ASUMMER TRAINING PROJECT REPORTONCAPITAL MARKET OF HCLIN THE PARTIAL FULLFILMENT FOR THEDEGREE OFMASTER OF BUSINESS ADMINISTRATION

SUBMITTED TO:- SUBMITTED BY:-MR.RAKESH THAKUR VIPAN KUMAR 611012028 M.B.A 3rd Sem.

2011-2013SRI SAI SCHOOL OF MANAGEMENT & COMMERCE STUDIESSRI SAI UNIVERSITYPALAMPURCERTIFICATE

It is certified that the project work entitled to CAPITAL MARKET OF HCL done by Vipan Kumar to be submitted to Sri Sai University Palampur in the partial Fulfillment of the requirement of the reward of the degree of MASTERS OF BUSINESS ADMINISTRATION has been carried out under my guidance and Supervision.

PROJECT GUIDE

DECLERATION I am Vipan kumar student of M.B.A Third semester (university roll no.611012028) at hereby declare that I have completed my research report on the topic titled capital market in HCL as a compulsory part of my course curriculum. The information provided in the report is original and has not been copied from anywhere.This report is not submitted to any other university/institute for the award of any other degree/diploma.

VIPAN KUMAR

PREFACEIt is my pleasure to be indebted to various people, who directly or indirectly contributed in the development of this work and who influenced my thinking, behavior, and acts during the course of study. I express my sincere gratitude to Mr. Rakesh thakur Asstt. Prof. Management Sri Sai University, Palampur for his support, cooperation, and motivation provided to me during the study for constant inspiration, presence and blessings. I also extend my sincere appreciation to Mr. bharat chhabra Asstt. finance Manager in HCL. Who provided his valuable suggestions and precious time in accomplishing my project report. Lastly, I would like to thank the almighty and my parents for their moral support and my friends with whom I shared my day-to-day experience and received lots of suggestions that improved my quality of work.

VIPAN KUMAR

AcknowledgementModern organizations are highly complex ad dynamics systems. They operate under very turbulent social economic and political environment. They are required to reconcile several incompatible goals. Conflicting roles and divergent interest they are also fraught with the use risk and uncertainties, hence tactful management of such organization to plan to execute guide, coordination and control the performance of people to achieve predetermined goals. Management has to keep the organization vibrant moving and in equilibrium. It has to achieve goal which themselves are changing it is therefore a problem highly complex and ticklish. This information will be asset to the manager in making effective decision. This research is used to acquire to analyze information and to make suggestion to management as to how marketing problems should be solved. The marketing research is the process which links to individuals through information in important part of the curriculum of MBA programme is project taken by the students to institute under which he or she is studying, after completion of the second semester of the programme.The objective of this project is to enable the students to understand the application of the academics in the real life. I am fully confident that this project report will be extremely useful to the management .We would also like to thank the faculty members and the staff members of HCL Info systems Ltd. for their kind support and help during the project. VIPAN KUMAR

IndexSerial No. ParticularsPage No.

1.Objective of the company

2.Hindustan computer limited

3.Indian Capital market

4.Types of capital market

5.Intermediaries of capital market

6.Investors in Capital market

7.Growth of Capital market in India

8.Scenario of Indian capital market

9.Factor affecting capital market

10.What are the Sensex & the Nifty?

11.Classification of Indian Capital Market

12.SEBI- The Regulator

13.Questionnaies

OBJECTIVE OF THE STUDY

The main objective of the report is to undertake a comprehensive study of the capital market. The project contains secondary data to evaluate the capital market.

Assessment of Performance of Indian Securities Market

Evaluating Book building process in india

Resource Mobilisation by Government and Corporate Sector

HINDUSTAN COMPUTERS LIMITED:

TypePublic(BSE: 500179,BSE: 532281)

Founded11th August 1976

HeadquartersNoida, India(Delhi metropolitan area), India

Key PeopleShiv Nadar, Founder, Chairman & CEOSanjay Kumar Choudhary , Vineet Nayar

IndustryInformation Technology Services

Revenue4.7 billion USD

Employees~53,000 (as on 31st Dec 2007)

Websitewww.hcl.in

Hindustan Computers Limited, also known as HCL Enterprise, is one of India's largest electronics, computing and information technology company. Based in Noida, near Delhi, the company comprises two publicly listed Indian companies, HCL Technologies and HCL Infosystems.HCL was founded in 1976 by Shiv Nadar, Ajay Choudhary and four of their colleagues. HCL was focused on addressing the IT hardware market in India for the first two decades of its existence with some sporadic activity in the global market. In 1981, HCL seeded a company focused on addressing the computer training industry, NIIT, though it has currently divested its stake in the company. In 1991, HP took minority stake in the company (26%) and the company was known as HCL HP for the five years of the joint venture. On termination of the joint venture in 1996, HCL became an enterprise which comprises HCL Technologies (to address the global IT services market) and HCL Infosystems (to address the Indian and APAC IT hardware market). HCL has since then operated as a holding company.

AN OVERVIEW ABOUT THE COMPANYHCL Infosystems is no flash in the Information Technology pan. Founded in 1976, the firm has climbed into pantheon of India's corporate giants on the strength of its IT products and services. HCL Infosystems specializes in IT hardware (PC's and servers, as well as networking, imaging and communications products), and system integration services serving the domestic Indian market. In addition to its consumer products, the company provides commercial IT products, facilities management, network services, and IT security services for clients in such industries as government, financial services, and education. HCL Corporation owns significant stakes in HCL Infosystems (about 44%) and sister company HCL Technologies.HCL Infosystems Ltd, a listed subsidiary of HCL, is an India-based hardware and systems integrator. It claims a presence in 170 locations and 300 service centre. Its manufacturing facilities are based in Chennai, Pondicherry and Uttarakhand .Its headquarters is in Noida.HCL Peripherals (A Unit of HCL Infosystems Limited) Founded in the year 1983, has established itself as a leading manufacturer of computer peripherals in India, encompassing Display Products, Thin Client solutions, Information and Interactive Kiosks. HCL Peripherals has two Manufacturing facilities, one in Pondicherry (Electronics) and the other in Chennai (Mechanical) .The Company has been accredited with ISO 9001:2000, ISO 14001, TS 16949 and ISO 13485.

HISTORY

HCL Infosystems Ltd is one of the pioneers in the Indian IT market, with its origins in 1976. For over quarter of a century, we have developed and implemented solutions for multiple market segments, across a range of technologies in India. We have been in the forefront in introducing new technologies and solutions. The highlights of the HCL saga are summarized below:

Y E ARH I G H L I G H T S

1976 - Foundation of the Company laid- Introduces microcomputer-based programmable calculators with wide acceptance in the scientific / education community

1977 - Launch of the first microcomputer-based commercial computer with a ROM -based Basic interpreter - Unavailability of programming skills with customers results in HCL developing bespoke applications for their customers

1980 - Formation of Far East Computers Ltd., a pioneer in the Singapore IT market, for SI (System Integration) solutions

1983 - HCL launches an aggressive advertisement campaign with the theme ' even a typist can operate' to make the usage of computers popular in the SME (Small & Medium Enterprises) segment. This proposition involved menu-based applications for the first time, to increase ease of operations. The response to the advertisement was phenomenal. -HCL develops special program generators to speed up the development of applications

1986 - Zonal offices of banks and general insurance companies adopt computerization- Purchase specifications demand the availability of RDBMS products on the supplied solution (Unify, Oracle). HCL arranges for such products to be ported to its platform.- HCL assists customers to migrate from flat-file based systems to RDBMS

1991 - HCL enters into a joint venture with Hewlett Packard - HP assists HCL to introduce new services: Systems Integration, IT consulting, packaged support services ( basic line, team line )

1994 - HCL acquires and executes the first offshore project from IBM Thailand- HCL sets up core group to define software development methodologies

1995 - Starts execution of Information System Planning projects - Execution projects for Germany and Australia - Begins Help desk services

1996 - Sets up the STP ( Software Technology Park ) at Chennai to execute software projects for international customers - Becomes national integration partner for SAP

1997- Kolkata and Noida STPs set up- HCL buys back HP stake in HCL Hewlett Packard

1998 - Chennai and Coimbatore development facilities get ISO 9001 certification

1999 - Acquires and sets up fully owned subsidiaries in USA and UK- Sets up fully owned subsidiary in Australia - HCL ties up with Broadvision as an integration partner

2000 - Sets up fully owned subsidiary in Australia- Chennai and Coimbatore development facilities get SEI Level 4 certification- Bags Award for Top PC Vendor In India- Becomes the 1st IT Company to be recommended for latest version of ISO 9001 : 2000- Bags MAIT's Award for Business Excellence- Rated as No. 1 IT Group in India

2001-Launched Pentium IV PCs at below Rs 40,000-IDC rated HCL Infosystems as No. 1 Desktop PC Company of 2001

2002-Declared as Top PC Vendor by Dataquest-HCL Infosystems & Sun Microsystems enters into a Enterprise Distribution Agreement- Realigns businesses, increasing focus on domestic IT, Communications & Imaging products, solutions & related services

2003- Became the first vendor to register sales of 50,000 PCs in a quarter- First Indian company to be numero uno in the commercial PC market- Enters into partnership with AMD- Launched Home PC for Rs 19,999

2004- 1st to announce PC price cut in India, post duty reduction, offers Ezeebee at Rs. 17990- Maintains No.1 position in the Desktop PC segment for year 2003- Becomes the 1st company to cross 1 lac unit milestone in the Indian Desktop PC market- Partners with Union Bank to make PCs more affordable, introduces lowest ever EMI for PC in India- Registers a market share of 13.7% to become No.1 Desktop PC company for year 2004- Crosses the landmark of $ 1 billion in revenue in just nine months

2005- Launch of HCL PC for India, a fully functional PC priced at Rs.9,990/-- Rated as the No.1 Desktop PC company by IDC India -Dataquest- 'Best Employer 2005' with five star ratings by IDC India -Dataquest.- 'The Most Customer Responsive Company 2005' -IT Hardware Category by The Economic Times -Avaya Global Connect.-Top 50 fastest growing Technology Companies in India' & 'Top 500 fastest Growing Technology Companies in Asia Pacific' by 'Deloitte & Touche'. by 'Deloitte & Touche'-'7th IETE -Corporate Award 2005' for performance excellence in the field of Computers & Telecommunication Systems by IETE.-India 's 'No.1 vendor' for sales of A3 size Toshiba Multi Functional Devices for the year '04 -'05 by IDC.-Toshiba 'Super Award 2005 towards business excellence in distribution of Toshiba Multifunctional products,-Strategic Partners in Excellence' Award by In focus Corporation for projectors.-'Most valued Business Partner' Award for projectors by In focus Corporation in 2005

2006

(till June)- 75, 000+ machines produced in a single month- HCL Infosystems in partnership with Toshiba expands its retail presence in India by unveiling 'shop Toshiba'- HCL Infosystems & Nokia announce a long term distribution strategy- HCL the leader in Desktops PCs unveils India's first segment specific range of notebooks brand - 'HCL Laptops'- IDBI selects HCL as SI partner for 100 branches ICT infrastructure rollout- HCL Infosystems showcases Computer Solutions for the Rural Markets in India - HCL Support wins the DQ Channels-2006 GOLD Award for Best After Sales Service on a nationwide customer satisfaction survey conducted by IDC- HCL Infosystems First in India to Launch the New Generation of High Performance Server Platforms Powered by Intel Dual - Core Xeon 5000 Processor

INDIA CAPITAL MARKET

Introduction-Capital Market is a broad term which includes Primary Market, Secondary Market, Term leading Institutions, Banks and anybody which is engaged in providing long term Capital. It is a market in which money is lent for periods longer than a year. In other words, capital market is a mechanism through which debtors receive long-term funds and creditors invest their funds in long-term securities. The capital market includes the stock market and the bond market. Financial regulators, such as the Securities and Exchange Board of India. The capital markets in their designated countries to ensure that investors are protected against fraud. The capital markets consist of the primary market and the secondary market. The primary markets are where new stock and bonds issues are sold (underwriting) to investors. The secondary markets are where existing securities are sold and bought from one investor or speculator to another, usually on an exchange. Money Market however includes all agencies providing short term (working capital) to the industry.Investors in the capital market

1. Individuals. 2. Corporate.3. Governments.4. Foreign countries.5. Banks.6. Provident Funds.7. Financial Institutions.

Rights and responsibilities of investors

Investor Rights

The right to get: The best price Proof of price/brokerage charged Your money/ shares on time Shares through auction where delivery is not receivedamount Square up amount where delivery not received in auction Statement of accounts from trading member The right for redressal against Fraudulent price Unfair brokerage Delay in receipt of money or shares Investor unfriendly companies

Investor Obligations

The obligation to: Sign a proper member constituent agreement Possess a valid contract or purchase/sale note Deliver securities with valid documents and proper signatures The obligations to ensure To make payment on time To deliver shares on time To send securities for transfer to the company on time Forwarding all the papers received from the company under objections to the broker on time

Indian capital market since independence

Before independence, the capital market was not properly developed. As very few companies engaged in the trading in the stock market thus the growth of industrial securities market was very much limited. Most of British Companies in India had then base in London capital market, instead of Indian capital market.After independence, the Indian Capital market started to enlarge its activity with increase in the volume of savings and investment in the economy particularly since 1951. One of the important indicators of the growth of Indian capital market is the expansion and growth of corporate enterprises. In India total number of public limited and pvt. limited companies has increased from 28500 in 1951 to 50000 in 1990 and their total paid up capital has also increased from Rs 775 crore in 195,1 to Rs. 20000 crore in 1990, another pointes the volume of investment has also grown in years.

Assessment of Performance of Indian Securities Market during 2000-2010

ParametersCompound annual growth Rate(2000-2010)

Resource Mobilisation in Primary Markets17.15%

Resource mobilization through Euro Issues43.89%

All-India Market Capitalisation23.15%

All-India Equity Market Turnover19.94%

All-India Equity derivatives turnover132.19%

Assets under Management of Mutual Funds18.99%

Net Investments by Foreign Institutional Investors30.53%

Net Investments by Mutual Funds54.07%

Returns on Nifty13.13%

SEGMENTS OF STOCK MARKET

PRIMARY MARKET SEGMENT

SECONDARY MARKET SEGMENT

PRIMARY MARKET Provides channel for sale of new securities. Issue the securities at face value or at a discount/ premium. Issuance is done either through public/ private placement

Features of primary markets are:This is the market for new long term capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called the new issue market (NIM). In a primary issue, the securities are issued by the company directly to investors. The company receives the money and issues new security certificates to the investors. Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business. The primary market performs the crucial function of facilitating capital formation in the economy. The new issue market does not include certain other sources of new long term external finance, such as loans from financial institutions. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as "going public." The financial assets sold can only be redeemed by the original holder

Methods of issuing securities in the primary market are:KINDS OF ISSUE

BOOK BUILDING IN INDIAParties associated are the issuer company, the Book Runner Lead Manager (BRLM) and the syndicate members

INVESTMENTS IN IPOS IN THE INDIAN CAPITAL MARKET

The existence of the phenomenon of underpricing is a well-established fact for the common stock initial public offerings (IPOs). Research concerning the primary capital market is found to be unequivocal in its conclusion that initial public offerings are offered at a discount. It has been found that an average firm goes public with an offer price that is lower than the price that prevails in the immediate aftermarket. As a result, IPOs register significant excess returns on the first day of trading. Under pricing is a phenomenon that is largely restricted to the opening transaction. And hence, the under pricing is almost entirely corrected by the market at the opening transaction. A worldwide survey of literature on the phenomenon of Under pricing of IPOs exhibit three fundamental characteristics:

(a) The initial price reaction phenomenon or in other words under pricing: the immediate after market price, on average is significantly higher than price at which the initial offer was made;(b) The Hot Issue Phenomenon: there are distinct cycles outlined, both in the number of issues that come to the market and the level of initial price reactions; (c) The long-run Underperformance phenomenon: initial offers are said to perform dismally in the long-run compared to the industry counterparts for the same period.

Studies on the Indian capital market also confirm the phenomenon of under pricing of IPOs. Most of the Studies on the Indian primary market concerning the phenomenon of under pricing are found to be in the post-liberalisation period i.e. after the abolition of the CCI. The initial excess return on IPOs in the Indian primary capital market are very high as compared to the experience of the capital markets of countries abroad.

Significant Developments in IPO Markets

The world financial markets (USA & UK) have come a long way. In the US markets, the IPO market has grown manifold in number and volume. The NYSE and the AMEX did not allow for transactions in equity securities of small companies. Smaller companies, that naturally imply smaller trading volumes, led to the development of a separate market to foster dealing of securities of these companies. The NASD, therefore, established the market for securities in the year 1971. There was demand for capital from the high growth-high risk medium sized companies. The expansion of the market for IPOs indicates that this expectation has, by and large, been fulfilled.

In the UK capital market, the Big Bang (1985) constituted a fundamental revolution for the LSE. Post Big Bang, the daily turnover in equities almost doubled in value and in volume of transactions; the average rates of commission came down for almost all clients, particularly for institutional investors; though, for small deals, the small investor lost out.The Big Bang brought about fundamental changes on the securities market, changing every aspect of the market: the participants, the transactions, the competition factor and of course, the gains. The initiation of the process of reform in India also would not have been possible without changes in the regulatory framework. The New Economic policy (1991) led to a major change in the regulatory framework of the capital market in India. The Capital Issues (Control) Act 1947 was repealed and the Office of the Controller of Capital Issues (CCI)

was abolished. The Securities and Exchange Board of India (SEBI), established in 1988 and armed with statutory powers in 1992, came to be established as the regulatory body with the necessary authority and powers to regulate and reform the capital market. The Controller of Capital Issues (CCI) has been the regulatory body for the Indian capital market for over fifty years. The CCI has had a strong control over the Indian capital market as a regulatory authority. Guidelines for issue of capital and pricing of securities has been rigid. SEBI came to be recognized as a regulatory body for the capital market after the abolition of the CCI. The control on pricing of capital issue has been abolishedand easy access is provided to the capital market. The objectives of the SEBI are: (i) To protect the interest of the investors (ii) To promote and develop the capital market and (iii) To regulate the securities market. SEBI is set up on the lines of the SEC in the US and the SIB in the UK. The SEBI has taken over all the functions of the Office of the Controller of Capital Issues.This paper aims (1) To look at the behaviour of IPOs in the primary capital market in the pre and post Liberalization Era: (a) Extent of under pricing during the CCI & SEBI times and (b) The influence on returns considering various factors such as Issue Size, Age,Foreign Equity, Issue Rating, and Issued Capital.

(2) To assess the long-run performance of IPOs for a period of five years after listing & Performance of IPO vis--vis Stock Index & Industry Index

Behaviour of IPOs

Issue Price: A negative relationship exists between return on listing and the issue pricei.e. lower the issue price higher is the return accrued. The relationship is found to be statistically significant (0.01level). R2 is found to be low. Issue price is one of the factors to influence return, but it is not the only factor.

Issue Size: There is a negative relation that exists between return on listing and the issuesize. However, the relationship is found to be statistically significant at 10% level.Return is found to be higher in case of small-size issues in comparison to large-sizeissues. There is a gradual fall in the initial return on listing across issue-size. Initialreturn on listing is as high as 226.1% for issue-size of less than 1 crore and as low as 36.4% for issue-size more than 50 crores.

Age of the Company: There is a negative relation that exists between return on listing and the age of the company at the time of issue. The relationship is found to be statistically significant (0.01 level). In both the cases: return on listing and daily return, a chi-square test indicates of a strong influence of age on the initial returns. The results are found to be significant (0.01 level).

Foreign Equity: A positive relation is established between return on listing and the foreign equity holding present in the total equity of the company. The relationship is found to be statistically significant (0.03 level). Return are found to be higher for the companies with foreign equity holding of 26% & above; and very low in case of the companies with foreign equity holding of below 26%.

Issue Rating: There is a positive relation that exists between return on listing and the issue rating for the said initial public offer made by the company. The relationship is found to be statistically significant (0.01 level). The issue rating assigned to the IPO is found to significantly influence the initial return on the IPO. A high rating assigned to the initial public offer is found to be significantly influence the return on listing.

Issued Capital: There is a negative relation that exists between return on listing and the issued capital of the company at the time of issue. The relationship is found to be statistically insignificant.

List Delay: The average time taken for listing is 125 days; almost 68% of the IPOs got listed within this time frame. The minimum time taken for listing is 11 days while the maximum is 888 days. Listing delay and the return on listing exhibit a negative relation; i.e. less the amount of time taken to list at the stock exchange, higher is the initial return. The relationship is found to be statistically significant (0.01 level).

Resource Mobilisation by Government and Corporate Sector

Issues (Rs) ($)

2010-112011-122010-11 2011-12

Corporate Securities222204038389124361285045

Domestic Issues217416036792424267281507

-Public Issues14671025479028795644

-Private Issues202745034244523979375863

Euro Issues478801596709403537

Government Securities436688062319085709138152

-Central Government3185500492497062522109104

-State Government118138013112202318729048

TOTAL658892010075102129321223197

SECONDARY MARKET

The secondary market, also known as the aftermarket, is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold. With primary issuances of securities or financial instruments, or the primary market, investors purchase these securities directly from issuers such as corporations issuing shares in an IPO or private placement, or directly from the federal government in the case of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market. The secondary market for a variety of assets can vary from fragmented to centralized, and from illiquid to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies.

Functions of secondary market Secondary marketing is vital to an efficient and modern capital market. In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be highly liquid.

Constituents of capital market

1. Stock Exchanges.2. Merchant Banks.3. Underwriters.4. Stock Brokers and Sub Brokers.5. Custodians.6. Depositories and Depository Participants.7. Financial Institutions.8. Investors etc.

Market participants Issuer of securities. Investors of securities Intermediaries. Stock market products.

Role of capital market

The primary role of the capital market is to raise long-term funds for governments, banks, and corporations while providing a platform for the trading of securities.This fundraising is regulated by the performance of the stock and bond markets within the capital market. The member organizations of the capital market may issue stocks and bonds in order to raise funds. Investors can then invest in the capital market by purchasing those stocks and bonds. The capital market, however, is not without risk. It is important for investors to understand market trends before fully investing in the capital market. To that end, there are various market indices available to investors that reflect the present performance of the market.

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Economic growth and Development of capital market

Economic growthAn efficient capital market is an essential perquisite of economic development. The capital market fosters the economic growth to the extent that it:-1. Increases the quantities of real savings and capital formation from any given level of national income.2. Increases the net capital inflow from abroad.3. Raises the productivity of investment by improving allocation investible funds.

Economic developmentCapital markets play an important role in the economic development of emerging capital markets. Well functioning markets insure that both corporations and investors get or receive fair prices for their securities. This ensures that valuable projects will be financed and negative value projects will be rejected. Most importantly, we argue that integration into world capital markets will accelerate the growth process. A country that erects to international participation will face a higher cost of capital. This discourages domestic investment and diminishes foreign direct investment.

Nature of Indian capital market

The capital market in India can be classified into two categories namely:-1) Organized sector2) Unorganized SectorIn the Organized sector, the demand for capital comes mostly from corporate enterprises and government and semi government institution and the supply comes from household savings, institutional investors like banks, investment trusts, insurance companies, Finance corporations, Government etc.The unorganized sector consists of indigenous bankers and moneylenders on the supply side and demand for funds is mostly for consumption purposes. In this market the rate of interest charged by lenders is exorbitant.

Indian Capital Market System and Capital Market Structure of India

Indian Capital Market Systemis the key structure to all Economic and Financial transaction in India. This entry provides some simple and important organizational structure details ofCapital Market organization structure of India.

Capital Market System and Structure in India

StructureInstitution

Government SecuritiesGovernment securities market.Reserve Bank of India (RBI)controls all transactions of government securities,

Industrial SecuritiesIndustrial securities divided into Primary market (New issues like IPO) and Secondary market (Market for trading the Equity shares through stock exchange). Popular national level stock exchanges in India,National Stock Exchange (NSE)andBombay Stock Exchange (BSE).

Development Financial Institutions (DFI)Financial institutions provide financial aid to develop special sectors. Financial institutions likeIFCI ( Industrial Finance Corporation of India ), ICICI ( Industrial Credit and Investment Corporation of India), SFC ( State Finance Corporations ), IDBI ( Industrial development Bank of India ),UTI ( Unit Trust of India ), etc.

Financial IntermediariesAll other state controlled finance intermediaries like, Merchant banking, Mutual funds, Leasing finance companies, Venture capital funds, etc.

Indian capital market institutions

1 Commercial banks in India.2 Insurance companies like LIC and GIC have also attained growing importance in Indian capital market and are mostly investing in government securities.3 Various special institutions like IDBI, IFCI, ICICI, UTI etc giving long form capital to the private sector of the country.

Investment choices in securities market

Securities is defined in the Securities Contracts (Regulation) Act, 1956It includes Shares, scrips, stocks, bonds, debentures, debenture stocks or other marketable securities Derivative Government Securities Mutual Funds etc. SharesEquity Shares- ownership interest in a company of holdersHolders of shares are members of company and have voting rightsVarious kinds of equity sharesRight shares, bonus shares, preferred shares etc. Mutual fundsPooling of resources by issuing units to the investorsProfit and loss shared by investors in proportion to the investmentSet up in the form of a trust and has a sponsor, trustees, asset management company and custodian.

DerivativesDerivative means a forward future, option or any other hybrid contract of pre determined fixed durationIncluded in the definition of securities with Securities Laws (Second Amendment) Act, 1999

Challenges

Education of Investors: As new instruments likes derivates are being introduced in the market, the emphasis on investor education should also be enhanced.2) Accounting and financial reporting norms: Financial disclosure requirements in India are not at par with international accounting practices in spite of attempts made by the institute of chartered accountants of India.3) Corporate Governance: With sophistication in the market place, demand for improved corporate governance by public companies will also increase. Ensuring high confidence of the investors in the business so as to improve investment levels through good governance is must.

4) Technology: Regulators most keep up with the sophistication in market technology and new market structure. As market manipulation and cyber crimes are increasing. A system ensuring close observation against cyber crime should be updated from time to time.5) Integration with other financial markets:The adoption of international best practices, sharing information with the regulatory bodies globally and co-operation with international bodies is important. Global bench-marks should be adopted to remove weaknesses in market difficulties in surveillance and increase investor risk aversion.

Indian brokerages must be strengthen as despite the growth of market, there hasn't been enough consolidation within the stock broking community to create large and effective broking houses which can fight in market place. The three fourth of NSEs total turnover comes from just three centers, brokers have no idea how to widen their reach to touch

FINDINGS

The share of resource mobilization has tremendously increased from the year 2000 to 2010 The compound annual growth of All India Market Capitalization has increased Net investments from foreign institutional investors has show an increments It has been found that mainly all the companies are using this book building process which has been evaluated Corporate Securities resource mobilization has shown a positive growth with respect to International market In Domestic Issues mainly Private issues has taken over the Public issues In case of Government securities, Central Government has show better results as compared to the state Government resource mobi

FORMULATE HYPOTHESISTypes of Hypothesis1. Null Hypothesis 2. Alternative Hypothesis3. Working Hypothesis

Null Hypothesis There is no difference between M one and M two. In which hypothesis tested for possible rejection is known as null hypothesis.Alternative Hypothesis It is denoted by Ha. It is desirable to formulate several hypothesis in beginning and then to select one that explain the phenomena.Working Hypothesis It is hypothesis which is provisionally adopted to explain certain facts and to guide a researcher in the investigation of other.I used null hypothesis for preparing my research report capital markit of HCL .

RESEARCH METHODOLOGY Research Methodology is a way to systematically solve the research problem. The Research Methodology includes the various methods and techniques for conducting a Research. Marketing Research is the systematic design, collection, analysis and reporting of data and finding relevant solution to a specific marketing situation or problem. D. Slesinger and M.Stephenson in the encylopedia of Social Sciences define Research as the manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art. Research is, thus, an original contribution to the existing stock of knowledge making for its advancement. The purpose of Research is to discover answers to the Questions through the application of scientific procedures. Our project has a specified framework for collecting data in an effective manner. Such framework is called Research Design. The research process followed by us consists of following steps:

Descriptive Research:-A type of conclusive research which has as its major objective the description of something-usually market characteristics or functions. In other words descriptive research is a research where in researcher has no control over variable. He just presents the picture which has already studied. Conclusion Oriented Research:-Research designed to assist the decision maker in the situation. In other words it is a research when we give our own views about the research. Sample Design-Sampling can be defined as the section of some part of an aggregate or totality on the basis of which judgement or an inference about aggregate or totality is made. The sampling design helps in decision making in the following areas:- Universe of the study-The universe comprises of two parts as theoretical universe and accessible universe. Sample frame-Sample frame refers from where the questionnaires are to be filled. Sample size- Sample size is the number of elements to be included in a study. Sample unit- Sampling unit is the basic unit containing the elements of the universe to be sampled. Sampling Techniques- The sampling techniques used are convience technique and simple random sampling technique.

Methods of Data Collection- Research work is exploratory in nature. Information has been collected from both Primary and Secondary data. Primary sources- Primary data are those, which are collected are fresh and for the first time, and thus happen to be original in character. Primary data has been collected by conducting surveys through questionnaire, which include both open- ended and close-ended questions and personal and telephonic interview. Secondary sources- Secondary data are those which have already been collected by someone else which already had been passed through the statistical process. Secondary data has been collected through magazines, websites, newspapers and journals. Tools of Analysis- To analyse the data obtained with the help of questionnaire, following tools were used. Likert Scale : These consist of a number of statements which express either a favourable or unfavourable attitude towards the given object to which the respondents are asked to react. The respondent responds to in terms of several degrees of satisfaction or dissatisfaction.

SCOPE OF THE STUDYThis project is vital to us in a significant way. It does have some importance for the company too. These are as follows

This project will be a learning device for the finance student. Through this project we would study the various methods of the capital market. The project will be a learning of planning and financing capital market. The project would also be an effective tool for credit policies of the companies. This will show different methods of holding inventory and dealing with cash and receivables. This will show the liquidity position of the company and also how do they maintain a particular liquidity position.

LIMITATIONS OF THE STUDYDue to constraints of time and resources, the study is likely to suffer from certain limitations. Some of these are mentioned here under so that the findings of the study may be understood in a proper perspective.The limitations of the study are: The research was carried out in a short period. Therefore the sample size and the parameters were selected accordingly so as to finish the work within the given time frame. The information given by the respondents might be biased some of them might not be interested to give correct information. Some of the respondents could not answer the questions due to lack of knowledge.

ConclusionTo sum up , It can be conclude that in last 10 year the Indian Capital Market has shown a tremendous growth in all the major sectors. On the other hand the Foreign Institutional Investors and foreign direct investment has very much increased. As the number of foreign institutional investors registered with the SEBI rose from none in 1992-93 to 528 in 2000-01, to about 1000 in 2010-11 and now it is more increased by numbers. Earlier Government was not one the major player but now the scenario has been changed and Government has taken up the capital market into consideration. The last decade (2011-12) was probably one of the best for the Indian capital markets, even a shade better than the 90s decade which actually established the base for the 00s decade through economic liberalization .The performance of the Indian capital market has been impressive with high returns and a high level of investment from both domestic and foreign investors. On the other hand, Indias debt market, particularly the corporate bond market is still underdeveloped. Of late, efforts have been made to bring regulatory changes to develop the corporate bond market. However, sustained effort and long-term commitment are needed to realize the true potential of this segment. The growth of Indias derivatives market has been significant but needs to develop further in terms of products and investor base Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund. They think their money will not be sec

BIBLIOGRAPHY Google Websites www.hcl.co.in www.nseindia.com www.bseindia.com www.sebi.gov.in www.sbimf.com www.moneycontrol.com

DATA ANALYSIS & INTERPRETATION(1) Investors invested in different kind of investments.

Kind of Investments No. of RespondentsSaving A/C 195Fixed deposits 148Insurance 152Mutual Fund 120Post office (NSC) 75Shares/Debentures 50Gold/Silver 30Real Estate 65

Interpretation: From the above graph it can be inferred that out of 200 people,97.5% people have invested in Saving A/c, 76% in Insurance, 74% in FixedDeposits, 60% in Mutual Fund, 37.5% in Post Office, 25% in Shares orDebentures 15% in Gold/Silver and 32.5% in Real Estate.

2. Preference of factors while investing

Factor(a) Liquidity(b) Low Risk(c) High Return(d) Trust

No. ofRespondents40606436

Interpretation:Out of 200 People, 32% People prefer to invest where there is High Return, 30%prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 18%prefer Trust

3. Awareness about Mutual Fund and its Operations,

ResponseYesNo

No. of Respondents13565

Interpretation: From the above chart it is inferred that 67% People are aware of Mutual Fund and its operations and 33% are not aware of Mutual Fund and its operations.

4. Source of information for customers about Mutual FundSource of informationNo. of Respondents

Advertisement18

Peer Group25

Bank30

Financial Advisors62

Interpretation:From the above chart it can be inferred that the Financial Advisor is the mostimportant source of information about Mutual Fund. Out of 135 Respondents,46% know about Mutual fund Through Financial Advisor, 22% through Bank,19% through Peer Group and 13% through Advertisement

5. Investors invested in Mutual FundResponseNo. of Respondents

YES120

NO80

Total200

Interpretation:Out of 200 People, 60% have invested in Mutual Fund and 40% do not haveinvested in Mutual Fund.

6. Reason for not invested in Mutual Fund

ReasonNo. of Respondents

Not Aware65

Higher Risk5

Not any Specific Reason10

Interpretation:Out of 80 people, who have not invested in Mutual Fund, 81% are not aware ofMutual Fund, 13% said there is likely to be higher risk and 6% do not have anyspecific reason.

7. Mode of Investment Preferred by the Investors

Mode of InvestmentOne time InvestmentSystematic Investment Plan (SIP)

No. of Respondents 78 42

Interpretation:Out of 120 Investors 65% preferred One time Investment and 35 % Preferredthrough Systematic Investment Plan

8. Preferred Portfolios by the Investors

PortfolioNo. of Investors

Equity56

Debt20

Balanced44

9. Preference of Investors whether to invest in Sectorial Funds

ResponseNo. of Respondents

Yes25

No95

Interpretation:Out of 120 investors, 79% investors do not prefer to invest in Sectorial Fundbecause there is maximum risk and 21% prefer to invest in Sectorial Fund.

QUESTIONNAIRE

1. What kind of investments you have made so far?

a. Saving accountb. Fixed depositsc. Insuranced. Mutual Fund

e. Post Office-NSC,etcf.Shares/Debenturesg. Gold/ Silverh. Real Estate

2. While investing your money, which factor will you prefer?

(a) Liquidity(b) Low Risk(c) High Return(d) Trust

3.Are you aware about Mutual Funds and their operations?

Yes

No

4. If yes, how did you know about Mutual Fund

a. Advertisementb. Peer Groupc. Banksd. Financial Advisors

5. Have you ever invested in Mutual Fund? Pl tick (). Yes No

6. If not invested in Mutual Fund then why?

(a) Not aware of MF (b) Higher risk (c) Not any specific reason

7. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick ().

a. One Time Investmentb. Systematic Investment Plan (SIP)

8. When you want to invest which type of funds would you choose?

a. Having only debtportfoliob. Having debt & equityportfolioc. Only equity portfolio

9. Instead of general Mutual Funds, would you like to invest in sectorial funds?Please tick (). Yes No

47