Summer Training Project Report -Roni Das 2 Repaired)

Project On Securities Market

[Organizational Study And Technical Analysis Of Securities And Investors Perception On Broking Firms With Respect To Prabhudas Lilladher]

Author: Roni Das[PGDM StudentShiva Institute Of Management StudiesGhaziabad]

SUMMER TRAINING PROJECT REPORT

“ORGANISATIONAL STUDY AND TECHNICAL ANALYSIS OF SECURITIESAND

INVESTORS PERCEPTION ON BROKING FIRMS WITH RESPECT TO PRABHUDAS LILLADHER”

Undertaken AtPrabhudas Lilladher Pvt. Ltd.

Submitted for partial fulfillment of award of

Post Graduate Diploma in Management

By

Roni Das

Enrollment No. :209234

Name of GuideDr. Mukhesh Jethwani

SHIVA INSTITUTE OF MANAGEMENT STUDIESGHAZIABAD

July, 2010

Technical Analysis of Securities and Investors Perception on Broking HouseBy: Roni Das PGDM Student SIMS, Ghaziabad Page 2

BONAFIDE CERTIFICATE

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr. Roni Das S/o Mr. Mrinal Kanti Das is a bonafide student of PGDM,

Batch 2009-11, bearing Enrollment No. 209234 conducted by Shiva Institute of Management

Studies. The course is approved by All India Council for Technical Education (AICTE)

Ministry of HRD, Government of India.

for SHIVA INSTITUTE OF MANAGEMENT STUDIES

Dr. Shefali Gautam

Director


CERTIFICATE FROM INTERNAL GUIDE

Certified that Roni Das Enrollment No. 209234 has carried out the project

work presented in this project report entitled “ORGANISATIONAL STUDY

& TECHNICAL ANALYSIS OF EQUITIES & INVESTORS

PERCEPTION ON BROKING FIRMS WITH RESPECT TO

PRABHUDAS LILLADHER” for the award of Post Graduate Diploma in

Management from Shiva Institute of Management Studies, Ghaziabad under

my supervision. The project report embodies results of original work and studies

carried out by student himself and the contents of the project report do not form the

basis for the award of any other degree to the candidate or to anybody else.

Date: PROJECT GUIDE Mukhesh Jethwani

Designation

contents

CHAPTER NO: TITLE PAGE NO.


EXECUTIVE SUMMARY 7

1. HISTORY OF SECURITIES MARKET IN INDIA-------------------------------------------------8 2. OBJECTIVE----------------------------------------------------------------------------------------------123. ABOUT THE COMPANY---------------------------------------------------------------------------13-28

MANAGEMENT TEAM--------------------------------------------------------------------14

KEY PEOPLE---------------------------------------------------------------------------------15

GROUP COMPANIES-----------------------------------------------------------------------16

GROUP SERVICE----------------------------------------------------------------------------17

COMPANY’S VISION, MISION----------------------------------------------------------18

MARKETING---------------------------------------------------------------------------------19

PRODUCT SCHEME------------------------------------------------------------------------20

CUSTOMER-----------------------------------------------------------------------------------21

COMPETITOR-------------------------------------------------------------------------------25

4. PRODUCT & ANALYSIS---------------------------------------------------------------------------28-52

PRODUCT BUSKET------------------------------------------------------------------------28

TRADING PLATFORM--------------------------------------------------------------------29

ACCOUNT OPENING PROCESS--------------------------------------------------------32

COMPARATIVE ANALYSIS OF BROKING FIRMS--------------------------------32

TRADING STRATEGY--------------------------------------------------------------------36

TECHNICAL ANALYSIS-----------------------------------------------------------------37

SHARE PRICE FACTOR------------------------------------------------------------------41

SENSEX CALCULATION----------------------------------------------------------------42

RESEARCH OF PL-------------------------------------------------------------------------43

REVENUE GENERATED-----------------------------------------------------------------44

MUTUAL FUND----------------------------------------------------------------------------44

5. SWOT ANALYSIS-------------------------------------------------------------------------------------53

6. RESEARCH METHODOLOGY---------------------------------------------------------------------54

7. QUESTIONNAIRE------------------------------------------------------------------------------------56

8. DATA ANALYSIS------------------------------------------------------------------------------------59

9. FINDINGS------------------------------------------------------------------------------------------------64

10. SUGGESTION-------------------------------------------------------------------------------------------65

11. CONCLUSION------------------------------------------------------------------------------------------66

12. BIBIBLIOGRAPHY------------------------------------------------------------------------------------67

ACKNOWLEDGEMENT


I would like to express my gratitude to this institute of excellence, which has encouraged me and given knowledge to go with this project report.At first I would like to express gratitude to Dr.Mukhesh Jethwani (faculty guide) and MR. Kunal Mukherjee (Sales manager) and Mr. Debjit Karmakar(Regional Manager) who gave me their help and opportunity to fulfill my goal.

I am also thankful to my reporting boss MR. Md Mobin (Unit Manager) and for their support for working in PRABHUDAS LILLEDHER PVT. LTD.

I am grateful to my parents who have help me in all respect to complete my project.

At last I would like to thank all of my friends who helped me to complete this project work.

RONI DAS

PGDM STUDENT

SHIVA INSTITUTE OF MANAGEMENT STUDIES


Executive Summary

As a partial fulfillment of my PGDM curriculum I have undergone 8 weeks summer training at

Prabhudas Lilladher Pvt. Ltd. I have done my summer training project at Kolkata Branch from 3rd May to

26th June.

The Prabhudas Lilladher group is one of the leading broking houses in India and It satisfied the investors

need since 1944, having the membership on BSE and NSE, PL Pvt. Ltd. Is also registered as depository

participant with CDSL (Central Depository Service Ltd.).Prabhudas Lilladher (PL) has exceeded

customer expectation by providing world class service. I was placed under the marketing and sales

department and I have learned lot in carrying out marketing task for PL India. I have done marketing in

retail client segment and corporate client also because our company make a deal with coal India

regarding the D-Mat opening because coal India will launch its IPO on September-October and the

company reserve its 1% share for its employee and our company has given a premium facility (Free D-

Mat A/C) to all the employee of coal India.

I have also carried out a project during summer training. The title of my project is Organizational Study

& Technical Analysis of Securities & Investors Perception on Broking Firms With Respect To

Prabhudas Lilladher Pvt. Ltd.

The questionnaire was as data collection instrument and both open ended and close ended type question

were used as per requirement. More details about the project are available in later part on this report.


HISTORY OF SECURITIES MARKET IN INDIA

BACKGROUND The equity broking industry in India is gaining momentum in terms of scope and scales of business. With the Indian securities markets experiencing rapid growth and with financial integration gaining speed, the role of intermediation will further strengthen. However in the long term, quality and maturity of service will determine the success and sustainability of firms operating in this segment. Key factors to drive growth and success in the broking industry would be distribution networks, diversification of services, expertise and research, transparency and disclosure, compliance and market integrity. India is one of the oldest stock market in the world with a strong presence of domestic and local intermediation. It was the extent of the indigenous equity broking industry in India that led to the formation of the Native Share Brokers Association in 1875 which later came to be known as Bombay Stock Exchange (BSE).

In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped, thus, the ‘Share Mania’ in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs. 2850/- could only be sold Rs.87/-). With the linearization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on per with the international standard. On the basis of the recommendations of high powered Pherwani Committee, The National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial finance Corporation of India, All Insurance Corporations, selected commercial banks and others.Some of the fundamental changes that fuelled rapid pace of market growth and at the same time brought in orderliness in the manner and the conduct of the operations are a large number of reforms that equipped Indian markets with the best of the processes and practices that included abolition of open outcry and introduction of electronic trading (secondary markets), allowing foreign ownership (foreign institutional investment) of shares, permitting Indian companies to raise capital from abroad (ADRs/GDRs), expansion in the product range (equities/derivatives/debt), book building process and transparency in IPO issuance (primary markets), T+2 settlement cycle (payments and settlements), depositories for share custody (dematerialization of shares) governance of the stock exchanges (demutualization and corporatization of stock exchanges) and internet trading (e-broking). These changes resulted in dramatic growth of the stock markets in India as well as the equity broking firms. The broking industry in emerging as a rapidly growing segment in Indian finance, in terms of business growth, distribution and network and enterprise value.

Business in stock exchange Business has been exceptionally good in primary and secondary markets, in the equities and derivatives segment in NSE rose from Rs 88 bn in January 2007 to Rs 198 bn in December 2007 and in BSE from Rs 44 bn to Rs 86 bn during this period. Cash market turnover in NSE during the first eight months of FY08 reached Rs 25,707 bn showing a y-o-y rise of 33%, similarly cash market turnover in BSE rose to Rs


11,602 bn during Apr-Dec 07, showing a growth of 21% during the first eight months of the year. Turnover in derivatives segment in NSE rose from to Rs 99,162 bn during Apr-Dec 2007 signifying a growth of 35% in the first eight months of the FY08. Average Daily Turnover in the Derivative segment in NSE rose from Rs 314 bn in January 2007 to Rs 671 bn in December 2007. Net cumulative investments by the Foreign Institutional Investors reached US$ 67 bn by Nov 2007, and during the first eight months the gross purchases and sales by the FIIs amounted to Rs 5972 bn and Rs 5321 bn respectively. BSE sensex closed at 20286 in Dec 07 from a level of 13,827.77 in Jan 2007, showing a rise of 46.7% during the year. During this period, it touched a low of 12316 and a high of 20498. S&P CNX Nifty rose from 4007.4 on Jan 2, 2007 to 6138.6 on Dec 31, 2007 and showing a growth of 54.8% (local currency) based on monthly averages of index movement. Except some parts of the information technology, most of the sectors witnessed sizeable spurt in the stock prices.

India in Global Markets

The stature and significance of India is growing in the world capital markets. India is not only attracting greater interest from world markets, but is also assuming increasing importance in global finance.

India is a major recipient of foreign institutional flows among India is a major recipient of foreign institutional flows amongst the emerging markets. Since the opening up of domestic stock markets to foreign investors, cumulative net FII investments reached US$ 67 bn by Nov 07.

Indian companies are regularly covered by global and regional investment banking research. India is major destination of private equity flows into the emerging markets. India was host to the annual meetings/conference of the World Federation of Exchanges (2005) and

International Organization of Securities Commission (IOSCO) India emerged a trillion dollar market capitalization markets in 2007, and was among the top 10 stock

exchanges in the world in terms of market capitalization. India is among the top fifteen stock exchanges in the world in respect of equity turnover. India emerged as a leading player in commodities futures market. India is among the top five in the number of transactions. India is among the top five in respect of volume traded in Stock Index Futures and Stock Futures. India is one of the few markets with extensive dematerialization of shares. Indian stock markets have largest number of listings. Trading takes place in about.

Market IntermediariesThe number of stock brokers registered with Securities and Exchange Board of India showed net increase of 108 from 9,335 in FY06 to 9,443 in FY07.


1. There were 263 additions and 155 cancellations during the year. National Stock Exchange of India has the highest number of brokers (1077) followed by Calcutta Stock Exchange (960), Inter-Connected Stock Exchange (925) and BSE (901).2. The proportion of corporate members at NSE was at 92% and at BSE at 76% The number of sub brokers registered during FY07 rose from 23,479 in FY06 to 27,541.NSE and BSE account for 95% of all sub brokers. This segment showed a growth of 17.3% during the year. As on Jan 25, 2007, 1269 Foreign International Investors and 3,760 Sub Accounts were registered with SEBI. AS on March 31, 2007, 40 mutual funds were

Registered with SEBI of which 33 were in the private sector and seven in the public sector.3. The number of domestic venture capital funds rose to 99 during FY07 from 80 in the previous year. 4. The number of foreign venture funds doubled from 39 to 78 during the period. The fees charged of market intermediaries by the regulator rose from Rs 580 mn to Rs 2010 mn. Major heads that generated fees included take over fees (Rs 520), stock brokers and sub brokers (Rs 450 mn), offer documents/prospects (Rs 340 mn) mutual funds (Rs 210), derivative members (Rs 110 mn) and FIIs (Rs 90 mn). As a part of investigations, SEBI suspended 52 market intermediaries, issued warning to 27 intermediaries and prohibitive directions issued to 345 intermediaries and non intermediaries during FY07.

5. An important feature of Indian stock markets as compared to other emerging markets as also developed markets is the large number of listed companies and also a good number member brokers. While the share of top securities in the total turnover is declining over the years, the share of top brokers in trading volumes is increasing. For instance in FY01, the top 10 securities accounted for 70% of the turnover in BSE which gradually fell to 24% in FY07. Similarly in NSE, the top 10 securities accounted for 73% of the volume in FY01, which came down to 28% in FY07. The top 100 securities now account for 71% of the trading volume in BSE and 84% in NSE. The top 10 members of BSE, who accounted for 14% of the turnover in cash segment in FY01, saw their share climbing to 24% in FY07. In NSE, the share of top members rose from 13% to 25% during FY01-07. The top 100 members now account for 73% and 75% of the cash market turnover of BSE and NSE respectively. Commodities future markets, which began in India in the early 2000s, are showing rapid growth and progress. Total volume of trading at all commodities exchanges for the period April 2, 2007 – Jan 31, 2008 stood at Rs 31,610 bn as against Rs 30,313 bn during the corresponding period in FY07. Commodities futures markets in India have taken off in a big way, but the concern arising from sharp spurt in prices of certain essential commodities and limits imposed on trading of few agricultural commodities dampened the growth in their volumes, though trading in other commodities continues to grow.

6. The table given below portrays the overall growth pattern of Indian stock markets since independence. It is quite evident from the table that Indian stock markets have not only grown just in number of exchanges, but also in number of listed companies and in capital of listed companies. The remarkable growth after 1985 can be clearly seen from the table, and this was due to the favoring government policies towards security market industry

Growth Pattern of the Indian Stock Market


SL.No. As on 31st Dec. 1946 1961 1971 1975 1980 1985 1991 1995

1 No. of stock exchanges

7 7 8 8 9 14 20 22

2 No. of listed cops

1125 1203 1599 1552 2265 4344 6229 8593

3 No. of stock issues of listed companies

1506 2111 2838 3230 3697 6174 8967 11784

4 Capital of listed comp. (Cr. Rs.)

270 753 1812 2614 3973 6174 8967 11784

5 Market value of capital of listed comp. (Cr. Rs.)

971 1292 2675 3273 6750 25302 110279 478121

6 Capital per listed cops. (4/2) (lakh Rs)

24 63 113 168 175 224 514 693

7 Market value of capital per listed comps. (lakh Rs.) (5/2)

86 107 167 211 298 582 1770 5564

8 Appreciated value of capital per listed comps. (lakh Rs)

358 170 148 126 170 260 344 803


OBJECTIVE:

We all know that in the market, there are different scheme for investment of which equity and mutual fund are the preferable. Some investors prefer investing in share market and some in mutual fund. Now a days to invest in equity, opening a d-mat A/c is compulsory. This is done by some bank and broking house. These bank and broking house act as a intermediator between stock exchange (BSE, NSE etc.) and company. Prabhudas Lilladher is one of the oldest broking houses in India.

My objective of Summer Internship Project from this broking house is as follows:

To know customer awareness about Prabhudas Liladher Pvt. Ltd.

To know the most preferable investment option of investors

To know the most preferable investment condition (short term, long term, medium term)

Comparative analysis of product scheme and service of Prabhudas Lilladher with respect to others

broking house.


ABOUT THE COMPANY:

PRABHUDAS LILLADHER PVT. LTD.(PL India) :

Prabhudas Lilladher Pvt. Ltd. is a leading equity and securities firm in India. It established as a brokerage house in 1944 by Mr. Prabhudas Lilladher Sheth. The company currently handles sizeable volumes traded on NSE and in the realm of online trading and investments; it currently holds a reasonable share of the market. PL is a member of the National Stock Exchange of India, Bombay Stock Exchange of India, and Depository Participant with Central Depository Services Ltd. (CDSL) and is a SEBI approved Portfolio Manager. It has been a long journey since 1944. A journey of success, based on strong adherence to ethics, uncompromising dedication to quality and an attitude of excellence. Imbibed in our corporate culture, these founding principles have guided us to reach the pinnacle that we are at today. Over the years, PL has evolved from a standalone brokerage firm to a one-shop stop for all financial services.

With a team of dedicated experts and a nationwide distribution network of branches, franchisees and associates, PL provides a comprehensive gamut of financial services in the Institutional and Retail domain. Our range of services includes Equity & Derivative Broking, Investment Banking, Corporate Advisory, Wealth Management, PMS, Online Trading, Loan Against Shares, Mutual Funds, IPO’s and Insurance.

Drawing on our team’s profound technical expertise and years of extensive practical experience, we develop customized solutions that are unique to each of our clients, thus ensuring high levels of customer satisfaction.

Prabhudas has a very credible Research and Analysis division, which not only caters to the need of our Institutional clientele, but also gives their valuable inputs to investment dealers.

It is mainly a Mumbai based company. It opens its branch at Kolkata in 2006.

REGISTRATION NUMBERS:

Member: NSE: SEBI Regn. No: INB 230597738 & INF 230597738Member Code : 05977 BSE: SEBI Regn. No: INB 010502855 & INF 010502855 Clearing No: 5977 CDSL No: IN-DP-CDSL-14-99 CDSL DP ID: 11300 PMS Registration no: INP 000001231

OUR MANAGEMENT TEAM:


Arun Sheth

Group Chairman & Managing Director

Joined the firm in 1970, became Partner /

Director in 1972

Dhiren Sheth

Group Vice Chairman & Jt. Managing Director

Partner / Director in the firm since 1979

Has led major technological initiatives at PL. Also provides strategic inputs cross various

business

Dilip Bhat

Group Joint Managing Director

Chartered Accountant

Has 25 years of experience in the financial services domain

Amisha Vora

Group Joint Managing Director

Chartered Accountant

Has 20 years of experience in the financial services domain.

Under Dilip and Amisha’s leadership, PL’s institutional trading volumes have grown more than 30 fold in the last six years.

Also leads Advisory Business

Mihir Sheth

Group Executive Director

Leads the online trading initiative at PL.

Head of Human Resource at PL.

Nishant Mahendra Sharma

Head – Online Busines.

Very experienced in stock market particularly Online Initiatives.

Lead ICICI Securities & Religare Online since inception

KEY PEOPLE


Name Designation Profile

Sanjay Kumar Maheshka

MD & CEO - PL Fund AdvisorsMember - Group Corporate Strategy

MBA (XLRI) B.Tech (IIT, Kanpur)Experience : 15 years.

Sandip Sabharwal

CEO – PMS IIT(Delhi ) and IIM(Bangalore)Experience : 14 years.

Dr. Carlos Asilis Chief Equity Strategist Wharton Aluminous, Ph.D (Economics)Experience : 17 years

Rakesh Bharucha

Group CFO CA & ICWAExperience : 16 years

Uday Kajaria Company Secretary and President – Compliance.

CA, CS, Experience : 28 years

Subrahmanian Analakkatt

President – Operations Settlement & Risk Management

CAExperience : 23 years

Apurva Shah Vice President and Head of Research , Institutional Equities

CFA, MMS, B.EExperience : 10 years

Name Designation Profile


Rahul Jain Vice President and Head – Institutional Sales

CA, ICWA, B.Com Experience : 11 years

Nishant Mahendra Sharma

Head- Online Trading(Major Gainz)

BE (Electronics & Power), PGDBA (Finance) Experience : 10 Years

Monal Desai Vice President and Head - Institutional Derivatives

MBA, Experience : 17 years

Parag Paigankar Vice President - Corporate Advisory & Financial Services

PGDBA Experience : 20 years

Dara Kalyaniwala Vice President -Investment Banking

CA Experience : 28 years

Manoj Chaudhary Head - Retail Distribution MMS Experience : 21 years

Ajay Bhaskar Head – Retail Franchisee MBA Experience :22 years

GROUP COMPANIES:

Prabhudas Lilladher Advisory Services Private LimitedPrabhudas Lilladher Advisory Services Private Limited is the group holding company. Besides providing financial advisory services to the Corporates, the Company helps its clients to raise resources from domestic & global investors through various instruments. Prabhudas Lilladher Private LimitedPrabhudas Lilladher Private Limited, is the stock-broking arm of the PL Group. A member of both the National Stock Exchange and The Stock Exchange, Mumbai, PL provides equity trading facilities and related products and services on these premier exchanges. We offer these services through our branches, Progress Partner locations and the internet (www.majorgainz.com) Prabhudas Lilladher Financial Services Private LimitedPrabhudas Lilladher Financial Services Private Limited is the non banking financial services (NBFC) arm of PL group. An RBI-approved NBFC, PLFS offers Loans and Margin Funding against approved securities to meet the fund requirements various borrowers. PL Capital Markets Private LimitedPL Capital Markets Private Limited offers capital raising and other investment banking services including the management of public offerings, private placements (including qualified institutional placements), rights issues, share buybacks, open offers/delisting,


Valuation services, mergers & Acquisitions etc. PL Fund Advisors Private LimitedPL Fund Advisors Private Limited offers Wealth management services across the entire spectrum right from equities to Mutual Funds, Private equity, Insurance, Real Estate, Art Funds among others. PL Distribution Company Private LimitedDistribution of Financial Products including Mutual Funds and IPOs is offered by PL Distribution Company Pvt. Ltd. With a reach across cities in India, we service the needs of investors pan-India.

OUR GROUP SERVICE:

COMPANY’S VISION

"To be a leading financial services house providing maximum value addition by offering innovative products and services”


IPO Distribution

Mutual Fund Distribution

Insurance

Portfolio Management

ServicesNRI services

Margin Funding

Investment Banking

Corporate Advisory

COMPANY’S MISSION

To become India’s premier, technology driven, one’s top brokerage house with customer interest at its core.

COMPANY’S CRM POLICYA Customer is the most Important Visitor On their Premises. Customer is not dependent on them but the company is dependant on them. He is not interruption in their work, But is the Purpose of it but is the purpose of it he is doing us a favor by giving the company an opportunity to do so.

COMPANY’S BUSINESS PHILOSOHIPYEthical practices & transparency in all their dealings customer interest above our own always deliver what they promise effective cost management.

COMPANY’S QUALITY ASSURANCE POLICY

The company is committed to being the leader in providing World Class Product & Services which exceed the expectations of their customers achieved by teamwork and a process of continuous improvement.

MARKETING

PL offers a wide range of SERVICES in form of focused research or state of the art of technology

1. Our customized product offering or personalized touch to our services. PL is the only 100% retail stock broking house offering a gamut of retail centric services.

1. E-BROKING

Multiple exchanges on single screen Intra-day calls & flash news Historical charts with technical tools

2. RESEARCH


Technical services Fundamental services Derivatives Mutual Fund Conference Calls

3. D-MAT SERVICES

Hassle free automated pay in Wide branch coverage Centralized billing & accounting

U.S.P

• Trade Rewards

• Better quality product at competitive brokerage

• Rated 8th Best Indian Broking House by Asia Money 2007

• Rated 3rd in generating Small Cap ideas by Asia Money 2007

• Our Jt. MD -Ms. Amisha Vora, rated amongst top sales person from India for 3 consecutive year

PRODUCT SCHEME


PROMOTIONAL ACTIVITIES

The company follows different channels for the promotion of the company’s different services. Apart from press and media advertisement, they periodically issue articles and arranger’s various seminars and events for the investors.Seminar called “INVESTMENT CAMP” for the new and existing customers.The company has initiated the biggest investor’s guidance seminar during the annual budget period

CUSTOMER SERVICES


Prabhudas Lilladher provides a wide range of personalized wealth-management & investment services to its retail clients. This includes-

Institutional Broking Retail Broking Online Trading(www.majorgainz.com) Loan Against Share Investment banking Corporate advisory Wealth Management PMS Distribution Insurance

MARKET SHAREThe IPO of Prabhudas Lilladher will launch most probably in March 2011.

FINANCE

PL has around 25,000 clients and the average daily turnover was of Rs 400 crores,

CUSTOMER:-

Prabhudas Lilladher is a diversified financial services group of India offering a multitude of investment options.

The diverse bouquet of financial services which PL offers can be broadly clubbed across three key verticals - Retail, Institutional and Wealth spectrums. PL is growing rapidly in the retail broking business. Along with 200+ Institutional clients, more than 100 FII’s and 22,000 retailers association now PL is extending its expertise to retail clients through more than 100 strong associates and branches across the country. PL has ambitious plans to expand this network many fold in near future. With a view to expand, diversify and introduce offerings benchmarked against global best practices.

PL is recognized for its unbiased fundamental and technical research which is always based on the pulse of the market. It has been consistently ranked highly in Asia Money Polls for the past several years, especially under the categories of independent research, corporate contact and road shows/events.PL well-researched investment & trading ideas have also been widely acclaimed by all section of investors.

PL group consisting of, PL advisory service Pvt. Ltd., PL Research and Development Pvt. Ltd and Majorgainz Online Trading Pvt. Ltd., is driven by dynamic executive management team led by person with vision and caliber.


http://www.majorgainz.com/

At PL, we are sensitive to the rapidly growing needs of our clients and value their trust in us. We respond swiftly, surely and decisively to the changing times without compromising on our ethical integrity, ideologies and operating methodologies. With client’s interest always at the core, we firmly believe hat growth in the assets of our clients is the only key to success.

Mainly customer are want proper adviser for his/her investment. Customers are basically business man or service man .the age group in between 25 to 40. In Kolkata customer are want batter facility. Customers want high return. Prabhudas produce different type of product segment to their customers.

The major part of the population nearly 60% in India lies between the age group of 18-35 years. They are young, like to take risk and want fast conversation of money they earn so they will like to invest in the share market with in the short period of time they earn huge return for their investment. It is the better option as compared to other investment. So the major customers are young people who are working and earn handsome money. The customers are businessman and salary employed person.

From a consumer survey I find that Indian customer are more confident and optimistic. After meeting their necessary living expenses, a majority of Indians still put their spare cash into savings. They have also become more daring and are investing in shares and mutual fund. More than 4 in 10 Indians put their spare cash into stocks (43%) market. After saving and investing,38% Indians like to spend their spare cash on holidays and vacation. About 35% like to spend on buy new technology products. 32% like to spend on new cloths and home improvement. 29% on paying of debt, 23% on out of home entertainment, and 22% on a retirement fund. The Chart is shown at next page.

HOW INDIANS UTILISE SPARE CASH AFTER COVERING ESSENTIAL LIVING EXPENSES


Putting into savings

Investing in shares

Holiday/Vacation

New technology product

Home Improvement

New Cloths

Paying debt/credit card/Loans

Out of home entertainment

Retairement fund

I Have no spare cash

Don't Kow

0% 10%20%30%40%50%60%

Consumer%

In the previous year the detail of account added in 2009 are as follows:-

NUMBER OF ACCOUNT ADDED IN 2009- 10220


E-BROKING ACCOUNT OPEN IN 2009- 11230

RETAIL INVESTOR

Investor who buy and sell securities for their personal account, and not for another company or organization. Retail investor buy in much smaller quantities than lager institutional

HIGH NET WORTH INDIVIDUAL (HNI)

High Net Worth Individual is generally quoted in terms of liquid assets over a certain figure. The categorization is relevant because high net worth individuals generally qualify for separately managed investment accounts in stead of regular Mutual funds. The high net worth “club” is $1milion in liquid financial assets. The HNWI are in high demand by private wealth mangers. The more money a person has the more work it takes to maintain and preserve those assets These individuals generally demand personalized service in investment management, estate planning, and tax planning and so on.

QUALIFIED INSTITUTIONAL BUYER (QIB)

Primarily referring to institutions that manage at least $100 million in securities including banks, savings and loans institutions, insurance companies, investment companies, employee benefit plans, or an entity owned entirely by qualified investors. Also included are registered broker-dealers owning and investing, on a discretionary basis, $10 million in securities of non-affiliates.

INSTITUTIONAL INVESTORS

A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. Institutional investors face fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.

Some examples of institutional investors are pension funds and life insurance companies.

COMPITETOR:-

Firms reporting The top 10 firms account for 44% of the total terminals.


Of the top 10 firms, five are located in Mumbai, four in Delhi and one in Rajkot. The top centers with regard to terminals are in the following order: Mumbai, Delhi, Kolkata,

Ahmadabad, Chennai, Bangalore, Hyderabad and Jaipur, which together account for 46%of the total terminals in the country.

The 193 equity broking firms listed in this publication have terminals located in more than100 cities across the country.

Approximately 80% of the 193 broking firms have membership in more than one exchange. Approximately 40% deal both in equities and equity derivatives and 50% are engaged in equities,

equities derivatives and commodities. Less than 10% are engaged in only cash market business. The equity firms listed in this study have a franchise distribution network that consists of 40,971 sub-

brokers spread across the country, while the commodity firms have a franchise network of 1,027 sub-brokers.

A new development in the broking industry is the rapid rise in e-broking with some growth of up to 400% in e-broking.

The 193 equity broking firms listed in this publication employ 63,549 staff and have a network of 11,648 branches/offices spread across the country.

The equity broking industry showed exceptional growth in 2007. The surge in business in terms of new customer accounts and value of share trading was evident across the entire spectrum of the equity broking industry. Major equity broking houses reported impressive gains in opening new customer accounts. The range of services provided by the broking firms transformed from being plain vanilla trading services to numerous financial services in the realm of primary and secondary markets as also fund management and wealth management services.

RELIGARE SECURITIES LTD. :

Religare Securities Ltd. (“RSL”) is the wholly owned subsidiary of REL and a securities firm in IndiaMajor activities and offerings of the company include equity broking both offline and online, depository participant services,portfolio management services and institutional brokerageMember of the NSE, BSE, depository participant with NSDL and CDSL, and SEBI approved portfolio managerBusinesses under Religare Securities Ltd. include:► Retail Equity Broking► Priority Client Equity Services► Online Investment Portal► Institutional Equity Broking (To be shifted to RCML)► Portfolio Management Services► Depository ServicesEmpanelment with 81 institutions including 20 mutual funds, 10 insurance companies, 35 banks and 11 FIIs. Has strong institutionalResearch team covers over 185 companies in 16 sectorsAggressive ramp up of equity trading client accounts with market share increasing to 3.8% in June 2008 from 2.7% in FY07 andonline trading market share increased to 8.7% in June 2008 from 7.2% in October, 2007Received in principal approval from SEBI to act as a sponsor of Asset Management joint venture with AegonReceived P1 Credit Rating from CRISIL for its short term debt issuance program for a sum of Rs. 7,000 million


IDBI PAISA BUILDER:

IDBI paisa builder is a multipurpose online stock trading website from IDBI Capital Market Services Ltd., a leading provider of financial services in India and is a 100% subsidiary of Industrial Development Bank of India (IDBI).

IDBI paisa builder allows investing in equity shares, derivatives (futures & options) mutual funds & IPO's in India Stock Markets. One can buy or sell securities on NSE and BSE Stock exchanges.

5PAISA:

5paisa is an Online Stock Trading Company of India Info line Securities Private Ltd., Owner of popular business portal Indiainfoline.com. Besides high quality investment advice from an experienced research team, the site offers real time stock quotes, market news and multiple tools for technical analysis. Trading is available in BSE and NSE.

KARVY:

Karvy Stock Broking, a major depository participant have decided to challenge the Securities and Exchange Board of India (SEBI) order in the Securities Appellate Tribunal (SAT) after studying the original document today. Company sources have informed that officials will study the original orders before taking up the issue with the higher authorities. So if Karvy do so, PL can go down.

ICICI DIRECT:

ICICI Direct (or ICICI Direct.com) is stock trading company of ICICI Bank. Along with stock trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPO’s, Mutual Funds and Bonds. Trading is available in BSE and NSE.

HDFC SECURITIES:


HDFC Securities (HDFCsec) is Equity Trading Company of HDFC Bank. HDFC Securities provide both online trading and trading on phone. The HDFC Securities trading account has a unique 3-in-1 feature that integrates HDFC Securities trading account with existing HDFC bank savings account and existing D-Mat account. Funds / shares are seamlessly moved from the linked Demat/Bank account to execute the transactions.

HDFC securities provides Cash-n-Carry on both NSE and BSE, Day trading on both NSE and BSE, Trade on Futures & Options on the NSE and Online IPO Investment.

SMC:

SMC Group, a leading Financial services provider in India is a vertically integrated investment solutions company, with a pan-india presence. Over the Years, SMC has expanded its domestic & international operations. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Bangalore, Cochin, Ahmedabad, Jaipur, Hyderabad and 1500+ offices across 375+ cities in India. SMC has plans to grow its network to 2,000 offices across 500+ cities in the next 3 years. The company has expanded Internationally, and has established office in Dubai Gold and Commodities Exchange(DGCX).Its products and Services include Institutional and retail brokerage of equity, commodity, currency,derivatives,online trading , investment banking, depository services, clearing services, IPOs and mutual funds distribution, Portfolio management, wealth advisory,insurance broking,equity and commodity research.

SMC is one of the most active trading organization in India, averaging over 3,50,000 trades per day. Currently, SMC has a highly efficient workforce of over 4,000 employees & one of the largest retail network in India currently serving the financial needs of more than 5,50,000 satisfied investors.

MOTILAL OSWAL SECURITIES LTD.:

Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an almost 2000 member team.

KOTAK SECURITIES LIMITED:


Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. The company was set up in 1994. Kotak Securities is a corporate member of both The Bombay Stock Exchange and The National Stock Exchange of India Limited. Its operations include stock broking and distribution of various financial products - including private and secondary placement of debt and equity and mutual funds. Currently, Kotak Securities is one of the largest broking houses in India with wide geographical reach. The company has four main areas of business: (1) Institutional Equities, (2) Retail (equities and other financial products), (3) Portfolio Management and (4) Depository Services.

Sharekhan and Indiabulls securities Ltd also competitor of Prabhudas Lilladher Pvt. Ltd.

PRODUCT & ANALYSIS

Product Basket

Trading Platforms

MAJORGAINZ :


Product

Equity Mutual Fund

Majorgainz is the gateway of online trading platform. It is a online venture promoted by Prabhudas Lilladher.

Majorgainz is your trusted personal investment guide who will take you through the complex maze of the financial world. Majorgainz is supported by Pl’s year of collective experience of equity markets, Powerful fundamental & Technical research and reliable state of the art technology architecture.

Majorgainz offer you a comprehensive range of features to help you a comprehensive range of features to help you in timing your investment decision & monitor your portfolio growth, thereby enabling you to maximize return on your investment.

www.majorgainz.com

WHY MAJORGAINZ?


BENEFITS OF MAJORGAINZ ONLINE:

• Paper less/ Hassle free independent trading.• Instant order confirmations.• Provides real-time stocks that are ready for trading.• Reduction in cost per transaction.


Research

CnT &

Online

Integrated Trading Platfor

m

Multi Payment Gateway

Charting & E-contacts

CRN to access Back Office

Flexible Brokerage

Available With Various Schemes

Trust worthy Brand Since 1944

• Control over your own bank and D-Mat accounts.• Earn interest on margin money in your trading account.• Dealing with a trustworthy brand.• Trade on NSE, BSE and NSE F&O.• Online IPOs, MFs, Commodities Trading, Currency Derivatives Trading and Tax Filing.• Extra trading exposure on stock holdings.• Trade online and over phone. • Online transfer of funds through internet payment gateway.

Terminal Charge for Online Trading:

If Monthly Brokerage Charge (in RS) Terminal Charge

Is less than 100 750Is less than 1000 500Is less than 2000 250Is more than or = 2000 Free

Terminal For Turbo

Account Opening Process


Form Punching Received Dispatch

REGIONAL OFFICE HEAD OFFICE

COMPARATIVE ANALYSIS OF BROKING FIRMS :

Account Opening Charge:

Broking House Amount ((RS))

SBI 500Motilal Oswal 390IIFL 750

India Bulls 1200

HSBC 950

Prabhudas Lilladher 300Angel Broking 500

Comparative analysis of AOC with respect to PL


Export To DP

Verification

SBI

Motilal Oswal

IIFL

India Bulls

HSBC

Angel Broking

0 200 400 600 800 1000 1200

Account Opening Charge

Series3 PL

Brokerage(Default):

Broking House Intraday Delivery

SBI 0.075% 0.50%Motilal Oswal 0.03% 0.30%IIFL 0.05% 0.25%Indial Bulls 0.05% 0.35%HSBC 0.05% 0.50%Prabhudas Lilladher 0.04% 0.40%Angel Broking 0.03% 0.30%

Comparative Analysis of Brokerage(Default) With Respect to PL

SBI Motilal Oswal

IIFL India Bulls

HSBC Angel Broking

0.00%

0.02%

0.04%

0.06%

0.08%

Intra Day

Other Broking House PL


SBI Motilal Oswal IIFL India Bulls HSBC Angel Broking0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

Delivery

Other Broking House

PL

Brokerage Slabs (other than default) of Three Broking House:

HSBC Invest Direct

Slabs(RS) 2500 12500 25000 50000Intraday 0.04% 0.03% 0.025% 0.02%Delivery 0.35% 0.25% 0.20% 0.15%

Angel Broking

Slabs(RS) 5000 10000 25000 50000 75000 175000

Intraday 0.025% 0.02% 0.015% 0.01% 0.0075% 0.005%Delivery 0.25% 0.20% 0.15% 0.125% 0.10% 0.08%

Prabhudas Lilladher

Slabs(RS) 1000 3000 6000 12000 30000 60000 120000

Intraday 0.035% 0.03% 0.025% 0.02% 0.015% 0.010% 0.005%Delivery 0.35% 0.30% 0.25% 0.20% 0.15% 0.10% 0.10%

Interpretation

From the above data we can find that Angel Broking has given minimum brokerage scheme among the three companies. Because :

Case 1: we can see that at Rs.12,500 HSBC has taken 0.03%/0.25% brokerage and Prabhudas has taken 0.02%/0.20% at Rs.12000 (Lower than HSBC) and Angel Broking has taken same brokerage as Prabhudas but at lower subscription (Rs. 10,000) than Prabhudas.


Case 2 : If we see the slab between 25,000-30,000 HSBC has taken the brokerage 0.025%/0.20% at subscription of Rs. 25,000 and Angel Broking has taken 0.015%/0.15% brokerage at same subscription whare Prabhdas has take same brokerage as Angel Broking but at Rs 30,000 as subscription which is Rs 5,000 more than Angel Broking.

Prabhudas Lilladher has given most diversified scheme than other two firms.

EXPOSER:

Broking House Times

SBI 10Motilal Oswal 4IIFL 10India Bulls 3HSBC 4Prabhudas Lilladher 6Angel Broking 4

Comparative Analysis of Exposure with respect to PL

SBI Motilal Oswal IIFL India Bulls HSBC Angel Broking

0123456789

10


Times

AMC ( Annual Maintenance Charge):

Broking House Amount (Rs.)

SBI 350Motilal Oswal 324IIFL -India Bulls -HSBC -Prabhudas Lilladher 500Angel Broking 400


Comparative Analysis Of AMC with respect to PL

SBI Motilal Oswal IIFL India Bulls HSBC Angel Broking0

50100150200250300350400450500


Findings:

Each and every broking house has its own advantages and limits compare with others. Way of choosing a particular brokerage house by any initial investor can be different from the

existing one.

Trading Strategies:

Best Trading Strategies for Day Trading in share market

1. If you are new to stock market, invest only the amount that you can afford to lose.

2. Select only few liquid stocks. 3. If you are already holding the stock wait for the peak or bottom. 4. Watch the Index Support / Resistance and general sentiments. 5. Never challenge the market and do not be over enthusiastic. 6. In a highly volatile market place stop loss orders after long or

short trades 7. When the market opens trade on a stock based on the previous

day’s movements, partially or fully cover the trade within half an hour.

8. When the market is about to close trade on a stock based on the days movements.

9. In a bull market raising stocks will raise further. Wait for correction and buy.

10. In a bear market falling stocks will fall further. Wait for up move and sell.

11. Stocks rise or fall prior to announcement of results. Have a knowledge on this date which will help in making decisions.

12. Rising or Falling Stocks which shrink in volume indicate that the run Is nearing final state. Watch for change in trend.

13. If you think that you have made enough profit or loss stop trading.


Best Trading Strategies for Short or Long Term investments in stock market

1. Strictly adhere to Stop loss. 2. Before entering in to trade analyse stocks on the basis of Technical indicators - moving average,

Oscillator, Trend line, Trend Channel & Patterns don't Trade against the trend. 3. When people are selling be a buyer. When people are buying be a seller. 4. Avoid purchase of stocks when market value of that stock crash. 5. Stop loss & Exit to be decided before entering in to the trade. 6. Do not have any sentimental attachment with any stock. 7. Periodic Profit booking to be done by selling and re-purchase of stocks. 8. Do not over trade. Trade only up to 50 % of your Trading capital. 9. Do not trade on the basis of rumours. 10. It is better to follow Monthly stop loss and stop loss or trade. 11. Do not keep all your stock holdings in same sector, distribute your investment to various sectors

ie. Diversification of investment to be done. 12. Do not invest more than 10% value of your Trading capital in any

single stock. 13. Buy the stocks whenever there is some bad news and sell the

stocks whenever there is good news.

Technical Analysis:

It is a process of identifying trend reversal at an earlier stage to formulate the buying and selling strategy. With the help of several indicators we can analyze the relationship between price-volume and supply-demand for the overall market and the individual stock. It based on the following assumption:

The market value of the scrip is determined by the interaction of supply and demand

The price of the security quoted represents the hopes, fears and inside information receive by the market players. Inside information regarding the issuing of bonus shares, dividend payment and right issues may support the prices. The loss of earnings and information regarding the forthcoming labour problem may result in fall in price. These factors may cause a shift in demand and supply, changing the direction of trends.

The market always moves in trend. The trend may be either increasing or decreasing. The trend continues foe sometime and then reverses.


The market technicians assumes that the past prices predict the future.

According to DOW Theory in primary trend (Movement for last one or two years) each peak is higher than the previous peak and the bottoms are also higher than the previous bottoms.

Technical Tools:

Different technical tools are used for this purpose like Bars and line charts, Moving Averages Oscillators etc. Here it has shown how the stock of any company is analyzed with the use of chart tools.

Support and Resistance Level:

Before analyzing the chart tools we have to know what support and resistence level is. A support level exists at a price where considerable demand for that stock is expected to prevent further fall in the price level. In the resistance level the supply of scrip would be higher than the demand and further rise in price is prevented.

Example: If a scrip price of any company is Rs 150 for some weeks, then it may rise and reach Rs 210. At this point the price halts and then falls back. The scrip keeps on falling back to around its original price Rs 150 and halts. Then it moves upward. In this case Rs 150 becomes the support level. At this point the scrip is cheap and investors buy it and demand makes the price move upward. Whereas Rs 210 becomes the resistance level, the price is high and there would be selling pressure resulting in the decline of the price.

In the following technical chart of Reliance Industries we can formulate buying and selling strategy, identifying support and resistance level.

Technical Chart of price movement of stock


In the above chart we can see the price movement of stock of reliance Industry (RIL) from 16th December 2009 to 16th June 2010. Here we can see that the company paid 70% Dividend on 10th May 2010 and during this 6 months the high price of the stock was Rs 1130 (approx) during the month of April and low price was Rs960 (Approx).


From the above data we can see that on June 16, 2010 the price of RIL closed at -8.10(BSE) & -8.15(NSE) point than previous day’s close price (i.e. 1065.45/1066.10 in BSE & NSE respectively). At that day its opening price was Rs 1070, high price on that particular day was 1078.70 (In BSE) and 1072.65 (In NSE) and low price was 1055.05 (In BSE) and 1055.10 (In NSE).

Its 52 week High/Low is 1184.70/840.55 ( In BSE) & 1079.85/858.55 (in NSE)

Analysis:

In the technical chart we can see that the previous Support level is between Rs 1040-1045 and the Resistance Level is Rs 1120-1125 and the above data shows that the market close at lower price than previous day’s closing price show the market is in downtrend and it may be fall up to Rs 1045-1050 and then it may take the uptrend so this is the purchasing time of RIL stock and the best purchase price at this time (16th June 2010) is Rs 1050.

Other Tools For Determining Value of Stock

Earning Per Share (EPS)

EPS = Net Earnings / Outstanding Shares That means, it will give you an idea that for every share that You hold, how much earnings you are going to receive.

It means….how much company is paying from its earnings for every share.For Example : Net earnings = Rs 1,00,000 Outstanding shares = Rs. 10000

EPS = Rs. 10.which means that for every one share u held in the company, you get Rs. 10/- as profit.


P/E Ratio

The P/E looks at the relationship between the stock price and the company’s earnings. The P/E is the most popular stock analysis ratio, although it is not the only one you should consider. P/E = MARKET PRICE OF SHARE / EPS

It is nothing but how much the share holders are ready to pay per share for every one rupee of earnings from the company.

A high P/E indicates that investors are ready to pay high amount for the stock, which is adversable from market point of view.

Better P/E ratio of 15 can be taken as benchmark for the assessing the company.

PEG (Price to Future Growth Ratio)

A ratio that will help you look at future earnings growth is called the PEG ratio. PEG = (P/E) / (projected growth in earnings) Lower the P/E ratio, higher you are safe.

These 3 ratios will give a basic idea on the performance of a share or performance of the market. But, all investment flows, will attract some additional costs …visible and invisible Inflation, brokerage and taxation are the 3 things which eat the money slowly without knowing to

the customer.

Share Price Factors:


Calculation Of Sensex :


Price

The formula for calculating the SENSEX = (Sum of free flow market cap of 30 benchmark stocks)*Index Factor

Index Factor = PREVIOUS DAY SENSEX PREVIOUS DAY FFMC

FFMC = MARKET CAPITALISATION*FF FACTOR.

Assume SENSEX has only 2 stocks namely SBI and RELIANCE. Total shares in SBI are 500 out of which 200 are held by Government and only 300 are available for public trading. RELIANCE has 1000 shares out of which 500 are held by promoters and 500 are available for trading. Assume price of SBI Stock is Rs.100 and Reliance is Rs.200

Then "free-Floating Market Cap" of these 2 companies =

(300*100+500*200) = 30000+100000 = Rs. 130000

Assume Market Cap during the year 1978-79 was Rs.25000

Then SENSEX = 130000*100/25000 = 520.

The methodology in the example is exactly followed to calculate the SENSEX, only difference being the inclusion of 30 stocks.

Free-float market capitalization takes into consideration only those shares issued by the company that are readily available for trading in the market. It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a free-float index is reduced to the extent of its readily available shares in the market.

Research Report of Prabhudas Lilladher Pvt. Ltd. On 14 th June:


The above report states the status, weekly trend and reversal point of buy and sell of equity of different company. For example If we want to see the movement of share of Infosys then from the


chart it is suggest that this stock will be in down trend for 1 day after 11th June 2010 and if the price touch the amount Rs 2694.10 then PL suggest to buy it. It also says that in down-trend if the stock price crosses the price of Rs 2595 then it can touch of Rs 2559 and in up-trend if the stock price cross the price limit of Rs 2688 it can touch of Rs 2746.

Revenue Generated from Equity trading in different Broking Firms

Name Of the Firm Revenue (%)

Brics Securities 85Ashika Stock Broking 85Motilal Oswal 80Arihant Capital Market 79Prabhudas Lilladher 75Dalal & Broacha 70AFN Langrana Shares 70KR Choksey 70ZEN Securities 65India Bulls 60

MUTUAL FUND:

What is Mutual Fund?

Mutual Fund means a fund established in the form of a Trust to raise money through the sale of units to the public or a section of the public under one or more schemes investing in securities, including money market instruments. Mutual funds issue units to the investors, which represent an equitable right in the assets of the mutual fund.

What are different types of mutual fund schemes?

Mutual funds can be classified by:Structure

Open Ended Schemes Close Ended Schemes Interval Schemes

Objective

Growth Schemes Income Schemes Balanced Schemes Money market /Liquid Schemes Tax saving Schemes


Index Schemes Sectoral Scheme

What is the difference between Open Ended and Close Ended Schemes?

Open Ended Schemes Close Ended Schemes

No Fixed Maturity Fixed Maturity

Variable Corpus Fixed Corpus

Not Listed Listed

Buy From & Sell to the Fund Buy & Sell in the Stock Exchange

Entry/Exit at NAV related Prices Entry/Exit at market prices

Excellent Liquidity Poor Liquidity

Some close-ended schemes give you an additional option of selling your units directly to the mutual fund through periodic repurchase at NAV related prices. SEBI regulations ensure that at least one of the two exit routes is provided to the investor.

What are growth schemes?

Growth schemes are also known as equity schemes.The aim of growth scheme is to provide capital appreciation over the medium to long term. These schemes normally invest a majority of their funds (80-100%) in equities and equity related instruments and invest (0-20%) in Debt securities and money market instruments.

These schemes are not for investors seeking regular income or needing their money back in the short term. These schemes are ideal for

Investors in their prime earning years. Investors seeking growth over the long term. Investors do not require regular & steady income

What are income schemes?

Income schemes are also known as Debt Schemes. The aim of income schemes is to provide regular and steady income to the investors. These schemes normally invest a majority of their funds (80-100%) in fixed income securities such as Government Securities, Bonds, and Corporate Debentures and invest (0-20%) in money market instruments.

The capital appreciation in such schemes may be limited. These schemes generally provide Tax-free return of 8-11% per annum. These scheme are ideal for

Retired people and others with a need for capital stability and regular income. Investors who need some income to supplement their earnings.

What are balanced schemes?

The aim of balanced schemes is to provide growth by way of capital appreciation and income by periodically distributing a part of the income and capital gains they earn.

They invest 60% (approx.) in equity related instruments and 40% (approx.) in Debt securities and money market instruments.


In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. The balanced schemes are ideal for Investor looking for a combination of income and moderate growth.

What are Money Market / Liquid Schemes?

The aim of liquid schemes is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest (50-90%) in money market instruments such as Treasury Bills, certificate of deposits, commercial paper and interbank call money and invest the rest (10-50%) in Debt securities such as government securities, corporate debentures and safe short-term bonds.

Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These schemes are ideal for Corporate and High networth individual investors as a means to park their surplus funds for short periods or awaiting a more favourable investment alternative.

What are tax savings schemes?

These schemes offers tax rebates to the investor under tax laws as prescribed from time to time. Under section 88 of the Income Tax act, contributions made to any Equity Linked Savings Schemes (ELSS) are eligible for rebate @ 20% for maximum investment of Rs. 10000/- per investor per financial year.

These schemes are ideal for investor seeking tax rebates.

What are index schemes?

Index schemes are an attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE Nifty. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to that in the index. And hence, the returns from such schemes would be more or less equivalent to that of the index.

These schemes are ideal for those who are satisfied with a return approximately equal to that of the index (Overall Market).

What are the different investment options under various schemes of a mutual fund?

Different investment options are as under

Growth Option:

No dividend to unit holders. Income will remain reinvested and reflected in Net Asset Value (NAV) of the scheme. Benefit of long-term capital gains for unit holders where units are redeemed after one year from the date of

purchase.


Dividend Option:

Dividend payout of the net surplus as approved by the Trustees. Balance of net surplus to be ploughed back and reflected in the Net Asset Value (NAV). Quantum and frequency of dividend distribution may vary between various plans. Investor can choose between Monthly, Quarterly, Half yearly and Annual dividend plan. Dividend income is Tax free in the hands of investor.

Dividend Re-investment option:

Dividend can be re-invested in additional units. Dividend automatically re-invested in the respective plan at the first ex-dividend NAV. Dividend re-invested shall be Tax exempted in the hands of unit holders. No entry load will be charged if any.

Systematic Investment Plan (SIP)

SIP allows investors to invest a fixed amount on monthly/quarterly basis at applicable NAV based price. Investor can select SIP by ticking the application form or written request. Post dated advance cheques to be provided by the investors. Allotment of units on the date of investment /date of realization for local/outstation cheques. Fresh account statement to unit holders within 3 days of the allotment. Investor can discontinue SIP after prior notice to the mutual fund. Advantages of SIP

1. Investor can build wealth over the long term. As can be seen from the example above, Investors automatically gain without having to monitor the market or attempt to predict the market for purchasing the units. Rupee cost averaging, cannot guarantee a profit or protect against a loss in a declining market.

2. Make the volatility of the market work in your favour. In SIP, since the amount invested per month is a constant, the investor ends up buying more units when the price is low and fewer units when the price is high. Therefore, the average unit cost will always be less than the average sale price per unit, irrespective of the market rising, falling or fluctuating. This concept is called Rupee Cost Averaging.

Systematic Withdrawal Plan

Facility to unit holders to withdraw specified sum each month/quarter or withdrawal of the capital appreciation, without affecting principal amount.

Minimum interval between two withdrawals will be one month. Unit holders can select plan by ticking application form or by written request. Withdrawals converted into units at applicable NAV based prices to be subtracted from the balance units

to the credit of the unit holders. SWP may be terminated on a written notice by unit holders.

Mutual fund can also close the account if the balance in unit holders’ account falls below the minimum account


E.g. Interpretation using hypothetical figures indicating how Systematic Investment Plan (SIP) can work for investors.

Suppose an investor would like to invest Rs. 1000/- under SIP on a Quarterly basis.

QuarterAmountInvested

(RS.)PurchasePrice

(RS.)No. Of

UnitsPurchaseInitial

Investment1000 10 100

1 1000 8.20 121.952 1000 7.40 135.143 1000 6.10 163.934 1000 5.40 185.195 1000 6.00 166.676 1000 8.20 121.957 1000 9.25 108.118 1000 10.00 100.009 1000 11.25 88.8910 1000 13.40 74.6311 1000 14.40 69.44

TOTAL 12,000 --- 1435.90

Average unit cost = 12000/1435.90 = Rs. 8.36Average unit price = 109.6/12 = Rs. 9.13Unit price beginning of next quarter is Rs. 14.90

Market value of investment = 1435.90 X 14.90 = Rs. 21,395/-The investor redeems the unit and gets back Rs. 21,395/-

Why should you invest in a Mutual Fund? What are advantages of Mutual Funds?

The advantages of investing in a Mutual Fund are:

1. Professional Management: You avail of the services of experienced and skilled professionals who are backed by a dedicated investment research team, which analyses the performance and prospects of companies, and selects suitable investments to achieve the objectives of the scheme.

2. Diversification: Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors in case of equity funds and can purchase large number of debt instruments of varying maturity and varying yields in case of debt funds. This diversification reduces the risk.

3. Liquidity: In open-ended schemes, you can get your money back promptly at Net Asset Value (NAV) related prices from the mutual fund. There is absolutely no Lock-in period except Equity Linked Saving Scheme (ELSS) commonly known as Tax Saving Schemes. In close-ended schemes, you can sell your units on a Stock Exchange at the prevailing market price or avail of the facility of direct repurchase at NAV related prices which some close-ended and interval schemes offer you periodically.


4. Transparency: You get regular information on the value of your investment in addition to disclosure on the specific investment made by your scheme, the proportion invested in each class of assets and the fund manager’s investment strategy and outlook.

5. Return Potential: Over a medium to long-term, mutual funds have the potential to provide a higher return as they invest in a diversified basket of selected securities.

6. Flexibility: The mutual fund offer systematic investment plan (SIP), systematic withdrawal plan (SWP), and dividend reinvestment and dividend payout plan. Hence you can systematically invest or systematically withdraw funds according to your needs and convenience.

7. Tax Efficiency: Dividends declared by mutual funds are fully exempted from income tax in the hands of the investors. Investments in mutual funds for over 12 months period qualify for long term capital gains and also get the benefit of indexation.

8. Well Regulated: All mutual funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of mutual funds are regularly monitored by SEBI.

What are the Tax benefits for investing in Mutual Funds?

1. Sec 10 (33):Under the provisions of section 10(33) of the income tax act, 1961, dividend distributed by mutual funds are tax-free in the hands of the investors.

2. Capital Gains Tax – Long Term:i. Sec 2 (42A):

Under section 2(42A) of the Income Tax Act, a unit of a mutual fund is treated as long term capital asset if the same is held for more than 12 months.

ii.a. Sec112:

under section 112 of the act, capital gains chargeable on transfer of long term capital assets are subject to following rates of tax.

Resident individuals & HUF 20% plus surchargePartnership firms and Indian companies

20% plus surcharge

Foreign companies20% (No surcharge)

b. Capital gains will be computed after taking into account cost of acquisition as adjusted by cost inflation index notified by the central government.

c. Under the provisions of Sec 112(1) of Income Tax Act, unit holders can opt for being taxed at 10% (plus surcharge) without the cost inflation index benefit or 20% (plus surcharge) with the cost inflation index benefit whichever is beneficial.

3. Capital Gains Tax – Short Term:Sec 2 (42B):Under the provisions of Sec 2 (42B) of the Income Tax Act, a unit of a mutual fund is treated as short term capital assets if the same is held for less than 12 months.

Short term capital gains /losses are directly added/subtracted to /from total income and taxed as per the relevant slabs. The maximum tax liability is as follows.

Resident individuals & HUF30% plus surcharge


Partnership firms and Indian companies

30% plus surcharge

4. Tax deductions at source (TDS):As per section 194 K and 196 A of the Income Tax Act, where any income is credited or paid on or after June 1, 1999 by a mutual fund, tax is required to be deducted at source. (No TDS on dividend).No tax is required to be deducted at source from capital gains arising at time of repurchase or redemption of the units.

Section 88:Under section 88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) of a mutual fund are eligible for rebate @ 20% for a maximum investment of Rs.10000/- per investor per financial year.

Investment under ELSS schemes carries Lock-in period of 3 years from date of investment.

What are the different risks involved with investing in mutual funds?

1. Market Risk:There are times when prices or yields of all securities in a particular market rise or fall due to certain outside influencing factors. This could affect highly profitable company’s and a fledging corporation.

2. Inflation Risk:Inflation is nothing but the loss of purchasing power. When inflation grows faster than earnings on an investment, one may be able to buy less. One is exposed to inflation risks when prices rise faster than one’s income.

3. Credit Risk:The ability of a company to repay investor’s money or to make interest payments determines the credit risk that investors face.

4. Interest Rate Risk:Interest rates are not predictable and can adversely affect the prices of stocks and bonds. When interest rates rise, bond prices fall and vice-versa. A diversified portfolio can help in offsetting these changes.

5. Exchange Risk:Many companies generate revenues in foreign currencies and may have investments or expenses also denominated in foreign currencies. Hence, changes in exchange rate have a positive or negative impact on companies, which in turn would have an effect on the investment of the fund.

6. Investment Risk:In sectoral fund schemes, investments will be predominantly in equities of select companies in the particular sectors. The NAV of the schemes are linked to the equity performance of such companies and may be more volatile than a more diversified portfolio of equities.

7. Changes in Government Policy:Changes in Government Policy in regard to Tax benefits may impact the business prospects of the companies leading to an impact on the investment made by the fund.


The distribution and advisory division of PL fund advisor Pvt. Ltd. offers you the opportunity to diversify your investment portfolio. By offering a choice of investment schemes from all major mutual fund providers we have taken our 100% retail focused philosophy a step further.

Prabhudas Lilladher fund advisor Pvt. Ltd. offers options catering to investors with varying risk-return profiles. We also help investors to choose the best mutual fund, based on their investment needs.

Prabhudas Lilladher – Advantage

Wide presence across India Facility to transact Online as well as Offline Schemes of all major fund houses available Latest NFO's, MF News & Fund Manager views Information & tools to help select the right scheme Dedicated customer helpdesk 24 X 7 web enabled Backoffice

Private Client Group

PL offers personalized advisory services to affluent HNI investors and actively assists them in managing their portfolio. PCG can seek guidance on specific stocks in their portfolio and can get pro active advice for timely exit and fresh investments. Here we also design customized products and services for our clients based on their risk profile, returns need and time horizon. Our experienced research team, in-depth analysis and customized value added products and services give us an immense advantage in assisting you to generate wealth on a longer and consistent basis.

Minimum Portfolio size of Rs.1Cr. for residents and Rs.1.5Cr for NRIs is the eligibility for PCG.

Portfolios are customized after a due discussion with clients and our research team. Deployment of funds can be among various investing avenues available with us including PMS,

mutual fund, advisory. Meetings and one to one discussion with our fund managers, chief investment officer and

Research director.


Special Technical and Derivative strategies.

CONTRIBUTION OF MUTUAL FUND IN THE INVESTMENT MARKET

A mutual fund brings together a group of people and invests their money in stocks, bonds, and other securities.

The advantages of mutuals are professional management, diversification, economies of scale,

simplicity and liquidity. consequences, and the inability of management to guarantee a superior return. There are many, many types of mutual funds. You can classify funds based on asset class,

investing strategy, region, etc. Mutual funds have lots of costs. Costs can be broken down into ongoing fees (represented by the expense ratio) and transaction

fees (loads). The biggest problems with mutual funds are their costs and fees. Mutual funds are easy to buy and sell. You can either buy them directly from the fund company

or through a third party.


SWOT ANALYSIS:

STRENGTH WEAKNESS

• The main strength is the brand name of company. Prabhudas Lilladher Pvt. Ltd. is quite known in the market because It is a Mumbai based company.

• It is a research based company.• Trading through the both the exchanges

NSE & BSE.• PL has all kind financial services for

investment so any customer will get every kind of services at one company.

• Low brokerage rate.

• Customer service is not up to the mark, especially for off-line trading.

• Comparatively weak in marketing policy with other companies.

OPPORTUNITY THREATS


• Already have a good market access

through different products.

• After launched its IPO on March 2011 it

can increased its Brand Value.

• After making deal with coal India at the time of launching its IPO, PL can increase huge no. of clients in all over India

• Main threat is the competitors. A lot of new competitors are there in the market in this sector. This is creating a lot of competition for larger players and it is creating a little confusion in the minds of the customer about the service provided by the broker. Also many banking firms entering in to the market with huge investment. Competitor like sharekhan, indiabulls, reliance money, motilal oswal, angel broking etc. are posting a lot of threats to the company.

RESEARCH METHODOLOGY

Research is a scientific and systematic search for relevant information on specific topic and the topic selected by me is “ORGANISATIONAL STUDY AND TECHNICAL ANALYSIS OF SECURITIES. AND INVESTORS PERCEPTION ON BROKING FIRMS WITH RESPECT TO PRABHUDAS LILLADHER”.

Research problem:

INVESTORS PERCEPTION ON BROKING FIRMS.

Research objective:

• To know the most preferable broking house on the basis of investors view point.• To know the product scheme of different broking house.• To know about the level of risk taken by the investors for investing in securities.• To find out where the people are mainly invest i.e. in insurance, mutual fund or equity.

Field work:The salient feature of methodology of the research which I conducted throughout my project was:1) Developing a plan.2) Collecting the information.3) Analysis.4) Place- Kolkata, Asansol5) Area:- Rabindrasadan, Belgharia, Barakar


Developing the plan

Data Source: –

Primary Data : Collected through structured questionnaire.

Secondary Data : Earlier records from Journals, Newspaper and other sources. Research Approach – conducting surveys was best suited to collect information for thedescriptive project in hand.

Research Instruments – In the project the most common and most important research is to collect Primary data. Questionnaires were used for this purpose, to help methodically correlate the information.

We also used table, pie chart, bar chart, column chart, and papers.The questionnaire is made in both closed and open ended questions.

Sampling plan – Random sampling methods was used to collect the information.

Collecting the information

The exercise of collecting the primary data was a tedious task done though interviews of the respondents based on the standard set of questionnaire. The interviews were conducted informally but the observations were carefully charted. The choice of an informal mode was intentionally made so as to keep the respondents comfortable. This made the process of interaction easy and thus helped in gaining an insight to the perception of the respondents.

AnalysisAnalysis is carries out with the help of secondary data and primary data to arrive at the correct picture of the securities market. Analysis of a whole and comparative analysis with products is highlighted


ANNUAL INVESTMENT SURVEY, 2010

Name………………………………………………………………..Age…………………

Address…………………………………………………………………………………….

Contact No(s)………………………………………..Occupation………………………..

We would like to know the following, please co-operate with us:1. Are you aware about Prabhudas Lilladher :

Yes

No

2. Have you visited our website -

www.majorgainz.com

yes

no

3. Your annual earnings:

Less than Rs. 1 lac

Rs. 1 lac to Rs.2.5 lac

Rs. 2.5 lac to Rs. 4 lac



Rs. 4 lac to Rs.7 lac

Rs. 7 lac to Rs.10 lac

More than Rs.10 lac

4. you are interested in investment:

Yes

No

5. Are you already investing somewhere:

Yes

No

6.Which investment product you are investing in : Insurance

Mutual Fund

Equity Broking

Commodity Broking

Currency Trading (Forex)

Others(Please specify)

7. What term you choose for investment:

Long term

Mid term

Short term

8. What risk/ return factor you will be your Investment:

High risk/High return

Medium risk/Medium return

Low risk/High return

Low risk/Low return

9. Have you ever attended any Investment Strategy Programme?

Yes

No

10. Would you like to be called from us to attend our investment strategy Programme?


Yes

No

INVESTMENT IN EQUITY

11. Are you trading though sub-broker or main-broker?

Ans;-

12. Have you any D-mat a/c ?

Yes

No

13. When you opened D-mat account?

Ans;-

13.a:-Are you a Prabhudas Lilladher Customer?

Yes

No

13.b:-.On which company you have the a/c?

Ans;-

13. c:-Would you like to open an a/c at PL?

Yes

No

14.-On which way/basis you do trade?

Intraday

Delivery


15.-You are a

On-line trader

Off-line trader

16.-Are you satisfied with the services of the company?

Yes

No

DATA ANALYSIS

1. Peoples are aware about Prabhudas Lilladher :

Attributes No. of Persons PercentageTotal 200 100

Yes 90 45%

No 110 55%

yes45%

no55%

Awarness


Interpretation

From the above statistics it is observed that in the survey at Kolkata 45% peoples are aware about PL & rest of people are have not aware.

2.People are mainly investing in

Attributes No. of Persons Percentage

Insurance 75 37.5%

Mutual fund 10 5%

Equity broking 45 22.5%

Commodity broking 3 1.5%

Currency trading 0 0%

Both (insurance + mutual fund) 10 5%

Both (insurance + equity broking) 55 27.5%

Both (insurance+ equity +commodity) 2 1%

total 200 100%


mutual fund

commodity broking

Both (insurance + mutual fund)

Both (insurance+ equity +commodity)

5% 22%

2%

0%5% 27%

1%38%

mainly invest in

Interpretation

According to survey, 38% peoples are investing in insurance. They mainly invest in insurance market. 5% are investing in Mutual fund. 22% peoples are investing in Equity broking. 5% people are investing in both sector insurance and mutual fund. 27.5% investors are investing in both insurance and equity broking. And remaining 1% are investing in insurance, equity broking and commodity broking.

3.People choose for investment:


Long term 76 38%

Mid term 70 35%

Short term 54 27.5%

total 200 100%


38%

35%

27%

people choose for investmentlong term mid term short term

Interpretation

The above table shows that out of 200 peoples, 38% peoples are investing for long term.

35% investors are investing for midterm, and rest of 27% peoples are choose for short term.

4. What risk/ return factor peoples are looking for his investment:


High risk/ high return 26 13%

Medium risk/ medium return 34 17%

Low risk/ high return 124 62%

Low risk/ low return 16 8%

Total 200 100%


13%

17%

62%

8%

risk and return for investmentHigh risk/ high return Medium risk/ medium returnLow risk/ high return Low risk/ low return

Interpretation

According to the survey peoples are looking for investment, 13% persons want high risk & high return.

17% investors are wanted to invest for medium risk & medium return. Among the peoples 62% want low

risk & high return. And remaining 8% want low risk &low return.

5. People have the D-Mat a/c

Name Of Broking House Customer Percentage (%)Angel Broking 55 27.5Religare 40 20Motilal Oswal 15 7.5ICICI Direct 8 4Prabhudas Lilladher 5 2.5Not to say 77 38.5Total 200 100


Angel Broking Religare

Motilal Oswal ICICI Direct

Prabhudas Lilladher Not to Say

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%

People Have D-Mat A/C

Interpretation:

The above table shows that out of 200 people 27.5% people have a D-Mat A/C at Angel Broking ,20% at Religare ,7.5% at Motilal Oswal, 4% at ICICI Direct, 2.5% at Prabhudas Lilladher and 38.5% people don’t want to say anything. So from the above survey we can see that maximum people in Kolkata have a D-Mat in Angel Broking and Minimum at Prabhudas Lilladher because of less awareness about that company.

FINDINGS:


Though PL is a renowned name in the investment market, but still maximum people are

not aware about PL mainly at Kolkata because PL open its branch at Kolkata on 2006.

Again as far as investments in equity are concerned investors prefers to invest in mid-

term and long-term because it involves less risk along with high return. So I can

conclude that investors don’t want to take too much risk.

Most of the investor prefers equity and insurance as their investment area.

PL have professional expert who can guide investors in choosing the right scheme for

investment. But after survey I have found that investors don’t seek any guidance from

expert.

SUGGESTIONS:


After market survey I have found that, investors generally do not seek help from professional expert of

PL. So PL should work on this. They should increases their Interpretation with investors more in order to

make aware of the need of advice of professional expertise. It should organize more investors strategy

programmer so that investors can understand the need of this programmed. So PL should try to promote

their product through advertisement, personal Interpretation, and etc. They should interact with investors

regularly to tell them different types of advantages of investing through PL. They should always try to

convince the investors about importance of PL in investment market.

Prabhudas have diversified product scheme with different brokerage rate. So the advisors should ensure

the investor that each & every scheme is profitable for them according to their investment.

In Kolkata PL should do more promotional campaign to increase its brand equity by giving more

attractive scheme than other broking firms like Religare, Angel Broking etc.

CONCLUSIONS

From above analysis and survey we can conclude as follows:


Awareness of equity is increasing as more number of private players are entering in security

market

Equity and Mutual Fund are providing same type of investment funds like, insurance, debt funds,

infrastructure fund, balanced fund etc.

In terms of expenses equity are having low expenses as compared to other investment area.

People are turning to words the share as a good investment option, but as insurance is in its

starting phase so customers prefer only big brands.

Equity and Mutual Fund is having good growth but many customers from rural areas don’t have

any knowledge about share trading.

Deriving the right feedback from customers and bringing out innovative products which cater to

customer demands will go a long way in tapping the market potential of the securities market.

BIBLIOGRAPHY


www.plindia.com

www.majorgainz.com

www.google.com

www.moneycontrol.com

www.5paisa.com

www.bse-india.com

www.nse-india.com

www.mutualfundsindia.com

www.technicalanalysisofstock.com

Economic Time


http://www.technicalanalysisofstock.com/

http://www.mutualfundsindia.com/

http://www.nse-india.com/

http://www.bse-india.com/

http://www.5paisa.com/

http://www.moneycontrol.com/

http://www.google.com/


http://www.plindia.com/

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