BNP Project Data

The Relationship between Bell Weather stocks and Nifty
Bangalore University
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Industry Profile:
The economic development at any country depends upon the existence of a
well organized financial system. It is the financial system which supplies the
necessary financial inputs for the production of goods and services which in
turn promote the well being and standard of living of the people of a country.
Thus the financial system is a broader term which brings under its fold the
financial markets and financial institutions which support the system.
The major assets traded in the financial system are money and monitory
assets. The responsibility of the financial system is to mobilize the savings in
the form of money and monetary assets and invest them to productive
ventures. An efficient functioning of the financial system facilitates the free
flow of the funds to more productive activities and thus promotes investments.
Thus, the financial system provides the intermediation between savers and
investors and promotes faster economic development.
Historic evolution:
The equity brokerage industry in India is one of the oldest in the Asia
region. India had an active stock market for about 150 years that played a
significant role developing risk market as also promoting enterprise and
supporting the growth of industry.
The roots of a stock market in India began in 1860s during the American
civil war that led to sudden surge in demand for cotton from India resulting in
setting up of a number of joint stock companies that issued securities to raise
finance. This trend as in to the rapid growth of securities markets in Europe
and the North America in the background of expansion of railroads and
exploration and natural resources and land development.
Historical records shows that as early as 1864, there were about 1,000
brokers with the stock markets functioning from three places in Mumbai:
between9 am to 7 pm at the junction of Meadows street and Rampart Row,
from day break 9 am and from 7 pm to early hours of next morning at
Bazargate.
Share prices rose sharply even at that time. A share of Colaba Land
Company during the boom period of the 1860s rose from Rs. 10,000 at par to
Rs. 12,000 and that back day shares went up from Rs. 2,000 to Rs. 54,000.
Bombay, at that time, was major financial centre having housed 31 banks, 20
insurance companies and 62 joint stock companies.
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Reports on markets around that time indicate that an ordinary broker in
1864 earned about Rs. 200 per day, a huge sum in those days. The boom
period came to an abrupt end in 1865.
Never had witnessed in any place a run so widely distributed or such distress
followed so quickly on the heels of such prosperity thus wrote Richard
Temple, who served as the Governor of Bombay at that time. An interesting
aspect is that despite the collapse of the stock market, most of the brokers met
their payment commitments.
Security market:
It is also called capital market.
It consists mainly of primary operation and secondary market operations.
Primary market or new issue market deals with the issue of new securities to
investors on facilities the corporate sectors in raising sectors in raising funds.
The primary market is made up of two components: where the firms go for the
first time through initial public offering and where the firms which are already
traded raise additional capital through seasoned equity offerings.

The security market is the market for equity, debt, derivatives.

Securit
y
market
Equity
market
Primary
Market
Seconda
ry
Market
Debt
Market
Govt
Security
Market
Corpora
te Debt
Market
Money
Market
Derivative
market
Options
Market
Future
Market
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Equity Market:
Equity Market is a market for the trading of equity shares. In this market the
shares are issued for the first time in the primary market segment and these
shares are traded in the secondary market segment.

Primary Equity Market:
It is also called as new issue market, where securities are issued for the
first time. There are 4 ways in which a company may raise equity capital in the
primary market:
Public issue
Rights issue
Private placement
Preferential allotment

Secondary Market:
It is also called as stock exchange.
The origin of stock exchange in India goes back to the end of the 18
th
century
when long term negotiable securities were first issued. However, for all
practical purposes, the real beginning occurred in the middle of the 19
th

century after the enactment of the companies act in 1850, which introduced
the feature of limited liability and generated investor interest in corporate
securities.
An important early event in the development of the stock market in India was
the formation of the Native share and stock Brokers Association at Bombay in
1875, the procurer of the present day Bombay Stock Exchange.
The most important development in Indian stock market was the establishment
of the National Stock Exchange (NSE) in 1994. Within a short period, it
emerged as the larger stock exchange in the country surging ahead of the
Bombay stock exchange which was historically the dominant stock exchange
in India.
As per the securities contract regulation act 1956 a stock exchange has defined
as follows It is an association or body of individuals whether in corporate or
not, established for the purpose of assisting and controlling business in buying,
selling and dealing in a securities.
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In brief, stock exchanges constitute a market where securities are issued by
central and state government. Public bodies and joint stock companies are
traded.

Functions of stock exchange:
Maintaining active trading.
Fixation of prices.
Ensure fair and safe dealing.
Dissemination of information
Performance inducer

Transaction in stock exchange:
The transaction of buying and selling of securities take place in stock
exchanges. To trade in exchanges, only registered members are eligible. If an
individual investors want to buy or sell securities he can do only through
registered members.
An individual who wish to buy or sell will first place an order with a
broker well then executes the order and report the same to the client, on due
date the transaction is settled by delivering security and paying funds.

2. Company profile:
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a) Background and inception of the company.
Geojit BNP Paribas started in the year 1987 when Mr. C.J. George and Mr.
Ranajit Kanjilal founded it as a partnership firm for doing broking business in
Cochin Stock Exchange. In 1994, the business was taken over by Geojit
Financial Services Ltd... A joint venture between Mr. C. J. George and the
Kerala State Industrial Development Corporations Ltd (KSIDC). In the
following year, the company came up with an IPO and the shares were listed
in the various stock exchanges in India in 1995.
Geojit Securities Ltd. Is growing as a Financial Supermarkets, which
gives all modern financial capital market service under one roof. Geojit
Securities Ltd. Is the first Online Share Broking Firm in India?
The company stands as the first member of NSE, the first company
give depository services in South India. Geojit Securities Ltd. is Indias first
internet brokerage firm. It has been active in the field of capital markets for 24
years. It is a leading retail broker listed on major stock exchange and has 540
offices across the country. The company has been growing at over 300%
annually and has a net worth of over Rs.13 cr. The company endeavours to
provide the best service at the lowest possible cost to investors. The aim is
supported by well qualified human resource and constant up-gradation of
technology. The company possesses the largest pool of certified professionals
in the Indian stock broking industry.
Geojit Securities Ltd. is a well-established corporate sector in Indian
Capital market. Its rate of return is growing every year and its role in the
market and in the world is expanding. The company also has an institution
named as Geojit Institute of Capital Market also to train Geojit staff to equip
them with modern technology for trading and related services. The staffs are
also trained for qualifying in NCFM exam conducted by BSE.
The electronic share trading, including internet based share trading and
derivatives trading are the most modern operational techniques in the capital
market. Geojit is first to start trading in index Futures & Options. This being a
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new concept, investors are hesitating to enter into this business. To spread
awareness about derivatives among investors, Geojit has conducted more than
149 workshops over the last 3 yrs. Mutual Fund is an important tool or product
in the capital market. Geojit has its own mutual fund department. Now all the
branches are being registered as per the statutory compliance of the ESI Act,
Which states that Geojit is a commercial establishment.

Milestones
1986- Membership in Cochin Stock Exchange (CSE)

1994- Becomes a Public Limited Company named Geojit Securities Ltd.

1995-
i. Kerala State Industrial Development Corporation Ltd.(KSIDC)
acquires 24 percent equity stake

ii. Membership in National Stock Exchange (NSE)

iii. Public Issue

1996- Launch of Portfolio Management Services with SEBI registration

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1997 Depository Participant (DP) under National Securities Depository
Limited

1999 Membership in Bombay Stock Exchange (BSE)

2000

i. BSE Listing
ii. 1st broking firm in India to offer online trading facility
iii. Commences Derivative Trading with NSE
iv. integrates the 1st Bank Payment Gateway in the country for
Internet trading
2001- Becomes India's first DP to launch depository transactions through
Internet
Establishes Joint Venture in the UAE to serve NRI customers
2002- 1st in India to launch an integrated internet trading system for Cash
& Derivatives segments

2003-
i. Geojit Commodities Limited, wholly owned subsidiary,
launched Online Futures Trading in agri-commodities, precious
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metals and in energy futures on multiple commodity exchanges.
National launch of online futures trading in Rubber, Pepper,
Gold, Wheat and Rice.
ii. Company renamed as Geojit Financial Services Ltd.

2004- National launch of online futures trading in Cardamom.

2005- NSE Listing

2006- Became the Charter member of the Financial Planning Standards
Board of India.

2007- BNP Paribas takes a stake in the companys equity, making it the
single largest shareholder
Establishes Joint Venture in Saudi Arabia to serve the Saudi national and
the NRI
2008- BNP Paribas Securities India (P) Ltd. a Joint Venture with BNP
Paribas S.A. for Institutional Broking.

1st brokerage to offer full Direct Market Access execution in India for
institutional clients
2009-
i. Launch of Property Services division

ii. Launch of online trading in Currency Derivatives

iii. Consequent to BNP Paribas becoming the largest
stakeholder in Geojit Financial Services, company is
renamed as Geojit BNP Paribas Financial Services Ltd.

2010
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Launch of FLIP (Financial Investment Platform), a new
advanced online investment platform.
Launch of state of the art Mobile Trading platform to empower
clients to trade from anywhere, even while on the move
through the innovative application FLIP- ME.

b) NATURE OF BUSINESS:

Geojit BNP Paribas today is leading retail financial services company in India
with a
growing presence in the Middle East. The company rides on its rich
experience in the
capital market to offer its clients a wide portfolio of savings and investment
solutions.

The gaument of value-added products and services offered ranges from
equities and
derivatives to Mutual Funds, Life and General Insurance and third party Fixed
Deposits.
The needs of over 5,76,000 clients are me via multichannel services - a
countrywide
network of over 540 offices, phone services, dedicated customer care and the
internet.

Further, deployment of BNP Paribas state-of-the-art globally accepted
systems and
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processes are already scaling up the sales of Mutual Funds and Insurance. 24
years of
history in Indian capital market.

Geojit BNP Paribas has 24 years of in-depth broking experience in Indian
capital market.
More than 5,76,000 clients and over 13,800 crores (as of 30
th
sep.10) in
Asset under
Management reflects the trust reflect the trust reposed in our expertise.

c) VISION, MISSION & QUALITY POLICIES
VISION
The vision of GEOJIT BNP PARIBAS is to be leading financial and
commodities markets intermediary for individual and institutional
clients from India and Overseas.
We continually strive to raise their products and service standards by
intelligent application of technology and processes.
MISSION
We understand and respect customers needs to consistently deliver
total quality solution through constants skills up-gradation.
We believe that the company culture help to attract and retain the best
talent.
We uphold uncompromising ethical standards and strive to maintain a
distinctive identity in public mindshare through innovation and quality.
We are committed to achieve profitable progress consistently.
We freely share their investments experience across all ages and strata
of society to encourage wise investments for a better future.
QUALITY POLICY
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Talented, efficient and competent team of youngsters rolling out high
profile applications for the global business community, keeping in
mind true quality, total customer satisfaction, delivering on time, right
time, every time.
We, at Geojit BNP Paribas, are always striving for continued
improvement and betterment of our own set standards in achieving
total quality management.
The quality of the products and services delivered by Geojit BNP
Paribas to customers is the concern of every personnel in the
organization. All are thus creatively involved in providing high quality
products and services through:
Responsiveness to customer needs;
Provision of work satisfaction and promising careers;
Constant measurement and monitoring of all operations;
Continuous improvements of procedures, products, and services;
and
Performance of operations in a responsible manner.
The quality of products and services will be maintained in accordance
with current Geojit BNP Paribas policy, standards and procedures. The
quality system will embrace a total quality management philosophy
and will comply with appropriate international quality standards

d) PRODUCTS/SERVICES PROFILE
SERVICES PROVIDED By GEOJIT BNP PARIBAS
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GEOJIT BNP PARIBAS Ltd. Plays a key role in India Capital Market
by giving different financial services to the investors. The company is
regarded as Indias first on-line share brokers and the first internet share
trading firm in India. The scope of GEOJIT BNP PARIBAS Ltd and various
functions can be clubbed under the following heads-
Equities (Broking Services through)
National Stock Exchange (NSE)
The Stock Exchange, Mumbai (BSE)
Net Trading.

Derivatives(NSE)
Index Futures
Index Options
Stock Futures
Stock Options

Depository Services-NSDL
All DP services available at all branches
Delivery of shares through internet (Speed-e)
Off market Transactions
Internet Services
Demat

Portfolio Management
GEOJIT BNP PARIBAS Ltd. Is SEBI registered portfolio
Manager (Reg no. 1N000316). They offer discretionary portfolio
management services to those who can invest a minimum of Rs. 5,
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00,000. The initial investment to the portfolio can be made either by
transferring the existing shares or by cash.
In the discretionary portfolio management team of experts take
decisions of buying and selling after discussed and Mr. Ajay Sheth,
who has successfully track record of more than 10 years in the capital
market heads the team. They have strong equity research backed by
both fundamental and technical analysis.

Distribution
Mutual fund
IPOs
Corporate Bonds and Govt. securities.
Life and General Insurance Products.

Internet Trading
The act of placing buy/sell orders for financial securities and/or
currencies with the use of a brokerage's internet-based proprietary
trading platforms.

e ) AREAS OF PPERATION
Geojit BNP Paribas presently providing products & services to these
specified areas.
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Globally
Abu Dhabi
Bahrain
Dubai
Kuwait
Mascot
Ras Alkhaimah
Sharjah

Nationally
Delhi
Kerala
Karnataka
Goa
Tamil Nadu
Andhra Pradesh
Maharashtra
Madhya Pradesh
Rajasthan
Gujarat
Uttar Pradesh
West Bengal

Regional
Belgaum
Bangalore
Dharwad / Hubli
Davangeri
Tumkur
Mysore
Hassan

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f) OWNERSHIP PATTERN
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Share holding
pattern as on :
30/09/2010 30/06/2010 31/03/201
0
Face value 1.00 1.00 1.00
No. Of
Shares
%
Holding
No. Of
Shares
%
Holding
No. Of
Shares
%
Holding
Promoter's holding
Indian Promoters 65606760 29.06 65606760 29.13 65606760 29.13
Foreign Promoters 76688959 33.97 76688959 34.05 7668895 34.05

Sub total 142295719 63.03 142295719 63.18 142295719 63.18
Non promoter's holding
Institutional investors
Banks Fin. Inst. and
Insurance
31900 0.01 50900 0.02 40900 0.02
FII's 5566883 2.47 5385275 2.39 5275227 2.34
Sub total 5598783 2.48 5436175 2.41 5316127 2.36
Private Corporate
Bodies
4908343 2.17 5263594 2.34 8178941 3.63
Individuals 33921446 15.03 32182713 14.28 31400162 13.94
Directors/Employees 29535900 13.08 29535900 13.11 29517900 13.10
Others 9464215 4.2 10539524 4.68 8544776 3.8
Sub total 46339301 34.4 77521731 34.41 77641779 34.47

Grand total 225724406 100 225253625 100 225253625 100

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g) COMPETITORS INFORMATION:
INDIABULLS
India bulls are Indias leading retail financial services company with 135 locations spread
across 95 cities. Which its size and strong balance sheet allow us to provide you with varied
products and services at very attractive price, its over 750 Client Relationship Managers are
dedicated to serving your unique needs. India bulls are lead by a highly regarded management
team that has invested crores of rupees into a world class Infrastructure that provides clients with
real-time service & 24/7 access to all information and products. IB is creating a world of Smart
Investor. India bulls offer a full range of financial services and products ranging from Equities to
Insurance to enhance your wealth and hence, achieve your financial goals.
INDIA INFOLINE
The India Infoline group, comprising the holding company, India Infoline Limited and its
wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging
from Equity research, Equities and derivatives trading, Commodities trading, Portfolio
Management Services, Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small
savings instruments to loan products and Investment banking. India Infoline also owns and
manages the websites www.indiainfoline.com and www.5paisa.com. The Company has a
network of 976 business locations (branches and sub-brokers) spread across 365 cities and
towns. It has more than 800,000 customers.

SHAREKHAN
Sharekhan is an Equities focused organization tracing its lineage to SSKI, a veteran
Equities solutions company with over 8 decades of experience in the Sharekhan does not claim
expertise in too many things. Sharekhans expertise lies in stocks and thats what he talks about
with authority. So when he says that investing in stocks should not be confused with trading in
stocks or a portfolio based strategy is better than betting on a single horse, it is something that is
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spoken with years of focused learning and experience in the stock markets. And these beliefs are
reflected in everything Sharekhan does in fact Sharekhan runs Indias largest chain of share
shops with around 250 outlets in 113 cities.
EDELWEISS CAP
Edelweiss is one of the leading financial services company in India. Its current businesses
include investment banking, securities broking, and investment management. They provide a
wide range of services to corporations, institutional investors and high net-worth individuals.

MOTILIAL OSWAL

Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit,
with just two people running the show. They have well diversified financial services firm
offering a range of financial products and services such as Wealth Management, Broking &
Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities, Private
Equity, Investment Banking Services and Principal Strategies.

HSBC
HSBC Securities Services, "HSS", is a dedicated provider of securities services to a wide
range of corporate and institutional clients, including investment managers, insurance funds,
pension funds, charity funds, and private, commercial and central banks and government
agencies.HSS holds $3 trillion of custody assets for over 2,700 clients in 79 markets, and
provides fund administration services to over 8,400 funds in 19 locations around the world,
confirming HSS's position as one of the leading global providers of securities services.

HSBC Securities Services is a division within Global Transaction Banking, part of the
Corporate, Investment Banking and Markets business line of the HSBC Group. HSS combines
the four businesses of Custody & Clearing, Corporate Trust & Loan Agency, Institutional Fund
Services, and Alternative Fund Services

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h) INFRASTUCTURAL FACILITIES:
Geogit being a leading financial services have good infrastructural facilities as mentioned below:
Over 5,76,000 clients serviced through a network of 500 offices
Over Rs. 13,800 crores in Assets under Management
Multichannel service: Internet, customer Care Desk (Via toll free number), Branch
Automated online trading services: Company is providing two type of service to their clients
i. Platinum Platform
ii. Gold Platform2
Call and Trade facility enables clients to place and track their orders through our dedicated
customer care desk
Professional advice from the research desk including daily SMS alerts, Mailing the everyday
transaction details to the client id, Providing the information on telephone, market pointers,
periodical research reports and stock recommendations
Risk management: Company is providing nearly two to three management services to their
clients, at the time of trading. Ex. Alex.
It provides security to its clients.

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i) ACHIEVEMENTS/AWARDS
1. Geojit BNP Paribas through its first mover advantage in different areas has been the first
to serve investors with its innovative offerings.
a. 1st to launch internet trading in the year 2000.
b. 1st to launch integrated internet trading system for cash and derivative segments
in the year 2002.
c. 1st Indian stock broking company to commence domestic retail broking
operations in any foreign country.
d. 1st in the industry to have a global player offering its name thereby creating
Geojit BNP Paribas.
e. 1st to launch exclusive branches for women in 2005.
2. Geojit BNP Paribas Financial Services launched Financial Investment Platform (FLIP)
the online investment platform.
3. Geojit BNP Paribas Financial Services Ltd bagged the 27th Annual Competition for
Young Managers 2009 organised by the Kerala Management Association, and lifted the
KMA-Toshiba Anand Rolling Trophy. This is the second consecutive year that the team
from Geojit BNP Paribas has stood first.
4. Mr C.J. George, Managing Director of Geojit Financial Services Ltd, has been selected
for the `Dhanam Businessman of the Year Award 2006'.
5. Geojit BNP Paribas becomes India's first DP to launch depository transactions through
Internet.
6. Geojit BNP Paribas is the 1st brokerage company to offer full Direct Market Access
execution in India for institutional clients.

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j) WORK FLOW MODEL

Giving information to the investors
Processing of applications
Opening demat and trading account

Sending market watch information to
investors

Buying and selling of securities

Sending contract notes

T+2 days settlements

After instruction payout

Providing investor ID and software
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The work flow model starts with giving information to the customer regarding securities,
stock market, investing in shares, their benefits etc.
The applications of the investors will be sreened in order to ensure the financial efficiency
and trust worthiness of the customers.
The customers who will possess all the required qualification are allowed to open an account.
The essentials to open an account are as follows:
i. Bank account with cheque book.
ii. Permanent Account Number.
The investor who want to invest in stocks has to open demat account and trading account.
Demat account is the Dematerialization of shares that is instead of keeping shares in physical
form.
Trading account refers to investor account opened to maintain his share holdings and his
transaction.
As soon as an investor open a demat account, the company will give an investor id which
will help him to carry out trading in a separate account.
The investors who are willing to trade offline, the companys employees will trade on behalf of
them.
The investors who are willing to trade by themselves will be given software which will support
trading and he will be trained by the company regarding trading.
The company will give regular information regarding the market movements and the
guidelines to the investors based on their preferences.
The company will be having a group of security analysts who will be having constant eye on
market and analyse each companys performance based on
i. Fundamental analysis
ii. Technical analysis
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According to their study they will give suggestions to the investors for buying ans selling of
shares.
The securities will be bought and sold on behalf of the investors in case of offline trading.
The generally preferred method is to buy a companys share on bad news and sell it during good
news.
The company will charge brokerages for their service to the investors
After each and every transaction the company will send a contract note to the stock exchange
on behalf of the investors.
T+2 days refer to the settlement of account on trading day + 2 days.
In case of purchase of the shares, the shares will be transferred to the investors account on that
day, or in case of selling of the amount will be transferred to investors trading account.

k) FUTURE GROWTH & PROSPECTS.
They want to be No. 1 stock broking company in India.
As every organization main objective is market expansion. Geogit is also looking
forward to expand its operation in foreign countries other than Arab countries.
They are at the edge to introduce mobile trading services.
They want to increase the market share in north India.
They are planning to penetrate the European market.
To have more advance R&D.
To introduce other investment avenues like commodity market, currency market etc.

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3) MCKENSYS 7S FRAME WORK MODEL
INDRODUCTION
The 7-s model is better known as Mckinsey 7-s model. This is because the Two persons
who developed this model, Tom Peters and Robert Waterman, have been consultant at Mckinsey
& co. so the 7S-Model is popularly known as Mckinsey 7S. They published their 7-SModel
in their article Structure is not Organization (1980) and in their books The art of Japanese and
Management (1981) and In search of excellence (1982).
The model starts on the premise that an organization is not just stricture, but consists of seven
elements.

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STRUCTURE:
The frame work in which the activities of the company members are co-ordinate.

MANAGING DIRECTOR

DIRECTOR (OPERATIONS)
HEAD - DISTRIBUTION
HEAD - EQUITY
HEAD - COMMODITY
GENERAL MANAGER
REGIONAL MANAGER
FRANCHISEES
COMMODITY MGMR BRANCH MANAGER DIST. MANAGER
ASSISTANT MANAGER
HR
SALES
RISK
ADMINISTRATIVE HEAD
OPERATIONS
EXECUTIVE
FRONT OFFI.
STAFF
FIN. CONSULTANT
TERMINAL
OPERATOR
BACK OFFI. STAFF
CAUSAL EMPLOYEES
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STRATERGY:
It covers vision, mission, objectives, goals and major action plans and policies. A
strategy targets at gaining competitive advantage over rivals. Strategies formulated need to be
implemented. Implementation of strategies is often more difficult than their formulation.
An overall group objective is already set and all the employees are driven towards
Geojit beliefs that no individual is big as the organization itself. Competition is the key survival
and for giving diversification for the given products as such competition is always good. Geojit
updates itself to the surroundings competition and brings out changes in services and related
products to be in competition.
SYSTEM:
It refers to the formal and informal procedures that support the strategy and structure. System
apply to many firms and system model of management shows that communication is needed for
Carrying out the managerial functions and for linking the organization with its external
environment.
System plays an important role in a company as it becomes a source to keep records of
everyday activities, covering everything from Management Information System at the point of
contact with the customer.
STYLE:
Style of the organization is evident through the patterns of actions taken by the member of
the top management team over a period of time. The style of an organization has to change with
the change of strategy, system and structure. Managers work together as a team to solve
problems in a significant manner.

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Leadership style of managers in Geojit BNP Paribas Ltd:
Maintain discipline in the company.
Give instructions and orders to the subordinate.
Listening to the clients and responding to their needs.
Maintains unity in the Company
Maintain smooth communication in the organization.

SKILL:
A skill is an ability or proficiency in performing particular tasks. It is an acquired or
learnt ability to translate knowledge into performance in the field in which the employee has
acquired the ability. Thus skills are the dominant attributes or capabilities and competencies
possessed by the organization. Here, organization is people. It refers to the fact that the
employees have which are needed to carry out the companies strategies. These peoples skills
help in generating and sharpening the competitive advantage collectively.
In Geojit BNP Paribas Ltd, the Training for newly appointed employees will be
generally trained on the basis of on Job Training.
SHARED VALUE:
Is to guide the super-ordinate goals stands for co vision, mission, values, philosophy,
in the back-drop of which organisations goals and objectives are set and strategies are
implemented.
CUSTOMER FOCUS: - The Company is always customer focused and will deliver what
the customer needs in terms of value, quality and satisfaction.
RESPECT FOR PEOPLE:- It is result oriented, setting high performance for ourselves
as well as
EXCELLENCE:-They do what is right, do it well and win innovation
INNOVATION: - The Company will constantly try to pursue for better processes,
products, services and management practices.

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STAFF:
Staff in the Geojit BNP Paribas Ltd has been classified into four categories:
CATEGORIES DUTIES RESPONSIBILITY
HUMAN RESOURCE
MANAGER
To maintain the
Human Resource
in the organization
To maintain
personnel files of
all employees
To maintain the
relationship between the
employee and employer
To select right person for
the right job
FINANCE MANAGER

To manage the
funds of the
organization
Planning of funds
Arranging for internal as
well as External Audit
DISTRIBUTION
MANAGER
To track and give
suggestion on
client portfolio.
To assist the middle and
lower level staff
Responsibility is to
increase the sale of the
company
TECHNICAL
EMPLOYEE
Ensuring discipline
Helping clients in
buying and selling
securities
To be loyal to the clients
and to the company
To follow ethics of the
company

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4) SWOT ANALYSIS

SWOT Analysis of Geojit BNP Paribas:
STRENGTH
It has a network of overseas trading.
They have decades of experience in capital market.
It is ISO 9000-2000 certified operations by DNV
They have qualified technical experts.
It became stronger when it merged with BNP Paribas, Geojit is one among top 5 stock
brokers in India.
Clients will enhance their confidence as company involves government participation.

WEAKNESS
There exists a cut throat competition in industry.
There are strict and stringent SEBI procedures.
Lack of HNIs (High Net worth Individuals).
To the present market, the technology being used is not up to the standard.
31

OPPORTUNITIES
They have scope to grow their business globally.
They have an opportunity to increase the clients by providing the education about stock
market trading.
It can attract more customers through its various products offered.
There are opportunities to tap the FOREX market.

THREATS
Banks are the major threats.
Fluctuation in Government policies
Volatile foreign exchange rate
There is a scope for entry of large number of competitors.
Company survival mainly depends on clients atmosphere and market trend.

32

5) Analysis of financial statement

GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD ANNUAL RESULTS

Industry: FINANCE- General Chairman /
Chair Person:
A P Kurian
ISIN No INE007B01023 52 Week
High
46 Book
Value
12.24 Face
Value
1
BSE
Code
532285 52 Week
Low
27.50 EPS 2.42 P/E 11.60
NSE
Code
GEOJITBNP P/BV 2.99 Div Yield 1.37 Market
Cap.
632.77

GEOJIT BNP FINANACIAL SERVICE LTD (Ratio Analysis):
Year March 2010 March 2009 March 2008
Current ratio 1.47 1.3 1.52
Fixed Assets 4.17 2.84 5.13
Debtors 3.83 3 4.33
Interest coverage ratio 152.33 21.47 156.96
PBIDTM (%) 32.56 19.69 37.6
PBITM (%) 28.56 13.34 34.62
PBDTM (%) 32.37 19.07 37.38
CPM (%) 23.84 15.46 26.11
APATM (%) 19.84 9.11 23.13
Inventory 0 0 0
ROCE (%) 27.65 8.21 31.95
RONW (%) 19.21 5.61 21.34

33

6) Learning experience:
By carrying out this project in Geojit BNP Paribas I got immense information about stock
exchange and its functioning.
Got practical exposure to the stock trading functions.
After observing the function of Geojit, got to know the importance of stock
broking firms as intermediary between stock exchange and the investor.
As Geojit has 24 years of online trading experience, got to know how trading
will done online.
Learnt how to execute order online on behalf of customers.
Learnt how the company gives information to the investors to hedge against
risk.
Importance of information technology in the field of stock broking is
immense.

34

I. a)GENERAL INTRODUCTION
Markets
In tune with the global stock markets that began to recover from the second half of
2003: Indian stock Markets too witnessed rapid growth. Indias two leading indices, the most
popular BSE Sensex, and the most used by the markets the National Stock Exchanges S&P
CNX Nifty rose to record levels. Both primary and secondary market activity experienced sharp
surge. Much progress was made in further strengthening and streamlining risk management,
market regulation and supervision. A few aspects of the major developments in Indias stock
markets are described below.
Market structure:
Indian securities market is fairly large as compared to several other emerging markets. There are
28 stock exchanges in the country, though the entire liquidity is shared between the countrys
two national level exchanges namely, the National Stock Exchange of India and the Bombay
Stock Exchange Ltd. The regional stock exchanges are in pursuit of business models that make
viable and vibrant. Meanwhile, these exchanges have become members of the national level
exchanges through formation of subsidiaries whose business is showing continuous growth and
progress.
Transaction in stock exchange:
The transaction of buying and selling of securities take place in stock exchanges. To trade
in exchanges only registered members are eligible. If an individual investors wants to buy or sell
securities he can do only through registered members.
An individual who wish to buy or sell will first place an order with a broker. The broker well
then executes the order and report the same to the client, on due date the transaction is settled by
delivering security and paying funds.

35

Dematerialization:
Since share certificates in India printed on paper, trading in them was fraught with high
operational cost and risk. Theft of counterfeiting of securities gives rises to number of criminal
activities. To solve this problem, National Securities Depository Services ( India) Ltd (NSDL)
followed this depository maintains a computer record of ownership of securities and dispenses
with physical share certificates. These cut down the hazardous related with the physical trading
in securities and also reduce the transaction costs substantially. This form of trading is known as
DEMAT trading.
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)
The Stock Exchange is a market for old securities i.e., those which have been already issued
and listed on Stock Exchange. These securities are purchases and sold continuously among
investors without the involvement of companies. Stock Exchange provides not only free
transferability of shares but also makes continuous evaluation of securities traded in the market.
The Basic objectives of the Board were identified as:
To protect the interest of investors in securities.
To promote the development of securities market.
To regulate the securities market and,
For matter connected therewith or incidental thereto.
NSE:
The National Stock Exchange inaugurated in 1994.
The NSE is a ring less, national, computerized exchange.
The NSE ha two segments; the capital market segment and the wholesale debt market
segment.
The trading members in the capital market segment are connected to the central computer
in Mumbai through a satellite link up, using VSAT( Very Small Aperture Terminals)
36

The NSE has opted for an order driven system. When an order is placed by a trading
member, the computer automatically generates a unique order number and the member
can take a print of order confirmation slip containing this number.
All trades on NSE are guaranteed by the National Security Clearing Corporation (NSCC)
The index of NSE is known as Nifty.
S&P CNX Nifty;
The Nifty index reflects the price movement of 50 stocks selected on the basis of market cap and
liquidity. The base period selected for Nifty index is the close of price on November 3, 1995,
which marked the completion of one year of operation of NSEs capital market segment. The
base value of the index has been set at 1000. It is a value weighted index.
Bell Weather Stocks:
The Stocks which have heavy weights in terms of daily trading or market capitalization are
called as Bell Weather Stocks.
The Stocks which are selected for the study are:-
Reliance industries
TCS
L&T
SBI
ONGC

37

Reliance industries;
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest
private sector enterprise, with businesses in the energy and materials value chain. The flagship
company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest
private sector company in India. Starting with textiles in the late seventies, Reliance pursued a
strategy of backward vertical integration - in polyester, fiber intermediates, plastics,
petrochemicals, petroleum refining and oil and gas exploration and production - to be fully
integrated along the materials and energy value chain.
The Group's activities span exploration and production of oil and gas, petroleum refining
and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles,
retail and special economic zones. Reliance enjoys global leadership in its businesses, being the
largest polyster yarn and fibre producer in the world and among the top five to ten producers in
the world in major petrochemical products.
Tata Consultancy Services:
Tata Consultancy Services started in 1968. Mr.F.C Kohli who is presently the Deputy
Chairman was entrusted with the job of steering TCS. Tata Consultancy Services (TCS) is one of
the world's leading information technology consulting, services, and business process
outsourcing organization with a presence in 34 countries across 6 continents. Their valued
customers are Asian Development Bank, British Airways, Citibank, Compaq, Ford Motor
Company, General Motors, Government of Sri Lanka, Hewlett Packard, HSBC, IBM, Nokia,
38

Nike, Singapore Airlines & Standard Chartered Bank etc. TCS Division of Tata Sons Ltd was
transferred to TCS with effect from 1st April 2004 for a consideration of Rs.2300 crores. Further
during August2004 the company made an Initial Public Offer from which it realized Rs.1935.88
crores. Subsequent to the IPO the company's paid-up share capital increased to Rs.47.83 crores.
TCS is not only the largest IT services company in India, it also has everything which one would
like to look for. Comprehensive range of services, one of the best track records of executing
large end-to-end mission critical projects, long-term client relationships, very extensive global
footprint, strong Indian presence, R&D capabilities, one of lowest employee attrition levels,
strong brand and of course strong management.The present CEO of the company is
Mr.S.Ramadorai. The companies strength is about 14,000.
Larsen & Toubro Limited (L&T):
Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing
company. It is one of the largest and most respected companies in India's private sector. Seven
decades of a strong, customer-focused approach and the continuous quest for world-class quality
have enabled it to attain and sustain leadership in all its major lines of business. L&T has an
international presence, with a global spread of offices. A thrust on international business has seen
overseas earnings grow significantly. It continues to grow its overseas manufacturing footprint,
with facilities in China and the Gulf region. The company's businesses are supported by a wide
marketing and distribution network, and have established a reputation for strong customer
support. L&T believes that progress must be achieved in harmony with the environment. A
commitment to community welfare and environmental protection are an integral part of the
corporate vision.
39

State Bank Of India:
State Bank of India is a financial services group operating primarily in the banking industry.
Its core operations include Treasury Operations, Corporate Banking Group, National Banking Group and
International Banking Group. SBI has a network of 13,908 branches, including 4,731 associate banks`
branches. It also provides financial services, such as life insurance, merchant banking, mutual funds, credit
card, factoring, security trading and primary dealership in the money market. Its seven associate banks are
State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore,
State Bank of Patiala, State Bank of Saurashtra and State Bank of Travancore. It also has non-banking
subsidiaries and joint ventures, such as SBI Capital Markets Ltd., SBI DFHI Ltd., SBI Funds Management
Pvt Ltd., SBI Factors & Commercial Services Pvt Ltd. and SBI Life Insurance Company Ltd. Effective
April 20, 2005, it acquired a 51% stake in Indian Ocean International Bank Ltd.

Oil and Natural Gas Corporation Limited (ONGC):
Oil and Natural Gas Corporation Limited (ONGC) (incorporated on 23 June 1993) is an Indian public
sector petroleum company. It is a Fortune Global 500 company ranked 152
nd
, and contributes 77% of
Indias crude oil production and 81% 0f Indias natural gas production. Indian government holds 74.14%
equity stake in this company.
Post 1990, the liberalized economic policy was brought into effect; subsequently partial
disinvestments of government equity in Public Sector Undertakings were sought. As a result, ONGC was
re-organized as a limited company and after conversion of business of the erstwhile Oil & Natural Gas
Commission to that of Oil and Natural Gas Corporation Ltd in 1993. In 2002-03 ONGC took over
Mangalore Refinery and Petrochemicals Limited (MRPL) from Birla Group and announced its entrance
into retailing business.

40

ONGC also went to global fields through its subsidiary, ONGC Videsh Ltd. (OVL). ONGC has made
major investments in Vietnam, Sakhalin and Sudan and earned its first hydrocarbon revenue from its
investment in Vietnam. In 2009, ONGC discovered a massive oil field, with up to 1 billion barrel reserves
of heavy crude, in the Persian Gulf off the coast of Iran.
[2]
Additionally, ONGC also signed a deal with Iran
to invest US$3 billion to extract 1.1 billion cubic feet of natural gas from the Farzad B gas field.

41

42

Title of the Study ;
A study on the Relationship between Bell weather stocks and Nifty
Statement of the problem;
As an investor there is lack information as to which stocks affect the nifty most. Therefore this study is
carried out to find the stocks which have most influence on nifty.
Nifty is the index of NSE which consists of 50 shares whose daily movement will leads to the movement of
nifty. These stocks prices will keep on varying depending on the demand and supply, companys
performance, profit, investors expectations and economic conditions in the particular industry where the
company is operating as well as the national economy.
All these 50 stocks performance will not affect the Nifty much, the stocks of the companies whose
performance are very good track record are traded more in intraday of the stock market, and therefore they
are called as Heavy Weighted Stocks or Bell Weather Stocks.
In other words, the stocks which have heavy weights in terms of market capitalization and trading and
whose performance affects index more than the other stocks are called as Bell Weather Stocks.

43

The study is carried out for the period of 3 years:
2008- when the global economy was in recession
2009- when the market was in recovery stage
2010- when the market was in Growth stage
This study helps to calculate the accurate influence of a companys stock both during inflation and
recovery period.
OBJECTIVE OF THE STUDY
Objectives of a study are to provide information to individual investors and to company to inform
their clients regarding their risk, and selecting the investment options to match their goals and attitude to
risk.
To know the risk and return of selected companies shares.
To ascertain the relationship between Heavy weights stocks and nifty
To find the volatility of shares by using beta, alpha, correlation co-efficient & standard
deviation.
To ascertain which stocks have maximum impact on nifty.
SCOPE:
To study the performance of nifty. As the index value of nifty varies daily due to the
influence of economic activities its important to study its day to day performance.
To study the impact of selected stocks on nifty. These stocks are selected on the basis of
their market cap in terms of intraday trading, i.e. the stocks which are traded more in a day.
To study the reasons for fluctuations. As there are so many reasons for the fluctuation of a
share prices, this study aims at finding out reasons for these fluctuations.
44

To know how to calculate deviation. Standard deviation represents the deviation from the
mean that is what will be the degree of variation from the return.
METHODOLOGY:

SAMPLING METHOD:
A sample is a small representation of lot of population selected at random. The random of
drawing a sample from a large population is called sampling. The sampling study adopted in this
study is judgment sampling. Sampling data in this study comprised of five stocks listed in NSE for
the period of three years. Each companys month ending price was taken in Indian rupee. The
sample stocks were from the specified group of NSE.

DATA COLLECTION METHOD
In order to fulfill the objective of the study, the data is collected from both the primary and
secondary sources.

Primary Data
The fresh data collected by the researcher concerned with the research problem refers to the
Primary data. Personal discussion was made with unit manager and interaction with other personnel
in the organization for this purpose. There is no formal design of questionnaire used in this study.

Secondary Data
The information available at various sources made for other purpose but facilitating the
study undertaken is called as Secondary data.

The various sources that were used to understand the collection of secondary data are:
Various text books were used to understand the concepts of risk and return.
Websites of the company.
Newspapers such as Economic Times, Business Standard, Business Line.
Magazines such as Business World, Business Today.
45

SAMPLING TECHNIQUE
The quality of research output and the validity of its findings depend upon appropriateness of the
sampling design selected for the study. It was needed to apply inferential statistical analysis hence;
probability sampling was chosen to be essential.

SAMPLING: Five companies were chosen from Bell Weather Stocks as sample for study

LIMITATIONS OF THE STUDY
The time period for the project was limited only Ten Weeks and information provided is
limited to the extent of internet and journals. The analysis is strictly based on the share price and
unit price information. Other company performance indicators are not considered. It focuses on
every month ending prices of during the period from January 2008 to December 2010.

46

47

INTRODUCTION TO RISK AND RETURN

Risk and Uncertainty are an integral part of an investment decision. Technically Risk can be defined as a
situation where the possible consequences of the decision that is to be taken are known. Uncertainty is
generally defined to apply to situation where the probabilities cannot be estimated. However, Risk and
Uncertainty are used interchangeably.
Risk is composed of the demands that bring in variations in return of income. The main forces
contributing to risk are price and interest. Risk is also influenced by external and internal considerations.
External risks are uncontrollable and broadly affect investments. These external risks are called systematic
risk. Risk due to internal environment of a firm or that affecting a particular industry is referred to as
unsystematic risk.
Systematic risk is non-diversifiable and is associated with the securities market as well as the
economic, sociological, political and legal considerations of the prices of all securities in the economy. The
effect of these factors is to put pressure on all securities in such a way that the prices of stock will move in
the same direction. For example, during a boom period, prices of all securities will rise indicate that the
economy is moving towards prosperity.
Unsystematic risk is unique to a firm or industry. It does not affect an average investor.
Unsystematic risk is caused by factors like labour strike, irregular disorganized management policies and
consumer preferences. These factors are independent of the price mechanism operating in the securities
market. The problems of both systematic and unsystematic risk are inherent in industries dealing with basic
raw materials as well as in consumer goods industries.

48

SYSTEMATIC RISK
Market risk, Interest rate risk and Purchasing power risk are grouped under systematic risk.
Market risk:
Market risk is referred to as stock variability due to changes in investors attitude and expectations.
The investors reaction towards tangible and intangible events in the chief cause affecting market risk.
Market risk triggers off through real events comprising political, social and economic reasons.
Interest rate risk:
There are four types of movements in prices of stocks in the market. These may be termed as (1)
long-term, (2) cyclical (bull and bear markets), (3) intermediate or within the cycle and (4) short-term.
The prices of all securities rise or fall depending on the change in interest rates.
Purchasing Power Risk:
Purchasing power risk is also known as inflation risk. This risk rises out of change in the prices of
goods and services and technically it covers both inflation and deflation periods. During the last two
decades, it has been seen that inflationary pressures have been continuously affecting the Indian
Economy.
UNSYSTEMATIC RISK
The importance of unsystematic risk arises out of uncertainty surrounding a particular firm or
industry due to facts like labour strike, consumer preferences and management policies.
Business Risk
Business risk is also associated with risks directly affecting the internal environment of the firm and
those of circumstances beyond its control. The former is classified as internal business risk and the later
as external business risk. Within these two broad categories of risk the firm operates.
Financial Risk
Financial risk in a company is associated with the method through which it plans its financial
structure. If the capital structure of a company tends to make earnings unstable, the company may fail
financially.
49

Tools used for the calculations:
Standard Deviation
Co-variance
Correlation
Beta
Alpha

Standard Deviation:
Standard deviation represents the deviation from the mean that is what will be the degree of variation from
the return.
Standard deviation is a measure of risk since it indicates whether returns have been received as per the
expectations or returns would be received as per expected return.

The formula to calculate SD is as follows:-
STANDARD DEVIATION
= ( R AR )
2

n 1 , where R is the return and AR is the average returns

Co-variance:
Co-variance is the tool to find out whether a stock is having a positive relation with stock or not
Positive co-variance:- It shows that the stock is having positive relation with the index i.e. it moves
in the same direction in which the index moves.

Negative Co-variance:- It shows that the stock is having negative relation with the index i.e. it
moves in the opposite direction in which the index moves.

50

The Formula to calculate Co-variance is:-
CovAX=(R-ArA)(R-Arx)
Where, CovAX = Co-variance of the stock A and index X
R= Return
ArA, ArX = Average return of the stock A and Index x

Co-efficient of correlation: { p}
Co-efficient of correlation shows the percent of relationship of the stock with the index.
The formula to calculate co-efficient of correlation is as follows
p=Cov/AX
Where, Cov= Covariance between the stock and the Index
A = SD of the Stock
X = SD of the Index
Beta:
An important measure of risk, the beta coefficient or simply beta measures the sensitivity of a
stock price relative to the fluctuations of a particular stock market index. In simple word, it refers to the
value of risk. It is said to have a beta of one. A stock with a beta higher than one is called a risky stock i.e.,
that is Aggressive stock and its market price may move faster than the market. If beta is less than one, the
stock is called a Defensive stock.
The Formula to calculate Beta is as follows:

= nxy (x) (y)
nx
2
(x)
2

Where, X is the return on the Index. i.e, Independent Variable
Y, is the return on the Stock. i,e, Dependent Variable
n, is the no of observations.

51

Alpha {}:
Alpha is commonly known as Unique Risk. This unique risk is mainly for a particular organization
and does not affect the whole industry. Lesser the value of Alpha lesser is the risk.

The Formula to Calculate Alpha is as follows:

= y - x
Where, X = x/n. i.e, Independent variable

Y = Y/n. i.e, Dependent Variable.
=Beta.
Formulas used to calculate Return is as follows:
Computation of Rate of Return for Listed companies:
The rate of return is calculated using yesterday closing and previous closing prices of each industry
on monthly basis.
R
A
=
Closing price of present month Closing price of the previous month
X 100

Closing price of the previous month
Computation of Rate of Return for S&P NIFTY:
The rate of return is calculated using today closing price and yesterday closing prices of each index
on monthly basis.
R
M
=
Closing index of the present month Closing index of the previous month
X 100

Closing index of the previous month

52

53

Analysis and Interpretation:

Table No: 1 views S&P CNX NIFTY-2008
Date Close Returns R-Ar R-Ar^2
Dec-2007 6138.6 - - -
Jan-2008 5137.45 -16.3091 -11.028 121.6167
Feb-2008 5223.5 1.674955 6.956051 48.38665
Mar-2008 4734.5 -9.36154 -4.08044 16.65002
Apr-2008 5165.9 9.111839 14.39293 207.1566
May2008 4870.1 -5.72601 -0.44492 0.197949
Jun-2008 4040.55 -17.0335 -11.7524 138.1197
Jul-2008 4332.95 7.236639 12.51773 156.6937
Aug2008 4360 0.624286 5.905382 34.87353
Sep2008 3921.2 -10.0642 -4.78312 22.87828
Oct-2008 2885.6 -26.4103 -21.1292 446.4425
Nov-2008 2755.1 -4.52246 0.75864 0.575534
Dec-2008 2959.15 7.406265 12.68736 160.9691

Total -63.3732 Total 1354.56
Ar -5.2811 Variance 123.1418
Std dev 11.09693

Analysis:
Nifty is the index of National Stock Exchange (NSE). In the year 2008 the closing prices of Nifty
has varied from the highest of 5223.5 to lowest of 2755.1, there by having a risk of 11.09693
The main reason for the variation in the closing prices of Nifty is Inflation, as most of the stocks
performance is affected by the inflation it resulted in the huge variation in the closing prices of Nifty.

54


Date Closing Return R-Ar R-Ar^2
Dec-2008 2959.15 - - -
Jan-2009 2874.8 -2.85048 -8.0665 65.06847
Feb-2009 2763.65 -3.86636 -3.86636 14.94871
Mar-2009 3020.95 9.310151 9.310151 86.67892
Apr-2009 3473.95 14.99528 14.99528 224.8585
May-2009 4448.95 28.06603 28.06603 787.7023
Jun-2009 4291.1 -3.54803 -3.54803 12.5885
Jul-2009 4636.45 8.048053 8.048053 64.77116
Aug-2009 4662.1 0.553225 0.553225 0.306058
Sep-2009 5083.95 9.048497 9.048497 81.87531
Oct-2009 4711.7 -7.32206 -7.32206 53.6126
Nov-2009 5032.7 6.812828 6.812828 46.41462
Dec-2009 5201.05 3.345123 3.345123 11.18985

Total 62.59227 Total 1450.015
Ar 5.216022 Variance 131.8195
Std dev 11.48127

Analysis:
In the year 2009, the closing prices of Nifty have varied from the highest 5201.05 to lowest of
2763.65, there by having a risk of 11.48127. In this year the Nifty has recovered slowly from the Inflation.

55

Date Closing Returns R-Ar R-Ar^2
Dec-2009 5201.05 - - -
Jan-2010 5225.65 0.472981 -0.61905 0.383224
Feb-2010 4922.3 -5.80502 -6.89705 47.56933
Mar-2010 5249.1 6.639173 5.54714 30.77076
Apr-2010 5278 0.550571 -0.54146 0.293181
May-2010 5086.3 -3.63206 -4.72409 22.31703
Jun-2010 5312.5 4.447241 3.355208 11.25742
Jul-2010 5367.6 1.037176 -0.05486 0.003009
Aug-2010 5402.4 0.648334 -0.4437 0.196868
Sep-2010 6029.95 11.61613 10.5241 110.7567
Oct-2010 6017.7 -0.20315 -1.29519 1.677505
Nov-2010 5862.7 -2.57573 -3.66777 13.45252
Dec-2010 5857.35 -0.09125 -1.18329 1.400169

Total 13.10439 Total 240.0777
Ar 1.092033 Variance 21.82525
Std dev 4.67175

Analysis;
In the year 2010, the closing prices of the Nifty varied from highest of 6029.95 to lowest of 4922.3, there
by having a risk of 4.67175. In this year there is a drastic decline in the standard deviation when compared
to 2008 and 2009, which is a good sign.

56

Table No: 4 views Reliance -2008
Date Close Returns R-Ar R-Ar^2 R-Ar(Nif) R-Ar(Rel) R-AR
Dec-2007 2887.5 - - - - - -
Jan-2008 2495 -13.59 -7.4955 56.18 -11.028 -7.49548 82.66
Feb-2008 2433.8 -2.453 3.64469 13.28 6.956051 3.64469 25.353
Mar-2008 2252.7 -7.441 -1.3434 1.805 -4.08044 -1.34345 5.4819
Apr-2008 2608 15.772 21.8698 478.3 14.39293 21.8698 314.77
May2008 2401.1 -7.933 -1.8357 3.37 -0.44492 -1.83569 0.8167
Jun-2008 2083 -13.25 -7.1505 51.13 -11.7524 -7.1505 84.036
Jul-2008 2214 6.289 12.3866 153.4 12.51773 12.3866 155.05
Aug2008 2125.3 -4.006 2.09127 4.373 5.905382 2.09127 12.35
Sep2008 1945.1 -8.479 -2.3812 5.67 -4.78312 -2.38121 11.39
Oct-2008 1365 -29.82 -23.726 562.9 -21.1292 -23.7261 501.31
Nov-2008 1135 -16.85 -10.752 115.6 0.75864 -10.7522 -8.157
Dec-2008 1232.6 8.5947 14.6923 215.9 12.68736 14.6923 186.41

Total -73.17 Total 1662 Total 1371.5

Company Standard
deviation
Correlation Beta Alpha
Reliance 12.29 0.838 1.0125 -0.751
57

Graph No-1 shows the performance of Reliance (2008)

Analysis:
From the above table it can be analyzed that the price of Reliance has fluctuated from highest of 2608 to
lowest of 1135 in the year 2008, there by having a standard deviation of 12.29. The correlation between
Reliance company scrip and market index is positively correlated i.e., 0.838. The beta value shows 1.0124
which means Reliance company scrips are stable. An alpha show the negative value of -0.751, which
means Reliance stock return, is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that Reliances stock is having greater impact on Nifty,
which is for every 1 Rs change in Index will result in 0.838 Rs change in Reliance scrip in the same
direction and beta value of 1.012 which shows stability in Reliance company scrip.
Crude oil is the major product of Reliance industries; due to rise in price of crude oil in the year 2008 the
stock price was in good stage having an impact of 0.838 on Nifty.

12.29164257
0.837971032
1.012484483
-0.7505593
-2
0
2
4
6
8
10
12
14
Standard Deviation correlation Beta Alpha
58

Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(Rel) R-Ar
Dec-2008 1232.55 - - - - - -
Jan-2009 1329.8 7.890146 6.931887 48.05105 -8.0665 6.931887 -55.9161
Feb-2009 1255.5 -5.58731 -6.54557 42.84444 -3.86636 -6.54557 25.30749
Mar-2009 1522.1 21.23457 20.27631 411.1287 9.310151 20.27631 188.7755
Apr-2009 1810.2 18.9278 17.96954 322.9043 14.99528 17.96954 269.4583
May-2009 2258 24.7376 23.77934 565.4569 28.06603 23.77934 667.3917
Jun-2009 2029 -10.1417 -11.1 123.2095 -3.54803 -11.1 39.38304
Jul-2009 1974 -2.71069 -3.66895 13.46123 8.048053 -3.66895 -29.5279
Aug-2009 1998.7 1.251266 0.293007 0.085853 0.553225 0.293007 0.162099
Sep-2009 2199 10.02151 9.063254 82.14258 9.048497 9.063254 82.00883
Oct-2009 1927 -12.3693 -13.3275 177.6228 -7.32206 -13.3275 97.58492
Nov-2009 1058 -45.096 -46.0543 2120.995 6.812828 -46.0543 -313.76
Dec-2009 1093.35 3.34121 2.38295 5.678451 3.345123 2.38295 7.971261

Total 11.49912 Total 3913.581 Total 978.8394

Company Standard
deviation
Reliance 18.86 0.43 0.91 -3.82

59

Graph No: 2 shows the performance of Reliance (2009)

Analysis :
From the above table it can be analyzed that the price of Reliance has fluctuated from highest of 2258 to
which means Reliance company scrips are less volatile. An alpha show the negative value of -3.82 which
means Reliance stock return is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that Reliances stock is had less impact on Nifty, which is for
every 1 Rs change in Index will result in 0.43 Rs change in Reliance scrip in the same direction.
In the year 2009 the price of Reliance has fallen drastically because there was a fall in the price of crude oil
price from 91.48 Rs in 2008 to 53.48 Rs in 2009 which is their main product.

18.86213369
0.439039035
0.917728734
-3.828613303 -5
0
5
10
15
20
60

Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(Rel) R-Ar
Dec-2009 1093.35 - - - - - -
Jan-2010 1085.9 -0.681 -0.377 0.142 -0.619 -0.377 0.2334
Feb-2010 979.3 -9.817 -9.512 90.49 -6.897 -9.512 65.608
Mar-2010 1074.5 9.7212 10.026 100.5 5.5471 10.026 55.613
Apr-2010 1031.55 -3.997 -3.693 13.64 -0.541 -3.693 1.9995
May-2010 1046.5 1.4493 1.7536 3.075 -4.724 1.7536 -8.284
Jun-2010 1089.15 4.0755 4.3798 19.18 3.3552 4.3798 14.695
Jul-2010 1009 -7.359 -7.055 49.77 -0.055 -7.055 0.387
Aug-2010 915.9 -9.227 -8.923 79.61 -0.444 -8.923 3.9589
Sep-2010 987.3 7.7956 8.0999 65.61 10.524 8.0999 85.245
Oct-2010 1097.15 11.126 11.431 130.7 -1.295 11.431 -14.8
Nov-2010 986.4 -10.09 -9.79 95.84 -3.668 -9.79 35.907
Dec-2010 1019.5 3.3556 3.66 13.4 -1.183 3.66 -4.331

Total -3.652 Total 661.9 Total 236.23

Company Standard
deviation
Reliance 7.757 0.54 0.98 -1.379

61

Graph No: 3 shows the performance of Reliance (2010)

Analysis:
From the above table it can be analyzed that the price of Reliance has fluctuated from highest of 1097.15 to
lowest of 915.9 in the year 2010, there by having a standard deviation of 7.757. The correlation between
which means Reliance company scrips are less volatile. An alpha show the negative value of -1.37 which
means Reliance stock return is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that Reliances stock is has less impact on Nifty, which is for
every 1 Rs. change in Index will result in 0.543 Rs. change in Reliance scrip in the same direction.
In the year 2009 the price of Reliance acquired 95% stake in Infold Broadband And crude oil price is
increased from 53.48 Rs to 70.67Rs in 2010 have affect on Reliance share price.

7.757250177
0.543289086
0.983992979
-1.378856844
-2
0
2
4
6
8
10
62

Table No: 7 views TCS -2008
Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(Tcs) R-Ar
Dec-2007 1059 - - - - - -
Jan-2008 885 -16.4306 -10.6672 113.789 -11.028 -10.6672 117.6381
Feb-2008 868 -1.9209 3.84247 14.7645 6.956051 3.842471 26.72842
Mar-2008 799 -7.94931 -2.18593 4.77830 -4.08044 -2.18593 8.919581
Apr-2008 920.15 15.1627 20.9260 437.900 14.39293 20.92608 301.1877
May2008 1033 12.2643 18.0276 324.997 -0.44492 18.02768 -8.02079
Jun-2008 861.5 -16.6021 -10.8388 117.478 -11.7524 -10.8388 127.3818
Jul-2008 829.9 -3.66802 2.09535 4.39050 12.51773 2.095354 26.22908
Aug2008 811.5 -2.21713 3.54624 12.5758 5.905382 3.54624 20.9419
Sep2008 657 -19.0388 -13.2754 176.237 -4.78312 -13.2754 63.49809
Oct-2008 537 -18.2648 -12.5015 156.286 -21.1292 -12.5015 264.1458
Nov-2008 562 4.65549 10.4188 108.552 0.75864 10.41887 7.904165
Dec-2008 476.85 -15.1512 -9.38787 88.1321 12.68736 -9.38787 -119.107


Company Standard
deviation
TCS 11.90 0.52 0.61 -2.49

63

Graph No: 4 shows the performance of TCS (2008)

Analysis:
From the above table it can be analyzed that the price of TCS has fluctuated from highest of 920.15 to
lowest of 476.85 in the year 2008, there by having a standard deviation of 11.9083. The correlation
between TCS company scrip and market index is positively correlated i.e., 0.528. The beta value shows
0.618 which means TCS company scrips are less volatile. An alpha show the negative value of -2.498
which means TCS stock return is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that TCS stock is has less impact on Nifty, which is for every 1
Rs. change in Index will result in 0.528 Rs. change in TCS scrip in the same direction.
In the year 2008, there was a drastic decline in the price of this stock due to recession. IT sector got
effected the most compared to other sector during the recession period.

11.90830239
0.528152703
0.618242431
-2.498374393
-4
-2
0
2
4
6
8
10
12
14
64

Date Close Returns R-Ar R-Ar^2 R-Ar(Nif) R-Ar(Tcs) R-Ar
Dec-2008 476.85 - - - - - -
Jan-2009 510 6.95187 1.223813 1.497718 -8.0665 1.223813 -9.87189
Feb-2009 484.05 -5.0882 -10.8163 116.9922 -3.86636 -10.8163 41.81964
Mar-2009 535 10.5257 4.797713 23.01805 9.310151 4.797713 44.66744
Apr-2009 622.1 16.2803 10.55232 111.3514 14.99528 10.55232 158.235
May-2009 697.35 12.0961 6.368067 40.55228 28.06603 6.368067 178.7264
Jun-2009 390.5 -44.002 -49.7304 2473.108 -3.54803 -49.7304 176.4447
Jul-2009 524.7 34.3662 28.63814 820.143 8.048053 28.63814 230.4813
Aug-2009 530.75 1.15304 -4.57502 20.9308 0.553225 -4.57502 -2.53101
Sep-2009 619.8 16.7781 11.05009 122.1044 9.048497 11.05009 99.98667
Oct-2009 631.2 1.83930 -3.88876 15.12242 -7.32206 -3.88876 28.47371
Nov-2009 689 9.15716 3.429102 11.75874 6.812828 3.429102 23.36188
Dec-2009 748.8 8.67924 2.951187 8.709502 3.345123 2.951187 9.872082


Company Standard
deviation
TCS 18.50 0.44 0.91 0.93

65


Analysis:
TCS company scrip and market index is positively correlated i.e., 0.448. The beta value shows 0.918 which
means TCS company scrips are less volatile. An alpha show the positive value of 0.937 which means TCS
stock return is independent on the market return.
Interpretation:
Rs change in Index will result in 0.448 Rs change in TCS scrip in the same direction.
In the year 2009, it shows a increasing trend that means economy is recovered from recession stage.

18.50132298
0.448115522
0.918503584 0.937144002
0
2
4
6
8
10
12
14
16
18
20
66

Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(Tcs) R-Ar
Dec-2009 748.8 - - - - - -
Jan-2010 781.3 4.34027 1.16033 1.34637 -0.61905 1.160332 -0.71831
Feb-2010 760.2 -2.7006 -5.8805 34.5811 -6.89705 -5.88057 40.55861
Mar-2010 779.5 2.53880 -0.6411 0.41106 5.54714 -0.64114 -3.55649
Apr-2010 763.4 -2.0654 -5.2453 27.5139 -0.54146 -5.24537 2.840169
May-2010 743.5 -2.6067 -5.786 33.4859 -4.72409 -5.7867 27.33691
Jun-2010 752 1.14324 -2.036 4.14816 3.355208 -2.0367 -6.83357
Jul-2010 835 11.0372 7.85728 61.7369 -0.05486 7.857289 -0.43102
Aug-2010 843.7 1.04191 -2.1380 4.57116 -0.4437 -2.13803 0.948639
Sep-2010 920 9.04349 5.86355 34.3812 10.5241 5.863553 61.70863
Oct-2010 1050 14.1304 10.9504 119.913 -1.29519 10.95049 -14.1829
Nov-2010 1080.45 2.9 -0.2799 0.07836 -3.66777 -0.27995 1.026775
Dec-2010 1073.5 -0.6432 -3.8232 14.6168 -1.18329 -3.8232 4.52394


Company Standard
deviation
TCS 5.53 0.36 0.47 2.66

67


Analysis:
TCS company scrip and market index is positively correlated i.e., 0.365. The beta value shows 0.471 which
means TCS company scrips are less volatile and less risky. An alpha show the positive value of 2.664
which means TCS stock return is independent on the market return.
Interpretation:
Rs. change in Index will result in 0.365 Rs. change in TCS scrip in the same direction. It shows an
increasing trend in share price 2010 because there was a urge for information technology, which plays an
important role.

5.533241963
0.365054491
0.471604473
2.664953348
0
1
2
3
4
5
6
68

Table No: 10 views L&T -2008
Date Close Returns R-Ar R-Ar^2
R-
Ar(Nif) R-Ar(l&T) R-Ar
Dec-2007 4165 - - - - - -
Jan-2008 3650 -12.3649 -2.69761 7.27710 -11.028 -2.69761 29.74925
Feb-2008 3507.9 -3.89315 5.77418 33.3412 6.95605 5.774184 40.16552
Mar-2008 3004 -14.3647 -4.69738 22.0654 -4.08044 -4.69738 19.16741
Apr-2008 3025 0.69906 10.3664 107.462 14.3929 10.3664 149.203
May2008 2976.2 -1.61322 8.05411 64.8687 -0.44492 8.054112 -3.5834
Jun-2008 2168 -27.1554 -17.4881 305.833 -11.7524 -17.4881 205.5277
Jul-2008 2600 19.9262 29.5935 875.777 12.5177 29.59353 370.444
Aug2008 2594 -0.23077 9.43656 89.0487 5.90538 9.436566 55.72652
Sep2008 2432.15 -6.2394 3.42793 11.7507 -4.78312 3.427936 -16.3962
Oct-2008 809.45 -66.7187 -57.0514 3254.86 -21.1292 -57.0514 1205.45
Nov-2008 729.9 -9.82766 -0.16033 0.02570 0.75864 -0.16033 -0.12163
Dec-2008 772.05 5.77476 15.4421 238.458 12.6873 15.4421 195.9195


Company Standard
deviation
L&T 21.34 0.80 1.66 -0.89

69

Graph No: 7 shows the performance of L&T (2008)

Analysis:
From the above table it can be analyzed that the price of L&T has fluctuated from highest of 3650 to lowest
of 729.9 in the year 2008, there by having a standard deviation of 21.34. The correlation between L&T
company scrip and market index is positively correlated i.e., 0.80. The beta value shows 1.66198 which
means L&T company scrips are high volatile and high risky. An alpha show the negative value of -0.89
which means L&T stock return, is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that L&T stock is has more impact on Nifty , which is for every
1 Rs change in Index will result in 0.80 Rs change in L&T scrip in the same direction.
During this year L&T suffered from huge commodity hedging loss and hence its price crashed with risk of
21.34.

21.34302702
0.802173509
1.661979936
-0.890252518
-5
0
5
10
15
20
25
70

Date Close Returns R-Ar R-Ar^2 R-Ar(Nif) R-Ar(L&T) R-Ar
Dec-2008 772.05 - - - - - -
Jan-2009 690 -10.6276 -18.7547 351.737 -8.0665 -18.7547 151.2845
Feb-2009 613 -11.1594 -19.2865 371.97 -3.86636 -19.2865 74.56856
Mar-2009 666.7 8.76019 0.63309 0.40080 9.310151 0.633093 5.894195
Apr-2009 879.9 31.9784 23.8513 568.884 14.99528 23.8513 357.657
May-2009 1396 58.6543 50.5272 2553.00 28.06603 50.52729 1418.101
Jun-2009 1570.35 12.4892 4.36215 19.0283 -3.54803 4.362153 -15.477
Jul-2009 1508.1 -3.96408 -12.0912 146.196 8.048053 -12.0912 -97.3105
Aug-2009 1564 3.70665 -4.42045 19.5403 0.553225 -4.42045 -2.4455
Sep-2009 1685 7.73657 -0.39053 0.15251 9.048497 -0.39053 -3.53371
Oct-2009 1561.8 -7.31157 -15.4387 238.352 -7.32206 -15.4387 113.0429
Nov-2009 1611.3 3.16942 -4.95768 24.5786 6.812828 -4.95768 -33.7758
Dec-2009 1677.25 4.09296 -4.03413 16.2742 3.345123 -4.03413 -13.4947


Company Standard
deviation
L&T 19.79 0.83 1.83 -1.43

71


Analysis:
From the above table it can be analyzed that the price of L&T has fluctuated from highest of 1677.25 to
L&T company scrip and market index is positively correlated i.e., 0.83. The beta value shows 1.832 which
means L&T company scrips are high volatile and risky. An alpha shows the negative value of -1.43
which means L&T stock return, is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that L&T stock is has high impact on Nifty, which is for every 1
Rs change in Index will result in 0.83 Rs change in L&T scrip in the same direction.
During this year L&T stock price has recovered with the same effect on Nifty because it has got orders
worth Rs.15000 crores from different sector.

19.79467989
0.835356878
1.832487041
-1.43115
-5
0
5
10
15
20
25
72

Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(L&T) R-Ar
Dec-2009 1677.25 - - - - - -
Jan-2010 1643.85 -1.9913 -3.3509 11.2285 -0.61905 -3.3509 2.074379
Feb-2010 1580 -3.8841 -5.2437 27.4966 -6.89705 -5.24372 36.16622
Mar-2010 1631.3 3.24683 1.88728 3.56185 5.54714 1.887289 10.46906
Apr-2010 1609.5 -1.3363 -2.695 7.2678 -0.54146 -2.6959 1.45973
May-2010 1623 0.83877 -0.5207 0.27120 -4.72409 -0.52078 2.460197
Jun-2010 1809.25 11.4756 10.1161 102.335 3.355208 10.11612 33.94167
Jul-2010 1793 -0.8981 -2.2577 5.09725 -0.05486 -2.25771 0.123849
Aug-2010 1811 1.00390 -0.3556 0.12648 -0.4437 -0.35564 0.157798
Sep-2010 2051.75 13.2937 11.9342 142.425 10.5241 11.93421 125.5969
Oct-2010 2020 -1.5474 -2.9070 8.45068 -1.29519 -2.90701 3.765111
Nov-2010 1950.65 -3.4331 -4.7927 22.9701 -3.66777 -4.79272 17.57856
Dec-2010 1941.8 -0.4536 -1.8132 3.28784 -1.18329 -1.81324 2.145586


Company Standard
deviation
L&T 5.51 0.76 0.98 0.28

73


Analysis:
From the above table it can be analyzed that the price of L&T has fluctuated from highest of 2051.75 to
L&T company scrip and market index is positively correlated i.e., 0.763. The beta value shows 0.982
which means L&T company scrips are less volatile and less risky. An alpha show the positive value of
0.286 which means L&T stock return is independent on the market return.
Interpretation:
From the above analysis it can be inferred that L&T stock is more has impact on Nifty compared to other
stocks in 2010, which is for every 1 Rs change in Index will result in 0.7632 Rs change in L&T scrip in the
same direction.

5.514606628
0.763298022
0.982763987
0.286368421
0
1
2
3
4
5
6
74

Table No: 13 views SBI -2008
Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(SBI) R-Ar
Dec-2007 2365 - - - - - -
Jan-2008 2165 -8.4566 -4.8888 23.9004 -11.028 -4.88881 53.91378
Feb-2008 2088.8 -3.5196 0.04822 0.00232 6.956051 0.04822 0.335418
Mar-2008 1608 -23.018 -19.450 378.308 -4.08044 -19.4502 79.36524
Apr-2008 1781 10.7587 14.3265 205.250 14.39293 14.32656 206.2012
May2008 1445 -18.865 -15.298 234.027 -0.44492 -15.298 6.806292
Jun-2008 1107 -23.391 -19.823 392.957 -11.7524 -19.8232 232.9703
Jul-2008 1406 27.0099 30.5777 935.001 12.51773 30.57779 382.7646
Aug2008 1404.55 -0.1031 3.46472 12.0042 5.905382 3.464721 20.4605
Sep2008 1472 4.80225 8.3701 70.0585 -4.78312 8.3701 -40.0352
Oct-2008 1114 -24.320 -20.752 430.678 -21.1292 -20.7528 438.4898
Nov-2008 1085.05 -2.5987 -0.9691 0.93916 0.75864 0.969107 0.735203
Dec-2008 1290 18.8885 22.4563 504.289 12.68736 22.45638 284.9122


Company Standard
deviation
SBI 17.02 0.73 1.23 2.93

75

Graph No: 10 shows the performance of SBI (2008)

Analysis:
From the above table it can be analyzed that the price of SBI has fluctuated from highest of 2165 to lowest
of 1107 in the year 2008, there by having a standard deviation of 17.022. The correlation between SBI
company scrip and market index is positively correlated i.e., 0.735. The beta value shows 1.2305 which
means SBI company scrips are high volatile and high risky. An alpha show the positive value of 2.93
which means SBI stock return is independent on the market return.
Interpretation:
From the above analysis it can be inferred that SBI stock is has less impact on Nifty, which is for every 1
Rs. change in Index will result in 0.735 Rs. change in SBI scrip in the same direction.
In 2008, due to the recession and due RBIs guidelines there was pressure on interest rates due to which the
banks margin affected this lead to drastic change in fall in SBIs price.

17.02249081
0.735434142
1.230598393
2.931063057
0
2
4
6
8
10
12
14
16
18
76

Date Close Return R-Ar R-Ar^2
R-
Ar(Nif)
R-
Ar(SBI) R-Ar
Dec-2008 1290 - - - - - -
Jan-2009 1148 -11.0078 -16.9499 287.3005 -8.0665 -16.9499 136.7267
Feb-2009 1022.9 -10.8972 -16.8394 283.5654 -3.86636 -16.8394 65.10712
Mar-2009 1055 3.138137 -2.80405 7.862708 9.310151 -2.80405 -26.1061
Apr-2009 1291.15 22.38389 16.4417 270.3294 14.99528 16.4417 246.5479
May-2009 1870 44.83213 38.8899 1512.427 28.06603 38.8899 1091.486
Jun-2009 1748.05 -6.52139 -12.4636 155.3408 -3.54803 -12.4636 44.22113
Jul-2009 1819 4.058808 -1.88338 3.547121 8.048053 -1.88338 -15.1575
Aug-2009 1745.95 -4.01594 -9.95813 99.16438 0.553225 -9.95813 -5.50909
Sep-2009 2212 26.6932 20.7510 430.6046 9.048497 20.7510 187.7655
Oct-2009 2181.2 -1.39241 -7.33459 53.79627 -7.32206 -7.33459 53.70435
Nov-2009 2235.1 2.471117 -3.47107 12.04834 6.812828 -3.47107 -23.6478
Dec-2009 2270.05 1.563688 -4.3785 19.17126 3.345123 -4.3785 -14.6466


Company Standard
deviation
SBI 16.88 0.87 1.63 -2.56

77


Analysis:
From the above table it can be analyzed that the price of SBI has fluctuated from highest of 2270.05 to
SBI company scrip and market index is positively correlated i.e., 0.873. The beta value shows 1.631 which
means SBI company scrips are more volatile and more risky. An alpha show the negative value of -2.569
which means SBI stock return is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that SBI stock is has high impact on Nifty, which is for every 1
Rs. change in Index will result in 0.873 Rs. change in SBI scrip in the same direction.
In 2009, there was relationship between Nifty and SBI because interest rates recovered and economy
recovered.

16.88236877
0.873096554
1.631829953
-2.56943633
-5
0
5
10
15
20
78

Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(SBI) R-Ar
Dec-2009 2270.05 - - - - - -
Jan-2010 2173 -4.27524 -6.14644 37.7787 -0.61905 -6.14644 3.8049
Feb-2010 1968 -9.43396 -11.3052 127.806 -6.89705 -11.3052 77.972
Mar-2010 2078 5.58943 3.71822 13.8252 5.54714 3.718225 20.625
Apr-2010 2300 10.6833 8.81214 77.6538 -0.54146 8.812144 -4.7714
May-2010 2263 -1.6087 -3.4799 12.1097 -4.72409 -3.4799 16.439
Jun-2010 2305 1.85594 -0.01526 0.00023 3.355208 -0.01526 -0.0512
Jul-2010 2503 8.59002 6.71881 45.1424 -0.05486 6.718816 -0.3685
Aug-2010 2765 10.4674 8.59623 73.8952 -0.4437 8.596234 -3.8141
Sep-2010 3220 16.4557 14.5844 212.707 10.5241 14.58449 153.48
Oct-2010 3157 -1.95652 -3.82773 14.6515 -1.29519 -3.82773 4.9576
Nov-2010 2994.8 -5.13779 -7.00899 49.126 -3.66777 -7.00899 25.707
Dec-2010 2732 -8.77521 -10.6464 113.346 -1.18329 -10.6464 12.597


Company Standard
deviation
SBI 8.05 0.67 1.27 0.44

79


Analysis:
From the above table it can be analyzed that the price of SBI has fluctuated from highest of 3220 to lowest
of 1968 in the year 2010, there by having a standard deviation of 8.052. The correlation between SBI
company scrip and market index is positively correlated i.e., 0679. The beta value shows 1.277 which
means SBI company scrips are high volatile and more risky. An alpha show the positive value of 0.476
which means SBI stock return is independent on the market return.
Interpretation:
From the above analysis it can be inferred that SBI stock is has less impact on Nifty, which is for every 1
Rs change in Index will result in 0.679 Rs change in SBI scrip in the same direction. The Bank has
increased dividend to Rs. 30.00 per share (300%) {(Inclusive of interim dividend of Rs. 10.00 per share
(100%) already paid)} from Rs. 29.00 per share (290%) in the last year.

8.052139217
0.679286663
1.277078472
0.476635758
0
1
2
3
4
5
6
7
8
9
80

Table No: 16 views ONGC -2008
Date Close Return R-Ar R-Ar^2

R-Ar(Nif) R-Ar(ONG) R-Ar
Dec-2007 1238 - - -

- - -
Jan-2008 1018 -17.77 -13.7673 189.539

-11.028 -13.7673 151.8262
Feb-2008 1012 -0.589 3.413865 11.6544

6.956051 3.413865 23.74702
Mar-2008 986 -2.569 1.434086 2.05660

-4.08044 1.434086 -5.85171
Apr-2008 1031.3 4.594 8.597576 73.9183

14.39293 8.597576 123.7444
May2008 861.6 -16.45 -12.4517 155.044

-0.44492 -12.4517 5.539951
Jun-2008 804 -6.685 -2.68198 7.19302

-11.7524 -2.68198 31.51981
Jul-2008 992 23.383 27.38634 750.011

12.51773 27.38634 342.8149
Aug2008 1023.75 3.2006 7.203861 51.8956

5.905382 7.203861 42.54155
Sep2008 1034.8 1.0793 5.082621 25.8330

-4.78312 5.082621 -24.3108
Oct-2008 684 -33.90 -29.897 893.831

-21.1292 -29.897 631.6996
Nov-2008 687.05 0.4459 4.449162 19.7950

0.75864 4.449162 3.37531
Dec-2008 668 -2.772 1.230532 1.51420

12.68736 1.230532 15.6122

Total -48.03 Total 2182.28

Total 1342.258

Company Standard
deviation
ONGC 14.08 0.71 0.99 1.22

81

Graph No: 13 shows the performance of ONGC (2008)

Analysis:
From the above table it can be analyzed that the price of ONGC has fluctuated from highest of 1034.8 to
ONGC company scrip and market index is positively correlated i.e., 0.7156. The beta value shows 0.99
which means ONGC company scrips are less volatile and less risky. An alpha shows the positive value of
1.22 which means ONGC stock return, is independent on the market return.
Interpretation:
From the above analysis it can be inferred that ONGC stock is having less impact on Nifty, which is for
every 1 Rs change in Index will result in 0.715 Rs change in ONGC scrip in the same direction. During
2008 there was a sharp increase of 35 points in share price due to highest dividend payout in Indian
corporate history.

14.08509231
0.715696262
0.990918402
1.229883479
0
2
4
6
8
10
12
14
16
82

Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(ONG) R-Ar
Dec-2008 668 - - - - - -
Jan-2009 656 -1.79641 -7.2240 52.1863 -8.0665 -7.22401 58.27253
Feb-2009 690 5.182927 -0.2446 0.05986 -3.86636 -0.24468 0.946019
Mar-2009 778.2 12.78261 7.35500 54.0960 9.310151 7.355002 68.47618
Apr-2009 868 11.53945 6.11184 37.354 14.99528 6.111843 91.64882
May-2009 1182.95 36.28456 30.8569 952.151 28.06603 30.85696 866.0324
Jun-2009 1065.25 -9.9497 -15.377 236.461 -3.54803 -15.3773 54.55912
Jul-2009 1170 9.833372 4.40576 19.4107 8.048053 4.405766 35.45784
Aug-2009 1189 1.623932 -3.8036 14.4679 0.553225 -3.80368 -2.10429
Sep-2009 1167.05 -1.84609 -7.2737 52.9066 9.048497 -7.2737 -65.816
Oct-2009 1133.95 -2.83621 -8.2638 68.2906 -7.32206 -8.26382 60.50819
Nov-2009 1198 5.648397 0.22079 0.04874 6.812828 0.22079 1.504208
Dec-2009 1182 -1.33556 -6.7631 45.7404 3.345123 -6.76317 -22.6236


Company Standard
deviation
ONGC 11.80 0.82 1.07 -0.18

83


Analysis:
From the above table it can be analyzed that the price of ONGC has fluctuated from highest of 1182.95 to
ONGC company scrip and market index is positively correlated i.e., 0821. The beta value shows 1.075
which means ONGC company scrips are more volatile and more risky. An alpha show the Negative value
of -0.1890 which means ONGC stock return is dependent on the market return.
Interpretation:
From the above analysis it can be inferred that ONGC stock is has more impact on Nifty, which is for
every 1 Rs change in Index will result in 0.821 Rs change in ONGC scrip in the same direction.
In 2009 it has achieved highest ever turnover, profits & dividend hence the ONGC stocks shows a positive
return.

11.80591326
0.82185245
1.075260812
-0.180953693
-2
0
2
4
6
8
10
12
14
84

Date Close Return R-Ar R-Ar^2 R-Ar(Nif) R-Ar(ONG) R-Ar
Dec-2009 1182 - - - - - -
Jan-2010 1198 1.353638 0.20973 0.04398 -0.61905 0.209734 -0.12984
Feb-2010 1119.5 -6.55259 -7.6964 59.2359 -6.89705 -7.69649 53.0831
Mar-2010 1092.5 -2.40732 -3.5512 12.6112 5.54714 -3.55123 -19.6992
Apr-2010 1055.1 -3.42776 -4.5716 20.9001 -0.54146 -4.57166 2.475382
May-2010 1175 11.36385 10.2199 104.447 -4.72409 10.21995 -48.28
Jun-2010 1315.6 11.96596 10.8220 117.116 3.355208 10.82205 36.31024
Jul-2010 1238 -5.89845 -7.0423 49.5947 -0.05486 -7.04235 0.386316
Aug-2010 1334 7.754443 6.61053 43.6992 -0.4437 6.610539 -2.93308
Sep-2010 1398.8 4.857571 3.71366 13.7913 10.5241 3.713668 39.08301
Oct-2010 1301.9 -6.92737 -8.0712 65.1454 -1.29519 -8.07127 10.45379
Nov-2010 1246.0 -4.28988 -5.4337 29.5260 -3.66777 -5.43379 19.92987
Dec-2010 1320 5.934754 4.7908 22.9522 -1.18329 4.79085 -5.66895

Total 13.72684 Total
539.064
5 Total 85.01072

Company Standard
deviation
ONGC 7.00 0.21 0.35 0.75

85


Analysis:
From the above table it can be analyzed that the price of ongc has fluctuated from highest of 1398.8 to
ONGC company scrip and market index is positively correlated i.e., 0.216. The beta value shows 0.354
which means ONGC company scrips are less volatile and less risky. An alpha show the positive value of
0.75 which means ONGC stock return is independent on the market return.
Interpretation:
From the above analysis it can be inferred that ONGC stock is has less impact on Nifty, which is for every
1 Rs change in Index will result in 0.354 Rs change in ONGC scrip in the same direction.
ONGC is quite bullish on the areas of non-conventional energy sources and plans to make an investment of
500 crore on research and development in the areas of renewable energy sources.

7.000418651
0.216649943
0.354108061
0.757217498
0
1
2
3
4
5
6
7
8
86

87

Findings:

In 2008, Reliance had the highest impact on Nifty. I.e. when the prices of these shares went up
automatically Nifty went up. The impact of this share is more because, they are highly traded in terms
of intra-day trading.
TCS had the least impact on the Nifty in the year 2008.
L&T, ONGC and SBI also had positive impact on the movement in Nifty. After Reliance L&T, ONGC,
SBI are the stocks which have heavy weights in intra-day trading.
Manufacturing companies had the biggest impact on Nifty during 2008. In this year due to recession all
most all software companies price fall, as a result investors diverted their investment towards
manufacturing companies resulting in their highest impact impact on Nifty.
In 2009, SBI had biggest impact on Nifty followed by Reliance. In 2009, there was stable relationship
between Nifty and SBI because interest rate recovered and economy recovered
In 2009, Reliance had least impact on Nifty. As the price of crude oil fell in the year 2009 the price of
Reliance stocks fell even though the Nifty was moving up.
L&T, ONGC also had positive impact on Nifty during 2009.
In 2010, L&T had the biggest impact on Nifty as compared to other stocks.
It is found that L&T is the major weights stock which influences Nifty to the large extent, thus it has
higher impact on Nifty compared to other stocks in 2010.
In 2010, ONGC and TCS had the least impact on Nifty.
Whenever company announces its quarterly financial results there will high fluctuation in the share
prices of that particular company.
If the company is independent of the market then usually company share prices depend upon its
performances like dividend declaration, business expansion, any mergers or acquisitions etc.

88

89

Suggestions:

Those who want to invest in index futures should be guided by L&T performance. As L&T has
higher impact on Nifty, its future performance evolution represents the performance of Nifty.
A combination of L&T and SBI bank in a portfolio would perfectly correlate the performance of
Nifty. As both L&T and SBI has higher impact on Nifty, the combination of both in a portfolio
would perfectly correlate the Niftys performance.
For steady performance compare to Nifty, he must invest in SBI.
For a risk adverse investor L&T should be avoided from the portfolio. As L&T stock prices can
affected by the external factors the investor who want to avoid risk should not involve L&T stocks
in his portfolio.
For an investor who is willing to the risk L&T should be part of portfolio.
Investors should go for long term investments.
Speculators & Traders can take advantage of market volatility
Share holder should also analyze the price earnings ratio, net turnover, SENSEX or Nifty and
capitalization rate from the previous years, which indicates further increase or decrease in share
prices.

90

Conclusions:

L&T is having highest impact over the Nifty.
TCS is having least impact on Nifty.
Going against the general perception that the Reliance impacts Nifty the most, this study
reveals thats its not the case.
Whenever company announces its quarterly financial results there will high fluctuation
in the share prices of that particular company.
If the company is independent of the market then usually company share prices depend
upon its performances like dividend declaration, business expansion, any mergers or
acquisitions etc.

91

92

Annexture:
Profit and Loss Account of Geojit BNP Paribas
PROFIT & LOSS ACCOUNT
Mar 10 Mar 09 Mar 08
Income:
Operating income 262.91 140.95 191.59
Expenses
Material consumed 0.00 0.00 0.00
Manufacturing expenses 28.47 25.96 27.34
Personnel expenses 51.09 43.09 41.06
Selling expenses 78.59 27.54 34.25
Adminstrative expenses 35.23 30.89 25.11
Expenses capitalised 0.00 0.00 0.00
Cost of sales 193.39 127.47 127.76
Operating profit 69.52 13.48 63.83
Other recurring income 25.15 17.73 11.69
Adjusted PBDIT 94.67 31.20 75.52
Financial expenses 0.54 1.00 0.46
Depreciation 11.52 10.13 6.21
Other write offs 0.00 0.00 0.00
Adjusted PBT 82.61 20.08 68.85
Tax charges 24.56 5.74 23.51
Adjusted PAT 58.05 14.33 45.33
Non recurring items -0.89 0.19 2.89
Other non cash adjustments 1.81 0.00 0.00
Reported net profit 58.96 14.52 48.23
Earnings before appropriation 113.93 70.99 78.58
Equity dividend 16.93 11.21 14.63
Preference dividend 0.00 0.00 0.00
Dividend tax 2.81 1.82 2.49
Retained earnings 94.19 57.96 61.47

93

Balance Sheet of Geojit BNP Paribas
BALANCE SHEET
Mar 10 Mar 09 Mar 08
( Rs. Cr) (Rs. Cr) (Rs. Cr)
SOURCES OF FUNDS
Share Capital 22.53 22.34 20.90
Reserves Total 294.62 252.24 211.77
Equity Share Warrants 0.00 0.00 8.54
Equity Application Money 1.88 1.47 0.41
Total Shareholders Funds 319.03 276.05 241.62
Secured Loans 0.00 0.00 0.00
Unsecured Loans 0.00 0.00 0.00
Total Loan Funds 0.00 0.00 0.00
Total Liabilities 319.03 276.05 241.62
APPLICATION OF FUNDS :
Loan / Non-Current Assets 0.00 0.00 0.00
Fixed Assets
Gross Block 71.50 66.66 45.65
Less: Accumulated Depreciation 31.40 21.41 12.55
Less: Impairment of Assets 0.00 0.00 0.00
Net Block 40.10 45.25 33.10
Lease Adjustment 0.00 0.00 0.00
Capital Work in Progress 2.82 0.36 1.73
Investments 125.29 150.44 147.19
Current Assets, Loans & Advances
Inventories 0.00 0.00 0.00
Sundry Debtors 109.14 41.37 64.74
Cash and Bank Balance 202.83 144.11 126.02
Loans and Advances 122.93 97.40 125.91
Total Current Assets 434.90 282.88 316.67
Less: Current Liab. & Provisions
Current Liabilities 262.39 189.31 189.58
Provisions 22.45 13.74 67.27
Total Current Liabilites & Provisions 284.84 203.05 256.85
Net Current Assets 150.06 79.83 59.82
Miscellaneous Expenses not written off 0.00 0.00 0.00
Deferred Tax Assets 2.29 2.40 1.83
Deferred Tax Liability 1.53 2.23 2.05
Net Deferred Tax 0.76 0.17 -0.22
Total Assets 319.03 276.05 241.62
Contingent Liability 4.69 3.82 2.59

94

95

BIBLIOGRAPHY:-
Websites:
www.bse.com, www.economictimes.com, www.equitypandit.com, www.moneycontrol.com,
www.financeministry.com, www.geogitbnpparibas.com, www.yahoofinanceindia.com,
www.nse.com, www.karvy.co, www.nifty.com, www.sharekhan.com

National dailies:
Economic Times and Business standards etc
Text Books:
Portfolio mgt and security analysis by Prasanna Chandra.
Security Analysis and Portfolio mgt by punithvathy pandian.

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