MARKETING AND PROMOTION OF ONLINE TRADING ACCOUNT AND EQUITY RESEARCH

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CONTENTS

S.NO. TITLE Page No.

1. INTRODUCTION

1.1 OVERVIEW OF THE INDUSTRY

1.2 PROFILE OF THE COMPANY

1.3 PROBLEMS OF THE COMPANY

1.4 COMPETITION INFORMATION

1.5 SWOT ANLYSIS

2. RESEARCH METHODOLOGY

2.1 MANAGERIAL USEFULNESS OF THE

STUDY

2.2 OBJECTIVE OF THE STUDY

2.3 SCOPE OF THE STUDY

2.4 RESEARCH METHODOLOGY

3. CONCEPTUAL DISCUSSION

4. DATA ANALYSIS

5. FINDINGS AND RECOMMENDATIONS

6. ANNEXURE

7. BIBLIOGRAPHY

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Chapter 1

INTRODUCTION

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INTRODUCTION

1.1 OVERVIEW OF THE INDIAN RETAIL BROKERAGE

INDUSTRY

Industry Definition and Segmentation

The Indian Retail Brokerage Industry consists of companies that primarily act as agents

for the buying and selling of securities (e.g. stocks, shares, and similar financial

instruments) on a commission or transaction fee basis.

Hence, to understand this industry we have to study Security Market:

Security Market

Which is the most televised structure in India? A study has revealed that it is not the

Rastrapati Bhawan or Parliament House; it is not the Taj Mahal; it is not even the abode

of Lord Tirupati; it is the Pheroze Jeejeebhoy Towers which houses the oldest securities

market participant in India, i.e. The Stock Exchange, Mumbai. This indicates our intimate

relationship with the securities market. In today’s rational world, it really means the

immense contribution of the securities market to our life and economy.

Which is the most reformed sector / segment / market in the Indian economy? Which

sector / segment / market of the economy has witnessed as much as nine special

legislative interventions during the last decade? Which market / segment / sector acquired

the first ever autonomous regulator (which in course time became the model regulator) in

India? Which sector / segment / market of the economy consumes 3/4 th space of the pink

newspapers everyday? Which sector / segment / market of the economy most promptly

reflects the feel good factor? The answer to all these questions is the securities market. It

expresses the significance of the securities market in our life.

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Two years down the line, there are few questions to ask-Which is the securities market

first to set up demutualised stock exchanges in the World? Which is the securities market

first to use satellite communication technology for securities transactions? Which is the

securities market first to introduce the straight through processing in securities

transactions? Which major securities market has implemented T+2 rolling settlement?

Which is the largest market for stock futures? Which securities market started real time

on line position monitoring of brokers? Which is the securities market where trading

terminals go off automatically when the margins are exhausted? Probably answer to all of

these is the Indian securities market. This has earned a place of respect amongst the

comity of securities markets in the World.

Segmentation Of Security Market :

It has two main interdependent segments:

PRIMARY MARKET and the SECONDARY MARKET.

The primary 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 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.

In primary market certain companies issue their shares directly to the public, collect

applications and after sorting out the good issues, they put in their applications. The share

brokers get their brokerage on the transactions made.

The secondary market is the financial market for trading of securities that have already

been issued in an initial private or public offering.

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The secondary market comprises of brokerage that a broker earns in the buying and

selling of companies that are listed in the stock exchange. These people are in charge of

the conformation and carrying out of transactions. Orders are taken and deliveries are

made in the latter half of the day. The erratic fluctuation of rates in the share market

makes the activity in a trade market a dynamic process. It is necessary for a broker to

have adequate knowledge about the economic and political factors as they affect the

share market.

EVOLUTION OF THE RETAIL BROKERAGE MARKET

A Brief History :

1. Pre 1990

Though the historical records relating to securities market in India is meager and obscure,

there is evidence to indicate that the loan securities of the East Indian Company used to

be traded towards close of the 18th century. By 1830’s, the trading in shares of banks

started. The trader by the name of broker emerged in 1830 when 6 persons called

themselves as share brokers. This number grew gradually. Till 1850, they traded in shares

of banks and securities of the East India Company in Mumbai under a sprawling Banyan

Tree in front of the Town Hall, which is now in the Horniman Circle Park. It is no

surprise that the majestic Phiroze Jeejeebhoy Towers is located at the Horniman Circle.

In 1850, the Companies Act introducing limited liability was enacted heralding the era of

modern joint stock company which propelled trading volumes.

The American Civil War broke out in 1861 which cut off supply of cotton from the USA

to Europe. This heightened the demand for cotton from India. Cotton prices increased.

Exports of cotton grew, payments were received in bullion. The great and sudden spurt in

wealth produced by cotton price propelled setting up companies for every conceivable

purpose. Between 1863 and 1865, the new ventures raised nearly Rs.30 crore in the form

of paid up capital and nearly Rs. 38 crore of the premia. Rarely was a share which did not

command a premium between 1861 and 1865. The Back Bay Reclamation share with

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Rs.5,000 paid up was at Rs.50,000 premium, the Port Canning share with Rs. 1,000 paid

up was at Rs.11,000 premium, etc. There was a share mania and every body was after a

piece of paper, variously called ‘allotments’, ‘scrips’ and ‘shares’. The people woke up

only when the American Civil war ended. Then all rushed to sell their securities but there

were no buyers. They were left with huge mass of unsaleable paper. This occurred then.

This also occurs today at regular intervals. There is, little seems to have changed since

then; the bubbles and burst continue to be a perennial feature of the securities market

world over.

The depression was so severe that it paved way for setting up of a formal market. The

number of brokers, which had increased during the civil war to about 250, declined.

During the civil war, they had become so influential and powerful that even the police

had only salams for them. But after the end of the civil war, they were driven from pillar

to post by the police. They moved from place to place till 1874 when they found a

convenient place, which is now appropriately called Dalal Street after their name. They

organized an informal association on or about 9th July 1875 for protecting their interests.

On 3rd December 1887, they established a stock exchange called ‘Native Share and Stock

Brokers’ Association’. This laid the foundation of the oldest stock exchange in India.

The word ‘native’ indicated that only natives of India could be brokers of the Exchange.

In 1880s a number textile mills came up in Ahmedabad. This created a need for trading

of shares of these mills. In 1894, the brokers of Ahmedabad formed "The Ahmedabad

Share and Stock Brokers' Association".

The 1870s saw a boom in jute prices, 1880s and 1890s saw boom in tea prices, then

followed coal boom. When the booms ended, there were endless differences and disputes

among brokers in eastern India which was home to production of jute, tea and coal. This

provoked the establishment of "The Calcutta Stock Exchange Association" on June 15,

1908.

Then followed the proliferation of exchanges, many of them even do not exist today. The

rest is history.

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2. Fast Forward to 1990s

In 1980s and 1990s, it was increasingly realized that an efficient and well developed

securities market is essential for sustained economic growth. Without venturing into a

detailed discussion, it would suffice if I just say that the securities market fosters

economic growth to the extent it augments the quantities of real savings and capital

formation from a given level of national income and it raises productivity of investment

by improving allocation of investible funds. The extent depends on the quality of the

securities market. In order to improve the quality of the market, that is, to improve market

efficiency, enhance transparency, prevent unfair trade practices and bring the Indian

market up to international standards, a package of reforms consisting of measures to

liberalize, regulate and develop the securities market is being implemented since early

1990s.

Legal Developments :

Control of capital issues was introduced through the Defence of India Rules in 1943

under the Defence of India Act, 1939 to channel resources to support the war effort. The

control was retained after the war with some modifications as a means of controlling the

raising of capital by companies and to ensure that national resources were channeled to

serve the goals and priorities of the government, and to protect the interests of investors.

The relevant provisions in the Defence of India Rules were replaced by the Capital

Issues (Continuance of Control) Act in April 1947.

Though the stock exchanges were in operation, there was no legislation for their

regulation till the Bombay Securities Contracts Control Act was enacted in 1925. This

was, however, deficient in many respects. Under the constitution which came into force

on January 26, 1950, stock exchanges and forward markets came under the exclusive

authority of the central government. Following the recommendations of the A. D.

Gorwala Committee in 1951, the Securities Contracts (Regulation) Act, 1956 was

enacted to provide for direct and indirect control of virtually all aspects of securities

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trading and the running of stock exchanges and to prevent undesirable transactions in

securities.

3. Post 2000

Gone are the days when you left orders with your broker, received conformations on the

price and quality of the shares at the end of the day and the payment made upfront or

received after delays. Your securities settlement took days to reflect in your account.

Internet has changed the way you do trading. The entire process is speedy with limited to

zero paper work. NSE launched internet trading in early February 2000. It is the first

stock exchange in the country to provide a web-based access to investors to trade directly

on the exchange.

The process : Log on to the brokers site of your choice where you get real time quotes,

place a buy or sell order on the spot, and direct the site to debit the requisite amount. In

some time you get confirmation and after the trade settlement your bank and depository

account will reflect the changes which you can view anywhere, anytime. Online trading

has become seamless. All that you need is a PC, a modem, subscription to an Internet

Service Provider (ISP), a saving and a depository account with any bank providing online

trading facility. Along with stocks one can trade in mutual funds and investment

instruments. The advantage with online trading that you can operate in both BSE and

NSE depending on the broking firm.

NSE introduced for the first time in India a fully automated screen based trading. It uses a

modern fully computerized trading system designed to offer investor across the length

and breadth of country a safe and easy way to invest. The NSE trading system called

“National Exchange for Automated Trading” (NEAT) is a fully automated screen-based

trading system which adopts the principle of an order driven market.

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STOCK EXCHANGES AND STOCK BROKERS

BOMBAY STOCK EXCHANGE

Background: The BSE Sensitive Index (1978-79=100) has, to a considerable extent,

been serving the purpose of quantifying the price movements as also reflecting the

sensitivity of the market in an effective manner.

The number of companies listed on the Bombay Stock Exchange has registered a

phenomenal increase from 992 in the year 1980 to about 4800 companies by the end of

July 2005 and their combined market capitalization rose from Rs. 5,421 crores to around

Rs. 18, 00,000crores at end of July 2005.

These factors necessitated compilation of a new broad-based index series reflecting the

present market trends in a more effective manner and providing a better representation of

the increased equity stocks, market capitalization as also the newly emerged industry

groups. Towards this end, the Exchange constructed and launched on 27th May 1994,

two index series viz. the BSE-200 and the DOLLEX.

Coverage: The equity shares of 200 selected companies from the specified and non-

specified lists of this Exchange have been considered for inclusion in the sample for

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`BSE-200'. The selection of companies has primarily been done on the basis of current

market capitalization of the listed scrips on the exchange. Besides market capitalization,

the market activity of the companies as reflected by the volumes of turnover and certain

fundamental factors were considered for the final selection of the 200 companies.

Choice of Base Year: The financial year 1989-90 has been chosen as the base year for

the price stability exhibited during that year and due to its proximity to the current period.

NATIONAL STOCK EXCHANGE

The 13-year-old National Stock Exchange (NSE) has outshined the 130 years old

Bombay Stock Exchange (BSE) in terms of turnover and volumes. The BSE has lost its

market share in these segments from 36 per cent to 31 percent in last three years. The

turnover in BSE stood at around Rs 2,950 crore as on August 17, 2005 while the turnover

in NSE was Rs 3,926 crore. The volumes (numbers of shares traded) of NSE at 2.94 crore

was also much higher than the volumes of BSE. The NSE has rewritten a number of rules

and upset many traditions. As the derivatives segment has immense effect on the cash

market, the movement in this segment mostly determines the trend in the market.

Against nearly 1,400 companies listed on the NSE, the BSE has nearly 4,800 listed

companies. Despite such a huge number of listed companies, the total market

capitalization of BSE is around Rs 20 lakh crore while on the other hand NSE has a total

market capitalization of Rs 19.7 lakh crore.

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The most tracked index on NSE, CNX Nifty also has more number of stocks than the

BSE Sensex. Nifty represents 50 stocks while the Sensex represents only 30 stocks. The

presence of more stocks on Nifty gives a better valuation than Sensex.

STOCK BROKERS

A stockbroker is a person who buys and sells stocks on behalf of another person (or

company). Stockbrokers also sometimes or exclusively trade on their own behalf, as a

principal, speculating that a share or other financial instrument will increase or decline in

price. In such cases the term broker makes little sense and the individuals or firms trading

in a principal capacity sometimes call themselves dealers, stock traders or simply traders.

In the US: When acting as an agent, the stockbroker typically charges the client a flat fee

and/or a percentage-based commission for undertaking the trade, and the price quoted the

client must be the best price available in the market. When acting as a principal, the trade

could be with another market participant or one of the stockbroker's clients. When trading

in a principal capacity with a client, the broker informs the client and charges the client a

markup or markdown from the prevailing market price.

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In the UK: When acting as an agent, the stockbroker charges the client a flat fee and/or a

percentage-based commission for undertaking the trade, and the price quoted the client

must be the best price available in the market. When acting as a principal, the trade could

be with another market participant or one of the stockbroker's clients. When trading in a

principal capacity with a client, the broker is obliged to inform the client and no

commission is charged

Roles similar to that of a stock broker include investment advisor, financial advisor, and

probably many others. A stockbroker may or may not be also an investment advisor.

Similarly, investment advisor may or may not be a stockbroker.

The Certified Financial Planner designation initially offered by the American College in

Pennsylvania is considered by many to be the next educational step a stock broker can

take in order to be consider a legitimate and ethical financial consultant.

The stock market will have either one or a number of stock exchanges.

In India, the most famous are the Bombay Stock Exchange and the National Stock

Exchange.

Then there are regional exchanges like the Ahmedabad Stock Exchange, Calcutta Stock

Exchange and the Cochin Stock Exchange.

The two most prominent ones are the BSE and NSE. Together, they account for most of

the stock trades in the country. This means that if they catch a cold, exchanges all over

the country will sneeze

People like you and me just cannot go to a stock exchange and buy and sell shares. If we

want to do so, we have to get in touch with someone who is a member of the stock

exchange. This means we need to talk to a stockbroker.

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Stockbrokers buy and sell shares for themselves to make a profit. They also buy and sell

shares on behalf of people like you and me and take a commission for doing so (more on

this on another day).

Every stockbroker has to be registered with the Securities and Exchange Board of India,

which is the stock market regulator. SEBI's main function is to make sure those who

invest in the stock market follow the rules and no scams take place. It is supposed to act

as a watchdog on behalf of the investors.

Readers from Mumbai may have seen the imposing stock exchange building called

Jeejeebhoy Towers. That's the home of the BSE.

But you would be disappointed if you think you can step inside the building and watch

the market excitement firsthand as brokers frenziedly trade stocks. That's because all

stock markets in India are now electronic.

Brokers have BSE computer terminals in their offices, from which they trade. They also

have BSE terminals in other cities and don't have to be physically present in Mumbai to

trade on the BSE. This means that even if you stay outside Mumbai, you can contact a

BSE broker and buy or sell stocks on the BSE.

Years ago, the BSE was a place where brokers physically bought and sold stocks and

shares through a system known as 'open outcry'. As a result, the market then resembled

a fish or vegetable market.

If you watch CNBC, you'll find that the New York Stock Exchange still follows that

system, with traders rushing around on the trading floor, scribbling trades on little slips of

paper.

Actually, the improvements in the BSE came about when the government promoted the

NSE. The NSE was an electronic exchange from the beginning and it started competing

with the BSE, which in turn forced the BSE to tone up its act.

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1.2 COMPANY PROFILE

Introduction

Religare is driven by ethical and dynamic process for wealth creation. Based on this, the

company started its endeavor in the financial market.

Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through Religare

Securities Limited, Religare Finvest Limited, Religare Commodities Limited and

Religare Insurance Broking Limited provides integrated financial solutions to its

corporate, retail and wealth management clients. Today, it provides various financial

services, which include Investment Banking, Corporate Finance, Portfolio Management

Services, Equity & Commodity Broking, Insurance and Mutual Funds. Plus, there’s a lot

more to come your way.

Religare is proud of being a truly professional financial service provider managed by a

highly skilled team, who have proven track record in their respective domains. Religare

operations are managed by more than 3000 highly skilled professionals who subscribe to

Religare philosophy and are spread across its countrywide branches.

Today, it has a growing network of more than 300 branches and more than 580 business

partners spread across more than 300 cities/towns in India and a fully operational

international office at London.

Unlike a traditional broking firm, Religare group works on the philosophy of partnering

for wealth creation. We not only execute trades for our clients but also provide them

critical and timely investment advice. The growing list of financial institutions with

which Religare is empanelled as an approved broker is a reflection of the high-level

service standard maintained by the company.

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GROUP COMPANIES

Religare Enterprises Limited group comprises of Religare Securities Limited, Religare

Commodities Limited, Religare Finvest Limited and Religare Insurance Broking Limited

which deal in equity, commodity and financial services business.

1. Religare Securities Limited

RSL is one of the leading broking houses of India and are dealing into Equity Broking,

Depository Services, Portfolio Management Services, Internet Trading, Institutional

Equity Brokerage & Research, Investment Banking, Merchant Banking and Corporate

Finance.

To facilitate free and fare trading process Religare is a member of major financial

institutions like, National Stock Exchange of India, Bombay Stock Exchange of India,

Depository Participant with National Securities Depository Limited and Central

Depository Services (I) Limited, and a SEBI approved Portfolio Manager.

RSL serves a platform to all segments of investors to avail the opportunities offered by

investing in Indian equities either on their own or through managed funds in Portfolio

Management

2. Religare Commodities Limited

Religare is a member of NCDEX and MCX and provides platform for trading in

commodities, which is an online facility also.

RCL provides platform to both agro and non-agro commodity traders to derive the actual

price of the commodity and also to trade and hedge actively in the growing commodity

trading market in India.

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With this realization, Religare Commodities is coming up with its branches at mandi

locations. It is a flagship effort from our team which would be helpful in facilitating trade

and speculating price of commodities in future.

3. Religare Finvest

Religare Finvest Limited (RFL), a Non Banking Finance Company (NBFC) is

aggressively making a name in the financial services arena in India. In a fast paced,

constantly changing dynamic business environment, RFL has delivered the most

competitive products and services.

RFL is primarily engaged in the business of providing finance against securities in the

secondary market. It also provides finance for application in Initial Public Offers to non-

retail clients in the primary market .

RFL is also planning to initiate personal loan portfolio as fund based activity and mutual

fund distribution as fee based activities.

Along with this, the company also undertakes non-fund based advisory operations in the

field of Corporate Financing in the nature of Credit Syndication which includes inter

alias, bills discounting, inter corporate deposit, working capital loan syndication,

placement of private equity and other structured products.

4. Religare Insurance Broking Ltd.

Religare has been taking care of financial services for long but there was a missing link.

Financial planning is incomplete without protective measure i.e. structured products to

take care of event of things that may go wrong

Religare Insurance Broking Limited. As composite insurance broker, deals in both

insurance and reinsurance, providing our clients risk transfer solutions on life and non-

life sides.

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This service will take benefit of Religare’s vast business empire spread throughout the

country -- providing our valued clients insurance services across India. We aim to have a

wide reach with our services – literally! That’s why we are catering the insurance

requirements of both retail and corporate segments with products of all the insurance

companies on life and non-life Still, there is more in store. We also cater individuals with

a complete suite of insurance solutions, both life and general to mitigate risks to life and

assets through our existing network side.

For corporate clients, we will be offering value based customized solutions to cover all

risks, which their business is exposed to. Our clients will be supported by an operations

team equipped with the best of technology support

Religare Insurance Broking aims to provide neutral, transparent and professional risk

transfer advice to become the first choice of India

Vision

Providing integrated financial care driven by the relationship of trust and confidence.

Mission

To be India's first Multinational providing complete financial services solution across the

globe.

Brand Essence

Religare is driven by ethical and dynamic processes for wealth creation.

Company Philosophy

The company believes that “The knowledge combined with investors trust and

involvement will lead to the growth of wealth and make it an exciting experience”.

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Why customer trade with Religare?

1. Personal Assistance

Dedicated dealers for facilitating trading and post trade needs.

Dedicated Relationship Managers for assisting multiple investment needs.

2. Research & Advisory

Regular news and updates on market

Research service over SMS to keep you abreast

Daily and weekly technical reports

A complete information report on results and performance individual companies.

Complete reports on various economic sectors and their performance along with

analysis of few major companies in that sector

Trading calls in Futures & Options

Daily capsule of Market indices and index movement, national and international

corporate news, and their performance along with forth coming IPO tracker.

3. Add-Ons

Access to all your accounts through your Customer Relationship Number (CRN)

Access your ledger balances and account information over internet, branch and

call center

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PRODUCT & SERVICES

Equity & Derivatives

Commodity

Depository

Portfolio Management Services

International Equity & Commodity

NRI Services

Investment Banking

Corporate Advisory Group

1.3 PROBLEMS OF THE ORGANIZATION

Religare has failed to evolve into a widespread Internet broking firm because of its un-

focused promotional strategies (advertisements in electronic media, newspapers, etc)

across the length and breadth of India. Although it is a well-known broking house in

some states like Maharashtra, Gujarat, etc. It still lacks considerable awareness in the

northern parts of India where its competitors have been building their reputation very

rapidly.

The other problem faced by Religare is that they give more attention to HNIs (high

networth individuals) as compared to retail investors or individuals; this is why volumes

of trading at Religare are less as compared to its competitors.

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1.4 COMPETITION INFORMATION

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1.5 SWOT ANALYSIS

Strengths

1. Religare is A Ranbaxy promoter Group Company.

2. It is a pioneer in online trading with a turn over of Rs.400 crores and more than

800 peoples working in the organization.

3. Religare provides multi-channel access to all its customers through a strong

online presence with www.religare.in, 580 share shops in 130 cities and a call-

center based Dial-n-Trade facility

4. Religare has dedicated research teams for fundamental and technical research,

Which constantly track the pulse of the market and provide timely investment

advice free of cost to its clients which has a strike rate of 70-80%.

Weakness

1. Localized presence due to insufficient investments for countrywide expansion.

2. Lack of awareness among customers because of non-aggressive promotional

strategies (print media, newspapers, etc).

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3. Lesser emphasis on customer retention.

4. Focuses more on HNIs than retail investors which results in meager market-share

as compared to close competitors.

Opportunities

1. With the booming capital market it can successfully launch new services and raise

its client’s base.

2. It can easily tap the retail investors with small saving through promotional

channels like print media, electronic media, etc.

3. As interest on fixed deposits with post office and banks are all time low, more and

more small investors are entering into stock market.

4. Abolition of long-term capital gain tax on shares and reduction in short term

capital gain is making stock market as hot destination for investment among small

investors.

5. Increasing usage of Internet through broadband connectivity may boost a whole

new breed of investors for trading in securities.

Threats

1. Aggressive promotional strategies by close competitors may hamper Religare’s

acceptance by new clients.

2. Lack of sufficient branch-offices for speedy delivery of services.

3. More and more players are venturing into this domain, which can further reduce

the earnings of Religare.

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Chapter 2

RESEARCH

METHODOLOGY

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RESEARCH METHODLOGY

2.1 MANAGERIAL USEFULNESS OF THE STUDY

This project is very useful to study the awareness level of clients about various

Broking Houses

2.2 OBJECTIVE AND PURPOSE OF STUDY

To study the current scenario of the existence of Equity Market.

To study the effectiveness of the Stock Exchange as this is one of the best way of

Investment.

To analyze the competitiveness amongst different Stock brokerages houses.

To study the awareness level of clients about various Broking Houses.

2.3 SCOPE OF THE STUDY

To study the various services provided by Broking house to their clients.

2.4 METHODOLOGY FOR SAMPLING

The size of samples was drawn from the Connaught Place (C.P.) area because of the

prospectiveness of this particular area. For e.g., if a particular research area consisted of

Offices then the sample size would obviously be higher. 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.

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After selecting the target audience, they were 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 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.

RESEARCH DESIGN

The study of research method provides us with the knowledge and skills we need to solve

the problem and meet the challenges of the fact- based decision. Business Research is a

systematic inquiry whose objective is to provide information to solve managerial

problem.

Descriptive Research

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Descriptive study is a fact- finding investigation with adequate interpretation. It is the

simplest type of research. It is more specific than an explanatory study, as it has focus on

particular aspect of the problem studied. It is designed to get her descriptive information

and provide information for formulating more sophisticated studies.

DATA COLLECTION

Data used for the research work was primary and secondary in nature. The data used in

this project is primary data collected from the various categories of investors from

different areas.

Primary Data is gathered for a specific. It is first hand information that the researcher

collects. It helps in collecting useful and most accurate information that is needed for the

researcher to do his research.

Sources of Primary Data: -

Questionnaire

Interview Schedule

Secondary Data is the data that was collected from another purpose and already exists

somewhere. It also help researcher to get elaborate information to do his research.

Sources of Secondary Data: -

Internet

Journals

SAMPLING TECHNIQUE

The Basic idea of sampling is that by selecting some of the element in a population in

order to get first hand information of study.

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There are two types of sampling i.e. Probability Sampling & Non-probability sampling

and in this research; I have used the probability sampling.

Probability Sampling:

Probability Sampling is based on the concept of Random Selection, the members of the

sample are on a probability basis.

Stratified Random Sampling: -

In this the population is sub divided into homogenous groups on strata and from each

strata random sample is drawn.

Sample Size:

Sample size for the questionnaire prepared for Investors & non-investors was 100.

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Chapter 3

CONCEPTUAL

DISCUSSION

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CONCEPTUAL DISCUSSION

EQUITY & DERIVATIES

Religare provides two type of Product in Equity & Derivative market:

R-ACE (Religare Advanced Client Engine) is a group of highly sophisticated trading

platforms meant for tech-savvy individuals. Various platforms of R-ACE have been

designed to suit the varying needs of different investors. It is fully automated platform,

wherein the client may do all his investments through Internet.

R-ACE clients also have the option to trade on following types of product.

A. R-ACE

B. R-ACE Lite

C. R-ACE pro

R-ACE

Account Activation Charges Rs.299/-

Minimum margin of Rs.5000/- required

No software installation required, easily accessible on browser

NSE cash segment, NSE F&O and BSE on single platform

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Trade online and over phone

Access your ledger balances and account information over Internet, SMS and

phone.

Integrated DP, back- office and trading account

Online transfer of funds through multiple banks

Lifetime free DP account (No annual maintenance charges)

Earn interest on cash margin deposited with us

247 Customer support center

R-ACE lite

Account Activation Charges Rs.499/-

Minimum margin of Rs.5000/- required

No software installation reqqired, easily accessible on browser

NSE cash segment, NSE F&O and BSE on single platform

Real- time streaming quotes

Alerts

Hot key functions

Access your ledger balances and account information over Internet, SMS and

phone.

Integrated DP, back- office and trading account

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Online transfer of funds through multiple banks

Lifetime free DP account (No annual maintenance charges)

Earn interest on cash margin deposited with us

247 Customer support center

R-ACE pro

Account Activation charges Rs. 999/-

Minimum margin of Rs.10000/- required

Traders terminal on your desktop

NSE cash segment,NSE F&O and BSE on single platform

Real- time streaming quotes

Advanced alerts

Technical charting (intra- day and EOD)

Multiple watch lists

Advanced hot- key function

Derivative chains

Futures & Option calculator

Access your ledger balances and account information over Internet, SMS and

phone.

Integrated DP, back- office and trading account

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Online transfer of funds through multiple banks

Lifetime free DP account (No annual maintenance charges)

Trade online and over phone

Earn interest on cash margin deposited with us

247 Customer support center

RELIGARE’s ALLY also known as R-ALLY is a perfect partner for savvy investors.

It has been designed to provide world-class experience and expertise to investors. Clients

opting for this service would be provided services managed by a team of dedicated

relationship managers and experienced trade dealers. They would not only assist the

client in information dissemination but would also take care of all post trade requirements

R-ALLY clients also have the option to trade on following types of product.

A. R-ALLY

B. R-ALLY Lite

C. R-ALLY pro

R-ALLY

R-ALLY clients have no option to trade on their own through our online platforms.

No subscription fees

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No Enrolment Deposit

Brokerage :

Jobbing : 0.10% each side + All Taxes

Delivery : 0.50% each side + All Taxes

(Negotiable based on volume)

R-ALLY lite

Account Activation charges Rs. 500/-

Browser based platform, easily accessible over internet explorer from anywhere

Minimum margin to be maintained Rs.5000

No software installation required

NSE cash segment, NSE F&O and BSE on single platform

Real- time streaming quotes

Multiple watch lists

Hot key function

Online transfer of funds through multiple banks

Trade Online and Over phone at Branch

Brokerage:

Trading 0.10% each side + All Taxes

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Delivery 0.50% each side + All Taxes

(Negotiable based on volume)

R-ALLY pro

Application based platform

Account Activation charges Rs. 1800 (refundable subscription fees )

Traders’ terminal on your desktop

NSE cash segment, NSE F&O and BSE on single platform

Real time streaming quotes

Multiple watch lists

Alerts and triggers

Advanced Hot key functions

Online transfer of funds through multiple banks

Trade Online and Over phone at Branch

Make and save your own workspace

View charts

Brokerage:

Trading 0.10% each side + All Taxes

Delivery 0.50% each side + All Taxes

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(Negotiable based on volume)

FUTURE PLANS (NEED TO HAVE STRATEGIC PERSPECTIVE WITH

TIMELINESS)

2, 00,000 + retail customers being serviced through centralized call centre / web

solution.

60branches/semi-branches servicing affluent/aggressive traders through highly skilled

financial advisors.

250 independent investment managers/franchisees servicing 50000 highly valued

clients.

Strong advisory role through Fundamental & technical research.

New initiatives - Portfolio Management Services & Commodities trading.

DEPOSITORY SERVICES

Religare is a depository participant with the National Securities Depository Limited and

Central Depository Services (India) Limited for trading and settlement of dematerialized

shares. Religare performs clearing services for all securities transactions through its

accounts. We offer depository services to create a seamless transaction platform –

execute trades through Religare Securities and settle these transactions through the

Religare Depository Services. Religare Depository Services is part of our value added

services for our clients that create multiple interfaces with the client and provide for a

solution that takes care of all your needs.

Dematerialization and trading in the demat mode is the safer and faster alternative to the

physical existence of securities. Demat as a parallel solution offers freedom from delays,

thefts, forgeries, settlement risks and paper work. This system works through depository

participants (DPs) who offer demat services and the securities are held in the electronic

form for the investor directly by the Depository. Religare Depository Services offers

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dematerialization services to individual and corporate investors. We have a team of

professionals and the latest technological expertise dedicated exclusively to our demat

department, apart from a national network of franchisee, making our services quick,

convenient and efficient.

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COMPETITORS ANALYSIS

OTHER MARKET PLAYERS

5paisa.com

Company Background

Indiainfoline was founded in 1995 and was positioned as a research firm. In 2000

e-broking was started under the brand name of 5 paisa.com. Apart from offering online

trading in stock market the company offers mutual funds online. It also acts as a

distributor of various financial services i.e. GOI securities, Company Fixed Deposits,

Insurance. It has a limited ground network, present in 20 Cities.

Online Account Types

•Investor Terminal: Investors / Students

•Trader Terminal: Day Traders / HNI’s

PRICING FOR RETAIL CLIENTS

Investor Terminal:-

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•Account Opening: Rs 500

•Demat 1st Yr: Rs 250

•Initial Margin: Rs 2500(Compulsory)

•Min Margin Retainable: Rs 1000

•Brokerage:

Trading 0.10% each side + ST

Delivery 0.50% each side + ST

PRICING FOR HNI CLIENTS

Trader Terminal

•Account Opening: Rs 500

•Demat 1st Yr: Rs 250

•Initial Margin: Rs 5000(Compulsory)

•Min Margin Retainable: Rs 1000

•Brokerage:

Trading 0.10% each side + ST

Delivery 0.50% each side + ST

(Negotiable to 0.05% each side & 0.25%)

•Account Access Charges

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Monthly Rs 800, adjustable against Brokerage

Yearly Rs 8000, adjustable against brokerage

PROBLEMS OF 5 PAISA

•Downtime

Recent past 5 paisa Trader Terminal (T.T) is experiencing high frequency downtime

between 3 – 3:30 p.m due to server load (as their T.T is feature heavy compared to

Speedtrade charting)

•Manual Accounting

The 5 paisa accounting system is manual, Online fund transfer through bank is not

credited instantly. Limit is provided EOD for shares sold from DP, or call Similarly limit

released for shares sold under BTST is manual Delay in receiving pay-out of clear funds

from trading to Bank Account.

•Min Account Balance

Concept of Min Rs1,000 is to be maintained in form of cash / securities to keep account

active. This can be withdrawn only on closure of account.

KOTAK SECURITIES

Company Background

Kotakstreet is the retail arm of kotak securities. Kotak Securities limited is a joint venture

between Kotak Mahindra Bank and Goldman Sachs.

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Online Account Types

• Twin Advantage / Green Channel: 2 DP’s, Limit against shares

• Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction

• High Trader: 6 Times Exposure Cash & Derivatives, Auto sq off 2:55

Pricing of KOTAK

• Account Opening: Rs 500

• Demat: Rs 22.5 p.m

• Initial Margin: Rs 5000(Compulsory)

• Min Margin Retainable: Rs 1000

• Brokerage Slab wise: Higher the volume, lower the brokerage. Even older

customers (on 0.25% & 0.40%) have been moved to the slab wise structure.

PROBLEMS OF KOTAKSTREET

Rigid Account Opening Terms

No Flexibility of A/c opening charges (Rs 500) + Compulsory margin Rs 5000/-

Account opening free with Rs 10,000 Margin OR Competitor Contract Note.No

Flexibility in Leverage – Dependent on Type of Account ( 4 to 6 times only) No

flexibility in Brokerage, driven by slab structure.

No Customization of commercial Terms.Restricted Access to Terminal like

product

KEAT Desktop restricted distribution on payment of Rs 500 Non refundable.

Many Other Charges:

Rs 22.5 p.m towards DP AMC charges

DP incoming charges extra, 0.02%

Rs 1,000 as retainable Margin to keep account active

Rs 25 per call after 20 calls for the month

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42

INDIABULLS

Company Background

India Bulls is a retail financial services company present in 70 locations covering 62

cities. It offers a full range of financial services and products ranging from Equities to

Insurance. 450 + Relationship Managers who act as personal financial advisors

Online Account Type

•Signature Account: Plain Vanilla Account with focus on Equity Analysis. The equity

analysis is a paid service even for A/c holders

•Power Indiabulls: Account with sophisticated trading tools, low commissions and

priority access to R.M

Pricing of IB Accounts

Signature Account

•Account Opening: Rs 250

•Demat: Rs 200 if POA is signed, No AMC for this DP

•Initial Margin: NIL

•Brokerage: Negotiable

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Power IndiaBulls

•Account Opening: Rs 750

•Demat: Rs 200 if POA is signed, No AMC for this DP

•Initial Margin: NIL

•Brokerage: Negotiable

PROBLEMS OF INDIABULLS

POA for Clients DMAT

Charges are levied to move shares from IB pool Account to client DP account All shares

held by client trading with IB are moved to IB Pool Account and the same is shown as a

reflection in client DP account.

Paid Research Services

Access to a research even for an IB trading account holder is charged a min of Rs 500 a

month.

Margin funding hoax

The interest on funding starts on leveraged delivery trades from T+1 day itself @21%

p.a, on a daily basis.

The role of Relationship Manager

Each RM is looked upon as a revenue generator and he gets a % on business generated

from client. This can lead to over leveraged (Interest) & high frequency (Brokerage)

trading, which may not be in the best interest of the client.

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ICICI DIRECT

Company Background

ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is an affiliate of

ICICI Bank Limited and the Website is owned by ICICI BankLimited.

Account Types

ICICI Direct e-invest Account:

Premium trading interface of ICICIDirect Link is given to DBC partners and HNI’s Plain

Vanilla Account with focus on 3 in 1 advantage. Differentiated in services within the

account.

1. Cash on spot

2. MarginPlus

Account Opening: Rs 750

Schemes: For short periods Rs 750 is refundable against brokerage generated in a qtr.

These schemes are introduced 3-4 times a year.

Demat: NIL, 1st year charges included in Account Opening Plus a facility to open

additional 4 DP’s without 1st yr AMC.

Initial Margin: Nil

Brokerage: All brokerage is inclusive of stamp duty and exclusive of other taxes.

Slab wise brokerage ranges from 0.75% to 0.25% depending on volume.

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PROBLEMS OF ICICI DIRECT

Poor online Interface

Slow website interface with no real-time quotes creates dissatisfaction among high

frequency traders

Margin trading restriction

The margin trading system is available up to 2:45 p.m, with outstanding net positions

under margin segment automatically squared off at any time between 2:45 – 3:30 p.m.

Thus no control of square off price.

Morning Trades Issue

Being one of the websites with largest no of after hour orders which are pushed 1st thing

in the morning, creates a choking of orders to the exchange, causes delay of

confirmations for new order placed during the early morning trades.

Restriction of BTST

The sale of shares purchased is restricted to T+1 day and is not permitted on T+2 Day.

No leverage for Delivery trades

Delivery is restricted to the total money allocated into the trading account.

No flexibility on leverage on Intra-day trades

The leverage of 4 times is available for intra- day trades.

Restriction of Bank Account

The choice of bank is restricted to ICICI Bank.

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Higher Brokerage rates with slabs

The delivery brokerage is pegged at 0.75% and trading at 0.10% each side, this makes is

very unviable for customers dealing in large volumes. Although progressively the

delivery and trading brokerage reduce as volumes go up.

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RECENT DEVELOPMENTS OF RELIGARE

Online Trading

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

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

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, Religare.in,Geojitsecurities.com,

HDFCsec.com, Tatatdw.com, Kotakstreet.com are some of the online broking sites in

India.

The various transactions involved in online trading can be shown from the point of view

of the

Client

Broker

Stock Exchange

The client places an order via the net by logging on to his broker’s site. The broker

accepts and executes the order, and places it with the exchanges.

The exchange accepts the order after checking the share limit for the day.

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The brokers makes the payment either directly via the client’s bank account or pays

through his own account and recovers it later from the client.

The exchange receives money and completes the settlement.

The client is intimated about the settlement either through the demat account or via E-

mail.

BENEFITS OF ONLINE TRADING

This mode of trading has shifted the trading power from stockbrokers to individual

investors. The advantages are that it:

1. Ensures the best price for investors

This technique offers the best price for the buying and selling transactions of the

investors, by ensuring proper matching of their orders within the communication network

itself. Also due to the high level of transparency with regard to display of information

relating to the specific stocks and company profiles ,the investors will be able to get the

best quote for the shares. This leads to a reduction in the transaction cost for the

investors.

2. Offers liquidity to the investors

Online trading offers 24-hour trading facilities. or trading for longer hours when

compared to the traditional stock exchanges. This provides added liquidity to the

investors.

3. Offers greater transparency

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

trail. This involves a complete integrated electronic chain starting from order placement,

to clearing and settlement and finally ending with a credit to the depository account of the

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investor. All these stages are subject to inspection, thus bringing in transparency into the

system.

4. Enables hassle free trading

Online trading integrates the bank, the brokerage and the demat accounts, which leads to

easy and paperless trading for the client.

5. Allows quick trading

The investor will be able to execute the entire trading transaction, right from logging on

to the broker's site, to the execution and settlement of his bank account, in a very short

period of time.

6. Provides a level playing field

Trading on the net, gives even the smallest retail investor access to information that

earlier was available only to the big traders. This provides a level playing field for

investors in the securities market.

7. Reduces the settlement risk

This method of trading reduces the settlement risk for the investor, as in this case no short

sale is possible. That is .the seller will not be able to sell the securities unless he has their

actual possession. In the case of a demat account (required for an online transaction),

when a seller wants to sell the securities, his demat account is checked by the Depository

Participant before executing the sale transaction. This reduces the settlement risk for the

buyer, who is assured of the delivery of the securities.

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HURDLES FOR ONLINE SHARE TRADING

1. Internet fraud

In India, we see this kind of frauds happening in different way due to nature of our

society. Here when you talk to broker's staff while buying or selling, he will usually

advise you to buy share which he has bought and plans to dump when price goes up.

We have seen enough of PUMP and DUMP even without help of internet in cases of

Harshad Mehta boom of 1992 and Ketan Parekh boom of 2000 (he even had cult

following with Index of 10 shares called K-10).

Today lot of investor’s depending on TV channel for recommendation about stocks to

sell, or buy or hold. Channels like CNBS offer array of experts from economist to brokers

to analyst. Most of these people have vested interest in stocks they recommend and

promote.

One of the most common forms of securities fraud on the Internet involves an imposter

who attempts to manipulate the price of a stock by disseminating phony press releases or

information, or creating phony websites. A recent example of this scheme is the hoax

perpetrated against US based, PairGain Technologies.

2. Volatility of India’s Stock Markets

Recent market developments have once more focused attention on the volatility that has

come to characterise India’s stock markets.

Movements in the Sensex during the two years have clearly been driven by the behaviour

of foreign institutional investors (FIIs), who were responsible for net equity purchases of

as much as $6.6 and $8.5 billion respectively in 2003 and 2004. These figures compare

with a peak level of net purchases of $3.1 billion as far back as 1996 and net investments

by FIIs of just $753 million in 2002. In sum, the sudden FII interest in Indian markets in

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the last two years account for the two bouts of medium-term buoyancy that the Sensex

recently displayed.

Given the presence of foreign institutional investors in Sensex companies and their active

trading behaviour, their role in determining share price movements must be considerable.

Indian stock markets are known to be narrow and shallow in the sense that there are few

companies whose shares are actively traded. Thus, although there are more than 4700

companies listed on the stock exchange, the BSE Sensex incorporates just 30 companies,

trading in whose shares is seen as indicative of market activity. This shallowness would

also mean that the effects of FII activity would be exaggerated by the influence their

behaviour has on other retail investors, who, in herd-like fashion tend to follow the FIIs

when making their investment decisions.

3. Rampant Speculation

The Indian stock markets are perhaps the only place in the world where you can buy

shares without having to put money on the table and sell shares you do not own. This

extraordinary situation has facilitated rampant speculation by all sorts of operators – the

indigenous variety, FIIs and even our own native financial institutions (FIs) as the

massive UTI scandal of recent years has demonstrated. So, when the stock markets were

made to collapse by a record 800-plus points on May 17 under the pretext that the Left is

opposed to divestment, the profits reaped by short sellers were astronomical and

incalculable.

Could this situation have been avoided? As aforesaid, the answer is yes. The electronic

monitoring system in both the Bombay Stock Exchange and the bigger National Stock

Exchange automatically stopped trading for half-an-hour when the two markets

respectively collapsed by 10 percentage points. Thereafter when trading resumed and the

markets fell further to another stipulated lower level, the electronic system automatically

stopped all trading again for another two hours.

A similar situation had occurred on Tuesday, September 11, 2001, the day of the terrorist

attacks in New York City. At the end of the day the stock exchange authorities of both

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the New York Stock Exchange and the heavily-weighted software exchange called

NASDAQ suspended all trading for the remainder three working days during that fateful

week to safeguard investor interests.

T+2 Rolling Settlement

As per the directive by SEBI, all transactions in all groups of securities in the Equity

Segment and Fixed Income securities listed on the Exchange are required to be settled on

T+2 basis w.e.f. from April 1, 2003. The settlement calendar, which indicates the dates of

the various settlement related activities, is drawn by the Exchange in advance and is

circulated among the market participants.

Under rolling settlements, the trades done on a particular day are settled after a given

number of business days. A T+2 settlement cycle means that the final settlement of

transactions done on T, i.e., trade day by exchange of monies and securities between the

buyers and sellers respectively takes place on second business day (excluding Saturdays,

Sundays, bank and Exchange trading holidays) after the trade day.

The transactions in securities of companies which have made arrangements for

dematerialization of their securities are settled only in demat mode on T+2 on net basis,

i.e., buy and sell positions of a member-broker in the same scrip are netted and the net

quantity and value is required to be settled. However, transactions in securities of

companies, which are in "Z" group or have been placed under "trade to trade" by the

Exchange as a surveillance measure (“T” and “TS” group) , are settled only on a gross

basis and the facility of netting of buy and sell transactions in such scrips is not available.

The Exchange has introduced a new segment named “BSE Indonext” w.e.f. January 7,

2005. “S” group consists of scrips from “B1” & “B2” group on BSE and companies

exclusively listed on regional stock exchanges having capital of 3 crores to 30 crores. All

trades in this segment are done through BOLT system under S group.

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The transactions in 'F' group securities representing "Fixed Income Securities" and "G"

group representing Govt. Securities for retail investors are also settled at the Exchange on

T+2 basis.

In case of Rolling Settlements, pay-in and pay-out of both funds and securities is

completed on the same day.

The members are required to make payment for securities sold and/ or deliver securities

purchased to their clients within one working day (excluding Saturday, Sunday, bank &

Exchange trading holidays) after the pay-out of the funds and securities for the concerned

settlement is completed by the Exchange. This is the timeframe permitted to the members

of the Exchange to settle their funds/ securities obligations with their clients as per the

Byelaws of the Exchange.

The following table summarizes the steps in the trading and settlement cycle for scrips

under CRS :

DAY ACTIVITY

T Trading on BOLT and daily downloading of statements showing details of transactions and margins at the end of each trading day.

Downloading of provisional securities and funds obligation statements by member-brokers.

6A/7A* entry by the member-brokers/ confirmation by the custodians.

T+1 Confirmation of 6A/7A data by the Custodians upto 11:00 a.m. Downloading of final securities and funds obligation statements by members .

T+2 Pay-in of funds and securities by 11:00 a.m. and pay-out of funds and securities by 1:30 p.m. The member-brokers are required to submit the pay-in instructions for funds and securities to banks and depositories respectively by 10: 30 a.m.

T+3 Auction on BOLT at 11.00 a.m.

T+4 Auction pay-in and pay-out of funds and securities by 12:00 noon and 1:30 p.m. respectively.

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Thus, the pay-in and pay-out of funds and securities takes places on the second business

day (i.e., excluding Saturday, Sundays and bank & Exchange trading holidays) of the day

of the execution of the trade.

* 6A/7A : A mechanism whereby the obligation of settling the transactions done by a

member-broker on behalf of a client is passed on to a custodian based on confirmation of

latter. The custodian can confirm the trades done by the members on-line and upto 11

a.m. on the next trading day. The late confirmation of transactions by the custodian after

11:00 a.m. upto 12:15 p.m., on the next trading day is, however, permitted subject to

payment of charges for late confirmation @ 0.01% of the value of trades confirmed or

Rs. 10,000/-, whichever is less.

Growing Derivative Market

One look at the accompanying derivatives ‘report card’ and you will probably conclude

that these instruments are a roaring success in India. Six years after its debut, the

derivatives market is flourishing, riding largely on the ongoing bull run. It has filled the

void left by the old badla system of trading, increasing the liquidity in the underlying

cash market and providing both traders and investors with new opportunities. But that is

only one part of the story. Dig beneath all the optimism and you will find that the

derivatives market is in desperate need for more products, more initiatives and a lot more

innovation.

Are Markets Mature Enough?

Individual stock futures were launched in

November 2001. Since then, not a single product

has been introduced in the equity derivatives space.

This has left market participants crying for more.”

There is a need for long-dated options — which

could have an expiry date 1-3 years in the future — as

there is a high cost involved with rolling-over one-

month futures,” says Sanjeev Shah, executive

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director, Benchmark AMC. There is also need for a roll-market that simplifies the

rollover process, feels C.K. Narayan, vice–president, ICICI Securities.

Further, most of the trading happens in the near-month series (contracts that expire in the

same month as the day of trade), stock options are very illiquid, and India’s ranking is

relatively low among world exchanges in value terms, even though the volumes are high.

But the high volumes needn’t necessarily mean that the markets are mature. Much of the

volume comes from arbitrage, where traders merely exploit risk-less spreads. Only 20 per

cent of the trades take a directional view on the market estimates Narayan.

Near-month contracts are more liquid than the rest, the world over. But in India’s case,

the disparity is rather extreme. On a typical trading day in the middle of the month, about

98 per cent of the turnover comes from near-month contracts, while less than 0.5 per cent

comes from the far-month series. Of the 124 symbols available for futures trading, far-

month contracts of only about 10 per cent are traded. The concentration of volumes in the

near-month series means that this is a speculator’s market, points out Susan Thomas,

assistant professor, Indira Gandhi Institute of Development Research (IGIDR). (She had

earlier worked on the project that led to the construction of NSE’s Nifty index.) In 2005,

non-institutional trade accounted for over 93 per cent of total trade in the derivatives

segment, much higher than their 83 per cent share in the cash market.

Despite its strong growth in the last six years, NSE has lagged behind global peers in

value terms. The Korea Stock Exchange — the country’s financial reforms began in the

early 1990s along with India’s — is 32 times the size of NSE (across all segments). NSE

ranks No. 1 in the world in the stock futures segment, but that’s only because the top

exchanges do not trade that product. In index futures, NSE ranked 15th with a turnover of

$38.7 billion in September. But this is less than 1 per cent of Chicago Mercantile

Exchange’s (CME) turnover of $4,431 billion.

The futures market — accounting for 87 per cent — has been the main growth driver of

the Indian derivatives market. But stock options are pathetically illiquid, accounting for

just 3 per cent of total turnover. On the positive side, the share of index derivatives has

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steadily increased to 44 per cent from about 11 per cent four years ago. That’s close to

global norms of about 60 per cent, implying that some amount of hedging, not mere

speculation, is being done.

Fall In Brokerage Rates:

Depository participants (DPs) impose various charges on the institutional as well as on

individual clients under various heads for providing services. The services available in

dematerialized environment that are extended to the clients are as follows:

Dematerialization

Rematerialization

Custodial services

Debit or Credit facility

Hypothecation

Speed-e along with smart card

Corporate benefits like bonus, stock split, dividend payment, etc.

This is an illustrative list of services available. The system of charging a fee for the

services extended to an investor is in two-layers. The Depository charges the DPs and

DPs in turn collect fee/charges from the investor. Each DP uses different norms to

classify charges depending on the extent of services rendered.

NSDL has a provision for collecting a one-time fee of 0.05 percent of market

capitalization of the company, as custody fees for life. For these companies, no custody

charge is supposed to be charged from the investors for life.

However, it is not clear whether DPs are passing this benefit to investors.

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Since 2-3 years with changing trends of industry and increased competition, broking

houses reduce brokerage rates to very much extent.

Advanced technology:

The growth in technology and communications has impacted every aspect of business in

some or the other form. These effects are enduring and have changed the very way in

which business is carried out.

The stock market is one such institution whose very existence has been challenged by the

growth in information technology. IT has turned the very idea of a stock market on its

head.

Technology has impacted the working of stock markets in every sense. However, a useful

starting point for this study would be the study of dematerialization, or demat as it is

popularly known as. This is simply because demat has changed the way stocks are held

and traded and therefore has effect on every other function of the market.

DEMATERIALIZATION in simple terms means the conversion of shares from

physical to electronic form.

Demat, enabled by the use of technology is probably is single most important factor

which has repercussions on every aspect of the stock markets.

Demat in India started with the creation of NSDL (National stock depository limited) in

1996. UTI, was one of the first institutions to use demat when it decided to dematerialize

50% of its holdings in 1997. SEBI gave a boost to demat, with compulsory trading on

shares in demat form in specified scrips by institutional investors from Jan 15, 1998.

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Process of conversion of securities into the demat form

Securities specified as being eligible for dematerialization by the depository in its bye

laws and as under the SEBI (Depositories and Participants) Regulations, 1996 (the

Regulations) can be converted or issued in a dematerialized form. The process of

conversion of securities into a dematerialized form or the issuance of the same in a

dematerialized form can be explained thus:

Firstly, the issuer company, whose securities are eligible for dematerialization,

has to enter into an agreement with a depository for dematerialization of securities

already issued, or proposed to be issued to the public or existing shareholders.

The investor is given an option to hold the securities in a dematerialized form and

it is his prerogative to exercise the option to hold the securities in that manner.

The depository enters into an agreement with the participants who are the agents

of the depository and co-functionaries in the process of dematerialization of

securities.

Any person can then enter into an agreement, through the participant, with the

depository for availing the services provided by the depository.

Upon the entering into such agreement with the depository, the person has to

surrender the certificate pertaining to the securities sought to be dematerialized to

the issuer. This surrender is affected in the following manner:

The person (beneficial owner) who has entered into an agreement with the

participant for dematerialization of the securities has to inform the participant

about the details of the certificate of such securities.

The beneficial owner has to then surrender the said certificate to the participant.

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The participant informs the depository about the particulars of the securities to be

dematerialized and the agreement entered into between him and the beneficial

owner.

The participant then transfers the certificate pertaining to the said securities to the

issuer along with the details and particulars of the securities.

These certificates are mutilated upon receipt by the issuer and substituted in the

records against the name of the depository, who is the registered owner of the said

securities. A certificate to this effect is sent to the depository and all stock

exchanges where the security is listed.

Subsequent to this, the depository enters the name of the person who has

surrendered the certificate of security as the beneficial owner of the

dematerialized securities.

The depository also enters the name of the participant through whom the process

has been carried out and sends an intimation of the same to the said participant.

DEPOSITORY SYSTEM (Working Model)

NSDL carries out its activities through various functionaries called business partners who

include Depository Participants (DPs), Issuing companies and their Registrars and Share

Transfer Agents, Clearing corporations/ Clearing Houses of Stock Exchanges. NSDL is

electronically linked to each of these business partners via a satellite link through Very

Small Aperture Terminals (VSATs) or through Leased landlines. The entire integrated

system (including the electronic links and the software at NSDL and each business

partner's end) is called the "NEST" [National Electronic Settlement & Transfer] system.

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Benefits of Depository System

In the depository system, the ownership and transfer of securities takes place by means of

electronic book entries. At the outset, this system rids the capital market of the dangers

related to handling of paper. NSDL provides numerous direct and indirect benefits, like:

Elimination of bad deliveries: In the depository environment, once holdings of

an investor are dematerialized, the question of bad delivery does not arise i.e. they

cannot be held "under objection". In the physical environment, buyer was required

to take the risk of transfer and face uncertainty of the quality of assets purchased.

In a depository environment good money certainly begets good quality of assets.

Elimination of all risks associated with physical certificates: Dealing in

physical securities have associated security risks of theft of stocks, mutilation of

certificates, loss of certificates during movements through and from the registrars,

thus exposing the investor to the cost of obtaining duplicate certificates and

advertisements, etc. This problem does not arise in the depository environment.

Immediate transfer and registration of securities: In the depository

environment, once the securities are credited to the investors account on pay out,

he becomes the legal owner of the securities. There is no further need to send it to

the company's registrar for registration. Having purchased securities in the

physical environment, the investor has to send it to the company's registrar so that

the change of ownership can be registered. This process usually takes around

three to four months and is rarely completed within the statutory framework of

two months thus exposing the investor to opportunity cost of delay in transfer and

to risk of loss in transit. To overcome this, the normally accepted practice is to

hold the securities in street names i.e. not to register the change of ownership.

However, if the investors miss a book closure the securities are not good for

delivery and the investor would also stand to loose his corporate entitlements.

No stamp duty: For transfer of any kind of securities in the depository. This

waiver extends to equity shares, debt instruments and units of mutual funds.

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Faster settlement cycle: The exclusive demat segments follow rolling settlement

cycle of T+2 i.e. the settlement of trades will be on the 2nd working day from the

trade day. This will enable faster turnover of stock and more liquidity with the

investor.

Faster disbursement of non cash corporate benefits like rights, bonus, etc.

NSDL provides direct credit of non cash corporate entitlements to an investors

account, thereby ensuring faster disbursement and avoiding risk of loss of

certificates in transit.

Reduction in brokerage by many brokers for trading in dematerialized

Securities: Brokers provide this benefit to investors as dealing in dematerialized

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 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.

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Disadvantages of Dematerialization

The disadvantages of dematerialization of securities can be summarized as follows:

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 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. However, the

advantages of dematerialization outweigh its disadvantages and the changes

ushered in by SEBI and the Central Government in terms of compulsory

dematerialization of securities is important for developing the securities market

to a degree of advancement. Freely traded securities are an essential component

of such an advanced market and dematerialization addresses such issues and is a

step towards the advancement of the market.

Dematerialization with Religare

Dematerialization is the process by which a client can get physical certificates converted

into electronic balances maintained in his account with the DP.

Features:

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Holdings in only those securities that are admitted for dematerialization by

National Securities Depository Ltd (NSDL) can be dematerialized.

Structure of holding in the securities should match with the account structure of

the depository account. Now shares in different order of names can also be

demat-ted.

Example:

If the shares are in the name of X and Y, the same cannot be dematerialized into the

account of either X or Y alone. However if the shares are in the name of X first and Y

second, and the account is in the name of Y first and X second, then these shares can be

dematerialized in this account.

Only those holdings that are registered in the name of the account holder can be

dematerialized. Physical shares which have not been transferred and are still there with a

transfer deed cannot be dematted. Only a few companies have been given the permission

to offer Transfer-cum-Demat. The list of these companies can be viewed here.

Rematerialization:

Rematerialization is the process by which a client can get his electronic holdings

converted into physical certificates. The client has to submit the rematerialisation request

to the DP with whom he has an account along with a Remat request form. The physical

shares will be posted by the company directly to the clients.

Trades

For all sales made by clients, the shares will have to be given to the broker, so that the

Pay In can be made by the broker to the stock exchange concerned. For that it's essential

that the shares be transferred to the account of the broker well before the deadline date.

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You must confirm with your broker the settlement date and settlement number and then

submit your instructions to your DP. Also it's important to give the instructions to your

DP as early as possible.

Pledge

Pledge enables you to obtain loans against your dematerialised shares. So you get

liquidity without having to sell your shares. A highly simplified procedure may be

availed of for pledging of securities in the electronic mode. The pledged securities

continue to be reflected in the DP account of the clients (pledgor) but the concerned

securities are "blocked" and cannot be used for any transactions. As and when the pledge

is to be removed, based on confirmations received from both the pledgor and the pledgee,

the blocked securities will be released to "Free Balance" of the account holder.

Market Size : Growth of Online Brokerage Market

In five years of its existence in India, online broking has grown to account for a tenth of

the total trading volumes. If the numbers are considered for only the retail segments, the

growth is starker. Almost half of the Rs 5,000 crore-6,000 crore daily market volumes on

the NSE are accounted for by non-retail entities such as foreign institutional investors,

domestic institutions, mutual funds and arbitrage traders. Institutions aren't online

customers anyway. Of the rest of the retail segment, current estimates suggest that online

broking's reach is close to 30 per cent.

As of September this year, there were 11.7 lakh Internet trading accounts registered with

the NSE, of which roughly 9.5 lakh are unique users. It's still a small proportion of the

estimated 3 crore Internet users in the country. As more surfers take to trading online,

analysts expect their number to keep doubling every year until 30-40 per cent of India's

overall trades are done online, as is the case in some mature Internet markets like South

Korea's.

The Internet's effect here has more to do with the bandwidth it has created for both

brokers and clients. Banga, director of indiabulls offers an example. "Traders from Ajmer

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use our online platform. It would otherwise have been prohibitively loss-making to open

a branch there." Thanks to the new channel, volumes are growing faster in the non-

metros, where transparency is low in offline trading. "These customers were made to pay

higher charges by small brokers, since they weren't aware of the market rates," says

Prasanth Prabhakaran, head of Kotaksecurities.com. That is one of the reasons why more

than 60 per cent of Kotak's daily online trading turnover comes from non-metros.

NSE’s growth story can be depicted by these figures :

Growth in cash market(online):

Month/Year No Of Companies

No of Trades(lakh)

Turnover(Rs cr)

Avg daily turnover(Rs cr)

Mar 2007 1084 710 167,954 7,998

April 2006 944 567 177,372 9,854

2005-06 929 6,088 1,569,556 6,253

2004-05 839 4,510 1,140,071 4,056

2003-04 787 3,780 1,099,535 4,328

2002-03 788 2,398 617,989 2,462

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Porter's Five Forces Analysis Of Online Brokerage Industry

Buyer Power

Awareness of investing knowledge :

Earlier retail investors often lack the knowledge and expertise in the financial sector that

called them to approach the broking houses.

But nowadays TV channels like CNBC and financial magazines, newspapers are giving a

brief knowledge and updates of financial sector to retail investors, also they provide

investors tips to invest their money in stock market.

Hence it increases the power of buyer and reduces his dependence.

Low Product and Service Differentiation Proves Beneficial :

The retail broking services provided by the various companies are homogeneous with

very low product differentiation. This allows customers to enjoy a greater bargaining

power.

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPO's coming to the market.

We see traction when initial public offers (IPOs) are announced. People find the online

platform a very convenient way to enter the market.

In 2004-05, Rs 25,526 crore was raised in the markets, almost 450 per cent more than the

amount raised in 2002-03. For instance, in the month that the Maruti IPO was announced,

300,000 demat accounts were opened. In an average month, the figure is about 100,000.

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Since 2002, the number of demat accounts has doubled to 7.1 million, many of them

belonging to new investors applying for IPOs.

INTENSITY OF COMPETITORS

Move towards consolidation

The bigger trend in the industry is consolidation, just like it happened in the US and

South Korea, where 90 per cent of online trades are with the top 10 players.

Says Banga: "As the industry grows, people prefer going to solid brands that have strong

balance sheets. The big guys can invest in infrastructure, technology and risk

management systems." As a result, several sub-brokers have been pushed by client

demand to take up franchises of the bigger brokers.

The consolidation in the broking industry should see more and more businesses shifting

from small, hole-in-the-wall brokerages to big players.

Lot of brokerage companies is moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations.

Increased Focus of Banks in Retail Broking

Many leading banks are coming into retail broking field like ICICI , HDFC , UTI etc.

Actually as online trading has come into feature; it would be easy for banks to give online

trading platform with depositary services. Although they are into only online trading,

they are not dealing with proper services of RM (Risk manager0.

Entry Of foreign Players

Even the foreign players are seeing opportunities in the Indian markets. Various foreign

banks like ABN Amro and others are planning to enter the Indian retail brokerage

industry.US-based E*Trade took a 34 per cent stake in IL&FS Investsmart (along with

Softbank) in March 2004.

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Online Trading Competes with Traditional Brokerage

There is an increasing demand for online trading due to consumer's growing preference

for internet as compared to approaching the brokers.

In India, the economics don't allow it to be a cost game. Says Bagchi: "Brokerage costs

are already so low (0.1-0.5 per cent for delivery) that the online medium doesn't really

offer any significant price advantages."

Traditional brokers are now scrambling to scale up their online operations. Meanwhile,

ICICI Direct & Indiabulls have raced ahead of the others. The other online players that

make up the top six - Sharekhan (owned by SSKI), Religar(earlier fortis securities),

Kotak Securities, HDFC Securities and 5paisa (owned by Indiainfoline) - all have hybrid

models. Collectively, these players have 75-80 per cent of the market.

The remaining 130 players, who were given licenses to open online trading platforms by

the NSE, can be divided into three categories - those that are active businesses but have

less than 5 per cent of the online market (Motilal Oswal among them); those that invested

in the technology but weren't able to get their projects off the ground (the Lalbhai Group's

Anagram Securities), and those that simply bid for the licence but didn't pursue business.

Most players fall in the last category.

THREAT OF NEW ENTRANTS

Entry of Foreign Players

As it is already discussed above, many foreign players like ABN Amro and US-based

E*Trade are taking place in Indian retail brokerage industry.

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New forms of trading

New forms of trading including T+2 settlement system, dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the

Indian industry

THREAT OF SUBSTITUTES

Alternative Investment Options :

Various alternative forms of investment including fixed deposits with banks and post

offices etc act as substitutes to retail broking products and services.

The most important alternative investment form is Mutual Fund investment in which gain

is as higher as in share investment but risk is too low.

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Chapter 4

DATA ANALYSIS

71

DATA ANALYSIS AND INTERPRETATION

Q1. In which of these Financial Instruments do you invest into?

Only Shares Mutual Funds Bonds Derivatives

75 16 7 2

Interpretation: This shows that although the mutual funds market is on the rise yet, the

most favored investment continues to be in the Share Market. So, with a more transparent

system, investment in the Stock Market can definitely be increased.

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Q2. Are you aware of online Share trading?

Yes 91

No 9

Interpretation: With the increase in cyber education, the awareness towards online share

trading has increased by leaps and bounds. This awareness is expected to increase further

with the increase in Internet education.

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Q3. Have you ever heard about Religare?

Yes 40

No 60

Interpretation: This pie chart shows that Religare has a less amount of Brand awareness

in terms of a premier Retail stock broking company. The company to increase its market

share over its competitors should further leverage this brand image.

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Q4. Do you know about the facilities provided by Religare?

Yes 17

No 83

Interpretation: Although there is not sufficiently high brand equity among the target

audience yet, that why it is to be noted that the customers are not aware of the facilities

provided by the company meaning thereby, that, the company should concentrate more

towards promotional tools and increase its focus on product awareness rather than brand

awareness.

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Q5. With which company do you have your DEMAT account?

Religare ICICI Direct Kotak Securities India Bulls Others

20 18 27 24 11

Interpretation: This shows that with not sufficiently high Brand Equity, Religare ranks

only 3rd amongst the Demat account providers. This is probably because of two main

reasons:

1. Lack of promotion and unfocussed approach towards Product awareness

2. Non – transparent marketing policies of the company

Hence, the company should crystallize its products and should indulge in aggressive

marketing and promotion.

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Q6. Are you currently satisfied with your Share trading company?

Yes 19

No 81

Satisfaction level of Customer among Current Broker

81%

19%

YES

NO

Interpretation: This pie chart accentuates the fact that Strategic marketing, today, has

gone beyond only meeting Sales targets and generating profit volumes. It shows that all

the competitors are striving hard not only to woo the customers but also to make them

Brand loyal by generating customer satisfaction.

How often do you trade?

77

Q7. How often do you trade?

Daily Weekly Monthly Yearly

9 27 53 11

Daily9%

Weekly27%

Monthly53%

Yearly11%

Interpretation: In spite of the huge returns that the share market promises, we see that

there is still a dearth of active traders and investors. This is because of the non –

transparent structure of the Indian share market and the skepticism of the target audience

that is generated by the volatility of the stock market. It requires efficient bureaucratic

intervention on the part of the Government.

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Q8. What percentage of your earnings do you invest in share trading?

Above 50% Upto 50% Upto 25% Upto 10%

3 7 19 71

Interpretation: This shows that people invest only upto 10% of their earnings in the

stock market, again reiterating the volatile and non-transparent structure of the Indian

stock market. Hence, effective and efficient steps should be undertaken to woo the

customers to invest more in the lucrative stock market.

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FINDINGS

AND

RECOMMENDATIONS

80

FINDINGS

In spite of these optimistic numbers, online trading in India is at a very nascent stage

(about 5-8 percent of total traded volumes) compared to countries like South Korea (60

percent), US (40 percent) and UK (20 percent). Online trading in the year 2000-2001

accounted for only Rs 50,170 crore out of total traded volume of Rs 25,08,445 crore.

There are currently close to 50 online brokerages in India with ICICIDirect, KotakStreet,

Religare, MotilalOswal, IndiaBulls and 5Paisa being some major players. However, due

to limited volumes, no online brokerage is currently making money and a shakeout is

imminent in the near future. The going is expected to get tougher with the advent of

capital account convertibility. On an average, Rs 40 crore per day (Rs 1,000 crore per

month) is likely to be the threshold breakeven for online brokerages. There is scope for

multiple players as the entire segment is in a growth stage.

While there are many factors that need to be understood to justify this assertion, one

simple fact is worthy of note. The average age of the Indian Internet user as cited by a

recent IDC survey is 27 years. The average age of the head (and financial decision taker)

of the Indian equity-investor household, as revealed by the SEBI-NCAER study of Indian

investors in 2000 is 45 years. The older, experienced equity investor is not online today

and the fact that older, mature investors are not ‘tech-positive’ and hence unlikely to

move to online trading is a major barrier to the growth of e-broking in India.

Here, the numbers of banks with a strong online presence are very few - again, dominated

by new private banks and foreign banks. Both have lesser reach owing to a smaller

network in the country. The relative inability of large public-sector banks to offer-

facilities for Internet banking is a barrier in this regard. Besides, Internet penetration in

India is still very low and concerns about security also tend to predominate. In markets

like the US, online brokerages are advertised very heavily. Online trading in India has so

far not seen similar levels of aggressive advertising, with the exception of ICICI Direct

and India bulls. Besides, only scripts that have been compulsorily dematerialized can be

traded on the net here.

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Brand building, assurances of security, developing multiple delivery channels with

anytime telephonic grievance redressed options is some directions, which may be of use

for the immediate future. Online trading firms can also market themselves aggressively to

students who are entering the professional arena, ensuring that their entry into equity

happens online. One of the major issues governing trading is the prevailing uncertainty in

the market.

Hence, not withstanding the current sentiment in the market, potential for online trading

is still immense in India. With a more transparent system, increased awareness, and a

sustained bullish market we would surely be heading to become the largest online stock

trading country by the turn of the next decade.

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RECOMMENDATIONS

We suggest following measures, which Religare could take so as to take on heavy

competition from various Brokerage Companies :

1. To identify regions where promotions are required. Religare lacks visibility in

northern region where as it is a well known name in western region. Even then, its

promotional campaign focuses on western region where as northern region is still

waiting for promotional campaigns.

2. Try to reduce cost, so that benefits can be passed on to customers. Senior

managers at Religare keep on telling that it is difficult to reduce cost, because of

services we provide. But the fact is, India being a price sensitive market; people at

times go for monetary benefits rather than for long-term non- monetary benefits.

3. If charges can’t be reduced because of costs involved, make the services

customized, so that services are provided to only those customers who are willing

to pay the price for services they are getting and let the other customers enjoy

costs benefits without getting services.

4. Concept of margin funding should be introduced, as more and more people are

asking for it.

5. Religare should contact with their clients regularly for knowing the problems

faced by them. This will help Religare in providing best services to customers.

This will result in additional customer base by getting further references from

satisfied clients.

6. To launch slab wise brokerage structure as Religare has fixed brokerage structure,

which cannot be negotiated. But other players in the market offer launch slab wise

brokerage structure, which motivate customers to increase their volumes.

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ANNEXURE

84

QUESTIONNAIRE

Q1. In which of these Financial Instruments do you invest into?

Shares Mutual Funds Bonds Derivatives

Q2. Are you aware of online Share trading?

Yes No

Q3. Have you ever heard about Religare?

Yes No

Q4. Do you know about the facilities provided by Religare?

Yes No

Q5. With which company do you have your DEMAT account?

Religare ICICI Direct Kotak Mahindra India Bulls

Others (please specify) __________

Q6. Are you currently satisfied with your Share trading company?

Yes No

Q7. How often do you trade?

Daily Weekly Monthly Yearly

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Q8. What percentage of your earnings do you invest in share trading?

Up to 10% Up to 25% Up to 50% Above 50%

Q9. What are the factors that you consider before investing in a particular company?

a) Financial Position [ ]

b) Current Market position [ ]

c) Goodwill/Brand name [ ]

d) Future prospects [ ]

e) Any other (Please specify) [ ]

Q10. What more facilities do you think you require with your DEMAT account?

------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------

Additional Information (optional)

Name:

Age:

Sex: Male Female

Phone No:

Occupation:

THANK YOU

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BIBLIOGRAPHY

87

BIBLIOGRAPHY

Books and Newspapers:

The Economic Times, Business Standard, Business line

Securities Market (Basic) Module :--NCFM

Indian financial system by M.Y KHAN

Fischer and Jordon, “Security Analysis and Portfolio Management”, Prentice

Hall, 1983.

Websites and URLs:

www.religare.in

www.indiainfoline.com

www.economictimes.com

http://www.investopedia.com/articles/

www.nseindia.com

www.bseindia.com

www.moneycontrol.com

www.business-standard.com

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