project on sharekhan
TRANSCRIPT
ASIAN SCHOOL OF MANAGEMENT, PUNE
A STUDY ON
“INVESTOR PREFERENCE FOR ONLINE TRADING”
AT
SHAREKHAN Ltd.IN PUNE
A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF
POST GRADUATE DIPLOMA IN MANAGEMENT2009-2011
SUBMITTED BY:
SANDEEP RAI
IN GUIDENCE OF
Dr. RAJAN DHAMDERE
ASIAN SCHOOL OF MANAGEMENT, PUNEAddress: Landmark Center, Opp. City Pride,
Pune-Satara Road, Pune-411009Contact No.: 020-24501000/1/2/3…../30
Website- www.asianschoolofmanagement.com
CERTIFICATE
This is certify that Mr. Sandeep Rai student of Asian School Of Management, Pune has successfully completed the project work in partial fulfillment of requirement for the completion of PGDM course of prescribed by ASOM.
This report is the record of authentic work carried out by him during period from 15 Dec.2009 to 4 Feb. 2010 in which he has worked under my guidance.
He has completed his project work on the following topic:
A STUDY OF
“INVESTOR PREFERENCE FOR ONLINE TRADING” at SHAREKHAN Ltd.
IN PUNE
Date:
Place: Pune
Dr. Rajan Dhamdere Mrs. Madhavi Khare (Internal Guide) (Director)
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www.sharekhan.com
TO WHOMESOEVER IT MAY CONCERN
This is to certify that Mr. Sandeep Rai a student of Asian School of Management, Pune has successfully completed his winter internship programme from 15 Dec. 2009 to 4 Feb. 2010. He has successfully completed her project.
The topic of her project is “Investor Preference For Online Trading”
During the project work we found Mr. Sandeep Rai to be hardworking and sincere.
We wish him all the best for his future.
Regards
Ranjeet KumarSales ManagerSharekhan Ltd.Pune
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SHAREKHAN LIMITEDRegd office: A-206, Phoenix House, Phoenix Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400013.
Tel: 91-22-67482000. Fax: 91-22-2498 2626.
Sharekhan Ltd.: BSE Cash-INB011073351; F&O-INF011073351; CD-INE011073351;NSE-INB/INF231073330; CD-INE231073330; MCX Stock Exchange: CD-INE261073330 DP: NSDL-IN-DP-NSDL-233-2003; CDSL-IN-DP-CDSL-271-2004; PMC INP000000662; Mutual Fund: ARN 20669. For any complaints email at [email protected] ; Investing in equities involves risk. Please carefully read the risk disclosure document as prescribed by SEBI & relevant exchanges.
BRANCH: G-15, Ashoka Mall, Ground Floor, Opp. Hotel Sun N Sand,Bundgarden Road, Pune- 411001. Tel.: 020-6600 4020
DECLARATION
I, Sandeep Rai here by state that the report entitled A STUDY OF “INVESTOR PREFERENCE FOR ONLINE TRADING” at SHAREKHAN Ltd. in Pune is a genuine and bonafide work prepared by me under the able guidance of Mr. Ranjeet Kumar, Sales Manager of SHAREKHAN Ltd.
The empirical findings in this report are based on the data collected by myself and the matters present in this report are not copied from any sources.
This project report is submitted to Asian School of Management, Pune in partial fulfillment for the award of PGDM.
Date:
Place: Pune
Sandeep Rai
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ACKNOWLEDGEMENT
The report what, I have presented is not the made outcome of my labor alone. There are dozens of hands buttressed me all through the programme it does not go without thanking all of those who constantly keep me on the move.
I would like to give heartily thanks to Asian School of Management, Pune who have give us an opportunity to learn something practical apart from book by including the in-plant training in our PGDM programme.
I express my gratitude to our Director Mrs. Madhavi Khare who has supported me to complete this project My sincere thanks to Dr. Rajan Dhamdere, Internal Guide for guiding me to work on this project.
I would like to express my sincere thanks and gratitude to External guide Mr. Ranjeet Kumar, Sales Manager who have give a good support to grad the external exposure and to complete a project in SHAREKHAN Ltd.
I give my sincere thanks to all my faculties and friends who have gathered me the wisdom of knowledge. This work is dedicated to my parents who have supported me throughout my study.
Sandeep Rai
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TABLE OF CONTENT
CH. No. TOPICPAGE
No.
1 EXECUTIVE SUMMARY 8
1.1 COMPANY 9
1.2 PROJECT TITLE 9
1.3 SCOPE OF THE PROJECT 9
1.4 OBJECTIVE 9
2 COMPANY PROFILE 102.1 SERVICES PROVIDED BY SHAREKHAN 12
2.2 PRODUCT PROFILE 13
2.3 TWO IN ONE ACCOUNT 13
2.4 ONLINE TRADING ACCOUNT 14
2.5 PROCESS OF ONLINE TRADING 14
3 FINANCIAL SYSTEM OVERVIEW 153.1 FINANCIAL SYSTEM- AN OVERVIEW 16
3.2 FINANCIAL MARKETS 16
3.3 COMPONENT OF CAPITAL MARKET 20
3.4 PRIMARY AND SECONDARY MARKET 22
3.5 PRODUCTS DEALT IN SECONDARY MARKET 24
3.6 ACCOUNT OPENING 26
4 OBJECTIVES & SCOPE 304.1 PRIMARY OBJECTIVES 31
4.2 SCOPE OF THE STUDY 31
5 ORGANISATION STRUCTURE 325.1 OVERALL ORGANISATIONAL STRUCTURE 33
5.2 FUNCTIONS OF DEPARTMENTS 335.3 MARKETING 345.4 ACCOUNTS 345.5 HR & ADMINISTRATION 35
6 STOCK EXCHANGES 36
6.1 FUNCTIONS OF STOCK EXCHANGES 37
6.2 THE BOMBAY STOCK EXCHANGE 39
6.3 THE NATIONAL STOCK EXCHANGE 40
7 THEORETICAL PERSPECTIVE 41
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8 SWOT ANALYSIS 448.1 STRENGTH 45
8.2 WEAKNES 45
8.3 OPPORTUNITY 45
8.4 THREATS 45
9 RESEARCH METHODOLOGY 469.1 DEFINES THE PROBLEM 47
9.2 DEVELOPING RESEARCH PLAN 47
9.3 DATA SOURCE 47
8.4 RESEARCH APPROACH 49
9.5 SAMPLING 49
9.6 SAMPLING PLAN 49
9.7 STATEMENT OF PROBLEM 50
10 DATA ANALYSIS 5110.1 INVESTMENT OPTION 52
10.2 BRAND AWARENESS 53
10.3 IS ONLINE TRADING EASY? 54
10.4 DO YOU NEED TRANNING 55
10.5 SOURCES OF ADVERTISEMENT 56
10.6 WHICH IS BETTER, NSE OR BSE 57
10.7 AWARENESS OF E-BROKING 58
10.8 KNOWLEDGE THROUGH COMPANY WEBSITE 59
10.9 VISIT BY COMPANY REPRESENTIVE 60
10.10 INTEREST IN E-BROKING 61
10.11 PEFERRED SYSTEMS OF SHARE TRADING 62
10.12 TRADITIONAL-INFLUENCING FACTORS 63
10.13 PREFERENCE FOR INVERTMENT 64
10.14 INFLUENCING FACTOR 65
10.15 FUTURE PLANNING FOR ONLINE TRADING 66
10.16 REASONS FOR NOT ENTERING IN TO E-BROKING 67
11 FINDING AND OBSERVATION 6812 LIMITATIONS 7013 SUGGESTIONS AND RECOMMENDATIONS 7214 CONCLUSION 7415 ANNEXURE 76
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CHAPTER: 1EXECUTIVE SUMMARY
1.1 COMPANY: - SHAREKHAN LTD.
1.2 PROJECT TITLE:-“INVESTORS PREFERENCE FOR ONLINE TRADING”.
1.3 SCOPE OF THE PROJECTThe research has been conducted within the geographical area of PUNE city. I have targeted
students, businessmen, and other people.
1.4 OBJECTIVEThe objective behind conducting this project is as followed:-
PRIMARY OBJECTIVE
To find out the people who are willing to be an agent for SHAREKHAN LTD.
To find potential customer of SHAREKHAN LTD. who involved in trading activities
and generate the business for SHAREKHAN LTD.
SECONDARY OBJECTIVE
To know and understand the thinking and perception of different people about D-mat
account and online trading account and share market
To see the interest of people for SHAREKHAN LTD.
To create the image about SHAREKHAN financial product.
Promotion of the product.
For conducting the research the data was collected through-
1-Primary Data
2- Secondary Data
PRIMARY DATA :- Primary data is the data which is actually collected from the field it is
a fresh data which is not used by anybody.
Primary data was collected using the following techniques-
# Questionnaire Method# Direct Interview Method# Observation Method
The main tool used was the questionnaire method. Further direct interview method, where
face to face formal interview was taken. Lastly observation method was used continuously
with the questionnaire method.
SECONDARY DATA :- It is the second hand data it used by the other person
before we use it. This data has been published in magazine, News Paper and Websites.
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CHAPTER: 2COMPANY PROFILE
Sharekhan is one of the top retail brokerage houses in India with a strong online
trading platform. The company provides equity based products (research, equities,
derivatives, depository, margin funding, etc.) through its pan India presence of 200 branches
and 310 franchises across 170 cities. Sharekhan was established by Morakhia family -in
1999-2000 and Morakhia family, continues to remain the largest shareholder.
Sharekhan is one of the leading retail broking brands in the country. It is the retail
broking arm of the Mumbai-based SSKI Group. With a legacy of more than 80 years in the
stock markets, the SSKI group ventured into institutional broking and corporate finance over
a decade ago. Presently SSKI is one of the leading players in institutional broking and
corporate finance activities. Sharekhan offers its customers a wide range of equity related
services including trade execution on BSE, NSE, Derivatives. Depository services, online
trading, Investment advice, Commodities, etc.
The Company's online trading and investment site - www.Sharekhan.com - was
launched on Feb 8, 2000. The site gives access to superior content and transaction facility to
retail customers across the country. Known for its jargon-free, investor friendly language and
high quality research, the content-rich and research oriented portal has stood out among its
contemporaries because of its steadfast dedication to offering customers best-of-breed
technology and superior market information.
Sharekhan's management team is one of the strongest in the sector and has positioned
Sharekhan to take advantage of the growing consumer demand for financial services products
in India through investments in research, pan-Indian branch network and an outstanding
technology platform. Further, Sharekhan's lineage and relationship with SSKI Group provide
it a unique position to understand and leverage the growth of the financial services sector.
SSKI Corporate Finance Private Limited (SSKI) is a leading India-based investment
bank with strong research-driven focus. Company team members are widely respected for
their commitment to transactions and their specialized knowledge in their areas of strength.
The team has completed over US$5 billion worth of deals in the last 5 years - making it
among the most significant players raising equity in the Indian market. SSKI, a veteran
equities solutions company with over 8 decades of experience in the Indian stock markets.
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If you experience Company profile, content or for that matter the online trading
facility, you'll find a common thread; one that helps you make informed decisions and
simplifies investing in stocks. The common thread of empowerment is what Sharekhan's all
about!
"Sharekhan has always believed in collaborating with like-minded Corporates into
forming strategic associations for mutual benefit relationships" says Jaideep Arora, Director
- Sharekhan Limited.
2.1 SERVICES PROVIDED BY SHAREKHAN
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2.2 PRODUCT PROFILE
SHAREKHAN is one of the leading Depository Participants (DP) in the country with over 8
Lac demat accounts. SHAREKHAN Demat services offers you a secure and convenient way
to keep track of your securities and investments, over a period of time, without the hassle of
handling physical documents that get mutilated or lost in transit. SHAREKHAN is
Depository participants both with -National Securities Depositories Limited (NSDL) and
Central Depository Services Limited (CDSL).
2.3 TWO IN ONE ACCOUNT:-SHAREKHA is providing 2-in- 1 account to its customer i.e.
1) Demat Account
2) Online Trading Account
D-MAT ACCOUNT :-It is called as demateralised account. It is used for keeping share in our account .
After placing order to BSE or NSE for share , the share transfer to your D-mat account
And amount price of that share you purchased deducted from your saving account.
D-mat account is used for holding share for particular period .
FEATURES & BENEFITS
As opposed to the earlier form of dealing in physical certificates with delays in transaction,
holding and trading in Demat form has the following benefits :
Settlement of Securities traded on the exchanges as well as off market transactions.
Shorter settlements thereby enhancing liquidity.
Pledging of Securities.
Electronic credit in public issue.
Auto credit of Rights / Bonus / Public Issues / Dividend credit through ECS.
Auto Credit of Public Issue refunds to the bank account.
No stamp duty on transfer of securities held in demat form.
No concept of Market Lots.
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Change of address, Signature, Dividend Mandate, registration of power of attorney, transmission etc. can be effected across companies held in demat form by a single instruction to the Depository Participant (DP).
2.4 ONLINE TRADING ACCOUNT:-
Online trading account is used for purchasing the share or to sale the share of particular
company.
It is provided for Rs.700 to the customer .
Normal plan is also available at Rs.299.
Client has to give the cheque on name of SHAREKHAN LTD.
ONLINE TRADING CONCEPT
2.5 PROCESS OF ONLINE TRADING For online trading SHAREKHAN provides ID and password to client so that client can easily
do login on sharekhan .com for online trading.
Client gives the order through online trading account to purchase the share of particular
company. The order goes to BSE or NSE. Order is executed and share of particular company
company comes to client D-MAT account where he hold the share until price of share rise.
As the share come to client D-mat account the cost amount is deducted from client saving
account. When client want to sell his share he give the order through online trading account.
Share is sell through his D-mat account And money get deposited in his saving account.
INTRA DAY TRADING In intra day trading the share is purchase and sale on the same day. The share market starts at
9.50 a.m. and close at 3.30 p.m. if the client purchases the share and prices of share rise then
he can sell his share and he will get the profit. If the prices of share fall down then he will be
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2 IN 1 ACCOUNTONLINE
TRADING ACCOUNT
D-MAT ACCOUNT
in loss. If client purchases the share and he does not sell it at market closing time then the
share automatically sell i.e. called square off. If price of share is high then client will get
profit and price of share fall down the customer will be in loss at time of square off.
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CHAPTER: 3FINANCIAL SYSTEM OVERVIEW
3.1 FINANCIAL SYSTEM- AN OVERVIEW:
The financial system of any country consists of specialized and non-specialized
financial institutions, organized and unorganized financial markets, financial instruments and
services that facilitate flow of funds from areas of surplus funds to the areas of deficit.
Financial system is a composition of various institutions, markets, regulations, law practices,
money managers, analysts, etc. By making funds available, the financial system helps the
growth of modern economics and the increase in the standard of living among the citizens.
3.2 FINANCIAL MARKETS:A financial market can be defined as the market in which financial assets are created
or transferred. Financial assets represents represent a claim to the payments of a sum of
money sometime in the future and/or periodic payment in the form of interest or dividend.
Financial Market performs an important function of mobilization of savings and channeling
them into the most productive uses. The participants in the financial markets are financial
institutions, agents, brokers, dealers, borrowers, lenders, savers and others who are inter-
linked by the laws, contracts and communication networks.
Financial markets consist of Primary and Secondary Markets. The Primary markets
deal in new financial claims and securities and hence are known as new issue markets. The
secondary market deals in securities already issued, existing or outstanding. Financial
markets are also classified as Money and Capital Markets. Money markets deals with
transactions in short-term instruments (with period of maturity one year or less, e.g. treasury
bills), while capital market deals with transactions in long-term instruments (with period of
maturity above one year, e.g. corporate debentures and government bonds).
On the basis of the type of the financial claim, financial markets are classified as Debt and
Equity markets. By the timing of delivery, financial markets are classified as Cash or Spot
markets and Forward or Future markets.
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The classification of Financial markets can be summarized as follows:
o Money Market
o Debt Market
o Forex Market
o Capital Market.
MONEY MARKETS:
Money markets can be defined as a market for short term money and financial assets
that are near substitutes for money (any financial assets that can be quickly converted into
money with minimum transaction cost). One more important function of this market is to
channel savings into short term productive investments like working capital. Money market
aids banking, operates as a medium of integration between sub markets, promotes
maintaining of minimum reserve in the form of cash and liquidity and controls the interest
rates.
Money market is a collection of market for the instruments like Call money, Treasury
bills, Commercial papers, Certificate of deposits, Money Market Mutual Funds, etc. A certain
degree of flexibility in the regulatory framework exists and there are constant endeavors for
introducing a new instruments or innovating dealing techniques. It is a wholesale market and
the volume of funds or financial assets traded are very large i.e. in crores of rupees.
ORGANIZED MONEY MARKET: Indian financial system consists of money
market and capital market. The money market has two components - the organized and the
unorganized. The organized market is dominated by commercial banks. The other major
participants are the Reserve Bank of India, Life Insurance Corporation, General Insurance
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Corporation, Unit Trust of India, Securities Trading Corporation of India Ltd., Discount and
Finance House of India, other primary dealers, commercial banks and mutual funds. The core
of the money market is the inter-bank call money market whereby short-term money
borrowing/lending is effected to manage temporary liquidity mismatches. The Reserve Bank
of India occupies a strategic position of managing market liquidity through open market
operations of government securities, access to its accommodation, cost (interest rates),
availability of credit and other monetary management tools. Normally, monetary assets of
short-term nature, generally less than one year, are dealt in this market.
UN-ORGANIZED MONEY MARKET: Despite rapid expansion of the organized money
market through a large network of banking institutions that have extended their reach even to
the rural areas, there is still an active unorganized market. It consists of indigenous bankers
and moneylenders. In the unorganized market, there is no clear demarcation between short-
term and long-term finance and even between the purposes of finance. The unorganized
sector continues to provide finance for trade as well as personal consumption. The inability of
the poor to meet the ‘creditworthiness’ requirements of the banking sector make them take
recourse to the institutions that still remain outside the regulatory framework of banking. But
this market is shrinking.
FOREIGN EXCHANGE MARKET:
Every sovereign country in the world has a currency, which is a legal tender in its
territory, and which does not act as money outside its boundaries. Foreign exchange or Forex
market is the one where a country’s currency is traded for another. The rate at which one
currency is converted to another is known as the rate of exchange. Forex market is the largest
financial market in the world having a daily turn over of couple of trillion dollars. The key
participants in the Forex market are importers (who need foreign currency to pay off their
imports), exporters (who want to convert their foreign currency receipts into domestic),
traders (who make a market in the foreign currency), foreign exchange brokers (who bring
together buyers and sellers), speculators (who tries to profit from exchange rate movements)
and portfolio managers who buy and sell foreign currency. Speculative transactions account
for more than 95% of the turnover on the Forex markets.
In India, the key participants in the Forex markets are RBI, banks and business
undertakings. Business undertakings can participate in the Forex market only to the extent
that they need cover for the exchange exposure arising from a merchant transaction or a
foreign currency borrowing and cannot resort to speculative transaction. One reason justified
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for the existence of the Forex market is that each nation has decided to keep their sovereign
right to have control on their own currency. If every country had the same currency, then
there will be no need for a foreign exchange market.
CAPITAL MARKET
The function of the financial market is to facilitate the transfer of funds from surplus
sectors (lenders) to deficit sectors (borrowers). Normally, households have investible funds or
savings, which they lend to borrowers in the corporate and public sectors whose requirement
of funds far exceeds their savings. A financial market consists of investors or buyers of
securities, borrowers or sellers of securities, intermediaries and regulatory bodies. Financial
market does not refer to a physical location. Formal trading rules, relationships and
communication networks for originating and trading financial securities link the participants
in the market.
Capital markets provide the resources needed by medium and large-scale industries
for investment purposes unlike money markets that provide the resources for working capital
needs. While money markets deal in short-term claims (with a period of maturity 1 year or
less) capital market deals in long-term claims (with a period of maturity more than 1 year).
Stock market and Government bond markets are example of capital markets.
Capital market consists of primary and secondary markets. The primary markets
create long-term instruments through which corporate entities borrow and the secondary
market provides liquidity and marketability to these instruments. Companies can raise capital
in the primary market through the issue of shares and debentures for which prior approval of
The SEBI is required. The secondary market that operates through the medium of stock
exchanges is that segment of the capital market where securities already issued are traded.
The primary market in which public issue of securities is made through a prospectus is a
retail market and there is no physical location. Offer for subscription to securities is made to
investing community. The secondary market or stock exchange is a market for trading and
settlement of securities that have already been issued. The investors holding securities sell
securities through registered brokers/sub-brokers of the stock exchange. Investors who are
desirous of buying securities purchase securities through registered broker/sub-broker of the
stock exchange. It may have a physical location like a stock exchange or a trading floor.
Since 1995, trading in securities is screen-based and Internet-based trading has also made an
appearance in India. The secondary market consists of 22 stock exchanges. The secondary
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market provides a trading place for the securities already issued, to be bought and sold. It also
provides liquidity to the initial buyers in the primary market to re-offer the securities to any
interested buyer at any price, if mutually accepted..
CAPITAL MARKET PARTICIPANTS: There are several major players in the primary
market.These include the merchant bankers, mutual funds, financial institutions, foreign
institutional investors (FIIs) and individual investors. In the secondary market, there are the
stock exchanges, stock brokers (who are members of the stock exchanges), the mutual funds,
financial institutions, foreign institutional investors (FIIs), and individual investors.
Registrars and Transfer Agents, Custodians and Depositories are capital market
intermediaries that provide important infrastructure services for both primary and secondary
markets.
3.3 COMPONENTS OF CAPITAL MARKET:
Following are the three main components of capital market:
1. New Issue Market
2. Financial Institutions
3. Stock Market
1. NEW ISSUE MARKET The new issue market represents the primary market where new securities, i.e. shares
or bonds that have never been previously issued, are offered. Both the new companies and the
existing ones can raise capital on the new issue market. The prime function of new issue
market is to facilitate the transfer of funds from willing investors to the entrepreneurs setting
up new corporate enterprise or going for expansion, diversification, growth or modernization.
Besides, the helping corporate enterprise in securing their funds, the new issue market
channelises saving of individuals and others into investors.
Issuing companies and the investors respectively represents the two facets of this
market, i.e. supply and demand. Also there is participation of intermediaries, which help, in
selling, transferring, underwriting etc. These agencies include financial institution,
underwriters, brokers, merchant bankers, etc.
It must be noted that although the functions and organization of new issue market are
quiet different from that of the secondary (stock) market, the sentiment in the stock market
influence the activity of new issue market.
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Successful issue of new securities is a highly specialized activity and requires both
experience and skill. There are number of methods of marketing new issue of securities. And
the choice of method selection depends upon number, character and sentiment of prospective
buyers.
2. FINANCIAL INSTITUTIONSSpecialized Financial Institutions are the most active constituent of the Indian Capital
Market. Such organizations provide medium and long-term loans on easy installments to big
business house. Such institutions help in promoting new companies during economic
depressions.
The need for establishing financial institutions was felt in many countries
immediately after the Second World War to reestablish war-shattered economies. Need for
such institution was more in underdeveloped countries.
Following are the main special financial institutions that are most active constituents
of the Indian Capital Market.
1. The industrial Finance Corporation of India. (I.F.C.I)2. The Industrial Credit and Investment Corporation of India. (I.C.I.C.I)3. The Refinance Corporation of India. (R.F.C.)4. State Financial Development Corporation. (S.F.Cs.)5. National Industrial Development Corporations. (N.I.D.C.)6. State Industrial Development Corporations. (S.I.D.Cs.)7. National Small Industries Corporations. (N.S.I.C.)8. Industrial Development Bank of India. (I.D.B.I.)9. Unit Trust of India. (U.T.I.)10. Life Insurance Corporation of India. (L.I.C.)11. Nationalized Commercial Banks. (N.C.B.)12. Merchant Banking Institutions. (M.B.Is.)
3. STOCK MARKET
Capital Market also includes Stock market. It is a place where securities which have
been issued the past are traded. It is a secondary market. In stock market the participants are
Stock Exchanges, Brokers and the investors. The investors want liquidity of their
investments. The securities, which they hold, should be easily sold when they need cash.
Similarly there are others who want to invest in new securities. So there should be a place
where securities should be purchased and sold. Stock exchange provides such a place where
securities of different companies can be purchased and sold via stock market.
One can trade in stock market two ways:
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1. On Market
2. Off Market
In On market trading is done via stock exchanges, where the buyer and seller don’t know
each other. But one can also trade Off market without the interference of stock exchange may
be through stock broker or not. For example: Raja and Gandhi are neighbors, Raja wants to
Sell the shares of Zodiac JRD, which he holds and Gandhi is ready to buy them at that price
they can enter into contract off market.
DEBT MARKET:
Traditionally debt instruments are known for generating a predetermined income for a given
period of time, other than in cases of default. Hence they are also known as fixed income
instruments. The debt markets in advanced are significantly larger and deeper than equity
markets. But in India, the trend is just the opposite. The development of debt market in India
has not been as remarkable as in the equity market. However the debt markets in India have
undergone a considerable change in the last few years. Characterized by regulated interest
rates, limited players and lack of trading earlier, the markets have become more integrated
and less regulated. The debt market in India is divided into two categories:
o Government securities market consisting of Central Government and State
Government securities.
o Bond market consisting of FI bond, PSU bonds and Corporate bonds/debentures.
3.4 PRIMARY AND SECONDARY MARKET:
There are two ways for investors to get shares from the primary and secondary markets. In
primary markets, securities are bought by way of public issue directly from the company. In
Secondary market share are traded between two investors.
PRIMARY MARKETMarket for new issues of securities, as distinguished from the Secondary Market,
where previously issued securities are bought and sold. A market is primary if the proceeds of
sales go to the issuer of the securities sold.This is part of the financial market where
enterprises issue their new shares and bonds. It is characterized by being the only moment
when the enterprise receives money in exchange for selling its financial assets.
Stocks available for the first time are offered through new issue market. The issue may be a
new company or an existing company. These issues may be of new type or the security used
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in the past. In the new issuing houses, investment bankers act as the channel of distribution
for the new issues. They take responsibility of selling the stocks to the public.
THE FUNCTION OF PRIMARY MARKET:
The main service functions of the primary market are origination, under writing and
distribution. Origination deals with the origin of the view issue. The proposal is analyzed in
terms of the nature of security, the size of issue, timing of the issue and floatation method of
issue. Underwriting contract makes the shares predictable and removes the elements of
uncertainty in the subscription. Distribution refers to the sale of the securities to the investors.
This is carried out with the help of the lead manager and broker to the issue.
IPO – INITIAL PUBLIC OFFERING
Public issues can be classified into Initial Public offerings and further public
offerings. In a public offering, the issuer makes an offer for new investors to enter its
shareholding family. The issuer company makes detailed disclosures as per the DIP
guidelines in its offer document and offers it for subscription. Initial Public Offering (IPO) is
when an unlisted company makes either a fresh issue of securities or an offer for sale of its
existing securities or both for the first time to the public. This paves way for listing and
trading of the issuer’s securities.
IPO is new shares Offered to the public in the Primary Market .The first time the
company is traded on the stock exchange. A prospectus is issued to read about its risk before
investing. IPO is a company's first sale of stock to the public. Securities offered in an IPO are
often, but not always, those of young, small companies seeking outside equity capital and a
public market for their stock. Investors purchasing stock in IPO’s generally must be prepared
to accept very large risks for the possibility of large gains. Sometimes, just before the IPO is
launched, Existing share Holders get very liberal bonus issues as a reward for their faith in
risking money when the project was new.
SECONDARY MARKET
The market where securities are traded after they are initially offered in the primary
market. Most trading is done in the secondary market. To explain further, it is Trading in
previously issued financial instruments. An organized market for used securities. Examples
are the New York Stock Exchange (NYSE), Bombay Stock Exchange (BSE),National Stock
Exchange NSE, bond markets, over-the-counter markets, residential mortgage loans,
governmental guaranteed loans etc.The secondary market is the financial market for trading
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of securities that have already been issued in an initial private or public offering.
Alternatively, secondary market can refer to the market for any kind of used goods. The
market that exists in a new security just after the new issue, is often referred to as the
aftermarket. Once a newly issued stock is listed on a stock exchange, investors and
speculators can easily trade on the exchange, as market makers provide bids and offers in the
new stock.
3.5 PRODUCTS DEALT IN SECONDARY MARKET
EQUITY: The ownership interest in a company of holders of its common and preferred
stock. The various kinds of equity shares are as follows –
EQUITY SHARES: An equity share, commonly referred to as ordinary share also represents
the form of fractional ownership in which a shareholder, as a fractional owner, undertakes the
maximum entrepreneurial risk associated with a business venture. The holders of such shares
are members of the company and have voting rights. A company may issue such shares with
differential rights as to voting, payment of dividend, etc.
RIGHTS ISSUE/ RIGHTS SHARES: The issue of new securities to existing shareholders
at a ratio to those already held.
BONUS SHARES: Shares issued by the companies to their shareholders free of cost by
capitalization of accumulated reserves from the profits earned in the earlier years.
PREFERRED STOCK/ PREFERENCE SHARES: Owners of these kind of shares are
entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before
dividend can be paid in respect of equity share. They also enjoy priority over the equity
shareholders in payment of surplus. But in the event of liquidation, their claims rank below
the claims of the company’s creditors, bondholders / debenture holders.
CUMULATIVE PREFERENCE Shares. A type of preference shares on which dividend
accumulates if remains unpaid. All arrears of preference dividend have to be paid out before
paying dividend on equity shares.
CUMULATIVE CONVERTIBLE PREFERENCE SHARES: A type of preference
shares where the dividend payable on the same accumulates, if not paid. After a specified
date, these shares will be converted into equity capital of the company.
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PARTICIPATING PREFERENCE SHARE: The right of certain preference shareholders
to participate in profits after a specified fixed dividend contracted for is paid. Participation
right is linked with the quantum of dividend paid on the equity shares over and above a
particular specified level.
SECURITY RECEIPTS: Security receipt means a receipt or other security, issued by a
securitisation company or reconstruction company to any qualified institutional buyer
pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an
undivided right, title or interest in the financial asset involved in securitisation.
GOVERNMENT SECURITIES (G-Secs): These are sovereign (credit risk-free) coupon
bearing instruments which are issued by the Reserve Bank of India on behalf of Government
of India, in lieu of the Central Government's market borrowing programme. These securities
have a fixed coupon that is paid on specific dates on half-yearly basis. These securities are
available in wide range of maturity dates, from short dated (less than one year) to long dated
(upto twenty years).
DEBENTURES: Bonds issued by a company bearing a fixed rate of interest usually payable
half yearly on specific dates and principal amount repayable on particular date on redemption
of the debentures. Debentures are normally secured/ charged against the asset of the company
in favour of debenture holder.
BOND: A negotiable certificate evidencing indebtedness. It is normally unsecured. A debt
security is generally issued by a company, municipality or government agency. A bond
investor lends money to the issuer and in exchange, the issuer promises to repay the loan
amount on a specified maturity date. The issuer usually pays the bond holder periodic interest
payments over the life of the loan. The various types of Bonds are as follows-
ZERO COUPON BOND: Bond issued at a discount and repaid at a face value. No periodic
interest is paid. The difference between the issue price and redemption price represents the
return to the holder. The buyer of these bonds receives only one payment, at the maturity of
the bond
CONVERTIBLE BOND: A bond giving the investor the option to convert the bond into
equity at a fixed conversion price.
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COMMERCIAL PAPER: A short term promise to repay a fixed amount that is placed on
the market either directly or through a specialized intermediary. It is usually issued by
companies with a high credit standing in the form of a promissory note redeemable at par to
the holder on maturity and therefore, doesn’t require any guarantee. Commercial paper is a
money market instrument issued normally for a tenure of 90 days.
TREASURY BILLS: Short-term (up to 91 days) bearer discount security issued by the
Government as a means of financing its cash requirements.
3.6 ACCOUNT OPENING
To avail the services of depository one requires opening an account with any of the
depository participants. The e-invest account is an account which allows a customer
electronic trading on the exchange. Through this unique three in one trading every customer
opening an e-invest account gets a bank saving account.
You can open a Depository Participant (DP) Account, either through sharekhan
branches or through Sharekhan Franchisee center.
There is no fee for opening DP accounts with SharekhanI. However, deposit
(refundable) will be levied towards services which can be adjusted towards billing
charges.
All investors have to submit their proof of identity and proof of address alongwith the
prescribed account opening form.
1. I. Proof of Identity : Your signature and photograph must be authenticated by an
existing demat account holder with the same DP or by a bank manager. Alternatively,
you can submit a copy of Passport, Voters Id Card, Driving Licence or PAN card with
photograph.
2. II. Proof of Address : You can submit a copy of Passport, Voters Id Card, Driving
Licence, PAN card with photograph, ration card or bank passbook as proof of address.
You must remember to take original documents to the DP for verification.
3. III Passport-size photograph.
DEMATERIALISATION:
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Dematerialisation is the process by which a client can get physical certificates converted into
electronic balances maintained in its account with the DP.
FEATURES:
Holdings in only those securities that are admitted for dematerialisation by NSDL can
be dematerialised.
Structure of holding in the securities should match with the account structure of the
depositoryaccount
If the shares are in the name of X and Y it cannot be dematerialised in to the account
of either X or Y alone. Further, if the shares are in the name of X first and Y second
and the account is in the name of Y first and X second, then these shares cannot be
dematerialized in this account. The dematerialisation process can be initiated only by
X first and Y second and for this a depository account will have to be opened in the
name of X first and Y second.
Only those holdings that are registered in the name of the account holder can be
dematerialised.
REMATERIALISATION:
Rematerialisation is the process by which a client can get his electronic holdings converted
into physical certificates. The client has to submit the rematerialisation request to the DP with
whom he has an account. The DP enters the request in its system which blocks the client's
holdings to that extent automatically. The DP releases the request to NSDL and sends the
request form to the Issuer/ R&T agent. The Issuer/ R&T agent then prints the certificates,
despatches the same to the client and simultaneously electronically confirms the acceptance
of the request to NSDL. Thereafter, the client's blocked balances are debited.
FEATURES:
A client can rematerialise his dematerialised holdings at any point of time.
The rematerialisation process is completed within 30 days.
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The securities sent for rematerialisation cannot be traded.
TRADES:
When an investor sells in a market trade i.e. through a broker, the flow of securities happens
as follow:
THE FLOW OF SECURITIES (MARKET TRADE) CAN BE SHOWN
This settlement of the trade happens on the investor giving his DP an instruction to debit his
account and credit the brokers account for the said quantity of shares and the broker in turn
giving his DP the instruction of delivering the sharesto the clearing corporation. Thus, on the
respective DPs executing the instructions the transfer of securities takes place.
In case of a market purchase, the securites come into the brokers account from the clearing
corporation on payout, then teh broker provides instructions to his DP to transfer stocks into
the investor account. If the investor has not availed of automatic credit facility, then he
should provide a receipt instruction to his DP.
In case of an off-market trade, the securities move from the seller to the buyer on the
execution of respective instructions by the respective DPs.
Thus, the flow of securities essentially depends upon the parties to the trade providing the
relevant instruction to the respective DPs at the appropriate time.
PLEDGE:
Pledge enables you to obtain loans against your dematerialised shares. So you get liquidity
without having to sell your shares.
You can pledge your shares and the money can be utilised to finance your personal needs, or
you can make further investments.
A highly simplified procedure may be availed of for pledging of securities in the electronic
mode. The pledged securities continue to be reflected in the DP account of the pledger but the
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concerned securities are "blocked" and can not be used for any transactions. As and when the
pledge is to be removed, based on confirmations received from both the pledger and the
pledgee, the blocked securities will be released to "Free Balance" of the account holder.
CORPORATE BENEFITS:
Corporate benefits are benefits given by a company to its investors. These may be either
monetary benefits like dividend, interest or non-monetary benefits like bonus, rights, etc.
NSDL facilitates distribution of corporate benefits.
CLIENT REGISTRATION PROCESS
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FORM SUBMISSION
FORM SUBMISSION
SCRUTINYSCRUTINY
SEGREGATESEGREGATE
OPEN A/C OR REJECT
OPEN A/C OR REJECT
BANKBANK VALID
FORM
VALID
FORM
INTIMATES
CPU
INTIMATES
CPU
OPEN A/C OR REJECT
OPEN A/C OR REJECT DPDP
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CHAPTER: 4OBJECTIVES & SCOPE
Online share trading is not a new concept for India too.NSE has started it in 1992.
Still share-trading is not very popular among middle class people and they think it as risky
investment. If we see the growth of the sensex .It has increased more than 15 times in 16
years. In 1992 it was at just 1000 and today it is about15000. It was at 21000 in January
2008.
During research it was my aim to find out different aspects of online trading and
people’s interest about it . Which companies are popular among them, how much they know
about these things, how much are they satisfied etc.?
Meanwhile I was also looking for prospect customers also for Sharekhan Ltd.
Following are the main objectives of the research:
4.1 PRIMARY OBJECTIVES:
To find out potential customer by creating awareness among the people for
opening Demat a/c
To study the awareness and interest of customers for online trading services.
To find out customer’s satisfaction level.
4.2 SCOPE OF THE STUDY:
To find out customer’s overall perception about the system.
To know what motivates prospective customer to think about going for online
share trading.
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To know what options are used by customer in online trading.
To get information regarding the current market share of the company.
To know competitors of Sharekhan in the market.
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CHAPTER: 5ORGANISATION STRUCTURE
5.1 OVERALL ORGANISATIONAL STRUCTURE
5.2 FUNCTIONS OF DEPARTMENTS
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HEAD OFFICE
REGIONAL HEAD QUARTERS
REGIONAL HEAD QUARTERS
REGIONAL HEAD QUARTERS
REGIONAL HEAD QUATERS
REGIONAL BRANCHQUATERS
OPERATIONS DIVISION
SUPPORT FUNCTION BRANCHES ISO CELL
BROKING
FPO
RIS
DP
ACCOUNTS
SYSTEM
HRD
ADMN.PURCHASE
OPERATIONS DIVISION
SUPPORT FUCTION
5.3 MARKETING
5.4 ACCOUNTS
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HEAD OF THE BRANCH
MARKETING MANAGER
SALES EXE. ASSISTANT TRAINEE
HEAD OF THE BRANCH
ACCOUNTANT MANAGER
DOCUMENTRY ASSISTANT ACCOUNT MANAGER
5.5 HR & ADMINISTRATION
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HEAD OF THE BRANCH
HRM
HR DEVOLPMENT PAY ROLE RECURTMENT
SALES EXE. TRAINEES
CHAPTER: 6STOCK EXCHANGES
6.1 FUNCTIONS OF STOCK EXCHANGES
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The importance of stock exchanges will be clear from the following functions performed by
stock exchanges:
1. ENSURES LIQUIDITY OF CAPITAL: The stock exchange provides a place where
shares and stock are converted into cash. It provides a ready market for buyers and sellers of
securities. If exchanges were not there many persons would have fear of blocking their
savings in securities.
2. CONTINUOUS MARKET FOR SECURITIES: The securities once listed continue to
be traded irrespective of the fact that owners go on changing. Exchanges provide regular
market for trading in securities.
3. EVALUATION OF SECURITIES: The investors can evaluate the worth of their shares
from price quoted at different stock exchanges for those securities.
The securities are quoted under free atmosphere of demand and supply and prices are set on
the basis of free market.
4. MOBILIZING SURPLUS SAVINGS: Through stock exchanges the investors are given
a safe platform to invest their savings. Hence stock exchanges play an important role in
mopping up surplus funds of investors.
5. HELPFUL IN RAISING NEW CAPITAL: The new concerns raise capital for first time
and the existing units increase their capital for further expansion and diversification purposes.
The new concerns get themselves registered so that the shares they issue can be further traded
at exchanges.
6. SAFETY IN DEALINGS: The dealings in stock exchanges are governed by well defined
rules and regulations of Securities contract act; 1956. There is no scope of manipulating the
transactions. Every transaction is done according to the procedure laid done and there is no
fear in minds of trading parties.
7. LISTING OF SECURITIES: Only listed securities can be traded in stock exchanges.
Every company desires of listing its securities will apply to the exchange authorities. But
listing is allowed after critical examination of capital structure, management and prospectus
of company. Hence provide security to a limit but it does not guarantee the financial stability,
so the investors should make analysis before investing.
8. CLEARING HOUSE FOR BUSINESS INFORMATION: The companies listing
securities with exchange have to provide financial statements, annual reports and other
reports to ensure maximum publicity of corporations operations and working. The economic
and other information provided at stock exchanges help companies to make their policies.
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9. PLATFORM FOR PUBLIC DEPTS.: The stock exchanges are also organized market
for government securities. However there is no any provision for a separate counter for
government securities but these are traded through brokers dealing in these securities.
10. FAIR PRICE DETERMINATION: The prices in the stock market are determined by
the interplay of forces of supply and demand. In stock exchange there is active bidding and a
two way auction takes place as a result there is a free competition in the stock market. The
price is determined where the bargain is stuck.
Stock exchanges also perform other functions that are useful for tax purposes and
hence protect the investor’s interest by eliminating dishonest and irregular practices in the
brokerage of trade.
6.2 THE BOMBAY STOCK EXCHANGE
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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 is 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.The Exchange's pivotal and pre-eminent
role in the development of the Indian capital market is widely
recognized and its index, SENSEX, is tracked worldwide.
Earlier an Association of Persons (AOP), the Exchange is now a
demutualised and corporatised entity incorporated under the
provisions of the Companies Act, 1956, pursuant to the BSE
(Corporatisation and Demutualization) Scheme, 2005 notified
by the Securities and Exchange Board of India (SEBI).
With demutualization, the trading rights and ownership
rights have been de-linked effectively addressing concerns
regarding perceived and real conflicts of interest. The Exchange is professionally managed
under the overall direction of the Board of Directors. The Board comprises eminent
professionals, representatives of Trading Members and the Managing Director of the
Exchange. The Board is inclusive and is designed to benefit from the participation of market
intermediaries.
In terms of organization structure, the Board formulates larger policy issues and
exercises over-all control. The committees constituted by the Board are broad-based. The
day-to-day operations of the Exchange are managed by the Managing Director and a
management team of professionals.
The Exchange has a nation-wide reach with a presence in 417 cities and towns of
India. The systems and processes of the Exchange are designed to safeguard market integrity
and enhance transparency in operations. During the year 2004-2005, the trading volumes on
the Exchange showed robust growth.
6.3 THE NATIONAL STOCK EXCHANGE
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The National Stock Exchange (NSE) is India's leading stock exchange covering
various cities and towns across the country. NSE was set up by leading institutions to provide
a modern, fully automated screen-based trading system with national reach. The Exchange
has brought about unparalleled transparency, speed & efficiency, safety and market integrity.
It has set up facilities that serve as a model for the securities industry in terms of systems,
practices and procedures. NSE has played a catalytic role in
reforming the Indian securities market in terms of microstructure,
market practices and trading volumes. The market today uses state-
of-art information technology to provide an efficient and transparent
trading, clearing and settlement mechanism, and has witnessed
several innovations in products & services viz. demutualization of
stock exchange governance, screen based trading, compression of settlement cycles,
dematerialization and electronic transfer of securities, securities lending and borrowing,
professionalization of trading members, fine-tuned risk management systems, emergence of
clearing corporations to assume counterparty risks, market of debt and derivative instruments
and intensive use of information technology.
MISSION
NSE's mission is setting the agenda for change in the securities markets in India. The NSE
was set-up with the main objectives of:
establishing a nation-wide trading facility for equities, debt instruments and hybrids,
ensuring equal access to investors all over the country through an appropriate
communication network,
providing a fair, efficient and transparent securities market to investors using
electronic trading systems,
enabling shorter settlement cycles and book entry settlements systems, and
Meeting the current international standards of securities markets.
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CHAPTER: 7THEORETICAL PERSPECTIVE
Bringing together under one site all the relevant factors to enable an informed investment is
what online trading is all about. There are several terms which are commonly used for online
share trading :
1. DEMAT A/c – This is a account where dematerialization takes place. Dematerialization is
the process by which physical certificates of an investor are converted to an equivalent
number of securities form and credited into the investor’s account with his/her DP.
2. DP – A depository participant is an agent of the depository through which it interfaces
with the investor. DP can offer depository services only it gets proper registration from SEBI.
3. DEPOSITORY – A depository is an organization which holds securities of investor in
electronic form at request at request of the investor through a registered repository
participant. It also provides services related to transactions in securities.
4. SAVING A/c - This is a regular bank a/c which is linked to D Mat a/c and trading a/c.
required amount of money is used for trading from saving a/c.
5. TRADING A/c – This is a a/c through which actual trading i.e. buying and selling takes
place. In online share trading all three accounts are interlinked.
6. LIMIT ORDER- A price higher or lower than you wanted, you need to place a limit order
rather than a market order. A limit order is an order to avoid buying or selling a stock at order
to buy or sell a security at a specific price. A buy limit order can only be executed the limit
price or higher. When you place a market, you can’t control the price at which your order will
be filled. Remember that your limit order may never be executed because the market price
may quickly surpass your limit before your order can be filled. But by using a limit order you
also protect yourself from buying the stock at too high prices.
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TRADING ACCOUNT
SAVING ACCOUNT
DEMAT
7. MARKET ORDER- Market order is an order to buy or sell stock at the current market
price. Unless you specify otherwise, your broker will enter your order as a market order.
8. ORDER- Investors have several options when it comes to placing an order to buy or sell
the securities. For example, whether you place an order directly with your broker or trade
online, you can instruct your broker to buy or sell at a specified price. Or you can place an
order that is good for one day only or for an extended period.
9. STOP ORDER- A stop order is an order to buy to sell a stock once the price of the stock
reaches the specified price, know as stop price. When the specified price is reached, your stop
order becomes a market order.
Buy stop order- Investors typically uses a stop order when buying stock to limit a loss or
protect a profit on short sell. The order is entered at a stop price that is always above the
current price.
Sell Stop order- A sell stop order helps the investors to avoid further losses or to protect a
profit that exists if the stock price continues to drop. A stop order to sell is always placed
below the current market price.
10. SHORT SELL- A short sell is generally the sale of a stock you do not own. Investors
who sell short believe the price of the stock will fall. If the price of the stock drops, you can
buy the stock at lower price and make the profit. If the price of the stock rises and you buy it
back later at higher price, you will incur a loss.
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CHAPTER: 8SWOT ANALYSIS
8.1 STRENGTH:
1) EMPLOYE MOTIVATION POLICY
2) RESEARCH TEAM
3) GOOD INFRASTRUCTURE
4) HELTHY FINACIAL MARKET
5) USER FRIENDLY WEB SITE
8.2 WEAKNES
1) INSUFFICIENT ADVERTISEMENT POLICY
2) NO ACCESS TO THE RURAL MARKET
8.3OPPORTUNITY
1-Sharekhan having goog customer relation strategy so that it create good opportunity to
create goodwill and capture the market.
2-Growing initial public offer create opportunity to capture the new market
3- Positive outlook of people towards financial product becouse most of investor more
about financial instrument and working strategy of stock brokers.
8.4 THREATS
1) MARKET UNCERTAINTY
2) STIFF COMPETITION
3) NEW ENTRY IN TO MARKET
4) GOVERNMENT POLICY
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CHAPTER: 9RESEARCH METHODOLOGY
Marketing research is a systematic design, collection, analysis & reporting of Data
which is relevant to specific market situation .
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My research process is as follows.
9.1 DEFINES THE PROBLEM AND RESEARCH OBJECTIVES
The objective of the research conducted was to study of consumer’s preference for online share
trading. Secondary objective of the survey was to know the customer’s satisfaction level. My
other objectives were to find out the overall perception about the system and what motivates
the people to think about going for online share trading.
9.2 DEVELOPING RESEARCH PLAN
The second stage of marketing research calls for developing a most efficient plan for gathering
needed information. Designing a research plan calls for taking decision on data sources
research, approach, research instrument, sampling plan and contact methods.
9.3 DATA SOURCE
There are two types of methods used in data collection i.e. primary data & secondary data.
A) PRIMARY DATA
Those data which are collected at first hand by the researcher especially for the purpose of
the study ,are known as primary Data .The data is collected directly from the person in sample
population. In this project research the collection of data is directly interviewing customer. In
the collection of the primary data, I have used survey method and use the questionnaire
methods.
There are mainly two methods for the collection of the primary data which are given
below,
Observational Method.
Survey Method.
OBSERVATION METHOD:-
In the observation method, it requires the observer. The observer will keenly observe the
person at the time of the interview & record his behavior accurately. it is also one of The
important method for the collection of data but it requires good & experienced observer who
can observer The behavior of the respondent properly and record it with great accuracy.
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SURVEY METHOD:-
It is most popular method for the collection of necessary data from the respondents. I have used
survey method for the collection of the necessary data.
Different types of the survey are given below,
Personal interview.
Telephonic survey.
Mail questionnaires.
PERSONAL INTERVIEW:-
In the personal interview, the interviewer will personally meet the respondent and will take is
interview. The interviewer will ask question in face to face direction to the respondents or
group of respondents.
TELEPHONIC SURVEY:-
In the telephonic interview, the interviewer will make call to respondents, inform the
respondents about the purpose of the call and then he will ask the related questions to the
respondents. This method is used, when the information to be collected is limited. It is mostly
used when information to be collected is limited.
MAIL QUESTIONNAIRE:-
In the mail questioner the interviewer will mail the questionnaire to the respondents and inform
them about the purpose of the survey. Also the time limit for the questionnaire is specified in
the mail. This method is used when the area to be covered is large and the survey has to be
conducted in the specific limit.
In my survey, I have used the personal interview to know customer awareness towards online
share trading. I have visited respondents personally.
B) SECONDARY DATAAny data which had been gathered earlier for other purposes are secondary data in hand of
marketing research. These data has been collected from company dealer like Dealer profile,
industrial profile, company profile are collected from the internet.
The secondary data are collected from the magazines, internet and
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Web -sites. Different web sites like www.sharekhan.com and GOOGLE
Search engine help in collecting the detailed information.
9.4 RESEARCH APPROACHOut of 4 ways of research approaches i.e.
1. Observation research.
2. Survey Research
3. Focus Group research
4. Experimental research.
In this project the approach used was survey approach because the main objective of our
survey was to study of the market potential and have an idea about the customer awareness.
9.5 SAMPLING
Research instruments can be of two types firstly questionnaire methods and secondly
mechanical instruments. In this survey the research instrument was questionnaire method.
9.6 SAMPLING PLAN:-
Sampling size : 50
Field Work area : Pune City
Random sampling
SAMPLING PROCEDURE:-
The sampling Procedure can be of two types:
1. Probable Samplings
2. Non-probable sampling
In this survey expert Judgments sampling method can be used.
CONTACT METHODS:
The method of contacts can be four types
1. Mail Questionnaire
2. Personal Interview
3. Telephonic Interview.
4. Internet
9.7 STATEMENT OF PROBLEM
Problem definition is one of the most important parts of the study. It is very important to
properly define the problem. If the problem is properly defined then it will provide proper
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guide line for the further study. The properly defined problem will direct the surveyor on the
proper path. And it is truly said that a properly defined problem is a half solve.
Here the main problem is to study on the INVESTOR PREFERENCES FOR ONLINE
TRADING (IN PUNE). Market potential is nothing but the finding out potential customers
for the product of organization; which gives maximum profitability. To find out market
potential study of competitors; consumer behavior; brand positioning is must which gives
idea about the market scenario. Online share trading –share trading is nothing but the buying
and selling shares as per the market position, this is done through broker. Broker-broker is
the person who brings buyer and seller together.
So the problem is to know the market potential of online share trading and the popularity of
online share trading among the people. It is also to know which options are preferred by
customers.
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CHAPTER: 10DATA ANALYSIS
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10.1 INVESTMENT OPTIONS
Investment Option Person Percent %
Valid Percent %
Cumulative Percent %
Bank 2 4.0 4.0 4.0
Insurance 20 40.0 40.0 44.0
Post office 10 20.0 20.0 64.0
Mutual-fund 18 36.0 36.0 100.0
Total 50 100.0 100.0
INTERPRETATION
This shows that most of people, who are observed, are interested in investing in
Insurance or Mutual Fund. 20% people are also interested in investing in Post office.
10.2 BRAND AWARENESS
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INTERPRETATION
ICICI was at the top of the mind of 45% people out of 100% and Sharekhan securing
second position with 31%, followed by Kotak and HDFC with 14% and 10%
respectively.
10.3 Is online trading easy?
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Companies No. of Respondents Percentage %ICICI 22 45%Sharekhan 16 31%Kotak Securities 07 14%HDFC Securities 05 10%Total 50 100%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Percentage of People
ICICI Sharekhan Kotak Securities
HDFC Securities
BRAND AWARENESS
Ans RespondentsPercent
%Valid
Percent %Cumulative Percent %
Yes 41 82.0 82.0 82.0
No 9 18.0 18.0 100.0
50 100.0 100.0
INTERPRETATION
This proves most of people accept that online trading is easy. This is a plus point for
stock trading companies.
10.4 DO YOU NEED TRAINING?
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Total
RespondentsPercent
%Valid
Percent %Cumulative Percent %
Yes 42 84.0 84.0 84.0
No 8 16.0 16.0 100.0
50 100.0 100.0
INTERPRETATION
This shows that people need proper training for using online trading although it is
easy.
10.5 SOURCES OF ADVERTISEMENT
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Ans.
Total
Sources No. of Respondents Percentage %News papers & magazines 32 64%Friends 10 20%Internet & Other media 08 16%Total 50 100%
INTERPRETATION
63% people come to know about online share trading through news paper and
magazines whereas 20% people come to know through friends and 17%
people come to know through other media like internet, news channel etc.
10.6 WHICH IS BETTER, NSE OR BSE?
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0%
10%
20%
30%
40%
50%
60%
70%
Percentage Of people
News papers& magazines
Friends Other media
SOURCES OF ADVERTISEMENT
Internet & Other media
OpstionRespondents
Percent %
Valid Percent %
Cumulative Percent %
NSE 44 88.0 88.0 88.0
BSE 6 12.0 12.0 100.0
Total 50 100.0 100.0
INTERPRETATION
This shows that most people like NSE in comparison of BSE.
10.7 AWARENESS OF E-BROKING
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NSE
INTERPRETATION
60% people were unfamiliar of the term e-broking and only 40% people
aware were with the concept of e-broking.
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Reply No. of Respondents Percentage %
Yes 20 40%
No 30 60%
Total 50 100%
10.8 KNOWLEDGE THROUGH COMPANY WEBSITE
Reply No. of Respondents Percentage %Yes 22 43%No 28 57%
Total 50 100%
INTERPRETATION
Out of the total sample size 43% people have visited the website of any e-broking
company and 57% people have not visited any website regarding e-broking.
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0%
10%
20%
30%
40%
50%
60%
Percentage Of people
Yes No
KNOWLEDGE THROUGH COMPANY WEBSITE
10.9 VISIT BY COMPANY REPRESENTATIVE
Reply No. of Respondents Percentage %Yes 12 24%No 38 76%
Total 50 100%
INTERPRETATION
Only 24% people who are interested in online share trading have been visited
by the representatives of the e-broking company and rest of the 73% people
have not been visited.
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0%
10%
20%
30%
40%
50%
60%
70%
80%
Percentage of People
Yes No
VISIT BY COMPANY REPRESENTATIVE
10.10 INTEREST IN E- BROKING
Reply No. of Respondents Percentage %Yes 48 96%No 02 04%
Total 50 100%
INTERPRETATION
Out of the total sample size 97% people found the concept of e-broking interesting
and 03% people do not find it interesting.
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0%10%
20%
30%40%
50%60%
70%80%
90%100%
Percentage Of people
Yes No
INTEREST IN E-BROKING
10.11 PREFERRED SYSTEMS OF SHARE TRADING
System No. of Respondents Percentage %Online 26 52%
Traditional 21 42%Can’t say 03 06%
Total 50 100%
INTERPRETATION
Regarding the preferences towards the different systems of share trading,
online share trading emerged as a clear cut winner with 53% people preferring
it, followed by traditional with 41% while 06% people were unable to answer.
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PREFERED SYSTEMS OF SHARE TRADING
52%42%
6%
Online Traditional Can’t say
10.12 TRADITIONAL- INFLUENCING FACTORS
Reason No. of Respondents Percentage %
Dependence on broker 20 40%Lack of computer knowledge
14 28%
Fear of fraudulence 16 32%Total 50 100%
INTERPRETATION
39% people opt for traditional system of share trading because of there
dependence on broker, 29% people opt for traditional system of share trading
because of the lack of computer knowledge and 32% people wants to stick
with traditional system due to fear of fraudulence.
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TRADITIONAL- INFLUENCING FACTORS
40%
28%
32%
Dependence on broker Lack of computer knowledgeFear of fraudulence
10.13 PREFERENCE FOR INVESTMENT
Option Respondents Percent %Valid Percent %
Cumulative Percent %
* Largecap 40 80.0 80.0 80.0** Midcap 8 16.0 16.0 96.0
*** Smallcap 2 4.0 4.0 100.0Total 50 100.0 100.0
INTERPRETATION
By seeing this we can say that people prefer to invest in largecap companies. It may be due to less risk.
* Largecap :- Companies worth $5 billion or more.
** Midcap :- Companies worth $1 billion to $5 billion.
*** Smallcap :- companies worth $250 million to $1 billion.
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10.14 INFLUENCING FACTORS
Factors No. of Respondents Percentage %Transparency 32 64%Hassle Free Service 07 14%Economical 06 12%Time saving 05 10%Total 50 100%
INTERPRETATION
Out of the four fascinating factors of online share trading transparency is at the
top as 64% people has voted for it followed by hassle free with 14%,
economical with 12% and time saving with 10% respectively.
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INFLUENCING FACTORS
64%14%
12%
10%
Transparency Hassle Free Service Economical Time saving
10.15 FUTURE PLANNING FOR ONLINE TRADING
Reply No. of Respondents Percentage %Yes 26 52%No 22 44%
Can’t say 02 04%Total 50 100%
INTERPRETATION
Out of the total sample size 53% people are planning to go for online share
trading and 43% people do not want to go for it while 4% people have not
yet decided.
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FUTURE PLANNING FOR ONLINE TRADING
52%
44%
4%
Yes
No
Can’t say
Percentage of people
10.16 REASONS FOR NOT ENTERING INTO E-BROKING
Reasons No. of Respondents Percentage %Relationship with broker 27 54%Trade rarely 15 30%Other reasons 08 16%Total 50 100%
INTERPRETATION
55% people do want to do online share trading because they have good
relationship with there broker, 30% people trade rarely and 15% have some
other reasons.
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0%
10%
20%
30%
40%
50%
60%
Percentage of People
RelationshipWith broker
Trade rarely Other reasons
REASONS FOR NOT ENTERING INTO E-BROKING
CHAPTER: 11FINDINGS AND OBSERVATIONS
It is found that people who were observed, they are yet investing in Insurance. And
mutual funds are also a good option for them. Post office was 3rd favorable option for
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investing. It may be due to less knowledge of Share market as well as it is considered
risky.
ICICI is found to be most popular among all. People are well aware of various services
providers like sharekhan.com, kotakstreet.com, hdfcsecurities.com. Professionals and
executive category are found to be in favor of the online share trading. They showed
interest in going for online share trading.
It is also seen that people think that online trading is convenient and easy to operate
but they also need initial guidance and training. So it must be provided to them so that
they can trade comfortably via online.
According to most of the people observed NSE is better than BSE.
People prefer to invest in largecap companies because of less risk.
News and magazines are found to be of major source of information.
93% people found to be aware of online trading of securities.
43% people said that they have visited at least one of the websites for the online share
trading concept.
The representative of at least one service provider has visited 24% people.
90% of the total population agrees that the concept is easy, convenient & interesting.
Still only 53% people are sure to go for online share trading. 41% people rarely want
to go for online trading.
People have highly voted for transparency feature of the online trading followed by
hassle free service, economical and time saving features.
Business class prefer off line share trading as most of them have good
relationship with their broker.
Business class which can be defined as the people who are self employed
entrepreneurs are found to be less interested and would like to stick to the traditional
system and are much dependent on their broker regarding investments.
.
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CHAPTER: 12LIMITATIONS
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There is no activity without limitations so it had too. The main Limitation has been faced
during project research are as follows:-
The research has been carried on time span of one an half month.
The research is totally based on the personal opinion of the respondents which
may vary depending upon their personal view.
The research has done along with achieving our target given by company.
People’s response was also not favorable.
Due to instability of market people were afraid of it, so they were less interested in
these things.
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CHAPTER: 13SUGGESTIONS AND RECOMMENDATIONS
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1. Although people have heard about online trading of securities still people have great
doubt about its operational feasibility as they are not clear about the concept. Special
awareness programs using various media mixes should be carried out to remove fear
from the minds of people and make it familiarize.
2. More emphasis should be laid on the convenience that the trading facilities offer by
either introducing kiosks in the centre where the clients could have a demonstration
for themselves and understand the various features of the product. This could help
them determine how conventional mode of trading is.
3. There are large numbers of prospective customers, who trades in small volume or
make infrequent transactions or like to hold the stock as a long term investment. The
current price structures are not at all suitable for such population. E- Trading
companies should look at such class.
4. Awareness campaigns like giving idea about futures and options, derivatives,
dividend policies will create interest in online trading. And this helps organization for
market positioning as well as mind positioning.
5. Sharekhan.com can go for banking business as it has large customer base. Generally
e-trading are not in banking business but this can be done as it will provide
convenience. Many times customer faces problem because of lack of coordination
between management of e-trading company and bank.
6. Development in public relation management and customer relationship management
will lead organization towards strong brand image as well goodwill.
7. Comparative study of customer care and services provide by other companies will
help develop business strategies as well business policies.
8. Seminars can be conducted at corporate level so as to increase potential customer
base. Corporate people do not go for share trading due to lack of time. This kind of
seminar will motivate them and make them aware about e-trading.
9. Tie-up with banks will facilitate the customer as maximum customers have their
salary accounts in banks and this account can be used for net banking as well share
trading.
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CHAPTER: 14CONCLUSION
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Shares are the best kind of investment available over a long period of time. And also
share market is a place where money earns money. For investing in share market every
investor needs to have an agreement with a Depository Participants. Depository Participants
are the one who provide the services of DEMAT.
Sharekhan is very well known among the investors but from the analysis I found that
ICICI Direct Securities is one of the major competitors. During my research I found that there
is a large market which is untapped, as most of people find the concept of online share trading
very interesting but none of them have been visited by the representative of any company.
During my research I also found that many people want to stick with the traditional system of
share trading because of lack of computer knowledge and also many people are dependent of
their personal broker. In the research I observed that Sharekhan limited is not effective in the
advertisement of its products.
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CHAPTER: 15ANNEXURE
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QUESTIONNAIRE
PERSONAL INFORMATION:
1. Name: 2. Gender: (a) Male (b)Female 3. Address:
4. Contact No.:
5. Age (a) Between 20-22 years (b) Between 22-25years (c) Between 25-30years (d) Above 30 years
6. Are you married? (a) Yes (b) No
7. Education (a) Postgraduate (b) Graduate (c) 12th (d) below 12th
8. Are you employed? (a) Yes (b) No
9. What is your monthly income? (In Rs) (a) Below 10000/- (b) Between 10000-20000/- (c) Between 20000-30000/- (d) Above 30000/-
RESEARCH-QUESTIONS:
10. Which is the best investment-option for you?
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(a)Bank (b) Insurance (c)Post office (d) Mutual Funds (e) Others
11. If yes, which company’s DEMAT a/c do you have? (a)Sharekhan (e) ICICI (d)Kotak Securitie (f) HDFC
12. Which is the best company according to you? (a)Sharekhan (b) ICICI (c)Kotak Securitie (d) HDFC
13. Do you agree that online trading is easy & convenient? (a) Yes (b) No
14. Do you need training for online trading? (a) Yes (b) No
15. How do you know about Sharekhan? (a) News Paper (b) friend (c) Internet & Other media
16. Which is better according you? (a) NSE (b) BSE
17. Are you interested to open a DEMAT a/c. with Sharekhan? (a) Yes (b) No
18. Do you collect information which is shows on company website? (a) Yes (b) No
19. Have you been visited by company representive? (a)Yes (b) No
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20. Are you interested in e-broking? (a) Yes (b) No
21. Which is your preference for share trading? (a) Online (b) Traditional (c) Can’t say
22. Which is your traditional influencing factor? (a) Dependent on broker (b) Fear of fraudulence (c) Lack of computer information
23. Which is your preference for investing? (a) Large-cap (b) Mid-cap (c) Small-cap
24. Which is your Influencing factor? (a) Transparency (b) ICICI (c) Hassle free service (d) Time saving
25. Do you have future planning for online trading? (a) Yes (b) No (c) Can’t say
26. What is reason for not entering in E-Broking? (a) The Relationship with broker (b) Trade rarely (c) Other reason
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