A Project Study Report On COMPREHENSIVE ANALYSIS OF DMAT A/C Of

A Report submitted to Apex Institute of Management &Science, Jaipur In partial fulfillment of full-time MBA Course .

Submitted to, Nikita Mam. Goyal

Submitted by Navin

[M.B.A IVth SEMESTER]

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Preface
It is well evident that work experience is an indispensable part of every professional course. Knowledge attains maturity and perfection through its application in practical field. And professional study is incomplete without practical knowledge; no doubt, theory provides the foundation stone for the guidance of practice, as practice examine the element of truth lying in theory.

To achieve this purpose MBA participants are required to go for project involving research based studies.

I had the privilege to do my project at JAIPUR CITY. I was assigned a project with regard to Comprehensive Analysis of DMAT A/C of Reliance Money".

Entering the organization is like stepping into an entirely new world .At first everything seemed strange and unheard of but as time passed I understood the concept and working of the organization theyre by developed a professional relationship

ACKNOWLEDGEMENT

I take a great pleasure in acknowledging the APEX INSTITUTE OF MANAGEMENT &SCIENCE, (JAIPUR) for giving me an opportunity to carry on my project with Reliance Money Ltd. I also offer my thanks and gratitude to the Marketing and Sales team of Reliance Money for accepting me as a trainee. I express my warm regards and obligations to our project guide, Mr. KSHITIZ for the help and direction given by him during my project work. I owe my gratitude to Mr.VIDHU MATHUR ordination to accomplish this project. I sincerely thank the employee of Reliance Money for the cooperation they have extended & valuable information they have provided for the completion of this project. I have no words to express adequately my deep sense of gratitude to each and everyone who have directly or indirectly cooperated and helped me to complete this project successfully. Last but not least researcher likes to express her thanks to friends and family members without whose valuable support this project have not been a reality. for giving me all the possible co-

NAVIN GOYAL

S.NO. CONTENTS

P. No.
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1 2 3 3.1 3.2 3.3 3.4 3.5 4 5 6 7 8 9 10 11

EXECUTIVE SUMMARY OBJECTIVE OF STUDY CHAPTER-1 INDUSTRY PROFILE History of Stock Market in India About SEBI ,NSDL,CDSL Risk Involved in Stock Market DMAT a/c Indian brokerage industry CHAPTER-4 COMPANY PROFILE CHAPTER-5 RESEARCH METHOLOGY CHAPTER-6 ANALYSIS AND INTERPRETATION CHAPTER-7 SWOT ANALYSIS CHAPTER-8 CONLUSION,FINDINGS AND SUGGESTIONS RECOMMENDATIONS CHAPTER-9 ANNEXURE BIBLIOGRAPHY

5 6 7-76 8-11 12-27 28-38 39-47 48-76 77-94 95-102 103-119 120-122 123-124 125-126 127-128 129

EXECUTIVE SUMMARY

This project is based on a survey method; the study is based on methodology of an investor in brokerage industry especially regarding DMAT account. To execute the study researcher preferred to study the role and activities of all the participants in the share trading and different features of DMAT account. It is prerequisite to the researcher to understand the whole market including all components.
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The first phase of the project is executed by availing the knowledge of the following in detail. 1. Role of SEBI 2. The Depository System 3. Role of BSE and NSE 4. Process of online trading
5. Activities of Reliance Money especially regarding DMAT account

Having the knowledge of the market and its operational features, the researcher started exploring the product, contacted the prospective investor and got the questionnaire filled regarding their need. For this purpose the researcher made a questionnaire which contains both type of questions open ended and close ended. The researcher used Stratified Random Sampling Technique to understand this study. The researcher did convenient sampling. The research is Descriptive and Diagnostic in nature as it dealt with describing the market and behavior of investor. The researcher finds out some places near by some of brokerage houses where prospective investors are used to come and get the questionnaire filled. After getting all the data, researcher started analyzing the data and gave suggestions. The researcher describes the behavior of an investor and tells the reasons behind his various decisions. The researcher gives some suggestions to the company so that company can attract new investor and retain the old one.

Objective of study:

The objectives of my study are

1. 2. 3.

Comprehensive analysis of DMAT A/c of Reliance Money To understand the trading system of Reliance Money. To understand the stock market and its components.
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4. 5. 6.

To create awareness among market about Reliance Money Help the company to attract new the investor. Mapping up of potential customers for Reliance Money.

7. To understand what are the expectations and feedback of the customers. 8. To find out suggestions and improvements to be implemented in Reliance Money offerings and service.

CHAPTER 1 INDUSTRY PROFILE

History of stock market in India

The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second to BSE in terms of popularity. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE.

The country's capital markets have passed through both good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there
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was no scale to measure the ups and downs in the Indian stock market. The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market.

SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally.

Due to its wide acceptance amongst the Indian investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it provides the time series data over a fairly long period of time (From 1979 onwards). Small wonder, the SENSEX has over the years become one of the most prominent brands in the country.

SENSEX Calculation Methodology

SENSEX is calculated using "Free-float Market Capitalization" methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying price of its stock by the number of shares issued by company. This market capitalization is further multiplied by the free-float factor to ssdetermine free-float market capitalization.

The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the Free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scripts etc. During market hours, prices of the index scripts, at which latest trades are executed, are used
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by the trading system to calculate SENSEX every 15 seconds and disseminated in real time. The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms daily turnover and number of trades, for both equities and derivative trading. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India.

In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.

The National Stock Exchange of India was promoted by leading financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994.

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SECURITIES AND EXCHANGE BOARD OF INDIA

Major part of the liberalization process was the repeal of the Capital Issues (control) Act, 1947, in May 1992. With this, Governments control over issues of capital, pricing of the issues, fixing of premium and rates of interest on debentures etc. ceased, and the office which administered the Act was abolished: the market was allowed to allocate resources to competing uses. However, to ensure effective regulation of the market, SEBI Act, 1992 was enacted to establish SEBI with statutory powers for: Protecting the interests of investors in securities. Promoting the development of the securities market, and Regulating the securities market

Its regulatory jurisdiction extends over corporate in the issuance of capital and transfer of securities, in addition to all intermediaries and person associated with securities market. SEBI can specify the matters to be discloser and the standards of disclosure
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required for the protection of investors in respect of issues; can issue directions to all intermediaries and other person associated with the securities market in the interest of investors or of orderly development of securities market and can conduct enquiries, audits and inspections of all concern and adjudicate offences under the Act. In short, it has been given necessary autonomy and authority to regulate and develop an orderly securities market. All the intermediaries in the market, such as brokers and sub brokers, underwriters, merchant bankers, bankers to the issue, share transfer agents and registrars to the issue, are now required to register with SEBI and are governed by its regulations.

FUNCTIONS OF SEBI
SEBI has been obligated to protect the interests of the investors securities and to promote and development of, and to regulate the securities market by such measures as it thinks fit. SEBI in particular has powers for:(a) Regulating the business in stock exchanges and other securities markets (b) Registering and regulating the working of stock brokers, sub brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner; (c) Registering and regulating the working of depositories, participants, custodians of securities, foreign institutional investors, credit rating agencies and such other intermediaries as SEBI may, by notification, specify in this behalf; (d) Registering and regulating the working of venture capital funds and collective investment schemes including mutual funds; (e) Promoting and regulating self regulatory organizations; (f) Prohibiting fraudulent and unfair trade practices relating to securities market;
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(g) Promoting investors education and training of intermediaries of securities markets; (h) Prohibiting insider trading in securities; (i) Regulating substantial acquisition of shares and take over of companies; (j) Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, mutual funds and other persons associated with the securities market and self regulatory organizations in the securities market; (k) Performing such functions and exercising according to securities contracts (Regulation) Act, 1956, as may be delegated to it by the Central Government; (l) Levying fees or other charges for carrying out the purpose of this section; (m) Conducting research for the above purpose.

DEPOSITORY SYSTEM

Depository system is concerned with conversion of securities from physical to electronic form, settlement of trades in electronic segment, transfer of ownership and custody of securities. In the depository system, the ownership and transfer of securities place by means of electronic book entries. This Rids the Capital market of the dangers and risks related to handling of paper. Its transaction costs are also less as compared to that of physical transactions. While investors will continue to exercise the option of holding securities in the physical form, those preferring Rematerialisation of scripts are permitted to withdraw from the depository by requesting the issue of physical certificate again. Share transaction costs in the depository shall be lower than the cost of buying and selling physical shares. Depository system is not mandatory as of now; it is optional and is left on the investor to decide whether he wants the securities to be DMATerialized. Holding and handling of securities in electronic form eliminates problems that are normally associated with physical certificates and it facilitates faster settlement cycle.
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Depository System Business Partners:

NSDL carries out its activities through various functionaries called business partners who include Depository Participants (DPs), Issuing companies and their Registrars and Share Transfer Agents, Clearing corporations/ Clearing Houses of Stock Exchanges. NSDL is electronically linked to each of these business partners via a satellite link through Very Small Aperture Terminals (VSATs) or through Leased land lines. The entire integrated system (including the electronic links and the software at NSDL and each business partners end) is called the NEST (National Electronic Settlement & Transfer) system. Depository Participant (DP): The investor obtains Depository Services trough a depository participant of NSDL. A DP can be a bank, financial institution, a custodian, a broker, or any entity eligible as per SEBI (Depositories and Participants) Regulations, 1996. The SEBI regulations and NSDL bye laws also lay down the criteria for any of these categories to become a DP.

Benefits of Depository System:

In the depository system, the ownership and transfer of securities takes place by means of electronic book entries. At the outset, this system rids the capital market of the
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dangers related to handling of paper. NSDL provides numerous direct and indirect benefits, like:

Elimination of bad deliveries In the depository environment, once holdings of an investor are DMATerialized, the question of bad delivery does not arise i.e. they cannot be held under objection. In the physical environment, buyer was required to take the risk of transfer and face uncertainty of the quality of assets purchased. In a depository environment good money certainly begets good quality of assets.

Elimination of all risks associated with physical certificates Dealing in physical securities have associated security risks of theft of stocks, mutilation of certificates, loss of certificates during movements through and from the registrars, thus exposing the investor to the cost of obtaining duplicate certificates and advertisements. Etc. This problem does not arise in the depository environment.

No stamp duty for transfer of any kind of securities in the depository. This waiver extends to equity shares, debt instruments and units of mutual funds.

Immediate transfer and registration of securities In the depository environment, once the securities are credited to the investors account on pay out, he becomes the legal owner of the securities. There is no further need to send it to the companys registrar for registration. Having purchased securities in the physical environment, the investor has to send it to the companys registrar so that the change of ownership can be registered. This process usually takes around three to four months and is rarely completed within the statutory framework of two months thus exposing the investor to opportunity cost of delay in transfer and to risk of loss in transit. To overcome this, the normally accepted practice is to hold the securities in street names i.e. not to register the change of ownership. However, if the investors miss a book closure the securities are not good for delivery and the investor would also stand to loose his corporate entitlements

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Faster settlement cycle The exclusive DMAT segments follow rolling settlement cycle of T+2 i.e. the settlement of trades will be on the 2 nd working day fro the trade day. This will enable faster turnover of stock and more liquidity with the investor.

Faster disbursement of non cash corporate benefits like rights, bonus, etc. NSDL provides for direct credit of non cash corporate entitlements to investors accounts, thereby ensuring faster disbursement and avoiding risk of loss of certificates in transit.

Reduction in brokerage by many brokers for trading in DMATerialized securities Brokers provide this benefit to investors as dealing in DMATerialized securities reduces their back office cost of handling paper and also eliminates the risk of being the introducing broker.

Reduction in handling of huge volumes of paper.

Periodic status reports to investors on their holding and transactions, leading to better control.

Elimination of problems related to change of address of investor, transmission etc. In case of change of address or transmission of DMAT shares, investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of securities.

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CENTRAL DEPOSITORY SECURITIES LIMITED (CDSL)

A Depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a Depository Participant (DP), who as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a DMAT account through any DP for DMATerialisation of his holdings and transferring securities.

The balances in the investors account recorded and maintained with CDSL can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and transactions. The depository system has effectively eliminated paper-based certificates
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which were prone to be fake, forged, counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities.

CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Union Bank of India and Centurion Bank

CDSL was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. Some of the important milestones of CDSL system are:

CDSL received the certificate of commencement of business from SEBI in February, 1999. Honorable Union Finance Minister, Shri Yashwant Sinha flagged off the operations of CDSL on July 15, 1999.

Settlement of trades in the DMAT mode through BOI Shareholding Limited, the

clearing house of BSE, started in July 1999.

All leading stock exchanges like the National Stock Exchange, Calcutta Stock Exchange, Delhi Stock Exchange, The Stock Exchange, Ahmedabad, etc have established connectivity with CDSL.

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 As at the end of Dec 2005, over 5000 issuers have admitted their securities (equities, bonds, debentures and commercial papers), units of mutual funds, certificate of deposits etc. into the CDSL system.

Salient Features of CDSL Convenience: On-line DP Services: The DPs are directly connected to CDSL thereby providing
on-line and efficient depository service to investors (This will have to be re-phrased as we are not giving branches anymore.)

Wide Spectrum of Securities Available for DMAT: Over 5500 issuers have
admitted their securities in CDSL consisting of Public (listed & unlisted) Limited and Private Limited companies. These securities include equities, bonds, units of mutual funds, Govt. securities, Commercial papers, Certificate of deposits; etc thus an investor can hold almost all his securities in one account with CDSL.

Competitive Fees Structure: CDSL has kept its tariffs very competitive to provide
affordable Depository services to investors.

Internet Access: A DP, which registers itself with CDSL for Internet access, can in
turn provide DMAT account holders with access to their account on the Internet.

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Dependability:
On-line Information to Users: CDSL's system is built on a centralised database architecture and thus enables DPs to provide on-line depository services with the latest status of the investor's account. Convenient to DPs: The entire database of investors is stored centrally at CDSL. If there is any system-related issues at DPs end, the investor is not affected, as the entire data is available at CDSL. Contingency Arrangements: CDSL has made provisions for contingency terminals, which enables a DP to update transactions, in case of any system related problems at the DP's office Wide DP Network: CDSL has over 375 DPs spread across 124 cities/towns across the country, offering convenience for an investor to select a DP based on his locationAlthough India had a vibrant capital market which is more than a century old, the paper-based settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standards that handles most of the securities held and settled in DMATerialised form in the Indian capital market. Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase
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efficiency, minimise risk and reduce costs. At NSDL, we play a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry. In the depository system, securities are held in depository accounts, which is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates.

Although India had a vibrant capital market which is more than a century old, the paperbased settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standards that handles most of the securities held and settled in DMATerialised form in the Indian capital market. Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimise risk and reduce costs. At NSDL, we play a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry. In the depository system, securities are held in depository accounts, which is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and
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hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates.

BENEFITS

Elimination of problems related to transmission of DMAT shares - In case of DMATerialized holdings, the process of transmission
is more convenient as the securities the surviving joint holder(s)/legal heirs/nominee has to correspond independently with each company in which shares are held.

Elimination of problems related to selling securities on behalf of a minor - A natural guardian is not required to take court
approval for selling DMAT securities transmission formalities for all securities held in a DMAT account can be completed by submitting documents to the DP whereas, in case of physical on behalf of a minor.

Elimination of problems related to change of address of investor - In case of change of address, investors are saved from
undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of securities

Elimination of bad deliveries: In the depository environment, once

holdings of an investor are DMATerialized, the question of bad delivery does not arise i.e. they cannot be held "under objection". In the physical environment, buyer was required to take the risk of transfer and face uncertainty of the quality of assets purchased. In a depository environment good money certainly begets good quality of assets.

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STOCK EXCHANGE

Stock Exchange organized market for buying and selling financial instruments known as securities, which include stocks, bonds, options, and futures. Most stock exchanges have specific locations where the trades are completed. For the stock of a company to be traded at these exchanges, it must be listed, and to be listed, the company must satisfy certain requirements. But not all stocks are bought and sold at a specific site. Such stocks are referred to as unlisted. Many of these stocks are traded over the counterthat is, by telephone or by computer.

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IMPORTANCE OF STOCK EXCHANGE

Stock exchanges perform important roles in national economies. Most importantly, they encourage investment by providing places for buyers and sellers to trade securities. This investment, in turn, enables corporations to obtain funds to expand their businesses. Corporations issue new securities in what is known as the primary market, usually with the help of investment bankers. The investment bank acquires the initial issue of the new securities from the corporation at a negotiated price and then makes the securities available for its clients and other investors in an initial public offering (IPO). In this primary market, corporations receive the proceeds of security sales. After this initial offering the securities are bought and sold in the secondary market. The corporation is not usually involved in the trading of its stock in the secondary market. Stock exchanges essentially function as secondary markets. By providing investors the opportunity to trade financial instruments, the stock exchanges support the performance of the primary markets. This arrangement makes it easier for corporations to raise the funds that they need to build and expand their businesses.

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STOCK TRADING

Stocks are shares of ownership in companies. People who buy a companys stock may receive dividends (a portion of any profits). Stockholders are entitled to any capital gains that arise through their trading activitythat is, to any gain obtained when the price at which the stock is sold is greater than the purchase price. But stockholders also face risks. One risk is that the firm may experience losses and not be able to continue the payment of dividends. Another risk involves capital losses when the stockholder sells shares at a price below the purchase price.

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STOCK BROKERS

A stockbroker is an employee of a brokerage firm. The individual investor contacts his or her stockbroker and provides the stockbroker with the details of the transaction the investor wants to complete. Stockbrokers, however, are more than order takers or sales representatives for their firms; they frequently provide advice to the investor. They may have their own client list and call clients when they see transactions that will fit the clients investment objectives. Stockbrokers almost always have certification from, or registration with, a state government agency or an exchange or both. For this reason they are sometimes referred to as registered representatives.

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Risk involved while investing in Stock Market

Risk is a complex, multidimensional concept that manifests itself in various ways. Risk is omnipresent and includes stock market crashes, corporate bankruptcies and currency devaluations, changes in sentiment, in inflation and interest rates, and even major changes in the tax code. Risk is generally defined as return volatility, or the degree of ups and downs of returns. But there's more to risk than volatility. Risk and long-term reward are generally related. Risk is the chance that your actual return will be less than you expected. People sometimes think that a good return can be achieved with little or no risk. Unfortunately, that's impossible. To achieve your objectives, you need to assume certain risks and avoid others. Thoughtful investment selections that meet your goals and risk profile keep individual stock and bond risks at an acceptable level. However, other risks are inherent to investing you have no control over. Most of these risks affect the market or the economy and require investors to adjust portfolios or ride out the storm.

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Major types of such risks are: Economic Risks

One of the most obvious risks of investing is that the economy can go bad. Following the market bust in 2000 and the terrorists attacks in 2001, the economy settled into a sour spell. A combination of factors saw the market indexes lose significant percentages. It has taken years to return to levels close to pre-9/11 marks. For young investors, the best strategy is often to just hunker down and ride out these downturns. If you can increase your position in good solid companies, these troughs are often good times to do so. Foreign stocks can be a bright spot when the domestic market is in the dumps if you do your homework. Thanks to globalization, some U.S. companies earn a majority of their profits overseas. Older investors are in a tighter bind. If you are in or near retirement, a major downturn in stocks can be devastating if you havent shifted significant assets to bonds or fixed income securities.

Inflation
Inflation is the tax on everyone. It destroys value and creates recessions. Although we believe inflation is under our control, the cure of higher interest rates may at some point be as bad as the problem. Investors historically have retreated to hard assets such as real estate and precious metals, especially gold, in times of inflation. Inflation hurts investors on fixed incomes the most, since it erodes the value of their income stream. Stocks are the best protection against inflation since companies have the ability to adjust prices to the rate of inflation. It is not a perfect solution, but that is why even retired investors should maintain some of their assets in stocks.
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Market Value Risk

Market value risk refers to what happens when the market turns against or ignores your investment. This happens when the market goes off chasing the next hot thing and leaves many good, but unexciting companies behind. Some investors find this a good thing and view it as an opportunity to load up on great stocks at a time when the market isnt bidding up the price. On the other hand, it doesnt advance your cause to watch your investment flat-line month after month while other parts of the market are going up. The lesson is dont get caught with all you investments in one sector of the economy. By spreading your investments across several sectors, you have a better chance of participating in growth of some of your stocks at any one time.

How to evaluate a company before Investing

For stock investors that favor companies with good fundamentals, a "strong" balance sheet is an important consideration for investing in a company's stock. The strength of a company's balance sheet can be evaluated by three broad categories of investmentquality measurements: working capital adequacy, asset performance and capital structure. A company's capitalization describes the composition of a company's permanent or long-term capital, which consists of a combination of debt and equity. A healthy proportion of equity capital, as opposed to debt capital, in a company's capital structure is an indication of financial fitness.

Optimal Debt-Equity Relationship

In financial terms, debt is a good example of the proverbial two-edged sword. The use of leverage (debt) increases the amount of financial resources available to a company for growth and expansion. The assumption is that management can earn more on borrowed funds than it pays in interest expense and fees on these funds. However, as successful
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as this formula may seem, it does require that a company maintain a solid record of complying with its various borrowing commitments. A company considered too highly leveraged (too much debt versus equity) may find its freedom of action restricted by its creditors and/or may have its profitability hurt as a result of paying high interest costs. Of course, the worst-case scenario would be having trouble meeting operating and debt liabilities during periods of adverse economic conditions. Unfortunately, there is no magic proportion of debt that a company can take on. The debt-equity relationship varies according to industries involved, a company's line of business and its stage of development. However, because investors are better off putting their money into companies with strong balance sheets, common sense tells us that these companies should have, generally speaking, lower debt and higher equity levels.

Capital Ratios and Indicators

In general, analysts use three different ratios to assess the financial strength of a company's capitalization structure. The first two, the so-called debt and debt/equity ratios, are popular measurements; however, it's the capitalization ratio that delivers the key insights to evaluating a companys capital position. The debt ratio compares total liabilities to total assets. Obviously, more of the former means less equity and, therefore, indicates a more leveraged position. The problem with this measurement is that it is too broad in scope, which, as a consequence, gives equal weight to operational and debt liabilities. The same criticism can be applied to the debt/equity ratio, which compares total liabilities to total shareholders' equity. Current and non-current operational liabilities, particularly the latter, represent obligations that will be with the company forever. Also, unlike debt, there are no fixed payments of principal or interest attached to operational liabilities.

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The capitalization ratio (total debt/total capitalization) compares the debt component of a company's capital structure (the sum of obligations categorized as debt + total shareholders' equity) to the equity component. Expressed as a percentage, a low number is indicative of a healthy equity cushion, which is always more desirable than a high percentage of debt.

Balance Sheet Strength

For stock investors, the balance sheet is an important consideration for investing in a company's stock because it is a reflection of what the company owns and owes. The strength of a company's balance sheet can be evaluated by three broad categories of investment-quality measurements: working capital adequacy, asset performance and capitalization structure.

Fixed Asset Turnover Ratio

Property, plant and equipment (PP&E), or fixed assets, is another of the "big" numbers in a company's balance sheet. In fact, it often represents the single largest component of a company's total assets A company's investment in fixed assets is dependent, to a large degree, on its line of business. Some businesses are more capital intensive than others. Natural resource and large capital equipment producers require a large amount of fixed-asset investment. Service companies and computer software producers need a relatively small amount of fixed assets. Mainstream manufacturers generally have around 30-40% of their assets in PP&E. Accordingly, fixed asset turnover ratios will vary among different industries. The fixed asset turnover ratio is calculated as:

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This fixed asset turnover ratio indicator, looked at over time and compared to that of competitors, gives the investor an idea of how effectively a company's management is using this large and important asset. It is a rough measure of the productivity of a company's fixed assets with respect to generating sales. The higher the number of times PP&E turns over, the better. Obviously, investors should look for consistency or increasing fixed asset turnover rates as positive balance sheet investment qualities.

Return on Assets Ratio

Return on assets (ROA) is considered to be a profitability ratio - it shows how much a company is earning on its total assets. Nevertheless, it is worthwhile to view the ROA ratio as an indicator of asset performance. The ROA ratio (percentage) is calculated as:

The ROA ratio is expressed as a percentage return by comparing net income, the bottom line of the statement of income, to average total assets. A high percentage return implies well-managed assets. Here again, the ROA ratio is best employed as a comparative analysis of a companys own historical performance and with companies in a similar line of business.

Bullish and Bearish Market

Origin of the term
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One common myth is that the terms "bull market" and "bear market" are derived from the way those animals attack a foe, because bears attack by swiping their paws downward and bulls toss their horns upward. This is a useful mnemonic, but is not the true origin of the terms. Long ago, "bear skin jobbers" were known for selling bear skins that they did not own; i.e., the bears had not yet been caught. This was the original source of the term "bear." This term eventually was used to describe short sellers, speculators who sold shares that they did not own, bought after a price drop, and then delivered the shares. Because bull and bear baiting were once popular sports, "bulls" was understood as the opposite of "bears." I.e., the bulls were those people who bought in the expectation that a stock price would rise, not fall. A stock market bull is someone who has a very optimistic view of the market; they may be stock-holders or maybe investors who aggressively buy and sell stocks quickly.A bear investor, on the other hand, is pessimistic about the market . What Drives Bear and Bull Markets? The stock market is affected by many economic factors. High employment levels, strong economy, and stable social and economic conditions generally build investor confidence and encourage investors to put their money in the stock market. Often, this can bolster bull markets. Also, new technologies and companies that encourage investors to put their money in stocks can create bull markets. For example, in the 1990s, the dot com craze encouraged many investors to put their money in stocks that they felt would keep increasing. In some cases, a bullish market is simply self-perpetuating. Since the market is doing well, it only encourages investors to invest more money or to start investing. On the other hand, discouraging economic or social political changes in a society can push the market down. Sudden instability or unemployment -- or even fears of unemployment caused by wars and other problems -- can start to make investors more
33

conservative and therefore lead to bear markets. Of course, again this becomes a selfperpetuating trend. As the economy slows down, companies begin downsizing. Increased unemployment makes people far less willing to gamble on the stock market. Sometimes, a panic caused by dire predictions about the market can also create bearish conditions. Investing During Bear and Bull Markets New investors often assume that they need to avoid investing during bear markets, and invest heavily during bull markets. This is not the case. Experienced investors know that you need to be able to invest in any sort of market condition, provided that you do so wisely. Each investor has a different strategy for dealing with a bull market or bearish markets. Many investors try to take advantage of bull markets by buying stocks as soon as the market gets bullish, and then starting to sell when prices seem to have reached their peak. The difficulty, of course, is that it is almost impossible to tell when the trend is beginning and when it will peak. In general, investors can take more chances with the market during a bullish phase. Since overall prices will rise, the chances of making a profit are good. In bearish market conditions, prices are falling and the possibility of loss is pretty good. What is worse, it is not always possible to tell when bearish conditions will end. Therefore, if you invest during such market conditions, you may have to suffer some losses before bullish times return and you're able to realize a profit. For this reason, many investors decide on short selling or fixed income securities and other more conservative types of investment. Defensive stocks are another good option that remains stable during bearish conditions. On the other hand, some investors see bearish market conditions as an ideal time to invest in more stocks. Since many people are selling off their stocks -- including valuable blue-chip stocks -- at low prices, it is possible to set up long-term investments that will prove valuable during bullish times. Our job in was to get such clients for the company, who not only wish to open a DMAT account but also willing to trade regularly. As the company earns through brokerage
34

charged per transactions (i.e. when a client buys or sells shares) and to earn this brokerage, they need such clients, who trade on regular basis. This is been done by various methods like
Cold Calls Here I collect the details of people from corporate databases, yellow

pages, internet and references and try to fix an appointment with these people by calling them.
Personal Network I also tried to make some clients based on my personal

network. I tried to contact my friends and family to give me prospective leads of people who all are interested in share market.
Going on the field I also tried to get some clients by directly approaching to big

offices, multiplexes and some complexes. Apart from this our job in Reliance Money was to also look at such clients who were not been trading in recent times. We tried and fixed an appointment with such clients and tried to help them out if could be done with the help of company so that these clients can trade with ease in future.

Important things one needs to keep in mind while opening a DMAT account

Zero balance: Unlike a normal bank account, one doesnt need to deposit any shares or cash for opening a DMAT account. Even after opening the account, there is no need to hold any securities in that account. If and when you buy any share, this share will be shown in your account electronically. The account will be adjusted to the extent of any sale/purchase of any securities as and when the transaction takes place.

One ID: The DP will open the account in the system and give an account number, which is also called BOID (Beneficiary Owner Identification number). This account is enough to hold all kinds of securities like shares, debentures and other debt

35

instruments like bonds and G-secs. However, there is no restriction on the number of DMAT accounts that can be held by a person. One can open any number of DMAT accounts with different DPs. Even post office instruments like Kisan Vikas Patra and National Savings Certificates can be held in DMAT form. However, at present, the facility is available only in 35 nominated post offices in Mumbai.

Two documents: PAN has been made compulsory for all DMAT accounts with effect from April 2006. Anyone opening a DMAT account needs to produce his PAN card at the time of opening it. The PAN card also doubles as a proof of identity document, which is mandatory. The other important document is proof of address. Passport, driving license, voters ID card, bank statement and electricity bills are among the various documents accepted as identity proofs.

Three accounts: A DMAT account will be fully operational only if its accompanied by two other accounts trading account and bank account. While the former is optional, the latter is a pre-requisite as it is needed for crediting any dividend warrants. Trading account is necessary to buy/ sell securities in the market and can be opened with a broker. If one does not intend to trade but only to convert existing physical instruments into DMAT form, the trading account is not necessary. Since many banks these days have broking and DP arms, you can open all three accounts at one place itself.

Four types of charges: There are four fees usually levied on a DMAT account: conversion fee, annual maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP.

36

 Conversion fees: The DP charges a fee for converting shares from the

physical to the electronic form or vice-versa. This fee varies for both DMAT and Remat requests. For DMAT, some DPs charge a flat fee per request in addition to the variable fee per certificate, while others charge only the variable fee.
Annual maintenance fees: This is generally charged in advance. Custodian fee: This is charged monthly and depends on the number of

securities held in the account. Each security is identified by a unique international securities identification number (ISIN). Custodian fee is linked to this numbers and ranges between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custodian fee for ISIN on which the firms have paid one-time custody charges to the depository.
Transaction fee: Transaction fee is charged for crediting/debiting

securities to and from the account on a monthly basis. While some DPs charge a flat fee per transaction, others peg the fee to the transaction value, subject to a minimum amount. For example, while SBI charges Rs 3 per transaction, ICICI Bank does not charge buy trades, but charges 0.04% of the transaction value in case of sell trades, subject to a minimum of Rs 10. The fee also differs on the kind of transaction (buying or selling). Some DPs charge only for debiting the securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected. In addition, service tax is also charged by the DPs. SEBI has removed account opening charges, transaction charges for credit of securities, and custody charges vide circular .

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DMAT

The term DMAT, in India, refers to a DMA Trailside account. For individual Indian citizens to trade in listed stocks or debentures the Securities Exchange Board of India (SEBI) requires the investor to maintain a DMAT account. In a DMAT account shares and securities are held in electronic form instead of taking actual possession of certificates. A DMAT Account is opened by the investor while registering with an investment broker (or sub broker). The DMAT account number which is quoted for all transactions to enable electronic settlements of trades to take place.

Access to the DMAT account requires an internet password and a transaction password as well as initiating and confirming transfers or purchases of securities. Purchases and sales of securities on the DMAT account are automatically made once transactions are executed and complted.

Advantages of DMAT

The DMAT account reduces brokerage charges, makes pledging/hypothecation of shares easier, enables quick ownership of securities on settlement resulting in increased liquidity, avoids confusion in the ownership title of securities, and provides easy receipt of public issue allotments.

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It also helps you avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation. DMAT account holders can also avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses.

Indian Market Scenario

Indian capital market has seen unprecedented boom in its activity in the last 15 years in terms of number of stock exchanges, listed companies, trade volumes, market intermediaries, investor population, etc. However, this surge in activity has brought with it numerous problems that threaten the very survival of the capital markets in the long run, most of which are due to the large volume of paper work involved and paper based trading, clearing and settlement. Until the late eighties, the common man kept away from capital market and thus the quantum of funds mobilized through the market was meager. A major problem, however, continued to plague the market. The Indian markets were drowned in shares in the form of paper and hence it was problematic to handle them. Fake and stolen shares, fake signatures and signature mismatch, duplication and mutilation of shares, transfer problems, etc. The investors were scared and were under compensated for the risk borne by them. The century old system of trading and settlement requires handling of huge volumes of paper work. This has made the investors, both retail and institutional, wary of entering the capital market.

However, lack of modernization become a hindrance to growth and resulted in creation of cumbersome procedures and paper work. However, the real growth
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and change occurred from mid-eighties in the wake of liberalization initiatives of the Government. The reforms in the financial sector were envisaged in the banking sector, capital market, securities market regulation, mutual funds, foreign investments and Government control. These institutions and stock exchanges experienced that the certificates are the main cause of investors` disputes and arbitration cases. Since the paper work was not matching the rapid growth so there was a need for a better system to ensure removal of these impediments. Government of India decided to set up a fully automated and high technology based model exchange that could offer screen-based trading and depositories as the ultimate answer to all such reforms and eliminate various bottlenecks in the capital market, particularly, the clearing and settlement system in stock exchanges.[1] A depository in very simple terms is a pool of pre-verified shares held in electronic mode which offers settlement of transactions in an efficient and effective way.

Object Of DMAT System

India has adopted this system in which book entry is done electronically. It is the system where no paper is involved. Physical form is extinguished and shares or securities are held in electronic mode. Before the introduction of the depository system by the Depository Act, 1996, the process of sale, purchase and transfer of shares was a huge problem and the safety perspective was zero.

DMAT Benefits
The benefits are enumerated as follows:

Its a safe and convenient way to hold securities

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 Immediate transfer of securities is there There is no stamp duty on transfer of securities Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc There is a major reduction in paperwork involved in transfer of securities,reduction in transaction cost etc .No odd lot problem, even one share can be sold thus there is an advantage Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately Transmission of securities is done by DP eliminating correspondence with companies.

Automatic credit into DMAT account of shares, arising out of bonus/split/consolidation/merger etc.

Holding investments in equity and debt instruments in a single account.

Benefit to the Company

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The depository system helps in reducing the cost of new issues due to less printing and distribution cost. It increases the efficiency of the registrars and transfer agents and the Secretarial Department of the company. It provides better facilities for communication and timely services with shareholders, investor etc. Benefit to the Investor The depository system reduces risks involved in holding physical certificated, e.g., loss, theft, mutilation, forgery, etc.It ensures transfer settlements and reduces delay in registration of shares. It ensures faster communication to investors. It helps avoid bad delivery problem due to signature differences, etc.It ensures faster payment on sale of shares. No stamp duty is paid on transfer of shares. It provides more acceptability and liquidity of securities.

Benefit to Brokers

The depository system reduces risk of delayed settlement. It ensures greater profit due to increase in volume of trading. It eliminates chances of forgery bad delivery. It increases overall of trading and profitability.It increases confidence in investors.

DMAT conversion
Converting physical holding into electronic holding (DMATerialising securities) In order to DMATerialise physical securities one has to fill in a DRF (DMAT Request Form) which is available with the DP and submit the same along with physical certificates one wishes to DMATerialise. Separate DRF has to be filled for each ISIN Number. The complete process of DMATerialisation is outlined below: Surrender certificates for DMATerialisation to your depository participant. Depository participant intimates Depository of the request through the system. Depository participant submits the certificates to the registrar of the Issuer Company. Registrar confirms the DMATerialisation request from depository. After DMATerialising the certificates, Registrar updates accounts and informs
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depository of the completion of DMATerialisation. Depository updates its accounts and informs the depository participant. Depository participant updates the DMAT account of the investor.

DMAT Options
Banks score over others Around 200 depository participants (DPs) offer the DMAT account facility. A comparison of the fees charged by different DPs is detailed below. But there are three distinct advantages of having a DMAT account with a bank quick processing, accessibility and online transaction. Generally, banks credit your DMAT account with shares in case of purchase, or credit your savings accounts with the proceeds of a sale on the third day. Banks are also advantageous because of the number of branches they have. Some banks give the option of opening a DMAT account in any branch, while others restrict themselves to a select set of branches. Some private banks also provide online access to the DMAT account. So, you can check on your holdings, transactions and status of requests through the net banking facility. A broker who acts as a DP may not be able to provide these services.

Fees Involved
There are four major charges usually levied on a DMAT account: Account opening fee, annual maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP. Account-opening fee Depending on the DP, there may or may not be an opening account fee. Private banks, such as ICICI Bank, HDFC Bank and UTI Bank, do not have one. However, players such as Karvy Consultants and the State Bank of India do so. But most players levy this when you re-open a DMAT account, though the Stock Holding Corporation offers a lifetime account opening fee, which allows you to hold on to your DMAT account over a long period. This fee is refundable. Annual maintenance fee This is also known as folio maintenance charges, and is generally levied in advance. Custodian fee: This fee is charged monthly and depends on the number of securities (international securities identification numbers ISIN) held in the
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account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custody fee for ISIN on which the companies have paid one-time custody charges to the depository. Transaction fee: The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, HDFC Bank and ICICI Bank peg the fee to the transaction value, subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). Some DPs charge only for debiting the securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected. In addition, service tax is also charged by the DPs. In addition to the other fees , the DP also charges a fee for converting the shares from the physical to the electronic form or vice-versa. This fee varies for both DMAT and remat requests. For DMAT, some DPs charge a flat fee per request in addition to the variable fee per certificate, while others charge only the variable fee. For instance, Stock Holding Corporation charges Rs 25 as the request fee and Rs 3 per certificate as the variable fee. However, SBI charges only the variable fee, which is Rs 3 per certificate. Remat requests also have charges akin to that of DMAT. However, variable charges for remat are generally higher than DMAT. Some of the additional features (usually offered by banks) are as follows.Some DPs offer a frequent trader account, where they charge frequent traders at lower rates than the standard charges.DMAT account holders are generally required to pay the DP an advance fee for each account which will be adjusted against the various service charges. The account holder needs to raise the balance when it falls below a certain amount prescribed by the DP. However, if you also hold a savings account with the DP you can provide a debit authorisation to the DP for paying this charge.Finally, once you choose your DP, it will be prudent to keep all your accounts with that DP, so that tracking your capital gains liability is easier. This is because, for calculating capital gains tax, the period of holding will be determined by the DP and different DPs follow different methods. For instance, ICICI Bank uses the first in first out (FIFO) method to compute the period of holding. The proof of the cost of acquisition will be the contract note. The computation of capital gains is done account-wise.

Opening an account
Steps involved in opening a DMAT account First an investor has to approach a DP and fill up an account opening form. The account opening form must be supported by copies of any one of the approved documents to serve as proof of
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identity (POI) and proof of address (POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening of account has been made mandatory effective from April 1, 2006. All applicants should carry original documents for verification by an authorized official of the depository participant, under his signature. Further, the investor has to sign an agreement with DP in a depository prescribed standard format, which details rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference. The DP will open the account in the system and give an account number, which is also called BO ID (Beneficiary Owner Identification number). The DP may revise the charges by giving 30 days notice in advance. SEBI has rationalised the cost structure for DMATerialisation by removing account opening charges, transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI has vide circular dated November 9, 2005 advised that with effect from January 9, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership.

Disadvantages of DMAT
The disadvantages of DMATerialization of securities can be summarised as follows:
Trading in securities may become uncontrolled in case of DMATerialized

securities.
It is incumbent upon the capital market regulator to keep a close watch on

the trading in DMATerialized securities and see to it that trading does not act as a detriment to investors.
The role of key market players in case of DMATerialized securities, such

as stock-brokers, needs to be supervised as they have the capability of manipulating the market.
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 Multiple regulatory frameworks have to be confirmed to, including the Depositories Act, Regulations and the various By-Laws of various depositories.
Additionally, agreements are entered at various levels in the process of

DMATerialization. These may cause anxiety to the investor desirous of simplicity in terms of transactions in DMATerialized securities.

However, the advantages of DMATerialization outweigh its disadvantages and the changes ushered in by SEBI and the Central Government in terms of compulsory DMATerialization of securities is important for developing the securities market to a degree of advancement. Freely traded securities are an essential component of such an advanced market and DMATerialization addresses such issues and is a step towards the advancement of the market.

Transfer of Shares between DPs

To transfer shares, we need to fill the Depository Instruction Slip Book (DIS). Firstly we need to check, whether both DMAT account's Depository Participant is same or not(CDSL or NSDL) If both of them are different, then we need an INTER Depository Slip (Inter DIS). If they are same, then we need INTRA Depository Slip (Intra DIS).

For example: If we have one DMAT account with CDSL and other DMAT account with NSDL, then we need an Inter DIS. Generally, brokers issue Intra DIS, so do check with broker. Once we identify the correct DIS, fill the relevant information like

scrip name INE number

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quantity in words and figures and submit that DIS for the transfer to the broker with signatures. The transferor broker shall accept that DIS in duplicate and acknowledge receipt of DIS on duplicate copy. Do try to submit that DIS when market is on. Accordingly, date of submission of DIS and date of execution of DIS can be same or a difference of one day is also acceptable. For transfer, you shall also pay the broker some charges.

COMPARISON

OF

INVESTMENT

IN

SECURITIES

IN

PHYSICAL

AND

DEPOSITORY MODES

IN PHYSICAL FORM

IN DMAT FORM

Space required for storage and safety Exclusive manpower to be allocated

No space required This function can be clubbed with functions. No Exclusive manpower is required

Insurance is required

No insurance required

Laborious inventory verification during Periodic statement of holding is made internal stock taking and audits available by the Dps Easy verification of audits Risk of theft /Forgery Pledging of shares is cumbersome No risk of Theft/ Forgery Pledging is safe and easy

Receipt of Corporate benefits need Faster and hassle free receipt of monitoring and risks of loss in transit corporate benefits
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not ruled out Inconvenience in portfolio shuffling and Convenient transactions within the group delivery is portfolio through shuffling a and single &

adjustment within the group since instrument,registration instantaneous.

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Indian Brokerage industry

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The Indian broking industry is one of the oldest trading industries that has been around even before the establishment of the BSE in 1875. Despite passing through a number of changes in the post liberalisation period, the industry has found its way towards sustainable growth. The equity broking industry in India is growing in terms of scope and scale of business. With the Indian securities markets experiencing rapid growth and with financial integration gaining speed, the role of intermediation is further going to strengthen. However in the long term, quality and maturity of service will determine the success and sustainability of the firms in this segment. Key factors driving growth and success in the broking industry would be distribution networks, diversification of services, expertise and research, transparency and disclosure, compliance and market integrity. Both the number of broking firms and the scope of the business have increased significantly in the last one and a half decades. A majority of the members now have memberships in more than one stock exchange, enabling them to expand the business into a number of products. A large number of broking firms today have memberships across equities, equity derivatives and commodities futures in domestic and international stock exchanges. Increase in the scale of business led top notch broking firms enhances their enterprise value. The equity broking industry showed exceptional growth in last few years. The surge in business in terms of new customer accounts and value of share trading was evident across the entire spectrum of the equity broking industry. Major equity broking houses reported impressive gains in opening new customer accounts. The range of services provided by the broking firms transformed from being simple trading services to number of financial services in the realm of primary and secondary markets as also fund management and wealth management services. As it can be seen from the Table 1. below IndiaBulls and Reliance Money is leading the race of acquiring new accounts.
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table 1. number of accounts added in 2010

Source: Research report, Indias leading broking houses, 2008. By Dun &
Bradstreet, India Equity broking firms which reported significant rise in their trading terminals during the first 10 months of 2007 included Motilal Oswal (3,744), Reliance Money (905), Master Capital (505), Inventure (529), Adroit Financial (438), Indiabulls (287), Emkay (281), Techno Shares (217), Sushil Finance (294), Jhaveri Securities (169), KRC (147), SKI Capital (155) and Mansukh (125). Firms with significant increase in the branches/offices during the first 10 months of CY07 included Bonanza (335), Arcadia (285), Master Capital (202), Khandwala Integrated (195), Reliance Money (107), Anand Rathi (93), Microsec Capital (90), Kunvarji Finstock (77), SKI Capital (55), Indiabulls (45) and Networth Stock Broking (34).

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Major developments in equity brokerage industry in India

i) Corporate memberships
There is a growing surge of corporate memberships (92% in NSE and 75% in BSE), and the scope of functioning of the brokerage firms has transformed from that of being a family run business to that of professional organised function that lays greater emphasis on observance of market principles and best practices. With proliferation of new markets and products, corporate nature of the memberships is enabling broking firms to expand the realm of their operations into other exchanges as also other product offerings. Memberships range from cash market to derivatives to commodities and a few broking firms are making forays into obtaining memberships in exchanges outside the country subject to their availability and eligibility.

ii) Wider product offerings

The product offerings of brokerage firms today go much beyond the traditional trading of equities. A typical brokerage firm today offers trading in equities and derivatives, most probably commodities futures, exchange traded funds, distributes mutual funds and insurance and also offers personal loans for housing, consumptions and other related loans, offers portfolio management services, and some even go to the extent of creating niche services such as a brokerage firm offering art advisory services. In the background of growing opportunities for Investors to invest in India as also abroad, the range of products and services will widen further. In the offerings will be interesting opportunities that might arise in the exchange enabled corporate bond trading, soon after its commencement and futures trading that might be introduced in the near future in the areas of interest rates and Indian currency. Also there has been a growing trend of separating the services offered into various subsidiaries so that each subsidiary can concentrate better on a particular service. For E.g. India Infoline ahs segregated its services into various subsidiaries:

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iii) Greater reliance on research

Client advising in India has graduated from personal insights, market tips to becoming extensively research oriented and governed by fundamentals and technical factors. Vast progress has been made in developing company research and refining methods in technical and fundamental analysis. The research and advice are made online giving ready and real time access to market research for investors and clients, thus making research important brand equity for the brokerage firms.

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iv) Accessing equity capital markets

Access to reliable financial resources has been one of the major constraints faced by the equity brokerage industry in India since long. Since the banking system is not fully integrated with the securities markets, brokerage firms face limitations in raising financial resources for business and expansion. With buoyancy of the stock markets and the rising prospects of several well organized broking firms, important opportunity to access capital markets for resource mobilization has become available. The recent past witnessed several leading brokerage firms accessing capital markets for financial resources with success.

v) Foreign collaborations and joint ventures

The way the brokerage industry is run and the manner in which several of them pursued growth and development attracted foreign financial institutions and investment banks to buy stakes in domestic brokerage firms, paving the way for stronger brokerage entities and possible scope for consolidation in the future. Foreign firms picked up stake in some of the leading brokerage firms, which might lead to creating of greater interest in investing in brokerage firms by entities in India and abroad.

vi) Specialised services/niche broking

While supermarkets approach are adopted in general by broking firms, there are some which are creating niche services that attract a particular client group such as day traders, arbitrage trading, investing in small cap stocks etc, and providing complete range of research and other support to back up this function.

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vii) Online broking

Several brokers are extending benefits of online trading through creation of separate windows. Some others have dedicated online broking portals. Emergence of online broking enabled reduction in transaction costs and costs of trading. Keen competition has emerged in online broking services, with some of these offering trading services at the cost of a few basis points or costs which are fixed in nature irrespective of the volume of trading conducted. A wide range of incentives are being created and offered by online brokerage firms to attract larger number of clients.

viii) Compliance oriented

With stringent regulatory norms in operation, broking industry is giving greater emphasis on regulatory compliance and observance of market principles and codes of conduct. Many brokerage firms are investing time, money and resources to create efficient and effective compliance and reporting systems that will help them in avoiding costly mistakes and possible market abuses. Brokerage firms now have a compliance officer who is responsible for all compliance related aspects and for interacting with clients and other stake holders on aspects of regulation and compliance.

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ix) Focus on training and skill sets

Brokerage firms are giving importance and significance to aspects such as training on skill sets that could prove to be beneficial in the long run. With the nature of markets and products becoming more complex, it becomes imperative for the broking firms to keep their staff continuously updated with latest development in practices and procedures. Moreover, it is mandated for certain types of dealers/brokers to seek specific certification and examinations that will make them eligible to carry business or trade. Greater emphasis on aspects such as research and analysis is giving scope for in-depth training and skills sets on topics such as trading programs, valuations, economic and financial forecasting and company research.

x) From owners to traders

A fundamental change that has taken place in the equity brokerage industry, which is a global trend as well, is the transformation of broking from owners of the stock exchange to traders of the stock market. Demutualization and corporatisation of stock exchanges bifurcated the ownership and trading rights with brokers vested only with the later and ownership being widely distributed. Demutualization is providing balanced welfare gains to both the stock exchanges and the members with the former being able to run as corporations and the latter being able to avoid conflict of interests that sometimes came as a major deterrent for the long term growth of the industry.

Opportunities

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 Growing Equity Culture

Theres a growing tendency amoung the people in the country to invest their savings in the equity market instead of other less riskier areas like government bonds, post office deposit etc.. The main reasons behind this transformation could be many like increase in awareness amoung peole about the equity market increase of coverage in newspapers and news channels, increase in overall education in the nation, increase in risk taking appetite for people etc.

Dynamic markets
The dynamic equity market has given the brokerage to increase the number of their revenue streams. Now along with revenue through equity trading the other source of revenue generation streans are derivatives trading, arbitrage, margin financing, e-broking etc. These are now major revenues streams for many players in this market.

Institutional investing: domestic/foreign

One of the very biggest opportunities of Indian broekrage firms comes with the increase investment by institutional investors both domestic and foreign. There number has been increased heavily in last few years.

Expanding product range

Because of requirement of giving better services to their clients new product and services are been generated. Now every brokearge firm is providing whole lot of services to their clients like equity trading, portfolio management services, equity

57

research, commodities research, mortgages services, online trading services, SMS tips, insurance plans, wealth management services, newsletters etc.

Key Drivers for Growth of the Industry

The major growth drivers for brokerage revenue and trading volume are:

Continuous fall in brokerage fees due to increase in volumes and also

due to increase in competition has been a major factor to attract more and more towards investment in stock market,

Adoption of technology like screen-based trading, electronic matching, and

paperless securities has make it more convenient for people to undersatnd and perform various activities involved. And due to this increase in convenient more and more volumes are been generated

Centralized operations, effective risk management, and control on large interconnected operations spanning multiple locations,
which is enabled by telecom connectivity and low costs has icreased the investors confident while working in this sector.

Increasing access to capital and the ability to provide margin finance has helped is removal of monetary restraints upto a very large extent
and this has played a major role in driving the volumes to a new level.

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Reforms in regulations have been there on a continous basis by SEBI to

increase the effectiveness, security and transperency in the system. For example An Integrated Market Surveillance System (IMSS) that monitors across stock exchanges (NSE/BSE) and market segments (cash and derivatives) aimed to enhance efficacy of surveillance function became operational with effect from Dec 1, 2006

Skill sets/expertise- Employment in the equity broking industry is showing

rapid growth. Employee numbers reported by 186 equity broking firms in this study stood at 63,549. Another interesting aspect that has emerged in the employment structure of broking firms is the incidence of a wide range of skill sets and expertise. Though dealers form the major chunk of the employees, others such as analysts, marketing and sales personnel and back office staff form a significant component of the staff. In terms of skill sets, employees educational backgrounds include post graduates, engineers and MBAs.

Profile wise Break-up

Qualification wise Break-up

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Size and Significance

The Indian retail brokerage market is showing phenomenal growth. The total trading volume of brokerage companies has increased from US$1239.1 billion in 2004 to US$1492.1 billion in 2005, and is expected to reach US$6535.7 billion by 2015. The stature and significance of India is growing in the world capital markets. India is not only attracting greater interest from world markets, but is also assuming increasing importance in global finance.

India is a major recipient of foreign institutional flows amongst the emerging markets. Since the opening up of domestic stock markets to foreign investors, cumulative net FII investments reached US$ 67 bn by Nov 07

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Indian companies are regularly covered by global and regional investment banking research

India is major destination of private equity flows into the emerging markets India was host to the annual meetings/conference of the World Federation of Exchanges (2005) and International Organization of Securities Commission (IOSCO) (2007)

India emerged a trillion dollar market capitalization market in 2007, and was among the top 10 stock exchanges in the world in terms of market capitalisation

India is amongst the top fifteen stock exchanges in the world in respect of equity turnover

India emerged as a leading player in commodities futures market India is amongst the top five in the number of transactions India is among the top five in respect of volume traded in Stock Index Futures and Stock Futures

India is one of the few markets with extensive DMATerialization of shares Indias T+2 securities settlement cycle is on par with the global standards Indian stock markets have largest number of listings. Trading takes place in about 2500-3000 stocks

Indias most popular stock index (Sensex) is constructed on the basis of full float methodology, one of the firsts in the Asia region and a global standard

Indian market indices such as Sensex and CNX Nifty are listed in foreign exchanges for trading as ETFs

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Future Aspirations

The main aspirations for all the Brokerage Houses currently are: To acquire more FII clients to increase their revenue base To diversify into full service financial services firms to provide better services to their customers at one place Expand into other businesses in their sector wherever they see opportunities. Coming out with an IPO which many brokerage firms have already done and others are trying to follow soon. Forge joint ventures/business relationships and having strategic relationships to have mutual benefits advantages with other firms and organsations.

Emerging challenges and outlook for the Brokerage Industry

Brokerage firms in India made much progress in pursuing growth and building professionalism in operations. Given the nature of the brokerage industry being very dynamic, changes could be rapid and so as the challenges that emerge from time to time. A brief description on some of the prospects and challenges of the brokerage firms are discussed below.

i) Fragmentation

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Indian brokerage industry is highly fragmented. Numerous small firms operate in this space. Given the growing importance of technology in operations and increasing emphasis on regulatory compliance, smaller firms might find it constrained to make right type of investments that will help in business growth and promotion of investor interests.

ii) Capital Adequacy

Capital adequacy has emerged as an important determinant that governs the scope of business in the financial sector. Current requirements stipulation capital adequacy in regard to trading exposure, but in future more tighter norms of capital adequacy might come into force as a part of the prudential norms in the financial sector. In this background, it becomes imperative for the brokerage firms to focus on raising capital resources that will enable to give continuous thrust and focus on business growth.

iii) Global Opportunities

Broking in the future will increasingly become international in character with the stock markets being open for domestic and international investors including institutions and individuals, as also opportunities for investing abroad. Keeping abreast with developments in international markets as also familiarisation with global standards in broking operations and assimilating major practices and procedures will become relevant for the domestic brokerage firms.

iv) Opportunities from regional finance

Regional economic integration such as that under the European Union and the ASEAN have greatly benefited businesses in the individual countries with cross border opportunities that helped to expand the scope and significance of the business. Initial measures to promote South Asian economic integration is being made by governments in the region first at the political level to be followed up in regard to financial markets. South Asian economic integration will provide greater opportunities for broking firms in India to pursue cross border business. In view of several of common features prevailing in the markets, it would be easier to make progress in this regard.
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v) Product Dynamics
As domestic finance matures and greater flow of cross border flows continue, new market segments will come into force, which could benefit the domestic brokerage firms, if they are well prepared. For instance, in the last three to four years, brokerage firms had newer opportunities in the form of commodities futures, distribution of insurance products, wealth management, mutual funds etc, and as the market momentum continues, broking firms will have an opportunity to introduce a wider number of products.

vi) Competition from foreign firms

Surging markets and growing opportunities will attract a number of international firms that will increase the pace of competition. Global firms with higher levels of capital, expertise and market experience will bring dramatic changes in the brokerage industry space which the local firms should be able to absorb and compete. Domestic broking firms should always give due focus to emerging trends in competition and prepare accordingly.

vii) Investor Protection

Issues of investor interest and protection will assume centre stage. Firms found not having suitable infrastructure and processes to ensure investor safety and protection will encounter constraints from regulation as also class action suits that investors might bring against erring firms. The nature of penalties and punitive damages would become more severe. It is important for brokerage firms to establish strong and streamlined systems and procedures for ensuring investor safety and protection.

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PESTEL ANALYSIS (Industry)

Political Factors
Political and Budget factors play a crucial role in the stock market and broking industry, so as government plays a big factor for the movement in stock market upmove and downmove.

Economical Factors
Stock market is fully dependent on the economy of the country and also somewhat the economy of other countries like U.S, European markets, and Asian Economy, as exports and imports are taken place between these countries of many large companies.

Social Factors
It is all about the customers sentiment about the stock market, and their perception about it, as when market goes up they are making good profits but as when it falls they are also making huge losses.

Technological Factors
Technology is changing dad by day, earlier customers have to go at the trading place do to trade, after that customers can do trading by phone calls, and now online software are there where trading can be done anywhere by the use of internet.

Environmental Factors
Environmental factors such as political affairs, economics, regulations can have a turbulence effect on the stock market.

Legal Factors
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Legal factors are the rules and regulation of the SEBI ( Securities Exchange Board Of India) play a important role for FII flows, and flows from other emerging market in Indian Market.

Porter's Five Forces Analysis

Buyer Power:
-Lack of Expertise of retail investors curtails their bargaining power and makes them more dependent on the brokerage firms, -Retail investors very often lack the knowledge and expertise in this financial sector that make them approach the broking houses for assistance. -Low product differentiation among various brokerage houses has been a negative for the industry because the retail broking services provided by the various companies is very much homogeneous with very low product differentiation. This allows customers to enjoy a greater bargaining power.

Supplier Power:
-The business of these firms is been increasingly depending on the IPOs by various firms. The reason for this is for applying for any IPO it is necessary to open a D-mat account with some firm. -There is a growing dependence of corporate on broking houses with the rising number of IPOs coming to the market. This means that both the corporate and broking houses depends on each other and hence any one of these dont have any upper hand on the other

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Intensity of Competition:
-Lot of brokerage companies are moving towards consolidation with the smaller ones becoming either franchisees for the larger brokers or closing operations. -There has been an increased focus of banks in retail broking. Various foreign banks like ABN Amro and others are planning to enter the Indian retail brokerage industry. -Online Trading is now competing with Traditional Brokerage services. There is an increasing demand for online trading due to consumers growing preference for internet as compared to approaching the brokers. Now therefore every firm is starting giving both online and offline trading facilities to its clients on their choice.

Threat of New Entrants:

-Entry of Foreign Players in the market has been intensifying the competition in this area. New forms of trading including T+2 settlement system, DMATerialization etc are strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry.

Threat of Substitutes:
-Various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail broking products and services. And due to high volatility in the equity market many risk averse investors may find those option more suitable for them.

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PLAYERS IN THE INDUSTRY

ICICI Securities Ltd. Kotak Securities Ltd. Indiabulls Securities Ltd. Motilal Oswal Securities Ltd Karvy SecuritiesLtd IndiaInfoline Securities Ltd Sharekhan Securities Ltd Reliance Money

INDIA INFOLINE LTD--------------India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries, straddles the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites, www.indiainfoline.com and www.5paisa.com .

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INDIA INFOLINE SECURITIES PVT LTD---------------India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the businesses of Equities broking and Portfolio Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. A choice of technologically advanced trading that is with the help of 5paisa.com. 5 paisa also represents the availability of world class service to investors at the lowest possible rate - 5 paisa for every trade of Rs100, i.e., a brokerage rate of 0.05%.

Features of 5 paisa.com: Paisa sense - They offer a good value for money proposition. Their brokerage rates
are very competitive, charging only 5 paise for Rs100 of trade done, which is 0.05% brokerage. They offer the most reasonable rates, independent of your net worth or volumes. In case of trades that result in delivery, they charge an additional 0.20% for back office and securities handling.

Personalized service - At 5paisa.com, they are committed to provide you with

unparalleled service, using e-mail, call centers and support staff. They have also invested in physical infrastructure.

Protection All transactions of 5paisa.com are secure and confidential. The orders
are electronically routed via sophisticated trading systems for execution. They follow a world class security system that enables them to protect from any fraud or hacking.

Pedigree - 5paisa.com is a brand renowned for quality of information and services,

they are professionally managed, with a skill set which is of high standard. Their top management has years of experience in financial services with leading banks and institutions.

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SHAREKHAN SECURITIES----------Sharekhan was created when SSKI Investor Services Pvt. Ltd., a company in the securities and equities segment decided to harness the power of the Internet and offer services to its customers through an online stock trading portal. Sharekhan brings and provides a user-friendly online trading facility. They also have an extensive all-India ground network of franchisees across the country. The company offers its services through a combination of online and offline channels. The online model comprises a portal, chat facilities, and 'speed trade' terminals. And the offline model uses a combination of an IVR infrastructure and a team of customer agents to receive orders over the telephone.

MOTILAL OSWAL-------------------Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just two people running the show. Motilal Oswal Securities Limited has established itself as the Best Local Brokerage House in India (Asia Money Brokers Poll 2005). Their Institutional Equities Division combines the efforts of the Research and Sales & Trading departments to best serve clients' needs. Consistent delivery of high quality advice on individual stocks, sector trends and investment strategy has established them as a reliable research unit amongst leading Indian as well as international investors.

Their sales & trading team, comprising top equity professionals, translates the research findings into actionable advice for clients, based on their specific needs. Sophisticated computerized tools are used to understand client investment profile and objectives, which ensures proactive and timely service.

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FEATURES Integrity: A company honouring commitment with highest ethical and business
practices.

Team
apolitical

Work:

Attaining

goals

collectively

and

collaboratively.

Meritocracy: Performance gets differentiated, recognized and rewarded in an

environment.

Passion & Attitude: High energy and self motivated with a Do It attitude. Excellence in Execution: Time bound results within the framework of the
companys value system.

KARVY ----------------The birth of Karvy was on a modest scale in the year 1982. It began with the vision and enterprise of a small group of practicing Chartered Accountants based in Hyderabad, who founded Karvy. They started with consulting and financial accounting automation, and then carved inroads into the field of Registry and Share Transfers. Karvy has built a reputation as an integrated financial services provider, offering a wide spectrum of services for over 20 years. In 1982, a group of Hyderabad-based practicing Chartered Accountants started Karvy Consultants Limited with a capital of Rs.150, 000 offering auditing and taxation services initially. Later, it forayed into the Registrar and Share Transfer activities and subsequently into financial services. Karvy made inroads into a host of capital-market services, - corporate and retail - which proved to be a sound business synergy. In January 1998, Karvy became the first Depository Participant in Andhra Pradesh.

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KARVYSECURITIESLIMITED Deals in distribution of various investment products, viz., equities, mutual funds, bonds and debentures, fixed deposits, insurance policies for the investor.

KOTAK SECURITIES---------------------Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. Kotak Securities was set up in 1994. Kotak Securities is a corporate member of both The Bombay Stock Exchange and the National Stock Exchange of India Limited. Its operations include stock broking and distribution of various financial products including private and secondary placement of debt and equity and mutual funds. Currently, Kotak Securities is one of the largest broking houses in India with wide geographical reach. The company has four main areas of business: Institutional Equities, Retail (equities and other financial products), Portfolio Management and Depository Services.

Kotak Securities Ltd is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), providing dual benefit services wherein the investors can use the brokerage services
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of the company for executing the transactions and the depository services for settling them. Kotak Securities has 195 branches servicing more than 2, 20,000 customers and coverage of 231 Cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments.

FEATURES OF KOTAK SECURITIES

AKSESS Kotak securities Electronic Search Service: AKSESS

offers you an easy way to get to Kotak Securities' institutional research. On this online archive you will be able to access estimates, company reports, sector reports, strategy reports and a bunch of other products including the daily India Market Flash produced by Kotak Securities.

High Quality of software (KEAT): K.E.A.T is special software that

Koataksecurities.com provides its customers using which they can view live market rates of scrips on both the NSE and BSE.

Research Reports: Kotak Securities provide Different reports to investors

which include

Intraday calls Daily Technical View Daily Morning Brief Weekly Technical Report Sectoral Reports Stock Ideas Derivative Reports

SMS Alerts: Kotak Securities also provides SMS alerts to customers providing
useful tips about stocks & shares.

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ICICI SECURITIES-----------------ICICI Securities, A subsidiary of ICICI Bank, was set up in February 1993 to provide investment-banking services to investors in India. As on date ICICI Bank holds 99.9% of the share capital of ICICI Securities. ICICI Securities Limited is Indias leading full service investment bank with a dominant position in all segments of its operations Corporate Finance Fixed Income and Equities.

FEATURES OF ICICI SECURITIES

ICICI provides multiple channels in banking like, which is unique feature. Internet Banking Mobile Banking ATM banking Phone Banking ICICI Securities is amongst the largest arranger of funds in Debt and Equity segments and also amongst the leading advisors in Mergers and Acquisitions.

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INDIABULLS-------------------Introduction
Indiabulls is Indias leading Financial and Real Estate Company with a wide presence throughout India. Indiabulls Financial Services Limited was established in the year 2000 by three promoters all of whom are engineers from Indian Institute of Technology, New Delhi, and has attracted over Rs 700 million of investments from venture capital firms, private equity funds and institutional investors.

INDIABULLS SECURITIES LTD Introduction

Indiabulls Securities Ltd is engaged in the business of Internet based trading and is registered with SEBI as a stockbroker, trading and clearing member of NSE, member of BSE and as a depositary participant with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). ISL is also a member of the National Securities Clearing Corporation Limited.

Strength of Indiabulls Securities

Indiabulls securities Ltd have a distinct set of competitive advantages that make it uniquely capable of winning in the marketplace against its competitors Diverse Branch Network Bouquet of financial products and services Advanced technology team that delivers market leading product innovation Strong sales and marketing teams with continuous reinvestment and training Strong cross-selling opportunities. Strong and experienced promoters Leading product innovation and marketing strategies Well capitalized player, with strong banking relationships and credit ratings
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Comparable analysis of major Brokerage firms

Parameter Assessment for Doing Competitive analysis
A differentiating aspect is a comparative assessment of the top retail brokerages on various value indicators, comprising of: Product Pricing Service Unique Value proposition.

Competitive analysis

Product

Price

Service

Value Proposition

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Customers need to analyze the Brokerage Firms Based on these 5 Parameters.

Brokerage & Miscellaneous charges: This accounts for all the charges that you
incur for your trading/investing. A few examples would be: DMAT Account maintenance, Brokerage, Annual account Fee, Telephone based trading charges, trading software usage charges, etc.

Quote Software: This is used mainly for technical study and for live quotes. Many
people dont evaluate quote software. Some Investors dont pay attention to the quality of data (how accurate it is). Or how fast and often it refreshes. Does it allow us to back test our strategy? Does it allow customizing technical signals/parameters?? Does it allow us to see historic data? For, what period is intra day data available? They might need all this information. They should be clear on what they need and ensure quote software provides it all.

Execution Platform: Its nothing but a platform that allows us to execute our trade
fast. It should automate trade management and execution, and should automatically give protection against human errors.

DMAT Account: DMAT account should only be opened with a well known and
established brokerage firm in the market.

Back office Support: People while trading face lots of problem because of lack of
good back office support. Relationship Managers trading without their clients
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knowledge, funds not being transferred, trades not being executed, slow execution etc are a few examples.

CHAPTER-2 COMPANY PROFILE

financial

services

sector

is

the

backbone

of

any

economy.
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Reliance money was official launched in April 2007. It is a distribution house of reliance capital which is a part of Anil Dhirubhai Ambani Group (ADA). So first of all I will discuss about the structure of Anil Dhirubhai Ambani Group

Reliance ADA Group is one year old and one of the top three business groups. This group has over 50 million customers in all over world and 8 million individual shareholders which is largest in the world. The assets of group are over 12 billion dollars and net worth of over 10 billion dollars. Group market capitalization of 33 billion dollars over 6 billion dollars owned by Foreign investors. The group is committed to maximize the shareholders value by entrepreneurial mindset, ownership and commitment, speed and execution, integrity, respect and dignity and pride and passion

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Communi cation

Infrastruct ure

Power

ADA GROUP

Media and Entertain ment

Financial Services

Natural Resources

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In ADA group Reliance Capital deals with financial services. Reliance capital provides services in Mutual funds, Insurance, Consumer Finance, Money changing and money transfer and Reliance Money.

Mr.. Amitabh Jhunjhunwala (Vice Chairman)

Mr. Rajendra Chitale (Independent Director)

Mr. C. P. Jain (Managing Director)

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RCL is registered as a depository participant with National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL) under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996. RCL has sponsored the Reliance Mutual Fund within the framework of the Securities and Exchange Board of India (Mutual Fund) Regulations, 1996.RCL primarily focuses on funding projects in the infrastructure sector and supports the growth of its subsidiary companies, Reliance Capital Asset Management Limited, Reliance Capital Trustee Co. Limited, Reliance General Insurance Company Limited and Reliance Life Insurance Company Limited. As of March 31, 2005, the companys investment in infrastructure projects stood at Rs. 1071 Crores. The investment portfolio of RCL is structured in a way that realizes the highest post-tax return on its investments. Chairman of RCL is Anil Dhirubhai Ambani. The managing directors of the reliance capital is Mr. Amitabh Jhunjhunwala( ViceChairman) , Rajendra Chitale ( Independent Director) , Shri C. P. Jain

Reliance Money is a group company of Reliance Capital; one of India's leading and fastest growing private sector financial services companies, ranking among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital is a part of the Reliance Anil Dhirubhai Ambani Group. Reliance Money has officially commenced operations in April 2007. The managing director of the company is Mr. Sudeep Bandhopadhyay. Total distribution network of 2270 outlets across the country. Reliance Money is a comprehensive electronic transaction platform offering a wide range of asset classes. Its endeavor is to change the way India transacts in financial markets and avails financial services. Reliance Money is a single window, enabling you to access, amongst others in Equities, Equity & Commodities Derivatives,
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Mutual Funds, IPOs, Life & General Insurance products, Offshore Investments, Money Transfer, Money Changing and Credit Cards.

Reliance Money is a distribution house of Reliance Capital Ltd. so the code of conduct is as Reliance Capital. Reliance Capital Ltd.'s Code of Ethics is in alignment with its values and commitments. The essence of this code is that each employee should conduct the Company's business in a way that upholds its values and commitments. This code expects every employee to conduct business with integrity, in compliance with applicable laws, and in a manner that excludes consideration of direct or indirect personal advantage / gains. It is the individual responsibility of each one of Reliance Capital Ltd.'s employees to ensure that all of us are aware of these values, commitments, and procedures, and behave in accordance with the spirit as well as the letter of this code. Reliance Capital Ltd. recognizes that it is vital that the behavior of its employees matches the high intentions and values. Hence, adherence to all the elements of this code and the accompanying principles and procedures is necessary. The principles and procedures in this Code of Ethics apply to all material transactions, large or small, and describe the conduct expected of every Reliance Capital Ltd. Employee.

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PRODUCT PORTFOLIO OF RELIANCE MONEY

Reliance Money
Equity Life and General Insurance

Derivatives

Mutual Funds

Commodity

IPO

Money Transfer

Money Changing

Gold

Credit Cards

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EQUITY: Investing in equity involves purchasing shares of a company listed on a

stock exchange. You can acquire these shares in two ways - either through the Primary Market, i.e., when a company makes an offer to issue its equity for the first time (this is called Initial Public Offering (IPO)) or through the secondary market, i.e. via a stock exchange. When you trade in equity through a stock exchange, you have to make use of the services of a brokerage firm, which acts as your agent whenever you buy or sell. Equity is considered a high risk-high return investment avenue. This is because there is scope for considerable appreciation or loss of the capital that you invest, depending on various factors such as the performance of the company that you have invested in, general market conditions, the state of the economy, etc. However, it forms an integral part of any well-balanced portfolio, since it is at one end of the risk-return spectrum.

Equity is a must for any well-balanced portfolio. So, irrespective of whether you are a high net worth investor or a small retail investor and irrespective of whether you have a large or timid appetite for risk, you must hold some portion of your assets in equity. This is because it is the only instrument that has the ability to truly deliver a high return, when held over a long period of time. There are various risks that companies are exposed to and when you invest in equity, your returns are affected by these risks. These are business risks (i.e. the risks associated with the prosperity of a business and the demand for its products), financial risks (the skill with which a companys finances are managed to ensure that it has an optimum level of debt, equity, reserves, etc.), industry risk (changes in technology, regulations, fashions, etc., affect the performance of an industry), management risks (the level of corporate governance, management skills and vision), political, economic and exchange rate risks (these factors affect a company but are outside its control). There are other risks, such as market risks (the risk that the market will collapse, or that you have invested at the peak), which determine your returns on your equity investment. The timing of trading in commodity market is Monday to Friday 10am - 3:30 pm

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COMMODITY: Commodities have occupied a large space in our life. The commodity
market is one of the oldest prevailing markets in the human history. Trading in commodity market is just like buying and selling shares of a company. In our country there are three most prominent commodity exchanges MCX, NCDEX and NMCE

DERIVATIVES: The term derivative refers to an asset that has no independent value;
but derives its value from that of an underlying asset. Te underlying asset could be securities, commodities, bullion, currency, livestock or anything else. Trading in derivatives allows us to speculate, hedge, undertake arbitrage activities and buy on margin. There are broadly 2 types of derivatives futures and options. Futures are that derivative contracts that require you to sell or buy a specified quantity of the underlying asset on a specified date (expiration date) at the spot price of the underlying asset prevailing on the expiration date. Futures can have a validity of 1 month, 2 months or 3 months. These contracts do not have a strike price.

An option is a type of derivative contract that gives the buyer the right (but not the obligation or the liability), to buy or sell a specified quantity of the underlying asset (in this case, stocks or an index) at an agreed price (strike/exercise price) on or before the specified future date (expiration date). You can purchase an option for a price called premium

OFFSHORE INVESTMENTS: for the first time in the history or India, traders now
have a new world of off-shore investment opportunities. The product suite being discussed include contracts replicating the returns from US and UK equities, global indices, bullion, crude and metals traded on commodity exchanges across the globe, and forex. Foreign Exchange is the trading of one currency against another
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IPOS: 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. In which peoples bid for shares and wait till the company listed in the stock exchange. After listing the can sell those shares at higher price and earn the profit

MUTUAL FUNDS:
Largest customer base in private sector mutual funds with 3.5 million customer. Largest assets under management amongst Indian mutual funds with current AUM in excess of Rs. 500 billion. Largest in new fund offering in 44 year old Indian mutual fund history- collected over 57 billion from 900000 investor. Only 100% owned Indian private sector mutual fund company. 28 schemes-equity, fixed income and money market. 123 branches at the end of FY07

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LIFE INSURANCE: Acquired AMP Sanmar in October 2005 Renamed Reliance

Life Insurance. 32 products 26 Individual products and 6 group products 2 schemes during FY07, Reliance Connect 2 Life Plan and Reliance Money Guarantee Plan Only 100% Indian owned life insurance company amongst the top 5 private sector players Only 2nd life insurance company in India to receive ISO certification 217 branches. IRDA approval for starting another 130 branches

GENERAL INSURANCE:
insurance products.

Offers home insurance, property insurance, auto

insurance, travel insurance, marine insurance, commercial insurance and other specialty

Customer base ranges across sectors ports, steel, power plants etc. Only 100% Indian private sector insurance company

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TRADING WITH RELIANCE MONEY

Reliance money is a most comprehensive website which allows you to invest in share mutual funds and derivatives (Future and option) and other financial products. Share trading in Reliance money is very easy and user friendly. A person can trade through 4 ways.

1. ONLINE In online trading investor need to go to reliancemoney.com then he put his user name, password and security key code to enter in his account. After entering in his account he can trade in Equity and Derivatives.

2. FRANCHISEE

In offline trading a investor can trade through franchisee. There are

two ways to trade with franchisee. First investor can make a call to franchisee and do trade, second he can go and work there.

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2.

CALL CENTRE Reliance money provides calls and trade facility to the

investor. An investor can trade by making a call on 3986000. Which charge a local call rate. Now an investor can trade from any place.

4.KIOS K Company is providing a kiosk facility to the investor in which he can trade over kiosk which are placed at various places like Reliance web world, Reliance money office, Some big malls and public places. This is standing computer with internet facility. An investor can login through this and can trade.

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Major Players in DMAT Accounts

HDFC BANK Ltd. HDFC BANK is one of the leading Depository Participant (DP) in the country with over 8 Lakh DMAT accounts. HDFC Bank DMAT 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. HDFC BANK is Depository participant both with -National Securities Depositories Limited (NSDL) and Central Depository Services Limited (CDSL). Features & Benefits As opposed to the earlier form of dealing in physical certificates with delays in transaction, holding and trading in DMAT 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 duties on transfer of securities held in DMAT 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 DMAT form by a single instruction to the Depository Participant (DP). Holding / Transaction details through Internet / email.

HSBC DMAT Accounts

As someone who's interested in regular trading, will need a well-resourced account to match ones needs in a dynamic market scenario. As a leading depository participant, we offer you HSBC DMAT Accounts, armed with an entire range of conveniences specially designed to make money work harder.

DMAT Account Features & Benefits HSBC DMAT Accounts are especially designed to give investor the edge in the stock markets today

One can purchase, hold and sell shares in electronic form Get Holding statement every 3 months, showing current portfolio of shares Avail of an Overdraft up to Rs.20 lakh available against DMAT shares through Asset Link As an NRI, one can easily DMATerialize ones portfolio of shares in India with us* If someone is already holding an HSBC Current/Savings account, there be no account opening charges and no minimum balance requirements for DMAT Account

One can save on transaction costs with quick transfers

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SBI DMAT Services

SBI DMAT services include investments in secondary market equities in cash or derivatives. State Bank of India offers DMAT services through eZ-trade SBI online share trading service that removes the tedious process of filling of different application forms. You can trade in equities, commodities, mutual funds IPOs and more online by blocking funds and shares in your DMAT account to trade. BNST (Buy Now Sell Tomorrow) option by eZ-trade service of SBI helps you deal with limited stock situations.

UNION DMAT ACCOUNTS

Union Bank of India now offers you the power of the value-added, service-oriented DMAT account-Union DMAT. Union Bank is Depository participant of Central Depository Services Ltd. To carter to your individual needs as diverse as your portfolio, Union DMAT will empower you with hassle-free, fast and accurate electronic transactions. Plus you get Union Bank's quality service which you are used to, at all times. UNION DMATS- Conduct hassle-free transactions on your shares. Manage your securities at your fingertips.

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ICICI Bank DMAT Accounts

ICICI Bank DMAT Account is the initiation part of ICICI Bank DMAT services. The bank endeavors to offer the most reliable DMAT customer care with the most competitive charges. The dedicated customer base for the ICICI Bank DMAT service has increased rapidly to over 11.5 lakh customers. For application, you can either contact the ICICI Bank branches providing DMAT services or download the application form from ICICI Bank website. No account-opening fee is applicable. The brokerage charges levied are applicable as per the transaction you make and are clearly mentioned on the membership guide you receive.

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CHAPTER-3 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY
This research included following topics

Title of the study

The project was titled as comprehensive analysis of DMAT a/c at Jaipur.

Objective of Project
The objectives of my study is
1. Analysis of DMAT A/c of Reliance Money.

2. To understand the trading system of Reliance Money. 3. To understand the stock market and its components. 4. To create awareness among market about Reliance Money. 5. Help the company to attract new the investor. 6. Mapping up of potential customers for Reliance Money 7. To understand what are the expectations and feedback of the customers. 8. To find out suggestions and improvements to be implemented in Reliance Money offerings and service.

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While preparing any specific research project, the following steps are to be followed: 1. 2. 3. 4. 5. 6. 7. Define the research problem Specifying the research objective Preparing the list of information needed Design the data collection for the project Collect the required data Analyze the Data Interpret and draw conclusion

ResearchDesign
Design layout Research work to be carried out Why is the study being made? To find out the DMAT status of reliance money. Where will be the study carried out? The study carried out in Jaipur (Rajasthan). What types of data required? Data is required for research is primary and secondary both. Where can be the required data Found? From office, field, sales executives, customers. What periods of time will the study include? Study was finished with in 30 days.
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What will be the sampling design? Probability sampling (simple random sampling).

What technique of data collection were used? Questionnaire and interview method.

How will the data be analyzed? Pie diagrams were used.

Data Source:
The research plan takes place for gathering secondary data & primary data. Secondary data are data that were collected for another purpose and already exists somewhere. Primary data are gathered for specific purpose or for a specific research project. So we can say that primary data is a fresh gathering of information made by researcher to solve a particular problem.

Data Collection Method:

After the research problem has been identified the important step is to collect and analyze the data. The researcher has to decide whether he has to collect the primary data or secondary data or both the methods of collection of the data are very important in the project. Two types of data were collected in this project. They are primary data and secondary data. Secondary data forms a major part of this project.

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Primary Data: Primary data is first hand information. This is collected through personal interviews, Surveys, Observations, schedule & Questionnaires. The primary data as collected through questionnaire. It is nothing but information of individuals, which is enclosed as annexure. Through questionnaire researcher enjoy fresh data / information for this survey.

Secondary Data: The secondary data is supplementary to the first hand information. Secondary data already exit somewhere Like in Newspapers, journals, books, reports, etc. For this project, primary data was collected from customers, of the bank through interview method. Secondary data was collected through Circular, Newspapers and journals, & through the website. Secondary data are collected through following important tools: -

a. "In Touch" with Reliance Money; It is a module of Reliance Money. The information about the product module comprising of various features has been collected through bank documents. The topics, which are being covered by this module, are as follow: Awareness about the current financial sectors Scenario. Awareness about RBI and its regulation like IRDA, AMFI etc.

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b. Companys Own Database: Banks own database, which already exists played a vital role in this research. The information like name, address, telephones no., segments of the persons to be contacted were provided by the bank.

Research Approach:
Survey method is used for collecting the data. This is perfectly suited for Descriptive Research. Includes following things:

Research Instrument: The questionnaire is used as most important research instrument to collect primary data. It includes a perfect set of the questions, easy under stable language, which was arranged in order and in, easy under stable language. Through this selection of proper information in proper manner became possible. The questionnaire includes closeended questions & open-ended questions.

Sampling Plan: For deciding all this things the next important part comes is designing sampling plan. It includes following things: -

Sampling Unit: - (who is to be surveyed?)

Sampling unit is nothing but the target population that will be surveyed. It includes various investors professionals, businessmen & others etc.

Frame: The limit of the sample was potential investors below the age of 65 years.
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Sample Size: The project consists of a sample size of 100 people. This sample size is decided on the basis of available time, available resources and budget of the research. On this sample size researcher tries his level best to get most reliable result.

Sample Method: After taking into consideration the features of Jaipurs population, researcher decided to use non - probability convenience sampling method for selecting the respondents.

Contact Method: After sampling Plan gets ready the next part comes which is nothing but to decide the means for establishing contact i.e. through mail, telephone or personal interview.

Personal Interview:1.

Especially

for

this

project,

Researcher

used

personal

interview

techniques.

Random Sampling:Random samples which are selected in such a manner that every member of the Universe has an equal chance of being included or excluded in it and in which the Probable error that may creep in the studies or result in mathematically known in advance.

Limitations:
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Margin of Error: Though the research is conducted properly and probability of biases and errors are kept at minimum, still some errors creep on account of certain limitations. 1) Recommendations are based on the respondents, which may include an element of bias. 2) Respondents are the representatives of others but opinion of these few respondents may differ from a group of thousand people. 3) The project had to be completed in limited time of two months. 4) Information given by the people may not be correct. 5) In-depth decision is lengthy and time-consuming process.

Chapter- 4 DATA ANALYSIS AND INTERPRETATION

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Categorization of sample according to their monthly income

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12%

8%

44%

36%

Less then 15000

from 15000-25000

from 25000-40000

more then 40000

44% of the people in sample are in an income group of 15000-25000, 36% are in income group of less than 15000,12% are found to be in between 25000-40000 and only 8% are having income more than 40000.

Categorization of sample according to their Age Group

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33%

48% 19%

0%

18-30

31-45

45-60

60&above

Majority of people in the sample are between 18-30 years.

You are trading in stock exchange since

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20% 16%

40% 24%

less then 1 yr

from 1-5 yrs

from 5-10 yrs

more then 10 yrs

In the sample first we calculate the experience of an investor in Stock Market. This is an important factor while trading. I divided experience into four parts less then 1 year, from 1 5 years, from 5 10 years and more then 10 years. By dividing the whole study into four groups, it is easy for researcher to understand the behavior of an investor. If an investor is new in the market then he will consult to his friends, broker or any other before taking any decision and avail minimum risk. On the other side when he is having a good experience he believe in himself and take decisions on his own. Investor having experience from 1-5 year are chose both ways because some time they feel hesitate while taking some decision then so he consult to the broker and friends.

How do you trade in stock exchange?

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30%

18% 52%

online

off line

Both

In the survey 52% people works off line, 18% online and 30% uses both. This factor is affected by many things like their working experience. This is also affected by the occupation of the investor. If a investors occupation is a service then he can only trade offline. Those investor who do not know how to operate computers or they are not having Internet connection and Computer at there home and office are bound to trade off line.

Correlation between Age Group and Trading Habits

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50 45 40 35 30 25 20 15 10 5 0 10 18-30 4 31-45 16 8 7 4 45-60 60&above 29 13 Both off line online 9

This is to understand investors behavior regarding his age group. In the above diagram it is understood that there is 18% online traders from which 10% belongs between 18-30 age group, 4% from 3145 and 4% from 45-60 age group. In 52% of offline traders 29% are from 18-30, 16% are from 31-45, and 7% from 45-60. And in 30% of both traders, who trade like both online and offline, 9% are from 18-30, 13% from 31-45 and 8% from 45-60 So it can be understood the relationship between the trading habit and age group of the investor.

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 Which mode of trade do you prefer

F&O 11% Delivery 20%

IPO 33%

Intraday 36%

From the survey conducted by us it is clear that 36% of the investors trade in Intraday, 20% trade in Delivery, 11% trade in Future & Option and 33% investors trade in IPO. These trading habits can be affected by their age group and monthly income. Young traders take risk and try to gain higher returns. And experienced traders take minimum risk and get good returns. A investors monthly income is high can take more risk then any other. So this is the reason that only rich traders trade in Future and Option. Investor related to govt. jobs likes to trade in IPOs because of safety and good returns.

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Who advised you to trade in particular script/stock?

Self 59%

Broker 20%

Others 3%

Friends 18%

With this question i tried to understand the person who is behind the decision of investment taking by the investor. In the survey Investor who are having trading experience from 1-5 ,5-10 and more then 10 years is 76% which means most of the investors are having good knowledge of share market and here 59% of investor saying that they take their decision self. 20% investor said that they consult to broker, 18% consults to their friends and relatives, 3% consult to others. Investors come in this part are generally those who has a less knowledge of share market.

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Where do you have your DMAT Account?

Where do you have your Demat Account?

10% 20%

14%

35% 21%

RELIGARE RELIANCE MONEY

ANAND RATHI ANY OTHER

ANGEL BROKING

Above chart explain that in which brokerage house investor having their account. As the research surveyed various brokerage houses in which some are local brokers.

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While opening a new DMAT account which thing affects you most?

27%

33%

28%

12%

Brokerage AMC

Credit Policy Any other

The research try to find out that which facility investor want when he is going to open a DMAT account. The higher % of investor gives preference to the brokerage. Then credit policy and then any other. In any other option there are many things like cutting charges, hiding charges, slip charges etc. only 12% investors give preference to the AMC charges. In some brokerages houses annual maintenance charges is very high.

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Are you aware about the facilities provided in DMAT account by the Reliance Money?

No 36% Yes 64%

The research tries to find out the awareness among investors regarding the facilities provided by the Reliance Money. In the results the majority of investors are aware from the facilities provided by the Reliance money.

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Would you like to open DMAT account in Reliance Money (if no then why?)

In this question the research tries to find out the reasons that why a investor do not want to open account when knows about the product feature of Reliance Money. This question can help the company to find out the investor expectation from Reliance Money. In the responses from the respondent they generally give emphasis on those facilities which they are getting in their brokerage house.

13% 10% 41%

25% 11%

No need

High charges

Credit policy

Not suited

Already opend

The research found that 41% of investor said they do not have any need. 25% investor said that reliance money is not providing the credit policy which they are availing. Some investor trade in low volume said prepaid system is not suited to them. And offline traders said that if they do trading in low volume the charges will be high.

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COMPARISON OF RELIANCE MONEY WITH OTHER BROKERAGE HOUSES

1. Comparison between charges Reliance Money Account opening fees Recurring fees for trading a/c DMAT AMC DMAT charges Cash Brokerage BTST Brokerage Margin Brokerage Derivative Brokerage Commodity About Brokerage Started to 0.4 005-.05 0.03-010 0.4 0.15 005-.05 0.03-010 0.5 0.15 005-.05 0.03-010 0.5 .005-.05 0.3-0.75 0.5 0.5 Inclusive 0 N 50 500 0 500 0 0 NA 0 700 750 ICICIDirect.com IndiaBull s 0 HDFC Sec 700

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2. Comparison between Product Feature

Reliance Products CASH Money Yes

ICICI Direct.com Yes India Bulls HDFC Sec. Yes Yes

ATST

Yes

Yes selective

Yes

No

Online Fund Transfers Funded Margin Margin Derivatives Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes selective Yes No

Commodities Yes IPO MF Insurance Yes Yes

Yes Yes Yes Yes

Yes No No No

No Yes No No

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Yes Call-on Trade 3-in-1 Account Yes Yes No No Yes Yes Yes Yes

DMATerializ ation charges Yes NO(for 1 month) YES Yes

Benefits of having a Reliance Money account:

It'sCost-effective Investor pay comparatively lower transaction fees. As an introductory offer, Reliance invite investors to pay a flat fee of just Rs. 500/- and transact through Reliance Money. This fee is valid for two months or a specified transaction value*. The details are shown in the table
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Validity earlier) Access Fee (Rs.)

(wichever

is

Turnover limit Nondelivery turnover Delivery turnover Rs. 10 Lac Rs. 30 Lac Rs. 60 Lac

TimeValidity

Turnover Validity Rs. l Cr.

500

2 months

Rs. 90 Lac

1350

6 months

Rs. 3 Cr.

Rs. 2.7 Cr.

2500

12 months

Rs. 6 Cr.

Rs. 5.4 Cr.

It offers Single Window Access to almost all financial products.

Its Convenient - Reliance Money's services are through the Internet, Transaction
Kiosks and over the phone.

It'sSafe Accounts are safe guarded with a unique security number that changes every 32 seconds. This number works as a dynamic password to keep your account extra safe.

It provides 3...in...l facility of Banking, Trading and DMAT Account through a single window and transfer funds across accounts seamlessly!

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Chapter-5 SWOT ANALYSIS

SWOT ANALYSIS
STRENGTHS

Linking of all three accounts i.e. saving accounts (HDFC, IDBI and UTI Banks), DMAT account and trading account. Trading in NSE, BSE, NCDEX and OFFSHORE
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Investor can also invest in Mutual fund, Life and General Insurance. Account protected through security key Web base trading system Less brokerage in intraday and delivery No service tax on brokerage

WEAKNESSES

High Charges for the off line traders who trade in low volume Server down. No credit facility Higher DMAT opening charge

OPPORTUNITIES

First time introduced prepaid brokerage in India. Already having a good market access through different products of RELIANCE LTD. Providing the facility of investing money in mutual funds

THREATS

Higher offline brokerage as compare to other brokering houses. Customer using online fund transfer facility must maintain Rs 5000 in his bank saving account in one of these banks HDFC, IDBI and UTI. Funding facility provided by other brokerage houses

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CHAPTER-6 CONCLUSION, FINDING AND SUGGESTION

In the whole study the researcher felt that investor in brokerage industry have a different need. The researcher can divide their needs like credit policy, funding etc. Many investor trades in brokerage house just for the personal relationship or family terms.

CONCLUSION:

In other brokerage houses brokerage is not fixed, it varies from investor to investor Basic services or facilities are same in different brokerage houses.
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FINDING:

Investors can pay high brokerage for the good services. Investors pay attention to the personal relationship. New investors give more importance to a broker.

SUGGESTIONS

Company must target to young age group from 20 to 40 yrs. Increase limit facility in intraday. Give proper services to the investor.

Recommendation

Based on the market survey, new clients and existing clients following recommendations can be given for more satisfaction of customers as well as more sell of the product.

Recommendation related to account opening

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 Document required for an account opening are to unique and confusing. Either of Voters ID, Pan Card, Passport or Driving license should be taken both as identity proof as well as address proof.

Numbers of signatures, which are made by the client, are too many, a user has 51 signatures and number of signs must therefore be reduced.

Fees taken by the Reliance Money for an account to be opened is high enough, though the product is providing extra facilities, but the client opinion is that fees should be reduced to reasonable.

Time taken in account opening is too long so the time limit should be reduced so that the clients are interested in opening the account.

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Chapter-7 Annexure

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QUESTIONNAIRE

NAME: . AGE : SEX: OCCUPATION: .......... CONTACT NO: Monthly Income: i) < 15000 iii) 25000-4000 1. ii) 15000 25000 iv) above 40000

You are trading in stock exchange since i) Less than 1 yr ii) iv) from 1 to 5 yrs more than 10 yrs

iii) From 5 to 10 yrs 2. i) Online 3.

How do you trade in stock exchange ii) off line

Which mode of trade do you prefer i) IPOs iii) Pick up deliveries ii) Intra-day trading iv) Future & Option

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4.

Why you prefer trading in above

5. i) Self
6.

Who advised you to trade in particular script/stock ii) Broker iii) Friends iv) others..

Where do you have your DMAT account i) Anand Rathi iv) Moti lal ii) Religare v) India Bulls or service is iii) Angle Broking vi) any other best suited to you there

7.

Which

facility

.... 8. What additional facility do you want to have ... .

9.

While opening a new DMAT account which thing affect you most i) Brokerage iii) Credit policy ii) Annual maintenance charges iv) Any other

10.

Are you aware about the facilities provided in DMAT account by the Reliance Money i) Yes
11.

ii) No

Would you like to open DMAT account in Reliance Money (if no then why)

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BIBLIOGRAPHY

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BOOKS: KOTHARI, C.R., RESEARCH METHODOLOGY Methods and techniques, New Delhi, New Age International (p) Ltd.1999.

MAGAZINES: BUSINESS WORLD BUSINESS TODAY

NEWSPAPERS: ECONOMIC TIMES

WEBSITES www.reliancemoney.com www.icicidirect.com www.nse.com www.hdfc.com www.hsbc.com

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