PREFACE
Indian stock exchanges host the most number of listed companies after United States. About 2500 companies are listed in the Bombay Stock Exchange and the National Stock Exchange. Apart from foreign institutional investors, Indian stock market has some 30 million domestic investors.
The working of stock markets has started in India as early as 1875, when 318 persons coming together to Native Share and Stock Brokers Association, with Re.1 for membership free.
Closest to BSE is National Stock Exchange, also located at Bombay. Nifty is the market index of NSE. Indian stock market has seen many ups and downs, but now is flying high, crossing every previous record and zoom to even further heights. BSE-Sensex crossed the four-figure mark of 1000 in 1990 and had a smooth bull ride till 1992, when the big-full of Indian stock market, Harshad Mehta became a villain in the infamous Harshad Mehta scam broke out. The sensex lost 570 points in no time and some eight to 12 million investors were pushed to bankruptcy.
After that incidence, came the Securities and Exchanges Board of India. With the enforcement of several regulations and strict guidelines, the confidence of investors was somewhat regained. With the present technology and practices, it is next to impossible to commit a fraud in Indian Stock market. So claims the SEBI.
Under the watchful eyes of SEBI, Indian Stock markets once again gained momentum. The sensex crossed reached and crossed 6000 mark in 2000 and crossed the 7000 and 8000 marks in 2005. Foreign Institutional Investors are pumping in money into the market.
The FIIs are confident of a sustainable momentum. The momentum in the stock market can be associated with the growth in the fields of export, IT, ITES, telecommunication, education, energy sector, agriculture etc. The reformist policies being pursued by the government is also a factor for this growth.
Due to large scale outsourcing by American and European countries, a large number of jobs also went to India, resulting in more affluent youth who are only happy to spend out their money. This helped in the growth of telecommunication, FMCG and manufacturing sectors. The steady growth of GDP is also a critical factor in the upward movement of Indian stock market.
Apart from FIIs, the non-resident Indians also invest hugely in he stock market. Diminishing returns from bank deposits and the facilities of online trading made them turn to stock markets and with the current bull-run many have made a good fortune from stock markets. The stockbrokers also chip in on and open offices in foreign countries, aimed at him NRIs there.
The initial public offers by Tata Consultancy Services, Maruti Udyog Limited, ONGC etc. were big events in Indian stock market. Not only did they put a great show, but also took the stock market to newer heights. TCS is a big weight in the stock market from the day it was listed. Traditional heavy weights are Reliance, Tata, and Bharati etc. Now new entrants like Biocon are also play significant roles in the market.
Growth directed at sky is visible everywhere. The biggest growth opportunity lies in the stock market itself. The population of India is well above one billion. The number of investors is just above 40 million. That is just 4% of the total population. The measures for a 10% growth are sought.
INDUSTRY STUDY
BOMBAY STOCK EXCHANGE
Bombay Stock Exchange is the oldest stock exchange in Asia What is now popularly known as the BSE was established as "The Native Share & Stock Brokers' Association" in 1875. Over the past 135 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient capital raising platform.
Today, BSE is the world's number 1 exchange in the world in terms of the number of listed companies (over 4900). It is the world's 5th most active in terms of number of transactions handled through its electronic trading system. And it is in the top ten of global exchanges in terms of the market capitalization of its listed companies (as of December 31, 2009). The companies listed on BSE command a total market capitalization of USD Trillion 1.28 as of Feb, 2010.
BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certifications. It is also the first Exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-Line trading System (BOLT). Presently, we are ISO 27001:2005 certified, which is a ISO version of BS 7799 for Information Security.
The BSE Index, SENSEX, is India's first and most popular Stock Market benchmark index. Exchange traded funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. Futures and options on the index are also traded at BSE.
With its tradition of serving the community, BSE has been undertaking Corporate Social Responsibility (CSR) initiatives with a focus on Education, Health and Environment. BSE has been awarded by the World Council of Corporate Governance the Golden Peacock Global CSR Award for its initiatives in Corporate Social Responsibility (CSR).
Vision
"Emerge as the premier Indian stock exchange by establishing global benchmarks" Base Year- 1978-79
Base Index Value- 100 Date of launch- 1/1/1986
Method of calculation-
Launched on full market capitalization method and effective
September 01, 2003, calculation method shifted to free-float market capitalization
NATIONAL STOCK EXCHANGE
The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges. It recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country.
On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.
The following years witnessed rapid development of Indian capital market with introduction of internet trading, Exchange traded funds (ETF), stock derivatives and the first volatility index - IndiaVIX in April 2008, by NSE.
August 2008 saw introduction of Currency derivatives in India with the launch of Currency Futures in USD INR by NSE. Interest Rate Futures was introduced for the first time in India by NSE on 31st August 2009, exactly after one year of the launch of Currency Futures. With this, now both the retail and institutional investors can participate in equities, equity derivatives, currency and interest rate derivatives, giving them wide range of products to take care of their evolving needs.
ORGANIZATION STRUCTURE
Introduction
Anagram Capital Ltd. (Anagram) is amongst the leading retail broking houses in India. It is engaged in offering comprehensive personal finance solutions since 1994. The company is a part of the of the Rs 20 bn Lalbhai Group. The group companies in the capital and
commodities market area include Anagram Capital Ltd and Anagram Comtrade Ltd. Anagram offers a wide range of services for the discerning equity investor, in addition to online account access and real time trading, Insurance Services, Wealth Management Services, Mutual Fund and Advisory Services
The firm has its roots in Western India especially Gujarat where it is the biggest player. But it has expanded considerably.
Anagram is positioned amongst the top retail broking houses in the country. An achievement indeed for a company that's been providing comprehensive personal finance solutions since 1994. Anagram Capital Ltd. (Anagram), promoted by Edelweiss Group. Anagram Stock broking Ltd. and Anagram Comtrade Ltd. are the other group companies in the capital market area.
Anagram is a member of all leading stock and commodities exchange in India -National Stock Exchange (NSE), Bombay Stock Exchange (BSE), National Commodities Exchange of India Ltd. (NCDEX) and multi Commodities Exchange Market of India (MCX) and a
depository participant with NSDL. Our current offerings include trading in cash and derivative segment through our branches and sub-brokers high-speed anywhere trading through the net, Online Depository Services, Commodities trading, PMS, Currency Future Trading, Distribution of Mutual Funds, IPO’s and other financial products.
DIVISIONS
We have a nationwide presence with 135 plus branches, 1300 plus Sub Brokers & Business Associates, 3000 plus terminals and a professionalized team of 1200 plus employees spread across 200 plus cities. Our well - qualified staff will always be ready to fulfil your Stock Broking needs or solve your queries over the telephone, or at the branches themselves.
PRODUCT OFFERINGS
Anagram has divided its product and service offering under three broad client interface categories:-
“Retail Spectrum”, “Wealth Spectrum” and “Institutional Spectrum” as per following details:-
Retail Spectrum Wealth Spectrum Institutional Spectrum
↓ ↓ ↓
Caters to a large number of retail clients by offering all products under one roof through our branch network & online mode
Equity & Commodity Trading Personal Financial Services Distribution of mutual funds Distribution of Insurance Distribution of savings products Personal Credit Personal loan services Loans against shares Online Investment To provide customized wealth advisory services to high net worth individuals
Wealth Advisory Services Portfolio Management Services International Equity Priority Client Equity Services Arts Initiative
To forge and build strong relationships with
corporate and institutional clients Institutional Equity Broking Investment Banking Merchant Banking Transaction Advisory Services
Karvy Consultants Ltd Centrum
Prabhudas Lilladher Centuryfinvest
Sharekhan Chona Financial Services (P) Ltd.
AnandRathi CIL Securities Ltd
JM Financial Ltd Competent Finman Pvt Ltd
Kotak Securities Ltd Composite Investments Private Ltd
Motilal Oswal Securities Ltd Consortium Securities Pvt Ltd
Ambit Holdings
Crimson Financial Services Ltd/ Crimson Commodity Ltd
Indiabulls Crosseas Capital Services
Moneypore Crown Group
Parag Parikh Financial Advisory Services Ltd Dalmia Securities Pvt Ltd
RBS Broking India Dani Shares & Stocks Pvt Ltd
5Paisa.com Dawnay Day AV Securities Pvt Ltd
Edelweiss Dynamic
Enam Securities Pvt Ltd Elite Stock Management Ltd (ESML)
HSBC InvestDirect (India) Limited (HIL) Eureka Stock & Share Broking Services Ltd
Kisan Ratilal Choksey Shares & Securities Pvt Ltd Farsight Group
Mathew Easow Financial Services Fortune Financial Services (India) Ltd
DJS Stock and Shares Ltd Globe Group
Hybrid Financial Services Ltd Gogia International Securities Ltd (GISL)
India Cements Capital Ltd Goldmine Stocks Pvt Ltd
Mefcom Securities Ltd GRD Securities Ltd
Modern Shares & Stock Brokers Ltd Gupta Equities Pvt Ltd
Munoth Capital Market Ltd H. Nyalchand Financial Services Ltd
Munoth Financial Services Ltd (MFSL) Hem Group
Pioneer Investcorp Ltd (PINC) ICDS Securities Ltd
Ratnabali Capital Markets Ltd ICICI Securities
16anna.com IDBI Capital Market Services Ltd
A.G. Shares & Securities Ltd IDFC-SSKI Group
Abhipra India Infoline
Adroit Financial Services Pvt Ltd Indira Group
Ajay Natavarlal Securities Pvt. Ltd. Innovate Securities Pvt. Ltd.
Alankit Invest India
Almondz Capital Markets Pvt Ltd InvestMentor Securities Ltd.
Amit Nalin Securities Pvt Ltd (ANSec) ITI Financial Services Limited
Angel Broking Ltd Jaypee Capital Services Ltd.
Anugrah Stock & Broking Pvt Ltd Jhaveri Securities Pvt. Ltd.
Anush Shares and Securities Pvt Ltd JRG Securities Ltd
Apeejay Securities Private Limited JV Capital Services (P) Ltd
Apollo Sindhoori Capital Investments Ltd Kassa Finvest Pvt Ltd
Above mentioned is the list of corporate stock brokers that are the competitors of Anagram Capital Ltd.
Asit C. Mehta Investment Intermediates Ltd Keynote India
Khajanchi & Gandhi Stock Broking
ASL Capital Holdings Private Ltd Khambatta Securities Ltd
Astha Credit & Securities (P) Ltd Khandwala Group
Best Bull Stock Trading Private Ltd Kunvarji Commodity Brokers Pvt. Ltd.
Bharat Bhushan & Company Labdhi Finance Corporation
Microsec Macquarie Securities (India) Pvt Ltd
Modex International Securities Ltd Magnum.co.in
Monarch Projects and Finmarkets Ltd Mansukh Securities & Finance Ltd
Moongipa Investments Ltd. Marck Securities Pvt. Ltd.
MSB Group Marfatia Stock Broking Pvt. Ltd.
Narayan Securities Pvt. Ltd. Master Trust Ltd
Navia Markets Ltd MG Group of Companies
NDA Securities Limited RR Investors Capital Services Pvt. Ltd
Networth Stock Broking Ltd Sajag Securities Pvt Ltd
Pace Financial Services SATCO Securities & Financial Services Ltd
Padmakshi Financial Services Pvt. Ltd Shah Investors Home Ltd (SIHL)
Parsoli Corporation Limited Shardul Securities Ltd
Pee Aar Securities Limited Share Mart
PKJ Share Brokers Ltd. Shree Naman Developers Limited
Prayas Securities Pvt. Ltd. Shreepati Holdings & Finance Pvt. Ltd
PSJ Securities Pvt. Ltd. Shreyas Stocks Pvt Ltd
R. Wadiwala Securities Pvt. Ltd. Shri Parasram Holdings Pvt Ltd
R.K. Global Shares & Securities Ltd SKP Securities Ltd
Rajvi Stock Broking Ltd SMC Investment Solutions & Services
Reflection Investments Star Finvest Pvt. Ltd
Reliable Stocks & Shares (India) Ltd Sugal & Damani Share & Stock Brokers
Reliance Money Sumedha Fiscal Services Ltd (SFSL)
Religare Enterprises Ltd Sushil Finance
Bonanza Portfolio Ltd Swastika Investmart Ltd
Wellworth Share and Stock Broking Ltd The Kasat Securities Pvt Ltd.
Yoha Securities Ltd Transparent Shares & Securities Pvt Ltd
Agroy Finance & Investment Ltd Twin Earth Securities Pvt Ltd (TESPL)
Amrapali Capital and Finance Services Ltd Unicon Investment Solutions
OTHER INFORMATION ABOUT ANAGRAM
Edelweiss to acquire Anagram Capital:
Edelweiss has entered into an agreement to acquire Anagram Capital for Rs. 164 crore in an all-cash transaction. With a nation-wide network of more than 137 branches and over 1,300 sub-brokers, Anagram has one of the widest geographical reach among retail broking firms. The company has more than 1.80 lakh clients and estimated total revenue of Rs. 100 crore for the nine months ended December 31, 2009. The company’s average daily equity trading volume is about Rs. 800 crore. Edelweiss plans to operate Anagram as a 100 per cent subsidiary with clear focus on continuity and building on the current business and people with investments in research, products, training and technology.
“This acquisition is in synch with Edelweiss’ plan to expand the retail broking business. The acquisition of Anagram, with its reach and large, high quality and diversified client base, will give impetus to Edelweiss’ retail broking and distribution businesses.
What makes this transaction exciting is the minimal overlap between the broking operations of both companies. We are also impressed with Anagram’s professional management team and the consistent focus on client service and risk management. I welcome all employees, Anagram’s clients and partners to the Edelweiss family,” said Rashesh Shah, Chairman, Edelweiss Group, said.
With a view to focussing on its core business of textiles, Gujarat-based Lalbhai group on Wednesday exited its domestic broking business by selling its firm, Anagram Capital, to Edelweiss Capital.
“The Lalbhai group’s core business is textiles and it is a global leader in denim. It is also diversifying into other businesses and since finance does not form a core business for the group, it was decided to sell-off the business,” Anagram Capital’s CEO, Mayank Shah, told PTI here. In the late-1990s, ICICI had acquired Anagram Finance, another Lalbhai group company.
REGISTERATION DETAILS Anagram Stockbroking Limited
BSE Cash SEBI Regn. No.: INB011257152, BSE F&O SEBI Regn. No.: INF010808537 PMS Regn. No.: INP000002031, NSDL DP SEBI Regn. No.: IN-DP-NSDL-180-2000, Mutual Fund: ARN 3068
Anagram Capital Limited
NSE Cash SEBI Regn. No.: INB230597630, NSE F&O SEBI Regn. No.: INF230597630 NSE Currency Derivative SEBI Regn. No: INE230597630
Anagram Comtrade Limited
MCX-10425; NCDEX-00205; NMCE- CL0126, National Spot Exchange Limited – 11270
Registered Office
Anagram House, H. L. Commerce College - Stadium Road Near Commerce Six Circle, Navrangpura, Ahmedabad 380 009
LIST OF STOCK EXCHANGES IN INDIA
OTC Exchange of India Madras Stock Exchange Ltd.
The Uttar Pradesh Stock Exchange Association Ltd. Cochin Stock Exchange Ltd. Jaipur Stock Exchange Ltd. Bangalore Stock Exchange Ltd. National Stock Exchange of India Ltd. Gauhati Stock Exchange Ltd.
The Ludhiana Stock Exchange Ltd. The Calcutta Stock Exchange Association Ltd Bhubaneshwar Stock Exchange Ltd. The Delhi Stock Exchange Ltd.
Vadodara Stock Exchange Ltd. Madhya Pradesh Stock Exchange Ltd.
Bombay Stock Exchange Ltd. Magadh Stock Exchange
Ahmedabad Stock Exchange Ltd. Pune Stock Exchange Ltd.
Mangalore Stock Exchange MCX Stock Exchange Ltd
Hyderabad Stock Exchange
Saurashtra Kutch Stock Exchange (SKSE) Coimbatore Stock Exchange
INTRODUCTION
Analysis of Indian Stock MarketIn general, the financial market divided into two parts, Money market and capital market. Securities market is an important, organized capital market where transaction of capital is facilitated by means of direct financing using securities as a commodity. Securities market can be divided into a primary market and secondary market.
PRIMARY MARKET
The primary market is an intermittent and discrete market where the initially listed shares are traded first time, changing hands from the listed company to the investors. It refers to the process through which the companies, the issuers of stocks, acquire capital by offering their stocks to investors who supply the capital. In other words primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is called an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus.
SECONDARY MARKET
The secondary market is an on-going market, which is equipped and organized with a place, facilities and other resources required for trading securities after their initial offering. It refers to a specific place where securities transaction among many and unspecified persons is carried out through intermediation of the securities firms, i.e., a licensed broker, and the exchanges, a specialized trading organization, in accordance with the rules and regulations established by the exchanges.
A bit about history of stock exchange they say it was under a tree that it all started in 1875.Bombay Stock Exchange (BSE) was the major exchange in India till 1994.National Stock Exchange (NSE) started operations in 1994.
NSE was floated by major banks and financial institutions. It came as a result of Harshad Mehta scam of 1992. Contrary to popular belief the scam was more of a banking scam than a stock market scam. The old methods of trading in BSE were people assembling on what as called a ring in the BSE building. They had a unique sign language to communicate apart from all the shouting. Investors weren't allowed access and the system was opaque and misused by brokers. The shares were in physical form and prone to duplication and fraud.
NSE was the first to introduce electronic screen based trading. BSE was forced to follow suit. The present day trading platform is transparent and gives investors prices on a real time basis. With the introduction of depository and mandatory dematerialization of shares chances of fraud reduced further. The trading screen gives you top 5 buy and sell quotes on every scrip. A typical trading day starts at 10 ending at 3.30. Monday to Friday. BSE has 30 stocks which make up the Sensex .NSE has 50 stocks in its index called Nifty. FII s Banks, financial institutions mutual funds are biggest players in the market. Then there are the retail investors and speculators. The last ones are the ones who follow the market morning to evening; Market can be very addictive like blogging though stakes are higher in the former.
ORIGIN OF INDIAN STOCK MARKET
The origin of the stock market in India goes back to the end of the eighteenth century when long-term negotiable securities were first issued. However, for all practical purposes, the real beginning occurred in the middle of the nineteenth century after the enactment of the
companies Act in 1850, which introduced the features of limited liability and generated investor interest in corporate securities.
An important early event in the development of the stock market in India was the formation of the native share and stock brokers 'Association at Bombay in 1875, the precursor of the present day Bombay Stock Exchange. This was followed by the formation of
associations/exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). In addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to recede into oblivion during depressing times subsequently.
Stock exchanges are intricacy inter-woven in the fabric of a nation's economic life. Without a stock exchange, the saving of the community- the sinews of economic progress and
productive efficiency- would remain underutilized. The task of mobilization and allocation of savings could be attempted in the old days by a much less specialized institution than the stock exchanges. But as business and industry expanded and the economy assumed more complex nature, the need for 'permanent finance' arose. Entrepreneurs needed money for long term whereas investors demanded liquidity – the facility to convert their investment into cash at any given time. The answer was a ready market for investments and this was how the stock exchange came into being.
Stock exchange means anybody of individuals, whether incorporated or not, constituted for the purpose of regulating or controlling the business of buying, selling or dealing in
securities. These securities include:
(i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;
(ii) Government securities; and (iii) Rights or interest in securities.
The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are the two primary exchanges in India. In addition, there are 22 Regional Stock Exchanges. However, the BSE and NSE have established themselves as the two leading exchanges and account for about 80 per cent of the equity volume traded in India. The NSE and BSE are equal in size in terms of daily traded volume. The average daily turnover at the exchanges has increased from Rs 851 crore in 1997-98 to Rs 1,284 crore in 1998-99 and further to Rs 2,273 crore in 1999-2000 (April - August 1999). NSE has around 1500 shares listed with a total market capitalization of around Rs 9, 21,500 crore.
The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9, 68,000 crore. Most key stocks are traded on both the exchanges and hence the investor could buy them on either exchange. Both exchanges have a different settlement cycle, which allows investors to shift their positions on the bourses. The primary index of BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE 50 Index (Nifty) which consists of fifty stocks. The BSE Sensex is the older and more widely followed index.
Both these indices are calculated on the basis of market capitalization and contain the heavily traded shares from key sectors. The markets are closed on Saturdays and Sundays. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE on Line Trading) and NEAT (National Exchange Automated Trading) System.
It facilitates more efficient processing, automatic order matching, faster execution of trades and transparency; the scrip's traded on the BSE have been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent those, which are in the carry forward
system (Badla). The 'F' group represents the debt market (fixed income securities) segment. The 'Z' group scrip's are the blacklisted companies. The 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups and Rights renunciations. The key regulator governing Stock
Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd.
BACKGROUND OF STOCK EXCHANGE IN INDIA
The emergence of stock market can be traced back to 1830. In Bombay, business passed in the shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when the Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also quoted the prices of business ventures like the Bengal bonded warehouse, the Docking
Company and the storm tug company.
Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of brokers was about 60 and during the exciting period of the American Civil war, their number increased to about 200 to 250. The end of American Civil war brought disillusionment and many failures and the brokers decreased in number and prosperity. It was in those troublesome times between 1868 and 1875 that brokers organized an informal
association and finally as recited in the Indenture constituting the “Articles of Association of the Exchange”. On or about 9th day of July,1875, a few native brokers doing brokerage business in shares and stocks resolved upon forming in Bombay an association for protecting the character, status and interest of native share and stock brokers and providing a hall or building for the use of the members of such association.
As a meeting held in the broker’ Hall on the 5th day of February, 1887, it was resolved to execute a formal deal of association and to constitute the first managing committee and to appoint the first trustees. Accordingly, the Articles of Association of the Exchange and the Stock Exchange was formally established in Bombay on 3rd day of December, 1887. The Association is now known as “The Stock Exchange”.
The entrance fee for new member was Re.1 and there were 318 members on the list, when the exchange was constituted. The numbers of members increased to 333 in 1896, 362 in
1916and 478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in 1916 and Rs. 48,000 in 1920. At present there are 23 recognized stock exchanges with about 6000 stock brokers. Organization structure of stock exchange varies.14 stock exchanges are organized as public limited companies, 6 as companies limited by guarantee and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have been permanent recognition. Others have to seek recognition on annual basis.
These exchange do not work of its own, rather, these are run by some persons and with the help of some persons and institution. All these are down as functionaries on stock exchange. These are
1. Stockbrokers 2. Sub-broker 3. Market makers
4. Portfolio consultants etc.
1.) Stockbrokers
Stock brokers are the members of stock exchanges. These are the persons who buy, sell or deal in securities. A certificate of registration from SEBI is mandatory to act as a broker. SEBI can impose certain conditions while granting the certificate of registrations. It is obligatory for the person to abide by the rules, regulations and the buy-law. Stock
brokers are commission broker, floor broker, arbitrageur etc.
2.) Sub-broker
A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists the investors in buying, selling or dealing in securities through
stockbroker. The broker and sub-broker should enter into an agreement in which obligations of both should be specified. Sub-broker must be registered SEBI for a dealing in securities. For getting registered with SEBI, he must fulfil certain rules and regulation.
3.) Market Makers
Market maker is a designated specialist in the specified securities. They make both bid and offer at the same time. A market maker has to abide by bye-laws, rules regulations of the concerned stock exchange. He is exempt from the margin requirements. As per the listing requirements, a company where the paid-up capital is Rs. 3 crore but not more than Rs. 5 crore and having a commercial operation for less than 2 years should appoint a market maker at the time of issue of securities.
4.) Portfolio consultants
A combination of securities such as stocks, bonds and money market instruments is collectively called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who advise, direct or undertake the management or
ABOUT NSE AND BSE
Formation
The National Stock Exchange of India was promoted by leading financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly known as "BSE", it was established as "The Native
Share&Stock Brokers Association" in 1875.
It was the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956. Earlier an Association of Persons (AOP), the Exchange is now a demutualised and corporatized entity incorporated under the provisions of the Companies Act, 1956, pursuant to the
BSE(Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI).Bombay Stock Exchange Limited received its Certificate of Incorporation on 8th August, 2005 and Certificate of Commencement of Business on 12th August, 2005. The Exchange has succeeded the business and operations of BSE ongoing concern basis and its recognition as an Exchange has been continued by SEBI.
Members
While the BSE has over 874 members-brokers across the country, NSE has more than 1000 members. In NSE, a prospective trading member is admitted to any of the following
combinations of market segments: Wholesale Debt Market segment, Capital Market (CM) and the Futures and Options segments, CM Segment and the WDM segment, or CM Segment, the WDM and the F and O segment. There is no such thing at BSE and members join as any of the following: Trading Members, Trading cum Clearing Members, Professional clearing member, Limited trading member and Self Clearing member.
For NSE: In order to be admitted as a trading member, the individual trading member/at least two partners of the applicant firm/at least two directors of the applicant corporate must be graduates and must possess at least two years' experience in securities markets. The applicant for trading membership/any of its partners/shareholders/directors must not have been
declared defaulters on any stock exchange, must not be debarred by SEBI for being
associated with capital market as intermediaries and must not be engaged in any fund-based activity. The trades executed on the Exchange may be cleared and settled by a clearing member.
The initial joining fee for a member at BSE is Rs. 90 Lakhs while that for an NSE member is between 100 to 300 Lakh depending on the kind of membership one chooses.
In addition to annual fees, NSE members are required to pay transaction charges on trades undertaken by them. They pay transaction charge at the rate of Rs. 3.5 for every Rs. 1 lakh of turnover in the CM segment. The transaction charges payable to the exchange by the trading member for the trades executed by him on the F&O segment are fixed at the rate of Rs. 2 per lakh of turnover (0.002%) subject to a minimum of Rs. 1, 00,000 per year. At BSE, these fees differ according to the various types of members.
For BSE, the requirements to becoming a member are:
1. Authorised By NSC As A Brokerage House
2. Authorisation Of BSE 3. Negotiation From NSC
4. Trained Staff At BSE(Brokers, Traders, Accountants)
5. Data On Member Registration
6. Company By-Laws
7. Membership Fee 8. Financial Statements
9. Company Mission Statements
10. Handbook On Internal Operations & Control
11. Personal Information File For Management And Specialized Staff
12. Contribution To The Guarantee Fund
13. Payment For The Licensed Access To Use The Operating System
Listing
Listing means formal admission of a security to the trading platform of the Exchange. In BSE, the securities may be of any public limited company, Central or State Government, quasi governmental and other financial institutions/corporations, municipalities, etc. The objectives of listing are mainly to provide liquidity to securities; mobilize savings for economic development; protect interest of investors by ensuring full disclosures. The Exchange has a separate Listing Department to grant approval for listing of securities of companies in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of the Exchange. A company intending to have its securities listed on the Exchange has to comply with the listing requirements prescribed by the Exchange.
At NSE, the following criteria’s are to be fulfilled when one applies to be listed: Approval of Memorandum and Articles of Association
Approval of draft prospectus Submission of Application
Listing conditions and requirements
Once a company fulfils these criteria’s then they have to submit the following to the board:
1. A brief note on the promoters and management.
2. Company profile.
3. Copies of the Annual Report for last 3 years.
4. Copies of the Draft Offer Document.
5. Memorandum & Articles of Association.
The listing fees depend on the companies paid up capital at both NSE and BSE. While the initial listing fee at NSE is Rs.7500, it is Rs.20, 000 at BSE. The annual listing fees for a company with a paid up capital up to Rs. 5 Crores is Rs. 10,000 at BSE while it is Rs. 8,400 at NSE. For a company with paid up capital between 5 to 10 crores, BSE charges Rs. 15,000 while NSE charges Rs. 10,000.
Indices
The main Index of BSE is SENSEX while that of NSE is CNX Nifty. The other indices at BSE are: BSE 500, BSE 100, BSE 200, BSE PSU, BSE MIDCAP, BSE SMLCAP, BSE BANKEX, BSE Teck, BSE Auto, BSE Pharma, BSE Fast Moving Consumer Goods (FMCG), BSE Consumer Durables (SYMBOL: Cons Dura), BSE Metal.
NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including: S&P CNX Nifty, CNX Nifty Junior, CNX 100 (= S&P CNX Nifty + CNX Nifty Junior), S&P CNX 500 (= CNX 100 + 400 major players across 72 industries), CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200).
CALCULATION OF SENSEX
SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As per this methodology, the level of index at any point of time reflects the total market value of 30 component stocks relative to a base period. (The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company). An index of a set of combined variables (such as price and number of shares) is commonly referred as a 'Composite Index' by statisticians. A single indexed number is used to represent the results of this calculation in order to make the value easier to work with and track over time. It is much easier to graph a chart based on indexed values than one based on actual values.
The base period of SENSEX is 1978-79. The actual total market value of the stocks in the Index during the base period has been set equal to an indexed value of 100. This is often indicated by the notation 1978-79=100. The formula used to calculate the Index is fairly straightforward. However, the calculation of the adjustments to the Index (commonly called Index maintenance) is more complex.
The calculation of SENSEX involves dividing the total market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the
adjustment point for all Index maintenance adjustments. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX every 15 seconds and disseminated in real time.
CLOSURE OF SENSEX
The closing SENSEX is computed taking the weighted average of all the trades on SENSEX constituents in the last 15 minutes of trading session. If a SENSEX constituent has not traded in the last 15 minutes, the last traded price is taken for computation of the Index closure. If a SENSEX constituent has not traded at all in a day, then its last day's closing price is taken for computation of Index closure. The use of Index Closure Algorithm prevents any intentional manipulation of the closing index value.
MAINTAINENCE OF SENSEX
One of the important aspects of maintaining continuity with the past is to update the base year average. The base year value adjustment ensures that additional issue of capital and other corporate announcements like bonus etc. do not destroy the value of the index. The beauty of maintenance lies in the fact that adjustments for corporate actions in the Index should not per se affect the index values.
The Index Cell of the Exchange does the day-to-day maintenance of the index within the broad index policy framework set by the Index Committee. The Index Cell takes special care to ensure that SENSEX and all the other BSE indices maintain their benchmark properties by striking a delicate balance between high turnover in Index scrips and its representative character. The Index Committee of the Exchange has experts from different field of finance related to the capital markets. They include Academicians, Fund-managers from leading Mutual Funds, Finance - Journalists, Market Participants, Independent Governing Board members, and Exchange administration.
ADJUSTMENTS TO SENSEX
The arithmetic calculation involved in calculating SENSEX is simple, but problem arises when one of the component stocks pays a bonus or issues rights shares. If no adjustments were made, a discontinuity would arise between the current value of the index and its previous value. The Index Cell of the Exchange periodically adjusts the base value to take care of such corporate announcements.
Adjustments for Rights Issues:
When a company, included in the compilation of the index, issues right shares, the market capitalisation of that company is increased by the number of additional shares issued based on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to the Base Market Capitalisation
Adjustments for Bonus Issue:
When a company, included in the compilation of the index, issues bonus shares, the market capitalisation of that company does not undergo any change. Therefore, there is no change in the Base Market Capitalisation, only the 'number of shares' in the formula is updated.
Other Issues: Base Market Capitalisation Adjustment is required when new shares are issued by way of conversion of debentures, mergers, spin-offs etc. or when equity is reduced by way of buy-back of shares, corporate restructuring etc.
Base Market Capitalisation Adjustment: The formula for adjusting the Base Market
New Base Market Capitalisation = Old Base Market Capitalisation X (New Market Capitalisation/Old Market Capitalisation)
To illustrate, suppose a company issues right shares which increases the market capitalisation of the shares of that company by say, Rs.100 crores. The existing Base Market Capitalisation (Old Base Market Capitalisation), say, is Rs.2450 crores and the aggregate market
capitalisation of all the shares included in the index before the right issue is made is, say Rs.4781 crores. The "New Base Market Capitalisation " will then be: Rs.2501.24 crores = 2450 X (4781+100)/4781
This figure of 2501.24 will be used as the Base Market Capitalisation for calculating the index number from then onwards till the next base change becomes necessary.
SENSEX UPDATION
During market hours, prices of the index scrips, at which trades are executed, are
automatically used by the trading computer to calculate the SENSEX every 15 seconds and continuously updated on all trading workstations connected to the BSE trading computer in real time.
BEING A MEMBER IN SENSEX
The general guidelines for selection of constituents in SENSEX are as follows:
Listed History: The scrip should have a listing history of at least 3 months at BSE. Exception may be considered if full market capitalisation of a newly listed company ranks among top 10 in the list of BSE universe. In case, a company is listed on account of merger/ demerger/ amalgamation, minimum listing history would not be required.
Trading Frequency: The scrip should have been traded on each and every trading day in the last three months. Exceptions can be made for extreme reasons like scrip suspension etc. Final Rank: The scrip should figure in the top 100 companies listed by final rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average full market capitalisation and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.
Market Capitalization Weightage: The weightage of each scrip in SENSEX based on three-month average free-float market capitalisation should be at least 0.5% of the Index.
Industry Representation: Scrip selection would generally take into account a balanced representation of the listed companies in the universe of BSE.
Track Record: In the opinion of the Committee, the company should have an acceptable track record.
COMPANIES LISTED IN NIFTY
as on Friday, July 09th, 2010
ABB ltd. ACC ltd.
Ambuja cements BHEL
Axis bank ltd. Bharat petroleum corporation ltd.
Bharti Airtel ltd. Cairn India ltd.
Cipla ltd. DLF ltd.
GAIL HCL tech ltd.
HDFC bank ltd. Hero Honda motors ltd.
Hindalco Industries ltd. Hindustan Unilever ltd.
HDFC finance corporation ltd. ITC ltd.
ICICI Bank ltd. Idea cellular ltd.
Infosys Technologies ltd. Infrastructure Development Finance Co.
ltd.
Jaiprakash associates ltd. Jindal Steel and Power ltd.
Kotak Mahindra bank ltd. Larsen and Tubro ltd.
Mahindra and Mahindra ltd. Maruti Suzuki India ltd.
NTPC ltd. ONGC
Power grid corporation of India ltd. PNB
Ranbaxy Laboratories ltd. Reliance Capital ltd.
Reliance Infrastructure ltd. Reliance Communications ltd.
Reliance Industries ltd. Reliance Power ltd.
Siemens ltd. SBI
SAIL Sterlite Industries ltd.
Sun Pharmaceuticals Industries ltd. Suzlon Energy ltd.
TCS Tata Motors ltd.
Tata Power co. ltd. Tata Steel ltd
COMPANIES LISTED IN SENSEX
As on Friday, 09th July at 4:02 pm
HDFC DLF
ONGC Reliance Infra
Sterlite India Mahindra and Mahindra
Tata Motors Reliance Communications
Wipro Tata Power
Tata Steel Reliance
NTPC Jaiprakash Associates
Maruti Suzuki Jindal Steel
SBI Larsen
ICICI Bank Infosys
Bharti Airtel TCS
HDFC Bank Hindalco
BHEL Hero Honda
Cipla ACC
DIFFERENCE BETWEEN NSE AND BSE
BSE
NSE
Market capitalization of listed companies
Rs. 4,670,227 crore Rs. 3,367,350 crore.
Number of members 951 (Oct 2007) 1,009 as on March 2007
Number of listed companies 4,867 OCT(2007) 1,288 (March 2007)
Geographical spread Presence in 417 cities Presence in 1,486 cities
Website www.bseindia.com www.nse-india.com
Main Index BSE Sensex S & P CNX Nifty
Owner Bombay Stock Exchange National Stock Exchange of India Limited
Key people Rajnikant Patel (CEO) R.H.Patil (Founder, MD)
Claim to fame Oldest stock exchange in Asia.
Third largest stock exchange in the world in terms of volumes.
What is it? Indian Stock exchange Indian Stock exchange
Location Mumbai Mumbai
Established in 1875 1993
Name Bombay Stock Exchange National Stock Exchange
Index value ( 2009) 17,326.01
Number of trader workstations 15,151(Oct 2007)
Index value (As on 11th December 2007)
6,097
Top trading companies in volumes in main index (Till March 2007)
Reliance Industries Limited, Infosys Technologies Limited, Satyam Computer Services.
Top companies in terms of market capitalization in each index (Till March 2007
Reliance Industries Limited, Oil and Natural Gas
Corporation, Bharti Airtel Limited
MARKET BASICS
Electronic tradingElectronic trading eliminates the need for physical trading floors. Brokers can trade from their offices, using fully automated screen-based processes. Their workstations are connected to a Stock Exchange's central computer via satellite using Very Small Aperture
Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer and are matched electronically.
Exchanges in India
The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the country's two leading Exchanges. There are 20 other regional Exchanges, connected via the Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading via their VSAT systems.
Index
An Index is a comprehensive measure of market trends, intended for investors who are concerned with general stock market price movements. An Index comprises stocks that have large liquidity and market capitalization. Each stock is given a weight age in the Index
equivalent to its market capitalization. At the NSE, the capitalization of NIFTY (fifty selected stocks) is taken as a base capitalization, with the value set at 1000. Similarly, BSE Sensitive Index or Sensex comprises 30 selected stocks. The Index value compares the day's market capitalization vis-à-vis base capitalization and indicates how prices in general have moved over a period of time.
Execute an order
Select a broker of your choice and enter into a broker-client agreement and fill in the client registration form. Place your order with your broker preferably in writing. Get a trade confirmation slip on the day the trade is executed and ask for the contract note at the end of the trade date.
Need a broker
As per SEBI (Securities and Exchange Board of India.) regulations, only registered members can operate in the stock market. One can trade by executing a deal only through a registered broker of a recognized Stock Exchange or through a SEBI-registered sub-broker.
Contract note
A contract note describes the rate, date, time at which the trade was transacted and the brokerage rate. A contract note issued in the prescribed format establishes a legally
enforceable relationship between the client and the member in respect of trades stated in the contract note. These are made in duplicate and the member and the client both keep a copy each. A client should receive the contract note within 24 hours of the executed trade.
Split
A Split is book entry wherein the face value of the share is altered to create a greater number of shares outstanding without calling for fresh capital or altering the share capital account. For example, if a company announces a two-way split, it means that a share of the face value of Rs 10 is split into two shares of face value of Rs 5 each and a person holding one share now holds `two shares.
Buy Back
As the name suggests, it is a process by which a company can buy back its shares from shareholders. A company may buy back its shares in various ways: from existing
shareholders on a proportionate basis; through a tender offer from open market; through a book-building process; from the Stock Exchange; or from odd lot holders. A company cannot buy back through negotiated deals on or off the Stock Exchange, through spot transactions or through any private arrangement.
Settlement cycle
The accounting period for the securities traded on the Exchange. On the NSE, the cycle begins on Wednesday and ends on the following Tuesday, and on the BSE the cycle
commences on Monday and ends on Friday. At the end of this period, the obligations of each broker are calculated and the brokers settle their respective obligations as per the rules, bye-laws and regulations of the Clearing Corporation. If a transaction is entered on the first day of the settlement, the same will be settled on the eighth working day excluding the day of
transaction. However, if the same is done on the last day of the settlement, it will be settled on the fourth working day excluding the day of transaction.
Rolling settlement
The rolling settlement ensures that each day's trade is settled by keeping a fixed gap of a specified number of working days between a trade and its settlement. At present, this gap is
securities sold. In India, we have adopted the T+5 settlement cycle, which means that a transaction entered into on Day 1 has to be settled on the Day 1 + 5 working days, when funds pay in or securities pay out takes place.
Advantages of Rolling Settlements
As mentioned earlier, this is the system practiced in developed countries. Pay outs are quicker than in weekly settlements, and investors will benefit from increased liquidity. The other benefit of the modified system is that it keeps cash and forward markets separate. In the current system, the trader has five days to square off his transaction which leads to a high level of speculation as people even without funds tend to "play" the market. During volatile markets, especially in a bearish market, this often leads to a payment problem which has dogged the Indian stock exchanges for a long time. It provides for a higher degree of safety, and once mechanisms such as futures and stock-lending become popular, it would result in quality speculation and genuine investor interest.
Short selling
Short selling is a legitimate trading strategy. It is a sale of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers take the risk that they will be able to buy the stock at a more favorable price than the price at which they "sold short."
The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller, Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.
Auction
An auction is conducted for those securities that members fail to deliver/short deliver during pay-in. Three factors primarily give rise to an auction: short deliveries, un-rectified bad deliveries, and un-rectified company objections
Separate market for auctions
The buy/sell auction for a capital market security is managed through the auction market. As opposed to the normal market where trade matching is an on-going process, the trade
matching process for auction starts after the auction period is over. If the shares are not bought at the auction i.e. if the shares are not offered for sale, the Exchange squares up the transaction as per SEBI guidelines. The transaction is squared up at the highest price from the relevant trading period till the auction day or at 20 per cent above the last available Closing price whichever is higher. The pay-in and pay-out of funds for auction square up is held along with the pay-out for the relevant auction.
Bad Delivery
SEBI has formulated uniform guidelines for good and bad delivery of documents. Bad delivery may pertain to a transfer deed being torn, mutilated, overwritten, defaced, or if there are spelling mistakes in the name of the company or the transfer. Bad delivery exists only when shares are transferred physically. In "Demat" bad delivery does not exist.
Dematerialization
Dematerialization in short called as 'demat' is the process by which an investor can get physical certificates converted into electronic form maintained in an account with the Depository Participant. The investors can dematerialize only those share certificates that are already registered in their name and belong to the list of securities admitted for
dematerialization at the depositories.
Depository
The organization responsible to maintain investor's securities in the electronic form is called the depository. In other words, a depository can therefore be conceived of as a "Bank" for securities. In India there are two such organizations viz. NSDL and CDSL. The depository concept is similar to the Banking system with the exception that banks handle funds whereas a depository handles securities of the investors. An investor wishing to utilize the services offered by a depository has to open an account with the depository through Depository Participant.
Depository Participant
The market intermediary through whom the depository services can be availed by the investors is called a Depository Participant (DP). As per SEBI regulations, DP could be organizations involved in the business of providing financial services like banks, brokers, custodians and financial institutions. This system of using the existing distribution channel (mainly constituting DPs) helps the depository to reach a wide cross section of investors spread across a large geographical area at a minimum cost. The admission of the DPs involves a detailed evaluation by the depository of their capability to meet with the strict service standards and a further evaluation and approval from SEBI. Realizing the potential, all the custodians in India and a number of banks, financial institutions and major brokers have already joined as DPs to provide services in a number of cities.
COMPARISON OF CORPORATE BROKERS
Criteria Offers provided
Types of account 2
A/c opening fees(Trading + Demat) 500/- + 250/-
Brokerage Intraday 0.05% - 0.10%
Delivery 0.25% - 0.50%
AMC None
Lead time 1 week
Margin Intraday 3 times
Delivery 12 times
Interest rate None
Sauda expiry T+5
Software Power indiabulls(750/-)
Criteria Offers provided
Types of account 2
A/c opening fees(Trading + Demat) 555+300
Brokerage Intraday 0.05%
Delivery 0.5%
AMC 300/-
Lead time 1 week
Margin Intraday 3 times
Delivery 12 times
Interest rate 18%
Sauda expiry T+5
Criteria Offers provided
Types of account 2
A/c opening fees(Trading + Demat) 500/- +40/-
Brokerage Intraday 1 paisa
Delivery 10 paisa
AMC 300/-
Lead time 4-5 days
Margin Intraday 4 times
Delivery 10 times
Interest rate 18%
Sauda expiry Never
Software ODIN
Criteria Offers provided
Types of account 2
A/c opening fees(Trading + Demat) 2520/-
Brokerage Intraday 3 paisa
Delivery 30 paisa
AMC 2000
Lead time 7-8 days
Margin Intraday 5 times
Delivery 10 times
Interest rate 18%
Sauda expiry T+3
Criteria Offers provided
Types of account 2
A/c opening fees(Trading + Demat) 650/- + 50/-
Brokerage Intraday 0.01% to 0.03%.
Delivery 0.10% to 0.30%.
AMC 400/-
Lead time 1 week
Margin Intraday 7 times
Delivery 10 times
Interest rate 18%
Sauda expiry T+4
Software FLIP
Criteria Offers provided
Types of account 2
A/c opening fees(Trading + Demat) 650/- + 50/-
Brokerage Intraday 0.01% to 0.03%.
Delivery 0.10% to 0.30%.
AMC 350/-
Lead time 1 week
Margin Intraday 7 times
Delivery 10 times
Interest rate 18%
Sauda expiry T+5
STATEMENT OF PROBLEM
To select a corporate broker that is rated highest on customer satisfaction level.
OBJECTIVE
1. To conduct a study on awareness level of people about stock brokers in Kanpur city. 2. To study the market share of Anagram Capital Ltd in the Kanpur city.
3. What factors should Anagram Capital Limited consider to become a market leader? 4. To find out the problems faced by clients while trading with Anagram Capital Ltd.
5. To identify the drawbacks in the current system of trading and suggesting improvements in the same.
6. To get practically exposed to the trading market.
METHODOLOGY
• Research applied – Exploratory research.
• Size of sample - 20 investors of Anagram Capital Ltd. and 50 investors of other corporate brokers.
• Population- Complete Kanpur City.
• Tool-Questionnaires, In-depth interview, Telephonic interview.
SOURCES OF DATA COLLECTION
1. Primary Data - Primary data is collected through questionnaire filling which was done by
investors of Anagram Capital Ltd. and other stock broking firms.
2. Secondary Data - Secondary data is collected from journals, textbook, website. These data
are located quickly and are also inexpensive.
Survey Method: - Survey refers to the method of securing information concerning
phenomena under study from all or selected number of respondents of the concerned area. In a survey the investigator examines those phenomena which exist in the universe independent of his action.
The data collected for the project is from 20 clients of Anagram Capital Ltd. and 50 other investors of other corporate stock broking firm.
We visited different stock broking offices to collect the data for the company for their
comparison and also met some existing clients of the company, who filled the questionnaires later.
ANALYSIS RESULTS AND FINDINGS
Comment: - On an average IIFL is rated highest on brokerage while on the other hand Angel
Stock Broking Limited is the company that charges the least brokerage on both intraday and delivery transactions.
Comment: - Karvy Securities charges the maximum account opening fees and the Annual
ANALYSIS RESULTS AND FINDINGS(CLIENTS)
1) Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years
2) What is your favourite instrument of saving?
3) What is the basic purpose of your investment?
(a) Liquidity (b) Returns (c) Capital appreciation (d) Tax benefits (e) Risk covering (f) Others
4) Who you are?
5) Your source of information of Anagram Capital Limited is.
(a) Newspaper (b) Internet (c) Television
6) How would you rate the following elements of Anagram Capital Limited? (Please tick for each statement)
Excellent Very good Good Fair Poor Overall satisfaction
Charges levied
Knowledge of employees you deal with Online services offered
Ability to resolve problems Quality of advice
Performance of investments
Ho1= charges levied is not dependent on the overall satisfaction level of the people.
Ha1= charges levied is dependent on the overall satisfaction level of the people.
Comment- the significant value is less than the tabulated value i.e. 1.213 hence the null
hypothesis is accepted which concludes that charges levied is not dependent on overall satisfaction.
Ho1= online services offered is not dependent on the overall satisfaction level of the people.
Ha1= online services offered is dependent on the overall satisfaction level of the people.
Comment- the significant value is less than the tabulated value i.e. 1.213 hence the null
hypothesis is accepted which concludes that online services is not dependent on overall satisfaction.
Ho1= ability to resolve problems is not dependent on the overall satisfaction level of the
people.
Ha1= ability to resolve problems is dependent on the overall satisfaction level of the people.
Comment- the significant value is less than the tabulated value i.e. 1.213 hence the null
hypothesis is accepted which concludes that ability to resolve problems is not dependent on overall satisfaction.
Ho1= quality of advice is not dependent on the overall satisfaction level of the people.
Ha1= quality of advice is dependent on the overall satisfaction level of the people.
Comment- the significant value is less than the tabulated value i.e. 1.213 hence the null
hypothesis is accepted which concludes that quality of advice is not dependent on overall satisfaction.
Ho1= performance of investments is not dependent on the overall satisfaction level of the
people.
Ha1performance of investments is dependent on the overall satisfaction level of the people.
Comment- the significant value is less than the tabulated value i.e. 1.213 hence the null
hypothesis is accepted which concludes that performance of investments is not dependent on overall satisfaction.
ANALYSIS RESULTS AND FINDINGS (NON CLIENTS)
1) Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years
3) What is your preferred medium of receiving research report and tips from your dealer?
a) SMS facility b) Instant messaging c) E-mail d) Others (specify) ________
4) In which company you have d-mat and trading account?
a) Karvy Securities b) India Infoline Security Private Limited
c) Indiabulls Securities Limited d) Angel stock broking limited e) Others
Comment:- Angel Stock broking limited is rated highest which signifies that Angel Stock
Broking Ltd. is the most popular company and Indiabulls is the least popular out of the ones selected for research.
5) Are you satisfied with you present broking firm? a)Yes b) No
Comment: - The chart signifies that Angel Stock Broking is the company whose clients are
most satisfied with the services of the company and other column signifies that some other company(s) is rated as the least preferred companies of the respective clients.
6) What is the reason for your satisfaction?
a) Services b) Brokerage c) Operating expenses d) Others
Comment: - the chart signifies that brokerage is the most convenient factor on which the
respondents are satisfied. The brokerage chart (mentioned above) also displays that Angel Stock Broking has the least brokerage charged from its clients
7) Write the name of the brand which comes immediately with respect to following punch lines?
(a) It’s all about money honey ___________________________________________ (b) Service truly personalised ____________________________________________ (c) Bringing industry, finance and people together ____________________________ (d) One name for successful investing ______________________________________ (e) Trading just got faster _______________________________________________
ASUMPTIONS
• Only age and income level of people are taken as parameter to construct a paired sample t testing, and qualification and gender are being ignored because it does not fit in to the investment criteria.
• The filling up of the questionnaires by the respondents is least affected by the time in which they fill the questionnaire.
• The sample of 70 respondents represent the whole Kanpur city
• As the sample size taken is quite small so the error rate taken is quite large.
FINDINGS
• According to the survey most of the clients of “Anagram Capital Ltd” say that the research data provided is sufficient for them to take intelligent trading decisions. • Anagram Capital Limited takes much in to account the budget of their clients and
then takes any investment decisions.
• People pay more emphasis on brokerage than service provided by brokerage houses. • Angel stock broking Ltd. came out to be a leading company on the following points
Brokerage Fees charged
Maximum customers Customer satisfaction Awareness
SUGGESTIONS TO ANAGRAM CAPITAL LIMITED
Improvement in the time delay of account opening is required.
There should be a specific number of clients under each relationship manger, so that each client can be attended properly and can be imparted desired time.
Some promotional activities are required for the awareness of the customer, seminars should be held for providing information to prospective and present customers. People at young age should be encouraged to invest in stock market.
