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SUMMER TRAINING PROJECT REPORT
SHARE KHAN LTD.
“MARKETING STRATEGY OF SHAREKHAN”
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ACKNOWLEDGEMENT
The completion of my summer training and the project on feedback of clients who have
bought SHARE-KHAN’S online trading account in the month of MAY would not have
been possible without the constant and timely encouragement from all concerned.
I express my sincerest gratitude and thanks to MR. KSHIJIT JHA (assistant manager) -
share khan, Delhi branch for his guidance and sustained help extended to me during the
course of my summer training.
I had the precious opportunity of attaining training at SHARE-KHAN. Under his
brilliant untiring guidance I could complete the project being undertaken on the
“STOCK MARKET IN INDIA AN EMPIRICAL STUDY” successfully in time. His
meticulous attention and invaluable suggestions have helped me in simplifying the
problem involved in the work. I would also like to thank the overwhelming support of all
the people who gave me an opportunity to learn and gain knowledge about the various
aspects of the industry.
I would like to thanks MR. ALOK SATSANGI (Corporate Cell Manager) for his
constant enthusiastic encouragement and valuable suggestions without which this project
would not been successfully completed.
Blessing of my parents have also been instrumented to complete this task.
Above all I would like to thank god for giving me this wonderful opportunity.
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CONTENTS
CONTENTS PAGE NO.
Chapter 1 - Introduction
1.1. Overview of Industry as a whole1.2. Profile of the Organization
- Origin- Recent Achievements- Mission & Vision- Products
- Organization Structure1.3 Introduction to the Topic/Title/Problem Studied
Chapter 2 - Objective & Methodology
2.1. Objectives of the Study2.2. Research Methodology
o Research Designo Sources of data (Primary/Secondary)o Sampling Techniqueo Sample size, if anyo Methods of data collectiono Tools and techniques of analysis
2.3. Limitations of the Study
Chapter 3 - Data Analysis & Interpretation
Chapter 4 - Findings
Chapter 5 - Recommendations
ANNEXURES:
BIBLIOGRAPHY/REFERENCES
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CHAPTER-1
INTRODUCTION
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1.1 Overview of Industry as a whole
Do you know that the world's foremost marketplace New York Stock Exchange (NYSE),
started its trading under a tree (now known as 68 Wall Street) over 200 years ago?
Similarly, India's premier stock exchange Bombay Stock Exchange (BSE) can also trace
back its origin to as far as 125 years when it started as a
voluntary non-profit making association.
You hear about it any time it reaches a new high or a
new low, and you also hear about it daily in statements
like 'The BSE Sensitive Index rose 5% today'. Obviously,
stocks and stock markets are important. Stocks of public
limited companies are bought and sold at a stock
exchange. But what really are stock exchanges? Known also as News on the stock
market appears in different media every day. he stock market or bourse, a stock
exchange is an organized marketplace for securities (like stocks, bonds, options)
featured by the centralization of supply and demand for the transaction of orders by
member brokers, for institutional and individual investors. The exchange makes buying
and selling easy. For example, you don't have to actually go to a stock exchange, say,
BSE - you can contact a broker, who does business with the BSE, and he or she will buy
or sell your stock on your behalf.
All stock exchanges perform similar functions with respect to the listing, trading, and
clearing of securities, differing only in their administrative machinery for handling these
functions. Most stock exchanges are auction markets, in which prices are determined by
competitive bidding. Trading may occur on a continuous auction basis, may involvebrokers buying from and selling to dealers in certain types of stock, or it may be
conducted through specialists dealing in a particular stock.
But where did it all start? The need for stock exchanges developed out of early trading
activities in agricultural and other commodities. During the middle Ages, traders found it
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easier to use credit that required supporting documentation of drafts, notes and bills of
exchange. The history of the earliest stock exchange, the French stock exchange, may be
traced back to 12th century when transactions occurred in commercial bills of exchange.
The first stock exchange in India, Bombay Stock Exchange was established in 1875 as
'The Native Share and Stockbrokers Association' and has evolved over the years into its
present status as the premier stock exchange in the country. It may be noted that BSE is
the oldest stock exchange in Asia, even older than the Tokyo Stock Exchange, which was
founded in 1878. The country's second stock exchange was established in Ahmadabad in
1894, followed by the Calcutta Stock Exchange (CSE). CSE can also trace its origin back to
19th century. From a get together under a 'Neem Tree' way back in the 1830s, the CSE
was formally established in May 1908.
India's other major stock exchange National Stock Exchange (NSE), promoted by leading
financial institutions, and was established in April 1993. Over the years, several stock
exchanges have been established in the major cities of India. There are now 23
recognized stock exchanges — Mumbai (BSE, NSE and OTC), Calcutta, Delhi, Chennai,
Ahmadabad, Bangalore, Bhubhaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur,
Kochi, Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara, Indore and Meerut.
Today, most of the global stock exchanges have become highly efficient, computerized
organizations. Computerized networks also made it possible to connect to each other
and have fostered the growth of an open, global securities market. Realizing there is
untapped market of investors who want to be able to execute their own trades when it
suits them, brokers have taken their trading rooms to the Internet. Known as online
brokers, they allow you to buy and sell shares via Internet.
Online Trading is a service offered on the Internet for purchase and sale of shares. In the
real world, you place orders on your stockbroker either verbally (personally or
telephonically) or in a written form (fax). In Online Trading, you will access a
stockbroker's website through your internet-enabled PC and place orders through the
broker's internet-based trading engine. These orders are routed to the Stock Exchange
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without manual intervention and executed thereon in a matter of a few seconds.
There are 2 types of online trading service: discount brokers and full service online
broker. Discount online brokers allow you to trade via Internet at reduced rates. Some
provide quality research, other don‟t. Full service online brokerage is linked to existing
brokerages. These brokers allow their clients to place online orders with the option of
talking/ chatting to brokers if advice is needed. Brokerage rates here are higher.
5Paisa.com, ICICIDirect.com, IndiaBulls.com, sharekhan.com, HDFCsec.com,
Tatatdw.com, HMRstreet.com are some of the online broking sites in India.
In general, the financial market divided into two parts, Money market and capital market.
Securities market is an important, organized capital market where transaction of capital is
facilitated by means of direct financing using securities as a commodity. Securitiesmarket can be divided into a primary market and secondary market.
A) PRIMARY MARKET
The primary market is an intermittent and discrete market where the initially listed shares
are traded first time, changing hands from the listed company to the investors. It refers to
the process through which the companies, the issuers of stocks, acquire capital by
offering their stocks to investors who supply the capital. In other words primary market is
that part of the capital markets that deals with the issuance of new securities. Companies,
governments or public sector institutions can obtain funding through the sale of a new
stock or bond issue. This is typically done through a syndicate of securities dealers. The
process of selling new issues to investors is called underwriting. In the case of a new
stock issue, this sale is called an initial public offering (IPO). Dealers earn a commission
that is built into the price of the security offering, though it can be found in the
prospectus.
B) SECONDARY MARKET
The secondary market is an on-going market, which is equipped and organized with a
place, facilities and other resources required for trading securities after their initial
offering. It refers to a specific place where securities transaction among many and
unspecified persons is carried out through intermediation of the securities firms, i.e., a
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licensed broker, and the exchanges, a specialized trading organization, in accordance with
the rules and regulations established by the exchanges.
A bit about history of stock exchange they say it was under a tree that it all started in
1875.Bombay Stock Exchange (BSE) was the major exchange in India till 1994.National
Stock Exchange (NSE) started operations in 1994.NSE was floated by major banks and
financial institutions. It came as a result of Harshad Mehta scam of 1992. Contrary to
popular belief the scam was more of a banking scam than a stock market scam. The old
methods of trading in BSE were people assembling on what as called a ring in the BSE
building. They had a unique sign language to communicate apart from all the shouting.
Investors weren't allowed access and the system was opaque and misused by brokers. The
shares were in physical form and prone to duplication and fraud.
NSE was the first to introduce electronic screen based trading. BSE was forced to follow
suit. The present day trading platform is transparent and gives investors prices on a real
time basis. With the introduction of depository and mandatory dematerialization of shares
chances of fraud reduced further. The trading screen gives you top 5 buy and sell quotes
on every scrip.A typical trading day starts at 10 ending at 3.30. Monday to Friday. BSE
has 30 stocks which make up the Sensex .NSE has 50 stocks in its index called Nifty. FII
s Banks, financial institutions mutual funds are biggest players in the market. Then there
are the retail investors and speculators. The last ones are the ones who follow the market
morning to evening; Market can be very addictive like blogging though stakes are higher
in the former.
Shares in the Share Market are either traded through:
(a) Stock Exchange these are organized market places where stocks, bonds are other
equivalents are traded between the buyers and sellers where exchange acts as
counter-party to both the participants in case of any default.
(b) Over-the -Counter (OTC) these are not centralized exchanges and the trade
takes place through a network of dealers.
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Generally stocks are of two types:
a) Common Stock
It gives an ownership right to the holders of the stock. The holders are entitled to
receive dividends whenever the company announces.
b) Preferred Stock
These stocks also give ownership right to its holders. Its holders enjoy the privilege
of receiving dividends from the company in preference to any other common share
holders.
Constituents of Share Market are :-
a) Buyer: An investor who buys a script in the belief that the market will rise. If his hinge
becomes right then he makes profit otherwise he suffers loss.
b) Seller: Seller of a stock sells in the hope that the stock price will go down.
c) Stock Broker: Brokers are persons or firms who execute buy/sell order on behalf of the
investors and charge a commission for rendering the service.
Share broking company offers two types of share trading facilities .
(a) Offline Share Trading In this form of trading the customer has to place order to
the dealer of the stock broking firm either in person or over phone.
(b) Online Share Trading The client could place his order on his own from any
place he wants, provided he has a computer with an Internet connection.
There are mainly two types of trading:-
1. Intra day trading : They buy and sell stocks during the same day.
Intra day Traders are of two types :
a. Scalp Traders: Investors who perform many trades per day for scalping out
small profits out of the bid-ask spread from each trade is known as scalp traders.
b. Momentum Traders: Investors who pounce on those stocks which move
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significantly in one direction and book desired profit are called momentum traders.
They do this within a day.
2. Delivery trading: The investor buys the share for holding purposes.
Delivery Traders are:
1. Technical Traders: They believe that buying/selling signals are present within
the graphs and charts of the stock.
2. Fundamental Traders: They perform trade on the basis of study of fact-sheets of
the company like historical profit graph, balance sheet, anticipated earning
reports, stock- splits, mergers and acquisitions, etc.
3. Swing Traders: They are basically fundamental traders who take delivery of
trades for a span of short period generally more than one day.
ORIGIN OF INDIAN STOCK MARKET
The origin of the stock market in India goes back to the end of the eighteenth century
when long-term negotiable securities were first issued. However, for all practical
purposes, the real beginning occurred in the middle of the nineteenth century after the
enactment of the companies Act in 1850, which introduced the features of limited
liability and generated investor interest in corporate securities.
An important early event in the development of the stock market in India was the
formation of the native share and stock brokers association at Bombay in 1875, the
precursor of the present day Bombay Stock Exchange. This was followed by the
formation of associations/exchanges in Ahmadabad (1894), Calcutta (1908), and Madras
(1937). In addition, a large number of ephemeral exchanges emerged mainly in buoyantperiods to recede into oblivion during depressing times subsequently.
Stock exchanges are intricacy inter-woven in the fabric of a nation's economic life.
Without a stock exchange, the saving of the community- the sinews of economic progress
and productive efficiency- would remain underutilized. The task of mobilization and
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allocation of savings could be attempted in the old days by a much less specialized
institution than the stock exchanges. But as business and industry expanded and the
economy assumed more complex nature, the need for 'permanent finance' arose.
Entrepreneurs needed money for long term whereas investors demanded liquidity – the
facility to convert their investment into cash at any given time. The answer was a ready
market for investments and this was how the stock exchange came into being.
Stock exchange means anybody of individuals, whether incorporated or not, constituted
for the purpose of regulating or controlling the business of buying, selling or dealing in
securities. These securities include:
(i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like
nature in or of any incorporated company or other body corporate;(ii) Government securities; and
(iii) Rights or interest in securities.
The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd
(NSE) are the two primary exchanges in India. In addition, there are 22 Regional Stock
Exchanges. However, the BSE and NSE have established themselves as the two leading
exchanges and account for about 80 per cent of the equity volume traded in India. The
NSE and BSE are equal in size in terms of daily traded volume. The average daily
turnover at the exchanges has increased from Rs 851 crore in 1997-98 to Rs 1,284 crore
in 1998-99 and further to Rs 2,273 crore in 1999-2000 (April - August 1999). NSE has
around 1500 shares listed with a total market capitalization of around Rs 9, 21,500 crore.
The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9,
68,000 crore. Most key stocks are traded on both the exchanges and hence the investor
could buy them on either exchange. Both exchanges have a different settlement cycle,
which allows investors to shift their positions on the bourses. The primary index of BSE
is BSE Sensex comprising 30 stocks. NSE has the S&P NSE 50 Index (Nifty) which
consists of fifty stocks. The BSE Sensex is the older and more widely followed index.
Both these indices are calculated on the basis of market capitalization and contain the
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heavily traded shares from key sectors. The markets are closed on Saturdays and
Sundays. Both the exchanges have switched over from the open outcry trading system to
a fully automated computerized mode of trading known as BOLT (BSE on Line Trading)
and NEAT (National Exchange Automated Trading) System.
It facilitates more efficient processing, automatic order matching, faster execution of
trades and transparency; the scrip's traded on the BSE have been classified into 'A', 'B1',
'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent those, which are in the carry
forward system (Badla). The 'F' group represents the debt market (fixed income
securities) segment. The 'Z' group scrip's are the blacklisted companies. The 'C' group
covers the odd lot securities in 'A', 'B1' & 'B2' groups and Rights renunciations. The key
regulator governing Stock Exchanges, Brokers, Depositories, Depository participants,Mutual Funds, FIIs and other participants in Indian secondary and primary market is the
Securities and Exchange Board of India (SEBI) Ltd.
HISTORY OF ONLINE STOCK TRADING
It's hard to believe that at one time, no one placed an order without talking to a broker.
It's even harder to imagine that the average person had no access to the web for their
personal use before 1979. Businesses used it, in fact, CompuServe became a leader in
providing services to the financial industry by linking commercial feeds together to
provide a quote system and financial information to Wall Street.
A) History
Before 1979, when CompuServe marketed Micro NET to Customer s, no individual used
the net, just businesses. Micro NET, the retail branch of CompuServe, found an outlet at
Radio Shack and soon gained wide appeal and it accounted for over 50 percent of the
company's income by the year 1987 when it took back the parent name, CompuServe.
The Source, its competitor that also started in 1979, grew rapidly. However, CompuServe
bought them out in 1989.
B) Time Frame
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Imagine the enthusiasm of Bernie Newcomb when Phil Porter shared his idea about
trading stock on a personal computer back in 1980. Newcomb understood programming
and developed the necessary one to successfully trade a stock. A dentist in Michigan
made the first stock trade on July 11, 1983. This was the first trade for the company
Trade Plus. It took 9 more years before the company was named the fastest growing
company in Silicon Valley and by 1996, Trade*Plus received the new name E-Trade
Group.
C) Features
Other companies entered the market for Customer stock trading. First Omaha Securities,
Inc. became a clearing broker in 1983. It changed its name to Accutrade. Later when they
were part of a holding company in 1987 the name changed again to TransTerra CompanyInc 1987 and eventually became AmeriTrade in 1996. It offered the first order system via
the touch-tone phone in 1988. Slowly the necessity of the broker started to seem less
important.
D) Considerations
Bernie Newcomb and Phil Porter split as partners and Porter started a new company, E-
Trade Group. E-Trades Securities was a subsidiary and the primary reason for the
company. It offered services to the public that allowed trading on both America Online
and CompuServe. Later when the firm grew dramatically, by 1996, it went public and the
changed the name to E*Trade Financial.
E) Effects
The market gets bullish for the 1990's. This fact, coupled with the lower cost of Internet
access started to drive the uses of the Internet. Communication via email and total access
to the web made the transition easy for millions of people. Now, they no longer had to
call a broker or schedule an appointment. The Web was open 24 hours a day and the
market was hot. By January of 1996, AmeriTrade introduced "Accutrade for Windows"
and developed the first eBroker.
F) Benefits
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Discount brokerage houses grew, as did online trading. Schwab, one of the innovators of
discount brokerage services, offered the first 24-hour quotation service to clients in 1980.
By the year 1996, they offered live trading on the web. Other companies also jumped into
the action. The American public fell in love with online trading because even an idiot
could make money in the stock market during the excessively bullish 1990's. The cost of
a trade was dramatically lowered. At first, a $24 trade was magnificent. However, as
companies grew more web-based the price dropped. When the market went south in 1999
and early 2000, web brokers slashed even more at the cost of the trade to maintain their
clients. Today, Online stock trading accounts are owned by most people that invest. Even
if they use the services of a broker, they normally have the option of trading stock on
their own, via the Internet.
HISTORY OF STOCK EXCHANGES
The world's foremost marketplace New York Stock Exchange (NYSE), started its trading
under a tree (now known as 68 Wall Street) over 200 years ago? Similarly, India's
premier stock exchange Bombay Stock Exchange (BSE) can also trace back its origin to
as far as 125 years when it started as a voluntary non-profit making association.
News on the stock market appears in different media every day. You hear about it any
time it reaches a new high or a new low, and you also hear about it daily in statements
like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks and stock markets are
important. Stocks of public limited companies are bought and sold at a stock exchange.
But what really are stock exchanges? Known also as the stock market or bourse, a stock
exchange is an organized marketplace for securities (like stocks, bonds, options) featured
by the centralization of supply and demand for the transaction of orders by member
brokers, for institutional and individual investors.
The exchange makes buying and selling easy. For example, you don't have to actually go
to a stock exchange, say, BSE - you can contact a broker, who does business with the
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BSE, and he or she will buy or sell your stock on your behalf.
Market Basics
Electronic trading
Electronic trading eliminates the need for physical trading floors. Brokers can trade from
their offices, using fully automated screen-based processes. Their workstations are
connected to a Stock Exchange's central computer via satellite using Very Small Aperture
Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer
and are matched electronically.
Exchanges in India
Heritage
The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the
country's two leading Exchanges. There are 20 other regional Exchanges, connected via
the Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading
via their VSAT systems.
The oldest stock exchange in Asia (established in 1875) and the first in the country to be
granted permanent recognition under the Securities Contract Regulation Act, 1956,
Bombay Stock Exchange Limited (BSE) has had an interesting rise to prominence over
the past 133 years.
While BSE is now synonymous with Dalal Street, it was not always so. The first venues
of the earliest stock broker meetings in the 1850s were in rather natural environs - under
banyan trees - in front of the Town Hall, where Horniman Circle is now situated. A
decade later, the brokers moved their venue to another set of foliage, this time under
banyan trees at the junction of Meadows Street and what is now called Mahatma Gandhi
Road. As the number of brokers increased, they had to shift from place to place, but they
always overflowed to the streets. At last, in 1874, the brokers found a permanent place,
and one that they could, quite literally, call their own. The new place was, aptly, called
Dalal Street (Brokers‟ Street).
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In 2002, the name "The Stock Exchange, Mumbai" was changed to Bombay Stock
Exchange. Subsequently on August 19, 2005, the exchange turned into a corporate entity
from an Association of Persons (AoP) and renamed as Bombay Stock Exchange Limited.
BSE, which had introduced securities trading in India, replaced its open outcry system of
trading in 1995, with the totally automated trading through the BSE Online trading
(BOLT) system. The BOLT network was expanded nationwide in 1997.
Prominent Position
The journey of BSE is as eventful and interesting as the history of India's securities
market. In fact, as India's biggest bourse, in terms of listed companies and market
capitalization, BSE has played a pioneering role in the development of the Indiansecurities market. It is surely BSE's pride that almost every leading corporate in India has
sourced BSE's services in capital rising and is listed with BSE.
Even in terms of an orderly growth, much before the actual legislations were enacted,
BSE had formulated a comprehensive set of Rules and Regulations for the securities
market. It had also laid down best practices which were adopted subsequently by 23 stock
exchanges which were set up after India gained its independence.
BSE, as a brand, has been and is synonymous with the capital market in India. Its
SENSEX is the benchmark equity index that reflects the health of the Indian economy.
Stocks of public limited companies are bought and sold at a stock exchange. But what
really are stock exchanges? Known also as the stock market or bourse, a stock exchange
is an organized marketplace for securities (like stocks, bonds, options) featured by the
centralization of supply and demand for the transaction of orders by member brokers, for
institutional and individual investors.
Several Firsts
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At par with the international standards, BSE has in fact been a pioneer in several areas. It
has several firsts to its credit even in an intensely competitive environment.
First in India to introduce Equity Derivatives
First in India to launch a Free Float Index
First in India to launch US$ version of BSE SENSEX
First in India to launch Exchange Enabled Internet Trading Platform
First in India to obtain ISO certification for a stock exchange
'BSE On-Line Trading System‟ (BOLT) has been awarded the globally recognized
the Information Security Management System standard BS7799-2:2002.
First to have an exclusive facility for financial training
First in India in the financial services sector to launch its website in Hindi and
Gujarati
Shifted from Open Outcry to Electronic Trading within just 50 days.
First bell-ringing ceremony in the history of the Indian capital markets.
Investor Education
An equally important accomplishment of BSE is its nationwide investor awareness
campaign - "Safe Investing in the Stock Market" - under which awareness campaigns and
dissemination of information through print and electronic medium is undertaken across
the country. BSE also actively promotes the securities market awareness campaign of the
Securities and Exchange Board of India.
THE NATIONAL STOCK EXCHANGE OF INDIA
In the fast growing Indian financial market, there are 23 stock exchanges trading
securities. The National Stock Exchange of India (NSE) situated in Mumbai - is the largest
and most advanced exchange with 1016 companies listed and 726 trading members.
The NSE is owned by the group of leading financial institutions such as Indian Bank or
Life Insurance Corporation of India. However, in the totally de-metalized Exchange, the
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ownership as well as the management does not have a right to trade on the Exchange.
Only qualified traders can be involved in the securities trading.
The NSE is one of the few exchanges in the world trading all types of securities on a
single platform, which is divided into three segments: Wholesale Debt Market (WDM),
Capital Market (CM), and Futures & Options (F&O) Market. Each segment has
experienced a significant growth throughout a few years of their launch. While the
WDM segment has accumulated the annual growth of over 36% since its opening in
1994, the CM segment has increased by even 61% during the same period. The National
Stock Exchange of India has stringent requirements and criteria for the companies listed
on the Exchange. Minimum capital requirements, project appraisal, and company's track
record are just a few of the criteria. In addition, listed companies pay variable listing
fees based on their corporate capital size.
The National Stock Exchange of India Ltd. provides its clients with a single, fully
electronic trading platform that is operated through a VSAT network. Unlike most world
exchanges, the NSE uses the satellite communication system that connects traders from
345 Indian cities.
HISTORY OF NATIONAL STOCK EXCHANGE OF INDIA
Capital market reforms in India and the launch of the Securities and Exchange Board of
India (SEBI) accelerated the incorporation of the second Indian stock exchange called
the National Stock Exchange (NSE) in 1992. After a few years of operations, the NSE has
become the largest stock exchange in India.
Three segments of the NSE trading platform were established one after another. The
Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital
Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options
segment began operating in 2000. Today the NSE takes the 14th position in the top 40
futures exchanges in the world.
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In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior
Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of
50 stocks from 25 different economy sectors. The Indices are owned and managed by
India Index Services and Products Ltd (IISL) that has a consulting and licensing
agreement with Standard & Poor's.
In 1998, the National Stock Exchange of India launched its web-site and was the first
exchange in India that started trading stock on the Internet in 2000. The NSE has also
proved its leadership in the Indian financial market by gaining many awards such as
'Best IT Usage Award' by Computer Society in India (in 1996 and 1997) and CHIP Web
Award by CHIP magazine (1999).
National Stock Exchange Of India Limited - NSE
The National Stock Exchange is India's largest financial market. Established in 1992, the
NSE has developed into a sophisticated, electronic market, which ranks third in the world
for transacted volume. The NSE conducts transactions in the wholesale debt, equity and
derivative markets.
STOCK AND EXCHANGE BOARD OF INDIA ESTABLISHMENT OF SEBI
The Securities and Exchange Board of India was established on April 12, 1992 in
accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
PREAMBLE
The Preamble of the Securities and Exchange Board of India describes the basic
functions of the Securities and Exchange Board of India as
“…..to protect the interests of investors in securities and to promote the
development of, and to regulate the securities market and for matters connected
therewith or incidental thereto”
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REGULATION OF BUSINESS IN THE STOCK EXCHANGES
Under the SEBI Act, 1992, the SEBI has been empowered to conduct inspection of stock exchanges. The SEBI has been inspecting the stock exchanges once every year since
1995-96. During these inspections, a review of the market operations, organizational
structure and administrative control of the exchange is made to ascertain whether:
The exchange provides a fair, equitable and growing market to investors.
The exchange's organization, systems and practices are in accordance with the
Securities Contracts (Regulation) Act (SC(R) Act), 1956 and rules framed there
under.
The exchange has implemented the directions, guidelines and instructions issued
by the SEBI from time to time.
The exchange has complied with the conditions, if any, imposed on it at the time
of renewal/ grant of its recognition under section 4 of the SC(R) Act, 1956.
During the year 1997-98, inspection of stock exchanges was carried out with a special
focus on the measures taken by the stock exchanges for investor's protection. Stock
exchanges were, through inspection reports, advised to effectively follow-up and redress
the investors' complaints against members/listed companies.
During the earlier years' inspections, common deficiencies observed in the functioning
of the exchanges were delays in post trading settlement, frequent clubbing of
settlements, delay in conducting auctions, inadequate monitoring of payment of
margins by brokers, non-adherence to Capital Adequacy Norms etc. It was observed
during the inspections conducted in 1997-98 that there has been considerable
improvement in most of the areas, especially in trading, settlement, collection of
margins etc.
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A. DEMATERIALIZATION
Dematerialization in short called as 'demat' is the process by which an investor can get
physical certificates converted into electronic form maintained in an account with the
Depository Participant. The investors can dematerialize only those share certificates that
are already registered in their name and belong to the list of securities admitted for
dematerialization at the depositories.
Depository: The organization responsible to maintain investor's securities in the
electronic form is called the depository. In other words, a depository can therefore be
conceived of as a "Bank" for securities. In India there are two such organizations viz.
NSDL and CDSL
B. PROCEDURE OF CLIENT ACQUISITION
In the first phase we are trained and they teach us different things about market. They
teach us about sharekhan.com introduction, products and services offered by
sharekhan.com in the market. We have been trained properly about sharekhan.com
After that they conduct a mock viva, in this they ask about the real life problem faced
by the customers.
They provide us leads and we make calls. Three types of leads are provided to us:
People who registers themselves on sharekhan.com website willing to be client of
sharekhan.com and want to know about its product.
People who have Demat account already with any another broker.
People who are totally unknown to this market. Then after that we have to provide details of product and convince them. People who
have already Demat account, we have to convince them by giving information about
sharekhan.com services benefits.
And people who are unknown to share market, we tell them about sharekhan.com
first step program for fresher.
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Then we have to visit them and get the formed filled from them.
We collect all-important documents from client.
C. DOCUMENTS PHOTOCOPIES REQUIRED
(i) TWO COLOURED PHOTOGRAPHS (self signed).
(ii) For Identification Proof - VOTER ID CARD/ DRIVING LICENCE /PASSPORT/
PAN CARD (ANY ONE)
(iii) For Residence Proof - BANK STATEMENT / VOTER ID CARD /
RATION CARD / DRIVING LICENCE /
PASSPORT / TELEPHONE BILL STATEMENT
ELECTRICITY BILL STATEMENT.
(ANY ONE)
(iv) One cancelled cheque leafed (For MICR No. record)(E)Latest bank statement/Front
page of passbook(showing Name,Address,A/C No.)
(v) One account opening cheque of Rs.750/1000.
(vi) Customer can also deposit the initial margin money at the time of opening th
account
Marinating dairy of clients and contacting them at regular basis. To get feedback
from them about sharekhan services.
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1.2 PROFILE OF THE ORGANISATION
-- ORIGIN OF THE COMPANY
Sharekhan is a stock broking company. The company offers a complete range of pre
trade, trade and post trade service on the BSE (Bombay stock exchange) and the NSE
(National stock exchange).
Whether the client come in to the company‟s conventionally located offices and trade in a
dedicated environment or issue instructions over the phone, the highly trained team and
sophisticated equipment ensure smooth transactions and prompt service.
Investment Advisory service
Facilitation services to Retail Investors, Corporate.
Depository services
Investment options include:
Online trading (Includes equity, derivatives)
Commodities trading
Mutual funds
Portfolio management service
Operations:
Institutional broking
Investment Banking
Retail Broking
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Through trading and settlement process the investor converted into the final product. The
clearing house of exchange may act as legal counter party to all dealers for all deals in
equity derivatives instruments on exchanges. Thus the both the parties to an equity
derivatives met either by the party itself or in the event of default on the part of the party,
by clearing corporation.
A client can trade only through a trading member of the exchange. A clearing member
can act as trading member. The process of trading is similar to screen based trading in
securities like shares on an exchange. The exchange introduced standardized contract
where settlement date, is specified by stock exchange and the client can enter into
contracts with different contract/ strike price.
In order to minimize the risk of failure parties to contract in full filling their respective
obligation under the contract, the Clearing Corporation/trading members. Margins are
required to be paid by clearing/trading members who in turn, collect margin from their
respective clients.
-- RECENT ACHIEVEMENTS OF SHAREKHAN
1. Rated among the top 20 wired companies along with Reliance, HUJl, Infosys, etc
by„Business Today‟, January 2011 edition.
2. Awarded „Top Domestic Brokerage House‟ four times by Euro
money and Asiamoney.
3. Pioneers of online trading in India amongst the top 3 online trading
websites fromIndia. Most preferred financial destination amongst online
broking customers.
4. Winners of “Best Financial Website” award.
5. Voted by CNBC Awaaz as the Most Preferred Stock broker in India in 2005.
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MISSION & VISION
Mission: To educate and empower the individual investor to make better investment
decisions through quality advice and superior service.
Vision: To be the best retail brokering Brand in the retail business of stock market.
PROFILE
Sharekhan Ltd. is one of the leading retail stock broking house of
SSKI Group which is running successfully since 1922 in the country. It
is the retail broking arm of the Mumbai-based SSKI Group, which has
over eight decades of experience in the stock broking business.
Sharekhan offers its customers a wide range of equity related services including trade
execution on BSE, NSE, Derivatives, depository services, online trading, investment
advice etc. The firm‟s online trading and investment site - www.sharekhan.com – was
launched on Feb 8, 2000. The site gives access to superior content and transaction facility
to retail customers across the country. Known for its jargon-free, investor friendly
language and high quality research, the site has a registered base of over one lakh
customers. The content-rich and research oriented portal has stood out among itscontemporaries because of its steadfast dedication to offering customers best-of-breed
technology and superior market information. The objective has been to let customers
make informed decisions and to simplify the process of investing in stocks.
On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable application
that emulates the broker terminals along with host of other information relevant to the
Day Traders. This was for the first time that a net based trading station of this caliber was
offered to the traders. In the last six months Speed Trade has become a de facto standard
for the Day Trading community over the net. Sharekhan‟s ground network includes over
331 centers in 137 cities in India which provide a host of trading related services.
Sharekhan has always believed in investing in technology to build its business. The
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company has used some of the best-known names in the IT industry, like Sun
Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette,
VeriSign Financial Technologies India Ltd, Spider Software Pvt Ltd. To build its trading
engine and content.
The Morakhiya family holds a majority stake in the company. HSBC, Intel & Carlyle are
the other investors. With a legacy of more than 80 years in the stock markets, the SSKI
group ventured into institutional broking and corporate finance 18 years ago. Presently
SSKI is one of the leading players in institutional broking and corporate finance
activities. SSKI holds a sizeable portion of the market in each of these segments. SSKI‟s
institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio
investment and 5% of all Domestic Institutional portfolio investment in the country. It
has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional
Investors generate about 65% of the organization‟s revenue, with a daily turnover of over
US$ 2 million. The Corporate Finance section has a list of very prestigious clients and
has many „firsts‟ to its credit, in terms of the size of deal, sector tapped etc. The group
has placed over US$ 1 billion in private equity deals. Some of the clients include BPL
Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper‟s Stop.
About SSKI group
SSKI group also comprises institutional broking and corporate Finance. While the
institutional broking division caters to the largest domestic and foreign institutional
investors, telecom and media. SSKI holds a sizeable portion of the market in each of
these segments.
As the forerunner of investment research in the Indian market, we provide the best
research coverage amongst broking houses in India. Our research team is rated as one of
the best in the country. Voted four times as the Top Domestic Brokerage House by Asia-
money Survey. SSKI is consistently ranked amongst the top domestic brokerage houses
in India.
Broking
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If you prefer the assurance and reliability of trading through a broker, you can use our
network of 250 branches and 157 business partner outlets in over 123 cities to trade in
equities as well as derivatives. We will help you with the investment process, give you
advice based on extensive research and provide you with relevant and updated
information to help you make informed investment decisions.
Our trading services are designed to offer an easy, hassle free trading experience, whether
you trade daily or occasionally. You will be entitled to a host of value-added services,
intended to assist you in your investment process depending of your investing style and
frequency.
Freedom @ www.sharekhan.com however, if you prefer the convenience of trading from
wherever you are, you can get yourself a Classic trading account and enjoy the freedom
that comes with it.
You can now place orders even after the trading hours, and the orders are queued up to be
executed as soon as the market opens. Sharekhan.com the winner of several prestigious
awards has been the most preferred destination for online trading ever since its launch.
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PROFILE OF THE COMPANY:
Name of the company : Sharekhan ltd.
Year of Establishment : 1925
Headquarter : ShareKhan SSKIA-206 Phoenix HousePhoenix Mills CompoundLower ParelMumbai - Maharashtra, INDIA- 400013
Nature of Business : Service Provider
Services : Depository Services, Online Services and
Technical Research.
Number of Employees : Over 3500
Website : www.sharekhan.com
Slogan : Your Guide to The Financial Jungle.
SHAREKHAN R E S E A R C H R E P O R T
Sharekhan tigers dig meaty Stock Ideas out of the heart of the market and bring them to
you. Their skill at identifying their prey-Stock Ideas-while keeping your taste for
investment in mind is reflected in the depth of their research and the performance of the
ideas. The Market Strategy reports, on the other hand, identify the hunting-ground for
Stock Ideas, i.e. sectors and stock groups that are ripe for performance, discuss the state
of the economy and its impact on the stock market as well as advise you on dealing with
the impact of socio-political issues on the market.
Building and maintaining customer ideal portfolio demands objective, dependable
information. Sharekhan Equity Analysis helps satisfy that need by rating stocks based on
carefully selected, fact-based measures. And because Sharekhan is not focused on
investment banking, it doesn't have the same conflicts of interest as traditional brokerage
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firms. This objectivity is only one important difference in our ratings.
MANAGEMENT TEAM
Owner of the company : Mr. Dinesh Murikya
CEO of the company : Mr. Tarun Shah
Director (Operations) of the company : Mr. Shankar Vailaya
Head Research : Mr. Gaurav Dua
Trader/Entrepreneur/Sub Broker : Mr. V S Ganesh
Assistant Manager- : Mr. Chethan KumarHuman Resource
Associate Vice President- : Mr. Hanumanth RaoFranchisee Business
Mr. Tarun Shah Mr. Chetan kumar Mr. Hanumanth rao Mr. Shankar Vailaya(CEO) att. Manager HR vice president director (operation)
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P R O D U C T A N D
S E R V I C E S
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PRODUCT & SERVICES
A Sharekhan outlet offers the following services: Online BSE and NSE executions (through BOLT & NEAT terminals).
Free access to investment advice from Sharekhan‟s Research team.
Sharekhan Value Line (a monthly publication with reviews of recommendations,
stocks to watch out for etc).
Daily research reports and market review (High Noon & Eagle Eye).
Pre-market Report (Morning Cups).
Daily trading calls based on Technical Analysis.
Cool trading products (Daring Derivatives and Market Strategy).
Personalized Advice.
Live Market Information.
Depository Services.
Derivatives Trading (Futures and Options).
IPO‟s & Mutual Funds Distribution.
Internet-based Online Trading: Speed Trade.
TYPES OF PRODUCTS
1. Classic Account
2. Fast trade Account
3. Trade Tiger
1. Classic Account:
The features about classic account are- It is basically used for beginners i.e. Fresher.
Here the transactions can be done in BSE, NSE and F&O nternet-based Online
Trading.
There can be a market watch.
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Here we can make four templates i.e. folders.
You can add 20 scrip‟s in each template.
Here you can add minimum 20 scrip and maximum 100 scrip.
Top gainers, Top losers, Top traded equities and Top traded funds are the special
links available in this.
It gives maximum access.
You can keep lump sum amount in the account.
There is a link which is- what‟s in, what‟s out.
A system required is Windows XP, 2000, IE 6.0.
2. Fast trade Account:
The features about fast trade account are-
We can make five templates.
You can monitor 125 companies.
Systems required here are Windows XP, 2000, IE 6.0 and Java.
You can also buy Mutual funds and IPO online.
You can also monitor circuits.
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You can see the market depth i.e. the logic of demand and supply. It will help to
decide whether to buy or not.
It can also add trigger as in it works as a reminder.
This online trading platform is an applet- based application that provides live.
Streaming quotes from BSE and NSE.
Get live market prices and market statistics like best bid price, quantity, best offer
price and quantity etc. for chosen stock.
3. Trade Tiger:
Trade Tiger is an application that brings you the power of a broker‟s terminal, right from
the desktop.
Trade on multiple exchanges {NSE, BSE, MCX, NCDEX} from a single screen.
Customize market watches by scripts or sectors and view them on a single screen.
Get access to technical tools and trade like a pro.
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Trade tiger :
This account allows you to trade through website and is suitable for retail Investors.
S y s t e m R e q u i r e m e n t s
Customers will need access to a computer, which has at least the following configuration:
Pentium 3 PC
Minimum 128 MB RAM
Windows 2000/XP
Dial-up Modem / Cable modem
Internet Connection Account
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Internet Explorer 6.0
Java enabled in IE
2.4 SHAREKHAN ONLINE TRADING FACILITIES
(a) CLASSIC ACCOUNT: A/C Opening charges: Rs. 750(life time charges)
DEMAT A/C free for first year and Rs.300 from
2nd year onwards.(Maintenance charges)
Trading through our website.(www. sharekhan.com)
No volume & minimum margin money commitment required.
NSE online and BSE offline.
Live applet for watching prices & trading purposes.
(b) SPEED TRADE: Account Opening Fee: Rs. 1000/-(life time charges)
DEMAT A/C free for first year and Rs.300 from
2nd year onwards.(Maintenance charges)
Trading through Software/Live Terminal provided by sharekhan NSE & BSE online
(through software as well as through website & phone).
Monthly Access Fee(for SPEEDTRADE only) : Rs 500/- a month. The access charges
will be applicable to all the new customers signed up from 2nd month of activation.
To explain if an account is signed up in January 2005, and the same is activated in
January 2005, the access charges will be applicable for Feb 2005 month and the first
debit of access charges for the account will happen by the 7th of March 2005.
Non applicability of Monthly Access Fee :
At the end of a Month if the client has contributed more than Rs. 1000/- as Gross
brokerage, the access charges of Rs. 500/- will not be Debited to client's account. If the
brokerage is less than 1,000/- the access charges of Rs. 500 will be debited in the
subsequent month by 7th.
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Exceptions applicable for Access Charges :
The access charges of Rs. 500 if charged to a client can be refunded in full if the total
brokerage by the client is above 3,000 in a Calendar Quarter.
BROKERAGE: -
CASH BROKERAGE: - DELIVERY: 0.50%, INTRADAY: 0.10%*
EXPOSURE: - 4 TO 6.6 TIMES* (ON MARGIN MONEY)
(* subject to change or as decided by Assistant Manager)
F&O BROKERAGE: - ON FIRST LEG {Buy} 0.10%,
SAME DAY SQUARE {Sell} OFF: 0.02%
SECOND LEG: 0.10%
OTHER FEATURES-:
Settlements of trades follow T+2 transaction cycle.
No Demat Transaction Charges in case of buying and selling through online.
For the fund transfer and withdrawl, we have tie-up with four banks- HDFC
Bank,CITI Bank, IDBI Bank & UTIBank.
If customers are having bank a/c in one of them, you can transfer the funds and
withdraw the funds online from their trading a/c at anytime.
BTST (Buy today Sell Tomorrow) Facility in all scripts.
DIAL-N-TRADE Call and Trade through Toll free no. From anywhere in India
(CUSTOMER CARE: 1600 22 7500, TRADING: 1600 22 7050,30307600)
Online IPO filling facility.
Freedom from paperwork, trading facilities are completely online.
SMS alerts on your mobile phones.
Daily sharekhan.com research reports in your mailbox (5 online research
papers/magazines).
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T r a d e i n E q u i t y b yu s i n g y o u r p h o n e
Free with Sharekhan Classic Account, the Dial-n-Trade service enables for customer to
place orders for buying and selling shares through their telephone.
All customer have to do is dial any one of sharekhan dedicated numbers 9899824828
enter their TPIN number (which is provided at the time of opening customer account)
and on authentication customer will be directed to a telebroker who will buy and sellshares for them.
F e a t u r e s o f D i a l - n-
T r a d e that enable you to trade effortlessly
Dedicated numbers for placing customer orders with their cell phone or landline. Toll
free number: 9899824828. For people with difficulty in accessing the toll-free
number, sharekhan also has a Reliance number which is charged at Rs. 1.50 per
minute for STD calls.
Automatic funds transfer with phone banking (for Citibank and HDFC bank
customers).
Simple and Secure Interactive Voice Response based system for authentication.
No waiting time. Enter your TPIN to be transferred to telebrokers.
You also get the trusted, professional advice of telebrokers.
After hours order placement facility between 8.00 am and 9.30 am (timings to be
extended soon).
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TYPES OF SHARE TRADING
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BRANCHES ALL OVER INDIA
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SWOT ANALYSIS
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A SWOT analysis focuses on the internal and external environments, examining strengths
and weaknesses in the internal environment and opportunities and threats in the external
environment.
STRENGTHS
SERVICES
As a product an extremely innovative product with very less cost. Services like online
trading facility, institutional and domestic broking, customized research reports with
almost 80% efficiency etc give Sharekhan an edge over its competitors. Sharekhan
provides other support services that make retail investors more confident and assured
with their trading. SMS alerts (allowing traders and investors to make the most of the
available opportunities), Softer, intangible features like imagery, equity driving
preference. Through efficient trading processes Investors can place their orders directly
on the Internet, do all the information seeking and basically own the investing process.
DISTRIBUTION NETWORK
Sharekhan with almost 250 branches spread across 123 cities beefed up by
comprehensive online research, advice and transaction services. In near future expect to
make 200000 plus retail customers being serviced through centralized call center, web
solution, 60 branches, semi branches servicing affluent, aggressive traders through
highly skilled financial advisors, 250 independent investment managers, franchisees
servicing 50000 highly valued clients.
MARKETING
Sharekhan is a veteran equities solutions company with over decades of experience in the
Indian stock markets. Sharekhan does not claim expertise in too many things.
Sharekhan‟s expertise lies in stocks and that's what it talks about with authority. So when
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he says that investing in stocks should not be confused with trading in stocks or a
portfolio-based strategy is better than betting on a single horse, it is something that is
spoken with years of focused learning and experience in the stock markets.
PRODUCTS
Company‟s product line is quite flexible in the sense that there is a product for every kind
of investors. Also all the products cover all the loop holes of all the products offered by
the other competitors like low cost, user friendly online trading services etc.
WEAKNESS
CUSTOMER SATISFACTION
As far as customer satisfaction goes sharekhan.com has to tighten their socks. Many
broking houses catering to heavy investors or small segment of the market can
afford to and does provide relationship managers for their customers, who can
understand the trading needs of individual customers, and advise accordingly.
However, a broking house like sharekhan.com, which caters to the mass segment, is
in no position to provide relationship managers for individual customers.
BRANDING
Though the company has efficient products but large part of investment interested
population does not know the company. The most basic expectation for a trader or
investor when one begins trading is that one must get timely delivery of shares and
proceeds from sale of shares. Also ones cash balances with the broker must be safe
and secure. Though this confidence in the broker comes with time and experience,
good and transparent practices also play a major role in imbibing confidence in
trader.
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COMPETITION FROM BANKS
Most of the banks due to good branding have the faith of the customers of their
banking database. So they enjoy the liberty of huge database and customers find it
more reliable to trade their rather than with a unknown broker. Also banks like
HDFC Bank and ICICI Bank have the advantage of linking the trading accounts of their
customers to saving accounts. This makes trading easier, and at the same time a
trader withdraws exactly as much money from his account as is needed to complete
the trade. Similarly sales proceeds are credited directly to saving account.
OPPORTUNITIES
EVER-INCREASING MARKET
After the NSE brought the screen based trading system stock markets are now more
secured which has attracted lot of retail investors and the demand is increasing day by
day. This has resulted in improved liquidity and heavy volumes on transactions.
Sharekhan is one of the early entrants here. As to how much it will roar and how swift it
can swoop on the market, the future alone can answer such queries. Sharekhan has
been a mega player and is known for being a mover of stocks. It is also known for
putting big deals through and enjoys good networking with the FIIs. It has been dynamic
enough to move with the times and capture the opportunities that the market throws
up from time to time.
IMPROVING TECHNOLOGY
In country like India technology is always improving which gives the company a chance
to keep on improving their product with time whereas for the small players like local
brokers it will be difficult to keep the same pace as the changing technology. Also with
SEBI lying down some strict guidelines small brokers are finding it harder to retain the
customers with no research department and small capital. The traditional business model
is highly dependent on a large network of sub-brokers, and many established players may
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not have systems (technology, customer service, etc.) capable of directly servicing so
many retail customers.
UNFULFILLED NEEDS OF THE CUSTOMERS
With so many competitors offering their products in the market but no one is able tocompletely satisfy the customers. Some have the problem of lack of information or some
were scared of volatility of the stock markets. Sharekhan.com has the opportunity to tap
this unsatisfied set of customers and to make hold in the market. The Internet serves to
break all barriers to information, as it offers an extremely hassle-free investing platform.
EDUCATION LEVEL
The education level in the country is improving year after year as far as technology goes.With that the understanding of the stock market is also increasing and a lot of retail
investors are steeping in the markets which are being shown by increasing volumes,
transactions and indices.
THREATS
THREATS NEW COMPETITORS
A lot of new competitors are trying to enter the market in this bullish run to taste the
flavor of this cherry. This is creating a lot of competition for large players like
sharekhan.com and it is creating little confusion in the minds of the customers about
the services provided by the broker. Also many banking firms are entering into the
market with huge investment.
TECHNOLOGY BASED BUSINESS
Online trading is totally based on the technology which is quite complex. Typically,
the technology solution has to start from the Internet front-end (or the screen that
you see when you begin trading). Then it needs to get into the 'middle tier' of risk
management systems that assess data from banks and depository participants (DP),
calculate client risk at that point in time, and give the 'Go/No go' advice to the trade.
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So technology is a kind of threat because unless until it is working properly it is good
but internet is not that safe. Though a lot of cyber laws are being made but not yet
executed.
Branch Head
Regional Sales Manager Equity Advisors Back Office Dept.
Territory sales
manager
Assistant Manager
Direct Sales
Executive
Trainees
Relationship
ManagersCustomer care
cacccre
Accounting
Department
ORGANISATION CHART
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1.3 PROBLEM STUDIED
Trading in securities may become uncontrolled in case of dematerialized securities.
It is incumbent upon the capital market regulator to keep a close watch on the trading in
dematerialized securities and see to it that trading does not act as a detriment to investors
Multiple regulatory frameworks have to be confirmed to, including the Depositories Act,
Regulations and the various Bye Laws of various depositories.
To maintain and cope up with the growing competition from the various online trading
providers, Share khan needs to find potential clients, also the new investors and satisfy
there needs.
The Broad objective of the project is to equip the trainees with all the quality which is
essential to face any circumstances which can arise while providing service to the clients.
This project will accomplish to understand how the people interact with technology savvy
products and if they are ready for doing all the trading through net. The project also helps
in understanding the trend of the scripts of the particular sector (banking sector) in
different market condition.
All these steps help me to understand how to cope up with different types of people and
there diversified need and satisfaction level.
Trading in securities may become uncontrolled in case of dematerialized securities.
It is incumbent upon the capital market regulator to keep a close watch on the trading in
dematerialized securities and see to it that trading does not act as a detriment to investors.
The role of key market players in case of dematerialized securities, such as stock-brokers,
needs to be supervised as they have the capability of manipulating the market.
Multiple regulatory frameworks have to be confirmed to, including the Depositories Act,
Regulations and the various Bye Laws of various depositories. Additionally, agreements
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are entered at various levels in the process of dematerialization. These may cause anxiety
to the investor desirous of simplicity in terms of transactions in dematerialized securities.
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Review of Existing Literature
According to the Webster‟s dictionary, literature is “the writings that pertain to a
particular branch of learning, and printed matter”. And review means “to examine
again, to study carefully”.
Therefore literature review is the printed matter, which we study very carefully during
our work. This project is also a collection of insight into the different printed material.
As this project is specifically related to investor who invest their money using different
investment alternative like equity, mutual fund, banks, others.
The main source of data through which this project has taken its shape is the circulars of
SEBI. These circulars give description of existing market.
“INVESTMENT DECISION” is taken from “FINANCIAL MANAGEMENT” written
by D. K GOYAL. Purpose of this book is to provide background needed to understand
the basics concept of investment.
The study related to investment decision also helped me a lot to understand what factor
an investor considers for his investment.
“The concept and role of mutual funds” of the AMFI mutual fund testing programme
by association of mutual funds in India. This book provide concept of mutual funds.
Last but not the least, the practical experiences of Share-khan Ltd. has given the best
ever exposure on the actually market works in financial products and services.
Investing is not just putting money in some instrument for the future but it involves
taking careful steps to make money grow. When you invest, your goal is that its value
will increase over a period of time. There are large numbers of investment avenues
available to invest like stocks, real estate, bank deposits, government of India bonds, post
office saving schemes etc.
The investment vehicles available for one to choose today vary from money market
certificates (which earn set rates of interest) to high-risk growth stocks. Investing in any
instrument almost always involves some risk, but if you learn how to analyze investments
carefully and invest wisely over an extended period of time, investing is a proven way to
increase wealth. Careful analysis and proper investment steps improve once capability to
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earn reward in the long run through investment alternatives available.
Investments are nothing but parking your savings into various instruments available
which suits the best risk and return appetite of the individual.
“Income – expenditure = Savings”
Savings are the difference between the net income and the total expenditure made.
Investment avenues and alternatives
3.1 INVESTMENT AVENUES AND ALTERNATIVES
Investment alternatives vary from fixed income to variable income which includes RBI
bonds, government securities, fixed deposit, equity investments, property and so on.
In recent years the 6.5 percent tax-free RBI Bonds have become a very popular saving
instrument -- especially amongst individuals. Till 1996, these bonds gave returns of 10
per cent. This came down to 9 per cent and then 8 percent and then in 2003 it was
reduced to 6.5 per cent (tax free). Nowadays, 8 percent taxable Government of India
bonds are also doing well to attract investors who want safe and higher yield.
However, with inflation at nearly 4.5%, the return offered by these instruments were still
attractive. However, with the scrapping of the tax-free bonds, safe investment options for
individuals have become very limited and people are now choosing to go with either post
office saving schemes or equity related instruments.
Take a look at what is happening. Debt funds, which were said to be relatively risk-free,
are giving very less returns. Monthly Income Plans offered by mutual funds are also not
attractive as their portfolio is made up of 80 percent debt and 20 percent equity. With
debt giving very less returns and returns from equity becoming stagnant, the returns from
MIPs are also very attractive. The returns offered by MIPs are totally dependant upon the
type of security and debt instruments held by the fund But with recent rally in the stock
market, very few people are now going for MIPs and have a very positive sentiment
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about the market and would like to stay with the market for long. But continuously we
still have a single question in mind:
So where should individuals park their money now?
"The 8 per cent taxable RBI Bonds seem to be one of the best options right
now looking for a safe avenues."
The person in the 30 percent tax bracket, the 8 per cent RBI bonds will give returns of
approximately 5.6 per cent. Though this is much lower than the previous 6.5 percent, it is
still a better than most other options. If you are a senior citizen, the Senior Citizens
Savings scheme offering a 9 Percent yearly interest is a good investment option. The
scheme was announced in the Budget 2004-2005 and was meant for people above the age
of 60. However, this scheme has a maximum deposit limit of Rs. 15 lacs while RBI
Bonds do not have any limit. In this case, the term for deposit is five years with a facility
for premature withdrawal. The 9 percent returns are subject to tax, so if you are in the 30
percent tax bracket, you will effectively get returns of 6.3 per cent.
Another option can be Floating Rate Bond Fund offered by mutual funds. Basically, these
funds invest in floating rate instruments and therefore have a direct correlation to interest
rates. If interest rates go up the returns from these funds rise and returns fall with a fall in
interest rates. This is unlike debt funds, where there is a reverse relationship between
interest rates and returns. A rise in interest rates results in a fall in returns. In the current
scenario, these funds are likely to give returns of 5 percent to 5.5 percent. The dividends
are tax-free in the hands of the investor and most importantly, there is complete liquidity.
Again, there is no limit on the amount that can be deposited. Also, there is hardly any
volatility making it a safe option. If you are willing to take a bit of risk, you can divideyour portfolio in such a way that 60 percent is invested in floating rate bond funds and
the remaining 40 percent in equity. That's like having an MIP except that instead of 80
percent in debt and 20 percent in equity, here the 60 percent is in floating rate bond
funds. Such a portfolio can give you returns of aprox. 8.5 % to 9.5 %.
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The NSCs and the Kisan Vikas Patras give returns of 8 percent so for those in the 30
percent tax bracket, it works out to 5.6 percent. Here too there is no limit on the amount
of deposit. However, here the interest is posted only at the time of maturity. So it is not a
good option if you want regular returns. On the other hand, RBI Bonds give returns every
six months or half yearly. So, depending upon their risk profile and need for liquidity,
one will have to decide on their portfolio. For anyone below 35 years, it is recommend
that one should invest some part of there portfolio in RBI Bonds and in NSCs, KVPs as a
long term investments and the remaining in combination of floating rate bond funds and
equity But for those above 35,
It is advocate that one should look at nearly 40 percent in RBI Bonds, 30 percent in
NSCs, KVPs, hence giving safe and regular income. And the remaining 30 per cent in
floating rate bond funds and equity. For those above the age of 60, 40 percent must be put
in the Senior Citizens Scheme (of course, this is up to a maximum limit of Rs 15 lakh),
another 40 percent in RBI Bonds and the remaining 20 percent in floating rate bond
funds, so that one has some liquidity.As an investor one has a wide array of investment
avenues available to one.
Reduction in brokerage by many brokers for trading in dematerialized securities
Brokers provide this benefit to investors as dealing in dematerialised securities
reduces their back office cost of handling paper and also eliminates the risk of being
the introducing broker.
Reduction in handling of huge volumes of paper
Periodic status reports to investors on their holdings and transactions, leading to
better controls.
Elimination of problems related to change of address of investor, transmission,
etc
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In case of change of address or transmission of demat shares, investors are saved
from undergoing the entire change procedure with each company or registrar.
Investors have to only inform their DP with all relevant documents and the required
changes are effected in the database of all the companies, where the investor is a
registered holder of securities.
Elimination of problems related to selling securities on behalf of a minor
A natural guardian is not required to take court approval for selling demat securities
on behalf of a minor.
Ease in portfolio monitoring
Since statement of account gives a consolidated position of investments in all
instruments.
Disadvantages of Dematerialization
The disadvantages of dematerialization of securities can be summarized as follows:
A. Trading in securities may become uncontrolled in case of dematerializedsecurities.
B. It is incumbent upon the capital market regulator to keep a close watch on the
trading in dematerialized securities and see to it that trading does not act as a
detriment to investors. The role of key market players in case of dematerialized
securities, such as stock-brokers, needs to be supervised as they have the capability of
manipulating the market.
C. Multiple regulatory frameworks have to be confirmed to, including the
Depositories Act, Regulations and the various Bye Laws of various depositories.
Additionally, agreements are entered at various levels in the process of
dematerialization. These may cause anxiety to the investor desirous of simplicity in
terms of transactions in dematerialized securities.
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SERVICES PROVIDED BY THE SHAREKHAN:--
1 Online Services to Suit your Needs!
With a Sharekhan online trading account, you can buy and sell shares in an instant!
Anytime you like and from anywhere you like!
You can choose the online trading account that suits your trading habits and preferences -
the Classic Account for most investors and Speed trade for active day traders. Your Classic
Account also comes with Dial-n-Trade completely free, which is an exclusive service for
trading shares by using your telephone.
#Freedom from paperwork
#Instant credit and money transfer
#Trade from any net enabled PC
#After hour orders
#Online orders on the phone
#Timely advice and research reports
#Real-time Portfolio tracking
#Information and Price alerts
2 Get everything you need at a Sharekhan outlet!
All you have to do is walk into any of share khan‟s 640 share shops across 280 cities in
India to get a host of trading related services - their friendly customer service staff will
also help you with any accounts related queries you may have.
A Share-khan outlet offers the following services:
Online BSE and NSE executions (through BOLT & NEAT terminals)
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Free access to investment advice from Sharekhan's Research team
Sharekhan Value Line (a monthly publication with reviews of recommendations,
stocks to watch out for etc)
Daily research reports and market review (High Noon & Eagle Eye)
Pre-market Report (Morning Cupper)
Daily trading calls based on Technical Analysis
Cool trading products (Daring Derivatives and Market Strategy)
Personalized Advice
Live Market Information
Depository Services: Demat & Remit Transactions
Derivatives Trading (Futures and Options)
Commodities Trading
IPO‟s & Mutual Funds Distribution
Internet-based Online Trading: SpeedTrade
1 Investing in Mutual Funds through Sharekhan
Invest in Mutual Funds through Sharekhan! They have started this service for a few
mutual funds, and in the near future will be expanding their scope to include a whole lot
more. Applying for a mutual /fund through share-khan is open to everybody, regardless
of whether you are a Sharekhan customer.
To invest in a fund, all you have to do is download the application form, print it out, fill it
in and send it over to share-khan. They‟ll do the rest for you.
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CLASSIC ACCOUNT
This is a User Friendly Product which allows the client to trade through website
www.sharekhan.com and is suitable for the retail investor who is risk-averse and hence
prefers to invest in stocks or who do not trade too frequently.
Features
Online trading account for investing in Equity and Derivatives via
www.sharekhan.com
Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.
Integration of On-line trading, Saving Bank and Demat Account.
Instant cash transfer facility against purchase & sale of shares.
Competitive transaction charges.
Instant order and trade confirmation by E-mail.
Streaming Quotes (Cash & Derivatives).
Personalized market watch.
Single screen interface for Cash and derivatives and more.
Provision to enter price trigger and view the same online in market watch.
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SPEED-TRADE
SPEED-TRADE is an internet-based software application that enables you to buy and sell
in an instant.
It is ideal for active traders and jobbers who transact frequently during day‟s session to
capitalize on intra-day price movement.
Features
Instant order Execution and Confirmation.
Single screen trading terminal for NSE Cash, NSE F&O & BSE.
Technical Studies.
Multiple Charting.
Real-time streaming quotes, tic-by-tic charts.
Market summary (Cost traded scrip, highest value etc.)
Hot keys similar to breakers terminal.
Alerts and reminders.
Back-up facility to place trades on Direct Phone lines.
DIAL-N-TRADE
Along with enabling access for your trade online, the CLASSIC and SPEEDTRADE
ACCOUNT also gives you our Dial-n trade services. With this service, all you have to do
is dial our dedicated phone lines 1-800-22-7500, 3970-7500.
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PORTFOLIO MANAGEMENT SERVICES
1. Prop rime: - Research & Fundamental Analysis.
2. Protect: - Technical Analysis.
-Thrifty Nifty
-Beta Portfolio
3. ProArbitrage: - Exploit price analysis
IPO ON-LINE
You can apply all the forthcoming IPO online hasselfree, paperless and time saving work.
CHARGE STRUCTURE
Structure for Pre Paid – Account Individuals: -
Charge Classic Account Speed Trade Account
Account Opening Rs. 750/= Rs. 1000/=
Monthly
Commitment
Rs. NIL Rs. 500/=
Brokerage Intra-day – 0.07 %**
Delivery - 0.40 %**
Intra-day - 0.05%**
Delivery - 0.25%**
* Refundable in case the brokerage is more than Rs. 500/= p.m.
** Condition Apply.
*** Taxes as per govt.
TABLE 3.1
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Structure for Post Paid – Account Individuals: -
Charge Classic Account Speed Trade Account
Account Opening Rs. 750/- Rs. 1000/-
Monthly
Commitment
Rs. NIL Rs. 500/-
Brokerage Intra-day - 0.10 %*
Delivery - 0. 50 %*
Intra-day - 0.10 %*
Delivery - 0.50 %*
* Refundable in case the brokerage is more than Rs. 500/= p.m.
** Taxes as per govt.
They offer an On-line Trading Account along with the Demat A/c for the benefits to the
employees of company.
Depository Charges
Account Opening Charges Rs. NIL
Annual Maintenance Charges Rs. NIL first year Rs. 300/= p.a. from
second calendar year onward
TABLE 3.2
TABLE 3.3
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PRODUCT DETAILS
(A) CLASSIC ACCOUNT: A/C Opening charges: Rs. 750/-
DEMAT A/C free for first year and Rs.300 from 2nd year onwards (Annual
Maintenance charges). Trading through website live terminal. No brokerage commitment
required.NSE and BS online. Both Cash & F&O.
(B) SPEED TRADE: Account Opening Fee: Rs. 1,000/-.Both Cash & F&O.
Monthly Recurring Fee: Rs 500/- per month, which is very nominal if you consider the
benefits of the product. This access charges will be debited to all the new customers
signed up after Sept 15, 2004. And at the end of the month if the client has contributed
more than Rs. 500/- as brokerage the access charges of Rs. 500/- will be credited back to
the clients account. Please note - this credit of Rs. 500/- will be given only to customers
who have contributed more than Rs. 500/- as brokerage during the months.
Minimum Brokerage Intra Day Per Share:
5 Paisa each leg (buy or sell) for Intra-day Trades (For e.g. on a Rs 20 Scrip, brokerage
@ 0.10% = 2 paisa, but there is a min. chargeable amount of 5 paisa).
Minimum Delivery Handling Charges:
10 Paisa for Delivery Trades (buy and sell) (For e.g. on a Rs 10 Scrip, brokerage @
0.50% = 5 paisa, but there is a min. chargeable amount of 10 paisa).
Rs 16/- per Scrip (The brokerage per Scrip will be charged for the selling of shares
resulting in delivery on actual). (For e.g. if a customer sells 100 shares of SAIL, TOTAL
Delivery value = 2200, brokerage @ 0.5% = Rs 11, but the min chargeable amt per scrip
per day = Rs 16), so additional Rs 5/- will be charged as Min delivery handling charges).
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EXPOSURE: 4 TO 6.7 TIMES (ON MARGINE MONEY)
Online IPO's available
They have tie up with Nine banks for online fund transferring i.e. HDFC, ICICI, IDBI,
CITI, Union Bank of India, Oriental Bank of Commerce, INDUSIND, UTI bank ,
Bank of India and Yes Bank for online money transfer.
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CHAPTER – 2
RESEARCH METHDOLOGY
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OBJECTIVE & METHODOLOGY
SIGNIFICANCE
This is a limited study which takes into consideration the responses of people. This data
can be exported to take in the trends across the industry. The significance for the industry
lies in studying these trends that emerge from the study. It is a rapidly changing and
evolving sector. People are only beginning to wake up to it‟s vast possibilities. A study
like this can attempt to guide the future of the industry based on current trends. This
project will help to understand the problem faced by the new client with respect to online
share trading and find ways to solve their queries at microscopic level. The study also
aims to highlight the possible hurdles that a prospective client faces who are interested to
investing in securities but is unaware of the system of online share trading. Its also aims
at finding out the brand image of the organization amongst the general investors and give
information to the management about the new developments in the market adopted by the
competitors and the areas where the company needs to improve.
MANAGERIAL & USEFULNESS OF THE STUDY
1. From the study, Share Khan will come to know about the problems faced by
its existing as well as prospective investors.
2. To prepare an effective marketing strategy to lure the clients as compared to
its close competitors.
3. The study also aims at finding out the ranking of the company and its
competitors in terms of certain parameters, as adjudged by consumers.
4. This information is a good guide to management as it brings out the strengths
of the competitors and the areas where the company needs to improve.
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OBJETIVES
Customer satisfaction through sales of Trading / Demat Accounts in order to get a
deep insight as to how the Organization actually performs these functions.
Understanding the Commodity and Derivative market and the way work is
performed in these segments.
Investigate the difficulties faced by the existing clients of Share Khan with
respect to its internet trading services
The primary objective of this study is to gain an insight into the basics of internet
trading with respect to Indian capital market.
To ascertain the problems those are hindering the acceptance of internet trading
among the prospective investors.
To conduct Market Research in various parts of the city in order to get
statistical data for commenting on the future of online share trading in India.
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2.4 SCOPE OF THE STUDY
1. With growing acceptance and popularity of internet trading the study aims at
providing a deeper insight into this new field of security trading in India.
2. Assess the penetration of internet trading with respect to the growth of
broadband connectivity provided by various Inter Service Providers (ISPs).
3. to help Share Khan in developing a better customer acquisition retention
strategy in relation to retail as well as institutional investors.
Limitations:-
Lack of Techno Savvy people and poor internet penetration: -- Since most of the
people are quite experienced and also they are not techno savvy. Also internet
penetration is poor in India.
The study is limited to the geographical area of Delhi and thereof cannot be
generalized.
Inaccurate Leads :-- Sometimes leads are provided which had error in it which
varies from only 5 digit phone number to wrong phone number
Misleading concepts: -- Some people think that Shares are too risky and just
another name of gamble but they don‟t know it‟s not at all that risky for long
investors.
Some respondents are unwilling to talk: -- Some respondents either do not have
time or willing does not respond as they are quite annoyed with the phone call.
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Mostly people comfortable with traditional brokers: -- As people are doing
trading from there respective brokers, they are quite comfortable to trade via
phone
Lack of awareness of Stock market :-- Since the area is not known before it takes
lot of time in convincing people to start investing in shares primarily in IPO‟s.
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2.5 METHODOLOGY
Expert opinion (primary data)…. Had a direct talk with customers of share khan and the
competitor‟s companies customer and for that I have prepared a list of questions which
helped me in knowing the details of their investment structure. This method was direct
and was mare beneficial from my project point of view. Secondary data through various
books, magazines, newspapers, journals and websites. The team divided the entire city
into zones and drew out samples out of each zone. The size of samples drawn from each
zone depended on the prospectiveness of the particular area. For e.g., if a particular
research area consisted of Offices then the sample size would obviously be higher than an
area like Shopping mall or PVR. This is because Office employees constitute the service
sectors who are the active investors of today. Also, the office areas consist of people from
the business class who have always been in the hunt for quick money, not to forget that
smart and timely investment in the share market can yield to enormous returns. After
dividing the city into zones, the Target audience was probed using Interviews and
questionnaires. These were later analyzed to draw out conclusive results.
Methodology for Customer Acquisition
The leads for customer acquisition primarily came from the questionnaires filled up by
prospective customers. Apart from these customers were also pitched through personal
references and contacts. Moreover the organization takes every possible effort in order
to spread mass awareness. As a result of this publicity campaign, influenced prospective
customers approach the organization. There are various ways to make people aware
about the organization as such Marketing Research, Canopy, Personal References, Pop-
up windows having collaboration with various portals e.g. Rediffmail.com etc. Person
with adequate interest leaves his contact information. Later on these leads are
contacted personally for further development. The organization has efficient sales stuff
that excels in this job. Part time trainees are also appointed for the same. This work
force been perfectly supervised by the Managers. Thus all these factors sum up into a
result oriented work force. These leads were the contacted through tele calling and
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after developing a relationship, they were pitched in at the addresses provided by them.
After giving them a presentation about the product and its advantages over its
competitors, they were promised of a Demo by company sales force in case a sale had
resulted. Also references were collected from such people and the same methodology
was repeated. For each and every customer personal quarries have been entertained
after the sale is done.
Data Source
Data used for the research work was primary and secondary in nature. Secondary data is
the data that was collected from another purpose and already exists somewhere. Primary
data is gathered for a specific purpose and is collected by the researcher from mapping or
cold calls methods. The data used in this project is primary data collected from the
various categories of investors from different areas. Secondary data was collected using
various journals and publications like:
NSE‟s module on Capital Market, October „03
Business Today, Feb‟05 edition
Report on internet based securities trading and services by a committee chaired
by Shri O P Gahrotra, Sr. Exec Director, SEBI.
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CHAPTER-3
DATA ANALYSIS
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DATA ANALYSIS
ANALYSIS OF FUTURE ONLINE TRADING
(1) Are people aware of stock market?
(a)Yes (b) No
Interpretation: - A survey was conducted on the 200 people in the market. 71% of
the respondent replies that they know about the stock market other than those 29%
belongs not know about that category.
29%
71%
NO
YES
People aware of stock
market No of respondent
NO 29
YES 71
FIGURE 4.1
TABLE 4.1
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(2)Through which sources people are aware?
(a)News paper (b) Friends (c) T.V (d) other sources
Sources No of respondent
Newspaper/Magazine 36
Friends/Colleagues 12
TV 47
Other sources 5
Interpretation:- The resources of the spreading awareness into the respondent as per
their percentage i.e. TV- 47% is the first above all, NEWSPAPER/ MAGZINES- 36%,
FRIENDS- 12%, OTHER SOURCES- 5%.
36%
12%
47%
5%
Newspaper/Magazine
Friends/Colleagues
TV
Other sources
FIGURE 4.2
TABLE 4.2
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(3) Which brand gives the more customer value?
(a) ICICIDIRECT
(b) INDIA BULLS
(c) SHAREKHAN
(d) RELIGARE
Chart
Brands
ICICI
DIRECT
INDIA
BULLS
SHAREKHAN
Ltd. RELIGARE OTHER
No of
respondent 50 36 60 45 9
Interpretation:- SHARE-KHAN- 60 is the rank Ist among the other brands that is
ICICI direct-50, RELIGARE – 45 and the INDIA BULLS-36 is the last in the tally.
50
36
60
45
ICICI DIRECT INDIA BULLS SHAREKHAN
Ltd.
RELIGARE
Series1
FIGURE 4.3
TABLE 4.3
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(4) AT WHAT PRICE PEOPLE WANT TO OPEN THEIR ACCOUNT?
(a) Rs 750
(b) Rs 900
(c) Rs 999
(d) Rs 750
Interpretation: - SHARE KHAN & ICICI direct are the two broking house which
are charging Rs-750 as opening of demat account. INDIA-BULLS is charging Rs-900,
and the RELIGARE securities is charging Rs-999 which is the highest charges among
the all.
750
900999
750
0
200
400
600
800
1000
1200
I C I C I D
I R E C
T
I N D I
A B U L L S
R E L I G
A R E S E
C U R I T I
E S
S H A R E K
H A N L T
D.
Series1
Brands
ICICI
DIRECT
INDIA
BULLS
RELIGARE
SECURITIES SHAREKHAN LTD.
No of respondent 750 900 999 750
FIGURE 4.4
TABLE 4.4
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Analysis Pattern
Analysis can be defined as get some information from collected date i.e. get information
from raw data. Collected data is of no use until some results have not been found out.And analysis serves this purpose. Analysis can be done in many ways like graphs, charts,
tables, coding and statistical analysis etc.
The data thus collected was edited, tabulated, analyzed and interpreted to make study
meaningful.
Question-1
Interpretation: This graph shows that the maximum time horizon for investment in lessthan 2 years is 39%. Most of the people invest their money for less than 2 years. People
do not wait till more than 2 years.
TIME HORIZON FOR INVESTMENT
39%
24%
37%
0
0.050.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
less than 2 years 2-5 years more than 5
years
FIGURE 4.5
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Question-2
Interpretation: This shows that out of 200 respondent 48% of respondent want 8%-15%
rate of return. Most of people expected 8%-15% rate of return.
IDEAL RATE OF RETURN AGAINST ANY
INVESTMENT
25%
48%
15%
12%
UPTO 8%
8%-15%
15%-18%
MORE THAN 18%
FIGURE 4.6
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Question-4
Interpretation: In this graph shows that most of the people consider rate of return factorwhile investing their money. Some people invest their money for tax benefit also.
FACTOR THAT AFFECTED INVESTMENT
DECISION
55%
10%13%
22%
0%
10%
20%
30%
40%
50%
60%
rate of return security liquidity tax benefit
Series1 Series2
FIGURE 4.7
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Question-5
Interpretation: This shows that 40% of respondent out of 200 investment up to 50000rs.
Only 6% respondent invests above 800000rs.
0%
5%
10%
15%
20%
25%
30%
35%
40%
upto50000
500000-200000
200000-500000
500000-800000
above800000
PORTFOLIO SIZE OF INVESTMENT
Series1 Series2
FIGURE 4.8
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Question-6
Mutual funds 1 2 3 4
Banks 1 2 3 4
Equity 1 2 3 4
Other 1 2 3 4
Interpretation: This graph shows that different investor rate according to their
preference. 38% of people give 1st rank to banks then 23% of people choose mutual funds
then after 22% of people prefer others and 17% of people prefer equity.
rate of various investment alternative
23%
17%
38%
22%
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
mutual
funds
equity banks others
Series1
Series2
FIGURE 4.9
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CHAPTER - 4
FINDINGS
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A survey was conducted on the 200 people in the market. 71% of the respondent
replies that they know about the stock market other than those 29% belongs not
know about that category.
The resources of the spreading awareness into the respondent as per their
percentage i.e. TV- 47% is the first above all, NEWSPAPER/ MAGZINES-
36%, FRIENDS- 12%, OTHER SOURCES- 5%.
SHARE-KHAN- 60 is the rank Ist among the other brands that is ICICI direct-
50, RELIGARE – 45 and the INDIA BULLS-36 is the last in the tally.
SHARE KHAN & ICICI direct are the two broking house which are charging
Rs-750 as opening of demat account. INDIA-BULLS is charging Rs-900, and the
RELIGARE securities is charging Rs-999 which is the highest charges among the
all.
This graph shows that the maximum time horizon for investment in less than 2
years is 39%. Most of the people invest their money for less than 2 years. People
do not wait till more than 2 years.
This shows that out of 200 respondent 48% of respondent want 8%-15% rate of
return. Most of people expected 8%-15% rate of return.
In this graph shows that most of the people consider rate of return factor while
investing their money. Some people invest their money for tax benefit also.
This shows that 40% of respondent out of 200 investment up to 50000rs. Only 6%
respondent invests above 800000rs.
This graph shows that different investor rate according to their preference. 38% of
people give 1st rank to banks then 23% of people choose mutual funds then after
22% of people prefer others and 17% of people prefer equity.
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CHAPTER - 5
RECOMMENDATIONS
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I suggest following measures: -
While interacting with the investors I found that most of the customers are
unaware about the Mutual fund. Some of the people look upon mutual funds and
equity trading as gambling. Thus a mutual fund awareness program can help to
increase the penetration of mutual funds in the market.
The Stock Market has been very buoyant until now especially in the past 3 years.
This particular trend is very favorable because a soaring SENSEX means higher
returns, which encourages the investors to invest their money in the market.
Although in the past 3 months the market has shown very unpredictable trend and
has already lost over 1000 points.
In case of insurance, it requires push selling because people always associate it
with emergencies and unpleasant situations like death and they don‟t want to
think about such situation let alone prepare for them, which means it requires a lot
of conviction on part of the executives.
People have just opened up to the idea of ULIPs because till now they knew only
two kinds of insurance plans, endowment and term plans so the concept of high
returns with protection is very new to them and slowly and slowly these are
becoming popular so there is a huge market waiting to be tapped
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ANNEXURE
QUESTIONNAIRE
Q1.What is the age group you fall in?
(a)17-30 (b)30-40 (c)40-50 (d)50-60 (e)above 60
Q2. Are people aware of stock market?
(a)Yes (b) No
Q3. If yes, in which company you are dealing with?
(a)SHAREKHAN Ltd.
(b) INDIA BULLS
(c) ICICI DIRECT
(d)RELIGARE SECURITIES
(e)ANY OTHER
Q4. Through which sources people are aware?
(a)News paper (b) Friends (c) T.V (d) other sources
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Q5. Where do you invest your money?
Equity mutual fund Banks others
(Others – Gold, Bonds, Post office, NSC)
Q6. What is your time horizon for investment?
Less than 2 years 2-5 years more than 5 years
Q7. Which factor you consider more while investing your money?
Rate of return Risk factor Liquidity
Tax benefit
Q8. What according to you is ideal rate of return against any investment?
Up to 3% 3-8% 8-15% 15-18% more than 18
Q9. What would be your portfolio size of investment ?
Up to 50000 50000 to 200000 200000 to 500000 Above 50%
500000 to 800000 above 800000
Q10. Please rates investment alternative according to your preference?
Mutual fund
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Equity
Banks
Others
Q11. Who influence you in your investment decision?
Friends Family members C.A Colleges others
Q12. Any suggestions you want to provide?
Name:…………………………………………………….
Age…………………………………………………….…
Sex…………Male…………..Female……………………
Phone No…………………………………………………
Occupation:………………………………………………
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BIBLIOGRAPHY
Books:
1 Agarwal, J.D. "Security Analysis & Portfolio Management: A Review, Finance
India, Vol. II No. 1, March 1989.
2 Bhatt, V. V. "An Appraisal Of Some Recent Estimates Of Savings and
Investments", ICRNI, Vol. 5, 1963.
3 Douglas A. Hayes and W. Scott Bauman "Investments: Analysis and
Management" III Ed., 1976, MacMillan
4 Malhotra, Naresh "Marketing Research and Applied Orientation" IV Ed., 2005,
Pearson
Internet:
1 www.mutualfundsindia.com
2 www.easymf.com
3 www.amfiindia.com
4 www.moneycontrol.com
5 www.valueresearchonline.com
6 www.nseindia.com
7 www.bseindia.com