DEPOSITORY SYSTEM

INTRODUCTION TO DEPOISITORY SYSTEM

Technology is revolutionizing every field of human endeavor and activity. Indian capital
market is barrow meter of Indian economy; one of them is introduced technology into capital
market. A major development in the Indian capital market has been setting up of Depository
system. The rapid growth in number, volume and value of securities in the Indian capital market
exposed the limitations of handling and dealing securities in the physical / paper mode; the short
coming of the market became in the manifest in terms of bad deliveries, delays in transfer and
irregular settlement etc. depository used as elixir, bringing solution for all those problems.
The main objectives of depository systems are to accelerate scrip less trading, to make
trust in individual investors participation in depository system and to create a competitive
environment and be responsive to users interest and concern.
A depository holds securities in electronics form and provides all services related to
transaction of shares/ debt instruments. A depository interacts with clients through a depository
participant with who the client has to maintain a dmat account.
Thus an investor who wishes to avail of all depository services has to open a dmat
account. A depository participant is an agent of depository and is authorized offer depository
services to investors.
MEANING OF DEPOSITORY
Depository means one place where something is deposited for safe keeping; one who receives
deposit money, securities, investments or other property; a person to whom something is
entrusted; a trustee; a person or group entrusted with preservation or safe keeping of something
The Act defines Depository as:
An organization where the securities of shareholders are held in the form of
electronic accounts in the same way as bank holds money. The holds electronic custody of
securities and also arranges for transfer of ownership of securities on the settlement dates.
According to section-2(e) of Depository Act:
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Depository means a company formed and registered under the companies act,
1956 and which has been granted a certificate of registration under section-12(1a0 of Securities
and Exchange Board of India act, 1992.
A depository can not act as depository unless it obtains a certificate of commence
of business from the board (SEBI).
The objective of depository system is accelerate the growth of scrip less trading
and to make the individual investors participation in depositories to create competitive
environment and to enhance liquidity and improving capital market efficiency.
Eligibility Criteria for a Depository
Any of the following may promote a Depository:

A public financial institution as defined in section 4A of the Companies Act,

1956;

A bank included in the second schedule to the Reserve Bank of India Act, 1934;

A foreign bank operating in India with the approval of the Reserve Bank of India;

A recognized stock exchange;

An institution engaged in providing financial services where not less than 75% of
the equity is held jointly or severally by these institutions;

A custodian of securities approved by Government of India, and

A foreign financial services institution approved by Government of India.

Registration:
As per the provisions of the SEBI Act, a depository can deal in securities only after
obtaining a certificate of registration from SEBI. The sponsors of the proposed depository
should apply to SEBI for a certificate of registration in the prescribed form.
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Commencement of Business:
A Depository that has obtained registration as stated above, can function only if it
obtains a certificate of commencement of business from SEBI. A Depository must apply
for and obtain a certificate of commencement of business from SEBI within one year
from the date of receiving the certificate of registration from SEBI.
Agreement between the Depository and Issuers:
If either the issuer ( a company which has issued securities ) or the investor opts to
hold his securities in a demat form, the issuer enters into an agreement with the
depository to enable the investors to dematerialize their securities. No such agreement is
necessary where the state or Central Government is the issuer of government securities.
Depository Participants
A Depository participant (DP) is described as an agent of the depository.
They are the intermediaries between the depository and the investors. The relationship between
the DPs and the depository is governed by an agreement made between the two under
the Depositories Act. In a strictly legal sense, a DP is an entity who is registered as
such with SEBI under the provisions of the SEBI Act. As per the provisions of this
Act, a DP can offer depository related services only after obtaining a certificate of
registration from SEBI.
The regulations have selected various categories of market participants who are
eligible to become depository participants who have a well established customer interface
network.
THESE CATEGORIES ARE

Public Financial Institutions.

Scheduled Banks.

RBI approved Foreign Banks Operating in India.

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State Financial Corporations.

Certified Custodians of Securities.

Clearing corporations of Stock Exchanges.

Registered Stock Brokers.

Non-Banking Financial Companies.

Services provided by a DP :-

Following services can be availed of through a DP:

Dematerialization, i.e., getting physical securities converted into electronic form.

Dematerialization, i.e., getting electronic securities balances held in a BO account

converted into physical form.

To maintain record of holdings in the electronic form.

Settlement of trade by delivering / receiving underlying securities from / BO

accounts.

Settlement of off
market trades i.e., transactions between BOsenteredoutside the stock exchange.

Providing electronic credit in respect of securities allotted by issuers under IPO or

otherwise.

Receiving on behalf of demat account holders non-cash corporate bonus such as,
allotment of bonus and rights share in electronic form or securities ensuring upon
consolidation, stock split or merger / amalgamation of companies.

Pledging of dematerialized securities & facilitating security lending and browsing,

if the DP is registered as an Approved Intermediary for the purpose.

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1.2 NEED OF THE STUDY

The rapid growth in number, volume and value of securities in Indian Capital Market is
taking place, large number of companies issuing shares through IPOs, which requires the
services of the Depository system. It will take much time of allotment, refund in physical form of
transactions. To reduce the delay in transactions and to eliminate malpractices Depository system
helps allot.
The present study provides the overview of Depository System in India. There is a need
to study what extent the depository services has benefits to the investors.
SCOPE OF THE STUDY
It covers the depository system of India i.e. how the depository evolved in India, functions and
regulations of depositories various institution and individuals which will be participated in the
process
(DPS, CCS, R&T Agent, companies, Investors etc,)
The process of various activities and special services of depository and it covers NSD

1.3 OBJECTIVES OF THE STUDY

To study various benefits that accrues to the Depositories at Anand Rathi Securities Ltd.,
To study the concept of Dematerialization of shares i.e., procedure, demat account, transfer
of securities and trading and settlement of demat securities.
To study depository system at Anand Rathi Securities Ltd.,
To present suggestions for improving efficiency.
1.4 RESEARCH METHODOLOGY

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In order to archive the above objectives both the primary and secondary data one
considered.
Primary data:
The primary data collected through a structured questionnaire from the investors in Twin
cities and through interviews with the employees.
Sample size:

50 investors

Sampling method: Random sampling method.

Secondary data:
The secondary data has been gathered from published books, periodicals,
journals, and annual reports and through Internet.
REFERENCE PERIOD
The scope of the study is limited for a particular period of time i.e. 45 days
Tools & Techniques: Data Collected through Questionnaires was tabulated and moreover graphs
and pie-charts were used for interpretation of data.

Chapterization:
The study is proposed to be divided in to chapters as follows:
Chapter I: It consists of research methodology. It covers objectives, methodology, and
limitations, Chapterization etc
Chapter II: This chapter deals with the profile of the industry in which study has been
undertaken. (Profile of the stock broking industry)
Chapter III: This chapter deals with the profile of the organization in which study has been
undertaken. (Profile of Anand Rathi Securities Ltd in particular).
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Chapter IV: It deals with theoretical aspects of Depository System.
Chapter V: It deals with data analysis and interpretation, tables that represents questions in the
questionnaire and diagrammatic representation of response given

by

respondents.

Chapter VI: It deals with the findings of the study, suggestions and conclusion on the study.
APPENDIX:
Questionnaire:
2) Bibliography: The list Books, Journals magazines etc., have to given under this heading.

INDUSTRY PROFILE
STOCK BROKING INDUSTRY:
Stock market occupies an important position in the national economy of a country. It
facilitates the mobilization of the saving of individual and pools them in reservoir of capital,
which can be deployed of the economic development of a Country. Efficient stock market is the
key to the raising of capital by the corporate sector of the economy and the protection of the
interest of the Investors. In the last decade far reaching developments have taken place in the
Working of the stock market. Present stock market is significantly different from is used to be in
eighties and before, there appears to be new opportunity what Challenges and threats in stock
market. A stock broking firm is a firm which buys and sells shares and other securities for a
7
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person in behalf of them. The service provided by a stock broking firm is also a financial service
like banking and insurance. The stock broking firm buys and sells shares and other securities for
it clients and they charge a brokerage for every buying and selling based on the capital involved
in the transaction. The stock broking firms of India are regulated and controlled by SEBI
(Security Exchange Board of India). Indian stock broking firms are on an expansion derive the
increase their the industry are Kotak securities, Karvy, Motial Oswal, Anagram and ICICI direct.
The top ten players corners one forth of the total equity markets turn over. Due to booming stock
markets and growing retail interest in equity and equity-related investments. Having witnessed a
high level of consolidation in the last 3-4 years, the domestic stock-broking houses could tap the
IPO market to raise funds for their expansion, besides mergers and acquisitions. The broking
business performance by the Indian corporate sector. For the sector the best is yet to come.
Only about 1.1 to 2 percent of the household income is routed into the stock market while
the stock market risen by 45percent in the year 2005. There is lot of good opportunity. During
2005, broking firm including IL & FS Invest smart, India info line and India bulls tapped the
market through IPOs to raise fund for expansion. Among the stock broking firms we cans ee
large and small players raising funds through IPO. Stock exchange listed brokerages JM
Financial Securities, Geojit Financial Services, Fortis securities, Prime Securities and the
recently listed IL & FS Investments, India Infoline and Indiabulls have seen big rise in their
stock prices, mainly due to increased business and rising stock markets.
Sensing the opportunity the public sector banks are also entering this segment. With the entry of
several corporate players, the industry has attained size and scale.
An industry is a group of firms that have similar technological structure of production
and produce similar products. An analysis of industry helps in identifying opportunities for
investment purpose and requires careful assessment of its ability to maintain its profitability in
the long run to deserve investment .
Industry Life Cycle:
Many industrial economists believe that the development of almost every industry may be
analyzed in terms of a life cycle with four well-defined stages.
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Pioneering stage
Rapid growth stage
Maturity and stabilization stage
Declining stage
Pioneering stage:
The prospective demand for the product is promising in this stage and the demand for the
product attracts many producers to produce the particular product leading to severe competition.
This stage may offer higher returns to the investor but also offers the greatest risk.
Rapid Growth Stage:
This stage starts with the appearance of surviving firms from the pioneering stage. These
companies grow strongly in market share and financial performance as the cost of production is
low and they have good quality products. It is advisable to invest in the shares of these
companies because of growth in potential returns and decrease in the risk of failure.
Maturity and Stabilization Stage:
In this stage, the growth rate tends to be moderate. Sales may increase but at the slower rate
than before Symptoms of obsolescence may appear in the technology. Products may become
more standardized and less innovative and the market place is full of competitors. Earnings are
stable and hence investors may get high dividend but must be avoided by those who are
primarily interested in capital gains.
Declining Stage:
The demand for the product and earnings decline in this stage. It is better to avoid investing in
the shares of this industry staged companies as it will lead to erosion of capital.

Major Players in Stock Brocking Industry

Aditya Birla Money Ltd
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Aditya Birla Money Limited formerly known as Apollo Sindhoori Capital Investments is a
leading player in the broking space with nearly 15 years of experience. The Company has a
strong distribution network of over 800 own branches and franchisee network, a large customer
base in excess of 1,80,000, a strong technology backbone and a range of products delivered
through a robust online and offline model. Aditya Birla Money offers trading facility in equity
segment and on derivative segment on NSE & BSE through a single platform, trading facility in
commodity segment, including bullion, oils, gaur seed etc. through its subsidiary, Aditya Birla
Commodities Broking Limited.

Advani Share Brokers

Advani Share Brokers, the reputed Bombay based investment house, operates from India's
financial hub, Dalal Street, since sixty years. It deals in equities, debt and derivatives on the
Bombay

Stock

Exchange

and

the

National

Stock

Exchange

of

India.

Agroy
AGROY Group of Companies is a well established name in the field of capital markets and
financial services. AGROY Finance & Investment Ltd. (AFIL) is the group's flagship company
engaged in capital markets as a premier financial and stock broking house. The company was
formed in July 1992. Since then it has enjoyed patronage of a large number of

Anand Rathi Securities Ltd

Anand Rathi Securities provides financial and advisory services including wealth
management, investmen banking, corporate advisory, brokerage & distribution of equities,
commodities, mutual funds and insurance - all of which are supported by powerful
research teams.

Angel Trade - Part of Angel Group

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DEPOSITORY SYSTEM
The Angel Group has emerged as one of the top 5 retail stock broking houses in India, having
memberships on BSE, NSE and the two leading commodity exchanges in the country i.e.
NCDEX and MCX. Angel Broking Ltd is also registered as a depository participant with CDSL.

Arcade Share & Stock Brokers

Arcadia group began its modest journey in 1995 and now Arcadia proudly boasts about
membership to NSE,BSE, Depository Participant (CDSL),MCX,NCDEX .The philosophy of
client servicing backed by all principal Indian Stock and Commodity exchange gives Arcadia
edge over other players in the industry segment to offer value based services to its customers.

Dalal & Broacha Stock Broking Pvt Ltd

The Company is the member of The Stock Exchange Mumbai, The National Stock Exchange
and the OTC exchange of India serving all the major Indian Financial Institutions, Banks,
Mutual

funds,

Insurance

companies,

Foreign

Institutional

Investors,

NRIs

clients.

Dalmia Securities
Dalmia Securities (P) Ltd., is one of the market leaders in the Indian securities market. Its
reputation is best reflected in the quality of customer base, individuals who demand, and get, the
highest standard in asset handling. Dalmia is a powerful builder of the market, generating
professional resources, setting standards of prudence, efficiency and of friendliness to investor

Emkay
Emkay is a Financial Services Company promoted and run by professionals. Core area of
operations is stock-broking and wealth management. Emkay has well demonstrated research
advice and execution capabilities in equities.

Ethical Investment Solutions Pvt. Ltd

At Ethical Investment Solutions Pvt. Ltd. we are committed to providing you superior

Geojit Financial Services Limited

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DEPOSITORY SYSTEM
Geojit, a member of NSE and BSE, has a network of over 300 branches in India and abroad,
rendering quality equity trading services. Geojit not only has a strong offline presence but also
provides automated online trading services. The online trading system allows customers to track
the markets by setting up their own market watch, receiving research tips, stock alerts, real-time
charts and news and many more features enable the customer to take informed decisions.
ICICI Direct
Online share and mutual funds trading facility by the ICICI group.

IL&LS Investsmart
IL&FS Investsmart Limited (IIL) is a premier financial service organisation providing
individuals and corporates with customised financial management solutions. We work towards
understanding your financial goals and helping you attain them

India Bulls
Indiabulls is India's leading retail financial services company with 70 locations spread across 62
cities. While our size and strong balance sheet allow us to provide you with varied products and
services at very attractive prices, our over 450 Client Relationship Managers are dedicated to
serving your unique needs.

IL&LS Investsmart
IL&FS Investsmart Limited (IIL) is a premier financial service organisation providing
individuals and corporates with customised financial management solutions. We work towards
understanding your financial goals and helping you attain them

ICICI Direct
Online share and mutual funds trading facility by the ICICI group.

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DEPOSITORY SYSTEM

Indianstockmarket.net
Indianstockmarket.net is an effort to educate indian investor by providing useful stock news,
stock market websites, informative articles, resources to various investment guides.

Indus Invest
INDUS PORTFOLIO (P) Ltd. is one of the well established professional stock broking
company in north India. Indus symbolizes dynamism of our economy, synthesis of civilization
and stability of our nationhood.

Indira Securities
After starting operations in 1995, the FIRM has grown from a modest stock broking firm to the
current status with substantial business base. The Firm provides Services of Share Broking in
National Stock Exchange of India Ltd. Its partners concern are the Members of Bombay Stock
Exchange and Regional Stock Exchange.

InvestMentor
InvestMentor Securities Ltd (ISL) is a leading stock broker of Gujarat, India. ISL has a seat on
India's largest stock exchange-National Stock Exchange of India ltd (NSE) and is also a very
active depository participant with India's largest depository National Securities Depository Ltd
(NSDL)

Investment Research & Information Services Ltd. (IRIS)

Myiris.com provides online trading service of Indian stocks and mutual funds. Also provides
financial news, car loans, housing

loans and credit cards.

Mangal Keshav
Mangal Keshav Securities Ltd has been a leading brokerage and advisory house with a
membership of NSE (Cash, F&O and Debt), BSE (Cash, F&O and Debt) OTCEI, NSDL and
CDSL. MKSL has been offering services since 1939 to Mutual Funds, Financial Institution, High
Networth Individuals and Retail Investors across the country offering a range of sophisticated
advisory, financial trading and investment services.
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DEPOSITORY SYSTEM

Khandwala Securities Limited

Member of the National Stock Exchange on both the capital market and the debt market
segments. The Khandwala group has had over six and a half decades of experience in the
financial services industry. KSL specializes in servicing the specific needs of institutional,
corporate and high networth individuals.

KRChoksey
Kisan Ratilal Choksey Shares & Securities is a Full Service Broking House offering complete
financial solutions suiting your needs. We serve an eclectic clientele comprising High Net Worth
Individuals, Corporates, NRI's, Mutual Funds, Insurance Companies, Banks as well as Other
Financial Institutions.

LKP
LKP, one of the most respected groups in India, offers a single window advantage to its clients
for all capital and money market related activities. Starting from primary and secondary markets,
corporate financing, merchant banking, foreign exchange broking to money changing, at LKP, it
handles everything.

Jaypee Capital Services

Jaypee Capital Services Ltd. is a registered self-clearing member with National Stock Exchange
and SEBI. It has the expertise and the experience to capitalize on daily stock movements and
employ

over

20

specialist

traders

certified

by

the

NSE.

and retail broking, MOSt is amongst the best-capitalized firms in the broking industry in terms of
net worth. Company was founded in 1987 as a small sub-broking unit, with just two people
running the show. Focus on customer-first-attitude, ethical and transparent business practices,
respect for professionalism, research-based value investing and implementation of cutting-edge
technology have enabled it to blossom into a thousand-member team

Motilal Oswal
One of the top-3 stock-broking houses in India, with a dominant position in both institutional
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DEPOSITORY SYSTEM
. Toss Financial Services Pvt. Ltd, a corporate member of The National Stock Exchange of India
Ltd (NSE) on the equity segment are one of the established Stock broking and Investment
Management Firms in India which strive for absolute professionalism and high degree ethical
standards when it comes to the question of client's interest.and retail broking, MOSt is amongst
the best-capitalized firms in the broking industry in terms of net worth. Company was founded in
1987 as a small sub-broking unit, with just two people running the show. Focus on customerfirst-attitude, ethical and transparent business practices, respect for professionalism, researchbased value investing and implementation of cutting-edge technology have enabled it to blossom
into a thousand-member teamToss Financial Services Pvt. Ltd, a corporate member of The
National Stock Exchange of India Ltd (NSE) on the equity segment are one of the established
Stock broking and Investment Management Firms in India which strive for absolute
professionalism and high degree ethical standards when it comes to the question of client's
interest.
and retail broking, MOSt is amongst the best-capitalized firms in the broking industry in terms of
net worth. Company was founded in 1987 as a small sub-broking unit, with just two people
running the show. Focus on customer-first-attitude, ethical and transparent business practices,
respect for professionalism, research-based value investing and implementation of cutting-edge
technology have enabled it to blossom into a thousand-member team

RBK Share Brokers

RBK Share Broking Ltd is the member of Mumbai Stock Exchange, the premier stock
exchange of India. its group company Truevalue Securities & Finance Pvt. Ltd is the member of
National Stock Exchange Ltd.

Networth Stock Broking Ltd

NSBL is a member of the National Stock Exchange of India Ltd (NSE) and the Bombay Stock
Exchange Ltd (BSE) on the Capital Market and Derivatives (Futures & Options) segment.

Orient Capital Market

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DEPOSITORY SYSTEM
OCM was started in the 1995 by 3 stalwarts of the industry with the sole aim to reduce the cost
and improve the efficiency of the Broking system.

Pratibhuti
Pratibhuti is one of the prominent Indian stocks Broking Company, head office quartered in
Mumbai effecting business on India's major bourses. It is the first stockbroker to obtain all
regulatory approvals in commencing its overseas on-line trading terminals via its own
representative office.

Mumbaibull.com
A guide to invest in indian stocks, few nice tips to invest in India and Indian stock markets.
A ccautios approach for maximizing profits. 100% free advice.

Sivan Securities
Sivan Securities Private Limited (Sivan) is one of the leading Indian Investment Banker & Stock
Broker with a strategic focus on South India. Headquartered in Bangalore, Sivan also operates
from offices in Madras (Chennai), Hyderabad

& Mangalore.

Religare Securities Ltd

Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through Religare
Securities Limited, Religare Finvest Limited, Religare Commodities Limited and Religare
Insurance Advisory Services Limited provides integrated financial solutions to its corporate,
retail and wealth management clients. Provides various financial services which include
Investment Banking, Corporate Finance, Portfolio Management Services, Equity & Commodity
Broking, Insurance and Mutual Funds.

Toss Financial Services Pvt Ltd

UTI Securities

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DEPOSITORY SYSTEM
UTI SECURITIES LTD., (UTISEL), was promoted as an independant professional entity in June
1994 by UNIT TRUST OF INDIA (UTI). With the repealing of Unit Trust of India (UTI) Act,
the entire share capital of UTISEL is now held by Administrator of Specified Undertaking of
Unit Trust of India since 1st February 2003
Toss Financial Services Pvt. Ltd, a corporate member of The National Stock Exchange of India
Ltd (NSE) on the equity segment are one of the established Stock broking and Investment
Management Firms in India which strive for absolute professionalism and high degree ethical
standards when it comes to the question of client's interest

Stockholding company ltd.

SHCIL provides depository, post trading, custodial services, securities lending, to institutional
investors and retail investors. Other auxiliary services provided by SHCIL include derivatives
clearing, PF fund accounting, SGL constituent account services, mutual funds and other capital
market instruments distribution. Stock Holding Corporation of India Limited (SHCIL) was
promoted by public financial institutions and insurance majors like IDBI, UTI, ICICI, LIC, GIC
and its subsidiaries, IFCI and IIBI

Trans Warranty Finance

Trans Warranty Finance Limited's corporate mission is to Build an institution which would be
one of the top ten investment banking and financial services companies in India Provide value
added service to maximize customers and investors satisfaction

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DEPOSITORY SYSTEM

Karvy Group of Companies

Group includes Karvy Consultants Ltd, Karvy Securities Ltd, Karvy Investor Services Ltd,
Karvy Stockbroking Ltd and Karvy Global Services. Provides registrar and brokerage services in
equities, mutual funds, bonds, debuntures, fixed deposits and insurance policies to investors.

RR Financial Consultants
RR Investors Capital Services Pvt Ltd offers all financial products and services to the individual
investor. You can avail these services through Agent Network, Investment shop, Private Market
Group, Direct Market group and etc.

Alankit Assignments Limited

Alankit Assignments Limited Offering insurance services, insurance broking, third party admin,
investor services, income tax services and also providing medicines, medical & surgical
equipment, beauty and health care products.

Bajaj Capital
Bajaj Capital's Investment Banking Service is a step ahead in that direction.Bajaj Capital offers
you unparalleled capital raising solutions for your business. With over 120 offices in 50 cities all
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DEPOSITORY SYSTEM
over the country and a network of over 10,000 Advisor Associates, we can connect you to
potential investors all over the country.

ICRA Limited
ICRA Limited (an Associate of Moody's Investors Service) was incorporated in 1991 as an
independent and professional company. ICRA is a leading provider of investment information
and credit rating services in India. ICRA's major shareholders include Moody's Investors Service
and leading Indian financial institutions and banks

Kotak Investing Banking

Kotak Mahindra Capital Company (KMCC) helps leading Indian corporations, banks, financial
institutions and government companies access domestic and international capital markets.
KMCC has the most current understanding of investor appetite, having been the leading book
runner/lead manager in public equity offerings in the period FY 2002-06.

Alliance Capital
Alliance Capital Asset Management (India) Pvt. Ltd. (ACAM) is an affiliate of Alliance Capital
Management L.P. (Alliance Capital), a leading global investment adviser headquartered New
York, USA. Alliance operates out of eight offices in the US and through its subsidiaries and
affiliate offices in over 19 countries. Since 1993, Alliance Capital has maitained a presence in
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DEPOSITORY SYSTEM
India when it was registered as a Foreign Institutional Investor (FII). As an FII, Alliance Capital
launched an "off-shore" fund, the India Liberalisation Fund in December 1993.

Chola Mutual Fund

Chola Mutual Fund offers a range of funds to help meet financial goals. Each fund is managed
with the same disciplined, research-oriented approach that reflects our investment philosophy-to
protect investor's capital in a market downturn and to out perform in a good market.

J.M.Capital Management Private Ltd

J.M.Capital Management Private Ltd (JMCM) is in the business of managing funds for retail and
corporate investors, both domestic and NRI, Institutions and Trusts, by floating a number of
schemes. JMCM interacts with a large network of distributors and brokers, each of whom
represent a large block of retail clients with investible surpluses. JMCM focuses on quality
research, with emphasis on constantly exploring and analyzing investment options

Kotak Mutual Fund

Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary
of KMBL, is the asset manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started
operations in December 1998 and has over 1,15,000 investors in various schemes. KMMF offers
schemes catering to investors with varying risk- return profiles and was the first fund house in
the country to launch a dedicated gilt scheme investing only in government securities.

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DEPOSITORY SYSTEM

Principal Mutual Fund Company

Principal Asset Management Company Limited, investment manager to Principal Mutual Fund,
is a 100 percent subsidiary of the Principal Financial Group, USA, a Fortune 500 company.
Principal Asset Management Company Limited was the first private sector company to tie-up
with the Department of Postal Services to sell mutual funds through the postal network. Today,
Principal Mutual Fund's schemes are available to the retail investors at 200 post offices around
India.

Prudential ICICI Mutual Fund

Prudential ICICI Asset Management Company, (55%:45%) a joint venture between Prudential,
UK's leading insurance company and ICICI Bank Ltd, India's premier financial institution. The
joint venture was formed with the key objective of providing the Indian investor mutual fund
products to suit a variety of investment needs. The AMC has already launched a range of
products

to

suit

different

risk

and

maturity

profiles.

Tata Mutual Fund

Tata Asset Management is one of India's fastest growing fund management companies with over
Rs 6000 crore (as on November 30, 2004) of assets under management, from over 390,000
investors. Established in 1995, it is also one of the oldest fund management companies in the
Indian private sector. The key objectives for Tata Asset Management are to serve various
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DEPOSITORY SYSTEM
segments of investors, retail and corporate, to identify investment avenues with an aim of
generating medium term returns for the investors in line with their objectives.

B. M. Chatrath &Co.
B. M. Chatrath &Co. offer highly reliable investment advisory services according to the market
booms and depressions. Our experts keep a strict watch on the market forces and accordingly
provide suggestions related to the monetary investment in various shares and bonds.
web site url : http://www.bmchatrath.com

Brain Point Investment Centre Pvt Ltd

Brain Point Investment Centre is a premier investment advisory firm launched in 1996 with the
aim of making investing simpler, more understandable and profitable. We offer personalised
investment advisory and financial planning services to individual investors,
corporate houses, institutional investors, Non-Resident Indians (NRIs) and High Networth
Clients, among others. We offer a wide range of products including Mutual Funds, Life
Insurance, GOI Bonds, Post Office Schemes, Company Fixed Deposits, 54EC Capital Gain
Bonds, Tax Saving Schemes.

Credit Analysis & Research Ltd

Credit Analysis & Research Ltd. (CARE), incorporated in April 1993, is a credit rating,
information and advisory services company

promoted by Industrial Development Bank of

India (IDBI), Canara Bank, Unit Trust of India (UTI) and other leading banks

and financial

services companies.

Firstcall India Equity Advisors

Firstcall India Equity Advisors takes a "One Firm" approach to business, working together across
our business groups and actively bringing all of the Firm's resources to bear for our
clients.Firstcall India maintains leadership positions in equityresearch, investment

banking,

private equity and private client services. Consistently recognized for its total solutions
commitment among the various investment banks
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DEPOSITORY SYSTEM
network enables it to quickly and effectively solve its clients' diverse financial needs.

G K Management Services (India) Limited

G K Management Services (India) Limited is a Company advisors engaged in offering business
financial services including financial statements preparation, financial planning services,
financial advisory services, financial outsourcing services and project finance

consulting

services.

Health n Wealth
Health n Wealth is a financial advisory firm offering information about shares, mutual

funds,

tax saving schemes and real estate.

Innosolv
Innosolv is amongst the finest management

consulting services companies. Leveraging on

more than two decades of enriched experience and expertise from the promoting firm, we are
catering to a large number of customers from different industries. Endeavoring to excel in advice
and

execution,

we

have

carved

niche

for

ourselves

in

this

unique

space.

Keerat Exports
Offering consulting services such as investment
service, portfolio management
service,

foreign

guidance service, investment advisory

service, commercial investment service, domestic investment

investment

service

and

funds

investment

service.

Lamcon Finance & Management Services

Lamcon provides financial planning and consultancy, market research, accounting and tax
planning, assistance in planning public issues, portfolio and investment
company

counselling and

secretarial work to its clients.

Mukesh Raj & Co.

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DEPOSITORY SYSTEM
Mukesh Raj & Co. is the Eight-year-old company

that promises to offer the best Chartered

Accounting Services including sale tax planning services,investment

planning services and

other services. We work with dedication,in order to serve our clients efficiently and in a
consistent manner.

Parag Parikh Financial Advisory Services Ltd

Parag Parikh Financial Advisory Services Ltd. is a leading Investment Advisory Firm with a
reputation built on performance. We follow a philosophy which focuses on doing the right things
rather merely doing things right and also believe that monetary rewards do not take precedence
over an ethical approach to our work. Our employees, who are aligned with this philosophy, are
considered to be our most important assets.

Parijat Consulting
Parijat Consulting is an India centric consulting, advisory and intermediary company
specializing in Foreign private equity placement and financial asset reconstruction.We are
Financial Advisors to a host of Institutional, Financial and Corporate entities across India.
web site url : http://www.parijatconsultings.com

Puneet Advisory Services

Puneet Advisory Services is a medium sized investment boutique in Indian Capital and Money
market. We are highly focussed on providing financial advisory services on the projects that are
'pure' in nature and character keeping in mind the complex Indian financial environment.

RCS Advisors
RCS Advisors is a leading strategy and investment advisory firm that provides a wide range of
services worldwide to a substantial and diversified client base that includes corporations,
financial institutions, governments and high-net-worth individuals. RCS Advisors is built on a
rigorous intellectual platform and a truly broad global network, and reinforced by clients' trust
accumulated over years of unbiased board room advices. We operate under the principal that the
trinity of financial, strategy and operational advice delivered by the same advisor can unlock vast
economic value and stimulate optimal performance for our clients. Our client relationships are
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DEPOSITORY SYSTEM
among our greatest competitive assets. We deepen and enrich these relationships through
disciplined growth, innovation, and seamless execution. We have a significant presence in China,
North America, Europe, and the Nordic Region serving clients in virtually all countries.

SKP Crossborder Consulting

SKP Crossborder Consulting (SKPCB) is a multi-disciplinary & multi location consulting
company with a focus on both inbound and outbound crossborder business setup and transaction
advisory services. With capabilities in regulatory, real estate, international tax services, and
project management as well as access to legal, financial, recruitment and other resources,
SKPCB delivers under one roof, a host of services comprising Inbound and Outbound
Investments, Joint ventures, Mergers & Acquisitions, International Tax, Transfer Pricing and
International Contract Structuring.

Sree Raam Associates

Sree Raam Associates is a leading service provider for financial services. We assist the clients
achieve their objectives with optimum time and cost.

ValueNotes Database Pvt. Ltd

ValueNotes provides company reports, equity research, valuations, business news, share prices,
stock quotes, financial results, articles, press releases and interviews to equity analysts, technical
analysts and research houses in India.

Value Research Online

Value Research is the independent provider of investment information. Founded in 1990, we
capitalise on our unique position the first dedicated fund research company in India. Closely
tracking the universe of Indian mutual funds, we have emerged as the most trusted provider of
mutual fund information in India.

Veer Capital Management Pvt. Ltd

Veer Capital Management Pvt. Ltd. Advising and managing equity investment

in India for

non-resident Indians and foreign investor

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DEPOSITORY SYSTEM

ANAND RATHI - PROFILE

About Anand Rathi
AnandRathi is a leading full service securities firm providing the entire gamut of
financial services. The firm, founded in 1994 by Mr. AnandRathi, today has a pan India presence
as well as an international presence through offices in Dubai and Bangkok. AR provides a
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DEPOSITORY SYSTEM
breadth of financial and advisory services including wealth management, investment banking,
corporate advisory, brokerage & distribution of equities, commodities, mutual funds and
insurance, structured products - all of which are supported by powerful research teams.
The firm's philosophy is entirely client centric, with a clear focus on providing long term value
addition to clients, while maintaining the highest standards of excellence, ethics and
professionalism. The entire firm activities are divided across distinct client groups: Individuals,
Private Clients, Corporate and Institutions and was recently ranked by Asia Money 2006 poll
amongst South Asia's top 5 wealth managers for the ultra-rich.
In year 2007 Citigroup Venture Capital International joined the group as a financial partner
Milestones

1994:
Started activities in consulting and Institutional equity sales with staff of 15

1995:
Set up a research desk and empanelled with major institutional investors

1997:
Introduced investment banking businesses .Retail brokerage services launched

1999:
Lead managed first IPO and executed first M & A deal

2001:
Initiated Wealth Management Services

2002:
Retail business expansion recommences with ownership model

2003:
Wealth Management assets cross Rs1500 crores

Insurance broking launched Launch of Wealth Management services in Dubai

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DEPOSITORY SYSTEM

Retail Branch network exceeds 50

2004:
Commodities brokerage and real estate services introduced

Wealth Management assets cross Rs3000crores

Institutional equities business relaunched and senior research team put in place
Retail Branch network expands across 100 locations within India

2005:
Real Estate Private Equity Fund Launched

Retail Branch network expands across 200 locations within India

2006:
AR Middle East, WOS acquires membership of Dubai Gold & Commodity Exchange
(DGCX)
Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money

2006 poll Ranked 6th in FY2006 for All India Broker Performance in equity distribution
in

the

High

Networth

Individuals

(HNI)

Category

Ranked 9th in the Retail Category having more than 5% market share
Completes its presence in all States across the country with offices at 300+ locations
within India

2007:
Citigroup Venture Capital International picks up 19.9% equity

stake

Retail customer base crosses 200 thousand

Establishes presence in over 450 locations

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DEPOSITORY SYSTEM

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DEPOSITORY SYSTEM

AR Core Strengths
Breadth of Services
In line with its client-centric philosophy, the firm offers to its clients the entire spectrum of
financial services ranging from brokerage services in equities and commodities, distribution of
mutual funds, IPOs and insurance products, real estate, investment banking, merger and
acquisitions, corporate finance and corporate advisory.
Clients deal with a relationship manager who leverages and brings together the product
specialists from across the firm to create an optimum solution to the client needs.
ManagementTeam
AR brings together a highly professional core management team that comprises of individuals
with extensive business as well as industry experience.
In-DepthResearch
Our research expertise is at the core of the value proposition that we offer to our clients.
Research teams across the firm continuously track various markets and products. The aim is
however common - to go far deeper than others, to deliver incisive insights and ideas and be
accountable for results.
Management Team
Our senior Management comprises a diverse talent pool that brings together rich experience from
across industry as well as financial services.
Mr. Anand Rathi - Group Chairman
Chartered Accountant
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DEPOSITORY SYSTEM
Past President, BSE

Held several Senior Management positions with one of India's largest industrial groups
Mr. Pradeep Gupta - Vice Chairman Plus 17 years of experience in Financial Services
Mr. Amit Rathi - Managing Director
Chartered Accountant & MBA
Plus 11 years of experience in Financial Services

Individual:
Private wealth Management:
Affluent individuals need sophisticated advice and strategic guidance to capitalize on
opportunities to preserve, grow and transfer their wealth. In addition, a desire exists within
wealthy families to simplify the management of multigenerational needs and lessen the profound
emotional

impact

of

wealth

on

family

members.

AR offers the most extensive platform of customized servicing, individual strategies and
products to help meet the requirements of the affluent private investor. We provide
comprehensive, integrated investment strategies to address your wealth management needs.
Working closely with specialists across firm PWM offers an array of products & services, which
includes AR's highly-rated research.
Philosophy
We at Anand Rathi try and understand your financial needs; to offer you personal advice and
expert analysis that you need to make your assets go the Xtra mile. Our ability to think far ahead
and formulate a long-term strategy, coupled with long hours of practice and research are the key
drivers,

which

make

your

wealth

work

harder

for

you.

We believe that the key to build wealth lies in allocating assets across various markets, financial
instruments and industry sectors. Keeping this in mind we leverage our expertise in scientific
asset allocation, to help you maximize returns and minimize risks.
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DEPOSITORY SYSTEM

Process
We realize the need to simplify the complexities of the investment strategies and we achieve this
by offering highly customized wealth management product - LaXmi
Xtra Mile

TM

(let your Assets go the

TM

) Our Personalized Relationship Managers along with the expert team of analysts

and advisors will assist you in analyzing all your investment needs and advice you on specialized
solutions

created

exclusively

for

you.

We have a dedicated research team who constantly screens the market for investment prospects.
The team provides support in fine-tuning the investment strategy & suggests how to capitalize on
these opportune

Products
Brokerage and Distributiontribution & Distribution
Equity & Derivatives Brokerage
Anand Rathi provides end-to-end equity solutions to institutional and individual investors.
Consistent delivery of high quality advice on individual stocks, sector trends and investment
strategy has established us a competent and reliable research unit across the country.
Clients can trade through us online on BSE and NSE for both equities and derivatives. They are
supported by dedicated sales & trading teams in our trading desks across the country. Research
and investment ideas can be accessed by clients either through their designated dealers, email,
web or SMS

Mutual Funds
AR is one of India's top mutual fund distribution houses. Our success lies in our philosophy of
providing consistently superior, independent and unbiased advice to our clients backed by indepth research. We firmly believe in the importance of selecting appropriate asset allocations
based on the client's risk profile.

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DEPOSITORY SYSTEM
We have a dedicated mutual fund research cell for mutual funds that consistently churns out
superior investment ideas, picking best performing funds across asset classes and providing
insights into performances of select funds.

Depository Services
AR Depository Services provides you with a secure and convenient way for holding your
securities on both CDSL and NSDL.
Our depository services include settlement, clearing and custody of securities, registration of
shares and dematerialization. We offer you daily updated internet access to your holding
statement and transaction summary.

CDSLDepository
Commodities
Commodities broking - a whole new opportunity to hedge business risk and an attractive
investment

opportunity

to

deliver

superior

returns

for

investors.

Our commodities broking services include online futures trading through NCDEX and MCX and
depository services through CDSL. Commodities broking is supported by a dedicated research
cell that provides both technical as well as fundamental research. Our research covers a broad
range of traded commodities including precious and base metals, Oils and Oilseeds, agricommodities such as wheat, chana, guar, guar gum and spices such as sugar, jeera and cotton.In
addition to transaction execution, we provide our clients customized advice on hedging
strategies, investment ideas and arbitrage opportunities.

Insurance Broking
As an insurance broker, we provide to our clients comprehensive risk management techniques,
both within the business as well as on the personal front. Risk management includes
identification, measurement and assessment of the risk and handling of the risk, of which
insurance is an integral part. The firm deals with both life insurance and general insurance
products across all insurance companies.

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DEPOSITORY SYSTEM

Our guiding philosophy is to manage the clients' entire risk set by providing the optimal level of
cover at the least possible cost. The entire sales process and product selection is research oriented
and customized to the client's needs. We lay strong emphasis on timely claim settlement and post
sales services.

Our services :

Risk Management

Due diligence and research on policies available

Recommendation on a comprehensive insurance cover based on clients needs

Maintain proper records of client policies

Assist client in paying premiums

Continuous monitoring of client account

Assist client in claim negotiation and settlement

IPOs
We are a leading primary market distributor across the country. Our strong performance in IPOs
has been a result of our vast experience in the Primary Market, a wide network of branches
across

India,

strong

distribution

capabilities

and

dedicated

research

team

We have been consistently ranked among the top 10 distributors of IPOs on all major offerings.
Our IPO research team provides clients with indepth overviews of forthcoming IPOs as well as
investment recommendations. Online filling of forms is also available.
Other IPOs handled

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DEPOSITORY SYSTEM

Name of Company
Date of Issue
Technocraft Industries (India) Limited
Jan 23, 2007
XL Telecom Limited
Dec 07, 2006
Hanung Toys and Textiles Limited
Oct 05, 2006
Plethico Pharmaceuticals Limited
Apr 17, 2006
Gallantt Metal Limited
Mar 10, 2006
Bombay Rayon Fashions Limited
Nov 17, 2005
Prithvi Information Solutions Ltd
Oct 28, 2005
Shri Ramrupai Balaji Steels Limited
Jul 14, 2005
Provogue (India) Limited
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DEPOSITORY SYSTEM
Jun 16, 2005
Emami Limited
Mar 10, 2005
Corrigendum to Technocrat Industries (India) Ltd.

Institutional services
The Institutional sales and trading team provides cutting edge market information and investment
advice to clients, coupled with excellent execution capabilities. A highly experienced and reputed
team of equity analysts supports the sales team. There is an extensive focus on research on
companies, sectors and macro-economy. The institutional equity team tracks nearly 250 large and
mid-sized

companies

to

give

clients

an

unparalleled

breadth

of

ideas.

We also provide Investment Advisory Services for institutional clients in India and overseas for
investment in the Indian equity markets.
Research
Our research expertise is at the core of the value proposition that we offer to our clients.
Research teams across the firm continuously track various markets and products. The aim is
however common - to go far deeper than others, to deliver incisive insights and ideas and be
accountable for results. AR research processes incorporate quantitative areas well as qualitative
analyses. This multi-pronged approach helps us to provide superior risk- adjusted returns for our
clients.AR analysts provide objective and decisive research that is designed to enable clients to
make informed investment decisions
The team covers entire spectrum of financial markets from equities, fixed income, and
commodities to currencies. They also cover the global markets, to give clients an unparalleled
macro-view of the investment opportunities across the globe.

Corporate Services
Institutional wealth Management:SACET-CHIRALA

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DEPOSITORY SYSTEM
Corporate and Institutional treasuries need ever more sophisticated advice that is backed by
serious and credible research. AR IWM provides its institutional clients integrated wealth
management solutions across global markets, which are backed by proprietary global economic
& investment research.We understand that your needs could range from finding short-term
surplus management strategies to higher yielding and long term investments. The IWM team
brings together the highly-rated AR research across fixed income, currencies and equities
markets to provide investment solutions that meet your complex needs - from simple moneymarket mutual funds to complex arbitrage strategies in the equities or commodities markets.
Products

Equity & Derivatives

Mutual Funds

Depository Services

Commodities

Insurance

IPOs

Client List

ACC

Bayer

Century Textiles

Clariant

CRISIL

Crompton Greaves

Dabur

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DEPOSITORY SYSTEM

Datamatics

GE Shipping

Godrej

Goodlass Nerolac

Grasim

Gujarat Ambuja Cements

Gujarat Pipavav Port

Heinz India

Hindalco

Hindustan Lever

H&R Johnson

IDFC

Indian Rayon

Jindal Group

Larsen & Toubro

Mastek

Mahindra & Mahindra

Raymonds

Sterlite Group

Syngenta

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DEPOSITORY SYSTEM

Tata Iron & Steel

Trent

VSNL

Wartsila
Research

Our research expertise is at the core of the value proposition that we offer to our clients.
Research teams across the firm continuously track various markets and products. The aim is
however common - to go far deeper than others, to deliver incisive insights and ideas and be
accountable for results. AR research processes incorporate quantitative areas well as qualitative
analyses. This multi-pronged approach helps us to provide superior risk- adjusted returns for our
clients.
AR analysts provide objective and decisive research that is designed to enable clients to make
informed investment decisions.
The team covers entire spectrum of financial markets from equities, fixed income, and
commodities to currencies. They also cover the global markets, to give clients an unparalleled
macro-view of the investment opportunities across the globe.

Investment Banking and & Corporate Finance:

Investment Banking
AR Investment Banking provides comprehensive services to clients including raising money in
the equity capital markets to identifying strategic alliances, mergers and acquisition opportunities
and debt financing & restructuring advisory.
Corporate Finance

The AR Corporate Finance team helps clients manage their debt-

financing needs by profiling business and cash-flow risks, defining the alternative sources of
funding , building in multiple variables such as currencies, fixed-floating, tenure, collateral etc.
in a comprehensive manner and finally negotiating with the prospective lenders / buyers.
The team has also built an impressive track-record in debt restructuring based on its superior
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DEPOSITORY SYSTEM
understanding

of

business

needs

and

relationships

with

key

lenders.

The Corporate Finance team has handled assignments in businesses like paper, hospitality,
telecom, textiles and sugar.
Services : Investment Banking :
Merchant Banking
A highly experienced equity capital markets team, a pan-India distribution presence and a high
level of quality and integrity in executing client's transactions has enabled us to provide tangible
value to our clients' businesses.We bring quality independent advice and excellent execution
capabilities to create landmark transactions for clients. Our track record of successfully lead
managed IPOs includes Tips Industries, Emami, HCL Info systems and Prologue.

M&A, Private Equity

Our Mergers & Acquisition team works with clients in creating lasting stakeholder value through
advice on mergers, acquisitions, divestitures and private equity financing. The team leverages on
the firm's superior understanding of businesses and tax and regulatory environments as well as a
deep

network

of

relationships

across

the

professional

and

corporate

world.

We have worked extensively with clients in industries like cement, sugar, chemicals, power and
textiles for mergers and acquisition deals, valuation and business restructuring
Corporate Finance :

Raising Cost-effective debt resources in Rupee and Foreign Currency for Projects,
Working Capital and Specific needs.

Financial Restructuring, CDR, OTS, Interest Cost Reduction, Long-term Corporate

Loans for Working Capital Margins.

Financial products and services in hedging of interest and currency risks

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DEPOSITORY SYSTEM
Distribution Capabilities

Strong pan- India distribution network, with presence at over 130 locations across India.

Leading distributor of equity related products including IPOs & mutual fund

Have been consistently amongst the top 8 brokers, inspite of not being a lead manager.

50000 plus captive Institutional clients and HNIs

Strong after market support

To know more about our distribution strength, please see table below.

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DEPOSITORY SYSTEM

All India 9th rank for 2004-05 on basis of

procurement

Month

IPO

of All

issue

Rank

Suzlon

Sep-05

7th

Talbros

Sep-05

3rd

Sasken Comm

Aug-05

5th

IDFC

Jul-05

8th

Jul-05

1st

ILFS investsmart

Jul-05

5th

Yes Bank

Jun-05

5th

Provogue

Jun-05

3rd

Gokaldas Exports

Apr-05

6th

Emami

Mar-05

2nd

Shri

Ramrupai

Balaji

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DEPOSITORY SYSTEM

Jet Airways

Feb-05

11th

Bharati Shipyard

Dec-04

7th

NTPC

Oct-04

7th

TCS

Aug-04

11th

Dishman Pharma

Apr-04

4th

NDTV

Apr-04

7th

Patni Computer

Feb-04

7th

TV Today

Dec-03

7th

Indraprastha Gas

Dec-03

6th

Maruti Udyog

Jun-03

8th

2003-04

Full Year

8th

2004-05

Full Year

9th

2005-06

Till Oct-05

7th

Corporate Advisory Services:SACET-CHIRALA

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DEPOSITORY SYSTEM
AnandRathi Advisors assists companies in realizing tangible improvements in various facets of
their businesses by providing a range of corporate advisory services that includes the entire
gamut from financial, organizational and operational restructuring, to profit improvement and
business turnaround strategies.Highly qualified and thoroughly professional, our specialists,
experts and associates assist you in conceptualizing problems and devising effective solutions,
whatever be your need.Successful assignments undertaken for leading organizations in India as
well as overseas bear ample testimony to our wide-ranging capabilities, utilizing our unparalleled
business know-how to give you the competitive edge.
We have successfully handled various assignments under industry segments like refinery,
cement, mining, power, paper, metals, airlines and optic fiber.

Services

Performance Improvement and Cost Reduction

Business Strategy and Re-engineering

Financial, Business & Organizational restructuring

Business Turn-around Strategies

Management Systems: MIS, Review & Control Mechanism

Case Studie
TPI
Profile
A USD 6 Billion group with fully integrated petrochemical complex & 10 mTPA cement
capacity

Assignment

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DEPOSITORY SYSTEM

Performance & profit improvement - Increased profits by USD 150 mil in 1999
compared to 1997

Hands on implementation of the MIS and the review mechanism

Business turnaround strategies leading to profit improvement & enhanced valuation

Conserving the working capital resource, leading to uninterrupted operations & increased
capacity utilization

Marketing strategies for

Products & territories,

Exports, Distribution & logistic

Salesman wise & customer wise targets

Sustained gradual increase in domestic price of cement

Financial & Business Restructuring

Interaction with international investment bankers in preparation and internal

vetting of the restructuring & divestment proposals

Negotiation with creditors for debt restructuring & with the strategic investors for
divestment, resulting in 54% upping of the initial bids

Various trouble shooting assignment including dealing with the media, SET & SEC,
international accounting & legal firms, Creditors & investment bankers

Bharat Aluminium Co Ltd

Profile
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DEPOSITORY SYSTEM
Turnover of Rs 12 Billion with 2 lakh MTPA Alumina and 1 lakh MTPA Aluminum capacity

Assignment

De-bottlenecking of Alumina plant resulting in performance improvement from 500

mTPD to 580 mTPD Alumina production.

Substantial reduction in specific power and steam consumption.

Achieved annual savings and increase in profits by about Rs 320 mil per year in mining
as well as process plant.

Annual savings of about Rs 40 mil per year in raw material procurement

Implementation of better mining practices and control.

Review and Improvement of measurement, automation and control pra

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DEPOSITORY SYSTEM

REVIEW OF LITERATURE
DEFINITION AND MEANING:
The term depository is defined as 'a central location for keeping securities on deposit'. It is
also defined as 'a facility for holding securities, either in certificated or uncertificated form to
enable book entry transfer of securities'.
It is understood from the above two definitions that the depository is a place where securities
are stored, recorded in the books oh behalf of the investors.
In recent times, the volume of securities and the size of the business handled have increased
manifold. Hence, the present day depositories are fully automated to serve the customers faster
and accurate.
Therefore, a depository can be defined as, "an institution which transfers the ownership of
securities in electronic mode on behalf of its members".
A depository is a nominee who keeps the scrips on behalf of the investors. He undertakes the
custodian role. The depository leads the capital market towards a scripless system through
immobilization and dematerialisation of share certificates. Immobilisation of securities means
stopping the physical movement. The number physical certificates that pass between company
and customers becomes negligible as lodged and the immobilised certificates are registered in
the name of depository nominee. Dematerialisation means issue of one certificate in favour of
the Depository Nominee or not issuing the certificates. The depository
operates the computerised book entry transfer for the securities. This results in a speedier and
more liquid trading environment. The depository also undertakes the trade and settlement
processing through its subsidiary as a part of its function.

OBJECTIVES OF A DEPOSITORY:SACET-CHIRALA

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DEPOSITORY SYSTEM
A depository enables the capital market to achieve the following objectives:
1. Reduce the time for transfer of securities.
2. Avoid the risk of settlement of securities.
3. Enhance liquidity and efficiency.
4. Reduce cost of transaction for the investor.
5. Create a system for the central handling of all securities.
6. Promote the country's competitiveness by complying with global
Standards. 7. Provide service infrastructure in a capital market.
ACTIVITIES OF THE DEPOSITORY
The main activities of the depository are as follows:
1. Accepting deposit of securities for custody.
1. Making computerised book entry deliveries of securities which are immobilised in its
custody.
2. Creating computerised book entry pledges of securities in its custody.
3. Providing for withdrawal of securities.
2. Undertaking corporate actions like distribution of dividend and interest.
4. Redemption of securities on maturity.
INTERACTING INSTITUTIONS
:-There are three institutions that are interacting in a depository system.
1. The Central Depository.
2. Share Registrar and Transfer Agent.
3. Clearing and settlement corporation.

1. Central Depository
The central depository is a nominee who holds the securities on behalf of the investors and
maintains records related to that in an electronic mode.
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DEPOSITORY SYSTEM

2.Share Registrar and Transfer Agent:The registrar is an institution that controls the issuance of securities.
The transfer agent is one who retains the names and addresses of registered securities
owners and reregister traded securities in the names of new owners.

learning and Settlement Corporation:It is a centre to do trade matching and settle the funds and exchange securities^,

TRADING IN A DEPOSITORY SYSTEM:When the investor sells his share, The Depository debits the free Balance of the seller and credits
the Available Balance of buyer for the scrip traded on the settlement day. After the payment has
been made by the buyer, the Available Balance will be converted into free balance which can be
traded by the buyer. It is like ,a Share Bank where the balance are in the from of different
corporate entities shares instead of currency. Confirmations statements are sent to the investors
after the accounts are adjusted or at stipulated intervals. The delivery and settlement process will
be the same as at present except that physical delivery will be replaced by a book entry.

TRANSFER OF OWNERSHIP
In the case of trade, ownership in the shares are transferred from one account to
another .Other than trade settlement, the transfer can also take place between the same
investors accounts with the same Depository Agent. The investor may also transfer the shares
to another account within the same Depository Agent transfer of securities to immediate family
Member is also possible. The transfer of shares can take place on account of the investor
offering the shares as collateral security for a loan .In this process .When the loan is repaid ,the
lien is cancelled and thereafter the shares will be available for trade

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DEPOSITORY SYSTEM

DECLARATION OF DIVIEDND/BONUS/RIGHTS
Though the shares are in the names of the names of the Depository Nominee the real owners are
individuals or institutions. When a company declares

dividend/rights or bonus issues the

depository will prepare the record of investors as on the record date and submit it to registrar of
investors as on the record date and submit it to the registrar of Company. The dividend will be
sent by the Registrar after calculating the dividend payable to each investor directly. When a
company declares bonus shares, the registrar will calculate the bonus entitlement and advise The
Depository the number of shares to be credited to each account on the basis of the application
and allotment. Based on this advies, the investors account will be credited the Depository
Reporting System.
The Depository is functioning in an advanced automated
environment. So, the reporting system is fast and highly superior. The investors get the following
statements regularly: (i) contract statements with details of trade, (ii) confirmation statements
with details of trade, (iii) monthly traded particulars and (iv) quarterly statements showing the
security balances.

DEPOSITORY SYSTEM IN INDIA

The agenda for capital market reform was set in motion by the government in tandem with the
policy of economic liberalisation. Modernisation of stock exchanges and related system and
procedures constituted an integral part of this programme. The stock exchanges in India were
characterised by lack of transparency, complex trading procedure and age old settlement system
resulting in inordinate delays and manifold risks.
The settlement system called for physical movement of share certificates in recording
ownership changes in the company books. The serious risks associated with the paper based
settlement system were bad deliveries, delays in transfer and registration, mutilation, loss,
forgery and theft of certificates. The share transfer in India takes place on an average about 2
months while in other countries it takes just a few days. The inadequacies of the settlement
mechanism were brought into sharp focus and highlighted on several investors forums. There

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DEPOSITORY SYSTEM
was a pressing demand to modernise the infrastructure and introduce automated trading to bring
Indian capital market at par with world standards.
Promulgation of the Depository Act, 1996 is one of the series of stepstaken by the
government for removing the shortcomings of the present system.
The depository system aims at replacing the manual system of share transfer, settlement of
transactions and physical delivery of shares by a method of simple book entries. The system is
envisaged to reduce the total time taken to complete a transaction and ensure greater liquidity^

Features of the Act:

Source: An Investor's Guide to Depository NSDL.
Investor

complaints

present

day

will

complaints

be

reduced

relate

to

substantially
signature

as

majority

difference,

time

of

the
lapse

during the transfer and mutilated certificates.

The financial institutions will not have the problem of processing and storing of huge
volume of scrips. They can depute their team for other productive business development
oriented purposes.

It would be possible to send notices and annual reports without delay because all
securities of the company with the participant are accumulated and held in the name of
the participant in the Depository's booky

BENEFITS to the Capital Market:1. The capital market will be more transparent as the trading, clearing and settlement
mechanism have to be highly automated and interlinked with the depository among
themselves.
2. The market will be highly automated and efficient due to the usage of computing and
telecommunication technology for the back office activities for all the capital market
players.
3. The investors confidence will improve due to the above two aspects.
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DEPOSITORY SYSTEM
4. The foreign investors will start participating in the market resulting in a more buoyant
capital market.
"5. The existence of depository will result in increase in the volume of trade both by number
and value

Citeman Network----December 10,2008

Technology has changed the face of Indian Stock Market in the Post-liberalization era,
increasing the value of activities
The Depository System involves, the concept of paperless trading, because shares in
electronic form.
Need: A lot of time is consumed in the process of allotment and transfer of shares and
many problems in physical shares transfer like, theft, fake or forged transfers and
signature mismatches.
Source: www.ise.com

The move on Depository System in India --- December 10, 2008 --- Citeman
Network
The move on Depository was initiated by Stock Holding Corporation of India Ltd., In
July, 1992. It prepared a concept on National Clearance and Depository System.
SEBI constituted 7 member squad to discuss various parameters to establish Depository
System.
Indian Government promulgated the Depository ordinance in September, 1995. The
Depository Act was passed by parliament in August, 1996
SEBI has allowed multiple depositories to ensure competition and transparency.
The Dhanuka Panel it its draft for Depository Act, 1998 recommended to empower SEBI
to make trading in Demat shares mandatory.

Source: WWW.ise.com

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DEPOSITORY SYSTEM
M.R.Mayya, Chairman----ICSE
The first commencement of trading in the ISE on February 26, 1999.
A decision taken by SEBI on August 9, 1999 to permit a stock exchange to become a
member of another stock exchange.
At the end of 1999 over 5000 companies accounting for over 85% of the market
capitalization have agreed to dematerialize their shares.
There are 110 Depository Participants operating from over 1 230 cities. Nearly 2 million
investors have opened account with Depository Participant at the end of 1999.
Source: WWW.ise.com

More loopholes in the Depository System --- March 27, 2006 Indian Express
On Friday, a pink news paper reported that SEBI had asked banks to dematerialize shares
pledged as collateral in order to prevent fraud based on the regulators finding that some
listed companies had obtained duplicate shares after the originals were pledged, and sold
duplicates in the market making a neat profit.
A Depository participant has listed eight companies which are flagged as defaulters for
failing to comply with Demat requests for over two years.
According to my sources, SEBI should design an integrated system that flags violations
of its guidelines and procedures even before an investor is forced to complain.

Services of Depository System

A Depository established under the Depositories Act can provide any service
connected with recording of allotment of securities or transfer of ownership of securities
in the record of a depository. Any person willing to avail the services of the depository
can do so by entering into an agreement with the depository through any of its
participants. A depository can provide depository services only through a DP. A depository
cannot directly open accounts and provide services to clients. Every depository in its byelaws must state which securities are eligible for demat holding. Generally, the following
securities are eligible for dematerialization:
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DEPOSITORY SYSTEM
1) Shares,

scrips

stocks, bonds, debentures, debenture stock or other marketable

securities of a like nature in or of any incorporated company or other body

corporate.
2) Unit of mutual funds, rights under collective investment schemes and venture
capital funds, commercial paper, certificates of deposit, securitised debt, money
market instruments, government securities and unlisted securities.
3) Securities admitted to NSDL depository are notified to all DPs through circulars
sent by email everyday. Investors are informed about these securities through
NSDLs website-http://www.nsdl.co.in/ - and NEST update-a monthly newsletter of
NSDL.

FUNCTIONS OF DEPOSITORY
1) Dematerialization: One of the primary functions of depository is to eliminate or
minimize the movement of physical securities in the market. This is achieved
through dematerialization of securities.
2) Account Transfer: The depository gives effects to all transfers resulting from the
settlement of trades and other transactions between various beneficial owners by
recording entries in the accounts of such beneficial owners.
3) Transfer and Registration: A transfer is the legal change of ownership of a
security in the records of the issuer. For effecting a transfer, certain legal steps
have to be taken like endorsement, execution of a transfer instrument and
payment of stamp duty.
4) Corporate Actions:

A depository may handle corporate actions in two ways. In

the

first case, it merely provides information to the issuer about the persons entitled
to receive corporate benefits. In the other case, depository itself takes the
responsibility of distribution of corporate benefits.
5) Pledge and Hypothecation: Depositories allow the securities placed with them to
be used as collateral to secure loans and other credits. In a manual environment,
borrowers are required to deliver pledged securities in physical form to the lender
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DEPOSITORY SYSTEM
or its custodian. These securities are verified for authenticity and often need to be
transferred In the name of lender.
6) Linkages with clearing system: Whether it is a separate clearing corporation
attached to a stock exchange or a clearing house (department) of a stock
exchange, the clearing system performs the functions of ascertaining the pay-in
(sell) or pay-out (buy) of brokers who have traded on the stock exchange.

DEPOSITORY PROCESS IN INDIA

The system consists of four constituents. They are I) The Depository ii) the depository
participants, iii) the beneficial owner and iv) the issuer.
1. The Depository: - The depository is entrusted with securities for affecting the transfer of
ownership of the securities. He is the custodian of his clients securities . The depository
has no right over the security except with the transfer of it.
2. The Depository participants :- The depository participants is the link between the
depositories and the owner of securities. He is deemed an agent of the depository. The
depository therefore is responsible for the acts of omission and commission on the part of
the DP. The depository therefore is responsible for the acts of omission and commission
on the part of the DP. The depository and DP are registered with SEBI, which regulates
their functioning.
3. The Beneficial owner :- the beneficial owner is the real owner of the security. He lodges
his securities with the depository in the form of book entries. He has all rights and
liabilities associated with the securities.
4. The issuer: - It is the company, which issues the security.
The issuer avails choice to the investors for holding securities either in physical form or
through the depository, which makes the investor to choose and communicate back to the issuing
company at the time of initial offer itself.

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DEPOSITORY SYSTEM
Then the issuer intimates the depository details about the allotment of securities. The
depository in turn records the names of allotted of the securities in their records as the beneficial
owners. The name of the depository is entered by the issuer as the registered holder of the
securities.
The investor is free to alter his choice either at the time of applying for securities or at
any time thereafter.
An investor who wishes to avail himself of the services will have to open an account
with depository through a DP. The investor has to enter into an agreement with the DP after
which he is issued a client number.

OVERVIEW OF NSDL
Frame Work of NSDL:
NSDL:
NSDL is the first depository in India, established in August 1996 and promoted by
institutions of national stature, responsible for economic development of the country has since
established a national infrastructure of international standard that handles most of the trading and
settlement in dematerialized form in Indian capital market.
The Industrial Development Bank of India (IDBI), The Unit Trust of India (UTI)
and The National Stock Exchange (NSE) to provide electronic depository facilities for securities
traded in equity and Debt market promoted NSDL.
CDSL:
CDSL is the other Indian depository promoted by stock exchange, Mumbai in
association with Bank of India, Bank of Baroda, and State Bank of India and HDFC Bank. The
Central Depository Services Limited (CDSL) commenced operations in the year 1999.

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DEPOSITORY SYSTEM
SERVICES OF NSDL :
NSDL carries out its operations through various functionaries called Business
Partners, NSDL electronically linked its Business Partners viz., depository participants,
Registrar and Transfer Agents, Clearing Corporations / Clearing Houses. They are National
Stock Clearing Corporation Limited (NSCCL) and Bank of India Stock Limited (BOISL).
This is done on order to facilitate settlement of trades and to perform a daily
reconciliation of all account balances held with a NSDL/CDSL. The entire system is called
NEST (National Electronic Settlement & Trading) system. Thus, a highly integrated set up for
maintenance of investor accounts have been developed and implemented.
Depositories and its Business Partners are regulated by SEBI and
Governed by SEBI (Depositories & Participants) Regulations, 1996. The functioning and
operations of NSDL are governed by provisions of NSDL /CDSL byelaws and business rules
framed in accordance with the regulations.

Basic functions:
The main functions of Depositories (NSDL) are:
1.Dematerialization

2.Re materialization

Dematerialization Process:
It is the process by which a client can get physical certificates converted into
electronic balances maintained in its account with the agent called Depository Participant. In
simple terms the conversion of holding from physical to electronic form.
The securities held in dematerialized from are fungible. They do not bear any
distinguishable features like distinctive numbers, folio numbers or certificate numbers

Figure: 1
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DEPOSITORY SYSTEM
DEMATERIALISATION PROCESS

SHARE HOLDER

DEPOSITORY PARTICIPANT

OPENS CLIENT ACCOUNT NUMBER

DEMATERIALISATION REQUEST FORM (DRF)

In duplicate to DP

DP TO DEPOSITORY
(FORM DEMATERLISATION)

DRF +SHARE CERTIFICATE TO

ISSUER COMPANY / STA

(IN 7 DAYS)
ISSUER COMPANY / STA verifies records and authorities
ELECTRONIC CREDIT (with in 15 days)

STA intimates DP
Authorizing dematerialization of investor physical holdings and adjustment of physical
holdings depository will add dematerialized holding to

BENEFICIAL OWNERS ACCOUNT

Process of Dematerialization:
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DEPOSITORY SYSTEM
Figure: 2

DEPOSITORY

INVESTOR

PARTICIPANT

R&T

NSDL/CDSL

AGENT

PROCESS:
THE INVESTORS ARE SUBMITS THE Demat Request From (DRF) duly filled to his
Depository Participant along with physical certificate.
1. The Depository Participant informs depository (NSDL) of the investors request
for dematerialization.
2. The Depository Participant sends the physical certificates to the Registrars of the
company.
3. The NSDL confirms the request to the Registrars.
4. After sufficient scrutiny, the Registrars accept the request by giving electronic
credit. This is conveyed to the NSDL.
(The Registrar updates to the NSDL of the Electronic credit)
5. The NSDL apprises of the credit to Depository Participant.
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DEPOSITORY SYSTEM
6. Subsequently, the investor is apprised of his credit in his account.

Rematerialization:
Rematerialization is the exact reverse of dematerialization. It refers to the process of
issuing physical securities in the place of the securities held electronically in book-entry form
with a Depository. Under this process, depository account of a beneficial owner is debited for the
securities sought to be rematerialized and physical certificates for the equitant number of
securities are issued.
PROCESS:
1. The investors request for Rematerialized Request Form (RRF) to its Depository
Participant.
2. If RRF is found in order, the Depository Participant should accept RRF and issue an
acknowledgement to the client.
3. The Depository Participant in turn will also apprise the Registrar & Transfer Agent.
4. The depository will appraise the Registrar/Transfer Agents.
5. The Issuer or its Registrar & Transfer Agent should verify that RRF and after that
printing the physical certificates will update the Depository Participant.
6. The Issuer or its Registrar & Transfer Agent should then proceed to issue the physical
security certificates and dispatch them to the Beneficial Owner.
7. The Depository Participant, on receiving conformation of debit entry in DPM, should
inform the client accordingly. This entire process takes a maximum of 30 days.
Thus NSDL play a major role in this process. They also provide basic
services as follows.

Account maintenance:
NSDL interfaces their investors through its agents called
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DEPOSITORY SYSTEM
Participants. The investors are open a account with a Depository Participant is
similar to the opening of a bank account.

Settlement of trades through market transfer:

In India the stock exchanges have established electronic connectivity with NSDL
to facilitate settlement is respect of dematerialized securities.
The NSDL provides investors to buy or sell their share in any of the stock
exchanges linked to NSDL through a broker of his choice.
The NSDL includes the facilities like

Off market transfers

Inter depository transfer

Distribution of non corporate actions

Nomination / transmission

DEPOSITORY PARTICIPANTS:
Depository services are extended through its agents called Depository Participants (DPs). The
Depository Participant is the link between the shareholder, the Company and the Depository.
Banks, Financial Institutes, Custodians, Stock Brokers etc. can become DPs subject to their
meeting certain requirements prescribed by the depositories and SEBI.
An investor can open his/her account with one or more DPs as he/she likes. The
procedure for opening an account with the Depository Participant is similar to opening a saving
bank account with a bank. After having opened the account, an investor can hold shares of many
numbers of companies in his/her account, provided all such companies have entered the
depository system.

ELIGIBILITY:
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DEPOSITORY SYSTEM
Persons belonging to one of the following categories are eligible to become a Depository
Participant.

A Public Financial Institute as defined as section 4A of the Companies Act.

A Bank included for the time begin in the second schedule to the Reserve Bank of
India Act. 1934.

A Foreign Bank operating in India with approval of Reserve Bank of India.

A State Financial Corporation established under the provisions of section 3 of

State Financial Corporation Act, 1951.

An Institution engaged in providing financial services promoted jointly or ever by

any of the institutions mentioned in the four mentioned clauses.

A Non banking Financing Company.

A Clearing Corporation or Clearing house of a stock exchange.

A stock broker who has been granted a certificate of registration by SEBI.

Depository participant Services:

The depository participant is the link between the shareholder, the company and NSDL
and provides the following services.
Account Opening
To utilize the services offered by a depository, any person having investment in
any security or intending to invest in securities needs to have a d-mat account
with a Depository DP. This holder of such d-mat account is called as
Beneficial Owner (BO). A BO can maintain a d-mat account with zero balance
in such account. A BO can open more than one account with the same or multiple
Depository Participants, in the same name/s and order, if he/she desires so. The
investor can approach any Depository Participant/s of his/her choice to open dmat account.
Dematerialization

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DEPOSITORY SYSTEM
Dematerialization

is

process

by

which

physical

certificates

(of

shares/debentures/other securities) are converted into electronic balances. A BO

has to submit the request for dematerialization by submitting the d-mat request
form (DRF) duly completed along with the concerned physical certificates, to
his/her Depository Participant.
Processing Delivery & Receipt Instructions
To settle trades done on a stock exchange (on market trades) and trades, which
are directly settled between tow BOs (off market trades), BOs submit duly
completed delivery instructions in the prescribed from to Depository Participant.
For receipt of securities into his/her account, a BO can give one time standing
instruction to depository participant. Once such a standing instruction is given to
the Depository Participant, there is no need to submit separate instructions for
receipt every time the investor busy securities.

Account Statement
Generally a Depository Participant sends to the BO, a statement of his account, monthly,
if there is any transaction in the account or every quarter if the account is not operated
during that period.

Rematerialization
Rematerialization is the process by which the electronic balances held I the d-mat
account can be converted back into physical certificates.

Pledging
If the BO decides to pledge any securities in his BO account, he can avail of the same by
submitting the pledge creation form duly complete, to his Depository Participant.

Nomination
BO accounts also have a facility for nomination in favor of any person.d

TRANSMISSION OF SECURITIES
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DEPOSITORY SYSTEM
NSDL offers a facility for transmission of balances held in BO account/s (to other BO
account/s) if so required due to death, lunacy, bankruptcy, and insolvency or required due
to operation of any law

Changes in Address
A BO who wishes to register his change in address submits his/her request in writing to
his/ her depository Participant. The changes entered by the Depository Participant in the
CDSL system will be automatically downloaded to all the companies in which the BO is
holding securities. This facility offered by CDSL saves money, time and effort for the
BO.

Bank Account Details

SEBI has made it mandatory for companies to print details of bank account of the BOs on
dividend/interest warrants etc. to prevent possibilities of misuse of the warrants. All BOs
should submit a request in writing to the Depository Participant if they wish to
record/challenge their bank account details.

Role of Depository participants:

Depository participants are described as an agent of the depository. They are the
intermediaries between the depository and the investors. The relationship between the depository
participants and the depository is governed by an agreement made between the two under the
depositories act. In a strictly legal sense a depository participant is an entity that is registered as
such with SEBI under the provisions of the SEBI Act. NSDL offers a host services to the
investors through its network of depository participants.

Issuer / R & T Agent:

Corporate / companies which issue any kind of security are known as Issuer in the
Depository System. Only those securities, which are admitted into the depository system are
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DEPOSITORY SYSTEM
available for dematerialization to the holders of such securities or can be allotted in electronic
record form by the Issuer.
It is necessary for the issuer to establish an electronic electivity with NSDL either directly
or through a Registrar and Transfer Agent, who was already established connectivity with CDSL.
Role of Issuer / R & T Agent in Dematerialization of securities:
The depository electronically intimates on a daily basis all Dematerialization requests to
respective issuer or its R&T agency. The issuer are its R&T Agent have to verify the validity of
security certificates as well as the fact that demat request has been made by the person recorded
as member in its registrar members. After such verification, issuer or its R&T agent intimates
NSDL & authorizes an electronic credit for that security in favor of the client.
In the event of an intimation being received by the depository from issuer or R&T
Agency to credit the account of the client with securities, which dont match, with the details the
client or depository participant, the balance is held in suspense account
i.

Role of Issuer/R&T Agent in Rematerialization of Securities:

A client may withdraw its security balances with NSDL at any point of time by making
an application for Rematerialization to NSDL through its depository participant. When the
investor submits the RRF , the issuer and/or its R&T agent.

ii.

Role of Issuer/R&T Agent in Corporate benefits:

Its the function of issuer/R&T agent inform NSDL about the corporate action relating to
prescribing dates for book closers, record dates, and dates for redemption or maturity of security,
dates of conversion of debentures, warrants, call money dates and such other action from time to
time.
The Issuer/R&T agent may, if the benefits in the form of securities, distributes such
benefits clients through NSDL.
Clearing Corporation/Clearing House:

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DEPOSITORY SYSTEM
This term applies to any entity engaged in the activity of clearing and settlement of trades
on any recognized stock exchange may be admitted as user on NSDL subject to its entering into
an agreement as raid down in the bye-laws of NSDL.
A different agreement has to be drawn up if a clearing house of a stock exchange
is not a legal counter party to the trades on the exchange and the trade/settlement guarantee fund
is held and managed by the exchange. A third kind of agreement has to be entered into if the
members/dealers of the exchange are not the clearing members of the clearing house.
Admission criteria:
i.

The clearing corporation or a clearing house of stock exchange has adequate

hardware and software systems to interact with NSDL as specified in the
business rules.

ii.

NSDL is satisfied that the clearing corporation or a clearing house stock

exchange operates in such manner that it ensures payment against delivery or
guarantee settlement.

iii.

The clearing corporation or a clearing house of stock exchange under takes to

corporation at all times to redress the grievances of clients & depository
participants on respect of its operation in relation to NSDL.

Clearing members/Brokers:
Clearing Members/Brokers are the members of the clearing corporation/clearing
houses, who facilitate settlement of trades done on stock exchanges. They could be a broker or
custodian registered with SEBI as such is an important intermediary in the capital market and
essential link in the depository participant

Role of clearing members/Brokers:

Clearing members/ Brokers are continuously monitor the deliveries received for pay in
or from pay out for the subsequent reconciliation of trade settlements very easily.
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DEPOSITORY SYSTEM

They subsequently reduce const of his operations for himself as well as for his clients.

Clearing members/Brokers are also offering one-stop services to clients in respect of trading and
Depository service, not only the increases his business but also can effectively monitor client
account position and insulate from failure in settlement
In the world of financial services and India's financial multiplex, IL&FS Invests mart
Limited (IIL) is a premier financial service organization providing individuals and corporates
with customized financial management solutions.
customers

financial goals and helping

IL & FS work towards understanding

them to their goals. Our institutional expertise,

combined with a thorough understanding of the financial markets results in appropriate

investment solutions for investors. At IL&FS Investsmart, we recognize that investors dreams,
needs, aspirations, concerns and resources are unique. This is reflected in the approaches of the
company towards there investors. IL&FS concentrates at having a deep appreciation for the
value and building a long term participant with their investors.

DATA ANALYSIS AND INTERPRETATION

Analysis is done on the basis of information gathered through the questionnaire to
ascertain the awareness of investors about depository system. The data analysis is based on seven
parameters they are Age, Source of awareness of depository system, mode of communication
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DEPOSITORY SYSTEM
between depository participant and Investors and Accessibility of depository participant service
center.
TABLE-1
Awareness of share market
Options
Investors
Percentage

Yes
42
84.00

No
08
16.00

Total
50
100

Figure - 4
Interpretation
The above table reveals that 84% of the investors are aware about the share market and
16% of the investors are not aware about the share market.
TABLE 2
2). Investors awareness of depository system
Options
Investors
Percentage
SACET-CHIRALA

Yes
43
86.00

No
07
14.00

Total
50
100
68

DEPOSITORY SYSTEM

Figure -5
Interpretation
The above table reveals 86% of investors know about depository system remaining 14%
investors are not aware of depository system.

TABLE 3
Participation in Depositories
Options
Investors
Percentage

SACET-CHIRALA

Yes
30
60.00

No
20
40.00

Total
50
100

69

DEPOSITORY SYSTEM

Figure - 6
Interpretation
In the table 60% of the investors are participants in depository system remaining 40% of
investors are not participants in depository system.
Above analysis present days most of the investors are look into security and less time
consume for trading of shares through electronic mode.
TABLE 4
Motivational factors
Options
Investors
Percentage

SACET-CHIRALA

Security
28
56.00

Transparency
10
20.00

Regulation
12
24.00

Total
50
100

70

DEPOSITORY SYSTEM

Figure -7
Interpretation

Above table shows that 56% of investors preferred depositories for security reasons and
21% of investors interested for transparency remaining 23% are preferred for regulation.

Above analysis most of the investors interested in security because the benefit of
security is elimination of bad deliveries and all risks associated with physical certificates, such as
loss, theft e
TABLE 5
Services offered by depository system
Options

BSE

IL & FS

NSE

TOTAL

Investors

22

14

14

50

Percentage

44.00

28.00

28.00

100

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DEPOSITORY SYSTEM

%OF

70
60
50
40
30
20
10
0

Percentage
Investors
BSE

IL & FS

NSE

OPINION

Figure -8
Interpretation

Above table observed that 44% investors are interest through BSE and 28% of investors
are interest through IL & FS remaining 28% of investors are interest through NSE.
According above table tells most of the investors are interest of trading activities through
BSE . NSE and IL & FS are equal importance of trading activities with investors and depository
participants.
TABLE 6
Satisfaction with companys depository procedures

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Options

Yes

No

Total

Investors

41

50

Percentage

82.00

18

100

72

DEPOSITORY SYSTEM

Figure - 9
Interpretation:Above table reveals that 82% of investors satisfied with company depository procedures
and 17.86% of investors are not satisfied with company depository procedures.
Above analysis observed that investors are interest in dematerialization means physical
shares convert into electronic mode this is used for investors in pledging and hypothecation
facilities, freezing/locking of investors account and stock lending and borrowing facilities.

TABLE 7
Level of satisfaction of investors
Options

Fully satisfied

Partly satisfied

Total

Investors

39

11

50

Percentage

78.00

22.00

100

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DEPOSITORY SYSTEM

Figure - 10
Interpretation:Above analysis 78% of investors are fully satisfied with procedures of the company and
22% of the investors are partly satisfied with procedure of the company.
Most of the people are fully satisfied in company procedure because company provides
carries out settlement of trades not done on the stock exchange, transfer securities and maintains
investor holding in the electronic form etc.,
TABLE 8
Provide up-to-date information in depository system

SACET-CHIRALA

Options

Yes

No

Total

Investors

39

11

50

Percentage

78.00

22.00

100

74

DEPOSITORY SYSTEM

Figure - 11
Interpretation:Above survey observed that 78% of investors are satisfied for depository system provide up-to
date information and 22% of investors are not satisfied regarding depository system not
providing up-to-date information
TABLE 9
Mode of communication between Depository Participant and Investors
Particulars

No. of investors

Percentage

E-mail

21

42%

Post

26

51%

Personnel information

03

07%

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Figure -12
INTERPRETATION
The above table reveals that 42% of Depository Participants are communicating with the
investors through E-Mail. 51% of investors are informed through post and 7% are informed
personally. Above analysis most of the investors communicating with company and depository
participant through E-mail services
TABLE 10
Type of investment
Particular

No of investors

Percentage

Equity

36

72%

Preference shares

10

20%

Debentures

08%

Total

50

100

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Figure - 13
INTERPRETATION
It is found in the survey that majority of the investors are investing in a combination of
instruments. The below table explains the pattern of investments of investors. Few of the
investments are dealing with all the varieties of instruments such as Equities, Debentures and
Mutual Funds etc.
Above analysis most of the investors interested in dematerialized in equity.
TABLE 10
Opinion of the investors on Anand Rathis overall performance
Particular

No of investors

Percentage

good

33

66%

Very good

12%

Cant say

08%

Bad

2.5%

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Very bad

1%

Total

50

100

The above table shows that majority of the investors i.e 66% were opinioned that overall
performance of the Anand Rathi services are good. Only 3.5% of the respondents were
dissatisfied with Anand Rathi performance.

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6.1 FINDINGS
1) Most of the investors investing in the Share market are aware about the Depository
Participant.
2) The investors are managing funds mostly through brokers and online trading.
3) The investors know about the Depository Participant through friends, Depository
participants and brokers.
4) The investors are communicating their Depository Participants services mostly through email and personnel intimation.
5) The awareness of the services provided by the NSDL is not reaching the investors who
are below 25 age group.
6.2 SUGGESTIONS
1) The minimum balance for opening account maintenance, charges should be minimized to
attract the great volumes of investors.
2) It is suggested to Depository Participants and other regulatory authorities, successors of
SEBI, to conduct awareness programs in rural areas.
3) In the survey, it was found that only high-income group investors are familiar with
Depository participant.
4) Middle and Lower income people are not aware of Depository participant.
5) Depository Participant have to concentrate on below 25 age investors.
6) The depository participant are suggested to advertise in regional language to facilitate the
investors to understand easily.

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6.3 CONCLUSIONS
1) The inspection of Depository System in Indian Capital Market has been only during the
1990s. However, when it has finally arrived ti was a welcome change for the investors
who were bogged down with many problems of scrip based trading.
2) The growth of Depository Participant has seen a sea change both in the size of
Depository participants and in the number locations.
3) However, the growth was not restricted to the volume of Depository participants. The
quantity and value of share being converted into electronic form.
4) The primary players in the whole process are companies. The role played by them in
encouraging share holders to convert their stock into electronic form.
5) Thus, we encourage all the investors to avail this service of Demat and take Indian capital
market to a new height. The concocted fears of the investors can be put to sleep and they
can join in the already moving hand wagon.
6.4 LIMITATIONS OF THE STUDY
1) The study is confined to only depository participants services through depositories and
awareness of investors about depository system only in twin cities.
2) By not considering the entire depository participants implications relating to the pattern
of trading may have been missed in this study.
3) Some of the investors may show lack of interest in providing the response which might
lead to biased information.

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BIBLIOGRAPHY
Books:
1) Financial markets & Institutions G.Ramesh Babu published by D.K Agencies(p) Ltd.,
1963
2) Financial Markets & Services E.Gordon, Dr.K.Natrajan
3) Depository System of India N.Sankaranarayana 19 Nov 1997
4) National Securities markets A Review
5) Indian Financial System 5th Edition MY.Khan published by Tata McGraw Hill
publishing company Ltd.,

Websites:

www.nsdl.co.in

www.cdslindia.com

www.moneycontrol.com

www.bse.com

www.nseindia.com

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Annexure - I

QUESTIONNAIRE TO UNDERSTAND INVESTORS

AWARENESS OF DEPOSITORY SYSTEM
NAME

AGE

QUALIFICATION

PROFESSION

ANNUAL INCOME

1). Are you aware of share market?

a) Yes

b) No

4). If yes what motivated you to option for depository system?

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b) No

3). Are you client of any depository participant?

a) Yes

b) No

2). If yes do you know about depository system?

a) Yes

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a) Security

b) Transparency

c) Regulations

5). Services offered by depository system?

a) BSE b) IL&FS

c) NSE

6). Are you satisfied with the companys depository procedure?

a) Yes

b) No

7). If yes what is your level of satisfaction?

a) Fully satisfied

b) Partly satisfied

8). Does your Depository system provide up to date information

regarding the changes in your depositary account?
a) Yes

b) No

9). what is the medium of communication between

Depository participants & Investors?

a) E-mail

b) Post

c) Personal Information

10). Which of these you want to investment in dematerialized form? [

a) Equity

b) preference shares

c) Debentures

11) How do you evaluate overall performance of the Anand Rathi ?

a) Very good b) Good c) Cant Say d) Bad e) Very bad
Thanking you

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