project report on bma wealth creators pvt. ltd

BMA WEALTH CREATORS PVT. LTD.NBS

INTRODUCTION

ABOUT THE SECTOR

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A stock market or equity market is a public entity (a loose network of

economic transactions, not a physical facility or discrete entity) for the

trading of company stock (shares) and derivatives at an agreed price;

these are securities listed on a stock exchange as well as those only

traded privately.

The size of the world stock market was estimated at about $38.6 trillion

at the start of October 2011.

The stocks are listed and traded on stock exchanges which are entities

of a corporation or mutual organization specialized in the business of

bringing buyers and sellers of the organizations to a listing of stocks

and securities together. The largest stock market in the United States,

by market capitalization, is the New York Stock Exchange (NYSE). In

Canada, the largest stock market is the Toronto Stock Exchange. Major

European examples of stock exchanges include the Amsterdam Stock

Exchange, London Stock Exchange, Paris Bourse, and the Deutsch

Börse (Frankfurt Stock Exchange). In Africa, examples include Nigerian

Stock Exchange, JSE Limited, etc. Asian examples include the

Singapore Exchange, the Tokyo Stock Exchange, the Hong Kong Stock

Exchange, and the Shanghai Stock Exchange. In Latin America, there

are such exchanges as the BM&F Bovespa and the BMV.

In India Bombay Stock Exchange (BSE) benchmark, Sensex & National

Stock Exchange (NSE), the 50-stock Nifty index.

The market in which shares are issued and traded, either through

exchanges or over-the-counter markets are also known as the stock

market. It is one of the most vital areas of a market economy because

it gives companies’ access to capital and investors a slice of ownership

in a company with the potential to realize gains based on its future

performance.

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EVOLUTION OF THE INDIAN BROKERAGE MARKET

The Indian broking industry is one of the oldest trading industries

that had been around even before the establishment of the BSE in

1875. Despite passing through a number of changes in the post

liberalization period, the industry has found its way towards

sustainable growth. The evolution of the brokerage market is

explained in three phases: pre1990, 1990-2000, post 2000.

Early Years

The equity brokerage industry in India is one of the oldest in the Asia

region. India had an active stock market for about 150 years that

played a significant role in developing risk markets as also

promoting enterprise and supporting the growth of industry.

The roots of a stock market in India began in the 1860s during the

American Civil War that led to a sudden surge in the demand for

cotton from India resulting in setting up of a number of joint

stock companies that issued securities to raise finance. This trend

was akin to the rapid growth of securities markets in Europe and the

North America in the background of expansion of railroads and

exploration of natural resources and land development.

Bombay, at that time, was a major financial centre having

housed 31 banks, 20 insurance companies and 62 joint stock

companies. In the aftermath of the crash, banks, on whose building

steps share brokers used to gather to seek stock tips and share news,

disallowed them to gather there, thus forcing them to find a

place of their own, which later turned into the Dalal Street.

A group of about 300 brokers formed the stock exchange in Jul 1875,

which led to the formation of a trust in 1887 known as the

“Native Share and Stock Brokers Association”. A unique feature of

the stock market development in India was that that it was entirely

driven by local enterprise, unlike the banks which during the pre

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-independence period were owned and run by the British.

Following the establishment of the first stock exchange in

Mumbai, other stock exchanges came into being in major cities in

India, namely Ahmadabad (1894), Calcutta(1908),Madras (1937), Uttar

Pradesh and Nagpur (1940) and Hyderabad (1944). The stock markets

Gained from surge and boom in several industries such as jute

(1870s), tea (1880s and 1890s), coal (1904 and 1908) etc, at different

points of time.

INDIA IN GLOBAL MARKETS

The stature and significance of India is growing in the world capital

markets. India is not only attracting greater interest from world

markets, but is also assuming increasing importance in global

finance. India is a major recipient of foreign institutional flows amongst

the emerging markets. Since the opening up of domestic stock markets

to foreign investors, cumulative net FII investments reached Rs 517 Bn

by 2008 end.

India is major destination of private equity flows into the emerging

markets.

India was host to the annual meetings/conference of the World

Federation of Exchanges (2005) and International Organization of

Securities Commission (IOSCO) (2007).

India emerged a trillion dollar market capitalization market in 2007,

and was among the top 10 stock exchanges in the world in terms of

market capitalization.

India is amongst the top fifteen stock exchanges in the world in respect

of equity turnover. India emerged as a leading player in commodities

futures market. India is amongst the top five in the number of

transactions. India is among the top five in respect of volume traded in

Stock Index Futures and Stock Futures. India is one of the few markets

with extensive dematerialization of shares. India’s T+2 securities

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settlement cycle is at par with the global standards. Indian stock

markets have the largest number of listings, with trading taking place

in about 2,500-3,000 stocks. India’s most popular stock index (Sensex)

is constructed on the basis of full float methodology, one of the firsts in

the Asian region and a global standard. Indian market indices such as

Sensex and CNX Nifty are listed in foreign exchanges for trading as

ETFs.

THE BSE AND NSE

Most of the trading in the Indian stock market takes place on its two

stock exchanges: the Bombay Stock Exchange (BSE) and the National

Stock Exchange (NSE). The BSE has been in existence since 1875. The

NSE, on the other hand, was founded in 1992 and started trading in

1994. However, both exchanges follow the same trading mechanism,

trading hours, settlement process, etc. At the last count, the BSE had

about 4,700 listed firms, whereas the rival NSE had about 1,200. Out of

all the listed firms on the BSE, only about 500 firms constitute more

than 90% of its market capitalization; the rest of the crowd consists of

highly illiquid shares.

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GENERAL INTRODUCTION

ABOUT THE COMPANY

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Established in December 2004, BMA Wealth Creators is a financial

services provider and specializes in extending customized financial

solutions to individual and corporates. The Company works towards

understanding the financial ambitions of its clients and adjusts to its

risk profile accordingly. Their expertise combined with thorough

understanding of the financial markets results in appropriate

investment solutions for all.

BMA Wealth creators is a part of the BMA Group. Established in 1920s,

the Group has created its forte by promoting successful ventures in the

fields of coal mining, refractory, steel and Ferro alloy. In the form of

established names in the market such as BMA Stainless Steel (Captain

TMT Bars), Prop. Snowtex Udyog Ltd, Anjanery Ferro Alloys Limited,

Maithan Alloys Limited, Maithan Smelters Limited, BMA International

and BMA EcoPrint.

BMA Financial Services primarily focuses on offering diversified

financial planning services to corporate & individuals. Their spectrum of

services include financial planning, advising, executing, monitoring of

investments & more. With their team of financial consultants & experts

they ensure to deliver customized solution to all their clients. They

offer a wide range of financial services and solutions through their

varied services.

Wealth Management Services

Investment Advisory Services

Securities Broking, Equities and Derivatives

Distribution of Financial Products

Marketing of Equity and Mutual Fund IPO

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Commodities Broking

Their expertise in each of these areas helps to achieve financial

objectives.

They provide full service functions, which include:

Planning

Advising

Executing

Monitoring your investments

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INDUSTRY PROFILE

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INDIAN SECURITIES MARKET

Meaning of securities

The issues in stock exchanges are called securities. This includes

shares and debentures issued by public companies, government and

semi-government bonds, debentures bonds issued by government

companies, etc. Indian stock market has a long history dated back to

19th century. At the end of 19th century Bombay stock exchange was

established in MUMBAI

Types of securities

Government Securities

Government securities refer to securities issued by the central

government or state government. Securities point of view, government

securities are considered to be better. It is called golden edge

securities.

Semi-government Securities

The bonds and debentures issued by public utility services are known

as semi government securities. Security point of view, place for the

category of securities comes after the government securities. The

payment of invested money with interest on such securities is

guaranteed by the government.

Investment Securities

The security that is suitable in view of investment is called investment

securities. A certain fixed income is expected from such securities, and

comparatively price is also remaining stable. For example the

government and semi-government securities, issued by banks and

insurance companies come under this category.

Speculative Securities

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The prices of securities that fluctuate largely called speculative

securities. The speculators have special interest in such securities.

They earn profit under the impression of future increase or decrease in

prices

Trustee Securities

Such securities in which some trust money can be invested, is called

trustee securities.

Industrial Securities

Industrial security is a wider term and it includes the securities of Bank,

Insurance, and industrial activities etc. Only the securities issued by

business institutions are categorized separately as industrial securities.

Registered Securities

Registered securities are those which are registered with the

concerned institutions book. Registered securities can be transferred

from one person to another through Registered.

Bearer Securities

Bearer securities can be transferred by mere delivery from one person

to another. The names of bearer securities are not deemed to be its

owner.

Listed Securities

The securities that include in the list of recognized stock exchanges, is

called listed securities. Only listed securities are transacted in stock

exchanges.

Cleared Securities

Those securities that have been recognized by the stock exchanges for

transactions are called cleared securities.

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STEPS TO PURCHASE SECURITIES:

The following procedure may be followed by a purchaser of securities

at a stock exchange:

1. Selection of a broker:

Since only members can deal in securities at a stock exchange, the

intending buyer will have to take the help of a broker for purchase of

securities. The broker may be engaged either directly or through the

mediation of a bank with which the intending buyer has dealings. The

latter, or course is generally preferred, since the banks are integrity of

the broker.

2. Placement of order:

Ordinarily the broker recommends for purpose of investment a number

of securities and indicates in each case the advantages and

disadvantages of investing funds in it, the risk involved, anticipated

return, prospects of appreciation and deprecation. The investor, on the

basis of the advice of broker draws upon the order wherein he

generally specifies the price at which the different securities may be

purchased.

3. Making of a contract:

After receiving the order the broker or his authorized agent goes to the

hall of the stock exchange where the securities required are dealt with.

He announces his requirement by shouting in the hall during the time

allotted for dealings in the particular class of securities, In response to

his 'shouting' another broker who has an order with him to sell those

securities, may accept his offer or may make a counter offers.

Instead of shouting in the hall, another alternative open to broker is to

contact the members in their cabins and find out whether they are

willing to sell the securities he wants to buy After negotiations with

them a bargain is struck.

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4. Preparation of contract note:

A book called "sauda book" is maintained by each broker. After

recording the transaction of purchase or sale of securities in the book,

the broker will get the signatures of the other member brokers with

whom he had the dealing in confirmation of the purchase of sale. A

copy of the transactions recorded in this book is submitted by the

broker to the stock exchanges at the end of the day. This facilitates

reconciliation by stock exchanges of all transactions for purchases with

sales and vice versa.

5. Settlement of the transactions:

The broker or members of the stocks exchanges settle the transactions

on the settlement day on behalf of their clients. The mode and time of

settlement depends on the nature of transactions, i.e. whether it is a

ready delivery transactions or a forward delivery transaction.

In case a person wants to sell the securities, practically the same

procedure, as discussed above, will have to be followed.

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HISTORY OF EQUITY MARKET

Market-oriented economic reforms in India began in 1991. With the

removal of Administrative controls on bank credit and the primary

market for securities, the capital markets came to occupy a larger role

in shaping resource allocation in the country. This led to a heightened

interest amongst policy makers in the institutional development of

securities markets. The efforts towards empowering the securities

market regulator (SEBI), and the first efforts towards attracting foreign

portfolio investment began early in the reforms process. Almost

immediately after the reforms began, there was a prominent scandal

on the fixed income and equity markets, which was exposed in April

1992.

This set the stage for an unusual policy intervention: the establishment

of a securities exchange, the National Stock Exchange (NSE), by the

government.

Contrary to most expectations, NSE succeeded, becoming the largest

equity market in 1995. NSE pioneered many important innovations in

market design in India. The most important of these included

nationwide electronic trading (1994), the clearing corporation as a

central counterparty (1996) and paperless settlement at the depository

(1996). NSE was a pioneer amongst securities exchanges in the world

in using a “demutualised” structure, where brokerage firms did not

own the exchange.

The demutualised structure helped in keeping NSE focused on the

needs of investors as opposed to the profit maximization of brokerage

firms. The creation of the new exchange, clearing corporation and

depository were important accomplishments of institution building.

From 1996 onwards, debates about policy issues on the equity market

were dominated by questions about the role for leveraged trading.

There was a proposal to have a spot market based on “rolling

settlement” (where leverage is limited to intra–day positions only).

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In 2001, a major crisis broke on the equity market. It involved

numerous elements: large leveraged positions which went wrong,

accusations of market manipulation, a payments crisis at the Calcutta

exchange, fraud in the banking system, ethics violations at the Bombay

Stock Exchange,

This crisis was valuable in breaking this five–year deadlock and moving

on with reforms. In June 2001, trading in index options commenced &

within a matter of weeks, liquidity improved sharply.

Over the 1990s, the equity market became a nationwide platform with

real–time capability for trading and settling stock transactions.

However, comparable improvements in the infrastructure for funds

transfer in the country have not taken place.

Beyond technical questions of market design, the most important

concerns about the securities markets today are questions of

governance and policy formulation Securities markets have made

significant progress in terms of exploiting modern trading technology

and modern financial instruments. However, the regulatory capacity on

the part of both exchange institutions and SEBI is highly limited.

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STOCK MARKET

The term 'the stock market' is a concept for the mechanism that

enables the trading of company stocks, other securities, and

derivatives.

The stocks are listed and traded on stock exchanges which are entities

(a corporation or mutual organization) specialized in the business of

bringing buyers and sellers of stocks and securities together.

Equity/Share

Total equity capital of a company is divided into equal units of small

denominations, each called a share. For example, in a company the

total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of

Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the

company then is said to have 20,00,000 equity shares of Rs 10 each.

The holders of such shares are members of the company and have

voting rights.

There are now stock markets in virtually every developed and most

developing economy, with the world's biggest markets being in the

United States, UK, Germany, France, India and Japan.

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THE BOMBAY STOCK EXCHANGE IN INDIA

Function and purpose

The financial system performs three main tasks:

first, it handles transfer of payments; second, it

channels savings to investments with a good

return for future consumption; and third, it

spreads and reduces (local enterprise)

economic risks in relation to the players'

targeted returns.

The smooth functioning of all these activities facilitates economic

growth in that lower costs and enterprise risks promote the production

of goods and services as well as employment. In this way the financial

system contributes to increased prosperity.

The stock market is one of the most important sources for companies

to raise money. Rising share prices, for instance, tend to be associated

with increased business investment and vice versa. Share prices also

affect the wealth of households and their consumption. Therefore,

central banks tend to keep an eye on the control and behaviour of the

stock market and, in general, on the smooth operation of financial

system functions.

Trading

Participants in the stock market range from small individual stock

investors to large hedge fund traders, who can be based anywhere.

Market Timings

Trading on the equities segment takes place on all days of the week

(except Saturdays and Sundays and holidays declared by the Exchange

in advance). The market timings of the equities segment are:

Normal Market Open: - 09:15 hours

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Normal Market Close: - 15:30 hours

LISTING

Listing means admission of securities of an issuer to trading privileges

on a stock exchange through a formal agreement. The prime objective

of admission to dealings on the Exchange is to provide liquidity and

marketability to securities.

SECURITIES

"Securities" is a generic term describing a transferable certificate of

ownership in an investment product. An investment product includes

notes, bonds, stocks, futures, contracts and options.

A Security gives the holder an ownership interest in the assets of a

company. For example, when a company issues security in the form of

stock, they give the purchaser an interest in the company's assets in

exchange for money.

There are a number of reasons why a company issues securities:

meeting a short-term cash crunch or obtaining money for an expansion

is just two.

TRADING IN INDIA

NSE introduced for the first time in India, fully automated screen based

trading. It uses a modern, fully computerized trading system designed

to offer investors across the length and breadth of the country a safe

and easy way to invest.

The NSE trading system called 'National Exchange for Automated

Trading' (NEAT) is a fully automated screen based trading system,

which adopts the principle of an order driven market.

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REGULATOR

WHO REGULATES THE SECURITIES MARKET?

The responsibility for regulating the securities market is shared by

Department of Economic Affairs (DEA), Department of Company Affairs

(DCA), Reserve Bank of India (RBI) and Securities and Exchange Board

of India (SEBI).

WHAT IS SEBI AND WHAT IS ITS ROLE?

The Securities and Exchange Board of India (SEBI) is the regulatory

authority in India established under Section 3 of SEBI Act, 1992. SEBI

Act, 1992 provides for establishment of Securities and Exchange Board

of India (SEBI) with statutory powers for (a) protecting the interests of

investors in securities (b) promoting the development of the securities

market and (c) regulating the securities market. Its regulatory

jurisdiction extends over corporates in the issuance of capital and

transfer of securities, in addition to all intermediaries and persons

associated with securities market. SEBI has been obligated to perform

the aforesaid functions by such measures as it thinks fit. In particular, it

has powers for:

1. Regulating the business in stock exchanges and any other

securities markets

2. Registering and regulating the working of stock brokers, sub–

brokers etc.

3. Promoting and regulating self-regulatory organizations

4. Prohibiting fraudulent and unfair trade practices

5. Calling for information from, undertaking inspection, conducting

inquiries and audits of the stock exchanges, intermediaries, self –

regulatory organizations, mutual funds and other persons

associated with the securities market.

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CLEARING CORPORATION

A Clearing Corporation is a part of an exchange or a separate entity

and performs three functions, namely, it clears and settles all

transactions, i.e. completes the process of receiving and delivering

shares/funds to the buyers and sellers in the market, it provides

financial guarantee for all transactions executed on the exchange and

provides risk management functions. National Securities Clearing

Corporation (NSCCL), a 100% subsidiary of NSE, performs the role of a

Clearing Corporation for transactions executed on the NSE.

Rolling settlement all open positions at the end of the day mandatorily

result in payment/ delivery ‘n’ days later. Currently trades in rolling

settlement are settled on T+2 basis where T is the trade day. For

example, a trade executed on Monday is mandatorily settled by

Wednesday (considering two working days from the trade day). The

funds and securities pay-in and pay-out are carried out on T+2 days.

FACTORS AFFECTING THE PRICES OF SECURITIES IN STOCK

EXCHANGE

Rates of dividend declared by companies.

Changes in the capital structure of companies.

Present economic condition of the institution.

Change in the management and control.

Strikes of employees.

Government policies towards industrial licensing and taxation.

Rate of interest in money market and availability of credit.

Business cycles.

Circulation of money.

National politics and change in government.

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Financial market can be divided into following sub-

markets

Markets can be classified into different categories depending upon

characteristics of market or instrument used to create categories.

Securities created by institutions in the markets normally pay an

interest on the nominal amount (the amount shown on the certificate

or contract). The interest-bearing securities market is split into money

market and the capital market, based on the term to maturity (the

term left to redemption of the debt) of the securities.

The capital market is the market for issue and trade of long terms

securities.

The money market is that of short-term securities .The money market

is basically concerned with the issue and trading of securities with

short term, maturities or quasi-money instrument .The instruments

traded in the money market are Treasury Bill, Certificates of Deposits

(CDs), Commercial paper (CPs), Bills of exchange and other such

instruments of short term maturities (i.e. not exceeding 1year with

regard to the original maturity).

The Bond market, which provide financing through the issuance

of bonds, and enable the subsequent trading thereof.

Commodity markets, which facilitate the trading of

commodities.

The derivatives markets, which provide instrument for the

management of financial risk.

Futures markets, which provide standardized forward contracts

for trading products at some future date

Insurance markets, which facilitate the redistribution of various

risks.

Foreign exchange markets, which facilitate the trading of

Foreign exchange.

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CAPITAL MATKET

PRIMARY MARKET

The market for instruments (also called securities) issued for the time,

is called the primary market. Because the standardization of these

instruments. Different needs in the market at different times, and

different views of economic factors, these instruments are traded

between institutions after they have been issued for the first time. If a

leader needs his money before redemption date of the loan, the lender

could trade the loan by selling the certificate to another institution. The

buyer of the instrument pays the seller and amount (the present value

the future cash flows of the loan), and the buyer becomes the new

lender. The market where instrument are traded subsequent to the first

issue is called the secondary market.

SECONDARY MARKET

The secondary market in some of the securities is a very active,

market. Activities in the secondary market have strong determining

influence on issue in the primary market as liquidity, market rates,

scale of demanded. Of specific instruments are reflected in the

secondary market. The variable of the economy in these markets are

expressed through the interest rate (the price mechanism) determined

in the rate and value at which issue can take place in the primary

market. The secondary markets give the investor the opportunity to

manage his portfolio in terms of risk and return ratio, liquidity, etc. The

investor receives or wants to receive on his investment (called the

yield); can be managed within certain parameters and by using

different strategies of buying and selling different instruments and

investments in the secondary market.

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TO BUY THE SHARES:

There are basically two ways to buy the shares of the company. The

ways are:-

Buying from the primary market

Buying from the secondary market

Buying from the primary Market

It means that buy the shares directly from companies when the make

new issues of shares or come out with IPOs. One can also get rights

issue and bonus shares.

Reasons to buy Shares from Primary Market

Listing gains are the chief attractions of buying the shares I the primary

market. The following are the important reasons to pick the shares

through IPOs, rather than buy them from the market:

The first reason is that often companies issue their shares cheaply and,

later, when these shares are listed on the stock Exchange, they list at a

premium (higher than the price at which they were issued). So make a

lot of money if sell the shares soon.

It also happens that companies who are going public or listing shares

for the first time also usually offer their shares cheap, and could go on

to become very successful, IPOs thus offer investors the chance to

participate in their prosperity cheaply.

Buying From the Secondary Market

It means buy the shares of a company that is already listed people can

buy them from the stock exchange through brokers.

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PRESENT SCENARIO

OVERVIEW

India has witnessed a consistently strong growth of over 7%+ over the

past 5 years. This, along with the positive regulatory environment, has

attracted foreign investors to India. The number of FIIs registered in

India has increased to 1711 in April 2010 from 513 in 2003. Increasing

foreign participation has been significantly positive for capital market

intermediaries in India.

FY09 remained a lackluster year, with FII being net sellers for

~US$10bn. Retail investors’ participation also remained low during

FY09, which impacted performance of capital market intermediaries.

With Indian economy moving on an up cycle during FY10, FIIs infused

~$20bn in Indian capital markets, and retail participation also

improved through insurance and mutual fund route. Corporate

fund raising activity (through QIPs, IPO, and debt syndication) has also

gained m momentum during FY102.

This has aided capital market intermediaries’ fee-income. The

secondary capital market volumes clocked a growth of 60% yoy to Rs.

978bn (annual average) during FY10 from Rs609bn in FY09. Presently

close to 77% of the capital market volumes comprise of F&O

volumes as compared to 61% in FY05. Change in the capital

market volume mix has tempered market share of top 10 capital

market intermediaries during FY10.

Moreover, lower delivery volumes in the cash segment have

impacted brokerage yields during FY10. We opine that the market

share of most of the capital market intermediaries will remain

under pressure going forward. With increased competition, brokerage

yields are expected to remain flat despite higher focus of the

intermediaries on the cash segment. We have assumed a 15% CAGR

over FY11-12 in capital market volumes from current average of Rs

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978bn. Operating cost of capital market intermediaries is largely

variable in nature. Cost effective distribution model - franchisee and

online trading through portals also helps in keeping a check on

operating cost. And, thus operating and net profit margins are

likely to remain stable. Post recent correction stock prices of capital

market intermediaries are trading at significant discount to the

benchmark index valuations.

The Indian retail brokerage industry consists of companies that

primarily act as agents for the buying and selling of securities

(e.g. Stocks, shares, and similar financial instruments) on a commission

or transaction fee basis. It has two main interdependent segments.

RAPID GROWTH

The last decade has been exceptionally good for the Stock markets in

India. In the back of wide ranging reforms in regulation and market

practice as also the growing participation of foreign institutional

investment, stock markets in India have showed phenomenal growth

in the early 1990s.

The stock market capitalization in mid-2007 is nearly the same

size as that of the gross domestic product as compared to about

25 percent of the latter in the early 2000s. Investor base

continued to grow from domestic and international markets. The

value of share trading witnessed a sharp jump too. Foreign

institutional investment in Indian stock markets showed continuous rise

reaching about USD10 bn in each of these years between FY04 to

FY06.

Electronic trading, digital certification, straight through processing,

electronic contract notes, online broking have emerged as major trends

in technology. Risk management became robust reducing the

recurrence of payment defaults. Product expansion took place in a

speedy m manner. Indian equity markets now offer, in addition to

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trading in equities, opportunities in trading of derivatives in futures and

options in index and stocks.

CORPORATE PROFILE

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ORIGIN OF THE ORGANIZATION

In the 1920s, Mr Bhuramal Agarwalla, founder of the BMA Group, had

made a foray into the obscure energy industry with a mission to

assume eminence in the coal mining business. With his vision and

character, he managed to place the business on a higher pedestal. By

adhering to bi-pronged philosophy of risk-taking and fostering an ethic-

based environment, he cautiously promoted excellence through quality

to meet the expectations of both domestic and international clients.

Taking inspiration from this, the group has scaled many heights

venturing into Refractory’s, Smelting, Ferrous Alloys, and Coke is

leading by example.

In the age of Second Generation Reforms, the company has

successfully passed down its mantle to the Fourth Generation. The

group has successfully fused traditional methods with modern mantra

of management to come out with flying colours. The group has taken

multifarious initiatives, some of which have already yielded dividends.

They are manufacturers and exporters of ferrous alloys, refractory’s

etc. The holistic production process combines a perfect balance

between product availability, manufacturing procedure, quality supply

chain and a geographical dispersion of marketing and operations. Over

the years the BMA Group has become a single reliable source for

resources and a Group you can count on for delivery and quality.

Service to the customer goes beyond the sale of products by providing

technical advice for economic and efficient applications and

maintenance for products supplied by the group companies.

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Group Companies are:

National Refractories Refractories Unit West Bengal

The Behar Potteries Ltd. Refractories Unit West Bengal

Anjanery Ferro Alloys Ltd. Ferro Alloys Unit Jharkhand

Maithan Alloys Ltd. Ferro Alloys Unit West Bengal

Maithan Smelters Ltd. Ferro Alloys Unit Meghalaya

Premium Fuels Metallurgical Coke Unit West Bengal

Corporate Social Responsibility should be the inherent motive of every

business house. The Group BMA takes its commitment seriously and

has imbibed this responsibility into its mission. It actively participates

in community development through three ways: philanthropy, civic

leadership & public policy and grass root efforts. The company provides

generous support & leadership to a wide range of organizations that

cater to cultural, civic, environmental, health and human services.

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GROWTH OF THE ORGANISATION

DIFFERENT VENTURES OF BMA GROUP

1. Refractories

Companies under Refractories:-

National Refractories (Prop. Snowtex Udyog Ltd) - An ISO

9001:2000 company

The Behar Potteries Ltd.

2. Ferro Alloys

Companies under Ferro Alloys:-

Anjaney Ferro Alloys Ltd.

Maithan Alloys Ltd.- An ISO-9001:2000 company

Maithan Smelters Ltd.

3. Coal & Coke

Companies under Coal and Coke

Premium Fuels (Prop. Snowtex Udyog Ltd.)

4. Steel Product

Manufacturing & exporting of stainless steel & allied products that are

tested to comply with international standards.

5. Export and Import

Companies under Export and Import

BMA International

EXPORT AND IMPORT ITEMS:

1. Refractory

Alumina Silicate Bricks

Insulation Bricks

31


Monolithics

Special Refractories

2. Ferro Alloys

High Carbon Ferro Manganese

High Carbon Ferro Manganese(LowPhos)

Medium Carbon Ferro Manganese

Low Carbon Ferro Manganese

High Carbon Silico Manganese

Medium Carbon Silico

Manganese

6. Financial Services



Securities Broking Equities and Derivatives

Distribution of Financial Products

Marketing of Equity and Mutual Fund IPO

Commodities Broking

Companies under Financial Service

BMA Wealth Creators Pvt. Ltd

BMA Commodities Pvt. Ltd

32


ABOUT COMPANY

BMA Wealth Creators Pvt. Ltd. is a premier financial services

organisation, providing individual and corporate with customized

financial solutions. They work towards understanding your financial

goals and risk profile. Their expertise combined with thorough

understanding of the financial markets results in appropriate

investment solutions for you. At Wealth Creators they realize your

dreams, needs, aspirations, concerns and resources are unique. This is

reflected in every move they make with and for you. They have deep

appreciation for the Value of building an everlasting relationship with

YOU. BMA Wealth Creators Pvt., Ltd. was formerly known as BMA Stock

Broking Pvt., Ltd. and changed its name in July 2007

Their financial services corporate entities are represented by

BMA WEALTH CREATORS LTD. - which holds corporate

membership in National Stock Exchange Ltd, Bombay Stock

Exchange Ltd. and Central Depositories Securities Ltd

BMA COMMODITIES PVT. LTD . - This holds corporate

membership in commodities exchange of NCDEX and MCX. It is

also is SEBI approved AMFI registered Mutual Fund advisory and

intermediary.

They inherit the legacy of BMA group which has been one of the

dominant entities in Ferrous and Ferro Alloy industry in India. The BMA

Group has created its niche in by promoting successful ventures in the

fields of coal mining, refractory, steel and Ferro alloy. The strive to

achieve excellence and dynamic growth has been possible through

optimum mix of technology, customer orientation, best business

practices, forging alliances, high quality standards and proactive

business culture. Currently they've presence in 1650 location PAN

India. Presently company has 5,000 employees in all over India.

33


MANAGEMENT TEAM

MISSION

“To be a premier financial supermarket providing integrated

investment services”

VISION

“To provide integrated financial services building investor wealth and

confidence”

34

MANAGING DIRECTOR & CEO - ANUBHAV BHATTER

DIRECTOR - AVINASH AGARWAL, SUDHANSHU AGARWAL.

COO - SAIKAT GANGULY

HEAD OF OPERATIONS AND RMS AND DIRECTOR - SHIV KUMAR DAMANI

VICE PRESIDENT AND HEAD OF FRANCHISEE DEVELOPMENT - ASIT

KUMAR GHOSH


FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION

ORGANIZATION OF BROKERAGE FIRMS

The firms that specialize in creating, trading and selling "securities" are

often referred to as brokerage firms. Like any type of business, a

brokerage firm has various departments to perform different functions,

all of which are related in one way or another to the trading and selling

of securities. However, not all firms have every department that

follows. In fact, many small firms, called specialty firms or boutiques,

perform just one of the functions.

BACK OFFICE

In BMA, Mr Jay Valani is the head of operating department and he takes

care of the function of Back – Office. The Back office function acts as a

back bone of any share broking firm as the work which the personnel in

back office has to perform is very crucial and important for the client as

well as the firm. Any mistake from the personnel might become a

liability for the firm, for e.g. if there is short delivery or pay in of clients

share then for those shares auction takes place for which they have to

pay the price for the same. Hence the back office function calls for the

full concentration level of the personnel while doing his or her work. If

the back office section detects any error it should draw the attention of

the higher authority for the corrective action. Basically the back office

function includes responsibilities like transaction processing,

settlement and other administration functions.

CLIENT REGISTRATION DEPARTMENT (CRD)

In order to trade in the market the client has to fill up the agreement

between the Client-Broker-Sub broker which is known as tripartite

agreement and also know your client forms with necessary

requirement attached to it, has to been send to CRD. In the mean while

35


the client or sub broker has to feed the all information in masters and

has to submit it in s/w which can be viewed by the client broker and

sub brokers end. After receiving the forms the employees in the CRD

verifies it and checks with the master, and everything is matched, it

gives instructions for the activation of the client to the surveillance

department. And once it get activated CRD informs to client by putting

the details in the ftp site which can be viewed at their end and can

start trading.

And if the details do not match or any particular attachment is not

there then they inform through ftp site where the client and sub broker

can view the current status. If any changes has to made like change in

name or address or in brokerage they have to inform to CRD and they

get it changed.

DELIVERY AND ACCOUNTS DEPARTMENT

Basically the employees in the Delivery department have to look after

the pay in and pay out of shares and Accounts department has to look

after the pay in and pay out of funds.

Pay in of shares

Now a days pay in of the shares is done automatically which is known

auto delivery out. NSE/BSE has the record of how much pay in of

shares is due from the seller s broker. The bank in which the broker has

his account, which is only for clearing member, the download of auto

delivery out is taken through the NSE s site. Then the broker gets the

print out of the delivery out report which shows whether NSDL/CDSL

has received the pay in correctly or not. After confirming it from the

bank the shares are sent from pse account to NSE/BSE and confirm the

pay in. Suppose if they are any short delivery of shares then NSE/BSE

gives debit to the pse account and similarly brokers debit it to sub

brokers/clients account and then NSE/BSE can charge penalty for short

pay in.

36


37


Pay out of shares and funds

When shares are purchased by the client then he gives money to sub

broker which he delivers to pse and pse sends to nse/bse as funds pay

in against which nse/bse gives payout of funds and also gives delivery

of shares to pse and in return pse gives the pay out of shares and

payout of funds to the respective sub brokers at present T+2 basis,

which means the day of trade plus two days.

Inter-settlement transaction

Intersettlement transactions are the necessary adjustments between

the broker and the client for which client has to give request to the

broker, for e.g. if the client has sold 20 share of reliance in settlement

number 154, but if the client request to broker/ sub broker to adjust

this pay in against the payout in settlement number 158 then it is

called as inter settlement transaction. d. Cash management and

transfer of funds Cash/ funds is the lifeblood of any organization so

management of cash and transfer of funds form a very important

aspect of the accounts department. This includes constant check and

reconciliation of the bank account of the sub broker.

Preparation Bank Reconciliation statement

Bank reconciliation state is very important as it helps the accountant to

understand the balance of cash in the respective bank account and if

there is any difference between in balance as per the sub brokers book

and as per our books it has to be rectified immediately and should be

informed immediately. There could be many reasons because of which

there can be indifference in cash and bank balances and doing bank

reconciliation statement can rectify these difference.

Preparing the cash statement

This statement gives the details of the transactions of previous days. It

shows all the debits and credits given to each and every client, margin

38


from the sub broker, net balances, net stock payment (normal/auction)

and net stock receivable(normal/auction)

Checking the Daily Funds Statements

Daily funds give the details of pay in and pay out of funds and also

show whether it was normal or auction. This report has to be checked

by the accountant and find whether there is any short delivery, if yes

then get the short delivery report from the delivery department.

Undertake the work of recovery

The job of recovery is very is very difficult and this is one of the

important functions of the accounts personnel for this he has to be very

strict person and see that the job is done.

THE SYNDICATE DEPARTMENT

The corporate and municipal finance departments do not sell

securities. This task falls to the syndicate department, which

coordinates the initial sale of new securities to both individual abd

institutional investors. The work of this department is discussed in

greater detail in the section on underwriting.

39


ORGANIZATION STRUCTURE

40

Head Office

Regional OfficeBranches

& Franchise

sClient

Branches

& Franchise

s

Branches

& Franchise

s

Business

AssociatesClient

Regional Office Regional Office


SERVICES AND PRODUCT OF THE ORGANIZATION


BMA Wealth Creators Pvt., Ltd. operates as a financial services

organization in India. It provides individual and corporate financial and

investment solutions. They give their customer path so that they can

efficiently increase their wealth. Expert team of BMA Wealth Creators

always suggest their customer so that they can invest their money in

such a way that it will make their wealth healthier.


Under BMA Wealth Creators Limited, it delivers advisory services to a

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

dedicated and expert professionals with varied experience and

background in handling investment portfolios. They are continually

engaged in designing the right investment portfolio for each customer

according to individual needs and budget considerations with a

comprehensive support system that focuses on trading customers'

portfolios and providing valuable inputs, monitoring and managing the

portfolio through varied technological initiatives. This is made possible

by the expertise it has gained in the business over the years. It covers

the latest of market news, trends, investment schemes and research-

based opinions from experts in various financial fields.

Securities Broking Equities and Derivatives

BMA Wealth Services Pvt. Ltd is also gives the service of Security

Broking, Equities and derivatives for their customer.

Distribution and Marketing of Equity and Mutual Fund IPO

Company also distributes different financial instruments like “Demat

Account” and also does the marketing of equity, mutual fund and IPOs

for their customers.

41


Depository Services

Depository is an organisation which holds your securities in electronic

(also known as ‘book entry’) form, in the same manner as a bank holds

your money. Further, a depository also transfers your securities without

actually handling securities, in the same day as a bank transfers funds

without actually handling cash. BMA Wealth Creators Limited gives

their customer depository services also.

Commodities Broking

Commodity trading is an investing strategy that involves the buying

and selling of goods that are classified as commodities. There are

many similarities between commodity trading and the trading activity

involved with stocks. One key difference has to do with the difference

between what is traded. Company also gives the services of

commodity broking services for customers who want to trade in

commodity.

Insurance Services

BMA Wealth Creators Pvt. Ltd also gives the insurance services to their

customer. Company has tied-up with different insurance companies for

insurance services. Company gives Life Insurance and General

Insurance both.

42


BMA WEALTH CREATORS DEALS WITH

EQUITY/SHARE

BMA Wealth Creators deals with different equity and shares of different

companies. Total equity capital of a company is divided into equal units

of small denominations, each called a share. For example, in a

company the total equity capital of Rs 2,00,00,000 is divided into

20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a

Share. Thus, the company then is said to have 20,00,000 equity shares

of Rs 10 each. The holders of such shares are members of the company

and have voting rights. Experts of the company suggest people to

invest their money in a right equity or share so that they can get good

return from that.

DEBT INSTRUMENT

Company also deals with debt instrument. Debt instrument represents

a contract whereby one party lends money to another on pre-

determined terms with regards to rate and periodicity of interest,

repayment of principal amount by the borrower to the lender.

In the Indian securities markets, the term ‘bond’ is used for debt

instruments issued by the Central and State governments and public

sector organizations and the term ‘debenture’ is used for instruments

issued by private corporate sector.

DERIVATIVE

Derivative is a product whose value is derived from the value of one or

more basic variables, called underlying. The underlying asset can be

equity, index, foreign exchange (forex), commodity or any other asset.

Derivative products initially emerged as hedging devices against

fluctuations in commodity prices and commodity-linked derivatives

remained the sole form of such products for almost three hundred

years. The financial derivatives came into spotlight in post-1970 period

43


due to growing instability in the financial markets. However, since their

emergence, these products have become very popular and by 1990s,

they accounted for about two third of total transactions in derivative

products.

COMMODITY

A market that transacts business with commodities of all nature

referred as commodity markets. Commodity market does not

necessarily require you to buy or sell the commodities but you can

even exchange them. Commodity market works on certain principles.

Firstly the trading has to be done only for standard products. Secondly

the transaction takes place through a future contract. According to this

contract the commodities will be sold or bought on a future date.

However the price at which they are sold will be the price agreed

during the contract. Similarly commodity marketing also makes use of

another type of contract called spot contract. In this contract the goods

are to be transferred as soon as the contract is made.

MUTUAL FUND

A Mutual Fund is a body corporate registered with SEBI (Securities

Exchange Board of India) that pools money from individuals/corporate

investors and invests the same in a variety of different financial

instruments or securities such as equity shares, Government securities,

Bonds, debentures etc. Mutual funds can thus be considered as

financial intermediaries in the investment business that collect funds

from the public and invest on behalf of the investors. Mutual funds

issue units to the investors. The appreciation of the portfolio or

securities in which the mutual fund has invested the money leads to an

appreciation in the value of the units held by investors. Mutual fund is

for the customers who do not have the knowledge about share or stock

market. In that case customer gives the investment amount, what they

wish to invest in share market, to the company and company invest

44


the amount on behalf of the customer in market. Experts of the

company decides where to invest the money for their customer

DEMAT ACCOUNT

Company also provides their customer De mat Account. The term De

mat, in India, refers to a dematerialised account for individual Indian

citizens to trade in listed stocks or debentures. Company provides

customer Demat Account facility who wants to transact in share

market. The Securities Exchange Board of India (SEBI) requires the

investor to maintain a Demat account. In a demat account shares and

securities are held in electronic form instead of taking actual

possession of certificates. A Demat Account is opened by the investor

while registering with an investment broker (or sub broker). The Demat

account number which is quoted for all transactions to enable

electronic settlements of trades to take place.

Access to the demat account requires an internet password and a

transaction password as well as initiating and confirming transfers or

purchases of securities. Purchases and sales of securities on the Demat

account are automatically made once transactions are executed and

completed.

The demat account reduces brokerage charges, makes

pledging/hypothecation of shares easier, enables quick ownership of

securities on settlement resulting in increased liquidity, avoids

confusion in the ownership title of securities, and provides easy receipt

of public issue allotments.

It also helps you avoid bad deliveries caused by signature mismatch,

postal delays and loss of certificates in transit. Further, it eliminates

risks associated with forgery, counterfeiting and loss due to fire, theft

or mutilation. Demat account holders can also avoid stamp duty (as

against 0.5 per cent payable on physical shares), avoid filling up of

transfer deeds, and obtain quick receipt of such benefits as stock splits

and bonuses.

45


46


Fees Involved in Demat Account

There are four major charges usually levied on a demat account:

Account opening fee, annual maintenance fee, custodian fee and

transaction fee. All the charges vary from DP to DP.

Account-Opening Fee

Depending on the DP, there may or may not be an opening account

fee. BMA Wealth Creators and some private banks, such as ICICI Bank,

HDFC Bank and UTI Bank, do not have one. However, players such as

Globe Capital, Karvy Consultants and the State Bank of India do so. But

most players levy this when you re-open a demat account, though the

Stock Holding Corporation offers a lifetime account opening fee, which

allows you to hold on to your demat account over a long period. This

fee is refundable.

Annual Maintenance Charge

Company also charges maintenance charge to maintain Demat

Account with the company. This is charges as yearly basis. This is also

known as folio maintenance charges, and is generally levied in

advance.

47

Account Opening Fee

Annual Maintenance Charge

Custodian Fee

Transaction Fee


Custodian Fee

This fee is charged monthly and depends on the number of securities

(international securities identification numbers — ISIN) held in the

account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per month.

DPs will not charge custody fee for ISIN on which the companies have

paid one-time custody charges to the depository.

Transaction Fee

The transaction fee is charged for crediting/debiting securities to and

from the account on a monthly basis. The fee also differs based on the

kind of transaction (buying or selling). Some DPs charge only for

debiting the securities while others charge for both. The DPs also

charge if your instruction to buy/sell fails or is rejected. In addition,

service tax is also charged by the DPs.

In addition to the other fees, the DP also charges a fee for converting

the shares from the physical to the electronic form or vice-versa. This

fee varies for both demat and remat requests. For demat, some DPs

charge a flat fee per request in addition to the variable fee per

certificate, while others charge only the variable fee.

Apart from all these charges one more charge is involved in

share trading and that is known as:-

Brokerage

Company gives the facility to their customer to sell or purchase stock

and other products of the company. For this facility given by the

company they charged some commission from the customer. This

commission is generally known as brokerage. And also company, who

deals with share and all other similar products, generally known as

broking houses.

48


Rates comparison of BMA Wealth Creators from other

companies:-

Brokerage Rate

1. Advance Brokerage Scheme (ABS)

BMA Wealth Creators takes the brokerage as advance for 12 months.

As per the trading doing by the customer their brokerage is being

reduced from the advance brokerage given by them. These rates are

different in case of advance brokerage chosen by the customer. BMA

Wealth Creators offers flexibility of low brokerage as your trade

volumes go high to higher.

You Pay (RS.) Variable Brokerage Time Limit.

Delivery Intraday

1,000 0.40 0.04 12 Months

2,000 0.30 0.03 12 Months

5,000 0.25 0.025 12 Months

10,000 0.20 0.02 12 Months

20,000 0.15 0.015 12 Months

25,000 0.10 0.01 12 Months

50,000 0.05 0.005 12 Months

Features:-

Flexibility to choosing slab rate as per your investment pattern.

Time valid for 12 months.

Trading allowed both in Equity and Commodity.

49


1000 2000 5000 10000 20000 25000 500000

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Delivery Brokerage of BMA as per dif-ferent Slab

Delivery Brokerage of BMA as per different Slab

1000 2000 5000 10000 20000 25000 500000

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.04

0.045

Intraday charges of BMA as per different slabs

Intraday charges of BMA as per different slabs

50


2. Unlimited Trade scheme (UTS):

No account opening charges

Flexibility of choosing slab as per your trading pattern

Free trading software and intraday charting

Research call on mobile and trading market watch

Client has the flexibility of trading through branch, online or

integrated desk

Intraday Delivery, Brokerage & Future – 0.01 per Trade

Option – 1 Rupees per Lot (Each Leg)

Plan Cash Market Cash + Future + Option + Currency

Fees 7500 15000

Offer Period 3 Months 3 Months

Exclusive of service tax

51


Brokerage rate of other companies:-

Broking Houses Delivery Intraday trading

SBICAP Securities 0.50% 0.10%

Share khan 0.03% - 0.50% 0.03% - 0.10%

Motilal Oswal 0.30% - 0.50% 0.03% - 0.15%

Angel Broking 0.50% 0.02% - 0.03%

ICICI direct 0.75% 0.15%

India bulls 0.25% - 0.50% 0.05% - 0.10%

HDFC Securities 0.50% 0.15%

UTI Securities 0.80% 0.15%

Religare 0.20% - 0.30% 0.02% - 0.03%

Geogit 0.30% 0.03%

Indiainfoline 0.50% 0.10%

SBI C

AP Secu

rities

Shere

khan

Motilal O

swal

Angel B

rokin

g

ICICI Dire

ct

Indiabulls

HDFC Se

curiti

es

UTI Se

curiti

es

Religa

reGeo

git

IndiaInfolin

e0.00%0.10%0.20%0.30%0.40%0.50%0.60%0.70%0.80%0.90%

Brokerage for Delivery

Brokerage for Delivery

52


SBI C

AP Secu

rities

Shere

khan

Motilal O

swal

Angel B

rokin

g

ICICI Dire

ct

Indiabulls

HDFC Se

curiti

es

UTI Se

curiti

es

Religa

reGeo

git

IndiaInfolin

e0.00%0.02%0.04%0.06%0.08%0.10%0.12%0.14%0.16%

Brokerage for Intraday

Brokerage for Intraday

Account Opening Charge

Name of the Broking House Account Opening Charge

BMA Wealth Creators NIL

Sherekhan Rs.750

India Bulls Rs.900

ICICIDirect.com Rs.750

SBI RS.500

HDFC Securities Rs.799

GEOJIT FINANCIAL SERVICES Ltd RS.650

Angel Broking Rs. 740

UTI Securities Rs. 499

India infoline Rs. 555

SMC Indian Rs. 499

53


BMA Wea

lth Crea

tors

Shere

khan

India Bulls

ICICIDirect.

com SB

I

HDFC Se

curiti

es

GEOJIT

FINANCIAL S

ERVICES

Ltd

Angel B

rokin

g

UTI Se

curiti

es

India infolin

e

SMC In

dian0

100200300400500600700800900

1000

Account Opening Charges

Account Opening Charges

54


MAJOR COMPETITORS

Among all the Indian brokerage companies, the top Brokerage Firms in

India can be listed as below:

Name Kotak Securities Limited

Terminals 4320

Sub Brokers 910

No. of Employees 4008

No. of Branches 350

Name Karvy Stock Broking Limited

Terminals 1700

Sub Brokers 19000


No. of Branches 581

Name Indiabulls

Terminals 2876

Sub Brokers NA


No. of Branches 522

Name IL&FS Investmart Limited

55


Terminals 1644

Sub Brokers NA


No. of Branches 294

Name Motilal Oswal Securities

Terminals 7923

Sub Brokers 890


No. of Branches 63

Name India Infoline

Terminals 173

Sub Brokers 173

No. of Employees NA

No. of Branches 605

Name Angel Broking Limited

Terminals 5715

Sub Brokers NA


56


No. of Branches NA

Name Anand Rathi Securities Limited

Terminals 1527

Sub Brokers 320


No. of Branches 220

Name Geojit

Terminals 627

Sub Brokers 247


No. of Branches 314

57


MICHAEL PORTER’S FIVE FORCES ANALYSIS & SWOT

ANALYSIS

Porter's five forces analysis is a framework for the industry analysis

and business strategy development developed by Michael E. Porter of

Harvard Business School in 1979. It uses concepts developed in

Industrial Organization (IO) economics to derive five forces which

determine the competitive intensity and therefore attractiveness of

a market. Attractiveness in this context refers to the overall industry

profitability. An "unattractive" industry is one where the combination of

forces acts to drive down overall profitability. A very unattractive

industry would be one approaching "pure competition".

Porter referred to these forces as the micro environment, to contrast it

with the more general term macro environment. They consist of those

forces close to a company that affect its ability to serve its customers

and make a profit. A change in any of the forces normally requires a

company to re-assess the marketplace. The overall industry

attractiveness does not imply that every firm in the industry will return

the same profitability. Firms are able to apply their core competences,

business model or network to achieve a profit above the industry

average.

58


The five forces model relevant to the Indian brokerage

industry

The Bargaining Power of Customers

Lack of Expertise Curtails Bargaining Power

Retail investors often lack the knowledge and expertise in the

financial sector that calls them to approach the broking houses.

Low Product Differentiation Proves Beneficial the retail broking

services provided by the various com panies are homogeneous

with very low product differentiation. This allows customers to

enjoy a greater bargaining power.

The Bargaining Power of Suppliers

Increased Dependence on IPOs -There is a growing dependence

of corporate on broking houses with the rising number of IPO’s

coming to the market.

The Intensity of Competitive Rivalry

Move towards consolidation-Lot of brokerage com panies are

moving towards consolidation with the smaller ones becoming

either franchisees for the larger brokers or closing operations.

Increased Focus of Banks in Retail Broking Various foreign banks

like ABN Amro and others are planning to enter the Indian retail

59


brokerage industry.

Online Trading Competes with Traditional Brokerage There is

an increasing demand for online trading due to consumer’s

growing preference for internet as compared to approaching the

brokers.

Threat of New Entrants

Entry of Foreign Players New forms of trading including T+2

settlement system, dematerialization etc are strengthening

the retail brokerage market and attracting foreign companies

to enter the Indian industry.

The Threat of Substitute Products

Alternative Investment Options Various alternative forms of

investment including fixed deposits with banks and post offices etc

act as substitutes to retail broking products and services. Now even

various banks provide similar type of services. They also give the same

service of portfolio management and wealth management.

SWOT ANALYSIS

STRENGTHS

Multiples engines of growth- an integrated financial services

platform

Well established and continuously expanding geographical

footprints

Unique, stable and scalable business model

Adoption of technology -screen based trading, electronic

matching, and paperless securities

Centralized operations, effective risk management, and

control on large interconnected operations spanning multiple

60


locations, which is enabled by telecom connectivity and low

costs

Accessibility of capital increases and margin finance increases

WEAKNESSES

Lack of visible goodwill among minor players

Lack of trust on companies by customers

Psyche of people in India is converging

Companies are still running on selling concept

Weak infrastructural facilities

Compliance with strict rules and norms set by govt.

61


OPPORTUNITIES

Structure of the industry, market size, and growth rates-

huge potential in Indian market

Government is continuously liberalizing the market

Proactive and progressive nature of Indian brokerage industry

(India ranks amongst top five globally in this segment)

Economy is still growing at healthy rate leading to

investment/capital requirement Huge market opportunity for

wealth management service providers as Indian wealth

management business is transforming from mere wealth

safeguarding to growing wealth.

Leveraging technology to enable best practices and processes

Corporates looking at consolidation/acquisitions/restructuring

opens out opportunities for the corporate advisory business.

THREATS

High degree competition

Fluctuations in government policies

Political framework

Developing Indian economy Companies must develop and implement

physical, administrative and technical safeguards to achieve the

following goals:

Ensure the security and confidentiality of customer records

and information

Secure against any anticipated threats or hazards to the

security or integrity of such information.

Secure against unauthorized access to or use of such

information that could result in substantial harm or

inconvenience to any customer Corporate espionage.

62


WORK PROFILE

At BMA Wealth Creators Pvt. Ltd., I learnt how the work of a

Relationship Manager is done. I have studied and experienced the work

of a Relationship Manager. Some Roles and Responsibilities of a

Relationship Manager are as under:

A relationship manager supervises the policies and procedures

employed by a company to ensure a good level of customer care is

provided to existing clients.

ROLES

1. Be an expert on the equity market – how, what when of the

market.

2. Be a smart guy and be a lackey for the customer.

3. Have the ability and resources to sort out all problems of the

customer – preferably in a jiffy.

4. Run odd jobs, sort out problems, anticipate and solve

problems.

In reality the RM :

1. Has no training, or very little training by the time he starts

talking to the customer.

2. He is under tremendous target pressure on day onwards

3. He has to achieve a lot of sales targets of a product that the

organisation wants to sell – damn what the client wants (that

is incidental)

RESPONSIBILITIES

Customer Service

A relationship manager works at all levels of a business from the head

office to front-line customer-focused operations. He helps initiate and

sustain an efficient customer service policy for all levels of the

organization. A relationship manager typically delegates work tasks to

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a customer service team, but may also interact directly or via

telephone with important customers or clients. He must also ensure

that company's guidelines are strictly adhered to when managing

customer concerns.

Marketing

A relationship manager plays a key role in marketing new products and

retaining existing customers. She often maintains a computer database

or develops software outlining the preferences and previous purchases

of all registered customers. This information can then be used for mail

distribution and cold-calling to market new products to the right

customers. She also develops feedback procedures for customers and

attends seminars to stay knowledgeable of any developments in

marketing techniques that could be initiated by a firm, as stated on the

Prospects website.

Data Analysis

A relationship manager produces reports on the level and nature of

complaints fielded by an organization and submits them to other

management. He also uses this data for research analysis to identify

more efficient ways of dealing with complaints to save an organization

time and money, and to improve its reputation. A relationship manager

should have proficient written skills for reporting purposes and should

be skilled in data analysis using computer software.

Staff Supervision

Relationship managers’ work closely with employees to provide

guidance and to ensure the best resolution for the customer and the

company is identified. A relationship manager should be adept at

managing and training available staff resources. She should also be

able to prioritize work activities, delegate responsibility to key

personnel and multitask when required. A relationship manager should

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have excellent communication skills as she will be required to

communicate with staff from all levels of a business.

DESCRIPTION OF LIVE EXPERIENCES

My internship experience at BMA Wealth Creators Pvt. Ltd., Ahmedabad

was very good. I have learnt so many things regarding stock market as

well as corporate life. Nothing can be understood without practical

knowledge. Things we study in a classroom will be clarified when we

experience it in real world.

I was given a task of cold calling at the office. List of contact numbers

of unknown persons was handover to me and I supposed to call them

and converting them into the prospective clients of the company. This

thing was very helpful to check our communication skills and behaviour

to strangers. I used to call people and 9 out of 10 times there was

negative response. Sometime people behave rudely when I call them.

But the useful thing is to keep our mind cool. It helps to increase the

patience level of one.

After doing cold calling my colleague and I have to go in the market for

marketing our products. We were given pamphlets of the company and

brochures of new brokerage plans. We had visited most of the

commercial building on C.G. Road. Our job was to meet the different

people and make them understand about our brokerage plans. After

giving all details we try to convert them into our clients. The

experience of meeting new people with different thoughts and ideas

was indeed a great learning for us. We learnt how the behaviour of

Relationship manager affects on the client. We used to collect the

contact details of each person we met for further use for company.

Sometime we had to come with empty hand at office. Sometimes

people even not allow us to enter their office. At that moment we felt

very disappointed but it happens when we are thrown into the real

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world. Each thing learnt during the internship was priceless and we had

gained so much knowledge about the real world.

We had enjoyed a lot with our guide and we had celebrated the

Birthday of our Branch Manager also. Sometimes we were threatened

by our guide but it all legal when you are in the corporate life and it is

helpful to increase our performance. The overall experience of the

summer internship was so much knowledgeable and helpful for my

upcoming future.

PERFORMANCE

At BMA Wealth Creators Pvt. Ltd., we were required to attempt the

work done by the Relationship Manager of the company. We were not

given any kind of work target show our performance during the

internship, but we were required to learn all the work of the

Relationship Managers.

During the early days of our internship I had done cold calling through

telephone and gathered a 15 prospective people who are ready to

meet us for further information.

I used to go into the market for door to door marketing where I had

gathered a so much knowledge regarding marketing skills. I had

collected so many contact details of the people who are interested to

deal with our company after my efforts during the meetings.

So the overall performance of mine was very good and helpful to

organisation as well as me. I had gained the knowledge of the stock

market as well as the corporate life.

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LEARNING EXPERIENCES

It’s hard to sum up the lessons you learn in an internship. I think the

valuable realization I’ve come to understand is that the companies that

employ interns, generally understand your limitations.

Some learning experiences:

1. An internship is a chance to “pay your dues” early on. People

who don’t have work experience often join the career force and

find themselves a little behind the game. By gaining those early

experiences as an intern, you (generally) earn yourself a bit more

of a leg-up to start.

2. Internships give you exposure to new and interesting

professional situations…with a safety net. The good internships

are with companies who “get” that you’re an intern. They give

you real opportunities for practical application of skill, but are

also there to catch you if there is a problem along the way.

3. You test your comfort zone. Until you really, really shake things

up (like I have) you never really know what you’re capable of.

Sometimes it takes a burst bubble for you to really get a grasp of

your full potential.

4. I understand how to talk the customers. For example first ask

the about customers trading equity or commodities customer

say that equity that which company you have doing equity

trading and how much brokerage you give after that

understand the BMA UTS scheme. Customer says –

commodities than I will understand the ABS scheme. Because

UTS scheme not allowed in commodities market.

5. I have study about company franchisee term and condition. I

have learnt about company franchisee. Company offers

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franchisee of 50000RS and we take brokerage of 10000000

transaction on 1000 RS company take.

6. I have study about company derivatives. I have learnt about

futures option and currency

7. I have study about company demat account forms. I have

learnt demat account forms and how to open and which type

of document requirement of company. For example pan card

license and residential proof.

8. I have met the some customer. I have learnt about customer

behavior and how to understand about company scheme and

other facilities.

9. I understand BMA marketing strategy. First understand the

customer business income and how much turnover they have

done in per day and which facilities give of the others company.

10. I have seen online trading and I have done the how to

operate BMA nest trader software and what are the function of

the nest trader and how its work.

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BIBLIOGRAPHY

WEBSITES :

www.bmawc.co.in

www.investopedia.com

www.moneycontrol.com

www.equitymaster.com

www.sebi.gov

www.nseindia.com

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http://www.nseindia.com/

http://www.bmawc.co.in/

project report on bma wealth creators pvt. ltd

Documents

financial

largest stock

bma wealth

bombay stock

account opening

national stock

total equity

promoting