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A REPORT ON
MARKET RESEARCH ON INVESTOR BEHAVIOUR IN
STOCK MARKET FOR NARNOLIA SECURITIES LTD.
NARONLIA SECURITIES LTD.
(MARKETING DEPARTMENT)
(AN AUTONOMOUS CONSTITUENT UNIT OF RANCHI UNIVERSITY, RANCHI)
PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT FOR
THE AWARD OF MASTER OF BUSINESS ADMINISTRATION (MBA) DEGREE
SUBMITTED BY
SHADAB ANJUM
MBA (MARKETING)
10MCRMC93067
Under the guidance of
Project Guide - Mr Vikash Kumar (Cluster Head, Narnolia Securities Ltd.)
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ACKNOWLEDGEMENT
I deem it a proud privilege to extend my greatest sense of gratitude to my
Project Guide Mr. Vikash Kumar, Cluster Head, NSL, for the keen interest, inspiring
guidance, continuous encouragement, valuable suggestions and constructive
criticism throughout the pursuance of this summer internship. I would like to thank
all the concerned executives and staff members of HDFC bank who acted as aconstant support for me and also helped by providing valuable insights
I am highly indebted to Ms. Richa Mishra, Senior HR Manager for her valuable
support in helping me to gain this opportunity of being associated with an
organization of such esteem.
This project is a result of many dedicated efforts and this project report would be
incomplete without giving due credit to them.
Last but not the least, it would be unfair if I dont express my indebtness to my
parents and all my friends for their active cooperation which was of great help during
the course of my training project.
SHADAB ANJUM
MBA (MARKETING)
MARWARI COLLEGE RANCHI
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CONTENT
S. No TOPIC NAME Page No.
1. EXECUTIVE SUMMARY 4
2. COMPANY ANALYSIS 5-18
3. INDUSTRY ANALYSIS 19-33
4. PROJECT BACKGROUND AND APPROACH 34-38
5. DATA ANALYSIS 39-46
6. RECOMMENDATION 47
7. BIBLIOGRAPHY AND REFERENCES 48
8. ANNEXTURE 49-50
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EXECUTIVE SUMMARY
The project report gives a detailed introduction of Narnolia Securities Ltd with special
mentioning of its products and services and then further an industry analysis along
with introduction to Primary and Secondary Market is provided. Narnolia Securities
Ltd is one of the largest Broking houses in Jharkhand, with the brokerage received as
its main source of income. In the project a market research was conducted to assess
the investor behaviour of its clients in the equity/stock market. The management
was worried over the dissuading participation of the investors which it ascribed to
various macro-economic factors but still it wanted to understand its customers
better to find out ways to overcome this situation.
The project was undertaken to get
insight into the investors interface with the stock market to determine and
understand the necessary steps to revamp investors interest and participation in the
Stock market investment activities, which have taken a beat lately. A questionnaire
was prepared to seek response from the investors and it was further analysed and
few recommendations were made.
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INTRODUCTION: COMPANY PROFILENARNOLIA SECURITIES LIMITED (AN ISO 9001:2000 COMPANY)
BRIEF HISTORY: BIGGER AND BETTER:
The history of the company dates back to 1993, the brilliant academic track record
and a deep understanding of capital market of its founder CMD Mr. Krishna N
Narnolia helped him to lay the solid foundation of NARNOLIA with well defined core
values and purpose of the organization.
1997, May 1the firm was corporatized. NARNOLIA SECURITIES PVT. LTD wasfounded, Mr. Shailendra Kumar (B.E., M.Tech, IIT Delhi) as one of the co-
founding director also brought with his experience of industry of financial
markets.
1999, First branch opened in Dhanbad. 2001, It was decided to make the organization big enough so that world class
services can be created and managed efficiently and at the same time to keep
it small enough to make the delivery of services personalized.
2002, Entered into strategic tie up with India's premier broking houseMOTILAL OSWAL as their exclusive regional partner for the states of Bihar,
Jharkhand and parts of West Bengal & Orissa.
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2004, Tied up with BIRLA SUNLIFE as the exclusive distributor of its life
insurance products. Tied up with ENAM as their super franchisee for primary market
distribution
Won the Best Franchisee Network of the Country Award at Most. 2005, Tied up with the world famous Mutual Fund Advisor 'VALUE RESEARCH'
led by Mr. Dhirendra Kumar.
2006, Published a monthly magazine NARNOLIA MUTUAL Won the Best Franchisee Network of the Country Award at MOST Launched NARNOLIA PREMIER CLUB (NPC) for its premium clients
2007, Recognized by Franklin Templeton as the Best Distribution House in the
East in terms of No. of application.
Recognized by Reliance Life as the best CDA in the country 2008,
Nominated by CNBC as the best performing Regional Level FinancialAdvisor of East for the year 2008
The group took a major leap forward by corporatizing its researchinitiative in the name of EASTWIND on the patterns of internationally
best practices. It launched series of investment (wealth management)
and Corporate Benchmarks (E/W INDEX). While the series of Wealth
Management Index have been uniquely designed to satisfy the needs
of both institutional and private investors as a measurement tool for
investment portfolio, the corporate benchmark is meant for our
visionary corporate clients to make a strategic comparison of
companies' business performance with the peer companies and a
benchmarked "best practices" leader. Once strategically restructured,
the Investment Banking arm of the group helps the company in fund
raising and all other capital budgeting exercise.
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VISION OF NARNOLIA SECURITIES LTD
We will be the most trusted, most knowledgeable, mostunderstanding and most concern provider of value added
and customer centric financial service in our strategically
chosen class and also mass market.
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MISSION OF NARNOLIA SECURITIES LTD
We commit ourselves both in thought and action to raise ourselvesin the eyes of our true boss i.e., the investors from being a mere
transaction broker to a true family financial doctor and a secretary to
help them to protect and improve their financial health. We further
resolve not to sell Daru (gambling) in the bottle of Dawa
(investment) and will dare to tell them the difference between the
two even if it results into low revenue in the short term. We shall
invest most of our time, energy and resources to reduce gaps at each
touch points with our existing investors and shall see our growth in
their growth. Let us believe that quantity follows quality.
QUALITY POLICY
Narnolia is committed to implementing appropriate qualitymanagement system to ensure satisfaction of the client (core
purpose) and other interested parties by ensuring the planning and
delivery of consistently high level of service as per the
predetermined high standards of systems, processes, policies,procedures and behaviours required for each of our financialproducts throughout the extensive area of operation.
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CORE PURPOSE
Like a Doctor whose primary duty is to save and improve the life ofhis patient, the primary duty of Narnolia, as an investment and
financial advisor, should be to help the customers, protect and
create wealth. The profit of the organization should be seen as the
secondary objective and as the resultant of the primary duty.
BUSINESS MODEL
The business model is centred on the vision, mission and corepurpose of the
Organization. It is based on the success stories of the world andunique situations of the country. It was realized that the interest of
the customers (core ideology) could best be served if all the world
class products and services could be made available to our customers
in a personalized way tuned to one's unique personal circumstances.
Accordingly decision was taken to enter into some strategic and
exclusive tie ups with leaders of each product. The role of our
research team comprising several investment experts was to add
value to each such products and also to tailor-make it as per specific
needs.
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BOARD OF DIRECTORS
Chairman-cum-Managing Director : Krishna Nand Narnolia(Gold Medalist, M.B.A)
Director - Corporate Strategy : Shailendra Kumar
(B.E,M.Tech.,IIT-Delhi)
Director - Execution & HR : Dilip Losalka
(B.E Hons, BITS,Pilani)
V.P. & Head - NPC (Delhi) : C.A. Jasleen Kaur Bhasin
(DISA)
Head - Back Office Operations : C.A. Vikash Ranjan Sahay
V.P. & HeadDistribution : Abhishek Singhania (MBA)
Associate V.P : Sujeet Kumar Singh
(DPCM,MBA)
Vice President : OM Prakash Agarwalla
(BTECH)
A.V.P Internal Accounts : Dharmendra Kumar Sinha
(MBA)
Associate V.P- Corporate Finance : C.A Anand Kumar Agarwal
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PRODUCTS AND SERVICES
To earn is difficult but to save out of it is more difficult, but even more difficult is to
invest such savings in the right avenue of investment. There is no one best way of
making money. Sound investing is in fact, a disciplined money management processand should be grounded in an investment plan that is based on one's personal
circumstances. It requires an organized knowledge, latest information & conceptual
imagination to arrive at such investment plan of an investor .This can be done on
one's own or with the help of a financial adviser. We, at NARNOLIA, believe in
providing all avenues of investment under one roof, but what differentiates us from
others is the quality of each product in terms of suitability, speed, convenience,
transparency and above all, the empowering advice the bedrock of which is the
WORLD CLASS research and analysis of each product by our team of investment
experts in close association with Motilal Oswal Securities. All these facilities of tradeexecution & advisory services can be availed through any of our over 200 outlets in
Jharkhand, Bihar & West Bengal having world class infrastructure. And if you are little
computer savvy then even the trade execution can be done by you on your own
either at a place of your convenience or at any of our offices using our infrastructure
through our net trading platform MY BROKER.
INVESTMENT & TRADING IN SHARES (STOCK MARKET)
Globally it has been experienced that over time, a portfolio of well-chosen shares will
always outperform bond or fixed deposit. Motilal Oswal Securities Ltd (MOSt) is the
member of both NSE & BSE. It is one of the leading stock brokers of the country and
has been rated by the famous Asia Money Poll '05 as the NO 1 in various categories
including the most prestigious 'BEST LOCAL BROKERAGE HOUSE OF THE COUNTRY'.
End to end equity solution is provided through the online trading terminals by the
team of investment experts & relationship managers. NARNOLIA is the exclusive
regional partner of MOSt for the states of Jharkhand, Bihar and northern part of
West Bengal and is the winner of BEST SUB-BROKER OF THE COUNTRY AWARD twice
in 2004 and 2006.
Cash Trading: It is a delivery based trading system wherein transactions canbe settled intraday or can be settled by taking delivery of shares or monies
Margin Trading: It is similar to cash trading except an additional facilitywherein the investor interested in taking leveraged position can do so by
paying only certain % of the total payment & the balanced amount is
financed by an independent investment company. A separate form isrequired to be filled up for availing this facility. Click here for list of shares
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Spot Payment: Normally under T+ 2 settlement cycle it takes around 3-5days before the payment gets credited in clients account. In cases where a
client having shares in our depository account needs payment early or same
day he/she can avail this facility with prior intimation.
BNST: Buy Now Sell Tomorrow (BNST) facilitates a client to sell specifiedshares (as attached) on T+1 basis even before the receipt of shares into
his/her demat account.
Premium Services: Clients who want to avail the services of our world classresearch team at MOST and NARNOLIA can do so through one of our
Relationship Managers who are closely monitored & guided by our research
analysts. A wide array of products is available which are offered to our
esteemed investors depending on his/her specific investment objective, timehorizon & risk appetite. These products have been classified as
(a) INDEX +
(b) INTEREST +
(c) INTEREST + and
(d) ADVISORY +
Portfolio Management Service (PMS): It is an alternative to investingdirectly. All those who do not have time or discipline or inclination orexpertise to understand the complex ways of investment ,still want to take
benefits of it , can do so by putting their money with the fund managers. Our
PMS helps you to earn the returns of Equities, with maximum ease and
comfort. We have 3 different schemes Value, Bull's Eye, Discover Value PMS,
with different approaches to managing your investments. The team of fund
managers is headed by Mr. Raamdeo Agrawal.
INVESTMENT IN EQUITY DERIVATIVES
Trading volume in derivative segment of the exchanges has surged significantly over
last few months/years. However, the bias is more towards future than options. There
are few misconceptions about this market. It is largely used by speculators to take
leveraged positions in the market. It is considered as a mere replacement of the age
old badla system of BSE. But the fact is that this derivative market has much larger
role to play not only for the speculators but more so for the investors, particularly
the high net worth & institutional investors. With the use of certain financial
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management tools like; Standard Deviation, Theta, Delta, Beta, Gamma, Rho, Vega
etc , one can create several strategies using multiple types of financial instruments of
derivatives market. These strategies can be used by the investors for risk
management, hedging, arbitrage and generation of regular incomes out of the idle
investment. We, at NARNOLIA, have a dedicated team of investment expertscomprising several Chartered Accountants, MBAs etc who are trained at our Narnolia
Knowledge Centre and are also closely supported by the experts at MOSt, Mumbai.
In house software has been developed by us using all the above advance tools to
help the investors to maximize their ROE. In view of the increasing popularity of
derivatives amongst speculators we have introduced a very low brokerage scheme
(lowest slab being .01%) for our net traders. Please click here for 1 PAISA SCHEME IN
MY BROKER.
INVESTMENT THROUGH MUTUAL FUNDS
It is an alternative to investing directly. All those who do not have time or discipline
or inclination or expertise to understand the complex ways of investment ,still want
to take benefits of it , can do so by putting their money with the money managers:
mutual funds who are supposedly the experts in investment matters and are
expected to perform better than individual common investor because of their
economies of scale, professional approach, experience, investing acumen, access to
money market instruments to park their short term/surplus funds etc. All these
features have made them globally a powerful and most convenient wealth creationvehicle. As per one estimate 75% of the retail money over next 10 years is supposed
to come through mutual funds. But, mutual funds are not magic investment tool and
there are a few problems in this expected all powerful investment solution. Mutual
fund cannot guarantee either a return or wealth protection, particularly if it is a
equity oriented fund. Further, there are around 2300 MF Schemes in India and are
likely to multiply even from here on. As such choosing the right scheme of the right
fund or the right mix of schemes of different mutual funds, suitable to one's
investment objective, time horizon & risk appetite, is a daunting task. The return on
investment of different investors will be different depending on the scheme or mix ofschemes where they invested their money. We, at NARNOLIA, can assist our
investors here as we are the corporate distributor of most of the MFs operational in
India and more so, because we have an exclusive tie up with the world famous and
India's premier Mutual Fund advisor- VALUE RESEARCH, headed by Mr. Dhirendra
Kumar. We work together to arrive at the most efficient and productive investment
solution based on specific needs of an individual. A monthly magazine NARNOLIA
MUTUAL is jointly published providing some readymade alternatives of scheme mix
(portfolio). This is customized further for our clients depending on his/her personal
circumstances & needs.
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PRIMARY MARKET
Initial Public Offer (IPO) by non listed companies or follow on offer by presently listed
companies presents good opportunities for making high returns on investment in a
very short period of time. However, contrary to common belief investment through
new issues does not always give high return or guarantee capital protection. We, at
NARNOLIA, provide you the list of all forthcoming new issues & in-depth analysis of
all such issues. A TEN COMMANDMENTS (click here) is available to all for general
guidelines. Online bidding and detailed news, views, follow up, recent listings etc are
provided to our investors free of cost. We have a dedicated servicing team to help
you to relieve you of all possible hassles of investing in new issues. It is because ofthis simplicity, convenience & expertise we are far ahead of others in our area of
operation with a market share of more than 75% in Jharkhand and in some promising
new issue.
DEPOSITORY SERVICES
Our depository services with the trade name of "MODES"- Motilal Oswal Depository
Related Services (Member NSDL & CDSL) is available to both our trading & nontrading client. We, at NARNOLIA, manage around 40,000 depository accounts of our
clients. All normal depository related services (a/c opening, dematerialization,
rematerialization, transmission, nomination, pledging etc) are provided by our
efficient exclusive team of experts, but what differentiate us from others is some
exclusive features of MODES:
It is amongst the cheapest of all the D.Ps A client can get automatic trading exposure limit in cash /derivatives
segments based on the valuation of his/her holdings. But it has to be settled in
cash/shares at the end of the settlement as per T+2 cycle
In case the client want leverage in payment, he/she can open margin tradingaccount wherein fund outstanding limit is given to such client based on such
holdings in his depository account. It is very much similar to loan against
shares with additional benefits of convenience, low cost because interest is
charged on daily basis based on actual debits
Clients having depository account with us can avail spot payment and BNSTfacility, whenever he /she need to avail these facilities
Clients having holding over 10 lack gets free research reports &recommendations based on most research which has been rated as the No 1
by Asia money poll 2005
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There is a dedicated support team headed by Smt. Sushma Srivastava withdedicated toll free no (1800 345 4000) to provide you all depository related
services and complaint redressal.
COMMODITY
The origin of commodity markets and trading is lost in history. It is the oldest of all
the futures market but the nature of deals was largely one off, at least till 1865 when
Chicago Board Of Trade began trading futures contracts in grains. In India there are
around 21 commodity exchanges but are largely single commodity exchanges and
are off line. Commodity market got a major boost in April 2003 when its regulator
FMC allowed almost all commodities to be traded .This paved the way for the
emergence of Multi Commodity Exchange Of India (MCX) in Nov 2003 and of
National Commodity And Derivative Exchange (NCDEX) in Dec. 2003 who launched
national level on line trading terminals in a transparent and organized manner. These
exchanges have seen a surge in the trading volumes and it is expected that volumes
in commodity will surpass the volumes in equity. It will provide a very meaningful
option of investment along with other asset class and will have a deeper root with
the participation of wider segments of market participants like investors, hedgers,
arbitragers, traders, manufacturers, planters, importers, exporters etc. Motilal Oswal
Commodities Broker (P) Ltd (click here) is the clearing and trading members of both
the exchanges and has a big research team to support various participants in their
own way.
INSURANCE
As per several estimates it is said that Indians are grossly under insured and with the
growing working age population & their income level this sector should see a rapid
growth even from here on. We, at NARNOLIA, realize the importance of insurance as
one of the most important asset class while determining the asset allocation for any
investor. Our sister concern, NARNOLIA INSURANCE AGENTS CO (P) LTD is the
exclusive jeevan chakra partner of Birla Sunlife for Jharkhand and serves its clients
from its various outlets in Bihar, Jharkhand & West Bengal, through their qualified
advisors. Soon, it will have non-life products as well in its kitty.
CORPORATE FINANCIAL PLANNING
Two companies with similar net profit, net worth (based on balance sheet valuation)
and same product line can differ in terms of their wealth creation for the
shareholders. We, at NARNOLIA, in close association with the investment banking
and private equity wing of MOSt provide various corporate advisory and support
services to various listed and unlisted business houses including the SMEs. Weprovide end to end wealth creation support and solutions: helping the management
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in taking most efficient and effective financial & investment decisions, imparting
management skills and also to provide growth capital up to $3 million to $7 million to
selected few. A whole lot of exclusive team of experts including IITians, MBAs (IIM)
are there to support such esteemed clients.
NARNOLIA KNOWLEDGE CENTRE
Falling interest rate has changed the rule of the money making game. While it has
given a boost to the entrepreneurs and consumers, it has, at the same time, made
the life of passive investors very difficult, as their age old no brainer ally - fixed
deposit in bank/ post office- is yielding a return which is barely enough to beat even
inflation. In this context of low interest regime and also when the growth of service
sector has outpaced the industrial or agrarian growth, the need of an organized
knowledge is increasingly been felt at various levels of economic activity. In view of
this we, at NARNOLIA, decided to create an independent department to impart
training to all our business partners, branch heads, and relationship managers and
also to our respected clients who are eager to know the art of wealth creation. It
includes following few modules and is imparted to all in different combinations
depending on the need and ability of each trainee:
BASIC COURSE: Indian Financial System:-structures, functions.Understanding various financial instruments of capital market via equity, debt
etc .Basic knowledge of wealth creation: investment options, asset mix,
portfolio building, portfolio restructuring
ADVANCE COURSE:Part 1:-Behaviour of equity market (short term vs. long term, learnings &unlearning, India story
Part 2:-Fundamental & technical analysis
Part 3:-Advance knowledge of wealth creation. The financial Horoscope:Need based wealth creation & financial planning strategies
EMERGING TRENDS: -challenges & opportunities SERVICING, MARKETING & BACK OFFICE OPERATIONS REFRESHER CLASSES & EXAM
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COMPETITORS OF NARNOLIA SECURITIES:
Narnolia Securities in collaboration with Motilal Oswal serves a vast range of all
financial products like advisory services, Mutual funds, Bonds, Insurances etc, so all
the companies who offer these services are the competitors of the Narnolia. There
are many competitors for Narnolia on this basis and almost all of them offer the
services which Narnolia offers.
Few Major competitors are:
SSKI Ltd. (Share khan) Bonanza securities Kotak Securities Religare Securities
Table 1: GROWTH OF THE COMPANY
Year Location No. of
Clients
No. of
Employees
1993-98 1 600 6
1999 3 1500 16
2000 7 3000 28
2001 11 5300 38
2002 16 9200 60
2003 27 12000 94
2004 38 15000 133
2005 86 25000 221
2006 126 35000 450
2007 156 42000 525
2008 178 50000 600
2009 200 60000 700
2010 225 70000 900
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Why should investors choose for Narnolia?
Excellence is next to nothing and here at Narnolia everybody tries their best to offer
excellent services to its clientele through its offerings maintaining the Narnolia
culture which includes:
1. Controlled and low cost service culture: Narnolia is there to serve its client atthe minimum possible cost. It controls cost by its various cost- cutting
techniques and minimization of avoidable costs
2. Large volume processing capability: being the largest financial service providerin the country, it has the unique distinction of operating its activities on a
large scale which benefits all the parties cordially
3. Adherence to strict time schedule: Narnolia knows that time is money andtries it best to finish the task within the stipulated time schedule
4. Expertise in coordinating multi-location responses: Narnolia has got a widenetwork and hence one can find its branches at most of the places in India.
Thus it enjoys its presence everywhere and coordinates among itself in solving
the queries and in responding to any situation
5. Expertise in managing independent entities such as banks, post-office etc.: thework culture of Narnolia and the ethics followed inside Narnolia makes its
workforce compatible with everybody, so the Narnolia people establishes
good coordination with independent entities too
6. Pooling of group resources: Narnolia group consists of eight subsidiaries, so itcan easily pool up its resources for accomplishment of its goals, wheneverneeded. The groups can help each other whenever there are peaks and lows,
and even in the case when they have huge targets just as we saw few years
back, Tata group pooling its resources to acquire Corus.
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INDUSTRY ANALYSIS
Indian Brokerage Industry
Overview
The Indian retail brokerage industry consists of companies that primarily act as
agents for the buying and selling of securities (e.g. stocks, shares, and similarfinancial instruments) on a commission or transaction fee basis. It has two main
interdependent segments: Primary market and the Secondary market.
Evolution
The Indian broking industry is one of the oldest trading industries that had been
around even before the establishment of the BSE in 1875. Despite passing through a
number of changes in the post liberalization period, the industry has found its way
towards sustainable growth.
The evolution of the brokerage market is explained in three phases: pre1990, 1990-
2000, post 2000. Early Years the equity brokerage industry in India is one of the
oldest in the Asia region. India had an active stock market for about 150 years that
played a significant role in developing risk markets as also promoting enterprise and
supporting the growth of industry. The roots of a stock market in India began in the
1860s during the American Civil War that led to a sudden surge in the demand for
cotton from India resulting in setting up of a number of joint stock companies that
issued securities to raise finance. This trend was akin to the rapid growth of
securities markets in Europe and the North America in the background of expansion
of railroads and exploration of natural resources and land development. Bombay, at
that time, was a major financial centre having housed 31 banks, 20 insurance
companies and 62 joint stock companies. In the aftermath of the crash, banks, on
whose building steps share brokers used to gather to seek stock tips and share news,
disallowed them to gather there, thus forcing them to find a place of their own,
which later turned into the Dalal Street.
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A group of about 300 brokers formed the stock exchange in Jul 1875,
which led to the formation of a trust in 1887 known as the Native Share and Stock
Brokers Association. A unique feature of the stock market development in India was
that that it was entirely driven by local enterprise, unlike the banks which during the
preindependence period were owned and run by the British. Following the
establishment of the first stock exchange in Mumbai, other stock exchanges came
into being in major cities in India, namely Ahmadabad (1894), Calcutta (1908),
Madras (1937), Uttar Pradesh and Nagpur (1940) and Hyderabad (1944). The stock
markets gained from surge and boom in several industries such as jute (1870s), tea
(1880s and 1890s), coal (1904 and 1908) etc, at different points of time. Beginning of
a new equity culture.
The Securities and Exchange Board of India (SEBI), which was set up in 1988as an administrative arrangement, was given statutory powers with the enactment of
the SEBI Act, 1992. The broad objectives of the SEBI include protecting the interests
of the investors in securities to promote the development of securities markets and
to regulate the securities markets. The scope and functioning of the SEBI has greatly
expanded with the rapid growth of securities markets in India in the last fifteen
years.
National Stock Exchange was incorporated in Nov 1992 as a tax paying
company, the first of such stock exchanges in India, since stock exchanges earlierwere trusts, being run on no-profit basis. NSE was recognized as a stock exchange
under the Securities Contracts (Regulations) Act 1956 in Apr 1993. It commenced
operations in wholesale debt segment in Jun 1994, capital market segment (equities)
in Nov 1994. The setting up of the NSE brought to Indian capital markets several
innovations and modern practices and procedures such as nationwide trading
network, electronic trading, greater transparency in price discovery and process
driven operations that had significant bearing on further growth of the stock markets
in India. Faster and efficient securities settlement system is an important ingredientof a successful stock market, to speed the securities settlement process.
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AN OVERVIEW OF THE INDIAN GLOBAL MARKET
Indian Global Market
The stature and significance of India is growing in the world capital markets. India is
not only attracting greater interest from world markets, but is also assuming
increasing importance in global finance.
India is a major recipient of foreign institutional flows amongst the emergingmarkets
Since the opening up of domestic stock markets to foreign investors,cumulative net FII investments reached Rs 517 Billion by 2008 end
India is major destination of private equity flows into the emerging markets India emerged a trillion dollar market capitalization market in 2007, India is among the top 10 stock exchanges in the world in terms of market
capitalization
India is amongst the top 15 stock exchanges in the world in respect of equityturnover India emerged as a leading player in commodities futures market
India is amongst the top 5 in the number of transactions India is among thetop 5 in respect of volume traded in Stock Index Futures and Stock Futures
India
Indian stock markets have the largest number of listings, with trading takingplace in about 2,500-3,000 stocks Indias most popular stock index (Sensex) isconstructed on the basis of full float methodology,
India has one of the firsts in the Asian region and a global standard Indianmarket indices such as Sensex and CNX Nifty are listed in foreign exchanges
for trading as ETFs.
Market Segments
Securities markets provide a channel for allocation of savings to those who have a
productive need for them. The securities market has two interdependent and
inseparable segments: primary market and secondary market.
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Primary Market
Primary market provides an opportunity to the issuers of securities, both
Government and corporations, to raise resources to meet their requirements of
investment. Securities, in the form of equity or debt, can be issued in domestic/international markets at face value, discount or premium.
The primary market issuance is done either through public issues or private
placement. Under Companies Act, 1956, an issue is referred as public if it results in
allotment of securities to 50 investors or more. However, when the issuer makes an
issue of securities to a select group of persons not exceeding 49 and which is neither
a rights issue nor a public issue it is called a private placement.
Secondary Market
Secondary market refers to a market where securities are traded after being offered
to the public in the primary market or listed on the Stock Exchange. Secondary
market comprises of equity, derivatives and the debt markets. The secondary market
is operated through two mediums, namely, the Over-the-Counter (OTC) market and
the Exchange-Traded market. OTC markets are informal markets where trades are
negotiated.
Participants
The securities market has essentially three categories of participants:
the investors the issuers the intermediaries
These participants are regulated by the Securities and Exchange Board of India (SEBI),
Reserve Bank of India (RBI), Ministry of Corporate Affairs (MCA) and the Department
of Economic Affairs (DEA) of the Ministry of Finance.
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Market Segments and their Products
The Exchange (NSE) provides trading in four different segments:
Wholesale Debt Market (WDM) Segment: This segment at NSE commenced itsoperations in June 1994. It provides the trading platform for wide range of
debt securities which includes State and Central Government securities, T-
Bills, PSU Bonds, Corporate debentures, Commercial Papers, Certificate of
Deposits etc
Capital Market (CM) Segment: This segment at NSE commenced its operationsin November 1994. It offers a fully automated screen based trading system,
known as the National Exchange for Automated Trading (NEAT) system.
Various types of securities e.g. equity shares, warrants, debentures etc. aretraded on this system
Futures & Options (F&O) Segment: This segment provides trading inderivatives instruments like index futures, index options, stock options, and
stock futures, and commenced its operations at NSE in June 2000
Currency Derivatives Segment (CDS): This segment at NSE commenced itsoperations on August 29, 2008, with the launch of currency futures trading in
US Dollar-Indian Rupee (USD-INR). Trading in other currency pairs like Euro-INR, Pound Sterling-INR and Japanese Yen-INR was further made available for
trading in February 2010. Interest rate futures was another product made
available for trading on this segment with effect from August 31, 2009.
Various important measures taken by Government to improve the
condition of Indian Stock Market:
Allow foreign institutional investors to invest in equity and debt markets through
liberalization of stock market to attract foreign investment
Expanding the product range offered by the stock exchanges by bring Indianmarket at par with the international standards and diversify product portfolio
Allowing Indian companies to issues ADRS and GDRS Allow Indian nationals and companies to invest abroad
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Facilitate market integration and give freedom to the companies Access to more funds for investment
Divestment of government ownership Strengthening of institutionalframework in primary and secondary markets Demutualization
Facilitate growth through privatization to ensure transparency Investorprotection
Provide a standard framework for operations Deregulation Reduces theconflict of interest
Maintain corporate bond reporting platforms to capture all informationrelating to trading for Investor protection
Making PAN compulsory Transactions necessarily settled through clearinghouse
Permit Gold Exchange Traded Funds Introduction of mutual fund schemes Strengthening KYC (Know Your Client) Investor protection and greater control Generate options for companies and investors Minimize risk for investors and
ensure returns
Market Size and Characteristics:
Markets in tune with the global stock markets that began to recover from the second
half of 2003; Indian stock markets too witnessed rapid growth. Indias two leadingindices, the most popular BSE Sensex, and the one most used by the markets the
National Stock Exchanges S&P CNX Nifty rose to record levels. Both primary andsecondary market activity experienced sharp surge. Much progress was made infurther strengthening and streamlining risk management, market regulation and
supervision. A few aspects of the major developments in the Indias stock marketsare described below:
Table 2: Registered Market Intermediaries
Table 3: Exchange Wise Registered Brokers
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Table 4: Estimates of Investor and Non-Investor Households by Type of Investment
(in Crore)
Table 5: Market Capitalization - BSE and NSE
Table 6: Equity Broking Companies
Table 7: Product Grid for Brokerage Industry
Table 2: Registered Market Intermediaries
Market Intermediaries 2011
Stock Exchanges(Cash Market) 19
Stock Exchanges(Derivatives
Market)
2
Brokers(Cash Segment) 9,235*
Corporate Brokers(Cash Segment 4,563
Sub-Broker(Cash Segment) 83,952
Broker (Derivative) 2,301
Foreign Institutional Investors 1,722
Custodians 19
Depositories 2
Depository Participants 805
Merchant Bankers 192
Underwriters 3
Debenture Trustees 29
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Credit Rating Agencies 6
Venture Capital Funds 184
Foreign Venture Capital Investors 153
Registrars to an Issue & Share
Transfer agents
73
Portfolio Managers 267
Mutual Funds 51
SOURCE: S.E.B.I HAND BOOK 2011
Table 3: Exchange Wise Registered Brokers
Stock Exchange 2010-2011
Sub-Brokers Corporate Brokers Total Brokers
Ahmedabad 93 177 333
Bangalore 158 131 270
BSE 38,124 1,087 1,301
Bhubaneshwar 16 19 215
Calcutta 79 201 901
Cochi 41 81 441
Coimbatore 20 48 136
Delhi 239 286 481
Gauhati 4 3 97
ICSE 1 348 943
Jaipur 32 18 481
Ludhiana 35 89 307
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Madhya Pradesh 5 42 203
Madras 109 85 211
NSE 44,783 1,239 1,389
OTCEI 17 536 701
Pune 156 54 185
UPSE 3 73 328
Vadodara 37 64 312
TOTAL 83,952 4,563 9,235
SOURCE: S.E.B.I HAND BOOK 2011
Table 4: Estimates of Investor and Non-Investor Households
by Type of Investment (in Crore)
Household
Particular
Equity Investors
Households
Only
Bonds/
Debentures
Household
Total
investor
Households
Non-
Investor
Household
Total
(all
House-
holds)Only
equity
Equity &
Debentures
Total
All India 0.4 0.3 0.7 0.7 1.3 16.3 17.7
Urban 0.3 0.2 0.5 0.3 0.8 4.3 5.1
Rural 0.1 0.1 0.2 0.3 0.5 12.0 12.5
SOURCE: S.E.B.I HAND BOOK 2011
Table 5: Market Capitalization BSE and NSE
Month/Year 2009-2010 2010-2011
NSE BSE NSE BSE
April 33,75,025 35,86,978 61,17,858 62,83,196
May 45,64,572 48,65,045 59,32,576 60,91,264
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June 44,32,596 47,49,934 62,29,136 63,94,001
July 48,16,459 51,39,942 63,40,120 65,10,777
August 49,75,800 52,85,657 63,93,418 65,62,025
September 53,53,880 57,08,337 69,58,534 71,25,807
October 50,24,830 53,75,920 70,55,094 72,24,908
November 54,30,088 57,95,209 68,94,912 70,67,845
December 56,99,637 60,81,308 71,39,310 72,96,726
January 57,82,965 59,25,725 64,41,491 65,95,280
February 57,55,305 59,04,929 61,95,967 63,43,072
March 60,09,173 61,65,619 67,02,616 68,39,084
SOURCE: S.E.B.I HAND BOOK 2011
Table 6: Equity Broking Companies
Brokerage Company
1. India bulls Securities Limited2. Reliance Money Limited3. Bonanza Portfolio Limited4. Angel Broking Limited5. Motilal Oswal Securities Limited6. Marwadi Shares & Finance Private Limited7. India Infoline Limited8. Anand Rathi Securities Limited9. Jhaveri Securities Private Limited10. Karvy Stock Broking Limited11. Asit C Mehta Investment Intermediates Limited12. Networth Stock Broking Limited13. Emkay Share & Stock Brokers Limited14. Unico Financial Intermediaries Private Limited
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Table 7: Product Grid for Brokerage Industry
Product grid comprises of all the products offered by brokerage or securities
industry. This industry is one of major emerging industry in the country as it helps in
dealing with various financial aspects which help in building a good financial portfolio
for an individual or corporate. Product grid, in simpler terms, can be explained as the
whole basket of products offered by brokerage industry to its customers. This can
further be explained by taking various companies operating in this sector and
thereby comparing the products offered by these companies.
Motilal
Oswal
Reliance
Mone
Karvy
Indian
Bulls
Kotak
Securities
India
Infoline
Ge-
Birla
Global
Finance
Share
Khan
Sundara
Equities Y Y Y Y Y Y Y Y Y YDerivatives Y Y Y Y Y Y Y Y Y Y
Margin funding Y N N N N N N Y N N
Depositary services Y Y Y Y Y N N N N N
Portfolio management Y Y Y Y Y Y Y Y Y Y
Commodity Y Y Y Y N Y Y N Y Y
Wealth management Y N N N N Y Y N N Y
Research Y N N Y Y Y Y N Y N
Mutual fund Y Y Y Y Y Y N Y Y Y
Structured products N Y N N Y N Y N N N
Third party products N Y Y N Y N Y N N NInsurance N Y Y N N Y N N N Y
Real estate N Y Y N N N Y Y N Y
Tax planning N Y N N N N Y N N N
Off-shore investment N Y N N N N N N N N
e-broking Y Y N N Y N N N N N
Mortgages N N Y N Y Y N N N N
IPO Y Y N Y Y Y N Y Y Y
Loans N N Y N Y Y Y Y N N
BPO N N Y N N N N N N Y
KPO N N Y N N N N N N NBonds N N Y N N N Y N N N
Promoter financing N N Y N N N N N N N
Retail financing N N Y Y N N Y N N Y
Corporate financing N N Y N N N Y Y N Y
Asset financing Y N N N N N Y N N N
On-line Y Y N Y Y Y Y N Y N
Debt market Y Y Y Y Y N Y N Y N
Investment banking N N Y N N N N N N N
Mergers N N N N N N N N N N
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PORTERS FIVE FORCES
Porter's five forces analysis is a framework for the industry analysis and business
strategy development developed by Michael E. Porter of Harvard Business School in
1979. It uses concepts developed in Industrial Organization (IO) economics to derivefive forces which determine the competitive intensity and therefore attractiveness of
a market. Attractiveness in this context refers to the overall industry profitability. An
"unattractive" industry is one where the combination of forces acts to drive down
overall profitability. A very unattractive industry would be one approaching "pure
competition". Porter referred to these forces as the micro environment, to contrast
it with the more general term macro environment. They consist of those forces close
to a company that affect its ability to serve its customers and make a profit. A change
in any of the forces normally requires a company to re-assess the marketplace. The
overall industry attractiveness does not imply that every firm in the industry willreturn the same profitability. Firms are able to apply their core competences,
business model or network to achieve a profit above the industry average.
Competitive
rivalrywithin aindustry
BargainingPower ofSuppliers
BargainingPower of
CustomersThreats of new
Entrants
Threats ofSubstituteProducts
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The threat of substitute products:
The existence of close substitute products increases the propensity of customers to
switch to alternatives in response to price increases (high elasticity of demand).
The threat of the new entry:
The threat of the entry of new competitors profitable markets that yield highreturns will draw firms. This results in many new entrants, which will effectively
decrease profitability. Unless the entry of new firms can be blocked by incumbents,
the profit rate will fall towards a competitive level (perfect competition).
Competitive rivalry within a industry:
The intensity of competitive rivalry for most industries, this is the major determinant
of the competitiveness of the industry. Sometimes rivals compete aggressively and
sometimes rivals compete in non-price dimensions such as innovation, marketing,
etc.
The bargaining power of customers:
The bargaining power of customers also described as the market of outputs. The
ability of customers to put the firm under pressure and it also affects the customer's
sensitivity to price changes.
The bargaining power of suppliers:
The bargaining power of suppliers also described as market of inputs. Suppliers
of raw materials, components, labour, and services (such as expertise) to the firm
can be a source of power over the firm. Suppliers may refuse to work with the firm,
or e.g. charge excessively high prices for unique resources.
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The relevance of five forces model in the Indian Brokerage
Industry
The Bargaining Power of Customers
Lack of Expertise Curtails Bargaining Power Retail investors often lacks the
knowledge and expertise in the financial sector that calls them to approach the
broking houses. Low Product Differentiation Proves Beneficial the retail broking
services provided by the various companies are homogeneous with very low product
differentiation. This allows customers to enjoy a greater bargaining power.
The Bargaining Power of Suppliers
Increased Dependence on IPOs There is a growing dependence of corporate on
broking houses with the rising number of IPOs coming to the market.
The Intensity of Competitive Rivalry
Move towards consolidation Lot of brokerage companies are moving towards
consolidation with the smaller ones becoming either franchisees for the larger
brokers or closing operations. Increased Focus of Banks in Retail Broking Various
foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry. Online Trading Competes with Traditional brokerage there is an
increasing demand for online trading due to consumers growing preference forinternet as compared to approaching the brokers.
Threat of New Entrants
Entry of Foreign Players New forms of trading including T+2 settlement system,
dematerialization etc are strengthening the retail brokerage market and attracting
foreign companies to enter the Indian industry.
The Threat of Substitute Products
Alternative Investment Options Various alternative forms of investment including
fixed deposits with banks and post offices etc act as substitutes to retail broking
products and services. Now even various banks provide similar type of services. They
also give the same service of portfolio management and wealth management.
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SWOT ANALYSIS OF BROKERAGE INDUSTRY
STRENGTHS
Multiples engines of growth- an integrated financial services platform
Well established and continuously expanding geographical footprints
Unique, stable and scalable business model
India is world second largest country with D-Materialized accounts.
WEAKNESSES
Lack of visible goodwill among minor players
Lack of trust on companies by customers
Psyche of people in India is converging
OPPORTUNITIES
Structure of the industry, market size, and growth rates-huge potentialin Indian capital market
Liberalization of markets by government
Proactive and progressive nature of Indian brokerage industry(Indiaranks amongst top five globally in this segment)
THREATS
High degree competition
Fluctuations in government policies
Political framework
Developing Indian economyc
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PROJECT BACKGROUND & APPROACH
1. Problem Statement
2. Research Objectives
3. Research Methodology
4. Questionnaire Design
Problem Statement
Narnolia Securities Ltd. has been successfully providing financial services to its clients
but lately the management is worried about the declining enthusiasm regarding
investment in Equity stocks amongst its clients in Ranchi. The management considers
the lacklustre performance of the index and the dearth of government policies as the
main reason for the problem.
So, it was decided to assess the investors behaviour to have a better perspective of
their approach towards stock market and investment decisions, that can
subsequently help the company in considering the steps to reinvigorate the
investors interests and offer them more customise services.
Research Objective
To get insight into the investment behaviour of the clients investing in Equity Stocks
for Narnolia Securities Ltd in the Ranchi area.
To analyse the factors that shape the clients investment activities and thus focus on
the important factors to improve services.
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Research Methodology
Research Design
Type of Research: Descriptive-Survey
Type of Data: Primary
Data Collection tool: Researcher Administered Questionnaire
Data Collection method: Structured Interview
Sampling Design
Sampling method: Convenience sampling
Population Size: 15000 accounts
Sample Size: 150 accounts
(Considering the resource constraints i.e. time, money and manpower, a non-
probabilistic convenience sampling method was adopted to select a sample of 150
clients from a population of 15000 clients. Also a sample size of 150 for a population
of 15000 with a confidence level of 95% gives a confidence interval of +-8.
Statistical tools used: Factor Analysis, Percentage Analysis, Pivot Tables, Pie charts,
Bar Graphs), SPSS.
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Questionnaire Design
The questionnaire comprised of the following questions that the respondents wereneeded to answer to fulfil the objective of the research.
The respondents were asked for some personal information like their name, age
group, gender and profession. Here the age group and profession of the respondents
were important information as these would help to determine the popularity of
stock market investments amongst various age groups and professions.
1. In which sector you invest most?
Here the idea was to know the popularity of various sectors so that the
company can accordingly increase its focus on the research on such sectors
accordingly.
2. Why do you invest in equity market?
This question helped in determining if the client is long term player or a short
term player.
3. What attracts you towards equity market?
The response to this question helped us understand the various factors
according to the importance assigned to them by the respondents.
4. What is the purpose of investment?This question fulfilled the purpose of knowing with what agenda the clients
invest in the stock market and thus this might help the company to help its
clients fulfill their purpose of investment.
5. Generally what is the holding period of equity?
The response to this question helped in understanding the clients modus
operandiand this would help the company to distinguish between investment
approach of its clients.
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6. Are you a trader or Investor ?(Mark All that applies)
Here we determined the level of involvement of the clients in the market and
categorised them according to their frequency of involvement in the market.
7. Do you think stock market research is essential for investing your money toearn high returns?
The idea was to know if the clients lay importance to research, which would
help the company in knowing to what extent it needs to involve its clients in
such market study/research.
8. What induces you to trade in a particular stock ?
This question helped in determining the factors that the clients consider
important before making investment in any particular stock.
9. What kind of investing or trading do you adopt ?
This question helped in getting an insight into what is the risk appetite of the
clients in relation to the return that they expect.
10.What kind of risk appetite do you have ?
To understand the risk appetite of the clients this question was asked. This will
help the company to classify the no. of clients under the survey based on their
risk taking capacity.
11.What sources of funds do you utilize to invest or trade in the stock Market?
The idea was to know how do the respondents finance their investment
activity. Company can thus come to know if there is some financial hardship
its clients are facing and thus the company can focus on its financing activities,
if needed.
12.What is total household income (monthly) ?
The response to this question was to know the income of the clients. This
would help the company differentiate their focus on various categories of
clients .
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13.For how many years you have been trading or investing in stock market?
The idea was to know how experienced the clients are. The categorisation on
the basis of the experience they have will help company to strategies about
its investors education.
14.How much is your total investment annually?
To know the investment capability of the respondents this question was
asked. This will also let the company identity high value clients.
15.What percentage of your investment is invested in equity market?
The response to this question will help the company know the share of equity
market investments in the total investment portfolio of its clients. This will
help company decide if there is any scope to increase the share of equity the
clients portfolio.
16.According to you, what are the factors responsible for fluctuations in Indian
Stock Market ? (Mark all that applies)
The idea was to know the understanding of the stock market and the factors
responsible for the fluctuations in its clients opinion.
17.What is your pattern of investing or trading ?
The idea was tocategories clients investing in variety of stock,a few particular
stocks or both.
18.Are you a panic buyer or seller while investing or trading in a stock ?
To know the behaviour and reaction of the clients this question was asked.
19.How helpful are the services provided by Narnolia Securities in facilitating
the trading and investment related activities?
The answer to this question will help the management in knowing what the
current perception do its clients have for Narnolia Securities Ltd.
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DATA ANALYSIS AND FINDINGS
Personal Information Analysis
Age Group
Profession
22%
31%33%
14%
Age Group (in yrs)
19-25
26-35
36-50
Above 50
Service
24%
Business
56%
Student
10%
Other
10%
Profession
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It can be seen from the pie chart that people between the age group of 36-50 are
mostly involved in the stock market with almost a third (33%) of the whole sample,
also age group of 26-35 also constitutes a major chunk. Together they comprise of2/3
rdof the whole sample suggesting that the popularity of the stock market is
mainly amongst the middle aged people.
Also 93% of the people surveyed were male, with females constituting only 7%.
It is observed that the participation of Businessmen is the highest (56%) followed by
service people (24%), students and others contribute 10% each. Higher participation
of businessmen is justified as they are high risk takers and stock market is relatively a
risky investment avenue.
1. The most popular sector amongst the investors are Banking (15%), IT (13%),FMCG(12%), Oil&Gas(10%), metal&mining(9%),Infrastructure(8%). Pharma
sector is the least preferred as only 5% respondents opt for it.
30
12
18
35
17
28
20 19
24
29
Sector Preference
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2&3. When asked about the reason to enter stock market, most of the respondents
i.e. 61% answered for quick short term gain while 39% said for long term
return. The most attractive feature of stock market for the investor is its high
returns(76%), the second most attraction is liquidity of funds.
4. When asked about purpose of investment 65 repondents(43%) want to meetthe cost of inflation, 52 respondents(35%) want to meet certain specific goals
in life.
5. A total of 91 respondents(61%) in the survey take delivery of the stocks while36 respondents(24%) are involved in intraday trading. There are 27 such
respondents who are involved in both.
115
35
22
95
High Return Speculation Dividend Liquidity of invested
fund
Intraday
23%
Delivery
59%
Both
18%
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6. Amongst the respondents most are short-term investors (41%),followed bylong term investors(36%). From the analysis it is clear that there are few
respondents who both investor and trader.
7 & 8. An overwhelming 123 respondents are of the opinion that stock market
research is essential for earning high returns, while there are 27
respondents who dont think research important. This belief is further
reinforced when 63% respondents attributed research reports for
inducing them into trading in any stock. Also the past experience of the
respondent was important factor followed by intuitions broker advice and
street rumours. It was quite unexpected that only 16% respondents
showed confidence in the brokers advice. This can be an area of concern.
0
10
20
30
40
50
60
70
Trader Occasional
Trader
Long term
investor
Short term
investor
49
40
54
62
Yes
82%
No
18%
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9 & 10. Most of the respondents (48%) considered themselves as an average risk
taker with medium risk appetite and since the risk appetite was medium to low, most
of the respondents(49%) were adopting low risk-low return options. This data
suggests that people here are conservative when it comes to stock market
investment.
11&12. Most investors(49%) use their savings to finance their investments in stock
market, some(29%) investors use their income to invest in stocks. Also 85
respondents (57%) are in the income bracket of Rs. 10,000 30,000,followed by
30,000 60,000 with 43 respondents(29%). Higher income group i.e. 60,000 and
above constitutes only (15%). This suggests that the clients are mostly of lower to
middle income bracket but since respondents generally misrepresent their income,there are chances of inconsistency.
0
20
40
60
80
10094
25
66
18
80
30
Inducing Factors
High Risk -
High
Return
29%
Low Risk -
High
Return
21%
Low Risk -
Low
Return
50%
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13. Most of the respondents have been investing for a few years and do have fair bit of
experience of the market
14&15. Again people misrepresent data regarding their investment, however we can see
that the highest frequency(62) of respondents falls in the bracket of 15,000-60,000.
Also, majority respondents (40%) have 25-50% of their investments in stock market.
Only 15% people had >75% of their total investment in stock market. This again
suggests that the investors mainly are moderate risk takers.
73
44
21
12
85
43
148
0
10
20
30
40
50
60
70
80
90
24
38
53
35
0
10
20
30
40
50
60
5 years
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16. In response to the factors responsible for the market fluctuations highest number of
respondents(60%) held government policies responsible. Market sentiments and global
news were also considered as important factors for the fluctuations.
0
10
20
30
40
5060
70
45
62
30
13
34
60
34
22
0
10
20
30
40
50
60
70
80
90
FII FDI Govt.
Policies
Market
Sentiments
Globals
News
43
11
9081 80
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19.More than half of the respondents(51%) considered services provided by NarnoliaSecurities to be helpful, while 25% considered it very helpful, 13% respondents
considered it not helpful and 11% dont have any opinion.
Very helpful
25%
Helpful
51%
Not helpful
13%
Cant say
11%
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RECOMMENDATIONS
There is a vast scope in the people of age group 26 50 as they constitutes almost2/3rd of the sample, so the company should focus more on this age group as they are
relatively aggressive and ambitious in their investment activities.
Also more than half(56%) of the
clients surveyed were businessmen which justifies the reasoning that investing in
stock market is suitable for such people, so the company should reach out to the
business class and market their services in their fraternity.
In the survey since it was reflected that sectors like Banking, IT and FMCG are mostpopular amongst the investor, the company should intensify its research facilities for
such sector to offer even better services to its clients.
The purpose of investment for various clients differ so the company shouldcategories the clients based on their purpose and provide service accordingly to fulfil
their purpose respectively.
Most of the companys clients are investors, so the company should encourage andfocus more on trading activities as frequent transactions will result in higher
brokerage collection.
The respondents have given overwhelming importance to the stock market researchso Narnolia Securities Ltd. should further improve its research facilities, also the
company should take initiatives to empower its client to do basic research on their
individual capacity. A shocking information came into focus when in response to a
question only 17% investors considered Brokers advice as an inducing factor forinvestment, so there is a great potential for the company to improve this figure by
providing better advice to its clients and subsequently garnering their trust.
Also most of the clients surveyed belonged to lower to middle income group i.e.10,000-30,000 and 30,000- 60,000 and very few were from higher income bracket,
although this might be inconsistent data, so the company should try to incorporate
more high value customers in its customer base and should also encourage the
lower- value creating customers by financing some part of their investments in stock
market for a short-to-medium term period.
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BIBLIOGRAPHY & REFERENCES
Books, Journals & other references
MARKETING RESEARCH BY PHILIP KOTLER THE ECONOMIC TIMES THE BUSINESS STANDARD S.E.B.I HANDBOOK 2011
Websites
www.narnolia.com www.mutualfundsindia.com www.valueresearchonline.com www.rediffmoney.com www.bseindia.com www.nseindia.com www.investopedia.com
http://www.narnolia.com/http://www.narnolia.com/http://www.mutualfundsindia.com/http://www.mutualfundsindia.com/http://www.valueresearchonline.com/http://www.valueresearchonline.com/http://www.rediffmoney.com/http://www.rediffmoney.com/http://www.bseindia.com/http://www.bseindia.com/http://www.nseindia.com/http://www.nseindia.com/http://www.investopedia.com/http://www.investopedia.com/http://www.investopedia.com/http://www.nseindia.com/http://www.bseindia.com/http://www.rediffmoney.com/http://www.valueresearchonline.com/http://www.mutualfundsindia.com/http://www.narnolia.com/7/28/2019 A REPORT O2
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ANNEXURE
QUESTIONNAIRE
Personal Information:
Name: ____________________________________________________
Age: 19-25 26-35 36-50 Above 50
Gender: Male Female
Profession: Service Business Student Other
1.In which sector you invest most?
IT Pharma Telecom Banking Auto Oil & Gas
FMCG Metal & mining Infra Others
2.Why do you invest in equity market?
For quick short term gain For high long term gain
3.What attracts you towards equity market?
High return Speculation Dividend Liquidity of invested fund
4.What is the purpose of investment?
To meet the cost of Inflation
To earn return on idle resources
To generate a specified sum of money for a specific goal in life
To make a provision for an uncertain future
5.Generally what is the holding period of equity?
Intraday Delivery Both
6. Are you trader or Investor (Mark All that applies)
Trader Occasional Trader Long Term Investor Short Term Investor
7.Do you think stock market research is essential for investing your money to earn high
returns?
Yes No
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8. What induces you to trade in a particular stock ?
Research Reports Brokers Advice News Street Talk / Rumors
Past Experience Intuitions
9.What kind of investing or trading do you adopt ?
High Risk - High Return Low Risk - High Return Low Risk - Low Return
10.What kind of risk appetite do you have ?
High Medium Low No Risk / Safe Investments
11.What sources of funds do you utilize to invest or trade in the stock Market?
Savings Income Loans Pledging
12.What is total household income(monthly) ?
10000-30000 30000-60000 60000-100000 >1 lac
13. For how many years you have been trading or investing in stock market?
Less than 1 Year 1 - 3 years 3 - 5 years >5 years
14. How much is your total investment annually?
Below 15,000 15,000 60,000 60,000 2,00,000 >2 lacs
15.What percentage of your investment is invested in equity market?
Less than 25% 25-50% 51-75% More than 75%
16. According to you, what are the factors responsible for fluctuations in Indian Stock
Market. ? (Mark all that applies)
FII FDI Government Policies Market Sentiments Global news
17.What is your pattern of investing or trading ?
Repeatedly invest or trade in same set of stocks
Invest or trade in variety of stocks
No fixed pattern
Thank you for giving your precious time to us.
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