FINAL REPORT ON COMPARISON OF DIFFERENT BROKERAGE HOUSES IN AHMEDABAD FOR INDIAINFOLINE STOCK BROKING LIMITED.

BY BHAVINI THAKKER

Acknowledgement

Any attempt at any level cant be satisfactorily completed without the support and guidance of learned people. It gives me a great pleasure to acknowledge all, who contributed in some way or the other towards the success of my project. I express my deepest sense of gratitude, profound respect and sincere thanks to Mr. Yagneshkumar godhaniya (sales manager @ India Infoline stock broking limited) and Dr Pradip Desai(Director at Dalia institute of management), for providing me this wonderful opportunity. I would like to express my deepest gratitude to Prof. Sanket Sheth (S.I.P guide ), for extending all the required facilities to me to carry out my project work without any sort of hindrance. I express my sincere thanks to all others who directly or indirectly helped me in the execution of the project.

PREFACE
Share trading in India is undergoing a transition and consolidation phase witnessed never before. The competition is likely to become so severe after the entry of many players, retaining a customer is most difficult practice for any service provider. Though India has a very big untapped market but the players will not flourish unless they change the way the customers are being served. Given the awareness level of today customers every player has to treat with care and make the customer feel that he is the king. Number of Online Share trader in India has crossed the line. More and more customers are coming under this umbrella and many of the existing one are changing pavilion. So customer retention and satisfaction is now more important as it was never before. Players keep coming with new schemes in order to attract new customers and retain the existing one. This is being supplemented with increased advertising and brand building efforts. Success of any organization depends upon its being proactive. An often quoted marketing adage is to manage a business well is to manage its future and to manage its future is to manage information. To give the student of management a feel of real world situation they are being sent to any organization where they work on a prescribed problem or a topic and come out with various conclusions and suggestions. I am very lucky as I got an opportunity to work with INDIA INFOLINE Ltd which is showing phenomenal growth and success in its Sector. My topic of study is comparision of broking firms This project is an effort to do a depth study and analysis of various known and unknown reasons for customer satisfaction and retention. To err is human and I am not an exception, valuable comments are always welcomed since it will motivate to work with greater zeal and efficiency in the future

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EXECUTIVE SUMMARY
A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets. Hence to gain money and acquire wealth many individuals invest in the capital market. To trade in the capital market one requires a trading account which is normally available in a dematerialized or demat form. Every field experiences competition and so does this. Many players have come down with their schemes and approaches to acquire larger market share. Hence comparison becomes necessary as to which company is better in providing efficient services and reasonable charges at the same time. The charge a brokerage firm may impose also depends on variety of factors i.e. the type of personalized services they provide. Some companies may lease some of the charges and charge some of the hidden charges. Hence it is necessary to compare various brokerage firms on the basis of the services provided and charges offered by them.

TABLE OF CONTENTS Sr. No 1 2

Table of contents

Pg. no

4.1 4.2

4.3

INTRODUCTIN HOW A BROKERAGE FIRM WORKS ROLE OF CHARGES IN A BROKERAGE FIRM DIFFERENT TYPES OF CHARGES A/C OPENING CHARGES ANNUAL MAINTENANCE CHARGES D.P. TRANSACTION

8 11

12

12

12 13

14

4.4 4.5

4.6

5.1

CHARGES BROKERAGE ONLINE ACCESS CHARGE CHARGES INVOLVED IN THE ISSUE OF CONTRACT NOTES COMPARISON OF THE CHARGES OFFERED BY DIFFERENT BROKERAGE HOUSES COMPARISON SHEET OF

14 16

16

17

18

5.2 6.

6.1

6.2

BROKERAGE CHARGES OF DIFFERENT COMPANIES ANALYSIS OF THE CHART SERVICES OFFERED BY THE BROKERAGE FIRMS. SERVICES OFFERED BY NETWORTH STOCK BROKING LIMITED SERVICES OFFERED BY

23 26

26

26

6.3

6.4

6.5

6.6

6.7

INDIA INFOLINE SERVICES OFFERED BY ANGEL BROKING. SERVICES OFFERED BY MOTILAL OSWAL SERVICES OFFERED BY INDIABULLS. SERVICES OFFERED BY SBI SERVICES OFFERED BY SHAREKHAN

30

34

35

36

36

6.8

SERVICES OFFERED BY RELIANCE MONEY

38

7.

8. 9. 10.

SERVICES PROVIDED BY DIFFERENT BROKERAGE HOUSES A TABULAR REPRESENTATI ON FINDINGS OF THE STUDY CONCLUSION RECOMMENDA TIONS.

39

40 41 42

11. 12.

LIMITATIONS OF THE STUDY REFERENCES

43 44

1. Introduction India Infoline has been successfully providing premium financial services and information for more than a decade. Their aim has consistently been to empower investors to take charge of their financial future & help them grow the net wealth.IIFL has always endeavored to make a difference in the financial services space. It constantly focuses on scaling and upgrading the technology infrastructure so as to provide the best services

The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading players in the Indian financial services space. IIFL offers advice and execution platform for the entire range of financial services covering products ranging from Equities and derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds and other small savings instruments. IIFL recently received an inprinciple approval for Securities Trading and Clearing memberships from Singapore Exchange (SGX) paving the way for IIFL to become the first Indian brokerage to get a membership of the SGX. IIFL also received membership of the Colombo Stock Exchange becoming the first foreign broker to enter Sri Lanka. IIFL owns and manages the website, www.indiainfoline.com, which is one of Indias leading online destinations for personal finance, stock markets, economy and business. IIFL has been awarded the Best Broker, India by FinanceAsia and the Most improved brokerage, India in

the AsiaMoney polls. India Infoline was also adjudged as Fastest Growing Equity Broking House - Large firms by Dun & Bradstreet. A forerunner in the field of equity research, IIFLs research is acknowledged by none other than Forbes as Best of the Web and a must read for investors in Asia. Our research is available not just over the Internet but also on international wire services like Bloomberg, Thomson First Call and Internet Securities where it is amongst one of the most read Indian brokers. A network of over 2,500 business locations spread over more than 500 cities and towns across India facilitates the smooth acquisition and servicing of a large customer base. All our offices are connected with the corporate office in Mumbai with cutting edge networking technology. The group caters to a customer base of about a million customers, over a variety of mediums viz. online, over the phone and at our branches OBJECTIVES The main objective of such a study is to know about the different services offered by different brokerage houses over Ahmedabad. As IIFL itself is a stock broking company it also helps to determine the product offered by it and the position of the product as of where it stands in the market. Many brokerage houses say that they provide lower charges , but most of them have hidden charges as DP charges etcand by having detailed information about the charges offered by such firms it sometimes becomes easier to market IIFLs product as against other products available in the market

SOURCES AND METHODOLOGY.

Primary Research Primary data is collected directly from respondents using data collection methods like questionnaires. We approach investors and traders and enquire about the services and charges offered by the brokerage firm they are dealing with. This provides us with the most reliable source of information as we are directly contacting the end users. Here the responses and feedback can be obtained faster, questionnaires can be delivered to the respondents faster, confidentiality is maintained as only the recipients read the questionnaire, respondents can reply to the questionnaire at their convenience and face to face interaction is possible. Here I am supposed to go to different brokerage houses and meet the person in personal and enquire about the services as well as charges offered by the respective brokerage house. The data collected would be in the form of questionnaires priorly prepared. And any other extra information that is available would be hence noted down. Information regarding the company and its services can also be collected by calling up the respective brokerage house. Under this we need to call the person working in the respective brokerage house and collect necessary information about the various services and charges offered by them Secondary research Data about the various branches of the brokerage house is easily available through the access of internet. We need to login into the site of each company and locate the branches under the section Branch locator.

2. HOW A BROKERAGE FIRM WORKS A brokerage firm acts as the legal mediator between a buyer and a seller of financial products, stocks or securities. Brokerage firms are usually associated with finance houses, although the terminology has been borrowed by the real estate and insurance industries as well. All investment trades must be made through a brokerage firm because individuals cannot interact directly with the stock exchange. Acting as an intermediary between buyers and sellers, a brokerage house typically employs brokers who carry out the wishes of the firm's clients as they pertain to the trading of stocks. Broker services are usually provided on a commission basis. Commission amounts charged for the buying and selling of securities vary with each brokerage house. Often, the price per trade is indicative of the level of service the firm offers. For example, a brokerage house that charges fees on the lower end of the scale may not execute trades as quickly as one that charges higher fees. Likewise, a firm that charges higher commissions usually offers more personalized service. In addition to commissions, a brokerage firm may charge various other fees. These fees may include charges for transferring assets, closing an account, and wiring money. Additionally, a brokerage firm may require the payment of IRA custodian fees, as well as annual services charges and fees related to periods of account inactivity. Depending on the policies of the brokerage house, a client's account may also incur a fee for failing to meet a minimum required account balance. A brokerage house may offer a variety of investment products or specialize in just one or two. Typical choices include stocks, mutual funds, and options, as well as government and corporate bonds. Over-the-counter (OTC) bulletin board stocks may

be offered as well. There are several different ways of executing trades. A brokerage house may choose to employ all or just some of them. For example, a firm may allow for trading over the phone or via the Internet In addition to the trading of various investment products, a brokerage firm may offer certain banking services. These services may range from money market sweeps and check writing to visa and ATM cards. Cash kept in a brokerage house money-market account may carry a higher interest rate than money held in a regular bank account. Often, a brokerage house may offer market research and investing strategies as well. Though much of the information uncovered by such research may be available on the Internet, many individuals don't have the time or the inclination to look for it. In such cases, having an account with a firm that conducts in-depth investment research may be extremely beneficial. 3. Role of charges in a brokerage firm A brokerage industry is a totally service based industry. In the earlier days there used to be a lot of paper work and hence charges also used to be high. But the scenario has been changed. With the advent of brokerage industry going online, the charges have been drastically reduced and all forms of work in a brokerage industry is carried out in dematerialized form i.e. demat form. Hence the main revenue that can be generated from a brokerage industry is through the charges that a firm impose on the variety of services provided by them. Hence charges occupy a primary importance in a brokerage industry.

4. Different types of charges. To generate revenue in a brokerage firm, a brokerage firm imposes a variety of charges pertaining to the trading and trading account. The different types of charges involved are discussed below: 4.1 Account opening charges The account opening charges are pertaining to the opening of a trading account. When an individual decides to carry out trade in the capital or commodity market, in equity or commodities or futures and options, he has to have a licensed account to carry out the trade. This trading account is available in the banks and the brokerage houses which carry out the actual function of trading. There are certain charges imposed to open this account with the b ank or a brokerage firm. The charges imposed for opening an account for various other players are as follows. Name of the company Account opening charges Networth Rs 250 India Infoline Nil Angel Broking Nil

Motilal Oswal Nil Indiabulls Rs 900 SBI Rs 400 Sharekhan Rs 750 Reliance Rs 500 Money R K Global Rs 700 L K P Shares Nil . 4.2 Annual Maintenance Charge. Just as opening an account requires certain amount to be paid; similarly there are certain charges that are imposed to maintain an account. Mostly these charges are imposed annually and are hence called annual maintenance charge. This is basically a charge that is imposed for providing the services. It differs from company to company. The basic strategy that any brokerage firm applies is that they charge nothing for the first year and from the 2nd year onwards a fixed amount is charged as an annual maintenance charge. For eg the annual maintenance charge in networth is Rs 450. The charges applied by different other companies are as below Name of the Annual company maintenance charge Networth Rs 450

India Infoline Angel Broking Motilal Oswal Indiabulls SBI Sharekhan Reliance money R K Global PUG Securities LKP Shares

Rs 650 Rs 300 Rs 400 Nil Rs 280 Rs 400 Rs 200 Rs 250 Rs 250 Rs 200

4.3 D P Transaction Charges. These are the charges that are imposed on every transaction or scrip. These are the charges wherein when a person buys certain scrip these charges are imposed on them Name of the D P Charges Company Networth Nil India Infoline Rs 15/scrip Angel Nil Broking Motilal Oswal Rs 20/scrip on selling

Indiabulls SBI Sharekhan Reliance Money R K Global LKP shares

Nil Rs 6/scrip on selling Nil Nil Rs 17/scrip on selling Rs 16/scrip on selling

4.4 Brokerage The main revenue that is generated in a brokerage firm is through the brokerage which it charges. Different companies charge different amount to gain maximum share in the market. Some apply the strategy of offering lowest brokerage charges and some claim that their brokerage rates are high due to the type of personalized services they offer. The brokerage charge is applied for two categories in which the trade is carried out. The trade can be carried out in two ways i.e. 1. Intra-day 2. Delivery 1. Intra-day

This type of trade is of one day. Buying and selling of a share occurs on the same day and hence it is called an intra-day trade 2. Delivery This is a type of trade wherein a trader buys the share and keeps it with him/her for a certain period of time. As the buying and selling does not occur on the same day it is said to be delivery type of trade. Hence the brokerage charges applied for both these type of trade are different and also different companies apply different charges. The schedule of these charges is as follows: Name of the Charges for Charges for company Delivery Intraday Networth 0.25p 0.03p India Infoline 0.30p 0.03p Angel Broking 0.30p 0.03p Motilal Oswal 0.40p 0.04p Indiabulls 0.50p 0.10p SBI 0.35p 0.075p Sharekhan 0.50p 0.10p Reliance Money 0.45p 0.05p R K Global 0.30p-0.05p 0.04p 0.02p LKP shares 0.50p 0.11p

Further more the brokerage charges are charged separately for the trade of futures and options. The charges for these are as follows

Name of the company Networth India Infoline Angel Broking Motilal Oswal Indiabulls SBI

Charges for Futures Rs 50/lot Rs 100 Rs 50/lot 0 to 5000/ 2.25% On value Rs 100 for buying and selling

Charges for Options 0.03% 0.03% 0.05p/lot 0.04% On value 0.05p

. 4.4.1 Calculation of brokerage charges on futures and options. a. Brokerage on options Calculation of brokerage on options can be made in two ways. 1. % wise

Consider if the premium is 20 Rs and brokerage is charged 0.03%. Let the strike prize be Rs 100, then brokerage can be calculated a Brokerage charge = strike prize *lot size*brokerage% =100*20*0.03 (in this case) 2. Lot wise This is a direct method. No calculation is involved. It is charged directly as 100 Rs/ lot. It can be both single leg and double leg. By single leg it means, either on selling or on buying. And double leg it meant both times. b. Brokerage on futures. Brokerage on futures contain cash prize instead of strike prize as in options. Thus brokerage is given as Brokerage = cash prize*lot*brokerage % 4.5 Online Access Charge This is the charge which a firm charges to its customer for providing an online streaming terminal to carry out the trade online by him/her. Most of the firm does not charge anything for the terminal but if the customer asks for the software of the company than the charges are imposed on it. It is a minimum charge that is charged for providing the software. 4.6 Charges involved on the issue of contract notes. As the trading has gone dematerialized the issue of contract notes as hard copy is not generally prevailing and hence not all the firms but some of them charge on the issue of

contract notes. Mostly contract notes are sent through e-mails. Also hard copies of the contract notes are issued only on the request of the client. Networth charges Rs 100 for the issue of contract note in hard copy. 5. Comparison of charges offered by different companies. As discussed above, different brokerage firms try to attract customers by offering different brokerage charges and services. The charges that are imposed are account opening charges, annual maintenance charge, brokerage, charges on the issue of contract notes etc. Hence it becomes very difficult for a customer as to where to go and where to have trading account, with which firm? Some of the companies say that they offer very less brokerage charges but there are hidden charges as DP Transaction charges, annual maintenance charges etc. Comparison can mainly be done by discussing the various points below: Brokerage is usually negotiable: Several of the clients trying to choose an online broker and open an online trading account must have been frustrated trying to search for the exact brokerage charges charged by various online brokers. But the fact is the brokerage charged by the same broker varies and in several cases is negotiable. For example if one goes and tell a brokerage house that he/she is going to deposit 2 lakh rupees and try to convince them that if you are going to trade heavily, they might consider reducing your brokerage. That is why in the above table you will find only a range for the brokerage charges in some cases. But that should be enough to get an idea. Effective brokerage with taxes is more: In addition to the above brokerage charges one will have to pay STT (Securities Transaction Tax) at the rate or 0.02% of the total

transaction amount. One will also be charged 12.5% Service Tax on the brokerage amount (and not on the transaction amount). For example, if your brokerage is 0.50% for delivery and you do a delivery transaction of Rs.100/- then the total brokerage you pay is 0.50 (brokerage) + 0.02 (stt) + 0.063 (service tax) = 0.58 . Thus your effective brokerage (including all taxes) will be 0.58%. Similarly for brokerage on intraday transactions. One may also like to compare brokerages charged by the online brokers mentioned above for trading in futures and options. In fact, making a comparison table of various brokerage houses just on the basis of brokerage charges turns out to be a fruitless exercise, as different brokers follow different policies for different segments (cash, intra-day, delivery, futures and options). Depending upon the turnover, initial deposit amount, frequency of trading, trading volume, types of trading etc, there ar accounts. Just look at few of the common names of online trading accounts advanced brokerage account, super saver account, classic account, premium account, trump account, 3-in-1 account, limit card account, light account, active account, professional account, freedom account, gateway account, and high trade account, to name the few. If you are an investor (not the trader) and especially the first-timer, then it would be really tough to take the right decision. Hence following points should be kept in mind as the most important points related with stock broking charges if you want to open an online stock trading account.

1. Most of the brokers will charge you one-time account opening fees varying from Rs. 200800 2. As per SEBI guidelines, a broker can charge maximum 2.5% brokerage, regradless of intra-day, delivery or F&O 3. As a retail investor, you will generally be interested in trades involving delivery, therefore look for the lowest delivery brokerage. 4. In most of the cases, average rate for delivery brokerage is around 0.5%. 5. Although many brokers offer variable brokerage (higher the turnover, lower the brokerage rate) but to be able to claim substantially lower rates (around 0.25%), you might have to do a trading turnover of more than one crore every year, which I doubt if any of you must be doing. 6. In addition to the brokerage, you have to pay various statutory charges connected with stock trading and you have to pay demat transaction charges. 7. Unless and until you thoroughly understand the intricacies of various brokerage plans, limit card plans, advance brokerage plans, brokerage rebate plans, annual subscription plans or any other plans, by whatever name they are called, you should stay away from such fancysounding trading accounts. Such accounts are generally suitable only for the sub-brokers, franchisees and HNI (high networth investors) traders. 8. Apart from lower brokerage rates, look out for the account that gives you lowest or zero fixed charges. That is, you do not have to pay any charges or fees other than the brokerage charge as and when you carry out any trades.

9. Go for the trading account in which you do not have to commit certain fixed turnover (trading volume) every day, month or year. Besides the brokerage rates, one may have to check out many other factors such as charges for online trading platform, web-based trading, call trading charges, convenience of funds and securities 5.1 COMPARSON SHEET OF BROKERAGE CHARGES OF DIFFERENT COMPANIES NAME Account Annual DP Brokerage OF THE Opening Maintaine Transacti COMPAN Charges nce on charges Y charges Intraday Delivery Futures Options Rs Nil 0.03p 0.25p Rs 0.03% Netw Rs 450 50/lot orth 250 Rs Rs 0.03p 0.30p Rs 0.03% India Nil 650 15/scr 100 Infoli ip ne Rs Nil 0.03p 0.30p Rs 0.05p/ Angel Nil 300 50/lot lot Broki ng

India Rs bulls 900

Nil

Nil Rs 400 Rs 200

0.10p 0.50p On value Nil Nil 0.10p 0.05p

On value 0.50p 0.45p

Sharekh Rs 750 an Kotak Rs 500 security

From the above table we can notice that account opening charges mainly ranges from Rs 200 to 900. Also, account maintenance charge range from nil to Rs 700and that of brokerage ranges from 0.02p to 0.10p for intraday and from 0.25p to 0.50p for delivery. Hence it is not possible to compare brokerage firms on the basis of charges only. Every company has their own advantages and disadvantages. Also we can also see that the company which offers less brokerage charges compensates their revenue by implying other sort of hidden charges. Hence it is also necessary to compare t Nowadays stock broking business is not only in stock broking but also provide varied financial services. Just to compare the charges that a brokerage house offers one has to treat each charge as the separate entity and then compare them. To start with I will compare account op 0

5.2 ANALYSIS OF THE CHARTS SHOWN ABOVE. For convenience I have shown the comparison chart of the various charges separately and then a combined chart comparing all the charges together are shown. It can be clearly seen from the chart that the company which provide nil or less charge for one type compensate that with some hidden charge. Compared to the other firms, it is seen that India Infoline doesnot have any account opening charges but the annual maintenance charge is the highest amongst all other firms considered here. Similarly for Motilal Oswal which has waived of the account opening charges has the highest D P Transaction charges amongst the firms considered. We can also see that out of the 10 firms 5 doesnot have any D P Transaction charges. The companies which have waived of their D P Transaction charges are Networth, Angel Broking, Indiabulls, Sharekhan, and Reliance Money. Out of all this companies networth charges almost average for all the charges, Angel broking has waived D P Transaction charges and also the account opening charges but the brokerage charges are comparatively high as in market through negotiations less charges are also available. Indiabulls has waived annual maintenance charges and DP FY2007 Net Sales 3766.7 % chg 21.2 Total 3,736.4 Expendit ure EBIDTA 30.3 (%of Net 0.8 Sales) Other 19.3 Income Depreciat 1.3 ion& Amortisa FY2008 3906.2 3.7 3887.1 FY2009 5656.4 44.8 5622.0

19.1 0.5 43.2 1.3

34.4 0.6 77.6 9.0

tion Interest 2.6 PBT 45.7 (% of Net 1.2 Sales) Extraordi 6.5 nary Expense/ (Inc.) Tax 10.6 arges and D P

2.1 58.9 1.5 7.3

2.7 100.2 1.8 -

10.2

15.3

(% of 23.2 17.3 15.3 PBT) 35.1 48.7 84.9 PAT % chg (13.6) 38.8 74.3 Ad. 28.6 41.4 84.9 PAT % chg (21.9) 44.9 105.2 Transaction charges but the account opening charges are relatively very high which is 900. Sharekhan doesnot imply D P Transaction charges but its account opening charges as well annual maintenance compensate on the other hand. Reliance money has also waived D P Transaction charges but all other charges are relatively quiet high. Thus, from the above discussion we came to know that only 2 out of 10 companies charge averagely otherwise all companies have compensated their revenue by increasing one or the other charges. The 2 companies which charge averagely are Networth Stock Broking Limited and Angel Broking. Networth stock broking Limited just because all the charges are almost average or below average besides this it has also waived of D P Transaction charges. Angel Broking because it waived 2 of its charges and the other rates are also average. But after comparison it is also necessary

to see that the company is not making loss because of its low charging policy. If it makes loss due to its charging policy then it wont able to sustain in the market for long. Two of the companies from the past records have shown that they are not loss making. profit making company. Going through the financials of angel broking limited it is evident that it is not at all a From networth s profile it is evident that the2009, but the investigation of P&L account and balance sheet of previous 3 years reveal that company was a profit making company. Going through the financials of angel broking limited it is evident that it is not at all a loss making company. For reference the P&L statement of both the companies are shown below: Angel Broking P&L Statemen

Y/E March Net Sales % chg Total Expendit ure EBIDTA (%of Net Sales) Other Income Depreciat ion& Amortisa tion Interest PBT (% of Net Sales)

FY2007 3766.7 21.2 3,736.4

FY2008 3906.2 3.7 3887.1

FY2009 5656.4 44.8 5622.0

30.3 0.8 19.3 1.3

19.1 0.5 43.2 1.3

34.4 0.6 77.6 9.0

2.6 45.7 1.2

2.1 58.9 1.5

2.7 100.2 1.8

Extraordi 6.5 7.3 nary Expense/ (Inc.) Tax 10.6 10.2 15.3 (% of 23.2 17.3 15.3 PBT) PAT 35.1 48.7 84.9 % chg (13.6) 38.8 74.3 Ad. PAT 28.6 41.4 84.9 % chg (21.9) 44.9 105.2 Networth stock 2008 2009 broking limited P&L Statement 2007 INCOME 289,574,646 494,978,461 386,880,639 1.income from operations (41,242,406) 2.income from trading & arbitrage activities 8,638,634 22,462,292 40,289,049 3.other income 298,213,280 517,440,753 385,927,282 EXPENDITURE 1.employme 131,074,734 203,845,610 170,076,905 nt cost 2.operating 28,575,377 72,121,771 100,673,253 expenses 3.administr 115,415,116 207,898,476 197,082,059 ative

expenses 9,808,252 16,817,043 29,551,119 4.interest and financial charges 284,873,478 500,682,899 497,383,336 PBIT 13,339,802 16,757,854 (111,456,054 ) Depreciatio 10,573,183 16,230,920 21,539,763 n PBT 2,766,619 526,934 (132,995,817 ) Less:provision for taxation 313,000 1,847,490 Current year tax (2,032,251) (2,667,343) Deffered tax (141,933) 51,744 55,167 Wealth tax 1,182,524 1,988,611 1,230,803 Fringe benefit tax (348,414) Prior year short/tax provision PAT 1,413,028 (980,246) (131,614,444 ) Thus by comparing the P&L statement it is evident that the company is notsufferring due to low brokerage charges.

6. SERVICES OFFERED BY THE BROKERAGE FIRMS.

6.1 Networth Stock Broking Limited. 1. A dedicated Relationship Manager would be allocated to every client for personalised service 2. For online A/c , client would be provided a streaming web based terminal through the interactive portal www.networthdirect.com or call/visit our branch. Client can also call our head office toll-free number accessible from any phone in India to place the orders. 3. DP instruction charges would be NIL which is being charge by other brokerage firms on per script basis. 4. The online streaming terminal access is provided which is as equivalent to the broker's terminal with a refresh rate of 5 secs. 5. Tie-up with 24 banks (Both public as well as private) for fast online transfer of fund. 6. A separate back-office called "My Networth" which is available 24/7 for getting all the details related to the account which is not provided by other firms. Besides these features it also provides financial services like financial planning, mutual funds, bonds/FDs, equities and derivatives, IPOs, online transactions, currency derivatives, life insurance, Merchant banking, commodities, general insurance, depository services, PMS, Loans etc.. 6.2 India Infoline. The services provided by India Infoline are shown and discussed below: Equities Indiainfoline provided the prospect of researched investing to its clients, which was hitherto restricted only to the institutions. Research for the retail investor did not exist prior to Indiainfoline. Indiainfoline leveraged technology to bring the convenience of trading to the investors location of preference (residence or office) through

computerized access. India infoline made it possible for clients to view transaction costs and ledger updates in real time. APPLY IN IPOs one can also invest in Initial Public Offers (IPOs) online without going through the hassles of filling ANY application form/ paperwork. PMS Our Portfolio Management Service is a product wherein an equity investment portfolio is created to suit the investment objectives of a client. We at Indiainfoline invest your resources into stocks from different sectors, depending on your risk-return profile. This service is particularly advisable for investors who cannot afford to give time or don't have that expertise for day-to-day management of their equity portfolio. Research Sound investment decisions depend upon reliable fundamental data and stock selection techniques. Indiainfoline Equity Research is proud of its reputation for, and we want you to find the facts that you need. Equity investment professionals routinely use our research and models as integral tools in their work. They choose Ford Equity Research when they can clear your doubts. Commodities Indiainfolines extension into commodities trading reconciles its strategic intent to emerge as a one-stop solutions financial intermediary. Its experience in securities broking has empowered it with requisite skills and technologies. The Companys commodities business provides a contra-cyclical alternative to equities broking. The Company was among the first to offer the facility of commodities trading in Indias

young commodities market (the MCX commenced operations only in 2003). Average monthly turnover on the commodity exchanges increased from Rs 0.34 bn to Rs 20.02 bn. The commodities market has several products with different and non-correlated cycles. On the whole, the business is fairly insulated against cyclical gyrations in the business. Mortgages During the year under review, Indiainfoline acquired a 75% stake in Moneytree Consultancy Services to mark its foray into the business of mortgages and other loan products distribution. The business is still in the investing phase and at the time of the acquisition was present only in the cities of Mumbai and Pune. The Company brings on board expertise in the loans business coupled with existing relationships across a number of principals in the mortgage and personal loans businesses. Indiainfoline now has plans to roll the business out across its pan-Indian network to provide it with a truly national scale in operations.

Home Loans Get expert advice that suits your needs Loan against residential and commercial property Expert recommendations Easy documentation Quick processing and disbursal No guarantor requirement

Personal Loans Freedom to choose from 4 flexible options to repay Expert During the year under review, Indiainfoline acquired a 75% stake in Moneytree Consultancy Services to mark its foray into the business of mortgages and other loan products distribution. The

business is still in the investing phase recommendations Easy documentation Quick processing and disbursal No guarantor requirement Invest Online Indiainfoline has made investing in Mutual funds and primary market so effortless. All you have to do is register with us and thats all. No paperwork no queues and No registration charges. INVEST IN MF Indiainfoline offers you a host of mutual fund choices under one roof, backed by in-depth research and advice from research house and tools configured as investor friendly. SMS Stay connected to the market The trader of today, you are constantly on the move. But how do you stay connected to the market while on the move? Simple, subscribe to Indiainfoline's Stock Messaging Service and get Market on your Mobile! There are three products under SMS Service: Market on the move. Best of the lot. VAS (Value Added Service ) Insurance An entry into this segment helped complete the clients product basket; concurrently, it graduated the Company into a one-stop retail financial solutions provider. To ensure maximum reach to customers across India, we have employed a multi pronged

approach and reach out to customers via our Network, Direct and Affiliate channels. Following the opening of the sector in 1999-2000, a number of private sector insurance service providers commenced operations aggressively and helped grow the market. The Companys entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues. The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy. Wealth Management Service Imagine a financial firm with the heart and soul of a two-person organization. A world-leading wealth management company that sits down with you to understand your needs and goals. We offer you a dedicated group for giving you the most personal attention at every level. Newsletters The Daily Market Strategy is your morning dose on the health of the markets. Five intra-day ideas, unless the markets are really choppy coupled with a brief on the global markets and any other cues, which could impact the market. Occasionally an investment idea from the research team and a crisp round up of the previous day's top stories. That's not all. As a subscriber to the Daily Market Strategy, you even get research reports of Indiainfoline research team on a priority basis. The Indiainfoline Weekly Newsletter is your flashback for the week gone by. A weekly outlook coupled with the best of the web stories from Indiainfoline and links to important investment ideas, Leader Speak and features is delivered in your inbox every Friday evening. .

6.3 Angel Broking

The services provided by angel broking is discussed below: a. Equities Three different online products tailored for traders & investors Customized single screen Market Watch for multiple exchanges Real-time rates Flash news & intra-day calls Intra-day & historical charts with technical tools Online research E-broking & back-office software training Support 24x7 Web-enabled Back Office Centralized Help Desk Live Chat support system b. Derivatives The derivative segment is a highly lucrative market that gives investors an opportunity to earn superlative profits (or losses) by paying a nominal amount of margin. Over past few years, Future & Options segment has emerged as a popular medium for trading in financial markets. Future contracts are available on Equities, Indices, Currency and Commodities. Angel with its membership as Trading and Clearing Member of NSE F&O Segment and BSE Derivatives Segment, provides you a gateway to the exciting world of derivative market. c. commodities

Commodities Derivative market has emerged as a new avenue for investors to create wealth. Today, Commodities have evolved as the next best option after stocks and bonds for diversifying the portfolio. Based on the fundamentals of demand and supply, Commodities form a separate asset class offering inv speculators immense potential to earn returns. Angel aims to harness the immense potential of the Commodities market by providing you a simple yet effective interface, research and knowledge d. Life Insurance The Angel Advantage Low and affordable Premium with maximum life cover Assistance at your doorstep Tailor made plans to suit your financial needs Help desk for all your queries Hassle free and transparent dealings e. Mutual Funds The Angel Advantage Pan India presence Online and offline transaction facility Schemes from all major fund houses Latest MF News and Fund Manager views Latest New Fund Offers (NFO) Information and tools to help you select the right scheme Dedicated Customer Help desk 24x7 Web-enabled Client Back Office f. Depository services. Angel Advantage Automated pay-in facility Access information Anytime, Anywhere Quarterly demat statements with valuation Statements on demand

View Demat A/C statement online Competitive transaction charges Enjoy exclusive benefits by registering with angel: No risk of loss, wrong transfer, mutilation or theft of share certificates Hassle free automated pay-in of your sell obligation with no need for physical instruction Reduced paper work Speedy settlement process resulting in increased liquidity of your securities Instant disbursement of non-cash benefits like Bonus and Rights Efficient pledge mechanism Wide branch coverage Personalized services of trained Help desk No charges for extra Transaction statement and Holding statement Combined monthly 'Bill-cum-Transaction-cum-Holding-cum-Ledger' statement of your investments. g. PMS Angel Approach to PMS Risk Profiling Research & Asset Allocation Stock Selection Review & Rebalancing Angel, with years of experience and research expertise, offers the best in class Portfolio Management Services. Benefits at Angel Investment in companies that have a strong competitive advantage over their peers Well laid-out investment philosophy Pro-active management of funds Dedicated Relationship Manager Quarterly newsletter from fund management team Committed parentage

h. Currency Trading BENEFITS Low Commissions: Brokerage fees are very low as the market is highly competitive. No Middlemen : Futures/Options currency trading does away with the middleman and allows clients to interact directly on the exchange platform. Standardized Lot Size : In the futures markets, exchanges determine lot or contract sizes which are fixed in nature. This allows traders to trade in multiple lots. Low Transaction Cost : The retail transaction cost (the bid/ask spread) is typically less than 0.1% under normal market conditions. In large deals, the spread could be as low as 0.07%. High Liquidity : With an average trading volume of over $4 trillion per day, Forex market has high liquidity. It means that a trader can enter or exit the market at will in almost any market condition. Instant Transactions:This is a very advantageous by-product of high liquidity. Low Margin, High Leverage: These factors increase the potential for higher profits (and losses). Online Access: The big boom in Forex came with the advent of online trading platforms. Interbank Market: The backbone of the Forex market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and by telephone. There is no organized exchange to serve as a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets. The Forex market operates in a manner similar to that of the NASDAQ market in the United States. Thus, it is also referred to as an over-the counter (OTC) market. Self-regulatory: The Forex market is so vast and has so many participants that no single entity, not even a Central Bank, can control the market price

for an extended period. Even interventions by mighty Central Banks are becoming increasingly ineffectual and short-lived. Thus, Central Banks are becoming less and less inclined to intervene and manipulate currency prices. No Insider trading: because of the Forex markets size and noncentralized nature, there is virtually any chance for ill effects caused by insider trading. Fraud possibilities, at least against the system as a whole, are significantly less than in any other financial instruments. Limited Regulation: There is limited governmental influence via regulation in the Forex markets, primarily because there is no centralized location or exchange. i. NRI Services Angel Service Matrix: NRI services desk for personalized assistance to NRI and PIO clients Dedicated offline equity dealing desk Online equity trading platforms Depository services 24x7 back office NRI investment advisory desk PMS IPO and mutual funds Insurance and personal loan solutions Banking support Pan Card assistance j. IPO An investor can garner estimable returns by investing early in a company through an Initial Public Offering (IPO). Angel helps to invest in the primary market through the IPO route in an effortless way. They also provide you with latest news about the upcoming and current IPOs including their listing dates. Their analysts also offer investment advice based on thorough fundamental research of the currently open IPOs. 6.4 Motilal Oswal

The services offered at motilal oswal are as under: a. Equities MOSt Advisory Group is equipped to augment and alter the investments in an effort to create healthy portfolio. MOSt Equity Advisor adjusts the portfolio to value addition and erosion across the researched companies. On the trading side the ideas are picked out of bouquet of products suitable to the trading appetite. The Equity Advisor doesnt stop at just that, he goes a step further to ensure that your trades are settled and stocks credited timely in your Demat account. This allows us to give you a convenient single window service and your Equity Advisor becomes the single point contact for all equities related matters. One will receive regular portfolio valuation reports to enable them to monitor performance and view the progress towards the investment objective. b. Derivatives Futures &Options (F&O): Futures & options are derivatives, which use equity as their underlying. Hence motilals Equity Advisory Group (EAG), will also act as client advisors for F&O & help them Why F&O: Since derivatives instrument provide good leverage opportunity, it is a great tool for speculation. Leverage is a double edge sword for which one requires an equity advisor. Motilals advisors will also help clients with various strategies like Bull Spread, Bear Spread, Cover call writing, hedging strategies etc. This is to help them to make better trading returns. The Equity Advisor doesnt stop at just that, he goes a step further to ensure that their trades are settled and traded with proper margin in your account in a timely manner. This allows us to give them a convenient single window service and your advisor becomes the single point contact for all your equity related matters. Clients can avail of their services from all our Business locations and through E broking across India, as in equities. Besides these they also provide financial services like portfolio management, insurance, commodities, mutual funds, IPOs, depository services etc.. Besides all these services they also provide margin funding

as their unique service. Margin Funding Motilal Oswal Financial Services understand customers needs and help them meet their liquidity requirements. They offer Margin funding to individuals and corporates. They provide finance for investment in primary market issues. They also possess expertise in financing for short-term requirements, to buy securities from secondary markets. Definition: It is finance facility where client have to pay only Margin and MTM Rest is funded by MOFSL. 6.5 Indiabulls Indiabulls provides services which are discussed as under: They have categorized their services as finan Loans include home loans, loans against property, business loans, commercial vehicle loans, commercial credit loans. Securities include equities, commodities, internet trading, NRI online trading. 6.7 Sharekhan Sharekhan Services Sharekhan is one of India's leading financial services companies. We provide a complete life-cycle of investment solution in Equities, Derivatives, Commodities, IPO, Mutual Funds, Depository Services, Portfolio Management Services and Insurance. We also offer personalized wealth management services for High Networth individuals.With a physical presence in over 300 cities of India through more than 800 "Share Shops", and an online presence through Sharekhan.com, India's premier online destination, we reach out to more than 800,000 trading customers. the unique service provided by sharekhan is fundamental research. Fundamental research Aimed at investors. Presents sharekhans stock pick and discusses reasons for the same. It comes with a price target and a time frame over which gains can be materialised Investors' Eye A daily fundamental newsletter to help clients take right decisions. Contents Views on most important news reports of the day

Recos using the bottom-up approach Stock Update reports Special reports

Other reports Sharekhan Top Picks A model portfolio comprising of 12 stocks for investors with a horizon of and when required to optimize performance View Point Views on companies they don't track. Views on economy, policy changes and government initiatives Special Reports Specialised reports on unique market opportunities. Reports like - Selectivity pays, Monetary policy review, Hurricane gains, Dividend yield stocks, etc. IPO Flash Report on forthcoming IPOs - only those IPOs which are covered by our research team Sector Reports View on various sectors and its constituents (eg sugar and Balrampur Chini, KCP Sugar Industries, Upper Ganges) Market Outlook Bi-monthly Fundamental view on the market.

7 SERVICES PROVIDED BY DIFFERENT BROKERAGE HOUSES- A TABULAR REPRESENTATION. Name of the company Services offered Networth financial planning, mutual funds, bonds/FDs, equities and derivatives, IPOs, online transactions, currency derivatives, life insurance, Merchant banking, commodities, general insurance, depository services, PMS, Loans etc.. India Infoline Equity, IPOs, PMS, Research, commodity, mortgages, loans, MF, insurance, wealth management services, newsletters. Angel Broking Equity, derivatives,

commodity, life insurance, MFs, depository services, PMS, Currency trading, NRI Services, IPO Indiabulls Loans, equity, commodity, NRI online trading. . Equity and derivatives, depository services, online services, commodity trading, PM, fundamental research, technical research. Equity, commodity, mutual funds.

Sharekhan

Reliance Money

From the above table we come to know that all the brokerage firms provide almost same services. Each one has th 8 Findings of the study. Through the study carried out it was found that almost all brokerage firms offer similar services. They vary their brokerage charges to gain maximum market share. According to my observation, I also came to know that most of the brokerage firms still believe that charges still govern the Indian Market and thus also the brokerage industry. There is immense competition in the market to gain maximum share by each brokerage firm. They adopt many techniques such as advance brokerage schemes, easy trade, super trade etc. By analyzing 6 brokerage firms I came to the conclusion that Angel Broking and Networth Stock Broking Limited charge averagely and also provide good services.

Also going through their financials I discovered that they are not loss making due to their charging policy 9 Conclusion Considering the findings of the project and the analysis carried out I came to a conclusion that to open a demat account with any brokerage firm it is necessary to become aware about the charging policies and services provided by the firms. According to me Angel broking and Networth Stock Broking limited charge averagely. Angel broking has been in the industry since long and is been considered as the trusted brokerage firm and also Networth Stock Broking Limited has been in the industry for about a decade and have occupied good client numbers since its inception which means that it is 10 Recommendations. 10.1 Recommendation for investors. Investors spend their hard earned money to gain something in return. To sustain in market every brokerage firm has to see that their customer is satisfied at the same time their revenue is not compromised as they are also into a business. Investors should carefully analyze each brokerage houses before investing. One should also notice that what type of investment he/she wants to go for. According to me, if an individual is a regular trader he/she should go for the company India Infoline, this is because it has a scheme in which one have to pay Rs 999 once and then one can trade for whatever he wants to according to his will. No brokerage charges are to be paid henceforth. The validity of the scheme is for 1 year, hence for a regular trader this scheme is beneficial. Whereas the same scheme for not a regular trader is worthless and all his money would be in vain. 10.2 Recommendation for the company. The branch with which I am working is a newly setup branch. Hence as every newly setup business takes time to settle so does this branch will. According to me there are fewer employees for the branch. And for proper

working of the branch it should be divided into departments which work for a specific purpose. As for example sales department handles only sales and dealers should be into dealing only. This could help the company to achieve greater revenue. As the company has varied product range it would easily held itself to achieve greater revenue. According to Henry Fayol, division 11 Limitations of the study. Details regarding terms and conditions which is applicable in different brokerage houses cannot be collected until and unless we open up a account with that particular brokerage firm. They dont disclose their data for project purposes. Sometimes the personnel are not ready to talk during market hours which cause the delay in the available information. 12 References Business Research Methods (ICFAI Publication). Address available through websites on internet. For e.g.: To locate the nearby office of a indiainfoline or any other brokerage house we can visit its website. Information about it is available under the section branch locator. www.networthdirect.com (company website) www.financialawarenessportal.com www.sharekhan.com www.indiainfoline.com www.angelbroking.com www.motilaloswal.com www.rkglobal.com Company guide: Mr. YAGNESH GODHANIYA Faculty Guide: Prof. SANKET SHETH Investment analysis and portfolio management by Prasanna Chandra