PRESTIGE INSTITUTE OF MANAGEMENT AND RESEACH

INDORE

SUMMER PROJECT REPORT ON

”COMPARATIVE STUDY OF KARVY WITH OTHER BROKER’S”

SUMMER INTERNSHIP IN

2nd June 2014 - 17th July 2014

Submission in partial fulfilment of the requirement for the award of MBA

YEAR 2013-15

GUIDED BY: SUBMITTED BY:

Dr. Shubhangi Jore Rahul Singh Tiwari

(FACULTY GUIDE) MBA (FT) “B”

112106873

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CERTIFICATE OF THE ORGNIZATION

This is to certify that RAHUL SINGH TIWARI perusing MBA (FT) at EPRESTIGE

INSTITUTE OF MANAGEMENT, INDORE has worked under my supervision and

guidance on his discretion entitled “COMPARATIV STUDY OF KARVY WITH

OTHER BROKER’S” at karvy stock broking ltd. Indore from 2th June 2014 to 20th July

2014. To the best of my knowledge this is an original piece of work.

During his project he was found to be very sincere, regular and attentive to small details

whatsoever told to him.

I wish him best of luck and success in life.

Dated, Branch Head

Karvy Stock Broking Ltd

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CERTIFICATE OF THE INSTITUTE

This is to certify that the project report entitled “COMPARATIVE STUDY OF KRVY

WITH THE OTHER BROKER’S” at Karvy Stock Broking Limited is a bonafide record of

work done by RAHUL SINGH TIWARI and submitted in partial fulfilment of the

requirements of MBA(FT) program of PRESTIGE INSTITUTE OF MANAGEMENT AND

RESEARCH, INDORE.

Date: faculty guide:

Dr. Shubhangi Jore

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ACKNOWLEDGEMENT

I have taken effort in this project. However, it would not have been possible without

kind support and help of many individuals and organizations. I would like to extend

my sincere thanks to all them.

My deepest thanks to the director madam Dr. Yogeshwari Pathak and project guide

mentor Dr. Shubhangi Jore are providing their valuable guidance at all stages of the

study, their advice, constructive suggestion, posiive and supportive attitude and

continuous encouragement. He has taken pain to go through the project and make

necessary correction as and when needed and without which it would have not been

possible to complete the project.

I am thankful to my corporate mentor Mr. Rakesh Sinha (Cluster Manager) who

gives me the opportunity to do my practical summer training in Karvy Stock

Broking Ltd.

I owe my wholehearted thanks and appreciation to the entire staff of the company for

their cooperation and assistance during the course of my project.

I am also grateful to my parents, family members and friends for giving us the

support, which was required for the completion of the report.

Place: Indore Rahul Singh Tiwari

Date:

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DECLARATION

I hereby declare that the project report titled “COMPARATIVE STUDY OF

KARVY WITH THE OTHER BROKER’S” is a genuine research work done by me and it

has not been published anywhere earlier.

DATED:

PLACE: INDORE

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INDEX

1. Introduction................................................................. 6

2. Objective Of Training................................................. 9

3. Organizational Structure...................................... ...... 10

4. Services Of Karvy........................................................ 12

5. Marketing Strategies................................................... 17

6. Hr Policies.................................................................... 19

7. Wings Of Karvy........................................................... 21

8. Competitor Of Karvy.................................................. 25

9. Stock Market .............................................................. 27

10. Trading With Stock Market....................................... 30

11. Intraday........................................................................ 32

12. Delivery......................................................................... 33

13. Future & Option.......................................................... 34

14. Comparison Of Karvy With Other Broker’s............ 36

15. Swot Analysis................................................................ 38

16. Suggestion..................................................................... 39

17. Conclusion.................................................................... 40

18. Bibliography................................................................. 41

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INTRODUCTION OF KARVY STOCK BOROKING

INTRODUCTION

“Success is a journey, not a destination.” If we look for examples to prove this quote then we

can find many but there is none like that of KARVY. Back in the year 1981, five people

created history by establishing karvy and company which is today known as karvy, the

largest financial service provider of India.

Success sutras of Karvy:

The success story of karvy is driven by 8 success sutras adopted by it namely trust, integrity,

dedication, commitment, enterprises, hard work and team play, learning and innovation,

empathy and humility. These are the values that bind success with karvy.

Vision of Karvy:

To achieve & sustain market leadership, Karvy shall aim for complete customer satisfaction,

by combining its human and technological resources, to provide world class quality services.

In the process Karvy shall strive to meet and exceed customer’s satisfaction and set industry

standards.

Mission statement:

“Our mission is to be a leading and preferred service provider to our customers, and we aim

to achieve this leadership position by building an innovative, enterprising, and technology

driven organization which will set highest standards of service and business ethics.”

Company overview:

Karvy was established as karvy and company by five chartered accountants during the year

1979-80, and then its work was confined to audit and taxation only. Later on it diversified

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into financial and accounting services during the year 1981-82 with a capital of Rs. 150000.

It achieved its first milestone after its first investment in technology. Karvy became a known

name during the year 1985-86 when it forayed into capital market as registrar.

EVOLUTION OF KARVY

It is well said that success is a journey not a destination and we can see it being proved by

karvy. Under this section we will see that how this “karvy and company” of 1980 became

“karvy” of 2014. Karvy blossomed with the setting up of its first branch at Mumbai during

the year 1987-88. The turning point came in the year 1989 when it decided to enter into one

of the not only emerging rather potential field too i.e.; stock broking. It added the feather of

stock broking into its cap. At the same time it become the member of Hyderabad Stock

Exchange through association firm karvy securities ltd and then karvy never looked

back…….it went on adding services one after another, it entered into retail stock broking in

the year 1990. Karvy investor services centers were set up in the year 1992. Karvy which

already enjoyed a wide network through its investor services centers, entered into financial

product distribution services in the year 1993. One year more and karvy was now dealing into

mutual fund services too in the year 1994 but it didn’t stopped there, it stepped into corporate

finance and investment banking in the year 1995.

Karvy’s strategy has always been being the first entrant in the market. Karvy again hit the

limelight by becoming the first registrar in the country to be awarded ISO 9002 in the year

1997. Then it stepped into the other most happening sectors I.e.; IT enables services by

establishing its own BPO unit’s and at a gap of just one year it look the path of e-Business

through its website www.karvy.com. Then it entered into insurance services in the year 2001

with the launch of its retail arm “karvy” the fin polis: your personal finance advisor”. Then

in the year 2002 it launched its PCG (Private Client Group) which looks after its High Net

worth Individuals and maintain their portfolio and provides them with other financial

services. In the year 2003, it commenced secondary debt and WDM trading.

It was a decade which saw many Indian companies going global…so why the largest

financial services provider of India should lag behind? Hence, karvy launched “karvy global

services limited” after entering into a joint venture with the Computershare, Australia in the

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year 2004. The year 2004 also saw karvy entering into commodities marketing though karvy

comrade.

Year 2005 saw karvy established a separate branch for its insurance services under the head

“karvy insurance broking ltd” and in the same year, after being impressed with the rapid

growth of karvy stock broking limited, PCG group of Hong Kong acquired 25% stake at

KSBL. In the year 2006, karvy entered into one of the hottest sector of present time i.e. real

estate through Karvy realty& services (India) ltd. Hence, we can see now karvy being

established as the largest financial service provider of the country.

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OBJECTIVE OF TRAINING

The objective of my project include the following:-

1. To study the financial products and services of Karvy Stock Broking Ltd.

2. To make a comparative study of competitors of Karvy Stock Broking Ltd. In

INDORE.

So, the objective of the project is to identify the market potential of Demat Account

services offered by Karvy Stock Broking Ltd. And a comparative analysis of the

competitors of KSBL in INDORE.

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ORGANIZATION STRUCTURE

NATIONAL LEVEL ORGANIZATION CHART

CM & MD

(Hyderabad)

GM

(Marketing) (Finance) (HRM)

Zonal Manager

Regional Manager

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Branch Mgr. Branch Mgr. Branch Mgr.

Accountant Sr. Executives

Executives

BRANCH LEVEL ORGANIZATION CHART

Branch Manager

Sr. Executive Executives Executive (Investment) (SB - 4) (IT)

Marketing Clerk

Executives-3

Executive

(Demat) Accountant

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KARVY SERVICES – AN OVERVIEW

1. Stock broking

2. Demat services

3. Investment product distribution

4. Investment advisory services

5. Corporate finance & Merchant banking

6. Insurance

7. Mutual fund services

8. IT enabled services

9. Registrars & Transfer agents

10. Loans

Stock Broking:

KARVY is working as Capital Market Intermediaries. Stockbrokers are regulated by SEBI

[Stock-brokers and Sub-brokers] Regulations, 1992. The stockbroker is a member of the

stock exchange. Stockbrokers are the intermediaries who are allowed to trade in securities on

the exchange of which they are members. They buy and sell on their own behalf as well as on

behalf of their clients.

Stockbrokers expand their business by engaging sub-broker. Sub-brokers mean “any person

not being a member of a stock exchange who acts on behalf of a stock broker as an agent or

otherwise for assisting the investors in buying, selling or dealing in securities through such

stock-brokers.”

Demat Services

Karvy is a depository participant with the National Securities Depository Limited (NSDL) for

trading and settlement of dematerialized shares. Depository Participants (DPs) are described

as an agent of the depository. They are intermediaries between the depository and the

investors. The relationship between the DPs and the depository is governed by an agreement

made between the two under Depositories Act.

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A DP can offer depository-related services only after obtaining a certificate of registration

from SEBI. Since Karvy is also in the broking business, investors who use Karvy’s

depository services get a dual benefit. They can use Karvy’s brokerage Services to execute

transactions and Karvy’s depository services to settle them.

Investment Products Distribution:

Company is also concern with the distribution of investment products like :-

(a). Fixed Deposit: KARVY is dealer of 34 fixed deposits of various types which includes

fixed deposits of Public Sector, Non-Banking Finance Companies, Housing Finance

Companies and Manufacturing Companies.

(b). Bonds: Karvy is dealer of following bonds

1. RBI Saving Bonds

2. NHB

3. REC

(c). IPO: Company is also provides services related to Initial Public Offer of company.

Company provides stationary at the time of IPO as well as provides information to investors

regarding IPO and solves their queries.

Investment Advisory Services:

This division provides portfolio management services to high net-worth individuals and

corporate. The expertise of Karvy in research and stock broking gives it the right perspective

to provide investment advisory services. Company provides advisory services to its clients.

Financial goal of each individual investor varies according to his dream, ambition and family

size and future financial planning for the children & old age pension for self and wife so does

the pathway to achieve it. Karvy apply the principles of Financial Planning as both science &

art, it understands the time horizon, risk bearing capacity and investment goals of investors

keeping in mind their psyche and financial needs. Based upon this Karvy helps individual

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investors to plan their entire life up to retirement, Taxes, Insurance needs and other important

personal financial goals. It designs portfolio for investor to invest their saving in various

financial products like shares, bonds, debentures, mutual funds, fixed deposits, insurance etc.,

Company design portfolio by considering following factors.

Investor’s requirement of getting money back,

Investor’s willingness to take risk,

Investor’s tax planning etc.

Corporate finance & Merchant banking:

Corporate finance is the financial activity of corporation. It deals with the firm's operations

with regard to investing and financing. It concerned with how firms raise capital and the

consequences of alternative methods of raising capital. Firm’s capital can be raised by raising

loans, issuing shares, and acquiring or merging with other businesses by public or private

companies.

Merchant banking is a financial intermediation that matches entities that need capital and

those that have capital. Hence they facilitate the flow of capital in the market. Karvy enjoys

SEBI category (I) authorization for Merchant Banking. Karvy offers the full spectrum of

Merchant Banking Services, beginning from identifying the best time for an issue to final

stage of marketing it, to harvest unparalleled success.

As a merchant banker Karvy offer following services:

Issue management

Instrument designing

Pricing of the issue

Registration process for the issue of shares

Marketing efforts

Final allotment to investors

Listing details on stock exchanges

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Loan syndication

Lease financing

Corporate advisory services

Underwriting

Portfolio management

Insurance:

Karvy is also dealer of many private life insurance companies. At Jamnagar branch, company

is associated with dealing of following companies.

I. ICICI Prudential Life Insurance

II. HDFC Life Insurance

III. TATA AIG Life Insurance

Mutual Fund Services:

Since its inception in 1982, Karvy has demonstrated a dedication coupled with dynamism that

has inspired trust from various segments – corporate, government bodies and individuals.

Karvy has since been performing a pivotal role as the intermediary – the interface – between

these players.

With Mutual Funds emerging as a distinct asset class, Karvy has made a strategic choice to

leverage the power of latest technology to provide a cutting edge to its services. Karvy, today,

service nearly 80% of the asset management companies (AMCs) across an extensive network

of service centers with assets under service in excess of Rs.10, 000 crores. Karvy's ability to

mass customize and offer a diverse range of products for a diverse range of customers has

helped mutual fund companies to uniquely position themselves in the market place. These

diverse range of services cut across multiple delivery channels – service centers, web, mobile

phones, call centre – has brought home the benefits of technology to investors, distributors,

and the mutual funds.

Going forward, Karvy shall strive to create new products and services, which would address

the needs of the end customer. Company’s single minded focus in delivering products for

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customers has given it the distinguished position of being the preferred provider of financial

services in the country.

Income Tax enabled services:

Karvy has been started this service since March, 2004. Karvy is work as TIN Facilitation

Centre it provides following IT enabled services:

a. Distribution of PAN Card.

b. Distribution of TAN Card.

c. Services related to e-TDS.

Karvy work as an intermediary between NSDL and IT payers. Karvy provides various form

for different IT enabled services and guide people to fill that forms. It also solves queries of

the tax payers. It also distributes PAN and TAN card to the tax payers.

Registrars & Transfer agents:

In 1985, Karvy entered the Registrar and Share Transfer Business to create a market niche in

the competitive field of financial services. In 1994-95, it reached a milestone when it

processed 104 Public Issues constituting 46 per cent market share. Now in its second decade

of existence, Karvy is the leader in the industry: In an opinion poll conducted by an

independent market research agency - MARG, Karvy has been rated as India’s Most Admired

Registrar on various parameters: -

a. Overall Excellence.

b. Handling of Volumes

c. Timely Dispatch

d. Quality Management and Technological Up gradation.

A SEBI Category 1 Registrar, So far, Karvy has handled over 675 ISSUES as Registrars to

public issues processed over 52 million applications and is servicing over 16 million

investors from various locations spread over 205 clients.

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Loan:

Karvy has recently started this service at selected branches of metro cities. This service has

not been started in Saurashtra-Koch region. Karvy provides loans for following.

Vehicle Loan

Home Loan

Personal Loan

MARKETING STRATEGY OF KARVY

A. Market Positioning:

Market positioning statements of Karvy are “At Karvy we give you single window service”

and “We also ensure your comfort”.

So, Karvy focus on the consumers who prefer almost all investment activities at same place

by providing number of various financial services. At Karvy a person can purchase or sell

shares, debentures etc. and at the same place also demat it. Karvy also pro vides other

investment option to the same person at same place like Mutual Fund, Insurance, Fixed

Deposit, and Bonds etc. and help the person in designing his portfolio. By this way Karvy

provides comfort to its customers. Karvy is also positioned according to Ries and Trout.

Karvy is promoted as a no. 1 investment product distributor and R & T agent of India.

Target Market:

Karvy uses demographic segmentation strategy and segment people based on their

occupation. Karvy uses selective specialization strategy for market targeting. Target person

for the Karvy Stock Broking and Karvy Investment Service are persons who can work as sub-

broker for the companies. Companies focus on Advisors of Insurance and post office, Tax

consultants and CAs for making sub-broker.

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B. Marketing channel System:

Karvy uses one level marketing channel for investment product distribution. Sub-brokers

work as intermediary between consumer and company. Company has both forward and

backward flow of activity through channel. Company distributes stationery, brokerage, and

information forward to its sub-broker. The sub-brokers send filled forms, queries, amount of

investment etc. back to the company.

C. Training Channel Members:

Karvy provides training to the sub-brokers because they will be viewed as the company by

the investors. The executives of Karvy explain various new schemes of investment to the sub-

brokers with its objective, risk factors and expected return. Company also periodically

arrange seminar to guide sub-brokers.

D. Advertising and Promotion:

The objective of advertising of Karvy is to create awareness about services of Karvy among

investors and sub-brokers and increase sub-brokers of Karvy.

Company doesn’t give advertisement in media like TV, Newspapers, and Magazines etc.

Karvy’s advertisement is made indirectly by the companies associate with it. Karvy is R & T

agent of around 700 companies. They publish name, address and logo of Karvy on their

annual report.

Karvy also publish its weekly Stock Market Newsletter ‘Karvy Bazaar Baatein’ and monthly

magazine ‘The Fin polis’ to guide investors and sub-brokers about market.

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HR POLICY OF KARVY

Karvy’s HR Department is located at Hyderabad.

1. Recruitment and Selection Policy:

The upper level members like zonal managers, regional managers, branch managers and

senior executives are recruited by publishing recruitment advertisement in leading national

level newspaper. The qualified applicant are then called for interview and selected.

The regional manager has authority to select lower level employee like peon, marketing

executives, accountant etc. by approval of zonal manager.

2. Training and Development:

Continuous training and upgrading technical, behavioural and managerial skills is a way of

life in Karvy. Karvy encourages employees to hone their skills regularly to enable them to

face the challenges of the changing requirements of customers that fit market up and down.

Training needs analysis is done on a regular basis and systematic methodologies are ensured

that skills and capabilities of all employees are constantly upgraded to enable them to

perform in the challenging work environment.

New employee has given training under experienced employee. The new employee work

under experience employee and observe his all activities. When company employs new

technology or there is any change in the working of company the training program is

arranged.

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3. Employee Motivation:

Karvy’s employees are highly empowered. They don’t have to report any person of the same

branch but they report upper level branch. E.e. Marketing executive of Jamnagar branch

directly reports Senior Marketing executive of Baroda zonal office.

If particular branch earn certain profit then Karvy gives them special incentives. E.g. last year

Karvy had arranged two days tour of Div for their employees of Rajkot, Jamnagar, Junagadh

and Bhavnagar branch which was totally free of cost. This also helps in mainta ining co-

operation between employees.

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NOW KARVY GROUP CONSISTS OF 11 HIGHLY RENOWED

ENTITIES WHICH ARE AS FOLLOW:

1. KARVY CONSULTANTS LIMITED:

The first securities registry to receive ISO 9002 certification in India. Registered with SEBI

as Category I Registrar, is Number 1 Registrar in the country. The award of being ‘Most

Admire’ Registrar is one among many of the acknowledgement we receive for our customer

friendly and competent services.

2. KARVY STOCK BROKING LIMITED:

Karvy stock broking ltd. Consists of five units namely stock broking services, depository

participant, advisory services, distribution of financial products, advisory services and private

client groups.

3. KARVY INVESTOR SERVICES LIMITED:

It is registered with SEBI as a category 1 merchant banker. Its clientele includes leading

corporate, state government, foreign institutional investors, public and private sector

companies and banks, in India and global markets.

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4. KARVY INSURANCE BROKING LIMITED:

Karvy insurance broking ltd is also a part of karvy stock broking ltd. At karvy insurance

broking limited both life and non- life insurance products are provided to retail individuals,

high net-worth clients and corporate.

5. KARVY:

The company provides investment, advisory and brokerage services in India Commodities

Markets. And most importantly, it offer a wide reach through our branch network of over225

branch located across 180 cities.

6. KARVY GLOBAL SERVICES:

Karvy global is a leading business and knowledge process outsourcing Services Company

offering creative business solution to client globally. It operation in banking and financial

services, insurance, healthcare and pharmaceuticals, media, telecom and technology. It has its

sales and business development office in New York, USA and the offshore global delivery

centre in Hyderabad, India.

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7. Karvy Realty(India) limited:

Karvy Realty (India) Limited is engaged in the business of real estate and property services

offering:

Buying/ selling/ renting of properties

Identifying valuable investment opportunities in the real estate sector

Facilitating financial support for real estate and investment in properties

Real estate portfolio advisory service.

8. KARVY COMPUTERSHARE PRIVATE LIMITED:

Karvy Computershare private limited is a joint venture between Computershare, Australia

and karvy Consultants Limited, India in the registry management services industry.

Computershare, Australia is the world’s largest and only global share registry providing.

Financial market services and technology to the global securities industry. Karvy Corporate

and Mutual Fund Share Registry and Investor Services business. India’s No.1 Registrar and

Transfer Agent and rated as India’s “Most Admire Registrar” for its overall excellence in

volume management, quality process and technology driven services.

9. KARVY DATA MANAGEMENT SERVICES LIMITED:

KDMSL is emerging as a leading service provider in the areas of E-governance processing,

insurance back office processing, record keeping, back office for BFSI clientele and is in

pursuit to establish credentials in the areas of Telecom processing, Data management

requirements of large corporate.

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KDMSL is striving to achieve leadership position by tapping the Indian retail sector boom,

through a combination of our extensive branch network and proprietary IT backbone.

Needless to say, KDMSL is run as an independent outfit with seasoned professionals on

board, who have decades of expertise in the industry.

KDMSL is a fully owned subsidiary of Karvy Stock Broking Limited (KSBL), incorporated

in April 2008 and is head quartered at Hyderabad.

10. KARVY FORTUNE:

Karvy Now presents Karvy Fortune, a correlate opportunity from India’s foremost financial

services provider, karvy. It offers complete Karvy’s spectrum of financial products. Karvy

fortune gives the opportunity to associate with “Karvy Family” as Franchisee, Remisser, E-

Franchisee or as an Independent Financial Advisors.

11. KARVY THE FINAPOLIS:

In its ambition to emerge as a complete financial advisor, KARVY has recently launched its

personal financial planning wing, KARVY Financial Planning. It proposes to cater all advice

to its customers pertaining to personal finance.

With India emerging as a strong market, the investments avenues have also increased, to

advices our customers the right avenue according to their suitability. Our vision is “to cater to

the unique needs and requirements of the mass affluent by providing complete financial

solution and thereby enabling them to transform their dreams into reality”

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COMPETITOR’S OF KARVY

A diversified financial services group with a pan-India presence and presence in multiple

international locations, Religare Enterprises Limited (REL) offers a comprehensive suite of

customer- focused financial products and services targeted at retail investors, high net worth

individuals and corporate and institutional clients.

REL, along with its joint venture partners, offers a range of products and services in India,

including asset management, life insurance, wealth management, equity and commodity

broking, investment banking, lending services, private equity and Mutual Fund. With a view

to expand and diversify, REL operates in the life insurance space under “AEGON Religare

Lige Insurance Company Limited” and has launched India’s first wealth management joint

venture the brand name “Religare Macquarie Private Wealth”.

REL operates from seven domestic regional offers, 43 sub-regional offices, and has a

presence in 498 cities and town controlling 1837 business location all over India.

The India Infoline group, comprising the holding company, India Infoline Limited and its

wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging

from Equity research, Equities and derivatives trading, commodities trad ing, Portfolio

Management Services, Mutual Fund, Life Insurance, Fixed deposits. GOI bonds and others

small saving instrument to loan products and Investment banking. India Infoline also owns

and manages the websites www.indiainfoline.com and www.5paisa.com

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Reliance Money, a Reliance Capital Company and part of the Reliance Anil Dhirubhai

Ambani Group is a comprehensive financial services and solution provider. It is a one-stop-

shop, providing end-10-end financial solutions. It has the largest non-banking distribution

channel with over 10000 outlets and 20000 touch points spread across 5165 cities/towns;

catering to the diverse needs of over 3 million existing customers.

Reliance Money endeavours to change the way investors transact in financial market and

avails financial services. It provides customers with access to Equity and commodity

Derivatives, offshore investment, portfolio management services wealth management

services, investment Banking, Mutual Fund, IPO’s, Life and General insurance products and

Gold Coins. Customers can also avail Loans, Credit Card etc.

Kotak Securities ltd. 100 % subsidiary of Kotak Mahindra Bank is one of the oldest and

largest broking firms in the Industry. Kotak Securities offers include stock broking through

the branch and Internet, Investment in IPO. Mutual Fund and Portfolio management services.

Kotak Securities is also a depository participant with National Securities Depository Limited

(NSDL) and Central Depository Services Limited (CDSL), Kotak process more than 400000

trades a day which is much higher even than some of the renowned international brokers. The

Network of Kotak Securities spans over 331 cities with 843 outlets.

Kotak Securities Limited has Rs. 2599 crore of Assets under Management (AUM). The

portfolio Management services provides top class services, catering to the high end of the

market. Portfolio Management from Kotak Securities comes as an answer to those who

would like to grow exponentially on the crest of the stock market, with the backing of an

expert.

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INTRODUCTION TO STOCK MARKET

Stock markets refer to a market place where in invertor can buy and sell stocks. The price at

which each buying and selling transaction takes is determination by the market forces (i,e.

demand and supply for a particular stock ).

Let us take an example for a better understanding of how market forces determine stock

prices. ABC Co. Ltd. Enjoys high investors’ confidence and there is an anticipation of an

upward movement in its stocks prices. More and more people would want to buy this stock

(I.e., high demand) and very few people will want to sell this stock at current market price.

Therefore, buyers will have to bid a higher prices for this stock to match the ask prices from

the seller which will increase the stock prices of ABC Co. Ltd. On the contrary, if there are

more sellers than buyers for the stock of ABC Co. Ltd. In the market, its price will fall down.

In earlier times, buyers and sellers used to assemble at stock exchange to make a transition

but now with the dawn of IT, most of the operation are done electronically and the stock

markets have become almost paperless. Now investors don’t have to gather at the exchange,

and can trade freely from their home or office over the phone or through Internet.

PRIMARY MARKET

The primary market is the part of the capital market that deals with issuing of

new securities. Companies, governments or public sector institutions can obtain funds

through the sale of a new stock or bond issues through primary market. This is typically done

through an investment bank or finance syndicate of securities dealers.

The process of selling new issues to investors is called underwriting. In the case of a

new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that

is built into the price of the security offering, though it can be found in the prospectus.

Primary markets create long term instruments through which corporate entities borrow from

capital market.

Once issued the securities typically trade on a secondary market such as a stock

exchange, bond market or derivatives exchange.

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FEATURES:

Features of primary markets are:

This is the market for new long term equity capital. The primary market is the market

where the securities are sold for the first time. Therefore it is also called the new issue

market (NIM).

In a primary issue, the securities are issued by the company directly to investors.

The company receives the money and issues new security certificates to the investors.

Primary issues are used by companies for the purpose of setting up new business or for

expanding or modernizing the existing business.

The primary market performs the crucial function of facilitating capital formation in the

economy.

The new issue market does not include certain other sources of new long term external

finance, such as loans from financial institutions. Borrowers in the new issue market may

be raising capital for converting private capital into public capital; this is kno wn as

"going public."

IPO and FPO are two ways to generate capital from public.

IPO (INITIAL PUBLIC OFFERING)

Initial public offering (IPO) or stock market launch is a type of public offering where

shares of stock in a company are sold to the general public, on a securities exchange, for the

first time. Through this process, a private company transforms into a public company. Initial

public offerings are used by companies to raise expansion capital, to possibly monetize the

investments of early private investors, and to become publicly traded enterprises. A company

selling shares is never required to repay the capital to its public investors. After the IPO,

when shares trade freely in the open market, money passes between public investors.

FPO (FOLLOW ON PUBLIC OFFERING)

FPO is a process by which a company, which is already listed on an exchange, issues new

shares to the investors or the existing shareholders.

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Definition: FPO (Follow on Public Offer) is a process by which a company, which is already

listed on an exchange, issues new shares to the investors or the existing shareholders, usually

the promoters. FPO is used by companies to diversify their equity base.

Description: A company uses FPO after it has gone through the process of an IPO and

decides to make more of its shares available to the public or to raise capital to expand or pay

off debt.

SECOUNDRY MARKET

The secondary market, is also called aftermarket, is the financial market in which

previously issued financial instruments such as stock, bonds options, and futures are bought

and sold. Another frequent usage of "secondary market" is to refer to loans which are sold by

a mortgage bank to investors such as Fannie Mae and Freddie Mac.

The term "secondary market" is also used to refer to the market for any used goods or assets,

or an alternative use for an existing product or asset where the customer base is the second

market (for example, corn has been traditionally used primarily for food production and

feedstock, but a "second" or "third" market has developed for use in ethanol production).

With primary issuances of securities or financial instruments, or the primary market,

investors purchase these securities directly from issuers such as corporations issuing shares in

an IPO or private placement, or directly from the federal government in the case of treasuries.

After the initial issuance, investors can purchase from other investors in the secondary

market.

The secondary market for a variety of assets can vary from loans to stocks, from fragmented

to centralized, and from illiquid to very liquid. The major stock exchanges are the most

visible example of liquid secondary markets - in this case, for stocks of publicly traded

companies. Exchanges such as the New York Stock Exchange, London Stock

Exchange and NASDAQ provide a centralized, liquid secondary market for the investors who

own stocks that trade on those exchanges. Most bonds and structured products trade “over the

counter,” or by phoning the bond desk of one’s broker-dealer. Loans sometimes trade online

using a Loan Exchange.

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TRADING WITH STOCK MARKET

This section will introduce us about the process and instruments used to help a customer or a

client to trade with arcadia securities. This process is almost similar to any other trading

firm but there will be some difference in the cost of brokerage commission.

Trading: It is a process by which a customer is given facility to buy and sell share this

buying and selling can only be done through some broker and this is where Arcadia helps its

customer. A customer willing to trade with any brokerage house need to have a demat

account, trading account and saving account with a brokerage firm. Anyone having

following document can open all the above mentioned account and can start trading.

Document Required

3 photographs ( signed across)

Photo Identification Proof - any of the following - Voter ID/Driving License/Passport.

Address Proof any of the following - Voter ID/Driving License/ Passport/ Bank

statement or pass book sealed and attestation by bank official/ BSNL landline bill.

A crossed Cheque favouring “Karvy Stock Broking”. Of the required amount. The

amount for Demat as well as trading will be Rs. 900/-(free Demat +900 Trading

Account) the minimum amount being Rs. 900 a cheque can be given for a larger

amount.

Copy of PAN Card is mandatory.

Registration Kit

CDSL Demat Kit

Bank and address proof declaration.

PAN name discrepancy form.

These documents may not be consumer friendly but it is to avoid illegal transaction and to

prevent black money this ensures that money invested is accounted.

Techniques and Instruments for Trading

The various techniques that are available in the hands of a client are:-

1. Delivery

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2. Intraday

3. Future

4. Forwards

5. Options

6. swaps

Basic Requirement for doing Trading

Trading requires Opening a Demat account. Demat refers to a dematerialized account.

You need to open a Demat account if you want to buy or sell stocks. So it is just like a bank

account where actual money is replaced by shares. We need to approach the Depository

Participants (DP, they are like bank branches), to open Demat account.

A depository is a place where the stocks of investors are held in electronic form. The

depository has agents who are called depository participants (DPs).

Think of it like a bank. The head office where all the technology rests and details of all

accounts held is like the depository. And the DPs are the branches that cater to individuals.

There are only two depositories in India –

The National Securities Depository Ltd (NSDL) and the

Central Depository Services Ltd (CDSL).

Capital Market Participants

Banks

Exchanges

Clearing Corporations

Brokers

Custodians

Depositories

Investors

Merchant Bankers

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Types of Investors

Institutional Investors- MFs / FI / FIIs / Banks

Arbitrageurs

Hedgers

Jobbers

CASH SEGMENT

Cash trading is an investment strategy that calls for the investor to make purchases of

securities on a cash basis only. This is different from the process of trading on margin, where

the investor makes use of a line of credit extended through a broker. With the cash trading

method, the investor relies solely on the balance of his or her cash account to purchase stocks,

bonds, commodities or other investment vehicles.

INTRADAY

Intraday trading refers to opening and closing a position in a security in the same trading day.

This can be buying and selling to capitalize on a potential rise in a security's value or shorting

and covering the short to capitalize on a potential drop in value. Intraday traders capitalize on

small moves in the value of a security by using "leverage" or "margin", which basically

means borrowing money.

Most day trading accounts are allowed to take an initial position in a security that is 4X the

value of their account (per securities regulations), but some professional accounts get more

leverage (i.e. 10X). For instance, a day trader with Rs.10,000 in his/her account can take a

Rs.40,000 position in a security for day trading purposes. This amount is not allowed to be

held overnight (only about 2X the value of the account can be held overnight per securities

regs). The leverage inherent in day trading allows small gains in a position to yield

meaningful profits (and losses). Most day traders are very strict about cutting losses with

"stop loss" orders. This limits the potential downside (but not the upside) on any particular

trade, hence the adage "cut your losses short and let your profits run". With this basic

strategy, a day trader can be wrong on 50% of his/her trades and still make good money. Day

trading styles vary from "scalpers", which take positions for only a few minutes, to holding a

position for most of the day. Some day traders are momentum followers and jump onto any

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given move, while others try to identify intraday reversals. Virtually all day traders use

technical analysis (stock charting) heavily in their decision making.

DELIVERY

Delivery Trading is a very secure Trading. If we buy shares today and sell them after 1 day

then the type of trading is called as Delivery Trading. Share you bought in Delivery option

can be sold at any time before Market closes. I.e. up to 3.30 pm. If you buy shares With the

Delivery option, It will be taken as Delivery Trade only if you sell your shares after 1 day

(may be next day or after a month or after a year, 3 years whenever you sell after 1 day it is

called delivery Trading) In Delivery Trading, it will also allow you to sell your shares

within 1 day also (may be within 1 sec, 1 hour, Before market close). But if you sell the

shares which were bought with Delivery option within 1 day(may be within 1 sec, 1 hour,

Before market close) would not be taken as a Delivery Trading and would be taken as

Intraday Trading. All the brokerages for such Trade will be charged as per intraday

brokerage charges (0.02% to 0.04%). Therefore if buy a securities with Delivery Trading

option we can also sell it in Intraday.

The main advantage of Delivery Trading is that, the Loss of Fear of Money is very less

when compared with Intraday Trading.

The main disadvantage of Delivery Trading is that, the brokerage charged by Share Broking

Companies is very high for Delivery Trading. It is around 0.2% to 0.4%. And in this type of

Trade profit will increase slowly.

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DIFFERENT BROKERAGES CHARGES OF BROKING

COMPANIES

S.No Company Name Intraday

Charges

Delivery Charges

1. Shairkhan Stock Broking ltd 0.03% 0.30%

2. Arihant Capital ltd. 0.03% 0.30%

3. Karvy Stock Broking ltd. 0.03% 0.30%

4. Anand Rathi ltd. 0.02% 0.20%

5. Angel Broking ltd. 0.03% 0.30%

6. India Info line ltd. 0.03% 0.25%

7. Religare Securities ltd. 0.03% 0.30%

8. Kotak Securities ltd. 0.03% 0.30%

FUTURE

A financial contract obligating the buyer to purchase an asset (or the seller to sell an asset),

such as a physical commodity or a financial instrument, at a predetermined future date and

price. Futures contracts detail the quality and quantity of the underlying asset; they are

standardized to facilitate trading on a futures exchange. Some futures contracts may call for

physical delivery of the asset, while others are settled in cash. The futures markets are

characterized by the ability to use very high leverage relative to stock markets.

Futures can be used either to hedge or to speculate on the price movement of the underlying

asset. For example, a producer of corn could use futures to lock in a certain price and reduce

risk (hedge). On the other hand, anybody could speculate on the price movement of corn by

going long or short using futures

OPTION

An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an

underlying asset at a specific price on or before a certain date. An option, just like a stock or

bond, is a security. It is also a binding contract with strictly defined terms and properties.

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In finance, an option is a contract which gives the buyer (the owner) the right, but not the

obligation, to buy or sell an underlying asset or instrument at a specified strike price on or

before a specified date. The seller has the corresponding obligation to fulfill the transaction

– that is to sell or buy – if the buyer (owner) "exercises" the option. The buyer pays a

premium to the seller for this right. An option which conveys to the owner the right to buy

something at a specific price is referred to as a call; an option which conveys the right of the

owner to sell something at a specific price is referred to as a put.

A. CALL: - A call option is an option contract in which the holder (buyer) has the right

(but not the obligation) to buy a specified quantity of a security at a specified price

(strike price) within a fixed period of time (until its expiration).

For the writer (seller) of a call option, it represents an obligation to sell the underlying

security at the strike price if the option is exercised. The call option writer is paid a

premium for taking on the risk associated with the obligation.

B. PUT: - An option contract giving the owner the right, but not the obligation, to sell a

specified amount of an underlying asset at a set price within a specified time. The

buyer of a put option estimates that the underlying asset will drop below the exercise

price before the expiration date.

5

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COMPARISION OF KARVY WITH OTHER BROKERS

S.No COMPANY

NAME

AMC ACCOUNT

OPENING

CHARGES

MARGIN

MONEY

INTRADAY DELIVERY

1 Shairkhan

Stock

Broking ltd.

400 ABOVE 50K

NIL, BELOW

50K RS.10,000

10000 10 TIMES 2 TIMES

2 Arihant

Capital ltd.

407 660 25000 3 TIMES 3 TIMES

3 Karvy Stock

Broking ltd.

350 650 5000 8 TIMES 2 TIMES

4 Anand Rathi

ltd.

552 50 10000 2 TIMES 2 TIMES

5 Angel

Broking ltd.

330 50 25000 7 TIMES 4 TIMES

6 India

Infoline ltd.

50 750 25000 10 TIMES 5 TIMES

7 Religare

Securities

ltd.

500 350 10000 10 TIMES 4 TIMES

8 Kotak

Securities

ltd.

600 750 10000 5 TIMES 5 TIMES

9 Relaince

Capital ltd.

500 10500 10000 2 TIMES 2 TIMES

Note: Given data collected during my summer internship further it may change.

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No. of DMAT Account open by me during my internship. Their details are as follows:

S.NO. Client Name Contact No.

1. Amreesh Kumar Agnihotri 9300222808

2. Rajeev Dwivedi 7489867660 3. Nitesh Tiwari 9685815148

4. Anand Tiwari 9752004807 5. Archna Mittal 9752045250

6. Shyamji Mishra 9826327787 7. Faizan Hashmi 9907209801

8. Raghav maheshwari 8989909093 9. Amit Kadam 9893280864

10. Deepak Soni 9993942246 11. Atul Kumar Dwivedi 9691857391

12. Anurag Awasthi 9977148777 13. Jagrati Bairagi 9977617891 14. Mohd. Abid Sheikh 9827005499

15. Harshvardhan Singh Solanki 9301623233 16. Keerti vardhan Singh 9300523861

17. Amit Kamrani 9907699962 18. Ambuj Kumar Dutta 8103880370

19. Rahul Singh Tiwari 9074380011 20. Rahul Shukla 8821847143

21. Pramod Singh 9039184090 22. Dhruva Kumar Pandey 8461892149

23. Vikesh Tiwari 8109848416 24. Yogendra Singh 9039762523

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SWOT ANALYSIS

STRENGTH:-

1. Qualified and experienced work force.

2. Wide spread branches and brokers network.

3. Wide range of products and services.

4. Strong customer relationship.

WEAKNESS:-

1. Not enough advertisement.

2. The company turnover is dependent on market performance.

3. Lack of Loyal clients.

OPPORTUNITY:-

1. Marketing at semi-urban areas.

2. Growing consumer awareness about equity market.

3. Positive outlook of people towards financial products.

THREATS:-

1. Market uncertainty.

2. Reduced brokerage charges by new players.

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SUGGESTION

1. Working as an internship in karvy stock broking Ltd, Infelt that karvy can go for

promotional activities for gaining more market share as karvy’s competitors are doing

the same.

2. Karvy should try to minimize it’s brokerage.

3. The company should organize the seminars and similar activities to enhance the

knowledge of prospective and exiting customers, so that they can feel more

comfortable while investing in stock market.

4. They should upgrade their technology. As their competitor already have advance

version of technology.

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CONCLUSION

While doing my summer internship program I came to a conclusion that this training has

helped me much in getting the thorough knowledge about some of the stock broking

companies, how these companies are competing against each other for getting the more

market share, how they are applying different marketing strategies to attract customers and

making them satisfied.

I came to know about the demat account, its benefits, how does it provides services the

customers of which I was totally ignorant when I started my project.

I gathered much more knowledge about Karvy Stock Broking Ltd. Its services, its strategies,

and how every employees of it work hard to achieve the organizational goal I.e. achieve the

maximum market share through customer satisfaction.

One thing that I noticed during my field work that many people of INDORE not

much more awarded about the various financial products and services of Karvy

which had to be there. They are ignorant about demat account and lack of

knowledge and information about it scared them of investing money in share

market. So to generate awareness among them advertising campaign can result

in fruitful results. Only a limited percentage of people are enjoying investing

money in share market in INDORE

.

Lastly and not the least as a coin has two sides, Karvy has favourable and

unfavourable aspects. The favourable aspect is that it provides lot of benefits to

its customers which some of its competitors fail to provide and again less

awareness about it among people is its negative side which hinders them to

invest their fund confidently.

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BIBLIOGRAPHY

1. www.karvyonline.com

2. www.nseindia.com

3. www.bse.com

4. www.investopedia.com

5. www.sharemarketbasics.com

6. https://in.answers.yahoo.com