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A Project Study Report

On

CUSTOMER BEHAVIOUR IN STOCK MARKET With reference to ICICI DIRECT


Submitted to in fulfillment for the Award of degree of Master of Business Administration From

SUBMITTED BY

SUBMITTED TO

Onkar Singh Rathore M.B.A. IV SEM. Submitted to:

Prof. MR BADI DEAN

RAJASTHAN TECHNICAL UNIVERSITY, KOTA JIET School Of Management , Mogra, Jodhpur (Affiliated to RTU, Kota)
2010-2011

PREFACE
Projects are very important for the beginners to gain a practical knowledge about organizations and the market. Theory till not used in practical field is of no use. So our institute has fixed a period for summer training when we can enter into the market through some organization in order to gain some real knowledge. Keeping this in mind I carried out my project in ICICI DIRECT.COM which is one of the largest and reputed companies in India. The project was a study of Customer Behavior In Relation To Stock Market with Special Reference to ICICI DIRECT .COM in Jaipur city. This report has been prepared after the collection of information from the Customer where they have highly appreciated the bank but a bit dissatisfaction with the brokerage charges which are high. Hence it is a systematic representation of the survey.

ACKNOWLEDGEMENT
Gratitude is the language of heart, when the language if from the heart, emotions prevail and when emotion prevails words fail. It is with utmost pleasure that I Ashish Asopa express my gratitude to all those who have been a great support to me for the completion of this project. The vastness of the subject and the variety of the themes gave me many a times a feeling of wonder and little uneasiness not knowing where to begin in my attempts of depicting the glory of finance industry. It is a great pleasure for me to acknowledge the contribution & support of a large number of individuals of this effort. I would hereby take the opportunity to express my indebtedness to people who have helped me to accomplish this task. My acknowledgement goes to Mr. Om Anwala, state head and Mr. Chandrakant Behura, product manager, ICICI Securities ltd, who helped me with his valuable directions in shaping the content of the project report and whose guidance and suggestions were of immense value. His kind support throughout encouraged me to complete my project successfully. I would like to give special thanks to Mr. Prassan Sharma, Centre Manager, ICICI Securities ltd for his excellent support in all aspects and I would also like to thanks all the staff members of ICICI DIRECT for their cooperation and support. I am really thankful to all of them for their immense support and valuable guidance in the completion of this project.

LIST OF CONTENT
Declaration Preface Acknowledgement Executive summary 02 03 04 08

Introduction Objective of study Scope of study Research methodology Type of data Limitation of study 10 11 12 12 13

Brief about stock market Evolution Indian stock exchange Growth pattern Trading pattern of Indian stock market Brief about ICICI direct.com

16 17 18 19

Introduction Retail- ICICI direct.com

32 36 37 38 38 39 42

Unique features Business objectives Thrust areas Sources of business Products & Services Awards & recognition

Customer behavior in relation to stock market

49 50

Categories of customer in stock market Investors behavior in stock market

Customer behavior with respect to icicidirect.com

57

Analysis SWOT analysis of icicidirect.com Questionnaire for Analysis of customer behavior 60 64

Findings

73

Recommendation Conclusion Bibliography

76 79 82

EXECUTIVE SUMMARY
Training is the first step to enter into the permanent job. Market research, market surveys are some of the pillars which helps us in future to stand with potentiality, knowledge and smart work. Keeping this in mind I had carried out my summer training in ICICI direct .com which is Indias favorite share trading website with the largest number of customers. ICICI direct.com offers investors a seamless, hassle-free and paperless way to trade shares, as it integrates the banking, trading and settlement part of the business. ICICI direct.com is trusted by over a lakh share investors, as it integrates the brokerage, banking and Demat systems. As Systematic, planned and disciplined work always leads to success. Keeping this in mind the project has been divided into parts. Firstly, a company with a brand name and market value was applied, to take me as its trainee and permit me to carry out a project on its behalf. Secondly, I got the topic of Customer Behavior In Relation To Stock Market with Special Reference to ICICI DIRECT.COM in Jaipur City. I talked to all the knowledgeable people of the organization who helped me to get an initial idea about the company and its product and services. I was than lead by the officer who dealt with the customer to know the kind of work that the company deed for there customers. Thirdly, the consumers of Jaipur city were selected and interviewed about the cement that they used, their views on ICICI direct .com and stock market of India, their expectation from the company, their satisfaction regarding the special services provided by the company. Lastly, all the data were compiled together to make a complete report by analyzing the data collected. Some findings and recommendation were also added to keep the brand name growing with its value.

Introduction GENERAL INTRODUCTION


PHYSICAL CERTIFICATES - THE TRADITIONAL WAY

The Indian capital market has seen an unprecedented boom in its activity in the last decade. We can now boast of a very large investor population and substantial volumes of trade. However, this surge in activity has brought with it, numerous problems that threaten the very survival of the Capital market in the long run. A closer inspection of the problems would reveal that most of them arise due to the intrinsic nature of paper based trading and settlement. This century-old system of trading and settlement requires handling of huge volumes of paper leading to increased costs and inefficiencies. Simultaneously, they expose the investors to greater risks putting them at a disadvantage. Some of these areas are: Unwarranted delay in transfer of shares. It takes 30 to 60 days for the investors to get the shares lodged in their name;

Possibility of forgery on various documents leading to bad deliveries, legal disputes etc;

Theft of shares leading to defective title in shares purchased and subsequent litigation;

Prevalence of fake certificates in the market;

Mutilation or loss of share certificates in transit;

Increased transaction costs due to stamp duty, fake shares, rejection by registrars.

This has made the investors, both retail and institutional, wary of entering the Indian capital market. In this scenario, it was felt that the getting up of a depository and the introduction of scrip less trading and settlement is imperative for the efficient functioning of the market. The Indian capital market has witnessed numerous changes in the recent past. Historically stock market booms have always resulted in a number of problems for the lay investor. Sometimes, the problem may magnify them and threatens to engulf the entire capital market. A close introspection of these problems will reveal that most of them are due to intrinsic nature of paper based trading and settlement. All this may have driven away many potential investors and Foreign Institutional Investors. Dematerialization of shares is looked upon as the remedy for the paper based problems. With effect from august 19, 1998 SEBI has granted certificate of registration of Central Depository Services (I) Ltd. (CDSL). Yet even with demat, from the point of view of investors there are numerous problems. Here Wallet Watch introduces you to setting up of a demat account and introduction of scrip less trading and settlement. There are numerous benefits of this scrip less trading and settlement, which Wallet Watch has discussed in detail.

COMPANY PROFILE
INTRODUCTION ABOUT THE COMPANY

Even as the European and American stock markets reckon with the changes brought about by the Internet and IT/telecom advances, the Indian stock market has quickly moved to global standards. The sheer breadth of the changes since the National Stock Exchange started operations in 1994 and with the Securities and Exchange Board of India (SEBI) also driving the changes in the market system, have enabled the Indian market to move well ahead in just five years. Even as online automated trading and better clearing and settlement mechanisms have been put in place, perhaps, the most significant change in the Indian market has been the coming of paperless trading; it may well be a precursor to the next big changes rolling settlements and Internet trading. But the push towards paperless trading stands out even in a decade when the market landscape has changed beyond recognition. Dematerialization (holding and trading securities in paperless mode) was an alien concept in India before 1995; in five years, large quantities of paper have been flushed out of the system. Since the entry of the foreign institutional investors (FIIs) and online trading, the old system, laden with paperwork at every conceivable stage, was out of place in an otherwise fast trading environment. As the FIIs complained about the paperwork as a major constraining factor, the government and SEBI took notice. The requisite legislative changes were put in place quickly - the Depositories Act, 1996 was passed and the NSE, with the UTI and the IDBI, set up the National Securities Depository Ltd (NSDL).

But the depository concept did not gain popularity; the FIIs which had clamored for its introduction, now ignored it. The reason: Lack of liquidity. But, unless the Institutional investors stepped in, there could be no liquidity. This stalemate frustrated the push for a paperless environment. Until SEBI stepped in, that is. With regulatory pushes SEBI, in phases, made demat trading in stocks mandatory for institutions first and, then, for all investors. Mandatory paperless trading, forced the FIIs to dematerialize their holdings quickly. As a consequence of SEBI's action, most major stocks are traded in the paperless mode now. The second phase will involve some 200 stocks in a few months time. The effect of SEBI's action is evident from NSDL's statistics. A total of 698 companies, with a market capitalization of Rs. 7,37,300 crores (almost 80 per cent of the market capitalization of all listed stocks), is enrolled with the NSDL. With 13.65 billion shares in the demat mode, nearly 19 million investor accounts, and securities valued at Rs. 3,96,800 crores ($91 billions) actually dematerialized, the concept of dematerialisation can be said to have taken roots. If the regulatory direction is any indication, more paper will be flushed out of the system in the next two years. The costs of dematerialisation have declined as the NSDL slashed charges as volumes expanded and the competition _ from the Central Depository Services Ltd (CSDL) floated by the BSE _ started in 1999 second half. A series of measures by SEBI and NSDL also helped ease the strain faced by retail investors. From a long-term perspective, demat in India is of considerable significance. Not only has the general trading environment improved and quickened, volumes too have perked up, even in the demat segment. With demat taking off, there is now scope for an improvement in the quality of investor services. As a consequence of dematerialisation, the Indian market is also well prepared for web-based trading though the quality of telecom infrastructure and inadequacies in the banking system-stock exchange linkages may cause delays.

Notably, with regard to the thrust towards paperless trading, the Indian market managed in three years what took even the US much longer. With a high degree of dematerialisation a reality, the stage is set for rolling settlements and web-based trading. Once these are in place, the Indian market will have moved closer to the standards in advanced markets, such as the US. And paperless trading may well be the catalyst for such a rapid advancement.

HISTORY OF THE ORGANIZATION

The dematerialized form of shareholding and the depository mode of trade (scrip less trade) have been in operation in developed financial markets for over 15 years. In India, the first depository commenced operation a decade back and is relatively new. The Indian financial market is in need of both scrip-based and scrip less trade, but the investing community, which is used scrip-based trade, is bound to take some time to accept the latter. The scrip less trading, till now a domain of the western world, institutional investors and GDR holders is now mandatory even for small investors. All those who hold physical share certificates have to get them dematerialized. If they do not, they will be forced to do so at the time of sale. The countless numbers of conservative Indians have to digest it, whether they like it or not. First, the institutional investors succumbed. Then the high net worth individuals, trading in more than a certain numbers of shares, were forced to give in. now, it is the turn of the small investors of select-companies. With their share certificates being replaced by small slips and receipts, naturally the average investors will have their share of fears and apprehensions. It is necessary to educate and convince these investors about the benefit of Demat rather than forcing them to take part in the game.

Companys Vision
To make ICICI direct the dominant online share trading by world class people and services. This they hope to achieve by:

Understanding the needs of customers and offering them superior product and Leveraging technology to service customers quickly and conveniently. Developing and implementing superior risk management and investment Providing and enabling environment to foster growth and learning for the

service.

strategic to offer sustainable and stable return to the shareholder. employees

Companys mission
To judged by their sales and earnings growth rates than on the absolute value of their sales and earnings. Look for companies that consistently grow faster than there peers. Investors prefer companies that increase profit margins -- the percentage of sales that they keep -- every year. This is accomplished either by lowering expenses or raising prices. Look for companies that consistently find ways to squeeze more profits out of sales than their peers. The financial health of a company is dependent on a combination of profitability, short-term liquidity and long term liquidity. Companies, which are profitable, but have poor short term or long term liquidity measures, do not survive the troughs of the trade cycle.

PRODUCT PROFILE
DE-MAT
The dematerialized form of shareholding and the depository mode of trade (scrip less trade) have been in operation in developed financial markets for over 15 years. In India, the first depository commenced operations a decade back and is relatively new. The Indian Financial Markets is in need of both scrip-based trade, but the investing community, which is used to scrip-based and scrip less trade, is bound to take some time to accept the latter. The scrip less trading, till now a domain of the western world, institutional investors and GDR holders is now mandatory even for small investors. All those who hold physical share certificates have to get them dematerialized. If they do not, they will be forced to do so at the time of sale. A process by which the physical certificates of an investor are taken back by the company / registrar and actually destroyed and an equivalent number of securities are credited in the electronic holdings of the investor. Offers services to clients dealing in Government securities through the SGL A/C. besides holding the securities, ICICI Capital Services Ltd.

Provides records update based on the transactions made by the clients. Collects and credits the benefits and proceeds from sale to the clients

account. Supplies periodical reports on the transactions and holding of the clients.

TRADING:

Next function activates when an investor buys or sells in the market.

Buying:

An investor gets order executed and makes payment to the broker.

Investor instructs his Depository Participant to expect credit on settlement day. Broker instructs his DP to debit his Clearing Member account on settlement day.

Before settlement day Broker makes payment to clearinghouse through Clearing Bank.

On settlement day clearing house releases shares to brokers Clearing Member account which is then transferred to investors account through NSDL (National Securities Depository Limited). Investor gets credit in his account.

SELLING:

An investor gets order executed.

Investor instructs his Depository Participant to debit his account with immediate effect.

The shares move from investors account to Brokers Clearing Member account via NSDL. A Broker clearing member accounts is credited.

Before settlement day broker transfers shares from his clearing member account to Clearing house via NSDL. His account is debited.

On settlement day Broker receives payment from clearing house which he passes on to the investor. HOW CAN ONE OPEN AN ACCOUNT IN DEMAT?

First an investor has to approach a DP and fill up an account opening form. The account opening form must be supported by copies of any one of the approved documents to serve as proof of identity (POI) and proof of address (POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening of account has been made mandatory effective from April 01, 2006. All applicants should carry original documents for verification by an authorized official of the depository participant, under his signature. Further, the investor has to sign an agreement with DP in a depository prescribed standard format, which details rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference. The DP will open the account in the system and give an account number, which is also called BO ID (Beneficiary Owner Identification number). The DP may revise the charges by giving 30 days notice in advance. SEBI has rationalized the cost structure for dematerialisation by removing account opening charges, transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI has vide circular dated November 09, 2005 advised that with effect from January 09, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership.

PROFILE OF THE ORGANISATION

DEPARTMENT/FUNCTIONAL AREAS

Infrastructure financing, corporate financing and retail have been the strong pillars of ICICIs growth. They expect these to remain thrust areas in the future too. The financial institution sees significant opportunities in the power sector, and in the rapid deregulation of the Telecom sector. On the retail side, ICICI has established a retail franchisee through a physical presence across 42 cities. Its retail thrust has been on the planks of technology enabled low cost distribution channels like the Internet, Call centers and ATMs. It occupies the number one position in automobile financing (over 20% of the market share), number one in credit cards on an incremental basis. It also has a growing presence in home finance and on-line trading.

ICICI BANK

ICICI Bank is a commercial banking outfit set up by the ICICI Group. The Bank was registered a banking company on January 5th, 1994 and received its banking license from the Reserve Bank of India on May 17th, 1994. The Bank has an authorized capital of INR 300crore (USD 75.96 million), of which subscribed and paid-up capital is INR 165 crores (USD 41.78 million). The first ICICI Bank branch was started in Madras in June 1994. The branches are fully computerized with state-of-the-art technology and systems. All of them are fully networked through V-SAT (Satellite) technology. The Bank is connected to the international SWIFT network since March 1995. ICICI Bank offers a wide spectrum of domestic and international banking services to facilitate trade, investment, cross-border business, and treasury and foreign exchange services. This is in addition to a whole range of deposit services offered to individuals and corporate bodies. ICICI Banks Infinity was the first Internet banking service in the country, and a prelude to banking in the next millennium. Currently the Bank has around 150,000 customers.

ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED

With the recent spurt in entrepreneurship in the country, venture capital and private equity capital financing are fast attaining a role of prominence. Uniquely positioned to take the Indian entrepreneur further is ICICI Venture Funds, the wholly owned subsidiary of ICICI, with its keen understanding of the Indian Financial Markets, entrepreneurial ethos, access to global capital and a network through influential global alliances. Strong parentage and affiliates provide ICICI Venture with access to a broad spectrum of financial and analytical resources. An affiliation with (Trust Company of the West) provides a platform for networking Indian Companies to global markets and technology. ICICI Venture Funds currently manages / advises 11 Funds aggregating US$ 400 million, making it the most significant private equity investor in the country. The investment experience of ICICI Ventures professionals is the foundation its strengths and success in several areas of investing. ICICI Venture seeks to invest in opportunities where its network through ICICI and TCW can create value for all involved. ICICI Ventures primary investment objective is capital investment through investments by way of equity or equity-related securities in unlisted companies with significant growth potential. ICICI Ventures investments span a broad spectrum of industries and stages of development, the investment focus being on Information Technology Biotechnology and Life Sciences Media and entertainment Retail Services

ICICI SECURITIES AND FINANCE COMPANY LIMITED

Formed in 1993 when ICICI s Merchant Banking Division was spun off into a new company, I-SEC today are Indias leading Investment Bank and one of the most significant players in the Indian capital markets. Its client list includes some of the best known, most respected names in Indian business and industry, and I-SEC offers them what are probably the widest, most in-depth range of services in the market, with the highest standards of professionalism. Backed by a strong distribution network, I-SEC is acknowledged to be at the forefront of all new developments in the Indian debt market. I-SEC Research Reports, Compendia, Updates, I-BEX and sovereign Bond Index, have become industry standards, sought after by finance, business and reputed publications alike. The Project Finance Group has helped take strategic projects from the drawing board to financial closure, leveraging the expertise of parent organization. I-SEC has also executed several assignments in M & A, including business valuations, spin-offs and mergers, for both domestic and overseas clients. The range of products offered by i-SEC includes:

Corporate Finance Mergers and Acquisitions, Equity, Bidding (especially for Telecom Projects)

Fixed Income Primary Dealership, Debt Research

Equities Lend management, Underwriting, Syndication, Private Equity placement, Sales, Trading, Broking, Sectoral and Company Research I - SEC Continues to sustain a steady rate of growth by offering the most extensive range

of services combined with unrivalled standards of professionalism.

ICICI BROKERAGE SERVICES LIMITED

Set up in March 1995, ICICI Brokerage Services is a 100% subsidiary of I-SEC. It commenced its securities brokerage activities in February 1996 and is registered with the National Stock Exchange of India Limited and The Stock Exchange, Mumbai. We are a joint venture between ICICI and the leading financial services provider in India, and prudential plc of U.K., one of the finest Life insurance companies in the world. Together we provide you with an extensive range of insurance products to suit your various needs at various life stages. We aim to keep you covered, at every step in life. Their policies are need-specific and address particular age groups. This means that no matter where in life you are, we offer specific products to suit your needs for savings, protection and retirement. Our products can be categorized into the following:

Saving plans Protection plans Retirement plans

ICICI PERSONAL FINANCIAL SERVICES LIMITED

ICICI Personal Financial Services Limited (ICICI PFS), formerly ICICI-Credit, was one of the first four companies to obtain registration as a Non-Banking Financial Company (NBFC) from the Reserve Bank of India (RBI) on September 10, 1997 under the new section 45IA of the Reserve Bank of India Act, 1934. During the year 1998-99, there was a significant shift in the Companys operation from leasing to hire purchase to distribution and servicing of all rental products for the ICICI Group. It is now a focal point for marketing and distribution of all rental asset products for ICICI, including auto loans, consumer durable finance and other financial products. The Company has thus become part of ICICI s retail strategy aimed at offering a comprehensive range of products and services to retail customers. In view of this reorientation of the business, the name of the Company was changed from ICICI Credit Corporation to ICICI Personal Financial Services Limited (ICICI PFS) effective March 22, 1999.

ICICI CAPITAL SERVICES LIMITED

ICICI Capital Services Ltd. was incorporated in the name of SCICI Securities Ltd. on September 24, 1994 as a wholly owned subsidiary of erstwhile SCICI Ltd. with the objective of providing stock broking services to the institutional clients and undertaking activities such as underwriting, primary market placements & distribution industry & company research etc.After the amalgamation of SCICI with ICICI effective from April 1, 1996, resulting in the change of the name. The company is mandated, under review by ICICI, to carry out on its behalf the retail resource raising activities and to provide front office services related to all retail and semi retail liability products of ICICI. The company also operates the network of ICICI Centers being set up by ICICI. As on date the company has set up 91 centers across the country.

ICICI INFOTECH

ICICI InfoTech is a leading provider of end-to-end IT solutions. We have an in-depth experience of having worked on varied technologies with leading corporations worldwide. Our service portfolio includes the following:

IS & IT Consulting Software Design and Development Enterprise Application Integration Value Chain Management Solutions (SCM, CRM etc.) Application Re-engineering and Management Knowledge Management Solutions Embedded System Applications Technology Incubation, IT-enabled Services & IT Outsourcing

ICICI Capital Ltd.

Its products are:

RBI Bonds E-invest (ICICI Direct.com) Fixed Deposits Mutual Funds Bonds Demat Equity IPO

ICICI DIRECT.COM (ONLINE TRADING)

ICICI DIRECT.COM (ONLINE SHARE TRADING):

ICICI Direct.com is a truly online share-trading site. Which means that from the time you punch in a buy or sell trade on your computer to the final settlement in your account, everything happens completely online? The 3-in-1 e-invest account integrates your brokerage, bank and one or more depository accounts to make sure that you can do the otherwise cumbersome share trading from the comfort of your home or office, at absolutely any time of the day or night.

SWOT ANALYSIS OF THE COMPANY

Strengths

1.

Management philosophy and commitment to maximize shareholders returns

2.

Upgraded product design and development facilities to develop new products and aid diversification.

3.

Ongoing activities to support up gradation of operational performance and rise in productivity.

4.

Team of talented and committed professionals available to improve companies performance.

Weakness

1.

Competition from cheap imports.

2.

Low customer base.

Opportunities

1.

UFSL has initiated development of products for diesel application. This will provide tremendous scope for diversification and growth.

2.

Acquisition of AMTEC to provide opportunities to access global OEMs.

3.

Opportunity to support AMTECs operations by supplying products from India.

4.

The introduction of new emission norms will provide UFSL opportunity to develop injection systems and thereby upgrade the status of the company from product to system supplier.

Threats, Risks & Concerns

1.

Constant pressure to be cost competitive to meet customer expectations.

2.

Relentless pressure to maintain profitability due to rising input/raw material prices.

3.

Increasing popularity of alternative fuel vehicles, such as Hybrid, Hydrogen powered, CNG and LPG vehicles poses new challenges for the company.

FUTURE PROSPECTS AND PLANS

FUTURE PROSPECTS AND PLANS OF THE ORGANIZATION

For ICICI the past half has been a trying period more so because of the adverse environmental conditions such as the depressed equity markets and the volatile currency markets. However, its retail thrust and a perceptible shift in financing from manufacturing projects to corporate finance will put it in good stead for the quarters to come. Its growing importance in the telecom and infrastructural sectors, which have huge potential, will be a key driver of growth for the future

ACHIEVEMENT AND AWARD

Winning is a habit that is assiduously cultivated at ICICI Securities Limited (i-SEC). Be it deals, mandates or awards, we manage them all in our quite and efficient way. For us winning awards is a matter of pride and honour. Each new award is a manifestation of our hard work and commitment to our clients.

Since inception, i-SECs expertise has been time and again widely recognized by both domestic and international agencies.

Our Fixed Income team for the last two years (CY 2004 and 2005) has been adjudged the Best Bond House in India by both Asiamoney and Finance Asia. The equities team was adjudged the Best Indian Brokerage House-2003 by Asiamoney. The Corporate Finance team, according to Bloomberg topped the M&A league tables in 2003.

PROBLEM ANALYSIS:

STATEMENT OF THE PROBLEM

Online trading and Demat are the two emerging concepts in the stock market. It involves personal factors, technical factors, business factors and economic factors. The interplay of these factors on stock market requires a deep study about the pattern process and procedures and performance. This study is intended to identify the various concepts about demat and the online trading and its way of functioning ICICI provisions are not exposing to its customers extensively. Hence in this report an attempt has been made to link the potential customers and the ICICI Direct .Com

OBJECTIVES OF THE STUDY

Every company has a particular goal. A study without objectives can not reach the destination. My project work program was also directed to some particular targets and the main objectives of the study are as bellow;

Study of ICICI Direct.com (online share trading)

Study of dematerialization in ICICI Capital Ltd.

Customers satisfaction and awareness of ICICI Capital Services Ltd.

ICICI Capital Services Ltd., is depository participant (DP) and it is providing the financial services to the share holders and various other DPs also providing almost same services which leads to a competition. So in order to retain the existing customers of ICICI Capital Ltd. and to attract new customers knowing the customers need and preferences and expectation is very important. The study involves knowing the expectation and satisfaction level of ICICI Capital Ltd. customers. The following survey was mainly done with an objective to know the state of mind of the investors who wanted to invest in the stock market & also to know the attitude and preference of the prospective investors regarding capital market with special reference to ICICI direct .com which is a online brokerage house in India.

SCOPE OF THE STUDY:

Globalization of the financial market has led to a manifold increase in investment. New markets have been opened; new instruments have been developed; and new services have been launched. Besides, a number of opportunities and challenges have also been thrown open. The following survey was done parallel when an investors is going to invest in the stock market. The study helps us to know the state of mind of the investors & their expected charges regarding Brokerage, Return, Annual maintenance charges, and so on. The Brokerage house is also benefited as he came to know what an individual investor expects when he or she is going to invest in capital market. Also if the Brokerage house is lacking in some areas, what is that and how to overcome that.

Brief about stock market

The Securities Contracts (Regulation) Act, 1956, has defined Stock Exchange as an "association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling business of buying, selling and dealing in Securities". Stock exchange as an organized security market provides marketability and price continuity for shares and helps in a fair evaluation of securities in terms of their intrinsic worth. Thus it helps orderly flow and distribution of savings between different types of investments. This institution performs an important part in the economic life of a country, acting as a free market for securities where prices are determined by the forces of supply and demand. Apart from the above basic function it also assists in mobilizing funds for the Government and the Industry and to supply a channel for the investment of savings in the performance of its functions. The Stock Exchanges in India as elsewhere have a vital role to play in the development of the country in general and industrial growth of companies in the private sector in particular and helps the Government to raise internal resources for the implementation of various development programs in the public sector. As a segment of the capital market it performs an important function in mobilizing and canalizing resources which remain otherwise scattered. Thus the Stock Exchanges tap the new resources and stimulate a broad based investment in the capital structure of industries. A well developed and healthy stock exchange can be and should be an important institution in building up a property base along with a socialist in India with broader distribution of wealth and income. Thus Stock Exchange is a vital organ in a modern society. Without a stock exchange a modern democratic economy cannot exist. The system of joint stock companies financed through the public investment as emerged has put the vast means of finances almost to entrepreneurs' needs.

Finance from external sources mainly from the investing public can become possible only when an institute like Stock Exchange provides opportunities for the conversion of scattered savings into profitable investments with the promises of a reasonable yield and minimum element of risk. Such a mechanism as provided by Stock Exchanges is not merely a source of capital but also a conduit which canalizes the savings into investment along with a free movement of capital. With the probable exception of a totalitarian state no Government will be able to mobilize resources from the public if the money market in the form of stock exchange does not exist. The Stock Exchange benefits the entire community in a variety of way. It enables the producers to raise capital which directly and indirectly gives gainful employment to millions of people on the one hand and helps consumers to get the variety of goods needed by them on the other. It provides opportunities to savers to store the value either as temporary abode of purchasing power or as a permanent abode of purchasing power in the form of financial assets. It also helps the segments of the savers who put their savings in commercial firms and non-banking financial intermediaries because these institutions avail themselves of the services of Stock Exchange to invest the money thus collected. The Stock Exchange comes close enough to a perfectly competitive market allowing the forces of demand and supply a reasonable degree of freedom to operate as compared to other markets specially the commodity markets. This segment of the factor market can be considered as a perfect or a nearly perfect market. Apart from providing a mechanism for transacting business in stock and shares it generates genuine potential for a new entrepreneur to take up initiative in the private sector enterprises and allows the expansion of investing community by offering gainful development of their otherwise sluggish or shy capital. The Stock Exchange must assume the responsibility of protecting the rights of investors specially the small investors in the Joint Stock Companies.

Evolution
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as "The Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.

Indian Stock Exchanges - An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom which was followed by a slump. But, in 1943, the situation changed radically, when India was fully mobilized as a supply base. On account of the restrictive controls on cotton, bullion, seeds and other commodities, those dealing in them found in the stock market as the only outlet for their activities. They were anxious to join the trade and their number was swelled by numerous others. Many new associations were constituted for the purpose and Stock Exchanges in all parts of the country were floated. The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940) and Hyderabad Stock Exchange Limited (1944) were incorporated. In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947, amalgamated into the Delhi Stock Exchange Association Limited

Growth Pattern of the Indian Stock Market


1946 No. of Stock Exchanges No. of Cos. Listed 1961 1971 1975 1980 1985 1991 1995

14

20

22

1125

1203

1599

1552

2265

4344

6229

8593

No. of Stock Issues of Listed Cos. Capital of Listed Cos. (Cr. Rs.) Market value of Capital of Listed Cos. (Cr. Rs.) Capital per Listed Cos. (4/2) (Lakh Rs.) Market Value of Capital per Listed Cos. (Lakh Rs.) (5/2) Appreciated value of Capital per Listed Cos. (Lak Rs.)

1506

2111

2838

3230

3697

6174

8967

11784

270

753

1812

2614

3973

9723

32041

59583

971

1292

2675

3273

6750

25302

110279

478121

24

63

113

168

175

224

514

693

86

107

167

211

298

582

1770

5564

358

170

148

126

170

260

344

803

Source: Various issues of the Stock Exchange Official Directory, Vol.2 (9) (iii), Bombay Stock Exchange, Bombay.

INTRODUCTION AND CONCEPT OF SHARE TRADING

Trading in shares is old phenomena its regulation had been started when securities contract act had been formed in 1956. Transfer of resources from those with idle resources to others who have a productive need for them is most efficiently achieved through the securities market. investments. It provides a channel for reallocation of savings to

Trading Pattern of the Indian Stock Market


Trading in Indian stock exchanges are limited to listed securities of public limited companies. They are broadly divided into two categories, namely, specified securities (forward list) and non-specified securities (cash list). Equity shares of dividend paying, growth-oriented companies with a paid-up capital of at least Rs.50 million and a market capitalization of at least Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified group and the balance in non-specified group Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery transactions "for delivery and payment within the time or on the date stipulated when entering into the contract which shall not be more than 14 days following the date of the contract and (b) forward transactions "delivery and payment can be extended by further period of 14 days each so that the overall period does not exceed 90 days from the date of the contract". The latter is permitted only in the case of specified shares.

The brokers who carry over the outstanding pay carry over charges which are usually determined by the rates of interest prevailing. A member broker in an Indian stock exchange can act as an agent, buy and sell securities for his clients on a commission basis and also can act as a trader or dealer as a principal, buy and sell securities on his own account and risk, in contrast with the practice prevailing on New York and London Stock Exchanges, where a member can act as a jobber or a broker only. The nature of trading on Indian Stock Exchanges are that of age old conventional style of face-to-face trading with bids and offers being made by open outcry. However, there is a great amount of effort to modernize the Indian stock exchanges in the very recent times.

MARKET DESIGN Primary Market


1.

Corporate Securities:

The Disclosure and Investor Protection (DIP) guidelines prescribe a substantial body of requirements for issuers/intermediaries, the broad intention being to ensure that all concerned observe high standards of integrity and fair dealing, comply with all the requirements with due skill, diligence and care, and disclose the truth, whole truth and nothing but truth. The guidelines aim to secure fuller disclosure of relevant information about the issuer and the nature of the securities to be issued so that investors can take informed decisions. For example, issuers are required to disclose any material risk factors and give justification for pricing in their prospectus. An unlisted company can access the market up to 5 times its pre-issue net worth only if it has track record of distributable profits and net worth of Rs. 1 crore in 3 out of last five years. A listed company can access up to 5 times of its pre-issue net worth. In case a company does not have track record or wishes to rise beyond 5 times of its pre-issue net worth, it can access the market only through book building with minimum offer of 60% to qualified institutional buyers.

Infrastructure companies are exempt from the requirement of eligibility norms if their project has been appraised by a public financial institution and not less than 5% of the project cost is financed by any of the institutions, jointly or severally, by way of loan and/or subscription to equity. The debt instruments of maturities more than 18 months require credit rating. If the issue size exceeds Rs. 100 crores, two ratings from different agencies are required. Thus the quality of the issue is demonstrated by track record/appraisal by approved financial institutions/credit rating/subscription by QIBs. The lead merchant banker discharges most of the pre-issue and post-issue obligations. He satisfies himself about all aspects of offering and adequacy of disclosures in the offer document. He issues a due diligence certificate stating that he has examined the prospectus, he finds it in order and that it brings out all the facts and does not contain anything wrong or misleading. He also takes care of allotment, refund and dispatch of certificates. The admission to a depository for dematerialization of securities is a prerequisite for making a public or rights issue or an offer for sale. The investors, however, have the option of subscribing to securities in either physical form or dematerialized form. All new IPOs are compulsorily traded in dematerialized form. Every public listed company making IPO of any security for Rs. 10 crores or more is required to do so only in dematerialized form.
2.

Government Securities:

The government securities market has witnessed significant transformation in the 1990s. With giving up of the responsibility of allocating resources from securities market, government stopped expropriating seigniorage and started borrowing at near market rates. Government securities are now sold at market related coupon rates through a system of auctions instead of earlier practice of issue of securities at very low rates just to reduce the cost of borrowing of the government. Major reforms initiated in the primary market for government securities include auction system (uniform price and multiple price method) for primary issuance of T-bills and central government dated securities, a system of primary dealers and non-competitive bids to widen investor base and promote retail participation, issuance of securities across maturities to develop a yield curve from short to long end and provide benchmarks for rest of the debt market,

innovative instruments like, zero coupon bonds, floating rate bonds, bonds with embedded derivatives, availability of full range ( 91-day and 382-day) of T-bills, etc.

Secondary Market (a) Corporate Securities:


The stock exchanges are the exclusive centers for trading of securities. Though the area of operation/jurisdiction of an exchange is specified at the time of its recognition, they have been allowed recently to set up trading terminals anywhere in the country. The three newly set up exchanges (OTCEI, NSE and ICSE) were permitted since their inception to have nation wide trading. The trading platforms of a few exchanges are now accessible from many locations. Further, with extensive use of information technology, the trading platforms of a few exchanges are also accessible from anywhere through the Internet and mobile devices. This made a huge difference in a geographically vast country like India.

(b) Exchange Management:


Most of the stock exchanges in the country are organized as mutuals which was considered beneficial in terms of tax benefits and matters of compliance. The trading members, who provide brokering services, also own, control and manage the exchanges. This is not an effective model for self-regulatory organizations as the regulatory and public interest of the exchange conflicts with private interests. Efforts are on to demutualise the exchanges whereby ownership, management and trading membership would be segregated from one another. Two exchanges viz. OTCEI and NSE are demutualise from inception, where ownership, management and trading are in the hands of three different sets of people. This model eliminates conflict of interest and helps the exchange to pursue market efficiency and investor interest aggressively.

(c) Membership:
The trading platform of an exchange is accessible only to brokers. The broker enters into trades in exchanges either on his own account or on behalf of clients. No stock broker or sub-broker is allowed to buy, sell or deal in securities, unless he or she holds a certificate of registration granted by SEBI. A broker/sub-broker complies with the code of conduct prescribed by SEBI. Over time, a number of brokers - proprietor firms and partnership firms have converted themselves into corporate. The standards for admission of members stress on factors, such as corporate structure, capital adequacy, track record, education, experience, etc. and reflect a conscious endeavor to ensure quality broking services.

(d) Listing:
A company seeking listing satisfies the exchange that at least 10% of the securities, subject to a minimum of 20 lakhs securities, were offered to public for subscription, and the size of the net offer to the public (i.e. the offer price multiplied by the number of securities offered to the public, excluding reservations, firm allotment and promoters contribution) was not less than Rs. 100 crores, and the issue is made only through book building method with allocation of 60% of the issue size to the qualified institutional buyers. In the alternative, it is required to offer at least 25% of the securities to public. The company is also required to maintain the minimum level of non-promoter holding on a continuous basis. In order to provide an opportunity to investors to invest/trade in the securities of local companies, it is mandatory for the companies, wishing to list their securities, to list on the regional stock exchange nearest to their registered office. If they so wish, they can seek listing on other exchanges as well. Monopoly of the exchanges within their allocated area, regional aspirations of the people and mandatory listing on the regional stock exchange resulted in multiplicity of exchanges. The basic norms for listing of securities on the stock exchanges are uniform for all the exchanges. These norms are specified in the listing agreement entered into between the company and the concerned exchange. The listing agreement prescribes a number of requirements to be

continuously complied with by the issuers for continued listing and such compliance is monitored by the exchanges. It also stipulates the disclosures to be made by the companies and the corporate governance practices to be followed by them. SEBI has been issuing guidelines/circulars prescribing certain norms to be included in the listing agreement and to be complied with by the companies. A listed security is available for trading on the exchange. The stock exchanges levy listing fees - initial fees and annual fees - from the listed companies. It is a major source of income for many exchanges. A security listed on other exchanges is also permitted for trading. A listed company can voluntary delist its securities from non-regional stock exchanges after providing an exit opportunity to holders of securities in the region where the concerned exchange is located. An exchange can, however, delist the securities compulsorily following a very stringent procedure. (e) Trading Mechanism: The exchanges provide an on-line fully-automated screen based trading system (SBTS) where a member can punch into the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching order from a counter party. SBTS electronically matches orders on a strict price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It allows faster incorporation of price sensitive information into prevailing prices, thus increasing the informational efficiency of markets. It enables market participants to see the full market on real-time, making the market transparent. It allows a large number of participants, irrespective of their geographical locations, to trade with one another simultaneously, improving the depth and liquidity of the market. It provides full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access to everybody. It also provides a perfect audit trail, which helps to resolve disputes by logging in the trade execution process in entirety.

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges is limited to listed securities of public limited companies. They are broadly divided into two categories, namely, specified securities (forward list) and non-specified securities (cash list). Equity shares of dividend paying, growth-oriented companies with a paid-up capital of at least Rs.50 million and a market capitalization of at least Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified group and the balance in non-specified group Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery transactions "for delivery and payment within the time or on the date stipulated when entering into the contract which shall not be more than 14 days following the date of the contract: and (b) forward transactions "delivery and payment can be extended by further period of 14 days each so that the overall period does not exceed 90 days from the date of the contract". The latter is permitted only in the case of specified shares. The brokers who carry over the out standings pay carry over charges (cantango or backwardation) which are usually determined by the rates of interest prevailing. A member broker in an Indian stock exchange can act as an agent, buy and sell securities for his clients on a commission basis and also can act as a trader or dealer as a principal, buy and sell securities on his own account and risk, in contrast with the practice prevailing on New York and London Stock Exchanges, where a member can act as a jobber or a broker only. The nature of trading on Indian Stock Exchanges are that of age old conventional style of face-to-face trading with bids and offers being made by open outcry. However, there is a great amount of effort to modernize the Indian stock exchanges in the very recent times.

THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.

NSE's Mission
NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of:

1. 2. 3.

Establishing a nation-wide trading facility for equities, debt instruments and hybrids, Ensuring equal access to investors all over the country through an appropriate communication network, Providing a fair, efficient and transparent securities market to investors using electronic trading systems, enabling shorter settlement cycles and book entry settlements systems, and

4. 5.

Meeting the current international standards of securities markets. The standards set by NSE in terms of market practices and technologies have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities.

NSE Group
National Securities Clearing Corporation Ltd. (NSCCL) It is a wholly owned subsidiary, which was incorporated in August 1995 and commenced clearing operations in April 1996. It was formed to build confidence in clearing and settlement of securities, to promote and maintain the short and consitent settlement cycles, to provide a counter-party risk guarantee and to operate a tight risk containment system.

NSE.IT Ltd. It is also a wholly owned subsidiary of NSE and is its IT arm. This arm of the NSE is uniquely positioned to provide products, services and solutions for the securities industry. NSE.IT primarily focus on in the area of trading, broker front-end and back-office, clearing and settlement, web-based, insurance, etc. Along with this, it also provides consultancy and implementation services in Data Warehousing, Business Continuity Plans, Site Maintenance and Backups, Stratus Mainframe Facility Management, Real Time Market Analysis & Financial News.

India Index Services & Products Ltd. (IISL) It is a joint venture between NSE and CRISIL Ltd. to provide a variety of indices and index related services and products for the Indian Capital markets. It was set up in May 1998. IISL has a consulting and licensing agreement with the Standard and Poor's (S&P), world's leading provider of investible equity indices, for co-branding equity indices.

National Securities Depository Ltd. (NSDL) NSE joined hands with IDBI and UTI to promote dematerialisation of securities. This step was taken to solve problems related to trading in physical securities. It commenced operations in November 1996.

DotEx International Limited DotEx was formed to provide a well structured inter trading platform for the members to further offer online trading facilities to their customers. With this facility, the members can serve a larger clientele with the use of automated risk management features and hence increase the volume. The investors also get comprehensive and updated information through it.

Bombay Stock Exchange (BSE)


A very common name for all traders in the stock market, BSE, stands for Bombay Stock Exchange. The oldest market not only in the country, but also in Asia. The early days of BSE was known as "The Native Share & Stock Brokers Association." It was established in the year 1875 and became the first stock exchange in the country to be recognized by the government. In 1956, BSE obtained a permanent recognition from the Government of India under the Securities Contracts (Regulation) Act, 1956.

In the past and even now, it plays a pivotal role in the development of the country's capital market. This is recognized worldwide and its index, SENSEX, is also tracked worldwide. Earlier it was an Association of Persons (AOP), but now it is a demutualised and corporatised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI).

BSE Vision
The vision of the Bombay Stock Exchange is to "Emerge as the premier Indian stock exchange by establishing global benchmarks."

REGULATORY FRAMEWORK The four main legislations governing the securities market are: (a) The SEBI Act, 1992 which establishes SEBI to protect investors and develop and regulate securities market; (b) The Companies Act, 1956, which sets out the code of conduct for the corporate sector in relation to issue, allotment and transfer of securities, and disclosures to be made in public issues; (c) The Securities Contracts (Regulation) Act, 1956, which provides for regulation of transactions in securities through control over stock exchanges; and (d) The Depositories Act, 1996 which provides for electronic maintenance and transfer of ownership of demat securities. Government has framed rules under the SCRA, SEBI Act and the Depositories Act. SEBI has framed regulations under the SEBI Act and the Depositories Act for registration and regulation of all market intermediaries, and for prevention of unfair trade practices, insider trading, etc. Under these Acts, Government and SEBI issue notifications, guidelines, and circulars which need to be complied with by market participants. Securities and non-payment of dividend are administered by SEBI in case of listed public companies and public companies proposing to get their securities listed. The SROs ensure compliance with their own rules as well as with the rules.

Functions of SEBI
SEBI has been obligated to protect the interests of the investors in securities and to promote and development of, and to regulate the securities market by such measures as it thinks fit. The measures referred to therein may provide for:(a) Regulating the business in stock exchanges and any other securities markets.

(b) registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner; (c) registering and regulating the working of the depositories, participants, custodians of securities, foreign institutional investors, credit rating agencies and such other intermediaries as SEBI may, by notification, specify in this behalf; (d) Registering and regulating the working of venture capital funds and collective investment schemes including mutual funds; (e) Promoting and regulating self-regulatory organisations; (f) Prohibiting fraudulent and unfair trade practices relating to securities markets; (g) Promoting investors' education and training of intermediaries of securities markets. (h) Prohibiting insider trading in securities. (i) Regulating substantial acquisition of shares and take-over of companies. (j) Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, mutual funds, other persons associated with the securities market, intermediaries and self- regulatory organizations in the securities market. (k) calling for information and record from any bank or any other authority or board or corporation established or constituted by or under any Central, State or Provincial Act in respect of any transaction in securities which is under investigation or inquiry by the Board. (l) Performing such functions and exercising according to Securities Contracts (Regulation) Act, 1956, as may be delegated to it by the Central Government. (m) Levying fees or other charges for carrying out the purpose of this section;

(n) Conducting research for the above purposes. (o) Calling from or furnishing to any such agencies, as may be specified by SEBI, such information as may be considered necessary by it for the efficient discharge of its functions.

(f) Trading Rules:


Regulations have been framed to prevent insider trading as well as unfair trade practices. The acquisitions and takeovers are permitted in a well-defined and orderly manner. The companies are permitted to buy back their securities to improve liquidity and enhance the shareholders wealth

(g) Price Bands:


Stock market volatility is generally a cause of concern for both policy makers as well as investors. To curb excessive volatility, SEBI has prescribed a system of price bands. The price bands or circuit breakers bring about a coordinated trading halt in all equity and equity derivatives markets nation-wide. An index-based market-wide circuit breaker system at three stages of the index movement either way at 10%, 15% and 20% has been prescribed. The movement of either S&P CNX Nifty or Sensex, whichever is breached earlier, triggers the breakers. As an additional measure of safety, individual scrip-wise price bands of 20% either way have been imposed for all securities except those available for stock options.

(h) Demat Trading:


The Depositories Act, 1996 was passed to proved for the establishment of depositories in securities with the objective of ensuring free transferability of securities with speed, accuracy and security by (a) Making securities of public limited companies freely transferable subject to certain exceptions.

(b) (c)

Dematerializing the securities in the depository mode. Providing for maintenance of ownership records in a book entry form. In order to

streamline both the stages of settlement process, the Act envisages transfer of ownership of securities electronically by book entry without making the securities move from person to person. Two depositories, viz. NSDL and CDSL, have come up to provide instantaneous electronic transfer of securities. At the end of March 2002, 4,172 and 4,284 companies were connected to NSDL and CDSL respectively. The number of dematerialized securities increased to 56.5 billion at of investor accounts was the end of March 2002. As on the same date, the value of dematerialized securities was Rs. 4,669 billion and the number 4,605,588. All actively traded scrips are held, traded and settled in demat form. Demat settlement accounts for over 99% of turnover settled by delivery. This has almost eliminated the bad deliveries and associated problems To prevent physical certificates from sneaking into circulation, it has been mandatory for all new IPOs to be compulsorily traded in dematerialized form. The admission to a depository for dematerialization of securities has been made a prerequisite for making a public or rights issue or an offer for sale.

(i) Charges:
A stock broker is required to pay a registration fee of Rs.5, 000 every financial year, if his annual turnover does not exceed Rs. 1 crores. If the turnover exceeds Rs. 1 crore during any financial year, he has to pay Rs. 5,000 plus one-hundredth of 1% of the turnover in excess of Rs.1 crores. After the expiry of five years from the date of initial registration as a broker, he has to pay Rs. 5,000 for a block of five financial years. Besides, the exchanges collect transaction charges from its trading members. NSE levies Rs. 4 per laces of turnover. The maximum brokerage a trading member can levy in respect of securities transactions is 2.5% of the contract price, exclusive of statutory levies like SEBI turnover fee, service tax and stamp duty. However, brokerage charges as low as 0.15% is also observed in the market.

(j) Trading Cycle:

Rolling settlement on T+3 bases gave way to T+2 from April 2003. The market has moved close to spot/cash market.

(k) Risk Management:


To pre-empt market failures and protect investors, the regulator/exchanges have developed a comprehensive risk management system, which is constantly monitored and upgraded. It encompasses capital adequacy of members, adequate margin requirements, limits on exposure and turnover, indemnity insurance, on-line position monitoring and automatic disablement, etc. They also administer an efficient market surveillance system to curb excessive volatility, detect and prevent price manipulations. Exchanges have set up trade/settlement guarantee funds for meeting shortages arising out of non fulfillment/ partial fulfillment of funds obligations by the members in a settlement. A clearing corporation assures the counterparty risk of each member and guarantees financial settlement in respect of trades executed on NSE.

(l) Government Securities:


The reforms in the secondary market include Delivery versus Payment system for settling scrip less SGL transactions to reduce settlement risks, SGL Account II with RBI to enable financial intermediaries to open custody (Constituent SGL) accounts and facilitate retail transactions in scrip less mode, enforcement of a trade-for-trade regime, settlement period of T+0 or T+1 for all transactions undertaken directly between SGL participants and up to T+5 days for transactions routed through NSE brokers, routing transactions through brokers of NSE, OTCEI and BSE, repose in all government securities with settlement through SGL, liquidity support to PDs to enable them to support primary market and undertake market making, special fund facility for security settlement, etc. As part of the ongoing efforts to build debt market infrastructure, two new systems, the Negotiated Dealing System (NDS) and the Clearing Corporation of

India Limited (CCIL) commenced operations on February 15, 2002. NDS facilitates screen based negotiated dealing for secondary market transactions in government securities and money market instruments, online reporting of transactions in the instruments available on the NDS and dissemination of trade information to the market.

Government Securities (including T-bills), call money, notice/term money, repose in eligible securities, Commercial Papers and Certificate of Deposits are available for negotiated dealing through NDS among the members. The CCIL facilitates settlement of transactions in government securities (both outright and repo) on Delivery versus Payment (DvP-II) basis which provides for settlement of securities on gross basis and settlement of funds on net basis simultaneously. It acts as a central counterparty for clearing and settlement of government securities transactions done on NDS.

Registration of Intermediaries
The intermediaries and persons associated with securities market shall buy or sell or deal in securities after obtaining a certificate of registration from SEBI, as required by Section 12: 1) Stock-broker, 2) Sub- broker, 3) Share transfer agent, 4) Banker to an issue, 5) Trustee of trust deed, 6) Registrar to an issue, 7) Merchant banker,

8) Underwriter, 9) Portfolio manager, 10) Investment adviser 11) Depository, 12) Depository Participant 13) Custodian of securities, 14) Foreign institutional investor, 15) Credit rating agency or 16) Collective investment schemes, 17) Venture capital funds, 18) Mutual fund, and 19) Any other intermediary associated with the securities market

Brief About ICICI Direct. Com

Induction

I
ICICI Venture

A m o n gst In d ias large st P Eq u ity In ve sto r

Industrial Credit and Investment Corporation of India Limited (ICICI)


ICICI was created in 1955 by the Government of India, World bank and industrialists to spur Industrial growth in the country Primary focus was to provide Corporate Finance and investment. Developed its foray as a premier in Commercial bank and soon became a profit making entity.
Developed its businesses in Retail banking, Investment Banking, Venture Capital

Merger of ICICI with ICICI Bank in 2002


The blurring boundaries between banks and financial institutions over the last decade clearly called for and integrated approach leading to the merger.

When did ICICI launch e-trading?


ICICI announces the launch of web based trading services through its group company on January 11, 2000: ICICI Web Trade Ltd. ICICI Direct commenced services on 17 Apr. 2000ICICI (NYSE Symbols: IC and Iced) through its group company namely ICICI Web Trade Limited would be launching a new Internet based trading service at icicidirect.com. The business model that would be that of a combination of thin branches (ICICI Centers which function like cyber points) and the web space. This model has been successfully adopted by leaders in the international market like Charles Schwab. Not only is ICICI Group the first to offer this service, but icicidirect.com offers the first end to end integrated web based trading service - e-Invest Account that allows the customer seamless electronic trading on the exchanges. Through this unique three-inone offering, every customer opening an e-Invest account will get a free demat account and a free online banking account. This integration will enable the customer to tie in his trading bank account and demat account to his e-Invest account electronically. When the customer punches in a trade on his computer, the icicidirect.com server will check the balance in his bank and demat accounts and will execute the trade on the exchange online. All of this will involve no paperwork. ICICI direct.com will keep track of all transactions, settlement dates and stock exchange rules, thus making trading a completely hassle free experience for the customer. Under this end to end integration, the customer will be offered a free online banking account and a free demat account with every e-Invest account opened. Therefore the customer need not be an existing account holder with ICICI Bank or ICICI Demat Services.

e-Invest allows the customer to not only buy shares to the extent of money in his bank account but also allows him to buy and sell shares on margin, thus leveraging his money. Hence he can buy much more than covered by the actual balance in his bank

account. There is a strong risk mitigation module incorporated in the system to protect the customer from over exposure. In line with ICICI Group's retail focus, this product is targeted at an individual customer who is interested in the stock markets. Any Indian (resident or non -resident) who has access to the Internet, located anywhere in the world can open an e-Invest account with us. For those customers who do not have an independent access to the net, ICICI Centers would provide net access, in the first phase in 12 centers and eventually throughout the country. The ideal mix of technology and Internet as a channel allows us to bring these features to everybody at competitive prices. The e-Invest account will be introduced in phases after obtaining the necessary regulatory approvals. It is expected that by February 28, 2000 the regulatory guidelines would be in place and statutory approvals would have been obtained. Live trading is therefore expected to commence only at that time. In the interim six weeks, icicidirect.com would be set up in the alpha and beta mode. With effect from January 13, 2000 investors can visit icicidirect.com to view a demo, give feedback and register for the beta testing. Incase the statutory clearances are obtained earlier; we would be ready to launch in line with the same. The site content will include online quotes and ticker, watch lists, portfolio tracking, charts, online news analysis; markets follow up, research, IPO centre, and view facilities for positions as well as transaction histories. ICICI Direct offers the highest level of security, ie, SSL with 128-bit encryption. The success of the launch has surpassed our initial expectations. On-line trading on ICICI Direct has appealed to all income levels. There are customers who also go to cyber cafs to trade through ICICI Direct. Every day we are adding more and more customers.

Retail ICICI direct.com & ICICI direct Largest reach in retail segment through its two pioneering brands- ICICI

direct.com & ICICI direct ICICI direct is Indias largest online trading website It is among the top 5 online brokers in the World First in India to introduce digitally signed contract note website Comes from the most trusted brand in India ICICI Closely integrated offering of bank, demat and brokering services provides a

completely online environment Safest transaction Capabilities ICICI direct.com is the most comprehensive website, leader in the online share

trading space with more than 1.2 million customers, which translate into a market share of over 65%

What are the features of ICICI direct? 1. Comprehensive

Trading on both NSE and BSE

PINS(portfolio investment services) as well as Non-PINS transactions online

2.

Hassle Free

Simplified account opening process opens up to 4 bank accounts,16 demat accounts, broking accounts and PINS at once.

No need to send transaction details to RBI.

3.

Seamless

No need to write cheques

Funds/Shares directly credited to clients Bank/DP

Direct pay-out of funds on the same day of the exchange pay-out

4.

Secure

Secured Socket Layer (SSL) with 128 bit encryption.

Detailed audit trail of transaction with time stamp of all orders.

Funds/Securities with ICICI Bank and flows only in clients accounts.

Business Objectives

To grow in multiples.

To fulfill every significant need gap in the market.

To penetrate deep into market geography

To add new customers to the ICICI group.

Thrust Areas

Scale up to 600 centers from more than 300

Integrate with technology

Build a differentiated brand experience in the market place through the ICICI direct centre

Grow the brand exponentially

Performance Management Philosophy of ICICI direct

What gets measured, gets improved

What gets improved, gets rewarded

What gets rewarded, gets reinforced

So
B r o k in g / In v

How to open account with ICICI Direct?


For Online Stock Trading with ICICI, investor needs to open 3 accounts...ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account (DP Account). Note: If you already have a bank account or demat account with ICICI, you could link it with new ICICI Direct trading account. Opening trading account with ICICI is easy. You could use one of the following options to open account with ICICI Direct.

Visit ICICIDirect.com and fill the "Open an Account" form. Call ICICI and tell them that you are interested in opening an account with them.

In both the cases ICICI representative contact you in a day or two and tell you about the procedure to open the account. They usually send somebody to your home to collect documents, signature and for demo if required.

Type of Account
ICICI Direct offers 3 different online trading platforms to its customers:

1. Share Trading Account


Share Trading Account by ICICI Direct is primarily for buying and selling of stocks in BSE and NSE. This account allows Cash Trading, Margin Trading, Margin PLUS Trading, Spot Trading, Buy Today Sell Tomorrow and Call and Trade on phone.ICICIDirect.com website is the primary trading platform for this trading account. They also provide installable application terminal based application for high volume trader.

2. Wise Investment Account Along with stock trading and IPO investing in BSE and NSE, Wise Investment account also provide options to invest in Mutual Funds and Bonds online. Online Mutual funds investment allows investor to invest on-line in around 19 Mutual Fund companies. ICICI Direct offers various options while investing in Mutual Funds like Purchase Mutual Fund, Redemption and switch between different schemes, Systematic Investment plans, Systematic withdrawal plan and transferring existing Mutual Funds in to electronic mode. This account also provides facility to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICIDirect.com website is the primary tool to invest in Mutual Funds, IPOs, Bonds and stock trading. 3. Active Trader Account Active Trader account gives more personalized investment options to the investors. It allows investor to use online and offline stock trading. It also provides with independent market expertise and support through a dedicated Relationship Manager from ICICI. Active Trader also provides commodity trading.

Mother Product of ICICI direct


EQUITY Equities have the potential to increase in value over time and can provide your portfolio with the growth necessary to reach your long-term investment goals. Equities are known to have outperformed all other forms of investment in the long-term

Equity Product
Cash Trading This is a delivery based trading system, which is generally done with the intention of taking delivery of shares or monies.

1.

In cash we simply buy or sell shares of various companies in NSE or BSE

exchanges.

2.

The timings of doing trade in this segment are 9:55 a.m to 3:30 p.m. The timings

can change due to some unavoidable circumstances which will be intimated by the exchange to us.

3.

There are 994 companies which can be traded under this segment till date.

Margin Trading

You can also do an intra-settlement trading up to 3 to 4 times your available funds, wherein you take long buy/ short sell positions in stocks with the intention of squaring off the position within the same day settlement cycle.

Margin PLUS Trading

Through Margin PLUS you can do an intra-settlement trading up to 25 times your available funds, wherein you take long buy/ short sell positions in stocks with the intention of squaring off the position within the same day settlement cycle. Margin PLUS will give a much higher leverage in your account against your limits.

Spot Trading

This facility can be used only for selling your demat stocks which are already existing in your demat account. When you are looking at an immediate liquidity option, 'Cash on Spot' may work the best for you, On selling shares through "cash on spot", money is credited to your bank a/c the same evening & not on the exchange payout date. This money can then be withdrawn from any of the ICICI Bank ATMs.

BTST

Buy Today Sell Tomorrow (BTST) is a facility that allows you to sell shares even on 1 st and 2nd day after the buy order date, without you having to wait for the receipt of shares into your demat account.

Call n Trade Call n Trade allows you to call on a local number in your city & trade on the telephone through our Customer Service Executives. This facility is currently available in over 11 major states across India. Trading on NSE/BSE: Through ICICIdirect.com, you can trade on NSE as well as BSE.

Market Order: You could trade by placing market orders during market hours that
allows you to trade at the best obtainable price in the market at the time of execution of the order.

Limit Order: Allows you to place a buy/sell order at a price defined by you. The
execution can happen at a price more favorable than the price, which is defined by you, limit orders can be placed by you during holidays & non market hours too.

TRADE IN DERIVATIVES

FUTURES Through ICICIdirect.com, you can now trade in index and stock futures on the NSE. In futures trading, you take buy/sell positions in index or stock(s) contracts having a longer contract period of up to 3 months. Trading in FUTURES is simple! If, during the course of the contract life, the price moves in your favor (i.e. rises in case you have a buy position or falls in case you have a sell position), you make a profit. Presently only selected stocks, which meet the criteria on liquidity and volume, have been enabled for futures trading.

Calculate Index and Know your Margin are tools to help you in calculating your margin requirements and also the index & stock price movements. The ICICIDIRECT UNIVERSITY on the HOME page is a comprehensive guide on futures and options trading.

OPTIONS

An option is a contract, which gives the buyer the right to buy or sell shares at a specific price, on or before a specific date. For this, the buyer has to pay to the seller some money, which is called premium. There is no obligation on the buyer to complete the transaction if the price is not favorable to him. To take the buy/sell position on index/stock options, you have to place certain % of order value as margin. With options trading, you can leverage on your trading limit by taking buy/sell positions much more than what you could have taken in cash segment. The Buyer of a Call Option has the Right but not the Obligation to Purchase the Underlying Asset at the specified strike price by paying a premium whereas the Seller of the Call has the obligation of selling the Underlying Asset at the specified Strike price. The Buyer of a Put Option has the Right but not the Obligation to Sell the Underlying Asset at the specified strike price by paying a premium whereas the Seller of the Put has the obligation of buying the Underlying Asset at the specified Strike price. By paying lesser amount of premium, you can create positions under OPTIONS and take advantage of more trading opportunities.

3. Investing in Mutual funds:


ICICIdirect.com brings you the same convenience while investing in Mutual funds also Hassle free and Paperless Investing. With the inclusion of Fidelity MF, you can now invest on-line in 19 mutual Funds through ICICIdirect.com. Prudential ICICI MF, JM MF, Alliance MF, Franklin Templeton MF, Sundaram MF, Birla Sun Life MF, HDFC MF, Principal MF, UTI MF, Reliance MF, Kotak MF, Tata MF, DSP Merrill Lynch MF, ING MF, CHOLA MF, Deutsche MF, HSBC MF and Standard Chartered MF are the Mutual Funds available for investment. You can invest in mutual funds without the hassles of filling application forms or any other paperwork. You need no signatures or proof of identity for investing. Once you place a request for investing in a particular fund, there are no manual processes involved. Your bank funds are automatically debited or credited while simultaneously crediting or debiting your unit holdings. You also get control over your investments with online order confirmations and order status tracking. Get to know the performance of your investments through online updation of MF portfolio with current NAV.

ICICIdirect.com offers you various options while investing in Mutual Funds:

Purchase: You may invest/purchase Prudential ICICI MF, JM MF, Alliance MF,
Franklin Templeton MF, Sundaram MF, Birla Sun Life MF, HDFC MF, Principal MF, UTI MF ,Standard Chartered MF ,Reliance MF,Kotak MF, Tata MF,DSP merrill lynch MF,ING MF,CHOLA MF,Deutsche MF,HSBC MF and Fidelity MF without the hassles of filling application forms.

Redemption:
In addition to giving hassle-free paperless redemption, ICICIdirect.com offers faster liquidity. You can redeem the mutual fund units through ICICIdirect.com. The money will be credited to your bank account automatically 3 days after the order placement date.

Switch:
To suit your changing needs you may wish to shift monies between different schemes. You can switch your monies online from one scheme to another in the same fund family without any hassles.

Systematic Investment plans (SIP):


SIP allows you to invest a certain sum of money over a period of time periodically. Just fill in the investment amount, the period of investment and the frequency of investing and submit. ICICIdirect.com will do the rest for you automatically investing periodically for you.

Systematic withdrawal plan:


This allows you to withdraw a certain sum of money over a period of time periodically.

Transfer-in: You can convert your existing Mutual funds into electronic mode through
a transfer-in request.

4. IPOs and Bonds Online:


You could also invest in Initial Public Offers (IPOs) and Bonds online without going through the hassles of filling ANY application form/ paperwork.

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are about to hit the market and analysis on these. IPO calendar, recent IPO listings, prospectus/offer

documents, and IPO analysis are few of the features, which help you, keep on top of the IPO markets.

5. Content Features:
There are a host of features on ICICIdirect.com that shall help you make informed investment decisions. We provide you with the indices of major world markets, nifty futures and ADR prices of Indian scrips. Get daily share prices of all scrips, monthly and yearly high/lows etc through Market Watch. Get breaking news from CNBC and Reuters. Catch a glimpse of News Headlines through our scrolling Direct News Headlines. Get a snapshot of the latest developments in the markets through the day using Market Commentary. You can get weekly snapshots also. Use Pick of the week which focuses on fundamental stocks with sound prospects. Catch interviews, reactions and comments from industry leaders with CEO Call. Track the movement of leading scrips within a sector across 12 sectors using Market@Desktop. Equip yourself with our barometers. Market Barometer gives you in-depth information of the weightages of shares on Nifty and Sensex. Get a glimpse of the performance of various industry sectors through Industry Barometer. Direct Technical Charts offer interactive charting with advanced indicators. Get a bird's eye view of over 5000 companies at a single click using Company Snapshot. Glance through analyst recommendations using Multex Global Estimates.

In case, you are not too comfortable with share trading, try our Learning Centre, which is a tutorial on investments and My Research that helps you to research a stock better.

6. Personal Finance:
Use our Personal Finance section and get hold of tools that can help you plan your investments, retirement, tax etc. Analyze your risk profile through the Risk Analyzer and get a suitable investment portfolio plan using Asset Allocator.

7. Customer Service Features:


With 'ICICIdirect Customer Tools & Updates' you can trouble shoot all your problems online. Address your trading queries on-line through "Easy Mail". You can view and change your profile or password on-line through General Profile option. Get details of ICICI Centers, our sales and service offices, across India through branch locator. View your Account Statement and Bill Summary of your transactions online using bills & accounts. View your Digital Contract Notes instantly. View various charges through the Fee Schedule option Give your feedback or viewpoint through the Viewpoint online. Enroll yourself for various ICICIdirect Workshops through Register for Customer Sessions.

WHATS DIFFERENT ON ICICIdirect.com:Experience hassle free trading on ICICIdirect.com with its different products: INVEST IN 14 MUTUAL FUNDS ON ICICIdirect.com ICICIdirect.com has launched DSP MERRILL LYNCH Mutual Fund on its integrated Mutual Fund Plaza to enable online investment in Mutual Funds. This is the 14th Mutual Fund to be launched on ICICIdirect after Prudential ICICI MF, Franklin Templeton India MF, Alliance Capital MF, JM MF, Birla Sun Life MF, Sundaram MF, IL&FS MF, Principal MF, HDFC MF, Standard Chartered MF, Reliance Capital MF, Kotak Mahindra MF and TATA MF. Customers of ICICIdirect will not have to worry about filling up application forms; drawing cheques /making demand drafts, depositing warrants as all the financial transactions are completely automatic at the touch of a button. The MF Plaza would enable customers of ICICIdirect to transact online through user friendly transactions including Purchases, Redemptions, Switches, Transfer-in and Systematic Investment Plans (SIP) and Systematic Withdrawal Plan (SWP).

Margin PLUS - New product on ICICIdirect.com


MarginPLUS offers an order placement feature through which you can take an intraday position in the equity segment and at the same time, place a cover order for this position specifying the Stop Loss Trigger Price and the limit price. This cover order will help you to limit the loss, if any, on the position.

How does MarginPLUS work?


At the time of taking a position in MarginPlus, you would also be required to specify a Stop Loss Order, and hence limiting your loss to that extent. Since the risk is now limited to the difference between your Buy/Sell rate and the Limit price, margin will be primarily based on this difference.

Features

MarginPlus is available for intra day trading in more than 60 stocks on Margin requirement could be as low as 4% Provides exposure up to extent of 25 times* on your limits in the equity segment Helps to limit your loss through a Stop Loss Order Open MarginPlus positions can be closed any time before the End of Settlement Auto square off process to help you close your open positions at the End of the

ICICIdirect.com

timings as specified by ICICIdirect.com

Day.

How to place a MarginPlus order?


Allocate the funds for trading in Equity segment. Select the link "MarginPlus order" on the trading page. Select the Buy/Sell option and the Stock for trading. (orders can be placed only The first Buy/Sell order can only be a market order. At the time of placing this order, also select a cover Stop loss trigger order.

during market hours)


E.g. You Buy 100 shares of INFTEC at 3400, anticipating that the price would rise. At the same time, you will be required to place a cover stop loss order. Say you decide your stop loss price at 3330. You will then be required to state the limit price at say 5% lower level i.e. Sell 100 INFTEC at 3230 limit price and 3330 Stop Loss Trigger Price. Margin blocked on this transaction will be 3400 - 3230 = Rs 170/-. Hence if your view goes wrong and the price of INFTEC moves down, your Stop Loss order will be triggered at 3330 and will get executed at the best available price between 3330 and 3230. If your position is favorable, and INFTEC moves up to 3500, you can modify the Stop Loss order to a market order and close your position.

How are you benefited?


You get a exposure of as much as 25 times your limits Your maximum loss is limited since you also place a Stop Loss Order.

VIEW YOUR DIGITAL CONTRACT NOTES INSTANTLY

SEBI has permitted issuance of digitally signed contract notes and with the appointment of Certifying Authorities; Digitally Signed Contract Notes are now acceptable as legally valid documents. ICICIdirect.com has received the approval to issue legally valid digital contract notes. This will help ICICIdirect.com customers to get online access to their contract notes. The contract notes would be made available to the customers on the same trading day after the end of the market. The contract notes can also be saved or printed for future reference. With the launch of the Digital Contract Notes, the practice of dispatching physical contract notes would be discontinued. Procedure to view digitally signed contract notes: 1. You would have to login, and go to the customer service section of the site. Then click on "Bills & Accounts". 2. Click on the topmost link "View Contract Notes". 3. Select the period of trading for which you wish to view the contract notes and click on the GO Button. 4. A page appears with the list of contract notes generated for trades done by you for the chosen period. Choose the contract note that you wish to view and click on "Verify". 5. The contract note verification screen would then be displayed along with the transaction details. 6. Click on the "View Contract Note" Button. This displays the contract note you wish to view.

7. You can save or print the contract note using the "Save" or "Print Contract note" buttons respectively.

VIEWPOINT - OPINION POLLS ONLINE

To help us understand you better, we are launching a new feature "OPINION POLLS ONLINE". Through this option we will conduct polls online regarding various subjects. Your active participation in these polls will go a long way in helping us to serve you better. The polls are based on a broad category of subjects to help us understand you better and also to address any issues that you may be facing. You can login to the CUSTOMER SERVICE page and then click on POLLING POINT on the bottom left hand side of the screen. The questionnaire will give you various options on different subjects. Kindly select the options that are applicable to you and then SUBMIT your poll. You can also see the historical details of the participation of your poll you can go through the POLLING HISTORY.

What is the marketing strategy that ICICIDirect adopt in the competitive scenario?
The marketing strategy is such that people are made aware of the of advantages of online trading. The other important thing is customer service. If you ask me as to what ICICIDirect is doing in customer service, I would put it succinctly as the ease of allowing trading, back-office operations and seamless connectivity to the bank and the DP. The company has launched margin trading. As margin trading has an inherent element of risk, our risk mitigation process needs to be fairly automated to handle a large number of transactions. One large customers risky position should not affect other smaller customers. Ultimately, the exchange holds the broker responsible for proper risk

management. A broker then has to manage all the risk for the clients and that has to be done properly

Perfect Portfolio Management Services


Intermediaries and investment consultants for retail, high net worth individuals and corporations helping them leverage the booming Indian economy by profitably participating in Indian Equity and Commodities Markets. We offer customized solutions based on the risk profile of each investor by planning a personalized asset allocation program and effectively utilizing various available cash and derivative products (including futures / options and related strategies like spreads, straddles, strangles etc.)

Account opening fees: Rs 750/- (One time non-refundable) Brokerage: ICICIDirect.com brokerage varies on volume of trade and inclusive of
demats transaction charges, service taxes and courier charges for contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.85% on delivery based trades.

Investing in Mutual funds

With the inclusion of Fidelity MF, you can now invest on-line in 19 mutual Funds through ICICIdirect.com. a) c) e) g) i) k) m) Prudential ICICI MF Franklin Templeton MF Birla Sun Life MF Principal MF Reliance MF Tata MF ING MF b) d) f) h) j) l) N) JM MF, Alliance MF Sundaram MF HDFC MF UTI MF Kotak MF DSP Merrill Lynch MF CHOLA MF

ICICIdirect.com brings you the same convenience while investing in Mutual funds also - Hassle free and Paperless Investing.

Once you place a request for investing in a particular fund, there are no manual processes involved. Your bank funds are automatically debited or credited while simultaneously crediting or debiting your unit holdings. You also get control over your investments with online order confirmations and order status tracking. Get to know the performance of your investments through online updating of MF portfolio with current NAV.

NT- Non Trader

Customers mapped to centers have different equity profiles. A part of these customers are profiled as NT (Non Trading) customers in the SRM. The account-opening year of these NTs varies from 2000-2007. These customers have never traded with us till date because of various reasons: 1. No body approached them 2. Lost the password 3. Hesitate to trade 4. Lack of knowledge in trading 5. Waiting for the right time to trade 6. A feeling that prices are higher

The few important things to be done so that the customer trades are: 1. Call the customer to know the reason for his not trading 2. Acknowledge, empathize and help him with the necessary support 3. If he needs a password, arrange for a new password by placing a request. 4. Talk about services- Centre facility, RM allocation, Research reports, and flexibility in trading etc. What is the credit that I get in case the customer puts a trade? 100% revenue is generated by these customers.

ST- Stop Trader

These are customers who have traded with us at some point of time but have subsequently stopped trading in either one or all products. What is the objective of the Offer? To win back stop traders and ensure positive revenue impact. To increase penetration of multiple equity products It is very difficult to retain stop traders. They do not revert back properly to the telephonic calls. They are either dissatisfied with the services or have made heavy losses in equity market.

What is the marketing strategy that ICICI Direct adopt in the competitive scenario? The marketing strategy is such that people are made aware of the advantages of on-line trading. The other important thing is customer service. If you ask me as to what ICICI Direct is doing in customer service, I would put it succinctly as the ease of allowing trading, back-office operations and seamless connectivity to the bank and the DP. The company has launched margin trading. As margin trading has an inherent element of risk, our risk mitigation process needs to be fairly automated to handle a large number of transactions. One large customers risky position should not affect other smaller customers. Ultimately, the exchange holds the broker responsible for proper risk management. A broker then has to manage all the risk for the clients and that has to be done properly Perfect Portfolio Management Services Intermediaries and investment consultants for retail, high net worth individuals and corporations helping them leverage the booming Indian economy by profitably participating in Indian Equity and Commodities Markets. We offer customized solutions based on the risk profile of each investor by planning a personalized asset allocation program and effectively utilizing various available cash and derivative products (including futures / options and related strategies like spreads, straddles, strangles etc.)

Awards and Recognition

TxA1 highest broker rating by CRISIL- ability of ICICI direct to service capital market broking transactions is highest

Awarded Asias first Web Seal by KPMG- a seal of assurance awarded to companies in the internet world with control conscious business operations

ICICI direct has the largest number of customers- SEBI

ICICI direct transparency, ease of trading, and technology initiatives have made it the leader in Indian online trading market- Capital Market.

The largest online broker by customers, trades and market share-Business India

Outlook Money- Indias Best e-Brokerage House awards in 2003-2004, 2004-2005 and 206-2007

CNBC AWAZ Consumer award for the most Preferred Brand of Financial Advisory Services

Customer behavior in relation to stock market

Who is a customer? A customer refers to individuals or households that purchase goods and services generated within the economy. The word historically derives from "custom," meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit to purchase goods there, and with whom the shopkeeper had to maintain a relationship to keep his or her "custom," meaning expected purchases in the future. Why the stock market is called a market? a market is a place where goods are bought and sold. The stock market is where people buy and sell one type of product. That unique product is shares of ownership in a company, which are also known as stocks. Potential investors get to choose from many companies that sell a variety of goods, from clothing to medicines to sports equipment to toys. When people buy and sell stock, it's called trading Who is a customer in stock market?

Persons who buys shares in the stock market are called as customer in stock market. In a stock market the buyer of shares is not called as customer but called as investor in stock market. Customers are called as investor because those people invest their money in a particular company by purchasing the shares of that company and becoming the shareholder in that company. The various categories of customer in stock market Not every person use to invest in stock market nor persons of a particular class invests in stock market .the major type of investors belongs to following categories: Businessmen Salaried person Retired person

The various sub-type of investor investing in stock market from the above categories Investors ranging from the non-informed to the highly informed characterize the demand side of the stock market. The following describes four kinds of investor types: 1) The non-informed investors. 2) The medium informed investors. 3) The highly informed investors. 4) The perfectly informed investors. The first three investor types are present everyday in actual stock markets whereas the perfectly informed investor is a hypothetical construct that functions only as a point of reference

Non-informed investorsThere are two kinds of non-informed investors: 1) Professional investors that have perfectly diversified portfolios.

2) Amateur investors that have non-diversified investments. Non-informed investors make no efforts at all to gather and analyze information about the fundamental value of the stock. Instead they rely exclusively on other and informed investors preventing the prices from diverting too much from the fundamental value. In other words, the non-informed investors free ride on the information about fundamental value that informed investors produces and indirectly make publicly available through their price determining market interactions. It is interesting that stock prices function not only to equilibrate demand and supply, but also to convey information about corporate value / long-term performance. When information is costless (as it is in perfect markets), prices function only to equilibrate demand and supply, because everybody knows the value of the goods they are buying. Noninformed investors typically prefer small stock holdings to large ones because minor holdings are more liquid.

Medium informed investors-

The medium informed investor analyze historical price or return information. Such analyses are also called technical analyses because investors use statistical- and econometric techniques to find out whether the historical price pattern exhibits any regularity. These regularities can be used to develop trading filter rules that may outperform an ordinary buy-and-hold strategy in terms of return before trading fees and salaries to the analysts. The finance literature typically refers to technical analyses in connection with the weak-form market efficiency hypothesis indicating that such analyses use only historical price information. Unfortunately, this indication is somewhat misleading. Principally, any information adding productiveness to a technical model of the stock price may be used. However, typically technical analyses satisfy with the historical price information plus a limited set of publicly available statistics.1[4] From a theoretical point of view it is interesting to note that if everybody in the stock market used only

historical price information, the stock price would contain no information at all about fundamental value, and it would be completely random!

Highly informed investorsHighly informed investors analyze all publicly available information in order to estimate fundamental corporate value. This kind of analysis is called fundamental value analysis. As the name hints, the analysis tries to determine stock value by investigating the fundamental value drivers of the firm, such as quality of management, firm operations, organizational structure, industry specifics, and national regulation. Such analyses are conducted by using dividend models, equity models, cash flow models or some kind of combination of these models. In principal fundamental analysis may also include the use of insider information. Insider information is relevant information that is not publicly available.2[5] Fundamental value analysis produces more certain stock price estimates than technical analysis but it also requires more time by the analysts. Another issue is that better-informed investors should be expected to have larger stock holdings than non-informed investors because this increases the return from being better informed. However, there are limits to this argument. For example, large holdings are less liquid and it is more difficult to trade without being discovered by other traders who try to mimic the trade of the informed traders in order to free ride on their information. Furthermore, some of the better informed investors are institutional investors, and the law probates that they own controlling stakes in the firms they invest in.

Perfectly informed investorsThe perfectly informed investors invest 'as if' the cost of gathering and analyzing information were zero. This is a hypothetical situation, because it is very reasonably to believe that beyond a certain point the marginal cost of gathering and processing further information will simply be too high to justify the extra profit to be made from more certain estimates of fundamental corporate value. Fundamental value analysts are always able to improve their

analysis by gathering more information and by examining it further. However, it does not pay because where as the costs principally may go indefinitely high, the gains are definite.

Behavior of customer with respect to the various categories Businessmen:They are more likely to take risks in investing because they have previous experience of taking risks in their previous wealth creation. These individuals have a high-risk tolerance and less of a need for security. They also need to feel in control of their investments, often to the extent of becoming highly involved with the running of their investments, researching or becoming overly involved with technicalities. The need for control is related to the fact that they have a strong belief in themselves and their own abilities. Once they feel they are losing control of an investment situation, their risk tolerance reduces. By being actively involved and in control, these investors feel they are reducing risk. However such involvement may actually be detrimental as it is likely to be a source of irritation to their investment advisor who cannot get on with the business of running their clients affairs due to constant questioning and harassment. The classes of occupation that are likely to be active investors include: small business owners who have developed their own businesses rather than inherited, medical surgeons, independent professionals, such as lawyers or accountants, who work for themselves rather than a large firm, entrepreneurs, and self-employed consultants. Active investors are more likely to get personally involved with the running of their financial affairs, and may believe they know more than their advisor does. They are less likely to delegate the maintenance of those parts of their investment portfolio in which they believe they have experience or have had personal success. However, these individuals are more likely to be contrarian in their stock picking habits and have less need to be completely diversified. Age tends to soften their need to be constantly in control, so that older clients may be more malleable and open to their advisors suggestions.

Salaried person:To these investors security is more important than risk In addition, certain classes of occupation are more likely to contain passive investors. For example, non-surgical doctors, corporate executives, lawyers and accountants who work in companies. Reasons for this are that these individuals are less likely to have high financial resources at an early stage in their careers, having had to delay earning good salaries in order to study or having to repay student loans. Once earning a decent wage, they are then more careful with their money, having a greater need for security. Anyone, therefore, with reduced financial recourses is likely to be more risk conscious and, hence, a passive investor. For these individuals it's important to hang on to their money.

Passive investors make good clients because they tend to trust their financial advisor and are more likely to delegate the running of their financial affairs. And because they are risk averse, they tend to like diversified portfolios of investments in quality companies or investment products. However, they can believe that an investment is more risky than it is, which may keep them out of potentially lucrative opportunities. Passive investors are also more likely to need the approval of others and are unlikely to take a first step into unknown investment territory by being a contrarian. Consequently, they are more likely to follow the investment herd when it comes to stock market investment and stick to following the trend. Retired person:These investor are cautious and intent on safeguarding their wealth, shunning volatility or excitement. These take the path of least resistance, looking primarily for security and safety in their investments and doing what has worked previously.

Customer behavior with respect to ICICI DIRECT.COM

Who are the customers in ICICI DIRECT .COM? All those persons who had there demat account open with ICICI direct .com are called the customer of ICICI direct .com

How to open account with ICICI Direct? For Online Stock Trading with ICICI, investor needs to open 3 accounts...ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account (DP Account). Note: If you already have a bank account or demat account with ICICI, you could link it with new ICICI Direct trading account. Opening trading account with ICICI is easy. You could use one of the following options to open account with ICICI Direct.

Visit ICICIDirect.com and fill the "Open an Account" form. Call ICICI and tell them that you are interested in opening an account with them.

In both the cases ICICI representative contact you in a day or two and tell you about the procedure to open the account. They usually send somebody to your home to collect documents, signature and for demo if required. Which are the various categories of people who are the customer of ICICI direct .com? All those categories of people who invest in stock market are the categories of person who are the customer of ICICI direct .com. As some of the customers in icici direct .com are of business class some are salaried one and some are retired person

Various categories of customer defined by ICICI direct .com

ICICI DIRECT .COM classify there customer on the basis of there response to stock market. Such as if a customer is regularly trading in stock market through its demat account then that customer is treated as TEQ (trading on equity) customer. In the same way other categories of customer are NT (non trader): All those customer who had open there demat account with ICICI direct .com but not started trading in stock market through that demat account after 3 month of its account opening date those customer are treated as non trader by ICICI direct .com. ST (stop trader) Those entire customers who had traded with its account once or twice and after that stop trading through its account due to some reasons are known as stop traders.

Proportion of various customers in icicidirect.com

st

nt 0%

teq

30% 40%

30%

ANALYSIS

SWOT analysis of icicidirect.com

WHAT IS SWOT ANALYSIS? A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors can be classified as Strengths (S) or Weakness (W), and those external to the firm can be classified as OPPURTUNITY (O) or THREATS (T). Such an analysis of the strategic environment is referred to as a SWOT ANALYSIS. The SWOT analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how SWOT ANALYSIS fits into an environmental scan:

ENVIRONMENTAL SCAN

INTERNAL ANALYSIS

EXTERNAL ANALYSIS

STRENGT HS

WEAKN ESS

OPPURTUNI TIES

THREA TS

SWOT ANALSIS FRAMEWORK


Strengths:

A firms strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include:

3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very well integrated. This feature makes ICICI the most interesting player in online trading facility. There is absolutely no manual interfere require. This is truly online trading environment. Unlike most of the online trading companies in India which require transferring money to the broker's pool or towards deposits, at ICICI Direct you can manage your own demat and bank accounts through ICICIdirect.com. Money from selling stock is available in ICICI bank account as soon as the ICICI Direct receive it. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one website. General Insurance is also available from ICICI Lombard. Trading is available in both BSE and NSE Good reputation among customers as icici direct.com provides a relationship manager to every client. Cost advantages from proprietary know how. Exclusive access to high-grade natural resources. Online trading platform Diverse Branch Network provides ample opportunities to penetrate deep into the existing & untapped market. Since its inception in financial year 2000 the company and its subsidiaries have grown from a single location to a nationwide network spread over various cities. Personal relationship manager who will help assist the clients in share trading No custodial charge It does not keep any condition as to collect minimum amount of brokerage from its clients Equity analysis report to support the investment decision of its clients Trading via branch network, telephones and internet account i.e. both online and offline

Strong market presence and increased market share leading to a virtuous cycle of growth and profitability The incentive model is created such that it leads to generation of higher revenue Induction of new employees through an extensive computer based training An added advantage of ICICI direct.com is its strong brand name, which helps its

for the organization. This acts as a motivating factor for the employees to perform well. module that equips them to service their clients efficiently.

sales force to sell the products.

Weakness:

1.

Getting access to ICICIDirect.com website during market session can be frustrating. ICICI Direct brokerage is high and not negotiable. Not all stocks are available under Margin Plus You dont have personal or physical interface with the broker or advisor. This could be very good for those who take their own decisions and are self-directed traders. If, however, somebody is not so, then Net trading is only an enabler and not the sole medium for decision-making for on-line trading.

2.

3.
4.

5.

Too many people try to eat the same piece of pie i.e. people employed in icici direct.com hit the same area to target their customers. There should be a separate set of staff working in fields and trading on behalf of their clients: icici direct.com has same set of staff who are making clients and also trading on behalf of clients this hinders the relationship manager to provide adequate and necessary tips to the clients and at times the managers are not in the position to answer the questions of their clients relating to the current market position as they are on fields.

6.

7.

Due to the continuous need to meet the targets, some of the Relationship managers crack under pressure and thus leave the organization

8.

There is no limit to the maximum number of clients that a Relationship manager can handle. This affects the level of service provided to the clients who are not volume traders.

Opportunities: The external environmental analysis may reveal certain new opportunities for profit and growth some examples of such opportunities include:
1.

The market will gradually evolve into two segments, where there will be self-

directed traders and those who seek advice for making their investment decisions.The latter set will prefer to speak to the broker, get his advice and then trade through certain channels. So both have to co-exist, as is the case in almost all the mature markets. 2.
3. 4. 5.

Scope of online trading on BSE An unfulfilled customer need. Market expansion i.e. opening branches at untapped areas The Capital market in the last few years has turned out to be one of the favorable avenues for the retail investors. This is due to the performance of the Indian Industry in various sectors and the Economy in general. Even the future outlook looks promising.

6. 7.

Market seems favorable for commodities trading. Arrival of new technologies

Threats: Changes in the external environmental also may present threat to the firm some of the examples include: Emergence of competitor company who charging less brokerage 1. 2. 3. 4. Companies like Sharekhan, Indiabulls, Kotak, and Private Brokers are major threats to ICICI Direct. Local brokers capable of charging lower brokerage Industry competitors vying for the same target segment. Changes in SEBI guidelines & other tax implications.

5. 6.

Government Regulations Shifts in consumer tastes away from firms products

Research Methodology
Meaning
Research means search for knowledge. It is a scientific and systematic search for knowledge on a specific topic.

Definition
According to Clifford Woody Research comprises defining and re-defining problems,

formulating hypothesis or suggested solutions, collecting, organizing & evaluating data, making deductions and reaching conclusions and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. Investment in assets is one of the most primary requisites of a business and the modern management obviously depends largely on the efficient management of the finance. They play a dominant role in setting the frame work of managerial decisions. The finance manager has to adhere to the five Rs with regard to money. Whether owned or borrowed

funds. At the right time to preserve solvency from the right sources and at the right cost of capital. The term investment analysis is also known as analysis and interpretation of investment decision refers to the process of determining investment profit & loss. The purpose of investment analysis is to diagnose the information contained in investment so as to judge the profitability. Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. So, the research methodology not only talks about the research methods but also considers the logic behind the method used in the context of the research study. The most vital function of management is an organization is to minimize risk and uncertainty through systematic decision-making. Better decision result from the effectively and timely utilization of right information about the consumers, dealers, competitors and others So far making effective decision research play and important role and provide the right information about consumer, dealers, competitors etc. Research is a systematic gathering, recording and analyzing of data about problems. In other words we can say that research comprises

defining and redefined problems, formulation hypothesis or suggested solution; collecting, organizing and evaluating of data; making deduction and reaching conclusions; and at lest carefully testing the conclusions determine whether they fit the formulating hypothesis. Research is of basis, three types Exploratory Descriptive Experimental

Exploratory research is a preliminary phase and is absolutely essential in order to obtain a proper definition of problems. The purpose of exploratory research is to determine the general nature of problems and veritable related to it. The major emphasis is on the discovery of ideas and insight. Exploratory research is characterized by flexibility and infirmity, exploratory research is generally carried out by three sources-

Literature (secondary data) Experience survey (discussion with experts) Study of some specific cases

Descriptive research is used for some specific purposes. It is focus on the accurate description of various present in the problems. The data is collected in such a manner that the ambiguous nature of causes and effect relationships in the phenomenon is reduced to maximum extent. A descriptive research require a clear specifications of what, who, when, where, why and how aspects of the research. Two types of research is Case Method Statistical Method

Experimental research attempt to satisfy the nature of functional relationship between two or more variable factors present in the problem environment. Experiment research is a process of manipulating and one variable in controlled environment, while all others variables constant in order to establishment a causal relationship. I have conducted a survey to know the state of mind of the investors who wanted to invest in the stock market & also to know the attitude and preference of the prospective investors. A Questionnaire is designed by me to collect the needed information regarding my survey. For my survey I have taken a sample of 40 existing and prospecting investors, I got the questionnaire filled by them to know the state of mind of the investors who wanted to invest in the stock market, their expected charges regarding Brokerage, Return, Annual maintenance charges & also to know the attitude and preference of the prospective investors. Results are cautiously viewed as sample is coming from a specific population. The response that is generated during this exercise is converted in the form of percentage to

have a comparative outlook. These percentages are then represented through the simple tools like Bar graph, Pie charts etc.

OBJECTIVES OF THE STUDY


1. To study the investment related to financial position of the company. 2. To analyze the financial stability and overall performance of company in general. 3. To analyze and interpret the trends as revealed by various ratios of the company in particular. 4. To analyze the profitability and solvency position of the unit with the existing tools of financial analysis related to investment.

IMPORTANCE OF THE STUDY


1. By INVESTMENT PERFORMANCE ANALYSIS we would be able to get a fail picture of the financial position of the company. 2. By showing the financial performance to various lenders and creditors it is possible to get credit in easy terms if good financial condition is maintained in the company with assets outweighing the liabilities. 3. Protecting the interest of the investor related to investment. 4. Compliances with legal requirement.

RESEARCH DESIGN OF THE STUDY

Descriptive research is used in this study because it will ensure the minimization of bias and maximization of reliability of data collected. The researcher had to use fact and information already available through financial statements of earlier years and analyze these to make critical evaluation of the available material. Hence by making the type of the research conducted to be both Descriptive and Analytical in nature. A research design is the basic plan that guides the collection, measurement and analysis of date. Decision regarding what, when, where, How much and by what means concerning a research study constitute a research design. In other words research design is the framework that specifies the type of information to be collected the source of data and the procedure of data collection. The study is based on survey technique. The study consists of analysis about investors awareness. For the purpose of the study customers 40 are picked up and their views solicited on different parameters. The methodology adopted includes

Questionnaire Random sample survey of customers Discussions with the concerned

Personal interviews and informal discussions were held with Investors and brokers. Customers to ascertain the awareness and satisfaction level. Further applying simple statistical techniques has processed the data collected This design involves the following steps:

1.

Formatting the objective of the study

2.

Design the method of data collection

Selecting the sample

Processing and analysis of the data

5.

Report the findings

SAMPLING PLAN:

Sampling since segment wise investors in Securities markets are not available for the overall customers was considered for the study. 100% coverage was difficult within the limited period of time. Hence sampling survey method was adopted for the purpose of the study.

Population: (universe) customers of Securities markets.

Sampling size: A sample of 40 was chosen for the purpose of the study. Sample considers of small investor, large investors and traders of Securities markets.

Sampling Methods: Probability sampling requires complete knowledge about all sampling units in the universe. Since due to time constraint non-probability sampling was chosen for the study.

Sampling procedure: From large number of customers of Equity share markets investors and brokers were randomly picked up.

Field Study: directly approached respondents.

LIMITATION OF STUDY

As the sample size is very small, and only 40 customers is taken into account. The data is not reliable. We cannot journalize the statement on the basis of these results.

.Since segment wise investors are not available in equity and debt markets. Overall concept is taken for the study.

Information is partly based on secondary data and hence the authentic of the study can be visualized and is measurable.

Level of accuracy of the results of research is restricted to the accuracy level with which the Investors and brokers have given their answers and the accuracy level of the answers cannot be predicted.

Investors were in hurry so they were not interested to talk and also to fill the questioner.

Some time Investors fill half of the questioners and walk out of the position.

Some investors feel shy in filling the questionnaire and talking about their investment behavior.

Some customers do not reply properly even after continuous follow up and getting appointments from them to inform about the products and services becomes very difficult.

DATA COLLECTION

The research design of the study is descriptive research. It portrays accurately the characteristics of a particular situation. Data collection method: - Two types of data are there primary and secondary data. Primary data the primary data was collected through following activities:1. 2. Administering the questionnaire to the brokers of a select group of companies. Telephonic Conversation

I made a questionnaire and the questionnaire filled by the prospective investors who wanted to invest in the capital market and also who had already invested in the stock market.

COLLECTION OF DATA THROUGH QUESTIONNAIRES: The data collected for the study purpose is through questionnaires. 40 investors and brokers have been selected randomly for the study purpose and then the information revealed from the investors is analyzed and interpreted in the study.

Secondary data:- The secondary data are those data that are already in written form. Those are collected from various sources like magazine, journals, websites, and booklets of NSE, Dalal Street Journal. SEBI, BSE, NCDEX, And MCX and by website.

I have taken the information from the official website of Brokering firm and the of BSE,NSE,SEBI and other important websites.

FINDING AND ANALYSIS RESPONDANTS AND GRAPHS

The term Feedback means responds from the respondent. Here in this case a set of questionnaire is paced before the respondent at the end of the meeting put a request to fill up the questionnaire; the filled questionnaire is the feedback in case based on the feedback of the questionnaire the particular chart is to be prepared. With this background in mind a questionnaire was administered to the corporate and the responses were collated. Each question was analyzed and result was recorded.

QUESTIONNAIRE

DEAR RESPONDENT

We would like to seek your valuable feedback pertaining to matter that you might have been doing it as a routine work, since it became a part of your work to deal with stock market. In this whole process we may not consider the important issue i.e. investment. Form these set

of questions we are trying to analyze brokerage of various securities. We would request you to kindly add your valuable views comments on it. Onkar Singh Rathore Student of MBA IV sem. JIETSOM, Jodhpur
(A) GENERAL INFORMATION

Name Name of firm Firms Address Education Qualification Experience Status(occupation ) Types of BusinessGovernment Servant Private Sector Servant

: .. : .. : : : :

Semi-Government Servant Business Others

QUESTIONNAIRE: ANALYSIS OF CUSTOMER BEHAVIOUR

Q1 what is your occupation? a) b) c) Businessman salaried person retired person

retired 25%

0%

businessm en 45%

salaried 30%

45% of the customer surveyed of Jaipur city who visited the branch of ICICI direct .com belongs to business class 30%are salaried person and rest are the retired persons.

Q2

Do you invest your money? a) b) yes no

0% yes 40%

no 60%

Among the various people Surveyed only very few means about 40% were interested in investing there money rest were not interested to invest there money.

Q3 In which market do you market do you invest your money? a) b) Primary market secondary market

c)

other

0%

others 30% prim m ary arket 43% secondary m arket 27%

Most of the people are afraid of investing there money in secondary market and

they use to invest there money in factors of primary market or in various post office schemes. Only 40% of people are interested in investing in stock market, others do invest in Mutual funds, banks, post office etc.

Q4

If you invest only in primary market than why do you not invest in secondary a) b) c) primary market is more safe to invest money than secondary market do not have sufficient knowledge about secondary market lack of sufficient money

market?

d)

Lack of time

10%

15%

35% RISK KNOWLEDGE MONEY TIME

40%

The survey make it clear that the major reason behind person not

interested to invest in secondary reason is lack of sufficient knowledge about it that is the reason why people think it is risky to invest in secondary market. Other reason is that for investment in secondary market required proper analysis of market which require a great time and now a days people are in short of time.

Q5 Do you have your own demat account? a) b) c) yes no

no 20%

0%

yes 80%

Among those who are interested in stock market trading only 80% of them Rest of them either has shares in physical form or do trades through their

have demat a/c

brokers demat a/c

Q6 Do you have your demat account with icici direct .com? a) b) Yes No

65% are person surveyed are the existing customer of ICICI direct .com

and rest 35% do not have there demat account with ICICI direct .com.

Q7 Do you know about online share trading? (a) Yes (b) No

no, 40% 40% ,

yes, 60% 60% ,

60% of the person having their demat account know about the online trading facilities but still 40% of the people are not aware of this facility.

Q8 Other then the demat account of ICICI direct .com with which other brokerage house do you have your demat account?
a)

India bulls Kotak Share khan

b)
c)

d)

Do not have other demat account

indiabulls 30% no 40%

sharekhan 15%

kotak 15%

India bulls is the other leading security company in the market. It has its 30% of A/Cs are opened in India bulls 15% of A/C in Kotak Mahindra 15% of A/Cs in Sharekhan 40%do not have there account open in any of the other brokerage house

majority of 30% in the market among its competitors like Kotak, Sharekhan.

other then ICICI direct .com

Q9 how do you invest your money? a) b) c)


d)

equity Mutual funds IPOs Others

60% 50% 40% 30% 20% 10% 0% businessm en salaried retired

equity

m utualfunds

ipo's

other

The survey show us that a business men is more risk taking as compared to

salaried or retired person these people invest there money more in equitys as compared to other funds on the other hand the ratio of investment by salaried people in various type of ventures is approximately same as these people get less time to invest there money .and retired person want the security of there money so they invest more in mutual funds.

Q10 what type of trading do you prefer? a) b) c) delivery based intraday Margin trading

70% 60% 50% 40% 30% 20% 10% 0% delivery intraday m arginbased businessm en businessm en salaried

The survey show that 65% of the businessmen do intraday trading and

20% does margin based trading only 15% of the businessmen does delivery based trading as they like to earn more in less time . On the other hand 45% and 50% of the salaried and retired person respectively like delivery based trading very few of them like to do intra day or margin based trading as they mainly prefer the safety of there money which is possible in long term trading .

FINDINGS
About stock market:-

This analysis contributes to our understanding that every investor is different,

with different financial goals, different tolerances to risk, different personal situations and different desires. The Objectives being the type of return being sought, while constraints include factors such as time horizon, how liquid the investor is, any personal tax situation and how risk is handled. The analysis also show that the majority of investors are more probable to sell

(buy) stocks in a company after a positive (negative) earnings surprise, and are biased towards buying after the disclosure of new financial statement information. Large investors, on the other hand, show behavior opposite to that of the majority of investors. We suggest investor overconfidence and asymmetric information as possible explanations for the documented behavior.

Uneducated mass do not have much information about the stock market but

invest in stock market according to the saying of other.

Businessmen make more investment in stock market whereas a salaried

investors are busy at work during the week and consider trading decisions mainly during the weekend and consequently they are more likely to trade (either buy or sell) on Mondays. There is a fear factor among general public in concerned with share market. They

think it is speculation.

CICIdirect.com customers are more satisfied with the quality services. Holding

securities in electronic form gives some far-reaching advantages to the investors.

ICICIdirect.com offers a wide choice of products for investing in the stock market.

It allows investing in shares, mutual funds and other financial products. With ICICIdirect.com one can manage own de-mat and bank accounts directly and independently.

The depository participant will allow an investor to trade through any broker of his

choice registered with the stock exchanges connected with National Securities Depository Ltd, what will have to provide the details of investors account with Depository Participant. Investor can click to get online information on their open orders and traders i.e.

orders that are routed to exchange are waiting in the queue to be executed can be viewed for their status. Transaction details for the traders done in the last month are available online.

About ICICI DIRECT .COM:

People are not aware of using the online trading facilities

ICICI DIRECT .COM has captured the market because of its brand brand awareness in the minds of the consumers. But people about its excellent service which would definitely help the more and more new customers

name and the are yet to know company to capture

Some consumers prefer ICICI DIRECT .COM because of their trust BANK. Customer feel that the brokerage charged by ICICI DIRECT .COM as compared to other brokerage house but they are not facilities(margin trading, recommendation etc) customer which make it unique .

in ICICI

are very high

aware of the various

provided by ICICI direct .com to its bad impression


Many clients did not know about the change of RM. This leaves a on the concerned client, damaging the reputation of the firm Many time clients are not given confirmation after the trade Some time the database (including customer contact number and maintained by the company is wrong that create a problem to the

address)

company to have a regular touch with its customer.

SUGGESTIONS

Some customers feel that they are trained for ICICI Direct.Com demo. Many customers feel that batch of 15 are good for ICICI Direct.Com training.

Survey reveals that most of the customers are not aware of the service of the Mutual Fund. ICICI Capital Services Ltd. and the normal tendency of the customer are both investing in shares and in Mutual Funds are one and the same. So for this ICICI Capital Services Ltd., should create an awareness of what exactly mean by Mutual Funds and all other services of ICICI Capital Services Ltd.

After getting the printouts of the holding statement, dispatch of the same should be taken place with no delay and this can be cross verified with the sender (dispatch section).

Customers are facing over crowding, non-availability of telephone lines, so proper measures should be taken to overcome these problems.

The ICICI official should conduct regular training demo classes for the new account holders.

Working of Back Office

There should be a person solely responsible for checking the Registration Kit to ensure that it is complete in all respects and there are no rejections. The policies related to Trading and DP should be consistent and in congruence with each other.

The time lag between giving in the kits for registration and opening the account should be reduced to ensure speedy and efficient service.

Any change in the policies of company should be given atleast one month notice before implementing it. After getting Leads attention should be made on following points:
1.

The calls made should be more informative and assertive. The RM should provide an in depth demonstration of the software and client should be assisted regularly.

2.

3.

Provision of a manual for online clients for ease of operation. Time lag between the complaints put and follow up should be reduced. Database should be verified properly, so that repeated entries do not occur. This will reduce inconvenience to the clients, who complained about multiple calls received.

4.

5.

Analysis of Client Interaction (Already existing clients)

The most crucial aspects for any business are client interaction and after sales services. We carried out a study to gauge the level of satisfaction of the clients with the services of ICICI direct .com. This helped us in understanding why ICICI direct .com has become one of the most trusted brands within a short span of its commencement. 1. The Relationship Managers (RM) should be made responsible to ensure that the clients are well catered, thus, reducing switching over of a lot of time lag is there between the follow up and the change of RM, as a result, the calls could not leave a positive impact on the clients, so contacted. Therefore, follow up should be done fast without any time lag. 2. The customers, who were satisfied with the services, appreciated this kind of follow up. Therefore, such follow-ups are done from time to time, to gain customer confidence. 3. Many clients are not given confirmation after the trade, so they should be given due information about it.
4. Complete net knowledge should be given to clients so that they may not find any

difficulty in login of their A/C on the website of ICICI direct.com. 5. Routing, thereby reducing loss of business to the firm.

CONCLUSION

Indian economy is growing faster. This is one of the best growing economies among the world. You can say the best emerging economy of the world. Stock market is the reflection of economy. Naturally stock market of India is roaring. Sensex (One of the best Index of Bombay Stock Exchange) has climbed from 3,000 to 22,000 in last five years and it is believed that it will reach 40000 in coming years. Now a day's every investor and trader enjoying sweet taste of stock. More all less every day many stock prices have been increasing. Some of them are heating the upper circuit (5%,10%20%). While making an investment in Indian stock market there are lots of thing you should consider before it. I will guide you most important thing and tips that you can implement while making any investment in stock market of India. These stock market tips and tricks are based on many years of expertise experience and as a professional expert in Indian stock market. These are the Stock market secrets:

Buy at low and sell at high: - This is way to make money in stock market that you should buy at lower prices and should sell at higher prices. It determines the success and failure of an investor in stock market of India Current Trend of Stock Market: - As per current trend of stock market it has been seen that once stock market rise at higher speed it down also with same speed and if stock market have gone down there is more possibilities of getting up. This is the current market trends but it can be change in future. Keep patience: - Patience is also plays a vital role in your winning and losing. In stock market many peoples take immediate decisions which can result in big losses later on. This is the nature of stock market every step should be take after a deep thinking and consideration on it.

From the above survey & comparison charts : We can conclude that the majority of prospective investors from the sample i.e.70% does not want to invest in the capital market because either they dont have sufficient knowledge about stock market or they dont have time or they feel that it is risky to invest in stock market.

At last from my study I would like to conclude that ICICI direct .com is growing at a good pace. It is rapidly increasing its market share by capturing new consumers and also by retaining the key customers who preferred ICICI bank.

However the beat and the unique qualities of the company are yet to be known by the people. The investors must be informed about its facilities like 3in1 account, margin based trading, research tips given on website under I-click to gain and I-click to invest and many others. Even though there are lots of opportunities to expand & progress for the company but still it is making sufficient profit. Last but not the least, ICICI direct .com is customer friendly and this obviously makes a value addition to any company in this competitive environment. My experience with this company as a summer trainee was a overwhelming, which gave me a lot of knowledge and idea about stock market and the brokerage house. Besides I came to know the difference between the class room study and the real work done in the market to make a product rise in the market

BIBLOGRAPHY

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