EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

There is a huge competition between brokerage firms in post reform India. For
investors always very difficult to decide which brokerage firm to choose in which
they can invest their funds.

Research was carried out to find which brokerage house people prefer while
investing in stock market.

This study suggest that people are not interested while investing in stock and
commodity market due to lack of proper knowledge they have.

The main purpose of any investment is get a good return and liquidity out of it, due
to lack of knowledge and awareness commodity market is less prefer by investors.
The major findings of this study are that people are interested to invest in stock
market but they dont have proper knowledge about the stock market.

Through this report we are also able to understand, what are the positive and strong
point of company (Sharekhan Limited) by which they are able of pitching to a
potential clients.

I was also asked to give a suggestion to the company, so that they can improve
their product list.

INTRODUCTION

ROLE OF STOCK EXCHANGE IN CAPITAL MARKET

OF INDIA

Stock exchange play a crucial role in the consolidation of a national economy in

general and in the development of industrial sector in particular. It is the most
dynamic and organized component of capital market. Especially, in developing
country like India, the stock exchanges play a cardinal role in promoting the level
of capital formation through effective mobilization of saving and ensuring
investment safety.

1. Effective Mobilization of Savings

Stock exchanges provide organized market for individual as well as institutional
investors. They regulate the trading transactions with proper rules and regulation in
order to insure investors protection. This helps to consolidate the confidence of
investors and small savers. Thus, stock exchange attract small savings especially of
large number of investors in the capital market.

2. Promoting Capital Formation

The fund mobilized through capital market are provided to the industries engaged
in the production of various goods and services useful for the society. This leads to
capital formation and development of national assets. The saving mobilized are
channelized in to appropriate avenues of investment.

3. Wider Avenues of Investment

Stock exchange provide a wider avenue for the investment to the people and
organizations with investable surplus. Companies from diverse industries like
Information Technology, Steel, Chemicals, Fuels and Petroleum, Cement,
Fertilizers, etc. offers various kinds of equity and debt securities to investors.
Online trading facility has brought the stock exchange at the doorsteps of investors
through computer network. Diverse type of securities is made available in the stock
4

exchanges to suit the varying objectives and notions of different classes of

investors. Necessary information from stock exchanges available from different
sources guides the investors in the effective management of their investment
portfolios.

4. Liquidity of Investment
Stock exchanges provide liquidity of investment to the investors. Investors can sell
out any of their investment in securities at the time during trading days and trading
hours on stock exchanges. Thus, stock exchanges provide liquidity of investment.
The online trading and online settlement of demat securities facilitates the investor
to sell out their investment and realize the proceeds within a day or two. Even
investors can switch over their investment from one security to another according
to the changing scenario of capital market.

5. Investment Priorities
Stock exchange facilitates the investors to decide his investment priorities by
providing him the basket of different kinds of securities of different industries and
company. He can sell stock of one company and buy a stock of another company
through stock exchange whenever he wants. He can manage his investment
portfolio to maximize his wealth.

6. Investment Safety
Stock exchanges through their by-law, securities and exchange board of India
(SEBI) guidelines, transparent procedures try to provide safety to the investment in
industrial securities. Government has established the National Stock Exchange
(NSE) and Over the Counter Exchange of India (OTCEI) for investors safety.
Exchange authority tries to curb speculative practices and minimize the risk for
common investor to preserve his confidence.

7. Wide Marketability to Securities

Online price quoting system and online buying and selling facility have changed
the nature and working of stock exchanges. Formerly, the dealing on stock
exchanges was restricted to its headquarters. The investors across the country were
5

absolutely in dark about the price fluctuations on stock exchanges due to the lack
of information. But today due to internet, online quoting facilities are available at
the computers of the investors. As a result, they can keep track of price fluctuations
taking place on stock exchange every second during the working hours. Certain
T.V. channels like CNBC are fully devoted to stock market information and
corporate news. Even other channel displays the online quoting of stock. Thus,
modern stock exchanges backed up by internet and information technology provide
wide marketability to securities of the industries. Demat facilities has
revolutionized the procedure of transfer of securities and facilitated marketing.

8. Financial Resources for Public and Private Sectors

Stock exchanges make available the financial resources available to the industries
in public and private sector through various kinds of securities. Due to the
assurance of liquidity, marketing support, investment safety assured through stock
exchange, the public issues of securities by these industries receive strong public
response (resulting in oversubscription of issue).

9. Fund for Development Purpose

Stock exchange enable the government to mobilize the funds for public utilities
and public undertaking which take up the developmental activities like power
project, shipping railways, telecommunication, dams & roads contraction, etc.
Stock exchange provide liquidity, marketability, price continuity and constant
evaluation of government securities.

10. Indicator of Industrial Development

Stock exchanges are the symbolic indicators of industrial development of a nation
productivity, efficiency, economic status, prospectus of each industry and every
unit in an industry is reflected through the price fluctuation of securities of various
companies tell the entire story of changes in the industrial sector.

11. Barometer of National Economy

Stock exchange is taken as a barometer of the economy of a country. Each
economy is economically symbolized (indicators) by its most significant stock
6

exchange. New York Stock Exchange, London Stock Exchange, Tokyo Stock
Exchange and Bombay Stock Exchange are considered as barometer of U.S.A,
United Kingdom, Japan and India respectively. At both national and international
level these stock exchanges represent the progress and condition of their
economies.
Thus, stock exchange serves the nation in several ways through its diversified
economic services which include imparting liquidity to investment, providing
marketability, enabling evaluation and ensuring price continuity of securities.

Capital market is divided into two categories:

1. Primary Market
2. Secondary Market

ROLES AND FUNCTION OF SEBI IN CAPITAL

MARKET OF INDIA

The Securities and Exchange Board of India (frequently abbreviated SEBI) is the
regulator for the securities market in India.
It was formed officially by the government of India in 1972 with SEBI Act 1992
being passed by the Indian parliament. SEBI headquartered in the business district
of Bandra Kurla Complex in Mumbai, and has Northern, Eastern, Southern, and
Western regional offices in New Delhi, Kolkata, Chennai and Ahmedabad.
Controller of capital issues was the regulatory authority before SEBI came into
existence; it derived authority from the capital issue (control) Act, 1947.
Initially SEBI was a non-statutory body without any statutory power. However in
1995, the SEBI was given additional statutory power by the Government of India
through an amendment to the Securities and Exchange Board of India Act 1992. In
April, 1998 the SEBI was constituted as the regulator of capital markets in India
under a resolution of the government of India.
The SEBI is managed by six members, i.e. by the chairman who is nominated by
central government & two members, i.e. officers of central ministry, one member
from RBI & the remaining two are nominated by the central government. The
office of SEBI is situated at Mumbai with its regional offices at Kolkata, Delhi and
Chennai.

Functions and Responsibilities

SEBI has to be responsive to the needs of three groups, which constitute the
market:
8

 The issuers of securities

The investors
The market intermediaries
SEBI has three function rolled in to one body: quasi-legislative, quasi-judicial, and
quasi-executive. It drafts regulations in its legislative capacity; it conducts
investigation and enforcement action and its passes rulings and orders in its
judicial capacity. Though this makes it very powerful, there is an appeals process
to create accountability. There is a securities appellate tribunal which is a threemember tribunal and is presently headed by a former chief justice of a high court Justice Mr. N.K. Sodhi. A second appeal lies directly to the Supreme Court.
SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively
and successively (e.g. the quick movement towards making the markets electronics
and paperless rolling settlement on T+2 basis). SEBI has been active in setting up
the regulation as required under law.
SEBI has also been instrumental in taking quick and effective steps in light of the
global meltdown and the Satyam fiasco. It had increased the extent and quantity of
disclosures to be made by Indian corporate promoters. More recently, in light of
the global meltdown, it liberalized the takeover code to facilitate investment by
removing regulatory structures. In one such move, SEBI has increased the
application limit for retail investors to Rs. 2 lakh, from Rs. 1 lakh at present.

COMPANY PROFILE

COMPANY PROFILE OF SHAREKHAN LIMITED

Sharekhan limited is one of the retail brokerage firms in India. It is the retail
broking firm of the Mumbai based SSKI Group, which has over eight decades of
experience in the stock broking business. Sharekhan offers its customers a wide
range of equity related services including trade execution on BSE, NSE,
Derivatives, depository services, online trading, and investment advice etc.
10

The firms online trading and investment site www.sharekhan.com was launched
on 8th February 2000. The site gives access to superior content and transaction
facility to retail customers across the country. Known for its jargon-free, investor
friendly language and high quality research, the site has a registered base of over
two lakh customers. The number of trading member currently stands at over 14
lakh. While online trading currently accounts for just over 3 daily trading in stock
in India.
The content rich and research oriented portal has stood out among its
contemporaries because of its steadfast dedication to offering customers best-ofbreed technology and superior market information. The objective has been to let
customers make informed decision and to simplify the process of investing in
stocks.
On April 17, 2002 Sharekhan launched aped trade, a net-based executable
application that emulate the broker terminals along with host of other information
relevant to the traders. This was the first time that a net based trading station of its
caliber was offered to the traders. In the six month speed trade has become a de
facto standard for the day trading community over the net.

11

Sharekhans ground network includes over 1450 branches in 450 cities in India and
2 branches in Dubai.

Reason to choose sharekhan limited

12

Expert
SSKI has more than eight decades of trust and credibility in the Indian stock
market. In the Asia money brokers polled held recently, SSKI won the Indias
best broking house for 2004 award. Ever since it is launched Sharekhan as it retail
broking division in February 2000, it has been providing institutional level
research and broking services to individual investors.

Techniques
Sharekhan Ltd provides online trading account through which you can buy and sell
shares in an instant from any PC with an Internet connection. You will get access to
our powerful online trading tools that will help you take complete control over
your investment in shares.

Accessibility
Sharekhan Ltd provides Advice, Education, Tools and Execution services for
investors. These services are accessible through our centers across the country
(Over 1005 locations in 410 cities) over the internet (through the website
www.sharekhan.com) as well as over the Voice Tool.

Knowledge
In a business where the right information at the right time can translate into direct
profits, you get access to a wide range of information on our content-rich portal,
Sharekhan. You will also get a useful set of knowledge-based tools that will
empower you to take informed decisions.

Convenience
An individual can call to Dial-N-Trade number to get investment advice and
execute your transactions. We have a dedicated call-center to provide this service
via a Toll Free Number 1800-22-7500, 1800-22-7050 from anywhere in India.

13

Customer Service
Our customer service team will assist you for any help that you need relating to
transactions, billing, demat and other queries. Our customer service can be
contracted via a toll-free number, email or live chat on www.sharekhan.com.

Investment Advice
Share khan has dedicated research teams of more than 30 people for fundamental
and technical researches. Our analysts constantly track the pulse of the market and
provide timely investment advice to you in the form of daily research emails,
online chat, printed reports and SMS on your mobile phone.

Benefits
1. Secure Order by Voice Tool Dial-n-Trade.
2. Automated Portfolio to keep track of the value of your actual purchases.
3. 24x7 Voice Tool access to your trading account.
4. Personalized Price and Account Alerts delivered instantly to your cell phone
& email 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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15

FEES STRUCTURE
Charge

Classic Account

Tiger trade account

Account Opening

Rs. 750 /-

Nil

Annually maintain charges

Rs.400/-

Rs. 400/-

Brokerage

Intra-day 0.10%

Intra-day 0.05%

Delivery 0.50%

Delivery 0.25%

Note
Minimum margin cheque Rs. 5000with the classic account that is must
deposit in account opening time.
If margin cheque exceeds Rs. 50000, account opening free.
Minimum brokerage cheque Rs. 6000 (adjusted towards brokerage within
one year) that is applicable for only tiger trade account.

Annual maintenance charges Rs. 300 (chargeable in second year) that is

applicable for both account

16

Swot Analysis of Sharekhan Ltd

Strengths

Employees are highly empowered.

Strong communication network.

Management philosophy and commitment to maximize shareholders returns
Upgraded product design and development facilities to develop new
products and aid diversification.
Ongoing activities to support up gradation of operational performance and
rise in productivity
Good co-operation between employees.
17

Weakness Competition from cheap imports.

Low customer base.
High employee turnover.

Opportunities

Growth rate of mutual fund industry is 40 to 50% during last year and it
expected that this rate will be maintained in future also.

Marketing at rural and semi-urban areas.

Threats, Risks and Concerns

Increasing number of local players.

Constant pressure to be cost competitive to meet customer expectations.

18

INTRODUCTION OF ALL PRODUCTS

& SERVICES OF SHAREKHAN
LIMITED

19

INTRODUCTION OF ALL PRODUCT & SERVICES OF

SHAREKHAN
There are many products & services which are provided by Sharekhan Ltd.
Sharekhan try its best to fulfill the demand of its customer & the market. The
products & services which are provided by share are as follows:

1. Demat Account
2. Equity Investment
3. Derivatives/ F&O
4. Initial Public Offering (IPO)
5. Commodity Market
6. Currency
7. Portfolio Management Services
8. Fortune Finder
9. Mutual Fund
10.

Insurance

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1. Demat AccountThe term "Demat", in India, refers to a dematerialized account for individual
Indian citizens to trade in listed stocks or debentures in electronic form rather than
paper, as required for investors by the Securities and Exchange Board of India
(SEBI). In a Demat account, shares and securities are held electronically instead of
the investor taking physical possession of certificates. A Demat account is opened
by the investor while registering with an investment broker (or sub-broker). The
Demat account number is quoted for all transactions to enable electronic
settlements of trades to take place.
Access to the Demat account requires an internet password and a transaction
password. Transfers or purchases of securities can then be initiated. Purchases and
sales of securities on the Demat account are automatically made once transactions
are confirmed and completed.

Advantages of Demat AccountA Demat Account also helps avoid problems typically associated with physical
share certificates, for example: delivery failures caused by signature mismatch,
postal delays and loss of certificate during transit. Further, it eliminates the risks
associated with forgery and loss due to damaged stock certificates. Demat Account
holders also avoid stamp duty (as against 0.5 per cent payable on physical shares)
and filling up of transfer deeds. Demat Account holders usually obtain quicker
receipts of benefits like stock splits and bonuses.
The other advantage is the ability access stocks, bonds, ETFs, IPO, Gold ETF, etc.
all in one place. Its like one centralized investment account from where you can
access and maintain investment products.

Depositary Participant (DP)-

21

A Depository (in simple terms) is a institution holding a pool of pre-verified shares

held in electronic mode that offers efficient settlement of transactions. A
Depository Participant (DP) is an intermediary between the investor and the
depository. A DP is typically a financial organization like a bank, broker, financial
institution, or custodian acting as an agent of the depository to make its services
available to the investors. Each DP is assigned a unique identification number
known as DP-ID. As of March 2006, there were a total of 538 DPs registered with
SEBI.

Disadvantages of Demat Account1. Trading in securities may become uncontrolled in case of dematerialized
securities.
2. It is incumbent upon the capital market regulator to keep a close watch on
the trading in dematerialized securities and see to it that trading does not act
as a detriment to investors.
3. For dematerialized securities, the role of key market players such as stockbrokers needs to be supervised as they have the capability of manipulating
the market.
4. Multiple regulatory frameworks have to be conformed to, including the
Depositories Act, Regulations and the various By-Laws of various
depositories.
5. Agreements are entered at various levels in the process of dematerialization.
These may cause anxiety to the investor desirous of simplicity.

2.Equity InvestmentAn equity investment generally refers to the buying and holding of shares
of stock on a stock market by individuals and firms in anticipation of income
from dividends and capital gains, as the value of the stock rises. Typically equity
holders receive voting rights, meaning that they can vote on candidates for the
board of directors (shown on a proxy statement received by the investor) as well as
certain major transactions, and residual rights, meaning that they share the
22

company's profits, as well as recover some of the company's assets in the event that
it folds, although they generally have the lowest priority in recovering their
investment. It may also refer to the acquisition of equity (ownership) participation
in a private (unlisted) company or a startup company. When the investment is in
infant companies, it is referred to as venture capital investing and is generally
regarded as a higher risk than investment in listed going-concern situations.

Book value
The book value of equity will change in the case of the following events:
1. Changes in the firm's assets relative to its liabilities.
2. Depreciation
3. Issue of new equity in which the firm obtains new capital increases the total
shareholders' equity.
4. Share repurchases, in which a firm gives back money to its investors,
reducing on the asset side its financial assets, and on the liability side the
shareholders' equity.
5. Dividends paid out to preferred stock owners are considered an expense to
be subtracted from net income (from the point of view of the common share
owners).
6. Other reasons - Assets and liabilities can change without any effect being
measured in the Income Statement under certain circumstances

Market value of Shares

In the stock market, market price per share does not correspond
to the equity per share calculated in the accounting statements.
Stock valuations, which are often much higher, are based on other
considerations related to the business' operating cash flow, profits
23

and future prospects; some factors are derived from the

accounting statements.

3. Derivatives/ F&OA Derivative instrument is a contract between two parties that specifies conditions
(especially the dates, resulting values of the underlying variables, and notional
amounts) under which payments, or payoffs, are to be made between the parties.
Derivatives can be used for speculating purposes ("bets") or
to hedge ("insurance"). For example, a speculator may sell deep in-themoney naked calls on a stock, expecting the stock price to plummet, but exposing
him to potentially unlimited losses. Very commonly, companies buy currency
forwards in order to limit losses due to fluctuations in the exchange rate of two
currencies.
Third parties can use publicly available derivative prices as educated predictions of
uncertain future outcomes, for example, the likelihood that a corporation will
default on its debts.

UsageDerivatives are used by investors for the following:

1. Provide leverage (or gearing), such that a small movement in the underlying
value can cause a large difference in the value of the derivative;
2. speculate and make a profit if the value of the underlying asset moves the
way they expect (e.g., moves in a given direction, stays in or out of a
specified range, reaches a certain level);
3. Hedge or mitigate risk in the underlying, by entering into a derivative
contract whose value moves in the opposite direction to their underlying
position and cancels part or all of it out;
4. Obtain exposure to the underlying where it is not possible to trade in the
underlying (e.g., weather derivatives);
5. Create option ability where the value of the derivative is linked to a specific
condition or event (e.g. the underlying reaching a specific price level).
24

Types of DerivativesThere are mainly 2 types of Derivatives in which an investor invest his/her money.
They are as follows:
1. Over-the counter
2. Exchange-Traded Derivative Contracts

4. Initial Public Offering (IPO)An initial public offering (IPO) or stock market launch is the first
sale of stock by a company to the public. It can be used by either
small or large companies to raise expansion capital and become
publicly traded enterprises. Many companies that undertake an
IPO also request the assistance of an investment banking firm
acting in the capacity of an underwriter to help them correctly
assess the value of their shares, that is, the share price (IPO Initial
Public Offerings, 2011).

Reasons for listing

When a company lists its securities on a public exchange, the money paid by
investors for the newly issued shares goes directly to the company (in contrast to a
later trade of shares on the exchange, where the money passes between investors).
An IPO, therefore, allows a company to tap a wide pool of investors to provide
itself with capital for future growth, repayment of debt or working capital. A
company selling common shares is never required to repay the capital to investors.
Once a company is listed, it is able to issue additional common shares via a
secondary offering, thereby again providing itself with capital for expansion
without incurring any debt. This ability to quickly raise large amounts of capital
from the market is a key reason many companies seek to go public.

25

Disadvantages of an IPO
There are several disadvantages to completing an initial public offering, namely:
1. Significant legal, accounting and marketing costs
2. Ongoing requirement to disclose financial and business information
3. Meaningful time, effort and attention required of senior management
4. Risk that required funding will not be raised
5. Public dissemination of information which may be useful to competitors,
suppliers and customers.

Issue Price
A company that is planning an IPO appoints lead managers to help it decide on an
appropriate price at which the shares should be issued. There are two ways in
which the price of an IPO can be determined: either the company, with the help of
its lead managers, fixes a price (fixed price method) or the price is arrived at
through the process of book building.

5. Commodity MarketCommodity markets are markets where raw or primary products are exchanged.
These raw commodities are traded on regulated commodities exchanges, in which
they are bought and sold in standardized contracts.
This article focuses on the history and current debates regarding
global commodity markets. It covers physical product (food, metals, and
electricity) markets but not the ways that services, including those of governments,
nor investment, nor debt, can be seen as a commodity. Articles on reinsurance
markets, stock markets, bond markets and currency markets cover those concerns
separately and in more depth. One focus of this article is the relationship between
simple commodity money and the more complex instruments offered in the
commodity markets.
26

Spot tradingSpot trading is any transaction where delivery either takes place immediately, or
with a minimum lag between the trade and delivery due to technical constraints.
Spot trading normally involves visual inspection of the commodity or a sample of
the commodity, and is carried out in markets such as wholesale markets.
Commodity markets, on the other hand, require the existence of agreed standards
so that trades can be made without visual inspection.

Forward contractsA forward contract is an agreement between two parties to exchange at some fixed
future date a given quantity of a commodity for a price defined today. The fixed
price today is known as the forward price.

Futures contractsA futures contract has the same general features as a forward contract but is
transacted through a futures exchange. Commodity and futures contracts are based
on whats termed forward contracts. Early on these forward contracts
agreements to buy now, pay and deliver later were used as a way of getting
products from producer to the consumer. These typically were only for food and
agricultural products. Forward contracts have evolved and have been standardized
into what we know today as futures contracts. Although more complex today, early
forward contracts for example, were used for rice in seventeenth century Japan.
Modern forward, or futures agreements began in Chicago in the 1840s, with the
appearance of the railroads. Chicago, being centrally located, emerged as the hub
between Midwestern farmers and producers and the east coast consumer
population centers.

Hedging27

Hedging, a common practice of farming cooperatives insures against a poor

harvest by purchasing futures contracts in the same commodity. If the cooperative
has significantly less of its product to sell due to weather or insects, it makes up for
that loss with a profit on the markets, since the overall supply of the crop is short
everywhere that suffered the same conditions.

Delivery and condition guaranteesIn addition, delivery day, method of settlement and delivery point must all be
specified. Typically, trading must end two (or more) business days prior to the
delivery day, so that the routing of the shipment can be finalized via ship or rail,
and payment can be settled when the contract arrives at any delivery point.

6. CurrencyIn economics, currency refers to a generally accepted medium of exchange. These

are usually the coins and banknotes of a particular government, which comprise the
physical aspects of a nation's money supply. The other part of a nation's money
supply consists of bank deposits (sometimes called deposit money), ownership of
which can be transferred by means of cheques, debit cards, or other forms of
money transfer. Deposit money and currency are money in the sense that both are
acceptable as a means of payment
Direct exchange of commodities such as precious metals, furs, grain, etc. in early
human societies lead to the first money proper in early civilizations. Until modern
times, precious metals such as gold or silver typically were used to retain the
commodity nature of the store of value function of money. However, nearly all
contemporary monetary systems are based on fiat money. Usually, a government
declares its currency (including notes and coins issued by the central bank) to
be legal tender, making it unlawful to not accept it as a means of repayment for all
debts, public and private. In major modern economies such as those of the United
States or the Euro Zone, most money is electronic, but the "currency" of these
policies may, depending on context, include all money or just specie.

Currency Convertibility28

Convertibility of a currency determines the ability of an individual, corporate or

government to convert its local currency to another currency or vice versa with or
without central bank/government intervention. Based on the above restrictions or
free and readily conversion features currencies are classified as:
1. Fully Convertible - When there are no restrictions or limitations on the
amount of currency that can be traded on the international market, and the
government does not artificially impose a fixed value or minimum value on
the currency in international trade. The US dollar is an example of a fully
convertible currency and for this reason, US dollars are one of the major
currencies traded in the FOREX market.
2. Partially Convertible - Central Banks control over international investments
flowing in and out of the country, while most domestic trade transactions are
handled without any special requirements, there are significant restrictions
on international investing and special approval is often required in order to
convert into other currencies. The Indian Rupee is an example of a partially
convertible currency.
3. Nonconvertible - Neither participates in the international FOREX market nor
allows conversion of these currencies by individuals or companies. As a
result, these currencies are known as blocked currencies. e.g.: North Korean
Won and the Cuban Peso.

7. Portfolio Management ServicesA Portfolio Management refers to the science of analyzing the strengths,
weaknesses, opportunities and threats for performing wide range of activities
related to the ones portfolio for maximizing the return at a given risk. It helps in
making selection of Debt Vs Equity, Growth Vs Safety, and various other tradeoffs.
Major tasks involved with Portfolio Management are as follows.
1. Taking decisions about investment mix and policy
2. Matching investments to objectives
3. Asset allocation for individuals and institution
4. Balancing risk against performance

29

There are basically two types of portfolio management in case of mutual and
exchange-traded funds including passive and active.
1. Passive management involves tracking of the market index or index
investing.
2. Active management involves active management of a funds portfolio by
manager or team of managers who take research based investment decisions
and decisions on individual holdings.

PortfolioIn terms of mutual fund industry, a portfolio is built by buying additional bonds,
mutual funds, stocks, or other investments. If a person owns more than one
security, he has an investment portfolio. The main target of the portfolio owner is
to increase value of portfolio by selecting investments that yield good returns. As
per the modern portfolio theory, a diversified portfolio that includes different types
or classes of securities; reduces the investment risk. It is because any one of the
security may yield strong returns in any economic climate.

Facts about Portfolio1. There are many investment vehicles in a portfolio.

2. Building a portfolio involves making wide range of decisions regarding
buying or selling of stocks, bonds, or other financial instruments. Also, one
needs to make decision regarding the quantity and timing of the buy and sell.
3. Portfolio Management is goal-driven and target oriented.
4. There are inherent risks involved in the managing a portfolio.
5. The basics and ideas of Investment Portfolio Management are also applied
to portfolio management in other industry sectors.

8. Fortune FinderSpot the best trading opportunities using Fortune Finder for 500 stocks inDay
Trading and over 3000 stocks for Delivery.

30

It's a scientific system powered by a trend evolution algorithm which captures the
changing trend pattern for each stock. This helps investors /traders to get a clear
and simple "call to action" for profitable trades.
It's a simple decision making system to generate high probability calls with only 3
action cues:
BUY
SELL
HOLD
No jargons, No indecision

Here's how you can find your Fortune:

Your Stock, Any Stock - Get the Buy, Sell, Hold on any stock
with an easy to understand explanation

Daily Picks - The system also provides daily picks for you to
choose from for day trading or delivery

9. Mutual FundA Mutual Fund is a type of professionally-managed collective investment

scheme that pools money from many investors to purchase securities. While there
is no legal definition of mutual fund, the term is most commonly applied only to
31

those collective investment schemes that are regulated, available to the general
public and open-ended in nature. Hedge funds are not considered a type of mutual
fund.
The term Mutual Fund is less widely used outside of the United States. For
collective investment schemes outside of the United States, see articles on specific
types of funds including open-ended investment companies, SICAVs, unitized
insurance funds, unit trusts and Undertakings for Collective Investment in
Transferable Securities.

History of Mutual Fund in India

The Mutual Fund Industry in India started in 1963 with the formation of Unit Trust
of India, at the initiative of the Government of India and Reserve Bank. The history
of mutual funds in India can be broadly divided into four distinct phases.
1. First Phase- 1964-1987
2. Second Phase- 1987-1993 (Entry of Public Sector)
3. Third Phase- 1993-2003 (Entry of Private Sector)
4. Forth Phase- since February 2003

Types of Mutual Fund

There are mainly 2 types of Mutual Fund in which an investor invest his/her
money. They are as follows:
1. Open-ended Funds
2. Close-ended Funds

10.

Insurance-

32

Insurance is a form of risk management primarily used to hedge against the risk of
a contingent, uncertain loss. Insurance is defined as the equitable transfer of the
risk of a loss, from one entity to another, in exchange for payment. An insurer is a
company selling the insurance; the insured, or policyholder, is the person or entity
buying the insurance policy. The amount to be charged for a certain amount of
insurance coverage is called the premium. Risk management, the practice
of appraising and controlling risk, has evolved as a discrete field of study and
practice.

Legal
When a company insures an individual entity, there are basic legal requirements.
Several commonly cited legal principles of insurance include:
1. Indemnity
2. Insurable interest
3. Utmost good faith .
4. Contribution Subrogation

Types of Insurances
There are many types of insurances which insurance company
give to its customer according to their needs.

1. Auto insurance
2. Gap insurance
3. Home insurance
4. Health insurance
5. Accident, sickness and unemployment insurance
6. Others
33

MAJOR COMPETITORS OF SHAREKHAN LTD.

34

ICICI DIRECT
35

ICICI Web Trade Ltd (IWTL) maintains www.icicidirect.com whereas IWTL is an

affiliate of ICICI Bank Ltd and the Website is owned by ICICI Bank Ltd. IWTL
has launched and established an online trading service on the Website.

Products and Services of ICICI DIRECT

Investing in Mutual Funds

Personal Finance

Customer Service Features

IPOs

Margin Trading

Margin PLUS Trading

Call Trade
Trading on NSE/BSE

36

HDFC SECURITY
HDFC Security is the subsidiary of HDFC (Housing Development Financial
Corporation). www.hdfcsec.com would have an exclusive discretion to decide the
customers who would be entitled to its online investing services.
www.hdfcsec.com also reserves the right to decide on the criteria based on which
customers would be chosen to participate in these services. The present web site
(www.hdfcsec.com) contains features of services that they offer/propose to offer in
due course. The launch of new services is subject to the clearance of the
regulators.ie. SEBI, NSE and BSE.

Products and Services of HDFC SECURITIES

Online trading for Resident & Non Resident Indians.

Cash-n-Carry on both NSE and BSE.

Day trading on both NSE and BSE.

Trades on Futures & Options on the NSE.

Online IPOs.

37

ACCOUNT ACTIVATION AND OTHER CHARGES

A/C
COMPAN

OPENIN

G
CHARGE

BROKERAGE
(INTRADA
Y

TRADING

INTERES

AM
C

T
EXPOSUR

MODE
DEBIT
D

RATE

4-6 times

19%

T+ 2

5-7 times

18%

T+4

NIL

5p, 25p

Karvy

Nil

5p, 50p

3-4 times

18%

T+2

SOFTWARE

USED

Rs 5000

Trade Tiger

1st yr
free

1st yr
free

Rs
Rs 750

TRADIN

MARGI

DELIVERY)

Sharekhan

ICICI Direct

OF

PERIO

50p, 75p

500
pa

38

Online/
Oflline

Online/
Offline

Online/
Offline

Rs 5000

NIL

Accesed
through net

Indiabulls

Rs900

3-4p, 30-40p

NIL

HDFC

Rs 750

30p,60p

400

4-5 times

17%

T+2

4-6 times

19%

T+3

3-5 times

20%

T+3

Rs
pa

IndiaInfolin
e

Rs 900

45p, 65p

Rs
500

Online/
Offline

Online/
Offline

Online/
Offline

NIL

Power India
Bulls

Rs 5000

Rs 5000

OBJECTIVES

1. To know about the different Broking Housing Firms which are the big
competitors of Sharekhan Ltd.
2. To know the different Companies Account Activation and Other Charges
like Brokerage, Annual Maintenance Cost (AMC), and Interest Rate etc.

39

3. To know about the Awareness of the Investors towards Stock Brokers and
Share Market.
4.

To study the Market share of Sharekhan Ltd in the Share Market and
identify the areas of competitive advantages over other players present in the
market.

5. To study about consumer Awareness and Satisfaction, about Operational

Services and Procedures of Sharekhan Ltd.

RESEARCH METHODOLOGY
40

RESEARCH METHODOLOGY

1. Research DesignMy research is based on Descriptive, Qualitative and Quantitative research.

1. Descriptive ResearchDescriptive research includes surveys and facts findings enquire of different kinds.
The major purpose of descriptive research is description of the state of affairs as it
exists at present. Researcher has no control over the variables of this type of
research.

2. Qualitative ResearchIn our research we need comparison between different stock brokers. So this based
on all qualitative data. In short, Qualitative research is especially important in the
behavioral sciences where the aim is to discover the underline motives of human
41

behavior. Through such research we can analyses various factors which motivate to
people to behave in a particular manner or which make people like or dislike a
particular thing.

3. Quantitative ResearchQuantitative research is based on the measurement of quantity or amount. It is

applicable to phenomena that can be expressed in terms of quantity. So we can use
it in our research for collection of all the numerical data.

2. Sample DesignA sample design is a definite plan for obtaining a sample from a given population.
It refers to the technique or the procedure the researcher would adopt in selecting
item for the sample.

1. Sample SizeThis refers to the number of items to be selected from the universe to constitute a
sample.
The Sample Size in this project is 100.
But I have also study the 5 other Stock Broker Companies in comparison to
Sharekhan ltd, related to security and commodity market like, ICICI Direct, HDFC
Securities and Indiabulls for the appropriate collection of the information. The
Sampling Area is Delhi.

3. Data CollectionThe data for any topic or content can be collected by 2 types:

Primary Data-

42

The Primary Data is collected using Sampling Method and by Survey

using Questionnaire.

Secondary DataSecondary Data includes information regarding present market

scenario, information regarding mutual funds and competitors, this data is
collected by internet, magazines, newspapers and books.
Research is totally based on Primary Data, but in some place Secondary Data is
also taken to make this report more appropriate.

DATA ANALYSIS & FINDINGS

43

AGE
N

Valid
Missing

100
0

Mean

2.46

Std. Deviation

.858

44

AGE
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

15-20

4.0

4.0

4.0

20-25

63

63.0

63.0

67.0

25-30

19

19.0

19.0

86.0

30-40

11

11.0

11.0

97.0

3.0

3.0

100.0

100

100.0

100.0

40 AND ABOVE
Total

45

46

Interpretation :- The data here shows age of 20-25 with 53% followed by
25-30 with 19% followed by 30-40 with 11% followed by 15-20 with 4%
followed by 40 and above with 3%.

GENDER
N

Valid

100

Missing

Mean

1.43

Std. Deviation

.498

GENDER
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

MALE

57

57.0

57.0

57.0

FEMALE

43

43.0

43.0

100.0

100

100.0

100.0

Total

47

Interpretation:- Here the data shows that in the sample 57% are male and 43%
are female.

48

OCCUPATION
N

Valid
Missing

100
0

Mean

1.54

Std. Deviation

.717

OCCUPATION
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

STUDENT

59

59.0

59.0

59.0

SERVICE

28

28.0

28.0

87.0

SELF EMPLOYED

13

13.0

13.0

100.0

100

100.0

100.0

Total

49

Interpretation:- Here the data shows that in sample 59% are student, 28% service
man, and 13% are self employed.

50

INTRESTED IN SHARE
TRADING
N

Valid

100

Missing

Mean

1.14

Std. Deviation

.349

INTRESTED IN SHARE TRADING

Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

YES

86

86.0

86.0

86.0

NO

14

14.0

14.0

100.0

100

100.0

100.0

Total

51

Interpretation:- Here the data shows that 86% are interested in trading and 14%
are not interested in trading.

52

TRADING
YEAR
N

Valid
Missing

100
0

Mean

1.73

Std. Deviation

.815

TRADING YEAR
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

BELLOW 1 YEAR

48

48.0

48.0

48.0

1 TO 2 YEAR

33

33.0

33.0

81.0

2 TO 5 YEARS

17

17.0

17.0

98.0

2.0

2.0

100.0

100

100.0

100.0

MORE THAN 5 YEARS

Total

53

54

Interpretation:- Here the data show that 48% do the trading bellow 1
year, 33% are 1 to 2 year,17% are 2 to 5 years, and 2% are more than 5
years.

TRADINGTYPE
N

Valid

100

Missing

Mean

1.10

Std. Deviation

.302

TRADING TYPE

Frequency
Valid

Percent

Valid Percent

Cumulative Percent

ONLINE

90

90.0

90.0

90.0

OFFLINE

10

10.0

10.0

100.0

100

100.0

100.0

Total

55

INVESTMENT SECTOR
N

Valid
Missing

Mean
Std. Deviation

100
0
2.17
1.256

56

INVESTMENT SECTOR
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

EQUITY

41

41.0

41.0

41.0

COMMODITY

25

25.0

25.0

66.0

CURRENCY

16

16.0

16.0

82.0

MUTUAL FUND

12

12.0

12.0

94.0

6.0

6.0

100.0

100

100.0

100.0

IPO
Total

57

Interpretation:- Here the data shows that 41% invested in equity, 25% invested
in commodity, 16% invested in currency, 12% invested in mutual fund, and 6%
invested in IPO.

BROKING FIRM PREFERENCE

N

Valid

100

Missing

Mean

1.31

Std. Deviation

.465

BROKINGFIRMPREFERENCE
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

SHAREKHAN LIMITED

69

69.0

69.0

69.0

OTHER BROKING FIRMS

31

31.0

31.0

100.0

100

100.0

100.0

Total

58

Interpretation:- Here the study shows that 69% people wants to go with the
Sharekhan Limited and 31% wants to go with Other Broking Firms.

59

AWERNESS OF
SHAREKHAN
N

Valid

100

Missing

Mean

2.99

Std. Deviation

1.133

AWERNESS OF SHAREKHAN
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

NEWSPAPER

14

14.0

14.0

14.0

JOURNALS

15

15.0

15.0

29.0

FRIENDS

36

36.0

36.0

65.0

INTERNET

28

28.0

28.0

93.0

7.0

7.0

100.0

100

100.0

100.0

TV Ads
Total

60

Interpretation:- Here the study shows that the 36% people know about the
Sharekhan Limited due to his friends, 28% know due to the internet, 15% know
due to the journals, 14% know due to the newspaper, and 7% know due to the TV
Ads.

61

Factor Analysis
Correlation Matrix
BETTERCUS

TIMELYRE

LOWBROKE TOMERSER BRANDLOYA MARGINMO GOODTRADI SEARCHR

RAGE
Correlation

LOW BROKERAGE

VICE

LTY

NEY

NGTIPS

EPORT

1.000

.598

.535

.470

.387

.418

.598

1.000

.452

.548

.364

.477

BRAND LOYALTY

.535

.452

1.000

.371

.369

.250

MARGIN MONEY

.470

.548

.371

1.000

.316

.479

.387

.364

.369

.316

1.000

.477

.418

.477

.250

.479

.477

1.000

BETTER
CUSTOMER
SERVICE

GOOD TRADING
TIPS
TIMELY
RESEARCH
REPORT

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity

.824

Approx. Chi-Square

188.879

Df

15

Sig.

.000

62

Interpretation:- Here the KMO value is 0.824>0.60 this shows that the factors
in the questionnaire is adequate.

Communalities
Initial

Extraction

LOWBROKERAGE

1.000

.628

BETTERCUSTOMERSERVICE

1.000

.644

BRANDLOYALTY

1.000

.456

MARGINMONEY

1.000

.540

GOODTRADINGTIPS

1.000

.420

TIMELYRESEARCHREPORT

1.000

.499

Extraction Method: Principal Component Analysis.

63

Total Variance Explained

Initial Eigenvalues

Extraction Sums of Squared Loadings

Compon
ent

Total

% of Variance

Cumulative %

3.187

53.109

53.109

.821

13.685

66.794

.728

12.135

78.929

.482

8.025

86.954

.407

6.787

93.741

.376

6.259

100.000

Extraction Method: Principal Component Analysis.

64

Total
3.187

% of Variance
53.109

Cumulative %
53.109

Component Matrix
Component
1
BETTERCUSTOMERSERVICE

.803

LOWBROKERAGE

.792

MARGINMONEY

.735

TIMELYRESEARCHREPORT

.706

BRANDLOYALTY

.675

GOODTRADINGTIPS

.648

Extraction Method: Principal Component Analysis.

a. 1 components extracted.

65

Component Score Coefficient

Matrix
Component
1
LOWBROKERAGE

.249

BETTERCUSTOMERSERVICE

.252

BRANDLOYALTY

.212

MARGINMONEY

.231

GOODTRADINGTIPS

.203

TIMELYRESEARCHREPORT

.222

Crosstabs

Case Processing Summary

Cases
Valid
N
GENDER * TRADINGTYPE

Missing
Percent

100

100.0%

66

Total

Percent
0

.0%

Percent
100

100.0%

GENDER * TRADINGTYPE Crosstabulation

TRADINGTYPE
ONLINE
GENDER

MALE

FEMALE

Total

Count

OFFLINE

Total

52

57

% within GENDER

91.2%

8.8%

.0%

100.0%

% within TRADINGTYPE

57.8%

55.6%

.0%

57.0%

% of Total

52.0%

5.0%

.0%

57.0%

38

43

% within GENDER

88.4%

9.3%

2.3%

100.0%

% within TRADINGTYPE

42.2%

44.4%

100.0%

43.0%

% of Total

38.0%

4.0%

1.0%

43.0%

90

100

90.0%

9.0%

1.0%

100.0%

100.0%

100.0%

100.0%

100.0%

90.0%

9.0%

1.0%

100.0%

Count

Count
% within GENDER
% within TRADINGTYPE
% of Total

Hypothesis
H0: Trading type is not dependent upon gender.
H1: Trading type is dependent upon gender.

67

Chi-Square Tests
Asymp. Sig. (2Value

Df

sided)

1.355a

.508

1.718

.424

Linear-by-Linear Association

.826

.363

N of Valid Cases

100

Pearson Chi-Square
Likelihood Ratio

a. 3 cells (50.0%) have expected count less than 5. The minimum expected
count is .43.

Interpretation:- H0 accepted since 0.508>0.05, this means trading type is not

dependent upon gender.

Reliability Statistics
Cronbach's Alpha
Based on
Standardized
Cronbach's Alpha
.823

Items

N of Items
.822

Interpretation:- This study show that the cronbachs alpha 0.822>0.50 so the
use of the data in this study is reliable.

68

FINDINGS
1. According to the data that have been collected all the people who were
surveyed are aware of the Share Market & Trading.
2. Survey Shows that the nearly 86% people are interested in Share Trading
and rest others are not interested.
3. The Survey also shows that 90% people prefer the online trading rather
than that of offline trading through brokers.
4. People like to invest more in Equity rather than other investment sectors.
5. The best preferred broking firm among the people is Sharekhan Limited.
6. Friends, Internet & Journals are the most preferred mode for awareness of
the Broking Firms & Share Trading.

69

CONCLUSION

CONCLUSION

Our findings during the training with Sharekhan Ltd, was good on the following
ground.
70

1.

Sharekhan Ltd is a top ranked company listed with NSDL & CDSL;
provide trading through both NSE & BSE.

2. Sharekhan Ltd is providing software to their prospective Sub broker &

Remises.
3. Online transferring of funds from trading account to Bank account & viceversa.
4. Give credit limit up to 10 times on intraday trading and 5 times on Delivery.
5. Give Bunch of services like:
1. Product Support
2. Back Office Support
3. Set Up Support
4. Sales Support
5. Business Development

71

LIMITATIONS

LIMITATIONS
1. Lot of efforts have been undergone to improve the prediction techniques,
like earlier there was only fundamental analysis being used but now analysis
has come into existence.
2. Once the people who are involved in it, they play it like gambling.
3. Its difficult to make people aware about the market knowledge it is very
vast.
4. Time limitations.

72

5. Research has been done only at Delhi.

6. Some of the persons were not so responsive.
7. Possibility of error in data collection.
8. Possibility of error in analysis of data due to small sample size.

BIBLIOGRAPHY
73

BIBLIOGRAPHY
Websites:
www.wikipedia.com
www.moneycontrol.com
www.mutualfundsindia.com
www.bseindia.com
www.nseindia.com
www.investopedia.com
www.sharekhan.com
www.rediffmoney.com

Journals & Other References:

74

The Economic Times

Business Standards
Business India
The Telegraph

ANNEXURE

75

ANNEXURE

Comparative Study of Products and Services of

Broking House in Delhi
1. Age
.
2. Gender
.
3. Occupation

4. Are you interested in share trading?

1. Yes
2. No
5. Since how many years you trade?
1. Bellow 1 year
2. 1 to 2 year
3. 2 to 5 years
4. More than 5 years
6. What type of trading you prefer?
1. Online
2. Offline
7. In which sector you invest the most?
1. Equity
76

2. Commodity
3. Currency
4. Mutual Fund
5. IPO
8. If you trade in future, which broking firm would you
prefer?
1. Sharekhan Limited
2. Other broking firms
9. How did you come to know about the Sharekhan
Limited?(if 1 selected in Q8)
1. Newspaper
2. Journals
3. Friends
4. Internet
5. TV Ads
10.
How important do you think these factors
influence in choosing a broking firm? (Select one)
(Not Very Important)
1
2
(Extremely Important)

FACTORS

I.

Low Brokerage

II.

Better Customer Service

III.

Brand Loyalty

IV.

Margin Money

V.

Good Trading Tips

VI.

Timely Research Report

77

78