KIITSOM

On Job Training

[REPORT ON CUSTOMER
PERCEPTION ON ONLINE
TRADING]
It is an attempt to analyze the working of online portal provided by IDBI Capital Market Services (p)
Ltd. This report provides with a clear idea about the online trading system in India and its scope.

IDBI CAPITAL MARKET SERVICES PVT. LTD. Page 1

ACKNOWLEDGEMENT
I sincerely thank my external guide Mr. Manoj Ku. Samal,
Branch Head, I.D.B.I Capital Market Services Pvt Ltd. whose
contribution in my learning and analyzing the subject has been
instrumental. He was always there to listen and give advice. He
has been a friend and mentor. He showed me different ways to
approach things, he showed me different ways to approach
things and succeed thereby.
Special thanks goes to my internal guide Mr. Amiya Sahu, who
is most responsible for helping me to complete the writing of
this dissertation as well as the challenging research that lies
behind it. Moreover he taught me to be clear about my
objectives and work hard, without his encouragement and
constant guidance; I could not have finished this dissertation.
I also thank my parents, friends and colleagues whose support
has always been instrumental in supporting me and making me
believe in myself.
Thank You
Pankaj Sikaria

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 Contents

 Executive Summary
 Company’s Profile
 SWOT Analysis
 Indian Equity Market
 Online Trading Process
 Data Analysis
 Suggestions
 Conclusion
 Annexure

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EXECUITVE SUMMARY
As per the title suggested the project report has been prepared regarding the growth
and development of online trading in India. Online trading was initiated by NSE in
India and soon after other exchanges followed it. There was a major boom in year
2000 when lots of online trading companies came with a bang but only few
survived because of lack of computer knowledge and low internet penetration.

Online trading in India significantly contributes to the total trading segment. We

already witnessed a boost in the capital market due to the emergence of online
trading portal companies.

Online trading process is a system in which the customer has the privilege of
managing his portfolio with just a click of the mouse. This system is getting
popular day by day and is also getting better with time. Online trading systems
attaches the saving account of the customer with his demat account and trading
account, which further means that there is no hassle in transferring funds from one
account to the other for investment and disinvestment purposes. This is helpful to
both the customer and the brokerage firm as because hassle free transfers allow the
investor to do more transactions which at times is obstructed when there are
troubles in transfers.

The online trading system uses the portal system. The portal system works on strict
price time system. The brokers are linked to the exchanges through terminals
(VSAT) through. These terminal links are linked to the mainframe systems used by
the exchanges. The orders are given by the investors to the brokers or executed by
self. This system avoids the problems which existed in the offline trading system.
The investor here sets the exact price to trade, but in offline system, it was on the
broker and prices were prone to manipulation. The online trading system also has a
bonus advantage of transaction summary, which is the ledger which u can review
to tally your orders given and the orders are executed thereby.

The major players in the online trading market are Sharekhan , Icicidirect ,
Indiabulls, Motilal Oswal, Karvy and IDBI Capital Market Services ltd.

IBDI Capital Market Services ltd. , is a wing of Industrial Development Bank Of

India, offering Stock Broking, Distribution of Financial Products, Merchant
Banking, Corporate Advisory Services, Debt arranging and underwriting, Portfolio
Management of Pension Funds & Research services.

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The company is a major player in the equity and derivatives market, this service is
offered by the online portal www.idbipaisabuilder.in . This portal allows the
investors after he has created an account with the company, to login in their
accounts and trade thereby.

As this concept of online trading is still a new phenomenon in the country, an

attempt was made to check the successful impact of this portal launched by the
company and a survey was made asking clients of the company about how they
feel about the online portal offered by the company as well as the services
provided with the company.

The results are based on the answers given by the customers themselves and have
no bias. The analysis reveals the fact that the best feature of the company as rated
by the clients is the live streaming that it allows. The customers are a bit
unsatisfied with the time taken by the company to activate the account, but they are
very clear about the information given by the marketing employee about the
services offered by the company while opening the account. The company toll free
helpline number offered was significantly used by the clients and moreover they
are quite satisfied with the support staff of IDBI Capital Services Ltd. The portal
site is user friendly and the terms used in the site are well understood by the users.

But still the company has to stress more upon advertising division of the company
as most clients came to know about the company through friends and relative and
not from any advertising campaign employed by the company.

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Research
Methodology

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Title:
To determine the “Customer Perception of Online Trading
in India”
Title Justifiation:
The above title is self explanatory. This study mainly
deals with dynamics of online trading in India since its
inception in the year 2000. The trading volume of stock
exchange has increased since then and the services
offered by online stock traders has facilitated the Indian
Customer. The level ofIndian stock trading through online
has been increasing and provides a vast scope for the
future.
Scope of The Study
Since the year 2000,a big boom has been witnessed in the
Indian Stock Market when the market showed the coming
of Online Trading System. Many online stock trading
companies came but only few survived. The companies
that survived are getting handsome returns and also
attracting foreign investment. Nowadays this sector is
facing cut throat competition and also provides huge
growth prospects. The study helps to evaluate and analyze
the findings so as to present a clear view of customer
perception on online trading.

Research Design:
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Non- Probability
The non-probability respondents have been researched by
selecting the persons who does the stock trading with
I.D.B.I. Portal. The persons who donot trade have not
been interviewed.
Exploratory And Descriptive Research
The research is primarily both exploratory descriptive in
nature. The sources of information are primary in nature.
The objectives of the exploratory research is to gain
insights and ideas.
The objective of the descriptive research study is typically
concerned with determining the frequency with which
something occurs.
A well structured questionnaire was prepared and
personal interactions were conducted to collect the
response of the target population.

Sampling Technology
SAMPLING TECHNIQUE

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Initially, a study was made on problems faced
by the clients in using the I.D.B.I Portal to
understand the problems faced by them, which
was the base for the questionnaire.
SAMPLING UNIT

The respondents who were asked to fill the

questionnaire, customers of I.D.B.I Capital
Market Services Ltd are the sampling unit.
These respondents comprise of persons trading
regularly in securities.
SAMPLE SIZE

The sample size was restricted to 50

respondents only.
Sampling Area

The area of research was Bhubhneswar.

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LIMITATIONS OF THE STUDY

 There is a lack of awareness among people

about investing in the stock market. So the
people aware were very few in numbers.

 Most people are comfortable with traditional

system, and are resistant to the new
technologies.

 Few customers do not trade by themselves,

they use phone to give orders and trade.

 Many customers are financially illiterate,

which was a major limitation for the study.

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INTRODUCTION

I.D.B.I. Bank
Industrial Development Bank of India (IDBI) is the tength largest bank in the
world in terms of development. The National Stock Exchange (NSE), The National
Securities Depository Services Ltd. (NSDL), Stock Holding Corporation of India
(SHCIL) are some of the institutions which has been built by IDBI. IDBI is a
strategic investor in a plethora of institutions which have revolutionized the Indian
Financial Markets.

IDBI Bank, promoted by IDBI Group started in November 1995 with a branch at
Indore with an equity capital base of Rs. 1000 million.

Main functions of I.D.B.I. Bank

IDBI is vested with the responsibility of co-coordinating the working of
institutions engaged in financing, promoting and developing industries. It has
evolved an appropriate mechanism for this purpose. IDBI also undertakes/supports
wide-ranging promotional activities including entrepreneurship development
programmes for new entrepreneurs, provision of consultancy services for small and
medium enterprises, up gradation of technology and programmes for economic
upliftment of the underprivileged.

IDBI's role as a catalyst

IDBI's role as a catalyst to industrial development encompasses a wide spectrum of
activities. IDBI can finance all types of industrial concerns covered under the
provisions of the IDBI Act. With over three decades of service to the Indian
industry, IDBI has grown substantially in terms of size of operations and portfolio.

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Developmental Activities of IDBI
Promotional activities
In fulfilment of its developmental role, the Bank continues to perform a wide range
of promotional activities relating to developmental programmes for new
entrepreneurs, consultancy services for small and medium enterprises and
programmes designed for accredited voluntary agencies for the economic
upliftment of the underprivileged. These include entrepreneurship development,
self-employment and wage employment in the industrial sector for the weaker
sections of society through voluntary agencies, support to Science and Technology
Entrepreneurs' Parks, Energy Conservation, Common Quality Testing Centres for
small industries.

Technical Consultancy Organisations

With a view to making available at a reasonable cost, consultancy and advisory
services to entrepreneurs, particularly to new and small entrepreneurs, IDBI, in
collaboration with other All-India Financial Institutions, has set up a network of
Technical Consultancy Organisations (TCOs) covering the entire country. TCOs
offer diversified services to small and medium enterprises in the selection,
formulation and appraisal of projects, their implementation and review.

BUSINESS PROFILE OF IDBI Ltd. TODAY:

IDBI Ltd has three wholly owned subsideries of its own:

1. IDBI Capital market Services Ltd. (ICMS): It was set up in December

1993 tooffer abroad range of capitl market related services, including
bond trading, retail distribution, mutual fund distribution, equity broking,
client asset management, depository services, merchant banking, etc. It Is
a leading primary dealer of the country.

2. IDBI Home Finance Ltd.(IHFL): In order to make a foray into retail

financing, the erstwhile IDBI acquired the entire shareholding of Tata

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 Fianance Limited in Tata Home Finance Ltd. The housing finance
company has since been named as IDBI Home finance Ltd.

3. IDBI Intech Ltd. (Intech): It was setup in March 2000 to undertake

information technology(IT) related activities. However, as IT is not a
permissible business for banking companies under section 19 of the
Banking Regulation Act, 1949, IDBI Ltd. Is in the process of winding up
the operations of Intech.

IDBI Capital Market Services Limited

IDBI Capital Market Services Limited (IDBI Capital) offers Stock Broking,
Distribution of Financial Products, Merchant Banking, Corporate Advisory
Services, Debt arranging & underwriting, Portfolio Management of Pension Funds
& Research services to institutional, corporate and retail clients. IDBI Capital is a
major player in the Pension Fund Management with assets of over Rs.8250 Crores.
The Equity broking segment has scaled up its operations enhancing turnover of
cash segment by 40% over the previous year.[

Subsidiaries

Revenue BreakDown among Subsidiaries[9]

IDBI Capital as an institutional player provides the entire gamut of Capital Market
services encompassing:
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 1. Public Offerings
2. Qualified Institutional Placements
3. Buyback
4. Takeover
5. Preferential Allotments
6. External Commercial Borrowings, FCCBs, etc.

The above activities entails liasioning with institutional investors such as treasury
departments of Domestic Institutions, Banks and corporates, fund managers of
mutual funds, private equity firms, FIIs, HNIs.

IDBI Capital Market Services Ltd. (ICMS), as a Securities and Exchange Board of
India (SEBI) registered Merchant Banker, provides the following services:

 Public issue of Equity and Debt Instruments in Indian markets through

Initial Public Offering (IPO), Follow on Public Offering (FPO) and Rights
Issue
 Acts as a Book Running Lead Manager, a Lead Manager, a Co-Manager or
an Advisor to the Issue.
 Underwrites Issues of Equity and Debt Instruments.
 Markets various instruments with Qualified Institutional Buyers (QIBs),
High Networth Individuals (HNIs), Corporate and Retail investors.
 Prepares all documents like Prospectus / Letter of Offer and assists the
Issuer in complying with legal and statutory requirements of SEBI, Stock
Exchanges, Registrar of Companies (ROC) and authorities under various
corporate laws and economic laws for issue of securities.
 Advisory services on structuring of capital and debt, timing for raising the
same, choice of agencies to assist in the process of raising funds, etc.

The objective of IDBI capital market service catering to specific financial

requirements of financial institutions, banks, mutual funds and corporate houses.
The company provides a complete range of financial products and services that
includes:

 Stock Broking-Institutional and Retail

 Derivatives Trading
 Distribution of Mutual Funds
 Investment Banking
 PF/Pension Fund Management
 Retail Marketing of Bonds and IPOs

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  Depository Services
 Research Services

Over the last 5 years, the company has been ranked amongst the leading players in
each of these businesses. It has a strong agent network which caters to the
investment needs of retail investors in instruments like IPOs, Bonds, etc.

The company is a major player in the Equity and Derivatives market and a leading
manager of Pension & Provident Funds in the country. The company has executed
several mandates on the Issue Management and Corporate Advisory Services.

The company offers an online investment portal idbipaisabuilder.in with

advanced features and tools for an easy and informed investing experience in
Equities, Mutual Funds and IPOs.

ONLINE TRADING:

With the rise in the use of internet and penetration of computer companies and
advanced technology into the Indian market, the Indian equity market saw a
significant change in the process of buying and selling of securities through
internet on the computer systems known as Online Trading or E-Broking.

This system allows the investor to make investment decision or disinvestment

decisions by self and also materialize the decision just with a click.

The I.D.B.I Capital Market Services Pvt. Ltd.’s portal www.idbipaisabuilder.in is a

web portal which entertains its customers with the options of buying and selling.
All that the customer needs is a demat account with I.D.B.I Capital Market
Services Pvt. Ltd. The I.D.B.I portal facilitates with three in one account which
means that the savings account, demat account and trading account of the client is
attached altogether for easy in use and free flow of funds. The client can directly
transfer funds from his savings account to his demat account for investment
purpose.

The I.D.B.I portal facilitates a unique feature of live streaming, which means that
an investor can watch and analyze the market on real time basis. The portal also
displays the day high, day low, percentage change, bid quantity and other
significant news of the company whose security the client would wish to invest.

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This may be done through two types of accounts offered by I.D.B.I Capital Market
Services Ltd.

Type of Account Used In The Portal System:

1. Paisa Power Classic Account
Paisa Power Classic Account is online stock trading account for beginners
and low volume traders in India Stock Market. It allows investor to invest in
Equity, Mutual Funds and IPOs online. Following are few popular features
of this account:

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

b. Short learning curve helps you to start quickly.
c. Easy to use features.
d. Evaluate & buy mutual funds schemes online and check on fund
rankings through our performance map.
e. Apply for IPO’s online. No paper work or check required for applying
in IPOs.
f. Integration of: Online trading + Bank + Demat account
g. Trading is available in both BSE and NSE.

Paisa Power Classic Trading Terminal

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 2. Paisa Power Streaming Account
Paisa Power Streaming Account for online trading is for high volume and
frequent equity traders. As classic account this account also provides
investment options in Stocks, Mutual Funds and Initial public offers online.
Following are few popular features of this account:

a. Live refreshing equity prices, which enable you to keep track of every
price movement as soon as it takes place.
b. Setting price alerts on the scripts in order to notify you as soon as your
scrip reaches a particular price point.
c. Multiple market watches, message window and trading window.
d. Evaluate & buy mutual funds schemes online and check on fund
rankings through our performance map.
e. Apply for IPO’s at the click of a button without any of the hassle of
tedious paperwork and processes involved in an offline IPO
application.
f. Trading is available in both BSE and NSE.

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Paisa Power Streaming Trading Terminal

SWOT ANALYSIS
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.
Broadly speaking, Strengths and Weaknesses often relate to internal factors dealing
with core competences and resources that are under your control. Opportunities
and Threats are often external factors outside of your immediate control. I have
used the SWOT technique as my benchmark in a variety of areas: making major
decisions, recommending a strategy for a client, or even simply understanding a
company’s operation. In a business context it can often offer valuable guidance and
insight. Its goal as we addressed each specific quadrant was to openly and
honestly address each of the four areas:

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Strengths (Internal):
1. What does the company do well?
2. What are its assets?
3. What advantages does the company have over its competitors?

The Key strengths of IDBI capital Market Services in the areas of Debt Fund
Management are:

1. Fund Management experience of 10 years

2. Expertise in managing large corpus
3. Expertise in both Debt & Equity Market
4. IDBI Capital is the only Portfolio Manager in the Country to achieve
ISO 9001: 2000 Standard for Quality Management Systems in Fund
Management operations, with certification from TUV NORD an
accredited German standards firm
5. Substantial Returns Over Benchmark
6. IDBI Capital is a SEBI registered Portfolio Manager
7. Minimum Idle Days
8. Our fund management skill covers Portfolio Analysis that includes
ALM, Asset Allocation, Risk Analysis, Maturity Analysis and Yield
Analysis
9. Transparency of Operations
10.Strict adherence to Compliance Procedures

Their strength in Private Equity advisory is on account of:

11.Strong relationships with PE funds and their key decision makers

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 12.Strong execution team gives an edge on optimal structuring and
efficient closure of transactions
13.Value addition on entire structure of activities
14.Presence in All Segment/ Asset of the Financial Services: IDBI Capital
deals in Equity and Equity related products and is one of the highly
rated Mutual Fund Distributor (won two consecutive CNBC TV18
Institutional Financial Advisor Award). In Investment Banking and
Debt Capital Market- Rated in Top 15 by Prime Database
15.Group Strength in Debt Market: IDBI Capital is one of the leading
players in debt market with presence in primary dealership since July
2007. The current operations of primary dealership is conducted by a
group company, IDBI Gilts

Weaknesses (Internal):

1. Why is the company for sale?

2. What is done badly?
3. What is it losing money?
4. How might a change in ownership affect the staff?

Weakness in heavyweights weigh on Sensex

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 1. THE market was news-driven with buying interest in selective counters.
However, weakness in select stocks brought the benchmark indices
down to end the day in the negative territory.

2. The BSE Sensitive Index was down 12.26 points at 2980.74 as against
the previous close of 2993 while the slightly broad based S&P CNX
Nifty recorded a decline of 2.4 points to 949.45.

3. IDBI seeking to convert Rs 2,130 crore bondsIDBI Capital Market

Services, dwelling on an issue that is obviously baffling a lot of people
these days.

4. What has changed so as to create this negative sentiment on the equity

front

The market is in a correction mode. Other factors like rising interest rates in the US
and views on crude oil prices must be mentioned. These affect our market from
time to time. The recent correction of over 200 points has been driven mainly by
the weaknesses spotted in foreign economies (mainly US) and the lower-than-
expected results/guidance by the IT bellwether and certain other technology
companies. A bounce-back can be expected once good results start pouring in.

AFTER nearly a decade of reforms and furious efforts by policy-makers to put in

place international best practices, the Indian capital market presents a dismal
picture. With a series of scams over the decade, the stock market is in doldrums,
lacking in d epth and transparency. There is a pervading sense of despair and
frustration among investors with the drastic erosion of shareholder wealth, running
into several thousands of crores of rupees. The broking community has been hit
hard with declining volume s. And, with the new issues market is virtually dead.
Also, the Governments plans to shed its equity in public sector enterprises through
disinvestments have suffered a serious setback.

Primary market scandal

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Serious initiatives to reform the capital market began after the 1992 securities
scam, better known as the Harshad Mehta scandal. The Securities and Exchange
Board of India (SEBI), set up in 1998, was given statutory powers in 1992, which
were reinforced in 1995. Before the reforms, under the Capital Issues (Control)
Act, firms were required to obtain approval from the Controller of Capital Issues
(CCI) for raising capital and fixing the premium on the issue price. This Act was
repealed in 1992 and stat utory control on floatation and pricing of issues was
abolished, subject only to certain disclosure requirements. While SEBI enacted
certain disclosure requirements, events have shown that it was not able to enforce
them. There have been too many cases o f price rigging by companies before
public issues, managing often to fix exorbitant premia and take the investors for a
ride.

The abolition of the CCI and the boom conditions in the market in the wake of the
entry of foreign institutional investors (FIIs), saw an unprecedented wave of initial
public offerings (IPOs). The absence of a proper regulatory framework and the
failure of SEBI to monitor and supervise the flood of IPOs, led to a massive scam
in the primary market.

Reform measures

The major weaknesses of the secondary market, pre-reform, included lack of

transparency, speculative excesses and scant regard for the interests of small
investors. Large volumes of trade were executed outside the exchanges after the
trading hours; broke rs did not distinguish between personal and client accounts;
deals were not time-stamped; brokers contracts did not clearly separate price,
commission and carry-forward charges. There was a significant amount of insider-
trading.

With a view to removing the prevailing weaknesses in the market, reform measures
were initiated at a hectic pace, often without even bothering to create the essential
infrastructure and institutional framework. The National Stock Exchange (NSE)
was estab lished with the explicit aim of moving rapidly to nation-wide screen-
based trading. The NSE began operations in 1994 and soon acquired a reputation
for transparency. Competition from the NSE induced the BSE also to adopt screen-
based trading. In October 1995, an ordinance was passed providing for the
establishment of one or more depositories to take away the arbitrary power of
company managements to block the transfer of shares.

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Opportunities (External):
1. What has the competition missed?
2. What are the emerging needs of the customer?
3. What should this company be doing better?

The opportunity looked almost too good to be true. For sale: a stable company
with along-standing reputation and a competent and experienced senior staff

IDBI CAPITAL HAS SO MANY OPPERTUNITIES IN VARIOUS

SECTORS .THEY ARE AS FOLLOWING.

 Union Bank tie up with IDBI Capital

 Through this strategic alliance, customers of Union Bank will have the
opportunity to invest in equities, mutual funds and initial public offers using
the online trading platform of IDBI Capital

 Making investing an ‘easy’ and ‘informed’ experience through

www.idbipaisabuilder.in.

 Mumbai, 13th March 2008: IDBI Capital Market Services Ltd., a leading
provider of financial services in the country and Union Bank of India, a
leading nationalised Bank in the country, have today announced their
strategic tie-up to offer IDBI Capital’s internet trading services platform to
the Bank’s customers.

 It already has similar tie ups with Punjab National Bank, IDBI, Oriental
Bank of Commerce, Bank of Rajasthan and Karur Vysya BankUnion Bank

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 of India, with its network, ethos and customer-centric approach plan, is
attempting to address the fast-growing phenomenon of internet trading and
seamlessly cater to the convenience and value-seeking, cash-rich and time-
poor new-age consumers.

 The integrated portal IDBIpaisabuilder.in will allow customers of the bank

to seamlessly execute their transactions as per their needs and demands.

 Any customer of Union Bank of India at any of its CBS branches can use
this online trading platform from any place having an internet connection.
When the customer indicates an intention to purchase any security, his
account is earmarked with the amount. The amount is debited from his
account only when the transaction is put through and his demat account is
credited in due course.

 Similarly when he desires to sell securities, lien is marked on thee

securities. When the transaction is concluded his demat account is debited
and his account is credited in due course

 This new alliance is in line with IDBI Capital’s strategy of increasing its
reach and penetration across the country.

 This also facilitates the creation of new business opportunities and seamless
customer centricity by leveraging the core competencies of both the
organisations. Both organisations will work closely and leverage each
other’s strengths to eventually ensure “customer delight

 Commenting on the tie up with IDBI Capital, Mr MV Nair, Chairman &

Managing Director, Union Bank of India, said, This tie up takes Union Bank
one step closer towards its vision of becoming a one stop shop for financial
services offering technology technology based products for its customers

 An advanced online trading portal, IDBIpaisabuilder.in is built with a core

objective to provide easy and informed investing experience to investors.

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  This association will provide customers of the bank with a world class
online investing platform with the backing of two very reputed and
established financial institutions of the country.

 This strong alliance will help us to expand our services to the consumers on
a larger platform; IDBIpaisabuilder.in is targeted mainly at the retail
investors.

 The site will enable the investors to make an informed decision by

minimising risk involved in equity investment support the investor
throughout the entire investment process including faster trade executions

 IDBIpaisabuilder.in is a portal designed to empower the common investor

with the information and analytical tools needed to take charge of their
investing needs.

 The portal enables online investing in Equities, Mutual Funds and IPO’s.

 IDBIpaisabuilder.in helps investors make the right investment decisions by

providing them with pertinent news, information and analysis along with
company specific fundamental analysis. Facilities of investing online in
Equity (NSE & BSE), Mutual Funds (including SIP facility) and IPOs,
portfolio tracker, choice of equity trading platforms and custom stock
screener are some of the other unique features, apart from the
comprehensive information and analytical tools that are showcased on
IDBIpaisabuilder.in.

 The portal has been designed keeping a retail investor in mind for easier
comprehension and very easy navigation within the site

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  IDBI Capital Market Services Ltd. is a leading provider of financial services
and is a 100% subsidiary of Industrial Development Bank of India (IDBI)

 with the objective of catering to specific financial requirements of financial

institutions, banks, mutual funds and corporate houses

 IDBI Capital provides a complete range of financial products and services

that includes Stock Broking for Institutional and Retail clients, Depository
Services, distribution of Financial Products, Investment Banking, Investment
Advisory (Mutual Funds / Portfolio Management services), Corporate
Advisory services, Debt arranging and underwriting, PF/Pension Fund
Management, Client Asset Management, and Research Services.

IDBI Capital was recently adjudged the ‘Best National Financial Advisor –
Institutional’ at the CNBC-TV18 Financial Awards 2008, for the second
consecutive year

Threats (External):

1. Are the company’s competitors getting stronger?

2. Will a change in ownership be perceived negatively by vendors and
customers?
3. Does the company have cash to fund research and development?
4. Will it be possible to retain key employees after the sale

1. IDBI Capital Market Services Ltd. (ICMS) is a leading Fund Manager in the
country for Provident, Pension and Retirement Benefit Funds.
2. The Company is a SEBI registered Portfolio Manager and manage its
Client’s assets under both discretionary and non-discretionary mandates.
3. These services are provided to various public and private sector
undertakings and their provident, pension, retirement benefit and surplus
funds.

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 4. The Company’s client base includes leading pension and provident funds in
the country.
5. IDBI capital has been advising institutions, banks and corporates for their
investment in Debt, Mutual Funds and Equities over several years.
6. Its services include managing Client Assets--Pension & Provident Funds,
Surplus fund Management, Equity Portfolio Management and Mutual Fund
Advisory.

The funds have continuously yielded superior returns, which are

significantly higher than the benchmark.
ISO Certification 9001:2000

7. Keeping in view the importance of standardized processes and service

levels, the Company has gone in for ISO Certification for Fund
Management, and is the only company to have done so in this sector.
8. Being a public sector, the Company is also audited by Comptroller and
Auditor General (CAG) office and follows transparent practices.

Regulatory Approval
9.
IDBI Capital is a registered Portfolio Manager with Securities and Exchange
Board of India (SEBI) since 1998 and is authorised to undertake Funds
Management activities (Debt & Equity) for clients.
10.These activities would be governed by Securities and Exchange Board of
India (Portfolio Managers) Rules and Regulations, 1993. SEBI Regisration
No. of IDBI Capital is INP000000209, valid till the year 2010.

Indian Equity Market

Market Growth over the years have attained a high benchmark to sustain her
business and competition with other nations. From the early 1990s, Indian market
economy have been following a liberalized policy, by reducing government
restrictions on foreign trade and investment. The publicly owned industries are
privatized and profit earning sectors like the software and financial services,
pharmaceutical, biotechnology, nanotechnology, telecommunication, shipbuilding
and aviation are now been opened to private and foreign interests. India's GDP,
currently more than 9%, makes it one of the fastest developing economies in the

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world. Indian market growth ranks her in the tenth position in the world
economy.

The easing of restrictions in capacity expansion for incumbents, removal of price

controls and reduction in the corporate tax rate in the 1980s initiated the process of
market growth in India . India Market Growth got further accelerated with the
economic liberalization of 1991 which marked an end to the License Raj, thereby
ending many public monopolies and allowing direct foreign investment in many
sectors. The public sector is involved with sectors like railways and postal system
which are considered either to be too important or not enough profitable to leave to
the market forces only.

Today the leading markets of India are the - Indian Bullion Market, Indian Car
Market, India Commodity Market, India Debt Market, India Design Market,
Indian Equity Market, Indian Food Market, India Financial Market, Indian
Gold Market, India IT Market, India Money Market, Indian Real Estate
Market, Indian Retail Market, India Semiconductor Market, Indian Stock
Market, India Telecoms Market.

There's been an increase in the India Market Growth specially in the industries
dealing with manufacturing, construction, transport and communication, tourism,
personal products, health care, education and recreation, vehicle,
telecommunications and software. According to the Indian Finance Minister, P.
Chidambaram, companies like General Motors Corp., Royal Dutch Shell Plc. and
the like have invested in about 3,000 new factories and other expansion projects
worth about more than twenty billion dollars in Indian market since 2004, in
order to tide the growing market demand.

To hold the India Market Growth rate steadily, the government need to follow
certain policies which would widen and broaden the scope for the growth of
Indian markets in the near future. these are:

 systematic reform programme

 promoting competition and higher corporate investment
 investing in infrastructure, health care and education

The increase in India Market Growth i s reflected in the actions of the

government like boosting productivity, reducing poverty and providing people
with more sustainable lifestyles in both the urban and rural sector

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The Indian equity market has emerged as third biggest after China and Hong Kong
in the emerging Asian region, with a market capitalisation of nearly $600 billion, a
latest ADB report says.

According to the Asian Development Bank's Asia Capital Markets Monitor'report,

the combined market capitalisation of all the equity markets in the Emerging Asia
region stood at $5,770 billion (about Rs 290 lakh crore) at end of March 2009.

Indian equity market's capitalisation at the end of March 2009 stands at $598.3
billion (Rs 30.13 lakh crore) which accounts for about one-tenth of the combined
valuation of the entire emerging Asia region.

However, People's Republic of China is at the top of the chart with a marketcap of
$2,347.4 billion followed by Hong Kong with $1,293.7 billion, the data compiled
in the ADB report revealed.

The other markets in the emerging Asia region are -- Indonesia, Korea, Malaysia,
Philippines, Singapore, Taipei, Thailand and Vietnam.

Meanwhile the report stated, "Emerging Asian equity markets have collectively
lost 51 per cent of their market capitalisation since the onset of the financial crisis,
after steady and robust growth during 2003�2007."

Emerging Asia's equity markets had enjoyed a relatively long boom period that
stretched from 2003 to 2007 on the back of robust economic growth and continued
financial deepening.

In contrast to the emerging Asia, the developed nation United States' equity market
had a valuation of a whopping $9.53 trillion at the end of March 2009, while the
United Kingdom and Japan stock markets' had $1.74 trillion and $2.80 trillion,
respectively, the ADB report shows.

Besides, with significant increases in market size and trading activity, many
emerging Asian equity markets now boast substantial depth and volume. Turnover
refers to the total value of shares traded divided by market capitalisation and
provides a measure of market liquidity.

The turnover grew 54 per cent per year on average between 2003 and 2007,
however, with the onset of the crisis, emerging Asian equity markets experienced a
tightening in market liquidity.

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In 2008, turnover at Chinese equity market had been $3.82 trillion, Hong Kong's
was $1.62 trillion, while the Indian equity market had a turnover of $1.05 trillion,
the report showed.

SCOPE OF ONLINE TRADING:

The India trader is being fancied by the democratized world of online trading or
also known as e-broking. The regular and attractive advertisements in the print
media and electronic media have added to this fancy world.

But as we compare to the Western Countries, in India online trading has not still
grasped the market, but has shown a significant amount of progress in the past
years and the future of online trading is bright. That is why many companies are
coming into this form of business structure and the existing companies are
changing to this new format besides offline and other traditional forms of trading
business. With only a mere share of 10% online trading a combined gross turnover
of around RS.9000-10000 crores handled by the BSE and NSE together there is a
much greater scope for online trading . At present some of the dominant players in
the online trading market share besides IDBI Capital Market Services are:-

1. Sharekhan.com
2. Icicidirect.com
3. Unicon
4. 5paisa.com
5. Indiabulls
6. Kotak Securities
7. Motilal Oswal
8. Geojit Securities
9. Angel trading
10.Reliance Money

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 11.Religare
12.Karvy
13.IL & FS

Earlier the share market was not safe enough to invest but some of the changes in
the past 10 years in the India Share Market have created the interest of trading in
the shares by the people. Broadly we can classify three important factors which
have contributed to the development of online trading in India:-

Firstly the mojor step was taken by National Stock Exchange(NSE) in the year
1994 which allowed the electronic trading and seeing various other stock
exchanges in India followed soon. This helped in making fast, accurate and
transparent transactions, saving a lot of time then the traditional method of trading.
The investors were also saved by the clutches of the fraud brokers ar the times
when the clients were not aware of the true pictures of the shares.

Secondly, in the year 1996 the dematerialization of the shares came( DEMAT)
which avoided the online presence of shares in an electronic form avoiding them
from theft, pilferage or from other loss like counterfeiting and frauds regarding
share transfer.

The third reason was the rapid growth of computer education learning of internet
by the people. With the evolving of internet the online trading became a hit and the
investors become confident in investing just with a click.

With the happening of such events the ratio of trading has improved a lot. As it
takes less time, the technology is praised by the people. Some people who traded
rarely now even trade 2-3 times a day as it provides the edge of researching about
the companies with the help of internet.

If person who trades in equities, derivatives, commodities etc through the use
internet it is known as ONLINE TRADING, enabling the investor to connect
electronically to buy or sell stocks, derivates and other share market instruments.
This can be done with the help of online service providers.

The benefits are:

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  A person can see the latest market movement through streaming quotes.
 Reduces time lag due to self execution and instant confirmation.
 Empowers traders to have a complete control over their trading decisions.
 A person can access hid accounts and related information on the website.
 Provides greater convenience of trade as a person can trade from any
convenient location.
 It is cheap in terms of cost associated and offers reduction in overheads.
 A trader can view historical charts on his computer.
 It allows the investor to have a look on the market dynamics to make
investment decessions.

The internet revolution has changed the way to communicate and the way to do
business in today’s society bringing closer and closer to vital sources of
information. It provides us with means to directly interact with service oriented
computer systems tailored to our specific needs; therefore, we can server
ourselves better by making our own decisions.

This new access by online trading customers to low cost transactions and
cutting edge, real time market information that formerly belonged only to
brokers has opened up extra ordinary new investment opportunities as well as a
crucial need for state of the art information.

Today the investors use the Internet Client Server technology to buy and sell the
securities at an instant at any point of time. People investing online have
reached proportions. Online trading allows an investor to buy and sell shares on
the exchange through Internet and helps in direct control of his investments.

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 ONLINE TRADING PROCESS
Today technology enables you to completely plan your investing needs in the
comfort of your home and at a time you like, all at the click of the mouse.

All you need is a computer with an Internet connection and a subscription to a

3-in-1 online investing account with any such service providers. Online mode
of investing largely eliminates all major hassles of investing:

• It provides a wealth of information, analysis and tools that enable you to

take more informed decisions,

• Virtually no paperwork involved as all transaction records are online and

statements available in digital form,

• You can invest anytime and from anywhere at your convenience (yes, even
at night),

• Integrated operations between your bank account, de-mat account and

trading accounts, and

• You can track your investment portfolio and net-worth online anytime.

Today, the online mode allows you to invest across different asset classes like
equity shares, mutual funds and IPOs amongst others. You can be your own
master in planning your investments. The online mode provides you the benefit
of getting up-to-date information and analysis, which is often sourced and
compiled, in an investor friendly format, from some of the best information
providers in their respective fields.

You are, therefore, not only able to take more informed investment decisions
but in the process is also able to reduce the probability of risk and improve the
probability of earning better returns on your investments.

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 Services to look out for. . .

To start investing online you would need to register as a member for an

integrated 3-in-1 online trading account with any of the service providers like
www.idbipaisabuilder.in. The three accounts are:

• Trading account, which enables you to transact online,

• An Internet-enabled bank account for online money transfers with any of the
banks with whom the online service provider has a tie-up, and

• Your demat account, where your shares will be deposited.

34 | P a g e
THE PORTAL SYSTEM:
Technology was used to carry the trading platform from the trading hall of
stock exchange to the premises of brokers. NSE carried the trading platform further
to the PC’s at the residence of investors through the internet and the handled
devices through WAP for convenience of mobile investors. This made a huge
difference in terms of equal access to investors in a geographically vast country
like India.

NSE has a main computer which is connected through very small apertures
terminal (VSTA) installed at its office. The main computer runs on a mainframe
computer at the Exchange. The broker works on his own terminal or the PC at his
own premises connected through a VSAT/modem/ lease line. An investor informs
a broker to place an order on his behalf. The broker enters the order through his
PC, which runs under Windows NT and sends signal to the satellite. The signal is
directed to the mainframe computer at the NSE site through the satellite. A
message relating to the order activity is broadcasted to the respective member.

The trading system operates on a strict price time priority. All orders received on
the system are sorted with the best priced order getting the best priority for the best
buy order match with the best sell order.

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 THE PORTAL SYSTEM USED FOR ONLINE TRADING

The features of the portal have been designed to empower the common investor
with the information and analysis tools to take charge of his investing needs.
The portal allows investing online in equities, mutual funds and IPOs

Tips on choosing your online investing account:

36 | P a g e
 Credibility and credentials of the service provider: While there are several
service providers, for any retail investor like you, the backing of a reputed bank
or financial institution can always provide that additional safety. Some service
providers also have an ISO certification for their online investing portal.

Investments that you can make online: Are you allowed to invest in equity
shares, mutual funds, futures & options and IPOs fully through the online route
or in only one of them? To derive the full power of online investing it is
important you get to invest in all.

Quality of information and content: Ensure you are getting the best
information, research support and tools in an easy and reader-friendly manner.
This would play a key role in taking informed investment decisions.

Speed of order execution: Are you able to place your equity orders and receive
quick order confirmations during peak hours or are you struggling to access the
site just when you need it most.

Are you getting wide array of products to choose from: A few service
providers provide a choice of products starting from the basic (classic) account
to more advanced (trading platforms with live and streaming market
information on equity markets).

Safety: Check for the inbuilt security features.

Customer care: Does the service provider have a dedicated customer care cell
to take care of your queries and problems?

Additional features: Besides the above criteria there are a combination of

several additional features whose importance can be determined based on your
own investing needs - ability to sell shares next day before receiving delivery,
SMS alerts, and intra-day trading in equities.

Benefits of online trading

 Ensures the best price for investors

This technique offers the best price for the buying and selling transactions of the
investors, by ensuring proper matching of their orders within the communication
37 | P a g e
network itself. Also due to the high level of transparency with regard to display of
information relating to the specific stocks and company profiles, the investors will
be able to get the best quote for the shares. This leads to a reduction in the
transaction cost for the investors.

 Offers liquidity to the investors

Online trading offers 24-hour trading facilities or trading for longer hours when
compared to the traditional stock exchanges. This provides added liquidity to the
investors.

 Offers greater transparency

Online trading gives greater transparency to the investors by providing them an

audit trail. This involves a complete integrated electronic chain starting from order
placement, to clearing and settlement and finally ending with a credit to the
depository account of the investor. All these stages are subject to inspection, thus
bringing in transparency into the system.

 Enables hassle free trading

Online trading integrates the bank, the brokerage firm and the demat accounts,
which leads to easy and paperless trading for the client.

 Allows quick trading

The investor will be able to execute the entire trading transaction, right from
logging on to the broker’s site, to the execution and settlement of his bank account,
in a very short period of time.

 Provides a level playing field

Trading on the net, gives even the smallest retail investor access to information
that earlier was available only to the big traders. This provides a level playing field
for all investors in the securities market.

 Reduces the settlement risk

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This method of trading reduces the settlement risk for the investor, as in this case
no short sale is possible i.e. the seller will not be able to sell the securities unless he
has their actual possession. In the case of a demat account (required for an online
transaction), when a seller wants to sell the securities, his demat account is checked
by the Depository Participant before executing the sale transaction. This reduces
the settlement risk for the buyer, who is assured of the delivery of the securities.

The trading on stock exchanges in India used to take place through open outcry
without using information technology for immediate matching or recording of
trades. This was time consuming and inefficient. This imposed limits on trading
volumes and efficiency. In order to provide liquidity, transparency and efficiency
NSE introduced a nation-wide nation-wide-online fully-automated screen based
trading system(SBTS) where a member can punch into computer quantities of
security and the prices at which he likes to transact and the transaction is executed
as soon as it finds a matching sell or buy order from a counter party. It allows
faster incorporation of price sensitive information into prevailing prices, thus
increasing the informational efficiency of markets. It enables market participants,
irrespective of their geographical locations, to trade with one another
simultaneously, improving the depth and liquidity of the market.

The process of online stock trading starts with the investor signing up with a online
brokerage house. Some online trading systems allow investors to complete the
entire application form over the internet while others require a copy to be mailed to
them using traditional mail. The form is a contract which allows the firm to trade
as an agentfor the investor at a present trading price. After the successful
completion of the application process, the client may start trading. When the
investor places a trade using the online system the investo is effectively signing an
electronic contract with the agent ot the brokers to buy or sell a certain number of
stocks at the market price or a price given by the client called the limit order. The
further step in the process is handled by the agent.

Questionnaire
Survey on Online trading portal of IDBI CAPITAL MARKET SERVICES LTD.

1. How did you get to know about IDBI CAPITAL MARKET SERVICES LTD.?

39 | P a g e
 a. Through a friends and relatives
b. Through hoardings
c. Through news papers
d. Through advertising on television

2. While opening the account, were the IDBI personnel accurate to provide
you with clear details of all the services offered by IDBI CAPITAL
MARKET SERVICES LTD.
a. Yes
b. No

3. Was there any grievance at the time of opening the demat account?
a. Yes
b. No

4. If yes what was it?

a. Miscommunication
b. Delay in process
c. Difficulty in opening the account
d. Too much paper work

5. How often do you seek help from toll free helpline?

a. Regularly
b. Once a week
c. Monthly
d. Rarely

6. In case of errors, does the support staff coordinate efficiently?

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 a. Yes
b. No

7. How do you rate the toll free customer helpline?

a. very satisfied
b. somewhat satisfied
c. satisfied
d. not satisfied
e. dissatisfied

8. Is the IDBI PORTAL user friendly?

a. Very much friendly
b. Fairly user friendly
c. Not user friendly

9. What do you like best in IDBI portal (www.idbipaisabuilder.in) ?

a. Live streaming
b. 3 in one account
c. Ledger facilities
d. Others ( specify)………………..

10. Do you clearly understand the terms that come up on the trading
site?
a. Very clearly
b. Clearly
c. Fairly
d. Somewhat understand
e. Do not understand

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 11. Any specific area where you find problem using the portal?

12. How satisfied are you with IDBI Portal (www.idbipaisabuilder.in) ?

a. very satisfied
b. somewhat satisfied
c. satisfied
d. not satisfied
e. dissatisfied

13. How much do you depend on tips provided on www.idbipaisabuilder.in?

a. Very much dependent
b. Fairly dependent
c. Not at all dependent

14. What according to you differentiates www.idbipaisabuilder.in from other

online trading portals?

15. What do you suggest for improvement of the portal?

Name: Profession:Age:
Phone Number:

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 ANALYSIS

Question 1

1.

30

20
Frequency

10

0
through friends and through hoardings through newspapers through advertising on
relatives television
1.

The bar chart above clearly displays the fact that the advertising tools used by
I.D.B.I Capital Market Services Pvt. Ltd are not impressive enough. The major part
of awareness of the company is through relatives and friends who already are using
the portal for investment purposes. This graph also brings in a note about the high
satisfaction that the client receives as he is referring this information to others he
knows.

Question 2
Q2

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 Cumulative
Frequency Percent Valid Percent Percent
Valid yes
31 62.0 62.0 62.0
no
19 38.0 38.0 100.0
Total
50 100.0 100.0

This question was asked to test the efficiency of the market team of the
company, how effective they are in giving a clear idea to the potential
consumers about the facilities and services provided by them.

62% of the sample agreed that they were clear about all the services and
facilities as explained by the personnel. The disagreement by 38% was because
of huge amount of less educated customers who think the equity market itself to
be a mystery.

Question 3

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 no
yes

15
30.00%

35
70.00%

This pie chart gives a clear pictorial representation of the problems that a consumer
faces while opening the account. 70% of the people surveyed did not have any
problems while opening the account with I.D.B.I Capital Market Services Ltd.
Whereas 30%were not totally satisfied while opening the account with the
company.

Question 4

45 | P a g e
 Q4

25

20
Frequency

15

10
21

16

5
7
4
2
0
no problems miscommunication delay in process difficulty in account too much paper
opening work
Q4

After asking the respondents about problems in account opening, they were then
asked about what problems they faced, maximum respondents had the problem of
delay in process, and they feel that the company takes a longer time compared to
others in the account opening procedure.

The company needs to make it more efficient, so that the grievances can be
minimized. Others grievances are very minimum in number so can be overlooked
as of now but delay in process has to be given due concern and minimized to as
early as possinle.

Question 5
46 | P a g e
 Q5

regulalry
once a week
monthly basis
rarely

8
16.00%

13
26.00%

11
22.00%

18
36.00%

The toll free number for grievances offered by the company is used adequately by the
respondents. This service is for grievance management and is efficiently known to
respondents.

Question 6

47 | P a g e
 Q6

no
yes

17
34.00%

33
66.00%

When asked the respondents, about the support staff, i.e. technical support and
guidance in case of any technical problems faced by the respondent, 66% of the
respondents were satisfied with the services offered by the support staff, where as 34%
were not. Few people in the unsatisfied category are those people who use old dated
systems and processors and in which the streaming gets affected because of the type
of machine they use, in which the support staff cannot do much.

Question 7

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 Standardized
Unstandardized Coefficients Coefficients t Sig.

Model B Std. Error Beta B Std. Error

1 (Constant) 1.603 .324 4.949 .000
Q5
.227 .106 .300 2.146 .037
Q6
-.212 .228 -.130 -.930 .357

When we used the regression model to find out the satisifaction level of the respondents
from the toll free number, the use of the toll free number played a significant role in the
evaluation of satisfaction level of the respondents.

Histogram

30

20
Frequency

23
10

14
12

Mean =2.08
Std. Dev. =0.778
N =50
0
1
0.00 1.00 2.00 3.00 4.00 5.00
Q7

Respondents were highly satisfied with the toll free services and a insignificant number
of respondents had a negative attitude towards this service.

Question 8

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50 | P a g e