RESEARCH PROJECT REPORT

ON

COMPARATIVE ANALYSIS OF STOCK BROKING HOUSES

Submitted to Dr. A.P.J. Abdul Kalam Technical University, Lucknow

for the fulfillment for the Degree of

MASTER OF BUSINESS ADMINISTRATION

Project Supervisor Submitted To:

Dr. ASHWANI VARSHNEY DR. SADANANDA

PRUSTY

Dean (Academics)

SUBMITTED BY:

PALLAVI BHARDWAJ
Roll no- 1811670078

1
 CERTIFICATE

This is to certify that “PALLAVI BHARDWAJ” a student of Master of Business

Administration, Batch (2018-20) of JAIPURIA INSTITUTE OF MANAGEMENT,
Roll No. 1811670078 has undertaken the Research Project Report under my
guidance for the Project Title “COMPARATIVE ANALYSIS OF STOCK
BROKING HOUSES”. This Project Report is prepared in fulfillment for the
Degree of Master of Business Administration by Dr A.P.J. Abdul Kalam Technical
University, Lucknow.

To the best of my knowledge, this research work is original and no part of this
report has been submitted by the student earlier to any other institution /
university.

2
 TABLE OF CONTENTS

Executive Summary 1

Introduction 3

Objective of Study 44

Scope of Study 45
Literature Review 47

Importance of the study 56

Research Methodology 57

Analysis of Data 61

Findings of Study 104

Recommendation 119

Conclusions 121

Limitations Of The Study 123

Suggestions 124
Bibliography 129

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 ACKNOWLEDGEMENT

I hereby take this opportunity to express my sincere gratitude to all those

who have helped me directly or indirectly while preparing my dissertation .
It is a great sense of satisfaction and wonderful experience during my
project and I have learned a lot while preparing the dissertation and it will
help me in enhancing my knowledge and skills.

First and foremost, I would like to thank DR. ASHWANI VARSHNEY (Faculty
Guide) for her valuable support and guidance during the progress of my
research report

Finally, I would like to express my sincere gratitude to all those who spent
their valuable time for providing the necessary data for completing this
research report.

4
 DECLARATION

The Research Project Report on “COMPARATIVE ANALYSIS OF STOCK

BROKING HOUSES “ has been undertaken as a fulfillment of the
requirement for the award of the degree of Master of Business
Administration from Dr. A.P.J. Abdul Kalam Technical University, Lucknow.

I hereby declare that this Research Project is my original work and the
analysis and findings are for academic purposes only. This project has not
been submitted by any student earlier to any other Institution/ University.

Date :

Name: PALLAVI BHARDWAJ

Roll No.1811670078

5
 EXECUTIVE SUMMARY

The project is being done to train the people about the whole procedure essential to open

an online trading account couple with demat account. The project will help in exploring

the area where there is the feasibility of acquiring more new investors. It would also help

in knowing the various competitors of the industry and exploring the areas through which

competitive advantage could be obtained. The project will also show which stock broker

is prefred by investors while investing their funds.

The report is divided into various sections.

1. About stockbroker & online trading:

This part describes about stockbroker and how brokers deal with customers and stock

exchanges and also define online trading with merit and demerit.

2. Company profiles:

This part describes the company profile. This part recognizes the achievements and

rewards the company has achieved, it also gives little insights into what company offers

to the corporate and the consumers. This section also describes the kind of technology

used.

3. About online trading account

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Since the project leads to opening of online trading account, this section gives the details

of what all services angel broking offers to the consumer.This section gives the detail of

how different services provided by the others online trading account and how is angel

broking superior from them.

4. Procedures and requirement for opening a trading cum demat account

This section gives the detail of the different conditions that have to be met for opening a

trading cum demat account. The section contains the document, which is required to open

an account.

5. Different competitors in online trading

This section gives the detail of the different competitors and different services provided

by them. Then we have compared there services with our services.

6.different formalities for opening demat account

This section throws some light over different document as well as hardware and software

requirement for opening of online trading cum demat account.

7. Learning about dematerialization

This section tells you about different concepts regarding dematerialization. How you can

get your security dematerialized? Growth rate of dematerialization etc.

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 INTRODUCTION

Industry Definition And Segmentation

The indian retail brokerage industry consists of companies that primarily act as agents for

the buying and selling of securities (e.g. Stocks, shares, and similar financial instruments)

on a commission or transaction fee basis.

Hence, to understand this industry we have to study security market:

Security Market

Which is the most televised structure in india?

A study has revealed that it is not the rastrapati bhawan or parliament house; it is not the

taj mahal; it is not even the abode of lord tirupati; it is the pheroze jeejeebhoy towers.

Which houses the oldest securities market participant in india, i.e. The stock exchange,

mumbai. This indicates our intimate relationship with the securities market. In today’s

rational world, it really means the immense contribution of the securities market to our

life and economy.

Which is the most reformed sector / segment / market in the indian economy?

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Which sector / segment / market of the economy has witnessed as much as nine special

legislative interventions during the last decade?

Which market / segment / sector acquired the first ever autonomous regulator (which in

course time became the model regulator) in india?

Which sector / segment / market of the economy consumes 3/4th space of the pink

newspapers everyday?

Which sector / segment / market of the economy most promptly reflects the feel good

factor?

The answer to all these questions is the securities market. It expresses the significance of

the securities market in our life.

Two years down the line, there are few questions to ask-which is the securities market

first to set up demutualised stock exchanges in the world?

Which is the securities market first to use satellite communication technology for

securities transactions?

Which is the securities market first to introduce the straight through processing in

securities transactions?

Which major securities market has implemented t+2 rolling settlement?

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Which is the largest market for stock futures?

Which securities market started real time on line position monitoring of brokers?

Which is the securities market where trading terminals go off automatically when the

margins are exhausted?

Probably answer to all of these is the indian securities market.

This has earned a place of respect amongst the comity of securities markets in the world.

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Segmentation Of Security Market :

It has two main interdependent segments: primary market and the secondary market.

The primary is that part of the capital markets that deals with the issuance of new

securities. Companies, governments or public sector institutions can obtain funding

through the sale of a new stock or bond issue. This is typically done through a syndicate

of securities dealers. The process of selling new issues to investors is called underwriting.

In the case of a new stock issue, this sale is an initial public offering (ipo). Dealers earn a

commission that is built into the price of the security offering, though it can be found in

the prospectus.

in primary market certain companies issue their shares directly to the public, collect

applications and after sorting out the good issues, they put in their applications. The share

brokers get their brokerage on the transactions made.

The secondary market is the financial market for trading of securities that have already

been issued in an initial private or public offering.

The secondary market comprises of brokerage that a broker earns in the buying and

selling of companies that are listed in the stock exchange. These people are in charge of

the conformation and carrying out of transactions. Orders are taken and deliveries are

made in the latter half of the day. The erratic fluctuation of rates in the share market

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makes the activity in a trade market a dynamic process. It is necessary for a broker to

have adequate knowledge about the economic and political factors as they affect the

share market.

Evolution Of The Retail Brokerage Market

A brief history :

1. Pre 1990

Though the historical records relating to securities market in india is meager and obscure,

there is evidence to indicate that the loan securities of the east indian company used to be

traded towards close of the 18th century. By 1830’s, the trading in shares of banks started.

The trader by the name of broker emerged in 1830 when 6 persons called themselves as

share brokers. This number grew gradually. Till 1850, they traded in shares of banks and

securities of the east india company in mumbai under a sprawling banyan tree in front of

the town hall, which is now in the horniman circle park. It is no surprise that the majestic

phiroze jeejeebhoy towers is located at the horniman circle. In 1850, the companies act

introducing limited liability was enacted heralding the era of modern joint stock company

which propelled trading volumes.

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The american civil war broke out in 1861 which cut off supply of cotton from the usa to

europe. This heightened the demand for cotton from india. Cotton prices increased.

Exports of cotton grew, payments were received in bullion. The great and sudden spurt in

wealth produced by cotton price propelled setting up companies for every conceivable

purpose. Between 1863 and 1865, the new ventures raised nearly rs.30 crore in the form

of paid up capital and nearly rs. 38 crore of the premia. Rarely was a share which did not

command a premium between 1861 and 1865. The back bay reclamation share with

rs.5,000 paid up was at rs.50,000 premium, the port canning share with rs. 1,000 paid up

was at rs.11,000 premium, etc. There was a share mania and every body was after a piece

of paper, variously called ‘allotments’, ‘scrips’ and ‘shares’. The people woke up only

when the american civil war ended.

Then all rushed to sell their securities but there were no buyers. They were left with huge

mass of unsaleable paper. This occurred then. This also occurs today at regular intervals.

There is, little seems to have changed since then; the bubbles and burst continue to be a

perennial feature of the securities market world over.

The depression was so severe that it paved way for setting up of a formal market. The

number of brokers, which had increased during the civil war to about 250, declined.

During the civil war, they had become so influential and powerful that even the police

had only salams for them. But after the end of the civil war, they were driven from pillar

to post by the police. They moved from place to place till 1874 when they found a

convenient place, which is now appropriately called dalal street after their name. They

organized an informal association on or about 9th july 1875 for protecting their interests.

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On 3rd december 1887, they established a stock exchange called ‘native share and stock

brokers’ association’.

This laid the foundation of the oldest stock exchange in india. The word ‘native’

indicated that only natives of india could be brokers of the exchange.

In 1880s a number textile mills came up in ahemdabad. This created a need for trading of

shares of these mills. In 1894, the brokers of ahemdabad formed "the ahemdabad share

and stock brokers' association".

The 1870s saw a boom in jute prices, 1880s and 1890s saw boom in tea prices, then

followed coal boom. When the booms ended, there were endless differences and disputes

among brokers in eastern india which was home to production of jute, tea and coal. This

provoked the establishment of "the calcutta stock exchange association" on june 15,

1908.

Then followed the proliferation of exchanges, many of them even do not exist today. The

rest is history.

2.fast forward to 1990s

In 1980s and 1990s, it was increasingly realized that an efficient and well developed

securities market is essential for sustained economic growth. Without venturing into a

detailed discussion, it would suffice if i just say that the securities market fosters

economic growth to the extent it augments the quantities of real savings and capital

formation from a given level of national income and it raises productivity of investment

by improving allocation of investible funds. The extent depends on the quality of the

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securities market. In order to improve the quality of the market, that is, to improve market

efficiency, enhance transparency, prevent unfair trade practices and bring the indian

market up to international standards, a package of reforms consisting of measures to

liberalize, regulate and develop the securities market is being implemented since early

1990s.

Legal developments :

Control of capital issues was introduced through the defence of india rules in 1943 under

the defence of india act, 1939 to channel resources to support the war effort. The control

was retained after the war with some modifications as a means of controlling the raising

of capital by companies and to ensure that national resources were channeled to serve the

goals and priorities of the government, and to protect the interests of investors. The

relevant provisions in the defence of india rules were replaced by the capital issues

(continuance of control) act in april 1947.

Though the stock exchanges were in operation, there was no legislation for their

regulation till the bombay securities contracts control act was enacted in 1925. This was,

however, deficient in many respects. Under the constitution which came into force on

january 26, 1950, stock exchanges and forward markets came under the exclusive

authority of the central government.following the recommendations of the a. D. Gorwala

committee in 1951, the securities contracts (regulation) act, 1956 was enacted to provide

for direct and indirect control of virtually all aspects of securities trading and the running

of stock exchanges and to prevent undesirable transactions in securities.

15
3. Post 2000

Gone are the days when you left orders with your broker, received conformations on the

price and quality of the shares at the end of the day and the payment made upfront or

received after delays. Your securities settlement took days to reflect in your account.

Internet has changed the way you do trading. The entire process is speedy with limited to

zero paper work. Nse launched internet trading in early february 2000. It is the first stock

exchange in the country to provide a web-based access to investors to trade directly on

the exchange.

The process : log on to the brokers site of your choice where you get real time quotes,

place a buy or sell order on the spot, and direct the site to debit the requisite amount. In

some time you get confirmation and after the trade settlement your bank and depository

account will reflect the changes which you can view anywhere, anytime. Online trading

has become seamless. All that you need is a pc, a modem, subscription to an internet

service provider (isp), a saving and a depository account with any bank providing online

trading facility. Along with stocks one can trade in mutual funds and investment

instruments. The advantage with online trading that you can operate in both bse and nse

depending on the broking firm.

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Nse introduced for the first time in india a fully automated screen based trading. It uses a

modern fully computerized trading system designed to offer investor across the length

and breadth of country a safe and easy way to invest. The nse trading system called

“national exchange for automated trading” (neat) is a fully automated screen-based

trading system which adopts the principle of an order driven market.

Stock exchanges and stock brokers

Bombay Stock Exchange

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Bombay stock exchange is the oldest stock exchange in asia with a rich heritage, now

spanning three centuries in its 133 years of existence. What is now popularly known as

bse was established as "the native share & stock brokers' association" in 1875.

Bse is the first stock exchange in the country which obtained permanent recognition (in

1956) from the government of india under the securities contracts (regulation) act 1956.

Bse's pivotal and pre-eminent role in the development of the indian capital market is

widely recognized. It migrated from the open outcry system to an online screen-based

order driven trading system in 1995. Earlier an association of persons (aop), bse is now a

corporatised and demutualised entity incorporated under the provisions of the companies

act, 1956, pursuant to the bse (corporatisation and demutualisation) scheme, 2005

notified by the securities and exchange board of india (sebi).

With demutualisation, bse has two of world's best exchanges, deutsche börse and

singapore exchange, as its strategic partners.

Today, bse is the world's number 1 exchange in terms of the number of listed companies

and the world's 5th in transaction numbers. The market capitalization as on december 31,

2007 stood at usd 1.79 trillion . An investor can choose from more than 4,700 listed

companies, which for easy reference, are classified into a, b, s, t and z groups.

The bse index, sensex, is india's first stock market index that enjoys an iconic stature ,

and is tracked worldwide. It is an index of 30 stocks representing 12 major sectors. The

sensex is constructed on a 'free-float' methodology, and is sensitive to market sentiments

18
and market realities. Apart from the sensex, bse offers 21 indices, including 12 sectoral

indices. Bse has entered into an index cooperation agreement with deutsche börse. This

agreement has made sensex and other bse indices available to investors in europe and

america.

The first exchange traded fund (etf) on sensex, called "spice" is listed on bse. It brings to

the investors a trading tool that can be easily used for the purposes of investment, trading,

hedging and arbitrage. Spice allows small investors to take a long-term view of the

market.

Bse provides an efficient and transparent market for trading in equity, debt instruments

and derivatives. It has a nation-wide reach with a presence in more than 359 cities and

towns of india. Bse has always been at par with the international standards. The systems

and processes are designed to safeguard market integrity and enhance transparency in

operations. Bse is the first exchange in india and the second in the world to obtain an iso

9001:2000 certification. It is also the first exchange in the country and second in the

world to receive information security management system standard bs 7799-2-2002

certification for its bse on-line trading system (bolt).

Bse continues to innovate. In recent times, it has become the first national level stock

exchange to launch its website in gujarati and hindi to reach out to a larger number of

investors.in 2006, bse launched the directors database and icers (indian corporate

electronic reporting system) to facilitate information flow and increase transparency in

the indian capital market.

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Bse also has a wide range of services to empower investors and facilitate smooth

transactions:

Investor services: the department of investor services redresses grievances of

investors. Bse was the first exchange in the country to provide an amount of rs.1

million towards the investor protection fund; it is an amount higher than that of any

exchange in the country. Bse launched a nationwide investor awareness programme-

'safe investing in the stock market' under which 264 programmes were held in more

than 200 cities.

The bse on-line trading (bolt): bse on-line trading (bolt) facilitates on-line screen

based trading in securities. Bolt is currently operating in 25,000 trader workstations

located across over 359 cities in india.

Bsewebx.com: in february 2001, bse introduced the world's first centralized

exchange-based internet trading system, bsewebx.com. This initiative enables

investors anywhere in the world to trade on the bse platform.

Surveillance: bse's on-line surveillance system (boss) monitors on a real-time basis

the price movements, volume positions and members' positions and real-time

measurement of default risk, market reconstruction and generation of cross market

alerts.

Bse training institute: bti imparts capital market training and certification, in

collaboration with reputed management institutes and universities. It offers over 40

20
 courses on various aspects of the capital market and financial sector. More than

20,000 people have attended the bti programmes

Awards

 The world council of corporate governance has awarded the golden peacock

global csr award for bse's initiatives in corporate social responsibility (csr).

 The annual reports and accounts of bse for the year ended march 31, 2006 and

march 31 2007 have been awarded the icai awards for excellence in financial

reporting.

 The human resource management at bse has won the asia - pacific hrm awards for

its efforts in employer branding through talent management at work, health

management at work and excellence in hr through technology

Drawing from its rich past and its equally robust performance in the recent times, bse will

continue to remain an icon in the indian capital market.

Website: www.bseindia.com

21
National Stock Exchange

The organisation

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The national stock exchange of india limited has genesis in the report of the high

powered study group on establishment of new stock exchanges, which recommended

promotion of a national stock exchange by financial institutions (fis) to provide access to

investors from all across the country on an equal footing. Based on the recommendations,

nse was promoted by leading financial institutions at the behest of the government of

india.

On its recognition as a stock exchange under the securities contracts (regulation) act,

1956 in april 1993, nse commenced operations in the wholesale debt market (wdm)

segment in june 1994. The capital market (equities) segment commenced operations in

november 1994 and operations in derivatives segment commenced in june 2000.

Facts & figures

At a glance:

Capital market (equities) segment

1 Settlement guarantee fund 31-mar-2009 Rs.4,843.50 crores

2 Investor protection fund 31-mar-2009 Rs.285.36 crores

3 Number of securities available for trading 30-jun-2009 1,643

4 Record number of trades 19-may-2009 11260392

5 Record daily turnover (quantity) 19-may-2009 19225.95 lakhs

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6 Record daily turnover (value) 19-may-2009 Rs.40151.91 crores

Rs.67,45,724
7 Record market capitalization 07-jan-2008
crores

8 Record value of s&p cnx nifty index 08-jan-2008 6357.1

9 Record value of cnx nifty junior index 04-jan-2008 13209.35

Clearing & settlement

1 Record pay-in/pay-out (rolling settlement):

Funds pay-in/pay-out (n2007200) 23-oct-2007* Rs.4,567.70 crores

Securities pay-in/pay-out (value) 21-may-

Rs.9,523.33 crores
(n2009088) 2009*

Securities pay-in/pay-out (quantity) 21-may-

4,385.75 lakhs
(n2009088) 2009*

*settlement date

Derivatives (f&o) segment

Rs.23,655.86
1 Settlement guarantee fund 31-mar-2009
crores

2 Investor protection fund 31-mar-2009 Rs.50.65 crores

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3 Record daily turnover (value) 18-oct-2007 Rs.110,563 crores

4 Record number of trades 07-jan-2009 1874697

Currency derivatives segment

1 Record daily turnover (value) 06-jul-2009 Rs.5,940.70 crores

2 Record number of trades 18-may-2009 36187

3 Record number of contracts 06-jul-2009 1228465

Wholesale debt segment

1 Number of securities available for trading 30-jun-2009 3,994

Rs. 13,911.57
2 Record daily turnover (value) 25-aug-2003
crores

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Our technology

Across the globe, developments in information, communication and network

technologies have created paradigm shifts in the securities market operations.

Technology has enabled organisations to build new sources of competitive advantage,

bring about innovations in products and services, and to provide for new business

opportunities. Stock exchanges all over the world have realised the potential of it and

have moved over to electronic trading systems, which are cheaper, have wider reach and

provide a better mechanism for trade and post trade execution.

Nse milestones

November 1992 Incorporation

April 1993 Recognition as a stock exchange

May 1993 Formulation of business plan

June 1994 wholesale debt market segment goes live

November 1994 capital market (equities) segment goes live

March 1995 Establishment of investor grievance cell

April 1995 Establishment of nsccl, the first clearing corporation

June 1995 Introduction of centralised insurance cover for all trading members

July 1995 Establishment of investor protection fund

October 1995 Became largest stock exchange in the country

April 1996 Commencement of clearing and settlement by nsccl

April 1996 Launch of s&p cnx nifty

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June 1996 Establishment of settlement guarantee fund

November 1996 Setting up of national securities depository limited, first depository

in india, co-promoted by nse

November 1996 Best it usage award by computer society of india

December 1996 Commencement of trading/settlement in dematerialised securities

December 1996 Dataquest award for top it user

December 1996 Launch of cnx nifty junior

February 1997 Regional clearing facility goes live

November 1997 Best it usage award by computer society of india

May 1998 Promotion of joint venture, india index services & products limited

(iisl)

May 1998 Launch of nse's web-site: www.nse.co.in

July 1998 Launch of nse's certification programme in financial market

August 1998 Cyber corporate of the year 1998 award

February 1999 Launch of automated lending and borrowing mechanism

April 1999 Chip web award by chip magazine

October 1999 Setting up of nse.it

January 2000 Launch of nse research initiative

February 2000 Commencement of internet trading

June 2000 Commencement of derivatives trading (index futures)

September 2000 Launch of 'zero coupon yield curve'

November 2000 Launch of broker plaza by dotex international, a joint venture

between nse.it ltd. And i-flex solutions ltd.

December 2000 Commencement of wap trading

June 2001 Commencement of trading in index options

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July 2001 Commencement of trading in options on individual securities

November 2001 Commencement of trading in futures on individual securities

December 2001 Launch of nse var for government securities

January 2002 Launch of exchange traded funds (etfs)

October 2002 Launch of nse government securities index

January 2003 Commencement of trading in retail debt market

June 2003 Launch of interest rate futures

August 2003 Launch of futures & options in cnxit index

June 2004 launch of stp interoperability

August 2004 launch of nse’s electronic interface for listed companies

March 2005 ‘india innovation award’ by empi business school, new delhi

June 2005 Launch of futures & options in bank nifty index

December 2006 'derivative exchange of the year', by asia risk magazine

January 2007 launch of nse – cnbc tv 18 media centre

March 2007 nse, crisil announce launch of indiabondwatch.com

June 2007 nse launches derivatives on nifty junior & cnx 100

October 2007 nse launches derivatives on nifty midcap 50

January 2008 introduction of mini nifty derivative contracts on 1st january 2008

March 2008 introduction of long term option contracts on s&p cnx nifty index

April 2008 Launch of india vix

April 2008 launch of securities lending & borrowing scheme

August 2008 launch of currency derivatives

28
Stock Brokers

A stockbroker is a person who buys and sells stocks on behalf of another person (or

company). Stockbrokers also sometimes or exclusively trade on their own behalf, as a

principal, speculating that a share or other financial instrument will increase or decline in

29
price. In such cases the term broker makes little sense and the individuals or firms trading

in a principal capacity sometimes call themselves dealers, stock traders or simply traders.

In the us: when acting as an agent, the stockbroker typically charges the client a flat fee

and/or a percentage-based commission for undertaking the trade, and the price quoted the

client must be the best price available in the market. When acting as a principal, the trade

could be with another market participant or one of the stockbroker's clients.

When trading in a principal capacity with a client, the broker informs the client and

charges the client a markup or markdown from the prevailing market price.

In the uk: when acting as an agent, the stockbroker charges the client a flat fee and/or a

percentage-based commission for undertaking the trade, and the price quoted the client

must be the best price available in the market. When acting as a principal, the trade could

be with another market participant or one of the stockbroker's clients. When trading in a

principal capacity with a client, the broker is obliged to inform the client and no

commission is charged.

Roles similar to that of a stock broker include investment advisor, financial advisor, and

probably many others. A stockbroker may or may not be also an investment advisor.

Similarly, investment advisor may or may not be a stockbroker.

The certified financial planner designation initially offered by the american college in

pennsylvania is considered by many to be the next educational step a stock broker can

take in order to be consider a legitimate and ethical financial consultant.

30
The stock market will have either one or a number of stock exchanges.

In india, the most famous are the bombay stock exchange and the national stock

exchange.

Then there are regional exchanges like the ahmedabad stock exchange, calcutta stock

exchange and the cochin stock exchange.

The two most prominent ones are the bse and nse. Together, they account for most of the

stock trades in the country. This means that if they catch a cold, exchanges all over the

country will sneeze

People like you and me just cannot go to a stock exchange and buy and sell shares. If we

want to do so, we have to get in touch with someone who is a member of the stock

exchange. This means we need to talk to a stockbroker.

Stockbrokers buy and sell shares for themselves to make a profit. They also buy and sell

shares on behalf of people like you and me and take a commission for doing so (more on

this on another day).

Every stockbroker has to be registered with the securities and exchange board of india,

which is the stock market regulator. Sebi's main function is to make sure those who

invest in the stock market follow the rules and no scams take place. It is supposed to act

as a watchdog on behalf of the investors.

Readers from mumbai may have seen the imposing stock exchange building called

jeejeebhoy towers. That's the home of the bse.

31
But you would be disappointed if you think you can step inside the building and watch

the market excitement firsthand as brokers frenziedly trade stocks. That's because all

stock markets in india are now electronic.

Brokers have bse computer terminals in their offices, from which they trade. They also

have bse terminals in other cities and don't have to be physically present in mumbai to

trade on the bse. This means that even if you stay outside mumbai, you can contact a bse

broker and buy or sell stocks on the bse.

Years ago, the bse was a place where brokers physically bought and sold stocks and

shares through a system known as 'open outcry'. As a result, the market then resembled

a fish or vegetable market.

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Recent Developments

Online Trading

Online trading is a service offered on the internet for purchase and sale of shares. In the

real world, you place orders on your stockbroker either verbally (personally or

telephonically) or in a written form (fax). In online trading, you will access stockbroker's

website through your internet-enabled pc and place orders through the broker's internet-

based trading engine. These orders are routed to the stock exchange without manual

intervention and executed thereon in a matter of a few seconds. .

There are 2 types of online trading service: discount brokers and full service online

broker. Discount online brokers allow you to trade via internet at reduced rates. Some

provide quality research, other don't. Full service online brokerage is linked to existing

brokerages. These brokers allow their clients to place online orders with the option of

talking/ chatting to brokers if advice is needed. Brokerage rates here are higher,

5paisa.com, icici direct.com, indiabulls.com, religare.in, geojitsecurities.com,

hdfcsec.com, tatatdw.com, kotakstreet.com are some of the online broking sites in india

but in angel broking ltd. Charged very less brokerage charge comparison to the other

broking company.

The various transactions involved in online trading can be shown from the point of view

of the

33
  Client

 Broker

 Stock exchange

The client places an order via the net by logging on to his broker’s site. The broker

accepts and executes the order, and places it with the exchanges. The exchange accepts

the order after checking the share limit for the day.the brokers makes the payment either

directly via the client’s bank account or pays through his own account and recovers it

later from the client.the exchange receives money and completes the settlement.the client

is intimated about the settlement either through the demat account or via e-mail.

34
Benefits Of Online Trading

This mode of trading has shifted the trading power from stockbrokers to individual

investors. The advantages are that it:

1. Ensures the best price for investors

This technique offers the best price for the buying and selling transactions of the

investors, by ensuring proper matching of their orders within the communication network

itself. Also due to the high level of transparency with regard to display of information

relating to the specific stocks and company profiles ,the investors will be able to get the

best quote for the shares. This leads to a reduction in the transaction cost for the

investors.

2. Offers liquidity to the investors

Online trading offers 24-hour trading facilities. Or trading for longer hours when

compared to the traditional stock exchanges. This provides added liquidity to the

investors.

3. Offers greater transparency

Online trading gives greater transparency to the investors by providing them an audit

trail. This involves a complete integrated electronic chain starting from order placement,

to clearing and settlement and finally ending with a credit to the depository account of the

investor. All these stages are subject to inspection, thus bringing in transparency into the

system.

35
4. Enables hassle free trading

Online trading integrates the bank, the brokerage and the demat accounts, which leads to

easy and paperless trading for the client.

5. Allows quick trading

The investor will be able to execute the entire trading transaction, right from logging on

to the broker's site, to the execution and settlement of his bank account, in a very short

period of time.

6. Provides a level playing field

Trading on the net, gives even the smallest retail investor access to information that

earlier was available only to the big traders. This provides a level playing field for

investors in the securities market.

7. Reduces the settlement risk

This method of trading reduces the settlement risk for the investor, as in this case no short

sale is possible. That is .the seller will not be able to sell the securities unless he has their

actual possession. In the case of a demat account (required for an online transaction),

when a seller wants to sell the securities, his demat account is checked by the depository

participant before executing the sale transaction. This reduces the settlement risk for the

buyer, who is assured of the delivery of the securities.

36
Hurdles For Online Share Trading

1. Internet fraud

In india, we see this kind of frauds happening in different way due to nature of our

society. Here when you talk to broker's staff while buying or selling, he will usually

advise you to buy share which he has bought and plans to dump when price goes up.

We have seen enough of pump and dump even without help of internet in cases of

harshad mehta boom of 1992 and ketan parekh boom of 2000 (he even had cult following

with index of 10 shares called k-10).

Today lot of investor’s depending on tv channel for recommendation about stocks to sell,

or buy or hold. Channels like cnbs offer array of experts from economist to brokers to

analyst. Most of these people have vested interest in stocks they recommend and

promote.

One of the most common forms of securities fraud on the internet involves an imposter

who attempts to manipulate the price of a stock by disseminating phony press releases or

information, or creating phony websites. A recent example of this scheme is the hoax

perpetrated against us based, pair gain technologies.

37
2. Volatility of india’s stock markets

Recent market developments have once more focused attention on the volatility that has

come to characterise india’s stock markets.

Volatility in indian securities market mainly come ,when there is buying or selling either

by fii or dii. Heavy buying & selling give the circumstances of upper circuit or lower

circuit in the market.other condition will be market happenings,market sentiments,pest

factor,world market performance & many other reasons.

In sum, the sudden fii interest in indian markets in the last two years account for the two

bouts of medium-term buoyancy that the sensex recently displayed.

Given the presence of foreign institutional investors in sensex companies and their active

trading behaviour, their role in determining share price movements must be considerable.

Indian stock markets are known to be narrow and shallow in the sense that there are few

companies whose shares are actively traded. Thus, although there are more than 4700

companies listed on the stock exchange, the bse sensex incorporates just 30 companies,

trading in whose shares is seen as indicative of market activity. This shallowness would

also mean that the effects of fii activity would be exaggerated by the influence their

behaviour has on other retail investors, who, in herd-like fashion tend to follow the fiis

when making their investment decisions.

38
3. Rampant speculation

The indian stock markets are perhaps the only place in the world where you can buy

shares without having to put money on the table and sell shares you do not own. This

extraordinary situation has facilitated rampant speculation by all sorts of operators – the

indigenous variety, fiis and even our own native financial institutions (fis) as the massive

uti scandal of recent years has demonstrated. So, when the stock markets were made to

collapse by a record 800-plus points on may 17 under the pretext that the left is opposed

to divestment, the profits reaped by short sellers were astronomical and incalculable.

Could this situation have been avoided? As aforesaid, the answer is yes. The electronic

monitoring system in both the bombay stock exchange and the bigger national stock

exchange automatically stopped trading for half-an-hour when the two markets

respectively collapsed by 10 percentage points. Thereafter when trading resumed and the

markets fell further to another stipulated lower level, the electronic system automatically

stopped all trading again for another two hours.

A similar situation had occurred on tuesday, september 11, 2001, the day of the terrorist

attacks in new york city. At the end of the day the stock exchange authorities of both the

new york stock exchange and the heavily-weighted software exchange called nasdaq

suspended all trading for the remainder three working days during that fateful week to

safeguard investor interests.

In current date worst market crash due to failure of various financial institutions in

u.s($750 billion bailout) which lead to the situation of global meltdown.also have

39
significant effect in indian securities market.as a result market show downtrend of more

than 65% from it’s bullish phase & finally took market towards bearish phase.

Growing derivative market

One look at the accompanying derivatives ‘report card’ and you will probably conclude

that these instruments are a roaring success in india. Six years after its debut, the

derivatives market is flourishing, riding largely on the ongoing bull run. It has filled the

void left by the old badla system of trading, increasing the liquidity in the underlying

cash market and providing both traders and investors with new opportunities. But that is

only one part of the story. Dig beneath all the optimism and you will find that the

derivatives market is in desperate need for more products, more initiatives and a lot more

innovation.

Are markets mature enough?

Individual stock futures were launched in november 2001. Since then, not a single

product has been introduced in the equity derivatives space. This has left market

participants crying for more.” There is a need for long-dated options — which could have

an expiry date 1-3 years in the future — as there is a high cost involved with rolling-over

40
one-month futures,” says sanjeev shah, executive director, benchmark amc. There is also

need for a roll-market that simplifies the rollover process, feels c.k. narayan, vice–

president, icici securities.

Further, most of the trading happens in the near-month series (contracts that expire in the

same month as the day of trade), stock options are very illiquid, and india’s ranking is

relatively low among world exchanges in value terms, even though the volumes are

high.

But the high volumes needn’t necessarily mean that the markets are mature. Much of the

volume comes from arbitrage, where traders merely exploit risk-less spreads. Only 20 per

cent of the trades take a directional view on the market estimates narayan.

Near-month contracts are more liquid than the rest, the world over. But in india’s case,

the disparity is rather extreme. On a typical trading day in the middle of the month, about

98 per cent of the turnover comes from near-month contracts, while less than 0.5 per cent

comes from the far-month series. Of the 124 symbols available for futures trading, far-

month contracts of only about 10 per cent are traded. The concentration of volumes in the

near-month series means that this is a speculator’s market, points out susan thomas,

Assistant professor, indira gandhi institute of development research (igidr). (she had

earlier worked on the project that led to the construction of nse’s nifty index.) In 2005,

non-institutional trade accounted for over 93 per cent of total trade in the derivatives

segment, much higher than their 83 per cent share in the cash market.

41
Despite its strong growth in the last six years, nse has lagged behind global peers in value

terms. The korea stock exchange — the country’s financial reforms began in the early

1990s along with india’s — is 32 times the size of nse (across all segments). Nse ranks

no. 1 in the world in the stock futures segment, but that’s only because the top exchanges

do not trade that product. In index futures, nse ranked 15th with a turnover of $38.7

billion in september. But this is less than 1 per cent of chicago mercantile exchange’s

(cme) turnover of $4,431 billion.

The futures market — accounting for 87 per cent — has been the main growth driver of

the indian derivatives market. But stock options are pathetically illiquid, accounting for

just 3 per cent of total turnover. On the positive side, the share of index derivatives has

steadily increased to 44 per cent from about 11 per cent four years ago. That’s close to

global norms of about 60 per cent, implying that some amount of hedging, not mere

speculation is being done.

42
Fall in brokerage rates:

Depository participants (dps) impose various charges on the institutional as well as on

individual clients under various heads for providing services. The services available in

dematerialized environment that are extended to the clients are as follows:

 Dematerialization

 Rematerialization

 Custodial services

 Debit or credit facility

 Hypothecation

 Speed-e along with smart card

 Corporate benefits like bonus, stock split, dividend payment, etc.

This is an illustrative list of services available. The system of charging a fee for the

services extended to an investor is in two-layers. The depository charges the dps and dps

in turn collect fee/charges from the investor. Each dp uses different norms to classify

charges depending on the extent of services rendered.

Nsdl has a provision for collecting a one-time fee of 0.05 percent of market capitalization

of the company, as custody fees for life. For these companies, no custody charge is

supposed to be charged from the investors for life. However, it is not clear whether dps

43
are passing this benefit to investors.since 2-3 years with changing trends of industry and

increased competition, broking houses reduce brokerage rates to very much extent.

Advanced technology:

The growth in technology and communications has impacted every aspect of business in

some or the other form. These effects are enduring and have changed the very way in

which business is carried out.

The stock market is one such institution whose very existence has been challenged by the

growth in information technology. It has turned the very idea of a stock market on its

head.technology has impacted the working of stock markets in every sense. However, a

useful starting point for this study would be the study of dematerialization, or demat as it

is popularly known as. This is simply because demat has changed the way stocks are held

and traded and therefore has effect on every other function of the market.

Dematerialization in simple terms means the conversion of shares from physical to

electronic form.

Demat, enabled by the use of technology is probably is single most important factor

which has repercussions on every aspect of the stock markets.demat in india started with

the creation of nsdl (national stock depository limited) in 1996. Uti, was one of the first

institutions to use demat when it decided to dematerialize 50% of its holdings in 1997.

Sebi gave a boost to demat, with compulsory trading on shares in demat form in specified

scripts by institutional investors from jan 15, 1998.

44
Market size : growth of online brokerage market

In five years of its existence in india, online broking has grown to account for a tenth of

the total trading volumes. If the numbers are considered for only the retail segments, the

growth is starker. Almost half of the rs 5,000 crore-6,000 crore daily market volumes on

the nse are accounted for by non-retail entities such as foreign institutional investors,

domestic institutions, mutual funds and arbitrage traders. Institutions aren't online

customers anyway. Of the rest of the retail segment, current estimates suggest that online

broking's reach is close to 30 per cent.

As of september this year, there were 11.7 lakh internet trading accounts registered with

the nse, of which roughly 9.5 lakh are unique users. It's still a small proportion of the

estimated 3 crore internet users in the country. As more surfers take to trading online,

analysts expect their number to keep doubling every year until 30-40 per cent of india's

overall trades are done online, as is the case in some mature internet markets like south

korea's.

The market has grown in scope and scale in a way that could not have been imagined at

The time. Average daily trading volumes have jumped from rs. 17 crore in 1994-95 when

Nse started its cash market segment to rs.11,325 crore in 2008-09. Similarly, market

Capitalization of listed indian firms went up from rs.363,350 crore at the end of march

1995 to rs.2,896,194 crore at end march 2009. Indian equity markets are today among

45
The most deep and vibrant markets in the world.

Nse’s growth story can be depicted by these figures :

Trading value

Segment/year 2005-06 2006-07 2007-08 2008-09

Cm 1,569,558 1,945,287 3,551,038 2,752,023

F&o 4,824,250 7,356,271 13,090,478 11,010,482

Cds _ _ _ 162,272

Wdm 475,523 219,106 282,317 335,952

Total 6,869,332 9,520,664 16,923,833 14,260,729

Source-factbook 2009,nse

OBJECTIVE OF PROJECT

46
Primary Objectives

 To study the competitive analysis of stock broking houses.

 The increasing competition among various stock broking companies.

Secondary Objectives

 To study the working and dynamics of financial equity market and the way it is

used as an investment tool by customers in the stock market.

 Evaluate the various investment opportunities for investors.

 The perception held by investors about the various financial stock broking

companies.

 Give recommendation either to retain or to modify the existing target in order to

maintain position

 To create awareness among investors about investment as well as trading.

 To know level of satisfaction of investors who have already invested.

SCOPE OF THE STUDY

A stock broker is an agent who represents clients to buy or sell stocks and other

securities. The term is applied to both companies that deal in securities and their

47
employees, who technically are registered representatives working for the brokerage. To

most investors, however, the broker is the person they call when they want to invest in or

trade stocks. Most individual brokers work in offices far removed from the stock trading

floors.

When you plan to start investing in a stock market, the first thing you have to do is to

choose a stock broker. It is just like choosing a car you think is most suitable for you.

You can thoroughly research the whole market in order to find the best car for you but

require a medium or a venue to execute the actual transaction. The same strategy is

needed when you want to buy stock in a stock market. You can select a company to

invest in by conducting detailed research about its future prospects but you still need to

have a broker to make the final transaction and purchase its stock from the stock

market. So we can say that stock brokers has vital scope in the stock market and with the

study investors will come to know following things regarding investment in stock market.

 Knowledge about various stock brokers.

 Different facilities provide by various stock holders.

 Formalities to be complied in stock market according to SEBI.

 Which broker is providing best deal.

 Correct information on the basis of research done by these brokers.

 Different services provided by different stock brokers.

48
The role stock brokers have evolved in a big way over the last few years. Now brokers

are not just here to buy or sell stocks on behalf of their clients. They play a bigger role in

helping an investor wade through whole investment process; providing research based

advice on stocks to helping client to invest in alternative assets; and subscribing to IPOs

and mutual funds schemes.

LITERATURE REVIEW

49
Gupta (1972) in his book has studied the working of stock exchanges in india and has

given a number of suggestions to improve its working. The study highlights the' need to

regulate the volume of speculation so as to serve the needs of liquidity and price

continuity. It suggests the enlistment of corporate securities in more than one stock

exchange at the same time to improve liquidity. The study also wishes the cost of issues

to be low, in order to protect small investors

Panda (1980) has studied the role of stock exchanges in india before and after

independence. The study reveals that listed stocks covered four-fifths of the joint stock

sector companies. Investment in securities was no longer the monopoly of any particular

class or of a small group of people. It attracted the attention of a large number of small

and middle class individuals. It was observed that a large proportion of savings went in

the first instance into purchase of securities already issued.

Gupta (1981) in an extensive study titled `return on new equity issues' states that the

investment performance of new issues of equity shares, especially those of new

companies, deserves separate analysis. The factor significantly influencing the rate of

return on new issues to the original buyers is the `fixed price' at which they are issued.

The return on equities includes dividends and capital appreciation. This study presents

sound estimates of rates of return on equities, and examines the variability of such returns

over time.

Jawahar lal (1992) presents a profile of indian investors and evaluates their investment

decisions. He made an effort to study their familiarity with, and comprehension of

financial information, and the extent to which this is put to use. The information that the

50
companies provide generally fails to meet the needs of a variety of individual investors

and there is a general impression that the company's annual report and other statements

are not well received by them. .c.gupta (1992) revealed the findings of his study that there

is existence of wild speculation in the indian stock market. The over speculative character

of the indian stock market is reflected in extremely high concentration of the market

activity in a handful of shares to the neglect of the remaining shares and absolutely high

trading velocities of the speculative counters. He opined that, short- term speculation, if

excessive, could lead to "artificial price". An artificial price is one which is not justified

by prospective earnings, dividends, financial strength and assets or which is brought

about by speculators through rumours, manipulations, etc. He concluded that such

artificial prices are bound to crash sometime or other as history has repeated and proved.

Nabhi kumar jain (1992) specified certain tips for buying shares for holding and also for

selling shares. He advised the investors to buy shares of a growing company of a growing

industry. Buy shares by diversifying in a number of growth companies operating in a

different but equally fast growing sector of the economy. He suggested selling the shares

the moment company has or almost reached the peak of its growth. Also, sell the shares

the moment you realise you have made a mistake in the initial selection of the shares. The

only option to decide when to buy and sell high priced shares is to identify the individual

merit or demerit of each of the shares in the portfolio and arrive at a decision.

Pyare lal singh (1993) in the study titled, indian capital market - a functional analysis,

depicts the primary market as a perennial source of supply of funds. It mobilises the

savings from the different sectors of the economy like households, public and private

51
corporate sectors. The number of investors increased from 20 lakhs in 1980 to 150 lakhs

in 1990 (7. 5 times). In financing of the project costs of the companies with different

sources of financing, the contribution of the securities has risen from 35.01% in 1981 to

52.94% in 1989. In the total volume of the securities issued, the contribution of

debentures / bonds in recent years has increased significantly from 16. 21% to 30.14%.

Sunil damodar (1993) evaluated the 'derivatives' especially the 'futures' as a tool for

short-term risk control. He opined that derivatives have become an indispensable tool for

finance managers whose prime objective is to manage or reduce the risk inherent in their

portfolios. He disclosed that the over-riding feature of 'financial futures' in risk

management is that these instruments tend to be most valuable when risk control is

needed for a short- term, i.e., for a year or less. They tend to be cheapest and easily

available for protecting against or benefiting from short term price. Their low execution

costs also make them very suitable for frequent and short term trading to manage risk,

more effectively.

R.venkataramani (l994) disclosed the uses and dangers of derivatives. The derivative

products can lead us to a dangerous position if its full implications are not clearly

understood. Being off balance sheet in nature, more and more derivative products are

traded than the cash market products and they suffer heavily due to their sensitive nature.

He brought to the notice of the investors the 'over the counter product' (otc) which are

traded across the counters of a bank. Otc products (e.g. Options and futures) are tailor

made for the particular need of a customer and serve as a perfect hedge. He emphasised

the use of futures as an instrument of hedge, for it is of low cost.

52
Trans asian research journals http://www.tarj.in

A publication of trans asian research journals

Tajmmr trans asian journal of marketing & management research vol.2 issue 7, july

2013, issn 2279-0667

Amanulla & kamaiah (1995) conducted a study to examine the indian stock market

efficiency by using ravallion co integration and error correction market integration

approaches. The data used are the rbi monthly aggregate share indices relating five

regional stock exchanges in india, viz bombay, calcutta, madras, delhi, ahmedabad during

1980-1983. According to the authors, the co integration results exhibited a long-run

equilibrium relation between the price indices of five stock exchanges and error

correction models indicated short run deviation between the five regional stock

exchanges. The study found that there is no evidence in favour of market efficiency of

bombay, madras, and calcutta stock exchanges while contrary evidence is found in case

of delhi and ahmedabad.

Pattabhi ram.v. (1995) emphasised the need for doing fundamental analysis and doing

equity research (er) before selecting shares for investment. He opined that the investor

should look for value with a margin of safety in relation to price. The margin of safety is

the gap between price and value. He revealed that the indian stock market is an inefficient

market because of the absence of good communication network, rampant price rigging,

and the absence of free and instantaneous flow of information, professional broking and

so on. He concluded that in such inefficient market, equity research will produce better

53
results as there will be frequent mismatch between price and value that provides

opportunities to the long-term value oriented investor. He added that in the indian stock

market investment returns would improve only through quality equity research.

Karajazyk (1995) investigated one measure of financial integration between equity

markets. He used a multifactor equilibrium arbitrage pricing theory to define risk and to

measure deviations from the “law of one price”. He applied the integration measure to

equities traded in 24 countries (four developed and 20 emerging). He found that the

measure of market segmentation tends to be much larger for emerging markets than for

developed markets, which flows into or out of the emerging markets. The measure tends

to decrease over time, which is consistent with growing levels of integration. Large

values of adjusted mis-pricing occur around periods in which capital controls change

significantly. Finally, he found asymmetric integration relationship; stock markets of

developed nations are more integrated than those of emerging nations.

Debjit chakraborty (1997) in his study attempts to establish a relationship between major

economic indicators and stock market behaviour. It also analyses the stock market

reactions to changes in the economic climate. The factors considered are inflation, money

supply, and growth in gdp, fiscal deficit and credit deposit ratio. To find the trend in the

stock markets, the bse national index of equity prices (natex) which comprises 100

companies was taken as the index. The study shows that stock market movements are

largely influenced by, broad money supply, inflation, c/d ratio and fiscal deficit apart

from political stability.

54
Redel (1997) concentrated on the capital market integration in developing asia during the

period 1970 to 1994 taking into variables such as net capital flows, fdi, portfolio equity

flows and bond flows. He observed that capital market integration in asian developing

countries in the 1990‟s was a consequence of broad-based economic reforms, especially

in the trade and financial sectors, which is the critical reason for economic crises which

followed the increased capital market integration in the 1970s in many countries will not

be repeated in the 1990s. He concluded that deepening and strengthening the process of

economic liberalization in the asian developing countries is essential for minimizing the

risks and maximizing the benefits from increased international capital market integration.

Avijit banerjee (1998) reviewed fundamental analysis and technical analysis to analyse

the worthiness of the individual securities needed to be acquired for portfolio

construction. The fundamental analysis aims to compare the intrinsic value (i.v.) with the

prevailing market price (m.p) and to take decisions whether to buy, sell or hold the

investments. The fundamentals of the economy, industry and company determine the

value of a security. If the 1.v is greater than the m.p., the stock is under priced and should

be purchased. He observed that the fundamental analysis could never forecast the m.p. of

a stock at any particular point of time. Technical analysis removes this weakness.

Technical analysis detects the most appropriate time to buy or sell the stock. It aims to

avoid the pitfalls of wrong timing in the investment decisions. He also stated that the

modern portfolio literature suggests 'beta' value p as the most acceptable measure of risk

of scrip. The securities having low p should be selected for constructing a portfolio in

order to minimise the risks.

55
Madhusudan (1998) found that bse sensitivity and national indices did not follow random

walk by using correlation analysis on monthly stock returns data over the period january

1981 to december 1992.

Arun jethmalani (1999) reviewed the existence and measurement of risk involved in

investing in corporate securities of shares and debentures. He commended that risk is

usually determined, based on the likely variance of returns. It is more difficult to compare

risks within the same class of investments. He is of the opinion that the investors accept

the risk measurement made by the credit rating agencies, but it was questioned after the

asian crisis. Historically, stocks have been considered the most risky of financial

instruments. He revealed that the stocks have always outperformed bonds over the long

term. He also commented on the 'diversification theory' concluding that holding a small

number of non-correlated stocks can provide adequate risk reduction. A debt-oriented

portfolio may reduce short term uncertainty, but will definitely reduce long-term returns.

He argued that the 'safe debt related investments' would never make an investor rich. He

also revealed that too many diversifications tend to reduce the chances of big gains, while

doing little to reduce risk. Equity investing is risky, if the money will be needed a few

months down the line. He concluded his article by commenting that risk is not

measurable or quantifiable. But risk is calculated on the basis of historic volatility.

Returns are proportional to the risks, and investments should be based on the investors'

ability to bear the risks, he advised.

Suresh g lalwani (1999) emphasised the need for risk management in the securities

market with particular emphasis on the price risk. He commented that the securities

56
market is a 'vicious animal' and there is more than a fair chance that far from improving,

the situation could deteriorate.

Bhanu pant and dr. T.r.bishnoy (2001) analyzed the behaviour of the daily and weekly

returns of five indian stock market indices for random walk during april 1996 to june

2001.they found that indian stock market indices did not follow random walk.

Nath and verma (2003) examine the interdependence of the three major stock markets in

south asia stock market indices namely india (nse-nifty) taiwan (taiex) and singapore (sti)

by employing bivariate and multivariate co integration analysis to model the linkages

among the stock markets, no co -integration was found for the entire period (daily data

from january 1994 to november 2002).they concluded that there is no long run

equilibrium.

Debjiban mukherjee (2007) made a comparative analysis of indian stock market with

international markets. His study covers new york stock exchange (nyse), hong kong stock

exchange (hse), tokyo stock exchange (tse), russian stock exchange (rse), korean stock

exchange (kse) from various socio- politico-economic backgrounds. Both the bombay

stock exchange (bse) and the national stock exchange of indian limited (nse) have been

used in the study as a part of indian stock market. The main objective of this study is to

capture the trends, similarities and patterns in the activities and movements of the indian

stock market in comparison to its international counterparts. The time period has been

divided into various eras to test the correlation between the various exchanges to prove

that the indian markets have become more integrated with its global counterparts and its

reaction are in tandem with that are seen globally. The various stock exchanges have

57
been compared on the basis of market capitalization, number of listed securities, listing

agreements, circuit filters, and settlement. It can safely be said that the markets do react

to global cues and any happening in the global scenario be it macroeconomic or country

specific (foreign trade channel) affect the various markets.

Juhi ahuja (2012) presents a review of indian capital market & its structure. In last decade

or so, it has been observed that there has been a paradigm shift in indian capital market.

The application of many reforms & developments in indian capital market has made the

indian capital market comparable with the international capital markets. Now, the market

features a developed regulatory mechanism and a modern market infrastructure with

growing market capitalization, market liquidity, and mobilization of resources. The

emergence of private corporate debt market is also a good innovation replacing the

banking mode of corporate finance. However, the market has witnessed its worst time

with the recent global financial crisis that originated from the us sub-prime mortgage

market and spread over to the entire world as a contagion. The capital market of india

delivered a sluggish performance.

IMPORTANCE OF STUDY

58
 Stock Exchanges play a crucial role in the consolidation of a national economy in

general and in the development of industrial sector in particular. It is the most

dynamic and organised component of capital market. Especially, in developing

countries like India, the stock exchanges play a cardinal role in promoting the level of

capital formation through effective mobilisation of savings and ensuring investment

safety. Hence correct guidance related to stock market is required which can be

availed with the help of various stock brokers present in the market. These brokers

plays a vital role for the investors who does not have full knowledge related to stock

market. This study will help you in knowing following things.

 Different stock brokers present in the market.

 Which is the best stock broker among all.

 The best portfolio having maximum return.

 Benefits of online trading.

 Wider avenues of investments.

 It facilitate the investors to decide his investment priorities by providing him the

basket of different kinds of securities of different industries and companies.

RESEARCH METHODOLOGY

59
Research Design

A research design is a type of blueprint prepared depending on various types of blueprints

available for the collection, measurement and analysis of data. A research design calls for

developing the most efficient plan of gathering the needed information. The design of the

research study is based on the purpose of the study.

Types Of Research

 Exploratory research

 Descriptive research

Exploratory Research

It is done to generate new ideas; respondents should be given sufficient freedom to

express themselves. Sometimes a group of respondents is brought together and a focus

group interview is held.

An exploratory study is generally based on the secondary data that are readily available.

It does not have a formal and rigid design as the researcher may have to change his focus

or direction, depending on the availability of new ideas and relationship among variables.

Descriptive Research

60
It is undertaken in many circumstances. When the researcher is interested in knowledge

the characteristics of certain groups such as age; sex; education level; occupation; or

income; interested in knowing the proportion of in a given population who have behaved

in a particular manner; making the projections of a certain things; or determining the

relationship between two or more variables, descriptive study may be necessary.

Methods And Instrument Of Data Gathering

Methods Of Data Collection

Primary Data-

Primary data is what is research collect from different sources .it is also helps research to

get elaborate information to his research

 Questionnaire

 Face to face interview

 Telephonic interview

Secondary data means data that are already available like:

 Various publications of central, state and local government;

 Various publications of international bodies ;

 Technical and trade journals;

 Books, magazines, newspapers;

61
  Reports and publication of various associations connected with business and

industry, bank, stock exchange etc.;

 Report prepared by research scholars, universities, economics, etc.;

 Public records and statistics, historical document and other sources of published

information

Sampling Procedures

The sample size for the above study was a total of 200 from the whole ncr (gurgaon,

noida, greater noida, faridabad and bhiwadi).the respondents of a sample are selected

using

Non probability procedures.nonprobability sampling is arbitrary and subjective; when

we choose subjectively.

The target respondents were hni’s (high network individuals), upper segment of middle

class, high level of middle class, high level executive workforce of corporations.

Approximately 200 questionnaires were filled and ultimately 169 were completed with

positive response that they have their interest in investing in real estate.

As a preliminary for the business development of the company it was essential to find the

investor perception about investing in real estate.

62
For collecting the information a questionnaire was designed focusing on the main cities

in ncr like gurgaon, faridabad, noida, greater noida and bhiwadi where the company is

operating its projects.

The respondents in our sample size are professionals from major public and private

institutions which include managers, consultants, proprietors, business class

etc.approximately 200 questionnaires were filled and ultimately collected 169 with

positive response .

63
 COMPARATIVE ANALYSIS OF VARIOUS BROKERS

Angel group

Company profile

About management

The angel group of companies was brought to life by mr. Dinesh thakkar. He ventured

into stock trading with an intention to raise capital for his own independent enterprise.

However, he recognised the opportunity offered by the stock market to serve individual

investors. Thus india’s first retail-focused stock-broking house was established in 1987.

64
Under his leadership, angel became the first broking house to embrace new technology

for faster, more effective and affordable services to retail investors.

Mr. Thakkar is valued for his understanding of the economy and the stock-market. The

print and electronic media often seek his views on the market trend as well as investment

strategies.

S.no Name Designation & department

1. Mr. Dinesh thakkar Founder chairman & managing director

2. Mr. Lalit thakkar Director – research

3. Mr. Amit majumdar Executive director – strategy and finance

4. Mr. Rajiv phadke Executive director – hr & corp
5. Mr. Vinay agrawal Executive director – equity broking
6. Mr. Nikhil daxini Executive director - sales and marketing
7 Mr. Hitungshu debnath Executive director - distribution & wealth management

8. Mr. Mudit kulshreshtha Executive director – operations

Why customer trade with angel trading?

1. Personal assistance

65
  Dedicated dealers for facilitating trading and post trade needs.

 Dedicated relationship managers for assisting multiple investments needs.

2. Research & advisory

 Regular news and updates on market

 Research service over sms to keep you abreast

 Daily and weekly technical reports

 A complete information report on results and performance individual companies.

Complete reports on various economic sectors and their performance along with

analysis of few major companies in that sector

 Trading calls in futures & options

 Daily capsule of market indices and index movement, national and international

corporate news, and their performance along with forth coming ipo tracker.

3. Add-owns

66
  Access to all your accounts through your customer id.

 Access your ledger balances and account information over internet, branch and

call center

Product & services

● Online trading

● Commodities

● Dp services

● Pms (portfolio management services)

● Insurance

● Ipo advisory,mutual fund

● Personal loans,quality assurance

Fundamental services

67
68
Technical services

Intra-day calls

For day trader’s angel provides intraday calls with entry, exit and stop loss levels during

the market hours and our calls are flashed on our terminals. Our analysts continuously

track the calls and provide the recommendations according to the market movements.

Past performance of these calls in terms of profit/loss is also available to our associates to

enable them to judge the success rate.

Posting trading calls

Angels “position trading calls” are based on a through analysis of the price movements in

selected scripts and provides calls for taking positions with a 10 - 15 days time span with

stop losses and targets. These calls are also flashed on our terminals during market hours.

Derivative strategies

Our analyst take a view on the nifty and selected scripts based on derivatives and

technical tools and devise suitable “derivative strategies” , which are flashed on our

terminals and published in our derivative reports.

Future calls

A customised product for hnis to help them trade with leveraged positions wherein clients

are advised on stocks with entry, exit and stop loss levels for short-term benefits. Over

and above this, financial status of the calls is mentioned at all times.

69
Softwares

Angel diet

1. Application based ideal for traders.

2. Multiple exchanges on single screen

3. Online fund transfer facility

4. User friendly & simple navigation

5. Bsc, nsc, f&o, mcx & ncdex

Angel investor

1. User-friendly browser for investors

2. Easy online trading platform

3. Works in proxy and firewall system set up

4. Integrated back office: access account information – anytime,

anywhere

70
5. Streaming quotes

6. Refresh static rates when required

7. Multiple exchanges on single screen

8. Online fund transfer facility

Angel trade

1.browser based for investor

2.no installation required

3.advantage of mobility

4.trading as simple as internet surfing

5.bsc, nsc, f&o, mcx & ncdex

Angel anywhere

71
 1. Application-based platform for day traders

2. Intra-day/historical charts with various indicators

3. Online fund transfer facility

4. Bsc, nsc, cash & derivatives

Angel backoffice

 Angel capital & debt market ltd.

 Angel capital & debt market ltd-future & option

 Angel broking ltd.

 Angel securities ltd.-future & options

 Angel commodities broking (p) ltd ncdx

72
 Angel commodities broking (p) ltd mcx

 Angel capital & debt market ltd.-currency futures

 E-contracts: equity commodities

 Risk management

 Depository participates depository-clients depository poa report

 Mutual fund/ipo back office

73
Equity & derivaties

Angel broking provides two type of product in equity & derivative market:

Account opening charge

 Account activation charges rs.490/-

 Minimum margin of rs.5000 required

 No extra charges for software installation and easily accessible on browser

 Nse cash segment, nse f&o and bse on single platform

 Trade online and over phone

 Access your ledger balances and account information over internet, sms and

phone.

 Integrated dp, back- office and trading account

 Online transfer of funds through multiple banks

 Earn interest on cash margin deposited with us

 247 customer support center

 Brokerage :

Jobbing : 0.10% each side + all taxes

Delivery : 0.50% each side + all taxes

(negotiable based on volume)

74
 Future plans (need to have strategic perspective with timeliness)

 6, 00,000 + retail customers being serviced through centralized call centre / web

solution.

 140 branches/semi-branches servicing affluent/aggressive traders through highly

skilled financial advisors.

 6500+ registered sub brokers& business associate

 Strong advisory role through fundamental & technical research.

 New initiatives - portfolio management services & commodities trading.

Problems of angel broking ltd.

Angel broking has failed to evolve into a widespread internet broking firm because of its

un-focused promotional strategies (advertisements in electronic media, newspapers, etc)

across the length and breadth of india. Although it is a well-known broking house in

some states like delhi , maharashtra, etc. It still lacks considerable awareness in the

northern parts of india where its competitors have been building their reputation very

rapidly.

The other problem faced by angel broking is that they give more attention to hnis (high

net worth individuals) as compared to retail investors or individuals; this is why volumes

of trading at angel broking are less as compared to its competitors.

75
COMPARATIVE ASSESSMENT

5paisa.com

Company background

India info line was founded in 1995 and was positioned as a research firm. In 2000 e-

broking was started under the brand name of 5 paisa.com. Apart from offering online

trading in stock market the company offers mutual funds online. It also acts as a

distributor of various financial services i.e. Goi securities, company fixed deposits,

insurance. It has a limited ground network, present in 20 cities.

76
Online account types

•investor terminal: investors / students

•trader terminal: day traders / hni’s

Pricing for retail clients

Investor terminal:-

•account opening: rs 500

•demat 1st yr: rs 250

•initial margin: rs 2500(compulsory)

•min margin retainable: rs 1000

•brokerage:

Trading 0.10% each side + st

Delivery 0.50% each side + st

77
Pricing for hni clients

Trader terminal

•account opening: rs 500

•demat 1st yr: rs 250

•initial margin: rs 5000(compulsory)

•min margin retainable: rs 1000

•brokerage:

Trading 0.10% each side + st

Delivery 0.50% each side + st

(negotiable to 0.05% each side & 0.25%)

•account access charges

Monthly rs 800, adjustable against brokerage

Yearly rs 8000, adjustable against brokerage

78
Problems of 5 paisa

•downtime

Recent past 5 paisa trader terminal (t.t) is experiencing high frequency downtime

between 3 – 3:30p.m due to server load (as their t.t is feature heavy compared to speed

trade charting)

•manual accounting

The 5 paisa accounting system is manual, online fund transfer through bank is not

credited instantly. Limit is provided eod for shares sold from dp, or call similarly limit

released for shares sold under btst is manual delay in receiving pay-out of clear funds

from trading to bank account.

•min account balance

Concept of min rs1,000 is to be maintained in form of cash / securities to keep account

active. This can be withdrawn only on closure of account.

79
Kotak securities

Company background

Kotakstreet is the retail arm of kotak securities. Kotak securities limited is a joint venture

between kotak mahindra bank and goldman sachs.

Online account types

• twin advantage / green channel: 2 dp’s, limit against shares

• free way: flat rs 999 cover charge p.m, 0.03% per transaction

• high trader: 6 times exposure cash & derivatives, auto sq off 2:55

80
Pricing of kotak

• account opening: rs 500

• demat: rs 22.5 p.m

• initial margin: rs 5000(compulsory)

• min margin retainable: rs 1000

• brokerage slab wise: higher the volume, lower the brokerage. Even older

customers (on 0.25% & 0.40%) have been moved to the slab wise structure.

problems of kotakstreet

 Rigid account opening terms

 No flexibility of a/c opening charges (rs 500) + compulsory margin rs 5000/-

account opening free with rs 10,000 margin or competitor contract note.

 no flexibility in leverage – dependent on type of account ( 4 to 6 times only) no

flexibility in brokerage, driven by slab structure.

 No customization of commercial terms.

 restricted access to terminal like product

81
  Keat desktop restricted distribution on payment of rs 500, non refundable

other charges:

 Rs 22.5 p.m towards dp amc charges

 Dp incoming charges extra, 0.02%

 Rs 1,000 as retainable margin to keep account active

 Rs 25 per call after 20 calls for the month

82
Indiabulls

Company background

India bulls is a retail financial services company present in 70 locations covering 62

cities. It offers a full range of financial services and products ranging from equities to

insurance. 450 + relationship managers who act as personal financial advisors

Online account type

•signature account: plain vanilla account with focus on equity analysis. The equity

analysis is a paid service even for a/c holders

83
•power indiabulls: account with sophisticated trading tools, low commissions and

priority access to r.m

Pricing of ib accounts

Signature account

•account opening: rs 250

•demat: rs 200 if poa is signed, no amc for this dp

•initial margin: nil

•brokerage: negotiable

Power indiabulls

•account opening: rs 750

•demat: rs 200 if poa is signed, no amc for this dp

84
•initial margin: nil

•brokerage: negotiable

Problems of indiabulls

Poa for clients dmat

Charges are levied to move shares from ib pool account to client dp account all shares

held by client trading with ib are moved to ib pool account and the same is shown as a

reflection in client dp account.

paid research services

Access to a research even for an ib trading account holder is charged a min of rs 500 a

month.

margin funding hoax

85
The interest on funding starts on leveraged delivery trades from t+1 day itself @21% p.a ,

on a daily basis.

The role of relationship manager

Each rm is looked upon as a revenue generator and he gets a % on business generated

from client. This can lead to over leveraged (interest) & high frequency (brokerage)

trading, which may not be in the best interest of the client.

86
Icici direct

Company background

Icici web trade limited (iwtl) maintains icicidirect.com. Iwtl is an affiliate of icici bank

limited and the website is owned by icici bank limited.

Account types

Icici direct e-invest account:

premium trading interface of icici direct link is given to dbc partners and hni’s plain

vanilla account with focus on 3 in 1 advantage .differentiated in services within the

account.

1. Cash on spot

87
2. Margin plus

Account opening: rs 750

Schemes: for short periods rs 750 is refundable against brokerage generated in a qtr.

These schemes are introduced 3-4 times a year.

Demat: nil, 1st year charges included in account opening plus a facility to open

additional 4 dp’s without 1st yr amc.

Initial margin: nil

Brokerage: all brokerage is inclusive of stamp duty and exclusive of other taxes.

Slab wise brokerage ranges from 0.75% to 0.25% depending on volume.

Problems of icici direct

Poor online interface

Slow website interface with no real-time quotes creates dissatisfaction among high

frequency traders

margin trading restriction

88
The margin trading system is available up to 2:45 p.m, with outstanding net positions

under margin segment automatically squared off at any time between 2:45 – 3:30 p.m.

Thus no control of square off price.

morning trades issue

Being one of the websites with largest no of after hour orders which are pushed 1 st thing

in the morning, creates a choking of orders to the exchange, causes delay of

confirmations for new order placed during the early morning trades.

restriction of btst

The sale of shares purchased is restricted to t+1 day and is not permitted on t+2 day.

No leverage for delivery trades

Delivery is restricted to the total money allocated into the trading account.

no flexibility on leverage on intra-day trades

The leverage of 4 times is available for intra- day trades.

restriction of bank account

The choice of bank is restricted to icici bank.

higher brokerage rates with slabs

89
The delivery brokerage is pegged at 0.75% and trading at 0.10% each side, this makes is

very unviable for customers dealing in large volumes. Although progressively the

delivery and trading brokerage reduce as volumes go up.

Comparision of services
fund

Mutual

Insurance

Pms

Back office

E-broking
advisory

Investment

M-connect

Funding

Personal

Software

E-chopda
Services

Angel broking Ye Ye Ye Ye Ye Ye Ye
Yes Yes Yes Yes
ltd. s s s s s s s

Ye Ye Ye Ye N Ye Ye
Icici direct No Yes Yes No
s s s s o s s

India infoline
N Ye Ye Ye N N Ye
security pvt. Yes Yes Yes No
o s s s o o s
Ltd.

N Ye Ye Ye N Ye Ye
Hdfc securities Yes Yes Yes No
o s s s o s s

Indiabulls Yes Ye N Ye Ye Yes N N Yes Ye No

90
 s o s s o o s

Kotak Ye Ye Ye Ye N N Ye
Yes Yes Yes No
securities s s s s o o s

Ye N Ye Ye N N Ye
Reliance money Yes Yes Yes No
s o s s o o s

Sharekhan N Ye Ye Ye N N Ye
No Yes Yes No
securities o s s s o o s

Ye N Ye Ye N N Ye
Motilal oswal No Yes Yes No
s o s s o o s

Anand rathi Ye Ye Ye Ye N N Ye
No Yes No No
securities s s s s o o s

Swot analysis of angel broking

Strengths

 It is a pioneer in online trading with a turn over of rs.220.5 billion and over 6810

sub-brokers & business associates.

 Angel broking provides multi-channel access to all its customers through a strong

online presence with www.angelbroking.com,144 share shops in all over india

91
 and a call-center based dial-n-trade facility. Nation-wide network of 21 regional

hubs presence in 124 cities.

 Above 6th lakh client in all over india

 100+ member research & advisory team comprises of experienced fundamental

and technical analyst, sector specialist, derivative strategists.

 Angel broking has dedicated research teams for fundamental and technical

research, which constantly track the pulse of the market and provide timely

investment advice free of cost to its clients which has a strike rate of 70-80%.

 Angel broking ltd. Announced that it is planning to invest around inr 300 million

this financial year for expanding its branch network. The company is looking to

invest around inr 250-300 million in this financial year for expanding its network

by 50 branches.

 The company has been increasing at a compounded growth rate of 100% every

year.

92
Weakness

 Localized presence due to insufficient investments for countrywide expansion.

 Lack of awareness among customers because of non-aggressive promotional

strategies (print media, newspapers, etc).

 Lesser emphasis on customer retention.

 Focuses more on hnis than retail investors which results in meager market-share

as compared to close competitors.

 Not listed in stock exchange.

Opportunities

93
  With the booming capital market it can successfully launch new services and raise

its client’s base.

 It can easily tap the retail investors with small saving through promotional

channels like print media, electronic media, etc.

 As interest on fixed deposits with post office and banks are all time low, more and

more small investors are entering into stock market.

 Abolition of long-term capital gain tax on shares and reduction in short term

capital gain is making stock market as hot destination for investment among small

investors.

 Angel broking ltd. Plans to finalize inr 2 billion – inr 2.5 billion fund raising plans

between december 2009 and march 2010. Dinesh thakkar, angel broking’s cmd

said, “we are got active interest from the us and uk-based institutions. We are

open to diluting a significant stake.”

 Increasing usage of internet through broadband connectivity may boost a whole

new breed of investors for trading in securities.

Threats

 Aggressive promotional strategies by close competitors may hamper angel

broking’s acceptance by new clients.

 Lack of sufficient branch-offices for speedy delivery of services.

94
  More and more players are venturing into this domain, which can further reduce

the earnings of angel broking ltd.

Porter's Five Forces Analysis Of Online Brokerage Industry

Buyer power

Awareness of investing knowledge :

Earlier retail investors often lack the knowledge and expertise in the financial sector that

called them to approach the broking houses.

But nowadays tv channels like cnbc and financial magazines, newspapers are giving a

brief knowledge and updates of financial sector to retail investors, also they provide

investors tips to invest their money in stock market.

Hence it increases the power of buyer and reduces his dependence.

Low product and service differentiation proves beneficial :

95
The retail broking services provided by the various companies are homogeneous with

very low product differentiation. This allows customers to enjoy a greater bargaining

power.

Supplier power

Increased dependence on ipos

There is a growing dependence of corporate on broking houses with the rising number of

ipo's coming to the market.

We see traction when initial public offers (ipos) are announced. People find the online

platform a very convenient way to enter the market.

In 2004-05, rs 25,526 crore was raised in the markets, almost 450 per cent more than the

amount raised in 2002-03. For instance, in the month that the maruti ipo was announced,

300,000 demat accounts were opened. In an average month, the figure is about 100,000.

Since 2002, the number of demat accounts has doubled to 7.1 million, many of them

belonging to new investors applying for ipos. During the year 2008-09, 19 companies

were listed through ipo mobilizing an amount ofrs 3,833 crore (us $ 752.40 million). Tata

capital ltd. Came out with an ipo for nonconvertibledebentures (ncd) mobilizing rs. 1,500

96
crore (us $ 294.41 million) whichwas the third largest ipo. Ksk energy ventures limited

was the largest ipo raising rs.830.66 crore (us $ 163.04 million) followed by gammon

infrastructure projects limitedraising rs. 276.39 crore (us $ 54.25 million) .

Threat of competitors

Move towards consolidation

The bigger trend in the industry is consolidation, just like it happened in the us and south

korea, where 90 per cent of online trades are with the top 10 players.

Says banga: "as the industry grows, people prefer going to solid brands that have strong

balance sheets. The big guys can invest in infrastructure, technology and risk

management systems." as a result, several sub-brokers have been pushed by client

demand to take up franchises of the bigger brokers.

The consolidation in the broking industry should see more and more businesses shifting

from small, hole-in-the-wall brokerages to big players.

Lot of brokerage companies is moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations.

Increased focus of banks in retail broking

Many leading banks are coming into retail broking field like icici , hdfc , axis etc.

97
Actually as online trading has come into feature; it would be easy for banks to give online

trading platform with depositary services. Although they are into only online trading,

they are not dealing with proper services of rm (risk management)

Entry of foreign players

Even the foreign players are seeing opportunities in the indian markets. Various foreign

banks like abn amro,hsbc,jp morgan,dbs,ing vyasa and others are planning to show their

existence in the indian retail brokerage industry.

Online trading competes with traditional brokerage

There is an increasing demand for online trading due to consumer's growing preference

for internet as compared to approaching the brokers.

In india, the economics don't allow it to be a cost game. "brokerage costs are already so

low (0.1-0.5 per cent for delivery) that the online medium doesn't really offer any

significant price advantages." traditional brokers are now scrambling to scale up their

online operations. Meanwhile, icici direct & indiabulls have raced ahead of the others.

The other online players that make up the top six - sharekhan (owned by sski),

religare(earlier fortis securities), kotak securities, angel broking and 5paisa (owned by

indiainfoline) - all have hybrid models. Collectively, these players have 75-80 per cent of

98
the market. The remaining 130 players, who were given licenses to open online trading

platforms by the nse, can be divided into three categories - those that are active

businesses but have less than 5 per cent of the online market (motilal oswal among them);

those that invested in the technology but weren't able to get their projects off the ground

(the lalbhai group's anagram securities), and those that simply bid for the licence but

didn't pursue business. Most players fall in the last category.

Threat of new entrants

Entry of foreign players

As it is already discussed above, many foreign players like abn amro,hsbc,jp

morgan,dbs,ing vyasa and us-based e*trade are taking place in indian retail brokerage

industry.

New forms of trading

New forms of trading including t+2 settlement system, dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the

indian industry

Threat of substitutes

Alternative investment options :

99
Various alternative forms of investment including fixed deposits with banks and post

offices etc act as substitutes to retail broking products and services.

DATA ANALYSIS

Mutual Fund Market Covers

100
101
Interpretation: this shows that angel broking covers highest market of mutual funds.

Online Trading

24%
17%

18%

21%
20%
Angel Broking
ICICI Direct
Kotak Securities
IndiaBulls
Others

Interpretation: this figure shows that angel broking has highest percentages of online

trading in all the broking houses.

102
Brand Awareness

28%
16%

17%

20%
19% Angel Broking
ICICI Direct
Kotak Securities
IndiaBulls
Others

103
Interpretation: this pie chart shows that angel broking has a reasonable amount of brand

awareness in terms of a premier retail stock broking company. The company to increase

its market share over its competitors should further leverage this brand image.

Brand Equity

25%
15%

18%

21%
22% Angel Broking
ICICI Direct
Kotak Securities
IndiaBulls
Others

Interpretation: although there is sufficiently high brand equity among the target

audience yet, it is to be noted that the customers are not aware of the facilities provided

by the company meaning thereby, that, the company should concentrate more towards

104
promotional tools and increase its focus on product awareness rather than brand

awareness.

Demat Account Market

17% 22%

18%

21%
20%
Angel Broking
ICICI Direct
Kotak Securities
IndiaBulls
Others

Interpretation : this pie chart shows that angel broking has maximum percentages of

demat account market.

105
Customer Satisfaction

18% 30%

24% 22%

6%
Angel Broking
ICICI Direct
Kotak Securities
IndiaBulls
Others

Interpretation: this pie chart accentuates the fact that strategic marketing, today, has

gone beyond only meeting sales targets and generating profit volumes. It shows that all

106
the competitors are striving hard not only to woo the customers but also to make them

brand loyal by generating customer satisfaction.

Stock Market

29%
23%
7%

22% 20% Angel Broking

ICICI Direct
Kotak Securities
IndiaBulls
Others

Interpretation : this pie chart shows that in stock market angel broking has maximum

number of percentages.

107
 FINDINGS

1- On comparing financial instruments in which person invest with the

occupation of person.

Financial instruments * occupation cross tabulation

Occupation Total

Business Service Retired

Financial Share
26 44 4 74
instruments
Mutual
6 9 2 17
fund
Bonds 1 6 0 7
Derivati
2 0 0 2
ves
Total 35 59 6 100

108
 Bar Chart

50 Occupation
Bussiness
service
retiered

40

30
Count

44
44.00
%
20

26
26.00
%
10

9
6 9.00% 6
4 6.00% 6.00%
4.00% 2… 2…
1…
0
share mutual fund bonds derivatives
Financial Instruments

H0 (null hypothesis) - field of investment is independent of occupation of person.

H1 (alternate hypothesis) - field of investment is dependent of occupation of person.

Chi-square tests

Value Dof

109
 Pearson chi-
6.934 6
square
Likelihood ratio 7.780 6
Linear-by-linear
.099 1
association
N of valid cases 100

Calculated value χ2 = 6.394

Tabulated value = 12.591 at 6 dof (degree of freedom) and 5% level of significance

Interpretation= since calculated value is lesser than tabulated value so null hypothesis

ho will be accepted hence “field of investment is independent of occupation of

person”

2- on comparing financial instruments in which person invest with gender of

investor.

110
Financial instruments * gender cross tabulation

Gender Total

Male Female

Financial Share 63 11 74

instrumen Mutual
13 4 17
ts fund
Bonds 5 2 7
Derivative
1 1 2
s
Total 82 18 100

111
 Bar Chart

gender
male
female
60
Count

40

63
63.00%

20

13
11 13.00%
11.00%
5
4… 5.00% 2… 1… 1…
0
share mutual fund bonds derivatives
Financial Instruments

H0 (null hypothesis)-field of investment is independent of gender.

H1 (alternate hypothesis) - field of investment is dependent of gender.

Chi-square tests

112
 Value Dof

Pearson chi-
2.762(a) 3
square
Likelihood ratio 2.367 3
Linear-by-linear
2.562 1
association
N of valid cases 100

Calculated value χ2=2.762

Tabulated value =7.814 at 3 dof (degree of freedom) and 5% level of significance

Interpretation= since calculated value is lesser than tabulated value so null hypothesis

ho will be accepted hence “field of investment is independent of gender”.

3-on comparing occupation of investor with the % of salary he/she invests.

113
Occupation * percentage invested cross tabulation

Percentage invested Total

Upto Upto Upto 50% and

10% 25% 50% above

Occupatio Business 24 7 3 1 35

n Service 44 11 2 2 59
Retired 3 1 2 0 6
Total 71 19 7 3 100

114
 Bar Chart

50 Percentage invested
upto 10%
upto 25%
upto 50%
50% and above
40

30
Count

44
20

24
10

11
7
3 2 2 3 2
1 1
0
Bussiness service retiered
Occupation

H0 (null hypothesis)-occupation of investor is independent of % of salary invested.

H1 (alternate hypothesis) - occupation of investor is dependent of % of salary invested.

Chi-square tests

115
 Value Dof

Pearson chi-
7.926(a) 6
square
Likelihood ratio 5.538 6
Linear-by-linear
.075 1
association
N of valid cases 100

Calculated value χ2=7.926

Tabulated value =12.591 at 6 dof (degree of freedom) and 5% level of significance

Interpretation= since calculated value is lesser than tabulated value so null hypothesis

ho will be accepted hence “occupation of investor is independent of % of salary

invested”.

4-on comparing gender of the investor with the % of salary invested by him/her.

116
Gender * percentage invested cross tabulation

Percentage invested Total

50%

Upto Upto Upto and

10% 25% 50% above

Gende Male
55 17 7 3 82
r
Femal
16 2 0 0 18
e
Total 71 19 7 3 100

117
 Bar Chart

60 Percentage invested
upto 10%
upto 25%
upto 50%
50 50% and above

40
Count

30
55
55.00%

20

10 17 16
17.00% 16.00%

7
7.00%
3… 2…
0
male female
gender

H0 (null hypothesis)-gender of the person is independent of the % of earning invested by

the person.

H1 (alternate hypothesis) -gender of the person is dependent on the % of earning

invested by the person.

118
Chi-square tests

Value Dof

Pearson chi-
3.904(a) 3
square
Likelihood ratio 5.721 3
Linear-by-linear
3.679 1
association
N of valid cases 100

Calculated value χ2=3.904

Tabulated value =7.814 at 3 dof (degree of freedom) and 5% level of significance

Interpretation= since calculated value is lesser than tabulated value so null hypothesis

ho will be accepted hence “gender of person is independent of the % of earning

invested by the person”

5-on comparing how often the person trades with the occupation of the person.

119
How often do you trade * occupation cross tabulation

Occupation Total

Bussiness Service Retiered

How Daily

often do
4 4 1 9
you

trade
Weekl
10 16 1 27
y
Month
18 31 4 53
ly
Yearly 3 8 0 11
Total 35 59 6 100

120
 Bar Chart

40 Occupation
Bussiness
service
retiered

30
Count

20

31

10
18
16

10
8

4 4 4
3
1 1
0
daily weekly monthly yearly
How often do you trade

H0 (null hypothesis) - how often a person trade is independent of occupation of person.

H1 (alternate hypothesis) -how often a person trade is dependent on occupation of

person.

Chi-square tests

Value Dof

121
 Pearson chi-
2.643(a) 6
square
Likelihood ratio 3.248 6
Linear-by-linear
.223 1
association
N of valid cases 100

Calculated value χ2=2.643

Tabulated value =12.591 at 6 dof (degree of freedom) and 5% level of significance

Interpretation= since calculated value is lesser than tabulated value so null hypothesis

ho will be accepted hence “how often a person trade is independent of occupation of

person”.

RECOMMENDATIONS

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According to the studies made following measures are suggested, which angel broking

could take so as to take on heavy competition from indiabulls and icici direct.com:

1. To identify regions where promotions are required. Angel broking lacks visibility

in northern region where as it is a well known name in western region. Even then,

its promotional campaign focuses on western region where as northern region is

still waiting for promotional campaigns.

2. Try to reduce cost, so that benefits can be passed on to customers. Senior

managers at angel broking keep on telling that it is difficult to reduce cost,

because of services we provide. But the fact is, india being a price sensitive

market; people at times go for monetary benefits rather than for long-term non-

monetary benefits.

3. If charges can’t be reduced because of costs involved, make the services

customized, so that services are provided to only those customers who are willing

to pay the price for services they are getting and let the other customers enjoy

costs benefits without getting services.

4. Concept of margin funding should be changed, as more and more people are

asking for it.

5. Angel broking should contact with their clients regularly for knowing the

problems faced by them. This will help angel broking is providing best services to

customers. This will result in additional customer base by getting further

references from satisfied clients.

123
6. To launch slab wise brokerage structure as angel broking has fixed brokerage

structure, this cannot be negotiated. But other players in the market offer launch

slab wise brokerage structure, which motivate customers to increase their

volumes.

7. Company can expand or diversify their business network by raising funds through

ipo’s.

8. Angel broking limited has to decrease it’s margin money up to rs. 3000 ,this will

attracts more new clients and for sub-brokership company should decrease its

security limit up to rs. 50,000.

9. There should be more public awareness programmed and advertisement related to

company’s product and services so that people should be more aware about angel

broking limited.

10. Company should organise customer happiness survey for active and inactive

clients both.

11. Company has to more aggressive toward its existing client’s feedback and for

their services after giving them products because it can increase company loyalty

as well its brand name.

12. They should provide demo version of software and its training for each clients.

124
 CONCLUSION

On the basis of the study it is found that angel broking ltd. Is better services provider than

the other stockbrokers because of their timely research and personalized advice on what

stocks to buy and sell. Angel broking ltd. Provides the facility of trade tiger as well as

relationship manager facility for encouragement and protects the interest of the investors.

It also provides the information through the internet and mobile alerts that what ipo’s are

coming in the market and it also provides its research on the future prospect of the ipo.

Study also concludes that people are not much aware of commodity market and while it’s

going to be biggest market in india. From the above survey and observation it is found

that most of the people who are trading in share market belongs to the employee group,

next comes the business men and other class of income people.

Trading in online trading firm is easy as it all delivered with internet and within a few

minutes the customer can buy and sell shares which save time as well as reduction of

paper work. Hence trading in share market is increasing day by day and investors are

ready to invest their investment in share market only.

I got the knowledge about the customer’s needs and their references for having a

particular product. The need of customers differs from person to person, area, locality and

occupation. Customer always wants more service by paying less.

While there are many factors that need to be understood to justify this assertion, one

simple fact is worthy of note. The average age of the indian internet user as cited by a

recent idc survey is 27 years. The average age of the head (and financial decision taker)

125
of the indian equity-investor household, as revealed by the sebi-ncaer study of indian

investors in 2000 is 45 years. The older, experienced equity investor is not online today

and the fact that older, mature investors are not ‘tech-positive’ and hence unlikely to

move to online trading is a major barrier to the growth of e-broking in india.

Here, the numbers of banks with a strong online presence are very few - again, dominated

by new private banks and foreign banks. Both have lesser reach owing to a smaller

network in the country. The relative inability of large public-sector banks to offer-

facilities for internet banking is a barrier in this regard. Besides, internet penetration in

india is still very low and concerns about security also tend to predominate. In markets

like the us, online brokerages are advertised very heavily. Online trading in india has so

far not seen similar levels of aggressive advertising, with the exception of icici direct and

india bulls. Besides, only scripts that have been compulsorily dematerialized can be

traded on the net here.

Brand building, assurances of security, developing multiple delivery channels with

anytime telephonic grievance redressed options is some directions, which may be of use

for the immediate future.

Hence, not withstanding the current sentiment in the market, potential for online trading

is still immense in india. With a more transparent system, increased awareness, and a

sustained bullish market we would surely be heading to become the largest online stock

trading country by the turn of the next decade

126
 LIMITATIONS OF THE STUDY

1. Small Sample Size

To complete the research the survey is needed to be done on a large and diversified

population which is out of preview because of lack of resources and time. So the research

may be biased. I.e. (the sample size may not be sufficient enough to arrive at a correct

decision with respect to population to be surveyed)

2. Inadequate Customer Knowledge

During the survey there may be few customers who may not have complete knowledge of

the equity market.

3. Biased Information

The sample surveyed might be from particular income strata or profession which may not

reflect a correct picture of the research made.

4. Lack Of Co-Operation From Customers

The persons surveyed may not give correct information as the data is generally related

with the financial gains of the person concerned.

5. Secondary Data

The secondary data taken from a source might be wrong or twisted to serve the purpose

of a person or organization concerned.

127
 SUGGESTIONS

1. Commitment should be equalized for every person

2. Provide the facility of free demonstrations for all

3. Improvement in the opening of de-mat & contract notice procedure is required

4. There should be a limited number of clients under the relationship manger. So that

he can handle new as well as old customer properly

5. Some promotional activities are required for the awareness of the customer

6. People at young age should be encouraged to invest in stock market

7. Seminars should be more held for providing information to prospective and

present customers

8. In the organization, there must me be co-operation with other department and

other branches

9. Company should make more promotional activities by giving advertisements and

publicity.

10. Give more demonstration to customers so that they can get complete knowledge

about online trading

128
 11. Give the complete information about products and services offered by the

company to the customers.

12. The number of branches it has at present should be increased all over the country,

which will attract a large number of customers.

13. Company should educate about the rules and regulations of sebi to its customers.

ANNEXURE

QUESTIONNAIRE

“sir/madam we are conducting a survey on angel broking ltd.. Please help us by giving

your view points.”

Q1. In which of these financial instruments do you invest into?

A) shares b) mutual funds c) bonds d) derivatives

Q2. Are you aware of online share trading?

129
A) yes b) no

Q3. Heard about angel broking ltd.?

A) yes b) no

Q4. Do you know about the facilities provided by angel broking ltd.?

A) yes b) no

Q5. With which company do you have your demat account?

A) angel broking b) icici direct c) kotak mahindra d) india bulls

E) others (please specify) __________

Q6. Are you currently satisfied with your share trading company?

A) yes b) no

130
Q7. How often do you trade?

A) daily b) weekly c) monthly d) yearly

Q8. Please tick percentage of your earnings do you invest in share trading?

A) up to 10% b) up to 25% c) up to 50% d) above 50%

Q9. Suggest more facilities which you think are required with your demat account?

------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------

------------------------------------------------------------

Q10. How many brokers name you know

A) 5 b) 10 c) 15 d) 20

Q11. In today’s scenario which brokers company provide better services

131
A) angel broking ltd. B) religare c) india bulls d) share khan

Additional information (optional)

Name:

Q10. Sex: a) male b) female

Q11. Age: a) 18-28 b) 29-38 c) 39-48 d) 49-58 e) >59

Phone no:

Occupation: a) business b) service c) retired

“thankyou for giving time

Your feedback is essential to us”

132
 BIBLIOGRAPHY

Books

1. Securities market (basic) module:--ncfm

2. Training kit provided by the angel broking ltd.

3. Nsdl depository operations module:--ncfm

4. Ismr review volume (x1)2008.

5. Fact book 2009,nse india.

Newspapers

1. The economic times

2. Business standard

133
 3. Business line

4. Mint

Magzines

1.dalal street.

2.business week.

Urls:

1 www.angelbroking.com

2 Www.economictimes.com

3 Http://www.investopedia.com/articles/

4 Www.nseindia.com

5 Www.bseindia.com

6 www.moneycontrol.com

7 www.moneycontrol.com

8 www.watchoutinvestors.com

9 www.myiris.com

10 Www.bloomberg.com

134
11 http://indiabudjet.nic.in

12 http://www.sebi.gov.in

13 Www.equitymaster.com

14 www.investorwords.com

15 Www.businessdictionary.com

135