A

Summer Internship Project Report

On
Study on Investment Perception And Selection Behaviour Towards
Stock Market
At

Patel wealth advisor pvt ltd.

Submitted To
Institute code: 729
L.J. Institute of Management Studies

Under the Guidance of

Dr. Bilva Desai Singh
(Professor)

In partial Fulfilment of the Requirement of the award of the degree of

Master of Business Administration (MBA)
Offered By
Gujarat Technological University
Ahmadabad
Prepared by:
BHORANIYA AHESANALI MIGDADALI
177290592024
MBA (Semester- III)
July - 2018

Page 1 of 75
 Student’s Declaration

I hereby declare that the Summer Internship Project Report titled “Study
On Investment Perception And Selection Behaviour Towards Stock
Market” in Patel wealth advisor pvt ltd. is a result of my own work and my
indebtedness to other work publications, references, if any, have been duly
acknowledged. If I am found guilty of copying from any other report or
published information and showing as my original work, or extending
plagiarism limit, I understand that I shall be liable and punishable by the
university, which may include ‘Fail’ in examination or any other punishment
that university may decide.

Enrolment no. Name Signature

177290592024 BHORANIYA AHESANALI Ahesanali

M.

Place: …….. Date: ……..

Page 2 of 75
 Date: __/__/____

Institute Certificate

“This is to Certify that this Summer Internship Project Report Titled “Study On
Investment Perception And Selection Behaviour Towards Stock Market” is the
bonafide work of BHORANIYA AHESANALI M. (1777290592024.) who has
carried out his project under my supervision. I also certify further, that to the best of
my knowledge the work reported herein does not form part of any other project
report or dissertation on the basis of which a degree or award was conferred on an
earlier occasion on this or any other candidate. I have also checked the plagiarism
extent of this report which is ……… % and it is below the prescribed limit of
30%. The separate plagiarism report in the form of pdf file is enclosed with
this.

Rating of Project Report [A/B/C/D/E]: ______

(A=Excellent; B=Good; C=Average; D=Poor; E=Worst)
(By Faculty Guide)

Dr. Bilva Desai Singh

Signature of the Faculty Guide/s

Dr. Siddarth Singh Bist

Signature of Principal/Director with Stamp of Institute

Page 3 of 75
Page 4 of 75
 PREFACE

This Project Report has been prepared in partial fulfilment of the requirement
for the Subject: Practical Studies of the programme M.B.A. in Financial Services
(Sem. III) in the academic year 2017-2018.

This report documents the work done during the summer internship at Patel
Wealth Advisor Ahmadabad under the guidance of Dr. Bilva Desai Singh and
company guidance Mr. Jatin Patel. The report first shall give an overview of the
company history in brief and experienced gained during the period of internship
with management skills.

Recent financial event have emphasized the need for an understanding of

financial decision-making, financing instruments, and strategies used in financial
and investment management.

This project will guide to investor for an investment in stock market. This
project deployed a lot time for collection of information from various sources. This
project report helps in following aspects,

 Build understanding of central ideas and theories of stock market.

 Develop familiarity with the analysis of stock market.

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 ACKNOLEDGEMENT

“It is not possible to prepare a project report without the assistance &
encouragement of other people. This one is certainly no exception.”

“It was indeed an opportunity for us to internship in “ Patel Wealth Advisor Pvt
Ltd.” and prepare a project report on the same during the programme M.B.A. in
finance.

We are the thankful to Dr. Bilva Desai Singh and Mr. Jatin Patel who permitted
us to visit the company and allowed us the prepare the report. We are also thankful
to the Departmental Heads of the company. Not only did they advised about our
project but listening to any of my ideas which can be beneficial for the company.
We are also highly indebted to our supervisors who seemed to have solutions to all
our problems.

Thanking You

Ahesanali

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 Index
Sr. No CONTENT PAGE NO

1 Executive Summary 9

2 Introduction 10

 What is Stock Market?

1. Capital Market. 11
2. Primary Market.
 Secondary Market 16
 Money Market 17
 SWOT analysis of Stock Market 18
 Types of Stocks 19

 Types of Exchange 20

 About SEBI 24
 Function and Responsibilities of SEBI 25
 Role of SEBI 26

 Objective of SEBI 27
 Types of investors 28
 Basic and Need of Investment 29
 Investment Process 31
3 Investor Behaviour

 Introduction 33
 Theories of Investor Behaviour 33

 Objective of the Study 35

 Investor attitude and perception 35

 Background to the study 36

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4 About company
 Company profile 39

 About Industry 40

 Vision & Mission 42

 Company Philosophy 44

 Product and Services 45

 Organizational Structure 46

 Competitors 47
 Patel Wealth Retail Broking 48
5 Literature Review 49
6 About the Study
 Problem Statement 51
Objective of the Study 51
7 Research Methodology
 Introduction 53
 Objective of Research 53
 Research Design 54
8 Data analysis and Interpretation 56
9 Finding 69
10 Suggestion 70
11 Conclusion 71
12 Bibliography 72
13 Annexure 73

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 Executive Summary

The report prepare undertaken with Patel Wealth Advisory pvt ltd. Under the
guidance of Dr. Bilva Desai Sing and Mr. Jatin Patel.

The project gives the details of Investment perception towards stock market.

This study tells the factors which directly or indirectly affects the market and some
basic information on stock market for the new investors or the students who have
some interest in the stock market.

The objective of selecting the topic is to know about the market trends of the stock
market and the information related to the investment for the future investors.

Through this project I also learned about option, future and forwards. This project
also highlights the Investment perception towards stock market (BSE and NSE).
This project gives us information about the how the Investor investment behaviour
in stock market and which factor are consider when a invest in stock market.

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 CHAPTER 2

INTRODUCTION
TO
STOCK MARKET

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 What Is Stock Market

Definition:

It is a place where shares of public listed companies are traded. The primary market
is where companies float shares to the general public in an initial public offering
(IPO) to raise capital.

The market in which shares of publicity held companies are issued and traded either
through exchanges or over the counter markets. Also known as the equity market.

The stock market lets investors participate in the financial achievement of the
companies whose shares they hold. When companies are profitable, stock market
investors make money through the companies pay out and by selling appreciated
stocks at a profit called a capital gain.

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 Capital Market

Definition of capital market

Capital market is a market where buyers and sellers engage in trade of financial
securities like bonds, stocks, etc. The buying/selling is undertaken by participants
such as individuals and institutions.

Capital market typically involve issuing instruments such as stocks and bonds for
the medium term and long term. In this respect, capital market are distinct from
money market, which refer to market for financial instruments with maturities not
exceeding one year.

Capital markets have numerous participants including individual investors,

institutional investors such as pension funds and mutual funds, municipalities and
governments, companies and organizations and banks and financial institutions.
Suppliers of capital generally want the maximum possible return at the lowest
possible risk, while user of capital want to raise capital at the lowest possible cost.

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The capital market is divide future into two markets:

 Primary Market
 Secondary Market

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 Primary Market

Definition:

“The primary market is the part of the capital market that deals with issuing of new
securities. In a primary market, companies, governments of public sector
institutions can raise funds trough bond issues and corporations can raise capital
through the sale of new stock through an initial public offering.”

The primary market are where investors can get first crack at a new security
issuance. The issuing company or group receive cash proceeds from the sale, which
is then used to fund operations or expand the business.

There are three ways in which a company may raise equity capital in the
primary market:

 Public Issue:

Issue of stock on a public market rather than being privately funded by the
companies own promoters.

If a company decide to raise capital by issuing stock, it must file a formal

registration statement with the Securities and Exchange Commission (SEC)
that details the business’s financial history, current financial situation, the
proposed public issue and future projection.

 IPO: Initial Public Offer

Initial public offering (IPO) or stock market launch is a type of public

offering where shares of stock in company are sold to the general public, on
securities exchange, for the first time. An initial public offering, or IPO, is the
first sale of stock by a company to the public. A company can raise money by
issuing either debt or equity. If the company has never issued equity to the
public, it’s known as an IPO.

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 Right Issues:
An issue of rights to a company’s existing shareholders that entitles them to
buy additional shares directly from the company in proportion to their
existing holdings, within a fixed time period. In a rights offering, the
subscription price at which each share may be purchased in generally at a
discount to the current market price. Rights are often transferable, allowing
the holder to sell them on the open market. A rights issue is when a company
issues its existing shareholders a right to buy additional shares in the
company. The company will offer the shareholder a specific number of shares
at a specific price. The company will also set a time limit for the shareholder
to buy the shares. The shares are often offered at a discounted price to
encourage existing shareholders to take the company up on their offer.

 Preferential Issues:
A preferential issue is an issue of shares or of convertible securities by listed
companies to a select group of persons under Section 81 of the Companies
Act, 1956 which is neither a rights issue nor a public issue. This is a faster
way for a company to raise equity capital. The issuer company has to comply
with the Companies Act and the requirements contained in Chapter pertaining
to preferential allotment in SEBI (DIP) guidelines which inter-alia include
pricing, disclosures in notice etc. Preferred stock is a different class than the
better-known common stock, with different characteristics. Thus, companies
have reasons for issuing preferred stock that may differ from the reasons they
“go public” by issuing common stock to everyday investors. Preferred stock
is still considered equity – an ownership stake, rather than debt – but it often
functions more like a bond than a share. Preferred stock is so named because,
on a company’s hierarchy of debts, it is favoured over common stock – that
is, its owners are paid before owners of common shares. However, preferred

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 stock normally does not convey voting rights to owners as common shares
do. Preferred stocks attract investors looking for dividends, which provide
owners with a fixed rate of return rather than returns that rise and fall with the
stock market.

Secondary Market

Definition:

“The secondary market, also called the aftermarket and follow on public offering is
the financial market in which previously issued financial instruments such as stock,
bonds, option and futures are bought and sold. After the initial issuance, investors
can purchase from other investors in the secondary market.”

Secondary markets include all stock exchanges where investors buy or sell their
securities with other investors. Because investors who deal with securities needed a
place to exchange their offerings for money, the stock exchange emerged. Today, it
is highly sophisticated and uses advanced technologies to provide real-time prices
of any share.

Secondary markets provide the liquidity for investors and even for the economy as a
whole. In general, the higher the number of investors, the greater the liquidity for
that market.

 Secondary market securities are sold by and transfer from one investor or
speculator to another.
 Private equity secondary market refers of the buying and selling of pre-
existing investors commitment to private equity funds

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 Money Market
Definition:
Money market refers for short-term market. Money market basically refers to a
section of the financial market where financial instruments with high liquidity and
short-term maturities are traded.

Money market has become a component of the financial market for buying and
selling of securities of short-term maturities, of one year or less, such as treasury
bills and commercial papers.

Money market instruments such as treasury bills, commercial papers. And

certificates of deposit. It is used by many participants, including companies, to raise
funds by selling commercial papers in the market. Money market is considered a
safe place to invest due to the high liquidity of securities.

Types:

1. Commercial Paper
2. Federal Funds
3. Discount Window
4. Certificate of Deposit
5. Treasury Bills

Objective:

 An equilibrating mechanism for evening out short-term deficits and

surpluses.
 A focal point for central bank intervention for influencing liquidity of the
economy, and
 An access to the users of short-term money to meet their requirements at
reasonable price.

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 SWOT analysis of Indian Stock Market

Strength:
1. The first and for most thing of strength of Indian stock market is its ability to
provide high return.
2. SEBI a regulatory body of Indian stock market who protects the interest of the
investors.
3. Large number of securities, which provides medium for investment.
4. Large number of Brokers who plays a role of facilitator for investment.

Weakness:
1. The weak point of Indian stock market is its volatility i.e. High risk.
2. It is a kind of gambling where no guarantee of return and some time it depends on
luck also.

Opportunity:
1. Stock market provides an opportunity to money lender and money seeker to
Invest and use money for their plan.
2. It provides an opportunity to the investor to be the owner of the company and
contribute in the business decision of the company.
3. Stock market is a kind of indicator of the economic growth of the country where
it provides an opportunity to gain according to the inflation of the country or more
than that.

Threats:

There are many competitors of stock market such as post office savings,
public provident fund, company fixed deposits, fixed deposits with bank etc.
Which provides fixed and assured returns.

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 Types of stocks

There are two main types of stocks : Common stock and Preferred stock.

Common stock:
A common stock is a simple piece of ownership of company and a claim
(dividends) on a portion of profit. Common stock may or may not pay a dividend,
and are consider riskier than preferred stock.
They are referring to common stock, if your friend or relatives owns a few shares of
that company, they are therefore an owner of the company.
A benefit of being an owner includes the receipt of any dividends paid by the
company. In addition, most common stock is classified as ‘voting stock’, which
allowed stockholders to vote for the board of directors and various shareholders
proposals.

Preferred stock:
Preferred stock represents some degree of ownership in a company but usually
doesn’t come with the same voting rights. Preferred stock typically is a debt
instrument of a company. Preferred stock works in very similar, it may be issued at
$25 per share and may trade on stock market.
This is a different from common stock which has variable dividends that are
declared by the board of directors and never guaranteed. It’s also possible for
companies to customize different classes of stock in any way they want.
The dividends of preferred stocks are different from and generally greater than those
of common stock. Preferred stocks trades the same way as common stocks, usually
through a brokerage firm and transaction cost.

Preferred share can be converted to a fixed number of common shares.

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 Types of Exchange

There are two types of Exchange

1. National Stock Exchange (NSE)

2. Bombay Stock Exchange (BSE)

1) National Stock Exchange:

The National Stock Exchange of India Limited (NSE) established in 1992.

Located in Mumbai. NSE was the first exchange in the country to provide a modern,
fully automated screen- based electronic trading system which offer easy trading
facility to investor.
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Mr. Ashok Chawla chairman of the NSE and Vikram Limaye is Managing Director
& Chief Executive officer (MD & CEO) of NSE.
National Stock Exchange has a total market capitalization of more than US$ 2.27
trillion. NSE was the provide different types of markets like Equities, Derivatives,
Debt etc.
There are two types of Trading Schedule in NSE:
(1) Pre-open session
 Order entry & modification open: 09:00 hrs
 Order entry & modification close: 09:08 hrs
(2) Regular trading session
 Normal/Retail debt/Limited physical market open: 09:15 hrs
 Normal/Retail debt/Limited physical market close: 15:30 hrs.

NIFTY 50

Formerly known as the S&P CNX Nifty Index, it was renamed in 2013 with the
expiration of agreement between IISL and Standard and Poor’s Financial Service on
31st Jan 2013.

The NIFTY 50 is a diversified 50 stock index accounting for 12 sector of the

economy. NIFTY 50 is managed by INDIA INDEX SERVICES AND PRODUCTS
LTD. (IIS).

There are three types of NIFTY 50 index:

1. NIFTY midcap
2. NIFTY smallcap
3. NIFTY largecap

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 2) Bombay Stock Exchange

The Bombay Stock Exchange (BSE) is an Indian Stock Exchange located at Dalal
Street, Mumbai. Established in 1875 is Asia’s first stock exchange. It claims to be
the world’s fastest stock exchange.
Bombay Stock Exchange was founded by Premchand Roychand. A man who made
a fortune in the stock broking business and come to be known as the cotton king,
the bullion king, or just the Big Bull.
The Bombay stock exchange is the oldest stock exchange in Asia. Its history dates
back to 1855, when 22 stockbrokers would gather under banyan trees in front of
Mumbai town hall. On August 31, 1957 the BSE become the first stock exchange
to recognized by the Indian Government under the securities contracts Regulation
Act.
The BSE is also a Partner Exchange of the United Nations Sustainable Stock
Exchange initiative, joining in September 2012.

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BSE established India Indian International Exchange (INX) on 30 December 2016.
India INX is the first international exchange of india.

The S&P BSE SENSEX (S&P Bombay Stock Exchange Sensitive index), also
called the BSE 30 or SENSEX. BSE under 30 companies. The base value of the
S&P BSE SENSEX is taken as 100 on 1 April, 1979 and its base year as 1978-79.

More than 5000 companies listed on BSE. The companies listed on BSE ltd.
Command a total market capitalization of USD 1.51 Trillion as of May 2014.

BSE also provides a host of other services to capital market participants, including
risk management, clearing, settlement, market data services, and education. BSE is
the first exchange in India and the second in the world to obtain and ISO 9001:2000
certification and the Information Security Management System Standard BS 7799-
2-2002 certification for its On-Line Trading system.

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 About SEBI

The Securities and Exchange Board of India (SEBI) is the regulator for the
securities market in India. It was established in the year 1988 and statutory power
on 30 January 1992 through the SEBI Act, 1992.

The Government of India on May 1992 and given

statutory powers in 1992 with SEBI Act 1992 being
passed by the Indian Parliament.

SEBI headquarters at the business district of Bandra Kurla

Complex in Mumbai, and has Northern, Eastern, Southern,
and Western Regional Offices in New Delhi, Kolkata, Chennai and Ahmedabad.

The chairman who is nominated by Union Government of India. Two members

One member from the Reserve Bank of India. Second member are officer from
Union Finance Minister.

Organization Structure

Ajay Tyagi was appointed chairman on 10 January 2017 replacing U K Sinha. A

charge of chairman office on 1 May 2017.

Name Designation
Ajay Tyagi Chairman
Gurumoorthy Mahalingam Whole Time Member
Sanjeev Kaushik Whole Time Member
Madhhabs Puri Buch Whole Time Member
Shaktikanta Das Part Time Member
N.S. Vishwanathan Whole Time Member
Prem Kumar Whole Time Member

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Function and Responsibilities of SEBI

The basic functions of the Securities and Exchange Board of India as “to protect the
interest of investors in securities and to promote the development of, and to regulate
the securities market and for matter connected there with or incidental there to”.

SEBI has to be responsive to the needs of three groups:

 The issuers of securities

 The investors
 The market intermediaries

SEBI has main responsibilities are the guide of all Stock Market, and handle the
regulation in Stock Market.

Function:

 The main function of SEBI are Regulating the business in stock exchanges
and any other securities markets.
 Registering and regulating the working of stock brokers, sub-brokers, share
transfer agents, bankers to an issue, trustees of trust deeds, registrars to an
issue, merchant bankers, portfolio managers, investment advisors.
 The duty of the Board to protect the interest of investors in securities and to
regulate the securities market.
 Board have some powers as issuing commissions for the examination of
witness or documents.

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Role of SEBI:

SEBI has power to make new rules for controlling stock exchange in India. For
example : SEBI fixed the time of trading 9:00 AM and 5:00 PM in stock market.

SEBI has power to provide license to dealers and brokers of capital market. If SEBI
sees can also control to that product and its dealer.

SEBI has many powers for stopping fraud in capital market. It can be on the trading
of those broker who are involved in fraudulent and unfair trade practices relating to
stock market.

SEBI uses his powers to audit the performance of different Indian stock exchange
for bringing transparency in the working of stock exchanges.

Role of SEBI in Mutual Fund:

 SEBI notified regulations for the mutual funds in 1993.

 SEBI has also issued guidelines to the mutual funds from time to time to
protect the interests of investors.
 All mutual funds whether promoted by public sector or private sector are
governed by SEBI.
 All mutual funds are bound to publish a scheme-wise annual report or an
abridged summary through and advertisement within six months of the
closure of the financial year.
 Mutual funds related all activity are the provider of all systemise knowledge.

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Role of SEBI in IPO:

 The rules and regulation and procedures relating to public issues in India are
governed by SEBI.
 Any company going public in India should get approval from SEBI before
opening its IPO. Issuers company’s lead managers submit the public issue
prospectus to SEBI, provide clarification, make changes to the prospectus
suggested by SEBI and get it approve.
 SEBI validate the IPO and make sure that document has enough information
to help investors to take decision before applying shares in an IPO.

Objective of SEBI:

1. To regulate the activities of stock exchange.

2. To protects the rights of investors and ensuring safety to their investment.
3. To prevent fraudulent and malpractices by having balance between self-
regulation of business and its statutory regulations.
4. To promote orderly functioning of stock exchange and securities industry by
regulating them.
5. To create and enforce bye-laws for 27orporate and financial intermediaries.
6. Promote and develop the financial market of india.
7. Checking for insider Trading.
8. To regulate and develop a code of conduct for intermediaries such as brokers,
underwriters, etc.
9. Settlement of investor’s grievances in securities market.

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Types of investors:

Three types of Investors

1. Speculators
2. Hedgers
3. Arbitragers

1) Speculators:
Speculator are typically sophisticated risk-taking investors with expertise in
the markets in which they are trading, they usually highly leveraged
investments, such as futures and options.
A speculator person who trades Derivatives, Commodities, Bonds, Equities
or Currencies with higher than average risk in return for a higher than average
profit potential.

2) Hedgers:
They are generally the commercial producers and consumers of the traded
commodities. They participate in the market to manage their spot market
price risk. Commodity prices are volatile and their participation in the futures
market allows them to hedge or protect themselves against the risk of losses
from fluctuating prices. For e.g. a copper smelter will hedge by selling copper
futures, since it is exposed to the risk of falling copper prices.

3) Arbitragers:
They are traders who buy and sell to make money on price differentials
across different markets. Arbitrage involves simultaneous sale and purchase
of the same commodities in different markets. Arbitrage keeps the prices in

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 different markets in line with each other. Usually such transactions are risk
free.

Basic and Need of Investment:

What is Investing?

Investing means putting your money to work for you- actually, it’s different way to
think about how to make money.

There are many different ways you can go about making an investment. This
includes putting money into stocks, bonds, mutual funds, real estate, gold etc.

The money you earn is partly spent and the rest saved for meeting future expenses.
Instead of keeping the savings idle you may like to use savings in order to get return
on it in the future. This is called Investment.

1. Earn return on your idle resources.

2. Generate a specified sum of money for a specific goal in life.
3. Make a provision for an uncertain future.

Need of Investment:

Investment ensures all your dreams turn real and you enjoy life to the fullest without
actually worrying about the future.

Investment ensures you save for rainy days. Careful investment makes your future
secure.

When to start Investment:

It’s never too late early to start investing. The best time to invest is now. The
3 keys that could guide you regarding when to invest are:

1. Start investing early

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 2. Invest regularly
3. Never time the market

Where to Invest:

One may invest in:

1. Physical assets like real estate, gold/jewellery, commodities etc

2. Financial assets such as fixed deposits with banks, small saving instruments with
post offices, insurance/provident/pension fund etc or securities market related
instruments like shares, bonds, debentures etc.

Options of investment:

Short Term:

1. Savings Bank Account

2. Money Market or Liquid Funds

3. Fixed Deposit with Banks

Long Term:

1. Post Office Savings

2. Public Provident Fund

3. Bonds

4. Mutual Funds

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Investment Process:

Framing of
Investment policy

Investment
Analysis

Valuation

Portfolio
construction

Portfolio
evaluation

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 Chapter-3

Investor Behaviour

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 Introduction:

Stock market refers to the market place where investors can buy and sell
stocks. The Price at which each buying and selling transaction takes is determined
by market forces demand and supply for a particular stock.

The investor plays a very important role in the stock market because of their big
share of saving the country. The Regulators of the stock market never can ignore the
behaviour of individual investor. This study aims to understand the behaviour of
individual investor in stock market, specifically their attitude and perception with
respect to the stock market.

Theories of Investor’s Behaviour:

Expected Utility Theory:

 Expected utility theory defines the individual investment decision as a trade-

off between immediate consumption and deferred consumption. It is a way to
balance risk versus reward using formal and mathematical functions. When
faced with a number of different choices, expected utility theory recommends
for an investor to calculate the expected utility of each choice and then
choose the one with the highest expected utility. However research conveys
that individuals may not always make investment decisions according to
these classical theories of economics (Davis, Hands & Maki 1997).

Prospect Theory:

 This is a behavioural economic theory that describes decisions between

alternatives that Involve risk, where the probabilities of outcomes are known.
The theory explains that investors make decisions based on the potential
value of losses and gains, rather than the final outcome.

 Moreover, according to prospect theorists, investor evaluated finance is

surveyed in its relation to underlying behavioural principles. They found that
behavioural factors are based on their losses and gains using interesting
heuristics.

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Conceptual Framework Individual Investor Behaviour:

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 Objective of the Study:

1. To study the investors behaviour towards the various investment alternatives

with special reference to stock market.
2. To study the investors objectives.
3. To study the factors influencing the investors to invest in various investment
alternatives.
4. To identify the time horizon with which they make their investment.
5. To identify the front runners for investment in various sources.

Investor attitude and perception:

A stock market is a place in which long term capital is raised by industry and
commerce, the government and local authorities and it is regarded as capital market.
 A study revealed the investors, can easily and quickly participant in, or
withdraw from the market depending on their confidence and perception
towards the prevailing market conditions.
 In the past, there have been extremely few studies on the subject of attitudes
and perceptions of the individuals’ investors. However, the emerging research
studies suggest that perceptions and attitudes may act as mediators between
financial transactions and investment decisions.

 Individual investors’ perceptions as well as their attitudes may change their

investment decisions. The examined how individual investor perceptions
change & drive trading and risk-taking behaviour during the 2008-2009
financial crisis. It is revealed that investor perceptions fluctuate significantly
during the crisis, with risk tolerance and risk perceptions being less volatile
than return expectations.

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 Background to the study

 Investment decisions are made by investors and investment managers.

Investors commonly perform investment analysis by making use of
fundamental analysis, technical analysis and judgment. The study related
of investor are commonly invest in stock market.

 Investment decisions are often supported by decision tools. It is assumed that

information structure and the factors in the market systematically influence
individuals‟ investment decisions as well as market outcomes.

 Investor market behaviour derives from psychological principles of decision

making to explain why people buy or sell stocks. These factors will focus
upon how investors interpret and act on information to make investment
decisions. Behavioural finance is defined by “a rapidly growing area that
deals with the influence of psychology on the behaviour of financial
practitioners”.

 Individual investments behaviour is concerned with choices about purchases

of small amounts of securities for his or her own account . No matter how
much an investor is well informed, has done research, studied deeply about
the stock before investing, he also behaves irrationally with the fear of loss in
the future. This different behaviour in the individual investors is caused by
various factors which compromise the investor rationality. An individual
investor is one who purchases generally small amounts of securities for his or
her own account.
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 Chapter- 4

About Industry
(Company Profile)

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Company Logo

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 PROFILE OF THE COMPANY

Name of the company: Patel Wealth Advisors Pvt. Ltd.

Date of Incorporation: 25 June 2015

Headquarter: “oxygen”, M/2/3, Housing Board, and Opp.

Pradhyuman-, Royal Heights, Near Neel Da Dhaba,

Kalawad Road., Rajkot, Gujarat, India – 360005

Branch : Kamdhenu Complex, Office no. B-46, Opp.

Sahajanand College, Panjarapol Cross Road, Ambawadi,,

Ahmadabad, Gujarat 380015

Nature of Business: Service Provider

Services: Depository Services, Online Services and Technical Research.

SEBI Reg. No. For NSE/BSE, CM/F&O/Currency Derivatives Segments:

INZ000018432

BSE Member ID: 6626

NSE Member ID: 90074

ISO 9001: 2008 CERTIFIED COMPANY

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Website: www.patelwealth.com

Slogan: Because advice matter

Introduction:

We are a group of business visionaries from Western Gujarat occupied with offering
an extensive variety of money related administrations with an essential spotlight on
subjective monetary exhortation and helping little and medium organizations to get
to capital at temperate expenses.

Under the great initiative of industry stalwarts named Minish Patel, Denish Patel
and Kaushal Patel, we have extended our contributions from stocks and
subsidiaries, ware subordinates and vault administrations to research and warning
administrations, appropriation of shared assets, Initial public offering and some
more. As a best fund organization, we have a best in class foundation in Rajkot,
Gujarat to oblige all the monetary needs of our worldwide customer base in a
conservative way.

 Patel Wealth Advisory Pvt. Ltd. Company journey start the 1995, located in
Rajkot, Gujarat.
 Head office if the company in Rajkot, Gujarat. And other branches are
located in Ahmadabad.
 This company are formally start the first of financial advisor.
 This company year 2001 after the start broker company.
 In course of time we added to our experience and excellence thereby
becoming a full service financial firm.
 Patel Wealth company are 20+ year experience in financial firm.
 This company are member in National Stock Exchange (NSE), Bombay –
Stock Exchange (BSE), MCX and NSDL.

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  Different types of products like Equity & Derivatives, Commodity &
Currency, Mutual Funds and Depository Services include in this company.

Management Team

In spite of the fact that they began off small, as history discussed our above will
substantiate, they are currently well while in transit to accomplishing the brand
acknowledgment at national level in money related administrations. As his history
represents itself with no issue, there has been no turning back for us. What was a
little oak seed planted route back two decades prior by his pioneer, Mr. Minish Patel
is currently raring to be a national name in budgetary administrations. The
excursion has been a learning background for the gathering and the exercises
grabbed by us will be used to make a dependable, feasible and elated money related
administrations bunch that would to oblige clients no matter how you look at it.

Mr. MINISH PATEL

SEBI approved Research Analyst – Registration NumberINH000002871. A pioneer

and veteran House of Patels, A pioneer with passion for technology. He is valued
for his understanding of the economy and the stock-market. Research – based &
personalized advisory services are Patel Wealth’s forte, and he has undoubtedly
been the brain behind it. When it comes to analysing the market, he is a true
virtuoso. His hands – on experience and fundamental knowledge of the market can
predict the market trend early. His experience spans 20 years in Corporate Advisory
and Portfolio.

Mr. DENISH PATEL

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With his vast experience, in depth knowledge and strong analytical skill, he
efficiently ensures flawless operations of the group. Being in the securities market
business for more than 10 years, he has seen all the phases of Stock market and
handled all the matters efficiently. He looks after the policy, vision and major part
of the operational activities of the group .

Mr. KAUSHAL PATEL

He played vital role in the development of group’s state- of-art web portal, IT &
internet based trading platform. His key roles & responsibilities include business
development, risk management, technological up-gradation &development and
administration of day to day activities at Group. He actively participates in business
promotions, operations and compliance functions of Group. His key strength lies in
meticulous and strategic planning and implementation of radical concepts for the
overall business development. He has lead many successful initiatives, redefined
people policies and delivered substantial growth for Group.

Vision & Mission

Vision:

 To work in all spectra of money related administrations from broking to

saving money at conservative cost through condition of-workmanship
conveyance component intended to oblige worldwide clients.
 The organization began our trip from enrollment of territorial stock trade
and in transit getting to be operators of national level merchants, we have
now achieved a phase as far as minimum amount, when we can create and
spread our own image in industry.

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  Our vision explanation can be summed up as " To work in all spectra of
money related from broking to managing an account at conservative cost
through condition of craftsmanship conveyance instrument intended to
carter to worldwide clients"
 The imagine growing to existing bunch of budgetary items and
administrations in the following couple of years.
 He are exceptionally dedicated to connecting with a great many customers
in both local and worldwide market.

Mission:

 The company are widely expanding this business.

 The company can achieve main idea is to provide hassles free and affordable
Financial advise to customer.
 He see ourselves giving our customers qualitative advisory and
intermediation services at affordable costs, through an integrated and wide
network which shall tap the customers at their doorstep.
 He shall leverage technology in order to build relationship for a lifetime on
sustainable basis.
 Our mission therefore is "Financial advice at customer doorstep at affordable
cost and minimal effort to customers".

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 Company Philosophy

 The house of Patel are, entering the business of financial services with the
impeccable record and penchant to give our clients “Life Time Financial
Service”
 He serve our clients on life time basis by offering high-end-fund-management
services such as Portfolio management, Stock advisory, Asset allocation
strategies and overall wealth and financial advisory keeping in view her
demographic and income profile.
 He seek to give our clients financial safety by allocating his overall saving
among various assets ranging from individual stocks, mutual fund schemes,
precious metals to pension and insurance schemes.
 The cornerstone of our clients servicing policy is to build long-term and
sustainable relationships so that we can give our clients life time benefits of
our investment.
 Our infrastructure of the company is advise to other person related to
financial matter.
 The company are the advise to other person after start the broker company.

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 PRODUCT AND SERVICES OF PATEL WEALTH ADVISORS

Equity & Derivatives

 Investment in shares and its derivatives is most common and largely preferred
to earn inflation beating returns. This involves buying, holding and trading of
shares whereby income is generated by the increase in the price of shares.

Commodities & Currency

 They offer excellent consulting services for trading commodities and

currency. We believe that diversifying the financial portfolio is a safeguard
against loss of portfolio value due to fluctuation in asset prices.

Mutual Funds

 They are AMFI registered distributor and are engaged in distribution of all
mutual fund products under one roof. With his 24x7 online monitoring
systems, they have the requisite technology at his end to enable you to make
timely decisions.

Depository Services

 Depository is nothing but a Share Bank that maintains Share balances of

clients in the form of electronic entries in the respective client Accounts.
Depository operates thru Depository Participant who acts as agent for the
Depository.

 Stocks and Derivatives : BSE , NSE

 Commodity Derivatives : MCX
 Depository Services : NSDL
 Research & Advisory Services : On individual Stock
 Index (Nifty for both long & short terms)

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 ORGANIZATIONAL STRUCTURE OF PATEL WEALTH
ADVISORS

Regional Officer

Branch Manger

RMS (Risk
management IT HR Back Office
services)

B2B B2C

Relationship Business Unit Relationship

Manager Development Manager Executive
Manager

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Main Competitors

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 Patel Wealth Retail Broking
 Patel Wealth is, registered with SEBI as an approved Stock Broker with
membership of National Stock Exchange of India , the Bombay Stock
Exchange and the MCX Stock Exchange .
 Patel Wealth is also, a depository participant with NSDL & CDSL, an
authorized TIN-FC agent by NSDL and a AMFI registered Mutual Fund
Distributor.

Technical Services
Intra-day Calls
For day traders provides intraday calls with entry, exit and stop loss levels
during the market hours and our calls are flashed on our terminals. Our analysts
continuously track the calls and provide the recommendations according to the
market movements. Past performance of these calls in terms of profit/loss is
also available to our associates to enable them to judge the success rate.

Posting Trading Calls

Patel Wealth “Position Trading Calls” are based on a through analysis of the
price movements in selected scripts and provides calls for taking positions with
a 10 - 15 days time span with stop losses and targets. These calls are also
flashed on our terminals during market hours.

Derivative strategies

Our analyst take a view on the NIFTY and selected scripts based on derivatives
and technical tools and devise suitable “Derivative Strategies”, which are
flashed on our terminals and published in our derivative reports.

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 Literature Review

Survey writing identified with the variables affecting speculators practices. The
speculator is a person who submits cash to the venture items with the desire for
budgetary restore, the essential worry of a financial specialist is to limit the dangers
while expanding the profits.

The reason for this paper is to compose and assess the current circumstance of
research on securities exchange incorporation by investigating the accessible
writing, to give brisk and simple access to future analysts. Another target of the
present investigation is to order the writing, to give the far reaching reference index
on securities exchange combination, and to break down the discoveries and
consequences of the examinations thought about for audit.
Outline/technique/approach – A scope of sources were sought to audit the past
writing on securities exchange incorporation and out of thousands of papers, 100
research papers frame the example for the present investigation.

 Gupta (1972) in his book has studied the working of stock exchanges in India
and has given a number of suggestions to improve its working. The study are
the need to regulate the volume of speculation so as to serve the needs of
liquidity and price continuity. It suggests the enlistment of corporate
securities in more than one stock exchange at the same time to improve
liquidity. The study also wishes the cost of issues to be low, in order to
protect small investors.

 Jawaharlal (1992) presents a profile of Indian investors and evaluates their

investment decisions. He made an effort to study their familiarity with, and
comprehension of financial information, and the extent to which this is put to
use. The information that the companies provide generally fails to meet the
needs of a variety of individual investors and there is a general impression
that the company's Annual Report and other statements are not well receive.

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 Chapter – 6

About the Study

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 Problem Statement:

Capital market provides the resources needed by medium and large scale industries
for investment purposes. In India households invest their saving in different
financial investments and product, even in capital market but some investor are
reluctant to invest or trade in derivative segment & capital market.

The investors who invest in stock markets are usually unaware of the stock market
behaviour. Many are facing the problem of stock trading as they do not know which
stocks to buy and which to sell in order to gain more profits. And moreover they
understood that the behaviour of the stock market depends a lot, on the relevant
news items. But they need to go through a lot of news articles manually and analyse
them in a very short span of time.

Objective of the Study:

 To find the profit/loss position of future buyer and seller and also the option
writer and option holder.
 To study about risk management with the help of future & option.

 To provide evidence that the stocks have a correlation with the sentiments in the
news items by building a real time system to predict the future stock price of a
company. Stock price of company is based mainly on three aspects: the
company’s profile, the historical prices and news articles of that company
published in the various media.

 To build a system that would analyze and predict the variations in stock prices
over a timeline based on the sequence of events. The stock price movement of
the next day was predicted based on the event that occurred in the previous day.

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 Chapter – 7

Research Methodology

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 Introduction:

Stock Market volatility is unavoidable. It is the nature of the stock markets to

fluctuate and turn red and green within short span of time. Volatility is an essential
part of the stock market because it checks the nerve of the market.

The same way market has two aspects the positive and the negative. At present,
stock market is much volatile because of the impact of weak rupee against dollar.
Indian capital market has grown exponentially in the last few decades. Further
research provides evidence of volatility caused by a host of factors, including
information contained in news, the financial performance of organizations, and even
investor behaviour. Day-to-day price swings are often large. So, it is felt that there
is a need to analyze the volatility and return in the Indian capital market from the
perspective of understanding market behaviour. Under this situation, present study
was conceptualized to re-examine the time variation in volatility.

Objective of Research:
 The main objective of the study analyzes the investor perception and
selection behaviour in stock market.
 To see the stock market volatility patterns in Indian stock market and
behaviour of volatility after the introduction of stock market.
 To study the stock price movements to show that any trend or movements in
the market are interdependent and to understand the weak form efficiency of
the Indian stock market.
 To identify the day-of-the-week effect and month-of-the-year effect in the
Indian stock market.

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 To investigate and compare the stock returns and volatility behaviour of the
Indian stock market as compared to International stock markets.

Research Design

1) Sample selection:
Indian Stock Market is one of the most dynamic and efficient markets in
Asia. The Bombay stock exchange and National Stock Exchange are two
major stock exchanges in India as most of the share transactions are done by
the investors in these two exchanges, Kaur (2004).
As on 30th September 2010, there were eighteen indices in NSE and twenty
four indices in BSE. But for the purpose of this study, only two indices from
each i.e. SENSEX and BSE100 indices in Bombay Stock Exchange and
NIFTY and CNX500 indices in National Stock Exchange were considered as
sample for this study. These four indices are important in the Indian Stock
Market. The NIFTY is well diversified, with 50 stocks accounting for 22
Sectors of the Economy

According to the IMF report USA, UK, Australia, Japan, Germany,

Hongkong stock market and Singapore are among the 36 countries which are
classified as advanced economies. So, Brazil, Russia, India and China
countries as emerging 46 economies and seven developed economies named
as USA, UK, Australia, Japan, Germany, Hongkong stock market and
Singapore are taken to understand their behaviour. The data for India stock
market is collected from the official websites of National Stock Exchange and
Bombay Stock Exchange i.e. www.nseindia.com and www.bseindia.com. The
data of other countries is collected from yahoofinance.com. Daily closing
prices are converted into returns.

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2) Sources of Data:
The present study mainly depended upon secondary data and used daily index
closing values. The required information of every day’s closing values was
collected from the websites of respective stock exchanges
(www.nseindia.com, www.bseindia.com, www.moneycontrol.com,
www.allstocks.com, and www.yahoofinance.com).

1) Primary Data:
The data for carrying out this study has been collected thoroughly on
questionnaire basis for the research purpose.

2) Secondary Data:
Secondary data collect on the base of the case study, annual report and
internet base.

3) Tools of presentation & Analysis :

 Percentage, Bar graphs & pie charts: these tools were used for analysis of
data.
 Descriptive analysis.
 Hypothesis Testing

4) Sampling Plan:
5) Sampling Method: Non Probabilistic – Convenience sampling
6) Sample Size: The sample size selected for the Research is 100 in the area
of Ahmedabad.
7) Sampling Unit: For our story purpose, the sampling unit is investor who
invests in Stock Market.
8) Sample Frame: Existing customer of Patel wealth in Ahmedabad.

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 Data analysis and Interpretation

Age:

Age Upto 18 19 to 30 30 to 50 Above 51

Percentage 7.1% 87.1% 4.3% 1.4%

Inference:

From the above mentioned table and figure, it is revealed that the out of 70 investors
who invest in Stock Market When age of Upto 18 age are 7.1% , 87.1% are age of
between 19 to 30 , 4.3% are age of between 30 to 50 and above 51 are age of
between 1.4% investors who invest in Stock Market.

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Gender:

Gender Male Female

Percentage 82.9% 17.1%

Inference:

From Above the chart 82.9% of the male are invested in stock market while 17.1%
female are invested in stock market .it can be conduct that mainly males invest in
stock market.

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 Education:

Education Under graduate Graduate Post graduate

Percentage 15.7% 42.9% 41.4%

Inference:

From the above mentioned table and figure, it is revealed that the out of 70 investors who invest
in Stock market, 15.7% have done Under Graduation, 42.9% have done Graduation, 41.4% have
done Post Graduation are invest in Stock market.

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Occupation:

Occupation Business Student Profession Any others

Percentage 11.6% 66.7% 10.1% 11.6%

Inference:

From the above mentioned table and figure, it is revealed that the out of 70 investors who invest

in Stock market,11.6% have a Businessman, 66.7% have Students, 10.1% have Profession,

11.6% have Any others, while invest in Stock market.

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Annual Income:

Income <1,00,000 1,00,000 to 2,00,001 to 3,00,000

2,00,000 3,00,000 Above
Percentage 67.1% 15.7% 8.6% 5.7%

Inference:
From the above mention table are annual income of 67.1% <1,00,000, 15.7%
1,00,00 to 2,00,00, 8.6% 2,00,001 to 3,00,000 and 5.7% Above 3,00,000 person
income in this data.

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Q-1) Do you invest in the stock market or working there?

Invest in stock market Yes No

Percentage 50% 50%

Inference:

From the above mention table are the invest in stock market and working there are
50% Yes (35 person) and 50% No (35 person) in the stock market.

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Q- 2) Are you investing into Equity Market?

Investing into equity Yes No

market
Percentage 51.4% 48.6%

Inference:

From the above mention table are investing in to Equity market are 51.4% (36
person) Yes and 48.6% (34 person) are No investment into equity stock market.

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Q – 3) Which of the methods do you use to conduct a stock market
research before investing money into shares?

Research Internet Friend’s Newspaper Television Other

advisor
Percentage 52.2% 22.4% 7.5% 9% 8.9%

Inference:

From the above mention table are research before investing in to shares are advise
through 52.2% Internet, 22.4% Friends advisors, 7.5% Newspaper, 9% Television
and 8.9% Other include experts opinion, Not investing, Not investing so not using
the advisors in to Stock market.

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Q – 4) What attracts you to Equity Market ?

Attracts High return Speculation Dividend Liquidity of

invested fund
Percentage 58.6% 14.3% 18.6% 8.6%

Inference:

From the above mention table are the attracts to equity stock market in 58.6% High
return, 14.3% Speculation, 18.6% Dividend and 8.6% Liquidity of investment fund
in attracts to equity stock market.

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Q – 5) What sources of funds do you utilize to invest or trade in the
Stock market?

Sources Saving/Personnel Loans Pledging

Percentage 88.1% 9% 3%

Inference:

From the above mention table are sources of funds 88.1% Saving/Personal, 9%
Loans and 3% Pledging in the invest or trade in the Stock market.

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Q – 6) What type of investor are you ?

Types Short term Mid term Long term Mix of any

two
Percentage 35.7% 28.6% 21.4% 14.3%

Inference:

From the above mention table are What type of investor in Stock market 35.7%
Short term, 28.6% Mid term, 21.4% Long term and 14.3% Mix of any two are the
investor in Stock market.

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Q – 7) What investment option are you considering ?

Option Stock Mutual fund Small saving Commodity

Percentage 42.9% 38.6% 15.7% 2.9%

Inference:

From the above mention table are What investment option are choose

42.9% Stocks, 38.6% Mutual fund, 15.7% Small saving and 2.9%
Commodity are choose the investment in Stock market.

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Q – 8) What are the objective factors that you think are in general
taken into account when investing in the stock market ?

Objective Dividend Low share Expectation Returns of other Other

factor price of share price substitute
increase investment
Percentage 22.9% 22.9% 27.1% 15.7% 11.4%

Inference:

From the above mention table objective factors that you think are in general taken
into account when investing in the stock market are different 22.9% Dividend,
22.9% Low share price, 27.1% Expectation of share price increase,15.7% Returns
of other substitute investment and 11.4% Other are factors affect in Stock market.

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 Finding

 From the collected data, i found that there are large number male who are
mostly stock market.

 19 to 30 age group of the people who have invested in stock market.

 Most of the peoples are bring in stock market on the basis of friends and
relative.

 Broker advice and market situation basis investor investment in stock market.

 Most of the people who have investment in stock market.

 Most of the people mutual fund, equity market who have consider investment
option.

 Most of the people attract to equity market on the basis of high return.

 At current level banking sector ,FMCG sector who have prefer more
investment.

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 Suggestion

 Company should target to rural area and aware of stock market.

 Company should try to arrange of the programme for the client.

 Company should try to easy process of opening demat account.

 Company should try to get less brokerage charges.

 Company should try to increase their research findings and message service
system for increase the base of transactions.

 Company should try to help for client on the bases of wealth maximize

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 Conclusion

 It is a good experience for me to conduct research about study for investor

investment perception in stock market. It will prove very helpful to me in my
future career.

 This is an opportunities to training in the Patel wealth advisory, I am being

aware of operation of the company, understanding the environment and
working condition.

 While conducting the research I can understand of the investor who have
invest in stock market. Their experience of stock market, frequency of stock
market ,expected of return, on what basis invest & their views to about to
make money in stock market.

 With the help of the research, you can conclude that the majority of investors
are focusing of equity investment for higher return although they know about
higher risk.

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 BIBLOGRAPHY
I get information through the following web sites:

 www.patelwealth.com
 www.rbi.org

 www.sebi.com

 www.nismexam.com

 www.moneycontrol.com

 www.bseindia.com

Books Referred:

• Research Methodology (Methods and Techniques) by C.R. Kothari, New Age

International (P) Limited, Publishers, ISBN (13) : 978-81-224-2488-1
• Marketing Research, An Applied Orientation by Naresh K. Malhotra, Pearson
Education, ISBN – 81-7808-368-X
• Board Jhon, Sandamann Gleb and Sutcliffe Charles (2001), " The Effect of
Future Market Volume on Spot Market Volatility", Journal of business
Finance and Accounting, Vol. 28, No. 7&8, October, 306-686.

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 QUESTIONNRIE

Name: ________________

Age
o Upto 18
o 19 to 30
o 30 to 50
o above 51

Gender

o Male
o Female

Education

o Under graduate
o Graduate
o Post graduate

Occupation
o Business
o Students
o Profession
o Any other

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Annual Income ?
o <1,00,000
o 1,00,000 to 2,00,000
o 2,00,001 to 3,00,000
o >3,00,000 and Above

Q- 1) Do you invest in the stock market or working there ?

o Yes
o No

Q- 2) Are you investing into Equity market ?

o Yes
o No

Q-3) Which of the method do you use to conduct a stock market research before
investing money into shares ?
o Internet
o Friend’s advisor
o Newspaper
o Television
o Other---------

Q- 4) What attracts you to Equity market ?

o High return
o Speculation
o Dividend
o Liquidity of invested fund

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Q- 5) What sources of funds do you utilize to invest or trade in the stock market?
o Saving/Personal
o Loans
o Pledging

Q- 6) What type of investors are you ?

o Short term
o Mid term
o Long term
o Mix of any two

Q-7) What investment option are you considering ?

o Stock
o Mutual fund
o Small saving
o Commodity

Q-8) What are the objective factors that you think are in general taken into account
when investing in the stock market ?
o Dividend
o Low share price
o Expectation of share price increases
o Returns of other substitute investment
o others

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