Final Report Alak 25

COMPARITIVE ANALYSIS OF RELIGARE SECURITIES LIMITED WITH ITS COMPETITORS
CHAPTER 1
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INTRODUCTION
Dematerialization
Before the introduction of the Depositories Act 1996, everyone used to hold
shares in the physical form. There were many risks associated with holding physical
certificates. These shares could get torn, duplicated or even stolen. Moreover,
transfer of shares from one person to another was not only a very long process but
would also attract a lot of charges. A revolution came in Capital Market with the
introduction of this act. This refers Dematerialization as the process of converting
securities from physical form to electronic form.
Basically, dematerialization refers to the absolute or relative reduction in the

quantity of materials required to serve various functions. In common terms,
dematerialization means doing more with less. According to the financial terms,
dematerialization is the substitution of paper-form securities into book-entry
securities. Dematerialized securities are the securities, which are not on paper, and a
certificate to that effect never exists. They exist in the form of entries. These entries
are in the book of depositories. Shares are held in the dematerialized form instead of
possessing it physically. This system works through a depository who is registered
with SEBI.
Dematerialization is the process wherein, there is no physical scrip in

existence as neither the individual who owns the shares nor the depository keeps
scrip. The depository maintains the electronic ledger of the securities under its
control. The owner of the securities bases the depository model on the deposit of
securities with a certified depository. Subsequently, an entry is made in the name of
the said owner, manifesting his ownership of the securities upon which the person
depositing the beneficial owner in respect of said securities.
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Process Overview
An investor (client) intending to dematerialize his/her securities need to have

a demat account with a DP. The client has to give the certificates to the DP. The DP,
after intimating the Depository electronically, sends the securities to the concerned
Registrar and Transfer agent (R&T Agent).
The depository informs the R&T agent electronically about the request for
dematerialization. The R&T, upon finding the certificate and the request in order,
registers the depository as the holder of the securities and confirms to the depository
electronically. It then authorizes the credit to the relevant client account with the DP.
Activities related to demat accounts are carried out at two levels. At bank level,
there is Depository Cell at Mumbai, which undertakes centralized transaction
processing and follows the rules and guidelines directed by SEBI. Branches and
Sales Teams are at field level that has to market the product and interact with the
investors.
Branches have to provide the relevant forms to the clients according to the
needs. They have the responsibility of preliminary verification of the instructions
submitted by the clients and promptly entering them in the system forwarding them
to the depository cell for execution as per the related guidelines. Branches also have
to regularly follow-up with the clients for all the necessary operational formalities
related to collection of various forms, documents, acknowledgements, reports, bills,
etc. Branches should co-ordinate with the with the Depository cell for timely
execution of the instruments and any other operational matters pertaining to its
demat account’s clients.
Demat account being primarily a securities account, does not involve any
monetary transactions except the charges for services rendered which are collected
separately. It is also not involved in the actual process of trading of securities,
except that it takes care of delivery part of the trading. Data pertaining to the Demat
account trading operations should be kept separate from that pertaining to other
banking operations.
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The phenomena of dematerialization of securities issued by large firms is

mostly undertaken via Central Securities Depository, a national or regional
institution holding the notary function, which itself entrusts banks and investment
firms to act as intermediaries between issuers and investors for the custody of these
securities. Therefore, dematerialized securities are often referred as Intermediate
Securities.
Advantages Of Dematerialization –
1. There is saving in time and cost on account.
2. The threat of loss of certificates or fraudulent interception of certificates in

transit that causes anxiety to the investors is eliminated.
3. It enables processing of share trading and transfers electronically without

involving share certificates and transfer deeds, thus eliminating the
paperwork involved in scrip-based trading and share transfer system.
4. Transfer of dematerialized securities is immediate.
5. There is no need to fill a transfer form transfer of shares and affix share
transfer stamps.
6. The investor is also relieved of problems like bad delivery, fake certificates,
shares under litigation, signature difference of transferor and the like.
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CHAPTER 2
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OBJECTIVES OF THE STUDY
In today’s competitive scenario of security business, where customers play a

vital role for the security companies, it is essential for them to invest more in share
market and its factors that basically determine the satisfaction level of customers
who have demat account in brokerage firm.
Primary Objectives: -
To have an in-depth knowledge about the share market and its factors:
1. To know about various products in different categories offered by Religare

Securities Limited.
2. To study about the dematerialization in brokerage firms.
3. To know the customer satisfaction of firms as compared with Religare

Securities Limited and identify the factors which define them.
Secondary Objectives: -
1. To have an overview of Share Market and its functioning.
2. To have knowledge about different brokerage firms which are active in NCR
region and giving an edge to Religare Securities Limited.
3. To create awareness about Religare Securities Limited.
4. To convert theoretical knowledge into practical knowledge.
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CHAPTER 3
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REVIEW OF LITERATURE
“Analysis of customer expectations towards share brokers”: A study by

K K Verma and Prakash Tiwari.
Investment is one of the key components for growth and development of any
country. There are various ways of investment by the individual like buying
securities or other monetary or paper assets in the money market or capital market,
or in fairly liquid real assets such as gold as an investment, real estate etc. Types of
financial investments include shares and other equity investment and bonds.
“Growth Of Indian Stock Market: A case of NSE” by Raj Kumar and

Hari Om Gupta
This paper provides historical background of stock market in India and also
analyzes the growth pattern of NSE. The study covers the period of twelve years
spreads over from 1995 to 2007. It has been found that all the segments of NSE
have registered splendid growth in terms of turn over. The derivative segment of
NSE has made it one of the largest stock exchanges in the world. So far as the
trading in securities is concerned it is not broad based. The trading is concerned to
few securities and a large portion of the securities are experiencing low liquidity.
“Share Trading on the Web: A comprehensive review of design

specification across the globe” by Robert Hudson, Kevin Keasey and Kevin
Littler in the year 2000.
In this study they had given the rapid increase over the past couple of years,
of shares dealing services available on the web. This paper describes the finding of
web-based share trading firms. The purpose of the research is to highlight the key
features of online trading across the globe and to identify “best of breed” examples
of the feature. The research is based on the latest available literature and a review of
the majority of the web sites across the globe.
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CHAPTER 4
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INTRODUCTION TO CONCEPT
Demat Account
The term Demat, refers to Dematerialized account. For individual Indian
citizens to trade in listed stocks or debentures, the Securities Exchange Board of
India (SEBI) requires investor to maintain a Demat account. In a Demat account,
shares and securities are held in electronic form instead of taking actual possession
of certificates. For opening a Demat account one has to register with an investment
broker (or sub-broker). The Demat account number, which is quoted for all
transactions to enable electronic settlements of trades, is likely to take place. Access
to Demat account requires an Internet password and a transaction password. For
initiating and conforming transfers or purchases of securities also password is
required. Purchases and sales of securities on the Demat account are automatically
made once transactions are executed and completed.
Moreover the Demat account reduces brokerage charges, makes pledging of

shares easier, enables quick ownership of securities on settlement resulting in
increased liquidity, avoids confusion in the ownership title of securities, and
provides easy receipt of public issue allotments. It also helps avoid bad deliveries
caused by signature mismatch, postal delays and loss of certificates in transit. It
eliminates risk associated with forgery and loss due to fire or theft. Demat account
holders can also avoid filling up of transfer deeds, and obtain quick receipt of such
benefits as stock splits and bonuses.
All the process of book entry is done electronically and there is no

involvement of paper work is. Physical form is extinguished and shares or securities
are held in electronic mode. Before the introduction of Depository system in 1996,
the process of sales, purchase and transfer of shares was a huge problem and the
safety perspective was almost nil.
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Essentials for opening a Demat account are as follows: -
i. Registration Form.
ii. Self-attested photographs.
iii. PAN Card.
iv. Proof of residence – passport, voter’s ID card, driving license etc.
v. Proof of identity – passport, voter’s ID card, driving license PAN card etc.
vi. Bank account proof- bank statement.
The benefits of having a Demat account are enumerated as follows: -
a. It is a very safe and convenient way of holding securities.
b. Immediate transfer of securities is possible.
c. No stamp duty on transfer.
d. Paper work is reduced very much.
e. Investments in equity and debt instruments can be kept into a single account.
f. There is an automatic credit system of shares arising out of bonus, split,

consolidation, merger etc, into the Demat account.
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There are four major charges usually levied on a Demat account: Account
opening fee, Annual maintenance fee, Custodian fee and Transaction fee.
Account Opening Fee –
There may or may not be an account-opening fee. It depends upon the

company policies. Private banks such as ICICI Bank, HDFC Bank and UTI Bank do
not have one. However, players such as Religare Securities Ltd., Share Khan, and
Globe Capital do so.
Annual Maintenance Fee –
This is also known as Folio management charge and is generally taken in

advance.
Custodian Fee –
This fee is charged monthly and depends on the number of securities

(International Securities Identification Numbers - ISIN) held in the account. It
generally ranges between Re. 0.5 to Re 1 per ISIN per month.
Transaction Fee –
The transaction fee is charged for crediting/debiting securities to and from

the account on a monthly basis. Some players charge flat transaction fee, where as
some charge variable based on the type of transaction.
There are few disadvantages also of having a Demat account: -
a. Role of key market players such as Stockbrokers, need to be supervised as

they have the capability of manipulating the market.
b. Trading in securities may become uncontrolled.
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Investment –
Investment basically means sacrifice of some money value at present with

the expectations to gain in the future. All investment activities are based on one or
another factual basis and these are done with the ultimate aim of having gain in the
future, yet different investors have different objectives in making investment. The
investment activity undertaken by the investors results in the creation of a portfolio,
which possesses a number of features depending upon the objectives and style of
taking investment decisions.
Dimensions Of Investment: -
Element Of Sacrifice –
As soon as person makes a commitment of investing money either in buying

shares, or a price of land or plant, etc., it entails an element of sacrificing current
consumption of money value.
Element Of Futurity –
Every investment is done with the aim of holding it for a certain time period.
Some investors hold it for a few days whereas others hold it for months or years.
The holding period is generally classified into three – short-term, medium-term, and
long-term.
Element Of Risk –
Since every investment activity has an element of the futurity and the future
is always full of uncertainties, it introduces an element of risk in any investment
activity. By risk, it is meant the chance of having an adverse or low return as
compared to the investors’ expectations.
Expectation Of Gain –
Investments are not done for charity. All the three elements become the basis
of expecting gains from the invested money. Generally, the gains expected by the
investors are nothing but the compensation for waiting; lose in purchasing power
and risk premium corresponding to level of risk
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Objectives Of Investment: -
Safety
Safety means protection against loss, since money invested is nothing but
hard earned money saved by the investors to get it back in the future, hence, one
always wants full safety of the invested money.
Regularity Of Income
A few investors invest their savings with the objective to have a regular
income to meet their day-to-day requirements.
Capital Gains
Today more and more investors are attracted to invest their savings in the
stock market just because they expect an appreciation in the capital invested by
them. High capital appreciation is sometimes achieved in the stock prices but at the
same time the element of risk is also high.
Tax Savings
The premium paid for various policies in India qualifies for tax Rebate. This
is achieved by investing in tax-free bonds.
Liquidity
The element of liquidity depends upon the marketability or buy-

back/redemption option. An instrument is marketable only if there are a large
number of buyers and sellers who are ready to deal in it every time.
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Risk Associated With Investment –
Risk means probability of having adverse or low returns as compared to the

expected returns. All investment activities are subject to risk, even the so-called safe
investments like Treasury Bills, Government Securities and Post office deposits.
There are various types of risks:
1. Risk Due To Inflation
Inflation causes loss of purchasing power, due to which real gains from the
investment are very low as compared to the monetary gains. The prices of shares as
well as debentures get affected due to this. As a result of rising inflation the returns
expected by the investors tend to increase and they discount future earnings at a
higher discount rate, which pulls the prices downside.
2. Interest Rate Risk
Interest rate in an economy tends to fluctuate either on account of regularity

framework or due to market forces. In general, interest rises and then it pushes up
investors’ expected rate of return from investment, as a result of which prevailing
share prices become unattractive.
3. Political Risk
Performance of industries and the stock market depends upon the kind of
political scenario prevailing in the country. Political uncertainty has adverse effect
on share prices.
4. Market Risk
Prices of securities (shares, stocks, and debentures) depend much upon the
activities of operators/speculators in the market. In the past when UTI used to
account for a major portion of the daily traded volume in the sock market the
buying and selling activities of the brokers on behalf of UTI used to create a
significant effect on the share prices.
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5. Changing Government Policies
The effect of changing government policies can clearly be observed by

looking at the movement of share prices during the budget announcements by the
finance minister every year.
6. Natural Calamities
In the past when Gujarat was hit by plague and cyclone, the ripples of these
were immediately observed in the stock market in the shape of declining share
prices. Prices of almost all shares declined irrespective of their fundamental
soundness.
7. War-like Situation/Internal Peace
Whenever there is an internal disturbance in the economy it immediately

gets discounted in the share prices.
8. Business Risk
Business risk gets created due to the operating of a company/business. A

company might not be able to sell its products due to imperfections in its operating
activities, due to which it might incur losses, which certainly has an adverse effect
on share prices of such company.
9. Financial Risk
Financial risk is due to wrong financial planning. A company have high

degree of debt, certainly has a high financial leverage, which has an adverse effect
on the earnings of the company. Hence, companies with high financial leverage are
considered as high risky and vice-versa.
10. Disputes
Share prices of few companies get affected adversely as and when there is a
situation of industrial dispute, labor-management unrest, lockout or strike. However
these risks can be minimized through proper diversification or well-planned
investment activities.
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CHAPTER 5
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BROKERAGE INDUSTRY
Understanding the Industry
Major reforms initiative that were taken in the early 2000s, led Brokerage
Industry in India to experience a rapid growth and diversity. At present industry is
not only offering brokerage business, but also a wide range of financial services.
These developments have resulted in huge advancements in business and also
growing market share of large sized brokerage houses has led to rapid growth in the
enterprise value. Presently there are about 45 equity brokerage firms that are listed
in the Indian Stock Exchanges. Brokerage industry continues to grow on rapidly.
Most of the traditional restrictions against banking activities are made to be
eliminated and the barriers among them are disappearing.
Basic functions of brokerage firms are the execution of buy and sell orders
for clients. Earlier these firms have offered the investigation of the quality and the
possibilities of investing in a variety of investment products. Still brokerage firms
are accustomed to offer information about possible investments, that also free of
charge. This activity of bringing free of charge stock investment reports is one of
the main tools that are utilized by brokerage houses to compete against other firms
and for investors it continues to be an important service.
While brokerage houses profitability was severely impacted in FY08-09,

bigger challenge faced by them was to protect their capital from erosion in the
adverse capital market movement. Steep market correction in January 2008 found
many brokerage houses unprepared and left many of them with margin shortfall on
their clients. Some of the brokerage houses with limited financial flexibility also
had their trading terminals shut down or put up in a square up mode due to margin
shortfall at Exchange Houses. Brokerage houses have tightened their exposure
norms and monitoring following the market fall. In ICRA’s view, regular stress
testing analysis will help brokerage houses in maintaining adequate financial
resources to withstand any default or delay in payment by clients.
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Even as the market turmoil seems to have eased out somewhat and
brokerage turnover has witnessed an upward movement in FY08-09, ICRA expects
the market volatility to continue. Accordingly, ICRA maintains a neutral outlook for
brokerage houses in the short to medium term as pressure on overall profitability are
likely to persist. In short term, ICRA would be focusing increasingly on rated
company’s ability to maintain adequate capital and liquidity to absorb any
advertises on broking and lending business and adherence to stringent risk
management systems. Over the medium to long term, company’s ability of
stabilizing the earning profile, improving upon the profitability, maintaining
adequate liquidity & capital and effectiveness of risk management systems would be
key rating drivers.
Strengths –
a. There is a huge market potential in India as it moves towards financial sector

reforms with larger inclusion of retail segment as well as creation of new
market as regulators have allowed trading in new classes like currency
futures, interest rate derivatives, SME equities etc.
b. There is an expected low leverage at industry level with many brokerage

houses strengthening their net worth over the past few years by limiting
external fund requirement.
c. Adequate capitalization levels, at least for larger players, coupled with low
leverage provides cushion to absorb losses in the short-term weak operating
environment.
Challenges –
a. Protection of brokerage yield in a highly competitive as well as fragmented

brokerage industry.
b. Achievement of a critical scale of operations for the sustainment of

profitability even in longer dull phases.
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c. There is a limited financial flexibility as banks enjoy capital market

exposure limits while mutual fund houses act very selectively in taking
exposure to brokerage houses.
d. Continuously upgrading the risk management systems and monitoring

policies to mitigate associated risks, especially during periods of extreme
volatility.
e. While moving towards value added services like wealth management,

portfolio management, research etc. intense competition is expected from
brokerage houses.
f. Diversifying earning profile to reduce concentration risk on the brokerage

business.
g. Maintaining flexible cost structure for protecting profitability in a market

downturn.
ICRA expects brokerage yield to remain under pressure with increasing

competition and changed dynamics with a few of the players offering a flat fee
structure. The average broking yields have declined in the past few years. However,
the fall going forward, is not expected to be as steep and ICRA does not expect the
average broking yields to go further below.
ICRA expects the operating expenses of brokerage houses to remain

relatively high as a proportion of their revenues, because of the setup of several new
branches, expansion in new business lines and higher expense on STT due to
change in regulation. However, ICRA expects some improvement in expenses with
many brokerage houses consolidating their branch network and focusing more on
the franchise model, rationalizing the employee expenses, re-negotiating lease
rentals and employing various other cost cutting measures. Brokerage houses are
also expected to incur lower interest expense during this Financial Year with the
decline in interest rates. With subdued earning and relatively high operating
expenses, ICRA expects a moderate profitability for most of the brokerage houses in
short to medium term.
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Adverse Market Movements
Recent market turmoil has exposed the brokerage houses to the market and
credit risk associated with their business. While their revenue profile was impacted
with the decline in industry turnover, the bigger challenge was to protect their
capital during adverse market movements. Such market volatility as witnessed in
the past is no rarity and brokerage houses need to considerably revamp their risk
management systems in order to avoid any margin shortfall on broking clients. In
ICRA’s view, online real time monitoring of client’s status and stringent policy
based exposure limits would be critical in mitigating market risk in a volatile
market. Further, strict squaring off policy needs to be followed by the companies
irrespective of their relationships with the clients. Relaxations given to high net
worth clients may create threat to the capital of brokerage houses.
The risk is even more intense for those brokerage houses focused largely on
small set of high net worth clients as compared to those that have relatively small
exposure to a well-diversified client base. ICRA knows that while the broking
companies can have an adequate margin cover in the form of stocks as collateral, it
may be difficult to realize the total value in case of illiquid stocks with high impact
cost. Many brokerage houses had tightened their exposure norms and monitoring
process following the market fall in January 2008, and accordingly they were able
to mitigate the associated risks during market correction to an extent.
Even as the market turmoil seems to have eased out somewhat and
brokerage houses turnover has witnessed an upward movement in FY09-10, market
volatility may still continue. Accordingly, ICRA maintains a neutral outlook for
brokerage houses in the short to medium term as pressure on overall profitability are
likely to persist. From the long term perspective, company’s ability of stabilizing the
earning profile, improving upon the profitability, maintaining adequate liquidity &
capital and effectiveness of risk management systems would be key factor for
ratings. The net profitability of the brokerage houses was impacted with many
players reporting large provisions and wire-offs on doubtful debtors. However, the
impact was felt more by less diversified companies.
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Figure 1: Equity Brokerage Turnover
Source: NSE and BSE website
The domestic brokerage volume has reported a growth of 66% in Q1FY09-

10 by a sequential quarter-to-quarter basis aided by increased share prices, which
eases global concerns and a stable central government. In fact, this was only second
to the highest volume ever in the last few years. The growth driver was not the
derivative segment but the cash segment, which accounted as 27% of the actual
turnover. However, under the prevailing uncertain conditions in global market, that
could jeopardize Indian brokerage houses as well, ICRA expects high volatility to
be continued for a short while, both in terms of share prices and also in trading
turnover.
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Share Market –
Every company needs long-term as well as short-term capital. Long-term

capital is required essentially for investment in fixed assets such as land, building,
plant and machinery, vehicles etc. It also includes core working capital and certain
kinds of R&D, pre operating expenses incidental to setting up a business, which are
required to be deployed or incurred for the production or rendering of goods and
services. Short-term capital or working on the other hand, is required essentially for
financing the requirements of the day-to-day operations of the business, such as raw
materials, work-in-progress, finished goods, etc. Year 2008 was the most eventful
year for the capital market. This was sparked by the supreme crisis and their ripple
effects.
The term Stock Market means the place where the actual trading of stocks
takes place. Trading in stock market means an investor can buy from or sell to
another investor instead of any particular issuing entity. The companies apply for
the membership of the specific stock market. The companies are permitted to get
into the stock market after successful completion of their Initial Public Offerings
(IPO). Once a company is registered in a stock market, it means the stocks of the
same are then available for transaction. The market regulator fixes the listing price
of the shares of the company. In stock markets, the shares of the listed companies
are traded at steady intervals.
It is a market in which outstanding securities of the corporate houses and

government are traded in. As per the rules, all the transactions in securities must be
executed on a recognized stock exchange. Stock Exchange can be defined as a
regulated marketplace, in which listed securities are bought and sold through the
intervention of members of stock exchange, by following an open system of two
way quotation, the settlement of trades is done according to the bye-laws of the
stock exchange. All the trades executed on the floor of the stock exchange become
legal and valid and have no default-risk, as the stock exchange assumes the role of
the counter party.
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Globalization Effect –
The phenomenon called Globalization has had some impact on the various
stock markets worldwide at present. The stock markets across the world have grown
in keeping with the process known as Globalization. The advent of Information
Technology has changed the way business is being executed throughout the world.
The stock markets across the world have also incorporated IT into their business
efficiently. The computers have contributed to the rise of bringing more avenues of
bringing up capital, that could be used for a variety of purposes like increasing the
size of the company as well as making new investments. IT has also helped the
various stock markets to conduct business with more clarity and in a smoother
manner.
Role in the development of Nation –
It is no exaggeration to say, that in a modern industrialist society, which

recognizes the rights of private ownership of capital, stock exchange is not simply a
convenience they are essential. In fact, they are market which exist to facilitate
purchase and sale on securities of companies and the securities or bonds issued by
the government in the course of its borrowing operation. As our country moved
towards liberalization, this tendency is certain to be strengthened.
The task facing the stock exchange is to devise the means to reach down the
masses, to draw the savings of the man in the street into productive investments, to
create conditions in which many millions of little investors in cities, towns and
villages will find it possible to make use of the facilities, which have so far been
limited to the privileged few.
At present, there is no relation of buying and selling of securities to a

physical location. The term, stock market loosely stands for the entire system in
which financial securities or financial instruments are traded, including the people
and institutions involved in these transactions, the organizations issuing or intending
to issue the securities and the systems that enable the trading processes. In short, it
implies the entire infrastructure required for transacting in securities, including the
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set of regulatory bodies to ensure that the transactions are carried out in a fair and
transparent manner. These exchange do not work of its own, rather these are run by
some persons and with the help of some persons and institutions. All these are
known as functionaries on stock exchange. These are as follows: -
1. Stockbrokers –
Stockbrokers are the members of stock exchanges. These are

the persons who buy, sell or deal in securities. A certificate of registration
from SEBI is mandatory to act as a broker. SEBI can impose certain
conditions while granting the certificate of registrations. It is obligatory for
the person to abide by the rules, regulations and the buy-law. Stockbrokers
are commission broker, floor broker, arbitrageur etc.
2. Sub-broker –
A sub-broker acts as an agent of Stockbroker. He is not a

member of a stock exchange. He assists the investors in buying, selling or
dealing in securities through stockbroker. The broker or sub-broker should
enter into an agreement in which obligations of both should be specified.
Sub-broker must be registered SEBI for a dealing in securities. For getting
registered with SEBI, he must fulfill certain rules and regulations.
3. Market Makers –
Market maker is a designated specialist in the specified

securities. They may both bid and offer at the same time. A market maker
has to abide by byelaws, rules and regulations of the concerned stock
exchange. He is exempt from the margin requirements.
4. Portfolio Consultants –
A combination of securities such as stocks, bonds and money

market instruments is collectively called as portfolio. Whereas the portfolio
consultants are the persons, firms or companies who advice, direct or
undertake the management or administration of securities or funds on
behalf of their clients.
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Listing Of Securities –
Listing means admission of the securities to dealings on a recognized stock

exchange. The securities may be of any public limited company, central or state
government, and other financial institutions/corporations, municipalities, etc. the
exchange has a separate Listing Department to grant approval for listing of
securities of companies in accordance with the provisions of the SEBI. The
objectives of listings are mainly to: -
1. Provide liquidity to securities.
2. Mobilize savings for economic development.
3. Protect interest of investors by ensuring full disclosures.
The movements of the prices in a market or section of a market are captured

in price indices called stock market indices, of which there are many examples, the
BSE (Bombay Stock Exchange), NSE (National Stock Exchange), CSE (Calcutta
Stock Exchange), etc. Such indices are usually market capitalization weighted, with
the weights reflecting the contribution of the stock to the index. The constituents of
the index are reviewed frequently to include/exclude stocks in order to reflect the
changing business environment. The principal aim of investing should be to
maximize diversification, minimize taxes from too frequent trading, and ride the
general trend of the stock market.
The stock price in the secondary market is determined completely by the

fluctuations in demand and supply of the particular stocks. However, the stock
prices of different types of shares are separate from each other. However, the
investors can keep track of the changes in the prices through the various trading
screens. Various stock markets have separate rates of their own. The stock market
rates are the prices of transactions in the stock markets. There are primarily three
different stock market rates or prices – the opening price, the closing price and the
listing price. The opening price is the one at which trading starts for the day. The
closing price of a stock is the one at which the trading stops for the particular day.
The closing price also serves as the opening price for the next trading day.
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Bombay Stock Exchange –
Bombay Stock Exchange is the oldest stock exchange in Asia located in

Dalal Street, Mumbai in India. BSE was established in 1875 as the “Native Share
and Stock brokers Association”. It earned a format status under the Securities and
Exchange Board of India (SEBI) in 1956. BSE deals with trading in derivatives,
equity and other debt instruments. BSE is managed professionally by Board of
Directors, which comprises of eminent professionals, representatives of Trading
Members and the Managing Director. The Board exercises complete control and
formulates larger policy issues. The Managing Director and its school of
professional as a management team manage the day-to-day operation of BSE.
The framework of BSE has been designed to safeguard market integrity and
to operate with transparency. It provides an efficient market for the trading in equity,
debt instruments and derivatives. Its online trading system, popularly known as
BOLT, is a proprietary system. The BOLT network was established nationwide in
1997. The surveillance and clearing & settlement functions of the exchange are ISO
9001:2000 certified. In terms of organization structure, the board formulates larger
policy issues and exercises overall control. It has SENSEX as its key index.
National Stock Exchange –
The National Stock Exchange of India Limited (NSE), is a Mumbai-based

stock exchange. It is the largest stock exchange in terms of daily turnover and
number of trades, for both equities and derivative trading. NSE has a market
capitalization of around Rs 47,01,923 crore (31st march 2010) and is expected to
become the biggest stock exchange in India in terms of market capitalization also.
BSE and NSE are the two most significant stock exchanges in India, and between
them are responsible for the vast majority of share transactions. Its key index is
NIFTY, an index of fifty major stocks weighted by market capitalization. NSE is
mutually owned by a set of leading financial institutions, banks, insurance
companies and other financial intermediaries in India but its ownership and
management operate as separate entities. NSE was setup with the following
objectives: -
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1. Establishing nationwide trading facility for all types of securities.
2. Ensuring equal access to investors all over the country through an

appropriate telecommunication network.
3. Providing fair, efficient and transparent securities market using electronic

trading system.
4. Meeting International benchmarks and standards.
NSE brings an integrated stock market network across the nation. Investors
can trade at the same price from anywhere in the country since inter-market
operations are streamlined, coupled with the countrywide access to the securities.
Delays in communication, late payments and the malpractice’s prevailing in the
traditional trading mechanism can be done away with greater operational efficiency
and informational transparency in the stock market operations.
Ahmadabad Stock Exchange(1894)
Following the success of the stock exchange at Bombay, an informal

association named as “Ahmadabad Share & Stock Brokers Association” was
established in the year 1894. It was also a voluntary non-profit making organization
like BSE. The business in this exchange used to be mainly in the shares and stocks
of cotton and the cotton textile industry.
Culcutta Stock Exchange (1908)
In West Bengal, coal mines were converted into companies and transactions
in the shares and stock of these companies gained momentum to facilitate the trade
of these shares. CSE was formed as a joint stock company. It was different from
earlier two exchanges as those were a non-profit making organizations and it was a
company.
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Market Mechanism (Buying And Selling Procedure At A Stock Exchange)
Market Mechanism is the system of buying and selling the

securities/derivatives in the stock exchange. An efficient market mechanism always
provides for the smooth functioning of the stock exchange and helps in the speedy
settlement of trades to the satisfaction of all the parties. It has components like
Investors, Brokers, Stock Exchange Officials Clearing House, Bye-laws and Rules
etc. All these companies working in consonance help in achieving the objective of a
stock exchange. To buy or sell the securities on the stock exchange the following
sequential activities take place: -
Placing An Order
Once a decision to buy or sell has been done by the client he will place an
order to his broker. The order can be of different types such as Market order, Limit
order, Stop Loss order, Time order, Spread order and more.
Execution Of Order
The broker executes the order on the floor of the stock exchange as per the
order specification of the client. Previously transactions use to take place through
manual trading, in which members used to shoot their quotation for buying or
selling the shares. As soon as a negotiation used to be completed between two
members order used to get converted in a trade that is called as execution of the
order.
Reporting Of Transactions
Once an order has been executed it becomes transaction but it get a legal and
valid mark only when it is reported to the stock exchange authorities. Previously,
when trading was done manually, the brokers had the obligation to report in writing
all the transactions, duly verified by the counter broker to the stock exchange. At
present transactions are done on an online system, therefore, there is no need to
report the transactions to the stock exchange as the exchange has the database of all
the trades in its system.
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Confirmation Of Transactions
After the execution and reporting it is necessary to give a confirmation to the

client by issuing a contract note. Issuance of contract note makes the claim of broker
and client against each other a legal and valid claim. The contract note shall contain
the details of the trade, like type of securities, quantity, market rate, brokerage, other
charges, tax, settlement details and all other relevant information.
Exchange Between Client And Broker
A broker executes the transactions on behalf of his clients, but the stock
exchange considers this as the obligation of the broker to settle the transaction on
the settlement date, therefore, a broker is responsible to carry out the settlement of
the transactions executed by him. To meet his obligation at the clearing house of the
exchange, the broker takes money/shares from his clients before the “Pay-In-Day”.
Clearing Function
By clearing function we mean exchange of money and shares between

brokers. Practically, brokers do not exchange the delivery or money value, instead
these are exchanged through the intervention of the Clearing House.
Exchange Between Broker And Client
After the payout from the clearing house the broker receives shares for his
all the purchases and payment for the securities sold. The broker delivers the
securities to those clients for whom he has made the purchase and makes the
payment to the clients for whom securities were sold. After this, the transaction gets
completed. Nowadays, physical delivery of securities is not done in majority of the
cases, because we have a system of depository.
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Stock Trading
The term stock trading signifies the buying and selling of securities. This
process is done after they have been brought out through an Initial Public Offering.
Before stock trading takes place, a particular security needs to be listed in the
relevant exchange. Stock trading could also be denoted to the dealing of the smaller
parts of a larger loan and ownership interest in business enterprises. But, secondary
markets need to have higher levels of liquidity, so that transaction could be carried
on properly. There are various benefits of trading in the secondary markets. The
biggest advantage is that the investors can recover their investments to a certain
extent, provided their economic status undergoes a change. This is different from
the conventional lending and partnership agreements. In such cases the investors
may refrain from making long-term investments. Even if they invest for a longer
period of time, they would charge higher rates of interest for it. In the secondary
markets the investors are provided the luxury of being able to sell their interests in
the respective investments. This is specifically applicable if the particular
investment has been fragmented in comparatively smaller parts. The investors are
provided such luxuries in case of the securitized loans, equity interests like bonds or
stocks that could be traded.
Traditionally stock trading is done through stockbrokers, personally or

through telephones. As a number of people trading in stock market increase
enormously in last few years, some issues like location constrains, busy phone lines,
miss communication etc. start growing in stockbroker offices. Information
technology helps stockbrokers in solving these problems with Online Stock Trading.
Online Stock Market Trading is an Internet based stock trading facility in which
investors can trade shares through a website without any manual intervention from
stockbroker. In this case online stock trading companies facilitate as the stockbroker
for the investors. They are registered with one or more stock exchanges. Mostly
online trading websites in India trades in BSE and NSE. There are two different
type of trading environments available for online equity trading. Through these two
different types of environments an investor can deal the equities into different
market situations like cash market and derivatives.
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Installable Software Based Stock Trading Terminals –
This trading environment requires software to be installed on investor’s

computer. This required the stockbroker provides software. This software requires
high-speed Internet connection. High volume intraday equity traders use this kind of
trading terminal.
Advantages:
1. Orders are directly send to stock exchanges rather than stockbroker. This
makes order execution very fast.
2. It provides almost each and every information, which is required for a trader
on a single screen including stock market charts, live data, alerts, stock
market news, etc.
Disadvantages:
1. Location Constrains – One cannot trade if he/she is not on the computer

terminal where the software is being installed.
2. Requires high-speed Internet connection.
3. These trading terminals are not easily available for low volume share
traders.
Web Based Trading Application –
This kind of trading environment doesn’t require any additional software

installation. They are like other Internet websites which investor can access from
around the world through normal Internet connection.
Advantages:
1. Real time stock trading without calling or visiting broker’s office.
2. Display real time market watch, historical data’s, graphs etc.
3. Investment in IPOs, mutual funds, and Bonds.
4. Place offline orders for buying or selling stocks.
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Disadvantages:
1. Website performance – sometime the website is too slow or

not enough user friendly.
2. Little long learning curve especially for people who don’t

know much about computer and Internet.
Technology was used to carry the trading platform from the trading hall of stock
exchanges to the premises of brokers. NSE carried the trading platform further to
the PCs at the residence of investors through the Internet and to handheld devices
through WAP for convenience of mobile investors. This made a huge difference in
terms of equal access to investors in a geographically vast country like India. A
message relating to the order activity is broadcast to the respective member. The
order confirmation message is immediately displayed on the PC of the broker.
Figure 2: Sample Screen Of Share Trading
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CHAPTER 6
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Parent Company
(Religare Enterprise Limited)
Introduction –
Religare Enterprise Ltd. (REL), incorporated in 1984 and promoted by

RANBAXY group, is the holding company of 11 subsidiaries. It is among the
leading integrated financial services group in the country today. Religare is a
diversified financial services group of India offering a multitude of investment
options. Each of its subsidiaries is engaged in a wide spectrum of financial products
and services targeted at retail, high net worth individuals, corporate and institutional
clients. The services offered by the group include share broking, financing loans
against shares, IPO financing, distribution of Mutual Funds, Insurance Broking,
Commodity Broking, Wealth Management, Advisory Services, Private Equity,
Merchant Banking and trading in Arts and Anti-crafts. The major revenue drivers
for the company are its retail equity broking arm, Religare Securities and Religare
Finvest, which finances loans against shares.
The diverse bouquet of financial services that Religare offers can be broadly
clubbed across three key verticals – Retail, Institutional and Wealth spectrums. The
services extend from Asset management, Life Insurance, Wealth management to
equity broking, commodity broking, investment banking, lending services, private
equity and venture capital. Religare has also ventured into the alternative
investments sphere through its holistic arts initiative and Film Fund. With a view to
expand, diversify and introduce offerings benchmarked against global best
practices, Religare operates in the life insurance space under “AEGON Religare
Life Insurance Company Limited”, and wealth management under the brand name
“Religare Macquarie Private Wealth”. Religare has its presence in 1837 locations
across 498 cities and towns. It also operates from nine international locations
following its acquisition of London’s Brokerage & Investment Firm, Hichens,
Hrrison & Co. plc.
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Religare is a global financial services group with the presence across Asia,
Africa, Middle East, Europe and America. In India the group offers a wide array of
products and services ranging from insurance, asset management, broking &
lending solution, investment banking and wealth management. The group has also
pioneered the concept of investments in alternative asset classes such as arts and
films. Religare serves over a million clients, including corporate and institutions,
high net-worth families and individuals, and retail investors.
Figure 3: Subsidiary Details
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Religare Enterprise Limited is part of a family of companies that fall under

the broader Religare brand, which includes other global businesses such as
diagnostics, aviation and travel, wellness retail, and IT products and solutions.
Various risk factors are there with respect to the market and there can be no
assurance that the objectives of Scheme will be achieved.
As with any investment in securities, the NAV of the units issued under the
Scheme may go up or down depending upon the factors and forces affecting the
securities market. Trading in the units of the Scheme on the exchange may be halted
because of market conditions or for other reasons. The investors are always advised
to refer to the Scheme Information Document for the full text of “Disclaimer Clause
of NSE”.
Some facts about REL –
• Religare is an integrated financial services institution offering a wide

range of financial products and services to retail investors, high net worth
individuals and corporate and institutional clients including equity and
commodity broking, online trading, wealth advisory services, investment
banking and insurance broking.
• Religare has grown rapidly from what was largely an equity trading
company into a diversified financial services company operating through its
11 subsidiaries.
• As on March 31st, 2010, Religare has operations at 1837 locations

across 498 cities and towns and a large management team-leading group of
over 10000 employees.
• It recently acquired Hichens, Harrison & Co., one of the oldest

broking firm in London, for a sum of GBP 55.5 million.
• Acquisition to boost the institutional and investment banking

operations of Religare and extend its geographical reach to London, South
Africa, Argentina, Brazil, UAE, Qatar, Singapore and Indonesia.
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Figure 4: Organization Structure
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Promoter Groups-
a. Fortis Healthcare Limited
b. Super Religare Laboratories Limited
c. Religare Wellness Limited
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Figure5: Group Share
RSL RCL RFL RWMSL REL RCML RIBL
Religare was founded with the vision of providing integrated financial care
driven by the relationship of trust. The bouquet of services offered by Religare
includes Broking (stocks and commodities), Depository Participant Service, and
Advisory on mutual fund investments and Portfolio Management services. Religare
is a pioneer in the concept of partnership to reach multiple locations in order to
effectively service its large base of individual clients. Besides the reach of Religare,
the clients of the company greatly benefit by its strong research capability, which
encompasses fundamentals as well as technical knowledge.
Subsidiaries Of Religare Enterprise Limited -
Religare Securities Limited:
1. Equity Broking.
2. Online Investment Portal.
3. Portfolio Management Services.
4. Depository Services.
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Religare Finvest Limited:
1. Lending and Distribution Services.
2. Proposed Custodial Business.
Religare Insurance Broking limited
1. Life Insurance.
2. General Insurance.
3. Reinsurance.
Religare Commodities Limited:
1. Commodity Broking.
Religare Capital Markets Limited:
1. Investment Banking.
2. Proposed Institutional Broking.
Religare Arts Initiative Limited:
1. Business Of Arts.
Religare Realty Limited:
1. In House Real Estate Management Company.
Religare Venture Capital Limited:
1. Private Equity and Investment Manager.
Religare Hichens Harrison:
1. Corporate Broking.
2. Institutional Broking.
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Figure 6: Religare Enterprises Tree
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CHAPTER 7
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RELIGARE SECURITIES LIMITED
Religare Securities Limited (RSL) is a wholly owned subsidiary of Religare

Enterprises Limited, a company promoted by late Dr. Parvinder Singh, Ex-CMD of
Ranbaxy Laboratories Ltd. The primary focus of Religare Securities Ltd. Is to cater
the services in Capital Market Operations to Institutional Investors. The company is
a member of National Stock Exchange (NSE). The growing list of financial
institutions with whom RSL is empanelled as approved Broker is a reflection of the
high levels of services maintained by the company.
As on date the company is linked with UTI, IDBI, IFCI, SBI, Bank Of India,
Punjab National Bank, ICICI, Oriental Insurance, UTI-Offshore, Punjab and Sindh
Bank, IDBI Principal, ICICI Prudential and JM Mutual Fund.
Major activities and offerings of the company include equity broking, both
online and offline, Depository Participant Services, Portfolio Management Services
and Institutional Brokerage. It is a member of NSE and BSE, and also a SEBI
approved Portfolio Manager. It has a strong institutional research team which covers
over 185 companies in 16 sectors.
Business under Religare Securities Ltd. Include: -
1. Retail Equity Broking.
2. Priority Client Equity Services.
3. Online Investment Portal.
4. Institutional Equity Broking.
5. Portfolio Management Services.
6. Depository Services.
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Religare Securities Ltd.(RSL) is a leading Equity and Securities firm in

India. The company currently handles sizable volumes traded on NSE and in the
realm of online trading and investments it currently holds a reasonable share of the
market. RSL has been constantly innovating in terms of product and services and to
offer such incisive services to specific user segments. Religare has a very credible
Research and Analysis division, which not only caters to the need of our
Institutional clientele, but also gives their valuable inputs to investments dealers.
Religare is one of the leading Depository service providers in the country.
Unique features and benefits of trading through Religare:
1. Trade Rewards – Trade Rewards is a unique offering from Religare that

gives you dual benefits of hassle free investment experience online and an
opportunity to earn while you invest with Religare Securities Limited..
2. Zero brokerage - “Break the shackles”. Get freedom from brokerage and
avail zero brokerage on your trades through Religare Securities Limited.
3. Exposure up to 20 times on your margin – Allowing you the freedom to

trade without hassles throughout the day without having to worry about your
cash margin. You can get exposure (on cash segment) as high as 20 times for
intraday trades. Of course conditions apply on above two.
4. Internet on Cash Margin – Even while you are waiting to make your next
trade or online investment, your unutilized cash does not lie idle with us.
You earn interest on your unutilized cash margin.
Mission –
To become India’s first multinational providing complete financial services

solutions across the globe.
Vision –
To provide an integrated financial care driven by the relationship of trust and

confidence.
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Four Leaf Clover of Religare represents four basic features of the company.
These features work as the four pillars in the success of the Religare Enterprises
Limited. The four features are as follows: -
1. Trust.
2. Hope.
3. Care.
4. Good Fortune.
DIRECTORS OF RELIGARE SECURITIES LIMITED
Chairman: Mr. Harpal Singh
Managing Director: Mr. Sunil Godhwani
Director: Mr. Vinay Kumar Kaul
Director: Mr. Malvinder Mohan Singh
Director: Mr. Shivinder Mohan Singh
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Business Heads / Functional Heads
1. Mr. Chandan Sinha
President – Insurance Broking
2. Mrs. Sangeeta Purushottam
Head – Institutional Business
3. Mr. Ashu Madan
National Head - Retail Equity
4. Mr. S Amarnath
Business Director-Strategic Initiatives
5. Mr. Amit Sarup
Head – Wealth Management
6. Mr. Jayant Manglik
Head – Commodities
7. Mr. Chandan Sinha
President – Insurance Broking
8. Mr. Nitin Jain
National Head – P F S
9. Mr. Mukesh Manglik
Head – Corporate Affairs
10. Mr. Gurpreet Sidana
Head – Internet Trading
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11. Mr. Bikram S Yadav
Head – Legal & Compliance
12. Mr. Varun Mehta
VP—Human Resource
Products And Services
Equity And Trading
Race and Rally are the two products offered by Religare Securities Limited,
which comes under equities and derivatives. While Rally deals with offline
facilities, Race provides for complete online package and facility. There is
difference between both offline and online modes of trading. The difference lies on
account of its schemes, platforms and facilities provided. Initially the clients used to
go for offline modes of trading, but now with increasing use of internet online mode
has become the preference.
Types Of Account
1. R-ACE (Basic) – It's the basic online trading account provided by Religare.
Investor can trade and access their account information online and over the
phone as well. This account comes with a browser based online trading
platform and no additional software installation needed. This account also
provides Lifetime free DP account with no annual maintenance charges.
2. R-ACE Lite (Advanced) – It's the advanced account option for the investor
with Religare. This trading account provides the entire feature of R-ACE
(Basic) account. In addition it also provides real-time streaming stock quotes
and alerts. This trading platform is also browser based and no software
installation is needed.
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3. R-ACE Pro (Professional) – As the name indicates this account is for high
volume traders. Along with the features from above 2 accounts, this account
also comes with a Training Terminal, software which needs to install o your
computer. This terminal directly connects the investor to stock market and
having all industry standard treading terminal features including technical
charting (intra-day and EOD), multiple watch list, advanced hot-key
functions for faster trading, derivative chains, futures and options calculator.
Brokerage and Account Opening Fees -
Religare offers three kinds of accounts as above. Below are detail about fees
and activation charges for each account:
1. R-ACE
Account activation charges rs. 299/-
Minimum margin of Rs. 5000/- required.
2. R-ACE Lite
Account activation charges Rs. 499/-
Minimum margin of Rs. 5000/- required.
3. R-ACE Pro
Account activation charges Rs. 999/-
Minimum margin of Rs. 10,000/- required.
4. All the account comes with free annual maintenance charge.
5. All account comes with free DP account.
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6. Brokerages at Religare
On the basis of volume and frequency of trading, Religare provide different

options for brokerages. On the broader way they divided into three categories:
• Classic Account
Intraday brokerages vary from 0.3% to 0.5%.
Delivery brokerages vary from 0.30% to 0.50%.
Derivatives brokerages vary from 0.3% to 0.5%.
• Freedom Account
In this payment scheme, investor has to pay a fix amount in advance for
monthly (Rs. 500/-), Quarterly (Rs. 1400), half-yearly (Rs. 2500) or Annual
Subscription (Rs 4000). This one time payment enable account holder to trade for
Rs. 3,00,000 intraday and derivatives trading and Rs. 40,000 of delivery based
trading for zero brokerage.
• Trump Account
Trump account has two payment options. Trump Plus and trump Super plan:
i. Trump Plus has annual subscription fees of Rs 2,500. Brokerages on

Delivery Trades of 0.25% and Brokerage o Intraday trades and F&O
Trades of 0.025%.
ii. Trump Super has annual subscription fees of Rs. 15,000. Brokerage
on Delivery Trades of 0.15% and Brokerage on Intraday Trades and
F&O Trades of 0.015%.
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CHAPTER 8
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Major Competitors
It is part of my project to analyze the various competitors' that the firm has,
and evaluate their offerings to the individual investors. This will help us understand
what processes and strategies competitors' have adopted to attract and retain
investors and satisfy their investments needs.
To achieve this end I have given the details of the following competitors' of
RELIGARE SECURITIES LIMITED, who have a presence in the Retail broking
arena and who can be considered as potential threat to the market share of
RELIGARE SECURITIES LIMITED.
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IndiabullsTM
Indiabulls Group is one of the top business house in the country with
business interests in Real Estate, Infrastructure, Financial Services, Retail,
Multiplex and Power sectors. Indiabulls Group companies are listed in Indian and
overseas financial markets. The Net worth of the Group exceeds USD 2 billion.
Indiabulls has been conferred the status of a “Business Super brand” by The Brand
Council, Super brands India.
Indiabulls Financial Services is an integrated financial services powerhouse

providing Consumer Finance, Housing Finance, Commercial Loans, Life Insurance,
Asset Management and Advisory services. Indiabulls Financial Services Ltd is
amongst 68 companies constituting MSCI – Morgan Stanley India index. Indiabulls
Financial is also part of CLSA's model portfolio of 30 Best Companies in Asia.
Indiabulls financial Services signed a joint venture agreement with Sogecap, the
insurance arm of Societe General (SocGen) for its upcoming life insurance venture.
Indiabulls Financial Services in partnership with MMTC Limited, the largest
commodity trading company in India, is setting up India's 4 th Multi-Commodities
Exchange.
Indiabulls Securities Limited is India's capital markets company with All-

India Presence and an extensive client base. Indiabulls Securities is the first and
only brokerage house in India to be assigned the highest rating BQ -1 by CRISIL.
Indiabulls Securities Ltd is listed on NSE, BSE and Luxemburg stock exchange.
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PRODUCTS
The company through various types of brokerage accounts provides product

and services related to purchase and sale of securities listed in NSE and BSE. It also
provides depository services, equity research services, mutual fund, IPO distribution
to its clients. The company provides these services through on-line and off-line
distribution channel.
1. POWER Indiabulls
Power Indiabulls (PIB) is an online trading platform which brings you the
power of a broker's terminal on your desktop. It is an in-house developed internet
enabled trading solution that supports securities and derivatives trading with NSE
and BSE. PIB is designed for the high volume traders that provide access to
multiple market segments through the ease of a single terminal.
Designed by the technology team of Indiabulls, PIB comes with several

enhanced features, which makes it the best desktop trading application in the
country today. You can create market watches where you can view “live broadcast”
of stocks both in capital as well as F&O segment. Stock prices get updated
automatically every second without any mutual intervention. PIB provides you with
extensive real time reports to evaluate the performance of your portfolio.
FEATURES
1. Integrated market watch for securities and derivatives
2. Live Streaming Quotes
3. Fast Order Entry
4. Tic by Tic Live Charts
5. Technical Analysis
6. Live News and Alerts
7. Extensive Reports for Real-time accounting
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BENEFITS
1. priority access to Relationship Managers who are dedicated to support

your trading and investing needs.
2. Get access to Indiabulls Equity Analysis of more than 500 listed

companies.
3. Get access to Research Reports.
4. Enjoy competitive commissions and get the service and support you
need at a fair price.
2. Indiabulls Signatures Account
With Indiabulls Signature account you will always remain on top of your
investments. It provides you the platform to trade in Equity and Derivatives. With
an unmatched service and nationwide presence, the Indiabulls Signature account
comes bundled with a variety of exclusive features. These features are as follows: -
i. Ease of Trading – With Indiabulls Signature account you have the

flexibility to place your orders either by logging on the website, calling
at the branch or walking in the branch.
ii. Dedicated Service Branch and Relationship Manager – You can get it
touch with your Relationship Manager and Service Branch for all your
trading related requirement.
iii. Power Indiabulls (PIB) – You can trade smarter and faster using the
Power indiabulls application. Access the broad spectrum of sophisticated
trading tools and get an edge in the stock markets.
iv. Online Payment Gateways – use our online payment gateways facility
and get instant credit in your Trading Account. We currently provide
online gateway payment facility with four major banks – HDFC,
ICICI , AXIS and IDBI.
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v. IPOs – Indiabulls provides you the flexibility to apply in ongoing IPOs

through either online or offline channels. For applying online, you do not
need to fill tedious forms and write cheques. You can apply conveniently
in IPOs from the comfort of your home/office through our Website/PIB.
For applying offline, you can contact your Relationship Manager/Service
Branch.
vi. Portfolio Tracker – You can track your investments online through our
portfolio tracker functionality. You can conveniently track the daily
movement, national/booked profits and losses in your portfolio.
vii. Equity Analysis Report – A qualified and dedicated team of equity

analysts at Indiabulls publishes various research reports. You can view
these reports to gain insight into the companies of your interest.
viii. News Room – The News Room provides real-time news from stock-
markets, corporate sector, economy and other segments that have a
bearing on the market sentiment.
Brokerages and Fees -
1. Account Opening Fees – Rs 1200/- (One time non-refundable) as below:
250/- Equity Trading Account opening charge
200/- Demat Account opening charge
750/- Software charges
Advantages of Indiabulls Equity Trading Account
1. Brokerage is less compare to other online trading companies.
2. Provide trading terminal 'powerbulls', a java based software. It's very fast in
term of speed and execution.
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ICICI DIRECT
ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank.

Along with stock trading and trading n derivatives in BSE and NSE, it also provides
facility to invest in IPOs, Mutual Funds and Bonds.
Types Of Accounting
ICICIDirect offers 3 different online trading platforms to its customers:
1. Share Trading Account
Share Trading Account by ICICIDirect is mainly for buying and selling of

stocks in BSE and NSE. This account allows Cash Trading, Margin Trading, Margin
Plus Trading, Spot Trding, Buy Today Sell Tomorrow and Call and Trade on phone.
They also provide installable application terminal based application for high volume
trader.
2. Wise Investment Account
Along with MF and IPO investing in BSE and NSE, Wise Investment
account also provide options to invest in Mutual Funds and Bonds online. Online
Mutual funds investment allows investor to invest on-line in around 19 Mutual Fund
companies. ICIC Direct offers various options while investing in Mutual Funds like
Purchase mutual Fund, Redemption and switch between different schemes,.
3. Active Trade Account
Active trader account gives more personalized investment options to the

investors. It allows investor to use online and offline stock trading. It also provides
with independent market expertise and support through a dedicated Relationship
Manager from ICICI. Active Trader also provides commodity trading.
IMS, Ghaziabad 5
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Brokerages and fees
1. Account Opening Fees : Rs 975/- (non-refundable)
2. Brokerage : ICICIDirect.com brokerage varies on volume of trade and

inclusive of demats transaction charges, service taxes and courier charges for
contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to
0.425% for squared off trades and 0.4% to 0.75% on delivery based trades.
Advantages of ICICIDirect
1. 3-in-1 account integrates your banking, broking and demat accounts. All
accounts are from ICICI and very well integrated. This feature makes ICICI
the most interesting player in online trading facility. There is absolutely no
mutual interfere require. This is truly online trading environment.
2. Unlike most of the online trading companies in India which requires

transferring money to the broker's pool or towards deposits, at ICICI Direct
you can manage your own demat and bank accounts through
ICICIDirect.com. Money from selling stock is available in ICICI bank
account as soon as the ICICI Direct receive it.
3. Trading is available in both NSE and BSE.
Disadvantages of ICICIDirect
1. Getting access to ICICIDirect.com website during market session can be

frustrating.
2. ICICI Direct brokerage is high and not negotiable.
3. Facility for linking account of ICICI Bank only.
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Share Khan \
ShareKhan is online stock trading company of SSKI Group, provider of

India-based investment banking and corporate finance service. Share Khan is one of
the largest stock broking houses in the country. S.S. Kantilal Ishwalal Securities
Limited (SSKI) has been among India's leading broking houses for more than a
country.
SahreKhan's equity related services include trade execution on BSE, NSE,

Derivatives, commodities, depository services, online trading and investment
advice. Trading is available in BSE and NSE. Along with Sharekhan.com website,
ShareKhan has around 510 offices (share shops) in 170 cities around the country.
Share Khan has one of the best state of art web portal providing fundamental
and statistical information across equity, mutual funds and IPOs. You can surf across
5,500 companies for in-depth information, details about than 1,500 mutual fund
schemes and IPO data. You can also access other market related details such as
board meetings, result announcements, FII transactions, buying/selling by mutual
funds and much more.
Types of Account
1. ShareKhan Classic Account
Allow investor to buy and sell stocks online along with the following
features like multiple watch lists, Integrated Banking, demat and digital contracts,
Real-time portfolio tracking with price alerts and instants credit and transfer.
a) Online trading account for investing in Equities and Derivatives.
b) Free trading through Phone (Dial-n-Trade)
i. Two dedicated numbers for placing your orders with your cell phone
or landline.
IMS, Ghaziabad 5
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ii. Automatic funds transfer with phone banking (for Citibank and
HDFC bank customers)
iii. Simple and Secure Interactive Voice Response based system for
authentication
iv. Get the trusted, professional advice of our telebrokers
After hours order placement facility between 8:00 AM 1nd 9:30 AM
c) Integration of: Online trading + Bank + Demat account
d) Instant cash transfer facility against purchase & sale of shares
e) Investments and trade confirmations by e-mail
f) Single screen interface for cash and derivatives
2. ShareKhan SpeedTrade Account
This account for active traders who trade frequently during the day's trading
session. Following are few popular features of SpeedTrade account.
a) Single screen interface for cash and derivatives
b) Real-time streaming quotes with Instant order Execution & Confirmation
c) Hot keys similar to a traditional broker terminal
d) Alerts and reminders
e) Back-up facility to place trades on Direct phone lines
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Brokerage:
Some stock trading companies charge direct percentage while others charge
a fixed amount per Rs 100. Sharekhan charges 0.5% for inter day shares and 0.1%
for intra day or you could say Sharekhan charges 50 paise per Rs 100.
Advantages of Sharekhan:
1. Online trading is very user friendly and one doesn't need any software to
access.
2. They provides good quality of services like daily SMS alerts, mail alerts,
stock recommendations etc.
3. Share khan has ability to transfer funds from most banks. Unlike ICICI
Direct, HDFC Sec, etc., so investor nor really needs to open an account with
a particular bank as it can establish link with most modern banks.
Disadvantages of Sharekhan:
1. They charge minimum brokerage of 10 paisa per stock would not let you
trade stocks below 20 rs. (If you trade, you will loose majority of your
money in brokerage).
2. Lots of hidden rules and charges.
3. They do not provide facility to book limit order trades during after-hours.
4. Classic account holders cannot trade commodities.
5. Cannot purchase mutual online.
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Table 1: Comparative Analysis Of Brokerage Firms
Features Religare India Bulls ShareKhan ICICI Direct
Opening Charges 299, 1200 750, 975
499, 1000
999
Scheme Charges 500, Depend upon Depend upon 1500,

Brokerage Brokerage
2500, 5000,
Maintenance 250 Nil 300 500

Charges
Intraday 0.03% to 0.05% 0.10% 0.125% to

0.05% 0.375%
Delivery 0.155 to 0.50% 0.30% to 0.40% to

0.50 % 0.48% 0.75%
Live Terminals Yes Yes Yes Yes
Research Advice Yes Yes Yes Yes
Min Margin 5000 5000 5000 5000
Interest On Yes No No Yes

Margin Money
Associate Banks UTI, IDBI, HDFC, ICICI, CITI Bank, ICICI

SBI, BOI, Axis Bank,
HDFC
PNB, IDBI
Punjab And
Sindh Bank
Multiple Demat No No No No
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CHAPTER 9
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Research Methodology
Research
The study of research method provides us with the knowledge and skills
needed to solve the problem and meet the challenges of the fact-based decision.
Marketing environment we define as Business Research as a systematic enquiry
whose objective is to provide information to solve managerial problem. Business
Research produces information to reduce uncertainty. It helps focus decision-
making. In a number of situations business researchers know exactly what their
business problems are and design studies to test specific hypothesis. Because of the
variety of research activity, it will be helpful to categorize the type of business
research. Business research can be classified on the basis of either technique or
function.
Research Design
A research design is a master plan specifying the methods and procedures for
collecting and analyzing the needed information. It is a framework or blueprint that
plans the action for the research project. The objectives of the study determined
during the early stages of the research are included in the design to ensure that the
information collected is appropriate for solving the problem. The research
investigator must also specify the sources of information, the research method or
technique, the sample methodology, and the schedule and cost of the research.
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PHASES OF RESEARCH PROCESS
The different stages are:
1. Defining the problem
2. Planning a research design
3. Planning a sample
4. Collecting data
5. Analyzing the data
6. Formulating the conclusions and preparing the data
Figure 7: Phases of the Research Process
Defining the Problem
ß
Planning a Research Design
Planning a Sample
Gathering the Data
ß
Processing and Analyzing the Data
ß
Formulating Conclusions and
Preparing the Report
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Type Of Research
Descriptive Research -
Descriptive study is a fact-finding investigation with adequate interpretation.

It is the simplest type of research. It is more specific than an explanatory study, as it
has focus on particular aspect of the problem studied. It is designed to get
descriptive information and provide information for formulating more sophisticated
studies. Using one or more appropriate method, observation and questionnaire
collects data. The major purpose of descriptive research, as the term implies, is to
describe characteristics of a population or phenomenon. Descriptive research often
helps segment and target markets. Accuracy is of paramount importance in
descriptive research; still errors cannot be completely eliminated. Descriptive
studies are based on some previous understandings of the nature of the research
problem.
Sample Design
Sample Unit
I have taken sample unit of all the existing customors of the various
brokerage firms in DELHI, NOIDA and GHAZIABAD(particularly the firms taken
into cosideration are Religare Securities ltd., ShareKhan, IndiaBulls and ICICI
Direct).
Sample Size:
Sample size relates to how many people to pick for the study. The question
often asked is: How big a sample is necessary for a good survey? According to the
law of large numbers, the larger the sample size, the better the estimates, or the
larger the sample the closer the “true” value of the population is approached. A
sample of 110 people was taken for the survey. Required data is collected through
questionnaire both through personal interview and online.
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How big a sample is necessary for a good survey?
This depend on factors such as:
• The researcher hypotheses or questions,

• Level of precision,
• Population homogeneity
• Sampling technique used
• Monetary and personal resources, and
• The amount of time available
SAMPLING TECHNIQUE:
CONVENIENCE SAMPLING – It attempts to obtain a sample of
convenient elements. The selection of sampling units is left primarily to the
interviewer. Often, respondents are selected because they happen to be in the right
place at the right time. Convenience sampling is the least expensive and least time
consuming.
SAMPLING AREA:
A method in which the area to be sampled is subdivided into smaller blocks

which are selected at random and then sub sampled or fully surveyed, method is
used when a complete frame of reference is not available.
Data Collection
I.Sources
Primary Data –
Primary data is the first hand information that the researcher collects. It
helps in collecting useful and most accurate information that is needed for the
researcher to do his work.
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Secondary Data –
Secondary Data, or historical data, are data previously collected and
assembled for some project other than the one at hand. This data can be found inside
the company, on the Internet, in the library, or they can be purchased from firms that
specialize in providing information, such as economic forecasts, that is useful to
organization. Secondary data can almost always be gathered faster and more
inexpensively than primary data.
II. Statistical Tools
FACTOR Analysis – The general purpose of factor analysis is to summarize

the information contained in a large number of variables into a smaller number
of factors. Factor analysis refers to a number of diverse techniques used to
discern the underlying dimensions or regularity in phenomena. The statistical
purpose of factor analysis is to determine linear combination of variables that
aid in investigating the interrelationships. Factor analysis accomplishes this by
combining the questions to create new, more abstract variables called factors.
In general, the goal of factor analysis is parsimony: to reduce a large number
of variables to as few dimensions or constructs as possible.
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CHAPTER 10
IMS, Ghaziabad 6
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Data Analysis And Interpretation
Gender Ratio:
Table 2
Gender No. Of Respondents
Male 83
Female 27
Figure 8
Inference –
The above pie-chart shows that there are high percentage of male interested
in share trading in the region selected for this research.
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Age Group:
Table 3
Age Group No. Of Respondents
Below 40 Years 76
40 Years or more 34
Figure 10
Inference –
This shows that the people who do share trading are mostly below the 40
years of age. People above 40 years of age are less interested in share trading.
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Income Group
Table 4
Income No. Of Respondents
0-5 lacs 37
5-10 lacs 56
10lacs or more 17
Figure 11
Inference –
People who earn between 5 – 10 lacs are more interested in dealing with
financial instruments. People who earn between 0 – 5 lacs are also interested in
investing as they are more concerned towards their future. So they like to invest
more to get profitable returns.
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Percentage Of Income Like to Invest:

Table 5
Percentage of Income No. Of Respondents
0-5% 52
5-10% 43
10% or more 15
Figure 12
Inference –
This shows that most of the people like to invest under 10% of their income.
This is because they want to get more profits from less investments and do not want
to take more risk, as this can be dangerous for their financial status.
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Area Of Residence
Table 6
Area Of Residence No. Of Respondents
Delhi 24
Noida 51
Ghaziabad 35
Figure 13
Inference -
As most of the companies were in Noida and its surroundings, the responses
filled were from Noida region.
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Brokerage Frim Choices

Table 7
Brokerage Firm No. Of Respondents
Religare 37
IndiaBulls 26
ShareKhan 22
ICICI Direct 17
Others 8
Figure 14
Inference –
In the region selected for sample Religare was the most preferable firm.
People find it most preferable for them to invest in Religare as it provides greater
options for growth and return on the investment done.
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Source Of Information:
Table 8
Source Of Information No. Of Respondents
Television 31
Print Media 36
Friends/Relatives 43
Figure 15
Inference –
This shows that people get effected by all the factors equally. There is no
special factor that determines the preference of choice for customers to choose the
brokerage firm.
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Investment Options:
Table 9
Financial Instruments No. Of Respondents
Securities 28
Mutual fund 25
Insurance 39
Others 18
Figure 16
Inference -
People like to invest more and more in securities, mutual fund and insurance,
as these are the instruments which have higher rate of return(probably). Also there is
a less risk factor involved as compared to other financial instruments.
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Frequency Of Trading:
Table 10
Frequency No. Of Respondents
Daily 6
2-3 days a week 11
Weekly 65
Monthly 28
Figure 17
Inference –
The maximum number of customers was of the kind who likes to trade on a
weekly basis. This shows a planned manner of investment.
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Factor Analysis Output:

Table 11
Since the KMO value is greater than 0.5, the process of factor analysis is
feasible to be applied. By factor analysis we will get to know the interrelated
data and its communalities.
Table 12
The extraction value shows that how much a variable is in common with
all factors. A relatively high communality indicates that a variable has much in
common with the other variables taken as a group.
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Table 13
This table shows that there are 6 variables whose Eigen value is greater
than 1, which is acceptable. Therefore these 16 variables will be reformed into
6 factors that will define the problem in a more defined manner.
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Table 14
This table shows the highest value of each variable for considering
various factors. This table will help to define the newly formed factors. Thus a
total of 6 factors would be extracted and they will be the factors affecting the
Customer Satisfaction. The rotation of components is done in order to obtain a
newer solution having fewer components.
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Table 15
S. Factor 1 Factor 2 Factor 3 Factor Factor 5 Factor 6

4
No.
1 Demos Decision Other Profit Options Security

Charges
2 Brokerage New Offers Convenienc Return Transpare

Paid e ncy
3 Tips
4 Accuracy
5 Pattern
6 Relationship
Factor 1 can be deducted as Consumer Preference.

Factor 2 can be deducted as Investment Opportunities.
Factor 3 can be deducted as Accessibility.
Factor 4 can be deducted as Profitability.
Factor 5 can be deducted as Product Features.
Factor 6 can be deducted as Security.
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1. Consumer Preference -
By Consumer Preference, I mean to bring together all the variables that
affect the consumer choice for selecting the brokerage firm. Customer thinks that
these are the variables that they can expect or either demand from a firm according
to their convenience. This factor includes variables such as Brokerage Paid, Tips,
Accuracy of Tips, Investment Pattern, Demos Provided and finally Relationship
Maintained.
2. Investment Opportunities -
Investment Opportunities constitutes two variables, Decision and New
Offers. Decision means the purchase and sales decision of securities suggested by
the company representative to the customer. New Offers and Services help in
probing the customer to invest more and profitable schemes often help in promoting
the company ahead of others. Decision through which customers will get greater
return and offers which promise the growth of investment in a better way always
add up to the credibility of the firm.
3. Accessibility -
Accessibility is also a major factor that has an impact on the customer choice
of Brokerage Firm. Accessibility includes the ease with which customers can trade
or interact and there must be least number of hidden charges involved. If any firm
has lots of hidden charges, then the customers feel this as inconvenient for their
investment.
4. Profitability -
Profit and Return combine and make Profitability as a common factor.
Greater the profits and returns, greater will be the profitability factor. Thus
Profitability as a factor plays important role in determining the satisfaction of the
customer.
5. Product Features -
Product Features explains the diversity a firm has related to its products. A
company having greater range of products or services will have a strong customer
database. Moreover transparency also matters a lot to the customers. There must be
a proper knowledge given to the customers by the company. These all add to the
credibility of the company.
6. Security -
Security is as always the major factor in any business or for any customer. In
Financial sector there is always greater risk than others. So the people will always
look for less risk and greater security of their investment. So it had a great impact
on the customer preferences and satisfaction level.
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CHAPTER 11
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CONCLUSION And SUGGESTIONS
According to the research conducted, I conclude that the customers are

having interest in financial instruments. As more and more people are getting
educated and also concerned about their future, they are going more towards
investing in financial instruments.
Earlier the people were not much aware of share trading. But by the use of
technology, now one can trade in securities form home itself. Earlier people use to
trade through agents, but now more people are trading by themselves. People are
getting educated and familiar with the use of technology for trading in securities.
Moreover people of every age group are able to get the knowledge of online trading.
Institutions like Religare Securities Ltd. have playing their role by educating
customers and giving them services so that investors can manage their money
profitably. The company lacks its focus on promoting. Religare is more focused in
promoting the Brand rather than the products available. In financial market, product
or the service is of much importance than the brand.
In the current scenario, investing has become a major area from the future
perspectives. Young people are investing earlier so that they can reap the benefits of
investing in future. People should keep their eye open and keep updating themselves
about various investment avenues so that they can get safe returns.
“Whatever you choose to do, or not do, with your money, you run risks. If
you stash it under your pillow, it won’t earn interest and you run the risk of losing
it to thieves. So not taking risk is also risky.”
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According to the research, which I have done as a part of my summer

internship, I may suggest the Religare Securities Ltd. various features, which
customers want to be there in their products. Although the present product features
very much relate their interests, company could attract more customers in future if
the suggestions given are taken into account. Some of the most feasible solutions
are mentioned below: -
1) The brokerage charges could be made low to gain more market share as
compared to its major competitors.
2) The documentation process should be made a lot easier to remove the
complexity faced by the customers.
3) There is a need of change in the approach of Relationship Managers towards
explaining the product features. The services could be made fast.
4) There is a need of generating more awareness among the potential customers
to gain the market share.
5) Customers should be made more familiar with the technology and the
benefits of the demat account.
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CHAPTER 12
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LIMITATIONS
Every research is conducted under some limitations. As this research was

conducted for academic purposes, Time was a major constraint. There were various
other limitations, which are as follows: -
1. This is a two-month study only.

2. Data available was not sufficient; there was lack of availability of data as
most of it was confidential for the companies.
3. Sample size is two small.
4. Language is one of the construe during questionnaire filling.
5. Portfolio requires the churning of proportion of investment in each sector as
well as company from time to time to give better returns.
6. Due to volatile in the stock market, new investors do not ready to invest in
the market.
7. People have traditional thinking regarding investment plan. They are not
ready to take risk.
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BIBLIOGRAPHY
Books:
Avadhani, V.A. (2008), “Investment Management”, Himalaya Publication House,
New Delhi.
Khatri, D.K. (2006), “Investment Management And Security Analysis, Text And
Cases”, Macmillan India Ltd., New Delhi.
Zikmund, W.G. (2003), “Business Research Methods”, Cenage Learning India Pvt.
Ltd., New Delhi.
Articles:
Tiwari, P. and Verma, K.K., May 2010, “Analysis of customer expectations towards
share brokers”, Monthly Review Of Indian Economy, By Centre For
Monitoring Indian Economy Pvt. Ltd., Mumbai.
Kumar, R., and Gupta, H.O., July-Dec 2009 “Growth Of Indian Stock Market: A
case of NSE”, Nice Journal Of Business, Vol. 4, No. 2, Shobhit University,
Meerut.
Links:
http://www.religareonline.com
http://www.religaresecurities.com/trade.asp
http://www.traderji.com
http://www.ShareKhan.com
http://www.indiabulls.com
http://www.icicidirect.com
http://www.chittorgarh.com/newportal/online-stock-brokers-list.asp
www.financialtimes.net
http://www.religare.in/
http://www.milestonereligare.com/
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Annexure
Evaluation of Customer Satisfaction Level of various Brokerage Firms
Name :
Company/Organization :
Gender :
Age :
Please tick the appropriate option :-
1. Annual Income Group to which I belong -

a) 0 – 5 lacs. b) 5 – 10 lacs. c) 10 lacs or more.
2. Percentage of Income like to invest into -

a) 0 – 5 %. b) 5 – 10 %. c) 10 % or more.
3. Area of Residence -
a) Delhi. b) Noida. c) Ghaziabad.
4. Brokerage Firm in which I have my Demat Account -

a) Religare. b) IndiaBulls c) ShareKhan.
d) ICICI DIRECT. e) Others.
5. Source of my knowledge about the Brokerage Firm -

a) Television. b) Print Media. c) Friends/Relatives.
6. Financial Instrument in which I invest into -

a) Securities. b) Mutual Fund. c) Insurance.
d) Others.
7. Frequency of my Trading -
a) Daily. b) 2-3 days/week. c) Weekly.
d) Monthly
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Below are the factors which should kept into consideration by any Brokerage
Firm for its customer's satisfaction. Please indicate that whether you are
satisfied or not in respect to the following factors. Your preferences should be
made on the basis of a 5 point scale which is as follows :
1. Highly Dissatisfied 2. Dissatisfied 3. Indifferent 4. Satisfied 5. Highly

Satisfied.
Sl Statements 1 2 3 4 5
No.
1 Trading Demos Provided.
2 Brokerage Paid
3 Tips
4 Accuracy of Tips
5 Investment Pattern Suggested
6 Relationship Maintained
7 Other Charges
8 Purchase and Sales decision
9 New Offer and Services
10 Growth of Investment
11 Profit Gaining
12 Security of Account
13 Convenience in Investing
14 Investment Options
15 Returns
16 Transparency
The information provided by you will be kept strictly confidential and will
be used for academic purpose only. Your co-operation is well appreciated.
Thank You.
IMS, Ghaziabad 9
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COMPARITIVE ANALYSIS OF RELIGARE SECURITIES LIMITED WITH ITS COMPETITORS

Basically, dematerialization refers to the absolute or relative reduction in the

Dematerialization is the process wherein, there is no physical scrip in

An investor (client) intending to dematerialize his/her securities need to have

The phenomena of dematerialization of securities issued by large firms is

1. There is saving in time and cost on account.

2. The threat of loss of certificates or fraudulent interception of certificates in

3. It enables processing of share trading and transfers electronically without

4. Transfer of dematerialized securities is immediate.

OBJECTIVES OF THE STUDY

In today’s competitive scenario of security business, where customers play a

1. To know about various products in different categories offered by Religare

2. To study about the dematerialization in brokerage firms.

3. To know the customer satisfaction of firms as compared with Religare

1. To have an overview of Share Market and its functioning.

3. To create awareness about Religare Securities Limited.

4. To convert theoretical knowledge into practical knowledge.

“Analysis of customer expectations towards share brokers”: A study by

“Growth Of Indian Stock Market: A case of NSE” by Raj Kumar and

“Share Trading on the Web: A comprehensive review of design

Moreover the Demat account reduces brokerage charges, makes pledging of

All the process of book entry is done electronically and there is no

Essentials for opening a Demat account are as follows: -

ii. Self-attested photographs.

iii. PAN Card.

iv. Proof of residence – passport, voter’s ID card, driving license etc.

vi. Bank account proof- bank statement.

The benefits of having a Demat account are enumerated as follows: -

a. It is a very safe and convenient way of holding securities.

b. Immediate transfer of securities is possible.

c. No stamp duty on transfer.

d. Paper work is reduced very much.

f. There is an automatic credit system of shares arising out of bonus, split,

Account Opening Fee –

There may or may not be an account-opening fee. It depends upon the

Annual Maintenance Fee –

This is also known as Folio management charge and is generally taken in

This fee is charged monthly and depends on the number of securities

The transaction fee is charged for crediting/debiting securities to and from

There are few disadvantages also of having a Demat account: -

a. Role of key market players such as Stockbrokers, need to be supervised as

b. Trading in securities may become uncontrolled.

Investment basically means sacrifice of some money value at present with

As soon as person makes a commitment of investing money either in buying

The element of liquidity depends upon the marketability or buy-

Risk Associated With Investment –

Risk means probability of having adverse or low returns as compared to the

1. Risk Due To Inflation

2. Interest Rate Risk

Interest rate in an economy tends to fluctuate either on account of regularity

5. Changing Government Policies

The effect of changing government policies can clearly be observed by

7. War-like Situation/Internal Peace

Whenever there is an internal disturbance in the economy it immediately

Business risk gets created due to the operating of a company/business. A

Financial risk is due to wrong financial planning. A company have high

Understanding the Industry

While brokerage houses profitability was severely impacted in FY08-09,

a. There is a huge market potential in India as it moves towards financial sector

b. There is an expected low leverage at industry level with many brokerage

a. Protection of brokerage yield in a highly competitive as well as fragmented

b. Achievement of a critical scale of operations for the sustainment of

c. There is a limited financial flexibility as banks enjoy capital market

d. Continuously upgrading the risk management systems and monitoring