PROJECT REPORT

A STUDY ON FII S INFLUENCE ON INDIAN STOCK MARKET

OVER THE PERIOD ON 2010-2014 WITH REFERENCE TO
HEDGE EQUITIES ,KOCHI.
INTRODUCTION

FOREIGN INSTITUTIONAL INVESTOR:

Foreign institutional investors have gained a significant role in Indian stock

markets .the dawn of 21st century has shown the real dynamism of stock market
and the various benchmarking of sensitivity index (sensex) in terms of its highest
peaks and sudden falls. In this context present paper examines the contribution of
foreign institutional investment in sensitivity index (sensex). ) Foreign Institutional
Investor [FII] is used to denote an investor - mostly of the form of an institution or
entity, which invests money in the financial markets of a country different from the
one where in the institution or entity was originally incorporated. Institutional
investors include hedge funds, insurance companies, pension funds and mutual
funds. The term is used most commonly in India to refer to outside companies
investing in the financial markets of India. International institutional investors must
register with the Securities and Exchange Board of India to participate in the
market. One of the major market regulations pertaining to FIIs involves placing
limits on FII ownership in Indian companies.

The term Foreign Institutional Investor is defined by SEBI as under:

"Means an institution established or incorporated outside India which proposes to

make investment in India in securities. Provided that a domestic asset management
company or domestic portfolio manager who manages funds raised or collected or
brought from outside India for investment in India on behalf of a sub-account, shall
be deemed to be a Foreign Institutional Investor."

Foreign Investment refers to investments made by residents of a country in

financial assets and production process of another country.

Entities covered by the term ‘FII’ include “Overseas pension funds, mutual funds,
investment trust, asset management company, nominee company, bank,
institutional portfolio manager, university funds, endowments, foundations,
charitable trusts, charitable societies etc.(fund having more than 20 investors with
no single investor holding more than 10 per cent of the shares or units of the fund)”
(GOI (2005)). FIIs can invest their own funds as well as invest on behalf of their
overseas clients registered as such with SEBI. These client accounts that the FII
manages are known as ‘sub-accounts’. The term is used most commonly in India to
refer to outside companies investing in the financial markets of India. International
institutional investors must register with Securities & Exchange Board of India
(SEBI) to participate in the market. One of the major market regulations pertaining
to FII involves placing limits on FII ownership in Indian companies. They actually
evaluate the shares and deposits in a portfolio.

WHY FIIS REQUIRED?

FIIs contribute to the foreign exchange inflow as the funds from multilateral
finance institutions and FDI (Foreign direct investment) are insufficient. Following
are the some advantages of FIIs.

• It lowers cost of capital, access to cheap global credit.

• It supplements domestic savings and investments.

• It leads to higher asset prices in the Indian market.

• And has also led to considerable amount of reforms in capital market and
financial sector.

INVESTMENTS BY FIIS

There are generally two ways to invest for FIIs.

• EQUITY INVESTMENT 100% investments could be in equity related

instruments or up to 30% could be invested in debt instruments i.e.70 (Equity
Instruments): 30 (Debt Instruments)

• 100% DEBT

100% investment has to be made in debt securities only

EQUITY INVESTMENT ROUTE: In case of Equity route the FIIs can invest in
the following instruments:
A. Securities in the primary and secondary market including shares which are
unlisted, listed or to be listed on a recognized stock exchange in
India.

B. Units of schemes floated by the Unit Trust of India and other domestic mutual
funds, whether listed or not.

C. Warrants

100% DEBT ROUTE: In case of Debt Route the FIIs can invest in the following
instruments:

A. Debentures (Non Convertible Debentures, Partly Convertible Debentures etc.)

B. Bonds

C. MONTHd government securities

D. Treasury Bills

E. Other Debt Market Instruments

It should be noted that foreign companies and individuals are not be eligible to
invest through the 100% debt route.

HISTORY OF FII

India opened its stock market to foreign investors in September 1992, and in 1993,
received portfolio investment from foreigners in the form of foreign institutional
investment in equities.

This has become one of the main channels of FII in India for foreigners. Initially,
there were terms and conditions which restricted many FIIs to invest in India. But
in the course of time, in order to attract more investors, SEBI has simplified many
terms

such as:-
• The ceiling for overall investment of FII was increased 24% of the paid up capital
of Indian company.

• Allowed foreign individuals and hedge funds to directly register as FII.

• Investment in government securities was increased to US$5 billion.

• Simplified registration norms.

PROCEDURE FOR REGISTRATION: The Procedure for registration of FII

has been given by SEBI regulations. It states- “no person shall buy, sell or
otherwise deal in securities as a Foreign Institutional Investor unless he holds a
certificate granted by the Board under these regulations”. An application for grant
of registration has to be made in Form A, the format of which is provided in the
SEBI (FII) Regulations, 1995.

THE ELIGIBILITY CRITERIA FOR APPLICANT SEEKING FII

REGISTRATION IS

AS FOLLOWS:

Good track record, professional competence and financial soundness.

• Regulated by appropriate foreign regulatory authority in the same

capacity/category where registration is sought from SEBI.

• Permission under the provisions of the Foreign Exchange Management Act, 1999
(FEMA) from the RBI.

• Legally permitted to invest in securities outside country or its

incorporation/establishment.

• The applicant must be a ‘fit and proper’ person.

• Local custodian and designated bank to route its transactions.

ELIGIBLE SECURITIES

A FII can make investments only in the following types of securities:

• Securities in the primary and secondary markets including shares, debentures and
warrants of unlisted, to- be-listed companies or companies listed on a recognized
stock exchange.

• Units of schemes floated by domestic mutual funds including Unit Trust of India,
whether listed on a recognized stock exchange or not, and units of scheme floated
by a Collective Investment Scheme.

• Government Securities

• Derivatives traded on a recognized stock exchange – like futures and options.

FIIs can now invest in interest rate futures that were launched at the National Stock
Exchange (NSE) on 31st August, 2009.

• Commercial paper.

• Security receipts

REGULATION RELATING TO FII OPERATION

• Investment by FIIs is regulated under SEBI (FII) Regulations, 1995 and

Regulation 5(2) of FEMA Notification No.20 MONTHd May 3, 2000. SEBI acts
as the nodal point in the entire process of FII registration.

• FIIs are required to apply to SEBI in a common application form in duplicate. A

copy of the application form is sent by SEBI to RBI along with their 'No Objection'
so as to enable RBI to grant necessary permission under FEMA.

• RBI approval under FEMA enables a FII to buy/sell securities on stock

exchanges and open foreign currency and Indian Rupee accounts with a designated
bank branch.

• FIIs are required to allocate their investment between equity and debt instruments
in the ratio of 70:30. However, it is also possible for an FII to declare itself a 100%
debt FII in which case it can make its entire investment in debt instruments.
• All FIIs and their sub-accounts taken together cannot acquire more than 24% of
the paid up capital of an Indian Company. Indian Companies can raise the above
mentioned 24% ceiling to the Sectoral Cap / Statutory Ceiling as applicable by
passing a resolution by its Board of Directors followed by passing a Special
Resolution to that effect by its General Body. Further, in 2008 amendments were
made to attract more foreign investors to register with

SEBI, these amendments are:

• The definition of “broad based fund” under the regulations was substantially
widened allowing several more sub accounts and FIIs to register with SEBI.

• Several new categories of registration viz. sovereign wealth funds, foreign

individual, foreign corporate etc. were introduced,

• Registration once granted to foreign investors was made permanent without a

need to apply for renewal from time to time thereby substantially reducing the
administrative burden,

• Also the application fee for foreign investors applying for registration has
recently been reduced by 50% for FIIs and sub accounts. Also, institutional
investors including FIIs and their sub-accounts have been allowed to undertake
short-selling, lending and borrowing of Indian securities from February 1, 2008.

SCOPE OF THE STUDY

The scope of the research is confined to study how FIIs affects Indian
stock market . The data of 5 years from 2010 to 2014 is analysed.

OBJECTIVES OF THE STUDY

 To know the impact of FII influence in Indian stock market
  To know the FIIs inflow and outflow of Indian stock market over
the period 2010 to 2014
 To identify the influence of FIIs on sensex when the stock market
was resulting in high volatility
 To know the factors which affect the FII inflow in India

RESEARCH METHODOLOGY
The study is descriptive in nature. The research methodology is based on
secondary data for which internet is the main source of information .The
research is also done based on journals ,research articles, government
publications, magazines ,newspapers, etc .The time frame for the study
is 5years i.e.,2010 to 2014 and BSE is taken as the sample .

ANALYSIS TECHNIQUE
Pearson correlation analysis, standard deviation test is done to analysis
the data. Help of SPSS software is taken to undertake the research
activity.
LITRERATURE REVIEW

Stanley Morgan (2002) has examined that FIIs have played a very
important role in building up India’s forex reserves, which have enabled
a host of economic reforms. Secondly FIIs are now important investors
in the country’s economic growth despite sluggish domestic sentiments.
The Morgan Stanley report notes that FII strongly influence that short –
term market movements during bear markets .However ,the Correlation
between returns and flows reduces during bull markets as other market
participants raise their involvement reduces the influence of FIIs.
Research by Morgan Stanley shows that the correlation between foreign
inflows and market returns is high during bear and weekends with
strengthening equity prices due to increase participation by other
players.
Agarwal, Chakrabarti et al (2003) have found in their research that the
equity returns has a significant and positive impact on the FII. But given
the huge volume of investments, Foreign investors could play a role of
market makers and book their profiles , i.e., they can buy financial assets
when the prices are declining thereby jacking-up the asset prices and sell
when the asset prices are increasing . Hence, there is a possibility of bi-
directional relationship relation between FII and the equity returns.
P.Krishna prassanna (2008) has examined the contribution of foreign
institution investment particularly among companies included in
sensitivity index (sensex) of Bombay stock exchange. Also examine the
relationship between foreign institutional investment and firm specific
characteristics in terms of ownership structure, financial performance
and stock performance. it is observed that foreign investors invested
more in companies with a higher volume of shares owned by the general
public . The promoter’s holdings and the foreign investors are inversely
related. Foreign investors choose the companies where family
shareholding of promoter is not substantial. Among the financial
performance variables the share returns and earnings per share are
significant factors influencing their investment decisions.
Gurucharan Singh (2004) highlighted that the securities market in India
has come a long way in terms of infrastructure, adoption of best
international practices, and introduction of competition. Today, there is a
need to review stock exchanges and improve the liquidity position of
various scrips listed on them. A study conducted by the world bank
(1997) reports that stock market liquidity improved in those emerging
economies that received higher foreign investments.
Anand Bansal and J.S.Pasricha (2009) studied the impact of market
opening to FIIs on Indian stock market behavior. They empirically
analyzed the charge of market return and volatility after the entry of FIIs
to Indian capital market and found that while there is no significant
change in the Indian stock market average returns; volatility is
significantly reduced after India unlocked its stock market to foreign
investors.
INDUSTRY PROFILE

FINANCIAL SERVICES

Meaning of financial services

In general, all types of activities, which are of a financial nature, could be brought
under the term 'financial services'. The term financial services’ ‘in a broad, sense
means "mobilizing and allocating savings". Thus it includes all activities involved
in the transformation of savings into investment. Financial services can also
be called 'financial intermediation'.
Financial services are the economic services provided by the finance industry,
which encompasses a broad range of organizations that manage money,
including creditunions,banks, creditcard companies, insurance companies, account
ancy companies, consumer finance companies, stock brokerages, investment
funds and some government sponsored enterprises.

IMPORTANCE AND ROLE OF FINANCIAL SERVICES

Banking financial services

Banking is an essential part of every successful business. It is important to know

what the benefits and services are of your banking institution so you can make the
most out of your business income. There are two types of banking activities they
are:

INVESTMENT BANKING

Investment banks provide services and advice to corporations, investors, and other
individuals or institutions. These services are generally based on the intermediation
between issuers of capital and providers of capital, and include financial products
ranging from debt or equity issuance to advice on mergers and acquisitions.

Corporate Finance: Assisting businesses with their funding needs, typically in

support of relationship managers who are responsible for integrated client
interaction.
 Capital Markets: Advising business on a variety of ways to access financial
markets, usually coordinating between corporate finance, sales & trading, and
research.
 Mergers and Acquisitions: Assisting buyers or sellers of businesses with deal
execution, advising on the strategy, timing, value, and terms associated with such
transactions.
 Public Finance: Assisting municipalities and other public-sector entities with
their financing needs.
 Sales/Trading: On behalf of clients or using the bank's own capital, selling,
buying and structuring financial products.
 Research: Providing industry, company, or product analysis to investors,
typically in support of sales & trading and wealth management areas.
 Wealth Management: Assisting individual investors with a variety of personal
finance decisions and investment choices.

COMMERCIAL BANKING

Commercial banks are typically in the business of taking deposits and making
loans using their own capital. Such loans are offered to both businesses and
individuals, and there are a number of related activities in support of the
commercial banking product

 Relationship Management: Interacting with corporate, small business or

individual clients to market the bank's products and make sure client needs are
addressed.
 Structuring/Underwriting: Using the bank's resources to package loans or related
financial products for clients, making sure that capital risks are adequately
mitigated.
 Syndication & Sales: Offloading all or parts of underwritten loans to other
financial institutions, in support of structuring/underwriting and relationship
management.
 Risk Management: Assisting clients and working with bank's internal resources
to help manage interest rate, foreign exchange and other market price exposure.
 Cash Management: Assisting corporations with the flows and short-term
investment of cash balances.
 Retail Banking: Working with individuals and small businesses to address their
banking needs at the branch level.
 Credit Cards, Mortgages, Student Loans, etc.: Marketing, structuring,
packaging, underwriting, and management of consumer credit products.

Financial intermediaries

An entity that acts as the middleman between two parties in a financial transaction.
While a commercial bank is a typical financial intermediary, this category also
includes other financial institutions such as investment banks, insurance
companies, broker-dealers, mutual funds and pension funds. Financial
intermediaries offer a number of benefits to the average consumer including safety,
liquidity and economies of scale.

Financial institutions (intermediaries) perform the vital role of bringing together

those economic agents with surplus funds who want to lend, with those with a
shortage of funds who want to borrow. In doing this they offer the major benefits
of maturity and risk transformation. It is possible for this to be done by direct
contact between the ultimate borrowers, but there are major cost disadvantages of
direct finance. Indeed, one explanation of the existence of specialist financial
intermediaries is that they have a related (cost) advantage in offering financial
services, which not only enables them to make profit, but also raises the overall
efficiency of the economy.

Types of financial intermediaries

 Banks
 Building societies
 Credit unions
 Financial advisers or brokers
 Insurance companies
 Collective investment schemes
 Pension funds
Financial institution
An establishment that focuses on dealing with financial transactions, such as
investments, loans and deposits. Conventionally, financial institutions are
composed of organizations such as banks, trust companies, insurance companies
and investment dealers. Almost everyone has deal with a financial institution on a
regular basis. Everything from depositing money to taking out loans and exchange
currencies must be done through financial institutions.
Broadly speaking, there are three major types of financial institutions:

1. Depositary Institutions : Deposit-taking institutions that accept and manage

deposits and make loans, including banks, building societies, credit
unions, trust companies, and mortgage loan companies
2. Contractual Institutions : Insurance companies and pension funds; and
3. Investment Institutions: Investment Banks, underwriters, brokerage firms.

Financial market

A financial market is a market in which people and entities

can trade financial securities, commodities, and other fungible items of value at
low transaction costs and at prices that reflect supply and demand. Securities
include stocks and bonds, and commodities include precious metals or agricultural
goods.
There are both general markets (where many commodities are traded) and
specialized markets (where only one commodity is traded). Markets work by
placing many interested buyers and sellers, including households, firms, and
government agencies, in one "place", thus making it easier for them to find each
other. An economy which relies primarily on interactions between buyers and
sellers to allocate resources is known as a market economy in contrast either to
a command economy or to a non-market economy such as a gift economy.
Types of financial markets

 Capital markets which consist of:

 Stock markets, which provide financing through the issuance of shares
or common stock, and enable the subsequent trading thereof.
  Bond markets, which provide financing through the issuance of bonds, and
enable the subsequent trading thereof.
 Commodity markets, which facilitate the trading of commodities.
 Money markets, which provide short term debt financing and investment.
 Derivatives markets, which provide instruments for the management
of financial risk.
 Futures markets, which provide standardized forward contracts for trading
products at some future MONTH; see also forward market.
 Insurance markets, which facilitate the redistribution of various risks.
 Foreign exchange markets, which facilitate the trading of foreign exchange.

FINANCIAL MARKET

A financial market is a broad term describing any marketplace where buyers and
sellers participate in the trade of assets such as equities, bonds, currencies and
derivatives. Financial markets are typically defined by having transparent pricing,
basic regulations on trading, costs and fees, and market forces determining the
prices of securities that trade.
Financial markets can be found in nearly every nation in the world. Some are very
small, with only a few participants, while others - like the New York Stock
Exchange (NYSE) and the forex (foreign exchange) markets - trade trillions of
dollars daily.
Investors have access to a large number of financial markets and exchanges
representing a vast array of financial products. Some of these markets have always
been open to private investors; others remained the exclusive domain of major
international banks and financial professionals until the very end of the twentieth
century.

Role of financial market

One of the important requisite for the accelerated development of an economy is

the existence of a dynamic financial market. A financial market helps the economy
in the following manner.
 Saving mobilization: Obtaining funds from the savers or surplus units such as
household individuals, business firms, public sector units, central government,
state governments etc. is an important role played by financial markets.
 Investment: Financial markets play a crucial role in arranging to invest funds
thus collected in those units which are in need of the same.
 National Growth: An important role played by financial market is that, they
contributed to a nation’s growth by ensuring unfettered flow of surplus funds to
deficit units. Flow of funds for productive purposes is also made possible.
 Entrepreneurship growth: Financial market contributes to the development of
the entrepreneurial claw by making available the necessary financial resources.
 Industrial development: The different components of financial markets help
an accelerated growth of industrial and economic development of a country,
thus contributing to raising the standard of living and the society of well-being.

Indian financial market

The financial market in India at present is more advanced than many other sectors
as it became organized as early as the 19th century with the securities exchanges in
Mumbai, Ahmedabad and Kolkata. In the early 1960s, the number of securities
exchanges in India became eight - including Mumbai, Ahmedabad and Kolkata.
Apart from these three exchanges, there was the Madras, Kanpur, Delhi, Bangalore
and Pune exchanges as well. Today there are 23 regional securities exchanges in
India. The Indian stock markets till MONTH have remained stagnant due to the
rigid economic controls. It was only in 1991, after the liberalization process that
the India securities market witnessed a flurry of IPOs serially. The market saw
many new companies spanning across different industry segments and business
began to flourish. The launch of the NSE (National Stock Exchange) and the
OTCEI (Over the Counter Exchange of India) in the mid 1990s helped in
regulating a smooth and transparent form of securities trading. The regulatory body
for the Indian capital markets was the SEBI (Securities and Exchange Board of
India). The capital markets in India experienced turbulence after which the SEBI
came into prominence. The market loopholes had to be bridged by taking drastic
measures
Indian financial market helps in promoting the savings of the economy –helping to
adopt an effective channel to transmit various financial policies. The Indian
financial sector is well developed, competitive, efficient and integrated to face all
shocks. In the Indian financial market there are various types of financial products
whose price are determined by the numerous buyers and sellers in the market. The
other determined factor of the price of the financial products is the market forces of
demand and supply. The various types of Indian market helps in the functioning of
the wide Indian financial sector.

Classification of Financial Markets: Organized Markets

There are standardized rules and regulations to be followed and all transactions are
under strict supervision and control by various regulatory bodies such as SEBI,
RBI, IRDA, etc. This results in high degree of institutionalization and a huge
spread with the types of instruments.
Types of Organized Market: -
1. Capital Market
2. Money Market

Capital market
It is a market for financial assets which have a long or indefinite maturity. It
includes securities with long term maturity (i.e. above one year). The types of
Capital Market are:
A. Industrial Securities Market
It comprises of the most popular instruments i.e. Equity shares, Preference shares,
bonds and debentures. It is a market where industrial concerns raise their capital by
issuing appropriate instruments. It is further sub-divided into two:-
1. Primary Market (New issue market)
2. Secondary Market (Stock Exchange)
Primary market

A market that issues new securities on an exchange. Companies,

governments and other groups obtain financing through debt or equity based
securities. Primary markets are facilitated by underwriting groups, which consist of
investment banks that will set a beginning price range for a given security and
then oversee its sale directly to investors. Also known as "new
issue market" (NIM).

The primary markets are where investors can get first crack at a new security
issuance. The issuing company or group receives cash proceeds from the sale,
which is then used to fund operations or expand the business. Exchanges have
varying levels of requirements which must be met before a security can be sold.

Once the initial sale is complete, further trading is said to conduct on the secondary
market, which is where the bulk of exchange trading occurs each day. Primary
markets can see increased volatility over secondary markets because it is difficult
to accurately gauge investor demand for a new security until several days of
trading have occurred.

Initial public offer

The first sale of stock by a private company to the public. IPOs are often issued by
smaller, younger companies seeking the capital to expand, but can also be done by
large privately owned companies looking to become publicly traded.
In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it
determine what type of security to issue (common or preferred), the best offering
price and the time to bring it to market.
Also referred to as a "public offering."

IPOs can be a risky investment. For the individual investor, it is tough to predict
what the stock will do on its initial day of trading and in the near future because
there is often little historical data with which to analyze the company. Also, most
IPOs are of companies going through a transitory growth period, which are subject
to additional uncertainty regarding their future values.

Recent IPOs in India

Initial Public Offer (IPO), is the first sale of shares by the privately owned
company to the public. The companies going public raises funds through IPO's
for working capital, debt repayment, acquisitions, and a host of other uses.
Investor can apply for IPO Stocks by filling an IPO Application Form. These
forms are usually available with stock brokers for free. Investor can also apply for
IPO Stocks online through Online Stock Brokers like ICICI bank, Share Khan,
and Reliance Money.

List of Upcoming IPO's, Current IPO's and Recently Closed IPO's in India

Issuer Company Exchange Issue Issue Offer Issue Issue Size

Open Close Price Type (Crore Rs.)
(Rs.)

Dhanuka Commercial BSE SME May May 10/- IPO- 4.44

Ltd IPO 22, 28, FP
 2014 2014

SPS Finquest Ltd IPO BSE SME May May 75/- IPO- 25.08
21, 23, FP
2014 2014

GCM Capital Advisors BSE SME May May 20/- IPO- 9.00
Ltd IPO 05, 07, FP
2014 2014

Wonderla Holidays Ltd BSE, Apr Apr 115/- IPO- 181.25

IPO NSE 21, 23, to BB
2014 2014 125/-

R & B Denims Ltd IPO BSE SME Mar Apr 10/- IPO- 3.71
28, 04, FP
2014 2014

Women's Next BSE SME Mar Apr 65/- IPO- 6.50

Loungeries Ltd IPO 28, 07, FP
2014 2014

Oceanaa Biotek BSE SME Mar Mar 10/- IPO- 2.10

Industries Ltd IPO 18, 20, FP
2014 2014

Shri Krishna Prasadam BSE SME Mar Mar 10/- IPO- 2.16
Ltd IPO 11, 14, FP
2014 2014

Follow on public offer (fpo s)

An issuing of shares to investors by a public company that is already listed on an

exchange. An FPO is essentially a stock issue of supplementary shares made by a
company that is already publicly listed and has gone through the IPO process.

FPOs are popular methods for companies to raise additional equity capital in the
capital markets through a stock issue. Public companies can also take advantage of
an FPO issuing an offer for sale to investors, which are made through an offer
document. FPOs should not be confused with IPOs, as IPOs are the initial public
offering of equity to the public while FPOs are supplementary issues made after a
company has been established on an exchange.

Secondary market

The secondary market, also called aftermarket, is the financial market in which
previously issued financial instruments such as stock, bonds, options,
and futures are bought and sold. The term "secondary market" is also used to refer
to the market for any used goods or assets, or an alternative use for an existing
product or asset where the customer base is the second market

Functions of secondary market

 Provides regular information about the value of security.

 Helps to observe prices of bonds and their interest rates.

 Offers to investors liquidity for their assets.

 Secondary markets bring together many interested parties.

 It keeps the cost of transactions low

Stock exchange

A stock exchange is a form of exchange which provides services for stock

brokers and traders to trade stocks, bonds, and other securities. Stock exchanges
also provide facilities for issue and redemption of securities and other financial
instruments, and capital events including the payment of income and dividends.
Securities traded on a stock exchange include stock issued by companies, unit
trusts, derivatives, pooled investment products and bonds. Stock exchanges often
function as "continuous auction" markets, with buyers and sellers consummating
transactions at a central location, such as the floor of the exchange.

National stock exchange

The National Stock Exchange of India Ltd. (NSE)is a exchange located in the
financial capital of Mumbai, India. National Stock Exchange (NSE) was
established in the mid 1990s as a demutualised electronic exchange. NSE provides
a modern, fully automated screen-based trading system, with over two lakh trading
terminals, through which investors in every nook and corner of India can trade.
NSE has played a critical role in reforming the Indian securities market and in
bringing unparalleled transparency, efficiency and market integrity.

Bombay stock exchange

BSE’s popular equity index - the S&P BSE SENSEX - is India's most widely
tracked stock market benchmark index. Established in 1875, BSE Ltd. (formerly
known as Bombay Stock Exchange Ltd.), is Asia’s first & fastest Stock Exchange
with the speed of 200 micro second and one of India’s leading exchange groups.
Over the past 139 years, BSE has facilitated the growth of the Indian corporate
sector by providing it an efficient capital-raising platform. Popularly known as
BSE, the bourse was established as "The Native Share & Stock Brokers'
Association" in 1875. BSE is a corporatized and demutualised entity, with a broad
shareholder-base which includes two leading global exchanges, Deutsche Bourse
and Singapore Exchange as strategic partners. BSE provides an efficient and
transparent market for trading in equity, debt instruments, derivatives, mutual
funds. It also has a platform for trading in equities of small-and-medium
enterprises (SME).

More than 5000 companies are listed on BSE making it world's No. 1 exchange in
terms of listed members. The companies listed on BSE Ltd command a total
market capitalization of USD 1.24 Trillion as of March 2014. It is also one of the
world’s leading exchanges (3rd largest in March 2014) for Index options trading.

Index Current Pt. Change % Change

S&P BSE SENSEX 25,110.13 +416.78 +1.69

S&P BSE 100 7639.32 +138.80 +1.85

S&P BSE MID CAP 8823.07 +154.75 +1.79

S&P BSE SMALL CAP 9285.65 +157.61 +1.73

S&P BSE 200 3067.95 +54.30 +1.80

Mcx stock exchange
MCX Stock Exchange Limited (MCX-SXAT) is an Indian stock exchange. It
commenced operations in the Currency Derivatives (CD) segment on October 7,
2008 under the regulatory framework of Securities and Exchange Board of
India (SEBI) and Reserve Bank of India (RBI). The Exchange is recognised by
SEBI under Section 4 of Securities Contracts (Regulation) Act, 1956. In line with
global best practices and regulatory requirements, clearing and settlement is
conducted through a separate clearing corporation, MCX-SXAT Clearing
Corporation Ltd. (MCX-SXAT CCL).At the end of June 2012, MCX-SX had 750
members and saw participation from 707 towns and cities across India. The
Exchange received permissions to deal in Interest Rate Derivatives, Equity,
Futures & Options on Equity and Wholesale Debt Segment, vide SEBI’s letter
MONTHd July 10, 2012.MCX-SX was granted the status of a “recognized stock
exchange” by the Ministry of Corporate Affairs (MCA),Government of India on
December 21, 2012. It received “commencement certificate” from market regulator
SEBI for trading in new segments such as Equity, Futures and Options on Equity,
Interest Rate Derivatives and Wholesale Debt Market on December 19, 2012.

Corporate actions

Any event that brings material change to a company and affects its stakeholders.
This includes shareholders, both common and preferred, as well as bondholders.
These events are generally approved by the company's board of directors;
shareholders are permitted to vote on some events as well.

When a publicly-traded company issues a corporate action, it is initiating a process

that will bring actual change to its stock. By understanding these different types of
processes and their effects, an investor can have a clearer picture of what a
corporate action indicates about a company's financial affairs and how that action
will influence the company's share price and performance.

Corporate actions are typically agreed upon by a company's board of directors and
authorized by the shareholders. Some examples are stock
splits, dividends, mergers and acquisitions, rights issues and spin offs.
Stock Splits
As the name implies, a stock split (also referred to as a bonus share) divides each
of the outstanding shares of a company, thereby lowering the price per share - the
market will adjust the price on the day the action is implemented. A stock split,
however, is a non-event, meaning that it does not affect a company's equity, or
its market capitalization. Only the number of shares outstanding change, so a stock
split does not directly change the value or net assets of a company.

Face
Record Split
Company Name Value Face Value After
MONTH MONTH
Before

23-
26-May-
Trinity Tradelink Ltd May- 10 1
2014
2014

02-May- 30-Apr-
Rekvina Labs Ltd 10 5
2014 2014

25-Apr- 23-Apr-
Kriptol Industries Ltd 5 10
2014 2014

Cubical Financial 25-Apr- 23-Apr-

10 2
Services Ltd 2014 2014

MatraKaushal 26-Apr- 23-Apr-

10 1
Enterprise Ltd 2014 2014

Swagruha 07-Apr- 04-Apr-

10 1
Infrastructure Ltd 2014 2014
Dividends
There are two types of dividends a company can issue: cash and stock dividends.
Typically only one or the other is issued at a specific period of time (either
quarterly, bi-annually or yearly) but both may occur simultaneously. When a
dividend is declared and issued, the equity of a company is affected because the
distributable equity (retained earnings and/or paid-in capital) is reduced. A cash
dividend is straightforward.

Rights Issues

A company implementing a rights issue is offering additional and/or new shares

but only to already existing shareholders. The existing shareholders are given the
right to purchase or receive these shares before they are offered to the public. A
rights issue regularly takes place in the form of a stock split, and can indicate that
existing shareholders are being offered a chance to take advantage of a promising
new development.

Company Book Closures EX Right

Premium Ratio Detail
Name MONTH MONTH

TATA
59 7:50 20/Mar/2014 19/Mar/2014
POWER CO.

TATA POWER CO. has announced a rights issues in the ratio of 7:50
TATA POWER CO. fixed record MONTH 19/Mar/2014 for right issue in ration
of 7:50.Premium for new shares are Rs59.

GOLDEN
4 9:5 19/Mar/2014 18/Mar/2014
GOENKA
 Company Book Closures EX Right
Premium Ratio Detail
Name MONTH MONTH

GOLDEN GOENKA has announced a rights issues in the ratio of 9:5

GOLDEN GOENKA fixed record MONTH 18/Mar/2014 for right issue in
ration of 9:5.Premium for new shares are Rs4

Mergers and Acquisitions

A merger occurs when two or more companies combine into one while all parties
involved mutually agree to the terms of the merge. The merge usually occurs when
one company surrenders its stock to the other. If a company undergoes a merger, it
may indicate to shareholders that the company has confidence in its ability to take
on more responsibilities. On the other hand, a merger could also indicate a
shrinking industry in which smaller companies are being combined with larger
corporations.

Parent Spinoff Spinoff

Parent Name Spinoff Name
Ticker Ticker MONTH

SLM Corporation SLM Navient Corporation NAVI April 30, 2014

Sears Holdings SHLD Land's End LE April 4, 2014

Dover Corporation DOV Knowles Corporation KN February 28,

2014

Newcastle NCT New Media NEWM February 13,

investment Corp Investment Group 2014

ONEOK Inc OKE ONE Gas OGS January 31,

2014
Spin Offs
A spin off occurs when an existing publicly-traded company sells a part of its
assets or distributes new shares in order to create a newly independent company.
Often the new shares will be offered through a rights issue to existing shareholders
before they are offered to new investors. Depending on the situation, a spin-off
could be indicative of a company ready to take on a new challenge or one that is
restructuring or refocusing the activities of the main business.

Broking firms

A brokerage firm, or simply brokerage, is a financial institution that facilitates the

buying and selling of financial securities between a buyer and a seller. Brokerage
firms serve a clientele of investors who trade public stocks and other securities,
usually through the firm's agent stockbrokers. A traditional, or "full service,"
brokerage firm usually undertakes more than simply carrying out a stock or bond
trade. The staffs of this type of brokerage firm is entrusted with the responsibility
of researching the markets to provide appropriate recommendations and in so
doing they direct the actions of pension fund managers and portfolio
managers alike. These firms also offer margin loans for certain approved clients to
purchase investments on credit, subject to agreed terms and conditions. Traditional
brokerage firms have also become a source of up-to-MONTH stock prices and
quotes.
A discount broker or an online broker is a firm that charges a relatively
small commission by having its clients perform trades via automated,
computerized trading systems rather than by having an actual stockbroker assist
with the trade. Most traditional brokerage firms offer discount options and compete
heavily for client volume due to a shift towards this method of trading.

B. Government Securities Market

It is also called gilt Edged Securities market. It is a market where government
securities (G-secs) are traded. In India there are many kinds of G-secs are traded.
G-secs are sold through Public Debt Office of the RBI. They offer a good source of
raising inexpensive finance for the government exchequer and the interest on these
securities affect pricing and yields in the market.

C. Long Term Loans Market

Commercial banks and development banks play a significant role in this market by
supplying long term loans to corporate customers. It is classified into 3 categories:
(i) Term Loans Market
(ii) Mortgages
(iii) Financial Guarantees Market.

Money market

Definition:

According to the RBI, "The money market is the centre for dealing mainly of
short character, in monetary assets; it meets the short term requirements of
borrowers and provides liquidity or cash to the lenders. It is a place where short
term surplus investible funds at the disposal of financial and other institutions and
individuals are bid by borrowers, again comprising institutions and individuals and
also by the government."

These definitions help us to identify the basic characteristics of a money market. A

money market comprises of a well organized banking system. Various financial
instruments are used for transactions in a money market. There is perfect mobility
of funds in a money market. The transactions in a money market are of short term
nature.

Functions of Money Market

Money market is an important part of the economy. It plays very significant

functions. As mentioned above it is basically a market for short term monetary
transactions. Thus it has to provide facility for adjusting liquidity to the banks,
business corporations, non-banking financial institutions (NBFs) and other
financial institutions along with investors.

The major functions of money market are given below:-

 To maintain monetary equilibrium. It means to keep a balance between the

demand for and supply of money for short term monetary transactions.
 To promote economic growth. Money market can do this by making funds
available to various units in the economy such as agriculture, small scale
industries, etc.
 To provide help to Trade and Industry. Money market provides adequate
finance to trade and industry. Similarly it also provides facility of
discounting bills of exchange for trade and industry.
 To help in implementing Monetary Policy. It provides a mechanism for an
effective implementation of the monetary policy.
 To help in Capital Formation. Money market makes available investment
avenues for short term period. It helps in generating savings and investments
in the economy.

Money market provides non-inflationary sources of finance to government. It is

possible by issuing treasury bills in order to raise short loans. However this does
not leads to increases in the prices.

Apart from those, money market is an arrangement which accommoMONTHs

banks and financial institutions dealing in short term monetary activities such as
the demand for and supply of money.
Money market instruments

Government securities

A government security is a bond or other type of debt obligation that is issued by a

government with a promise of repayment upon the security's maturity MONTH.
Government securities are usually considered low-risk investments because they
are backed by the taxing power of a government. The primary reason that most
government securities are issued is to raise funds for government expenditures.

Types of government securities

 Treasury bills are short-term securities issued by the federal government.

There maturity periods range from days to 52 weeks. These securities are sold
at a discount rate and will be paid at face value, which is how the investors
make their money.
 Treasury notes are government securities with maturity periods longer than
treasury bills. There maturity periods can be two, three, four, five, seven, and
ten years. Interest is paid every six months.
 Treasury bonds are long-term investments with a maturity period of 30
years. Interest is paid every six months.
 Treasury inflation protected securities (TIPS) are securities that are
protected from inflation as the principal increases if there is inflation and
decreases if there is deflation as measured by the Consumer Price Index. They
have maturities of five, ten, and 30 years. Interest is paid every six months.
 Municipal bonds are government securities issued by a state or local
government that are usually issued to support special projects like building
schools and other public buildings. There are two general types of municipal
bonds. Public purpose bonds are tax-exempt, while private purpose bonds are
taxable unless specifically exempted from taxation. The tax-exempt status
means that the interest earned on the bonds are not subject to taxation, which
can be attractive to certain investors.
Treasury bills

The Treasury bills are short-term money market instrument that mature in a year or
less than that. The purchase price is less than the face value. At maturity the
government pays the Treasury bill holder the full face value. The Treasury Bills
are marketable, affordable and risk free. The security attached to the treasury bills
comes at the cost of very low returns.

Types of treasury bills

In India there are two types of treasury bills via:

1. Ordinary or regular

2. ’ad hoc’ or known as ‘ad hocs’

Ordinary treasury bills are issued to the public and other financial institutions for
meeting the short term financial requirement of the government. These bills are
freely marketable and they can be bought and sold at any time and they have
secondary market also

On the other hand ad hoc are always issued in favour of RBI only. They are not
sold through tender or auction .they are purchased by the RBI on top and the RBI
is authorized to issue currency notes against them .they are marketable sell them
back to the RBI.

Certificates of deposits

A certificate of deposit is a promissory note issued by a bank. It is a time deposit

that restricts holders from withdrawing funds on demand. Although it is still
possible to withdraw the money, this action will often incur a penalty.
A CD bears a maturity MONTH, a specified fixed interest rate and can be issued
in any denomination. CDs are generally issued by commercial banks and are
insured by the FDIC(federal deposit insurance corporation). The term of a CD
generally ranges from one month to five years.
Capital market

Markets for buying and selling equity and debt instruments. Capital markets
channel savings and investment between suppliers of capital such as retail
investors and institutional investors, and users of capital like businesses,
government and individuals. Capital markets are vital to the functioning of an
economy, since capital is a critical component for generating economic output.
Capital markets include primary markets, where new stock and bond issues are
sold to investors, and secondary markets, which trade existing securities.

Significance of Capital Markets

 Mobilisation Of Savings And Acceleration Of Capital Formation :-

In developing countries like India the importance of capital market is
self evident. In this market, various types of securities helps to mobilize
savings from various sectors of population. The twin features of reasonable
return and liquidity in stock exchange are definite incentives to the people to
invest in securities. This accelerates the capital formation in the country.

 Raising Long - Term Capital :-

The existence of a stock exchange enables companies to raise
permanent capital. The investors cannot commit their funds for a permanent
period but companies require funds permanently. The stock exchange
resolves this dash of interests by offering an opportunity to investors to buy
or sell their securities, while permanent capital with the company remains
unaffected.

 Promotion Of Industrial Growth :-

The stock exchange is a central market through which resources are
transferred to the industrial sector of the economy. The existence of such an
institution encourages people to invest in productive channels. Thus it
stimulates industrial growth and economic development of the country by
mobilizing funds for investment in the corporate securities.

 Ready And Continuous Market :-

The stock exchange provides a central convenient place where buyers
and sellers can easily purchase and sell securities. Easy marketability makes
investment in securities more liquid as compared to other assets.
 Technical Assistance :-
An important shortage faced by entrepreneurs in developing countries is
technical assistance. By offering advisory services relating to preparation of
feasibility reports, identifying growth potential and training entrepreneurs in
project management, the financial intermediaries in capital market play an
important role.

 Reliable Guide To Performance :-

The capital market serves as a reliable guide to the performance and
financial position of corporate, and thereby promotes efficiency.

 Proper Channelization Of Funds :-

The prevailing market price of a security and relative yield are the
guiding factors for the people to channelize their funds in a particular
company. This ensures effective utilisation of funds in the public interest.

 Provision Of Variety Of Services :-

The financial institutions functioning in the capital market provide a
variety of services such as grant of long term and medium term loans to
entrepreneurs, provision of underwriting facilities, assistance in promotion
of companies, participation in equity capital, giving expert advice etc.

 Development Of Backward Areas :-

Capital Markets provide funds for projects in backward areas. This
facilitates economic development of backward areas. Long term funds are
also provided for development projects in backward and rural areas.

 Foreign Capital :-
Capital markets makes possible to generate foreign capital. Indian
firms are able to generate capital funds from overseas markets by way of
bonds and other securities. Government has liberalised Foreign Direct
Investment (FDI) in the country. This not only brings in foreign capital but
also foreign technology which is important for economic development of the
country.
  Easy Liquidity :-
With the help of secondary market investors can sell off their holdings
and convert them into liquid cash. Commercial banks also allow investors to
withdraw their deposits, as and when they are in need of funds.
 Revival Of Sick Units :-
The Commercial and Financial Institutions provide timely financial
assistance to viable sick units to overcome their industrial sickness. To help
the weak units to overcome their financial industrial sickness banks and FIs
may write off a part of their loan.

Growth of broking firms

The Growth of Stock Broking Companies Lures More Retail Investors

The booming stock markets and growing retail investors in equity and share
trading business help Indian stock broking companies to expand their network into
more cities and towns to lure investors into their folds. Experts say the broking
business will continue to grow in future because of the changing economy and the
high-quality performance by the Indian corporate sector. With the entrance of a
number of corporate sectors, no doubt the industry has achieved size and
scale. Many retail investors are also entering new fields of activity such as
commodity broking, mutual fund products and insurance schemes. It has been
witnessed in last 6 to 7 years that the expansion of stock broking companies hit
the IPO market to raise funds and guard the fall of stock broking industry. Many
public sector banks are also entering into this business. While IDBI capital
markets, the broking arm of IDBI, is diversifying into retail broking business,
many current players including Kotak Securities, Anagram and ICICI Direct
corner, Motilal Oswal, and Karvy have acquired one fourth of the total
equity market turnover. India has two big stock exchanges named Bombay Stock
Exchange (BSE) and National Stock Exchange (NSE) and few small
exchanges where shares and equities are traded. An
investor can trade stocks in any of the stock exchanges in India, but all the stock
brokers’ trade online only in BSE and NSE. They are registered member of the
stock exchange and can register a client to one or more stock exchanges. They
take commissions (brokerages) for their service that vary from broker to broker.
An investor has to take the help of a stock broker to trade stocks
because they only can directly buy and sell shares in
Stock Market.
 COMPANY PROFILE

HEDGE EQUITIES

Hedge Equities is one of the leading Financial Services Company in

India. It offers equity, futures, options, depository services, commodity broking
and mutual funds distribution to its customers.

The company was launched by the renowned Actor Mohanlal during

August 2008, in association with Fedex Securities, Kozhikode-based Baby Marine
Exports, Smart Financial, Thakker Group and SM Hedge of Videocon. He is the
brand ambassador and one of the directors of the company. It had a net worth of
Rs. 8 crore at the beginning, which shortly reached Rs. 10 crore. The company had
16 branches in the first phase and planned to establish 45 new branches all over
South India by the end of that year. Now, the company is having a Global Outlook
blended with a Local Flavor and backed with a growing network of over 120
service outlets, 450 qualified employees, and over 200 support associates. It is the
trust and goodwill of over 20,000 satisfied customers. The main focus of the firm
is South India. The company targeted about 500-700 clients and a business of Rs
300 crore of assets under management from Kerala in the first year of operations.
At present it is having almost 20,000 clients and is further looking forward at a
customer base of 40,000 by December 2011 by chalking out an aggressive
marketing strategy. The total branch network will be increased to 200 from 156 by
the end of the current fiscal year.
 It is specialized in offering a wide range of financial products, tailor
made to suit individual needs. As a first step to make their presence Global, Hedge
Equities have initiated operations in Middle East to cater to the vast Non Resident
Indian (NRI) population in that region. Ever since their inception, they have
spanned their presence all over India through their Meticulous Research, High
Brand Awareness, and Intellectual Management and Extensive Industry
knowledge. People at Hedge believe in creating a new breed of Investors who take
judicious decisions through them.

Hedge Equities is a coming together of over 25 years of cutting edge

experience of its founders in various industries backed with a strong expertise in
global financial markets. The Board comprises of veterans from six power houses
in their respective fields: Fedex Securities(a leading merchant banker), Baby
Marine Exports, Thakker Developers, Smart Financial, S.M.Hegde (CFO,
Videocon Industries), and Padmashree Mohan Lal. It endeavors to become a well
reputed financial services super-mart catering to the evolving needs and unique
requirements of our clientele, and partnering with them to Build, Manage, and
grow their Wealth.

Hedge believes in the philosophy of educating and empowering

potential investors. Studies have revealed that only 3% of the population in Kerala
is aware of the investment opportunities in the stock market and invests in stocks
as compared to 40% in Mumbai and Gujarat. The company's emphasis will be to
utilize the potential of this largely untapped segment. They are basically targeting
the small investors and are confident that they will be able to guide those investors
in the best possible manner. They want to be a revelation to them since the
business here in Kerala is still in its infancy. They say that it is the age of the smart
investor. Its time the company stops working for money and make money work for
us. The company aims in giving financial freedom to customers.

Vision

'Evolving into a financial supermarket which will be a one stop shop for all
financial solutions.'

Ever since its inception, Hedge Equities has been a household name
among the masses owing their success to timely Professional financial assistance to
their clients. This aptly articulates their vision.

Mission

“To create an ethical and sustainable financial services platform for

the customers and partner them to build business, to provide employees with
meaningful work, self-development and progression, and to achieve a consistent
and competitive growth in profit and earnings for the shareholders and staff.”

PROMISE OF HEDGE

 To our Customers: We exist to serve and meet your needs. Our focus is to
create an ethical and sustainable financial services platform that places
your unique needs over and above everything else.

 To our Employees: We will provide our employees with a meaningful and

rewarding career with emphasis on self development and career progression.
 To our Shareholders: We will spare no efforts to achieve a consistent and
competitive growth in earnings and profitability.
ADVANTAGES OF HEDGE
 At Hedge Equities, the needs of our Customers stand before everything
else.
 SEBI Registered Portfolio Manager with a dedicated Wealth
Management Services desk that aims to provide objective guidance
tailored to meet each customers individual needs.
 Strong Research Team backed with best of breed data mining and
analysis.
 Industry leading technology solutions that make portfolio administration
simpler and cost effective.
 A Global Outlook blended with a Local Flavor and backed with a
growing network of over 120 service outlets., 450 qualified employees,
and over 200 support associates.
 The Trust and Goodwill of over 20,000 satisfied customers.
 Member of BSE, NSE, MCX, MCXSX,NMCE,NCDEX and Depository
Participant in CDSL
 Rated as the top brand by the investor community of Asianet channel
 Growing overseas presence with operations in Middle East and an
expanding presence in the European region and North America.

Management

Alex K Babu - Managing Director

Alex Babu is the Founder & Managing Director of Hedge Equities.

He has over 9 years of experience in equity research and fund management with
considerable experience across all market capitalizations. He is a specialist in mid-
cap and infra stock selection. Ever since joining the Hedge Family, he has been
designing, developing and implementing the strategic plan for the company in the
most cost effective and time efficient manner. He was also instrumental in
establishing and assembling a strong research team with equal emphasis on
macroeconomic, industrial, and company level research.

Bhuvanendran - CEO

‘Professionalism augmented by profound vision’ is a perfect phrase to

describe Bhuvanendran. His rich experience spanning 20 years with the leading
names in the Indian financial services industry, is often camouflaged by his
youthful appearance, till Mr.Bhuvanendran opens up his favourite subject-Money
matters. Bhuvanendran is a talented and introspective writer whose creativity has
been capitalized by various financial journals. He is also in the limelight for a
market related show which aims at quenching the financial queries of professionals
and investors in a leading Malayalam television channel

Bobby J Arakunnel – COO

Mr. Bobby has been responsible for the entire operations of Hedge
Equities ever since its inception. He has proved his versatility by showcasing
excellent Man-Management and Marketing Activities and is well versed in all
aspects of Indian Financial Markets. In the last 12 years, he has worked with all the
major players in the financial service sector of the country which has added oodles
to his workmanship

Mr.Raj Krishnan - Director

In his 15+ year career in Finance & Operations, Raj Krishnan has
served in varied roles such as CEO, COO, Investor, and Entrepreneur. At Hedge
Equities, he works with a team that employs both top-down macroeconomic and
industrial research, as well as a bottom-up equity valuation process to identify and
analyze great businesses selling well below their intrinsic values.

Mr. Mohanlal – Director

This Honorary Lieutenant Colonel's brand image and brimming

popularity has helped Hedge Equities to create awareness amongst small investors
in retail segment to invest in stocks. Versatility and a natural flair for donning
complex characters have won him numerous accolades not to speak of some
unforgettable films contributed by him. A Multifaceted personality, whose
inspiring attitude, has helped him to take up Business world with a storm.

Mr. Krishnadas – Director

Managed by a team of ex-bankers, Fedex is a SEBI registered

category 1 merchant banker. Mr.Krishnadas with his 20 Years experience in
commercial and investment banking is concentrating on non fund based activities
like structuring, tie up of project financing, financial restructuring, investment
banking, corporate and advisory services through Fedex Securities. With offices at
Nariman Point and Vile Parle East, Mumbai, state of the art infrastructure and
qualified manpower to conduct the business, Fedex Securities envisages a
phenomenal growth in this sector for its clients.

Mr. Pradeep Kumar C – Director

A leading Textile exporter of Kerala whose 20 years of experience in

this field has made him a veteran we all look up to. His vision, augmented by his
hard work and commitment has helped him to be a strong player in the field of
Exporting. Starting from a root level, he has travelled the hard way to reach this
phenomenal position in Garment Industry which has supplemented him to expand
his domain to foreign locations as well.

BUSINESS VERTICLES

 Hedge finance
Hedge finance has chalked out extensive, long term plans for the
comprehensive growth of the company. With parent company’s wide client
base and advanced infrastructure, Hedge Finance is heading towards
achieving a loan book position of Rs 100 Crore within the first three months
of operations.
Hedge equities a leading player in the financial markets is all set to leave its
mark in the NBFC sector with the launch of Hedge Finance. The Indian Non
Banking Finance Companies (NBFCs) constitutes a reasonable big chunk of
the country’s overall financial system. It is estimated that the NBFCs as a
whole accounts for 9.1% or Rs. 4 trillion of assets of the entire financial
system in India. NBFC industry today is a more mature, developed and
promising since the days of inception and is destined to shape the future of
India. It is in such a time that Hedge Finance has burst into the scene and
creating waves in the sector. Backed by Hedge Equities, which is a coming
together of over 25 years of unparalleled experience of business leaders in
various industries, Hedge Finance is all set to be one of the top Non Banking
Finance Company in the country.
 Hedge school of applied economics
Hedge School of Applied Economics (HSAE) is the first ever educational
venture dedicated to creating a class of high-end investment professionals
across India. Our faculties’ role does not end with the program; we continue
to mentor interested candiMONTHs so that they stay abreast and develop an
 ongoing understanding on the evolving dynamics in the financial markets.
The programs are designed for students, financial professionals and
investors who would be the advocates of smart investments. Scholarship
opportunities are available to qualified candiMONTHs, which are subjected
to interviews and assessments of the course coordinators.

 Hedge OHARI- the magazine

Hedge Ohari is a monthly finance magazine that provides its readers

comprehensive knowledge and insight about the various aspects of financial
planning and the entire spectrum of investment and wealth creation methods,
viz. stock market, mutual fund, real estate, gold, bonds, banking and so on.
The magazine’s content includes articles, features and interviews about the
diverse areas related to finance and business. Sections such as industry,
business management, agriculture, education, automobile, brand equity,
success mantras, insurance, lifestyle, gadgets, and cinema enrich the
magazine’s contents from cover to cover. They are mainly focusing on the
read for those readers of Malayalam who are on the lookout of rich advice to
gain insights into the methods of systematic financial planning and
investment and follow a planned way of investing to realize their objectives.
Moreover, every issue of the magazine presents the best reading experience
to readers who like to follow the latest trends in finance and business they
have the readership of over two lakh Malayalees in Kerala and other parts of
the country. Its readership includes eminent people from all walks of life,
including policy makers, corporate honchos, political leaders, film stars,
professionals, bureaucrats, investors, youngsters, students etc. they have the
circulation 40000 copies per month
ORGANIZATIONAL STRUCTURE

Under the GM
Regional organizational structure

CORPORATE SOCIAL RESPONSIBILITY

Being a responsible corporate citizen, Hedge equities has initiated a non-profit

movement, “Hedge Yuva”, which focuses on educating the masses about Stock
Market. The movement has also formulated various scholarship programs for
young and dynamic youth.

SERVICES OFFERED

Online trading

Hedge equities have a large network of branches with online terminals of NSE and
BSE in the capital market and Derivative segments. The clients are assured of
prompt order execution through dedicated phones and expert dealers at our
Internet Trading

Hedge equities offers internet trading through their site. One can trade through the
internet from the comforts of your office or home, anywhere in the world. The
dedicated IT systems ensure service up time and speed, making internet broking
through Hedge equities hassle-free. Using the easiest facility provided by NSDL,
our clients can transfer the shares sold by them
online without delivery instruction slips. Additionally, digitally signed contract
notes can be sent to clients through E-mail.

Depository Services

Hedge offers trading in the futures and options segment of the National Stock
Exchange (NSE).Through the present derivative trading an investor can take a
short term view on the market for up to a three months’ perspective by paying a
small margin on the futures segment and a small premium in the options segment.
In the case of options, if the trade goes in the opposite direction the maximum loss
will be limited to the premium paid.

Knowledge Centre

Knowledge centre activities are intended to provide systematic and structured

services mainly to new investors and also to young aspirant aiming for a career in
financial markets. The centre has three functional areas: the publication division,
the training center, and wealth management advisory service which provides
complete investment solutions to investments through knowledge based
personalized services.
Equity Research

Hedge equities constantly strive to deliver insightful research to enable pro-active

investment decisions. The research department is broadly divided into two
divisions- Fundamental Analysis Group (FAG) and Technical Analysis Group
(TAG). Our fundamental analysts are continuously scanning the entire economy
for discovering what they call the hidden gems in stock market terminology and
present it to our clients for profitable investments. A good fundamental analysis
Team has the capability to identify emerging businesses before such businesses
become the talk of the street and we are proud to say we have one such
fundamental analysis team. Timing the market has always been the most difficult
task for all analysts and our Technical Analysis Group has merged to predict the
market movements well in advance using complex analytical methods including
Elliot Wave Theory. We are equipped with cutting-edge technologies for technical
Charting which assist our technical analysts to predict both upside and downside
movements efficiently for the benefit of our clients.

Portfolio Management Services (PMS)

Hedge equity is a SEBI-approved portfolio manager offering discretionary and

non-discretionary schemes to its clients. Hedge equities’ portfolio management
team keeps track of the markets on a daily basis and is exposed to a lot of
information and analytic tools which an investor would not normally have access
to. Other technicalities pertaining to shares like dividends, rights, bonus, buy-back,
Mergers and Acquisitions and are also taken care of by us. Maximize yourreturns
by opting for our PMS scheme.
Commodity Trading
One can trade in futures like gold, silver, crude oil, rubber etc and take advantage
of the extended trading hours (10 am to 11 pm) in commodities trading.

Mutual Funds, Bonds etc

Hedge equities also offer Mutual funds and bonds. One can select from a wide
range of Mutual funds and bonds available in the market today.

Currency Trading

Currency derivatives can be described as contracts between the sellers and buyers,
whose values are to be derived from the underlying assets, the currency amounts.
These are basically risk management tools in force and money markets used for
hedging risks and act as insurance against unforeseen and unpredictable currency
and interest rate movements.
Any individual or corporate expecting to receive or pay certain amounts in foreign
currencies at future MONTH can use these products to opt for a fixed rate- at
which the currencies can exchanged now itself. Currency derivatives serve the
purpose of financial risk management encompassing various market risks. An
upfront premium is payable for buying a derivative.
Currency futures will bring in more transparency and efficiency in price discovery,
eliminate counterparty credit risk, provide access to all types of market
participants, offer standardized products and provide transparent trading platform.
Hedge school of applied economics

Hedge Equities initiates Hedge School of Applied Economics with the sole
objective of moulding highly qualified investment professionals in the state. It is in
fact a company itself floated by Hedge Equities with the parent holding cent
percent stake. It is a knowledge initiative of hedge Equities. The initiative has now
developed into a movement imparting financial freedom at individual and
organizational level and thus building a financially strong India.

Through the various activities of Hedge School, they facilitate the students, youths
and new investors who wish to explore career as well as investment opportunities
in the sector. It offers a set of structured courses which enables the incumbents to
build a better career in the financial industry and take informed investment
decisions.

AREA OF OPERATION:

Hedge Equities has 130 branches in India and one branch in Dubai, UAE.

 106 branches in Kerala

 06 branches in Karnataka
 07 branches in Maharashtra
 01 branch in Tamilnadu.

Hedge Equities registered office is at Mumbai and Corporate office is in Kaloor,

Kochi and their regional offices are in Bangalore and Hyderabad. There are 117
employees in their Head office, 8-10 employees in their Regional office and 4-5
employees in each branch.
MAIN COMPETITORS:
 Geojit BNP Parbas
 JRG Securities
 Religare
 Muthoot Securities
 Share wealth
 Motilal Oswal
 Anandrathi
 Angel Brocking

DEPARTMENTAL PROFILE

I. Client Relation Department:-

The client relation department assists the client or customer top open an account in
HEDGE EQUITIES (p) Ltd securities. This department is also known as the front
office. A client has to open two types of accounts to trade and own securities in the
NSE & BSE.

II. Finance Department:-

Thus a department, to organize financial activities may be created under the direct
control of the board of directors. Finance manager will decide the major financial
policy methods. Lower levels can delegate the other routine activities.
III. Marketing Department:-
The major functions of marketing department are:
 Business associate development: The company takes up the marketing
activities of the various branches. It ensures an efficient marketing arena at
its various branches. The company encourages better relations in its
branches and promotes for the development of various marketing strategies.
 Brand promotion: An important function of marketing department is to
promote the name of the company.
 Investment promotion: The main clients of the company were its investors.
Hence the marketing department tries to capture as many investors as
possible to encourage them to invest.
 Delivery promotion: Intraday trading is not always profitable and might
involve a lot of risk hence the company promotes for delivery were the
shares are kept to be sold for a later MONTH analyzing the profitability
factors.

IV. Systems Department:-

The systems department is playing a vital role in the day operations of the
company. It is through the systems department that the clients can avail the
facilities of Internet trading. Optic fibre cables and high bandwidth
connections from the Hedge Equities (P) Ltd office to the ISP, a dedicated
server and back-up ISDN connections were maintained directly by the
systems department. For the purpose of trading they have made use of two
software namely ODIN (Open Dealers Integrated Network).
V. Human Resources Department:-
Human resource is often considered as the back bone of an organization even in
this age of advanced automation and mechanization. Since virtual organizations are
not very much popular in our part of the world, it is very important to any
organization to have a HR department. The presence of an excellent HR
department increases the efficiency of an organization considerably. Human
resource management is defined as asset of practices, policies and programmes
designed to maximize both personal and organizational goals.
 a). Training and induction: The selected employees will undergo three days
continuous induction. During this period, he will undergo training with all
the department of Hedge Equities (P) Ltd Securities (India) Pt. Ltd. There
will also be classroom induction also within 3 months.
 b). Wages and Salary Administration: The wages and salaries of the
employees were fixed and granted by the HR department with consent of
the finance department.
 c). Performance Appraisal: It was human resources department which gives
the promotion to all employees, making transfers and taking disciplinary
actions if needed.
 d). Grievance Handling: The grievance of employees were received only
through proper channels i.e., through the particular department heads. The
HR department will make solutions to the complaints as per the rules and
regulations of the company.

VI. Trading Department:-

 The department deals with the trading related activities of the company. The
trading refers to the buying and selling of shares. This department is the most
important part of the organization. There are two types of trading. They are:
 Online Trading:-
These are the trading terminal of the organization. The each computer of the
department is termed as the trading terminal. The each terminal is assigned
with NCFM certified dealers, who is in charge of each portal will do the
trade according to the client request. The terminal is managed by either
NEAT (National Exchange for Automated Trading) software or ODIN
(Open Dealers Integrated Network) software. The client can also place his
through written request or through the telephone, in this the order will be
place d by the dealer.

 Internet Trading:-
It is a facility provides by the company in order to trade the securities from
his convenient place like his office, home etc. the order will be placed by the
client itself, and he can make changes before the trade is done for changing
the price, cancellation of the order.

VII. Delivery and Depository Department:-

Delivery refers to the share that bought on particular day are not sold on that day
itself and holding of the share for an appreciation in the value of the security and to
trade it on a future MONTH. Deliver Instruction Slip: it is a slip the client should
fill and gave to the dealer regarding the purchase of the share.

VIII. Equity Research Department:-

The function of the department is to study the details regarding the share or
securities and to make prediction regarding the future performance of the
company. The following types of approaches done through this department:
i) Fundamental analysis ii) Technical analysis

DATA ANALYSIS AND INTREPRETATION

FII INFLOW INVESTMENT IN INDIA OVER 2010-2014
2014

MONTH GROSS GROSS SALES NET NET SALES

PURCHASE PURCHASES
JANUARY 65,566.26 66,832.14 -1,265.88 25,688.41
2014
FEBRUARY 51,761.74 50,341.84 1,419.90 20,369.86
2014
MARCH 2014 88,941.73 63,565.28 25,376.45 28,561.88
APRIL 2014 69,601.75 63,318.58 6,283.17 22,694.70
MAY 2014 109,809.08 98,006.27 11,802.81 35,633.49

40,000.00

30,000.00

20,000.00 NET PURCHASES

10,000.00 NET SALES

0.00
Jan/14 Feb/14 Mar/14 Apr/14 May/14
-10,000.00

Interpretation
From this chart it can be found that in the year 2014,both the net purchases and the net
sales the biggest fall month is January, and the highest point attain in the month of march
also.
2013

MONTH GROSS GROSS SALES NET NET SALES

PURCHASE PURCHASES
JAN 2013 74,013.68 54,815.80 19,197.88 23,690.75
FEB 2013 67,980.27 58,447.24 9,533.03 19,148.86
MARCH 2013 65,561.74 56,138.67 9,423.07 19,101.35
APRIL 2013 55,439.86 50,798.29 4,641.57 17,292.29
MAY 2013 70,499.57 56,033.67 14,465.90 19,423.80
JUNE 2013 54,317.73 65,743.14 -11,425.41 28,336.69
JULY 2013 61,815.09 62,229.57 -414.48 28,396.17
AUGUST 2013 70,692.60 78,163.07 -7,470.47 31,033.50

SEPT 2013 68,120.40 56,944.35 11,176.05 19,922.39

OCTOBER 60,286.13 42,730.57 17,555.56 17,529.64
2013
NOV 2013 52,448.11 45,491.74 6,956.37 15,067.67
DEC 2013 61,150.68 47,684.69 13,465.99 20,367.10

35,000.00
30,000.00
25,000.00
20,000.00
15,000.00
NET PURCHASES
10,000.00
NET SALES
5,000.00
0.00
Mar/13

Oct/13
Jan/13

Jun/13

Aug/13

Nov/13
Feb/13

Jul/13

Sep/13

Dec/13
Apr/13
May/13

-5,000.00
-10,000.00
-15,000.00
Interpretation:

In this chart there are more ups and downs in the year 2013 ,in case of net
purchases the biggest fall is in the month of june and august ,and it attain high
points in the month of october. In case net sales low point is found in the month of
november and high point is in the month of august.
2012

MONTH GROSS GROSS SALES NET NET SALES

PURCHASE PURCHASES
JAN 2012 52,903.37 43,434.23 9,469.14 20,327.33
FEB 2012 76,648.78 53,412.40 23,236.38 24,653.67

MAR 2012 63,999.11 57,472.38 6,526.73 21,594.97

APR 2012 37,723.69 39,387.05 -1,663.36 19,033.07

MAY 2012 46,301.71 49,057.97 -2,756.26 20,906.69

JUNE 2012 40,956.28 38,161.60 2,794.68 19,437.49

JULY 2012 47,179.02 41,276.07 5,902.95 19,252.18

AUG 2012 45,533.62 37,786.51 7,747.11 19,133.72

SEPT 2012 68,789.70 47,981.89 20,807.81 23,131.13

OCT 2012 52,306.07 43,863.14 8,442.93 19,653.76

NOV 2012 43,328.18 37,036.67 6,291.51 12,145.65

DEC 2012 58,290.81 43,924.32 14,366.49 19,385.77

30,000.00

25,000.00

20,000.00

15,000.00
NET PURCHASES
10,000.00 NET SALES

5,000.00

0.00
Mar/12

Jun/12

Aug/12

Oct/12
Jan/12

Nov/12
Feb/12

Jul/12

Sep/12

Dec/12
May/12
Apr/12

-5,000.00
Interpretation:

In this chart it is found that in the year 2012,the biggest fall in net purchases is in
the month of may and it gain high point in the month of september. In case of net
sales the lowest point is in the month of november and highest point is in the
month of february.

2011

MONTH GROSS GROSS SALES NET NET SALES

PURCHASE PURCHASES
JAN 2011 57,526.07 66,429.67 -8,903.60 29,176.33
FEB 2011 57,097.91 64,311.30 -7,213.39 27,598.55
MAR 2011 52,192.02 44,215.13 7,976.89 23,972.23
APR 2011 49,090.25 49,085.85 4.40 19,996.44
MAY 2011 53,777.46 57,482.83 -3,705.37 25,090.68
JUNE 2011 53,473.22 50,810.46 2,662.76 21,175.88
JULY 2011 50,802.29 46,520.79 4,281.50 25,153.30
AUG 2011 45,395.78 56,954.98 -11,559.20 28,430.65
SEPT 2011 50,283.64 53,372.51 -3,088.87 21,240.18
OCT 2011 44,233.02 42,390.55 1,842.47 19,216.41
NOV 2011 43,094.11 49,602.82 -6,508.71 25,235.59
DEC 2011 38,711.73 41,098.87 -2,387.14 18,900.48

35,000.00
30,000.00
25,000.00
20,000.00
15,000.00
NET PURCHASES
10,000.00
NET SALES
5,000.00
0.00
-5,000.00
-10,000.00
-15,000.00
Interpretation

In this year 2011,there are many ups and downs ,in case of net purchases the
biggest fall is in the month of august and high point is in the month of march ,in
case of net sales the highest point is in the month of august and lowest point is in
the month of october.
2010

MONTH GROSS GROSS SALES NET NET SALES

PURCHASE PURCHASES
JAN 2010 56,109.18 63,325.85 -7,216.67 39,004.29
FEB 2010 39,001.43 40,944.90 -1,943.47 21,547.80
MAR 2010 59,692.57 44,900.24 14,792.33 25,818.47
APR 2010 55,061.05 52,393.68 2,667.37 26,283.22
MAY 2010 49,588.04 61,659.16 -12,071.12 29,971.71
JUNE 2010 51,878.01 44,164.06 7,713.95 23,549.21
JULY 2010 52,571.21 44,030.15 8,541.06 24,776.03
AUG 2010 56,120.24 48,582.94 7,537.30 24,770.34
SEPT 2010 74,920.16 52,444.52 22,475.64 24,046.54
OCT 2010 77,706.10 63,318.04 14,388.06 28,069.00
NOV 2010 79,726.26 74,375.39 5,350.87 32,674.49
DEC 2010 52,683.49 53,405.68 -722.19 24,798.87

50,000.00

40,000.00

30,000.00

20,000.00 NET PURCHASES

10,000.00 NET SALES

0.00
Mar/10

Oct/10
Jan/10

Jun/10

Aug/10

Nov/10
Feb/10

Jul/10

Sep/10
May/10

Dec/10
Apr/10

-10,000.00

-20,000.00
Interpretation
In this year 2010, in case of net purchases the highest point is
in the month of September and lowest point is in the month of
may.in case of net sales lowest point is in the month of
February and highest point is in the month of January.
FII INFLOW AND OUTFLOW OVER THE PERIOD 2010- 2014
Year Net purchases Net sales

2010 5126.09 27109.16

2011 -2216.52 23765.56

2012 8430.509 19887.95

2013 6136.589 21609.18

2014 8723.29 26589.67

NET INFLOW
10000
8000
6000
4000
year
2000
Net purchases
0
-2000 1 2 3 4 5

-4000
year
Interpretation
From the above chart ,it can be found that there were many fluctuations
noticed in each year .The least point was found in the year 2011 .The
maximum point net inflow on 2014,it had net inflow of 8000 points.

NET OUTFLOW
10000
8000
6000
4000
year
2000
Net purchases
0
1 2 3 4 5
-2000
-4000
year

Interpretation
From the above chart ,The least point was found in the year 2011 .The
maximum point net outflow on 2014,it had net outflow of 8000 points.
FII INFLUENCE ON INDIAN STOCK MARKET OVER THE PERIOD 2010 -2014

SENSEX PERFORMANCE OVER THE YEARS

PERIOD: YEAR 2010 TO 2014

YEAR OPEN HIGH LOW CLOSE

2010 17,473.45 21,108.64 15,651.99 20,509.09

2011 20,621.61 20,664.80 15,135.86 15,454.92

2012 15,534.67 19,612.18 15,358.02 19,426.71

2013 19,513.45 21,483.74 17,448.71 21,170.68
2014 21,222.19 25,644.77 19,963.12 25,580.21

30000

25000

20000
Series1
Series2
15000
Series3
Series4
10000
Series5

5000

0
YEAR OPEN HIGH LOW CLOSE
Interpretation

From the table and chart, it can be found that the Sensex had high points at 2014(series 5) and
the lowest low at the year 2013(series 3).the changes in the value of Sensex depends on many
factors such as :

Macroeconomic factors:

 Global Market Trends

 Government Stability & Economic Growth

 Inflation

 Interest Rates

 Industry Growth

 Crude Oil Prices

 Exchange Rates

Microeconomics:

 Demand Supply

 Profitability

 Market Dynamics

 Shareholders Perspective
FII and HDFC trend analysis(yearwise from 2010 -2014)

HDFC BANK

HDFC Bank Limited is an Indian financial services company based in Mumbai,

Maharashtra. It was incorporated in 1994. HDFC Bank is the fifth largest bank in
India by assets. It is the largest bank in India by market capitalization as of 24
February 2014. As on Jan 2 2014, the market cap value of HDFC was around USD
26.88B, as compared to Credit Suisse Group with USD 47.63B. The bank was
promoted by the Housing Development Finance Corporation, a premier housing
finance company (set up in 1977) of India.

As of 31 March 2013, the bank had assets of INR 4.08 trillion. For the fiscal year
2012-13, the bank has reported net profit of INR 69 billion, up 31% from the
previous fiscal year. Its customer base stood at 28.7 million customers on 31 March
2013.

Products Credit cards, consumer

banking, corporate
banking,finance and
insurance,investment
banking, mortgage loans, private
banking, private equity, wealth
management
2010
MONTH Fii inflow Hdfc bank
Jan-10 -7,216.67 29,10,100
Feb-10 -1,943.47 35,53,400
Mar-10 14,792.33 52,83,700
Apr-10 2,667.37 32,97,200
May-10 -12,071.12 32,85,600
Jun-10 7,713.95 37,25,900
Jul-10 8,541.06 37,47,600
Aug-10 7,537.30 35,28,800
Sep-10 22,475.64 52,53,600
Oct-10 14,388.06 41,14,300
Nov-10 5,350.87 33,76,300
Dec-10 -722.19 41,81,500

6,000,000 25,000.00

20,000.00
5,000,000
15,000.00
4,000,000
10,000.00

3,000,000 5,000.00
Hdfc bank
0.00 Fii inflow
2,000,000
-5,000.00
1,000,000
-10,000.00

0 -15,000.00

mean 5126.094167 3854833.333

Std
deviation 9736.36476 747968.2496
correlation 0.773097311
Interpretation:

The above chart shows the trend of FII flows with the share price of HDFC bank for the
period January 2010- November 2010. It can be seen from above that both the trends lines
are moving together. Increase in FII flow causes an increase in the prices of hdfc stock and a
decrease in FII flow causes a short drop in the prices of hdfc bank.in this it shows that a
positive correlation between fii inflow and hdfc bank.

2011

MONTH Fii inflow Hdfc bank

Jan-11 -8,903.60 58,19,800
Feb-11 -7,213.39 45,89,200
Mar-11 7,976.89 49,66,800
Apr-11 4.4 44,73,700
May-11 -3,705.37 43,09,000
Jun-11 2,662.76 34,60,700
Jul-11 4,281.50 31,12,700
Aug-11 -11,559.20 34,99,500
Sep-11 -3,088.87 38,75,300
Oct-11 1,842.47 43,44,300
Nov-11 -6,508.71 37,66,600
Dec-11 -2,387.14 35,39,700
 7,000,000 10,000.00
6,000,000
5,000.00
5,000,000
4,000,000 0.00
3,000,000 -5,000.00 Hdfc bank
2,000,000 Fii inflow
-10,000.00
1,000,000
0 -15,000.00

Aug/11

Oct/11
Jan/11

Mar/11

Jun/11

Jul/11

Nov/11
Feb/11

Sep/11
May/11

Dec/11
Apr/11

Mean - 2216.521667 4146441.667

std dev 5797.697219 761884.7401
Correlation - 0.119384533

Interpretation

The above chart shows the trend of FII flows with the share price of HDFC bank for the
period January 2011- November 2011.in this , Increase in FII flow causes an decrease in the
prices of hdfc bank stock and a decrease in FII flow causes a short rise in the prices of hdfc
bank.in this it shows negative correlation between fii inflow and hdfc bank.

2012

MONTH Fii inflow Hdfc bank

Jan-12 9,469.14 25,85,600
Feb-12 23,236.38 38,54,800
Mar-12 6,526.73 27,56,500
Apr-12 -1,663.36 23,09,400
May-12 -2,756.26 30,60,100
Jun-12 2,794.68 30,95,600
Jul-12 5,902.95 24,80,300
Aug-12 7,747.11 23,72,200
Sep-12 20,807.81 29,08,300
Oct-12 8,442.93 20,51,800
Nov-12 6,291.51 21,78,400
Dec-12 14,366.49 23,13,500
4,500,000 25,000.00
4,000,000
20,000.00
3,500,000
3,000,000 15,000.00
2,500,000
10,000.00
2,000,000 Hdfc bank
1,500,000 5,000.00 Fii inflow
1,000,000
0.00
500,000
0 -5,000.00
Mar/12

Oct/12
Jan/12

Feb/12

Jun/12

Sep/12
Jul/12

Aug/12

Nov/12
May/12

Dec/12
Apr/12

mean 8430.509167 2663875

stddev 7877.320816 505752.73
correlation 0.381690855

Interpretation

The above chart shows the trend of FII flows with the share price of HDFC bank
for the period January 2012- November 2012. in this ,from january 12 to march 12
it shows increase in fii from 10000 to 25000 points and hdfc bank from 15000 to
20000 points , from march 12 to august 12 it shows sudden decrease in fii inflow
ie., falls from 20000 to 0 points ,it affects a slight increase in hdfc bank from
15000 to 10000 points.and from august 12 to september 12 fii increases from
10000 to 20000 and also hdfc rises from 10000 to 15000.from September 12 to
October 12 fii inflows decreases from 20000 to 10000 and also in hdfc it shows
slight drop from 15000 to 10000.it shows positive correlation between fii inflow
and hdfc bank.
2013

MONTH Fii inflow Hdfc bank

Jan-13 19,197.88 26,53,400
Feb-13 9,533.03 33,38,800
Mar-13 9,423.07 34,61,500
Apr-13 4,641.57 32,84,500
May-13 14,465.90 24,19,900
Jun-13 -11,425.41 33,14,500
Jul-13 -414.48 33,19,800
Aug-13 -7,470.47 61,21,300
Sep-13 11,176.05 46,28,900
Oct-13 17,555.56 30,19,800
Nov-13 6,956.37 26,50,100
Dec-13 13,465.99 32,16,600

7,000,000 25,000.00
6,000,000 20,000.00
5,000,000 15,000.00
10,000.00
4,000,000
5,000.00 Hdfc bank
3,000,000
0.00 Fii inflow
2,000,000 -5,000.00
1,000,000 -10,000.00
0 -15,000.00
Aug/13
Mar/13

Jun/13

Oct/13
Jan/13

Nov/13
Feb/13

Jul/13

Sep/13

Dec/13
May/13
Apr/13

mean 7258.755 3452425

std
deviation 9516.058728 1007961.207
Correlation - 0.507663254

Interpretation

The above chart shows the trend of FII flows with the share price of HDFC bank for the period
January 2013- November 2013 .in this , Increase in FII flow causes an decrease in the prices of
hdfc bank stock and a decrease in FII flow causes a rise in the prices of hdfc bank.it shows
negative correlation between fii inflow and hdfc bank.
2014

MONTH Fii inflow Hdfc bank

Jan-14 -1,265.88 23,67,400
Feb-14 1,419.90 12,97,400
Mar-14 25,376.45 26,31,000
Apr-14 6,283.17 18,78,900
May-14 11,802.81 32,46,100

3,500,000 30,000.00

3,000,000 25,000.00

2,500,000 20,000.00

2,000,000 15,000.00
Hdfc bank
1,500,000 10,000.00 Fii inflow

1,000,000 5,000.00

500,000 0.00

0 -5,000.00
Jan/14 Feb/14 Mar/14 Apr/14 May/14

mean 8723.29 2284160

std
deviation 10558.03473 740014.5965
correlation 0.515236382

Interpretation

The above chart shows the trend of FII flows with the share price of HDFC bank
for the period January 2014- November 2014.in this , Increase in FII flow causes a
slight increase in the prices of hdfc bank stock and a slight decrease in FII flow
causes a short rise in the prices of hdfc bank.it shows positive correlation between
hdfc bank and fii inflows

FII AND AMBUJA CEMENT STOCK PRICE INDICES TREND ANALYSIS

AMBUJA CEMENT

Ambuja Cements Ltd (ACL), a part of a global conglomerate Holcim, is one of

India’s leading cement manufacturers and has completed over 25 years of
operations. The company, initially called Gujarat Ambuja Cements Ltd, was
founded by Narotam Sekhsaria in 1983 in partnership with Suresh Neotia. Global
cement major Holcim acquired management control of Ambuja in 2006. The
Company has also made strategic investments in ACC Limited.

Products Cement
2010

MONTH Fii inflow Ambuja cement

Jan 2010 -7,216.67 48771125
Feb 2010 -1,943.47 37028589
Mar 2010 14,792.33 60592769
Apr 2010 2,667.37 40791849
May 2010 -12,071.12 54340587
June 2010 7,713.95 32233651
July 2010 8,541.06 38103631
Aug 2010 7,537.30 37918494
Sept 2010 22,475.64 56660426
Oct 2010 14,388.06 35501815
Nov 2010 5,350.87 48029546
Dec 2010 -722.19 26568160

70000000 25,000.00
60000000 20,000.00

50000000 15,000.00
10,000.00
40000000
5,000.00
30000000 Ambuja cement
0.00
20000000 Fii inflow
-5,000.00
10000000 -10,000.00
0 -15,000.00
Mar/10
Jan/10

Jun/10

Aug/10

Oct/10
Nov/10
Feb/10

Jul/10

Sep/10
May/10

Dec/10
Apr/10

mean 5126.094167 43045054

std
deviation 9736.36476 10513073
correlation 0.141560266

Interpretation

The above chart shows the trend of FII flows with the share price of ambuja
cement stock price indices for the period January 2010- November 2010.in this ,
Increase in FII flow causes a slight increase in the prices of ambuja cement stock
price and a decrease in FII flow causes a short rise in the prices of ambuja cement
stock indices .it shows positive correation between fii inflow and ambuja cement.it
shows positive correlation between fii inflows and ambuja cement.
2011

MONTH Fii inflow Ambuja cement

Jan 2011 -8,903.60 25460522
Feb 2011 -7,213.39 35517182
Mar 2011 7,976.89 55675979
Apr 2011 4.40 91099129
May 2011 -3,705.37 35148714
June 2011 2,662.76 35477494
July 2011 4,281.50 35766111
Aug 2011 -11,559.20 43686565
Sept 2011 -3,088.87 48640480
Oct 2011 1,842.47 39557093
Nov 2011 -6,508.71 44498345
Dec 2011 -2,387.14 39377519

100000000 10,000.00
90000000
80000000 5,000.00
70000000
60000000 0.00
50000000
40000000 -5,000.00 Ambuja cement
30000000 Fii inflow
20000000 -10,000.00
10000000
0 -15,000.00
Jan/11

Oct/11
Feb/11
Mar/11

Sep/11
Jun/11
Jul/11
Aug/11

Nov/11
May/11

Dec/11
Apr/11

Mean - 2216.521667 44158761

std
deviation 5797.697219 16656386
correlation 0.270717074

Interpretation

The above chart shows the trend of FII flows with the share price of ambuja
cement stock price indices for the period January 2011- November 2011.in this ,
Increase in FII flow causes a increase in the prices of ambuja cement stock price
and a decrease in FII flow causes a short rise in the prices of ambuja cement stock
indices .it shows positive correlation between fii inflow and ambuja cement.

2012

MONTH Fii inflow Ambuja cement

Jan 2012 9,469.14 40204327
Feb 2012 23,236.38 76069683
Mar 2012 6,526.73 47796196
Apr 2012 -1,663.36 37609945
May 2012 -2,756.26 48955008
June 2012 2,794.68 75688988
July 2012 5,902.95 51149431
Aug 2012 7,747.11 36293388
Sept 2012 20,807.81 67997166
Oct 2012 8,442.93 67997166
Nov 2012 6,291.51 28264098
Dec 2012 14,366.49 42539754

80000000 25,000.00
70000000 20,000.00
60000000
50000000 15,000.00
40000000 10,000.00
30000000 Ambuja cement
5,000.00
20000000 Fii inflow
10000000 0.00
0 -5,000.00
Mar/12

Jun/12

Aug/12

Oct/12
Jan/12

Nov/12
Feb/12

Jul/12

Sep/12
May/12

Dec/12
Apr/12

mean 8430.509 51713763

std
deviation 7877.321 16306215
correlation 0.427216
Interpretation

The above chart shows the trend of FII flows with the share price of ambuja
cement stock price indices for the period January 2012- November 2012.in this ,
Increase in FII flow causes a increase in the prices of ambuja cement stock price
and a decrease in FII flow causes an increase in the prices of ambuja cement stock
indices .it shows positive correlation between fii inflow and ambuja cement.
2013

MONTH Fii inflow Ambuja cement

Jan 2013 19,197.88 60523735
Feb 2013 9,533.03 52652134
Mar 2013 9,423.07 45469257
Apr 2013 4,641.57 36077753
May 2013 14,465.90 56101901
June 2013 -11,425.41 45083320
July 2013 -414.48 70016434
Aug 2013 -7,470.47 74692337
Sept 2013 11,176.05 42112161
Oct 2013 17,555.56 41760080
Nov 2013 6,956.37 27827757
Dec 2013 13,465.99 24976101

80000000 25,000.00
70000000 20,000.00
60000000 15,000.00
50000000 10,000.00
40000000 5,000.00
Ambuja cement
30000000 0.00
20000000 -5,000.00 Fii inflow

10000000 -10,000.00
0 -15,000.00
Mar/13

Jun/13

Aug/13

Oct/13
Jan/13

Nov/13
Feb/13

Jul/13

Sep/13
Apr/13

Dec/13
May/13

mean 7258.755 48107748

std
deviation 9516.058728 15400313
Correlation - 0.30241555

Interpretation

The above chart shows the trend of FII flows with the share price of ambuja
cement stock price indices for the period January 2013- November 2013.in this ,
decrease in FII flow causes a increase in the ambuja cement stock price and a
increase in FII flow causes a slight increase in the prices of ambuja cement stock
indices .it shows negative correlation between fii inflow and ambuja cement.

2014

MONTH Fii inflow Ambuja cement

Jan 2014 -1,265.88 27459614
Feb 2014 1,419.90 36719759
Mar 2014 25,376.45 35480709
Apr 2014 6,283.17 32472808
May 2014 11,802.81 55335394

60000000 30,000.00
50000000 25,000.00
40000000 20,000.00
15,000.00
30000000
10,000.00 Ambuja cement
20000000 5,000.00
Fii inflow
10000000 0.00
0 -5,000.00

mean 8723.29 37493657

std
deviation 10558.03473 10593269
correlation 0.311946163

Interpretation

The above chart shows the trend of FII flows with the share price of ambuja
cement stock price indices for the period January 2014- November 2014.in this ,
Increase in FII flow causes a slight increase in the prices of ambuja cement stock
price and a decrease in FII flow causes an increase in the prices of ambuja cement
stock indices .it shows positive correlation between fii inflow and ambuja cement.