CHAPTER 1

INTRODUCTION

As MBA students our aim should not be only to hit the books by theoretical concepts in the
lecture hall, but it becomes more important as how we apply those concepts in practices. In
present scenario the world is developing so fast and thus the technological and application
theory is changing at a greater phase. The study teaches students to think out of the box,
rather than highlighting within the box. We are coming across many modern theories and
implementation of technologies, to start new business. We must have the knowledge of
theories and practical, through it, the student can able to know about how to apply their
mind in the real business world. This program of internship project will create awareness
about the industrial environment amongst the students. Such internship program will be a
vital source of knowledge to the corporate world during their MBA Program. The
importance of this internship and project report preparation has been widely accepted in the
education institutions. Thus knowing the importance of such practical knowledge, the
university and our college is providing such program which will enhance the overall
development of the students.

The Economic Liberalization has accelerated the pace of development in the India Securities
Market which has undergone a sea exchange during the last 2 decades. The role of securities
Market in mobilizing and canalizing private capital for the Economic Development of the
country has increased over the years and the Securities itself has undergone Structural
transformation with the introduction of the computerized online interconnected Market
System.

Movements in the stock market have a profound impact on the economy. With its genesis in
1830, it has managed to be the most stable and resilience force. This report gives an insight
into the bearish and bullish trends of the stock market during the ‘Modi’ government
regime. The study would analyze the impact of reforms brought by the BJP government to
tackle the volatility in currency and stock market. A favourable monetary policy, fed rate
stability and the new government has kept the market on its feet. This report unfolds some
of the critical information on politics and its impact on stock market.

The internship opportunity I had with Karvy stock broking Ltd. was a great chance for
learning and professional development. Where they gives chance to students of BBA,
B.Com, M.Com, MBA etc. to do their implant study and project report on their company. It
consists of various departments which is well maintained and well organized. As it is a part
of our 4th semester MBA, the study involves the organization as a medium for studying the
stock market condition on various reforms of our PM Narendra Modi sir.

INDUSTRY PROFILE

STOCK EXCHANGE IN INDIA

The market for long term securities like bonds. Equity stock and preferred stocks are divided in
two primary and secondary markets. The primary market deals with the new issues of
securities. Outstanding securities are traded in the secondary market which is commonly
known as stock market or stock exchange. In the Secondary market the investors can sell n buy
securities. Stock markets predominantly deal in the equity share. Debt instruments like bonds
and debentures are also traded in the stock market. Well regulated and active stock market
promotes capital formation. Growth of the primary market depends on the stock market. The
health of the company reflected by the growth of the stock market.

The origin of the stock exchange in India can be traced back to the later of the 19th century.
After the American civil war (1860-61) due to the share mania of public, the number of brokers
dealing in share increased. The brokers organized an informal association of brokers dealing in
share increased. The brokers association” in 1975. At presently in India there are 23 stock
Exchanges are there and situated in various part of the country. All the stock exchanges in India
are controlled by SEBI (Security Exchange Board of India).

FUNCTIONS OF STOCK MARKET

 Provide quotations of share/ stock for facilitating trading and marketability.

 Extend liquidity to such stock as they are easily marketable and traded.

 Promotes savings and investment in the economy by attracting funds for investment
incorporate shares securities.

 Ensures safe and fair dealing.

 Maintain active trading.

INDIAN STOCK MARKET

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years
ago. The earliest records of security dealings in India are meager and obscure. The 1850's
witnessed a rapid development of commercial enterprise and brokerage business attracted
many men into the field and by 1860 the number of brokers increased into 60.

The first stock exchange in India 1894 set up in Mumbai. These was organized as voluntary
non-profit making associations of brokers to evaluate and protect their interest before the
control on securities trading become a central subject under the constitution in 1950, it was a
state subject and Bombay securities Contract Act 1925 used to regulate trading in securities.
Under this Act, the Bombay stock exchange was recognized in 1927 and Ahmedabad in 1937.
The central Legislation was proposed and a committee headed by A.D.Gorwala went into the
Bill for securities regulation.

The securities contract Act become low in 1956. As per April 1998 there were 23 stock
exchanges recognized by central Government. They are located in Ahmedabad, Bangalore,
Calcutta, Cochin, Coimbatore, Delhi, Guwahati, Hyderabad, Jaipur, Ludhiana, Madhya
Pradesh, Madras, Magadh, Mangalore, Meerut, OTC Exchange Of India (Mumbai), Pune,
Saurashtra, Kutch, Uttar Pradesh, Vadodara.

A stock exchange is a market where securities i.e., shares, debentures and government
securities are brought and sold. The securities contract act, 1956, defines the stock exchange as
“an association, organization, or body of individuals where in corporate are not established for
the purpose of assisting, regulating and controlling of business in buying, selling and dealing in
securities”.

The two main stock exchanges in India are:-

NSE (National Stock Exchange)

BSE (Bombay stock exchange)

NSE (National Stock Exchange)

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock
market trading system on par with the international standards. On the basis of the
recommendations of high powered Pherwani Committee, the National Stock Exchange was
incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and
Investment Corporation of India, Industrial Finance Corporation of India, all Insurance
Corporations, selected commercial banks and others.

Trading at NSE can be classified under two broad categories:

 Wholesale debt market and

 Capital market.

Wholesale debt market operations are similar to money market operations - institutions and
corporate bodies enter into high value transactions in financial instruments such as government
securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc.

There are two kinds of players in NSE:

 Trading members and

 Participants.

Recognized members of NSE are called trading members who trade on behalf of themselves
and their clients. Participants include trading members and large players like banks who take
direct settlement responsibility.

BSE (Bombay stock exchange)

Bombay Stock Exchange Limited (the Exchange) is the oldest stock exchange in Asia with a
rich heritage. Popularly known as "BSE"; it was established as "The Native Share & Stock
Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent
recognition in 1956 from the Government of India under the Securities Contracts (Regulation)
Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital
market is widely recognized and its index, SENSEX, is tracked worldwide.

The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The
systems and processes of the Exchange are designed to safeguard market integrity and enhance
transparency in operations. During the year 2004-2005, the trading volumes on the Exchange
showed robust growth.

The Exchange provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary
system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing &
settlement functions of the Exchange are ISO 9001:2000 certified.

NATURE OF STOCK MARKET

A stock exchange is a market where securities i.e., shares, debentures and government
securities are brought and sold. The securities contract act, 1956, defines the stock exchange as
“an association, organization, or body of individuals where in corporate are not established for
the purpose of assisting, regulating and controlling of business in buying, selling and dealing in
securities”.

Members of stock exchanges

The regulations governing the members of the recognized stock exchanges are uniform in
terms of the provisions of the securities contract act, 1957.

The statutory rules provide that no person shall be eligible to be elected as a member if he is:-

 Not an Indian Citizen.

 Less than 21 years.

 A judged bankrupt to be insolvent.

 Convicted of an offence-involving frond.

 Member of any other association in India where dealings in securities are carried on.

 Engaged as principal or employee in any business other than that of securities.

Functions

The three important functions of secondary markets are

 Price discovery process which results from the interactions of buyer and sellers in the
market when they trade assets.

 Provisions of liquidity by providing a mechanism for an investor to sell financial assets.

 Finally low cost of transactions and information.

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges is limited to listed securities of public limited companies.
They are broadly divided into two categories, namely, specified\securities (forward list) and
non-specified securities (cash list). Equity shares of dividend paying, growth-oriented
companies with a paid-up capital of at least Rs.50 million and a market capitalization of at least
Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified
group and the balance in non-specified group.

Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery
transactions "for delivery and payment within the time or on the date stipulated when entering
into the contract which shall not be more than 14 days following the date of the contract”: and
(b) forward transactions "delivery and payment can be extended by further period of 14 days
each so that the overall period does not exceed 90 days from the date of the contract". The latter
is permitted only in the case of specified shares. The brokers who carry over the outstanding
pay carry over charges (cantango or backwardation) which are usually determined by the rates
of interest prevailing.

A member broker in an Indian stock exchange can act as an agent, buy and sell securities for
his clients on a commission basis and also can act as a trader or dealer as a principal, buy and
sell securities on his own account and risk, in contrast with the practice prevailing on New
York and London Stock Exchanges, where a member can act as a jobber or a broker only. The
nature of trading on Indian Stock Exchanges are that of age old conventional style of face-to-
face trading with bids and offers being made by open outcry.

Over The Counter Exchange of India (OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way to many
functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long
settlement periods and benami transactions, which affected the small investors to a great extent.
To provide improved services to investors, the country's first ringless, scripless, electronic stock
exchange - OTCEI - was created in 1992 by country's premier financial institutions - Unit Trust
of India, Industrial Credit and Investment

Corporation of India, Industrial Development Bank of India, SBI Capital Markets, Industrial
Finance Corporation of India, General Insurance Corporation and its subsidiaries and CanBank
Financial Services.

Trading at OTCEI is done over the centres spread across the country. Securities traded on the
OTCEI are classified into:-

 Listed Securities - The shares and debentures of the companies listed on the OTC can
be bought or sold at any OTC counter all over the country and they should not be listed
anywhere else

 Permitted Securities - Certain shares and debentures listed on other exchanges and units
of mutual funds are allowed to be traded

 Initiated debentures - Any equity holding at least one lakh debentures of particular scrip
can offer them for trading on the OTC.

HISTORICAL OVERVIEW OF STOCK MARKET IN INDIA

Evolution and Growth of Stock Market in India

Stock market in India has a long and chequered history. Bombay Stock Exchange, the first
stock exchange of the country was established as early as in 1875, predating the Tokyo Stock
Exchange by three years. Over these years Indian stock market has passed through diverse
fortunes. The historical evolution of Indian stock market through four distinct phases is
described in this section.

Early Beginnings
The stock market in India dates back to the 18th century when the securities of the East India
Company were traded in Mumbai and Kolkata. Stock broking was not very popular in those
days and in Mumbai, during 1840 and 1860, there were only half a dozen brokers recognised
by the banks and merchants. The securities traded were mainly shares, debentures and bonds
representing titles to property or promises to pay issued on the condition of transfer from one
person to another.

The real beginning of trading in corporate securities came in 1850 when the Companies Act,
introducing joint stock companies with limited liability, was passed. The following period
witnessed rapid development of commercial enterprises, which made investments in stocks and
shares popular. In Mumbai and Kolkata, shares of banks, cotton mills and loan securities of
East India Company were being transacted in large volume. The cotton boom of the 1860’s has
added further impetus to trading in securities. The American Civil War (1860-61), which
caused to cease the supply of cotton from the United States to Europe, was a boon for cotton
industry in India. There was an unlimited demand for cotton from India and cotton exporters
gained substantially. The export proceeds in gold and silver served as fresh capital for a number
of new ventures. Many new companies were started in a variety of fields such as banking, land
reclamation, trading, cotton cleaning, pressing, shipping and construction. Banks were
following a reckless lending policy during this period. The excessive speculation coupled with
the reckless lending policy resulted in a stock market boom. Any scrip that was floated in the
1860s commanded a very high premium. The steep rise in share prices attracted many people to
the stock exchange.

However, this boom was short-lived. As the Civil War ended, a disastrous slump followed in
India, and the Indian capital market witnessed the first shock in 1865. Though the depression
was severe and long, the share mania of the 1860s created some positive effects. It led to the
establishment of a regular and liquid market for securities, developed an equity cult among the
investors, and helped to make Mumbai the chief centre of the money and capital market and the
financial capital of India.

The boom and the burst had its impact on the share brokers too. The number of brokers
increased significantly during the period of share mania and it stood at 250 in 1865. The slump
brought many failures to the brokers also. This brought brokers in Mumbai together to form the
first formally organised stock exchange in the country-The Bombay Stock Exchange. It was
formed as a society named Native Share and Stock Brokers Association, in 1875.
Subsequently, stock exchanges were set up at Ahemedabad, Kolkata and Madras in 1894, 1905
and 1908 respectively.

Period of Repression (1947-1980)

At the time of Independence though India inherited a poor economy, it had one of the best
formal financial markets in the developing world. There were four functioning stock exchanges
with clearly defined rules governing listing, trading and settlement, 1119 listed companies with
the market value of capital Rs.971 crores, a developed equity culture, if only among the urban
rich; and a banking system with well developed lending norms and recovery procedures. In
terms of corporate laws and financial system, India was better endowed than many of the
erstwhile colonies. The Companies Act, 1956 as well as other laws governing joint stock
companies and investor protection was built on this foundation.

However, in this period, the role assigned to the financial system was limited, with primary role
assigned to the state and its agencies for mobilisation and allocation of savings. Accordingly in
the process of capital accumulation, the role of the financial system was essentially limited. To
a large extent, financial system also had a limited role in providing incentives for savings and
capital accumulation as interest rates were controlled and household savings were pre-empted
through high levels of statutory reserve and liquidity ratio. The industry depended less on
mobilisation of resources through shares and debentures on account of the administered interest
rate structure, and the credit deployment by the banks and financial institutions were at
relatively low rates of interest (Jalan, 2002). As far as external finance was concerned, the
country relied primarily on bilateral and multilateral official development and did not
encourage private external capital inflows as a way to supplement domestic savings. Hence,
there was no noticeable development in respect of the structure and working of capital market
of the country, and it remained more or less repressed during this period.

During the 1950’s and 1960’s, the demand for long- term funds was not significant, partly due
to weak industrial base and partly due to the low saving rate. In terms of the participation of
investors also, this period did not witness substantial progress. However, this period was
characterised by the enactment of a number of basic legislations covering different aspects of
the securities market, i.e., Capital Issues (Control) Act, 1947; Securities Contracts (Regulation)
Act, 1956; Companies Act, 1956; and the Foreign Exchange Regulation Act (FERA), 1975.
The FERA legislation restricting the shareholding of foreign firms in joint ventures to 40 per
cent, made many well managed multinational companies to offer their equities to the public at
the regulated low prices during the 1970’s. Encouraged by the good response to such issues, a
large number of domestic public limited companies offered new capital issues for public
subscription. Consequently, the stock market exhibited an upward trend with share prices
displaying high level of buoyancy (Misra, 1997). By the end of 1980, the number of exchanges
increased to nine with 2265 companies listed on them and the market value of listed capital
aggregated at Rs.6,750 crore. For the first time, awareness was created among the common
investors about the potential of equity investments as a hedge against inflation and a source of
higher earnings compared to the other forms of investments. The number of share owning
population as a proportion of total population registered a nominal rise from 0.12 per cent in
1955 to 0.36 per cent in 1980.
Period of Change (1980-1992)

The period from 1980 to 1992 can be termed as a period of change, signifying the widening
and deepening of the capital market in India (Misra, 1997). Since the mid-eighties, debentures
emerged as a powerful instrument of resource mobilisation in the primary market. The
introduction of public sector bonds since 1985-86 imparted an additional fillip to the stock
market. The mutual fund industry was widened, by permitting banks to set up mutual funds as
subsidiaries. All these resulted in the growth of stock market in terms of number of exchanges,
listed companies, their paid-up capital and market capitalisation. It also witnessed the
emergence of several specialised institutions such as the Securities and Exchange Board of
India (regulatory body), CRISIL, CARE and ICRA (credit rating agencies), SCHIL (custodial
service), OTCEI (screen-based stock exchange), mutual funds and venture capital companies.
By the end of this phase ten new exchanges were set up in the country, taking the total number
of exchanges to 19. The number of listed companies multiplied to 5968 with their listed value
rising to Rs.27, 761 crore and market value to Rs. 55,406 crore. The proportion of share
owning population increased to 1.2 per cent of the total population by the end of 1991. A
number of Committees, relating to the development and working of the capital market, were set
up during this phase. These included the Committee on the Organization and Management of
Stock Exchange,1986 (Chairman: G.S.Patel), the Working Group on the Development of the
Capital Market, 1989(Chairman: Abid Hussain), the High Powered Study Group on
Establishment of New Stock Exchanges,1991(Chairman: M.J.Pherwani) and the Committee on
Trading in Public Sector Bonds and Units of Mutual Funds,1992(Chairman: S.S.Nadkarni). A
number of reform measures were implemented on the recommendations of these committees to
streamline the operations of the stock market.

However, large-scale irregularities existed in the basic structure and operational procedures of
the stock market. The Bombay Stock Exchange (BSE) monopolised the Indian stock market.
The BSE, which was an association of brokers, imposed entry barriers leading to elevated costs
of intermediation. Trading at that time was mainly through ‘open outcry’ on the trading floor
and there was no price-time priority, so users of the market were not assured that a trade was
executed at the best possible price. Moreover, there existed inefficiencies in clearing and
settlement procedures. The market mainly followed fortnightly settlement cycle, in which,
trading was supposed to take place for a fortnight until a predetermined expiration date. Open
positions on the expiration date only would go to actual settlement, where funds and securities
were exchanged. Besides, a market practice called badla allowed the brokers to carry positions
across settlement periods. In effect, even the open positions at the end of the fortnight did not
always have to be settled. All these problems led to an extremely poor functioning of equity
market in the early 1990’s. From the late 1992 onwards, the Indian state embarked on a radical
reform programme, which completely transformed the stock market (Shah and Thomas, 1997).

Period of Structural Transformation (1992)

The period from 1992 onwards witnessed several policy initiatives which refined the structure
and operations of the stock market. The process of economic reforms and liberalizations set in
motion in the mid-eighties was accelerated in the wake of severe foreign exchange crisis,
declining industrial production, galloping inflation and rising fiscal deficit. The state-dominated
development paradigm followed by the country has shifted sharply towards a more market
determined-strategy of development since 1992. The change in the development paradigm also
led to a change in the perception about the role of the financial system in development, Banks,
financial institutions and capital market has recognised as important instruments for allocating
savings among alternative investment choices according to their relative efficiency.
Accordingly, the securities market reforms were launched in 1992, based on the
recommendations of the Pherwani, Dave, Nadkarni and Narasimham Committees and the
Standing High Level Committee on Capital Markets, which included measures for its
liberalisation, regulation and development.

Specifically these reforms included: repeal of the Capital Issues (Control) Act, 1947, through
which the Government used to expropriate seignoirage and allocate resources from capital
market for favoured uses; the enactment of the Securities and Exchange Board of India Act,
1992 to assign statutory status to the SEBI; free pricing of securities according to market
sentiments; permitting private financial institutions to set up mutual funds and foreign
institutional investors to participate in the stock market; setting up of the National Stock
Exchange in 1993; passing of the Depositories Act, 1996 to provide for the maintenance and
transfer of ownership of securities in book entry form; amendments to the Securities
Contracts(Regulation) Act, 1956 in 1999 to provide for the introduction of futures and options,
and the introduction of rolling settlements in securities trading etc. Since 1992 India has
experienced two stock market booms one in 1992-93 and the other in 1999-2000.The first
boom reflected the price deregulation and was driven by the liberalisation wave. During this
period many firms found it cheaper to raise funds from the capital market causing a rapid
increase in the number of listed firms from 6925 in 1992 to 9077 in 1995. Also, the share of
market capitalisation in GDP rose from 32 per cent in 1992 to 46 per cent in 1995. Equity
finance however declined thereafter till 1999. The main causes for this decline are: investors’
realisation that stock prices are overvalued in the primary market, a decline in the public
confidence in the equity market due to a series of scams and malpractices during 1992-93, and
reduced inflow of foreign capital due to Mexican and South Asian crisis. The stock market
experienced another boom in 1999 in the wake of the IT boom, relaxation of IPO requirements
for IT firms, and the reduction in the capital gains tax from 20 per cent to ten per cent. The per
cent of market capitalisation in GDP has increased from 34 per cent in 1999 to 85 per cent in
2000. However, the number of listed companies registered only a mild increase to 9800 (Shirai,
2002).

REFORMS IN INDIAN STOCK MARKET

Since the initiation of the financial liberalisation programme in 1992, there have been
substantial regulatory, structural, institutional and operational changes in the securities market
of the country. These reforms were carried out with the objective of improving market
efficiency, enhancing transparency, preventing unfair trade practices and bringing the Indian
securities market up to international standards. Major reform measures undertaken were the
following.

SEBI as a Statutory Body

The Securities and Exchange Board of India (SEBI) set up as an administrative body in April
1988, was given statutory status on November 1992 by the promulgation of the SEBI
Ordinance. The objective of setting up of SEBI is to protect the interest of investors in
securities, and to promote the development of securities market and to regulate it. Its regulatory
jurisdiction extends over corporate bodies in the issuance of capital and transfer of securities
and to all the intermediaries and persons associated with securities market. After the repeal of
the Capital Issues (Control) Act 1947 in 1992, SEBI has vested with the powers so far
exercised by Controller of Capital Issues. SEBI has the responsibility of prohibiting fraudulent
and unfair trade practices relating to securities market and of regulating substantial acquisition
of shares and takeover of companies. SEBI also has the powers to impose monetary penalties
and to levy fees from market intermediaries. In a recent amendment to the SEBI Act, the
regulator has also been given search and seizure powers.
Introduction of Screen-Based Trading
Prior to 1990’s, the trading on stock exchanges in India used to take place through floor-based
open outcry system, which was inaccessible to users. This system neither allowed immediate
matching or recording of trades, nor did it provide price-time priority, which made it difficult to
ensure that a trade was executed at the best possible price. Besides, this system was time
consuming and resulted in high transaction costs. In order to provide efficiency, liquidity and
transparency in securities trading, fully automated screen based trading system was introduced
in most of the stock exchanges. The NSE pioneered this system of trading by launching the
automated trading system NEAT in1993. Following NSE, BSE introduced BOLT in 1995 and
many other exchanges followed suit. In on-line trading system orders are electronically
matched on price-time priority and hence cut down on time and cost. It enables market
participants to see the full market on real-time, making the market transparent. It also allows a
large number of participants, irrespective of their geographical locations, to trade with one
another simultaneously, improving the depth and liquidity of the stock market.

Entry of Foreign Institutional Investors

As part of a move towards global integration, foreign institutional investors (FIIs), were
allowed to invest in the Indian securities market from September, 1992. However, investments
by them were first made in January 1993. Each FII need to be registered with SEBI initially for
a period of five years and it can operate through opening an office in India or through a sub-
account with a local company. All FIIs are required to buy or sell only for delivery and they are
not allowed to offset a deal or to sell short. FIIs are permitted to trade in exchange traded
derivatives from June 1998. As per the original policy of 1992, registered FIIs could
individually invest in a maximum of five per cent of a company’s issued capital and all FIIs
together up to a maximum of 24 per cent. The five per cent individual FII limit was raised to
ten per cent in June 1998. As of March 2001, FIIs as a group were allowed to invest in excess
of 24 per cent and up to 40 per cent of the paid up capital of a company with the approval of the
general body of the shareholders granted through a special resolution. It was further enhanced
to sectoral FDI limit in September 2000. Now, investments by the FIIs have become a crucial
factor in the movement of share prices in India. They also have an impact on stock market
behaviour mainly through effects on interest rates and asset prices. Their investments enjoy full
capital account convertibility.
Introduction of Depository Receipts
The process of integration received a major impetus when the Indian corporate was allowed to
go global with the issue of GDR/ADR/FCCB1 from November 1993. While bunching of
Depository Receipts (DRs) issues took place in view of the pent-up overseas demand for Indian
securities, it was primarily motivated by the costly procedure of floatation in the domestic
market (Patil, 1994). Initially, companies seeking to float DRs were required to obtain prior
permission from the Department of Economic Affairs. To be eligible, companies should have a
consistent track record of good performance for a minimum of three years. The infrastructure
companies were exempted from the latter requirement in June 1996. The restrictions on number
of DR issued were also removed along with it. The end-use restrictions on Euro issues were
removed in May 1998. In December 1999 Indian software companies, in March 2000 other
knowledge-based companies, and in April 2001 all types of companies were permitted to
undertake overseas business acquisition through ADR/GDR stock swaps. In January 2000,
companies were made free to access the GDR/ADR market through an automatic route
operated by the RBI, without the prior approval of the Government of India or the track record
condition. Similarly, companies were allowed in phases to utilise, without any prior approval,
part of the DR proceeds for overseas investment and finally upto 100 per cent of the proceeds
from February 2001.

DRs can be redeemed at the price of the corresponding shares of the issuing company ruling on
the BSE or NSE on the date of redemption. Similar norms apply to conversion of FCCBs. The
ordinary shares and FCCB issued against the DRs are treated as foreign direct investment
(FDI). The aggregate of foreign equity participation directly or indirectly through the DR
mechanism should not exceed 51 per cent of the issued and subscribed capital of the issuing
company. Two-way-fungibility in DR issues of Indian companies has been introduced from
February 13, 2002 whereby converted local shares could be reconverted into DR subject to
sectoral caps on FDI. Interest payments and dividend on these instruments are subject to tax
deduction at source at the rate of 10 per cent. Capital gains on account of transactions among
non-resident investors outside India are free from any income tax liability in India

Introduction of Depository System

For modernising the settlement system the Depositories Act was passed in 1996, which
provided for the establishment of depositories in securities. The objective of this Act is to
reduce settlement risk arising out of bad delivery, the time taken for settlement and due to the
physical movement of paper. It aims at de-materialisation of securities in the depository mode
and providing for maintenance of ownership records electronically in a book entry form. The
Act also envisages transfer of ownership of securities electronically by book entry with making
securities move from person to person. Accordingly two depositories were set up in the
country, viz. the National Securities Depository Limited (NSDL) and the Central Depository
Services Limited (CDSL), to provide instantaneous electronic transfer of securities. It has been
now made mandatory that all new securities issued should be compulsorily traded in de-
materialised form. The admission to a depository for de-materialisation of securities has been
made a pre-requisite for making a public or rights issue or an offer for sale. It has also been
made compulsory for public limited companies making Initial Public Offer of any security for
Rs. 10 crore or more only in dematerialised form.

Derivatives Trading
The suggestion to introduce derivative trading in Indian securities market was first made by the
L.C. Gupta committee (1998). It suggested the introduction of derivatives in order to assist
market participants to manage risks better through hedging, speculation and arbitrage.
Accordingly, the Securities Contracts (Regulation) Act was amended in 2001 to introduce
derivative trading in NSE and BSE. The market presently offers index futures and index
options on S&P CNX NIFTY, CNX IT Index, CNX Bank NIFTY Index, and BSE 30 Index.
Stock futures and stock options on individual stocks and futures in interest rate products like T-
bills and bonds are also introduced.

Demutualization of Stock Exchanges

Traditionally, stock exchanges were organised in the form of clubs, with the ownership and
control vested with the brokers. In case of disputes, often the interests of the brokers alone are
protected, leaving the investors at the losing end. Therefore to reduce the dominance of trading
members in the management of stock exchanges, the Government proposed to corporatize the
stock exchanges by which ownership, management and trading membership would be
segregated from one another. Of the 24 stock exchanges of the country, only two stock
exchanges, i.e. OTCEI and NSE are de-mutualised. A few exchanges have started the de-
mutualisation process.
Risk Management Mechanism

With a view to avoid any kind of market failures, the stock exchanges have developed a
comprehensive risk management system, which is constantly monitored and upgraded. It
encompasses capital adequacy of members, adequate margin requirements, limits on exposure
and turnover, indemnity insurance, on-line position monitoring and automatic disablement. To
eliminate the counter-party risk that arises from electronic trading, the NSE set up a clearing
corporation, the National Securities Clearing Corporation (NSCCL) in 1996. The NSCCL
assured the counter-party risk of each member and guaranteed financial settlement. NSCCL
established a Settlement Guarantee Fund to provide a cushion for any residual risk and
operated like a self-insured mechanism wherein members contribute to the Fund. In the event
of failure of a member to meet his obligations, the fund is utilised to the extent required for the
successful completion of the settlement. This has eliminated counter-party risk of trading on the
exchange.

Investor Protection Measures

Investors in securities market have been facing serious problems in view of market
disturbances arising out of the inefficiencies of the system. Hence, the SEBI Act entrusted
SEBI with the primary objective of protecting the interests of investors in securities and
empowered it to achieve this objective. The Central Government has established a fund called
Investor Education and Protection Fund in October 2001, for the promotion of awareness
amongst investors and protection of the interest of the investors. Department of Economic
Affairs (DEA), Department of Company Affairs (DCA), the SEBI and the stock exchanges
have set up investor grievance cells for redressal of investor grievance. The exchanges maintain
investor protection funds to take care of investor claims. The DCA has also set up an investor
education and protection fund for the promotion of investors’ awareness and protection of
interest of investors. All these agencies and investor associations are organizing investor
education and awareness programmes. In January 2003, SEBI launched a nation-wide
Securities Market Awareness Campaign that aims at educating investors about the risks
associated with the market as well as the rights and obligations of investors.
Introduction of Rolling Settlement
Indian stock market in the early nineties used ‘future-style settlement’ with fortnightly
settlement cycle. Often, this cycle was not adhered to and on several occasions led to defaults
and risks in settlement. Besides, a peculiar market practice called ‘badla’ allowed brokers to
carry positions across settlements. In other words, even open positions at the end of the
fortnight did not always get settled. In order to reduce large open positions, SEBI over a period
reduced the trading cycle to a week. Stock exchanges, however, continued to have different
weekly trading cycles, which enabled shifting of positions from one exchange to another.
Rolling Settlement was introduced by SEBI for the first time in 1998 by making it optional for
demat scrips. Rolling settlement on T+5 bases was introduced in 2000 with respect of specified
scrips reducing the trading cycle to one day. All scrips moved to rolling settlement from
December 2001. The settlement period has been reduced progressively fromT+5 to T+3 days.
Currently, T+2 day rolling settlement with one day trading cycle is being followed, i.e. trades
taking place over a day are settled together after two working days.

Reduction of Transaction Costs

In the pre-reforms period transaction costs in the Indian securities market was high due to high
order processing and brokerage related costs, which are caused by entry barriers into the
brokerage industry and costs of clearing and settlement. With increased competition and free
entry in the post-liberalisation period, brokerage related costs went down. Similarly, costs
relating to clearing and settlement also went down thanks to the dematerialisation of shares and
adoption of rolling settlement system. For those who use the services of NSDL, transaction
costs have come down to one-tenth of previous levels, which is comparable to those seen on the
best markets overseas.

Trends and Patterns in Indian Stock Market

Participation of Investors
In spite of the massive rise in the activities of the stock market in the 1990s, there has not been
any corresponding rise in the participation rate of individual investors in the country. Yet there
has been a nominal rise in the number of share owning individuals from 4.5 lakhs in 1955 to
2.4 million in 1980, nine million in 1990 and further to 16 million in 1995. It further increased
to 21 million in 2000. Even though, the number in absolute terms is quite large, it accounts for
only two per cent of the total population of the country, which is quite low when compared to
that of advanced countries. Further, a survey of Indian investors conducted by SEBI estimated
that only 7.4 per cent of all Indian households have directly invested in equity shares or
debentures, or both during 2000-01(SEBI-NCAER). Of this the number of debenture owning
households and individual debenture holders far exceeds household and individual equity
investors. This excessive reliance on debt instruments is attributed to the investors urge to meet
their long-term income flow requirements (Tenth Five Year Plan). Another reason for poor
participation rate is the lack of investor confidence in stock market investment. The investors
have been facing serious problems in view of market disturbances arising out of unscrupulous
practices followed by many companies and market intermediaries.

Dependence on Securities Market

Since 1990s the securities market in India has emerged as a major source of finance for trade
and industry. In the early 1990s the corporate sector increasingly depended on external sources,
especially equity finance, for meeting its financial requirements. The increase in the external
finance available to the corporate sector through the capital market enabled the corporates to
replace internal funds during this period. A decline in corporate profitability in the mean period
also contributed to the increase in the corporate dependence on external finance (Nagaraj,
1996). The contribution of capital market and equity as a source of finance peaked in 1994.
However, the importance of equity finance has declined significantly since 1995. Debenture
and bonds have become more important as a source of finance after 1995 (Pal, 2001).

Progress of Dematerialization
SEBI has taking serious efforts to accelerate the process of dematerialization, ever since the
passing of the Depositories Act in 1996. Two depositories viz. NSDL and CDSL provide
instantaneous electronic transfer of securities. Although the investors have a right to hold
securities in either paper or demat form, SEBI has made it compulsory that trading on securities
should be only in dematerialised form. This was initially introduced for institutional investors
and was later extended to all investors. The admission to a depository for dematerialisation of
securities has been made a pre-requisite for making a public or rights issue or an offer for sale.
The securities of listed companies, which fail to establish connectivity with depositories within
the scheduled date, are traded on the ‘trade for trade’ settlement window of the stock
exchanges.
 COMPANY PROFILE

KARVY, is a premier integrated financial services provider, and ranked among the top five
in the country in all its business segments, services over 16 million individual investors in
various capacities, and provides investor services to over 300 corporates, comprising the who
is who of Corporate India. KARVY covers the entire spectrum of financial services such as
Stock broking, Depository Participants, Distribution of financial products - mutual funds,
bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance
Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPO’s,
among others. Karvy has a professional management team and ranks among the best in
technology, operations and research of various industrial segments.|

Karvy early days:

The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small
group of practicing Chartered Accountants who founded the flagship company …Karvy Consultants
Limited. We started with consulting and financial accounting automation, and carved inroads into the
field of registry and share accounting by 1985. Since then, we have utilized our experience and
superlative expertise to go from strength to strength…to better our services, to provide new ones, to
innovate, diversify and in the process, evolved Karvy as one of India’s premier integrated financial
service enterprise.

Thus over the last 20 years Karvy has traveled the success route, towards building a reputation as an
integrated financial services provider, offering a wide spectrum of services. And we have made this
journey by taking the route of quality service, path breaking innovations in service, versatility in
service and finally…totality in service.

Our highly qualified manpower, cutting-edge technology, comprehensive infrastructure and total
customer-focus has secured for us the position of an emerging financial services giant enjoying the
confidence and support of an enviable clientele across diverse fields in the financial world.
Our values and vision of attaining total competence in our servicing has served as the building block
for creating a great financial enterprise, which stands solid on our fortresses of financial strength - our
various companies.

With the experience of years of holistic financial servicing behind us and years of complete expertise
in the industry to look forward to, we have now emerged as a premier integrated financial services
provider.
And today, we can look with pride at the fruits of our mastery and experience – comprehensive
financial services that are competently segregated to service and manage a diverse range of customer
requirements.

Karvy consultant is one of India's premier investment consultancy firms offering personalized
investment planning, advisory and prompt facilitation services to retail investors, corporates and
institutions. It started in the year 1979 as karvy and company and later emerged as a karvy consultant
to cater to specialized and personal services. The company has a long track record and history of
being transparent and trust worthy with its customers.

“Success is a journey, not a destination.” If we look for examples to prove this quote then we
can find many but there is none like that of KARVY. Back in the year 1981, five people
created history by establishing karvy and company which is today known as karvy, the largest
financial service provider of India.

Success sutras of Karvy:

The success story of karvy is driven by 8 success sutras adopted by it namely trust, integrity,
dedication, commitment, enterprises, hard work and team play, learning and innovation,
empathy and humility. These are the values that bind success with karvy.

EVOLUTION OF KARVY

It is well said that success is a journey not a destination and we can see it being proved by
karvy. Under this section we will see that how this “karvy and company” of 1980 became
“karvy” of 2014. Karvy blossomed with the setting up of its first branch at Mumbai during
the year 1987-88. The turning point came in the year 1989 when it decided to enter into one
of the not only emerging rather potential field too i.e.; stock broking. It added the feather of
stock broking into its cap. At the same time it become the member of Hyderabad Stock
Exchange through association firm karvy securities ltd and then karvy never looked
back…….it went on adding services one after another, it entered into retail stock broking in
the year 1990. Karvy investor services centers were set up in the year 1992. Karvy which
already enjoyed a wide network through its investor services centers, entered into financial
product distribution services in the year 1993. One year more and karvy was now dealing into
mutual fund services too in the year 1994 but it didn’t stopped there, it stepped into corporate
finance and investment banking in the year 1995.
Karvy’s strategy has always been being the first entrant in the market. Karvy again hit the
limelight by becoming the first registrar in the country to be awarded ISO 9002 in the year
1997. Then it stepped into the other most happening sectors I.e.; IT enables services by
establishing its own BPO unit’s and at a gap of just one year it look the path of e-Business
through its website www.karvy.com. Then it entered into insurance services in the year 2001
with the launch of its retail arm “karvy” the fin polis: your personal finance advisor”. Then in
the year 2002 it launched its PCG (Private Client Group) which looks after its High Net worth
Individuals and maintain their portfolio and provides them with other financial services. In
the year 2003, it commenced secondary debt and WDM trading.
It was a decade which saw many Indian companies going global…so why the largest
financial services provider of India should lag behind? Hence, karvy launched “karvy global
services limited” after entering into a joint venture with the Computershare, Australia in the
year 2004. The year 2004 also saw karvy entering into commodities marketing though karvy
comrade.
Year 2005 saw karvy established a separate branch for its insurance services under the head
“karvy insurance broking ltd” and in the same year, after being impressed with the rapid
growth of karvy stock broking limited, PCG group of Hong Kong acquired 25% stake at
KSBL. In the year 2006, karvy entered into one of the hottest sector of present time i.e. real
estate through Karvy realty& services (India) ltd. Hence, we can see now karvy being
established as the largest financial service provider of the country.

PROMOTERS & MANAGEMENT TEAM

The KARVY group was formed in 1983 at Hyderabad, India. Karvy ranks among the top
player in almost all the field it operates. Karvy Computers shares Ltd is India’s largest Register
and Transfer Agent with a client base of nearly 500 blue chips corporate managing over 2 core
accounts. Karvy stock brokers Ltd, member of National stock Exchange of India. With over
6,00,000 active accounts, it ranks among the top 5 Depository Participated in India, registered
with NSDL and CDSL karvy COM trade, Member of NCDEX and MCX ranks among the
top0 3 commodity brokers in the country. Karvy Insurance Brokers is registered as a Broker
with IRDA and ranks among the top 5 insurance agent in the country. Registered with AMFI as
a corporate Agent Karvy is also among the top Mutual fund mobilize with over Rs. 5,000 cores
under management. Karvy Realty Services, which started in 2006, has quick established itself
as broker who adds value, in the realty sector. Karvy global offers niche off shoring services to
client in the US.

Karvy has 575 offices over 375 locations across India overseas at Dubai and New York. Over
9,000 high qualified people staff Karvy.

The birth last of Karvy was on a modest scale in 1979. It began with the vision and enterprise
of a small group of practicing Chartered Accounts who founded the flagship company. Karvy
started with consulting and financial accounting and carved inroads into the field of registry
and share accounting by 1985. Since then, Karvy have utilized its experiences and superlative
enterprise to go from.

Strength to Strength ….. To better its services, to provide new ones, to innovative, diversity and
the process, evolved karvy as one of India’s premise integrated financial services enterprise.

Karvy the name comes from the names of the directors:

K – Mr. Krishna Prasad

A- Mr. Arun

R- Mr. Radha Krishna

V- Mr. Venkat Krishna

Y- Mr. Yogendar

MR. C. PARTHASARATHY
Chairman & Managing Director

Mr. C. Parthasarathy is the Chairman and Managing Director of the diversified financial
services Karvy group. C Parthasarathy (CP as he is better known in the Industry), has the
uncanny knack of staying ahead of the curve and the foresight to spot opportunities that seem
invisible on the horizon for the others. Karvy’s entire history is a case study of turning
adversity into opportunity. CP is a chartered accountant by qualification, whose
entrepreneurial energy drove him to co-found Karvy in 1983 with a less-than-modest capital
of Rs 150,000.

Over the years CP’s vision and leadership skills have helped the group navigate through the
turbulent times with a strong sense of purpose and clarity of thought.

CP is one of the pioneers of financial inclusion. Under his leadership Karvy has won
numerous industry awards and accolades. He also is an independent Director in many listed
companies.

MR. M. YUGANDHAR
Managing Director

Mr. M Yugandhar, Managing Director is a founder member of the KARVY Group. He is a

Fellow Member of the Institute of Chartered Accountants of India and has varied experience
in the field of financial services spanning over 30 odd years.

Yugandhar has helped position and build a strong brand for the group in the registry and other
financial services businesses. The registry business of Karvy is one of its flagship businesses
and with the collaboration with Computershare has grown to become the largest registrar in
India for over two decades. Yugandhar has played a key role in building strong relationships
with public sector banks and other PSUs which has helped Karvy win some important
mandates from some of India’s renowned companies. Karvy under his guidance has helped
create the equity cult and substantially built retail investor wealth. He is an Independent
Director on the board of several reputed companies.
MR. M. S. RAMAKRISHNA
Director

Mr. M S Ramakrishna, Director, founder member of KARVY GROUP, he is the orchestrator

of technology initiatives such as the call center in the service of the customer.

Mr. Ramakrishna was a member of the Hyderabad Stock Exchange and has more than 30
years of experience in the financial services arena. He has helped KARVY diversify into the
field of medical transcription leveraging on the company's core competency of transaction
processing.

MANAGEMENT TEAM

1. MR. V.MAHESH
Managing Director – Karvy Data Management

2. MR. V. GANESH
CEO – Karvy Computershare

3. MR. SUSHIL SINHA

Wholetime Director - Karvy Comtrade

4. MR. P. B. RAMAPRIYAN
CEO - Distribution & Allied Businesses

5. MR. RAJIV R. SINGH

CEO - Stock Broking

6. MR. J. RAMASWAMY
Group Head - Corporate Affairs

7. MR. DEEPAK GUPTA

Group Head - HR

8. MR. G. KRISHNA HARI

Group Head - Finance
 VISION MISSION & QUALITY POLICY

Vision of Karvy:

To achieve & sustain market leadership, Karvy shall aim for complete customer satisfaction, by
combining its human and technological resources, to provide world class quality services. In
the process Karvy shall strive to meet and exceed customer’s satisfaction and set industry
standards.

Mission statement:

“Our mission is to be a leading and preferred service provider to our customers, and we aim to
achieve this leadership position by building an innovative, enterprising, and technology driven
organization which will set highest standards of service and business ethics.”
Quality policy:

To achieve and retain leadership, Karvy shall aim for complete customer satisfaction, by
combining its human and technological resources, to provide superior quality financial
services. In the process, Karvy will strive to exceed Customer's expectations.
Quality Objectives

As per the Quality Policy, Karvy will:

 Build in-house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of services.
 Establish a partner relationship with its investor service agents and vendors that
will help in keeping up its commitments to the customers.
 Provide high quality of work life for all its employees and equip them with
adequate knowledge & skills so as to respond to customer's needs .
 Continue to uphold the values of honesty & integrity and strive to establish
unparalleled standards in business ethics.
 Use state-of-the art information technology in developing new and innovative
financial products and services to meet the changing needs of investors and
clients.
 Strive to be a reliable source of value-added financial products and services and
constantly guide the individuals and institutions in making a judicious choice of
same.
 Strive to keep all stake-holders (shareholders, clients, investors, employees,
suppliers and regulatory authorities) proud and satisfied.
 PRODUCTS / SERVICES PROFILE / AREAS OF OPERATION

Products Profile – Overview:

Karvy Stock Broking Limited is part of KARVY Group; one of India's leading financial
services company, renowned for its quality of investment advice. Karvy Stock Broking Limited
offers customized investment solutions to corporate, institutions and individual investors,
through its wide network of offices across India.

At Karvy we help you to construct a portfolio factoring in your risk profile and your future
financial needs, so that your investments achieve an optimal balance between risk and returns.

Our comprehensive account helps you to approach various investment avenues in an integrated
fashion, providing you the facility to transact with ease. So whether you want to trade in
Equities, Derivatives , Currency or invest in IPOs, Mutual funds or NCDs, we have a combined
account facility that caters to all these needs. This account also permits you to seamlessly
integrate your movements of funds with ease through various payment gateways.

Our Product Classes

Equity

Karvyonline.com offers you various options while trading in equities such as, Delivery, Day
trading

Future & Options

This instrument provides a good leverage opportunity and is a great tool for speculation.

Currency

Currency Derivatives has also emerged as an important & new asset class for investors.

Commodity

Commodities are goods that are normally used as inputs in production of other goods& services
Mutual Funds

We provide a platform to invest in Mutual funds in a hassle-free, simple and convenient

manner

Exchange Trading Funds

Exchange Traded Funds or ETFs are securities that are traded, like individual stocks, on an
exchange.

Margin Funding

The funds that brokerages arrange to finance investors’ share purchases.

IPOs

An Initial Public offer (IPO) is the selling of securities to the public in the primary market.

NCDs / BONDs

Non-convertible debentures (NCDs) are debentures which cannot be converted into equities or
shares

Fixed Deposits

Company fixed deposit is a deposit in company for a fixed rate of return over a fixed period of
time.
Services Profile:

Areas of Operation:

OUR COMPANIES
 Karvy Stock Broking LTD
Equity Broking, Depository Participant, Distribution of Financial Products (Mutual Funds,
FD and Bonds), Wealth Management Services, Currency Derivatives, Portfolio Management
Services

 Karvy Comtrade LTD

Commodities Broking

 Karvy Capital LTD( Formerly Karvy Capital Private LTD)

NBFC & Portfolio Manager

 Karvy Investment Advisory Services LTD(Formerly known as Karvy Insurance

Broking LTD)
Investment Advisory Services

 Karvy Holdings LTD

Core Investment Company

 Karvy Middle East LLC

Wealth Management Products for NRI's

 Karvy Realty (India) LTD

Realty Services

 Karvy Financial Services LTD

Non Banking Financial Services

 Karvy Insurance Repository LTD

Insurance Repository services

 Karvy Forex & Currencies Private LTD

Currency and forex services

 Karvy Consultants LTD

Consultancy and Advisory Services, Publications

 Karvy Computershare Private LTD

Registrar and Share Transfer agent

 Karvy Computershare W.L.L( Formerly known as Fakhro Karvy

Computershare W.L.L )
Agent for Custody & Registration of Securities, Registered Administrator

 Karvy Data Management Services LTD

Data Management Services

 Karvy Investor Services LTD

Merchant Banking and Corporate Finance

 Karvy Insights LTD

Market Research

 Karvy Analytics LTD

Analytics

 Karvy Solar Power LTD

Power Generation

 Karvy Global Services LTD

Business Process Outsourcing

 Karvy Global Services Inc, USA

Business Process Outsourcing

 Karvy Inc, USA

INFRASTRUCTURE FACILLITIES

The Karvy Group is today a well diversified conglomerate. Its businesses straddle the entire
financial services spectrum as well as data processing and managing segments. Since most of
its financial services were retail focused, the need to build scale and skill in the transaction
processing domain became imperative. Also during stressed environment in the financial
services segment, the non financial businesses bring in a lot of stability to the group’s
businesses.

Karvy’s financial services business is ranked among the top-5 in the country across its business
segments. The Group services over 70 million individual investors in various capacities, and
provides investor services to over 600 corporate houses, comprising the best of Corporate
India.

The Group offers stock broking, depository participant, distribution of financial products
(including mutual funds, bonds and fixed deposits), commodities broking, personal finance
advisory services, merchant banking & corporate finance, wealth management, NBFC (loans to
individuals, micro and small businesses), Data management, Forex & currencies, Registrar &
Transfer agents, Data Analytics, Market Research among others.

Karvy prides itself on remaining customer centric as all times through a combination of leading
edge technology, Professional management and a wide network of offices across India.

Karvy is committed to its quest as an Equal Opportunity Employer and believes in the rights
for differently-abled persons. We have over 12% employees who are challenged in some form
in one of our prominent businesses.
WHY KARVY

Karvy’s business entities address a heterogeneous swathe of population from the super rich, to
the nouveau riche, the ubiquitous middle class, the lower classes (the SEC E3 according to the
new Social Economic Classification), urban and the rural folks. All of whom either make a
living through large business (corporate world), SMEs, professional services, traders, farmers,
labour, blue and white collar jobs and the government.

Another key feature of Karvy has been its ability to offer leading edge advice based on incisive
ideas that are strongly rooted in high quality research on every conceivable aspect of
investments be it equities, forex, commodities, bonds, fixed returns, debt instruments or any
other investment grade asset class.

The customer has always been at the centre of every Karvy initiative.

COMPETITORS’ INFORMATION OF KARVY

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 SWOT ANALYSIS

 STRENGTH:-

1. Qualified and experienced work force.
2. Wide spread branches and brokers network.
3. Wide range of products and services.
4. Strong customer relationship.

 WEAKNESS:-

1. Not enough advertisement.
2. The company turnover is dependent on market performance.
3. Lack of Loyal clients.

 OPPORTUNITY:-

1. Marketing at semi-urban areas.
2. Growing consumer awareness about equity market.
3. Positive outlook of people towards financial products.

 THREATS:-

1. Market uncertainty.
2. Reduced brokerage charges by new player
 AWARDS & ACCOLADES

1. 2017

 To recognise the important role Karvy Comtrade played in agricultural trades and to
celebrate their contribution towards catalysing growth in farm incomes, NCDEX
announces winners of "KRISHI PRGATI AWARDS,2017".

 Karvy Commodities honoured with Derivative House of the Year 2017 by the
ASSOCHAM on 1st March 2017 at Hotel Le Meridien, New Delhi.

2. 2016

 Karvy Comtrade Limited received “Market Excellence Award, Commodities - Metal”

at the Zee Market Excellence Awards 2016.

 The SKOCH – BSE Order of Merit award and the SKOCH – BSE Aspiring Nation
award for KSBL’s efforts to educate, empower and help create an enlightened corps
of financial market investors.

3. 2014

 KSBL won the “NSDL Star Performer Award 2014 for Highest Asset Value” the
third time consecutively.

 Karvy comtrade Limited won the prestigious ZEE Business Award for the “Best
Agricultural Analyst” in the fifth edition of India’s Best market Analyst.

4. 2011

 KCTL also bagged the ‘Broker with Best Corporate Desk for Commodity Broking’
award at the Bloomberg UTV Financial Leadership Awards 2011.

 KCTL receiving the ‘Broker with Best Corporate Desk for Commodity
Broking’award

5. 2010

 KSBL won an award for being the ‘Largest E-Broking House in India’ by Karvy
Stock Broking Limited at the prestigious Dun & Bradstreet – BSE Equity Broking
Awards 2010.
  Mr. C Parthasarathy, Chairman, Karvy Group, receiving the ‘Largest E-Broking
House in India’ award at the Dun & Bradstreet – BSE Equity Broking Awards 2010

Karvy Stock Broking Limited

1. 2014

Won the prestigious "NSDL Star Performer Award 2014 for Highest Asset Value".
Organized by the National Securities Depository, the NSDL Star Performers Awards
recognize the best performers in the securities and depositories space. The award ceremony
was organized on Saturday, December 20, 2014, at Taj Coromadel, Chennai. Karvy has won
this award consecutively for last two years.

2. 2010

"Largest E-Broking House in India" at BSE Equity Broking Awards 2010 by Dun &
Bradstreet held in ITC Grand Maratha, Mumbai. This award is based on the study carried out
by the world’s leading provider of business information, knowledge and insight, Dun &
Bradstreet in association with the oldest stock exchange in India, the Bombay Stock
Exchange.

The BSE-D&B Equity Broking Awards recognizes the brokerage firms based on the number
of online accounts, volume of online trade, and service delivery of their online trading
platform. Karvy Stock Broking Limited has won this prestigious award for its state of the art,
in-house developed KarvyOnline, a comprehensive online investment platform that enables
investors to invest, anytime from anywhere.

3. 2007

Bagged ace award by receiving the coveted Annual Award for 2006 for "Best CEO,
Initiating HR Practices”, by, the Uttar Pradesh Chapter of National Institute of Personnel
Management (NIPM). The Award has been conferred to Mr. C Parthasarathy, CMD, Karvy
Group, for his contribution to HR practices in Lucknow, organized by UP chapter of NIPM.

4. 2007

"Amity Corporate Excellence" award at the 9th International Business Summit and
Research Conference-INBUSH (International Business Horizon) which was held at a
glittering function in Noida. This award was conferred by Amity International Business
School, Noida.

5. 2006

ISTD – "Vivekananda National Award" for Excellence in HRD & Training

6. 2004

"Best Depository Participant in the country" award