Download - KARVY STOCK BROKING

PART-A

INDUSTRY PROFILE

STOCK EXCHANGE IN INDIA

The emergence of stock market can be traced back to 1830. In Bombay, business

passed in the shares of banks like the commercial bank, the chartered mercantile bank, the

chartered bank, the oriental bank and the old bank of Bombay and shares of cotton presses.

In Calcutta, Englishman reported the quotations of 4%, 5%, and 6% loans of East India

Company as well as the shares of the bank of Bengal in 1836. This list was further

broadened in 1839 when the Calcutta newspaper printed the quotations of banks like union

bank and Agra bank. It also quoted the prices of business ventures like the Bengal bonded

warehouse, the Docking Company and the storm tug company.

Between 1840 and 1850, only half a dozen brokers existed for the limited business.

But during the share mania of 1860-65, the number of brokers increased considerably. By

1860, the number of brokers was about 60 and during the exciting period of the American

Civil war, their number increased to about 200 to 250. The end of American Civil war

brought disillusionment and many failures and the brokers decreased in number and

prosperity. It was in those troublesome times between 1868 and 1875 that brokers

organized an informal association and finally as recited in the Indenture constituting the

“Articles of Association of the Exchange”. On or about 9th day of July,1875, a few native

brokers doing brokerage business in shares and stocks resolved upon forming in Bombay

an association for protecting the character, status and interest of native share and stock

brokers and providing a hall or building for the use of the members of such association.

As a meeting held in the broker hall on the 5th day of February, 1887, it was

resolved to execute a formal deal of association and to constitute the first managing

committee and to appoint the first trustees. Accordingly, the Articles of Association of the

Exchange and the Stock Exchange was formally established in Bombay on 3 rd day of

December, 1887. The Association is now known as “The Stock Exchange”.

H.K.E.S society S L N college of Engineering Yermarus Camp Raichur.

The entrance fee for new member was Re.1 and there were 318 members on the

list, when the exchange was constituted. The numbers of members increased to 333 in

1896, 362 in 1916 and 478 in 1920 and the entrance fee was raised to Rs.5 in 1877,

Rs.1000 in 1896, Rs.2500 in 1916 and Rs. 48,000 in 1920. At present there are 23

recognized stock exchanges with about 6000 stock brokers. Organization structure of

stock exchange varies.

14 stock exchanges are organized as public limited companies, 6 as companies limited by

guarantee and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock

exchanges have been permanent recognition. Others have to seek recognition on annual

basis.

The Stock Market in India comprises of two stock exchanges:

● Bombay Stock Exchange (BSE)

● National Stock Exchange (NSE)

BSE

The Bombay Stock Exchange (BSE) was established in 1875. The BSE serves as

the most important for companies to raise money. The chief function of the Stock Market

of India is to help raise money as capital for the growth and expansion of various private

and public sector enterprises. Besides, the Stock Market of India provides able assistance

to the individual investors through daily updates on current position of the stocks of the

respective companies that are enlisted in the Stock Index in which the movement of prices

in a section of the market are captured in price indices. The popular acronym for Stock

Index is Sensitive index or sensex. Moreover, the liquidity provided by the exchange

enables the investors to sell securities owned by them easily and quickly. Hence a person,

who is subjected to sudden dearth of funds, can immediately sell his shares for cash in

India Stock Market.

The BSE Sensex, also known as “BSE 30” is a widely used market index not only

in India but across Asia. In terms of volume of transactions, it is ranked among the top five

stock exchanges in the world.


NSE

The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today

the largest stock exchange in India and a preferred exchange for trading in equity, debt and

derivatives instruments by investors. NSE has set up a sophisticated electronic trading,

clearing and settlement platform and its infrastructure serves as a role model for the

securities industry. The standards set by NSE in terms of market practices; products and

technology have become industry benchmarks and are being replicated by many other

market participants.

NSE provides a screen-based automated trading system with a high degree of

transparency and equal access to investors irrespective of geographical location. The high

level of information dissemination through the on-line system has helped in integrating

retail investors across the nation.

The exchange has a network in more than 350 cities and its trading members are

connected to the central servers of the exchange in Mumbai through a sophisticated

telecommunication network comprising of over 2500 VSATs.

NSE has around 850 trading members and provides trading in equity shares and

debt securities. Besides this, NSE provides trading in various derivative products such as

index futures, index options, stock futures, stock options and interest rate futures.

Stock Index: A stock index reflects the mood and direction of the overall market. Apart

from being an indicator of the market movements, stock indices also serve as a benchmark

for measuring the performance of fund managers. The innovations in the financial markets

and the modern portfolio theory had redefined the uses of stock indices for instance the

advent of index funds. Stock indices are rarely static; their composition changes so that the

objectives behind the construction of indices are served. Of course the changes might also

be driven by other reasons like mergers and corporate restructuring that make some of the

stocks cease to exist from the market. Although the changes in an index like Nifty are a

regular phenomenon, these actions will have implications for markets in general and index

funds in particular. When a stock is added (deleted) to the Nifty, index funds will try to

include it in their portfolio and these actions may induce buying (selling) pressure and

correspondingly the price level is increased (decreased) and the volume levels of both

types of stocks are increased.


COMPANY PROFILE

A. Background And Inception of Company

Karvy, is a premier integrated financial services provider, and ranked among the top

five in the country in all its business segments, services over 16 million individual

investors in various capacities, and provides investor services to over 300 corporate,

comprising the who is who of Corporate India. Karvy covers the entire spectrum of

financial services such as Stock broking, Depository Participants, Distribution of financial

products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities

Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance,

placement of equity, IPO’s, among others. Karvy has a professional management team and

ranks among the best in technology, operations and research of various industrial

segments.

The birth of Karvy was on a modest scale in 1981. It began with the vision and

enterprise of a small group of practicing Chartered Accountants who founded the flagship

company Karvy Consultants Limited. It started with consulting and financial accounting

automation, and carved inroads into the field of registry and share accounting by 1985.

Since then, they have utilized their experience and superlative expertise to go from

strength to strength…to better their services, to provide new ones, to innovate, diversify

and in the process, evolved Karvy as one of India’s premier integrated financial service

enterprise.

Thus over the last 28 years Karvy has traveled the success route, towards building a

reputation as an integrated financial services provider, offering a wide spectrum of

services. And they have made this journey by taking the route of quality service, path

breaking innovations in service, versatility in service and finally…totality in service.

Our highly qualified manpower, cutting-edge technology, comprehensive

infrastructure and total customer-focus has secured for us the position of an emerging

financial services giant enjoying the confidence and support of an enviable clientele across

diverse fields in the financial world.


B.Nature of Business Carried

Karvy is a stock Broking Company that deals in shares. Apart from security broking

Karvy is in to Mutual Fund & Demat, Insurance Service. It offers a wide range of financial

services in order to meet different individuals financial planning. In the present scenario

the service industry has given an utmost importance of doing a particular task at a fastest

time in order to satisfy the customer and to attract new customer.

C. Vision of Karvy

“To cater to the unique needs and requirements of the mass affluent by providing

complete financial solutions and thereby enabling them to their dreams into reality.”

Mission of Karvy

Karvy’s mission statement is “To Bring Industry, Finance and People together.”

Karvy is work as intermediary between industry and people. Karvy work as investment

advisor and helps to people to invest their money same way karvy helps industry in

achieving finance from people by issuing shares, debentures, bonds, mutual funds, fixed

deposits etc.

“Company mission statement is clear and thoughtful which guide geographically dispersed

employees to work independently yet collectively towards achieving the organization’s

goals.”

Quality policy of Karvy

To achieve and retain leadership, Karvy shall aim for complete customer satisfaction,

by combining its human and technological resources, to provide superior quality financial

services. In the process, Karvy will strive to exceed Customer's expectations.


Quality Objectives

As per the Quality Policy, Karvy will:

Build in-house processes that will ensure transparent and harmonious relationships with

its clients and investors to provide high quality of services.

Establish a partner relationship with its investor service agents and vendors that will

help in keeping up its commitments to the customers.

Provide high quality of work life for all its employees and equip them with adequate

knowledge & skills so as to respond to customer's needs.

Continue to uphold the values of honesty & integrity and strive to establish

unparalleled standards in business ethics.

Use state-of-the art information technology in developing new and innovative financial

products and services to meet the changing needs of investors and clients.

Strive to be a reliable source of value-added financial products and services and

constantly guide the individuals and institutions in making a judicious choice of same.

Strive to keep all stake-holders (shareholders, clients, investors, employees, suppliers

and regulatory authorities) proud and satisfied.

D. Products and service profile

KARVY CONSULTANTS LIMITED

As the flagship company of the Karvy Group, Karvy

Consultants Limited has always remained at the helm of

organizational affairs, pioneering business policies, work ethic and channels of progress.

Having emerged as a leader in the registry business, the first of the businesses that

they ventured into, they have now transferred this business into a joint venture with

Computershare Limited of Australia, the world’s largest registrar. With the advent of

depositories in the Indian capital market and the relationships that they have created in the

registry business, they believe that they were best positioned to venture into this activity as

a Depository Participant. They were one of the early entrants registered as Depository

Participant with NSDL (National Securities Depository Limited), the first Depository in

the country and then with CDSL (Central Depository Services Limited). Today, they

service over 6 lakhs customer accounts in this business spread across over 250


cities/towns in India and are ranked amongst the largest Depository Participants in the

country. With a growing secondary market presence, they have transferred this business to

Karvy Stock Broking Limited (KSBL), their associate and a member of NSE, BSE and

HSE.

KARVY STOCK BROKING LIMITED

Karvy Stock Broking Limited, one of the

cornerstones of the Karvy edifice, flows freely towards

attaining diverse goals of the customer through varied services. Helping the customer

create waves in his portfolio and empowering the investor completely is the ultimate goal.

Member - National Stock Exchange (NSE), the Bombay Stock Exchange (BSE), and the

Hyderabad Stock Exchange (HSE).

Stock Broking Services

It is an undisputed fact that the stock market is unpredictable and yet enjoys a high

success rate as a wealth management and wealth accumulation option. The difference

between unpredictability and a safety anchor in the market is provided by in-depth

knowledge of market functioning and changing trends, planning with foresight and

choosing options with care. This is what they provide in their Stock Broking services.

They offer services that are beyond just a medium for buying and selling stocks

and shares. Instead they provide services which are multi dimensional and multi-focused

in their scope.

They offer trading on a vast platform; National Stock Exchange, Bombay Stock

Exchange and Hyderabad Stock Exchange. More importantly, they make trading safe to

the maximum possible extent, by accounting for several risk factors and planning

accordingly. They are assisted in this task by their in-depth research, constant feedback

and sound advisory facilities. Their highly skilled research team, comprising of technical

analysts as well as fundamental specialists, secure result-oriented information on market

trends, market analysis and market predictions.

This crucial information is given as a constant feedback to their customers, through

daily reports delivered thrice daily; The Pre-session Report, where market scenario for the


day is predicted, The Mid-session Report, timed to arrive during lunch break, where the

market forecast for the rest of the day is given and The Post-session Report, the final

report for the day, where the market and the report itself is reviewed.

To add to this repository of information, they publish a monthly magazine “The

Finapolis” which analyzes the latest stock market trends and takes a close look at the

various investment options, and products available in the market, while a weekly report,

called “Karvy Bazaar Baatein”, keeps clients more informed on the immediate trends in

the stock market. In addition, their specific industry reports give comprehensive

information on various industries. Besides this, they also offer special portfolio analysis

packages that provide daily technical advice on scripts for successful portfolio

management and provide customized advisory services to help you make the right

financial moves that are specifically suited to their portfolio.

Stock Broking services are widely networked across India, with the number of

trading terminals providing retail stock broking facilities. Its services have increasingly

offered customer oriented convenience, which they provide to a spectrum of investors,

high-net worth or otherwise, with equal dedication and competence.

But true to their spirit, this success is not their final destination, but just a platform

to launch further enhanced quality services to provide you the latest in convenient,

customer-friendly stock management.

Over the years Karvy have ensured that the trust of their customers is their biggest

returns. Factors such as their success in the Electronic custody business has helped build

on their tradition of trust even more. Consequentially their retail client base expanded very

fast.

To empower the investor further they have made serious efforts to ensure that their

research calls are disseminated systematically to all their stock broking clients through

various delivery channels like email, chat, SMS, phone calls etc.

Their foray into commodities broking has been path breaking and they are in the

process of converting existing traders in commodities into the more organized mainstream

of trading in commodity futures, both as a trading and risk hedging mechanism.


In the future, their focus will be on the emerging businesses and to meet this

objective, they have enhanced their manpower and revitalized their knowledge base with

enhances focus on Futures and Options as well as the commodities business.

Depository Participants

The onset of the technology revolution in financial services Industry saw the

emergence of Karvy as an electronic custodian registered with National Securities

Depository Ltd (NSDL) and Central Securities Depository Ltd (CSDL) in 1998. Karvy set

standards enabling further comfort to the investor by promoting paperless trading across

the country and emerged as the top 3 Depository Participants in the country in terms of

customer serviced.

Offering a wide trading platform with a dual membership at both NSDL and

CDSL, they are a powerful medium for trading and settlement of dematerialized shares.

They have established live DPMs, Internet access to accounts and an easier transaction

process in order to offer more convenience to individual and corporate investors. A team

of professional and the latest technological expertise allocated exclusively to their demat

division including technological enhancements like SPEED; make their response time

quick and their delivery impeccable. A wide national network makes their efficiencies

accessible to all.

Distribution of Financial Products

The paradigm shift from pure selling to knowledge based selling drives the

business today. With their wide portfolio offerings, they occupy all segments in the retail

financial services industry.

A 1600 team of highly qualified and dedicated professionals drawn from the best

of academic and professional backgrounds are committed to maintaining high levels of

client service delivery. This has propelled us to a position among the top distributors for

equity and debt issues with an estimated market share of 15% in terms of applications

mobilized, besides being established as the leading procurer in all public issues.

To further tap the immense growth potential in the capital markets they enhanced

the scope of their retail brand, Karvy – the Finapolis, thereby providing planning and

advisory services to the mass affluent. Here they understand the customer needs and


lifestyle in the context of present earnings and provide adequate advisory services that will

necessarily help in creating wealth. The edge that they have over competition is their

portfolio of offerings and their professional expertise. The investment planning for each

customer is done with an unbiased attitude so that the service is truly customized.

Their monthly magazine, Finapolis, provides up-dated market information on

market trends, investment options, opinions etc. Thus empowering the investor to base

every financial move on rational thought and prudent analysis and embark on the path to

wealth creation.

Advisory Services

Under their retail brand ‘Karvy – the Finapolis', they deliver advisory services to a

cross-section of customers. The service is backed by a team of dedicated and expert

professionals with varied experience and background in handling investment portfolios.

They are continually engaged in designing the right investment portfolio for each

customer according to individual needs and budget considerations with a comprehensive

support system that focuses on trading customers' portfolios and providing valuable inputs,

monitoring and managing the portfolio through varied technological initiatives. This is

made possible by the expertise they have gained in the business over the years. Another

venture towards being investor-friendly is the circulation of a monthly magazine called

‘Karvy - the Finapolis' covering the latest of market news, trends, investment schemes and

research-based opinions from experts in various financial fields.

Private Client Group

This specialized division was set up to cater to the high net worth individuals and

institutional clients keeping in mind that they require a different kind of financial planning

and management that will augment not just existing finances but their life-style as well.

Here they follow a hard-nosed business approach with the soft touch of dedicated

customer care and personalized attention.

For this purpose they offer a comprehensive and personalized service that

encompasses planning and protection of finances, planning of business needs and

retirement needs and a host of other services, all provided on a one-to-one basis.


Their research reports have been widely appreciated by this segment. The delivery

and support modules have been fine tuned by giving their clients access to online portfolio

information, constant updates on their portfolios as well as value-added advice on

portfolio churning, sector switches etc. The investment recommendation given by their

research team in the cash market has enjoyed a high success rate.

KARVY INVESTORS SERVICE LIMITED

Merchant Banking:

Recognized as a leading merchant banker in the country, they are registered with

SEBI as a Category I merchant banker. This reputation was built by capitalizing on

opportunities in corporate consolidations, mergers and acquisitions and corporate

restructuring, which have earned us the reputation of a merchant banker. Their quality

professional team and their work-oriented dedication have propelled us to offer value-

added corporate financial services and act as a professional navigator for long term growth

of their clients, who include leading corporate, State Governments, foreign institutional

investors, public and private sector companies and banks, in Indian and global markets.

They have also emerged as a trailblazer in the arena of relationships, both at the

customer and trade levels because of their unshakable integrity, seamless service and

innovative solutions that are tuned to meet varied needs. Their team of committed industry

specialists, having extensive experience in capital markets, further nurtures this

relationship.

Their financial advice and assistance in restructuring, divestitures, acquisitions, de-

mergers, spin-offs, joint ventures, privatization and takeover defense mechanisms have

elevated their relationship with the client to one based on unshakable trust and confidence.

An Investment Banker is total solutions provider as far as any corporate, desirous

of mobilizing capital, is concerned. The services range from investment research to

investor service on the one side and from preparation of offer documents to legal

compliances and post issue monitoring on the other. There exists a long lasting

relationship between the Issuer Company and the Investment Banker. A "Merchant

Banker" could be defined as "An organization that acts as an intermediary between the

issuers and the ultimate purchasers of securities in the primary security market"


Merchant Banker has been defined under the Securities & Exchange Board of

India (Merchant Bankers) Rules, 1992 as "any person who is engaged in the business of

issue management either by making arrangements regarding selling, buying or

subscribing to securities as manager, consultant, advisor or rendering corporate advisory

service in relation to such issue management".

Merchant Banking, as a commercial activity, took shape in India through the

management of Public Issues of capital and Loan Syndication. It was originated in 1969

with the setting up of the Merchant Banking Division by ANZ Grind lays Bank. The main

service offered at that time to the corporate enterprises by the merchant banks included the

management of public issues and some aspects of financial consultancy. The early and

mid-seventies witnessed a boom in the growth of merchant banking organizations in the

country with various commercial banks, financial institutions, broker's firms entering into

the field of merchant banking.

KARVY AS AN INVESTMENT BANKER

Karvy is well networked with 200 full-fledged branches and 350 Investor Service

Centers with a workforce of over 3500 personnel drawn from various disciplines.

Karvy Investor Services Limited, a SEBI registered Merchant Banker is a 100%

subsidiary of Karvy Consultants Limited and is among the top 10 merchant Bankers in

India today. The parent Company i.e. Karvy Consultants Limited was founded by a group

of professionals in 1982 and today it has evolved as integrated financial services company

of repute, offering various financial services to suit every requirement/need of their

customers. By virtue of its access to millions of Indian Shareholders, in addition to

companies, banks and financial institutions, Karvy has in the process built up a positive

reputation with regulatory authorities and other government agencies. Their emphasis on

the quality of the services, they offer, has been instrumental in helping us to attain the

leadership in the financial services sector.

They have a track record of handling 70 public/rights issues as Merchant Bankers.

During the last two years they have handled the share buyback issues of TTK LIG

Limited, Sirpur Paper Mills Limited, Bhagyanagar Metals Limited, A V Thomas Group-

Nelliampathy Tea and Produce Company Limited, Chordia Food Products Limited,


Heritage Foods (India) Limited, Titanor Components Ltd, Punjab Communications

Limited, etc. to name a few.

They have also handled/are handling the Rights/Public issues of Dhanalakshmi

Bank, Dhandapani Finance, Moschip, Karur Vysya Bank, Lux Hosiery Industries Ltd, Sah

Petroleums Limited, Paradyne Infotech Limited, Yash Papers Limited, SPL Industries

Limited, Provogue (I) Limited, Tulip IT Services Limited, Gati Limited as lead managers

to name a few. They have also been appointed as advisor to some of the GOI

disinvestments. They have actively marketed bond issues of corporations from the States

of Maharashtra, Karnataka & Gujarat and debt issues of all the Financial Institutions like

IDBI, ICICI, IFCI, REC, PFC, SIDBI, etc.

As an Investment Banker, Karvy provides;

• Management of Capital Issues

• Management of Buybacks, Takeovers and Delisting offers

• Private Placement of Debt and Equity

• Mergers and Amalgamations

• Loan Syndication

KARVY COMPUTERSHARE PRIVATE LIMITED

Karvy have traversed wide spaces to tie up with the world’s largest transfer agent,

the leading Australian company, Computershare Limited. The company that services more

than 75 million shareholders across 7000 corporate clients and makes its presence felt in

over 12 countries across 5 continents has entered into a 50-50 joint venture with us.

With its management team completely transferred to this new entity, they will aim

to enrich the financial services industry than before. The future holds new arenas of client

servicing and contemporary and relevant technologies as they are geared to deliver better

value and foster bigger investments in the business. The worldwide network of

Computershare will hold us in good stead as they expect to adopt international standards

in addition to leveraging the best of technologies from around the world.


Excellence has to be the order of the day when two companies with such similar

ideologies of growth, vision and competence, get together.

Mutual Fund Services:

They have attained a position of immense strength as a provider of across-the-

board transfer agency services to AMCs, Distributors and Investors.

Nearly 40% of the top-notch AMCs including prestigious clients like Deutsche

AMC and UTI swear by the quality and range of services that they offer. Besides

providing the entire back office processing, they provide the link between various Mutual

Funds and the investor, including services to the distributor, the prime channel in this

operation.

Carrying the ‘limitless' ideology forward, they have explored new dimensions in

every aspect of Mutual Fund servicing right from volume management, cost effective

pricing, delivery in the least turnaround time, efficient back-office and front-office

operations to customized service. They have been with the AMCs every step of the way,

helping them serve their investors better by offering them a diverse and customized range

of services. The ‘first to market' approach that is their anthem has earned us the reputation

of an innovative service provider with a visionary bent of mind.

Their service enhancements such as ‘Karvy Convert', a full-fledged call center, a

top-line website (www.Karvymfs.com), the ‘m-investor' and many more, creating a galaxy

of customer advantages.

Issue Registry:

In their voyage towards becoming the largest transaction-processing house in the

Indian Corporate segment, they have mobilized funds for numerous corporate, Karvy has

emerged as the largest transaction-processing house for the Indian Corporate sector. With

an experience of handling over 700 issues, Karvy today, has the ability to execute

voluminous transactions and hard-core expertise in technology applications have gained us

the No.1 slot in the business. Karvy is the first Registry Company to receive ISO 9002

certification in India that stands testimony to its stature.


Karvy has the benefit of a good synergy between depositories and registry that

enables faster resolution to related customer queries. Apart from its unique investor

servicing presence in all the phases of a public Issue, it is actively coordinating with both

the main depositories to develop special models to enable the customer to access

depository (NSDL, CDSL) services during an IPO.

Their trust-worthy reputation, competent manpower and high-end technology and

infrastructure are the solid foundations on which their success is built.

Corporate Shareholder Services:

Karvy has been a customer centric company since its inception. Karvy offers a

single platform servicing multiple financial instruments in its bid to offer complete

financial solutions to the varying needs of both corporate and retail investors where an

extensive range of services are provided with great volume-management capability.

Today, Karvy is recognized as a company that can exceed customer expectations

which is the reason for the loyalty of customers towards Karvy for all his financial needs.

An opinion poll commissioned by “The Merchant Banker Update” and conducted by the

reputed market research agency, MARG revealed that Karvy was considered the “Most

Admired” in the registrar category among financial services companies.

They have grown from being a pure transaction processing business, to one of

complete shareholder solutions.

E. Area of Operation

Karvy has 575 offices over 375 locations across India and overseas at Dubai and

Newyork. Over 9000 highly qualified people staff karvy.

Karvy ranks among the top player in almost all the fields it operates. Karvy

Computershare Limited is India’s largest Registrar and Transfer Agent with a client base

of nearly 500 blue chip corporate, managing over 2 crores accounts.

Karvy Stock Brokers Limited, member of National Stock Exchange of India and

the Bombay Stock Exchange, ranks among the top 5 stock brokers in India. With over

6,00,000 active accounts, it ranks among the top 5 Depositary Participant in India,


registered with NSDL and CDSL. Karvy Comrade, Member of NCDEX and MCX ranks

among the top 3 commodity brokers in the country.

Karvy is also among the top Mutual Fund mobilize with over Rs. 5,000 crores under

management.

Has more than 25,000 investors visiting our 575 offices

Publishes / broadcasts at least 50 buy / sell calls

Attends to 10,000+ telephone calls

Mails 25,000 envelopes, containing Annual Reports, dividend cheques / advises,

allotment / refund advises

Executes 150,000+ trades on NSE / BSE

Executes 50,000 debit / credit in the depositary accounts

Advises 3,000+ clients on the investments in mutual funds

F. Ownership Pattern

C. Parthasarathy Chairman & Managing Director

M. Yugandhar Managing Director

M S Ramakrishna Executive Director

K Sridhar Management Team

V Mahesh Management Team

V Ganesh Management Team

S. Gopichanda Management Team

J. Ramaswami Management Team

M. S. Manohar Management Team

S Ganapathy Subramanian Management Team

G. Competitors Information


In current scenario Karvy Stock Broking Limited is a well known field of online

trading. According to customers need KSBL launched different-different products. But

there are many more companies who also consumer focused. They continuously innovate.

So KSBL want ad infinitum leadership place in the market, it must familiar with its

competitors and its product. Few Major competitors are:

1. India bulls

2. Motilal oswal securities

3. Angel Broking

4. Share khan

5. India Info-line

6. Religare Securities

7. ICICI Direct

8. HDFC Securities

G. Infrastructural Facilities

Karvy facility management manages some 980 buildings with an approximate area of

1.9 million square meters for some 30000 work shop and building investment to the

amount of 180 million [approximately € 116 million] . They have 700 employees

supervise almost 9000 moves.

H. Achievements and Awards of karvy


Among the top 5 stock brokers in India (4% of NSE volumes).

India's No. 1 Registrar & Securities Transfer Agents.

Among the to top 3 Depository Participants.

Largest Network of Branches & Business Associates.

ISO 9002 certified operations by DNV.

Among top 10 Investment bankers.

Largest Distributor of Financial Products.

Adjudged as one of the top 50 IT uses in India by MIS Asia.

Karvy Stock Broking Limited Awarded ‘Largest E-Broking House in India.

I. Future Growth and infrastructure

The Company Diversified Growth Equity Top 100 Fund is an open-ended equity

Scheme which seeks to generate capital appreciation. The Scheme’s portfolio constitutes

equity and equity related securities of the 100 largest listed corporate by market

capitalization, in India. Differentiated stock selection of universal filters at each level

ensures a high quality of portfolio construction in this Scheme. Investment in large cap

companies provides lower volatility than the broader market and better access to cash and

credit reserves increases predictability of future performance.

J. Work Flow Model of karvy


Work flow model:

The work flow model is used to describe the trading, clearing, and settlement

process of equities trading in the market. It is also known as end to end model which is

given below.

Chapter-2


McKensy’s 7s frame work

Strategy

A strategy is a plan of action designed to achieve a particular goal. Strategy refers

to the systematic action and allocation of resources to achieve the companies aim the

integrated vision and direction of the company as well as the manner, which it drives,

articulate, communicates and implements that vision and direction. It can also be defined

as the choice of direction and action that the company adopts to achieve its objectives in a

competitive situation. As per the vision and mission statement of the company, the main

strategy of consortium securities is to gain competitive advantage over the rivals not by

letting the others down but by taking its own standards to a higher level through better

services and customer satisfaction. Their strategic goal is to excel in its service with

integrity, diligence and transparency in satisfying the customer’s investment needs and to

build itself as the trusted and a world class financial service provider.

System:


The daily activities and procedures that staff member’s e engage in to get job done.

System comprises of the main system that run the organization like the finance or the

human resource systems. At consortium securities they use a computerized information

system (CIS) from where all the important data are being collected and then processed

further as per various needs. And the decision making system too is dependent on the CIS

which is usually in the hands of the top management. The management control system at

consortium is all bound by the company’s vision and mission statement as well as their

immediate goals and targets. This is taken care of by the responsibility centre at the head

office. While the appraisal and the reward systems are on a merit rating cum experience

basis so that they can encourage and retain the existing employees as well as attract the

most potential employees while recruiting.

So, this as a whole helps consortium to bind the different constituents of the

organization and positions in fact to facilitate the performance of the entire organization in

a coordinated, cohesive and fruitful manner

Structure:

Business needs to be organized in a specific form of shape that is generally

referred as organizational structure.

Organization is structured in a variety of ways, dependent on their objectives and

culture. The structure of the company often dictates the way it operates and performs.

Traditionally, the business have been structured in a hierarchical way with several

divisions and departments, each responsible for a specific task such as human resources

management, production or marketing .many layers of management controlled the

operations, with each answerable to the upper layer of management.

ORGANISATION CHART


Managing Director

Chief Managing Director

Vice-President Vice-President Vice-President Vice-President

Karvy Karvy Karvy Karvy Stock Broking Consultants Investors Services Securities Ltd. Ltd. Ltd. Ltd.

Deputy Deputy Deputy Deputy General General General General

Senior Senior Senior Senior Manager Manager Manager Manager

Branch Manager

N number of Team Leaders

N number of Executives

Shared values:

Shared values are the core values of the company that are evidenced in the

corporate culture and the general work ethics. The values of EXECUTIVE BRANCH

MANAGER Future and option Depository and D-Mat Currency trading Mutual fund

Commodities trading PRODUCT HEADZONAL HEADREGIONAL HEADCEO and

MD.


Style:

Style of leadership refers to the manner in which an individual uses his or her

talent, values, knowledge, judgment, and attitudes to lead and relate to others. Style

expresses the person’s character. Style is the leadership approaches of top management

and the organization’s overall operating approach; also the way in which the organizations

employees present themselves to the outside world, to suppliers and customers. The

company follows a top-down style of management where in the top-level managers would

give instructions and the same is followed the lower levels. However, at consortium they

have a very pleasant and cooperative culture where everyone’s ideas are respected and

considered. All are participative when it comes to working at the office so as to reach the

targets and meet the organizational goals jointly in the least possible time.

Staff:

Organizations are made up of people who makes the real differences to the success

of the organization in the increasingly knowledge based society. The importance of human

resource as thus got the central position in the strategy of the organization, away from the

traditional model of capital and land.

The people working in KSBL have technical skills that are required for the day to day operations in the company.

Skills:

Skills deals with the strongest skills, actual skills and competencies of the

employees working for the company and how they are monitored. Skills the ability,

knowledge, undertaking, and judgment to accomplish at ask. Skills may be defined as

what the company does best; the distinctive capabilities and competencies that reside in

the organization. KSBL have variety of skills in carrying out business. The company has

its distinctive competency in providing excellent investment service and known for its

strong and long standing relationship with investors, other companies and its clients. The

company also has potential and proficient, technical and fundamental analysis that helps to

analyze the market carefully and correctly before any investment. The dealers at KSBL are

also well qualified and fully trained. Thus, the skills which are the dominant capabilities

and core competencies possessed by the organization are very much in parallel to

organizational strategy, structure, systems, and the culture.


Chapter-3

SWOT ANALYSIS OF KARVY STOCK BROCKING LTD.

STRENGHTS

Among the top 5 stock brokers in India (4% of NSE volumes)

India’s No.1 Registrar & securities Transfer Agents

Among top 3 Depository Participants

Largest Network of Branches & Business Associates

ISO 9002 Operation By DNV

Among Top 10 Investment Bankers.

Largest Distributor of Financial Products.

Adjudged as one of the top 50 IT uses in India by MIS Asia.

Fully fledged IT driven operation.

WEAKNESS

Insurance selling is not up to expectation in Karnataka state.

It is fully depended on brokerage there is risk of security

It is not a listed company.

OPPRTUNITIES

It is having opportunity to start online trading by clients like ICICI direct.com,

Share khan.

It is having opportunity to expand branches to abroad.

It can start funding services like Geojit financial services.

Karvy can start its own mutual fund under its own brand name.


THREATS

Karvy have to compete with nearly 30 competitors engaged in same field

There are more than 30 other companies (especially prudential ICICI, Kotak,

Standard chartered) doing well, Karvy has come under pressure from these

companies. Karvy has to gear itself to other private giants in this field.

This has put extra pressure on Karvy to take steps to retain the share in the market.

Due to fluctuation in market clients are losing their faith in stock market. Moreover

it has to struggle to retain its share in market.

5. Analysis of Financial Statement

The company balance sheet is showing increase in share capital year by year. During

2010 share capital was 33,827.10 lacs and 2011 was 34,864.56 lacs increased to 2012 is

35,248.15 lacs.

The company has purchased new assets in the year 2011 but during year there is a net

fall in assets.

During 2011 there is reduction in the profit but during current year company has

increased it’s profit potential.

Overall the financial condition of the company is favorable and economical.

6. Learning experience

With the help of the college requisition letter I approached many companies and I

got permission in Karvy Stock Broking Limited. This opportunity makes me to learn from

the company and people. The staffs at KSBL are very friendly and with their help and

cooperation I could complete the project successfully.

I understood the stock market and how the orders are placed, how the trading is

done and how the brokers receive the order from the clients and execute the order, how to

modify order, how to cancel the order etc. KSBL is a stock broking company and I

practiced and learned how the trading is done online using the various software’s, how the

records of the clients are maintained etc.


Part-B

General Introduction

Statement of the problem:

To analyze the performance of Nifty 50 & to understand the performance of its top 10 companies.

Objectives of the study

To Study the organization of Karvy financial services ltd.

To know about the operations of Stock market.

To understand the performance of Nifty 50 index.

To understand the working of Nifty 50.

Scope of the study:

The Study covers:

The organization profile of Karvy financial securities Ltd. .

Study of Nifty 50.

The Study helps the investors in understanding the performance of Nifty 50.

The study also helps in understanding the performance of top 10 companies of

Nifty 50.

Methodology:

Primary & secondary information & Analysis are made by getting responses & through the suggestions of brokers, internal guide & external guide.


Limitations of the study:

Time Constraint

Busy work Schedule of department managers.

As stock market is a broader phenomenon so it is very difficult to cover all the

aspects in a single report.

The information is relating to past 20 years only.

INTRODUCTION TO NIFTY 50

S&P CNX Nifty

S&P CNX Nifty is a well diversified 50 stock index accounting for 24 sectors of the

economy. It is used for a variety of purposes such as benchmarking fund portfolios, index

based derivatives and index funds.

S&P CNX Nifty is owned and managed by India Index Services and Products Ltd.

(IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialized

company focused upon the index as a core product. IISL has Marketing and licensing

agreement with standard & poor’s (S&P), who the world leaders are in index services.

The main features of the NSE S&P CNX Nifty 50 index are:

The total traded value for the last six months of all Nifty stocks is approximately

67.68% of the traded value of all stocks on the NSE.

Nifty stocks represent about 67.34% of the total market capitalization as on

September 31, 2012.

Impact cost of the S&P CNX Nifty for a portfolio size of Rs.2 crore is 0.16%

S&P CNX Nifty is professionally maintained and is ideal for derivatives trading


http://www.nseindia.com/content/indices/ind_niftymaintenance.htm

http://www.nseindia.com/content/indices/ind_ic_2007.csv

http://www.nseindia.com/content/indices/ind_niftytrading.htm

What Does Nifty 50 Mean? (Nifty 50 of USA)

The 50 stocks that were most favored by institutional investors in the 1960s and

1970s. Companies in this group were usually characterized by consistent earnings growth

and high P/E ratios.

Investopedia explains Nifty 50 of U.S.A.

The nifty-50 stocks got their notoriety in the bull markets of the 1960s and early

1970s. They became known as "one-decision" stocks because investors were told they

could buy and hold forever.

Examples of nifty-50 stocks included General Electric, Coca-Cola, and IBM.

However, part of this list included companies that have been troubled in the last decade,

such as Xerox and Polaroid.

About Nifty 50

The S&P CNX Nifty (Nifty 50 or simply Nifty) is a composite of the top 50 stocks

listed on the National Stock Exchange (NSE), representing 24 different sectors of the

economy. It is a simplified tool that helps investors and ordinary people alike, to

understand what is happening in the stock market and by extension, the economy. If the

Nifty Index performs well, it is a signal that companies in India are performing well and

consequently that the country is doing well.

An upbeat economy is usually reflected in a strong performance of the Nifty Index.

A rising index is also indicative that the investors are gung-ho about the future. The Nifty

Index is based upon solid economic research. It is internationally respected and recognized

as a pioneering effort in providing simpler understanding of stock market complexities.

Nifty is the flagship index of NSE, the 3rd largest stock exchange in the world in

terms of number of transactions (Stock Futures).


Ownership and Management

Nifty was developed by the economists Ajay Shah and Susan Thomas, then at

IGIDR. Later on, it came to be owned and managed by India Index Services and Products

Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first

specialized company focused upon the index as a core product. IISL have a consulting and

licensing agreement with Standard & Poor's (who are world leaders in index services).

CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to

reflect the identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for

CRISIL, 'N' stands for NSE and X stands for Exchange or Index. The S&P prefix belongs

to the US-based Standard & Poor's Financial Information Services.

It is calculated as a weighted average, so changes in the share price of larger

companies have more effect. The base is defined as 1000 at the price level of November 3,

1995.

Criteria for inclusion of Stock in Nifty50

Average market capitalization of Rs.5, 000 million or more during the last six

months.

Liquidity: Cost of transaction (impact cost) of less than 0.75% for more than 90%

of trades, over six months.

At least 12% floating stock (not held by promoters of the company or their

associates).

The Organization

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 and was incorporated in November 1992 as a tax-paying company unlike other stock

exchange in the country.


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.

The S&P CNX Nifty Index Futures

The NSE Nifty futures contract is a forward contract, which is traded on the National

Stock Exchange (NSE) on June 12, 2000. The index futures contracts are based on the

popular market benchmark S&P CNX Nifty index.

Contract Specifications

Security descriptor

The security descriptor for the S&P CNX Nifty futures contracts is:

Market type: N

Instrument Type: FUTIDX

Underlying: NIFTY

Expiry date: Date of contract expiry

Instrument type represents the instrument i.e. Futures on Index.

Underlying symbol denotes the underlying index which is S&P CNX Nifty

Expiry date identifies the date of expiry of the contract

Underlying Instrument

The underlying index is S&P CNX NIFTY.

Trading cycle

S&P CNX Nifty futures contracts have a maximum of 3-month trading cycle - the

near month (one), the next month (two) and the far month (three). A new contract is

introduced on the trading day following the expiry of the near month contract. The new

contract will be introduced for three month duration. This way, at any point in time, there

will be 3 contracts available for trading in the market i.e., one near month, one mid month

and one far month duration respectively.


Expiry day

S&P CNX Nifty futures contracts expire on the last Thursday of the expiry month. If the

last Thursday is a trading holiday, the contracts expire on the previous trading day.

Trading Parameters

Contract size

the permitted lot size of S&P CNX Nifty futures contracts is 200 and multiples thereof.

Price steps

the price step in respect of S&P CNX Nifty futures contracts is Re.0.05.

Base Prices

Base price of S&P CNX Nifty futures contracts on the first day of trading would be

theoretical futures price. The base price of the contracts on subsequent trading days would

be the daily settlement price of the futures contracts.

Price bands

There are no day minimum/maximum price ranges applicable for S&P CNX Nifty

futures contracts. However, in order to prevent erroneous order entry by trading members,

operating ranges are kept at + 10 %. In respect of orders which have come under price

freeze, members would be required to confirm to the Exchange that there is no inadvertent

error in the order entry and that the order is genuine. On such confirmation the Exchange

may

approve such order.

Quantity freeze

Quantity Freeze for S&P CNX Nifty futures contracts would be 20,000 units or

greater. In respect of orders which have come under quantity freeze, members would be

required to confirm to the Exchange that there is no inadvertent error in the order entry

and that the order is genuine. On such confirmation, the Exchange may approve such

order. However, in exceptional cases, the Exchange may, at its discretion, not allow the


orders that have come under quantity freeze for execution for any reason whatsoever

including non-

availability of turnover / exposure limits.

Order type/Order book/Order attribute

· Regular lot order

· Stop loss order

· Immediate or cancel

· Good till day

· Good till cancelled

· Good till date

· Spread order

Good Till Cancelled (GTC) orders are cancelled at the end of the period of 7 calendar days

from the date of entering an order

Why Trade the NSE Nifty Index?

You can trade the 'entire stock market' instead of individual securities.

Index Futures are:

- highly liquid

- large intra-day price swings

- high leverage

- low initial capital requirement

- lower risk than buying and holding stocks

- just as easy to trade the short side as the long side

- only have to study one index instead of 100's of stocks

Index futures are settled in cash and therefore all problems related to bad

delivery, forged, fake certificates, etc can be avoided. Since the index consists of many

securities (50 securities) it is very difficult to manipulate the index.

You are required to pay a small fraction of the value of the total contract as margins.

This means that trading in Stock Index Futures is a leveraged activity since the investor is

able to control the total value of the contract with a relatively small amount of margin.


Data Analysis & Interpretation

Analysis & Interpretations of nifty 50’s performance

Nifty 50 One of the Greatest Wealth Creator

Equity is the one of the most exotic asset class, it has given about 21% average

annualized return since 1990, investment in equity has seen sea change in recent decade.

Emergence of business channel sprayed the awareness about equity among the investor

community ,earlier to buy equity was not so easy as it is now, today market is in pockets

of investor in terms of access, technology has provided the multiple way to access the

market through internet, through cell phone and WAP , now a day’s various expert advices

trading and investment tips are available with the investors, Many fund house are running

their mutual fund and giving good return to their investors and the asset under

management of mutual fund industry is approximately $ 6.7 lakh billion. Reliance capital

is the largest mutual fund whose asset under management is more than one lacks crore

followed by HDFC MF, ICICI Prudential MF, state run UTI Mutual Fund and Birla Sun

Life MF are the five largest fund house of the country. Insurance companies, HNI, FII,

Retail investors are holding significant amount of equities in their portfolio, although the

allocation in equity is less than 5% of the total house hold saving in the country however

in totality it is a huge amount. In recent market selloff where FII has sold 13.1 billion US$

at one way and DII has bought more than 16.2 US$ at the same time in other way.

Identification of investable share is the tuff job even for the market participant and

timing the market is even tougher for the expert, but the fundamental analysis and

technical analysis helps the people to identify the cheap stocks at the right time to park

their investments. But still the question remain same what and how much one should buy?

The main barometer which is index it gives the diversity and credibility of the basket and

also liquid to exit and enter at desired time for the investor.


NIFTY 50 stocks reflects the appropriate behavior of equity because this is the

broader index composed of 50 blue chips Company of various sector having better

corporate governance, credibility and profitability. Nifty is claimed as the stock of the

nation gives the diversity and reliability. Reshuffling in script is also an important

phenomena because we have observed that time to time the company who hasn’t followed

the corporate governance and not adequately performed have shown exit way from the

index, similar incident happened with the Satyam computers after the scam broke out in

the company the script of the company removed from the index and replaced by other

company. The most important characteristics of NIFTY is the diversity it is the basket of

the shares who represents the various sectors like Reliance and ONGC represents the

petrochemical sector, NTPC represents the power sector, ACC represents the cement

sector ,Infosys represent the IT sector and SBI and ICICI bank represents the banking

sectors and so on.

The stocks in NIFTY gets proportionate weightage according to their market

capitalization so if money will allocated to the company who are the component of index

according to their proportion, then the capital appreciation will be similar as the index

fluctuation.


Nifty performance Analysis

Table1: Performance of Nifty 50


YEAR OPEN CLOSE GAIN PT. %

1993 785 1042 257 32.738853

1994 1246 1994 748 60.032102

1995 1071 908 -163 -15.219421

1996 848 899 51 6.0141509

1997 972 1079 107 11.008230

1998 963 884 -79 -0.082035

1999 966 1480 514 53.209109

2000 1546 1263 -283 -18.305304

2001 1371 1059 -312 -22.757111

2002 1075 1093 18 1.674418

2003 1041 1879 838 80.499519

2004 1809 2080 271 14.980652

2005 2057 2836 779 37.870685

2006 3001 3966 965 32.155948

2007 4082 6130 2048 50.171484

2008 5137 2959 -2178 -42.398286

2009 2874 5201 2327 80.967292

2010 4882 6134 1252 25.645227

2011 5505 4624 -881 -16.003633

2012 5199 5905 706 13.579534

TOTAL 785 5905 5120652.22929

9

HIGH 785 6200 5415 689.808917

LOW 785 4823 4038 514.394904

Above table depicts the twenty year equity behavior in Indian context the index

was quoting at 785 at 1993 and when it peaked out in January 2008 it was quoting on

whooping above 6200 which was 689.80 % from the 1993 level .The appreciation is

excluding the dividend payouts from the holding of the share for such a long time. The

gain has outperformed all the asset class around.

However market corrected in between, time to time but they recovered their losses

in coming year. In the above calendar 2009 was the best month in terms of return the year

has given 80.96% of annualized return to the Nifty followed by 80.49% in 2003 and

60.032% in 1994.since 1993, 14 years it has given positive return while 6 years it has

given negative return among them 2008 has given -42.39% followed by -22.75% in

2001.

Fig: Graphical presentation of Nifty movement on opening basis


19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

0

1000

2000

3000

4000

5000

6000

78512461071848 972 963 966

1546137110751041

18092057

3001

4082

5137

2874

48825505

5199

Performance of Nifty

YEARS

NIFTY I

NDEX

Several events have been priced by the market since 1992, earlier Indian capital

market was in nascent stage and the market infrastructure were poor, it was operating

under very low base and volume, there was the manual trading system in practice,

settlements were in physical form and time taking activity, the unlawful practices were

quite common with the Indian market. After the new economic policy opted by Rao

Manmohan duo the market has seen a revolutionary change in their all dynamics. The

participation of investors has increased after the reform, system became more regulated

after the formation of SEBI, FII became the dominant player in the market, retail and HNI

also became active in on the bourses, household saving started trickling in the equity

market through mutual fund and direct investment. These events bring new confidence and

improved the sentiments in Indian capital market.

In Indian condition equity sparked fear in the minds of investor. In India people in

generally love to see their investment on regular basis. The fluctuation in the market is

mostly hyped by the media channel that’s why people feel themselves scary about to

investment in the market. In spite of that the equity has given best return in the longer

horizon most of the household saving finds their way towards fixed income instruments

because liquidity concerns and conservative attitude of the people. Investment psychology

plays very important role to park the saving in the equity, and second most important thing

is risk aversion or risk apatite.

The advent of business channel has created a revolution in the investment world

people getting aware about the fundamental and technical’s of the markets and behaving

accordingly.

The financial reforms taken by the government open another gate for money to the

capital market and treasury operation if corporate emergence of HNI and retail investor in

the big way played significant role in the lustrous performance of capital market in India.

Today Indian market has their own legs and wings although they are more

dependent on foreign flow but as the time is running out the dependency is getting lesser.

In the recent downturn in equity market in 2008 the FII has sold more than 13 billion US$

and in the same period more than 16 billion US$ of domestic money get the way in the

market. Indian equity market has slowly and slowly showing sense of stability in their

behavior.


1993:

Year 1993 was started on good notes. Historical serial bomblast of 12th march 1993

shocked the market and on reaction of it market corrected 19 % in two month i.e. March

and April. The green year for the market here it has given 32.73 % annual return, it was

great time for Indian economy because Manmohan Singh policy was converted into the

performance by that time and the country and the corporate India was in growth track.

There was some profit booking seen in the first two quarter but Nifty came back strongly

in next quarter with significance gain.

1994:

1994 was the year of consolidation after 1993 year of bull run for the market. Main

outcome of the year was the market able to hold their green flag with 60% gain in the

year .in spite of global problems and geopolitical concerns market consolidated their gains

in this year.

1995:

After the two year of Bull Run market corrected in this year due to political

uncertainty in Delhi and poor monsoon given the market an excuse for profit taking and it

corrected -15% in the year. This was the real breather for the market after for year of

strong Bull Run.

1996:

Year started with the cautious note and remained under narrow range in whole year

market closed mere 6.01% down although first half market gone up 23% while final half

of the year surrendered 17%of their gain which was backed by non event year.

1997:

This year was given return of 11% but alternate band of buying and selling were

seen on the screen ,FII flow were sustained followed by better global picture .Positive

budget and growth familiar budget supported the market gain


1998:

Looming global instability and credit crisis in Asian economy open the selloff in

market. NATO intervention on Yugoslavia Middle East crisis of Israel and Palestine

dampened the sentiments of the markets and market corrected 0.08% in the year.

The subdued interest if FII and cooling of economic activity in the region pull backed the

market this year.

1999:

This was the fourth best year of the Indian capital market with 53% gain in the

year the flavor of NDA government led by Atal Bihari Vajpayee was backed by the

market participant and plenty of optimism created euphoria in the market.

Political stability in the centre and new reforms by the government bring the

positive sentiments in the market

2000:

Gloomy global economy and poor monsoon given the proper reason to selling in

equity market .political instability in the Delhi was another reason that created selloff in

the equity markets. This year market corrected 18% in the year. Ketan Parikh incident was

created panic in the market in November.

2001:

Global jitter especially Asian crises, geopolitical condition in Middle East created

global selloff in the equity markets and India corrected 22% in the year with global peers.

Japanese economy and problem in the Japanese financial system spread wave of

selling in the equity market in the Asia region.

Domestically poor agriculture growth and bad corporate earning added more flavor

in the bad sentiments and market further cooled


2002:

After the subdued year Indian capital market was mixed in 2002 here alternate

bouts of rise and fall were registered on the screen. Political uncertainty also added the

sentiment and market finally able to registered 1.6% gain in the year and made a good

base for further move which was never imagined that Indian capital market going to

surprise every analyst in coming year.

2003:

This was the phenomenal year for equity market Nifty given 80.49% return in year

among them 70% came in second half of the year. Again market was celebrating the

election year.

Economy was growing at the rate of more than 8% one of the highest among the

growing nations. The corporate earnings were phenomenal. So market given thumbs up

and registered second highest gain in the history.

First half of the year was given only 3%of return but in second half it was given 66%

return.

2004:

Surprise result of Lok Sabha election and strong performance of left parties spread

the negative sentiments in the market.

After the sustain rise market corrected in first half in first quarter 7% second

quarter14% and third quarter13% however fourth quarter was the recovery backed by the

some policy action of P.Chidambaram and Manmohan Singh. The quarter given 14% of

northward movement and annual basis market ended positive with 8%gain.


2005:

India became the destination of the overseas money yen carry trade created the

opportunity for the Japanese money to trickle in Indian bourses .and this effect was visible

with the 37% annual return in the market.

In spite of the fact that left parties supporting the government they forwarded

banking reform infrastructure spending and a budget that liked by India INC

2006:

Chidambaram effect was still there on Dalal street .Index were making new high

and it was the liquidity driven rally.

Growing economy better corporate number reflected at the screen of the market

and market has given 32% return in the year.FII were the key contributor in the market

they were parking their money in BRIC country .hedge fund became more active in this

year. They were putting their money through the participatory notes. Which were issued

by FII

2007:

Year 2007 was the green carpet for the markets with whooping 50% rally in the

market backed by record FII flow of 17 billion US$ in a single calendar year and

significant amount of retail participation in the market. The best month was the October

with the 16% return while worst month was the February with 9% negative return. The

sentiments were quite positive in this year record number of companies came with their

IPO and they were successful to tap the market.

By this time India became one of the prime destination of investment, many India

dedicated fund were started operating from overseas, tax treaty done with Singapore also

supported the equity market, good amount of Japanese money came in the market and

market rallied on the liquidity.

The GDP growth was at record level of 9.2 and India were about to achieve the

double digit growth.


2008:

The year 2008 was the worst year and one of the most eventful year of the equity

market not only in India but globally, the ghost of subprime spread their wing across the

globe, credit crisis was the flavor of the season .This event pulled down the equity market

globally, equity markets all around the globe corrected more than 60% taking the global

link , Indian market has also corrected record 42% in the year .The investors money

significantly eroded in the crash .In the entire calendar year only July and December was

the month that has given the positive return and rest of the months ended into the red.

Growing crude price, inflation and credit crisis was the flavor of the season

2009:

The year started on the subdued notes however post march market surprise the

investor with their northward journey FII pumped significant money in the market and

market gained 80.96% by June election result created great euphoria in the market and in

the history of Indian capital market. Indices had hit the 20% circuit on Monday, May 18,

after the UPA (United Progressive Alliance) swept the Lok Sabha polls. This was the

repeat of the history .The day's percentage rise was the biggest since a 20.8 percent jump

on March 2, 1992 when Singh, who was then finance minister, unveiled reforms that

opened the economy to foreigners.

2010:

The prevailing economic conditions, both domestic and global, suggest the Indian

stock market is poised to continue to rally in 2010 even though US and European Markets

have yet to recover from recession effect. The phase wise withdrawal of financial support

given by Indian government to the market. So far, the recovery in India has been driven by

domestic consumption and government expenditure. However, corporate investment is

expected to surge in 2010 due to the strong GDP growth which will increase capacity

utilisation.


2011:

Market experts believe that there was nothing too positive in the budget which in turn

disappointed the investors who were expecting one more dream budget from P

Chidambaram. It was the worst budget day performance for markets in the last four years

as the finance minister's budget fell way short of market expectations. To make matters

worse, amendments made in the direct tax avoidance agreement further spooked the

investors on the expiry day.

2012:

There may be all round negativity but the stock story led by Nifty has something

positive to offer at the end of six months this calendar. Nifty, the broader stock market

index, has grown about 15% during January to June 2012 period. “Next six months look

good from market perspective and Nifty can climb to levels of 5800 -6000 by the end of

2012.With Manmohan Singh at the helm of finance ministry, government once again

appears confident.”ends.

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

-60

-40

-20

0

20

40

60

80

100

Percentage Changes Of Nifty


NIFTY-FIFTY

Present share list of NIFTY-FIFTY

1 ABB LTD.

2 ACC LIMITED

3 AMBUJA CEMENTS LTD

4 AXIS BANK LIMITED

5 BHARTI AIRTEL LIMITED

6 BHEL

7 BHARAT PETROLEUM CORP LT

8 CAIRN INDIA LIMITED

9 CIPLA LTD

10 DLF LIMITED

11 GAIL (INDIA) LTD

12 GRASIM INDUSTRIES LTD

13 HCL TECHNOLOGIES LTD

14 HDFC BANK LTD

15 HDFC LTD

16 HERO MOTOCORP LTD

17 HINDALCO INDUSTRIES LTD

18 HINDUSTAN UNILEVER LTD.

19 ICICI BANK LTD.

20 IDEA CELLULAR LIMITED

21 INFOSYS TECHNOLOGIES LTD

22 ITC LTD

23 JINDAL STEEL & POWER LTD


24 LARSEN & TOUBRO LTD. 49 UNITECH LTD

25 MARUTI SUZUKI INDIA LTD. 50 WIPRO LTD

26 MAHINDRA & MAHINDRA LTD

27 NATIONAL ALUMINIUM CO LTD

28 NTPC LTD

29 OIL AND NATURAL GAS CORP.

30 PUNJAB NATIONAL BANK

31 POWER GRID CORP. LTD.

32 RANBAXY LABS LTD

33 RELIANCE COMMUNICATIONS L

34 RELIANCE CAPITAL LTD

35 RELIANCE INDUSTRIES LTD

36 RELIANCE INFRASTRUCTU LTD

37 RELIANCE POWER LTD.

38 STEEL AUTHORITY OF INDIA

39 STATE BANK OF INDIA

40 SIEMENS LTD

41 STERLITE INDS (IND) LTD

42 SUN PHARMACEUTICALS IND.

43 SUZLON ENERGY LIMITED

44 TATA COMMUNICATIONS LTD

45 TATA MOTORS LIMITED

46 TATA POWER CO LTD

47 TATA STEEL LIMITED

48 TATA CONSULTANCY SERV LT


Nifty’s Top 10 companies with their market capitalization:

Market capitalization according to nifty in 2012

Market capitalization according to nifty in 2011

SECURITY Market Capitalization in crores

WEIGHTAGE

RELIANCE 1,84,504 10.11 %INFOSYSTCH 1,46,179.72 8.01 %LT 1,27,747.5 7 %ICICIBANK 1,24,645.13 6.83% HDFC 93,255.7 5.11 %ITC 91,065.77 4.99 %HDFCBANK 78,473.51 4.3 %SBIN 77,196 4.23 %ONGC 53,836.4 2.95 %BHARTIARTL 52,923.9 2.9 %


SECURITY Market Capitalization in crores

WEIGHTAGE

RELIANCE 2,24,408 10.95%ONGC 54,718 2.67%NTPC 33,405 1.63%BHARTIARTL 50,414 2.46%INFOSYSTCH 1,77,272 8.65%SBIN 82,795 4.04%BHEL 50,005 2.44%ITC 1,05,748 5.16%TCS 56,153 2.74%HINDUNILVR 35,249 1.72%

RELIANCE INDUSTRIES LIMITED (NSE: RELIANCE) is India's largest

private sector conglomerate (by market value) and second largest in the world, with an

annual turnover of US$ 66 billion and During the fiscal year ending in March 2010

making it one of India's private sector Fortune Global 500 companies, being ranked at

206th position (2010). It was founded by the Indian industrialist Dhirubhai Ambani in

1966. Ambani has been a pioneer in introducing financial instruments like fully

convertible debentures to the Indian stock markets. Ambani was one of the first

entrepreneurs to draw retail investors to the stock markets. Critics allege that the rise of

Reliance Industries to the top slot in terms of market capitalization is largely due to

Dhirubhai's ability to manipulate the levers of a controlled economy to his advantage.

Though the company's oil-related operations form the core of its business, it has

diversified its operations in recent years. After severe differences between the founder's

two sons, Mukesh Ambani and Anil Ambani, the group was divided between them in

2006. In September 2008, Reliance Industries was the only Indian firm featured in the

Forbes's list of "world's 100 most respected companies".

The Group's activities span exploration and production of oil and gas, petroleum refining

and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals),

textiles, retail and special economic zones.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn

and fibre producer in the world and among the top five to ten producers in the world in

major petrochemical products.


2011 20129.6

9.8

10

10.2

10.4

10.6

10.8

11

11.2

10.11

10.95

Change in weightage of Reliance

The graph shows the weight of Reliance in nifty in 2011 and 2012. It’s been

observed that Reliance Nifty weight in nifty over 2 years is above 10%. Even though there

has been a change in the way of calculation of Market Capitalization in Nifty. The method

for calculation has changed from full market capitalization to free float method from 26

June, 2010. Reliance has been the highest contributor in the Nifty.

Reliance share holding pattern clearly states the importance given to public

shareholding. As it is India’s largest private conglomerate it has also the highest public

share holders.

Reliance has the highest weight in Nifty. The scrip is one of the most sustained stocks.

The stock has been the biggest contributor to the recent rally. Reliance has gained under

the new free float method. And it has still maintained itself at the top of the list.


INFOSYS TECHNOLOGIES LTD. (NASDAQ: INFY) was started in 1981 by

seven people with US$ 250. Today, we are a global leader in the "next generation" of IT

and consulting with revenues of over US$ 4 billion.

Infosys defines designs and delivers technology-enabled business solutions that

help Global 2000 companies win in a Flat World. Infosys also provides a complete range

of services by leveraging our domain and business expertise and strategic alliances with

leading technology providers.

Their offerings span business and technology consulting, application services, systems

integration, product engineering, engineering, independent, IT infrastructure services and

business process outsourcing.

Infosys pioneered the Global Delivery Model (GDM), which emerged as a

disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is

based on the principle of taking work to the location where the best talent is available,

where it makes the best economic sense, with the least amount of acceptable risk.

In recent years, Infosys has begun shifting operations to the United States and

other countries outside of India. In 2012, Infosys announced a new office in Milwaukee,

Wisconsin to service Harley-Davidson, being the 18th international office in the United

States. Infosys hired 1,200 United States employees in 2011, and expanded the workforce

by an additional 2,000 employees in 2012. Globally, Infosys has 67 offices between the

US, India, China, Australia, Japan, Middle East, UK, Germany, France, Switzerland,

Netherlands, Poland, Canada. Infosys is the third-largest India-based IT services company

by 2012 revenues. Of this revenue, the majority comes from international business. In

2009, Infosys collected 1.2% of its income from the domestic Indian market.


Infosys takes pride in building strategic long-term client relationships. Their 97% of

revenues come from existing customers.

2011 20127.6

7.8

8

8.2

8.4

8.6

8.8

8.01

8.65

Change in weightage of Infosys tech

The graph shows the weight of Infosys in nifty in 2011 and 2012. It’s been

observed that Infosys weight in nifty in year 2008 its 4%. The stock was the 5th highest

contributor in 2008. But the company has significantly moved from 4 % weight in the year

2008 to 8% in the year 2011. This has happened because there has been a change in the

way of calculation of Market Capitalization in Nifty. The method for calculation has

changed from full market capitalization to free float method from 26 June, 2010 Infosys

has only 16% Promoters holding in the shareholding pattern.

Infosys share holding pattern clearly states the importance given to public

shareholding. As it is India’s largest IT Company. Promoter’s contribution is only to the

extent of 16% which shows the importance given to the public shareholding.

Infosys has the second highest weight in Nifty. Infosys contributes 8% of the nifty.

The scrip is one of the most sustained stocks. The stock has been one of the biggest

contributors to the recent rally. Infosys has gained under the new free float method.


ITC is one of India's foremost private sector companies with an annual turnover

stood at $7 billion and market capitalization of over $34 billion. ITC has a diversified

presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-

Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel,

Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an

outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards,

Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent

businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and

Stationery. ITC's diversified status originates from its corporate strategy aimed at creating

multiple drivers of growth anchored on its time-tested core competencies: unmatched

distribution reach, superior brand-building capabilities, effective supply chain

management.

The company has its registered office in Kolkata. It started off as the Imperial

Tobacco Company, and shares ancestry with Imperial Tobacco of the United Kingdom,

but it is now fully independent, and was rechristened to India Tobacco Company in 1970

and then to I.T.C. Limited in 1974.

The company is currently headed by Yogesh Chander Deveshwar. It employs over

29,000 people at more than 60 locations across India and is listed on Forbes 2000. ITC

Limited completed 100 years on 24 August 2012.


2011 20124.9

4.95

5

5.05

5.1

5.15

5.2

4.99

5.16

Change in weightage of ITC

Tobacco major ITC Ltd has launched Wills Navy Cut Regular size filer cigarettes,

priced at Rs 24 a pack of 10 sticks in select markets in north and west India. The

brand has been launched keeping in mind ITC's objective of delivering superior

quality and value to, all its consumers. The new cigarettes, which have been

launched in select retail markets such as Mumbai and Pune, could be rolled out

nationally based on the response from these "test markets", ITC's distributors said.

Analysts believe ITC's move to launch the new cigarette directly through retailers

instead of the company’s distributor network could be a part of a strategy to de-

emphasise Wills as a tobacco brand.

ITC Foods has drawn up plans to foray into the nascent frozen foods category in

the domestic market within the next six-eight months. The company will extend its

Kitchen of India brand to frozen foods, which would include meals packaged in

trays and snacks. ITC recently began exporting frozen vegetarian foods to markets

such as the US and Canada, since exporting non-vegetarian foods out of India is

restricted. The company is manufacturing the frozen foods range at its Bangalore

facility, and will use the same to cater to the domestic market as well, ITC Foods

CEO Yogesh Chander Deveshwar told ET. This will be seventh food category ITC

Foods will tap.


State Bank of India (SBI) is the largest bank in India. The bank traces its

ancestry back through the Imperial Bank of India to the founding in 1806 of the Bank of

Calcutta, making it the oldest commercial bank in the Indian Subcontinent. The

Government of India nationalized the Imperial Bank of India in 1955, with the Reserve

Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the

Government took over the stake held by the Reserve Bank of India. SBI provides a range

of banking products through its vast network in India and overseas, including products

aimed at NRIs. The State Bank Group, with over 15,003 branches, including 157 foreign

offices making it the largest banking and financial services company in India by assests.

With an asset base of $501 billion, it is a regional banking behemoth. It has a market share

among Indian commercial banks of about 20% in deposits and advances, and SBI accounts

for almost one-fifth of the nation’s loans.

SBI has tried to reduce its over-staffing through computerizing operations and

Golden handshake schemes that led to a flight of its best and brightest managers. These

managers took the retirement allowances and then went on the become senior managers at

new private sector banks. The State bank of India is 29th most reputable company in the

world according to Forbes. State Bank of India is one of the Big Four Banks of India with

ICICI Bank, Axis Bank and HDFC Bank.

The reasons:

1. The bank has decided on revising interest rates in the second half of the year

2010. The bank, which has already extended loans worth INR 50 billion to help

cash-strapped mutual funds, India's largest bank, has announced its plans to raise


deposit rates by 25-50 basis points effective from June 1, 2010. While the two-to-

three-year term deposit rate will be raised to 8.75 percent.

2. Country’s largest lender State Bank of India (SBI) reported a 10.2% rise in

quarterly profit on trading gains and rising loan demand. The bank, which along

with its associates controls almost a quarter of Indian bank loans and deposits, said

on Saturday that its July-September net profit rose to Rs 2,490 crore ($530.2

million) from Rs 2,260 crore a year earlier. That met a Reuter’s poll of brokers

who forecast a profit of Rs 2,460 crore for the period. Closest rival ICICI Bank on

Friday said that its quarterly net profit rose 2.6%, beating forecasts. Shares in State

Bank, valued at $31.5 billion, rose 26% in July-September, beating a 20% rise in

the sector index and an 18% gain on the benchmark index.


2011 20123.9

3.95

4

4.05

4.1

4.15

4.2

4.25

4.3

4.25

4.04

Change in weightage of SBI

ONGC (Oil and Natural Gas Corporation Limited) is India's leading

oil & gas exploration company. ONGC has produced more than 600 million metric tons of

crude oil and supplied more than 200 billion cubic meters of gas since its inception.

Today, ONGC is India's highest profit making corporate. It has a share of 77 percent in

India's crude oil production and 81 per cent in India's natural gas production. The origins

of ONGC can be traced to the Industrial Policy Statement of 1948, which called for the

development of petroleum industry in India. Until 1955, private oil companies such as

Assam Oil Company at Digboi, Oil India Ltd (a 50% joint venture between Government

of India and Burmah Oil Company) at Naharkatiya and Moaran in Assam, and Indo-

Stanvac Petroleum project (a joint venture between Government of India and Standard

Vacuum Oil Company of USA) at West Bengal, were engaged in exploration work. The

vast sedimentary tract in other parts of India and adjoining offshore were largely

unexplored. In 1955, Government of India decided to develop the oil and natural gas

resources in the various regions of the country as part of the Public Sector development.

To achieve this objective an Oil and Natural Gas Directorate was set up in1955, as a

subordinate office under the then Ministry of Natural Resources and Scientific Research.

ONGC has a fully owned subsidiary, ONGC Videsh Ltd (OVL) that looks for

exploration opportunities in other parts of the world. OVL is pursuing exploration of oil

and gas in Russia, Iran, Iraq, Libya Myanmar and other countries. ONGC has also

acquired 72% stake in MRPL with full management control of the 9.69 tons, state-of-the-

art refinery.


2011 20122.5

2.55

2.6

2.65

2.7

2.75

2.8

2.85

2.9

2.95

3

2.95

2.67

Change in weightage of ONGC

The rebound in crude prices has increased the likelihood of healthy crude

realization in coming quarters, which will boost the bottom‐line of the company.

The market capitalization of ONGC was Rs. 1,78,538 crores in 2008 and it was

ranked on number 2nd among the top 10 companies, based on market capitalization. The

market capitalization of the company decreased to 54,718 crores and its ranking came

down to 8th among the top 10 companies.


India is the fourth largest telecom market in Asia after China, Japan and South

Korea. The Indian telecom network is the third largest in the world and the second largest

among emerging economies. At current levels, telecom intensiveness of Indian economy

measured as the ratio of telecom revenues to GDP is 2.1 percent as compared with over

2.8 percent in developed economies.

Indian telecom sector has undergone a major process of transformation through

significant policy reforms. The reforms began in 1980s with telecom equipment

manufacturing being opened for private sector and were later followed by National

Telecom Policy (NTP) in 1994 and NTP'1999.

Historically, the telecom network in India was owned and managed by the

Government considering it to be a natural monopoly and strategic service, best under

state's control. However, in 1990's, examples of telecom revolution in many other

countries, which resulted in better quality of service and lower tariffs, led Indian policy

makers to initiate a change process finally resulting in opening up of telecom services

sector for the private sector.

The telecom industry of today is characterized by hyper competition, convergence

and constant change. The market for mobile services is exploding and new actors are

continuously entering the market. The rapid advancements and changes in this industry

provide companies with business opportunities as well as challenges due to an

increasingly complex environment in terms of competition and technology.

Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is India's

largest cellular service provider with more than 183.61 million subscribers as of Nov

2012.

It offers its TELECOM services under the Airtel brand and is headed by Sunil Bharti

Mittal. The company also provides telephone services and Internet access over DSL in 14

circles.

Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base,

behind China Mobile and China Unicom. In India, the company has a 24.6% share of the


wireless services market, followed by 17.7% for Reliance Communications and 17.4% for

Vodafone Essar.

The market share of Bharti Airtel as a overall percentage in NSE is shown below:

2011 20122.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3

2.9

2.46

Change in weightage of Airtel

The market capitalization of Bharti Airtel was Rs. 52,923.9 crores in 2011 and it

was ranked on number 10th among the top 10 companies based on market capitalization.

The market capitalization of the company increased to 50,414 crores and its ranking go up

to 5th among the top 10 companies.

Issues

Rural Telecommunications

Interconnection

Spectrum Allocation

Other reasons for such fall are:


Bharti Airtel and MTN deal: Bharti Airtel Ltd’s shares had risen 4% to Rs435 soon

after its talks with South Africa’s MTN Group Ltd were called off. But that relief rally

was short-lived, with its shares falling by 8% to Rs400. When Bharti was pursuing the

deal, the markets were concerned about its implications and the resultant uncertainty

had led to its shares underperforming the market by a wide margin.

Fierce Price-War between the Telecom giants: Bharti recently cut its rates by about

10% for on-network calls, and all the major incumbents responded to this move

immediately. We believe that such rapid cuts in prices are negative, as this can

aggravate investor concerns about industry fragmentation and irrational pricing.

Larsen & Toubro Limited (L&T) is India’s largest engineering and construction

conglomerate with additional interests in electrical, electronics and IT. A strong customer-

focused approach and constant quest for top-class quality have enabled L&T to attain and

sustain leadership position over 6 decades. L&T enjoys a premier brand image in India

and its international presence is on the rise. ECC – the Engineering Construction &

Contracts Division of L&T – is India’s largest construction organization. Many of the

country’s prized landmarks – its exquisite buildings, tallest structures, largest industrial

projects, longest flyovers, highest viaducts – have been built by ECC. Leading-edge

capabilities of ECC cover every discipline of construction: civil, mechanical, electrical and

instrumentation engineering.


L&T market cap has increased from 42,566 crore (2009) to 89,672 crore (2010),

which accounts to 7% of the market capitalization in year 2011 as compared to 2.49% in

the November, 2010

2011 20125.8

6

6.2

6.4

6.6

6.8

7

7.2

7

6.22

Change in weightage of L & T

Larsen and Toubro (L&T) is one company which seems to be bucking the

slowdown trend. The engineering and construction behemoth has projected an order book

of Rs 66,000 crore (Rs 660 billion) by March 2011, a growth of 30 per cent over the

previous year. The company is, however, likely to close the year with a better-than-

projected order book of Rs 75,000 crore, though it is not certain about the growth

prospects in the next financial year.

Larsen & Toubro Ltd, the diversified engineering company, has raised $600

million (Rs2, 280 crore) through qualified institutional placements and foreign currency

convertible bonds to fund expansion in its emerging businesses, including railways and

defense. The company sold $400 million of shares and $200 million of foreign currency

convertible debentures. The shares were priced at a 1 per cent discount. L&T is adding

railways, defense and shipbuilding to its main business of constructing factories, roads and

bridges, to benefit from a government plan to spend $500 billion by 2014 to augment

India’s infrastructure.


ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian

financial institution, and was its wholly-owned subsidiary. ICICI’s shareholding in ICICI

Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an

equity offering in the form of A

DRs listed on the NYSE in fiscal 2000, ICICI Bank’s acquisition of Bank of Madura

Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI

to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the

initiative of the World Bank, the Government of India and representatives of Indian

industry. The principal objective was to create a development financial institution for

providing medium-term and long-term project financing to Indian businesses. In the

1990s, ICICI trang sformed its business from a development financial institution offering

only project finance to a diversified financial services group offering a wide variety of

products and services, both directly and through a number of subsidiaries and affiliates

like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or

financial institution from non-Japan Asia to be listed on the NYSE.

ICICI Bank’s market capitalization rose to 87,524.30 in November 2011 from

39,132 in November 2010, which accounts to 6.83% as compared to 2.29% in the previous

year.

India’s largest private sector bank by net profit ICICI Bank rose 7.6% as its American

depository receipt (ADR) rose 4.76%.


2011 20126.45

6.5

6.55

6.6

6.65

6.7

6.75

6.8

6.85

6.83

6.59

Change in weightage of ICICI Bank


ICICI Bank is India's second-largest bank with total

assets of Rs. 4,736.47 billion (US$ 93 billion) at March 31,

2012 and profit after tax Rs. 64.65 billion (US$ 1,271

million) for the year ended March 31, 2012. The Bank has a network of 3,100 branches

and 10,486 ATMs in India, and has a presence in 19 countries, including India.

HDFC was incorporated in 1977 with the primary objective of meeting a social need –

that of promoting home ownership by providing long-term finance to households for their housing

needs. HDFC was promoted with an initial share capital of Rs. 100 million.

The primary objective of HDFC is to enhance residential housing stock in the

country through the provision of housing finance in a systematic and professional manner,

and to promote home ownership. Another objective is to increase the flow of resources to

the housing sector by integrating the housing finance sector with the overall domestic

financial markets.

HDFC Bank is the fifth or sixth largest bank in India by assets and the first largest

bank by market capitalization as of November 1, 2012. The bank was promoted by

the Housing Development Finance Corporation, a premier housing finance company (set

up in 1977) of India. As on December 2012, HDFC Bank has 2,776 branches and 10,490

ATMs, in 1,399 cities in India, and all branches of the bank are linked on an online real-

time basis

HDFC Ltd. Market waightage in the previous year, which accounts for 5.11% in

2011 as compared to 4.92% in 2012.


2011 20124.8

4.85

4.9

4.95

5

5.05

5.1

5.15

5.11

4.92

Change in weightage of HDFC Ltd

The Group’s principal activity is to provide information technology and business

process outsourcing services. The Group provides services to industries such as banking

and financial services, insurance, manufacturing, telecommunications, retail and

transportation. On 19-Sep-2008, it acquired Tata Consultancy Services (Philippines) Inc.

On 22-Oct-2008, the Group’s wholly owned subsidiary, Tata InfoTech Deutschland

GmbH merged with Tata Consultancy Services Deutschland GmbH. On 02-Dec-2008, its

subsidiary Financial Network Services (Europe) Plc voluntarily liquidated. On 11-Dec-

2008, the Group acquired 50% share capital of National Power Exchange Limited. On 31-

Dec-2008, it acquired 96.26 % equity interest in TCS e-Serve Limited.

TCS entered the small and medium enterprises market for the first time in 2011,

with cloud-based offerings. On the last trading day of 2011, TCS overtook RIL to achieve

the highest market capitalization of any India-based company.

Reasons:

TCS (Tata Consultancy Services) share value down as the TCS share split was enforced

today. After the 1:1 share split TCS share price at about 350 (previous close over 700).


2011 20120

0.5

1

1.5

2

2.5

3

2.01

2.74

Change in weightage of TCS

India’s largest consumer products company and have an annual turnover of over Rs

13,000 crores (calendar year 2009). It was formed in 1933 as Lever Brothers India Limited

and came into being in 1956 as Hindustan Lever Limited through a merger of Lever

Brothers, Hindustan Vanaspati Mfg. Co. Ltd. And United Traders Ltd. It is headquartered

in Mumbai, India and has employee strength of over 16,500 employees and contributes for

indirect employment of over 65,000 people. The company was renamed in late June 2007

to “Hindustan Unilever Limited”.

In 2007, Hindustan Unilever was rated as the most respected company in India for

the past 25 years by Business World, one of India’s leading business magazines. The

rating was based on a compilation of the magazine’s annual survey of India’s Most

Reputed Companies over the past 25 years. HUL is the market leader in Indian consumer

products with presence in over 20 consumer categories such as Soaps, Tea, Detergents and

Shampoos amongst others with over 700 million Indian consumers using its products. It

has over 35 brands. Eighteen of HUL’s brands featured in the AC Nielsen-Brand Equity

list of 100 Most Trusted Brands Annual Survey (2012) . According to Brand Equity, HUL


has the largest number of brands in the Most Trusted Brands List. It’s a company that has

consistently had the largest number of brands in the Top 50 and in the Top 10 (with 4

brands).

2011 20120

0.5

1

1.5

2

2.5

3

2.42

1.72

Change in weightage of HUL

Reasons:

Hindustan Unilever Ltd (HUL) continues to be plagued by market-share loss

across its key categories – toilet soaps, tea and toothpastes, among others. Fast moving

consumer goods major saw decline in volumes in eight of its top ten categories year on

year, of which six categories have also shown a loss in market share. HUL which has been

reporting sequential market-share loss, is aware that the majority of its share loss has been

in the mass-end segment. Despite many re-launches and heavy investments driving

volume growth, most categories continued to lose on volumes.


BHEL, a public sector undertaking, is the largest engineering and manufacturing

enterprise in India in the energy-related/infrastructure sector. The company was set up at

Bhopal under the name of M/s Heavy electrical (India) Ltd. In collaboration with AEI,

UK. Subsequently, three more plants were set up at Hyderabad, Hardwar and Trichy.

BHEL manufactures over 180 products under 30 major product groups and caters to

sectors like power generation & transmission, industry, transportation, telecommunication,

renewable energy, etc. The company has 14 manufacturing divisions, four power sector

regional centres, over 100 project sites, eight service centres and 18 regional offices. The

company has installed equipment for over 90,000 MW of power generation and has

supplied over 2,25,000 MVA transformer capacity and other equipment operating in the

transmission & distribution network up to 400 kV (AC & DC). Between Jan. 92 and

Feb.92, the government disinvested a portion of its share holding in the company.


2011 20120

0.5

1

1.5

2

2.5

3

3.5

4

3.8

2.44

Change in weightage of BHEL

Reasons:

The company was facing a lot of issues with regards to proper execution of orders

and too much of inventory being stocked up. There was decrease in their profits which

bound to bring down the market price of the company. The company produces capital

goods and during the time of economic slowdown, the demand for the same had come

down. As a result of which there was a decline in the BSE Capital Goods index of about

40%. The company also started losing out on foreign competition, where 2 of its major

orders were bagged by companies from China and Japan. The 52 week low price was

Rs.981 and 52 week high price is Rs.2550. There was a lot of fluctuation in the market

prices in the mid year where prices ranges on between Rs.1170-Rs.1190.


NTPC Limited is the largest thermal-power generating company of India. A

public sector company, it was incorporated in the year 1975 to accelerate power

development in the country. Since then, it has grown to become the largest power utility of

the country. NTPC has mostly built regional power stations supplying power to the

various states in the region as per the power allocation formula approved by the

government of India. The strategy, inter-alia, includes capacity addition through green

field projects, expansion of existing stations, joint ventures, takeover of SEB`s stations,

significant addition of hydro-capacity, and forays into non-conventional and nuclear

power generation.

NTPC has also entered into a MoU with Petronet LNG for arranging one MMTPA

of LNG which can be used to overcome shortage of gas at the existing gas power stations

of NTPC. NTPC signed a MoU with The Energy and Resources Institute (TERI) for

implementation of distributed generation projects in villages in India.


2011 20121.3

1.35

1.4

1.45

1.5

1.55

1.6

1.65

1.44

1.63

NTPC PERFORMANCE AS PER WEIGHTAGE

Reasons:

NTPC is a Public Sector Undertaking and there have been continuous changes in

this sector with government disinvestment happening in many units. This has been done in

order to attract more capital from the public, FDI in specific, and to enhance the economic

growth of the country in this time of recession.

There are 2 aspects that are considered while calculating the top 10 companies i.e.

Market price and the number of shares issued. Market prices may dip when the investor’s

confidence is low with regards to the company or if the company itself is not performing

well in the market.

Even though the profits for the company were on a rise, the market prices kept on falling.

The 52 week low price was Rs.113 and 52 week high price is Rs.233. There was a lot of

fluctuation in the market prices (Rs. 150 – Rs. 180) during December – March, due to

which the prices fell. When NTPC was to come out with the IPO, it was considered to be

better than Reliance and TATA Power. However, there is was lack of confidence in the

retail investors and there was not much participation by them in the F&O segment.


FINDINGS

1. The Nifty 50 has fall down in the year 2008 due to economic breakdown i.e. global

crises.

2. Free float method has changed the positions of all the stocks in NIFTY. Changes in the

ranking of the stocks have been due to the free float market capitalization method.

3. The top 8 stocks of nifty constitute more than 50% weight in the nifty. It tells the

biasness for the stocks like RELIANCE, INFOSYS. It can also be predicted if Nifty

moves up or down then it is majorly due to the top 8 stocks.

4. The Reliance is ranked first as per its market capitalization but its performance has

fall in the year 2011 as compared to the year 2012 i.e. from 10.95 to 10.11

(weightage).

5. The Infosys weight age is raised from 8.01 to 8.65%.

6. ONGC weight age has fallen down from 2.95.to 2.67%.

7. The weight age of Bharti airtel has fallen from 2.9 to 2.46%.

8. The weightage of SBI has fallen from 4.23 to 4.04%.

9. Investing in nifty for short term may be risky but in long term it has more potential to

give the better return.


SUGGESTIONS

Suggestions to investors while trading in Nifty:

While investing in Nifty shares, an investor should deliberately analyze the pros

and cons of the investing procedures and trading regulations of particular stock

exchange.

Some of the tips you need to learn before investing in Nifty shares.

At the very beginning, you must envisage and realize the corporate environment

of the organization whose shares are to be purchased by you.

Observe the company management and their long term decisions before going to

invest in Nifty.

Purchasing of those shares that are unlisted or inactive for a long time could push

you in a huge loss so it's good to keep it avoid.

Shares of diversified companies make the best deal as the risk of liquidity loss is

reduced here.


Conclusion

The nifty 50 is well diversified stock index which includes the 24 sectors of

industries which acts as a best portfolio to invest in. The Companies in Nifty 50 have

given the better returns so as investors we can invest in Nifty 50 in order to get better

returns from this portfolio. Nifty 50 is such a portfolio where all the best performing

company’s shares are listed so as to give good returns to the customer.

Generally people investment in stock market by analyzing both fundamental &

technical aspects & the performance of the Top 10 Company’s of Nifty 50 are showing

good results.


ANNEXURE

Balance sheet of as on 31, March 2012

As at 31st March, 2012

Rs in Lacs

As at 31st March, 2011Rs in Lacs

As at 31st March, 2010Rs in Lacs

SOURCES OF FUNDS

Shareholders' Funds 35,248.15 34,865.56 33,827.10

Share Application Money 174.20 174.20 174.20

Loan Funds 56,022.84 23,030.85 3,434.70

Total 91,445.19 58,070.61 37,436.00

APPLICATION OF FUNDS

Net Fixed Assets 15,992.06 18,149.00 17,651.43

Stock Exchange Membership Cards

15.75 21.00 26.25

Investments 17,392.55 18,002.92 15,670.02

Current Assets 73,824.32 44,954.71 33,024.30

Less: Current Liabilities and Provisions

15,908.43 23,228.74 28 28,984.70

Net Current Assets 57,915.89 21,725.97 4,039.60

Deferred Tax Asset 128.94 171.76 48.70

Total 91,445.19 58,070.61 37,436.00


Bibliography

Information is collected through:

Security Analysis & portfolio management: Punithavathy pandian

Websites:

www.nseindia.com

www.capitalvia.com

www.karvy.com


http://www.karvy.com/

http://www.capitalvia.com/

http://www.nseindia.com/

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