A Brief Study of Equity Products atA Brief Study of Equity Products at Indiabulls Securities Ltd.Indiabulls Securities Ltd.

&&Comparative Study of Equity MarketComparative Study of Equity Market

InInJaipurJaipur

Submitted By

RICHA AGRAWALThird Semester-MBA(CAM)

2007-2008

Faculty of Management StudiesR.A PODAR INSTITUTE OF MANAGEMENT STUDIES

JAIPUR (RAJ)

Acknowledgement

First and foremost I would like to express my sincere gratitude to Mr.Rajat Sharma, Senior Vice President, Indiabulls Securities Ltd. Jaipur Branch for providing me an opportunity to work in this organization as a project trainee.

I am grateful to corporate guide Mr.anil sharma, Branch Manager, who has been an inspiration for me, who has shown me the light of corporate world, who has guided me eloquently during my project work and who has been my mentor through out my project.

I would also like to express my sincere thanks to the following people without whom the project would not have been possible-Ms. Jyoti saraswat (HR Manager), Ms.Savita pareek (Regional operation manager), Mr. Rahul jain, Mr.Mukesh bhorodia and all the other staff members, relatives and friends.

Finally I would like to thank the institute for giving me to learn and add to my knowledge and to gain some experience through this summer training project.

RICHA AGRAWAL

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CONTENTS

1) Introduction

- Indian Stock Market

- An Overview

- Depository

- Indian Online Share Trading

- Sensex and Nifty

- Margin Trading

2) About the Organization

- Company Profile

- Equity Products & Services

3) Research Methodology

4) Analysis and Findings

5) Limitations of the study

6) Suggestions

10) Concluding note

11) Bibliography

12) Glossary

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Indian Stock Market Overview

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are the two primary exchanges in India. In India, in addition, there are 22 Regional Stock Exchange. However, the BSE and NSE have established themselves as the two leading exchanges and account for about 80 percent of the equity volume traded in India. The average daily turnover at the exchanges has increased from Rs 851 crore in 1997-98 to Rs 1,284 crore in 1998-99 and further to Rs 2,273 crore in 1999-2000 (April-August 1999). NSE has around 1500 shares listed with a total market capitalization of around Rs9, 21,500 crore (Rs 9215-bln). The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9,68,000 crore (Rs 9680-bln). Both exchanges have a different settlement cycle, which allows investors to shift their positions on the bourses. The primary index of BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE50 Index (Nifty), which consist of fifty stocks. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE on Line Trading) and NEAT (National Exchange Automated Trading) System. It facilitates more efficient processing, automatic order matching, faster execution of trades and transparency. The scrips traded on the BSE have been classified into ‘A’, ‘B1’, ‘B2’, ‘C’, ‘F’, and ‘Z’ groups. The ‘A’ group shares represent those, which are in the carry forward system (Badla). The ‘F’ group represents the debt market(fixed income securities) segments. The ‘Z’ group scrips are the blacklisted companies. The ‘C’ group covers the odd lot securities in ‘A’, ‘B1’ & ‘B2’ groups and right renunciations. The key regulator governing Stock Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FII and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd.

Working of the stock Market

A person desirous of buying/selling shares in the market has to first place his order with a broker. When the buy order of the shares is communicated to the broker he routes the order through his system to the exchange. The order stays in the queue exchange’s systems and gets executed when the order logs on to the system within buy limit that has been specified. The shares purchased will be sent to the purchase by the broker either in physical or demat format.

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Rolling Settlement Cycle

In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. At NSE and BSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. Typically trades taking place on the Monday are settled on the Wednesday, Tuesday’s trades settled on Thursday and so on.

Primary Markets

Securities available for the first time are offered through the primary securities markets. The issuer may be a brand-new company or one that has been in business for many, many years, like that of MARUTI. The securities offered may be a new type for the issuer or additional amounts of a security used frequently in past. The key is that these securities absorb new funds for the coffers of the issuer.

Secondary Markets

Once investors have purchased new issues, they change hands in the secondary markets. There are actually two broad segments of the secondary markets the organized exchanges and the over-the-customer (OTC) market. The primary middlemen in the secondary market are brokers and dealers. Broker act as an agent while dealer as a principal in a transaction.Organized stages are physical market place where the agent of buyers and sellers operate through the auction process.

Depository

The organization responsible to maintain investor’s securities in the electronic from is called the depository. In other words, a depository can therefore be conceived of as a “Bank” for securities. In India there are two such organizations viz. NSDL and CDSL.The depository concept is similar to the banking system with the expectation that bank handle funds whereas a depository handles securities of the investors. An investor wishing to utilize the services offered by a depository has to open an account with the depository through a depository participant. Depository participant: the market intermediaries through whom the depository services can be availed by the investors are called a Depository Participant (DP).

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Indian online share trading

Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them, brokers have taken their trading rooms to the Internet known as online brokers, they allow you to buy and sell shares via Internet.

Investors can have complete control of their stock investing actions, now that they have the convenience of buying and selling shares on the NSE online and in real time. Each individual has access to the latest information and tools to analyse any stock investment decision. Plus the power to execute the sale or purchase right before them on their personal computer screen.

There are 2 types of online trading service:

Discount brokers

Discount online brokers allow you to trade via Internet at reduced rates. Some provide quality research, other don’t.

Full service online

Full service online brokerage is linked to existing brokerages. These brokers allow their clients to place online orders with the option of talking/ chatting to brokers if advice is needed. IndiaBulls.com, 5Paisa.com, ICICIDirect.com, Sharekhan.com, Geojit securities.com, HDFCsec.com, Tatatdw.com, Kotakstreet.com are some of the online broking sites in India.

Advantages of online trading:

The convenience of desktop investment-trade from anywhere at any time. Not just online but real time-from placing an order to having it executed-in a

few seconds. Continuous feedback of all transactions orders and their status.

Three level securities via Firewalls, data encryption using Secure Socket Layer (SSI) technology, User IDs and Passwords i.e your personal information remains for your eyes only.

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Online access to a wealth of live information that can facilitate better investment decisions.

Sensex and Nifty

Sensex and Nifty are the two important indices that track the Indian equity market. There are however many differences in their construction and behaviour. Investors must choose one between the two to benchmark their portfolios. It is sometimes seen that these indices move with a low correlation to each other, that is to say that they are not moving together.

An index is used to give information about the price movements of products in the financial, Commodities or any other market. A stock index is created to provide investors with information regarding the average share price in the stock market. Generally the stock price of any company is vulnerable to three types of news:

Company specific Industry specific Economy specific

Functions of an index: The main objective is to give all market participants an indicator of the general movement of the stock.

The primary function of a stock index is to serve as a barometer of the equity market. The ups and down in the index represents the movement of the equity market.Investors can have a clear picture on equity market.

Secondly, stock market indices are lead indicators of the performance of the overall economy. Similarly, sectoral index serves as a lead indicator of the performance of that particular sector.Perhaps, the most important use of an equity market index is as a benchmark for a portfolio of stocks. The systematic risk of one’s portfolio can also be measured by comparing it to the index.

Finally, indices are useful in modern financial applications of derivatives. Indices serve as the underlying for Future & Options products. In the Indian market, both Sensex and Nifty are underlying for Futures and Options contracts.

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Margin Trading

Margin Trading is nothing but borrowing money to invest in stocks, Here the investor borrows money from his/her broker to invest in stocks through the same broker. The “margin” here is the money actually borrowed from the broker. The margin loan can be up to 50% of the total amount invested. This effectively means that you can invest in shares worth Rs 100 by borrowing Rs 50 from your broker. This is called buying shares on a 50% margin. If the value of the shares goes down, the investor has to pay a “maintenance margin” to bring the margin up to 40% of the market value of the shares. This margin is paid when the broker makes a “margin call” to the investor, and investor has to pay the difference between current margin and maintenance margin to take it to 40%. If the margin falls below 30%, the broker has the discretion of liquidating the client’s holdings and thus recovering the loan advanced.

Risks in Margin Trading:

You can lose more money that you have invested You may have to deposit additional cash or securities in your account on

short notice to cover market losses; You may be forced to sell some or all your securities when falling stock

prices reduce the value of your securities

Benefits of Margin Trading:

I. It serves as an avenue for the investor who wants to buy more shares than the cash available.

II. The investor leverages the transaction and aim to make more money on the investment than the interest payable on the margin loan.

III. It can be very effective tool in the hands of the experienced and heavy trades, who can invest up to double his investible sum in the hope to earn high profits.

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IV. Improves liquidity in the market. With lesser amounts of cash with investors, they can assume higher risk and can invest in higher value of stocks.

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About the Organization

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INDIABULLS SECURITES LTD.

Indiabulls is India's leading retail financial services company with 135 locations spread across 65 cities. It was founded in mid 1999 by: Rajiv Rattan, Saurabh Mittal and Sameer Gehlaut, IIT – Delhi graduates.

Indiabulls offers a full range of financial services and products ranging from Equities to Insurance to enhance your wealth and hence achieve your financial goals.

Indiabulls is lead by a highly regarded management team that has invested cores of rupees into a world class Infrastructure that provides the clients with real-time service & 24/7 accesses to all information and products. Indiabulls Professional Network offers real-time prices, detailed data and news, intelligent analytics, and electronic trading capabilities, right at your fingertips.

Indiabulls is highly profitable and rapidly growing business and is managed by a highly motivated, qualified and talented team. Indiabulls collaborates with all associated fields that are doing very best. Indiabulls is one of the very few who conform to the stringent norms of the National Stock Exchange and hence are approved to provide online and real time trading experience.

With indiabulls.com investors can have complete control of their stock investing actions, now that they have the convenience of buying and selling shares on the NSE online and in real time. Each individual has access to the latest information and tools to analyze

Indiabulls has diverse and growing revenue streams:

• Brokerage services for Cash equities, Debt markets and Derivatives.

• Margin lending business. Indiabulls has developed a sophisticated real-time risk management system to monitor and manage this portfolio to earn attractive spreads with minimal risk

• New business areas such as insurance brokerage & investment management

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Financial Services and Products

Indiabulls offers a full range of financial services and products ranging from Equities to Insurance to enhance your wealth and hence achieve your financial goals

Equity

Online IPO

Indiabulls Equity Products

Normal Indiabulls Power Indiabulls Equity Analysis

Normal Indiabulls

Web Based Connection A connection is made through the website and get the script of 20 companies. The trading is done through the site of Indiabulls Securities limited.

Power Indiabulls

POWER INDIABULLS is an extremely sophisticated trading application that brings a dealer's trading terminal right on to your desktop. Indiabulls is dedicated to empower Active Traders through Personal service and advanced trading technology. Power Indiabulls provides users with an extremely powerful fully integrated Market Watch functionality. Users can open multiple grid based Market Watch screens. These screens can be given user-defined names and can have any number of scrips added to them.

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Power Indiabulls presents the user with a highly powerful charting package. User can open charts for any number of scrips using the right-click menu.

One of the most distinctive features of Power Indiabulls is extremely fast and convenient order entry.

Features of Power Indiabulls:

•Offers great deal of versatility even at low bandwidths ensuring speed and total functionality of a broker’s terminal

•An Active trader can seek information about the cash and derivatives market, execute trades and get confirmations of the same.“All On One Screen”

Computer Terminal needs to be 128 bit Encrypted (supported by Internet Explorer Version 5 and above) Live Streaming Quotes Fast Order Entry Tic by Tic Live Charts Live News and Alerts Extensive Reports for Real-time Accounting • Replica of NEAT Terminal• Creates Multiple Market Watches/Portfolios• Cash and FNO on the same screen• Unlimited number of scrips covered - Unlimited scrips covered in one market watch - Any number of Scrips/FNO on the screen at one time • Also Categorizes MW on the basis - Business Groups - Industry - Any other category • Multiple Intraday Charts with Technical Analysis • Multiple Order books

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Normal Indiabulls:

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Power Indiabulls:

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Equity Analysis

Indiabulls Equity Analysis provides premium research on 400+ companies updated daily.

Indiabulls Equity Analysis provides clients with an objective stock rating system for more than 400+ stocks

An unbiased approach to help in deciding which shares to buy and sell. Includes third party opinions to facilitate more informed investing

decisions.

PARAMETERS

Provides its clients in short and precise the company’s background, stock price, asset class, ratings along with the 3rd party opinions. 1.Overview:

Contains precise information about the industry (cement, pharmaceutical, IT, etc), current stock price, asset class (large cap; mid cap; small cap) and 52-week high-low.

2. Company background /details:

INDIABULLS EQUITY ANALYSIS provides the user with a basic company background that includes:- Services and products offered- Client profile- Core competence- Achievements and its relative position (market share) in the Industry.

3. Equity Ratings:

Ratings are based on a set of parameters, which are as follows: Fundamentals - Assessed on parameters like net profit margin and ROE

(Return on Equity). Valuation - Assesses the attractiveness of a particular stock. Higher the

current value of the company, lower is its future attractiveness.

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Risk - Assessed on parameters like price volatility, liquidity of the stock, debt/equity ratio, etc.

Momentum - Assesses the potential of the stock to keep performing at a stronger than market level in the future. The more the number of buy/buy-hold recommendation the better the momentum rating for the company

4. Current consensus opinion:

Perspective from the viewpoint of the Analyst, which are used to generate ratings for each company (scrip wise). This includes the following:

Third party opinions Only for companies researched by some analysts Parameters include Buy, Buy/Hold, Hold, Weak/Hold, Sell, and No

opinion.

5. Fundamental information:

Under this parameter the company’s share is compared with the industry and market which is based on the following parameters:

-Revenue: Income generated from sales of the product.-Market capital: Number of shares * market price-Price/sales: Stock's current price / revenue per share-Profit margin (%): This parameter is an indicator of profitability, which is calculated as: Net earnings after taxes/revenues-ROE (%) Return on Equity: This is useful in comparing the profitability of a company to other firms in the same industry and this calculated as: Net income/shareholder’s equity-Long Term Debt/Equity: A measure of financial leverage indicating the proportion of equity and debt used by the company to finance its assets.-Dividend Yield: This parameter indicates the income generated by a share.-Beta: A measure of volatility for systematic risk of a security compared to the market.

6. Peer analysis

7. Growth expectations & valuation measuresDepository Services

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Indiabulls is a depository participant with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for trading and settlement of dematerialized shares. Indiabulls performs clearing services for all securities transactions through its accounts. We offer depository services to create a seamless transaction platform – execute trades through Indiabulls Securities and settle these transactions through the Indiabulls Depository Services. Indiabulls Depository Services is part of our value added services for our clients that create multiple interfaces with the client and provide for a solution that takes care of all your needs.

Personal Finance:

Indiabulls believe there’s lot more to money than stocks. They provide a reservoir of information about saving, investment and borrowing options for investors facilitating decisions related to varied needs.

Personal loan:

Home loan:

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RESEARCH METHODOLOGY

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Objectives of the study:

Objective of this study is to find out Indiabulls Securities services for, Demat

account, Equity market, and Derivative market. The Project is sub-divided into

the following objectives:

To find the competition of equity market especially in NSE trading and

comparison of the broking firms.

To study the equity products and services of Indiabulls Securities Ltd.

To increase the market of Indiabulls Securities Ltd. in Jaipur city.

To find the advantages of the Demat account

To study the trading procedure of Indiabulls Securities

To find the cost saving analysis on the brokerage charges by the

Indiabulls Securities on the share and derivative trading with the other

broking firms.

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RESEARCH METHODOLOGY

Research: Exploratory research

Universe

ALL TYPES OF INVESTORS AND BROKERSInvestor is a person who invests money to earn profit or interest on the investment, it can be in the form of deposits, lending in the form of loans or investing in equities.

Population

ALL INVESTORS DEALING IN SHARE MARKET (PRIMARY\SECONDARY) OR DERIVATIVES

ALL BROKING FIRMS (NATIONAL PLAYERS AND LOCAL BROKERS )

Information Source:Investors from Various firms, Relationship managers, Internet, Brokers & Sub-brokers in Jaipur, Telecalling references generated from respondents interviewed.

Sample size

BROKERS AND SUB BROKERS IN JAIPUR

Share brokers and sub-brokers (including on-line line & off-line brokers):Kotakstreet.com, 5Paisa.com(India infoline),reliance money, ICICIDirect.com, Sharekhan, religare, anagram securities,angel broking,Emkay securities, Anandrathi, H.C.Jain & Co., Hem Securities, Eureka Securities, Alankit Assignments, UTI Securities, Motilal Oswal, unicorn securities.

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Sampling

Sampling method Stratified sampling technique used Data Type Primary Data and Secondary Data Data Collection Techniques Personal Interview, telecallingand Tools Journals, Indiabulls.com

other books and websites

Area under Study Jaipur City

Statistical Analysis

Data analysis is done with the help of bar charts, pie charts, tables and certain mathematical tools are also applied to derive the results.

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FINDING AND ANALYSIS

Objective of this study is to find out Indiabulls Securities services for Equity market, Derivative market clients. Another aspect of this study is to explain various technical aspects related to investment to investors and to have an overview of competing On-line share trading firms’ strategy.

1.Comparison of Cost- Physical Vs Demat Of Shares

TYPE OF ACCOUNT PHYSICAL DEMATBrokerage 0.75-1.25% 0.25-0.75%Stamp Duty on transfer 0.5% of MV NILPostal Actual NILTransfer Deeds INR 0.35/TD NILFollow Ups Actual NILSettlement Changes NIL 0.05% of Transaction

ValueCustody Changes (Vault Cost) 0.02% of Share

ValueBad Delivery Not Quantifiable NILLoss/Theft/Mutilation Actual NILNon Receipt Of Bonus/right Shares

Actual NIL

No bad delivery of shares. No loss of share certificate in postal transit. No courier\postal charges incurred in transferring them or changing your

address etc. No requirement of stamp duty on transfer of shares. (This is 0.5% of

value in case of physical) Shares are transferred in the name of purchaser within a day of

completion of settlement as against 45-60 days in physical mode. Much faster payment on sale of shares. No scope for theft\forgery damage of share certificates. Minimum handling of paper. Less brokerage payable to broker when trading in Demat shares.

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2.Corporate Offer

Sno. Parameters Competitors offer Indiabulls Offer

1 Facilities Only offline or online or both

Both offline and online

2 A/c Opening charges Rs 0 to Rs.750 (initially)

Rs 900(lifetime)

3 Annual Maintenance charges

Rs 190 to Rs. 500 Nil

4 Brokerage-Intraday 0.15% to 0.02% 0.10(negotiable)5 Delivery 0.75% to 0.20% 0.50(negotiable)6 Min Charges Rs 10 to Rs 25 1 Paisa7 Margin-Intraday Generally 6 to 10

times8 times

8 Margin on Delivery Most of the competitors do not provide

4 times

9 Automised margin lending facility

Do not have Provided

10 Equity analysis Do not have Equity Analysis of 400+ companies updated daily

11 Technical charts Do not provide Provided on trade terminal

12 Transparency Not so transparent Everything provided online

Online trading through Power Indiabulls is extremely fast and convenient.

User can open charts for any number of scrips. Competitors are providing website based software whereas Power

Indiabulls is Java based, that is why it is faster than that of others. Charging no AMC is a special feature of Indiabulls Securities Ltd.

Account once opened is active for the whole life. Account holder needs not renew his account every year.

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3. Comparison of different Depository Participants

SNO. Name Of DP Demat Charges initial

Account Maintenance (AMC)

Charges for Trading Account

1 ICICI DIRECT.COM

Rs. 750 Rs. 500/- PA Nil

2 IL&FS Rs. 270 Rs. 250/- PA Rs. 6703 UTI

SECURITIES Rs. 375 Rs. 240/- PA Nil

4 KOTAK SECURITIES

Rs. 360 Rs. 30/- Per Month

Nil

5 SHAREKHAN Nil Rs. 300/- PA Rs. 7506 INDIABULLS

SECURITIES LTD.

Rs. 200 NIL Rs. 500

7 ANAGRAM Rs. 50 Rs. 300/- PA Rs. 300 (AMC)

8 INDIAINFOLINE Nil Rs. 250/-PA Rs. 4259 ALANKIT

ASSIGNMENT Rs.400 Rs. 260/-PA Rs. 50

10 MOTILAL OSWAL

Nil Nil Rs. 500

11 ANANDRATHI Nil Rs. 330/- PA Rs. 20012 FORTIS Rs. 350 Rs. 190/- PA Nil13 HEM

SECURITIESRs. 100 Rs.250/- PA Nil

14 EUREKA SECURITIES

Nil Rs. 265/- PA Rs. 40

Demat charges per year taken by the entire depository participants are almost similar.

Local Brokers’ charges are the lowest among these. Many of them are free.

Many depository participants are opening accounts in free but they are charging annual maintenance (AMC).

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A very few are not charging account maintenance (AMC) viz. Indiabulls and Motilal Oswal.

4.Comparison of brokerage charges by different Depository Participants

SNO. Name Of DP Brokerage Charges on Delivery

Brokerage Charges on Intraday settlement

1 ICICI DIRECT.COM 0.75-0.25% 0.10-0.08%2 IL&FS 0.75% 0.25%3 UTI SECURITIES 0.3% 0.08%4 KOTAK

SECURITIES0.65-0.20% 0.07-0.03%

5 SHAREKHAN 0.35-0.20% 0.08-0.06%6 INDIABULLS

SECURITIES LTD.0.50-0.20% 0.10-0.03%

7 ANAGRAM 0.30-0.25% 0.03%8 INDIAINFOLINE 0.25-0.20% 0.05-0.04%9 ALANKIT

ASSIGNMENT 0.50-0.30% 0.05-0.03%

10 MOTILAL OSWAL 0 .40-0.30% 0.075%11 ANANDRATHI 0.30-0.25% 0.08%12 FORTIS 0.30-0.20% 0.03-0.02%13 HEM SECURITIES 0.25-0.10% 0.03%14 EUREKA

SECURITIES0.40-0.30% 0.05-0.04%

Brokerage charges of almost all the broking firms are negotiable according to the potential of the customer. But brokerage charged by icicidirect.com is not negotiable (according to slab-rate).

In Alankit and Fortis brokerage is negotiable up to any level. Indiabulls Securities Ltd. is encouraging the investors to trade more by

charging less brokerage as compared to other competitors. ICICI Web Trade is first mover with the smart deal of Demat + Bank

Account + On-Line Trading Account

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The local brokers and the sub brokers are charging the least brokerage as compared to the national players.

5.Comparison of margin limits given by different Depository Participants

SNO. Name Of DP Margin on Delivery

Margin on Intraday settlement

1 ICICI DIRECT.COM Nil 4t – 20t2 IL&FS Nil Depends on

volume3 UTI SECURITIES 4t 10t4 KOTAK

SECURITIES4t 6t

5 SHAREKHAN Depends on volume

Depends on volume

6 INDIABULLS SECURITIES LTD.

4t 8t – 15t

7 ANAGRAM Nil 5t8 INDIAINFOLINE 4t 6t – 10t9 ALANKIT

ASSIGNMENT Nil 10t

10 MOTILAL OSWAL Nil 5t11 ANANDRATHI Negotiable 4t12 FORTIS 4t – 5t 8t13 HEM SECURITIES Nil 10t14 EUREKA

SECURITIESDepends on volume

10t

Hem Securities requires Rs. 25000 as a minimum balance in trading account. One cannot trade through Hem Securities without having Rs. 25000 minimum.

In UTI Securities it is Rs. 10000 and in Indiainfoline it is Rs. 5000. And in Indiabulls Securities it is Rs. 500.

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Most of the broking firms do not provide margin on delivery, on the other hand some are allowing their customer to trade up to any limit, which is very risky.

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28% of the respondents were already trading in shares with other broking firms. 45% of the tea traders were either trading with other brokers (mostly with local brokers) or they were interested in online share trading. Doctors also showed interested in online share trading .

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ICICIdirect.com charges the highest brokerage and also doesn’t have good CRM. It has undertaken massive promotional measures like setting up of canopies, hoarding, banners, etc. The other competitors did not seem to pose a threat and were small players at least in Jaipur market.

Indiabulls is providing better facilities for investors (both in Offline and Online)

Indiabulls is providing better margin on Intraday and Delivery trading.

Dematerlisation of shares became the necessity for the investors, because through this only an investor can trade more quickly.

All depository participants’ charges vary from 1 to 3 percent of share value and from Rs 25 to 35 per request.

Majority of the investors of this region would like to invest between 25000-50000 at one shot.

Indiabulls is charging less brokerage than other share trading firms.

Overall Indiabulls is providing better deal in Jaipur. All its products and services are better enough to attract investors and traders.

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Limitations:

Findings cannot be generalized to all over India.

The research undertaken is strictly

with in the time frame of 01/07/2007 to 25/09/2007.

Several suggestions could not be

included in the report because more of research works are required

for them.

The findings of the research are

directly in accordance with above mentioned time period and are

directly proportional to market conditions.

The result is just an instantaneous

view of the equity market scenario.

Although every care has been

taken to make sure that the research is accurate to the highest degree

of significance but still a slight possibility of errors cannot be ruled

out.

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Suggestions

Brokerage rate on trading have to be reduced. Even this one of the major factor that has to be taken care of, because competitors are providing lesser brokerage both Intraday and Delivery trading which satisfies customer who are investing and trading frequently.

Tapping the high income groupsCompany should focus on High-income groups and Level to be maintained. They can better profit to the company and can increase the turnover of the company.

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Conclusion

Over all Indiabulls is providing better deal to investors in Jaipur city. Indiabulls

is in Jaipur for past 8 years, hence has captured a major share in Jaipur market

(35%) through aggressive marketing. Its Jaipur Branch has a strong team of

Marketing & Relationships Executives. India bulls have negotiable brokerage

system even in on-line share trading. It has also undertaken promotional

measures to lure the clients. It is also providing “Pool” account through which

per transaction cost can also be saved.

There are no hidden costs charged from investors till today. The Turnover of

the company is high and acted as one of the largest retail financing company

and the company is providing convenience of buying and selling shares on NSE

online.

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Bibliography

1) www.nseindia.com

2) www.sebi.gov.in

3) www.indiabulls.com

4) www.kotakstreet.com

5) www.indiainfoline.com

6) www.yahoofinancials.com

7) www.hindubonline.net

10) www.icicidirect.com

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GLOSSARY\TERMINOLOGY

Arbitrage- Profiting from differences in price of the same share traded on two or more stock exchanges.

Automated Screen Trading- Electronic trading in stocks through Visual Display Units (VDU). The associated computer enters, matches, and executes the deal. It makes possible a floorless exchange and brings transparency to deals.

Bears- Those who sell shares anticipating a fall in prices.

Bear Hammering- Persistent selling pressure by bears, bringing the prices down.

Beta Shares- Listed, but infrequently traded, shares of companies with a generally low equity capital.

Blank Sales- Sale of securities by BEARS who do not possess the securities at the moment of selling, but hope to buy them at a lower price when the market has fallen.

Book Closure-Before a company declares a dividend or issues bonus or rights shares, it closes its register of members for a certain period, from one week to a month, during which no transfer of shares is registered.

Brokers- are intermediaries who compete for the right to help people buy or sell something of value on his client’s behalf.

Bulls-Those who buy shares in anticipation of increase in price.

Call Option- Right to buy at fixed price.

Capital Market-includes primary market, securities market term lending institutions, banks, investors engaged in providing long-term capital (whether equity capital or debt capital) to the Industrial Sector.

Commodities Market-Market for trading bulk & basic goods like grain, edible oils, rubber, cotton, metals, etc. Certain special items like tea & coffee are traded in auctions with inspection facilities for the goods.

Day Trading-Buying and selling the same share during a single day, hoping to make a profit from price fluctuations.

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Depth market- refers to the number of participants in the market ready to transact at a given price to ensure sufficient liquidity.

Derivatives- is a product whose value is derived from the value of underlying asset, index etc. The underlying assets can be equity, forex commodity, or any other asset.Government Securities- means a security created & issued by the Central Government or State Government for the purpose of raising a public loan.

Grey Market- Unofficial premium market in which new, not-yet-listed shares rebought and sold.

Equity Market- Ownership of tangible assets are bought & sold in Equity Market.

Ex-Dividend Date-A publicly announced date on or after which a buyer will not be entitled to the dividend declared on a share. The share price is usually shade lower on the ex-dividend date.

Exercise-To put into effect, the right to buy or sell.

Financial Market- provide the channel for allocation of savings to investment & provide a variety of assets to savers as well as various forms in which the investors can raise funds.

FI- Financial InstitutionFII-Financial Institutional Investor

Floor Broker-A person who actually does the buying & selling of shares on behalf of a member of the stock exchange for a small share of the commission charged by a broker.

Forward Dealing/Trading-Contracts to buy or sell specific quantities of goods, currency, or freight at a stated price and a stated time in the future. Forward contracts are bought & sold in the FUTURES MARKET.

Futures-Shares or commodities bought or sold for delivery at a future date. These can be sold at a profit before delivery if prices in the market have changed.

Holding the Market-Market intervention by public corporations like the UTI or LIC with large buy orders of shares to stabilize a falling market. It is a part of their government mandate.

Hot Shares- 1. Shares in great demand. 2. Stolen shares.

In-and-Out Trader-One who buys and sells the same share in the course of the trading day, hoping to profit from sharp price movements & keeps no over-night position.

IPO- Initial Public Offering. New shares offered to public in the Primary Market.

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Jobbers- Broker’s broker. One who specializes in specific securities catering to the needs of other brokers.Liquid Market- One where the size of an order creates minimal affects on the transactions price.

Lot-A fixed number in which shares are bought & sold.

Low-The lowest price paid for a share in the last twelve months.

Mark Down- When a broker is buying shares on his own account from a customer he takes the best Bid Price and deducts a commission, which is the mark down.

Mark Up- When a broker is selling from his own account to a customer, he charges the best Ask Price and adds a commission, which is the mark up.

Market at Rest- The day’s closing prices that are taken into account while preparing share price movements charts.

Market Capitalization- The total market value, at the current stock exchange list price, of the total number of equity shares issued by a company.

Market Order- Order to the stockbroker to buy or sell a share at the best available price.

Market Price- The last reported price of a share at which it was sold on the stock exchange.

Market Lot- Each Company specifies the minimum number of securities, which makes an even or market lot.

Margin- The difference in prices at which a Jobber will buy and sell. Also called a Haircut.

Margin Account-An account with a brokerage firm, which will allow the client to buy shares with money borrowed from the broker. Margin requirements can be met with a deposit in cash or shares.

Maturity-Day on which option is exercised.

Meltdown- The phenomenon of fast, uncontrolled fall in share prices.

Member Code- A unique code given to each member of the stock exchange to enable the clearinghouse to check his payment or delivery position.

Member Firm- A brokerage firm, which has at least one membership on a major stock exchange.

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MIT- Market If Touched. A limit order, which automatically becomes a market order when the price is reached.Naïve Buy-and-Hold Strategy- Selecting shares randomly, buying them, and holding them regardless of any information available in the market.

Naked Call Writing- Selling a call option on shares the writer does not own.

Naked Option- A Call option for which the seller does not own the supporting shares.

One Way Market- A market dominated by only buyers or sellers.

Out of the money-Option exercised price is above (in case of call) or below (in case of put) prevailing price of underlying asset.

Over the Counter Market or OTC Market- A market where shares which are not listed on the stock exchange are traded.

Panic Selling- A condition of the stock market in which not only inexperienced investors, but also sturdy bulls, take fright and start selling.

Portfolio- Combined holding of many kinds of financial securities- shares, debentures, government bonds, Unit Trust certificates, and other financial assets. Reducing risk by diversification and maximization of gains are the primary objects.

Portfolio Manager- A professional who manages other peoples’ or institution’s investment portfolios with the objectives of profitability, growth and risk minimization.

Premium- 1. A price above the face value of a share or any other financial security. 2. Price paid for buying an Option.

Price Gap- A share’s high and low during a day does not overlap the prices on the previous.

Profit Booking- Selling shares when their prices have risen above their purchase price.

Profit Taking- Selling a share, bought when its price was relatively low, when the market price has risen.

Punter- Small speculator who hopes to make a quick buck by buying shares, holding them for short period, and selling them to make a quick profit.Purchase Order- Written instruction to a share broker to buy or sell particular shares in a particular way.

Put Option-Right to sell at fixed price.

Quotation- Highest bid and lowest offers for a share.

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Quoted Price- The price at which a share was last bought and sold on the stock exchange.

Quoted Shares- The shares of a company which are officially registered on a stock exchange, and whose prices are quoted on the Official List.

Rally- Noticeable rise in the price of a share, or a noticeable rise in the share market index, after a period of stagnancy or a declining trend.

Ramping- Large-scale buying of a stock from the market with the object of boosting the image of the stock and the company behind it to increase its demand and consequently its price.

Rate of Turnover- Total annual sales divided by the average inventory shows the speed with which stock has been turned over.

Record Date- For the purpose of dividend distribution and entitlements to Bonus or Rights Issues, a company fixes a date on which a shareholder must officially own shares to qualify.

Resistance Level- A level at which the rise in price of a share has repeated halted, as there are more sellers at that price than buyers.

Retail Investor- He is the individual buying shares for himself, as opposed to the institutional investor who buys for others.

Rigging- Manipulation of share prices so as to attract naïve investors to buy or sell shares.

Rights Issue- Issue of shares at par or at a premium by an existing company to its shareholders in a certain proportion to their holdings, as a matter of their right to receive preferential treatment.

Roll Over- Transfer of funds from one investment to another.

Round Lot- The minimum number of shares in a trading lot; 10 or 50 in the case of Rs.10 shares, and 10 or 5 for Rs.100 shares.

Running Ahead- A broker buying or selling a share on his own account before his client’s order for the same share.

Sauda Book- A book used by members of a stock exchange or their authorized assistants to record sales and purchase transactions.

Screening Stocks- A process of looking for shares, which meet predetermined, financial and investment criteria. With computerized share scan the process has now become much simpler.

Scrip- Share Certificate.

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SEBI (Securities & Exchange Board of India)- is the National Regulatory body for the securities market set up under the SEBI ACT, 1992 to ‘protect the interests of investors in securities & to promote the development of, & to regulate, the securities market & for matters connected therewith or incidental to.’

Secondary Market- Place where already issued and outstanding shares are bought and sold. Distinguished from the primary market in which the issuer sells shares directly to the investor.

Securities Market-refers to the markets for those financial instruments/ claims/ obligations that are commonly & readily transferable by sale.

Seller’s Market- Characterized by a shortage of shares in the market in relation to their demand and consequent high prices, indicating a BULL MARKET.

Sell Out- When a client fails to pay and take delivery of the shares bought on behalf of him by the broker, the broker sells off the shares at the best market price and the client is responsible for any financial loss to the broker.

Selling Short- Sale of shares, which he doesn’t possess, by a speculator.

Sensitive Market- Market easily influenced by good or bad news.

Settlement Date- In a spot delivery contract the delivery of share certificates and payment for them have to be concluded on the same day or the next day. In hand delivery contracts the delivery and payments have to be made on an agreed date, not exceeding a fortnight from the date of contract.

Settlement/Badla Trading –Buy share even if we do not have the requisite amount of money or sell shares even if we do not have the Share Certificates.

Share- A share is one unit of ownership of a company.

Share Certificate- Documentary evidence of the ownership of a block of shares.Shareholder- A person or a legal entity who owns equity or preference shares of a company.

Share Premium- An amount in excess of the face value of a share charged by a company on its share issue.

SHCIL-Stock Holding Corporation of India Ltd. Set up in 1988 to provide post-trade services like holding stocks on behalf of investors.

Specified Shares- The most widely traded shares, also known as GROUP A SECURITIES, CLEARED SECURITIES, transactions in which are made through the clearinghouse of the stock exchange.

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Spot Delivery- Delivery of shares and payment for the same on the date of purchase or within 48 hours.

Spot Market- Commodities market in which goods are sold against cash and delivered immediately.

Squaring Up- Settling of accounts on ACCOUNTS DAY, by actual delivery of shares or carrying forward one’s transactions to the next account day, by paying BACKWARDATION.

Stock Exchange- A marketplace where shares change hands for consideration. An association of individual members called member brokers/ members/ brokers formed for the purpose of regulating & facilitating the buying & selling securities by the public & institutions at large.Stock Exchange operates with due recognition from the Government under the Securities & Contracts (Regulations) Act, 1956. BSE controls 80% of total volume of transactions.

Stock Option- In share trading, it is the right to buy or sell a hare at a particular price within a particular period, in order to hedge the investment.

Striking or Exercise Price: Fixed price at which the option may be exercised and the underlying asset bought or sold.

Take a Position- To buy a share for the long-term.

Take Delivery- Physical acceptance of shares, which have been bought on his account, by a client.

Trading Floor- The area in a stock exchange in which dealers trade through personal contact, as against impersonal screen trading.

Trading Halt- Suspension of trading in a share for a time while important news from the issuing company is being evaluated.

Unloading- Selling shares off when prices are falling to avoid further loss.

Wash Sale- Buying & selling of a share simultaneously or within a short period of time by an individual or a group to generate artificial market activity and a rise in the share’s price which the manipulator’s can then cash in on.

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Indiabulls is India’s leading Financial Services and Real Estate company having over 640 branches all over India. Indiabulls serves the financial needs of more than 4,50,000 customers with its wide range of financial services and products from securities, derivatives trading, depositary services, research & advisory services, consumer secured & unsecured credit, loan against shares and mortgage & housing finance. With around 4000 Relationship Managers, Indiabulls helps its clients to satisfy their customized financial goals. Indiabulls through its group companies has entered Indian Real Estate business in 2005. It is currently evaluating several large-scale projects worth several hundred million dollars.

Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay Stock Exchange and Luxembourg Stock Exchange. The market capitalization of Indiabulls is around USD 2,350 million (25th April 2007). Consolidated net worth of the group is around USD 510 million (31st March 2007). Indiabulls and its group companies have attracted USD 500 million of equity capital in Foreign Direct Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are the largest financial institutions of the world such as Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley and Farallon Capital.

Business of the company has grown in leaps and bounds since its inception. Revenue of the company grew at a CAGR of 159% from FY03 to FY07. During the same period, profits of the company grew at a CAGR of 184%.

Indiabulls became the first company to bring FDI in Indian Real Estate through a JV with Farallon Capital Management LLC, a respected US based investment firm. Indiabulls has demonstrated deep understanding and commitment to Indian Real Estate market by winning competitive bids for landmark properties in Mumbai and Delhi.

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2000-01 Indiabulls Financial Services Ltd. established India’s one of the first trading platforms with the development of an in house team.

2001-03 Indiabulls expands its service offerings to include Equity, F&O, Wholesale Debt, Mutual fund, IPO distribution and Equity Research.

2003-04

Indiabulls ventured into Insurance distribution and commodities trading.

Company focused on brand building and franchise model.

2004-05

Indiabulls came out with its initial public offer (IPO) in September 2004.

Indiabulls started its consumer finance business. Indiabulls entered the Indian Real Estate market

and became the first company to bring FDI in Indian Real Estate.

Indiabulls won bids for landmark properties in Mumbai.

2005-06 Indiabulls has acquired over 115 acres of land in

Sonepat for residential home site development. Merrill Lynch and Goldman sac, one of the

renowned investment banks in the world have increased their shareholding in Indiabulls.

Indiabulls is a market leader in securities brokerage industry, With around 31% share in online trading,

Farallon Capital and its affiliates, the world’s largest hedge fund committed Rs. 2000 million for

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Indiabulls subsidiaries Viz. Indiabulls Credit Services Ltd. and Indiabulls Housing Finance Ltd.

Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture Ltd. acquired 8.2% stake in Indiabulls Credit Services Ltd.

2006-07

Indiabulls entered in a 50/50 joint venture with DLF, Kenneth Builders & Developers (KBD). KBD has acquired 35.8 acres of land from Delhi Development Authority through a competitive bidding process for Rs 450 crore to develop residential apartments.

Indiabulls Financial Services Ltd. is included in the prestigious Morgan Stanley Capital International Index (MSCI).

Farallon Capital has agreed to invest Rs. 6,440 million in Indiabulls Financial Services Ltd.

Indiabulls ventured into commodity brokerage business.

Indiabulls has received an “in principle approval” from Government of India for development of multi product SEZ in the state of Maharashtra.

Dev Property Development plc., has subscribed to new shares and has also acquired a minority shareholding from the Company.

Indiabulls Financial Services Ltd. Board resolves to Amalgamate Indiabulls Credit Services Limited and demerge Indiabulls Securities Limited.

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