Share Khan
Content
A SUMMER PROJECT REPORT ON
With reference to SHAREKHAN PVT. LTD.
I n partial fulfillment for the degree of
Masters in Management Studies
(Batch: 2008-20 10)
Submitted to:DR. SANCHITA C. BANERJI
KARVY). others.
F.SALES EXE(5) VAR SALES EXE(5)
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A PROJECT REPORT ON
A Comparative Study of Major Players of Stock Brokers in Mumbai Region
I N PARTIAL FULFILLMENT OF MASTERS OF MANAGEMENT STUDIES AS PRESCRIBED BY
SUBMITTED BY NIKUNJ SHAH
Table of CONTENTS
Limitations Suggestions Conclusion Bibliography Appendix
DECLARATION
I Mr. Nikunj R. Shah of Atharva Institute of Management Studies pursuing Masters in Management Studies (Semester I I I ) hereby declare that I have completed this project on “A Comparative Study of Major Players of Stock Brokers in Mumbai Region” for the Academic period 2008-2010. This information submitted is true and original to the best of my knowledge. This study report has not been submitted to any other institution or university for the award or any other degree. This report is based on my personal opinion hence cannot be referred to legal purpose.
(Nikunj R. Shah) Date: -
DR. SANCHITA C. BANERJI
ACKNOWLEDGEMENT
Preservation, inspiration and motivation have always played a key role in the success of any venture. In the present world of competition and success, training is
like a bridge between theoretical and practical working; willingly I prepared this particular Project. First of all I would like to thank the supreme power, the almighty god, who is the one who has always guided me to work on the right path of my life. My special thanks to M r . Yatin Padia (Manager Corporate Communication), and my sincere thanks to M r . Rajiv (Marketing Head). Also my Special thanks to my Training head M r . Swapnil Naik, and other staff members of SHAREKHAN.
My special thanks to Mr. Sunil Rane (Executive President AET) and Prof. M r . N. S. Rajan (Dean AIMS) for constantly guiding, motivating and encouraging me. I also thank my project Guide and Marketing Faculty Dr. Sanchita C. Banerji and for giving me their valuable inputs for the project. I am also thankful to all the teaching and non teaching staff for their continuous support and guidance.
Last but definitely not the least my gratitude goes to my Mother and my Father for believing i n me.
Executive Summary
There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose.
Research was carried out to find which brokerage house people prefer and to figure out what people prefer while investing in stock market.
This study suggests that people are reluctant while investing in stock and commodity market due to lack of knowledge.
Main purpose of investment is returns and liquidity, commodity market is less preferred by investors due to lack of awareness. The major findings of this study are that people are interested to invest in stock market but they lack knowledge.
Through this report we were also able to understand, what are our Company’s (Sharekhan Ltd.) positive and strong points, on the basis of which we come to know what can be the basis of pitching to a potential client.
We also gave suggestions to the company, what improvement can be done to our product.
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Stock Exchange, in Mumbai, is Asia's oldest and India's largest stock exchange.
The Role Of Stock Exchanges
Stock exchanges have multiple roles in the economy, this may include the following:
Raising capital for businesses
The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public.
Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in stronger economic growth and higher productivity levels and firms.
Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.
Profit sharing
Both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses.
Corporate Governance
By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). However, some welldocumented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. The dotcom bubble in the early 2000s, and the subprime mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), MCI WorldCom (2002), Parmalat (2003), American International Group (2008), Lehman Brothers (2008), and Satyam Computer Services (2009) were among the most widely scrutinized by the media.
Creating investment opportunities for small investors
As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors.
Government capital-raising for development projects
Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates
by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature.
Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.
Capital Market is divided into two categories. 1.Primary Market. 2.Secondary Market.
Primary Market.
Securities generally have two stages in their lifespan. The first stage is when the company initially issues the security directly from its treasury at a predetermined offering price. This is a primary market offering. It is referred to as the Initial Public Offering (IPO). I n primary market, securities are offered to public for subscription for the purpose of raising capital or fund.
Secondary Market.
Secondary Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors Secondary market could be either auction or dealer market.
Introduction to the company SHAREKHAN
Sharekhan Ltd is India’s leading online retail broking house with its presence through 1288 ‘Share Shops’ in 325 cities and serving more than 8, 00,000 customers
th
across the nation. Launched on Feb 8 2000 as an online trading portal, Sharekhan offers its clients trade execution facilities for cash as well as derivatives, on BSE and NSE, depository services, mutual funds, initial public offerings (IPOs), and commodities trading facilities on MCX and NCDEX. Besides high quality investment advice from an experienced research team Sharekhan provides market related news, stock quotes fundamental and statistical information across equity, mutual funds, IPOs and much more.
Sharekhan has set category leadership through pioneering initiatives like ‘Speed Trade’, a net based executable application that emulates a broker terminal besides providing information relevant to Day traders. Their second initiative, ‘First Step’ is targeted at empowering first time investors. Sharekhan has also set their global footprints through the ‘India First’ initiative, a series of seminars conducted by Sharekhan to help NRIs participate and benefit from the huge investment opportunities in India. These exchange do not work of its own, rather, these are run by some persons and with the help of some persons and institution. Al l these are down as functionaries on stock exchange. These are 1.Stockbrokers 2.Sub-broker 3.Market makers 4.Portfolio consultants etc.
1.)Stockbrokers
A Stock broker is a member of a recognized stock exchange, who is permitted to do trades on the screen-based trading system of different stock exchanges. He is enrolled as a member with the concerned exchange and is registered with SEBI. These are the persons who buy, sell or deal in securities. A certificate of registration from SEBI is mandatory to act as a broker. SEBI can impose certain conditions
while granting the certificate of registrations. It is obligatory for the person to abide by the rules, regulations and the buy-law. Stock brokers are commission broker, floor broker, arbitrageur etc.
Details of registered brokers
Total no. of registered brokers as on 31.03.2009 Total no. of sub-brokers as on 31.03.2009
9000 Approx
2,40,000 Approx
2.)Sub-broker
Sub broker is a person who is registered with SEBI as such and is affiliated to a member of a recognized stock exchange. A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists the investors in buying, selling or dealing in securities through stockbroker. The broker and sub-broker should enter into an agreement in which obligations of both should be specified. Sub-broker must be registered SEBI for a dealing in securities. For getting registered with SEBI, he must fulfill certain rules and regulation.
3.) Market Makers
Market maker is a designated specialist in the specified securities. They make both bid and offer at the same time. A market maker has to abide by bye-laws, rules regulations of the concerned stock exchange. He is exempt from the margin requirements. As per the listing requirements, a company where the paid-up capital is Rs. 3 crore but not more than Rs. 5 crore and having a commercial operation for
less than 2 years should appoint a market maker at the time of issue of securities.
4.) Portfolio consultants
A combination of securities such as stocks, bonds and money market instruments is collectively called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who advise, direct or undertake the management or administration of securities or funds on behalf of their clients. It is basically a stock brokering company which deals in security and derivative market, Commodity market, mutual funds and Insurance etc.
SHAREKHAN- ONE OF THE FASTEST GROWING FINANCI AL SERVI CES COMPANY I N INDIA
SHAREHOLDERS & THE MANAGEMENT TE AM
ORGANISATIONAL HIERARCHY OF SHARE KHAN Regional Sales Manager TEAM MANAGER
Asst. Mgr Asst. Mgr
TEAM MANAGER
Asst.Mgr
TEAM MANAGER
Asst. Mgr
Asst.Mgr
F.SALES EXE(5)
VAR SALES EXE(5)
WORK STRUCTURE OF SHAREKHAN
Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and content. The Citi Venture holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors. On April 17, 2002 Sharekhan launched Speed Trade and Trade Tiger, are net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months SpeedTrade has become a de facto standard for the Day Trading community over the net. Sharekhan’s ground network includes over 1288+ Shareshops in 325+ cities in India. The firm’s online trading and investment site - www.sharekhan.com - was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over 3 Lacs customers. The number of trading members currently stands at over 8 Lacs. While online trading currently accounts for just over 5 per cent of the daily trading in stocks in India, Sharekhan alone accounts for 27 per cent of the volumes traded online.
The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’ to its credit, in terms of the size of deal, sector tapped etc. The group has
placed over US$ 5 billion in private equity deals. Some of the clients include
F.SALES EXE(5)
VAR SALES EXE(5)
BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop. Finally, Sharekhan shifted hands and Citi venture get holds on it.
Sharekhan offers the following products.
CLASSIC ACCOUNT
This is a User Friendly Product which allows the client to trade through website www.sharekhan.com and is suitable for the retail investors who is risk-averse and hence prefers to invest in stocks or who does not trade too frequently.
F Features Online trading account for investing in Equity and Derivatives via w www.sharekhan.com L Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE. I Integration of On-line trading, Saving Bank and Demat Account. I Instant cash transfer facility against purchase & sale of shares. C Competitive transaction charges. I Instant order and trade confirmation by E-mail. S Streaming Quotes (Cash & Derivatives). P Personalized market watch. S Single screen interface for Cash and derivatives and more. Provision to enter price trigger and view the same online in market watch.
SPEEDTRADE
SPEEDTRADE is an internet-based software application that enables you to buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently during day’s session to capitalize on intra-day price movement.
F Features I Instant order Execution and Confirmation. S Single screen trading terminal for NSE Cash, NSE F&O & BSE. T Technical Studies. M Multiple Charting. R Real-time streaming quotes, tic-by-tic charts. M Market summary (Cost traded scrip, highest clue etc.) H Hot keys similar to broker’s terminal. A Alerts and reminders. B Back-up facility to place trades on Direct Phone lines. Live market debts.
DIAL-N-TRADE
Along with enabling access for trade online, the CLASSIC and SPEEDTRADE ACCOUNT also gives Dial-n-trade services. With this service, one can dial Sharekhan’s dedicated phone lines 1-800-22-7500, 3970-7500. Beside this, Relationship Managers are always available on Office Phone and Mobile to resolve customer queries.
ShareMobile
Sharekhan had introduced ShareMobile, mobile based software where one can watch Stock Prices, Intra Day Charts, Research & Advice and Trading Calls live on the Mobile.
PREPAID ACCOUNT
Customers pay Advance Brokerage on trading Account and enjoy uninterrupted trading in their Account. Beside this, great discount are also available
on brokerage. Prepaid Classic Account Prepaid Speed trade Account : - Rs750 < Rs. 2000 : - Rs. 2000 < Above.
IPO ON-LINE
Customers can apply to all the forthcoming IPOs online. This is quite hasslefree, paperless and time saving. Simply allocate fund to IPO Account, Apply for the IPO and Sit Back & Relax.
Mutual Fund Online
Investors can apply to Mutual Funds of Reliance, Franklin Templeton Investments, ICICI Prudential, SBI, Birla, Sundaram, HDFC, DSP Merrill Lynch, PRINCIPAL and TATA with Sharekhan.
CHARGE STRUCTURE Fee Structure for General Individuals: -
Charges*
Classic Account
Speed Trade Account
Account Opening
Rs. 750
Rs. NIL
Monthly Commitment
Rs. NIL
Rs. NIL
Brokerage
Intra-day – 0.05 % Delivery - 0.50 %
Intra-day - 0.05% Delivery - 0.50%
* Taxes as per govt. EXPOSURE: 4 TO 6.7 TIMES (ON MARGIN MONEY) BROKERAGE RATES OF SHAREKHAN.COM
MAJOR PLAYERS IN THE REGION
Karvy
KARVY is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.
History of Karvy :- The birth of Karvy was on a modest scale in 1981. I t began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company, Karvy Consultants Limited. They started with consulting and financial accounting automation and carved inroads into the field of registry and share accounting by 1985. Since then, karvy utilized its experience and superlative expertise to go from strength to strength, to better their services, to innovate, diversify and in the process, evolved as one of India’s premier integrated financial service enterprise. P PRODUCT AND SERVICES OF KARVY GROUP K Karvy comtrade. K Karvy consultant ltd. K Karvy merchant banking. Karvy global services ltd.
ICICI Direct
ICICI Web Trade Limited (IWTL) maintains www.icicidirect.com (herein after referred to as the "Website") whereas IWTL is an affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited. IWTL has launched and established an online trading service on the Website.
PRODUCTS AND SERVICES OF I C I C I DIRECT
1.Investing in Mutual funds 2.Personal Finance 3.Customer Service Features 4.IPO’s 5.Margin Trading 6.Margin PLUS Trading 7.Call Trade 8.Trading on NSE/BSE
INDIAINFOLINE SECURITY PRIVATE LTD
India Infoline.com Securities Pvt. Ltd. is a wholly owned subsidiary of India Infoline.com Ltd and is the stock broking arm of India Infoline.com. The subsidiary was formed to comply with regulatory guidelines. www.5paisa.com is a focused website for online stock market trading. 5paisa.com is a trade name owned by the India Infoline.com group. IILSPL has applied for trading membership of the BSE under Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules 1992. IILSPL is in the business of providing broking services online via the Internet ("Ebroking Services") and has been permitted by the NSE by way of registration permission no: NSEIL/CMO/INET/1 103/2000 dated 03/July/2000, and will be applying for permission to the BSE, to provide E-broking Services to its clients. IILSPL is a TRADING MEMBER of the National Stock Exchange of India.
PRODUCT OFFERED BY IILSPL
Stock market:-IILSPL deals in stock market by trading in equity and derivatives. Personal finance: - It Deals In Mutual Fund and Insurance. Online Trading: - It provides services in stock and commodity trading (through Internet).
HDFC SECURITY
HDFC security is the subsidiary of HDFC (Housing Development Financial Corporation). www.hdfcsec.com would have an exclusive discretion to decide the customers who would be entitled to its online investing services. www.hdfcsec.com also reserves the right to decide on the criteria based on which customers would be chosen to participate in these services .The present web site (www.hdfcsec.com) contains features of services that they offer/propose to offer in due course. The launch of new services is subject to the clearance of the regulators. i.e. SEBI, NSE and BSE.
P PRODUCT OFFERED BY HDFC SECURITY O Online trading for Resident & Non Resident Indians. C Cash-n-Carry on both NSE and BSE. D Day trading on both NSE and BSE. T Trade on Futures & Options on the NSE. O Online IPO's. Telephone-based Broking (Equity & Derivatives).
INDIABULLS SECURITIES LIMITED
Indiabulls Securities Limited was incorporated as GPF Securities Private Limited on June 9, 1995. The name of the company was changed to Orbis Securities Private Limited on December 15, 1995 to change the profile of the company and subsequently due to the conversion of the company into a public limited company; the name was further changed to Orbis Securities Limited on January 5, 2004. The name of the company was again changed to Indiabulls Securities Limited on February 16, 2004 so as to capitalize on the brand image of the term “Indiabulls” in the company name. ISL is a corporate member of capital market & derivative segment of The National Stock Exchange of India Ltd. At present, ISL accounts for approximately 3% of the total daily turnover of the Exchange with 32,359 client relationships and 70 branches spread across the country as of April 30, 2004.
INDIABULLS CREDIT SERVICES LIMITED: - Indiabulls Credit
Services has been valued at Rs. 263 crore with the Rs. 87.6-crore infusion. Indiabulls Credit Services Ltd, the recently formed subsidiary of broking firm, Indiabulls Financial Services Ltd. Faralon Capital, a San Francisco-based private equity fund, and its affiliates have acquired 33.3 per cent stake for Rs 87.6 crore.
INDIABULLS REAL ESTATE: - Indiabulls through its group companies has
entered Indian Real Estate business in 2005. It is currently evaluating several largescale projects worth several hundred million dollars. Indiabulls became the first company to bring FDI in Indian Real Estate through a JV with Farallon Capital Management, a respected US based investment firm.
O OTHER PRODUCT OFFERED BY INDIA BULLS E Equity & Debt Stock Broking. I Insurance. C Commodity trading. D Depository Services. D Derivatives Broking Services. E Equity Research Services. Mutual Fund Distribution.
ST R E N G T H S
E Employees are highly empowered. S Strong communication network. M Management philosophy and commitment to maximize shareholders returns Upgraded product design and development facilities to develop new products a and aid diversification. Ongoing activities to support up gradation of operational performance and rise i in productivity Team of talented and committed professionals available to improve company’s p performance weakness. G Good co-operation between employees. N Number 1 registrar and transfer agent in India. Number 1 dealer of investment products in India
WE A K N E S S
C Competition from cheap imports L Low customer base. High employee turnover.
OPPORTUNITIES
Growth rate of mutual fund industry is 40 to 50% during last year and it e expected that this rate will be maintained in future also. Marketing at rural and semi-urban areas.
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Threats,
Risks & Concerns
I Increasing number of local players. Constant pressure to be cost competitive to meet customer e expectations. Relentless pressure to maintain profitability due to rising input/raw material prices.
RESEARCH METHODOLOGY
Objective of Research
Any activity done without an objective in a mind cannot turn fruitful. An objective provides a specific direction to an activity. Objectives may range from very general to very specific, but they should be clear enough to point out with reasonable accuracy what researcher wants to achieve through the study and how it will be helpful to the decision maker in solving the problem. Each research study has its own specific purpose. It is like to discover to Question through the application of scientific procedure. But the main aim of our research to find out the truth that is hidden and which has not been discovered as yet. Our research study has two objectives:-
OBJECTIVE FOR DOING THE PROJECT : 1. To know about the awareness of the consumers towards stock brokers and share market. 2. To study the market share of Sharekhan Ltd in the Share market and identify the areas of competitive advantage over other players 3. To study about consumer awareness & satisfaction, about operational Services & procedures of Share khan Ltd. 4. To study about the difficulties faced by the clients/trades while trading with Sharekhan. 5. To identify the lacunae in the present system suggesting the measures improvement in current Trading system.
TYPES OF RESEARCH
On the basis of theoretical study a research has many types. A l l of these are distributed on the nature of research. Some of these are like 1.Descriptive and Analytical 2.Qualitative and Quantitative 3.Conceptual and empirical 4.Applied and fundamental 5.One time research Our research is based on Descriptive, Qualitative and Quantitative research.
Descriptive Research: - Descriptive research includes surveys and fact finding
enquires of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. Researcher has no control over the variables of this type of research.
Qualitative Research: -
In our research we need comparison between different
stock brokers. So this based on all qualitative data. In short, Qualitative research is especially important in the behavioral sciences where the aim is to discover the underline motives of human behavior. Through such research we can analyses various factors which motivate to people to behave in a particular manner or which make people like or dislike a particular thing.
Quantitative research: -
Quantitative research is based on the measurement of
quantity or amount. It is applicable to phenomena that can be expressed in terms of
quantity. So we can use it in our research for collection of all the numerical data.
SAMPLE DESIGN
“ A sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting item for the sample” Generally Sample designs are two types
1.PROBABILITY RESEARCH DESIGN 2.NON PROBABILITY RESEARCH DESIGN
We used the probability research design.
SAMPLING UNITS
Sampling unit may be a geographical one, such as state, district, village etc. The researcher will have to decide one or more of such units that he has to select for his study.
SIZE OF SAMPLE
“This refers to the number of items to be selected from the universe to constitute a sample”
The sample size in this project is 50.
But we also study the 5 stock broker companies related to security & commodity market like India-infoline, ICICI direct, HDFC securities, Karvy consultant ltd. for the appropriate collection of the information.
SOURES OF DATA COLLECTION
While deciding about the method of data collection to be used for the study the researcher should keep to types of data.
1.Primary Data
The Primary Data Is Collected Using Sampling Method And By Survey Using Questionnaire.
2.Secondary Data
Secondary data includes information regarding present market scenario, information regarding mutual funds and competitors are collected by internet, magazines and news papers and books.
Survey Method: -
Survey refers to the method of securing information
concerning phenomena under study from all or selected number of respondents of the concerned area. I n a survey the investigator examines those phenomena which exist in the universe independent of his action.
Scheduling: -
I n this method the enumerators along with schedules, go to
respondents, put to them the questions from the performa in the order the questions are listed and recorded the replies in the space meant for the same in the performa. I n present report Scheduling Method is used.
COMPARATIVE ANALYSIS
A Comparative analysis was done and following results were found: There are the two type of the transaction:1.Intra-day based
Another way of saying “within the day". Intraday price movements are particularly important to short-term traders looking to make many trades over the course of a single trading session
2.Delivery based
Delivery based trading is normally considered as a safer approach for trading in shares when compared to day trading. Delivery based trading involves buying shares on a market day and selling them only after receiving the delivery of those shares in demat account.
Results on the Basis of charges/Brokerage.
Results On the basis of Account opening charges
HDFC securities ltd: - Account opening charges w.e.f. April 2005 are as follows: -
Rs.749, i f the customer has an existing relationship with HDFC.
Sharekhan l td : - There are no account opening charges with sharekhan only i f the client is an HNI (High Networth Individual) i.e. he churns more money in market, or else he has to pay Rs 750 as an account opening charges but require minimun margin money of Rs 5000 for trading purposes. I C I C I direct: - A one-time charge of Rs. 750 at the time of account opening will be charged. You may later upgrade your Invest account to an ICICI direct.com share trading account when you desire to trade in equity.
India Infoline: - There is a nominal charge of Rs. 500 only towards stamp duty, legal and processing fees for opening the account. This includes the registration and account opening charges. Bank and Depository Participant (DP) account opening charges, i f applicable, are payable separately.
KARVY consultants l t d : - Account Opening Charges Are 452 But now SEBI banned on opening of new demat account of Karvy.
Indiabulls: - Account opening charges are Rs. 900. There is no AMC and no margin money is required.
Comment: - India Bulls charge maximum account opening charges but there are no such charges in Sharekhan Pvt. Ltd.
Results on the basis of customer preferences
1. According to survey 70 % peoples are satisfied with Sharekhan Ltd because of their RM’s facility and power of Sharekhan Ltd software.
2. According to survey, Sharekhan Ltd open new branches for individually handle to their customer, but in ICICI direct, HDFC security there is no separate offices for this .So people prefer Sharekhan Ltd.
Results On The Basis Of Facilities Basis of Sharekhan Karvy India I CI CI Indiabulls HDFC difference Ltd. Infoline direct Share trading Commodity trading D-mat opening rights Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Yes
No
Yes
Yes
Yes
No
FINDINGS & ANALYSIS
1) Do you know about investment options available? KNOWLEDGE Yes No TOTAL AGE (%) 80% 20% 50
COMMENT:-
Only 80% people know the exact meaning of investment. Because of
remaining 20% take his/her residential property as an investment. According to law purpose this is not an investment because of it is not create any profit for the owner.
2) Most preferable investment scenario. IN VESTMENT SCENARIO Banks Derivatives & securities market Insurance Bonds Real estate Others TOTAL %AGE 24% 28% 4% 20% 20% 4% 50
COMMENT
Today in the changing scenario, people are more interested in derivatives & securities markets. According to the above graph, it can be seen that out of total responses, 28% goes in favor of derivatives & securities market. 24% are interested in bank securities, 20% are interested in bond and real estate, and a very small amount of consumers are interested to invest into insurance securities.
3) What is the basic purpose of your investment? IN VESTMENT PURPOSE Liquidity Returns Capital appreciation Tax benefits Risk covering Others TOTAL PERCENTAGE 30% 25% 10% 20% 5% 10% 50
COMMENT:-75% people are interested in liquidity, returns and tax benefits. And
remaining 25% are interested in capital appreciations, risk covering, and
others.
4) Most important things you take into your mind while making investments? FACTOR Risk Returns Both TOTAL 50 %AGE 8% 18% 74%
COMMENT75% people are considered the both factors risk as well as returns but, only 8%
considered the risk and 17% on returns factor.
5) Awareness related to security markets KNOWLEDGE Complete Partial Nil TOTAL PERCENTAGE 8% 74% 18% 50
COMMENT
On that basis, we conclude that 17% people know nothing about the securities investments and 75% people have partial knowledge about it, so, some promotional activities are required for increasing the awareness about security market.
6) I n which company you have d-mat and trading account? COMPANY SHAREKHAN INDIAINFOLINE ICICI DIRECT INDIA BULLS KARVY Others TOTAL PERCENTAGE 38% 20% 14% 12% 8% 8% 50
C OM ME N T :- In Sharekhan Ltd 38% respondents have de-mat & trading account because of
better services and no annual maintenance for the First year and other charges, 20% are with indiainfoline because of their web portal 5paisa.com, 14% are with ICICI Direct because they have their accounts in ICICI bank.
8) Are you satisfied with you present broking firm?
YES NO TOTAL
58% 42% 50
COMMENT: According to the above graph it shows that 65% of respondents are not satisfied from their present broking firm and only 35% of respondents are satisfied from their brokers mainly because of their Product or their Services.
9) Specify the reason of satisfaction with the current broking house. SATISFACTION Operating expenses Services Brokerage TOTAL PERCENTAGE 28.57% 33.33% 38.10% 100
COMMENT
According to of the brokerage that they charge, 25% of clients are satisfied because of the services that they are given, and 18% because their operating expenses are low.
C R O SS T AB S "In which Company do you have D-Mat and Trading Account" * "Are you satisfied with your present Broking Firm" Crosstabulation Count
"Are you satisfied with your present Broking Firm"
YES NO Total
"In which Company do you have D-Mat and Trading Account"
SHAREKHAN INDIAINFOLINE ICICI DIRECT INDIA BULLS KARVY OTHERS
14 6 3 2 3 1 29
5 4 4 4 1 3 21
19 10 7 6 4 4 50
Total
"In which Company do you have D-Mat and Trading Account" * "The Reason for yuor satisfaction with the current broking firm" Cross tabulation
Count
"The Reason for your Dis-satisfaction with the current broking firm" OPERATING EXPENSES "In which Company do you have D-Mat and Trading Account" SHAREKHAN INDIAINFOLINE ICICI DIRECT INDIA BULLS KARVY OTHERS Total 2 1 2 0 0 1 6 SERVICES 1 3 1 0 0 2 7 BROKERAGE 2 0 1 4 1 0 8 Total 5 4 4 4 1 3 21
FINDINGS
F According to the survey most of the customers of “Sharekhan Ltd” says that it is p pocket friendly. Coming to faith 70% say Sharekhan Ltd is better than others stock brokers due to customers satisfaction. Main purposes of investments are returns & liquidity. I Investors take risk as well as returns into their mind while making the investment. B Businessmen are more interested in the stock market than others. C Commodity market is less preferred by the investors. People want to invest their money in the security market but they don’t have the p proper knowledge. They are also not aware of hedging in stock market. Traders pay more emphasis on brokerage than service provided by brokerage houses.
LIMITATIONS
L D Due to limitation of time a sample size of only 50 respondents were chosen. The survey was carried through questionnaire and the questions were based on p perception.
T The sample for research was chosen only from a limited area.
S Some of the respondents may be biased in giving responses.
Complete data was not available due to company privacy and secrecy.
S SUGGESTIONS
T The facility of free demonstrations should be provided for all. I Improvement in the opening of De-mat & contract notice procedure is required. There should be a limited number of clients under the relationship manger, so t that he can handle new as well as old customer properly. Some promotional activities are required for the awareness of the customer, seminars should be held for providing information to prospective and present c customers. People at young age should be encouraged to invest in stock market. There is high potential market for mutual fund in Mumbai city, but this market needs to be explored as investors are still hesitated to invest their money in mutual f funds.
Investors have inadequate knowledge about mutual funds, so proper marketing of various schemes is required; company should arrange more and more seminars on mutual funds.
CONCLUSION
On the basis of the study it is found that Sharekhan Ltd is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. Sharekhan Ltd. provides the facility of Trade tiger as well as relationship manager facility for encouragement and protects the interest of the investors. It also provides the information through the internet and mobile alerts that what IPO’s are coming in the market and it also provides its research on the future prospect of the IPO.
Study also concludes that people are not much aware of commodity market and while it’s going to be biggest market in India.
The company should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers, so that they feel more comfortable while investing in the stock market.
BIBLIOGRAPHY
Books
G C. BERI - MARKETING RESEARCH NEW DELHI, TATA Mc GRAW-HILL PUBLISHING COMPANY LIMITED. C.R.KOTHARI - RESEARCH METHODOLOGY NEW AGE INTERNATIONAL LTD.
Magazines
VALUELINE (SHAREKHAN MONTHLY RESEARCH MAGAZINE) CAPITAL MARKET (5PAISA.COM), NEW DELHI. THE FINAPOILS (YOUR PERSONAL FINANCE ADVISOR FROM
Webliography
http://www.moneycontrol.com http://www.capitaline.com http ://www. sharekhan ltd.com http://www.indiainfoline.com http://www.icicidirect.com http://www.hdfcsecurity.com http://www.karvy.com http://www.bseindia.com http ://economictimes .indiatimes .com/
KARVY).
APPENDIX
QUESTIONNAIRE DATE:
NAME OCCUPATION AGE CONTACT NO. 1)Do you know about Investment options available? a) Yes b) No
2)Do you know about the different types of investment alternatives? a) Insurance & mutual funds b) Banks c) Real estate e) Commodity d) Share market f) Others
3)What is the basic purpose of your investment? a) Liquidity b) Returns d) Risk covering
c) Capital appreciation e) Tax benefits
4) What are the most important things you take into account, while making any investment? a) Risk b) Returns c) Both
5)Do you have any knowledge of share markets? a) Partial b) Complete c) Nil
6)Do you have any D-mat & Trading account? a) Yes b) No
7)In which company you have D-mat & Trading account? a) Sharekhan Ltd c) Indiainfoline e) Indiabulls g) Others 8)Are you satisfied with your present broking company? a) Yes b) No b) Karvy d) ICICI direct f) HDFC securities
9)What is the reason? Please specify. a)Services b)Brokerage c)Operating expenses d)Others
10) What is your trading exchange preference? a) NSE c) MCX Suggestion: b) BSE d) NCDEX
With reference to SHAREKHAN PVT. LTD.
I n partial fulfillment for the degree of
Masters in Management Studies
(Batch: 2008-20 10)
Submitted to:DR. SANCHITA C. BANERJI
KARVY). others.
F.SALES EXE(5) VAR SALES EXE(5)
33
A PROJECT REPORT ON
A Comparative Study of Major Players of Stock Brokers in Mumbai Region
I N PARTIAL FULFILLMENT OF MASTERS OF MANAGEMENT STUDIES AS PRESCRIBED BY
SUBMITTED BY NIKUNJ SHAH
Table of CONTENTS
Limitations Suggestions Conclusion Bibliography Appendix
DECLARATION
I Mr. Nikunj R. Shah of Atharva Institute of Management Studies pursuing Masters in Management Studies (Semester I I I ) hereby declare that I have completed this project on “A Comparative Study of Major Players of Stock Brokers in Mumbai Region” for the Academic period 2008-2010. This information submitted is true and original to the best of my knowledge. This study report has not been submitted to any other institution or university for the award or any other degree. This report is based on my personal opinion hence cannot be referred to legal purpose.
(Nikunj R. Shah) Date: -
DR. SANCHITA C. BANERJI
ACKNOWLEDGEMENT
Preservation, inspiration and motivation have always played a key role in the success of any venture. In the present world of competition and success, training is
like a bridge between theoretical and practical working; willingly I prepared this particular Project. First of all I would like to thank the supreme power, the almighty god, who is the one who has always guided me to work on the right path of my life. My special thanks to M r . Yatin Padia (Manager Corporate Communication), and my sincere thanks to M r . Rajiv (Marketing Head). Also my Special thanks to my Training head M r . Swapnil Naik, and other staff members of SHAREKHAN.
My special thanks to Mr. Sunil Rane (Executive President AET) and Prof. M r . N. S. Rajan (Dean AIMS) for constantly guiding, motivating and encouraging me. I also thank my project Guide and Marketing Faculty Dr. Sanchita C. Banerji and for giving me their valuable inputs for the project. I am also thankful to all the teaching and non teaching staff for their continuous support and guidance.
Last but definitely not the least my gratitude goes to my Mother and my Father for believing i n me.
Executive Summary
There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose.
Research was carried out to find which brokerage house people prefer and to figure out what people prefer while investing in stock market.
This study suggests that people are reluctant while investing in stock and commodity market due to lack of knowledge.
Main purpose of investment is returns and liquidity, commodity market is less preferred by investors due to lack of awareness. The major findings of this study are that people are interested to invest in stock market but they lack knowledge.
Through this report we were also able to understand, what are our Company’s (Sharekhan Ltd.) positive and strong points, on the basis of which we come to know what can be the basis of pitching to a potential client.
We also gave suggestions to the company, what improvement can be done to our product.
9
Stock Exchange, in Mumbai, is Asia's oldest and India's largest stock exchange.
The Role Of Stock Exchanges
Stock exchanges have multiple roles in the economy, this may include the following:
Raising capital for businesses
The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public.
Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in stronger economic growth and higher productivity levels and firms.
Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.
Profit sharing
Both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses.
Corporate Governance
By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). However, some welldocumented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. The dotcom bubble in the early 2000s, and the subprime mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), MCI WorldCom (2002), Parmalat (2003), American International Group (2008), Lehman Brothers (2008), and Satyam Computer Services (2009) were among the most widely scrutinized by the media.
Creating investment opportunities for small investors
As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors.
Government capital-raising for development projects
Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates
by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature.
Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.
Capital Market is divided into two categories. 1.Primary Market. 2.Secondary Market.
Primary Market.
Securities generally have two stages in their lifespan. The first stage is when the company initially issues the security directly from its treasury at a predetermined offering price. This is a primary market offering. It is referred to as the Initial Public Offering (IPO). I n primary market, securities are offered to public for subscription for the purpose of raising capital or fund.
Secondary Market.
Secondary Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors Secondary market could be either auction or dealer market.
Introduction to the company SHAREKHAN
Sharekhan Ltd is India’s leading online retail broking house with its presence through 1288 ‘Share Shops’ in 325 cities and serving more than 8, 00,000 customers
th
across the nation. Launched on Feb 8 2000 as an online trading portal, Sharekhan offers its clients trade execution facilities for cash as well as derivatives, on BSE and NSE, depository services, mutual funds, initial public offerings (IPOs), and commodities trading facilities on MCX and NCDEX. Besides high quality investment advice from an experienced research team Sharekhan provides market related news, stock quotes fundamental and statistical information across equity, mutual funds, IPOs and much more.
Sharekhan has set category leadership through pioneering initiatives like ‘Speed Trade’, a net based executable application that emulates a broker terminal besides providing information relevant to Day traders. Their second initiative, ‘First Step’ is targeted at empowering first time investors. Sharekhan has also set their global footprints through the ‘India First’ initiative, a series of seminars conducted by Sharekhan to help NRIs participate and benefit from the huge investment opportunities in India. These exchange do not work of its own, rather, these are run by some persons and with the help of some persons and institution. Al l these are down as functionaries on stock exchange. These are 1.Stockbrokers 2.Sub-broker 3.Market makers 4.Portfolio consultants etc.
1.)Stockbrokers
A Stock broker is a member of a recognized stock exchange, who is permitted to do trades on the screen-based trading system of different stock exchanges. He is enrolled as a member with the concerned exchange and is registered with SEBI. These are the persons who buy, sell or deal in securities. A certificate of registration from SEBI is mandatory to act as a broker. SEBI can impose certain conditions
while granting the certificate of registrations. It is obligatory for the person to abide by the rules, regulations and the buy-law. Stock brokers are commission broker, floor broker, arbitrageur etc.
Details of registered brokers
Total no. of registered brokers as on 31.03.2009 Total no. of sub-brokers as on 31.03.2009
9000 Approx
2,40,000 Approx
2.)Sub-broker
Sub broker is a person who is registered with SEBI as such and is affiliated to a member of a recognized stock exchange. A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists the investors in buying, selling or dealing in securities through stockbroker. The broker and sub-broker should enter into an agreement in which obligations of both should be specified. Sub-broker must be registered SEBI for a dealing in securities. For getting registered with SEBI, he must fulfill certain rules and regulation.
3.) Market Makers
Market maker is a designated specialist in the specified securities. They make both bid and offer at the same time. A market maker has to abide by bye-laws, rules regulations of the concerned stock exchange. He is exempt from the margin requirements. As per the listing requirements, a company where the paid-up capital is Rs. 3 crore but not more than Rs. 5 crore and having a commercial operation for
less than 2 years should appoint a market maker at the time of issue of securities.
4.) Portfolio consultants
A combination of securities such as stocks, bonds and money market instruments is collectively called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who advise, direct or undertake the management or administration of securities or funds on behalf of their clients. It is basically a stock brokering company which deals in security and derivative market, Commodity market, mutual funds and Insurance etc.
SHAREKHAN- ONE OF THE FASTEST GROWING FINANCI AL SERVI CES COMPANY I N INDIA
SHAREHOLDERS & THE MANAGEMENT TE AM
ORGANISATIONAL HIERARCHY OF SHARE KHAN Regional Sales Manager TEAM MANAGER
Asst. Mgr Asst. Mgr
TEAM MANAGER
Asst.Mgr
TEAM MANAGER
Asst. Mgr
Asst.Mgr
F.SALES EXE(5)
VAR SALES EXE(5)
WORK STRUCTURE OF SHAREKHAN
Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and content. The Citi Venture holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors. On April 17, 2002 Sharekhan launched Speed Trade and Trade Tiger, are net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months SpeedTrade has become a de facto standard for the Day Trading community over the net. Sharekhan’s ground network includes over 1288+ Shareshops in 325+ cities in India. The firm’s online trading and investment site - www.sharekhan.com - was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over 3 Lacs customers. The number of trading members currently stands at over 8 Lacs. While online trading currently accounts for just over 5 per cent of the daily trading in stocks in India, Sharekhan alone accounts for 27 per cent of the volumes traded online.
The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’ to its credit, in terms of the size of deal, sector tapped etc. The group has
placed over US$ 5 billion in private equity deals. Some of the clients include
F.SALES EXE(5)
VAR SALES EXE(5)
BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop. Finally, Sharekhan shifted hands and Citi venture get holds on it.
Sharekhan offers the following products.
CLASSIC ACCOUNT
This is a User Friendly Product which allows the client to trade through website www.sharekhan.com and is suitable for the retail investors who is risk-averse and hence prefers to invest in stocks or who does not trade too frequently.
F Features Online trading account for investing in Equity and Derivatives via w www.sharekhan.com L Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE. I Integration of On-line trading, Saving Bank and Demat Account. I Instant cash transfer facility against purchase & sale of shares. C Competitive transaction charges. I Instant order and trade confirmation by E-mail. S Streaming Quotes (Cash & Derivatives). P Personalized market watch. S Single screen interface for Cash and derivatives and more. Provision to enter price trigger and view the same online in market watch.
SPEEDTRADE
SPEEDTRADE is an internet-based software application that enables you to buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently during day’s session to capitalize on intra-day price movement.
F Features I Instant order Execution and Confirmation. S Single screen trading terminal for NSE Cash, NSE F&O & BSE. T Technical Studies. M Multiple Charting. R Real-time streaming quotes, tic-by-tic charts. M Market summary (Cost traded scrip, highest clue etc.) H Hot keys similar to broker’s terminal. A Alerts and reminders. B Back-up facility to place trades on Direct Phone lines. Live market debts.
DIAL-N-TRADE
Along with enabling access for trade online, the CLASSIC and SPEEDTRADE ACCOUNT also gives Dial-n-trade services. With this service, one can dial Sharekhan’s dedicated phone lines 1-800-22-7500, 3970-7500. Beside this, Relationship Managers are always available on Office Phone and Mobile to resolve customer queries.
ShareMobile
Sharekhan had introduced ShareMobile, mobile based software where one can watch Stock Prices, Intra Day Charts, Research & Advice and Trading Calls live on the Mobile.
PREPAID ACCOUNT
Customers pay Advance Brokerage on trading Account and enjoy uninterrupted trading in their Account. Beside this, great discount are also available
on brokerage. Prepaid Classic Account Prepaid Speed trade Account : - Rs750 < Rs. 2000 : - Rs. 2000 < Above.
IPO ON-LINE
Customers can apply to all the forthcoming IPOs online. This is quite hasslefree, paperless and time saving. Simply allocate fund to IPO Account, Apply for the IPO and Sit Back & Relax.
Mutual Fund Online
Investors can apply to Mutual Funds of Reliance, Franklin Templeton Investments, ICICI Prudential, SBI, Birla, Sundaram, HDFC, DSP Merrill Lynch, PRINCIPAL and TATA with Sharekhan.
CHARGE STRUCTURE Fee Structure for General Individuals: -
Charges*
Classic Account
Speed Trade Account
Account Opening
Rs. 750
Rs. NIL
Monthly Commitment
Rs. NIL
Rs. NIL
Brokerage
Intra-day – 0.05 % Delivery - 0.50 %
Intra-day - 0.05% Delivery - 0.50%
* Taxes as per govt. EXPOSURE: 4 TO 6.7 TIMES (ON MARGIN MONEY) BROKERAGE RATES OF SHAREKHAN.COM
MAJOR PLAYERS IN THE REGION
Karvy
KARVY is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.
History of Karvy :- The birth of Karvy was on a modest scale in 1981. I t began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company, Karvy Consultants Limited. They started with consulting and financial accounting automation and carved inroads into the field of registry and share accounting by 1985. Since then, karvy utilized its experience and superlative expertise to go from strength to strength, to better their services, to innovate, diversify and in the process, evolved as one of India’s premier integrated financial service enterprise. P PRODUCT AND SERVICES OF KARVY GROUP K Karvy comtrade. K Karvy consultant ltd. K Karvy merchant banking. Karvy global services ltd.
ICICI Direct
ICICI Web Trade Limited (IWTL) maintains www.icicidirect.com (herein after referred to as the "Website") whereas IWTL is an affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited. IWTL has launched and established an online trading service on the Website.
PRODUCTS AND SERVICES OF I C I C I DIRECT
1.Investing in Mutual funds 2.Personal Finance 3.Customer Service Features 4.IPO’s 5.Margin Trading 6.Margin PLUS Trading 7.Call Trade 8.Trading on NSE/BSE
INDIAINFOLINE SECURITY PRIVATE LTD
India Infoline.com Securities Pvt. Ltd. is a wholly owned subsidiary of India Infoline.com Ltd and is the stock broking arm of India Infoline.com. The subsidiary was formed to comply with regulatory guidelines. www.5paisa.com is a focused website for online stock market trading. 5paisa.com is a trade name owned by the India Infoline.com group. IILSPL has applied for trading membership of the BSE under Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules 1992. IILSPL is in the business of providing broking services online via the Internet ("Ebroking Services") and has been permitted by the NSE by way of registration permission no: NSEIL/CMO/INET/1 103/2000 dated 03/July/2000, and will be applying for permission to the BSE, to provide E-broking Services to its clients. IILSPL is a TRADING MEMBER of the National Stock Exchange of India.
PRODUCT OFFERED BY IILSPL
Stock market:-IILSPL deals in stock market by trading in equity and derivatives. Personal finance: - It Deals In Mutual Fund and Insurance. Online Trading: - It provides services in stock and commodity trading (through Internet).
HDFC SECURITY
HDFC security is the subsidiary of HDFC (Housing Development Financial Corporation). www.hdfcsec.com would have an exclusive discretion to decide the customers who would be entitled to its online investing services. www.hdfcsec.com also reserves the right to decide on the criteria based on which customers would be chosen to participate in these services .The present web site (www.hdfcsec.com) contains features of services that they offer/propose to offer in due course. The launch of new services is subject to the clearance of the regulators. i.e. SEBI, NSE and BSE.
P PRODUCT OFFERED BY HDFC SECURITY O Online trading for Resident & Non Resident Indians. C Cash-n-Carry on both NSE and BSE. D Day trading on both NSE and BSE. T Trade on Futures & Options on the NSE. O Online IPO's. Telephone-based Broking (Equity & Derivatives).
INDIABULLS SECURITIES LIMITED
Indiabulls Securities Limited was incorporated as GPF Securities Private Limited on June 9, 1995. The name of the company was changed to Orbis Securities Private Limited on December 15, 1995 to change the profile of the company and subsequently due to the conversion of the company into a public limited company; the name was further changed to Orbis Securities Limited on January 5, 2004. The name of the company was again changed to Indiabulls Securities Limited on February 16, 2004 so as to capitalize on the brand image of the term “Indiabulls” in the company name. ISL is a corporate member of capital market & derivative segment of The National Stock Exchange of India Ltd. At present, ISL accounts for approximately 3% of the total daily turnover of the Exchange with 32,359 client relationships and 70 branches spread across the country as of April 30, 2004.
INDIABULLS CREDIT SERVICES LIMITED: - Indiabulls Credit
Services has been valued at Rs. 263 crore with the Rs. 87.6-crore infusion. Indiabulls Credit Services Ltd, the recently formed subsidiary of broking firm, Indiabulls Financial Services Ltd. Faralon Capital, a San Francisco-based private equity fund, and its affiliates have acquired 33.3 per cent stake for Rs 87.6 crore.
INDIABULLS REAL ESTATE: - Indiabulls through its group companies has
entered Indian Real Estate business in 2005. It is currently evaluating several largescale projects worth several hundred million dollars. Indiabulls became the first company to bring FDI in Indian Real Estate through a JV with Farallon Capital Management, a respected US based investment firm.
O OTHER PRODUCT OFFERED BY INDIA BULLS E Equity & Debt Stock Broking. I Insurance. C Commodity trading. D Depository Services. D Derivatives Broking Services. E Equity Research Services. Mutual Fund Distribution.
ST R E N G T H S
E Employees are highly empowered. S Strong communication network. M Management philosophy and commitment to maximize shareholders returns Upgraded product design and development facilities to develop new products a and aid diversification. Ongoing activities to support up gradation of operational performance and rise i in productivity Team of talented and committed professionals available to improve company’s p performance weakness. G Good co-operation between employees. N Number 1 registrar and transfer agent in India. Number 1 dealer of investment products in India
WE A K N E S S
C Competition from cheap imports L Low customer base. High employee turnover.
OPPORTUNITIES
Growth rate of mutual fund industry is 40 to 50% during last year and it e expected that this rate will be maintained in future also. Marketing at rural and semi-urban areas.
33
Threats,
Risks & Concerns
I Increasing number of local players. Constant pressure to be cost competitive to meet customer e expectations. Relentless pressure to maintain profitability due to rising input/raw material prices.
RESEARCH METHODOLOGY
Objective of Research
Any activity done without an objective in a mind cannot turn fruitful. An objective provides a specific direction to an activity. Objectives may range from very general to very specific, but they should be clear enough to point out with reasonable accuracy what researcher wants to achieve through the study and how it will be helpful to the decision maker in solving the problem. Each research study has its own specific purpose. It is like to discover to Question through the application of scientific procedure. But the main aim of our research to find out the truth that is hidden and which has not been discovered as yet. Our research study has two objectives:-
OBJECTIVE FOR DOING THE PROJECT : 1. To know about the awareness of the consumers towards stock brokers and share market. 2. To study the market share of Sharekhan Ltd in the Share market and identify the areas of competitive advantage over other players 3. To study about consumer awareness & satisfaction, about operational Services & procedures of Share khan Ltd. 4. To study about the difficulties faced by the clients/trades while trading with Sharekhan. 5. To identify the lacunae in the present system suggesting the measures improvement in current Trading system.
TYPES OF RESEARCH
On the basis of theoretical study a research has many types. A l l of these are distributed on the nature of research. Some of these are like 1.Descriptive and Analytical 2.Qualitative and Quantitative 3.Conceptual and empirical 4.Applied and fundamental 5.One time research Our research is based on Descriptive, Qualitative and Quantitative research.
Descriptive Research: - Descriptive research includes surveys and fact finding
enquires of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. Researcher has no control over the variables of this type of research.
Qualitative Research: -
In our research we need comparison between different
stock brokers. So this based on all qualitative data. In short, Qualitative research is especially important in the behavioral sciences where the aim is to discover the underline motives of human behavior. Through such research we can analyses various factors which motivate to people to behave in a particular manner or which make people like or dislike a particular thing.
Quantitative research: -
Quantitative research is based on the measurement of
quantity or amount. It is applicable to phenomena that can be expressed in terms of
quantity. So we can use it in our research for collection of all the numerical data.
SAMPLE DESIGN
“ A sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting item for the sample” Generally Sample designs are two types
1.PROBABILITY RESEARCH DESIGN 2.NON PROBABILITY RESEARCH DESIGN
We used the probability research design.
SAMPLING UNITS
Sampling unit may be a geographical one, such as state, district, village etc. The researcher will have to decide one or more of such units that he has to select for his study.
SIZE OF SAMPLE
“This refers to the number of items to be selected from the universe to constitute a sample”
The sample size in this project is 50.
But we also study the 5 stock broker companies related to security & commodity market like India-infoline, ICICI direct, HDFC securities, Karvy consultant ltd. for the appropriate collection of the information.
SOURES OF DATA COLLECTION
While deciding about the method of data collection to be used for the study the researcher should keep to types of data.
1.Primary Data
The Primary Data Is Collected Using Sampling Method And By Survey Using Questionnaire.
2.Secondary Data
Secondary data includes information regarding present market scenario, information regarding mutual funds and competitors are collected by internet, magazines and news papers and books.
Survey Method: -
Survey refers to the method of securing information
concerning phenomena under study from all or selected number of respondents of the concerned area. I n a survey the investigator examines those phenomena which exist in the universe independent of his action.
Scheduling: -
I n this method the enumerators along with schedules, go to
respondents, put to them the questions from the performa in the order the questions are listed and recorded the replies in the space meant for the same in the performa. I n present report Scheduling Method is used.
COMPARATIVE ANALYSIS
A Comparative analysis was done and following results were found: There are the two type of the transaction:1.Intra-day based
Another way of saying “within the day". Intraday price movements are particularly important to short-term traders looking to make many trades over the course of a single trading session
2.Delivery based
Delivery based trading is normally considered as a safer approach for trading in shares when compared to day trading. Delivery based trading involves buying shares on a market day and selling them only after receiving the delivery of those shares in demat account.
Results on the Basis of charges/Brokerage.
Results On the basis of Account opening charges
HDFC securities ltd: - Account opening charges w.e.f. April 2005 are as follows: -
Rs.749, i f the customer has an existing relationship with HDFC.
Sharekhan l td : - There are no account opening charges with sharekhan only i f the client is an HNI (High Networth Individual) i.e. he churns more money in market, or else he has to pay Rs 750 as an account opening charges but require minimun margin money of Rs 5000 for trading purposes. I C I C I direct: - A one-time charge of Rs. 750 at the time of account opening will be charged. You may later upgrade your Invest account to an ICICI direct.com share trading account when you desire to trade in equity.
India Infoline: - There is a nominal charge of Rs. 500 only towards stamp duty, legal and processing fees for opening the account. This includes the registration and account opening charges. Bank and Depository Participant (DP) account opening charges, i f applicable, are payable separately.
KARVY consultants l t d : - Account Opening Charges Are 452 But now SEBI banned on opening of new demat account of Karvy.
Indiabulls: - Account opening charges are Rs. 900. There is no AMC and no margin money is required.
Comment: - India Bulls charge maximum account opening charges but there are no such charges in Sharekhan Pvt. Ltd.
Results on the basis of customer preferences
1. According to survey 70 % peoples are satisfied with Sharekhan Ltd because of their RM’s facility and power of Sharekhan Ltd software.
2. According to survey, Sharekhan Ltd open new branches for individually handle to their customer, but in ICICI direct, HDFC security there is no separate offices for this .So people prefer Sharekhan Ltd.
Results On The Basis Of Facilities Basis of Sharekhan Karvy India I CI CI Indiabulls HDFC difference Ltd. Infoline direct Share trading Commodity trading D-mat opening rights Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Yes
No
Yes
Yes
Yes
No
FINDINGS & ANALYSIS
1) Do you know about investment options available? KNOWLEDGE Yes No TOTAL AGE (%) 80% 20% 50
COMMENT:-
Only 80% people know the exact meaning of investment. Because of
remaining 20% take his/her residential property as an investment. According to law purpose this is not an investment because of it is not create any profit for the owner.
2) Most preferable investment scenario. IN VESTMENT SCENARIO Banks Derivatives & securities market Insurance Bonds Real estate Others TOTAL %AGE 24% 28% 4% 20% 20% 4% 50
COMMENT
Today in the changing scenario, people are more interested in derivatives & securities markets. According to the above graph, it can be seen that out of total responses, 28% goes in favor of derivatives & securities market. 24% are interested in bank securities, 20% are interested in bond and real estate, and a very small amount of consumers are interested to invest into insurance securities.
3) What is the basic purpose of your investment? IN VESTMENT PURPOSE Liquidity Returns Capital appreciation Tax benefits Risk covering Others TOTAL PERCENTAGE 30% 25% 10% 20% 5% 10% 50
COMMENT:-75% people are interested in liquidity, returns and tax benefits. And
remaining 25% are interested in capital appreciations, risk covering, and
others.
4) Most important things you take into your mind while making investments? FACTOR Risk Returns Both TOTAL 50 %AGE 8% 18% 74%
COMMENT75% people are considered the both factors risk as well as returns but, only 8%
considered the risk and 17% on returns factor.
5) Awareness related to security markets KNOWLEDGE Complete Partial Nil TOTAL PERCENTAGE 8% 74% 18% 50
COMMENT
On that basis, we conclude that 17% people know nothing about the securities investments and 75% people have partial knowledge about it, so, some promotional activities are required for increasing the awareness about security market.
6) I n which company you have d-mat and trading account? COMPANY SHAREKHAN INDIAINFOLINE ICICI DIRECT INDIA BULLS KARVY Others TOTAL PERCENTAGE 38% 20% 14% 12% 8% 8% 50
C OM ME N T :- In Sharekhan Ltd 38% respondents have de-mat & trading account because of
better services and no annual maintenance for the First year and other charges, 20% are with indiainfoline because of their web portal 5paisa.com, 14% are with ICICI Direct because they have their accounts in ICICI bank.
8) Are you satisfied with you present broking firm?
YES NO TOTAL
58% 42% 50
COMMENT: According to the above graph it shows that 65% of respondents are not satisfied from their present broking firm and only 35% of respondents are satisfied from their brokers mainly because of their Product or their Services.
9) Specify the reason of satisfaction with the current broking house. SATISFACTION Operating expenses Services Brokerage TOTAL PERCENTAGE 28.57% 33.33% 38.10% 100
COMMENT
According to of the brokerage that they charge, 25% of clients are satisfied because of the services that they are given, and 18% because their operating expenses are low.
C R O SS T AB S "In which Company do you have D-Mat and Trading Account" * "Are you satisfied with your present Broking Firm" Crosstabulation Count
"Are you satisfied with your present Broking Firm"
YES NO Total
"In which Company do you have D-Mat and Trading Account"
SHAREKHAN INDIAINFOLINE ICICI DIRECT INDIA BULLS KARVY OTHERS
14 6 3 2 3 1 29
5 4 4 4 1 3 21
19 10 7 6 4 4 50
Total
"In which Company do you have D-Mat and Trading Account" * "The Reason for yuor satisfaction with the current broking firm" Cross tabulation
Count
"The Reason for your Dis-satisfaction with the current broking firm" OPERATING EXPENSES "In which Company do you have D-Mat and Trading Account" SHAREKHAN INDIAINFOLINE ICICI DIRECT INDIA BULLS KARVY OTHERS Total 2 1 2 0 0 1 6 SERVICES 1 3 1 0 0 2 7 BROKERAGE 2 0 1 4 1 0 8 Total 5 4 4 4 1 3 21
FINDINGS
F According to the survey most of the customers of “Sharekhan Ltd” says that it is p pocket friendly. Coming to faith 70% say Sharekhan Ltd is better than others stock brokers due to customers satisfaction. Main purposes of investments are returns & liquidity. I Investors take risk as well as returns into their mind while making the investment. B Businessmen are more interested in the stock market than others. C Commodity market is less preferred by the investors. People want to invest their money in the security market but they don’t have the p proper knowledge. They are also not aware of hedging in stock market. Traders pay more emphasis on brokerage than service provided by brokerage houses.
LIMITATIONS
L D Due to limitation of time a sample size of only 50 respondents were chosen. The survey was carried through questionnaire and the questions were based on p perception.
T The sample for research was chosen only from a limited area.
S Some of the respondents may be biased in giving responses.
Complete data was not available due to company privacy and secrecy.
S SUGGESTIONS
T The facility of free demonstrations should be provided for all. I Improvement in the opening of De-mat & contract notice procedure is required. There should be a limited number of clients under the relationship manger, so t that he can handle new as well as old customer properly. Some promotional activities are required for the awareness of the customer, seminars should be held for providing information to prospective and present c customers. People at young age should be encouraged to invest in stock market. There is high potential market for mutual fund in Mumbai city, but this market needs to be explored as investors are still hesitated to invest their money in mutual f funds.
Investors have inadequate knowledge about mutual funds, so proper marketing of various schemes is required; company should arrange more and more seminars on mutual funds.
CONCLUSION
On the basis of the study it is found that Sharekhan Ltd is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. Sharekhan Ltd. provides the facility of Trade tiger as well as relationship manager facility for encouragement and protects the interest of the investors. It also provides the information through the internet and mobile alerts that what IPO’s are coming in the market and it also provides its research on the future prospect of the IPO.
Study also concludes that people are not much aware of commodity market and while it’s going to be biggest market in India.
The company should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers, so that they feel more comfortable while investing in the stock market.
BIBLIOGRAPHY
Books
G C. BERI - MARKETING RESEARCH NEW DELHI, TATA Mc GRAW-HILL PUBLISHING COMPANY LIMITED. C.R.KOTHARI - RESEARCH METHODOLOGY NEW AGE INTERNATIONAL LTD.
Magazines
VALUELINE (SHAREKHAN MONTHLY RESEARCH MAGAZINE) CAPITAL MARKET (5PAISA.COM), NEW DELHI. THE FINAPOILS (YOUR PERSONAL FINANCE ADVISOR FROM
Webliography
http://www.moneycontrol.com http://www.capitaline.com http ://www. sharekhan ltd.com http://www.indiainfoline.com http://www.icicidirect.com http://www.hdfcsecurity.com http://www.karvy.com http://www.bseindia.com http ://economictimes .indiatimes .com/
KARVY).
APPENDIX
QUESTIONNAIRE DATE:
NAME OCCUPATION AGE CONTACT NO. 1)Do you know about Investment options available? a) Yes b) No
2)Do you know about the different types of investment alternatives? a) Insurance & mutual funds b) Banks c) Real estate e) Commodity d) Share market f) Others
3)What is the basic purpose of your investment? a) Liquidity b) Returns d) Risk covering
c) Capital appreciation e) Tax benefits
4) What are the most important things you take into account, while making any investment? a) Risk b) Returns c) Both
5)Do you have any knowledge of share markets? a) Partial b) Complete c) Nil
6)Do you have any D-mat & Trading account? a) Yes b) No
7)In which company you have D-mat & Trading account? a) Sharekhan Ltd c) Indiainfoline e) Indiabulls g) Others 8)Are you satisfied with your present broking company? a) Yes b) No b) Karvy d) ICICI direct f) HDFC securities
9)What is the reason? Please specify. a)Services b)Brokerage c)Operating expenses d)Others
10) What is your trading exchange preference? a) NSE c) MCX Suggestion: b) BSE d) NCDEX
