“Comparative Study on Share Market & Mutual Fund”

A SUMMER INTERNSHIP PROJECT REPORT ON “Comparative Study on Share Market & Mutual Fund”

IN THE PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE PROGRAMME IN BUSSINESS MANAGEMENT SUBMITTED TO

GRADUATE SCHOOL OF BUSSINESS AND ADMINISTARTION,GREATER NOIDA, UTTAR PRADESH UNDER THE GUIDANCE OF:

SUBMITTED BY,

MR. VIJAY SINGH

PRASHANT KUMAR

Assistant Manager

PGDBA 2008-10

Sharekhan Ltd.

D-24-08

SHAREKHAN LIMITED

ACKNOWLEDGMENT It is my great pleasure to take this opportunity to acknowledge the contribution of number of people who helped me in completing this project. I would like to thank Dr. P.L. Maggu (Executive Director, Graduate School of Business & Administration) for giving me this opportunity to work on this project which gave me awareness of real corporate life. I express my deep sense of respect to Mr. Vijay Singh, Asst. Manager Sales– Sharekhan Ltd., Pitampura Branch, New Delhi, for giving me an opportunity to work under him and allotting me this project. He gave me continuous guidance, his mentoring and informal discussions become vital for me in the entire duration of this project in overcoming the barriers. I also thank the other staff of SHAREKHAN who devoted their valuable time in helping me to complete my project.

I would also like to thank Prof. V.N.RAI (Dean GSBA) and T.N SRIVASTAVA(Head of placement cell) sir for giving me the privilege to undergo summer training and thus learn through this process.

Finally I am sincerely thankful to others who have directly or indirectly helped me in the completion of the project. I would also like to acknowledge the support of other company members who has helped me to successfully complete this project.

(Prashant Kumar)

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SHAREKHAN LIMITED

PREFACE Share market is gaining significant grounds with the onset of booming Indian Economy. The project involved a “comparative study of share market and mutual fund” I had the privilege of doing my summer training with ShareKhan Ltd. Pitampura Branch, New Delhi wherein I was responsible for the sales and distribution of the Demat Account. This had been a great learning experience for me in terms of corporate culture, etiquettes and values. The content of this project report was decided after a detailed survey and analysis of Share market & mutual funds.

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SHAREKHAN LIMITED

EXECUTIVE SUMMARY Indian Capital Market has been linked to the International Financial Market and the Standard has been increased in terms of efficiency and transparency through Dematerialization of the Indian Capital Market in terms of handling and dealing in securities in paper mode , the main objective of this study is to analyze trends in growth of dematerialization process was not keeping pace with the Indian Capital Market due to un popularity of Demat, lack of information , and short direction after the inception of the scheme or the earliest time taken to evaluate its popularity. My project is base on study about dematerialization in the Indian Capital Market .The project covers issues related to depository and Sharekhan as depository .Project start with objective , Methodology ,and limitation of project than it highlight company profile with product details, than it explains capital market and depository part of this capital market . This project cover trading in equity of capital market, settlement of trade in depository, comparative analysis of structure and services offers in the same industry , analysis of structure and services offers in the same industry, analysis of dematerialization , issues related to demat

e.g. opening account , nomination dematerialization

,transmission ,freezing defreezing.

SHAREKHAN (DEPOSITORY PARTICIPANT)

SHARE MARKET

DEPOSITORY

5

CAPITAL MARKET

SHAREKHAN LIMITED

TABLE OF CONTENTS

1.

Company Profile…………………………………….

7

2.

Introduction………………………………………….

16

a. Objectives and limitations…………………

18

b. Methodology…………………………………

20

c. Comparative study on mutual Fund and share market……………… d. Result and finding…………………

22 56

3.

Conclusion…………………..

64

4.

Bibliography…………………………………………...

65

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SHAREKHAN LIMITED

COMPANY PROFILE

7

SHAREKHAN LIMITED Sharekhan is one of the leading retail brokerage firms in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. 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. The firm’s online trading and investment site – www.Sharekhan.com 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 onelakh customers. The number of trading members currently stands at over 3 lakh. While online trading currently accounts for just over 1 percent of the daily trading in stocks in India, Sharekhan alone accounts for 22 percent of the volumes traded online. The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks. On April 17, 2002 Sharekhan launched speed trade, a net-based executable application that emulated the broker terminals along with host of other information relevant to the day traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net. Sharekhan’s ground network includes over 250 centers in 123 cities in India, of which 20 are fully-owned branches. Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry like Sun Microsystem, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd., Spider Software Pvt. Ltd. to build its trading engine 8

SHAREKHAN LIMITED and content. The Morakhia 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 the institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKI’s 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, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organization’s revenue, with a daily turnover of over US$ 2 million. 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. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular holding, Gujarat Pipavav, Essar, Hutchison, Planet Asia and Shopper’s Stop.

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SHAREKHAN LIMITED REASONS TO CHOOSE SHARE KHAN LTD. EXPERIENCE SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia Money broker’s poll held recently, SSKI won the ‘India’s best broking house for 2004 award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has been providing institutional-level research and broking services to individual investors. TECHNOLOGY With our online trading account you can buy and sell shares in an instant from any PC with an Internet connection. You will get access to our powerful online trading tools that will help you take complete control over your investment in shares. ACCESSIBILITY Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for investors. These services are accessible through our centers across the country (over 250

locations

in

123

cities),

over

the

internet

(through

the

website

www.sharekhan.com) as well as over the voice tool. KNOWLEDGE In a business where the right information at the right time can translate into direct profits, you get access to a wide range of information on our content-rich portal, sharekhan.com. You will also get a useful set of knowledge-based tools that will empower you to take informed decisions. CONVENIENCE You can call our Dial-N-Trade number to get investment advice and execute your transactions. We have a dedicated call-centre to provide this service via a toll free number from anywhere in India.

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SHAREKHAN LIMITED CUSTOMER SERVICE Our customer service team will assist you for any help that you need relating to transactions, billing, Demat and other queries. Our customer service can be contracted via a toll-free number, email or live chat on sharekhan.com. INVESTMENT ADVICE Sharekhan has dedicated research teams for fundamental and technical research. Our analyst constantly track the pulse of the market and provide timely investment advice to you in the form of daily research emails, online chat, printed reports and SMS on your phone. BENEFITS •

Secure Order by Voice Tool Dial-n-Trade.

•

Automated Portfolio to keep track of the value of your actual purchases.

•

24x7 Voice Tool access to your trading account.

•

Personalized Price and Account Alerts delivered instantly to your cell phone & email address.

•

Special Personal Inbox for order and trade confirmations.

•

On-line customer service via web chat.

•

Anytime Ordering.

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SHAREKHAN LIMITED

PRODUCTS OF SHAREKHAN

1- Equity Trading Platform (Online/Offline). 2- Commodities Trading Platform (Online/Offline). 3- Portfolio Management Service. 4- Mutual Fund Advisory and Distribution. 5- Insurance Distribution. 6- Depository Services. 7- Research Report. TYPES OF ACCOUTNS 1- CLASSIC ACCOUNT 2- TRADE TIGER ACCOUNT

1. Classic Account – This account allows the client to trade through our website www.sharekhan.com and is suitable for the retail investor who is risk averse and hence prefers to invest in stocks or who does not trade too frequently. Features •

Online trading account for investing in equity and derivatives via

www.sharekhan.com •

Live terminal (NSE Online, BSE Offline)

•

Integration of on-line trading, saving bank and Demat account. 12

SHAREKHAN LIMITED •

Instant cash transfer facility against purchase & sale of shares.

•

Competitive transaction charges.

•

Instant order and trade confirmation be email.

•

Streaming Quotes. (Cash & Derivatives)

•

Personalized market watch.

•

Single screen interface for cash and derivatives and more.

•

Provision to enter price trigger and view the same online in market watch. Dial-n-trade – Along with enabling access for your trade online, the CLASSIC 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 1-800-22-7050.

2. Tiger Trade Account – It is an internet-based software application that enables you to buy and sell in an instant. It is ideal for active trades and jobbers who transact frequently during day’s session to capitalize on intra-day price movement. Features A single platform for multiple exchange BSE, NSE, MCX, NCDEX, Mutual funds and IPOs. Multiple Market Watch available on a single screen. User can save his own defined screen as well as graph template, that is, can save the layout for future use. User-defined alert settings on an input Stock Price trigger tools available to gauge market such as Tick Query, Ticker, Market Summary, Action Watch, Option Premium Calculator, Span Calculator. Shortcut key for FAST access to order placements & reports.

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SHAREKHAN LIMITED

FEES STRUCTURE Charge Account Opening Monthly maintain charges Brokerage

Classic Account Rs. 750 /Rs.300/Intra-day 0.10%

Tiger trade account nil Rs. 300/Intra-day 0.05%

Delivery 0.50%

Delivery 0.25%

Note

 Minimum margin cheque – Rs. 5000with the classic account that is must deposit in account opening time.  If margin cheque exceeds Rs. 50000, account opening free.  Minimum brokerage cheque – Rs. 6000 (adjusted towards brokerage within one year) that is applicable for only tiger trade account.  Annual maintenance charges – Rs. 300 (chargeable in second year) that is applicable for both account.  No account closing charges.

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Comparison with leading companies in share brokrage FIRMS NAME FACTS

HDFC

OPENING CHARGES

RS.750/-

AMC

ICICI

RELIGARE

INDIABULL

SHAREKHAN

Rs.750/-

Rs.500/-

Rs.1250/500

Rs.750/-

Rs. 750/-

Rs. 750/-

Rs .16 per transaction

Rs.16per transaction

Rs. 300/-

RESEARCH REPORT

NO

NO

R. M.

R.M.

DAILY BASIS

DIAL N TRADE

Rs.20per call chargeable

Rs.20per call NO chargeable

NO

FREE

BROKRAGE

INT .15% DEL.75%

INT .15% DEL.75%

INT .10% DEL.50%

INT .10% DEL .50%

INT .05% DEL .50%

LIVE TERMINAL

NO

NO

YES

YES

YES

EXPOSURE

NO

NO

8timeonly trading

8time only trading

5time 2days+trading

TRADING TIMING

9:55to3:0

9:55to3:30

9:55to2:45

9:55to3:00

9:55to3:30

Note  In India bull provide two types of account cool and demat account and both charge is shown on the table.  In this table Religare and India bull provide only R.M. facility insists of research report.  In the case of exposure India bull and Religare provide till trading but Sharekhan provide trading plus two another working days

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INTRODUCTION

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ON THE JOB TRAINING On the job training means learning practical and implementing it in the day to day work of the organization. During my SIP in the company I learnt many things. I did an analysis of the various competitor of Share Khan. I have done practical as well as theoretical analysis of the competitor of Share khan. My Company Guide assigned the tasks in groups to do a survey on various competitors of Share khan. I went to Kotak Securities and ICICI direct. Com, HDFC etc for gathering the information over there. There I gathered the information regarding the policies, procedures, services and brokerage. After getting all the information when I compared it with share khan I found that the facilities and services provided by ShareKhan is much better than any other company. The above statement is not out of any prejudice but is based on the study undertaken by me and is testified by the research findings. My work in the company was to open Demat account. I had to call the prospects and the existing customers and convince them to open Demat Account in Share khan by providing awareness to the customers about the benefits provided by Share Khan. I have got very good experience here. I was able to do things practically in the organization by incorporating whatever I’ve have learnt theoretically in my course. My training programme was very good . At last I can say that OJT gives us the real picture of practical world. I met near about 100 customers and I was able to convert 25 customers and it was really a good experience for me. I went to many places in order to meet the customers according to their convenience. During the course of making the prospect all my problems were dealt by discussions with my company guide.

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SHAREKHAN LIMITED

Objective: These are the following objectives of on the job training: 

To understand about the corporate environment.



To know about corporate etiquettes.



To know about my strength and weakness in the work environment.



To apply the concepts learnt in classrooms in real life situation.



To get the platform in on the job training and to develop a network this will be

helpful in my career growth.

Target/Task: The target assigned to me in on the job training is: 

To open 10 demat accounts in a month.



To achieve this I have to open at least 3 accounts in a week.



As my work is to do open demat a/c so I have to fix the appointments with the

customers. 

So my target is to fix at least one appointment on daily basis

Limitations:  I have to search for the relevant data for fulfilling my target.  Scarcity of time as sometimes I have to deal with so many customers and satisfy many customers simultaneously.  As I am here for a very short span I am not having convince and this caused me difficulties in approaching the customers.  I am not getting the full financial credit from the company which I spend while dealing and approaching the customer

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SHAREKHAN LIMITED

SYNOPSIS In this project I had to undertake a comparative study on share market and mutual funds. I had to undertake an analysis of the mutual funds, its benefits, and drawbacks and make a detailed summary on its various aspects and then compare it with the SHARE MARKET. I have to tell about the share market, benefits of investing in share market, its drawbacks and make study on various aspects of share market.

Objective: 

To know the work culture and methodology of the share market



To know the rules and regulation of SEBI.



To know the rules and regulation of AMC (Assets Management Company)



To know the brokerage system of the share market



To know the difference between share market and mutual funds.



To know the various competitors in the mutual funds market.



To know the various exchanges of share markets all over the world.



To know the timing of the share market.



To know how the value of shares and mutual funds is calculated.



To know the various factors on which prices of shares and mutual funds

fluctuates. 

To know the benefits of investing in share market and mutual funds.



To know about the services of the share market and mutual funds.

Limitations: Though the present study aims to achieve the above-mentioned objectives in full earnest and accuracy, it may be hampered due to certain limitations. Some the limitations of this study may be summarized as follows: 

Getting accurate responses from the respondents.



Locating the target customers of mutual funds is very time consuming. 19

SHAREKHAN LIMITED

METHODOLOGY The objective of the present study can be accomplished by conducting a systematic market research. Market research is the systematic design, collection, analysis and reporting of data and findings that are relevant to different marketing situations facing the company. The marketing research process that will be adopted in the present study consists of the following stages a) Defining the problem and the research objective:

The research objective

states what information is needed to solve the problem. The objective of the research is to find out the facilities provided in mutual funds and share market and what will be its benefits in the future. b) Developing the research plan: Once the problem is identified, the next step is to prepare a plan for getting the information needed for the research. The present study will adopt the exploratory approach wherein there is a need to gather large amount of information before making a conclusion. If required, the descriptive and casual approaches may also be used. c) Collection and Sources of data: Market research requires two kinds of data, i.e., primary data and secondary data. Preparing questionnaires that will contain both open-ended and close-ended questions may collect the primary data. Secondary data will be collected from various journals, books and web sites. d) Analyze the collected information: This involves converting raw data into useful information. It involves tabulation of data and using statistical measures on them for developing frequency distributions and calculating the averages and dispersions. e) Report research findings: This phase will mark the culmination of the marketing research effort. The report with the research findings is a formal written document. The research findings and personal experience will be used to propose recommendations to develop the market in online trading. 20

SHAREKHAN LIMITED

PROJECT TITLE: COMPARATIVE STUDY ON

SHARE MARKET AND MUTUAL FUNDS 21

SHAREKHAN LIMITED

What is a Mutual Fund? A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost. The small savings of all the investors are put together to increase the buying power and hire a professional manager to invest and monitor the money. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.

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SHAREKHAN LIMITED

TYPES OF MUTUAL FUND SCHEME Mutual fund schemes may be classified on the basis of its structure and its investment objective.

BY STRUCTURE 1.

Open-end Funds

An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. 2.

Closed-end Funds

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. 3.

Interval Funds

Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.

BY INVESTMENT OBJECTIVE 23

SHAREKHAN LIMITED

1.

Growth Funds

The aim of growth funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their corpus in equities. It has been proved that returns from stocks, have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time. 2.

Income Funds

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income. 3.

Balanced Funds

The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth. 4.

Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and interbank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods. .

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SHAREKHAN LIMITED

Three Common Investment Goals

Goal No. 1: Retirement

Most individuals buy mutual funds for long-term goals, especially retirement. It is estimated that retirees will need 70 to 80 percent of their final, pre-tax income to maintain a comfortable lifestyle in retirement. If you plan to retire at age 65, retirement savings should last for at least 18.5 years, since the average life expectancy for a 65-year-old is 83.5,and continues to rise. Ideally, individuals use a combination of sources to fund retirement, such as Social Security benefits, employer-sponsored retirement plans-like 401(k) plans—and personal savings, including Individual Retirement Accounts (IRAs).

Goal No. 2: Education

Many parents and grandparents use mutual funds to invest for children’s college educations. Your time horizon is an essential consideration when investing for education: if you start when the child is born, you have 18 years to invest. However, if a child or grandchild is in your future, the time horizon can be lengthened by investing now.

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SHAREKHAN LIMITED

Goal No. 3: Emergency Reserves and Other Short-Term Goals

Emergency reserves are assets you may need unexpectedly on short notice. Many investors use money market funds for their reserves. Money market funds alone, or in combination with short-term bond funds, can also be appropriate investments for other short-term goals.

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SHAREKHAN LIMITED

OTHER SCHEMES 1.

Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds. 2.

Special Schemes •

Index Schemes Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50

•

Sectoral Schemes Sectoral Funds are those that invest exclusively in a specified sector. This could be an industry or a group of industries or various segments such as 'A' Group shares or initial public offerings.

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SHAREKHAN LIMITED

HOW TO INVEST IN MUTUAL FUND Step one - Identify your Investment needs Your financial goals will vary, based on your age, lifestyle, financial independence, family commitments, and level of income and expenses among many other factors. Therefore, the first step is to assess your needs. You can begin by defining your investment objectives and needs, which could be regular income, buying a home or finance a wedding or educate your children or a combination of all these needs, the quantum of risk you are willing to take and your cash flow requirements.

Step Two - Choose the right Mutual Fund The important thing is to choose the right mutual fund scheme, which suits your requirements. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. Some factors to evaluate before choosing a particular Mutual Fund are the track record of the performance of the fund over the last few years in relation to the appropriate yardstick and similar funds in the same category. Other factors could be the portfolio allocation, the dividend yield and the degree of transparency as reflected in the frequency and quality of their communications.

Step Three - Select the ideal mix of Schemes Investing in just one Mutual Fund scheme may not meet all your investment needs. You may consider investing in a combination of schemes to achieve your specific goals.

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SHAREKHAN LIMITED

Step four - Invest regularly The best approach is to invest a fixed amount at specific intervals, say every month. By investing a fixed sum each month, you buy fewer units when the price is higher and more units when the price is low, thus bringing down your average cost per unit. This is called rupee cost averaging and do investors all over the world follow a disciplined investment strategy. You can also avail the systematic investment plan facility offered by many open-end funds.

Step Five- Start early It is desirable to start investing early and stick to a regular investment plan. If you start now, you will make more than if you wait and invest later. The power of compounding lets you earn income on income and your money multiplies at a compounded rate of return.

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SHAREKHAN LIMITED ADVANTAGES OF MUTUAL FUNDS

Mutual funds make saving and investing simple, accessible, and affordable. The advantages of mutual funds include professional management, diversification, variety, liquidity, affordability, convenience, and ease of recordkeeping—as well as strict government regulation and full disclosure. •

Diversification: The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value.

•

Professional Management: Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell.

•

Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud.

•

Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and you've got the cash.

•

Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet.

•

Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index

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SHAREKHAN LIMITED •

Transparency

•

Flexibility

•

Tax benefits

DRAWB ACKS OF MUTUAL FUNDS •

No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.

•

Fees and commissions: All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund.

•

Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made.

•

Management risk: When you invest in a mutual fund, you depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.

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SHAREKHAN LIMITED

How to Read a Mutual Fund Fee Table

There are two basic types of costs associated with mutual funds. Some funds charge shareholder fees when you purchase or redeem shares of the fund, i.e., sales commissions. In addition, all funds have operating expenses, which represent the costs of running the fund. A mutual fund’s fees and expenses are required by law to be clearly disclosed to investors in a fee table at the front of the fund’s prospectus. Mutual funds compete vigorously to keep costs low, since the performance figures reported by the fund ,and the total value of your mutual fund account, are provided after all fees and expenses have been deducted. For example, the fund returns published in newspapers, advertisements, and official fund documents already are “net” of any fees the fund charges you. Thus, any time you consider a fund’s past performance, your decision reflects the impact fees have had on the fund in the past. Particularly important to your assessment of costs is the fund’s expense ratio. The availability of this figure in all fund prospectuses allows you to easily compare how much more or less one fund costs versus another—an important part of making an informed investment decision.

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SHAREKHAN LIMITED

Ten Tips on Buying Mutual Funds

1. Determine your financial objectives and how much money you can afford to invest. Make sure the fund’s objectives coincide with your own. Do not change your objectives or exceed the amount set aside for investment without careful consideration. 2. Research and obtain all available information before you invest. Request a copy of the fund’s prospectus and read it carefully. Also look over the SAI and the latest shareholder report from each fund you are considering. 3. Determine the amount of all sales charges, management fees and administrative expenses before you invest. Some funds charge for reinvestment of dividends and capital gains distributions, which can add to your costs. See the fund’s prospectus for a description of all fees and expenses. 4. Never treat the risks of investing in mutual funds lightly. All mutual funds involve some degree of risk. Unlike money market accounts and certificates of deposit, mutual funds are not federally insured. 5. Exercise caution when considering investing in funds with junk bond portfolios.

33

SHAREKHAN LIMITED While junk bonds pay a high-rate of return, junk bond companies are more volatile and more likely to default on bond payments. These factors can seriously affect the fund’s performance 6. Do not invest in periodic payment plans unless you are absolutely certain that you will hold your shares for a long time. If you sell or redeem early – or do not complete the plan – you may find that a large portion of your investment has gone to pay sales charges. 7. Learn the consequences of redemptions. Besides the sales charges for redeeming periodic payment plans before completion, some funds may charge a redemption fee or a proportion of your investment, known as a contingent deferred sales load. 8. Call Secretary of State office to find out whether your broker/financial advisor and the mutual fund are properly registered in Indian. Secretary office can tell you if a company or an individual has failed to properly register or if there is a history of trouble with securities regulators. If there is a history of problems, this should serve as a red flag to prospective investors. 9. Even after investing in a mutual fund, review the shareholder reports and any amendments to the prospectus and the Statement of Additional Information (SAI). 10. If you believe you have encountered investment fraud, call Secretary office. If something does not seem right, or if you are not satisfied with the answers you have received, contact the Secretary of State’s office. We are here to help you!

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SHAREKHAN LIMITED

Share market is the market for securities where organized issuance and trading

Share Market Overview

of shares takes place. It plays an important role in channelizing capital from the investors to the business houses which consequently leads to the availability of funds for business expansion. Shares are certificates which represents ownership rights of the holder in a company.

What is share? Share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.

Shares in the Share Market are either traded through :(a) Stock Exchange These are organized market places where stocks, bonds are other equivalents are traded between the buyers and sellers where exchange acts as a counter - party to both the participants in case of any default. (b) Over-the -Counter (OTC) These are not centralized exchanges and the trade takes place through a network of dealers. Basically, Share Market can be divided into two parts :1. Primary Market It is the market where new issues of securities are offered to the investors.

2. Secondary Market An investor of a secondary market buys a security from another participant of the same and not from any issuing corporation (as in case of Primary Market).

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SHAREKHAN LIMITED

Why shares Historically shares have outperformed all the other investment instruments and given the maximum returns in the long run. In the twenty-five year period of 1980-2005 while the other instruments have barely manage to generate returns at a rate higher than the inflation rate(7.10%), on an average shares have given returns of about 17% in a year and that does not even take in account the dividend income from them. Were we to factor in the dividend income as well, the shares would have given even higher returns during the same period.

WHY INVESTING IN SHARE MARKET Dividend income: investments in shares are attractive as much for the appreciation in the share prices as for the dividends their companies pay out. Tax advantages: shares appear as the best investment option if you also consider the unbeatable tax benefits that they offer. First, the dividend income is tax-free in the hands of investors. Second, you are required to pay only a 10% short term capital gains tax on the profits made from investments in shares, if you book your profits within a year of making the purchase. Third, you don't need to pay any long-term capital gains tax on the profits if you sell the shares after holding them for a period of one year. The capital gains tax rate is much higher for other investment instruments: a 30% short-term capital gains tax (assuming that you fall in the 30% tax bracket) and a 10% long-term capital gains tax Easy liquidity: shares can also be made liquid anytime from anywhere (on sharekhan.com you can sell as here at the click of a mouse from 36

SHAREKHAN LIMITED anywhere in the world) and the investments can be realized in just two working days .Considering the high returns, the tax advantages and the highly liquid nature, shares are the best investment option to create wealth.

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SHAREKHAN LIMITED

DIFFERENCE BETWEEN PRIMARY AND SECONDARY MARKETS In the primary market securities are issued to the public and the proceeds go to the issuing company. Secondary market is a term used for stock exchanges, where stocks are bought and sold after they are issued to the public.

PRIMARY MARKET Individuals apply to get shares of the company Company

IPO

Companies share ownership by issuing shares

Company

Owners

Companies allocate shares to individuals and those who get the shares become part owners of the company.

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SHAREKHAN LIMITED

PRIMARY MARKET The first time that a company shares are issued to the public, it is by a process called the initial public offering (IPO). In an IPO company offloads a certain percentage of its totals shares to the public at a certain price. Most IPOs these days do not have a fixed offer price instead they follow a method called the book building process, where the offer price is placed in a hand or a range with the highest and the lowest value (refer to the newspaper ad). The public can bid for the shares at any price in the band specified. Once the bid come in the company evaluates all the bids and decides on an offer price in that range. After the offer price is fixed the company either allots its shares to the people who had applied for its shares or returns them their money.

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SHAREKHAN LIMITED

SECONDARY MARKET

Company

Broker

Stock Exchange

Individual Investors

Companies get themselves listed on popular stock exchanges like BSE and NSE

SECONDARY MARKET Once the offer price is fixed and the shares are issued to the people, stock exchanges facilitate the trading of shares for the general public. Once a stock is listed on an exchange, people can start trading in its shares. In a stock exchange the existing shareholders sell their shares to anyone who is willing to buy them at a price agreeable to both the parties. Individuals cannot buy or sell shares in a stock exchange directly they have to execute their transactions through authorized members of the stock exchange who are also called stock brokers

40

SHAREKHAN LIMITED

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SHAREKHAN LIMITED

DYNAMICS OF THE SHARE MARKET

Buyer He pays the money to his broker

Broker His broker pays it to the exchange

Stock Exchange The exchange pays it to the seller’s broker

Broker

Seller

Seller’s broker finally pays the money to the seller

Similar process happens for the transfer of shares from the seller’s end.

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SHAREKHAN LIMITED

MULTI CHANNEL ACCESS TO THE STOCK MARKET

Relationship Manager

Live chat

Call centre

Website

SMS

Email

CUSTOMER SUPPORT

Multi Channel Investment Option

Share Shops

Dial n Trade Online Trading

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SHAREKHAN LIMITED

TRANSACTION CYCLE IN SHARE MARKET

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SHAREKHAN LIMITED

HOW TO A READ SHARE MARKET TABLE

Columns 1 & 2: column 1&2 shows 52- Week High and Low price rate of shares. Column 3:column shows Company Name & Type of Stock. Column 4: column 4 shown Ticker Symbol of company name which companies share has shown. Column 5: column 5 shown Dividend Per Share. Column 6: Column 6 shown Dividend Yield per share. Column 7: column 7 shown Price/Earnings Ratio of per share. Column 8: column 8 shown Trading Volume in hunred volume. Column 9 & 10: column 8 shown Day High and Low rate of share. Column 12: column 8 shown Net Change of shares which share goes up or down that thing is shown with the help of this table.

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SHAREKHAN LIMITED

TERMINOLOGY USED IN SHARE MARKET 1.

Stock Broker / Sub – Broker: - People like you and me cannot just go to a stock exchange and buy and sell shares. Only the members of the stock exchange can. These members are called stockbrokers and they buy and sell shares on our behalf. So, if you want to start investing in shares, you can do it only through a broker. Every stockbroker has to be registered with the Securities and Exchange Board of India, which is the stock market regulator. You can either choose a broker (who is directly registered with SEBI) or a sub-broker (people licensed by brokers to work under them).

2.

Demat account: - Gone are the days when shares were held as physical certificates. Today, they are held in an electronic form in demat accounts. Demat refers to a dematerialized account. Let's say your portfolio of shares looks like this: 40 shares of Infosys, 25 of Wipro, 45 of HLL and 100 of ACC. They will show in your demat account. You don't have to possess any physical certificates showing you own these shares. They are all held electronically in your account. Periodically, you will get a demat statement telling you what shares you have in your demat account. How to get a demat account To get a demat account, you will have to approach a Depository Participant. A depository is a place where an investor's stocks are held in electronic form. There are only two depositories in India -- the National Securities Depository Ltd and the Central Depository Services Ltd. The depository has agents who are called Depository Participants. In India, there are over a hundred DPs. Think of it like a bank. The head office, where all the technology rests and the details of all the accounts are held, is like the depository. The DPs are like the branches of banks that cater to individuals. A broker, however, is not similar to a DP. A broker is a member of the stock exchange and he buys and sells shares for his clients and for himself. A DP, on the other hand, gives you an account where you can hold those shares. 46

SHAREKHAN LIMITED To get a list of the registered DPs, visit the NSDL and CDSL Web sites. 3.

Get a PAN: - The taxman demands that you get yourself a Permanent Account Number. This is a unique 10-digit alphanumeric number (AABPS1205E, for example) that identifies and tracks an individual in the taxman's database. Almost every money transaction demands the use of a PAN.

4.

Trading / Square off Transaction:Whenever a trader / investor buys or sells a security and on the same day before the market closes, he sells or buys that particular security (in the same quantity), the transaction is called as square off transaction or a trading transaction. Shares lying in the T, TS and T are not square off the same day.

5.

Delivery Transaction:Delivery transactions are those transactions which are not squared off at the day end, and the investor/trader is ready to take / give the delivery of the security. Charges such as brokerage, service tax on brokerage, STT, stamping charges etc. are very high on the delivery transactions.

6.

Settlement Period :Currently the settlement period is T+2. Settlement period i.e. T+2 means one has to give the delivery of the shares sold within 2 days of the date of the transaction. In case of purchase transaction, one will get the delivery within 2 days of the date of transaction.

7.

Shares Category:The stock exchange has divided the shares into the categories according to the performance of the company. 47

SHAREKHAN LIMITED The different categories are A, B1, B2, S (BSE Indonext), T, TS, Z 8.

Auction:In case of failure of delivery of shares for sale transaction within the stipulated time period, the BSE auction those shares as per the rules and regulations.

9. Close Out:In case of failure of delivery of shares for purchase transaction within the stipulated time period, the person buying the shares gets the benefit in the form of Close Out as per the BSE’s rules and regulations.

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SHAREKHAN LIMITED

ROLE OF STOCK EXCHANGE 1.

Raising capital for business.

2.

Mobilizing saving for investment.

3.

Facilitate Company growth.

4.

Redistribution of wealth.

5.

Corporate governance.

6.

Create investment opportunities for small investors.

7.

Government raises capital for development projects.

LISTING OF SECURITIES Listing means admission of the securities to dealings on a recognised stock exchange. The securities may be of any public limited company, Central or State Government, quasi-governmental and other financial institutions/corporations, municipalities, etc. The objectives of listing are mainly to: •

Provide liquidity to securities;

•

Mobilize savings for economic development;

•

Protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for listing of securities of companies in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of the Exchange. A company intending to have its securities listed on the Exchange has to comply with the listing requirements prescribed by the Exchange.

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SHAREKHAN LIMITED

[I] MINIMUM LISTING REQUIREMENTS FOR NEW COMPANIES (A) Minimum Capital: 1. New companies can be listed on the Exchange, if their issued & subscribed equity capital after the public issue is Rs.10 Crores. In addition to this the issuer company should have a post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs.20 Crores. 2. For new companies in high technology (i.e. information technology, internet, ecommerce, telecommunication, media including advertisement, entertainment etc.) the following criteria will be applicable regarding threshold limit: i.

The total income/sales from the main activity, which should be in the field

of

information

technology,

internet,

e-commerce,

telecommunication, media including advertisement, entertainment etc. should not be less than 75% of the total income during the two immediately preceding years as certified by the Auditors of the company. ii.

The minimum post-issue paid-up equity capital should be Rs.5 Crores.

iii.

The minimum market capitalization should be Rs.50 Crores. (The capitalization will be calculated by multiplying the post issue subscribed number of equity shares with the Issue price).

iv.

Post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs.20 Crores.

(B) Minimum Public offer: 50

SHAREKHAN LIMITED

As per Rule 19(2) (b) of the Securities Contracts (Regulation) Rules, 1957, securities of a company can be listed on a Stock Exchange only when at least 25% of each class or kind of securities is offered to the public for subscription. In case of IPOs by unlisted companies in the IT& entertainment sector, at least 10% of the securities issued by the company may be offered to the public subject to the following: •

Minimum 20 lac securities are offered to the public (excluding reservation, firm allotment and promoters contribution)

•

The size of the offer to the public is minimum 50 cores.

For this purpose, the term "offered to the public" means only the portion offered to the public and does not include reservations of securities on firm or competitive basis. SEBI may, however, relax this condition on the basis of recommendations of stock exchange(s), only in respect of a Government company defined under Section 617 of the Companies Act, 1956.

[II] MINIMUM LISTING REQUIREMENTS FOR COMPANIES LISTED ON OTHER STOCK EXCHANGES

The Governing Board of the Exchange at its meeting held on 6th August, 2002 amended the direct listing norms for companies listed on other Stock Exchange(s) and seeking listing at BSE. These norms are applicable with immediate effect. 1. The company should have minimum issued and paid up equity capital of Rs. 3 cores. 2. The Company should have profit making track record for last three years. The revenues/profits arising out of extra ordinary items or income from any source of non-recurring nature should be excluded while calculating distributable profits. 51

SHAREKHAN LIMITED 3. Minimum net worth of Rs. 20 cores (net worth includes Equity capital and free reserves excluding revaluation reserves). 4. Minimum market capitalization of the listed capital should be at least two times of the paid up capital. 5. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%. 6. Minimum 25% of the company's issued capital should be with Non-Promoters shareholders as per Clause 35 of the Listing Agreement. Out of above Non Promoter holding no single shareholder should hold more than 0.5% of the paid-up capital of the company individually or jointly with others except in case of

Banks/Financial

Institutions/Foreign

Institutional

Investors/Overseas

Corporate Bodies and Non-Resident Indians. 7. The company should have at least two years listing record with any of the Regional Stock Exchange. 8. The company should sign an agreement with CDSL & NSDL for Demat trading.

[III] MINIMUM REQUIREMENTS FOR COMPANIES DELISTED BY THIS EXCHANGE SEEKING RELISTING OF THIS EXCHANGE The companies delisted by this Exchange and seeking relisting are required to make a fresh public offer and comply with the prevailing SEBI's and BSE's guidelines regarding initial public offerings.

[IV] PERMISSION TO USE THE NAME OF THE EXCHANGE IN AN ISSUER COMPANY'S PROSPECTUS The Exchange follows a procedure in terms of which companies desiring to list their securities offered through public issues are required to obtain its prior permission to use the name of the Exchange in their prospectus or offer for sale documents before filing the same with the concerned office of the Registrar of Companies. The Exchange has since last three years formed a "Listing Committee" to analyze draft prospectus/offer documents of the companies in respect of their forthcoming public issues of securities and decide upon the matter of granting them permission to use 52

SHAREKHAN LIMITED the name of "Bombay Stock Exchange Limited" in their prospectus/offer documents. The committee evaluates the promoters, company, project and several other factors before taking decision in this regard.

[V] SUBMISSION OF LETTER OF APPLICATION As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities on the Exchange is required to submit a Letter of Application to all the Stock Exchanges where it proposes to have its securities listed before filing the prospectus with the Registrar of Companies.

[VI] ALLOTMENT OF SECURITIES As per Listing Agreement, a company is required to complete allotment of securities offered to the public within 30 days of the date of closure of the subscription list and approach the Regional Stock Exchange, i.e. Stock Exchange nearest to its Registered Office for approval of the basis of allotment.

[VII] TRADING PERMISSION As per Securities and Exchange Board of India Guidelines, the issuer company should complete the formalities for trading at all the Stock Exchanges where the securities are to be listed within 7 working days of finalization of Basis of Allotment. A company should scrupulously adhere to the time limit for allotment of all securities and dispatch of Allotment Letters/Share Certificates and Refund Orders and for obtaining the listing permissions of all the Exchanges whose names are stated in its prospectus or offer documents. In the event of listing permission to a company being denied by any Stock Exchange where it had applied for listing of its securities, it cannot proceed with the allotment of shares. However, the company may file an appeal before the Securities and Exchange Board of India under Section 22 of the Securities Contracts (Regulation) Act, 1956.

[VIII] REQUIREMENT OF 1% SECURITY

53

SHAREKHAN LIMITED The companies making public/rights issues are required to deposit 1% of issue amount with the Regional Stock Exchange before the issue opens. This amount is liable to be forfeited in the event of the company not resolving the complaints of investors regarding delay in sending refund orders/share certificates, non-payment of commission to underwriters, brokers, etc.

[IX] PAYMENT OF LISTING FEES All companies listed on the Exchange have to pay Annual Listing Fees by the 30th April of every financial year to the Exchange as per the Schedule of Listing Fees prescribed from time to time. The schedule of listing fees for the year 2004-2005, prescribed by the Governing Board of the Exchange and approved by the Securities and Exchange Board of India is given here under:

SCHEDULE OF LISTING FEES FOR THE YEAR 2006-2007 1. Initial Listing Fees

-

20,000

(i) Companies with paid-up capital* up to Rs. 5 cores -

10,000

(ii) above 5 cores and up to Rs. 10 cores

-

15,000

(iii) Above Rs. 10 cores and up to Rs. 20 cores

-

30,000

2. Annual Listing Fees

3. Companies which have a paid-up capital* of more than Rs. 20 cores will pay additional fee of Rs. 750/- for every increase of Rs. 1 cores or part thereof. 4. In case of debenture capital (not convertible into equity shares) of companies, the fees will be charged @ 25% of the fees payable as per the above mentioned scales.

[X] COMPLIANCE WITH LISTING AGREEMENT 54

SHAREKHAN LIMITED The companies desirous of getting their securities listed are required to enter into an agreement with the Exchange called the Listing Agreement and they are required to make certain disclosures and perform certain acts. As such, the agreement is of great importance and is executed under the common seal of a company. Under the Listing Agreement, a company undertakes, amongst other things, to provide facilities for prompt transfer, registration, sub-division and consolidation of securities; to give proper notice of closure of transfer books and record dates, to forward copies of unabridged Annual Reports and Balance Sheets to the shareholders, to file Distribution Schedule with the Exchange annually; to furnish financial results on a quarterly basis; intimate promptly to the Exchange the happenings which are likely to materially affect the financial performance of the Company and its stock prices, to comply with the conditions of Corporate Governance, etc. The Listing Department of the Exchange monitors the compliance of the companies with the provisions of the Listing Agreement, especially with regard to timely payment of annual listing fees, submission of quarterly results, requirement of minimum number of shareholders, etc. and takes penal action against the defaulting companies.

[XI] "Z" Group The Exchange has introduced a new category called "Z Group" from July 1999 for companies who have not complied with and are in breach of provisions of the Listing Agreement. The number of companies placed under this group as at the end of May, 2001 was 1,475. The number of companies listed at the Exchange as at the end of May 2001 was 5,874. This is the highest number among the Stock Exchanges in the country and in the world.

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SHAREKHAN LIMITED

QUESTIONNAIRE We are first year students of Graduate School of Business and Administration, Greater Noida, conducting a survey on investor’s behavior and psychology. We assure you that individual response will be kept confidential. Please circle or tick the appropriate option. Q1.

Q2.

Q3.

Where do you invest your savings? i.

Mutual funds

ii.

Equity

iii.

Insurance

iv.

Fixed Deposits

Which sectors give more return? i.

Share market

ii.

Mutual Funds

Are you satisfied with your current investment?

i.

Yes

ii.

No Q4.

Your investment decisions are influenced by

i.

Oneself

ii.

Broker

iii.

Eco.Policies

iv.

Market Research

v.

Friends/Relatives

vi.

An other Q5.

Are you satisfied with company services? i.

Yes

ii. 56

No

SHAREKHAN LIMITED Q6.

What are the factors which you considered before investing in a particular company? i.

Financial Position

ii.

Current Market Position

iii.

Goodwill

iv.

Future Prospects

v.

Any others.

PERSONAL DETAILS: Name Mr./Mrs./Miss__________________________ Address____________________________________ ___________________________________________ Phone No. __________________________________ Email ______________________________________ Occupation a) Government Employee b) Private Employee c) Self Employed

d) Student

E) Housewife

Your monthly household income a) Less than 15000

b) 15001-25000

c)25001 and above

Please give some references of people who you know are trading/investing in stocks:

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SHAREKHAN LIMITED 1.

_________________________________

2.

_________________________________

RESULTS AND FINDINGS

The feedback of 300 customers has been taken and the findings along with its analysis are as follows: -

• I asked from the customers about the securities in which they invest their savings.

70

Percentage

60

59

EQUITY

50

MUTUAL FUND

40 30

25

FIXED DEPOSITS

20 10 0

9

7

Sector

COMMENT

58

INSURANCE

SHAREKHAN LIMITED

This figure says that most people go for at 1st EQUITY investment then for MUTUAL FUND, FIXED DEPOSITS AND INSURANCE. Because equity gives good return in short time as well as long term as compared to mutual fund

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SHAREKHAN LIMITED

SWhich Sector Gives More Return.

23%

77%

Sharemarket

Mutual funds

COMMENT This pie chart shows that share market give return 77% as compared to mutual fund at 23% return. It signifies mostly more people go for share market as compared to mutual funds.

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SHAREKHAN LIMITED

• Investment decisions of the customers are influenced on the basis of following grounds.

40

36

Oneself

35 Brokers

Percentage

30 25 20

24 Eco. Policies

20

15

Market Ramous

8

10

Friends/Relatives

5 0

Investment Decisions

COMMENT How do investors take their investment decisions is presented in this bar graph. In this graph it is evident that mostly investment decision are taken on the insistence of the brokers firms and companies and that percentage is 36%. In this area Sharekhan has its own research report and that strike rate has 80%. This is an advantage to the customers of Sharekhan.

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SHAREKHAN LIMITED

• Are you satisfied with your current investment? .

42% 58%

Yes No

COMMENT That chat is show the satisfaction level of current investment( in share) and long term investment(mutual fund) than here shows that the satisfaction level in current investment (shares) is 58% and satisfaction in long term investment (mutual fund) is 42%.

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SHAREKHAN LIMITED

• What are the factors which you considered before investing in particular company?

40

36

Financial Positions

35 30 e g a t n e c r e P

25

Current market Positions

24 20

20

Goodwill

15

12

10

8

5

Future Prospects

Any other

0 factors

COMMENT What factors are necessary before the investment in company or in firm is show in this bar graph. It is evident that in the current market position accounts for 36% , most investors go for investment after seeing the current market positions and after that the financial position of company which is at 24%, then goodwill of company at 20%,future prospects at 12%,and any other factors at 8%. 63

SHAREKHAN LIMITED

•

What is the market of share khan in the earning share brokerage?

Comparison between different broker company according to earn brokerage 5paise

40

13.23%

sharekhan

70

23.34%

motilaloswal

11

3.53%

icicidirect

61

20.05%

hdfc

15

5.01%

indiabulls

38

13.06%

kotak

19

6.33%

any other

46

15.45%

Voters: 300. 300.

COMMENT Share khan earn more brokerage in share trading as compared to all the leading firms and companies and share khan get 284 vote and 23.34% regarding to other firms and companies earning that is shown that satisfied level, share khan strike rate all things are shown share khan ‘s profit and market share.

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SHAREKHAN LIMITED

CONCLUSION The strategy adopted by me in completion of this project help me a lot till now in making comparison between share market and mutual funds. From the analysis we can say that if there is more risk there is more return and we can say that share market is totally dependent on the risk taken by the investors in investing in shares. And in mutual funds there is less risk as the money of investors invested in different sectors so it can divide the risk in different portfolio adopted by mutual funds companies. At last I can say that money invested in this rise and fall market it is better to invest in mutual funds for those investors who are risk adverse and for those who are risk taker it is better for them to invest in share market. We can also say that in share market customers is decision maker while in mutual funds investors is totally dependent on assets management company, investors do not have active control on money invested by him/her. In OJT the strategy adopted by me in achieving my target helped me a lot. This strategy helped me in knowing the customer reaction towards share market, customer’s attitude towards share broking firms and in this I helped how to interact with the customers which is beneficial for me in future.

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SHAREKHAN LIMITED

BIBLIOGRAPHY .

 www.sharekhan.com  www.mutualfunds.com  www.amfi.com  www.google.com

 Training kit provided by Sharekhan

 www.altavista.com  www.dogpil.com

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