manohar arora project report

8/9/2019 Manohar Arora Project Report

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ACKNOWLEDGEMENT

The summer Training at Religare securities Ltd. New Delhi is my professional

experience in both Financial and Marketing sector that enriched my

knowledge to a great extent.

I am thankful and would like to express my Gratitude to the Honorable Mr RAKESH

SHARMA (SENIOR RELATIONSHIP MANAGER) and the entire Institute for

giving me a Platform to have this wonderful opportunity and being able to get a

glimpse of the Corporate Word.

During the course of my project, I had the good fortune of being guided by

Mr.VISHAL SHARMA [Branch Manager] Religare Securities Ltd, Karol Bagh

New Delhi Branch Who with all his magnanimity supervised this project report

through all its stages. I have benefited a great deal from his incisive analyses and

erudite suggestions. I humbly acknowledge his congeniality. The atmosphere of a

learning organization that he has created along with his peers in Karol Bagh Branch

has not only helped me but all the other trainees.

I am also thankful to Mr. Amit Gupta (Senior Relationship Manager Equity),

Mr. Ravi Kumar Rathor (Manager Commodity) and Mr. Sumit Upadhyay (Senior

Relationship Manager Commodity) Religare Securities Ltd, Karol Bagh Branch, for

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there constant support to my project, guidance and precious time at every level of this

study.

Acknowledgements are also due to all the other staff in Religare Securities Ltd, Karol

Bagh Branch for providing information at various point of the project, especially the

discussions on the market.

My special thanks to all my friends for their unremitting help in numerous ways,

which deserve adequate expression on this page.

I would also like to thank all the respondents of questionnaire for their cooperation.

In the end, I would like to say that it was a great experience working on this project.

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DECLARATION

I here by declare that all the contents and sources used in this project are

true and real to the best of my knowledge. I collected all data and

information used in this project. This project is result of my own efforts.

MR. MANOHAR ARORA

PGDM

(2008-2010)

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TABLE OF CONTENTSPg no.

Executive Summary. 07

About Religare securities. 08

INTRODUCTION

Project Briefs and Deliverables .. 16

Investment- why when and how???????............................................... 17

Investment in Indian Capital Market. 22

Investment in equity market.. 23

Modes of investment in equities 34

Portfolio Management Service.. 40

COMPARATIVE ANALYSIS OF LEADING BROKING HOUSE IN INDIA

Objective of project. 44

Parameters of Comparison.. 45

Research Methodology 46

Importance of broking House.. 47

Background of the companies. 48

DATA ANALYSIS

Summary of results

53

Observations..

59

Appendix

Questionnaire 62

References. 64

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Executive Summary

Investing is every bodys need. Every one wants to invest their savings for uncertain

future ahead. These hard earn savings should be properly and smartly invested so thatthe principal is safe, returns are maximized and liquidity is available. With the

globalization of Indian financial market lot of avenues of investment has opened up.

With the increase in number of options now available, complexity too has increased.

Proper knowledge can help an investor to get maximum possible returns while

minimizing his risk.

The project covers the various benefits and services provided by leading broking

house in India & Comparative Analysis of the same and seek to analyze them with

respect to return they generate and risk they have. The focus of the project is to have

better insight into investment in equities market and related instrument like Equity,

Mutual funds and Portfolio Management Services (PMS) .The key focus of the

project is the comparative analysis of functioning of leading broking house and

benefit and services they provide compare to RELIGARE SECURITIES.

The project in first stage has been able to cover the in-depth study of directinvestment in equities market i.e. investment through holding the ownership of share

of different companies.

The next stage of project has covered the study of mutual fund, portfolio management

services, Equity as investment avenues. That has been followed by the analysis of all

of these options in different broking house in terms of return they generate and degree

of risk they have.

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About Religare Securities

Company Profile

Religare is present in more then 100 branches all over India and will cross more than200 branches very soon.

Religare branches are fully equipped with high bandwidth Internet lines and high-end

computers machines. There are efficient branch managers and dealers to give you tips

of highest quality and accuracy with support from our analysts.

Our branches give you the feel of doing business in Dalal Street however, in a more

sophisticated manner. You get to work with more traders and learn more and also

trade more.

We are present in more than 150 locations across length and breadth of the country

and each location is manned by experienced professionals who are highly motivated

and are genuinely interested to serve the clients in the best possible manner.

Our equity research team consists of well-qualified and experienced professionals in

the field of fundamental & technical analysis.

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BACKGROUND AND HISTORY

Late Dr. Parvinder Singh (ex CMD Ranbaxy) was a true leader -- practical and realist

and yet, talked the language of a visionary and an idealist. For it was his vision to

start integrated financial services driven by the relationship of trust and confidence.

From here Religare Securities Limited, a Ranbaxy Promoter Group Company started

its operations.

To realize its vision, the Religare group has taken one step ahead. Today, Religare

provides various financial services, which include broking (stocks & commodities),

depository participant services, portfolio management services, advisory on mutual

fund investments and many more.

Unlike a traditional broking firm, Religare group works on the philosophy of being

Financial Care Partner. We not only execute the trades for our clients but also

provide them critical and timely investment advice. The growing list of financial

institutions with which Religare is empanelled as an approved broker is a reflection of

the high-level service standard maintained by the company.

Religare is proud of being a truly professional financial service provider managed by

a highly skilled team, who have proven track record in their respective domains.

Through its regional, zonal and branch offices, Religare has the widest reach and is

available to you across the length and breadth of the country.

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GROUP OF COMPANIES

Religare Securities Limited

1. Member of National Stock Exchange of India and Bombay Stock Exchange of

India.

2. Depository Participant with National Securities Depository Limited and

Central Depository Services (I) Limited

3. A SEBI approved Portfolio Manager

RSL serves a platform to all segments of investors to avail the opportunities offered

by investing in Indian equities either on their own or through managed funds in

Portfolio Management.

Religare Comdex Limited

Commodities as a word originated from the French word commodity meaningbenefit or profit. Rightly so! The continuously growing turnover which commodities

market has seen is incredible, benefiting both producers and buyers. These amazing

results have transformed commodities as a most sought-after asset class. And this has

caught attention of the whole world.

Commodities market is particularly significant to our country as India is essentially a

commodity-based economy. Therefore, it should not be surprising to see that Indian

Commodities Market is also taking giant strides, growing at a scorching pace and is

well all poised to occupy its rightful place in the world. This has provided Indian

investors with new emerging investment opportunities in the arena of commodities.

Commodity Derivatives trading in India is now done through the electronic trading

platform of two popular exchanges NCDEX (National Commodity & Derivative

Exchange Limited) and MCX (Multi Commodity Exchange). The various

commodities being traded on the exchanges include precious metals, crude oil, andagro-commodities amongst others.

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Religare Comdex Limited is a member of both the exchanges (MCX & NCDEX) that

allows you to trade in all the commodities traded in both the exchanges. Presently,

trading in commodities is restricted to futures contracts only.

Member of National Commodity Derivative Exchange and Multi Commodity

Exchange.

RCL provides platform to both agro and non-agro commodity traders to derive the

actual price of the commodity and also to trade and hedge actively in the growing

commodity trading market in India.

Religare Finvest Limited (RFL)

Religare Finvest Limited (RFL) is registered with the Reserve Bank of India (RBI)

as a Non-Banking Finance Company (NBFC) and is presently engaged in providing

personal credit {such as Loans Against Shares (LAS) and Personal Loans},

distribution of Mutual Funds, Wealth Management, IPO Financing and Corporate

Finance Services.

RFL is aggressively making a name in the Financial Services arena in India. In a fast

paced, constantly changing dynamic business environment, RFL has developed achange resilient vertically integrated value chain for delivering the most competitive

products and services.

Loan Against Shares

Sitting Idel on your Stock Portfolio?

Religare Finvest offers you to get more out of your existing portfolio through its

Loan Against Shares product. Loan Against Shares allow you to take

advantage of investment opportunities in the market without the involvement of fresh

funds. One can use the shares in his current portfolio to take larger positions in the

market.

If utilized prudently, this product can help unlock the value of Securities even

during depressed Stock Market conditions and provide customers with the much-

needed liquidity during pressing times.

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Corporate Financing

We provide innovative, integrated and best-fit solutions to our corporate customers. It

is our continuous endeavor to provide value enhancements through diverse financial

solutions on an on-going basis, through Corporate Debt, Private Equity, IPO, ECB,

FCCB, and GDR/ADR etc.

IPO Financing

The first sale of stock by a company to the public is termed as Initial Public Offer (IPO). IPOs areissued with the purpose of seeking capital to expand and diversify and simultaneously become traded

on the Stock Exchange Bourses.

IPO gives an opportunity to the investor (s) to be a part of an existing company and have a share in it.

To subscribe to the offer of any company the investor (s) need to have ready cash at their disposal at

the time of application. This might not be so in all circumstances.

Here IPO Financing acts as a support scheme to cash-in on the opportunities available in the primary

market. IPO Financing is a scheme wherein the investor provides the margin amount, and the financer

finances the remaining amount at an agreed rate of interest and other mutually agreed upon terms and

conditions.

Example

Own Investment Through IPO financingInvestors fund (Rs.) 10,00,000 10,00,000

Financing (Rs.) * 0 90,00,000

Application size 10,00,000 1,00,00,000

No. of shares applied for

(assuming issue price to be 100/-)10,000 1,00,000

No. of times issue is

oversubscribed50 50

Shares allotted 200 2000

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Personal Financing

Life is too short to worry about tomorrow, so drop your worries and live your dreams,

TODAY! We help your desires come alive as we take care of at least one of the

roadblocks in your way.

Religare Personal Loans allow you to sit back and relax, for you now have the

pleasure of surplus wealth. Just give us a call or fill up an application form online or

better still, drop in to any of our branches and let us help you in making the most of

what life has to offer.

Religare is a corporate financial service provider with very sound financial base and

backing. It is managed by the best skilled professionals in the market and boasts to

have the widest reach in India through its regional, zonal and branch offices spread

across the country.

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Religare Enterprises Limited

Religare Securities Limited

Equity Broking

Online Investment Portal

Portfolio Management Services

Depository Services

Religare Commodities Limited

Commodity Broking

Religare Capital Markets Limited

Investment Banking

Proposed Institutional Broking

Religare Realty Limited

In house Real Estate Management

Company

Religare Hichens Harrison**

Corporate Broking

Institutional Broking

Religare Finvest Limited

Lending and Distribution business

Proposed Custodial business

Religare Insurance Broking Limited

Life Insurance

General Insurance

Reinsurance

Religare Arts Initiative Limited

Business of Art

Gallery launched - arts-i

Religare Venture Capital Limited

Private Equity and Investment

Manager

Religare Asset Management*

Derivatives Sales

Corporate finance

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MANAGEMENT PROFILE

Individuals who are professional leaders and are committed to reface the financial

services industry in India lead Religare.

Each of the individual works constantly towards Religares objective of Indias

first truly MNC in financial services.

Religare team is led by a very eminent Board of Directors who provide policy

guidance and work under the active leadership of its CEO & Managing Director andsupport of its

Board of Directors

Following is the list of Directors of Religare Securities Limited:

Chairman Mr. Harpal Singh

Managing Director Mr. Sunil GodhwaniDirector Mr. Vinay Kumar Kaul

Director Mr. Malvinder Mohan Singh

Director Mr. Shivinder Mohan Singh

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Project briefs and deliverables

The primary goal is to build a lifetime relationship with the customer and act as

an advocate in the pursuit of finding a mutually agreeable solution to differences

between the customer and services offered by Religare securities.

This project, Comparative Analysis of Religare Securities With Top Five Broking

Houses at its very outset, helped me to understand the fact that How different retail

broking houses provide different services of all the financial product to their existing

clients & also help the Religare Securities to know its existing market share. No

company can hope to survive in this competitive business world without knowing the

different benefits provide by their rivals in the market so with the help of this project

Religare Securities also come to know the benefits provide by other retail broking

houses to different clients to some extent. It not only helps the company to attract

customers by providing different services which make customer happy but also retain

their existing clients. This project also help me in gathering knowledge about the

different financial product as well as how to deal with the customer. Therefore, the

primary objective of undertaking this project is to gain knowledge about the financial

product as well as how to judge the customer & to provide what type of service to that

customer. It helped me to familiarize myself with the sort of problems faced by thecompany in providing different benefits to different clients as well as the steps taken

by the company to achieve its end. And also how the increasing list of customer

affects the profitability of the company. So the bottom line is that undertaking this

project helped me to get a fair idea of the company profile in general and handling the

marketing of the financial products in particulars.

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INVESTMENT Why When & How ??????????

Investment planning is an alien concept for the Indian populace. For a country, which

till now was worried about making ends, meet this emerging trend is definitely a new

experience. But, the truth is that if only they would have been introduced to the Art of

Managing Money, life could have been so much easier. Most of us spend more than

half of our lives working and saving because money is important, in fact crucial.

However, most of us spend almost no time planning to make that hard-earned money

work more effectively for us. So, how do one plan for his financial life?

Financial planning is nothing but an assessment of ones goals and the steps one must

take to help make them a reality. Is he willing to retire with a sound lump sum amount

or does one want a steady monthly income. Is sons education or daughters' marriage

worrying? The key is to figure out goals. Where is your money going? The most

important thing is that one should where your money is going. Zero on your monthly

and annual expenses.

Knowledge is power. It is common knowledge that money has to be invested wisely.

It takes years to understand the art of investing. To start with, one should take

investment decisions with as many facts as he can assimilate. But, understand that no

one can ever know everything. Learning to live with the anxiety of the unknown is

part of investing. Investing isn't gambling or speculation; it's about taking reasonable

risks to reap steady rewards. Our main aim in the project is to study, analyze and

compare the services provided by leading broking house in comparison to servises

provided byRELIGARE SECURITIES.

Why should one Invest?

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Simply put, one should invest so that his money grows and shields him against rising

inflation. The rate of return on investments should be greater than the rate of inflation,

leaving him with a nice surplus over a period of time.

Whether money is invested in stocks, bonds, mutual funds or certificates of deposit

(CD) or any other assets, the end result is to create wealth for retirement, marriage,

college fees, vacations, better standard of living or to just pass on the money to the

next generation. Also, it's exciting to review investment returns and to see how they

are accumulating at a faster rate than salary or any other source of regular income.

When to Invest?

The sooner the better. By investing into the market right away allows investments

more time to grow, whereby the concept of compounding interest swells income by

accumulating earnings and dividends. Considering the unpredictability of the markets,

research and history indicates these three golden rules for all investors

1. Invest early

2. Invest regularly

3. Invest for long term and not short term.

Trust in the power of compounding is growth via reinvestment of returns earned on

savings. Compounding has a snowballing effect because one earns income not only

on the original investment but also on the reinvestment of returns accumulated over

the years. The power of compounding is one of the most compelling reasons for

investing as soon as possible. The earlier one starts investing and continues to do so

consistently the more money will be made. The longer the money remains invested

and the higher the interest rates, the faster the money will grow. There is always a first

time for everything so also for investing. To invest, one needs capital free of any

obligation. If he is not in the habit of saving sufficient amount every month, then he is

not ready for investing.

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How much money is needed to Invest?

There is no statutory amount that an investor needs to invest in order to generate

adequate returns from his savings. The amount that should be invest will eventually

depend on factors such as:

Investors risk profile

Time horizon of investment

Savings made

The investing options are many, to name a few

Stocks

Bonds

Mutual funds

Fixed deposits

Metals

Others

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here Can I Invest?

The possible avenues for investment can be divided into following categories:

Equities

Options available are secondary market (buying and selling shares in the stock

exchanges) or the primary market (IPOs). Generally classified as a high risk high

return asset. But after the completion of this project I personally do not consider them

high risk investment yes one need to be knowledgeable enough to make money

through this investment

Fixed Income Instruments

This product class includes options such as Fixed Deposits, Debentures, Bonds,

Preference shares etc. These investments are relatively safer but limited upside onreturns. In analysis of project I found that generally investment trends have started

moving against these investments because of returns they generate. It has been

observed that such instrument generate a return in range of 4% - 9% and given the

current level of inflation of about 2% - 5% actually people end up having a negative

return on their investment.

Foreign Currency Investments

Wherever allowed by government regulations, investors particularly in developing

countries will prefer to keep their assets in foreign currency. Hard currencies like the

US dollar or Pound or Euro are relatively stable. The risk of currency depreciation in

case of economic / political turmoil is high. This was evident when all major South

East Asian currencies collapsed last year. People at individual level or so called retail

level do not make investment in these instruments as the threshold limit itself is very

high for investing in these instruments. Apart for it requires far more indepthknowledge about world market, inflation, interest rates to make investment in these

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instruments. During the projectI have learned that it is better for retail or individual

investor to remain away from investing in these instruments.

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Commodities

However these investments do not for part of my study but because of its close

relation with stock market I have got fair enough insight in to these instrument as

well. A trader or speculators, who generally are skilled, do investing in commodities

on a large scale typically. Normally in commodities high risk investors would invest

for high returns in a short period. A proxy for this is the way retail households stock

up commodities in anticipation of price increase, such as stocking sugar or wheat

requirement for the full year.

Art/ Antiques, Etc

Art has proved to be an important investment avenue, particularly for the rich and

wealthy. However, one has to be an expert in evaluating the value of art. Wrong

decisions might just leave a piece of paper hanging on your wall (not to mention the

hole in your pocket). Investment in paintings is illiquid and has a long gestation

period, entails high risk but with high rewards too. Other collector items can be

stamps, antiques, cards, signatures, letters, etc. In general, it is difficult for the

common man to explore investment opportunities in this segment. I have kept them

out of my study.

Mutual Funds

Mutual funds are surrogate direct investment in debt or equity. In effect, any mutual

fund is an effective retail (can be institutional also) fund accumulator. Mutual funds

can be classified on the basis of their investment strategy and avenues. Equity funds

invest in shares while debt funds invest in debentures, and other debt instruments. A

balanced fund tries to maintain an optimum balance of debt and equity. Real Estate

This offers a limited option to investors as in India most people buy a house to live in.

Only the very rich buy property as an investment. In the early 90s, property prices

rose sharply, creating a fancy for real estate. In the last 3 years, the real estate market

has taken a real beating, which coincided with the economic slowdown. Real estate is

very illiquid investment option.

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INVESTMENTS

IN

INDIAN CAPITAL MARKET

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EQUITY MARKET

INTRODUCTION

Investment in shares of companies is investing in equities. Stocks can be bought/sold

from the exchanges (secondary market) or via IPOs i.e. Initial Public Offerings

(primary market). RELIGARE SECURITIES provide an investor all the required

services to invest in Indian equity market both through initial public offerings and

through secondary market. Stocks are the best long-term investment options wherein

the market volatility and the resultant risk of losses, if given enough time, is mitigated

by the general upward momentum of the economy. There are two streams of revenue

generation from this form of investment.

1. Dividend: Periodic payments made out of the company's profits are termed as

dividends. Dividend is the part of profit distributed by the company among its

investors. It is usually declared as a percentage of the paid-up value or face value of

the share.

2. Growth: The price of a stock appreciates commensurate to the growth posted by

the company resulting in capital appreciation.

An insight to some technical terms

Equity share

An equity share represents the form of ownership. The holder of such a share is a

member of the company and has voting rights.

Equity shares are high-risk high-return investments. The major distinction of Equity

investment from all other investment avenues is that while the return from many

avenues such as Bank Deposits, Small Saving schemes, Debentures, Bonds etc are

fixed and certain, the earnings from equity investments are highly uncertain and

varied. A good scrip picked up at the right time could fetch fairly good returns else

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the return may be meager or it may even turn negative, i.e. the invested fund itself

may be eroded. In short, if the investment in fixed income category instruments is

secured and risk-free to a large extent, investment in equities and related fields could

be termed as risky.

Stock Exchange

A Stock Exchange is a place where the buyer and seller meet to trade in shares in an

organized manner. There are at present 23 recognized stock exchanges in the country

that are governed by the Securities Contact (Regulation) Act, 1956. Anyone can buy

the shares that are listed on any of the recognized Stock Exchanges to be able to buy

or sell shares in the stock markets a client would need to be registered with a stockbroker (Kotak securities) who holds membership in stock exchanges and who is

registered with SEBI.

Buying and Selling

There are several types of orders that client can dictate to a broker. The most common

type, which is a regular buy or sells order, is called a market order. Another type of

order is a limit order wherein you ask the broker to trade only if the price reaches a

specific level. In a stop order, client tells the broker to sell shares if the price drops to

a certain level to prevent significant loss because if it drops to that level it is likely to

drop further and losses are likely to increase.

Placing Orders

Trading can be done via the phone or by coming in person to the office of Broker or

through any other facility provided by Broker like Internet trading. The dealer is

employee of Broker who is supposed to input the investors order into the stock

exchange order system. After checking the authenticity of the person calling and after

checking the margin available in the account would put/enter the order into the stock

exchange system.

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Taking a Position

When one acts upon a stock and buy into it, he is taking a position. A position is an

amount of money committed to an investment in anticipation of favorable price

movements. There are two kinds of positions: -

a) Long positions are what most people do. When investor buys long, that means he

is anticipating an upward movement in the price, and that is how he profits. People

usually buy stocks at prices expecting to sell them later at higher prices and hence

make profits.

b) Short positions are the tricky ones. When investor buys short, he is anticipating a

fall in the price and the fall is the source of his profits. The shares will be sold and

when the price falls they will be repurchased and given back and the difference is the

where the investor profits. Of course, the investor who borrowed the shares carries the

risk of not having the price move as anticipated, in which case he may lose money in

repurchasing the stocks.

Index

An index is a stock-market indicator created as a statistical measure of the

performance of an entire market or segment of a market based on a sample of

securities from the market. An index is thus a means to evaluate the overall

performance of a market or of a segment of the market. Index measures aggregate

market movements.

We have 2 renowned indices viz.

(a) BSE Sensitive (BSE Sensex) and

(b) S&P Nifty 50 (Nifty)

BSE Sensex comprises of 30 large-cap companies. As the name suggests, it is a

premier index on Bombay Stock Exchange (BSE). Nifty comprises of 50 large-cap

companies on the National Stock Exchange (NSE).

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Index Fluctuations

Theoretically, index fluctuations reflect changing expectations of the stock market

about future stock returns. An upward movement in the market index on a particular

day implies that the stock markets expect higher future returns from the stocks as

compared to the expectations on previous day and vice versa. However, since indices

are derived from the market capitalization of stocks, it is quite possible that a few

stocks account for a major portion of the index. Thus, fluctuation inn prices of a few

stocks may affect the overall index too which will give an incomplete picture. Hence,

it is advisable to follow a broad-based index that is an index constructed using a large

number of stocks spread across a wide range of sectors to gauge overall performance.

Also, an index should not consist of illiquid stocks in its portfolio since in such cases;

the index can be easily manipulated by manipulating the prices of such illiquid stocks.

Constructions of Index Most market indices are constructed using the value-weighted

method. In this method, the initial market value of these stocks is assigned a base

index value. Say, we take the base year as 1982 and take 30 stocks, which have a total

market capitalization of Rs 3,000 crore. Let us assume that the base value on the first

day is 100.

Importance of an Index

The index has practical applications too in the world of finance. Derivatives and index

funds both make extensive use of indices. Both the NSE and BSE have launched

index futures based on the S&P CNX Nifty and BSE Sensex respectively. The global

market for index services and their applications is a multi-trillion dollar industry.

Indices also serve as a benchmark for measuring the performance of fund managers

and their respective funds. For gauging the performance of individual sectors or

sectoral mutual funds, sector specific indices can be used.

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Methodology Of Trades

The market watch, i.e. the screen kept open normally on the trade screen would show

the following columns -

1. Best bid price 2. Best bid quantity 3. Best offer price 4. Best offer quantity

5. Last traded price

The first 2 columns as given above show the available buyers for a particular share in

the stock exchange and the next 2 columns show the available sellers, and the fifth

column shows the price at which the last trade took place. Hence when a investor

wants to buy a share at market price ideally the 3rd and the 4th column would depict

how many shares one can get at a stipulated price. The client can also put a limit price

order which would sit in the order book till it reaches a price time priority when the

trade can be executed.

Contract Note

Contract Note is a confirmation of trades done on a particular day on behalf of the

client. It establishes a legally enforceable relationship between the client and Broker

with respect to the settlement of the trades. The Contract Note would show settlement

number, order number, trade number, time of trade, quantity and price of the trades,

brokerage charged, etc and it would be signed by an authorized person of Broker.

Depository

A depository can be compared to a bank. A depository holds securities (like shares,

debentures, bonds, Government Securities, units etc.) of investors in electronic form.

Besides holding securities, a depository also provides services related to transactions

in securities. There are two main depositories in India, namely, a) National Securities

Depository Ltd. (NSDL) and b) Central Depository Securities Ltd. (CDSL), both of

which are regulated by SEBI. One can approach any DP of his choice and fill up an

account opening form. At the time of opening an account, He has to sign an

agreement with DP in a NSDL prescribed standard agreement, which details your and

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your DPs rights and duties. Religare securities is depository participant having a

membership of NSDL, thus provides all its client service of demat accounts too.

Market Trades And Off Market Trades

Any trade settled through a clearing corporation is termed as a Market Trade. These

trades are done through stockbrokers on a stock exchange. Off Market Trade is one,

which is settled directly between two parties without the involvement of a clearing

corporation. The same delivery instruction slip can be used either for market trade or

off-market trade by ticking one of the two options.

Delivering or Receiving the Shares To or From Broker

In case of sales, the investor would need to transfer the shares to the pool account of

Broker for the specified settlement number. The pool account number for shares sold

on BSE is IN630043 and for NSE it is IN558537. The delivery should necessarily

come from the demat account of the investor and not from any other person. Similarly

Broker would directly transfer shares bought to the account of the investor.

Making or Receiving the Payments To or From Broker

Payments to Broker had to be made via an Account Payee cheque / Demand Draft in

favor of Brokers name ( RELIGARE SECURITIES LIMITED). The payment

should necessarily come from the bank account of the investor and not from any other

person. Similarly Broker would pay an Account Payee cheque in the name of the

investor, which will also contain the Bank name and account number of the client.

The payout of funds and securities to the clients by Broker will be within 24 hours of

the payout

Rolling Settlement

In a Rolling Settlement trades executed during the day are settled based on the net

obligations for the day. In NSE and BSE, the trades pertaining to the rolling

settlement are settled on a T+2 day basis where T stands for the trade day. Hence

trades executed on a Monday are typically settled on the following Wednesday

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(considering 2 working days from the trade day). The funds and securities pay-in and

pay-out are carried out on T+2 day.

Auction

The securities are put up for auction by the Exchange on account of non-delivery of

securities by the selling trading member to ensure that the buying trading member

receives the securities due to him. The non-delivery by the trading member could

arise on account of short delivery. The Exchange purchases the requisite quantity in

the Auction Market and gives them to the buying trading member.

In case of purchase on clients behalf, the member broker has the liberty to close out

transactions by selling securities in case client fails to make full payment to the broker

for the execution of contract before pay-in day as fixed by Stock Exchange for the

concerned settlement period unless client already has an equivalent credit with the

broker. The shortages in case of sales are met through auction process and the

difference in price indicated in Contract Note and member pays price received

through auction to the Exchange, which is then liable to be recovered from the client.

In both the cases any loss in transactions will be deductible from the margin money

paid by client.

In case a broker fails to deliver to client on time and make the proper payment of

money/shares or client has a complaint against the conduct of the broker, he can file a

complaint with the respective stock exchange. The exchange is required to resolve all

complaints. To resolve the dispute the complainant can also resort to arbitration as

provided on the reverse of Contract Note /Purchase or Sale Note. However, if the

complaint is not addressed by the Stock Exchanges or is unduly delayed then the

complaints along with supporting documents may be forwarded to Secondary Market

Department of SEBI. Clients complaint would be followed up with the exchanges for

expeditious redressal.

In case of a complaint against a sub-broker, for redressal the complaint may be

forwarded to the concerned broker with whom the sub broker is affiliated.

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Additional Charges Other Than Brokerage Levied On the Investor

The trading member can charge:

1. Securities Transaction Tax.

2. Service tax as applicable.

3. Transaction charges levied by NSE, Stamp duty and other charges directly

attributable to the transaction.

The brokerage and service tax is indicated separately in the contract note.

Rights of Investors

The investor has right to get

Proof of price/brokerage charged

Money/shares on time

Statement of Accounts and Contract Note from trading member.

Obligations of Investor

The obligations to investor are

Sign a proper Member-Constituent Agreement

Possess a valid contract or purchase/sale note

Deliver securities & make payment on time

Provide Margin before trade

Various kinds of accounts that are needed to trade via Internet with Broker

This facility is provided by RELIGARE through its online trading website

www.religaresecurities.in

Three kinds of accounts are required to be able to trade on-line. They are:

E-Broking account with Broker

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Depository Participant (DP) account with RELIGARE

Bank account that has developed an interface with Broker i.e. designated

banks like HDFC Bank, UTI Bank, ICICI Bank.

Tax implications of investing in Indian equities

Tax rates on investments gains are categorized as long term & short-term capital

gains.

(a) Long term capital gains

Long Term investments that are held for more than 12 months are termed as long-

term capital assets. Profit on sale of such assets is termed as long-term capital gain

(LTCG), which as per the latest Budget notification will attract nil tax.

(b) Short term capital gains

Shares that are held for less than 12 months are classified as short-term capital assets

that as per the latest Budget notification will attract 10% tax.

Fair value of share

We all like bargains but, but few investors attempt to estimate a company's worth

before buying a stock. Investing requires the same discipline one exerts when

purchasing a house, a car or even groceries, literally. The problem arises when

investors don't anticipate the amount of risk they are taking when purchasing stocks

that trade at high premiums to the intrinsic value of the business. Because buying

securities at over inflated levels can lead to serious loss of capital.

From a purely static point of view, the fair value of an equity share is a point of

indifference. A price level, below which we would buy the stock. Or a price level,

above which we would sell the stock. Real life, however, is more dynamic and as a

stock investor, we are dealing with moving targets. Where stock prices fluctuate

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madly, as much as eight or 12 per cent every day. Thankfully, the fair value of a

company does not fluctuate with the price of its share. It is important to understand

this before we proceed with our equity investments.

How to determine fair value?

A simple method is to use the price-to-earning multiple, where the earnings per share

of a company divide the price of a companys stock. Which makes sense since growth

in earnings is a proxy for how well a company is performing within a given market

opportunity. However, as long-term investors we are interested in absolute value,

irrespective of how the stock market is currently pricing the company. Here, the P/E

loses relevance since it is will be continuously influenced by the demand or supply for

a company's stock on the numerator side.

Earnings per share, which represents the denominator side of the P/E, also may not

help. Since all earnings do not equal free cash flows. Most of it is ploughed back into

the company via capital expenditures. And as investors we are interested in the

surplus cash (though this term has many variations, it is loosely defined as the cash

after providing for recurring capital expenditures plus depreciation and taxes, the later

being a non-cash charge), which can be returned to equity shareholders.

This dictum is codified in the discounted cash flow model. Which says, that the value

of a stock is equal only of the free cash flows it produces in the future, discounted

back to the present. When we discount future income, we essentially adjust for the

fact that a rupee in hand today is more valuable than a rupee to be received in the

future because today's rupee can be invested elsewhere to generate a return. The DCF

allows us to discount incoming cash flows by a rate, which we believe equates the

level of risk we are assuming. This risk-adjusted value then is compared with the

prevailing stock price to check a company's investment worthiness. If a stock is said

to be trading at fair value, it simply means that the market is pricing it according to

the value it represents. Otherwise, it could either be bought or sold short. With minor

modifications, the DCF can be used to value a range of companies, from those

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growing faster than the economy to those growing slower, or matching the pace of the

economy.

Limitations

However, like all other valuation models, the DCF too has its limitations. For decades

it served analysts and investors well until faced with the prospect of valuing

companies in the so-called new economy businesses.

Not that the basic premises of the DCF are under question, but how does one account

for companies where revenues are growing at a rate, which have a high element of

surprise. And small changes in the amount of information available can bring about

large changes in stock prices. How does one come up with an appropriate discountrate, which reflects the high level of technological risk for many such companies?

Hence distinguish between 'price' and 'value'

In the end, instead of grasping on the appropriate valuation for these companies,

investors can caution themselves by thinking more carefully in terms of 'price' versus

'value'.

Price is not value. Price is what we pay. Value is what we get in return for owning a

piece of a company. When we shop for a consumer durable, we don't pay the list price

without being sure of the quality of the product and consistency of its expected

performance.

Similar issues should matter more while investing--the quality of management, nature

of the company's business, the ability of the management to sustain growth and so on.

Alternatively, think about the return that we will need to compensate for the

investment risk given the quality of the management and the nature of business. If we

cannot see a company providing such a return over a longer term, do not invest.

When it comes to investing choosing a great company is only the starting point. In

order to make good profit investors must buy the stocks of great companies at sensible

prices.

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Modes of Investment in Equity Market

Direct Investment In Equities

Options available are secondary market (buying and selling shares in the stock

exchanges) or the primary market (IPOs). Generally classified as a high risk high

return asset. But after the completion of this project I personally do not consider

them high-risk investment yes one need to be knowledgeable enough to make

money through this investment

Mutual funds

A mutual fund pools together sums from individual investors and invests it in

various financial instruments. Each mutual fund has its own investment objective,

which broadly falls into two categories: capital appreciation and current income.

Suppose a mutual fund sells one million units or shares (used as synonyms in this

context) at Rs 10 a share and collects a total Rs 10 million. If the fund objective

stated investment in blue-chip stocks, the fund manager would invest the entireproceeds (less any commissions and management fee) of that sale in buying equity

shares of companies like Hindustan Lever, Reliance Industries, Hero Honda and

so on. And each individual who bought shares of the fund would own a

percentage of the total portfolio only to the extent of money invested.

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Mutual funds over direct investment in equities

As financial intermediaries, they do not come without risk. Also when defined in

terms of our chances of losing money, the risk in mutual funds is no different than

that present in other financial instruments. Still they are relatively safer and a more

convenient way on investing. They offer quick liquidity. Most private mutual funds

can be redeemed in three to four working days, unlike a fixed deposit that is more

likely to be received a month after its maturity, or an equity share after the end of its

settlement period (or depending up on our broker). This too cuts the overall risk

associated with investing, often not so visible and hence not accounted by many

investors. But the market risk or the risk that exists due to economy-wide factors

remains. And there is always the possibility that a fund fails to stick to its pre-

determined objectives or invests in securities that alter its risk profile. In which case,

the blame goes straight to the fund manager and the Asset Management Company

(AMC), which manages the mutual fund. All said and done mutual funds still have

following advantage over direct investment in equities.

Affordable

Almost everyone can buy mutual funds. Even for a sum of Rs 1,000 an investor

can invest in a mutual fund.

Professional Management

This is the biggest advantage mutual fund have over direct investment over equity.

For an average investor, it is a difficult task to decide what securities to buy, how

much to buy and when to sell. By buying a mutual fund, we acquire a professional

fund manager who manages our money. This is the person who decides what to

buy for us, when to buy it and when to sell. The fund manager takes these

decisions after doing adequate research on the economy, industries and

companies, before buying stocks or bonds. Most mutual fund companies charge a

small fee for providing this service, which is called the management fee.

Diversification

According to finance theory, when our investments are spread across severalsecurities, our risk reduces substantially. A mutual fund is able to diversify more

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easily than an average investor across several companies, which an ordinary

investor may not be able to do. With an investment of Rs 5000, you can buy

stocks in some of the top Indian companies through a mutual fund, which may not

be possible to do as an individual investor.

Liquidity

Unlike several other forms of savings like the public provident fund or National

Savings Scheme or real assets, you can withdraw your money from a mutual fund

on immediate basis.

Transparency

Regulations for mutual funds have made the industry very transparent. We can

track the investments that have been made on our behalf and the specific

investments made by the mutual fund scheme to see where our money is going. In

addition to this, we get regular information on the value of our investment.

Tax Benefits

Mutual funds have historically been more efficient from the tax point of view. A

debt fund pays a dividend distribution tax of 12.5 per cent before distributing

dividend to an individual investor or an HUF, whereas it is 20 per cent for all

other entities. There is no dividend tax on dividends from an equity fund for

individual investor.

MUTUAL FUND INVESTING - RISK VS REWARDS

Having understood the basics of mutual funds the next step is to build a successfulinvestment portfolio. Before we can begin to build a portfolio, one should understand

some other elements of mutual fund investing and how they can affect the potential

value of our investments over the years. The first thing that has to be kept in mind is

that when we invest in mutual funds, there is no guarantee that we will end up with

more money when we withdraw our investment than what we started out with. That is

the potential of loss is always there. The loss of value in our investment is what is

considered risk in investing.

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Even so, the opportunity for investment growth that is possible through investments in

mutual funds far exceeds that concern for most investors. Heres why.

At the cornerstone of investing is the basic principal that the greater the risk we

take, the greater the potential reward. Or stated in another way, we get what we

pay for and we get paid a higher return only when we're willing to accept more

volatility.

Risk then, refers to the volatility -- the up and down activity in the markets and

individual issues that occurs constantly over time. This volatility can be caused by a

number of factors -- interest rate changes, inflation or general economic conditions. It

is this variability, uncertainty and potential for loss, that causes investors to worry.We all fear the possibility that a stock we invest in will fall substantially. But it is this

very volatility that is the exact reason that we can expect to earn a higher long-term

return from these investments than from a savings account.

We might find it helpful to remember that all financial investments will fluctuate.

There are very few perfectly safe havens and those simply don't pay enough to beat

inflation over the long run.

Investing in mutual fund choosing the right scheme/option

Choosing a mutual fund is not an easy task with so many funds. Rarely do investors-

normal investors, who do something else for a living-have a systematic checklist of

things that they should evaluate about a fund, which they are considering buying.

Here's my blueprint for a structured approach to fund selection. There are four basic

areas that one must evaluate in a fund to decide whether it's a good investment.

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Performance:

Performance comparisons must be used only to compare the same type of fund. They

are meaningless otherwise. Only when used within the same category of funds

performance numbers tell anything at all.

Portfolio:

Unlike performance and risk, portfolio is one of the 'internals' of a fund. It is internal

in the sense that the result of good, bad or ugly portfolios is already reflected in the

first two measures and it's perfectly OK to choose funds on the basis of those two

measures alone without actually bothering about what they own. My basic analysis of

portfolios measures whether a fund (I am talking about equity funds here) holds

mostly large, medium or small companies. It also looks at whether a fund prefers

companies that may be overpriced but which are growing fast or whether it prefers

low-priced stocks belonging to companies that are growing at a more gentle pace.

Management:

Fund management is a fairly creative and personality-oriented activity. This may not

be true of some types of funds like shorter-term fixed-income funds and, of course,

index funds, but equity investment is more of an art than a science. When we are

buying a fund because we like its track record (and unless we can foresee the future,

that's the only way to buy a fund), what we are actually buying is a fund manager's (or

sometimes a fund management team's) track record. What we need to make sure is

that the fund manager who was responsible for the part of the fund's track record that

we are buying into is still there. A high-performance equity fund with a new manageris a like a new fund.

Cost:

Funds are not run for free and nor are they run at an identical cost. While the

difference in different funds' cost is not large, these can compound to significant

variations, especially for fixed income funds where the performance differential

between funds is quite small to begin with. Even for equity funds, it may not be worth

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buying a higher cost fund that appears to be only slightly better than a lower cost one.

There is no reason for one AMC to have much higher costs than others, apart from the

fact that it wants to have a higher margin, or that it wants to spend more on things like

marketing, which are of no relevance to you. If an AMC wants higher returns from its

business, then it must justify it by giving you higher returns on your investments.

Loads:

Entry Load/Sale Load

It is the charge imposed on the investor at the time his entry into the fund.

Thus, the investor has to pay for the value of the units plus an additional

charge. This additional charge is called the entry/sale load.

Exit Load/Repurchase Load

It is the charge imposed on the investor at the time of his exit from the

scheme. Operationally, therefore, the mutual fund will pay back to the investor

the value of the units reduced by the charge levied on exit.

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PORTFOLIO MANAGEMENT SERVICES

INTRODUCTION

Based on the Risk Appetite and Risk Expectation of the investor, the fund houses

designs and develops a personalized investment plan, The Portfolio Management

Services, to match your expectations of safety, return and liquidity. Your account is

always managed the way you want and your investment does not get lost in a crowd

as in the case of most mutual funds.

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Why PMS?

In todays scenario there is a new emerging breed of investors, who has a high

disposable income and a sizeable amount to invest, who wants a share of the higher

earnings potential of equities, but doesnt have the time or expertise to do it himself.

So, he leans on experts. But not for him the one size-fits-all approach of mutual funds.

Instead, he prefers the personalized touch of a PMS, where professionals construct an

equity portfolio exclusively for him based on his investment needs and risk profile,

manage it regularly, while keeping him updatedfor, roughly, the same fee as a

mutual fund.

Now PMS is not just the preserve of High Net Worth individuals, but also within

reach of the well-heeled salaried person.

Benefits to Investors

a) Personalized service.

Unlike an equity fund, a PMS tailors a portfolio to an individuals needs. There might

be a possibility that: "A retired person might wantbluechips, yuppie fast-moving

stocks. But a fund gives them identical portfolios." Clients have different life

circumstances and risk-reward profiles. Such nuances are bettered captured and

serviced continuously by a PMS.

Most portfolio managers aim to generate long-term returns, with the choice of stocks

and investing styleaggressive or buy-and-holdbeing driven by an investors risk

preferences. There is also diversity in product offerings.

b) Competitive costs.

The good PMS providers operate on similar lines as funds. They have a strong

research set-up. And for all the personal attention they give you, their management

fee compares well with that of funds.

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Return guarantees are illegal. Due to the profit-sharing structure, the schemes on offer

are mostly discretionary in nature stock selection is the prerogative of the portfolio

manager.

c) Transparency.

Most entities give you a client ID and password, with which you can access your

portfolio detailslike list of shares, performance, transaction details and tax liability

online. Although portfolio managers call the shots, they are willing to sit with you and

explain the philosophy behind your portfolio, even get into specifics.

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Discretionary portfolio Vs non- discretionary portfolio

In the discretionary portfolio manager individually and independently manages the

funds of each client in accordance with the needs of the client in a manner, which

does not partake character of a Mutual Fund, whereas the non-discretionary portfolio

manager manages the funds in accordance with the directions of the client.

PMS Vs Mutual Fund

a) The client has control over the asset allocation, which is automatic in a

Mutual Fund.

b) The portfolio can be customized to suit the client's risk return profile.

c) The client has access to the Portfolio Manager which is not possible in a

Mutual Fund.

d) The Portfolio Manager has the flexibility to move into cash as and when

required.

Major Players

The major Players in the market providing Portfolio Management Services (PMS) are

as follows:

a) Religare Securities

b) KOTAK Securities Limited.

c) Motilal Oswal

d) HDFC

e) Geojit

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I OBJECTIVE OF THE STUDY

To compare all the financial instruments and the services provided by Top five retail broking companies on different

parameters.

46

MOTILAL

OSWAL

RELIGARE

KOTAK

SECURITIE

S

INDIABULLS

SHAREKHA

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PARAMETERS OF COMPARISON

47

Turnover

Of the Company

Benefits

Provided

By Company

Infrastructure

Goodwill

Ofthe Company

Services provided

by theCompany


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II METHODOLOGY

Research methodology that I undertook for the purpose of this study is

enumerated below: -

PRIMARY RESEARCH

This consisted Questionnaire and interaction with various people. A focusgroup study was conducted to design the customer survey Questionnaire with a

sample size of 85 respondents. The survey was conducted in Delhi and NCR.

SECONDARY RESEARCHSources were primarily the Internet, Newspapers, annual reports and

presentations available to employees.

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IMPORTANCE OF BROKING HOUSE

Industry Overview

The securities market achieves one of the most important functions of channeling idle

resources to productive resources or from less productive resources to more

productive resources. Hence in the broader context the people who save and investors

who invest focus more towards the economys abilities to invest and save

respectively. This enhances savings and investments in the economy, the two pillars

for economic growth. The Indian Capital Market has come a long way in this process

and with a strong regulator it has been able to usher an era of a modern capital market

regime. The past decade in many ways has been remarkable for securities market in

India. It has grown exponentially as measured in terms of amount raised from the

market, the number of listed stocks, market capitalization, trading volumes and

turnover on stock exchanges, and investor population. The market has witnessed

fundamental institutional changes resulting in drastic reduction in transaction costs

and significant improvements in efficiency, transparency and safety.

Dependence on Securities Market

Three main sets of entities depend on securities market- the corporate, the government

& households. While the corporate and governments raise resources from the

securities market to meet their obligations, the households invest their savings in

securities.

Primary Market & Secondary Market

The securities market comprises two segments- primary market (new issues, offer for

sale) & secondary market (trading of stocks). There are two major types of issuers

who issue securities. The corporate entities issue mainly debt and equity instruments

(shares, debentures, etc.), while the governments (central and state governments) issue

debt securities (dated securities, treasury bills).

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Background of Companies

About

Kotak Securities

Kotak Securities Ltd. is India's leading stock broking house with a market share of

around 8.5 % as on 31st March. Kotak Securities Ltd. has been the largest in IPO

distribution

The accolades that Kotak Securities has been graced with include:

` Prime Ranking Award (2003-04)- Largest Distributor of IPO's

Finance Asia Award (2004)- India's best Equity HouseFinance Asia Award (2005)-Best Broker In India

Euro money Award (2005)-Best Equities House In India

Finance Asia Award (2006)- Best Broker In India

Euro money Award (2006) - Best Provider of Portfolio

Management: Equities

The company has a full-fledged research division involved in Macro Economic

studies, Sectoral research and Company Specific Equity Research combined with a

strong and well networked sales force which helps deliver current and up to date

market information and news. Kotak Securities Ltd is also a depository participant

with National Securities Depository Limited (NSDL) and Central Depository Services

Limited (CDSL), providing dual benefit services wherein the investors can use the

brokerage services of the company for executing the transactions and the depository

services for settling them. Kotak Securities has 195 branches servicing more than

2,20,000 customers and a coverage of 231 Cities. Kotaksecurities.com, the online

division of Kotak Securities Limited offers Internet Broking services and also online

IPO and Mutual Fund Investments. Kotak Securities Limited manages assets over

2500 crores of Assets Under Management (AUM) .The portfolio Management

Services provide top class service , catering to the high end of the market. Portfolio

Management from Kotak Securities comes as an answer to those who would like to

grow exponentially on the crest of the stock market, with the backing of an expert.

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About

Indiabulls

Indiabulls is Indias leading Financial Services and Real Estate company having

presence over 648 locations in more than 124 cities. Indiabulls serves the financial

needs of more than 3,00,000 customers with its wide range of financial services and

products from securities, derivatives trading, depositary services, research & advisory

services, insurance, consumer secured & unsecured credit, loan against shares and

mortgage & housing finance. With around 5000 Relationship Managers, Indiabulls

helps its clients to satisfy their customized financial goals. Indiabulls through its

group companies has entered Indian Real Estate business in 2005. It is currently

evaluating several large-scale projects worth several hundred million dollars.

Indiabulls Financial Services Ltd is listed on the National Stock Exchange, BombayStock Exchange, Luxembourg Stock Exchange and London Stock Exchange. The

market capitalization of Indiabulls is around USD 800 million, and the consolidated

net worth of the company is around USD 500 million. Indiabulls and its group

companies have attracted USD 300 million of equity capital in Foreign Direct

Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are

the largest financial institutions of the world such as Fidelity Funds, Capital

International, Goldman Sachs, Merrill Lynch, Lloyd George and Farallon Capital.

Indiabulls is ranked 82nd in the list ofmost valuable companies in India in BT500.

Business of the company has grown in leaps and bounds since its inception. Revenue

of the company grew at a CAGR of 184% from FY03 to FY06. During the same

period, profits of the company grew at a CAGR of 268%.

Indiabulls became the first company to bring FDI in Indian Real Estate through

a JV with Farallon Capital Management LLC, a respected US based investment

firm. Indiabulls has demonstrated deep understanding and commitment to

Indian Real Estate market by winning competitive bids for landmark properties

in Mumbai and Delhi. In April 2006, Indiabulls announced demerger of its real

estate division to a separate entity.

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About

Motilal Oswal Securities Ltd.

Motilal Oswal Securities is a leading research and advisory based stock broking house

of India, with a dominant position in both institutional and retail broking. Asia money

Brokers Poll 2005 has ranked us the best Indian brokerage firm. There are various

other categories where the Brokers Poll has rated us number one most independent

research, sales and service etc.

In March 2006, AQ Research, a firm that analyses the accuracy of a brokers research

call, declared Motilal Oswal Securities the best research house for Indian stocks.

Motilal Oswal Securities has witnessed rapid organic growth due to favorable market

conditions as well as efforts put in by the company itself. FY05 and FY06 saw the

company grow inorganically through acquisition of three significant regional broking

firms from Andhra Pradesh, Karnataka and Kerala. Over a period of time many more

regional broking firms may be acquired to gain solid footing in various regions of

India.

The company was founded in 1987 as a small sub-broking unit, with just two people

running the show. Focus on customer-first-attitude, ethical and transparent business

practices, respect for professionalism, research-based value investing and

implementation of cutting-edge technology have enabled us to blossom into an almost

two thousand-member team.

Our institutional business unit has relationships with several leading foreign

institutional investors (FIIs) in the US, UK, Hong Kong and Singapore. In a recent

media report we were rated as one of the top-10 brokers in terms of business

transacted for FIIs.

The retail business unit provides equity investment solutions to more than 1,75,000

investors through 1017 outlets spanning 375 cities and 24 states. We provide advice-

based broking (equities and derivatives), portfolio management services (PMS), e-

Broking, depository services, commodities trading, IPO and mutual fund investment

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advisory services. Its Value PMS Scheme gave a 402.74% return since inception

(Feb 2003), (Sensex is 270.69% & Nifty is 245.11%). The performance of Value

Hedging since inception (Oct 2005) is 32.76%.

Such an outstanding performance can be only attributed to our single-minded focus on

research-based value investing. Motilal Oswal Securities invests almost 5-10% of its

revenue on equity research and hires and trains the best resources

to become advisors to its valued clients.

Ourunique Wealth Creation Study,authored by Mr. Raamdeo Agrawal, Managing

Director, is now in its eleventh year. Investors keenly await this annual study for the

wealth of information it has on how companies created wealth during the preceding

five years.

The organization finds its strength in its team of young, talented and confident

individuals. Qualified professionals carry out different functions under the able

leadership of its promoters, Mr.Motilal Oswal and Mr. Raamdeo Agrawal.

Stringent employee selection process, focus on continuous training and adoption of

best management practices drive the quest to achieving ourVision.

53
http://motilaloswal.com/pms.htmhttp://motilaloswal.com/pms.htmhttp://motilaloswal.com/pms.htmhttp://motilaloswal.com/pms.htmhttp://motilaloswal.com/wc2005/wc2005.pdfhttp://motilaloswal.com/wc2005/wc2005.pdfhttp://motilaloswal.com/people.htmhttp://motilaloswal.com/people.htmhttp://motilaloswal.com/people.htmhttp://motilaloswal.com/people.htmhttp://motilaloswal.com/vision.htmhttp://motilaloswal.com/pms.htmhttp://motilaloswal.com/wc2005/wc2005.pdfhttp://motilaloswal.com/people.htmhttp://motilaloswal.com/people.htmhttp://motilaloswal.com/vision.htmhttp://motilaloswal.com/pms.htm


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RESULTS

SUMMARY:

Out of the total of 85 correspondent (60 questionnaire based & 25 telephonic

interview) it was found out that

India bulls have the highest market share as it has 37% of the

respondents as its customers.

Religare followed up with 21% and further followed by Kotak and Share

khan.

Market Share

kotak

19%

india bulls

37%

Religare

21%

others

13%

Sharekhan

10%

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The results of Appendix I (Questionnaire) are summarized

as follows:

WHAT IS THE PURPOSE OF INVESTMENT?

We have found that most of the investor has the spare money to put in stock market.

The major objective we have found out in our survey that investor put their money in

stock market to earn short to medium term return. Investor does not consider stock

market for their long-term investment. However this is not standard phenomenon as

people also invest for long term on the basis of stock they are investing. Broadly we

can say that in stock market all types of investor exist. The difference comes in the

nature of investment they do means in what kind of stock they are investing. A long-

term investor put money in more stable and fundamentally strong stocks while some

one with an objective of quick gain would invest in more aggressive stock where can

be high

How long have you been investing?

29%

46%

14%

11%

below 2 yrs

2-5 yrs

5-10 yrs

above 10 yrs

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VOLUME OF INVESTMENT

SUMMARY:

As according to the respondents response it was found out that most of the

investors were into the category of (1-10) lakh followed by (0-1) lakh followed

by the following.

It was found out that people take many Factors into considerations before

investing into the market

23%

38%

21%

11%

7%

Volume of Investment

0-1 lakh

1-10 lakh

10-20 lakh20-50 lakh

above 50 lakh

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The results of Appendix I (Ques.7, 8, 9, 10, 11) are summarized as

follows:

Summary of Satisfaction survey

0

5

10

15

20

25

satisfied 18 13 10 4 4

dissatisfied 3 24 9 6 9

Religare

(21)

Indiabulls

(37)

Kotak

(19)

Sharekhn

(10)

Others

(13)

METHOD OF TRADING YOU PREFERS?

Comfort with trading methodology varies from person to person. We have found that

people are pretty comfortable with offline as well as online mode of transit. Howeverwe have seen a shift towards online mode of trading preferred these days to offline

mode of trade. This trend is most visible amongst the new generation investors who

are majorly employees of IT companies and BPOs. Religare is the only player,

which provides the ODIN trading platform so that they have best of both worlds i.e.

online trading at offline platform.

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TIME TAKEN TO ACTUALLY EXECUTE A TRADE?

All the broking houses today are technologically at par so there is not much of

variation in time taken to execute a trade. However in some branches where customer

rush is very high, execution of trade gets delayed. RELIGARE stands ahead in this

regard compared to its competitors as in RELIGARE, trade is executed in flick of a

second because of efficient dealers.

DO YOU HAVE AN ACCOUNT OPENING CHARGES FOR DEMAT? (YES,

NO)

We have found that most of the broking houses have various charges in their standard

template for charges, but companies are flexible in their approach to charge a client

according to potential of business expected of him. We have found that companies

like Religare and Indiabulls are very aggressive in their approach to charge a client

and can reduce and waive charges very quickly whereas there are broking house like

Kotak who are not ready for such differentiation.

HOW MUCH TIME IS TAKEN TO RECEIVE A PAYMENT?

This is the area where organization differs significantly. In some organizations we

have found that it takes around a week for a client to take a payment cheque. However

some organizations adopt innovative methods to improve their efficiency in these

areas. Broking house like Kotak and Religare have tied up with major banks in the

country and can arrange online transfer of funds in the same day. But, the industry as

a whole needs to do a lot in this area.

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The results of Appendix I (Ques.6) are summarized as follows:

PATTERNS OF TRADE

27%

20%

53%

Yourself

Follow the tips

Relation mgr

TRADING

PATTERNS

HOW DO YOU TRADE (BASIS OF TRADE)?

We have found out that majority of investors trade on the basis of relationship

managers advice. People who are been investing in stock market for long generally

do not prefer RM advise but the investor (which do form a big chunk today) generally

invest on the basis of advise of their respective RM. This practice is now getting more

and more popular amongst all leading broking house in the country. Religare has a

good strength of RMs in its every branch. However other broking house do lack in

this aspect. Market leader KOTAK leads in the number of RM followed by the

RELIGARE, which has built up very good team of RM in very short period of time.

DO YOU NEED A RELATIONSHIP MANAGER?

We consulted with the investor in Gurgaon area where the response we have got is in

favor of having a RM. We have found that, as majority of the clientele are

professionals working in MNCs or IT companies, these people do not have any

knowledge of stocks and shares, therefore they prefer having a RM. We have also

found that some investor have negative opinion about RM because of certain bad

instances in past. We have found that investors with security houses like

INDIABULLS, Karvy do not have good opinion about RM.

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RESULTS of the telephonic interview..

Telephonic interviews

A total of 25 participated in the telephonic interviews. This included men and

women, out of which were mostly young professionals from IT sector and

BPOs. They were asked a set of questions

1. ARE YOU PROVIDED WITH RM?

When we ask this question with investor we got mixed responses. We have seen

generally majority of the investor are being provided with RM. But in most of the

cases we have found that the role of RM in most of the cases has been limited to

opening of the account rather then being an ally of investor to guide him properly in

ups and downs of the stock market

2. WHAT IS YOUR FREQUENCY OF INTERACTION WITH RM?

We have found that majority of RM interact on need basis with their client. Generally

RM interacts with client on daily basis during the course of trading. Otherwise for a

passive client it is found that RM interact

3. IS ORGANISATION MORE IMPORTANT OR RM?

We have seen people giving more preference to RM then organization. It is because

of this that people shift to new broking house once RM leaves their job.

4. IS BRANCH LOCATION IMPORTANT FOR YOU?

We have seen that branch location is very critical in offline mode of trade but it is also

found that if the comfort with RM is created people are ready to open an account in

branches that are far from their location

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5. DO YOU BELIEVE IN BROKING HOUSE HAVING A BRAND

NAME?

When surveyed we found that there is a visible shift in the preference of the customer

from a non-brand broking house to branded broking house. The professionals who

invest their money in the stock market prefer branded broking house as its easy to

trust on these companies. This has affected companies like PRABHUDAS

LILADHAR and has help companies like RELIGARE and KOTAK who invest

substantial sum in creation of brands for their organization.

6. ADVERTISEMENT RELEVANCE IN DECISION-MAKING

We have found that advertising is important for creating a general level awareness for

the companies and buildup trust in the companies. However many investors who were

surveyed responded that although advertising is important but its not the major

element in decision making about the broking house they want to trade with.

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OBSERVATIONS

Professionalism:

Religare securities as they are known for their brand name still they have to more

emphasize on customer relationship management in Religare Securities type of

services they provide to their client in initial stage is perfectly good but after some

time the services provided by them to the client become low grade due to which the

existing client feel ignored thats why their competitors in the market like Kotak

Securities & India bulls can easily break their client from them so they have to take

care of it.

No of Branches:

No of branches of the Religare securities in the Delhi and NCR region is less as

compared to their competitors. The no. of branches of Kotak & India bulls are

available in every market in Delhi which also help them to be on top of Religare

Securities.

Research Team:

Tips provided by Religare securities to their clients as per the recommendation of

their research team is not as effective as the tips provided by Share khan securities as

the research team of Religare securities is in Mumbai. Also, growing of research teamresults in growth of their market share.

Small services:

Small services like providing tips on email & SMS on cell phone should be taken

undertaken so as to avoid delay in decision making by the clients.

Online Product:

The online product introduced by Religare securities in the market is not good incomparison of ICICI Direct.

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APPENDIX 1

QUESTIONNAIRE

1.Do you deal in any of the following financial instruments?

Cash Market F & O Commodities Mutual Fund

2.From which broking house you are trading?

Kotak securities Indiabulls Religare securities

Share khan Others If yes specify.

3. How long have you been investing?

Below 2 yrs 2-5 yrs 5-10 yrs above 10 yrs

4. What is the volume of your investment?

Below 1 lakh 1-10 lakh 10-20 lakh 20-50 lakh

Above 50 lakh

5. What type of brokerage they are charging from you on delivery & intraday?

.75 & .07 .5 & .05 .4 & .04 .3 & .03

.2 & .02 Others Specify

6.You trade:

Yourself Follow the tips Consult your broker

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7.How much limit your broking house provides you for delivery & intraday?

4 & 10 times 3 & 7 times 2 & 5 times

Others specify

8.Whether your broking house provides you with the software terminal free of

cost?

Yes No

9. Whether your broking house provides you with regular clues through SMS or

e-mail?

Yes No

10. Whether you are fully satisfied with the services provided by your broking

house?

Yes No

11. What are the top three services, which you expect from broking house?

..

..

...

NAME ..

Address ..

..

Mobile No:

Thank you for your cooperation

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BIBLIOGRAPHY

REFRENCES

Following references have been utilized during the progress of project

Web support

https:\\www.myiris.com

https:\\www.moneycontrol.com

http:\\www.religare .in

http:\\www.equitymaster.com

https:\\www.debtonnetindia.com

Magazines and other publications

Religare research report

Dalal street Economic times

Business today publications
http://www.religare/http://www.religare/

manohar arora project report

Documents