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8/2/2019 Summer Training Project Report-rishika
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CHAPTER- 1
INTRODUCTION
1.1 OVERVIEW OF INDUSTRY AS A WHOLE
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NSE launched internet trading in early February 2000. It is the first
stock exchange in the country to provide a web-based access to
investors to trade directly on the exchange. The process : Log on to the
brokers site of your choice where you get real time quotes, place a buy
or sell order on the spot, and direct the site to debit the requisite
amount. In some time you get confirmation and after the trade
settlement your bank and depository account will reflect the changes
which you can view anywhere, anytime. Online trading has become
seamless. All that you need is a PC, a modem, subscription to an
Internet Service Provider (ISP), a saving and a depository account
with any bank providing online trading facility. Along with stocks one can
trade in mutual funds and investment instruments. The advantage with
online trading that you can operate in both BSE and NSE depending on
the broking firm.
NSE introduced for the first time in India a fully automated screen based
trading. It uses a modern fully computerized trading system designed to
offer investor across the length and breadth of country a safe and easy
way to invest. The NSE trading system called National Exchange for
Automated Trading (NEAT) is a fully automated screen-based
trading system which adopts the principle of an order driven market.
With over 20 million shareholders, India has the third largest investor
base in the world after the USA and Japan. Over 9000 companies are
listed on stock exchanges, which are serviced by approximately 7500
stockbrokers. The Indian capital market is significant in terms of the
degree of development, volume of trading and its tremendous growth
potential.
STOCK EXCHANGE
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A stock exchange, share market or bourse is a corporation or mutual
organization which provides facilities for stock brokers and traders, to
trade company stocks and other securities. Stock exchanges also
provide facilities for the issue and redemption of securities, as well a,
other financial instrument and capital events including the payment of
income and dividends. The securities traded on a stock exchange
include: shares issued by companies, unit trusts and other pooled
investment products an bonds. To be able to trade a security on a
certain stock exchange, it has to be listed there.
National Stock Exchange
The national stock exchange of India limited (NSE) is a Mumbai-based
stock exchange. It is the largest stock exchange in India and the third
largest in the world in terms of volume of transaction. NSE is mutually-
owned by a set of leading financial institutions, banks, insurance
companies and other financial intermediaries in India but its ownership
and management operate as separate entities. In March 2006, the NSE
had a total market capitalization of 4,380,774 crores INR making it the
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second-largest stock market in south Asia in terms of market-
capitalization.
Bombay Stock Exchange
The Bombay stock exchange (or BSE) is there oldest stock exchange in
Asia. It is located at Dalal street, Mumbai, India.
The Bombay stock exchange was established in 1875. there are around
4800 Indian companies listed with the stock exchange, and has a
significant trading volume. As of may 2007, the equity market
capitalization of the companies listed on the BSE was about Rs.40.7
trillion (US$999billion).
This topic includes the practical experience company products that are
followed by studying the consumer preference or interest towards share
market. This is a market; which is uncertain sometimes it gives huge
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profit and also vice-versa; it depends upon the investment customer
made. This is a better option to have better returns on the investments
then investing in banks, mutual fund or bond et. But risk is high in this
case.
This products offers customer two type of investment option INTRADAY
and DELIVERYboth has The topic is to study the consumer preferences
towards investment in stock market.
Demat account is a pool of various scripts and securities, whereas online
trading is a tool of purchasing/selling of scripts online. These scripts are
then transferred to depository account after three days.
There own benefits and limitations but a better way to have more
returns on investment. Intraday means investing in a share market for a
day i.e. purchasing and selling of sharekhan in one day. Delivery is
purchasing share and selling those share next day. The charges that
company charge in terms of brokerage is different in both the cases.
Gone are the days when you left orders with your broker, received
conformations on the price and quality of the shares at the end of the
day and the payment made upfront or received after delays. Your
securities settlement took days to reflect in your account. Internet has
changed the way you do trading. The entire process is speedy with
limited to zeropaper work. NSE launched internet trading in early
February 2000. it is the first stock exchange in the country to provide a
web-based access to investors to trade directly on the exchange. The
process : Log on to the brokers site of your choice where you get real
time quotes, place a buy or sell order on the spot, and direct the site to
debit the requisite amount. In some time you get confirmation and after
the trade settlement your bank and depository account will reflect the
changes which you can view anywhere, anytime. Online trading has
become seamless. All that you need is a PC, a modem, subscription to
an Internet Service Provider (ISP), a saving and a depository
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account with any bank providing online trading facility. Along with stocks
one can trade in mutual funds and investment instruments. The
advantage with online trading that you can operate in both BSE and NSE
depending on the broking firm.
1.2 Company profile
Share khan is the retail broking arm of Mumbai-based SSKI
Group, which has over eight decades of experience in the stock brokingbusiness. SSKI owns 65% in Share Khan Balance ownership is HSBC, first
Carlyle and Intel Pacific.
It has been into broking since 80 years. And has focused on
providing equity solutions to every segment. It boasts of largest ground
network of 588 share shops across 213 cities in India.
Sharekhan offers its customers a wide range of equity related services
including trade execution on BSE, NSE, Derivatives, depository services,
online trading, investment advice etc.
Through its online trading portal www.sharekhan.com, it provides
multi-channel access to the stock markets to its customers. The website
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was launched on Feb 8, 2000. The site gives access to superior content
and transaction facility to retail customers across the country. Known for
its jargon-free, investor friendly language and high quality research, the
site has a registered base of over one lakh customers. The number of
trading members currently stands at over 3 Lacs. While online trading
currently accounts for just over 2 per cent of the daily trading in stocks
in India, Sharekhan alone accounts for 32 per cent of the volumes
traded online.
Share khans ground network includes over 588 centers in 148
cities in India, of which 32 are fully-owned branches.
The company has used some of the best-known names in the IT
industry, like Sun Microsystems, Oracle, Microsoft, Cambridge
Technologies, Nexgenix, Vignette, Verisign Financial Technologies India
Ltd, Spider Software Pvt Ltd. to build its trading engine and content. The
Morakhiya family holds a majority stake in the company. HSBC, Intel &
Carlyle are the other investors.
With a legacy of more than 80 years in the stock markets, the SSKI
group ventured into institutional broking and corporate finance 18 years
ago. Presently SSKI is one of the leading players in institutional broking
and corporate finance activities. SSKI holds a sizeable portion of the
market in each of these segments. SSKIs institutional broking arm
accounts for 7% of the market for Foreign Institutional portfolio
investment and 5% of all Domestic Institutional portfolio investment in
the country. The Corporate Finance section has a list of very prestigious
clients and has many firsts to its credit, in terms of the size of deal,
sector tapped etc.
SSKI
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With a legacy of more than 80 years in the stock market, the SSKI
group ventured into institutional broking and corporate finance 18 years
ago. Presently SSKI is one of the leading players in institutional broking
and corporate finance activities. SSKI holds a sizeable portion of the
market in each of these segments. SSKIs institutional broking arm
accounts for 7% of the market for foreign institutional portfolio
investment and 5% of all domestic institutional portfolio investment in
the country. It has 60 institutional clients spread over India, fa east, UK
and us. Sharekhan is the retail broking arm of SSKI, an organization
with more than eight decades of trust and credibility in the stock
market.
SSKI GROUP COMPANIES
SSKI investor services Ltd (sharekhan)
S.S. kantilal ishwarlal securities
SSKI corporate finance
Idream productions
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TECHNOLOGY USED BY COMPANY
Sharekhan has always believed in investing in technology to build its
business. The company has used some of the best-known names inthe IT industry, like sun Microsystems, oracle, Microsoft, nexgenix,
spider software pvt. Ltd. to build its trading engine and content.
SHAREKHAN BUSINESS
1. Brokering house2. white feathering house production
VISION
To be the best retail brokering brand in the retail business of stock
market.
MISSION
To educate and empower the individual investor to make better
investment decisions through quality advice and superior service
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Key Statistics about Sharekhan
Top Locations
Bombay Area, India (123) Delhi Area, India (21)
Sharekhan Headquarters Address
A-206 Phoenix House 2nd Floor Senapati Bapat Marg Lower Parel
Mumbai, Maharashtra 400 013
IndiaPhone: 91 22 2498 2000
Fax: 91 22 2498 2626
Headquarters Bombay Area, IndiaIndustry Financial Services
Type Privately HeldStatus OperatingCompany Size 1001-5000 employeesWebsite http://www.sharekhan.com
Table: 1.1
Common Job Titles Manager
Relations Manager
Vice President
15%
10%
9%
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http://www.linkedin.com/search?search=&company=Sharekhan¤tCompany=currentCompany&searchLocationType=I&distance=50&countryCode=in&postalCode=400604http://www.linkedin.com/search?search=&company=Sharekhan¤tCompany=currentCompany&searchLocationType=I&distance=50&countryCode=in&postalCode=110041http://www.linkedin.com/companies/sharekhan#hq-address%23hq-addresshttp://www.linkedin.com/companyDir?searchByInd=&ind=43°Dist=net&trk=copro_industryhttp://www.linkedin.com/search?search=&company=Sharekhan¤tCompany=currentCompany&searchLocationType=I&distance=50&countryCode=in&postalCode=110041http://www.linkedin.com/companies/sharekhan#hq-address%23hq-addresshttp://www.linkedin.com/companyDir?searchByInd=&ind=43°Dist=net&trk=copro_industryhttp://www.linkedin.com/search?search=&company=Sharekhan¤tCompany=currentCompany&searchLocationType=I&distance=50&countryCode=in&postalCode=4006048/2/2019 Summer Training Project Report-rishika
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Analyst
Branch Manager
5%
4%
Top Schools Univ. of Mumbai
Univ. of Pune
Delhi Univ.Inst. of Tech. and
Management
South Gujarat Univ.
15%
6%
6%5%
4%
Median Age 28 yearsGender Male
Female
80%
20%
Table: 1.2
Companies related to Share khan
Parent Company
SSKI
Career path for Sharekhan employees
Before:
A. Anand Rathi...
After:
Religare Motilal Oswal...
ShareKhan.com is an online trading facility founded in 1999-2000 with a
focus on equities, derivatives and commodities brokerage execution on
the National Stock Exchange of India Ltd. (NSE), Bombay Stock
Exchange Ltd. (BSE), National Commodity and Derivatives Exchange
India (NCDEX) and Multi Commodity Exchange of India Ltd. (MCX).
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Sharekhan Limited offers online security broking and portfolio services
to institutions and large corporate houses as well as individual investors.
Sharekhan Limited was formerly known as SSKI Investor Services Private
Limited. The company is based in Mumbai, India.
1.3 Problems of Share Khan
Share khan has been strongly committed not only to environmental
conservation programs but also expresses the increasingly inseparable
balance between the economic concerns and the environmental andsocial issues faced by a business. A business must not grow at the
expense of mankind and mans future but rather must serve mankind.
Share Khan has failed to evolve into a widespread internet broking
firm because of its un-focused promotional strategies
(advertisements in electronic media, newspapers, etc) across the
length and breadth of India. Although it is a well known broking
house in some states like Maharashtra, Gujarat, etc. it still lacks
considerable awareness in the northern parts of India where its
competitors have been building their reputation very rapidly.
The other of Share Khan is that they give more attention to HNIs
(high net worth individuals) as compared to retail investors.
Most of the processing and clarifications (account opening,
payments, etc) are routed to the head office in Mumbai due to
lack of decision making powers of local branches which delays
the speedy execution of decision
1.4 Competitors Information
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5paisa.com
Company Background
Indiainfoline was founded in 1995 and was positioned as a research firm.
In 2000 e-broking was started under the brand name of 5 paisa.com.
Apart from offering online trading in stock market the company offers
mutual funds online. It also acts as a distributor of various financial
services i.e. GOI securities, Company Fixed Deposits, Insurance. Limited
ground network, present in 20 Cities.
Online Account Types
Investor Terminal: Investors / Students
Trader Terminal: Day Traders / HNIs
PRICING FOR RETAIL CLIENTS
Investor Terminal
Account Opening: Rs 500
Demat 1st Yr: Rs 250
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Initial Margin: Rs 2500(Compulsory)
Min Margin Retainable: Rs 1000
Brokerage:
Trading 0.10% each side + ST
Delivery 0.50% each side + ST
PRICING FOR HNI CLIENTS
Trader Terminal
Account Opening: Rs 500
Demat 1st Yr: Rs 250
Initial Margin: Rs 5000(Compulsory)
Min Margin Retainable: Rs 100
Brokerage:
Trading 0.10% each side + ST
Delivery 0.50% each side + ST
(Negotiable to 0.05% each side & 0.25%)
Account Access Charges
Monthly Rs 800, adjustable against Brokerage
Yearly Rs 8000, adjustable against brokerage
Deal Clinchers v/s 5 Paisa
Downtime
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Recent past 5 paisa Trader Terminal (T.T) is experiencing high frequency
downtime between 3 3:30 p.m due to server load (as their T.T is
feature heavy compared to Speed trade charting)
Manual Accounting
The 5 paisa accounting system is manual, Online fund transfer through
bank is not credited instantly. Limit is provided EOD for shares sold
from DP, or call similarly limit released for shares sold under BTST is
manual Delay in receiving pay-out of clear funds from trading to Bank
Account
Min Account Balance
Concept of Min Rs 1,000 to be maintained in form of cash / securities to
keep account active. This can be withdrawn only on closure of account.
Kotakstreet
Company Background
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No Flexibility in Leverage Dependent on Type of Account ( 4 to 6 times
only) No flexibility in Brokerage, driven by slab structure
Many Other ChargesRs 22.5 p.m towards DP AMC charges
DP incoming charges extra, 0.02%
Rs 1,000 as retainable Margin to keep account active
Rs 25 per call after 20 calls for the month
INDIABULLS
Company Background
India Bulls is a retail financial services company present in 70 locations
covering 62 cities. It offers a full range of financial services and products
ranging from Equities to Insurance. 450 + Relationship Managers who
act as personal financial advisors
Online Account Type
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Signature Account: Plain Vanilla Account with focus on Equity
Analysis. The equity analysis is a paid service even for A/c holders
Power India bulls:Account with sophisticated trading tools, low
commissions and priority access to R.M
Pricing of IB Accounts
Signature Account
Account Opening: Rs 250
Demat: Rs 200 if POA is signed, No AMC for this DP
Initial Margin: NILBrokerage: Negotiable
Power India Bulls
Account Opening: Rs 750
Demat: Rs 200 if POA is signed, No AMC for this DP
Initial Margin: NIL
Brokerage: Negotiable
Deal Clinchers v/s India Bulls
POA for Clients DMAT
All shares held by client trading with IB are moved to IB Pool Account
and the same is shown as a reflection in client DP account. Charges are
levied to move shares from IB pool Account to client DP account
Paid Research Services
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Access to a research even for an IB trading account holder is charged a
min of Rs 500 a month
Margin funding hoax
The interest on funding starts on leveraged delivery trades from T+1
day itself @21% p.a, on a daily basis
The role of Relationship Manager
Each RM is looked upon as a revenue generator and he gets a % onbusiness generated from client. This can lead to over leveraged
(Interest) & high frequency (Brokerage) trading, which may not be in the
best interest of the client.
ICICIDirect
Company Background
ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is an
affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank
Limited
Account Types
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ICICI Direct e-invest Account: Plain Vanilla Account with focus
on 3 in 1 advantage. Differentiated in services within the account
1. Cash on spot2. Margin Plus
Premium trading interface of ICICIDirect Link is given to DBC partners
and HNIs
Account Opening: Rs 750
Schemes: For short periods Rs 750 is refundable against brokerage
generated in a qtr. These schemes are introduced 3-4 times a year.
Demat: NIL, 1st year charges included in Account Opening Plus a
facility to open additional 4 DPs without 1st yr AMC
Initial Margin: Nil
Brokerage: All brokerage is inclusive of stamp duty and exclusive of
other taxes. Slab wise brokerage ranges from 0.75% to 0.25%
depending on volume.
Deal Clinchers v/s ICICIDirect
Poor online Interface
Slow website interface with no real-time quotes creates dissatisfaction
among high frequency traders
Margin trading restriction
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The margin trading system is available up to 2:45 p.m, with outstanding
net positions under margin segment automatically squared off at any
time between 2:45 3:30 p.m. Thus no control of square off price.
Morning Trades Issue
Being one of the websites with largest no of after hour orders which are
pushed 1st thing in the morning, creates a choking of orders to the
exchange, causes delay of confirmations for new order placed during the
early morning trades.
Restriction of BTST
The sale of shares purchased is restricted to T+1 day and is not
permitted on T+2 Day.
No leverage for Delivery trades
Delivery is restricted to the total money allocated into the trading
account.
No flexibility on leverage on Intra-day trades
The leverage of 4 times is available for intra- day trades.
Restriction of Bank Account
The choice of bank is restricted to ICICI Bank.
Higher Brokerage rates with slabs
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The delivery brokerage is pegged at 0.75% and trading at 0.10% each
side, this makes is very unviable for customers dealing in large volumes.
Although progressively the delivery and trading brokerage reduce as
volumes go up.
1.5 S.W.O.T. Analysis of Share Khan
A swot analysis focuses on there internal and external environments.
Examining strengths and weaknesses in the internal environment andopportunities and threats in the external environment
STRENGTHS
Services
As a product share khan is a extremely innovative product with very less
cost services like online trading facility institutional and domesticbroking. Customized research with almost 80% efficiency etc. share
khan an edge over its research provides other support services that
make retail investors more confident and assured with their trading.
SMS alerts (allowing traders and investors to make the most of the
available opportunities). Softer intangible features like amagers, equity
driving preference. Through efficient trading processes investors can
place their orders directly on the internet do all the information seeking
and basically own the investing process.
Distribution network
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Sharekhan with almost 250 branches spread across 123 cities beefed up
by comprehensive online research advice and transaction services. In
near future expect to make 200000-retail customers being serviced
through centralized call centre/ web solution. 60 branches semi
branches servicing affluent aggressive through highly skilled financial
advisors. 250 independent advisory roles through fundamental &
technical research and new initiatives are being made in portfolio
management services & commodities trading.
Marketing
Sharekhan is a product of SSKI a veteran equities solutions company
with over decades of experience in the Indian stock markets.
Sharekhan does not claim expertise in too many things. Shraekhans
expertise lies in stocks and that what it talks about with authority. So
when he saves that investing in stocks should not be confused with
trading in stocks or a portfolio-based strategy is better than betting on a
single horse. It is something that is spoken with years of focused and
experience in the stock markets.
Products
Companys product line is quite flexible in the sense that there is a
product for every kind of investors. Also all the products cover all the
products offered by the other competitors like low cost user-friendly
online trading services etc.
WEAKNESS
Localized presence due to insufficient investments for country
wide expansion.
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Lack of awareness among customers because of non-aggressive
promotional strategies (print media, newspapers, etc).
Lesser emphasis on customer retention.
Focuses more on HNIs than retail investors which results inmeager market-share as compared to close competitors.
OPPORTUNITIES
The external environment analysis may reveal certain opportunities for
profit and growth.
Ever-increasing market
After the NSE brought the screen based trading system stock markets
are now more secured which has attracted lot of retail investors and the
demand is increasing day by day. This has resulted in improved liquidity
and heavy volumes on transaction. Share khan is one of the early
entrants here. As to how much it will roar swift it can swoop on themarket, the future alone can answer such queries. Sharekhan has been
a mega player and is known for being a mover of stocks. It is also known
for putting big deals through and enjoys good networking with the FIIs. It
has been dynamic enough to move with the times and capture the
opportunities that the market throws up from time to time.
Improving technology
In county like India technology is always improving which gives the
company a chance to keep on improving their product with time
whereas for the small players like local brokers it will be difficult to keep
the same pace as the changing technology. Also with SEBI lying down
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some strict guidelines small brokers are finding it harder to retain
customers with no research department and small capital. The
traditional business players may not have systems technology, customer
services etc capable of directly servicing so many retail customers.
Education level
The education level in the country is improving year as far as technology
goes. With that the understanding of the stock market is also increasing
and a lot of retail investors are steeping in the markets which are being
shown by increasing volumes, transactions and indices.
THREATS
Aggressive promotional strategies by close competitors may
hamper Share Khans acceptance by new clients.
Lack of sufficient branch-offices for speedy delivery of services.
Other players are providing margin funds to investors on easy
terms where as there is no such facility in share khan.
More and more players are venturing into this domain which can
further reduce the earnings of Share Khan.
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CHAPTER 2
OBJECTIVE AND METHODOLOGY
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2.1 SIGNIFICANCE
This project will accomplish to understand the problem faced by the new
client with respect to online share trading and find ways to solve their
queries at microscopic level. The study also aims to highlight the
possible hurdles that a prospective client faces who are interested toinvesting in securities but is unaware of the system of online share
trading. Its also aims at finding out the brand image of the organization
amongst the general investors and give information to the management
about the new developments in the market adopted by the competitors
and the areas where the company needs to improve.
This is a limited study which takes into consideration the various
operations performed by the company. This data can be exported to
take in the trends across the industry. The significance for the industry
lies in studying these trends that emerge from the study. It is a rapidly
changing and evolving sector.
At sharekhan our goal is not only to sell a bike, but also to help you
every step of the way in making our world a better place to live in.
besides its will to provide a high quality service to all of its customer.
Sharekhan takes a stand as a socially responsible enterprise respectful
of its environment and respectful of the important issues.
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Sharekhan has been strongly committed not only to environmental
conservation programmes but also expresses the increasingly
inseparable balance between the economic concerns and the
environmental and social issues faced by a business. A business must
not grow at the expense of mankind and mans future but rather must
serve mankind.
The best is yet to come. SHAREKHAN is powering its way through a
market that is still to unleash its true potential, as barely two percent of
the population had been penetrated so far.
2.2 MANAGERIAL USEFULNESS OF THE STUDY
The stock market is one such institution whose very existence has been
challenged by the growth in information technology. It has turned very
idea of a stock market on its head.
Technology has impact the working of stock markets in every sense.
However, useful starting point for this study would be the study of
dematerialization, or demat as it is popularly known as. This is simply
because demat has change the way stocks are held and traded and
therefore has effect on every other function of the market.
Dematerialization in simple terms means the conversion of shares from
physical to electronic form.
Demat, enabled by the use of technology is probably is single most
important factor which has repercussions on every aspect of the stock
markets.
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Demat is instrumental in:
Abolition of market lots
Introduction of rolling settlements
Enhancing liquidity
Brining stamp duty to zero
Reducing chances of bad delivery
Increased lending by banks and other FIs
SEBI extended demat to IPOs during capital reforms in capital marketsin 2002. The premise being elimination of problems due to loss of
allotment letters, share certificates etc., encouraging shareholders to
out of for demat credit allotments, trading compulsorily in demat form
within an option of holding shares in physical form for retail investors.
BSE, the first exchange to be set up in India, started as a floor-based
exchange. However, NSE, setup as an alternative to BSE, was an
electronic (computerized) exchange. With advancements in technology,both these exchanges moved to SBTS (Screen Based Trading System) in
`997.
While NSE introduced NEAT (NSEs Online Trading System) in May 1997,
BSE introduced BOLT (BSEs Online Trading System) in September 1997
in Mumbai.
The outcome has phenomenal with respect to the number of trades
taking place on these two exchanges.
Further, trading in stocks has reached retail investors home via the
Internet in 2003-2004, SEBI proposed Internet based trading under ORS
(Order Routing System)
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Trading via Internet was an instant hit, with 18 members being granted
licenses in 2004-2005 and trades touching 767 Cr. During the first six
months itself.
Although security concerns still exist regarding the safety of datatransfer over the Internet, companies like VERISIGN and RSA, who
specialize in security algorithms and data encryption ensure high degree
of authenticity and trust in trades.
Information Flow
Any trading system disseminates data to market constituents, in other
words, information is freely available. This has two disadvantages-
It makes easier for off-exchange transactions to occur because of
availability of information.
It makes off-exchange transactions attractive due to absence of
trading costs.
On the other hand rapid flow of information has also meant increased
volatility in the markets. In financial terms, volatility is:
The degree to which the price of a security, commodity, or market rises
or falls within a short-term period. An obvious reason for market
volatility is technology. This includes more timely information
dissemination, improved technology to make trades and more kinds of
financial instruments. The faster information is disseminated, the
quicker markets can react to both negative and positive news. Improved
trading technology makes it easier to make it easier to take advantage
of arbitrage opportunities, and the resulting price alignment arbitragecauses. Finally, more kinds of financial instruments allow investors more
opportunity to move their money to more kinds of investments positions
when conditions change.
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2.3 OBJECTIVE OF THE STUDY
Customer Acquisition through sales of Trading / Demat Accounts in
order to get a deep insight as to how the Organization actually
performs these functions.
Understanding the Commodity and Derivative market and the way
work is performed in these segments.
Investigate the difficulties faced by the existing clients of Share Khan
with respect to its internet trading services
The primary objective of this study is to gain an insight into the
basics of internet trading with respect to Indian capital market.
To ascertain the problems those are hindering the acceptance of
internet trading among the prospective investors.
To conduct Market Research in various parts of the city in order to
get statistical data for commenting on the future of online share
trading in India.
2.4 SCOPE OF THE STUDY
With growing acceptance and popularity of internet trading the
study aims at providing a deeper insight into this new field of
security trading in India.
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collected from such people and the same methodology was
repeated. For each and every customer personal quarries have
been entertained after the sale is done.
Methodology is a way to systematically solve to research problem.it may be understood as a science of studying how research is
done scientifically. In it we study the various steps that are
generally adopted by a researcher in studying his research
problem along with logic behind him. Why research study has
been undertaken, how research problem has been defined, in
what way and why the hypothesis has been formulated, what data
collected and what particular method has been adopted, why
particular technique of analyzing data has been used and a host of
similar other questions are usually answered when we talk of
research methodology concerning a research problem or study.
Research is a process of refining human experience for being
embodied in the stock of knowledge. In course of this refining
operation a researcher has to follow various specific steps. First,
any development in the scientific knowledge is founded on thebasis of previous knowledge in that area of study. Further, a
researchers quest is to adopt a suitable methodology to pursue
his current research endeavor. This enables him to get reliable
results, which are helpful to form some concrete conclusions.
Present research aims to investigate the level of customer
satisfaction amongst different product types of Sharekhan.
Both type i.e. Primary as well as Secondary data are used in this
report.
Questionnaire and Observation as primary data while Research
reports, pamphlets, and sites of Sharekhan group are used for
secondary data.
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Present research is descriptive in nature.
Convenient sampling technique is used in this report.
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CHAPTER 3CONCEPTUAL DISCUSSION
(THEORITICAL BACKDROP & LITERATUREREVIEW)
3.1 GENERAL INTRODUCTION
The stock trading history in India is obscured in the mists of time.
Historical records, as and where they exist, rarely speak about business
and speculative activity except in passing. However, the origin of stock
broking in the country may go back to a time, when shares, debentures
and bonds representing titles to property were first issued on the
condition of transfer from one person to another and the earliest record
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of dealings in securities in India is the East India Company's loan
securities, way back in the 18th century.
The first stock exchange in India, Bombay Stock Exchange was
established in 1875 as 'The Native Share and Stockbrokers Association'
and has evolved over the years into its present status as the premier
stock exchange in the country. It may be noted that BSE is the oldest
stock exchange in Asia, even older than the Tokyo Stock Exchange,
which was founded in 1878. The country's second stock exchange was
established in Ahmedabad in 1894, followed by the Calcutta Stock
Exchange (CSE). CSE can also trace its origin back to 19th century. From
a get together under a 'neem tree' way back in the 1830s, the CSE was
formally established in May 1908.
India's other major stock exchange National Stock Exchange (NSE),
promoted by leading financial institutions, was established in April 1993.
Over the years, several stock exchanges have been established in the
major cities of India. There are now 23 recognized stock exchanges
Mumbai (BSE, NSE and OTC), Calcutta, Delhi, Chennai, Ahmedabad,
Bangalore, Bhubhaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur,
Kochi, Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara,
Indore and Meerut. Today, most of the global stock exchanges have
become highly efficient, computerized organizations.
Computerized networks also made it possible to connect to each other
and have fostered the growth of an open, globalsecurities market.
Though Stock Broking was practiced in Calcutta as early as 1836, the
members of the broking profession had neither any code of conduct for
their guidance, nor any permanent place for congregation. The centre of
their activity was near a neem tree, where at present, stands the offices
of the Chartered Bank (now known as Standard Chartered) on Netaji
Subhas Road, Calcutta. In 1905, Chartered Bank began to construct their
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own building, which led brokers to shift the arena of their operation, to
the neighborhood of the recent Allahabad Bank.
The brokers had no shelter and business was carried on in the open
place. The inconvenience of such trading, prompted brokers to organize
themselves and in May 1908, an association was formed under the
name and style of the Calcutta Stock Exchange Association at 2,
China Bazaar Street.
At the time of incorporation in 1908, the Stock Exchange had 150
members. Today the total membership has risen to more than 900,
which contains several corporate and institutional members. The
number of companies listed on the Exchange is more than 4800. The
Annual turnover of the Exchange in 2004-05 was to the tune of around
Rs, 12, 00,000 crores. The Calcutta Stock Exchange has been granted
permanent recognition by the Central Government with effect from April
14, 1980 under the relevant provisions of the Securities Contracts
(Regulation) Act, 1956, with a view to render useful service to investors.
In December 1993, SEBI directed the stock exchanges to discontinue thetraditional system of carry forward of transactions (badla).
Subsequently, it proposed an alternative system in March 1994, but no
agreement could be reached on implementing this system. In February
1995, SEBI set up the G. S. Patel Committee (GSPC) to review the
system of carry forward transactions. The GSPC submitted its report in
March 1995. SEBI adopted the system recommended by the GSPC with
some modifications in its decisions of July 27, 1995 and October 5, 1995.
DEMAT A\C
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Demat a\c is just like a saving a\c. in saving a\c we save our money and
in demat we deal in share market. Demat is dematerialization and
trading in the demat mode. It is safer and faster alternative to the
physical existence of securities.
Demat as a parallel solution offers from delays, thefts, forgeries,
settlement risk and the paper work. This system works through
depository participants (Dps) who offers demat services and the
securities are held in the electronic form for there investor directly by
the depository.
WHAT IS DEPOSITORY
In India, there are two depositories
National securities depository ltd.(NSDL)
Central depository services India ltd.(CDSL)
NSDL
Although India had a vibrant capital market, which is more then a
century old, the paper based settlement of trades caused problems like
bad delivery and delayed transfer of till recently, the enactment of
depositories act in august 1996 paved the way for establishment of
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Central depository services India ltd.(CDSL) is the other depository,
promoted by the stock exchange, Mumbai in association with bank of
India, bank of Baroda, and state bank of India and HDFC bank.
With the depositories in place, there is a need to ensure that an
effective online trading mechanism is available for the retail investors to
transact in the paperless form. Effectively all leading stock exchange
including BSE and NSE have moved towards online trading. Further the
national stock exchange established a view to provide an efficient and
transparent securities market to the investors.
The depositories are required to have adequate controls, system and
procedure to prevent conduct by DPs which is detrimental to the interest
of investors or the securities market. It charged NSDL of not taking
appropriate penal against DPs observed by them during inspections.
NSDLs action has never gone beyond imposition of monetary penalties.
DEMATERIALIZATION
The dematerialization system is an alternative to the physical existenceof securities. In this system securities are converted into electronic form
and deposited in a depository account in the investors name.
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In order to dematerialize certificates, an investor will have to first open
an account with a DP and then request for the dematerialization request
form(DRF), which is available with the DP, and submitting the same
along with the physical certificates. The investor has to ensure that
before the certificates are handed over to the DP for demat, they are
defaced by marking surrendered for dematerialization on the face of
the certificates
3.2 TYPES OF PRODUCTS
Products offered by Sharekhan
1- Equity and Derivatives
2- Research
3- Mutual Fund Advisory
4- Portfolio Management Services.
1. EQUITY and DERIVATIVES
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Figure3.1
With a Sharekhan online trading account, you can buy and sell
shares instantly. The investors can choose from 2 online trading
accounts that suit their trading habits and preferences the classic
account for most investors and speed trade for active day traders.
The Classic Account also comes with Dial-n-trade completely free,
which is an exclusive service for trading shares by using telephone.
This account enables people to buy and sell shares through
sherkhans website. They get features like:
a) Streaming quotes (using the applet based system)
b) Multiple watch lists
c) Integrated Banking, demat and digital contracts
d) Instant credit and transfer
e) Real-time portfolio tracking with price alerts
and, of course, the assurance of secure transactions.
The Dial-n-Trade service enables one to place orders for buying
and selling shares through telephone by dialing any one of our two
numbers (1-800-22-7050 or 30307600), enter your TPIN
number (which is provided at the time of opening your account)
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and on authentication you'll be directed to a telebroker who
will buy and sell shares for you.
2. RESEARCH
To cater to the different needs of each investor sherkhan provides
a comprehensive set of research reports, so that you can make the
right investment decisions regardless of your investing
preferences.
A. SHAREKHAN SHOPS
It has 510 share shops across 170 cities in India. There it provides a
host of trading related services - customer service staff will also help
you with any accounts related queries you may have.
A Sharekhan outlet offers the following services:
Online BSE and NSE executions (through BOLT & NEAT terminals)
Free access to investment advice from Share khans Researchteam
Sharekhan Value Line (a monthly publication with reviews of
recommendations, stocks to watch out for etc)
Daily research reports and market review (High Noon & Eagle Eye)
Pre-market Report (Morning Cuppa)
Daily trading calls based on Technical Analysis
Cool trading products (Daring Derivatives and Market Strategy)
Personalized Advice
Live Market Information
Depository Services: Demat & Remat Transactions
Derivatives Trading (Futures and Options)
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Commodities Trading
IPOs & Mutual Funds Distribution
Internet-based Online Trading: Speed
Trade
B.DEMAT
Dematerialization and trading in the demat
mode is the safer and faster alternative to
the physical existence of securities. Demat
as a parallel solution offers freedom from
delays, thefts, forgeries, settlement risks and paper work. This system
works through depository participants (DPs) who offer demat services
and the securities are held in the electronic form for the investor
directly by the Depository.
Sharekhan Depository Services offers dematerialization services to
individual and corporate investors.
3. MUTUAL FUNDS
Share khans clients will now also be able to invest in Mutual fundsthrough them. They have already started this service for a few mutual
funds, and in the near future will be expanding our scope to include a
whole lot more. Applying for a mutual fund through us is open to
everybody, regardless of whether you are a Sharekhan customer.
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To invest in a fund, all you have to do is download the application form,
print it out, fill it in and send it over to them.
3. PMS
This is a product which allows the customer to be completely hands off
as all the equity decisions of the customer are taken y the professionals
appointed by the firm.
The product is classified into three categories-:
ProTech
ProPrime
ProArbiterage
ProTech
Product Offerings
Nifty Thrifty:
Nifty futures are bought and
sold and the exposure does not
exceed the value of the
portfolio. The advantage is that
Nifty allows making profits
even in falling markets
Beta Portfolio :
Here 80% of the portfolio is traded in
delivery (cash
market) and the rest 20% in the Future and Option segment (e.g. Buying
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calls /put etc.)This results in a higher and safer return as risk is
undertaken only on the 29% of the portfolio
ProPrime
Product Offerings
The Aggressive Scheme:
Ideal for investors looking at higher returns and are ready to
take higher risks.
The portfolio consists of the following stocks:
Expected growth in profitability
Relatively low valuations
Mid to smallcap companies
The Balanced Scheme:
Ideal for investors looking at steady returns with low risk
appetite consists of a blend of consistent a blue chip stocks
ensuring a balanced growth.
ProArbiterage
It spots risk free opportunities which offer higher return than other risk
free instruments available in the market. On spotting the opportunity
the stock is bought and the future is sold so as to lock in the spread. In
this way the scheme moves from one opportunity to another.
ACCOUNT OPENING
Their demat and trading a/c opening charges (combined) are Rs 950/-
and it as mandatory to open both the accounts there i.e. you cannot
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2. Speed trade terminal- Speedtrade is a powerful trading
and research platform that has live streaming quotes,
trading calls, advanced charting, market news and a single
trading screen for BSE & NSE. It is not provide to all the
clients. Only those clients are eligible for it that can
generate a quarterly brokerage of Rs.1500. Otherwise, they
are bound to pay the penalty of the remainder.
Comparatively it has got more and advanced features, e.g.:
one can see more number of scripts at a time on the screen.
Dial-n-trade (calling the dealers on phone and getting the trade
done through them)
R.M. FACILITY
Relation managers are the people who provide their clients with the
regular tips for trading in equity market and thereby assist them in
getting the maximum returns.
In sherkhan, relationship managers are not provided to all the clients.
This facility is only made available to those clients whos portfolio is
above Rs. 2, 00,000/-.
TECHNICAL REPORTS
Their clients receive 4 mails per day informing them about the most
probable share market movements for that day.
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Their Technical Trading calls based on the Brave heart Strategy has
consistently given a strike rate of 87% on calls with a 1-2 months of
price target and 95% for calls based on 3-6 months target.
INTERACTION WITH CLIENTS
The clients are provided with two numbers through which they can
interact with the company, one is a local number (call rates applicable)
and another is a MTNL/BSNL number (no charges). If the clients want to
avail the sms facility they have to pay Rs. 100 extra per month for it.
AWARDS AND RECOGNITION
Sharekhan has been voted as Indias most preferred broking house by
CNBC, a testimony of customers confidence in it.
Its research team by the name of cool gurus has been quoted by
Economic Times for getting the highest returns.
BANK TIE-UPS
Sharekhan has tie-ups with 10 banks. Few of them are:
ICICI
HDFC
UTI
OBC
AXIS
YES
3.3 SHAREKHAN SERVICES
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Dial-n-trade
Along with enabling access for your trade online, the classic and
Speedtrade account also gives you our dial-n-trade services. With this
service, all you have to do is dial our dedicated phone lines 1-800-22-
7500 and 39707500.
DNT-Toll free features
Dedicated toll free number for order placements.
Automatic fund transfer with phone banking (only with
Citibank).
Simple and secure IVR based system fro authentication.
No wait time. On entry of phone id and TPIN, the call istransferred.
Trusted, professional advice of Tal-brokers, who offer r
undiluted sharekhan research inputs.
IPN ON-Line
Can apply the entire following IPO online for free.
Research tips: Company provide 4-6 e-mails to therecustomers per day.
Pre Market:pre-market report covering views, events andmore.
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Daring derivatives:covers futures and option commentaryand trading calls.
High Noon:is aimed at traders, this technical daily newsletter
carries punters calls and smart chart. It is released at noon to be
acted upon during the course of the day.
Post-Market report: updates you day happening.
Eagle Eye: is aimed at traders, this technical daily newsletter
carries punters calls, hit list and smart chart. Its released at the
end of the day to be acted on following day.
Investor eye: is aimed at investors, this fundamental dailynewsletter carries most important news report, research update
on our stock idea and other fundamental reports.
Stock ideas: aimed at investors and it presents our best stock
picks in todays market.
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CHAPTER 4
DATA ANALYSIS
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Analysis
On the basis of the primary data collected through questionnaires &
personal interviews conducted with companies employees and clients
analysis was done and following are the question wise results:Types of Investors
54
Religare Securities Ltd.
0%
10%
20%
30%
40%
25L
acs
Investment
P
ercentage
ofInvestors
Investment
India Bulls Financial S ervices L
0%5%
10%15%
20%25%
30%35%
25La
cs
Investmen
P
ercentage
ofInvetsors
Investment
Reliance Mone
0%
10%
20%
30%
40%
25Lac
s
Investment
Percentage
of
Invetors
Investment
Sharekhan
0%
10%
20%
30%
40%
25Lac
s
Investment
Percentage
of
Invetsors
Investment
Icici Direct
0%
10%
20%
30%
40%
25La
cs
Investment
Perce
ntage
ofInvetors
Investment
Figure: 4.1
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Small investors prefer to invest in the stock market through Religare
Securities Ltd., India Bulls Financial Services Ltd. & ICICI Direct.com.
Reliance Money is being preferred more by medium investors.
Sharekhan is suitable for big investors.
Medium of Trade
55
Religare Secur ities Ltd.
0%
20%
40%
60%
80%
online offline
Medium of Trade
Percentage
of
investors
Medium of Trade
Sharekhan
0%
20%
40%
60%
80%
online offline
Medium of trade
Percentage
of
investors
Medium of trade
Indiabulls Finacial Services Ltd.
0%
20%
40%
60%
80%
online offline
Medium of Trade
Percentage
of
Investors
Medium of trade
ICIC Direct
0%
20%
40%
60%
80%
100%
online offline
Medium of trade
Percentage
of
Investors
Medium of Trade
Medium of trade
0%
50%
100%
150%
online of fline
Me dium of trade
Percentage
of
investors
Medium of trade
Figure: 4.2
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It has been observed that traders inclination towards online trading is
increasing. Investors who opt for online trading are more in Religare and
Indiabulls as their software terminal is very effective. Offline traders are
more in Sharekhan and ICICI Direct.com as their terminal is very
expensive as well as inaccurate. RelianceMoney offers only internet
based trading.
Technical Reports
56
Religare Securities Ltd.
Yes
66%
No
34%Yes
No
Indiabulls Financial Services Ltd.
Yes
55%
No
45%Yes
No
Sharekhan
Yes
95%
No
5%
Yes
No
Reliancemone
Yes
35%
No
65%
Yes
No
ICICI Direct
Yes
97%
No
3%
Yes
No
Figure: 4.3
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Religare send market tips through E-mails to the clients. Moreover
Relationship Manager also keeps on giving market tips to their
respective clients. Indiabulls provide market tips through e-mails and
sometimes through sms. Both these companies are irregular in sending
technical reports to their clients. On the other hand, Sharekhan and ICICI
Direct.com are very regular in sending technical reports to their clients.
Share khan send 4 reports through mails which include premarket report
before 9:55, post market report, afternoon report and evening report.
ICICI Direct.com sends their market tips through e-mails only.
91% of the respondents says that Sharekhan is number one in themarket.
The common reasons behind this arte as follows:
Good returns
Advisory
Customized services
Only 9% of the respondents find that Sharekhan is not number one in
the market.
But the reasons of this thing was not even clear to the respondents as
they fill they need more customized services and more returns out of
their investment.
So at last here I would like to recommend that if Sharekhan gives more
emphasis on customized services then more and more customers get
satisfied.
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CHAPTER 5- FINDINGS AND RECOMMENDATION S
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Preference of Investment
Only Shares-- 75 %
Mutual Funds-- 16%
Bonds--7%
Derivatives--2%
Figure: 5.1
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Interpretation: This shows that although the mutual funds market is on
the rise yet, the most favored investment continues to be in the Share
Market. So, with a more transparent system, investment in the Stock
Market can definitely be increased.
Interpretation: With the increase in cyber education, the awareness
towards online share trading has increased by leaps and bounds. This
awareness is expected to increase further with the increase in Internet
education.
Overall Satisfaction
Customers are satisfied with the services which are being provided to
Religare. Indiabulls, ICICI Direct.com and Reliance money have satisfied
their clients to some extent only. Customers are not satisfied with Share
khans performance.Sharekhan provide effective service only to the big
investors. Small investors are not given due importance and attention.
Activeness of Grievance cell
Religare clients find grievance cell of the company active to some
extents only. Indiabulls is highly ineffective in redressing customer
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Awareness of online share trading
Yes -- 91%
No-- 9%
Figure: 5
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grievances. Share khans grievance cell is not effective and customers
receive very indifferent responses. ICICI Direct.com and Reliance money
are particular in redressing their customers grievances.
After having an experience of two months in sales of demat account I
would like to suggest the following things:
Company has an advantage of reach tips for which sharekhan is
known for, the customer who are new they need relationship
managers who will tell them about investment so it should be
provided to all the customer on demand this will lead to customer
satisfaction and will hip to have more references from the satisfied
customer.
The company also have the advantage of brokerage charges it
need some revision so that the customer who are locking for the
less brokerage can open there account in our company taking into
consideration the different proposal. It can reduce for a HNI client.
The company has shown the growth trend and it has reached at
no.2 it can move to no.1 because it has an advantage of its
services. As sharekhan is already tie-up with 10 banks for online
fund transfer that reduces the paper work for customer and ease
in trading.
The company should revise the advertising strategy to increase its
brand awareness. I suggest making advertisement on television so
that maximum market can be targeted.
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Company should focus on customer satisfaction at every levels of
the account procedure.
Brokerage can be reduced with the attractive proposal with
HNI.
Relationship manager should be given on the customer
demand.
Company should use the tool of advertising for marketing
the brand and the product.
Reduction in brokerage would attract the customer of
indiabulls, 5paisa and other competitors having less
brokerage then us.It would increase the market share or
client acquisition.
The account opening time should be reduced to maximum
5days because customer losses the opportunity of
investments.
The company shows the positive trend in growth but it can
be increased more if it focuses on building the brand equity
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Conclusion
Talking about Sharekhan it is one of the most well known players in
this segment and boasts is of high clientele because of its good andregular research tips, tie-ups with almost all major banks (10 banks to
be precise) as well as competent Relationship Managers. But the only
stain on its name because of the fact that it doesnt care much for its
small customers who are not even provided an R.M. Also their terminal
charges are also quiet high as compared to that of its competitors.
While there are many factors that need to be understood, one simple
fact is worthy of note. The average age of the Indian Internet user as
cited by a recent IDC survey is 27 years. The average age of the head
(and financial decision taker) of the Indian equity-investor household, as
revealed by the SEBI-NCAER study of Indian investors in 2000 is 45
years. The older, experienced equity investor is not online today and the
fact that older, mature investors are not tech-positive and hence
unlikely to move to online trading is a major barrier to the growth of e-
broking in India.
Here, the numbers of banks with a strong online presence are very few -
again, dominated by new private banks and foreign banks. Both have
lesser reach owing to a smaller network in the country. The relative
inability of large public-sector banks to offer-facilities for Internet
banking is a barrier in this regard. Besides, Internet penetration in India
is still very low and concerns about security also tend to predominate. In
markets like the US, online brokerages are advertised very heavily.
Online trading in India has so far not seen similar levels of aggressive
advertising, with the exception of ICICI Direct and India bulls. Besides,
only scripts that have been compulsorily dematerialized can be traded
on the net here.
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ANNEXURES
QUESTIONNAIRE
Name: ..... Occupation:
Phone: .....
(1) Do you invest in stock market?
Yes No
(2) You are a client of which is a brokerage house.
(3) What is your Experience in the market?
Less than a year 1-4 year More than 4 years
(4) What is your Trading Preference?
Speculation Investment Both
(5) What is your Average investment period? Less than 3 months. 3 to 9 months.
9 months to 2 year. More than 2 year.
(6) Factors influencing the investment decisions?
Advice from Broker Current news
Reviews in Financial Magazines Advice from Friends
Self Evaluation Others___________
(7) How much Risk are you willing to take?
High Low Moderate
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BIBLIOGRAPHYBooks and Newspapers:
The Economic Times, Business Standard, Business line
Securities Market (Basic) Module :--NCFM
Economic Times.
Training Kit Provided by the Sharekhan.
Indian financial system by M.Y KHAN
NSDL Depository operations module :--NCFM
URLs:
www.indiainfoline.com
www.economics times.com
http://www.investopedia.com/articles/
www. nse-india.com www.bseindia.com
www.moneycontrol.com
www.sharekhan .com
http://www.economics/http://www.investopedia.com/articles/http://www.bseindia.com/http://www.moneycontrol.com/http://www.economics/http://www.investopedia.com/articles/http://www.bseindia.com/http://www.moneycontrol.com/