Arti Singh

7/31/2019 Arti Singh

1/64

Summer Training ReportOn

Competitive Analysis & Overall

Functioning of Broking Firm

AtKotak Securities Ltd.,

Bhilai

Under The Guidance of Lect.Swati Shukla(FacultyGuide,GDRCET),

Mr.Rehan khan (Branch Manager, Kotak SecuritiesLtd,Bhilai)

Submitted by Arti Singh

in partial fulfilment for the Award of degree of

MASTERS OF BUSINESS ADMINISTRATION

From

CHHATTISGARH SWAMI VIVEKANAND TECHNICAL UNIVERSITY

(Session 2011-13)

DEPARTMENT OF MANAGEMENT

GD Rungta College Of Engineering & Technology Bhilai

Approved By AICTE, New Delhi

Kohka-kurud Road, Bhilai-490024(C.G.)

1


2/64

DECLARATION

2


3/64

DECLARATION

I,ARTI SINGH student of MBA in department of management,

GD Rungta College of Engineering &Technology, kohka

kurud road, Bhilai Nagar (C.G) hereby declare that research

report entitled

Competitive Analysis & Overall Functioningof Broking Firm

Submitted to Mr.Rehan Khan at kotak securities Ltd., and

Lect.Swati Shukla at GD Rungta College of Engineering &Technology andIs the record of original work done by me and the matterenclosed has not been submitted for the award of any otherdegree or diploma in the university or anywhere.

PLACE: BHILAI NAGAR MBASTUDENT

DATE: ARTI SINGH

3


4/64

CERTIFICATION

4


5/64

CERTIFICATE

This is to certify that the project work done onCompetitive Analysis & Overall Functioning of BrokingFirm submitted to GD RUNGTA COLLEGE OF ENGINEERING &

TECHNOLOGY, BHILAI, ARTI SINGH, student of MBA in partialfulfilment of the requirement for the award of degree business

administration in a summer internship programme at our branchcarried out by her under my supervision and guidance .This workhas been submitted anywhere else for other degree/diploma.

SIGNATURE:

Name: Rehan Khan

Designation: Branch Manager

5


6/64

ACKNOWLEDGEMEN

T

6


7/64

ACKNOWLEDGEMENT

Working on this project has been a great learning experience for us. We enjoyed every

step of its progress and we thankful to all people associated with us during this period.

We convey my sincere thanks to our company guide, Mr.Rehan Khan (Branch

Manager,Kotak Securities Ltd., bhilai) who gave us an opportunity to be a part of

Kotak Securities Ltd as a summer intern for 45 days. His support and guidance helped

us to carry out our project which wouldnt have been possible without his constant

advice, support, co-operation and encouragement throughout the project.

It is also our pleasure to acknowledge the utmost co-operation and valuable

suggestions given from time to time by the other members of Kotak Securities Ltd.,Bhilai, i.e., Mr.Anand Nandeshwar who provided us utmost knowledge about the

overall functioning in a broking firm, and Mr.Rajesh Prajapati who guided us

throughout upon dealing with clients.

We also pay our sincere thanks to Lect.Swati Shukla (Faculty Guide, GDRCET) for

his valuable suggestions, inspiration and guidance with regard to our project.

We also would like to thank all those who have directly or indirectly helped us

providing complete information which helped in development of this project.

7


8/64

ABSTRACT

8


9/64

ABSTRACT

This report provides an overview of two important aspects. The first iscompetitive analysis of Kotak Securities Ltd., and various other brokingfirms which are the major competitors of Kotak. Based on the feedbacktaken from various customers from various sectors (Industrial,

Educational, Business, private, etc.,) who invest in stock market or havesome knowledge of stocks or an idea of investment in stock market, acompetitive analysis have been done.

The second aspect which this report looks into is the Overall Functioningof a broking firm. The major roles played by a broking starting fromenquiry clients, opening demat and trading account of customers, thewhole documentation process, telephonic trade conversation, trading ofclients to settlement of clients receipts and payments and use of ODINclient software and also making trade decisions on the basis of latestcompany results and stock news, everything has been explained.

9


10/64

DECLARATION 3

CERTIFICATION 5

ACKNOWLEDGEMENT 7 ABSTRACT 9

TABLE OF CONTENT

S.NO DESCRIPTION PAGE NO

1) UNIT-1

Introduction Research objective

11

12-2223

2) UNIT-2

Literature Survey

24

25-37

3) UNIT-3

Research Methodology

Research Design

Sample Design

Flow chart

38

39-4041-424344

4) UNIT-4

Data analysis

Findings

Limitation

45

46-5657-5859-60

5) UNIT-5

Conclusion

Bibliography

Questionnaire

61

61-626364-66

10


11/64

UNIT-1

INTRODUCTION

11


12/64

INTRODUCTION

The Kotak Mahindra GroupKotak Mahindra is one of India's leading banking and financial services organizations,offering a wide range of financial services that encompass every sphere of life. Fromcommercial banking, to stock broking, to mutual funds, to life insurance, to investmentbanking, the group caters to the diverse financial needs of individuals and corporatesector.

The group has a net worth of over Rs. 100.6 billion and has a distribution networkof branches, franchisees, representative offices and satellite offices across cities andtowns in India, and offices in New York, London, San Francisco, Dubai, Mauritius andSingapore servicing around 8 million customer accounts.

Kotak Group Products & Services:Bank

Life Insurance

Mutual Fund

Car Finance

Securities

Institutional EquitiesInvestment Banking

Kotak Mahindra International

Kotak Private Equity

Kotak Realty Fund

KOTAK SECURITIES

Originally established in 1994, Kotak Securities is a subsidiary of Kotak Mahindra

Bank, which services more than 7.4 lakh customers. The firm has a wide network ofmore than 1400 branches, franchisees representative offices, and satellite officesacross 448 cities in India and offices in New York, London, Dubai, Mauritius andSingapore.

We process more than 400000 trades a day which is much higher than some of therenowned international brokers.

The company is a corporate member of both The Bombay Stock Exchange (BSE) andThe National Stock Exchange of India (NSE). Our operations include stock broking

services for trading in stock markets through branches & internet and distribution ofvarious financial products including investments in IPOs, Mutual Funds and CurrencyDerivatives. Currently, Kotak Securities is one of the largest broking houses in India

12


13/64

with substantial geographical reach to Asia Pacific, Europe, Middle East and America.

Kotak Securities Limited has Rs. 1,202 crore of Assets Under Management (AUM) as of31st Dec, 2011.

Innovators:

We have been the pioneers in providing many products and services which have nowbecome industry standards for stock broking in India. Some of them include:

Mobile stock trading application to keep track of your investments even on the go

Facility of Margin Finance to the customers for online stock trading

Investing in IPOs and Mutual Funds on the phone

SMS alerts before execution of depository transactions

Auto Invest - A systematic investing plan in Equities and Mutual funds

Provision of margin against securities automatically against shares in your Demataccount

Research Expertise:We specialize in Fundamental and Technical analysis backed by a team of highlytrained and qualified individuals.

Our full-fledged research division is involved in Macro Economic studies, Sectorialresearch and Company Specific Equity Research which publishes in-depth stockmarket analysis. This is combined with a strong and well networked sales force whichhelps deliver current and up to date market information and news.

We are also a depository participant with National Securities Depository Limited

(NSDL) and Central Depository Services Limited (CDSL). By being a stock broker anddepositary participant, we provide dual benefit in our services wherein the investorscan avail our stock broking services for executing the transactions and the depositoryservices for settling them.

Our Portfolio Management Service comes as an answer to those who would like togrow exponentially on the crest of the stock market, with the backing of an expert.

Awards

Best Broker in India by Finance Asia for 2010 & 2009

UTI MF - CNBC TV18 Financial Advisor Awards - Best Performing Equity Broker(National) for the year 2009

Best Brokerage Firm in India by Asia money in 2009, 2008, 2007 & 2006

Best Performing Equity Broker in India - CNBC Financial Advisor Awards 2008

Avaya Customer Responsiveness Awards (2007 & 2006) in Financial ServicesSector

The Leading Equity House in India in Thomson Extel Surveys Awards for theyear 2007

Euro money Award (2007 & 2006) - Best Provider of Portfolio Management:Equities

13


14/64

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

Finance Asia Award (2005)-Best Broker in India.

Finance Asia Award (2004) - India's best Equity House.

The best broker and the best equity house in India.

Right Investment Partner

Kotak securities see investing from customer perspective, and make recommendationsbased on customer needs. One of Kotak securities important goals is to simplifyinvesting for customer; along with this Kotak securities also provide long term valuesto their customers.

Kotak securities have a million reasons for you to choose us. Listed below are a few:

Stability: Kotak securities are a subsidiary of Kotak Mahindra Bank and one of theoldest and largest stock broking firms in the Industry. Kotak securities have been thefirst and only NBFC to receive the license to be converted into a bank.

Innovators in the Industry:Kotak securities have been the first in providingmany products and services which have now become industry standards.

First to provide Margin Financing to the customers First to enable investing in IPOs and Mutual Funds on the phone Providing SMS alerts before execution of depository transactions Launching of Mobile application to track portfolio Auto Invest - A systematic investing plan in Equities and Mutual fund Provision of margin against securities automatically against shares in your

Demat account

Value:Whether customer with a small or large wallet size, they can expect Kotaksecurities to bring value to them in every form.

Quality Research Quick trade execution Low brokerages Accounts that suit your investment profile Risk Profiler

Superior Customer Service

14


15/64

Service: Kotak securities believe in highstandards of service and that's precisely whatKotak offer. It's an honors to be awarded the mostcustomer responsive company award in theFinancial Institution sector by AVAYA GlobalConnect Award both in 2006 and 2007

Robust Technology:Kotak Securities have developed their own proprietarytrading platform which is robust and among the best in the industry. They have morethan 150 technology professionals constantly working on upgrading and speeding upall their systems.

Centralized Risk Management System:Unlike many other players theyhave a centralized risk management system. This allows them to offer the same levelsof service to customers across all locations.

Exceptional Research:Unlike most other competitors they have their own inhouse research team. Their in house research team is among the best in the industryand they have years of experience in the financial markets. They scan through theplethora of stocks and find the scrips that have a high potential of providing you goodreturns.

Their investors get research Technical, Fundamental, Derivatives, Macro-economic andmutual fund research.

Large Presence: Kotak securities are present in 447 cities with 1420 outlets allover the country. Their employee strength extends beyond 3800.

Multiple Share Trading Platforms

Kotak securities understand customers trading needs. If you're an Online Customer,Kotak Securities offers multiple mechanisms to place your trade. Be it a Wi-Fi-zone or acybercaf or a 3G connection or GPRS handset or a completely aloof from internetzone, you'll always have access to trade through Kotak Securities. Kotak Securities areone of the brokers to have the highest number of trading platforms to serve customertrading needs.

Mode ApplicationType of

ApplicationSatisfying Need

Internet Website Web Access all the features on the web

Desktop KEATProX .EXE based

application

Ultra high speed experience with

advanced features. Exe based

15
http://www.kotaksecurities.com/keat/keat.htmlhttp://www.kotaksecurities.com/keat/keat.html


16/64

application.

Desktop FASTLANE

Java applet

KEATProX like experience when your

office premises do not allow

application installations

Mobile Mobile StockTrader

MobileApplication

High speed trading experience on aMobile

Mobile / Computer Xtralite WebWhen you have a weak internet

connectivity

Phone Call and Trade -When customer not in an Internet

zone

Phone BranchAdvisory - When customer not in an Internetzone

Share Market Education

KEAT Pro X

A free, easy-to-use web based tool for all our online trading customers, KEAT Pro X is ahigh speed trading tool that allows you to monitor what is happening in the market atreal time speed. KEAT Pro X allows you to check live market rates of scripts on NSE,BSE & NSE Currency. You can create multiple watch lists and simultaneously placeorders; view order reports etc.this platform is powered with many features that make your trading experience fasterand easier.

Features

Real time streaming data :Watch the market at real time with free streaming stock quotes from NSE, BSE& NSE Currency. Available information also has details of Market Lot, TopGainers/Losers, Indices Update, Top Active Scrips, and Option Calculator.

Charting Tools :With available charting facility you can study and understand the pattern of thestock of your choice. This gives you the option of viewing different kinds ofcharts like Area, Candlestick etc.

Live Account Information :Track your account information live, view placed orders; get trade

16
http://www.kotaksecurities.com/whatweoffer/mobiletrading.htmlhttp://www.kotaksecurities.com/whatweoffer/mobiletrading.htmlhttp://www.kotaksecurities.com/whatweoffer/mobiletrading.htmlhttp://www.kotaksecurities.com/whatweoffer/mobiletrading.html


17/64

confirmation; view limits, positions, changing profit and loss etc. You cancustomize the reports as per your convenience.

Customizable :KEAT Pro X allows you to create your own personalized view of the Indian sharemarket so you can watch the data you want. You can create multiple watchlists

that can have upto 50 scrips in each of them; these watchlists can be set intabs.

Speed :KEAT Pro X is a high speed trading platform which provides you real trading andreporting that helps you to take advantage of changing stock prices.

Stock Recommendations :This share trading software i.e. KEAT Pro X also provides you recommendationon stocks which are researched by our research analysts on real-time basis as

and when a call is made by the research analyst.

Watch lists :It gives more control on your investment decisions by allowing you to createyour personalized watch lists for tracking your favorite stocks on real-timebasis. This share trading software also allows you to do in-depth research onany stock of your choice. KEAT Pro X allows you to view NSE, BSE and currencyprices all on a single watch list.

Highly Integrated :

KEAT Pro X is a highly integrated platform, this means you can access todifferent exchanges and instruments like, Equities, Derivatives and CurrencyDerivatives from this single platform. It also allows each of your createdwatchlists to be available on Website and Mobile Stock Trader as well and vice-versa.

Benefits

It comes free of charge with you online trading accountSet multiple watchlists

Create tab-wise access to watchlistView placed order and trade confirmationSelect indices/sectors or business groups

Trade long contractsFacility to sell from existing stocksLimits, Positions tabs available in the Risk ReportView changing profit and lossFast and convenient User InterfaceCustomizable User InterfaceView live Market DepthPredefined watchlist to create personalised watchlist

17


18/64

18


19/64

OBJECTIVE

PRIMARY OBJECTIVE:

Competitive analysis of the most popular broking companies in Bhilai based onthe major factors contributing to the choice of a broking service. To knowwhether Kotak Securities Ltd., is among the best services provider as a stockbroker in Bhilai.

SECONDARY OBJECTIVE:

To know about the awareness towards stock brokers and share market.

To study the different investment option in share market

To study the factors affecting them

To study the perception of people for different option

19


20/64

UNIT-2

LITERATURE

SURVEY

20


21/64

INDUSTRY PROFILE

Following diagram gives the structure of Indian financial system:

21


22/64

FINANCIAL MARKET:

Financial markets are helpful to provide liquidity in the system and for smoothFunctioning of the system. These markets are the centers that provide facilities forbuying and selling of financial claims and services. The financial markets match thedemands of investment with the supply of capital from various sources.

According to functional basis financial markets are classified into two types.They are:

Money markets (short-term)

Capital markets (long-term)

According to institutional basis again classified in to two types.They are:

Organized financial market

Non-organized financial market.

The organized market comprises of official market represented by recognizedinstitutions, bank and government (SEBI) registered/controlled activities andintermediaries. The unorganized market is composed of indigenous bankers,moneylenders, individual professional and non-professionals.

MONEY MARKET:

Money market is a place where we can raise short-term capital. Again the moneymarket is classified in to -

Inter-bank call money market

Bill market and

Bank loan market Etc.

E.g.-treasury bills, commercial papers, CD's etc.

22


23/64

CAPITAL MARKET:

Capital market is a place where we can raise long-term capital.Again the capital market is classified in to two types and they are

Primary market and

Secondary market.

E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:

Primary market is generally referred to the market of new issues or market formobilization of resources by the companies and government undertakings, for newprojects as also for expansion, modernization, addition, and diversification and upgradation. Primary market is also referred to as New Issue Market. Primary marketoperations include new issues of shares by new and existing companies, further and

right issues to existing shareholders, public offers, and issue of debt instruments suchas debentures, bonds, etc.

23


24/64

The primary market is regulated by the Securities and Exchange Board of India (SEBI agovernment regulated authority).

Function:

The main services of the primary market are origination, underwriting, anddistribution. Origination deals with the origin of the new issue. Underwriting contract

make the shares predictable and remove the element of uncertainty in thesubscription. Distribution refers to the sale of securities to the investors.

The following are the market intermediaries associated with the market:1. Merchant banker/book building lead manager2. Registrar and transfer agent3. Underwriter/broker to the issue4. Adviser to the issue5. Banker to the issue6. Depository7. Depository participant

Investors protection in the primary market:

To ensure healthy growth of primary market, the investing public should be protected.The term investor protection has a wider meaning in the primary market. The principalingredients of investors protection are:

Provision of all the relevant information

Provision of accurate information and

Transparent allotment procedures without any bias.

SECONDARY MARKET

The primary market deals with the new issues of securities. Outstanding securities aretraded in the secondary market, which is commonly known as stock market or stockexchange. The secondary market is a market where scrips are traded. It is a marketplace which provides liquidity to the scrips issued in the primary market. Thus, thegrowth of secondary market depends on the primary market. More the number ofcompanies entering the primary market, the greater are the volume of trade at the

secondary market. Trading activities in the secondary market are done through therecognized stock exchanges which are 23 in number including Over The CounterExchange of India (OTCE), National Stock Exchange of India and Interconnected StockExchange of India.

Secondary market operations involve buying and selling of securities on the stockexchange through its members. The companies hitting the primary market aremandatory to list their shares on one or more stock exchanges in India. Listing ofscrips provides liquidity and offers an opportunity to the investors to buy or sell thescrips.

The following are the intermediaries in the secondary market:1. Broker/member of stock exchange buyers broker and sellers broker2. Portfolio Manager

24


25/64

3. Investment advisor4. Share transfer agent5. Depository6. Depository participants.

STOCK MARKETS IN INDIA:

Stock exchanges are the perfect type of market for securities whether of governmentand semi-govt bodies or other public bodies as also for shares and debentures issuedby the joint-stock companies. In the stock market, purchases and sales of shares areaffected in conditions of free competition. Government securities are traded outsidethe trading ring in the form of over the counter sales or purchase. The bargains thatare struck in the trading ring by the members of the stock exchanges are at the fairestprices determined by the basic laws of supply and demand.

Definition of a stock exchange:

Stock exchange means anybody or individuals whether incorporated or not,constituted for the purpose of assisting, regulating or controlling thebusiness of buying, selling or dealing in securities. The securities include:

Shares of public company.

Government securities.

Bonds

History of Stock Exchanges:

The only stock exchanges operating in the 19th century were those of Mumbai setup in1875 and Ahmadabad set up in 1894. These were organized as voluntary nonprofit-marking associations of brokers to regulate and protect their interests. Before thecontrol on securities under the constitution in 1950, it was a state subject and theBombay securities contracts (control) act of 1925 used to regulate trading insecurities. Under this act, the Mumbai stock exchange was recognized in 1927 andAhmadabad in 1937. During the war boom, a number of stock exchanges wereorganized. Soon after it became a central subject, central legislation was proposed anda committee headed by A.D.Gorwala went into the bill for securities regulation. On the

basis of the committees recommendations and public discussion, the securitiescontract (regulation) act became law in 1956.

Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By giving quotations to thelisted companies, they help trading and raise funds from the market. Over the hundredand twenty years during which the stock exchanges have existed in this country andthrough their medium, the central and state government have raised crores of rupeesby floating public loans. Municipal corporations, trust and local bodies have obtained

from the public their financial requirements, and industry, trade and commerce- thebackbone of the countrys economy-have secured capital of crores or rupees throughthe issue of stocks, shares and debentures for financing their day-to-day activities,

25


26/64

organizing new ventures and completing projects of expansion, diversification andmodernization. By obtaining the listing and trading facilities, public investment isincreased and companies were able to raise more funds. The quoted companies withwide public interest have enjoyed some benefits and assets valuation has becomeeasier for tax and other purposes.

Various Stock Exchanges in India:

At present there are 23 stock exchanges recognized under the securities contracts(regulation), Act, 1956. Those are:

Ahmadabad Stock Exchange Association Ltd.

Bangalore Stock Exchange Bhubaneswar Stock Exchange Association

Calcutta Stock Exchange26


27/64

Cochin Stock Exchange Ltd.

Coimbatore Stock Exchange

Delhi Stock Exchange Association

Guwahati Stock Exchange Ltd

Hyderabad Stock Exchange Ltd.

Jaipur Stock Exchange Ltd

Kanara Stock Exchange Ltd

Ludhiana Stock Exchange Association Ltd

Madras Stock Exchange

Madhya Pradesh Stock Exchange Ltd.

Magadha Stock Exchange Limited

Meerut Stock Exchange Ltd.

Mumbai Stock Exchange

National Stock Exchange of India

OTC Exchange of India

Pune Stock Exchange Ltd.

Saurashtra Kutch Stock Exchange Ltd. Uttar Pradesh Stock Exchange Association

Vadodara Stock Exchange Ltd.

27


28/64

Out of these major stock exchanges were:

NSE (National Stock Exchange)

The National Stock Exchange of India Limited has genesis in the report of the HighPowered Study Group on Establishment of New Stock Exchanges, which recommendedpromotion of a National Stock Exchange by financial institutions (FIs) to provideaccess to investors from all across the country on an equal footing.

Based on the recommendations, NSE was promoted by leading Financial Institutions atthe behest of the Government of India and was incorporated in November 1992 as atax-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 operationsin November 1994 and operations in Derivatives segment commenced in June 2000.

NSE's mission is setting the agenda for change in the securities markets in India. TheNSE was set-up with the main objectives of:

Establishing a nation-wide trading facility for equities and debt instruments.

Ensuring equal access to investors all over the country through an appropriatecommunication network.

Providing a fair, efficient and transparent securities market to investors usingelectronic trading systems.

28


29/64

Enabling shorter settlement cycles and book entry settlements systems, andmeeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have becomeindustry benchmarks and are being emulated by other market participants. NSE ismore than a mere market facilitator. It's that force which is guiding the industrytowards new horizons and greater opportunities.

BSE (Bombay Stock Exchange)

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as"The Native Share and Stock Brokers Association". It is the oldest one in Asia, evenolder than the Tokyo Stock Exchange, which was established in 1878. It is a voluntarynon-profit making Association of Persons (AOP) and is currently engaged in the processof converting itself into demutualized and corporate entity. It has evolved over theyears into its present status as the premier Stock Exchange in the country. It is the

first Stock Exchange in the Country to have obtained permanent recognition in 1956from the Govt. of India under the Securities Contracts (Regulation) Act 1956.TheExchange, while providing an efficient and transparent market for trading in securities,

29


30/64

debt and derivatives upholdsthe interests of the investors and ensures redresses oftheir grievances whether against the companies or its own member-brokers. It alsostrives to educate and enlighten the investors by conducting investor educationprogrammers and making available to them necessary informative inputs.

A Governing Board having 20 directors is

the apex body, which decides thepolicies and regulates the affairs of

the Exchange. The Governing Board

consists of 9 elected directors, who

are from the broking community (one

third of them retire ever year by

rotation), three SEBI nominees, six

public representatives and an

Executive Director & Chief Executive

Officer and a Chief Operating Officer.

The Executive Director as the ChiefExecutive Officer is responsible for theday-to-day administration of theExchange and the Chief OperatingOfficer and other Heads of Departmentassist him.

The Exchange has inserted new RuleNo.126 A in its Rules, Byelaws

pertaining to constitution of the Executive Committee of the Exchange. Accordingly, anExecutive Committee, consisting of three elected directors, three SEBI nominees orpublic representatives, Executive Director & CEO and Chief Operating Officer has beenconstituted. The Committee considers judicial & quasi matters in which the GoverningBoard has powers as an Appellate Authority, matters regarding annulment oftransactions, admission, continuance and suspension of member brokers, declarationof a member-broker as defaulter, norms, procedures and other matters relating toarbitration, fees, deposits, margins and other monies payable by the member-brokersto the Exchange, etc.

30


31/64

REGULATORY FRAME WORK OF STOCK EXCHANGE

A comprehensive legal framework was provided by the Securities Contract RegulationAct, 1956 and Securities Exchange Board of India 1952. Three tier regulatorystructure comprising

Ministry of finance

The Securities And Exchange Board of India

Governing body

Members of the stock exchange:

The securities contract regulation act 1956 has provided uniform regulation for theadmission of members in the stock exchanges. The qualifications for becoming amember of a recognized stock exchange are given below:

The minimum age prescribed for the members is 21 years.

He should be an Indian citizen.

He should be neither a bankrupt nor compound with the creditors.

He should not be convicted for fraud or dishonesty.

He should not be engaged in any other business connected with a company.

He should not be a defaulter of any other stock exchange.

The minimum required education is a pass in 12th standard examination.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolutionof government of India. It was later made statutory body by the SEBI act1992.according to this act, the SEBI shall constitute of a chairman and four othermembers appointed by the central government. With the coming into effect of thesecurities and exchange board of India act, 1992 some of the powers and functionsexercised by the central government, in respect of the regulation of stock exchangewere transferred to the SEBI.

31


32/64

OBJECTIVES AND FUNCTIONS OF SEBI

To protect the interest of investors in securities.

Regulating the business in stock exchanges and any other securities market.

Registering and regulating the working of intermediaries associated withsecurities market as well as working of mutual funds.

Promoting and regulating self-regulatory organizations. Prohibiting insider trading in securities.

Regulating substantial acquisition of shares and take over of companies.

Performing such functions and exercising such powers under the provisions ofcapital issues (control) act, 1947and the securities to it by the centralgovernment.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK

EXCHANGES): Board of Directors of Stock Exchange has to be reconstituted so as

to include non-members, public representatives and governmentrepresentatives to the extent of 50% of total number of members.

Capital adequacy norms have been laid down for the members of various stockexchanges depending upon their turnover of trade and other factors.

All recognized stock exchanges will have to inform about transactions within24hrs.

TYPES OF ORDERS:Buy and sell orders placed with members of the stock exchange by the investors.

The orders are of different types.

Limit orders: Orders are limited by a fixed price. E.g. buy ReliancePetroleum at Rs.50.Here, the order has clearly indicated the price at which ithas to be bought and the investor is not willing to give more than Rs.50. Bestrate order: Here, the buyer or seller gives the freedom to the broker to executethe order at the best possible rate quoted on the particular date for buying. Itmay be lowest rate for buying and highest rate for selling.

Discretionary order: The investor gives the range of price for purchaseand sale. The broker can use his discretion to buy within the specified limit.Generally the approximation price is fixed. The order stands as this buy BRC100 shares around Rs.40.

Stop loss order:The orders are given to limit the loss due to unfavorableprice movement in the market. A particular limit is given for waiting. If the pricefalls below the limit, the broker is authorized to sell the shares to prevent furtherloss. E.g. Sell BRC limited at Rs.24, stop loss at Rs.22.

32


33/64

Buying and selling shares: To buy and sell the shares the investor hasto locate register broker or sub broker who render prompt and efficient serviceto him. The order to buy or sell specifying the number of shares of the companyof investors choice is placed with the broker. The order may be of any type.After receiving the order the broker tries to execute the order in his computerterminal. Once matching order is found, the order is executed. The broker thendelivers the contract note to the investor. It gives the details regarding the nameof the company, number of shares bought, price, brokerage, and the date ofdelivery of share. In this physical trading form, once the broker gets the sharecertificate through the clearing houses he delivers the share certificate alongwith transfer deed to the investor. The investor has to fill the transfer deed andstamp it. The stamp duty is one of the percentage considerations, the investorshould lodge the share certificate and transfer deed to the register or transferagent of the company. If it is bought in the DEMAT form, the broker has to give amatching instruction to his depository participant to transfer shares bought tothe investors account. The investor should be account holder in any of thedepository participant. In the case of sale of shares on receiving payment from

the purchasing broker, the broker effects the payment to the investor.

Share groups: The scrips traded on the BSE have been classified intoA,B1,B2,C,F and Z groups. The A group represents those, which are inthe carry forward system. The F group represents the debt market segment(fixed income securities). The Z group scrips are of the blacklisted companies.

The C group covers the odd lot securities in A, B1&B2 groups.

ROLLING SETTLEMENT SYSTEM:

Under rolling settlement system, the settlement takes place n days (usually 1, 2, 3 or5days) after the trading day. The shares bought and sold are paid in for n days afterthe trading day of the particular transaction. Share settlement is likely to becompleted much sooner after the transaction than under the fixed settlementsystem.The rolling settlement system is noted by T+N i.e. the settlement period is ndays after the trading day. A rolling period which offers a large number of daysnegates the advantages of the system. Generally longer settlement periods areshortened gradually.SEBI made RS compulsory for trading in 10 securities selected onthe basis of the criteria that they were in compulsory demats list and had dailyturnover of about Rs.1 crores or more. Then it was extended to A stocks in ModifiedCarry Forward Scheme, Automated Lending and Borrowing Mechanism (ALBM) andBorrowing and lending Securities Scheme (BELSS) with effect from Dec 31, 2001.SEBIhas introduced T+5 rolling settlement in equity market from July 2001 andsubsequently shortened the cycle to T+3 from April 2002. After the T+3 rollingsettlement experience it was further reduced to T+2 to reduce the risk in the marketand to protect the interest of the investors from 1st April 2003.

Activities on T+1: Conformation of the institutional trades by the custodian is sent to thestock exchange by 11.00 am. A provision of an exception window would be availablefor late confirmation. The time limit and the additional changes for the exception

window are dedicated by the exchange.The exchanges/clearing house/ clearing corporation would process and download theobligation files to the brokers terminals late by 1.30 p.m on T+1. Depository

33


34/64

participants accept the instructions for pay in securities by investors in physical formupto 4 p.m and in electronic form upto 6 p.m. the depositories accept from other DPstill 8p.m for same day processing.

Activities on T+2:The depository permits the download of the paying in files of securities

and funds till 10.30 a.m on T+2 from the brokers pool accounts. The depositoryprocesses the pay in requests and transfers the consolidated pay in files to clearingHouse/clearing Corporation by 11.00am/on T+2. The exchange/clearing house/clearingcorporation executes the pay-out of securities and funds latest by 1.30 p.m. on T+2 tothe depositories and clearing banks. In the demat mode net basis settlement isallowed. The buy and sale positions in the same scrip can be settled and net quantityhas to be settled.

UNIT-3

RESEARCHOBJECTIVES

34


35/64

Research Methodology:

MEANING OF RESEARCH

Research in common parlance refers to a search for knowledge. Once can also define

research as

a scientific and systematic search for pertinent information on a specific topic. In fact,

research is an art of scientific investigation. The Advanced Learners Dictionary of

Current English lays down the meaning of research as

A careful investigation or inquiry specially through search for new facts in

any branch of knowledge.

Redman and Mory define research as a

Systematized effort to gain new knowledge.

Some people consider research as a movement, a movement from the known to the

unknown. It is actually a voyage of discovery. We all possess the vital instinct of

inquisitiveness

for, when the unknown confronts us, we wonder and our inquisitiveness makes us

probe and attainfull and fuller understanding of the unknown. This inquisitiveness is

the mother of all knowledge and the method, which man employs for obtaining the

knowledge of whatever the unknown, can be termed as research. Research is an

academic activity and as such the term should be used in a technical sense.According

to Clifford Woody research comprises defining and redefining problems,formulatinghypothesis or suggested solutions; collecting, organising and evaluating

35


36/64

data; making deductions and eaching conclusions; and at last carefully testing the

conclusions to determine whether they fit the formulating hypothesis.

D. Slesinger and M. Stephenson in the Encyclopaedia of Social Sciences define

research as the manipulation of things, concepts or symbols for the purpose

of generalising to extend, correct or verify knowledge, whether that

knowledge aids in construction of theory or in the practice of an art.

OBJECTIVES OF RESEARCH

The purpose of research is to discover answers to questions through the application of

scientific procedures. The main aim of research is to find out the truth which is hidden

and which has not been discovered as yet. Though each research study has its own

specific purpose, we may think of research objectives as falling into a number of

following broad groupings:

1. To gain familiarity with a phenomenon or to achieve new insights into it (studies

with thisObject in view are termed as exploratoryor formulative research studies);

2. To portray accurately the characteristics of a particular individual, situation or a

group (Studies with this object in view are known as descriptive research studies);

3. To determine the frequency with which something occurs or with which it is

associated with something else (studies with this object in view are known as

diagnostic research Studies);

4. To test a hypothesis of a causal relationship between variables.

TYPES OF RESEARCH

The basic types of research are as follows:

(i) Descriptive vs. Analytical: Descriptive research includes surveys and fact-finding

enquiries of different kinds. The major purpose of descriptive research is description of

the state of affairs as it exists at present. In social science and business research we

quite often use the term Ex post facto research for descriptive research studies. Themain characteristic of this method is that the researcher has no control over the

variables; he can only report what has happened or what is happening.

(ii)Applied vs. Fundamental: Research can either be applied (or action) research or

fundamental (to basic or pure) research.Applied research aims at finding a solution for

an immediate problem facing a society or an industrial/business organisation, whereas

fundamental research is mainly concerned with generalisations and with the

formulation of a theory.

Gathering knowledge for knowledges sake is termed pure or basicresearch. Research concerning some natural phenomenon or relating to pure

mathematics are examples of fundamental research.36


37/64

(iii) Quantitative vs. Qualitative: Quantitative research is based on the measurement of

quantity or amount. It is applicable to phenomena that can be expressed in terms of

quantity. Qualitative research, on the other hand, is concerned with qualitative

phenomenon, i.e., phenomena relating to or involving quality or kind. For instance,

when we are interested in investigating the reasons for human behaviour (i.e., why

people think or do certain things), we quite often talk of Motivation Research, an

important type of qualitative research. This type of research aims at discovering theunderlying motives and desires, using in depth interviews for the purpose.

(iv) Conceptual vs. Empirical: Conceptual research is that related to some abstract

idea(s) or theory. It is generally used by philosophers and thinkers to develop new

concepts or to reinterpret existing ones. On the other hand, empirical research relies

on experience or observation alone, often without due regard for system and theory. It

is data-based research, coming up with conclusions which are capable of being verified

by observation or experiment.

(v) Some Other Types of Research: All other types of research are variations of one ormore of the above stated approaches, based on either the purpose of research, or the

time required to accomplish research, on the environment in which research is done,

or on the basis of some other similar factor. Form the point of view of time, we can

think of research either as one-time research or longitudinal research. In the former

case the research is confined to a single time-period, whereas in the latter case the

research is carried on over several time-periods.

MEANING OF RESEARCH DESIGN

The formidable problem that follows the task of defining the research problem is the

preparation of the design of the research project, popularly known as the research

design. Decisions regarding what, where, when, how much, by what means

concerning an inquiry or a research study constitute a research design. A research

design is the arrangement of conditions for collection and analysis of data in a manner

that aims to combine relevance to the research purpose with economy in procedure.

More explicitly, the desing decisions happen to be in respect of:

(i) What is the study about?

(ii) Why is the study being made?

(iii) Where will the study be carried out?

(iv) What type of data is required?

(v) Where can the required data be found?

(vi) What periods of time will the study include?

(vii) What will be the sample design?

(viii) What techniques of data collection will be used?

37


38/64

(ix) How will the data be analyzed?

(x) In what style will the report be prepared?

Keeping in view the above stated design decisions, one may split the overall research

design into

the following parts:

(a) the sampling design which deals with the method of selecting items to be observed

for the given study;

(b) the observational design which relates to the conditions under which the

observations are to be made;

(c) the statistical design which concerns with the question of how many items are to

be observed and how the information and data gathered are to be analysed; and

(d) the operational design which deals with the techniques by which the procedures

specified in the sampling, statistical and observational designs can be carried out.

In brief, research design must, at least, contain

(a) a clear statement of the research problem;

(b) procedures and techniques to be used for gathering information; (c) the population

to be studied; and (d) methods to be used in processing and analysing data.

FEATURES OF A GOOD DESIGN

A good design is often characterised by adjectives like flexible, appropriate, efficient,

economical and so on. A research design appropriate for a particular research

problem, usually involves the consideration of the following factors:

(i) the means of obtaining information;

(ii) the availability and skills of the researcher and his staff, if any;

(iii) the objective of the problem to be studied;

(iv) the nature of the problem to be studied; and

(v) the availability of time and money for the research work.

DIFFERENT RESEARCH DESIGNS

1. Research design in case of exploratory research studies: Exploratory

research studies are also termed as formulative research studies. The main purpose

38


39/64

of such studies is that of formulatinga problem for more precise investigation or of

developing the working hypotheses from an operationalpoint of view. The major

emphasis in such studies is on the discovery of ideas and insights. As suchthe

research design appropriate for such studies must be flexible enough to provide

opportunity forconsidering different aspects of a problem under study. Inbuilt

flexibility in research design is neededbecause the research problem, broadly defined

initially, is transformed into one with more precisemeaning in exploratory studies,which fact may necessitate changes in the research procedure forgathering relevant

data. Generally, the following three methods in the context of research design forsuch

studies are talked about:

(a) the survey of concerning literature;

(b) the experience survey and

(c) the analysis of insight-stimulating.

2. Research design in case of descriptive and diagnostic research studies:

Descriptive researchstudies are those studies which are concerned with describing

the characteristics of a particularindividual, or of a group, whereas diagnostic

research studies determine the frequency with whichsomething occurs or its

association with something else. The studies concerning whether certainvariables are

associated are examples of diagnostic research studies. As against this, studies

concernedwith specific predictions, with narration of facts and characteristics

concerning individual, group orsituation are all examples of descriptive research

studies.

3. Research design in case of hypothesis-testing research studies: Hypothesis-

testing research studies (generally known as experimental studies) are those where

the researcher tests the hypotheses of causal relationships between variables. Such

studies require procedures that will not only reduce bias and increase reliability, but

will permit drawing inferences about causality. Usually experiments meet this

requirement. Hence, when we talk of research design in such studies, we often mean

the design of experiments.

Sampling Design

A sample design is a definite plan for obtaining a sample from a given population. It

refers to the technique or the procedure the researcher would adopt in selecting items

for the sample. Sample design may as well lay down the number of items to be

included in the sample i.e., the size of the sample. Sample design is determined before

data are collected. There are many sample designs from which a researcher can

choose. Some designs are relatively more precise and easier to apply than others.

Researcher must select/prepare a sample design which should be reliable and

appropriate for his research study.

CRITERIA OF SELECTING A SAMPLING PROCEDURE39


40/64

Usually a systematic bias is the result of one or more of the following factors:

1. Inappropriate sampling frame: If the sampling frame is inappropriate i.e., a

biased representation of the universe, it will result in a systematic bias.

2. Defective measuring device: If the measuring device is constantly in error, it will

result in systematic bias. In survey work, systematic bias can result if the

questionnaire or the interviewer is biased. Similarly, if the physical measuring device is

defective there will be systematic bias in the data collected through such a measuring

device.

3. Non-respondents: If we are unable to sample all the individuals initially included

in the sample, there may arise a systematic bias. The reason is that in such a situation

the likelihood of establishing contact or receiving a response from an individual is

often correlated with the measure of what is to be estimated.

4. Indeterminancy principle: Sometimes we find that individuals act differently

when kept under observation than what they do when kept in non-observed situations.

For instance, if workers are aware that somebody is observing them in course of a

work study on the basis of which the average length of time to complete a task will be

determined and accordingly the quota will be set for piece work, they generally tend to

work slowly in comparison to the speed with which they work if kept unobserved. Thus,

the indeterminancy principle may also be a cause of a systematic bias.

5. Natural bias in the reporting of data: Natural bias of respondents in the

reporting of data is often the cause of a systematic bias in many inquiries. There is

usually a downward bias in the income data collected by government taxationdepartment, whereas we find an upward bias in the income data collected by some

social organisation. People in general understate their incomes if asked about it for tax

purposes, but they overstate the same if asked for social status or their affluence.

40


41/64

RESEARCH PROCESS IN FLOW CHART

Where,

= feedback (Helps in controlling the sub-system to which it

is transmitted)

= feed forward (Serves the vital function of providing criteria

for evaluation)

41

VII

Design

resea

rch

(inclu

ding

sampl

e

desig

n)

Formul

ate

hypoth

esis

Define

researc

h

proble

m

Review

concepts

and theories

Review

previous

research

findings

Review the literature

Collec

t data

(exec

ution)

Analy

ze

data

(test

hypot

hesis

if any)

Interpre

t and

report

F

F

F

F

F FI

II

IIIV

VIIV

F

F

F

F


42/64

UNIT 4

DATA ANALYSIS AND

FINDINGS

42


43/64

Q-1.What type of investment plan do you presently have or like

to have?

INFERENCE

From the above table it is clear that 15% of the respondents has refer to invest in

share market, 20% are go for mutual fund, 30% people prefer gold investment, 20%prefer fixed deposit, and rest prefer for real estate.

43

INVESTMENT PLAN PERCENTAGESHARE MARKET 15%

MUTUAL FUND 20%

GOLD INVESTMENT 30%

BANK DEPOSIT 20%

REAL STATES 15%


44/64

Q.2.What will be your preferable mode of investment?

GOLD % REAL STATE % SHAREMARKET

% MUTUALFUND

% BANK DEPOSIT

%

1.Physicalgold

35

1.plot 58

1.offline 56

1.physical 17

1.Fixeddeposit

62

2.commodity

12

2.flats 30

2.online 44

2.electronic/Demat

11

2.Reccurringdeposit

38

3.coin 48

3.commercialproperty

6 3.SIP 72

4.any

others

5 4.row

houses/individual bungalow

6

44


45/64

INFERENCE

From the above table it is clear that in:-

1) Gold investment - 35% of the respondents has refer to invest in physical gold, 12%

are for commodity, 48% people refer gold coin & 5% refer any other.

2) Real estate 58% refer plot, 30% refer flats, rest 12% equal in both commercial

property and row houses/bungalow.

3) Share market 56% prefer offline mode and 44% refer online trading.

4) Mutual fund 17% refer to physical, 11% prefer electronic/Demat & 72% invest in

SIP MF.

5) Bank Deposit 62% people invest in fixed deposit and 38% prefer recurring deposit.

45


46/64

Q.3.Which type of investment will you prefer?

INFERENCE

From the above table it is clear that in type of investment 53% of the respondent has

invest for long-term basis and 47% people are invest for short term.

46

TYPE PERCENTAGE

Long term 53

Short Term 47


47/64

Q.4. Will you like to invest in share market?

INFERENCE

From the above table it is clear that in interest in share market investment 34% of the

respondent has interested to invest but 66% of the responded are not interested to

invest in share market.

47

SHAREMARKET

PERCENTAGE

Interested 34

Not interested 66


48/64

Q.5. If you desire to invest in share market how much you

invest?

HOW MUCH INVEST PERCENTAGE

No investment 49

Below 50000 3150000-100000 16

100000-500000 3

500000-1000000 0

1000000-1500000 1

1500000-2000000 02000000 & above 0

INFERENCE

From the above table it is clear that in investment portfolio maximum are no investorwhich is 49%, below 50,000 are 31%, 16% want to invest 50,000-1,00,000, only 3%are ready to invest 1,00,000-5,00,000 and rest are not preferred.

48


49/64

Q. 6. What kind of trading mode will you prefer?

TRADING MODE PERCENTAGE

No trading 14Online 47Offline 39

INFERENCE

From the above table it is clear that existing client more prefer to online mode i.e.,47%, 39% prfer offline mode and rest 14% people dont trade.

49


50/64

Q.7.Do you have existing Demat account?

INFERENCE

From the above table it is clear that 31% people are having there demat a/c in some

broking firms and 69% are not having demat a/c.

50

DEMAT A/C PERCENTAGE

Yes 31

No 69


51/64

Q.8.You wants to open a new Demat a/c in other brokerage firm?

OPEN A NEW DEMAT A/C PERCENTAGE

Yes 11

No 89

INFERENCE

From the above table it is clear that 11% people want to open new demat a/c and 89%are not want to open demat a/c.

51


52/64

Q.9. Are you aware of margin financing/loan against securities?

INFERENCE

From the above table it is clear that margin financing is known by only 18% people &rest of 82% doesnt know about it.

52

AWARE PERCENTAGEYes 18

No 82


53/64

Q.10.Do you want invest in gold ETF or would you be interested

for gold investment in Demat form?

GOLD ETF PERCENTAGE

Yes 19

No 81

INFERENCE

From the above table it is clear that 19% people refer to invest in gold ETF & 81%doesnt want to invest in gold ETF.

53


54/64

FINDINGS

54


55/64

INTERPRETATION OF FINDINGS

(30% )People most preferred gold investment method.

Only (34%) people are ready to invest in stock market.

(89%) people are not want to open a demat account.

Only (47%) people are preferred online trading.

(18%) people are aware of margin financing and (19%)

are aware of gold ETF facility.

55


56/64

LIMITATION

56


57/64

LIMITATIONS OF THE STUDY

During the course of survey there were certain difficulties that are worth to be

considering as limitation of study so that they can be co-related with variation if any.

The limitation attributes to the researcher are as follows: -

The attitude of the person changes from time to time. Hence the result of the

project may be applicable only at present.

We cannot get exact information because some of the people are reluctant to

share the information.

Respondent could not fill their questionnaire instantly owing to pressure at works

fronts and time constrains.

The respondents are not mostly aware to the term share market.

Time period of survey was short thats why the sample size is small.

57


58/64

UNIT-5

CONCLUSION

58


59/64

CONCLUSION

This project report contains a brief description about the overall

functioning of stock market and kotak securities as,it is a part of oursummer training . We have tried to highlight the features, facilities,

functioning and working of kotak family and studied the overall

competitive environment of kotak.

This project will lay down emphasis to interact with kotak and as being a

trainee, I have tried to co-relate the entire factor as brief as possible.

This project can be improved further as this is only an effort not the final

description.

59


60/64

BIBLIOGRAPHY

1. C.R.Kothari research methodology, 2nd revised edition 2004, new ageinternational publishers.

INTERNET:

www.kotaksecurities.com

www.google.com

www.nse.com

www.bse.com

www.wikipedia.org

Data Sources:

Secondary Data through Internet

Primary Data through Questionnaire

Contact Method

Personal Interaction

60
http://www.kotaksecurities.com/http://www.google.com/http://www.nse.com/http://www.bse.com/http://www.wikipedia.org/http://www.kotaksecurities.com/http://www.google.com/http://www.nse.com/http://www.bse.com/http://www.wikipedia.org/


61/64

KOTAK SECURITIES LTD

Competitive Analysis & Overall

Functioning of Broking Firm

Questionnaire:

Personal Data:

1. Name :

2. Occupation : Pvt service Business

Govt service Professional Others

3. Address :

4. Gender : Male Female

5. Age : 21 30 31 35

61


62/64

36 40 41 & above

6. Email :

7. Mobile :

Analysis Data:

1. What type of investment plan do you presently have or like to have?

Share market mutual fund gold investment bank depositreal state others

2. What will be your preferable mode of investment?

GOLD REAL STATE SHAREMARKET

MUTUAL FUND

1.Physical gold 1.plot 1.offline 1.physical2.commodity 2.flats 2.online 2.electronic/Demat3.coin 3.commercial property 3.SIP4.any others 4.row houses/individual

bunglow

Q.3.Which type of investment will you prefer? Long-term short-term

62


63/64

Q.4. Will you like to invest in share market?

Interested Not Interested

Q.5. If you desire to invest in share market how much youinvest?

Below 50,000 50,000-1lac 1lac-5lac 5lac-10lac 10lac-15lac

15lac-20lac

20lac and above

Q. 6. What kind of trading mode will you prefer?

No trading Online Offline

Q.7.Do you have existing Demat account?

Yes No

Q.8.You wants to open a new Demat a/c in other brokerage firm?

Yes No

Q.9. Are you aware of margin financing/loan against securities?

Yes No

Q.10.Do you want invest in gold ETF or would you be interested

for gold investment in Demat form?

Yes No

63


64/64

Arti Singh

Documents

Transcript of Arti Singh