A PROJECT REPORT

ON
A Study of Investors Perception towards Capital Market

SUBMITTED IN PARTIAL FULFILLMENT FOR THE

AWARD OF THE DEGREE OF MASTER IN BUSINESS
ADMINISTRATION 2010-12

UNDER THE GUIDANCE OF:

SUBMITTED BY:

Ms. Mona Kawatra

Manish Sharma

Faculty M.A.I.T.

Roll No: 03414803910

MBA 4th SEM

Department of Management
Maharaja Agrasen Institute of Technology
Approved by AICTE, HRD Ministry, Govt of India
Affiliated to Guru Gobind Singh Indraprastha University, Delhi
PSP Area, Plot No. 1, Sector 22, Rohini Delhi 110086

STUDENT DECLARATION
This is to certify that I have completed the Summer Project titled A Study
of Investors Perception towards Capital Market under the guidance of
Ms. Mona Kawatra in partial fulfillment of the requirement for the award
of degree of Master of Business Administration at Maharaja Agrasen
Institute of Technology, Delhi. This is an original piece of work and I have
not submitted it earlier elsewhere.

Date:

Signature:

Place:

Name: Manish Sharma

University Enrollment

No.: 03414803910

CERTIFICATE
This is to certify that the summer project titled A Study of Investors
Perception towards Capital Market is an academic work done by
Manish Sharma submitted in the partial fulfillment of the requirement for
the award of the degree of Master of Business Administration from
Maharaja Agrasen Institute of Technology, Delhi, under my guidance &
direction. To the best of my knowledge and belief the data & information
presented by him in the project has not been submitted earlier.

Signature

Name of the Faculty : Ms. Mona Kawatra

ACKNOWLEDGEMENT
There is always a sense of gratitude which one express to other for the
helpful so needy services they render during all phases of life. I would like
to express my gratitude towards all those who have been helpful to me in
getting this mighty task of training to a successful end.
With the deepest sense of esteem and gratitude I express my sincere thanks
to Ms. Mona Kawatra under whose able guidance I was able to learn
much and successfully complete my project report.
I would take this opportunity to thank all my family members for their
helps and suggestions during the course of the project work. I am also
thankful to all my friends who gave me constant & continuous inspiration
to complete this project report.

EXECUTIVE SUMMARY
The Indian capital market is one of the oldest and largest capital markets in
the world. The first instance of organized trading of securities in India was
started by the East India Company in the 19th century.
Securities markets provide a channel for allocation of savings to those
who have a productive need for them. The securities market has two
interdependent and inseparable segments: (i) primary market and (ii)
secondary market. Over a period, the Indian securities market has
undergone remarkable changes and grown exponentially, particularly in
terms of resource mobilisation, intermediaries, the number of listed stocks,
market capitalisation, turnover and investor population.
The principal reform measures undertaken since 1992 are : Creation of
Market Regulator, Screen Based Trading, Reduction of Trading Cycle,
Equity Derivatives Trading, Dematerialisation, Clearing Corporation,
Investor Protection, Globalisation, Direct Market Access, Launch of
Securities Lending & Borrowing Scheme, Launch of Currency Futures,
Launch of Interest Rate Futures, Issue of Capital and Disclosure
Requirements (ICDR) Regulations 2009, etc.
Investors are experiencing a number of grievances from different market
participants. Their widespread geographical distribution, unorganized
nature and lack of awareness about capital market investment instigated
market participants to exploit them. This calls for the attention of the
government and the other policy makers to take initiatives to overcome the
problems. Securities market is regulated by Securities and Exchange Board
of India (SEBI).
Hence an attempt is made to know the perception of investors awareness,
investment option, purpose of investment, factors affecting investment in
the capital market, etc. For this study, investors; opinions were collected

and the data was analyzed to determine awareness and perception of

investors towards capital market investments.

CHAPTER SCHEME
The study has been divided into 7 chapters.
Chapter 1 is about the overview of the Indian Securities Market which
includes its market segments, key indicators of securities market, its
products and participants, market segments and their products, reforms in
Indian securities markets and its regulatory framework.
Chapter 2 is about the importance and purpose of my research which
contains the purpose of the study, the research objectives and the research
methodology which includes research, research design, sampling design,
data collection and the limitations.
Chapter 3 describes the topic of the study.
Chapter 4 deals with the detailed analysis of the questionnaire.
Chapter 5 shows the findings of the analysis

Chapter 6 shows the suggestions to the security market participants.

Chapter 7 is about the conclusion of the study.

List of Tables
Table No. 1.01: Market Participants in
India...........................................................................3
Table

No

4.01:

Responses

respondents....21

of

List of Graphs
Graph No. 4.01 : Response of Q. No. 1.
...23
Graph No. 4.02 : Response of Q. No. 2....
25
Graph No. 4.03 : Response of Q. No. 3...
.27
Graph No. 4.04 : Response of Q. No.
4...29
Graph No. 4.05 : Response of Q. No. 5...
....31
Graph No. 4.06 : Response of Q. No. 6 ...
...33
Graph No. 4.07 : Response of Q. No. 7
..35
Graph No. 4.08 : Response of Q. No. 8 ..
....37
Graph No. 4.09 : Response of Q. No. 9 ...
...39
Graph No. 4.10 : Response of Q. No. 10 .
...41
Graph No. 4.11 : Response of Q. No. 11..
...43
Graph No. 4.12 : Response of Q. No. 12 ..
..45
Graph No. 4.13 : Response of Q. No. 13 .
...47
Graph No. 4.14 : Response of Q. No. 14 ..
..49
Graph No. 4.15 : Investment in companies which are more popular and
have a good
clean image .....
50
ii

Graph No. 4.16 : Response of Q. No.15 ..

...51
Graph No. 4.17 : Studying company profile before investing
....52
Graph No. 4.18 : Response of Q. No.16 ...
..53
Graph No. 4.19 : Proper analysis of the company before investing
.......54
Graph No. 4.20 : Response of Q. No. 17 ..
..55
Graph No. 4.21 : Effect of past performance of the company on
investment decisions ....56
Graph No. 4.22 : Response of Q. No. 18 ....
57
Graph No. 4.23 : Advice of peers, friends and relatives before
investing ......58
Graph No. 4.24 : Response of Q. No. 19
....59
Graph No. 4.25 : Consulting Financial Planner for managing the wealth
..60
Graph No. 4.26 : Response of Q. No. 20 ..
..61
Graph No. 4.27 : Satisfaction from the transparency of the earlier
transactions ....62
Graph No. 4.28 : Response of Q. No.21 ..
...63
Graph No. 4.29 : Satisfaction from the services of the stock brokers
....64
Graph No. 4.30 : Response of Q. No. 22 ..
..65
Graph No. 4.31 : Awareness about the rights and duties of an Investor
.....66
Graph No. 4.32 : Response of Q. No. 23 ...
..67
iii

Graph No. 4.33 : Awareness and Satisfaction with the SEBI protection
guidelines ..68

iv

List of Charts
Chart No. 4.01: Education
Qualification......24
Chart No. 4.02 : Occupation..
..26
Chart No. 4.03 : Monthly
Income....28
Chart No. 4.04 : Annual
Savings.....30
Chart No. 4.05 : Capital Market
Investment....32
Chart No. 4.06 : Type of
Investment...34
Chart No. 4.07 : Investment
Experience......36
Chart No. 4.08 : Investment
Motive....38
Chart No. 4.09 : Factors influencing investment in a particular stock
...40
Chart No. 4.10 : Long Investment in a particular stock..
.42
Chart No. 4.11 : Risk Appetite...
..44
Chart No. 4.12 : Investment Pattern
...46
Chart No. 4.13 : Type of Investment ..
....48

List of Abbreviations
ADRs American Depositary Receipts
ASBA - Application Supported by Blocked Amount
CDS - Currency Derivatives Segment
CDSL - Central Depository Services (India) Limited
CM - Capital Market
DEA - Department of Economic Affairs
DIP - Disclosure and Investor Protection
DMA - Direct Market Access
ECBs - External Commercial Borrowings
FCCBs Foreign Currency Convertible Bonds
FPOs - Follow On Public Offer
FIIs - Foreign Institutional Investors
F&O - Futures & Options
GDP - Gross domestic product
GDRs Global Depositary Receipts
ICDR - Issue of Capital and Disclosure Requirements
IEPF - Investor Education and Protection Fund
INR - India Rupee (Currency Unit, ISO)
IOSCO - International Organisation of Securities Commissions
IPO - Initial Public Offering
MCA - Ministry of Corporate Affairs
NEAT - National Exchange for Automated Trading
NSCCL - National Securities Clearing Corporation Ltd.
NSDL - National Securities Depository Limited
NSE - National Stock Exchange
OTC - Over-the-Counter
PSU - Public Sector Undertakings
RBI - Reserve Bank of India
SBTS - Screen Based Trading System
S&P CNX Nifty - Nifty 50 or simply the Nifty (stock market index)
SC(R)A - Securities Contracts (Regulation) Act
SEBI Securities and Exchange Board of India
SROs - Self-Regulatory Organizations
WDM - Wholesale Debt Market

vi

Table of CONTENTS
Student
declaration.
.....i
Certificate
...ii

..

Acknowledgement...
.iii
Executive
Summary..
....iv
Chapter
Scheme
.....
...v
List of Tables...
..vi
List of Graphs..
vii
List of Charts..
..ix
List
if
Abbreviations,
if
......x

any.

Pag
e
no.
CHAPTER-1
1.1
Market
Segments...
...1
1.2
Key
Indicators
of
Securities
Market........1
1.3 Products and Participants.
....2
1.4
Market
Segments
and
Products4
vii

their

1.5
Reforms
in
Indian
Securities
Markets..5
1.6
Regulatory
Framework...
..7
CHAPTER-2
2.1Purpose of the study..
..17
2.2Research
Objectives
of
study....17

the

2.3Research
Methodology
of
study...17

the

2.3.1Research
Design.....
..17
2.3.2Data Collection Primary & Secondary data.
....17
2.3.3

Design....
.18

2.3.3.1
Population..
..18
2.3.3.2
Sample
size......
....18
2.3.3.3 Sampling technique......
....18
2.3.4
Method
of
data
collection.
....18
2.3.4.1
Instrument
for
data
....18

collection..

2.3.4.2 Drafting of a questionnaire..

19
2.3.4.3
Limitations.
..19
CHAPTER -3
About
the
Topic...
....20
viii

CHAPTER -4
Analysis...
.....21
CHAPTER -5
Findings
...
...69
CHAPTER -6
Suggestions....
..70
CHAPTER -7
Conclusion
.;;
...71
Bibliography
Annexures
Evaluation Attendance Sheet

ix