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A Summer Internship Project Report On Awareness of online trading In Ahmedabad.

In Partial Fulfillment of the requirements for the fulltime two years MBA program under Gujarat Technological University

Submitted by: Bhavik thakkar

Submitted To : Prof. gurmeet sir

===================================================================== N.R.INSTITUTE OF BUSINESS MANAGEMENT (GLS-MBA), AHMEDABAD.

DECLARATION

I, bhavik thakkar student of N.R. INSTITUTE OF BUISENESS MANAGEMENT, AHMEDABAD, hereby declare that this project report is a result of culmination of my sincere efforts.

I declare that this submitted work is done by me and to the best of my knowledge; no such work  has been submitted by any other person for the award of degree or diploma.

I also declare that all the information collected from various secondary and primary sources have been duly acknowledged in this project report.

(bhavik thakkar)

DECLARATION

I, bhavik thakkar student of N.R. INSTITUTE OF BUISENESS MANAGEMENT, AHMEDABAD, hereby declare that this project report is a result of culmination of my sincere efforts.

I declare that this submitted work is done by me and to the best of my knowledge; no such work  has been submitted by any other person for the award of degree or diploma.

I also declare that all the information collected from various secondary and primary sources have been duly acknowledged in this project report.

(bhavik thakkar)

PREFACE Today‟s modern world is progressing by leaps and bounds. In this fast changing world,

management management of business is very important phase. The course of MBA MBA gives great knowledge knowledge to the students. Summer Internship Internship Project is also a part of the MBA course. That enables the student to understand how they can apply their theoretical knowledge in practical world. It helps me to develop my leadership skills, communication skills, and analytical skills and so on. it presents a unified picture of what management is and how it is applied to various forms of human endeavor. I got the opportunity to make Summer Internship Project on online share trading in secondary market.

This project report report gives details about online share trading in India and its scope

particularly in Ahmadabad It also describe the primary analysis about customer satisfaction towards online share trading. An overall view of online share trading presented in the report gives better idea about different options available to customers.

ACKNOWLEDGEMENT

Every successful Endeavour has its share of problems and hurdles, but at the same time there are people who help to overcome these difficulties and thus I want to express my heartfelt gratitude towards the people who have been of great help to me in achieving the purpose. Hence, my project bears the imprints of many people. I wish to express my deep sense of gratitude towards Mr. shailesh Sharma and Ms. Sangeeta  jain at motilal oswal securities ltd. for their immense help and valuable guidance in conducting this summer industrial project from its conception to its completion. I am obliged to N.R.Institute of Business Management. The institute has given us an opportunity to get practical knowledge in the field of management and also for helping us to undergo this inspiring project. The learning during this project has been a great experience. Most importantly I would like to thank Gurmeet sir for supporting in the preparation of project and providing the guidance during the summer training. Finally, I would like to thank all those who directly and indirectly contributed to this project. This project was an excellent opportunity for me to relate my classroom course to the real business. Last, but not the least I would like to thank all the employees of motilal oswal securities ltd, Who had directly or indirectly helped us in preparing this project report and gave their valuable time to help us.

EXECUTIVE SUMMARY

Being Management students, we need to understand how i ndustry analysis is done. Therefore, we are required to identify the industry of our interest to conduct a thorough analysis of the selected Industry. This helps us as the students to develop a sense of awareness around us to keep the details of the industry. Such an analysis helps to understand the industry and is highly useful for career development

This project report is the testimonial of awareness of online trading in equity markets. It gives brief about stock, stock market, history of stock market and current scenario of Indian stock  market. The project report defines primary and secondary markets, the processes of  materialization and dematerialization. The report explains depositary system and explains the roles of depository exchange and their participants.

There is a questionnaire that justifies that even in the contemporary IT favorite times offline trading in Indian stock markets is more popular than online trading along with its reasons.

TABLE OF CONTENT CH.

TOPIC

NO

RESEARCH METHODOLOGY 1

INTRODUCTION TO THE CAPITAL MARKET 1.1 Capital Market 1.2 Capital market Segment – Primary And Secondary 1.3 The Stock Exchanges and its Functions 1.3.1 The BSE and Sensex 1.3.2 The NSE

2

CONCEPT OF SHARE TRADING 2.1 Introduction 2.2 Trading and settlement 2.3 Trading System 2.3.1 Off line Trading System 2.3.2 On line trading System

3

ONLINE TRADING 3.1 History 3.1.1 History of online share trading In Global Scenario 3.1.2 History of e trading in Indian context 3.2 Process Of Online Trading 3.3 Clearing Process 3.4 Settlement Cycle 3.5 Auction Process

4

INDUSTRY ANALYSIS 4.1 PESTEL Analysis of Indian Capital Market 4.2 SWOT Analysis of Stock Market

5

INTRODUCTION TO THE COMPANY 5.1 company profile 5.2 Products And Services 5.3 Motilal oswal online software

6

ANALYSIS OF SURVEY

7

FINDINGS AND RECOMMANDATIONS

8

CONCLUSIONS GLOSSARY BIBLIOGRAPHY

Annexure : Questionnaire

RESEARCH METHODOLOGY

1. Objective: 

The purpose of research is to discover answers to questions through the application of  scientific procedures.



To identify the broking services used by the respondents and their preferences towards it.



To study overall scenario of e-Broking..



To identify the factors influencing preference for online trading.



To identify the factors influencing offline trading.



To measure the satisfaction level in online and offline trading.

2. Research design: Descriptive research

3. Research methodology: DATA SOURCE: 

Primary

data

source

 – 

Questionnaire,

Observations

and

formal

Interaction

with customers. 

Secondary data source  – From magazines and Websites.

DATA ACQUISITION TOOL: 

Informal Tool:- Observations and Informal talks



Formal Tool:- Structured Schedule

DATA ANALYSIS: 

Various tables, graphs, pie charts and statistical tools used t o analyze the data.

DATA COLLECTION: Data collection is an integral part of the research. It calls for developing the most efficient research plan for gathering the needed information. Information which is generated the first time and is fresh is called “primary data” and it is generated by four main methods viz.

observation, experimentation, interviewing and estimation. The primary data can be collected

through telephone, interviews, group interviews, mail surveys and self administered questionnaire. Secondary data is that which has previously already being gathered and is available. It can be generated by internal sources (within the firm) or by external sources (like books, periodicals, published reports, data services, computer data bank etc.).

The study is carried out based on both primary and secondary data. Primary data is collected through collecting information from the employees and customer. The secondary data is collected by the use of internet, company browser and different reference books. SURVEY PROCESS: The researcher visited all departments where the work was being executed. Met the staff  members and asked questions which are short and specific and easily understandable. Steps in Market Research: 1. Planning and Research. a) Defining the problem b) Sampling the plan. c) Preparing questionnaire. d) Deciding the area of research

2. Field Work. a) Asking question to sample selected. b) Data collection.

3. Planning Report. a) Analyzing the data collected. b) Report preparation.

4. Sample: Sample Universe

Ahmedabad city

Type of Sampling

Non

Probability

Convenience

based

Sampling Sample size

300 respondents

Research Instrument

A

structured

formatted

questionnaire Literature review:

1. There is seminar on awareness of trading in india and recent rand in Indian stock industry y. Under  that they explain the current industry mechanism and factor which is dconsider while investing in  shremarket. By tamilnadu government. 2. Previous years project report on preference of online & offline trading.made by harshit shah& Rinav Shah

CHAPTER 1 INTRODUCTION TO THE CAPITALMARKET

1] INTRODUCTION TO THE CAPITALMARKET

1.1CAPITAL MARKET :The capital market is the market for securities, where companies and the government can raise long term funds. The capital market includes the stock market and the bond market. Financial regulators ensure that investors are protected against fraud. The capital markets consist of the primary market, where new issues are distributed to investors, and the secondary market, where existing securities are traded. Since projects require long term finance, but on the other hand, the investor may not like to relinquish control over their savings for a long time. A liquid stock market ensures a quick exit without incurring heavy losses or costs. Thus development of efficient market system is necessary for creating conductive climate for investment and economic growth. The primary function of the system is to provide a link between savings and investment for the creation of new wealth and to permit portfolio adjustment in the composition of the existing wealth. The progress of savings, finance and investment involves financial institutions, markets instruments, and services. Above all, supervision control and regulation are equally significant. Thus financial management is in integer part of the financial system. Capital market thus plays a vital role in channelizing the savings of individuals for Investment in the economic development of the country. As a result the investors are not constrained by their individual abilities, but by the abilities of the companies, which in turn enhance the savings and investments in the country, liquidity of capital market is an i mportant factor affecting growth.

1.2 CAPITAL MARKET SEGMENT  – PRIMARY AND SECONDARY Broadly, the Capital Market comprises of two segments  –  the new issue market which is commonly known as PRIMARY MARKET and the stock market where the issues shares are traded is known as SECONDARY MARKET.

PRIMARY MARKET Primary market is the market for new securities issues. In the primary market the security is purchased directly from the issuer. Government and Corporate can create and issue fresh Securities in exchange for funds. In Primary market the investors have the first opportunity to buy a newly issued security. After the first purchases, subsequent trading is said to occur in the secondary market. Chart showing the transaction in the primary market : Figure 1

The securities Act 1933 governs the issuance of securities. This act requires that a registration statement must be filled with the SEC (security exchange commission) by the issuer of a security. The registration statement includes the information regarding the nature of business, key features of security, the nature of risk associated with the security, and background of  management. Financial statement must be included in the registration statement and they must be certified by an independent public accountant

INITIAL PUBLIC OFFERING - IPO Corporation's first offering of stock to the public. An initial public offering (IPO) is the process through which a privately held company issues shares of stock to the public for the first time. Also known as "going public," an IPO transforms a small business from a privately owned and operated entity into one that is owned by public stockholders. An IPO is a significant stage in the growth of many small businesses, as it provides them with access to the public capital market and also increases their credibility and exposure. The primary advantage a small business stands to gain through an initial public stock offering is access to capital. Becoming a public entity involves significant changes for a small business, though, including a loss of flexibility and control for management. In many cases, however, an IPO may be the only means left of financing growth and expansion. The decision to go public is sometimes influenced by venture capitalists or founders who wish to cash in on their early investment. Staging an IPO is also a very time-consuming and expensive process. A small business interested in going public must apply to the Securities and Exchange Commission (SEC) for permission to sell stock to the public. The SEC registration process is quite complex and requires the company to disclose a variety of information to potential investors. The IPO process can take as little as six months or as long as two years, during which time management's attention is distracted away from day-to-day operations. Overall, going public is a complex decision that requires careful consideration and planning. Experts recommend that small business owners consider all the alternatives first (such as securing venture capital, forming a limited partnership or joint venture, or selling shares through private placement, self-underwriting, or a direct public offering), examine their current and future capital needs, and be aware of how an IPO will affect the availability of future financing.

SECONDARY MARKET It is the market where investors can buy and sell those shares at current prices as determined by other investors in the market. The key distinction between a primary market and secondary market is that in secondary market the issuer of the asset does not receive funds from the buyer rather the existing issues changes hands in the secondary market and funds flow from buyer of the asset to the seller. Function of secondary market

1. Secondary market provides to an issuer of securities, whether the issuer is a corporation or a governmental unit, regular information about the value of the security. The periodic trading of the asset reveals to the issuer the consensus price that, the asset commands in an open market. Thus, firm can discover what value investors attach to their stocks, and firm & non corporate issuers can observe the prices of their bonds and the implied interest rates investors expect & demand for them. Such information helps issuers assess how well they are using the funds acquired from earlier primary market activities, and it also indicates how receptive investors would be to new offering. 2. Investors in financial assets receive several benefits from a secondary market like dividends, bonus shares etc. Such a market obviously offers them liquidity for their assets as well as information about the assets fair or consensus values. 3. Secondary market brings together many interested parties and so can reduce the cost of searching for likely buyers and sellers of assets. 4. Moreover, by accommodating many traders. Secondary markets keep the cost of transactions low. By keeping the costs of both searching and transacting low, secondary market encourage investors to purchase financial assets.

Many Secondary markets are continuous markets, which mean that prices are determined continuously throughout the trading day as buyers and sellers submit orders. For examples, Given the order flow at 10 A.M., the market clearing price of a stock on some organized stock exchange may be Rs.70; and at 11 a.m. of the same trading da y, the market clearing price of the same stock, but with different order flows, may be Rs.70.75.Thus, in a continuous market, prices may vary with the patterns of orders reaching the market and not because of any change in the basic situation of supply and demand.

A contrasting market structure is the call market, in which orders are batched or grouped together for simultaneous execution at the same price. That is, at certain times in the trading day (or possibly more then once in a day), a market maker holds an auction for a stock. The auction may be oral or written. 1.3 BRIEF ABOUT THE STOCK EXCHANGES Stock Exchange is a market like any other centralized market where both buyers and sellers come and conduct their business of purchase and sale of shares & securities. In other words, it is a market place for shares and securities where trading takes place in a controlled and protected environment. MEANING OF STOCK EXCHANGE A stock exchange, share market or bourse is a corporation or mutual organization which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed  there. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets are driven by various factors which, as in all free markets, affect the price of stocks. There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that bonds are traded. Increasingly, stock exchanges are part of a global market for securities.

FUNCTIONS OF STOCK EXCHANGE Stock exchange is established into the main purpose of providing a market place for the members to deal in securities under well laid down regulations and to protect the interest of the investors. The main functions of stock exchange are; 1. It brings the companies and investors together so that the investors can put risk capital into companies and thus, companies can use the capital. 2. It provides an orderly regulated market for securities. 3. It provides continuous, ready and open market for selling and buying securities. 4. It

promotes savings and investment in the economy by attracting funds from the investors.

5. It facilitates takeover by means of acquiring majority of shares traded on t he stock market. 6. It acts as a clearing house of business information. 7. It motivates the managers of well reputed companies, to retain their shares in „A‟ group, to improve performance. 8. It

induces the managers to improve performance for converting non-specified shares into

specified shares in the exchange. 9. It enables the investors to evaluate the net worth of their holdings. 10. It also allows the companies to float their shares in the market.

1.3.1THE BOMBAY STOCK EXCHANGE (BSE) The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal Street, Mumbai, India. Bombay Stock Exchange was established in 1875. There are around 3,500 Indian companies listed with the stock exchange, and has a significant trading volume. As of April 2010, the market capitalization of the BSE was about Rs. 62.4L Cr. The BSE SENSEX (SENSitive indEX), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of tr ansactions volume. An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1. This banyan tree still stands in the Horniman Circle Park, Mumbai. In 1875, Brokers organized an association known as the Native share Brokers Association, and the country‟s first stock exchange the Bombay Stock Exchange (BSE), set up in Mumbai with

318 members. The membership fee gradually increased from Re. 1 in 1887 to Rs. 1000 in 1896 and Rs. 48,000 in 1920. In 1986, The BSE came out with 30-share Sensitivity Index (a.k.a. the Sensex) that subsequently became the „barometer‟ of the Indian stock market which is updated every two

minutes. In 1995, BSE has launched an electronic (e-Trading) system named BOLT, the BSE Online Trading system. In 2005, the status of the exchange changed from an Association of Persons (AOP) to a fullfledged corporation under the BSE (Corporatization and Demutualization) Scheme, 2005 (and its name was changed to The Bombay Stock Exchange Limited).

HOW BSE WORKS? The scripts traded on BSE have been classified into the following; A - Large capitalization, profitable, reliable, high-liquid companies B1 - Mid-capitalization, reliable, high-liquid companies B2 - Mid- capitalization, moderate liquid companies T - Trade to trade companies (compulsory delivery of trade within a day), low liquid companies S - Not reliable, low liquid companies Z - Blacklist companies Jobbers play an important role on the BSE. A jobber or a broker who trades on his own account and hence offers a two-way quote or a bid-ask quote. The bid price reflects the price at which the jobber is willing to buy and the ask price represents the price at which the jobber is willing to sell. Investors have to transact via jobber/ broker. The jobber / broker feed his buy/sell quotes in his terminal, which is linked to the main server at the BSE. Since both jobbers and brokers feed their orders, the NSE has adopted a „quote-driven system and an order driven‟ system.

BSE SENSEX The BSE SENSEX (also known as the  BSE 30) is a value-weighted index composed of 30 scripts. The base year of SENSEX is 1978-79 and the base value is 100. SENSEX is not only scientifically designed but also globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The set of companies which make up the index has been changed only a few times in the last 20 years. These companies account for around one-fifth of the market capitalization of the BSE. The index is widely reported in both domestic and international market through print as well as electronic media.

The Index was initially calculated based on the “Full Market Capitalization” methodology but was shifted to the Free float methodology with effect from September 1, 2003. The “Free Float Market Capitalization” methodology of index construction is regarded as an industry best practice

globally. Due to its wide acceptance amongst the Indian investors, SENSEX is regarded to be the pulse of the Indian stock market. 1.3.2NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE) National Stock Exchange (NSE), established in the mid 1990s as a demutualised electronic exchange by leading Indian financial institutions, offers trading, clearing and settlement services in a range of products covering equity, debt and equity derivatives. It is India's largest exchange and ranks third globally by number of trades in the equities market. NSE provides a modern, fully automated screen-based trading system, named NEAT (National Exchange Automated Trading system) with nearly 40,000 trading terminals giving it extensive reach. Its flagship index, the NIFTY 50, is used extensively by investors in India and around the world to take exposure to the Indian equities market. In the fast growing Indian financial market, there are 23 stock exchanges trading securities. The National Stock Exchange of India (NSE) is the largest and most advanced exchange with 1016 companies listed and 726 trading members. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. The National Stock Exchange of India Ltd. provides its clients with a single, fully electronic trading platform that is operated through a VSAT network. Unlike most world exchanges, the NSE uses the satellite communication system that connects traders from 345 Indian cities. The advanced technologies enable up to 6 million trades to be operated daily on the NSE trading platform. In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as 'Best IT Usage Award' by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999).

HOW NSE WORKS? The NSE has opted for an order-driven system. When an order is placed by a trading member, an order confirmation slip is generated. When a trade takes place, a tradi ng confirmation slip is printed at the trading member‟s workstation. It gives details like quantity, price, code number of counterparty, and so on. The identity of the trading member is not revealed to other when he places an order or when his pending orders are displayed. Hence, large orders can be placed on the NSE. On the eighth day of trading, each member gets a statement showing his net position, the amount which he has to transfer to the clearing bank, and the security he has to deliver to the clearing house. Members are required to deliver securities and cash by the thirteenth and fourteenth day respectively. The fifteenth day is the payout day. All trades on NSE are guaranteed by the National Securities Clearing Corporation (NSCC). This means that when A buys from B, NSCC becomes the counterparty to both the legs of the transaction. In effect, NSCC becomes the seller to a and the buyer from B. This eliminates counterparty risk.

CHAPTER 2 CONCEPT OF SHARE TRADING

CONCEPT OF SHARE TRADING

2.1 INTRODUCTION The concept of share broking emerged after the establishment of the joint stock companies. The ownership of the companies was divided into small parts and that every part was called share. So, the term “Share” denominates some part in the ownership of the company. The shares are

freely transferable subject to the some certain restrictions. When the need was felt to sell the shares by the owner of the shares, it was difficult to find out the buyers of the shares who want to buy the shares at the price the seller want to sell. At that time a need was felt to bring the buyers and sellers on a common platform. To solve this problem, a group of persons came into picture, which used to bring the buyers and sellers together for the trade of the shares. These persons are called the share Brokers who find the persons who wish to buy or sell their securities. The whole process of finding the buyers and sellers of the securities by the brokers is called the Share Broking. The origination of the Indian securities market may be traced back to 1975, when 22 enterprise brokers under a Banyan tree established the Bombay Stock Exchange (BSE). Over the last 130 years, the Indian securities market has evolved continuously to become one of the most dynamic, modern international standards both in terms of structure and in terms of operating efficiency. 2.2 TRADING AND SETTLEMENT India‟s stock exchanges are fully computerised order driven or order-cum-quote driven

systems. The country has made rapid strides towards a dematerialised trading environment on the basis of a competing depositories model. Investors have the choice of holding their stocks in physical or dematerialised form, but trading in the exchanges is in mandatory dematerialised mode in most important stocks. As of October 2000, about 98per cent of the trading in the stock  exchanges is in dematerialised mode. India has put in place a regulatory regime for internet trading of stocks. A large number of  online brokers have started operations. More brokers are expected to follow when the exchanges put in place an ASP (Application Service Provider) model for online trading software. However, currently, the level of penetration of online trading is extremely small.

The stock exchanges currently run two parallel settlement systems. Practically all the trading takes place in the account period settlement system in which all trades during a weekly account period are netted off and the net obligations are settled five business days after the end of the period. The other unpopular system is that of rolling settlements where trades of each day are settled on a T+5 basis. SEBI is currently working on mandatorily shifting all stocks in a phased manner to the rolling settlement system. Further improvements in the settlement system to T+3 or beyond would have to wait for improvements in the payment system. However, account period settlement does not give rise to significant systemic risks in India because of stringent end of day and intra-day margining systems. Put simply, the weekly settlement is regarded as akin to a one-week futures contract, and the systemic risk is taken care of by using futures style margining. The exchange imposes daily mark to market and initial margins on the brokers to eliminate settlement risk. Exchanges also have clearing houses to guarantee settlements on the exchange. As a result, there have been no settlement failures in the principal stock exchanges during the last five years.

TABLE 3 SETTLEMENT CYCLE SCHEDULE SR. NO.

DAY TRADE

1

T

2

T+2

PAY IN BY 10.30 am.

3

T+2

PAY – OUT BY 2 pm.

T+3

Auction of shortage in deliveries Auction pay-in by 10.30 (1 am/ pay Out by 2 pm.)

4 5

T+5

DESCRIPTION OF ACTIVITY

Trading Day

2.3 TRADING SYSTEM Off line trading System On line trading System

2.3.1 OFF LINE TRADING SYSTEM As the internet has taken over the physical trade, the same is the situation in trading in shares. Even the internet has not spared trading in shares and still the conventional system of offline trading continues in today‟s world.

Explanation of off-line trading system:In offline trading system, two parties i.e. an individual and a broker come into contact with each other and the transaction takes place. The investor goes to the broker for the purpose of  buying or selling of securities and for that he has to make a payment to settle the transaction. Here both the parties would be facing some risk. Brokers would be facing the risk of default. In a typical situation, a customer would be allowed to trade on margin, either by way of  transferring it to trade account with the broker or giving the broker authority to keep a hold on his bank or depository account till the time of settlement. If the margin goes below the specified limit, the website of the broker would give warning to the investor to replenish the same. Brokers can either ask for blanket permission/power of  attorney from the customer to replenish the same or take risk on that, in which case they may also square off the contract. 3 WAYS OF SETTLEMENT ; 1. They would require full funding before the pay in day. 2. They may debit the customer's account account with the margin margin money and keep hold on balance balance amount. On pay-in day, the balance amount will be transferred to broker's trade. 3. The broker would debit only the margin amount and would wail to the customer to pay on the pay-in day. As a matter of prudence, the broker would have checked the balance in the customer's account, but the balance may go down between trade day and the pay-in day. d ay. Here, brokers would have to decide the extent of risk if at all they are ready to take. In periods of volatility, especially when markets are failing, decision-making of the broker as to the extent of risk he is willing to take would be very important.

Customers would face the risk of leakage of personal information. ADVANTAGES OF OFFLINE TRADING SYSTEM :

Low Brokerage In case of offline trading, brokerage charged by the broker is quite low because of some personal relations, low cost of installation as compared to online trading.



Less Margin Generally, company charges 25% margin while the brokers charge nearly 10%margin from the investors in case of trading in equity. Sometimes broker charges negligible amount and he allows trading up to his limit. This shifts the investors from trading online to the trading with the brokers. Foe example: Local Brokers like Motilal Oswal, Ratnakar, Pravin Ratilal etc. allow trading in shares with less margin and low brokerage.



Flexibility in credit period Local Brokers allow their customers to trade in shares with longer credit periods which facilitate the payments for the investors. Whereas in Online trading a customer is required to make the payment in less than 2 days which is not the case in offline trading. The conventional system also allows making delay in settlement of payment if the relation with the broker is good.



Customized Advice Normally, investors would like to take to the broker before taking an investment decision. Internet trading would lack this personal touch. As far as customization of data using data mining is concerned, that would not attract customers looking for something different. Some of the brokers are of the view that they would have to provide advisory services to the customers. But, with increased volumes they will have to balance their preferences and needs of the customers. DEMERITS OF OFFLINE TRADING SYSTEM:-



Problems in getting in touch with the Broker



Problem of Attention from the Broker due to load



Reliance on the Broker's information



Customer has to believe what the broker says



Broker might not give the best price



Reconciliation of accounts and cash settlements



Paperwork 



Geographical Restriction

1.3.2ONLINE – TRADING :- A NEW DIMENSION OF TRADING Online-trading is the mechanism of buying/selling securities via the Internet. Online-trading is considered as a logical extension of e-commerce.

EXPLANATION OF ON-LINE TRADING SYSTEM:To put it simply, e-commerce is buying and selling through electronic medium. There could be not be a better place than the stock market, where tremendous volumes are traded, to exploit the opportunities of e-commerce. But, there are certain inherent characteristics of this market, which make it more vulnerable to risks associated with e-commerce. The market requires knowledge, information, ability to analyze and quick decision-making. This requires utmost care while trading on the net. A single click can make or destroy investor's wealth. Online-trading is a service offered on the Internet for purchase and sale of shares. In the real world, person place orders on personal stockbroker verbally (personally or telephonically). In Online Trading, a customer can access a stockbroker's website through his internet-enabled PC and place orders through the broker's internet-based order routing and trading engine. These orders are routed to the Stock Exchange without manual intervention and executed thereon. The order routing to the exchange will happen in a matter of seconds. The order execution once it reaches the exchange system is similar to that of an offline transaction.

BENEFITS OF ONLINE SHARE TRADING:

Seamless Trading E-broking integrates Bank, Demat account and Brokerage account. Transfer of money and shares from and to Bank account and Demat account is done automatically.



No Geographical Restriction Customers have access to site from anywhere in world. So even if customer is out of station, customer can take the advantage of market condition.



No Time Restriction Customer can trade not only during market hours but also when market is closed. He is required to give limit as to at what price he wants to buy or sell the shares. When market will open, the shares will be purchased or sold automatically at that particular price or best favorable price.



Online Brokers Make Investing Cheaper By charging drastically lowered commissions; online brokers offer cheaper access to financial markets, consequently encouraging more investing, as is evident by the increasing number of daytraders. The latter are individuals who have tried to make a career out of buying and selling stocks very quickly, often making and closing dozens of trades in a single day.



The Online Investor Is Self-Reliant Because online trading greatly diminishes the role of brokers. Investors have more freedom when making investment decisions and come to rely on themselves when developing strategies. The online investor is responsible for researching, making decisions, entering an order and using a computer. All this makes online investors the masters of their domain and leaves them with no one to blame. Thus, online trading promotes self-empowerment.



Offers Greater Transparency Online trading gives greater transparency to the investors by providing them an audit trail. This involves a complete integrated electronic chain starting from order placement, to clearing and settlement and finally ending with a credit to the depository account of the investor. Each of  the above mentioned stages are subject to inspection, thus bringing in transparency into the system. Greater transparency helps in reducing the systematic risk for the investor. This is possible as the market related information affecting the stocks gets communicated to the investor on a regular basis. Due to this increased exposure, the investor can take necessary steps, which would reduce his overall market risk.



Enables Hassle Free Trading Online trading integrates the bank, the brokerage firm and the demat accounts which leads to easy and paperless trading for the client.



Quick Trading The investor will be able to execute the entire trading transaction, right from logging on to the broker's site, to the execution and settlement of his bank account, in a very short period of time.



Provides A Level Playing Field Trading on the net, gives even the smallest retail investor access to information that earlier was available only to the big traders. This provides a level playing field for all investors in the securities market.



Reduces The Settlement Risk  This method of trading reduces the settlement risk for the investor, as i n this case no short sale is possible i.e. the seller will not be able to sell the securities unless he has actual possession of  them. In the case of a demat account (which is required for an online transaction), when a seller wants to sell the securities, his demat account is checked by the Depository Participant before executing the sale transaction. This reduces the settlement risk for the buyer, who is assured of the delivery of the securities.

DEMERITS IN ONLINE SHARE TRADING:

Lack Of Speed

If customers in large number access the site at the same time, server gets overloaded, so it results into delay in process. 

Security Aspect

There may be chances of hacking of password if customer is not alert. This may cause a major loss to the investor. 

Lack Of Flexibility

If the customer is not alert about his position on last trading day and if he is not able to square off  his position, he has to take delivery compulsory or if he doesn't have enough liquidity, the site will automatically square off his position. This action may or may not be in benefit of customer. Whereas in conventional broking, broker will inform the customer time to time or will take the decision himself in favor of the customer.



Network Crash

There will be problems and delays due to a large influx of traffic and rapid online trading criteria  Black Monday’. as it happened on 17 th May, 2004 which is referred to as ‘  

Computer illiteracy

Literacy of Computers is mandatory for traders using this online trading service. So for those who are computer illiterate, using websites serves as a handicap for them.

CHAPTER 3 ONLINE TRADING

ONLINE TRADING

3.1HISTORY

3.1.1 HISTORY OF ONLINE SHARE TRADING IN GLOBAL SCENARIO The history of e-trading began in 1983, when a doctor in Michigan placed the first online trade using E*TRADE technology. What began with a single click over 16 years ago has now taken the world by storm.. This led him to wonder why, as an individual investor, he had to pay a broker hundreds of dollars for stock transactions. Today his dream has become a reality. E-trading has become a way of investing in the developed world and is soon catching on in developing countries too. Since that time, online trading has increased dramatically - according to an unprecedented efficiency and control. 1.1.2 HISTORY OF E TRADING IN INDIAN CONTEXT On  Jan 31st  2000, the Securities Exchange Board of India (SEBI) formally notified all the stock exchanges, giving them a green signal for Net/Online trading. The various players of the securities market, which includes NSE, BSE, other regional stock exchanges and the brokers, had been waiting long for the go-ahead sign. Trading via the net is expected to generate greater volumes than ever before and this has attracted a large number of players. One day after SEBI announced its regulations for net trading, Kerala based ‘Geojit Securities’  took the lead and started online trading in Mumbai. The Kerala State Industrial Development Corporation (KSIDC) decided to join Geojit Securities in 1994. It has a 24% stake in the equity, the balance belonging to Geojit Securities itself. This is the only venture in India where a state owned development institution is participating in the equity of a stock broking company. The first net transaction was a trade for 100 shares of Reliance executed by DR Metha, Chairman, and SEBI for the Chairman of Geojit Securities. Today there are many other big brokerage firms like Motilal Oswal, Kotak 

Securities, SSKI and ICICI Direct running successfully.

WHY ONLINE TRADING ENTERED LATE IN INDIA?

The Indian exchanges and brokering houses have been very sl ow in moving their transactions online and the major reason has been the lot government regulations. The initial delay was due to laying down the specifications for creating Closed User Groups (CUGs). This issue was resolved between the Department of Telecommunications (DoT) and the Finance Ministry around 1998 and after that soon came the online trading portals like Anagram, investsmart, ICICIDirect.com, motilaloswal.com, sharekhan.com etc. Connectivity related issue was perhaps the most important technological factor.RBI made regulation that it is mandatory for company to store at least 7 year financial and transactional data.

3.2 PROCESS OF ONLINE-TRADING: Sitting in ones own home or office or even from personal car, as long as person can access the net he can trade on the market. There are three basic things needed for online-trading: 

A bank account,



A D-Mat account and



A brokerage account.

The steps in online-trading replicate the real life situation and are fairly simple to follow. Once these three accounts are opened, the money and shares are transferred to investor‟s bank and

Demat account automatically, electronically and without any paper work. The first step is of course to open an account. One can open multiple accounts with himself or herself as the first name in the account. Then it is necessary to determine the type of account that person want and how person want to pay for the trades person make. Joint accounts are allowed but for that person will need to have certain information about those people. Accounts can be Individual, Joint, Sole Proprietorship, Corporate, or Partnership etc. The form filling requires simple personal

details

like full

legal name, Citizenship

status, Residency status, employer's name and address, personal passport\PAN number, Date of  birth etc.' One can download the forms or request for them by post or even request for a

representative of the firm to come over to help person with the form. Post-submitting, person are allotted a USERID and PASSWORD while giving details for registration. Then an Account reference Number is generated and displayed to person. These three things are unique to an individual and ensure security of transactions. The acceptance of the application is communicated by email. Once person has got personal USER ID and PASSWORD and person‟s account has been set

up, he can access the website and login using the same. The second step is then to Fund Personal Account. In order to start trading online it is important that person deposit money in personal bank account before placing a buy order. In order to place a sell order person must have shares in personal DEMAT Account. Person can sell his shares anytime as long as shares are there in his DEMAT Account. In order to place a buy order person need to fund person account. Person can do this by depositing money in his bank account or else person can sell some shares existing in his Demat account and use the proceeds of sale to fund his purchase transaction. The amount of money required before placing a buy order would depend on the value of order and the type of e-invest account person have enrolled for - whether cash or margin. In a Margin account one can use a line of credit to buy marginable securities or for overdraft protection. Such an account is opened after taking into consideration Annual income, Net worth, description of person‟s investment objectives, as it involves lending a line of credit. In a cash

account, the amount of securities bought has to be backed by the cash in the account .



NSE has main computer which is connected through Very Small Aperture Terminal (VSAT) installed at its office.



Brokers have terminals installed at their premises which are connected through VSATs/leased lines/modems.



An investor informs a broker to place an order on his behalf. The broker enters the order through his PC, which runs under Windows NT and sends signal to the Satellite via VSAT/leased line/modem. The signal is directed to mainframe



The order confirmation message is immediately displayed on the PC of the broker.



This order matches with the existing passive order(s), otherwise it waits for the active orders to enter the system.



On order matching, a message is broadcast to the respective member.



All orders received on the system are sorted with the best priced order getting the first priority for matching i.e., the best buy orders match with the best s ell order. Similar priced



Orders are sorted on time priority basis, i.e. the one that came in early gets priority over the later one.



Orders are matched automatically by the computer keeping the system transparent, objective and fair.



Where an order does not find a match, it remains in the system and is displayed to the whole market, till a fresh order comes in or the earlier order is cancelled or modified.

3.3 CLEARING PROCESS : Meaning:Clearing is the process of determination of obligations, after whish the obligations are discharged by the settlement. Explanation:Clearing is necessary for two reasons. 1) what members are due to deliver 2)

what members are due to receive on the settlement date

NSCCL has two categories of clearing members: 1) Trading clearing members 2) Custodians Trading members can trade on a proprietary basis or trade for their clients. All proprietary trades become the member‟s obligation for settlement. Where trading members trade on behalf of 

their clients they could trade for normal clients or for clients who would be settling through their custodians.

Trades which are for settlement by Custodians are indicated with a Custodian Participant (CP) code and the same is subject to confirmation by the respective Custodian. The custodian is required to confirm settlement of these trades on T+1 day by the cut-off time 1.00 p.m. Nonconfirmation by custodian devolves the trade obligation on the member who had input the trade for the respective client. Settlement is a two way process which involves transfer of funds and securities on the settlement date.

3.4 SETTLEMENT CYCLE: After clearing, settlement of fund or securities is done. The important settlement types are as follows: 1. Normal segment 2. Trade for trade Surveillance 3. Retail Debt Market 4. Limited Physical market 5. Non cleared TT deals 6. Auction normal In 1 st, 2nd, 3rd, and 6 th types settlement done in dematerialized mode. In limited physical market settlement is done in physical form. Trades under settlement type Non cleared TT deals are s ettled either in physical or dematerialized mode. Dematerialized settlement:

NSCCL follows T+ 2 rolling system.



Trade executed on T day, and on the second day NSCCL cumulate all the obligation i.e. T +1 and finally trade are settled on 3 rd day i.e. T+ 2 day. On this day, funds and securities are transferred from one account to another.



In case of short deliveries, NSCCL conduct a auction on T+3 day and deliveries are made on T+4 day for the same.



All intervening holidays, bank holidays, Sundays and Saturdays are excluded to arrive at the settlement.

FIGURE 2 SETTLEMENT PROCESS :-

(1)Trade details from Exchange to NSCCL (real-time and end of day trade file). (2) NSCCL notifies the consummated trade details to CMs/custodians who affirm back. Based on the affirmation, NSCCL applies multilateral netting and determines obligations. (3) Download of obligation and pay-in advice of funds/securities. (4) Instructions to clearing banks to make funds available by pay-in time. (5) Instructions to depositories to make securities available by pay-in-time. (6) Pay-in of securities (NSCCL advises depository to debit pool account of  Custodians/CMs and credit its account and depository does it). (7) Pay-in of funds (NSCCL advises Clearing Banks to debit account of  Custodians/CMs and credit its account and clearing bank does it). (8) Pay-out of securities (NSCCL advises depository to credit pool account of  Custodians/CMs and debit its account and depository does it). (9) Pay-out of funds (NSCCL advises Clearing Banks to credit account of  Custodians/CMs and debit its account and clearing bank does it). (10) Depository informs custodians/CMs through DPs. (11) Clearing Banks inform custodians/CMs.

LIMITED PHYSICAL MARKET (SMALL WINDOW):Not exceeding 500 shares. SEBI has provided the way for small investors to trade in physical form. Features:



Trading in the name of individual or HUF is only constitute as a good delivery. In the street name, it is considered as bad delivery. Any trade which bears the last date on or after the introduction of security is known as bad delivery in LP market.



Maximum 500 shares are traded in LP market.



Shortages are closed out at actual traded price + 20%



Bad deliveries are closed out at actual traded price+ 10%



Non rectification/replacement for objection cases is closed out at official closing price+20%



Buyer must send the securities for transfer within the 3 months from the date of pay out.



These transactions are traded in a same manner as in normal market if transfer is done within the 3 months from the date of pay out. 3.5AUCTION PROCESS:-



Buying-in auction is conducted for the security shortages on t he day after the pay-out day through NSE/BSE trading system i.e. on T+3 day.



An Auction Tender Notice is issued to the Members informing them about the names of the securities short or not delivered, quantity slated for auction and the date and time of the auction session.



On NSE the auction is carried out on T+3 rd day and auction settlement happens on T+5th day. Auction is carried out in the following two cases :



Short deliveries



Bad deliveries Short Deliveries: If a member is not able to deliver securities on the day of pay-in then it is considered as Short delivery. It happens when a speculator who sells shares that he doesn‟t own

(short selling) fails to square up his transaction within a trading cycle.

Bad Delivery: Bad delivery exists only in the case of physical share transfers. It doesn‟t exist in de-mat form of securities. If a physical transfer deed is torn, mutilated, overwritten, defaced, or if  there are spelling mistakes in the name of the company or the transfer then it is considered as bad delivery. Clearing agency identifies members who are fully/partially short of securities delivery on securities pay-in day and debits their account by an amount calculated at the valuation price. (The valuation price is the closing price of the security on the preceding trading day of securities pay-in day.)

Auction is a separate trading mechanism which is different from the normal trading. Then the exchanges conduct auction to get the securities and delivers them to the buyers who have not received the securities. There is separate trading session wherein brokers are allowed to quote offer prices. Unlike normal trading session, where order matching is done continuously, the quotes are captured and placed in ascending order of price and matched at the end of the session. If the auction price is more than the valuation price the member who defaulted will have to pay differing amount.

Chapter: 4

INDUSTRY ANALYSIS

INDUSTRY ANALYSIS

PESTEL ANALYSIS OF INDIAN CAPITAL MARKET

POLITICAL: The capital market of India is very vulnerable. India has been politically instable in the past but it is a little politically stable now-a-days. The political instability of the country has a very strong impact on the capital market. The share market of India changes as the political changes took place. The BSE Index, SENSEX goes up and down with any kind of small and big political news, like, if there is news that a particular political party has withdrawn its support from the ruling party, and then the capital market will go down with a bang. Also when it was declared that Congress Party has got majority in the parliament election of 2009, there was a upper circuit in Sensex. The capital market of India is too weak and is based on speculations. The political stability of the country is very important for the stability and growth of capital market in India. The political imbalance or balance of the country is the major factor in deciding the capital market of India. The political factors include: 

employment laws



tax policy



trade restrictions and tariffs



political stability

ECONOMICAL: The economical measures taken by the government of India has a very strong relationship with the capital market. Whenever the annual budget is announced the capital market goes up and down with the economical policies of the government .If the policies are supportive to the companies then the capital market takes it positively and if there is any other policy that is not supportive and it is not welcomed then the capital market goes down. Like, in the case of  allocation of 3-G spectrum, those companies that got the license for 3-G, they witnessed sharp growth in their share values so the economic policies play a major part in the growth and decline of the capital market and again if there is relaxation on any kind of taxes on items of automobile

industry then the share of automobile sector goes up and virtually strengthen the capital market. The economical factors include: 

inflation rate



economic growth



exchange rates



interest rates

SOCIAL: India is a country of unity in diversity .India is socially rich but the capital market is not very attached with the social factors .Yes, there is some relation between the social factors with the capital market. If there is any big social factor then to some extent it affects the capital market but small social factors do n‟t impact at all. Like, there was opposition of reliance fresh in many cities and many stores were closed. The share prices of the reliance fresh went down but the impact was on and individual firm there was not much impact on t he capital market on a whole the social factors have not much of impact on the capital market in India. The social factors include: 

emphasis on safety



career attitudes



population growth rate



age distribution



health consciousness

TECHNOLOGICAL: The technological factors have not that much effect on the capital market. India is technological backward country. Same as social factors, technological factor can have an effect on an individual form but it cannot have a big impact on a whole of capital market. The Bajaj got a patent on its dts-i technology, and launched it in its new bike but it does not effect on capital market. The technological change in India is always on a lower basis and it doesn‟t effect on

country as a whole. The technological factors include: 

R&D activity



technology incentives



rate of technological change



automation

ENVIORNMENTAL FACTORS: Initially the environmental factors don‟t play a vital role in the capital market. But now, the

time has changed and the people are more eco-friendly. This is really bothering them that if any firm or industry is environment friendly or not. An increasing number of people, investors, and corporate executives are paying importance to these facts, the capital markets still see the environment as a liability. They believe that it is of no use for their strategy. The environmental performance is even under-valued by the markets. LEGAL FACTORS : Legal factors play an important role in the development and sustain the capital market. Legal issues relating to any industry or firm decides the fate of the capital market. If the govt. of India or the parliament introduces a new law that can affect the running of the industry then the industry will be demotivated and this demonization will lead to the demonization of the investors and will result in the fall of capital market. Like after the Hardhat Mehta scam, new rules and regulations were introduced like PAN card was made necessary for trading, if any investor was investing too much money in a small firm, then the investors were questioned,etc. These regulations were meant to maintain transparency in the capital market, but at that time, investment was discouraged. Legal factors are necessary for the improvement and stability of the capital market.

SWOT ANALYSIS OF BROKING INDUSTRY STRENGTHS: 

Good Image of India in terms of investment



Indian Economy at a growing stage



High Political Stability



Liberalization in norms for Investment



World Wide Presence of Indian Companies



Sensex Growth at 45% in last 8 years



Strong Hold of SEBI to prevent violation of laws

WEAKNESS: 

Illiquidity outside the scrips in futures and options may lead to large scale price manipulation in

illiquid

scrips

and

lower

price

realisations

in

such

counters.

Poor Indian Accounting disclosures may lead to large scale manipulation of figures by publicly traded companies. 

Heavy dependence up on the Foreign Investment.



Inefficiency

of

SEBI

to

prevent

cases

like

SATYAM,

Ketan

Parekh.

OPPORTUNITIES: 

A large domestic market that is still into traditional fixed income and other government savings is all buy bound to enter the market sooner if not later.



More Foreign Investment in to Public Sector through norms Liberalization.



By proper Management it can be a very good way to channelize nation‟s savings.

THREATS: 

Global Economic slowdown



Currency mismangement, High global commoditiy prices,



Over valuation in Index scrips,



Non liquidity in other financial markets,



Change in governement focus on controlling inflation,



Dominance of FII

CHAPTER 5 INTRODUCTION COMPANY

TO

THE

INTRODUCTION TO THE COMPANY

COMPANY‟S PROFILE

Name

:

MOTILAL OSWAL SECURITIES LTD.

Registered office

:

3rd floor, Hoechst house NAriman point Mumbai-400 021 Board : + 91 22 39825500

Fax : + 91 22 22823499 Ahmedabad branch

:

6-7-8-9, city pride complex, Ground flr,nr nalanda hotel Mithakali 6th road Ahmedabad 380006 Tel :

07930078107/06/20

Promoter

:

Mr. motilal oswal

Accounting year

:

1 ST April to 31st March

Abuot motilal oswal securities ltd.

Motilal oswal securities ltd. was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of  cutting-edge technology has enabled us to blossom i nto an over 1600 member team.

Motilal Oswal Financial Services Ltd.(MOFSL) is a well diversified, financial services company focused on wealth creation for all its customers, such as institutional and corporate clients, HNI and retail customers. their services and product offerings include equity broking, commodity broking and venture capital management. MOFSL is the holding of Motilal Oswal Securities Ltd.(MOSL), Motilal Oswal Commodities Brokers Pvt Ltd.(MOCBPL), Motilal Oswal Investment Advisors Pvt Ltd. (MOIAPL), and Motilal Oswal Venture Capital Advisors Pvt Ltd. (MOVCPL). Mr. Motilal oswal and Mr. Raamdev agrawal laid the foundation for MOFSL and initially conducted business as a sub broking firm. Thus, began the expedition of building a professional organization with strong value system, to provide investment advice to investors. Today, Motilal Oswal Financial Services Ltd

Market & networks: Motilal oswal has membership in all the leading stock and commodities exchanges in the country. The firm is a member in NSE, BSE, NCDEX and MCX. It is a depository participant with NSDL&CDSL . It Is a well-established brand among retail and individual investors in India, with a network spread over 611 cities and towns comprising 1,644 Business and 709,041 registered customers.

Focus on research: Research is the solid foundation on which Motilal Oswal Securities advice is based. Almost 10% of revenue is invested on equity research and MOSL hire and train the best resources to become advisors. At present MOSL have a expert team of Research Analysts researching 25+ sectors and commodities. From a fundamental, technical and derivatives research perspective; Motilal Oswal's research reports have received wide coverage in the media (over a 1000 mentions last year). Their consistent efforts towards quality equity research has reflected in an increase in the ratings and rankings across various categories in the AsiaMoney Brokers Poll over the years.

Our unique Wealth Creation Study, authored by Mr. Raamdeo Agrawal, Jt. Managing Director, is now in its 15th year. Investors keenly await this annual study for the wealth of information it has on the companies that created wealth during the preceding five years. Core purpous &value:

Milestones Motilal Oswal AMC organized the first edition of Motilal Oswal MOSt Shares ETF Conclave 2011 at NSE, Mumbai on 15th June, 2011. The event was telecast LIVE via webcast and the panel discussion was telecast LIVE by CNBC TV18. Ø Mr. Raamdeo Agrawal was honoured with an award for Special Contribution to Indian Capital Market by Zee Business at the „INDIA‟S BEST MARKET ANALYST AWARDS 2011 on April

29, 2011. Ø Our Analysts Mr. Dhirendra Tiwari & Mr. Harshad Borawake won the Best Market Analyst Award for the categories Equity-Sectoral-Infrastructure and Equity – Sectoral – Energy respectively at

„INDIA‟S BEST MARKET ANALYST AWARDS 20 11 organised by Zee Business on April 29,

2011. Ø Motilal Oswal Asset Management Company becomes India‟s 1st AMC to ring The NASDAQ Stock Market Opening Bell on 30 March 2011, to celebrate the launch of Motilal Oswal MOSt Shares NASDAQ 100 - India‟s First US Equities Based ETF. Ø Motilal Oswal MOSt Shares NASDAQ 100 - India‟s First US Equities Based ETF gets listed on NSE and BSE on 31st March, 2011 Ø Motilal Oswal Securities won 4 awards at the ET Now Starmine Analyst Awards 2010-2011. This puts MOSL amongst the Top 3 Award winning Brokers at the ET NOW Starmine Analyst Awards 2010-2011 Ø Our analyst Mr. Alpesh Mehta was awarded Top Earnings Estimator  –  Overall, at the ET NOW Starmine Analyst Awards 2010. He also received an award for Top Earnings Estimator for Financial Sector along with our analysts Mr. Harshad Borawake being awarded Top Stock Picker for Energy Sector and Mr. Siddharth Bothra being awarded Top Stock Picker for Real Estate Sector. Ø Motilal Oswal Mutual Fund launches MOSt Shares NASDAQ 100 - India‟s first US Equities based ETF tracking the NASDAQ-100 Index® Ø Motilal Oswal Mutual Fund‟s MOSt Shares M50 bagged the „Most Innovative Fund of the Year‟ Award at CNBC TV18-CRISIL Mutual Fund Award 2011 held in Mumbai. Ø Motilal Oswal MOSt Shares Midcap 100 ETF  –  India‟s First Midcap Index ETF; based on CNX Midcap Index was listed on NSE on February 4, 2011 Ø Motilal Oswal Asset Management launches MOSt Shares M100 ETF - India‟s First Midcap ETF; based on CNX Midcap Index

Product & services:

1. Equities: Motilal Oswal Securities Limited provides Customized Equity Advisory Group to clients based on their profile. Equity Research is an inherent strength of MOSt. Converting that research to advice is the main function of Equity Advisory. Investors are presented with well researched opportunities in companies which will grow in both market perceived value and growth. Along side, the trading fraternity is catered to with ideas induced by Technical analysis and news flow analysis. The investment ideas identified by the research team are presented and communicated with conviction to our clients by our advisory team. Our advisory team has highly trained equity professionals, who act as your Equity Advisor. MOSt Equity Advisor proactively helps you take informed equity investment decisions and build a healthy portfolio giving the best fit to your investment and trading needs.

2. Derivatives: Futures & options are derivatives, which use equity as their underlying. Hence our Equity Advisory Group (EAG), will also act as your advisors for F&O & help you take informed decisions while trading in these derivative instruments. This product is advisable only for those who have a high risk appetite. Apart from risk appetite the other major requirement is discipline on the part of the trader. Our EAG will help you with the trading calls for F&O, but every good trader understands that trading involves probability and hence the discipline of stop loss is crucial for capital protection. As the underlying is equities is pays to have the same advisor who is capable of dealing in both cash as well as derivatives. Also you will not have to deal with multiple people for equities as a product.Since the advisory only deals with equity as an asset class, his understanding of the derivatives and nuances of the market will be better than someone who deals with multiple asset classes.The most important of all, the EAG gets inputs from the technical and derivatives research group, whose sole objective is to identify trading opportunities with a favorable risk-reward ratio.The research products of the derivative and Technical desk will be available for you as a client. 3. Online trading:   

Easy to use interface for first time investors Trade from any internet connected PC Multiple scrips with refresh option (static)

Screenshot is for illustrative purpose only

Feature-rich Platform    

Screenshot is for illustrative purpose only

Single window order placement with instant confirmation Trade from any internet connected PC Tick-by-Tick market watch (BSE/NSE/F&O) Shortcut keys for faster access

Desktop Features of Desktop Trading Application

  

Single window order placement with instant confirmation Tick-by-Tick market watch (BSE/NSE/F&O) Shortcut keys for faster access

Screenshot is for illustrative purpose only

Mobile Features of Mobile Trading

Live streaming quotes buy/sell from market watch  Directly  Modify/Cancel facility for pending orders   Access live advice from Motilal Oswal  Instant access to Top Gainers, Losers &  Traded  Value along with indices Market Depth of scrip selected  Synchronized position whether  order/trade done from Mobile/Web/Desktop/Call N Trade 

Screenshot is for illustrative purpose only

5. Depositary services: In the times of T+2 having a de-mat account linked to your trading account becomes really convenient. The non-trading clients can also avail of MODES. Today MODES is available at all business locations of Motilal Oswal. In terms of number of  accounts MODES is the second biggest Depository Participant in CDSL with over 150,000 accounts. The trust they have in Motilal Oswal is reflected by their cumulative holding in MODES worth over Rs. 3400 crores. Holder of a MODES account receives regular account reports and an efficient service at all times. Clients having holdings over Rs. 10 lakhs receive special SMS service. They get recommendations on their holdings based on Motilal Oswal Research rated the "Most Independent Research - Local Brokerage" by Asia Money Brokers Poll 2006.

6. Mutual funds: Mutual funds are becoming the most popular investment vehicles offering various kinds of  schemes with different investment objectives. Investments through Mutual funds are one of the safest, easiest and convenient ways of making successful investments. The investments are in congruence to the laid down investment objectives securing the goals & objectives of the unit holders.

At Motilal Oswal Securities Ltd, we understand the importance of financial goals of our privileged clients and provide you comprehensive solutions to all your financial needs. Through our tailor made portfolios, we serve your needs better and help you make informed investment decisions. Our dedicated Mutual fund desk gives you Solid advice backed services thus giving you the edge that you always wanted.

7. Investment banking: MOIAPL offers comprehensive Investment Banking solutions and transaction expertise covering private placement of equity, debt and convertible instruments covering international & domestic capital markets, mergers & acquisitions advisory and restructuring advisory & implementations.The team comprises of multi-disciplinary professionals with extensive collective

banking and corporate finance advisory experience. An in-depth understanding of different sectors within the Investment Banking team underpinned by the two decade old research strength of the group company, Motilal Oswal Securities Limited enables us to provide customized financial solutions to our clients across industries. We display a focused transaction-closure orientation which is facilitated by our crossproduct knowledge and the well entrenched relationships that we nurture at the highest levels within the investor community, market intermediaries and the corporate sector. We work in partnership with the management of our clients and commit our resources end-to-end throughout the transaction, ensuring timely execution with minimal disruption

8. IPOS: Book

Building

and

Fixed

Price

Issue

are

the

two

types

of Initial

Public

offerings (IPOs) through which a public company can raise money in the capital market.

In a book building public issue the bids are received at different price levels and the demand for the issue is built up over a period of time. Depending upon the bids received at different price levels the issue price is ascertained. In a fixed price issue the issue price is pre ascertained by the issuer.

MOtilal oswal online software: Introducing: Lite

• Knowledge & Transparency replaces Fear   – 24x7 access to Trading Platform* and Reports  – Fast and Secure access to Equities, Derivatives, IPOs and Mutual Funds  – Real Time Stock Advice and Market Watch with Live Rates  – Seamless Funds‟ Transfer from 39+ banks

Features: Best Buy: Ctrl+F1 What: Invoke Buy Order Form to get best price out of both exchanges Benefit: On selling from DP/ while buying for positional/investment purposes one

does not have to search which exchange is having the best price.

Fixed Buy: Ctrl+1/2/3 What: Invokes Buy order form with predefined quantity Benefit: For frequent traders in fixed quantity helps to save time in punching the

quantity.

Arbitrage: F7 What: Invokes Buy order form for arbitrage between exchanges Benefit: Single screen to carry out arbitrage. Also calculates if the arbitrage is

Profitable

Market Depth: Shift+F6 What: Gives the market depth of both exchanges in one screen

Benefit: Helps get a single view for comparison and buying from the market depth.

Gives ability to buy/sell using multiple items in market watch.

Market Movement: F4 What: : Open, High, Low, Close, Qty and Volume of a Scrip at specific intervals as

defined Benefit: Helps get a view of the movement of the scrip during the period to take a

decision.

Most Active: Alt+T+G+W What: Most active scrip in terms of quantity and value, in a single window Benefit: Give visibility identify most active stock movements to take decisions

Fund Transfer: Alt+F+R+T What: : Real time fund transfer from your bank account to your trading account Benefit: Bring in funds from any of 39+ banks online

Mini Admin: Ctrl+F8 What: : Additional margin limits to clients for placing trades via dealer Benefit: Now additional leverage for client built into the system

Chapter 6

ANALYSIS SURVEY

OF

ANALISIS OF QUESTIONERRIE: 1. From the following which you are invested?

criteria bank fd. post mf insurance others

no.of  respondants 187 126 33 194 39

percenage 62 42 11 65 13

Chart Title percenage

others

13

39 65

insurance mf 

no.of respondants

11

33 42

post

126 62

bank fd.

194

187

Out of 300 respondents 62% investing in bank fix deposit,and 65% investing in insurance which is maximum. So on the basis of t hat people more investin bank and insurance. People less invest I the mutual funds which is 11% nearlyfrom this servey. There are 126 people invest in post as a fixed deposit which indicate that people more like to invest in government institutions. 

 

2. Do you have investment in any t securities? Yes no

123 177

41 59

yes, 123 yes

no, 177

no



Out of 300 people only 123 investing in securities or s hare market means around 41% people are doing trade & almost 59% people do not interested or aware about trading.

3. IF no , in future would you like to invest in share market? YES NO

72 105

72 □

YES

□

NO

105





Out of 177 respondents 72 people like to invest in future in share market and 105 people do not like to invest in share market . It shows that large part of people do not like to invest in share market due to different reason.

4. What are the reasons for not trading in share market? Risky

112

lack of  knowledge Gamble finance back  up Other

87 38 42 26

26 Risky

42 112

lack of knowledge gamble

38

finance back up other 87



 

Form the 177 respondents I ask about the reason of not trading in share market and they say that due to risk factor from the market fluctuations they are not trading in share market. People are not trading due to lack of knowledge of the trading system. So there is awareness requirement about trading process for such people.

5. Tick the broking firm you know? Firm Mosl Sharekhan Angel Religare IIFL Other

NO.of  respondants 113 132 157 87 106 97

As chart shows that out of 300 respondents 157 know angel broking which is most there any other broking firms. Motilal oswal (MOSL) has market awareness about 38% which is not good si gn for the company in ahmedabad. There is no major monopoly in awareness of company‟s name in Ahmadabad . IF you are trading, 6. Where you have your demat account? 





mosl sharekhan angel religare IIFL other

23 19 32 18 21 12

19 15 26 15 17 10 mosl

21

12

23

sharekhan 19

18 32

angel religare IIFL other

 

Out of 300 people only 123 people have their account in different broking firm. Maximum share of that is angel broking where 26% have their accounts.



So there is direct relationship between awareness of firm and no of account holder in the firm for the trading.

7. From the following in which you are investing? Equity derivatives commodities Equity and derivatives All

56 24 12 18 13

60 50 40 30 20 10 0 equity



derivatives commodities Equity and derivatives

All

Out of 123 respondents majority are trading in equity which shows that people more prefer equity market for trading than the other .

8. In which of the following do you trade in stock market ? ( Multiple Ticks Allowed )

Intraday

69

Delivery

98

Future & Options

37

120 98

100 80

69

60

Series1 37

40 20 0 □





Intraday

□

Delivery

Future & Options

Out of 123 people trading in market 69 people prefer intraday and 98 people trading as delivery base and only 37 people trade in future & options. IT is due to more people in our sample for them share market is not the prime .so they used to invest as delivery basis.

9. Which mode do you use for trading?

online Offline

39 84

150 100

84

offline online

50 0 1





Out of 123 respondents only 39 person trading online and rest of 84 p erson doing offline trade It is seen that people prefer to offline trade due to lack of awareness of online trade or not able to operate it

10. IF offline,Do you know online trading? Yes No

32 52

60 40 20 0 yes no





Out of 84 respondents who are doing online trading trade only 32 know how to trade online and rest of other don‟t know or aware about online trading. People do not prefer to change their method of trading due to time constraint, risk  andnot having of devise for online trading.

11. Would you like to use online service for trading in future? YES

35

NO

49

□

YES

□

NO



Out of 84 people trading offline ,only 35 people like to use online platform and 49 people not agree touse online software.

12. IF NO, What are the factor which are responsible for not trading online mode?

Non availability of internet and/or P.C.

34

Uncomfortability with online system.

26

Fear of Input error by self. Accustomed to offline system since long time.

16

software charges.

29

Others

12 34

Non availability of  internet and/or P.C. □

35 29 30

26

Uncomfortability with online system. □

25

Fear of Input error by self. □

20

16 12

15 10

Accustomed to offline system since long time. □

□

software charges.

5 others 0 1





From the above we can see that 34 people do not use the online due to not availability of internet or computer. 16 people do not use due to accustomed to offline system since long ti me.

13. If Online,What are the factors that influence you to trade in online mode?

Access to stock prices and trade platformat owns place Verification and confirmation to real time data. Privacy.

31 28 16

Speed. Customization available on screen.

28

Software aids with technical analysis. Others :

24

21

14

35

Access to stock prices and trade platformat owns place □

30

Verification and confirmation to real time data. □

25

21

□

Privacy.

□

Speed.

20 15 Customization available on screen. □

10

Software aids with technical analysis. □

5

Others :

0 1

 

More than 80% people use online due to access to stock price and tr ade at owns place. Out of 39 people using online 28 finding speed is the influence and 21 finding customization is the influence for online trading.

14. Rate your comfort level regarding online trading:

Excellent

11

Good Fair Bad Poor

18 6 3 1

poor bad fair

Series1

good Excellent 0 

5

10

15

20

As per the above chart we analise that the person who are doing online trade hve high satisfaction and excellent comfort level as seen from the collected data that 29 person hve experience good or excellent comfort level from online trading.

15. In this stock market industry, how do you see the growth of online trading ?

Slow

15

Moderate

47

Tremendous

38

Cannot say

23

15

47

38

50



Slow

□

Moderate

□

Tremendous

□

Cannot say

23

1

0

□

100

150

Out of 123 people about 70% people says that growth of online trading is moderate and tremendous.

16. Overall satishfaction level of your broking firm? H.s. m.s. 29 s.f. d.s. h.d.s.

27 53 21 8 4

60 40

53 27 21

20

Series1 8

0

4 H.s.



m.s.

s.f.

Series1 d.s.

h.d.s.

Out of 123 people 57 moderate satisfy from their broking firm and by showing overall scenario of satisfaction level of persons from there broking firm relatively satisfactory.

17. What are your expectations from the broking firm? Research tips research reports online monety transfer IPO funding trade conformation branch training Other

103 68 27 13 74 63 36

120 100 80 60 40 20 0

Personal detail: 1. Occupation: no. of  occupation: respondents pecentage Business 134 45 profession 57 19 Employee 76 25 Student 24 8 Others 9 3

24 9 134

76

57

business

profession

employee

2. Income: Upto 2 lk 2 to 5 5 to 10 10 <

72 141 68 19

24 47 23 6

150 100 50 0 Upto 2 lk

3. AGE: Age