Jaideb,s Final Edited Report

8/8/2019 Jaideb,s Final Edited Report

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CHAPTER -1

A: INTRODUCTIONB: NEED OF STUDY

C: SCOPE OF STUDY

D: OBJECTIVE OF STUDY


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INTRODUCTION

Indian Stock market has undergone tremendous changes over the years. Investment in

Stocks has become a major alternative among Investors. The project has been carried

out to understand investors perception about stock market in the context of their

trading preference, their portfolio management, explore investors risk perception &

satisfaction of the services obtained.

The methodology used was data collection using Schedule & Questionnaire. The

target customers were Investors who are trading in the stock market. The area of

survey was restricted to people residing in Allahabad.

Investment in share markets are based on analysis & reasoning which help to predict

market to some extent. Through the years a number of technicals & theories foranalysis have evolved, these combined with modern technology guides the investor.

The big players in the market, like Foreign Institutional Investors, Mutual Funds, etc.

have the expertise for various analytical tools & make use of them. The speculator

invests for a short period for instant gains & his investment are based on market

sentiments, inside information, through grapevine, tips & intuition. The small

investors depend on brokers and brokerage house for his investments.

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NEED

In recent years a large number of players have entered into his market. The level of

competition is so high that retaining existing customers or getting new customers by

good word of mouth from existing customers is very important. This clearly shows the

importance of knowing how satisfied our present customers are.

It is with this backdrop that the study is being initiated. We are trying to find out how

satisfied the existing customers are and also trying to find out what are the crucial

factors that customers look for. This will help in improving methods by which the

overall performance can be improved and key indicators of customer dissatisfaction

shall be documented and supported by objective information.

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SCOPE

This project also throws light on the Capital Market and broking services. During my

Summer Training project, I have analyzed Investors behaviors on stocks. I have tried

to analyze the equity instruments and the Market Trend.

I have given a brief introduction about the instruments, and various clearing and

settlement process in Equity buying and selling. Then I have tried to analyze portfolio

of various investors as per the Market investor and Market Trend.

It gives you an Introduction about the Stock Market Introduction and Brokerage firm

role in securities Market, various terms used in it and the types of Market Participant,

who use these Instruments. The basic purpose of this project is analyze Investors

perception & their portfolio strategy in respect of changing market scenario, and also

buying and selling patterns and time for that. However, major volumes are related to

Research on some stock strategy in equity selling which is a major part of Equity

market.

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OBJECTIVE

1. To find out Satisfaction level of Investors with respect to their existing broker.

2. To find out awareness of competitors products among Investors.

3. Investors Preference & Investment patterns.

4. To present and analyze various strategies in different market situations for

players of different profiles.

5. This work is intended to be useful for researchers, traders, portfolio managers,

financial institutions, mutual funds, corporate and student finance.

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CHAPTER -2

A: RESEARCH METHODOLOGY

a- Sample Size

b- Methods of Data Collection

c- Instrument Used

B: LIMITATION

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RESEARCH METHODOLOGY

Sample Size

The Sample consists of 100 investors from various brokers premises.

Methods Of Data Collection

Primary Data was collected through survey among investors. The procedure adopted

to select sample was simple random sampling.

Secondary data was collected through firms internal sources, website of different

stock exchanges, business magazines & journals.

Instrument Used

The data was collected through using Schedule & Questionnaire to different investors.

The research design is analytical in nature. A questionnaire was prepared and

distributed to Investors. The investors profile is based on the results of a

questionnaire that the Investors complete.

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LIMITATIONS

Limitations in regards with the Sample Selections:

The sample under study is relatively small, limited to field research for 100

Investors in the Stock market & conducted only in Allahabad. The responses are

subjected to customer bias.

A more extended geographical sample may show greater difference in

perceptions.

It would be interesting, in further research, to correlate perceptions of services

in terms of customer satisfaction, or factor analysis on the various services

expected by customers. The Sample size may be extended to include other

services also.

Limited Time for conducting the study.

Respondents were not interested to disclose details.

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CHAPTER -3

COMPANY PROFILE

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Religare is driven by ethical and dynamic process for wealth creation. Based on this,

the company started its endeavour in the financial market.

Religare Enterprises Limited through Religare Securities Limited, Religare Finvest

Limited, Religare Commodities Limited and Religare Insurance Advisory Services

Limited provides integrated financial solutions to its corporate, retail and wealth

management clients. Today, we provide various financial services which include

Investment Banking, Corporate Finance, Portfolio Management Services, Equity &

Commodity Broking, Insurance and Mutual Funds. Plus, theres a lot more to come

your way.

Religare is proud of being a truly professional financial service provider managed by

a highly skilled team, who have proven track record in their respective domains.

Religare operations are managed by more than 2000 highly skilled professionals who

subscribe to Religare philosophy and are spread across its country wide branches.

Today, we have a growing network of more than 150 branches and more than 300

business partners spread across more than 180 cities in India and a fully operational

international office at London. However, our target is to have 350 branches and 1000

business partners in 300 cities of India and more than 7 International offices by the

end of 2006.

Unlike a traditional broking firm, Religare group works on the philosophy of

partnering for wealth creation. We not only execute trades for our clients but also

provide them critical and timely investment advice. The growing list of financial

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institutions with which Religare is empanelled as an approved broker is a reflection of

the high level service standard maintained by the company.

COMPANYPROFILE

RELIGARE Securities Ltd. (RSL) is a wholly owned subsidiary of RELIGARE

Financial Services Ltd. (RFSL), a Company promoted by the late Dr. Parvinder Singh,

Ex-CMD of Ranbaxy Laboratories Ltd.

The primary focus of RSL is to cater to services in Capital Market Operations to

Institutional Investors. The Company is a member of the National Stock Exchange

(NSE) and OTCEI. The growing list of financial institutions with whom RSL is

empaneled, as approved Broker is a reflection of the high levels of services

maintained by the Company.

As on date the Company is empaneled with UTI, IDBI, IFCI, SBI, BOI-MF, Punjab

National Bank, PNB-MF, Oriental Insurance, GIC, UTI-Offshore, ICICI Canbank

MF, Punjab & Sind Bank, Pioneer ITI, SUN F&C, IDBI Principal, Prudential ICICI,

ING Baring and J M Mutual Fund.

RELIGARE was founded with the vision of providing integrated financial care driven

by the relationship of trust. The bouquet of services offered by RELIGARE includes

Broking (Stocks and Commodities), Depository Participant Service, Advisory on

Mutual Fund Investments and Portfolio Management Services.

RELIGARE is a pioneer in the concept of partnership to reach multiple locations in

order to effectively service its large base of individual clients. Besides the reach of

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RELIGARE, the clients of the company greatly benefit by its strong research

capability, which encompasses fundamentals as well as technicals.

GROUP STRUCTURE:-

RELIGARE in recent years has expanded its reach in health care and financial

services wherein it has mutiple speciality hospital and labs which provide health care

services and mutiple financial services such as secondary market equity services,

portfolio management services, depository services etc.

RELIGARE financial services group comprises of Religare Securities

Limited, RELIGARE Comdex Limited, and RELIGARE Finvest Limited which

provide services in Equity, Commodity and Financial Services business & Religare

Insurance Advisory Ltd.

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RELIGARE SECURITIES LIMITED

1. Member of National Stock Exchange of India and Bombay Stock

Exchange of India.

2. Depository Participant with National Securities Depository

Limited (NSDL) and Central Depository Services Limited

(CDSL).3. A SEBI approved Portfolio Manager.

RSL provides platform to all segments of the investor to leverage the immense

opportunity offered by equity investing in India either on their own or through

managed funds in Portfolio Management.

RELIGARE COMDEX LIMITED

Member of National Commodity Derivative Exchange and Multi Commodity

Exchange.

FCL provides platform to both agro and non agro commodity traders to derive the

actual price of the commodity and also to trade and hedge actively in the growing

commodity trading market in India.

RELIGARE FINVEST LIMITED

A RBI approved Non-banking finance company.

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FFL provides fund based financial services such as loan against shares, IPO financing

and other allied services.

RELIGARE is a truly professional corporate backed financial service provider

with very sound financial base and backing. RELIGARE is managed by team of

highly skilled professional who have proven track record in their respective domains.

RELIGARE has the widest reach in India through its Regional, Zonal and

Branch Offices spread across the country.

RELIGARE INSURANCE ADVISORY LTD

Religare has been taking care of financial services for long but there was a missing

link. Financial planning is incomplete without protective measure i.e. structured

products to take care of event of things that may go wrong.

Consequently, Religare is soon coming up with Religare Insurance Advisory Services

Limited. As composite insurance broker, we would deal in both insurance and

reinsurance, providing our clients risk transfer solutions on life and non-life sides.

This service will take benefit of Religares vast business empire spread throughout the

country -- providing our valued clients insurance services across India. We aim to

have a wide reach with our services literally! Thats why we are catering the

insurance requirements of both retail and corporate segments with products of all the

insurance companies on life and non-life side.

Still, there is more in store. We also cater individuals with a complete suite of

insurance solutions, both life and general to mitigate risks to life and assets through

our existing network of over 150 branches expected to reach 250 by the end of this

year!

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For corporate clients, we will be offering value based customized solutions to cover

all risks which their business is exposed to. An operations team equipped with the best

of technology support will support our clients.

Religare Insurance Advisory aims to provide neutral, transparent and professional risk

transfer advice to become the first choice of India.

PRODUCT & SERVICES

Equity Trading

Derivative Trading Commodity Trading

Depository Services

Margin Financing

NRI Desk Management

Research & Technical Analysis

Portfolio Management Services

International Equity & Commodity

Institutional Business

Investing Banking

Internet Trading ( RACE & RALLY )

BUSINESS & OPERATIONS

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BUSINESS

Over a period of time RSL has recorded a healthy growth rate both in business

volumes and profitability as it is one of the major players in this line of business.

The business thrust has been mainly in the development of business from FinancialInstitutions, Mutual Funds and Corporate.

OPERATIONS

The operations of the company are broadly organized along the following functions.

RESEARCH & ANALYSIS

This group is focused on doing daily stock picks and periodical scrip segment specific

research. They provide the best of analysis in the industry and are valued by both our

Institutional and Retail clientele.

MARKETING

This group is focused on tracking potential business opportunities and converting

them into business relationships. Evaluating the needs of the clients and tailoring

products to meet their specific requirements helps the company to build lasting

relationships.

DEALING

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Enabling the clients to procure the best rates on their transactions & providing

customize portfolio is the core function of this group.

BACK OFFICE

This group ensures timely deliveries of securities traded, liaison with stock exchange

authorities on operational matters, statutory compliance, handling tasks like pay-in,

pay-out, etc. This section is fully automated to enable the staff to focus on the

technicalities of securities trading and is manned by professionals having long

experience in the field.

INFRASTRUCTURE

OFFICES

The company has offices located at prime locations in Mumbai, New Delhi, Kolkata

and Chennai. The offices are centrally located to cater to the requirements of

institutional and corporate clients and retails clients, and for ease of operations due to

proximity to stock exchanges and banks.

COMMUNICATIONS

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The company has its disposal, an efficient network of advance communication system

and intends to install CRM facility; besides this it is implementing interactive client

information dissemination system which enables clients to view their latest client

information on web. It has an installed multiple WAN to interconnect the branches to

communicate on real time basis.

The company is equipped with most advanced systems to facilitate smooth

functioning of operations. It has installed its major application on IBM machines and

uses latest state of art financial software.

MANAGEMENT

Mr. Sunil Godhwani is Chief Executive Officer and Managing Director of

RELIGARE Securities Limited. He is also the CEO & MD of the parent company

RELIGARE Financial Services Limited and is managing the entire operations of both

the companies.

CEO is supported by various HODs who are creditable professional of their respective

fields and they are further working with team of professionals consisting of Chartered

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Accountants, MBAs with varied experience in financial services and stock broking

functions.

The Board of Directors consists of Mr. Harpal Singh as Chairman and Mr. V.K. Kaul,

Mr. Malvinder Mohan Singh, Mr. Shivinder Mohan Singh as Directors.

DEPARTMENT HEAD

Retail Broking: Mr. Ashu Madan

Strategic Operations & Depository: Mr. Shachindra Nath

Back Office: Mr. Anil Saxena

Private Client Group: Mr. Atul Gupta

Research: Mr. Sanjay Kumar

CORPORATE STRUCTURE

Our organization is led by individuals who are professionals and leaders in every

sense of the word. Experts in their respective domains, esteem members of our Boardof Directors are:

Name Designation

Mr. Malvinder Singh ChairmanMr. Vinay Kumar Kaul Director Mr. Harpal Mohan Singh Director

Mr. Shivinder Mohan Singh Director Mr. Sunil Godhwani M.D.

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DEPOSITORY PARTICIPANT SERVICES

RELIGARE Securities Ltd. has also ventured into depository services to cater to its

clients and is among leading depository services providers having more than 3000

Crore worth of security under its custody.

Why should you choose RSL as your financial partner? A summary of

our competitive advantages

1. Participant on the countrys premier exchange:RELIGARE is a member of the

countrys premier stock exchange The National Stock Exchange of India (NSE).

2. Clearing membership on Capital & Derivatives segments:It has clearing

memberships on both the Capital Market and Derivatives segment of the exchange.

We are also authorised to trade the retail debt market.

3. Depository Participants with NSDL & CDSL: We are depository participantswith the countrys premier depository service - National Securities Depository

Limited (NSDL), as well as with the only other depository with a countrywide

reach - Central Depository Services Limited (CDSL).

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4. Leading private sector bank as partner: Our banking partner is HDFC & ICICI

Bank The foremost private sector bank in the country, which has the most

technologically advanced infrastructure in the country, with Internet banking

allowing access to information 24 X 7.

5. Bloomberg Information Services: The worlds two best information services are

Bloomberg LPandReuters. These are prohibitively expensive for all but mutual

funds and financial institutions to own terminals of, and subscribe to. We however

have two connections to the Bloomberg Information Service, the premier service,

both in Delhi and Mumbai, and these provide us information ahead of the general

public, and at par with the financial institutions.

6. Access to breaking news from across the globe, and across asset classes, and

superior research and analysis capabilities.

7. Prime Office Locations: We have prime office locations in the nations political

capital and the business capital Delhi and Mumbai, in the heart of the city.

8. Research Capabilities: We have a dedicated team of analysts in our Bombay

office They provide fundamental analysis of stocks and markets, which are

fundamentally strong, and provide above market returns to investors, but over a

slightly longer time frame Typically 6 months and above.

9. Technical Analysis: A daily technical newsletter is published by our in-house

technical analyst, who is a recognized leading practitioner of the science. He has a

success rate of over 73%. He tracks the progress of the calls on a real-time basis,

and advises of any change in the profit points or stop loss levels.

10. All Services under one roof : India has moved to a T+2 settlement system, where

all trades and settled on a rolling basis. However this gives the clients no time to

arrange deliveries to their broker, through a separate depository participant.

RELIGARE, being a trading-clearing member, as well as a depository participant,

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allows seamless transfer of securities under the same roof, with minimum delay,

and constant monitoring.

PORTFOLIO MANAGEMENT SERVICES

Religare Securities Ltd, (PMS Registration No. INP000000738)a company

promoted controlled and managed by the promoters of Ranbaxy. Ranbaxy is one of

the leading Indian pharma-research and pharmaceutical companies in India with a

global presence in 5 continents, spread over 40 countries. With an annual turnover of

close to 1.2 Billon US$ ('05 Sales), Ranbaxy is ranked amongst the 10 global generic

companies. Our overseas revenues contribute over 75% of sales. We have a presence

in 23 of top 25 pharma markets of the world.

INTRODUCTION

Portfolio management services is The art and science

of making decisions about investment mix and

policy , matching investments to objectives,

assets allocation for individuals and

institutions, and balancing risk vs.

performance.

The main idea behind Portfolio Management Services is to manage our

clients wealth more efficiently, reduce risk by diversifying across assets, sectors and

funds, and maximizing returns. Expert Portfolio Managers find best of avenues to

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achieve optimum returns at managed levels of risk. This service could also be called

as transparent collective investments. You get an upper hand in many ways.

WHY PMS?

(1) As a discerning investor, who understands the

risk-reward ratio, you want:-

A portfolio comprising of select ideas.

Ability to take focused bets both in stocks and sectors.

Efficient allocation among assets, viz. Equity and Cash.

(2) PMS portfolios combine the benefits ofprofessional money management with the

flexibility, control of owning individual stocks or

other securities.

(3) PMS offers a higher level of information and

investors can receive:-

Communications that include relevant information on major market

events.

Quarterly performance updates.

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(4) Competitive and flexible fee structure:-

As the costs of garnering assets are typically lower, PMS offerings

have attractive fee structures.

Investors can choose a variable fee structure that is dependent on

the performance of the portfolio.

Mutual Fund vs. PMS

MUTUAL FUNDS PMS

PRODUCT Mass product Customized product

SERVICES No personalized service

available

Personalized services in

the form of access to

fund manager and

dedicated relationship

manager.

COSTS Entry/Exit Loads No entry/Exit Loads.

FEE STRUCTURE Fixed Option of fixed/

performance based fees

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PORTFOLIO

PROFILING

No As per risk/reward

appetite of the investor.

SECTOR/STOCK

LIMITS

Yes No

UPDATES Monthly Daily

CROSS

SUBSIDIZATION

Yes No

TRANSPARENCY No Yes

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ADVANTAGES OF HAVING RELIGARES

PORTFOLIO MANAGEMENT SERVICES.

Constant monitoring of portfolios asset mix to ensure effectively position to

meet long-term objectives. Our portfolio managers adjust the asset mix to

reflect the current economic climate and to benefit from opportunities.

Performance linked fees, constant disclosure of the portfolio on daily and

monthly basis.

High water mark level for profit sharing.

No transaction and custodian charges

Schemes would also use derivatives both from the point of protection of

portfolio as well as for increasing the return from portfolio

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INVESTMENT PHILOSOPHY

Mix of Top Down and Bottom Up.

Stock specific selection procedure based on fundamental research for

making sound investment decisions.

Focus on minimizing investment risk by following rigorous valuation

disciplines.

Belief in serving investors by a disciplined investment approach- which

combines an understanding of the goals and objectives of the investor

with a fine tuned strategy backed by research.

Capital Preservation.

Selling discipline and use of derivatives for volatility.

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INVESTMENT PROCESS

Reviewing publicly available historical information.

Management meeting to get a better understanding of industry trends,structure and peculiarities related to the industry.

Preparing forecasted earnings model based on assumptions.

Review meeting with the company management to validate theassumptions.

Using multiple valuation process for valuing the company whichincluded relative valuations (P/E, PEG, P/BV etc.), determiningintrinsic value based on DCF and sum of parts valuation.

We follow strict selling discipline both in booking profits as well ascutting losses in case the underlying premise of buying into a particular

stock has changed.

INVESTMENT PROCESS

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Identification

Valuation Validation Acquisition Revision

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WHY RELIGARE?

Investment team consisting of fund managers and headed by CIO which ensures

collective decision making.

More than 40 man years of cumulative work experience in capital markets.

Institutional Research team comprising more than 15 professionals having an

experience ranging from 2-10 years.

Benefit from a network of empanelled brokers and analysts from a wide

spectrum of broking outfits.

Capabilities to identify emerging businesses at a nascent stage backed by

primary research.

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FUND MANAGEMENT TEAM

Our CIO is Mr. Kunj Bansal. He is an engineer and a management graduate and

has more than 10 years of Direct Experience in Equity Market. He was a part of

equity team which was awarded for the best fund performance from CNBC and

CRISIL. Mr. Bansal has also been adjudged as best fund manager by Business

Today. He is supported by two-fund managers Mr. Vipul Sanghvi and Chetan

Shah and a dedicated research team supports them.

NEWS AND EVENTS

We arrange meetings and conferences with our fund managers for some specific

information. We provide:

Monthly market update, Market and Portfolio Performance Overviews prepared

by the Religare Portfolio Management Services Investment Team

Performance Appraisal Statement

Review of the Market

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DESCRIPTION

History, present business and background of the portfolio manager.

RSL is a member of the National Stock Exchange of India Limited (NSE) from

November, 1995, Bombay Stock Exchange Limited from October 2004 and also

Depository participant with National Securities Depository Limited (NSDL) since

July, 2000 and Central Depository Services India Limited (CDSL) since February,

2003.

Religare is imbued with the vision of providing integrated financial care driven by

the relationship of trust. The growing list of financial institutions with whom Religare

is empanelled, as approved broker, is a reflection of the high levels of services

maintained by the company. Religare has all India reach at multiple locations and it is

presently catering to institutional clients and a large number of retail & high net worth

clients.

Under the portfolio management schemes offered by Religare, the funds of investors

are managed by a team of professionals having long experience in the various facets

of equity markets such as Research, Fund Management, Dealing and institutional

sales.

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Promoters of the Portfolio manager,

directors and their background.

Promoters

RELIGARE Securities Limited is a wholly owned subsidiary of RELIGARE

Financial Services Limited.

DIRECTORS

MR HARPAL SINGH

Mr. Harpal Singh has a diverse and wide-ranging experience of more than 27 years in

the corporate sector. He is an alumnus of The Doon School and B.A. (Honours)

Graduate in Economics from St. Stephens College, New Delhi. He also holds a

Masters Degree in Public Affairs from the CSCH, California, and U.S.A.

PREVIOUS EXPERIENCE

Starting with the Tata Administrative Services, Mr. Singh held senior positions in

Hindustan Motors, Telco and Board Level responsibility at Shaw Wallace.

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MR VINAY KUMAR KAUL

Mr. Vinay Kumar Kaul is recognized in the industry for his variegated knowledge and

has more than 28 years of experience in Corporate Finance. After completing hisGraduation in Physics (Hons) from Ramjas College, University of Delhi, Mr. Kaul

acquired Chartered Accountant degree from The Institute of Chartered Accountants of

India.

CURRENT POSITION

He is also director in, RELIGARE Healthcare Limited, RELIGARE Financial

Services Limited, RELIGARE Comdex Limited and RELIGARE Finvest Limited.

PREVIOUS EXPERIENCE

Mr. Kaul joined Ranbaxy Laboratories Limited as Divisional Accountant in 1975 and

retired as Executive Vice President (Finance) and CFO in December, 2003.

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MR MALVINDER MOHAN SINGH

An alumnus of the Doon School and an Honours Graduate in Economics from

St.Stephens College, Delhi, and Mr.Malvinder Mohan Singh is an MBA from theFuqua School of Business, Duke University, USA.

CURRENT POSITION

.He is director in RELIGARE Healthcare Limited, RELIGARE Financial Services

Limited, RELIGARE Comdex Limited and RELIGARE Finvest Limited.

PREVIOUS EXPERIENCE

Mr. Singh had led the India Region operations as Regional Director soon after his

successful tenure as Director, Global Licensing and Business Development. He joined

Ranbaxy Laboratories Limited in 1994 as a Management Trainee and has worked at

different positions in the functions of general management, sales & marketing, finance

and business development.

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MR SHIVINDER MOHAN SINGH

An alumnus of the Doon School and an Honours Graduate in Mathematics from

St.Stephens College, Delhi, and Mr. Shivinder Mohan Singh is an MBA withspecialization in Healthcare management from the Fuqua School of Business, Duke

University, USA.

CURRENT POSITION

Mr. Singh is presently the Joint Managing Director of RELIGARE Healthcare and

leading a team which plans to leap frog to be the countrys largest healthcare /

pathology provide. He is also director in RELIGARE Financial Services Limited,

RELIGARE Comdex Limited and RELIGARE Finvest Limited.

PREVIOUS EXPERIENCE

Mr. Shivinder Mohan Singh is one of the principal promoters of RELIGARE

Healthcare Limited and SRL Ranbaxy Limited. He has been instrumental in

conceptualizing the healthcare delivery strategy and implementing the plans to make

RELIGARE Healthcare a major players in the front-end healthcare sector.

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MR SUNIL GODHWANI

Mr. Sunil Godhwani holds an M.Sc.degree in Industrial Engineering from Polytechnic

Institute of New York, New York. He has rich business experience of more than 15years.

CURRENT POSITION

Mr.Godhwani is CEO & MD of the parent company RELIGARE Financial Services

Limited and RELIGARE Securities Limited. He is also director in RELIGAREComdex Limited and RELIGARE Finvest Limited.

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TOP 10 GROUP COMPANIES/FIRMS.

Ranbaxy Laboratories Limited.

Religare Financial Services Limited.

Oscar Investments Limited.

Fortis Healthcare Limited.

Religare Finvest Limited.

Religare Comdex Limited.

SRL Ranbaxy Limited.

International Hospitals Limited.

Ranbaxy Holding Company.

Oscar Bio Tech (p) Limited.

HOW TO GET STARTED?

Account can be opened by way of Fresh Inflow of Money or

Transfer of Securities or combination of both.

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An investor can also invest with the corpus of cash and equity both

by any ratio.

If an investor would like to utilize his portfolio management

services, Religare will work with him to define an investment

strategy, which best suits, his needs.

Investors portfolios management will be adapted to his

objectives, to the accepted degree of risk and to his reference.

Investors assets will be managed within a strategy framework

customized especially for his particular preferences.

DOCUMENTS REQUIRED:-

Account Opening Form: - PMS Agreement, Power of

Attorney, Risk Disclosure Document.

PAN Details, From No.60 (Declaration to be filled by a

person who does not have either have a PAN)

Address proof which includes any of the following:-

Ration Card.

Passport.

Driving License.

Identity Card issued by any institution.

Copy of the electricity bill or telephone bill

showing residential address.

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Any document or communication issued by any

authority of Central Government, State

Government or local bodies showing residential

address. Any other documentary evidence in support of

his address given in the declaration.

Initial money in cash or in securities or in both required to start

a portfolio of an investor.

Identity Proof

Photograph

Please find enclosed our Asset Allocation

as of June, 2009.

Details of services being offered by the

portfolio manager

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Discretionary Services

Under these services, the choice as well as the timings of the

investment decisions rest solely with the portfolio manager. In

other words the portfolio manager shall have the sole and absolute

discretion to invest clients funds in any type of securities and in

any market as he deems fit as per the executed agreement. The

securities invested /disinvested by the portfolio manager for clients

in the same scheme may differ from client to client. The portfolio

managers decision in deployment of the clients account is

absolute and final and can never be called in question or be open to

review at any time during the currency of the agreement or at

anytime thereafter. The right of the portfolio manager shall be

exercised strictly in accordance with the relevant acts, rules and

regulations, guidelines and notifications in force from time to time.

Periodical statements in respect to clients portfolio shall be sent to

the respective client.

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Advisory Services

The Portfolio Manager will provide Advisory Portfolio Management

Services, in terms of the SEBI (Portfolio Manager) Regulations

1993, which shall be in the nature of investment advisory and shall

include the responsibility of advising on the portfolio strategy and

investment and divestment of individual securities on the clients

portfolio, for an agreed fee structure, entirely at the Clients risk.

The Portfolio Manager shall be solely acting as an advisor to the

portfolio of the client and shall not be responsible for the investment

/divestment of securities and /or administrative activities on the

clients portfolio. The Portfolio Manager shall, provide advisory

services in accordance with such guidelines and / or directives

issued by the regulatory authorities and / or the Client, from time to

time, in this regard.

UNDER THE DISCRETIONARY SERVICES,FIVESCHEMES ARE OFFERED TO INVESTORS:-

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PANTHER

TORTOISE

ELEPHANT

LEO

CATERPILLAR

SCHEMES SPECIFIC DETAILS:-

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PANTHER:-

OBJECTIVE:-The scheme aims to achieve higher returns by

taking aggressive positions across sectors and market capitalization.

STRATEGY:-

Investment strategy would be to invest across the sectors with aview to take advantage ofvarious market conditions.

Efforts would be made to find out stocks which have triggers tobecome multi-baggers in the market, backed by a turn-around, ornew product introduction, idea marketing, unveiling of valuation

and such other factors. Schemes would also aggressively use Derivatives both from the

point of protection of portfolio as well as for increasing the returnfrom portfolio.

Panther scheme is aimed at high return with certain level of riskappetite.

Suitability:-The scheme is suitable for High risk High Return

investor.

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Low Medium High

High

Medium

Low

Suitability

Investment horizon:-The targeted investment horizon for investing in the

scheme should be in the range of 1-2 years.

Portfolio turnover:-

Portfolio turnover of the scheme is expected to be highas there might be a continuous reshuffling of the investments.

Schedule of charges:-

Option I: Fixed Fee

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Option II: Profit Sharing

Particulars

Fees/Charges Mode of Payment

ManagementFees (fixed) 0.75% p.a. of investment amount. 50% payable at thetime of investment &balance at the time ofredemption or at theexpiry of 12 monthswhich ever is earlier.

ManagementFees (Profitsharing)

Up to 12% Return Nil>12%-18% Return 10% of total profit>18%-24% Return 15% of total profitAbove 24% Return 20% of total profit

Payable at the time of

profit call. *

Minimum investment that is required to beinvested in panther scheme is Rs.25 lacs.

* Refers:

Profit would mean realized gains, unrealized gains and dividend received.

Re-investment of profit would be eligible for management fees.

Profit call at the sole discretion of the fund manager.

Particulars Fees/Charges

Mode ofPayment

Management Fees 2% p.a. of the averagedaily value of portfolio

Payable Quarterly

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Note: The uninvested amounts in all the above schemes may be

deployed in liquid Fund schemes, debt oriented schemes of mutual

Funds, gilt schemes bank deposits and other short term avenues for

investment. The portfolio manager, with consent of the client, may

lend the securities through an approved intermediary, for interest.

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TORTOISE:-

Objective:- The scheme aims to achieve growth in the portfolio

value over a period of time by way of careful and judicious investment infundamentally sound companies having good prospectus.

Strategy:-

Investment strategy would be to invest in companies havingconsistency in earnings growth and financial performance.

The scheme would select the companies for investment after acareful, research oriented due diligence procedure andconsideration of various risk involved.

Emphasis would also be laid on subjective parameters likecorporate governance, management track record and intellectualcapability.

The scheme will be open to investment in companies with

improving fundamentals as well.

Suitability:- The scheme is suitable for Medium Risk Medium Returninvestor.

Investment Horizon:-

The targeted investment horizon for investing in thescheme should be in the range of 2 to 3 years.

Low Medium High

High

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Medium

Low

Suitability

Portfolio Turnover:-Portfolio turnover of the scheme is expected to be medium.

Minimum investment that is required to beinvested in Tortoise scheme is Rs.25 lacs.


Option I: Fixed Fee



Mode ofPayment


Payable Quarterly

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Particulars


Management

Fees (fixed)

0.75% p.a. of investment amount. 50% payable at the

time of investment &balance at the time ofredemption or at theexpiry of 12 monthswhich ever is earlier.

ManagementFees (Profitsharing)



profit call. *

Elephant:-

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Objective:- The scheme aims to generate steady return over a longer period byinvesting in securities selected only from BSE 100 index and NSE 100 index.

Strategy:-

Investment strategy would be to invest in the companies whichform part of BSE 100 and NSE 100 index, as these companieshave steady performance and reduce liquidity risk in the market.

The scheme shall invest across the sectors from within thispredefined space and shall select stocks with long-term growthprospects trading at modest relative valuations.

Suitability:-The scheme is suitable for Low Risk Low Return investor.

Portfolio Turnover:-Portfolio turnover of the scheme is expected to be Low.

Low Medium High

High

Medium

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Low

Suitability

Investment Horizon:-The targeted investment horizon for investing in the scheme should be in

the range of 3 to 4 years.

Minimum investment that is required to be

invested in Elephant Scheme is Rs.25 lacs.


Option I: Fixed Fee


Particulars



Mode ofPayment


Payable Quarterly

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ManagementFees (fixed)

0.75% p.a. of investment amount. 50% payable at thetime of investment &

balance at the time ofredemption or at theexpiry of 12 months

which ever is earlier.ManagementFees (Profitsharing)



profit call. *

Option III: Relative performance

Fee.

Particulars Fees/Chares Mode of Payment

Management Fees(fixed)

1.0% p.a. of investmentamount.

50% payable at the timeof investment & balanceat the time of redemptionor at the expiry of 12months which ever is

earlier.Management Fees(Profit sharing)

35% of the total profitover Benchmark return(benchmark: BSE 100)

Payable at the time ofprofit call.*

* refers

Profit would mean realized gains, unrealized gains and dividendreceived.

Re-investment of profit would be eligible for management fees. Profitcall at the sole discretion of the fund manager.

Leo:-

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Objective:-

The scheme seeks to provide medium to long term capitalappreciation by investing in stocks across the market capitalization range.

Investment strategy:-

The investment strategies followed in LEO involves a mix of bothmoderate and aggressive investment strategies.

The aim is to have a balanced portfolio comprising selected picksfrom both Tortoise and panther besides other stocks.

The investment horizon for every stock is different and dependsupon market conditions. Exposure to derivatives is taken within

permissible regulations.

Minimum Investment amount: - Rs.5 Lacs.

Investment Philosophy:-

Stock specific selection procedure based on fundamental

research for making sound investment decisions. Focus on minimizing investment risk by following

rigorous valuation disciplines.

Effort is to enhance absolute returns for investors.

Belief in serving investors by a disciplined investmentapproach-which combines an understanding of the goalsand the objectives of the investor with a fine tunedstrategy backed by research.

Capital Preservation.

Selling discipline and use of derivatives for volatility.

Schedule of Charges:-

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Option IV: Fixed Fee for LEO


Mode ofPayment

Management Fees 2.5% P.a. of the averagedaily value of portfolio

Payable quarterly

CATERPILLAR:-

Objective:-55


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Scheme aims to achieve capital appreciation over a long period of time

by investing in a diversified portfolio.

Investment Strategy:-Investment strategy would be to invest in scrips which are poised to

get a rerating either because of change in business, potential fancy for a particular

sector in the coming years/months, business diversification leading to a better

operating performance, stocks in their early stages of an upturn or for those which are

in sectors currently ignored by the market.

Suitability:-

The scheme is suitable for investors with a high risk appetite.

Derivatives:-

Derivatives may be used depending upon the prevailing market conditions.

Investment Philosophy:-

Stock specific selection procedure based on fundamental research for

making sound investment decisions.

Focus on minimizing investment risk by following rigorous valuation

discipline.

Effort is to enhance absolute returns for investors.

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Belief in serving investors by a disciplined investment approach

which combines an understanding of the goals and objectives of the

investor with a fine tuned strategy backed by research.

Investment Horizon:-

The targeted investment horizon for investing in the scheme should be in

the range of 1-3 years.

Minimum investment required to be

invested in Caterpillar scheme is Rs. 1

crore.

Mode of inflow can be in the form of Fresh

investment/ Securities

Transfer/Combination of both. Portfolio disclosure is made only after

scheme is fully invested.

PORTFOLIO DISCLOSURE:-

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Access through Web:

-Clients can see the portfolio details on web 24*365.

Valuation Report

Holdings Statement

Transaction Report

Gain/loss Report

Corporate Action.

Monthly Report:-

Containing all the details about the portfolio and a monthly news letter

on markets, stock idea and investment wisdom.

Annual Audited Balance Sheet

Investment Details:-

Minimum Investment Amount:

Resident Investors - Rs.25 lacs

Non Resident Investors - Rs.50 lacs

Mode of Inflow:

Inflow can be in the form of cash and/or securities.

Risk Factors:-

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Investments in Securities are subject to market risks, which include price

fluctuation risks. There is no assurance or guarantee that the objectives of

any of the schemes will be achieved. The investment may not be suited to

all categories of investors.

The post performance of the portfolio manager does not indicate the future

performance of the same scheme in future or any other future schemes of the

portfolio manager. Investors are not being offered any guaranteed returns

through these schemes.

The scheme may use derivatives instrumental like index futures, stock futures

and options contracts, warrants, convertible securities, swap agreements or any

other derivative instruments for the purpose of hedging and portfolio

balancing, as permitted under the regulations and guidelines. The use of a

derivative requires an understanding not only of the underlying instrument but

also of the derivative itself. Derivatives require the maintenance of adequate

controls to monitor the transactions entered into, the ability to assess the risk

that a derivative adds to the portfolio and the ability to forecast price or interest

rate movement correctly. Scheme using derivative / futures and options

products (if any) are affected by risks different form those associated with

stock and bonds. Such products are highly leveraged instruments and their use

requires a high degree of skill, diligence and expertise. Small price movements

in the underlying security may have a large impact on the value of derivatives /futures and options. Some of risks relate to mis-pricing or the improper

valuation of derivatives/futures and options and the inability to correlate the

positions with underlying assets, rates and indices. Also the derivative/ future

and options market is nascent in India.

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The names of the schemes do not in any manner indicate their prospects or

returns. The performance in the equity schemes may be adversely affected by

the performance of individual companies, changes in the market place and

industry specific and macro economic factors.

The Portfolio Manager, first time, has launched schemes in September, 2004

under Portfolio management services. Disclosure Document is being submitted

to SEBI under its SEBI (Portfolio Managers) Regulations, 1993.

The debt investments and other fixed income securities may be subject to

interest rate risk, liquidity risk, credit risk and reinvestment risk. Liquidity in

these investments may be affected by trading volumes, settlement periods and

transfer procedures.

Technology stocks and some of the investments in niche sectors run the risk of

volatility, high valuation, obsolescence and low liquidity.

In the case of stock lending, risks relate to the defaults from counter parties

with regard to securities lent and the corporate benefits act thereon, inadequacy

of the collateral and settlement risks. The portfolio manager is not responsible

or liable for any loss resulting from operations of the schemes.

The Performance of the schemes may affected by changes in Government

polices, general levels of interest rates and risks associated with trading

volumes, liquidity and settlement systems in equity and debt markets.

The scheme may invest in non-publicly offered debt securities and unlisted

equities. This may expose the scheme to liquidity risks.

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Engaging in securities lending is subject to risks related to fluctuations in

collateral value/settlement/liquidity/counter party.

DIFFERENT COMPETETORS:-

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The major players in proving Portfolio management Services are as follows:-

Sharekhan.com

Motilal Oswal

India Infoline

India bulls

Kotak securities

HDFC

ICICI Direct

COMPANY BACKGROUNG

Sharekhan is the retail broking arm of SSKI Securities Pvt Ltd. SSKI owns 56% in

sharekhan; balance ownership is HSBC, First Caryle, and Intel pacific into broking

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since 80 years. Focused on providing equity solutions to every segment. Largest

ground network of 210 Branded Share shops in 90 cities.

Sharekhan Portfolio Management Services (PMS no- INP000000662)

PRO TECH

PRO PRIME

PRO ARBITRAGE

PRO TECH:Investing based on price

movements.

.

Product Offerings:-

(1) Nifty Thrifty: - Nifty futures are bought and sold on the basis of an

automated trading system that generates calls to go long/short. The exposure never

exceeds value of portfolio i.e. there is not leveraging; but being short in Nifty allows

you to earn even in falling markets and there by generates linear returns.

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(2) Beta portfolio: - Stocks in long term technical up trends are identified at

various inflection points in their trading cycles. 80% of the portfolio is traded in

delivery of such stocks. 20% is used in creating an options book i.e. buying calls/puts

of the index/stocks to increase the portfolio beta and hedge against pitfalls. The use of

timing for delivery and options for a higher beta enables potentially a superior rate of

return by taking a risk on just 20% of capital.

PRODUCT APPROACH

Superior performance can be achieved through sheer market timing, by picking

stocks/Nifty before the inflection points in their trading cycles.

Linear returns are possible from having sell market positions in downtrends and

by using the options market to change the portfolio beta.

Money management rules will be in place.

PRODUCT CHARACTERISTICS

Using swing/momentum based index trading systems with stop/reverse trend

following.

One get the best of both worlds by:

Having positions in cash and options.

Delivery positions enable profit maximization, while options positions

offer high beta short term profit in the same portfolio.

Low impact cost.

PRODUCT DETAILS

Minimum Investment: Rs 5 lakh

Lock in: 3 months

AMC fees: 0%

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Reporting: Fortnightly reporting of Portfolio Net worth, monthly

reporting of portfolio holdings/transaction.

Charges: 0.05% brokerage for derivatives, 20% profit sharing on

booked profits quarterly basis, 5% discount for 1 crore investmentsor 1 year lock in period.

PRO PRIME :-Investing based on company fundamentals.

TWO PRODUCT OFFERINGS

(1)The Aggressive Scheme

Ideal for investors looking at higher returns with high risk appetite.

This portfolio consists of high growth stocks fulfilling any of the

following conditions:

Expected growth in profitability

Turnaround and corporate restructuring enabling value unlocking. Relatively low valuation.

Mid to small cap companies.

(2) The Balanced Scheme

Ideal for investors looking at steady returns with low risk appetite. The portfolio

consists of a blend of quality blue chip and growth stocks ensuring a balanced

portfolio with relatively medium risk profile.

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PRODUCT APPROACH

Investments are based on 3 tenets:

Consistent, steady and sustainable returns. Margin of safety.

Low volatility.


Bottom up stock selection

In depth, independent fundamental research. High quality companies with sustainable competitive advantage.

Disciplined valuation approach applying multiple valuation measures.

Medium to long term vision, resulting in low portfolio turnover.

PRODUCT DETAILS.

Minimum Investment: Rs 5 lakh

Lock in: 3 months.

Reporting: online access to portfolio holdings, monthly reporting of portfolio

holdings/transactions.

Charges: 2.5% per annum AMC fees charged every quarter, 0.5% brokerage,

20% profit sharing after 15% hurdle is crossed- chargeable at the end of fiscal

year.

PRO ARBITRAGE:-Investing using arbitrage opportunities.

PRODUCT OFFERINGS

Cash-future Arbitrage: It spots risk free opportunities that yield

greater returns than conventional risk free products. On spotting

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the opportunity, the stock is bought and future is sold to lock in the spread. Position is

liquidated if the spread thins before time or on

Expiry, whichever come earlier. In this manner, the scheme moves from one

opportunity to another.

PRODUCT APPROACH

There is an inherent opportunity in the spread that lies between cash and futures.

When the spread is high stocks are bought; at the same time futures are sold to lock in

the difference which is then bound to be zero at expiry.


Risk Free: On the whole, it is risk free and can be compared to RBI bonds and GILT

funds.

High Returns: As compared to other zero risk products, it offers roughly an 8% post

tax return.

PRODUCT DETAILS

Minimum Investment: Rs 5 lakh.

Lock in: 3 months

Reporting: Fortnightly for portfolio net worth, monthly for portfolio

holdings/transactions.

Charges: 0.035% brokerage for cash, 0.075% for delivery.

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Motilal Oswal Financial Services is a well diversified financial services group having

businesses in securities, commodities, investment banking and venture capital. With

1160 Business locations and more than 2, 00000 investor in over 360 cities, Motilal

Oswal is well suited to handle all wealth creation & wealth management needs.

Motilal Oswal Financial services Ltd, consists of four companies: Motilal Oswal

investment advisors Pvt ltd, Motilal Oswal commodities broker (p) ltd, Motilal Oswal

venture capital advisors private limited, Motilal Oswal securities Ltd.

PMS SCHEMES OFFERED BY MOTILAL OSWAL

(1) VALUE PMS

Value PMS is a scheme meant for investors with a long term investment horizon in

the Indian Equity markets. The investment philosophy is not dependent on the market

trends but banks on the power of the intellect.

SCHEME OBJECTIVE

The scheme aims to deliver superior wealth creation by way of long term

compounding effect, with investments in good businesses run by great business

managers.

PORTFOLIO CHARACTERISTICS.

Value based stock selection.

Investment approach: Buy and Hold

Investments with long term perspective.

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Aim to maximize post tax return due to low churn.

Focused portfolio construction

Capital preservation consciousness.


Identify and purchase a piece of great business at a fraction of its true value.

Investments with a long-term investment view. The fund manager strongly

believes that money is made by sitting.

Investments are identified by a Bottom up approach. The aim is to identify

potential long-term wealth creators by focusing on individual companies andtheir management bandwidth.

PORTFOLIO TENURE: - Long term (3-5 years).

INVESTOR PROFILE: -Investors who like to invest with a long-term wealth

creation view.

RISK RETURN

MATRIX

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(2) BULLS EYE PMS

Bulls eye PMS scheme under is designed to invest in stocks with short-medium

term perspective, for a minimum 15-20% move. The investment philosophy is to find

momentum in value.

SCHEME OBJECTIVE

The scheme aims to deliver superior returns in low to medium term by investing in

value stocks with momentum approach, coupled with active profit booking.

PORTFOLIO CHARACTERISTICS

Investment Approach: Momentum in Value.

Investments with short-medium term perspective.

Regular profit booking.

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Ability to sit on cash.


Identifying the right sector and right company with a scalable business managedby competent managers.

To look out for companies with transparency, execution capability and

management bandwidth.

Investments in market leaders, who have the vision to make it big.

PORTFOLIO TENURE: - Short to Medium term (1-3 Quarters)

INVESTOR PROFILE: - Investors who like to invest in value stocks and capitalize

on the periodic upside by an active process of profit booking.

RISK RETURN MATRIX

INDIA INFOLINE LTD AND ITS SUBSIDIARY COMPANIES:-

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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, GOI bonds and

other small savings instruments to loan products and investment banking.

SCHEMES OFFERED BY INDIA INFOLINE:-

(1) GROWTH PORTFOLIO

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This is for those who would rather run a marathon than a sprint. They

are not concerned with day-to-day price movements. The portfolio

comprises the choicest of fundamentally sound companies. The focus

in on medium to large capitalization blue chip companies, considered to be

undervalued from the point of view of their long-term growth prospect and well

placed to deliver extra-ordinary capital appreciation over the long term.

(2) MOMENTUM PORTFOLIO

This is for those who want to live life in the fast lane. The main

objective of this portfolio is to generate capital appreciation through

short to medium term investments in equities and equity related

instruments. The investment choice is primarily influenced by technical factors like

price & volume indicators, RSI, MACD, & other studies. Secondary factors will be

reasonable levels of market capitalization, good liquidity, competitive position in the

industry, sectors with good growth prospects, etc.

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(3) NRI

PORTFOLIO

The main objective of the scheme is to generate capital

appreciation through investments in equities with a long-term

perspective. The scheme will invest in all equity & equity related

instruments with emphasis on fundamentally sound, well-researched blue chip

companies perceived to be undervalued from the point of view of their long term

growth prospects. The focus will be on medium to large capitalization companies

which have a proven track record or earning capability, quality management,

leadership status in sectors or potential to achieve such status, etc & that have the

potential to deliver growth over the long term. The scheme is aimed at medium risk

taking investors willing to invest in companies over a long term period.

(4) CUSTOMIZED PORTFOLIO

The objective of this scheme is to generate optimum returns based

on the assessment and understanding of the risk profile of the

client. The scheme will be customized to suit the needs of the

client. Based on the assessment of the client profile, the optimum portfolio mix will be

formalized. Asset classes include equity or equity related instruments including

mutual funds, debt & debt related instruments including debt mutual funds,

commodities markets, etc. The clients can specify the asset mix they prefer.

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CHAPTER -4

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DESCRIPTIVE WORK ON SUB TOPIC

OF

STUDY

SECURITIES MARKET IN INDIA - OVERVIEW

There were a lot of reforms & other market development in Securities Market in

India-Overview during 2000-2001 & April-June 2001. The originating of the Indian

securities market may be traced back to 1875, when 22 enterprising brokers under a

Banyan tree established the Bombay Stock Exchange(BSE).Over the last 125 years,

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the Indian securities market has evolved continuously to become one of the most

dynamic, modern and efficient securities markets in Asia. Today, Indian markets

conform to international standards both in terms of structure and in terms of operating

efficiency.

Securities markets provide a channel for allocation of savings to those who have a

productive need for them. As a result, the savers and investors are not constrained by

their individual abilities, but by the economys abilities to invest and save

respectively, which inevitably enhances savings and investment in the economy.

MARKET SEGMENTS

The securities market has two interdependent and inseparable segments: the primary

and the secondary market. The primary market provides the channel for creation of

new securities through issuance of financial instruments by public companies as well

as Governments and Government agencies and bodies whereas the secondary market

helps the holders of these financial instruments to sale for exiting from the investment.

The price signals, which subsume all information about the issuer and his business

including associated risk, generated in the secondary market, help the primary market

in allocation of funds. The primary market issuance is done either through issues or

private placement. A public issue does not limit any entity in investing while in

private placement, the issuance is done to select people. In terms of the CompaniesAct, 1956, an issue becomes public if it results in allotment to more than 50 persons.

This means an issue resulting in allotment to less than 50 persons is private placement.

There are two major types of issuers who issue securities. The corporate entities issue

mainly debt and equity instruments (share, debentures, etc.), while the governments

(central and state governments) issue debt securities (dated securities, treasury bills).

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The secondary market enables participants who hold securities to adjust their holdings

in response to changes in their assessment of risk and return. They also sell securities

for cash to meet their liquidity needs. The exchanges do not provide facility for spot

trades in a strict sense. Closest to spot market is the cash market in exchanges where

settlement takes place after some time. Trades taking place over a trading cycle (one

day under rolling settlement) are settled together after a certain time. All the 23 stock

exchanges in the country provide facilities for trading of corporate securities. Trades

executed on NSE only are cleared and settled by a clearing corporation which

provides novation and settlement guarantee. Nearly 100% of the trades in capital

market segment are settled through demat delivery.

NSE also provides a formal trading platform for trading of a wide range of debt

securities including government securities in both retail and wholesale mode. NSE

also provides trading in derivatives of equities, interest rate as well indices. In

derivatives market (F&O market segment of NSE), standardized contracts are traded

for future settlement. These futures can be on a basket of securities like an index or an

individual security. In case of options, securities are traded for conditional future

delivery. There are two types of options a put option permits the owner to sell a

security to the writer of options at a predetermined price while a call option permits

the owner to purchase a security from the writer of the option at a predetermined

price. These options can be on individual stocks or basket of stocks like index. Two

exchanges, namely NSE and the Stock Exchange, Mumbai (BSE) provide trading of

derivatives of securities. Today the market participants have the flexibility of

choosing from a basket of products like:

Equities

Bonds issued by both Government and Companies.

Futures on benchmark indices as well as stocks

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Options on benchmark indices as well as stocks

Futures on interest rate products like Notional 91-day T-Bills, 10-year

notional zero-coupon bond and 6% notional 10-year bond.

The past decade in many ways has been remarkable for securities market in

India. It has grown exponentially as measured in terms of amount raised from the

market, number of stock exchanges and other intermediaries, the number of listed

stocks, market capitalization, trading volumes and turnover on stock exchanges and

investor population. Along with this growth, the profiles of the investors, issuers and

intermediaries have changed significantly. The market has witnessed several

institutional changes resulting in drastic reduction in transaction costs and significant

improvements in efficiency, transparency, liquidity and safety. In a short span of time,

Indian derivatives market has got a place in list of top global exchanges. In single

stock futures, the Futures Industry Association (FIA) placed NSE in second position

in the year 2000.

Reforms in the securities market, particularly the establishment and empowerment of

SEBI, market determined allocation of resources, screen based nation-wide trading,

dematerialisation and electronic transfer of securities, rolling settlement and ban on

deferral products, sophisticated risk management and derivatives trading, have greatly

improved the regulatory framework and efficiency of trading and settlement. Indian

market is now comparable to many developed markets in terms of a number of

qualitative parameters.

DEPENDENCE ON SECURITIES MARKET

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Three main sets of entities depend on securities market. While the corporate and

governments raise resources from the securities market to meet their obligations, the

households invest their savings in the securities.

CORPORATE SECTOR:The 1990s witnessed emergence of the securities market as

a major source of finance for trade and industry. A growing number of companies are

accessing the securities market rather depending on loans from FIs / banks. The

corporate sector is increasingly depending on external sources for meeting its funding

requirements. There appears to be growing preference for direct financing (equity and

debt) to indirect financing (bank loan) within the external sources.

Accordingly to CMIE data, the share capital market based instruments in resources

raised externally increased to 53% in 1993-94, but declined thereafter to 33% by

1999-00 and further to 21% in 2001-02. There is not much difference in the

shareholding pattern of companies in different sectors. Strangely, private corporate

bodies hold 63% of shares in companies in media and entertainment sector though the

requirement of public offer was relaxed to 10% forthem. The promoter holding is not

strikingly high in respect of companies in the IT and telecom sectors where similar

relaxation was granted.

GOVERNMENTS: Along with increase in fiscal deficits of the governments, the

dependence on market borrowings to finance fiscal deficits has increased over the

years. During the year 1990-91, the state governments and the central governments

financed nearly 14% and 18% respectively of their fiscal deficit by market borrowing.

In percentage terms, dependence of the state governments on market borrowing did

not increase much during the decade 1991-2001. In case of central governments, it

increased to 77.6% by 2002-03.

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HOUSEHOLDS: According to RBI data, household sector accounted for 82.4% of

gross domestic savings during 2001-02. They invested 38% of financial savings in

deposits, 33% in insurance/ provident funds, 11% on small savings, and 8% in

securities, including government securities and units of mutual funds during 2001-02.

Thus the fixed income bearing instruments are the most preferred assets of the

household sector. Their share in total financial savings of the household sector

witnessed an increasing trend in the recent past and is estimated at 82.4% in 2001-02.

In contrast, the share of financial savings of the household sector in securities (share,

debentures, public sector bonds and units of UTI and other mutual funds and

government securities) is estimated to have gone down from 22.9% in 1991-92 to

4.3% in 2000-01, which increased to 8% in 2001-02.

Through there was a major shift in the saving pattern of the household sector from

physical assets to financial assets and within financial assets, from bank deposits to

securities, the trend gotreversed in the recent past due to high real interest rates,

prolonged subdued conditions in the secondary market, lack of confidence by the

issuers in the success of issue process as well as of investors in the credibility of theissuers and the systems and poor performance of mutual funds. The portfolio of

household sector remains heavily weighted in favour of physical assets and fixed

income bearinginstruments.

INVESTOR POPULATION

The Society for Capital Market Research and Development carries out periodical

surveys of household investors to estimate the number of investors. Their first survey

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carried out in 1990 placed the total number of shareowners at 90-100 lakh. Their

second survey estimated the number of shareowners at around 140-150 lakh as of

mid-1993. Their latest survey estimates the number of shareowners at around 2crore at

1997 end, after which it remained stagnant up to the end of 1990s.

The bulk of increase in number of investors took place during 1991-94 and tapered off

thereafter. 49% of the shareowners at end of 2000 had, for the first time, entered the

market before the end of 1990, 44% entered during 1991-94, 6.3% during 1995-96

and 0.8% since 1997. The survey attributes such tapering off to persistent depression

in the share market and investors bad experience with many unscrupulous company

promoters and managements.

Distribution of Investors:The Society for Capital Market Research &

Development estimates that 15% of urban households and only 0.5-1.0% of semi-

urban and rural household own shares. It is estimated that 4% of all households own

shares. An indirect, but very authentic source of information about distribution of

investors is the database of beneficial accounts with the depositories. By February

2003, there were 3 million beneficial accounts with the National Securities Depository

Limited (NSDL).

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CHAPTER -5

DATA ANALYSIS

&

INTERPRETATION

MAIN STUDY

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The Study was undertaken to understand the Investor perception about

portfolio, in the context of satisfaction derived by existing customers and to find out

what are the crucial factors that customers look for from the Service providers.

Reforms in the Security Market, particularly the establishment & empowerment of

SEBI, market determinant allocation of resources, screen based nation-wide trading,

dematerialization, electronic transfer of securities, rolling settlement, sophisticated

risk management & derivative trading have improved the regulatory framework &

efficiency of trading and settlement. Indian stock market is now comparable with any

developed market in terms of number of qualitative parameters. There are around 30

lakhs beneficiary accounts with the National Stock depositary in India.

In this context, the study was conducted to know about the perception of

investors in portfolio regarding current scenario of Stock Market. The reduction in the

interest rates in small savings, Fixed Deposits, sluggish trend in the real estate market

etc. may raise the stock market as an alternative for investments.

RESEARCH METHODOLOGY

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Schedule & questionnaire was used for data collection. Simple Random

Sampling selected the sample. Respondents belong to various demographic

parameters as Occupation, Sex etc.

Schedule & Questionnaire Preparation:

Schedule was prepared keeping in mind the expectations & purpose of

investments in the Stock Market. Investors were interviewed at various stock brokers

premises in and around New Delhi.

The Schedule consisted of the following aspects:

Investment Presently Held:

(Stocks/Bonds/Options/Mutual funds/Bullions/Bank Deposits)

Trading Preference: Speculation/Investment/Both

Average Investment Period

Appreciation & Loss Expected

Risk Willingness

Investment Decisions

Rating of Service Satisfaction received from Current Broker

Sources of Data Collection

Primary Data was collected through survey among the investors. The procedure

adopted to select sample was simple random sampling.

Research Design

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The research design is analytical in nature. The investors profile was based on the

results of the schedule & Questionnaire that the Investor completes. The Sample

consists of 100 investors from various brokers premises.

The following are the premises were interview was conducted;

RELIGARE Securities

India Bulls

India Info line

Motilal Securities

Nearly residing investors.

Decision regarding investment in share market.

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Figure 1. Decision regarding Investment

55% people are currently investing in share market with the expectation that market

will show a record breaking performance. 35% people are not investing either because

they dont have much knowledge about share market or they prefer mutual funds over

trading.10% people have stopped now after suffering heavy losses.

Trading Preference

Figure 2. Trading Preference

Trading preference can be classified into Investment and Speculation. Investment

refers to a longer time horizon. Buying and selling shares in selected companies to

87

0

10

20

30

40

50

60

yes no earlier,now

stopped

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make a profit and is linked to a long time. Speculation on the other hand refers to

making quick profits by anticipating the changes in the prices of shares. Speculative

transactions are carried out in the stock exchange day in & day out. The preference of

trading was found to be 48% in Investment & 10% in speculation.

APPROXIMATE TRANSACTION PER DAY:

Figure 3. Approximate Transaction per Day

The amount of investment in the stock market varies from investor to investor.

There are a various reasons, viz. the returns expected from the past investments, the

Dividends obtained, the amount availability, etc. A majority of the transaction done

was found to be Rs.50, 000 per day (57%) followed by 50,000 to 1 lakh per day

(25%).

RETURN ON INVESTMENT

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RESPONDENTS PERCENTSGE

Below 5% 20 20%

5- 10 % 57 54%

10- 30 % 18 18%

More than 30 % 8 8%

TOTAL 100

Figure 4. Return on Invest

Interpretation:

20% of the respondents get below 5%

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54% of the respondents get 5- 10 %

18% of the respondents get 10 -30 %

8% of the respondents get more than 30%

Inferences:

From the above survey most of the respondents get 5- 10 % returns on their

investments.

Expectations of Annual Income & Expense over next 3 to 5 Years:

A view of the present income & expense level to their projections determines theamount of investment. The various aspects to be considered are,

Percentage of his income to be invested in share market

Quality & Return Investments

Profitability

Growth of Capital & Earnings

ANNUAL INCOME:

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Figure 5. Income Expectations of Investors

Annual Income: Respondents % Average Change %

Increase 87.01 54.13

Decrease 1.94 28.33

Remain Same 11.03

INCOME DISTRIBUTION

Figure 6- Income Distribution of Investors

45% Investors are willing to reinvest more of their income, shows having

faith on their portfolio as well as on market, 10% of investors are

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reinvesting all their income,want same return on their income from

investment, 35% thinking it is better to keep more amount of their

income,shows they are balancing and risk aware investor while 10% of

investor want to keep all their income.

ANNUAL EXPENSE:

Figure 7. Expense Expectations of Investors

Annual Expense: Respondents % Average Change %

Increase 86.2 34.19

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Decrease 4.13 7

Remain Same 9.65

TRADING PREFERENCE OF INVESTORS

TRADING PREFERENCE

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

SPECULATOR INVESTMENT BOTH

Figure 8. Trading preference of investors

The trading of 25% of players are speculative in nature, 34% are trading forinvestment purpose, but most of the investors are including in both form oftrading i.e. 40%.

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Inferences:

It means most of the players want short as well as long term return.

They are generally balance their return & risk.

INVESTMENT AVENUES:

Figure 9. Investment Avenues

Mode of Investment Percentage

Govt. Securities 3%

Bullion 1%

Mutual Funds 4%

Real Estate 65%

Option 5%

Bonds 3%

Stocks 19%

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Diversification reduces risk by combining asset classes with low correlation.

Diversification is a portfolio strategy designed to reduce exposure to risk by

combining a variety of investments, such as stocks, bonds, and real estate, which are

unlikely to all move in the same direction.

The goal of diversification is to reduce the risk by investing in different asset

classes that have a low degree of correlation with each other. With proper

diversification volatility is reduced by the fact that not all asset classes, industries or

individual companies move up and down in value at the same time or at same rate.

Diversification reduces both the upside and downside potential, but allows for more

consistent performance under a wide range of economic conditions.

AVERAGE INVESTMENT PERIOD:

Figure 10. Average Investment Period

The investment period refers to the period within which the security/share is

bought and sold. It relates to the investor behavior towards his expectations & reaction

to the change in prices of the share. It was found that 34% of the investor preferred a

category of 3 to 6 months.

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Investors Importance or Order of preference from Service Providers:

Figure 11. Order of Preference from Service Provider

STOP LOSS:

A certain characteristic of an Investor is to average out the cost of investment

in Stock if the market goes down & price of the stock reduces, while certain stop their

loss to further increase by selling it at a lesser price than what it was bought, thus

incurring

Jaideb,s Final Edited Report

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