Analysis of Indian Stock Market and Comparison of Corporate Stock Brokers Final

PREFACE
Indian stock exchanges host the most number of listed companies after United States.
About 2500 companies are listed in the Bombay Stock Exchange and the National Stock
Exchange. Apart from foreign institutional investors, Indian stock market has some 30
million domestic investors.
The working of stock markets has started in India as early as 1875, when 318 persons
coming together to Native Share and Stock Brokers Association, with Re.1 for membership
free.
Closest to BSE is National Stock Exchange, also located at Bombay. Nifty is the market
index of NSE. Indian stock market has seen many ups and downs, but now is flying high,
crossing every previous record and zoom to even further heights. BSE-Sensex crossed the
four-figure mark of 1000 in 1990 and had a smooth bull ride till 1992, when the big-full of
Indian stock market, Harshad Mehta became a villain in the infamous Harshad Mehta scam
broke out. The sensex lost 570 points in no time and some eight to 12 million investors were
pushed to bankruptcy.
After that incidence, came the Securities and Exchanges Board of India. With the
enforcement of several regulations and strict guidelines, the confidence of investors was
somewhat regained. With the present technology and practices, it is next to impossible to
commit a fraud in Indian Stock market. So claims the SEBI.
Under the watchful eyes of SEBI, Indian Stock markets once again gained
momentum. The sensex crossed reached and crossed 6000 mark in 2000 and crossed the 7000
and 8000 marks in 2005. Foreign Institutional Investors are pumping in money into the
market.
The FIIs are confident of a sustainable momentum. The momentum in the stock
market can be associated with the growth in the fields of export, IT, ITES,
telecommunication, education, energy sector, agriculture etc. The reformist policies being
pursued by the government is also a factor for this growth.
Due to large scale outsourcing by American and European countries, a large number
of jobs also went to India, resulting in more affluent youth who are only happy to spend out
their money. This helped in the growth of telecommunication, FMCG and manufacturing
sectors. The steady growth of GDP is also a critical factor in the upward movement of Indian
stock market.
Analysis of Indian Stock Market and Comparison of Corporate Stock Brokers
Apart from FIIs, the non-resident Indians also invest hugely in he stock market. Diminishing
returns from bank deposits and the facilities of online trading made them turn to stock
markets and with the current bull-run many have made a good fortune from stock markets.
The stockbrokers also chip in on and open offices in foreign countries, aimed at him NRIs
there.
The initial public offers by Tata Consultancy Services, Maruti Udyog Limited, ONGC
etc. were big events in Indian stock market. Not only did they put a great show, but also took
the stock market to newer heights. TCS is a big weight in the stock market from the day it
was listed. Traditional heavy weights are Reliance, Tata, and Bharati etc. Now new entrants
like Biocon are also play significant roles in the market.
Growth directed at sky is visible everywhere. The biggest growth opportunity lies in
the stock market itself. The population of India is well above one billion. The number of
investors is just above 40 million. That is just 4% of the total population. The measures for a
10% growth are sought.
2 Dr. Gaur Hari Singhania Institute of Management and Research

INDUSTRY STUDY
BOMBAY STOCK EXCHANGE
Bombay Stock Exchange is the oldest stock exchange in Asia What is now popularly known
as the BSE was established as "The Native Share & Stock Brokers' Association" in 1875.
Over the past 135 years, BSE has facilitated the growth of the Indian corporate sector by
providing it with an efficient capital raising platform.
Today, BSE is the world's number 1 exchange in the world in terms of the number of listed
companies (over 4900). It is the world's 5th most active in terms of number of transactions
handled through its electronic trading system. And it is in the top ten of global exchanges in
terms of the market capitalization of its listed companies (as of December 31, 2009). The
companies listed on BSE command a total market capitalization of USD Trillion 1.28 as of
Feb, 2010.
BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000
certifications. It is also the first Exchange in the country and second in the world to receive
Information Security Management System Standard BS 7799-2-2002 certification for its BSE
On-Line trading System (BOLT). Presently, we are ISO 27001:2005 certified, which is a ISO
version of BS 7799 for Information Security.
The BSE Index, SENSEX, is India's first and most popular Stock Market benchmark index.
Exchange traded funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. Futures and
options on the index are also traded at BSE.
With its tradition of serving the community, BSE has been undertaking Corporate Social
Responsibility (CSR) initiatives with a focus on Education, Health and Environment. BSE
has been awarded by the World Council of Corporate Governance the Golden Peacock
Global CSR Award for its initiatives in Corporate Social Responsibility (CSR).
Vision
"Emerge as the premier Indian stock exchange by establishing global benchmarks"
Base Year- 1978-79

Base Index Value- 100
Date of launch- 1/1/1986
Method of calculation- Launched on full market capitalization method and effective
September 01, 2003, calculation method shifted to free-float market capitalization

NATIONAL STOCK EXCHANGE
The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges. It recommended promotion of a
National Stock Exchange by financial institutions (FIs) to provide access to investors from all
across the country on an equal footing. Based on the recommendations, NSE was promoted
by leading Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the
country.
On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956
in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment
in June 1994. The Capital Market (Equities) segment commenced operations in November
1994 and operations in Derivatives segment commenced in June 2000.
The following years witnessed rapid development of Indian capital market with introduction
of internet trading, Exchange traded funds (ETF), stock derivatives and the first volatility
index - IndiaVIX in April 2008, by NSE.
August 2008 saw introduction of Currency derivatives in India with the launch of Currency
Futures in USD INR by NSE. Interest Rate Futures was introduced for the first time in India
by NSE on 31st August 2009, exactly after one year of the launch of Currency Futures.
With this, now both the retail and institutional investors can participate in equities, equity
derivatives, currency and interest rate derivatives, giving them wide range of products to take
care of their evolving needs.

ORGANIZATION STRUCTURE
Introduction
Anagram Capital Ltd. (Anagram) is amongst the leading retail broking houses in India. It is
engaged in offering comprehensive personal finance solutions since 1994. The company is a
part of the of the Rs 20 bn Lalbhai Group. The group companies in the capital and
commodities market area include Anagram Capital Ltd and Anagram Comtrade Ltd.
Anagram offers a wide range of services for the discerning equity investor, in addition to
online account access and real time trading, Insurance Services, Wealth Management
Services, Mutual Fund and Advisory Services
The firm has its roots in Western India especially Gujarat where it is the biggest player. But it has
expanded considerably.
Anagram is positioned amongst the top retail broking houses in the country. An achievement
indeed for a company that's been providing comprehensive personal finance solutions since
1994. Anagram Capital Ltd. (Anagram), promoted by Edelweiss Group. Anagram Stock
broking Ltd. and Anagram Comtrade Ltd. are the other group companies in the capital market
area.
Anagram is a member of all leading stock and commodities exchange in India -National
Stock Exchange (NSE), Bombay Stock Exchange (BSE), National Commodities Exchange of
India Ltd. (NCDEX) and multi Commodities Exchange Market of India (MCX) and a
depository participant with NSDL. Our current offerings include trading in cash and
derivative segment through our branches and sub-brokers high-speed anywhere trading
through the net, Online Depository Services, Commodities trading, PMS, Currency Future
Trading, Distribution of Mutual Funds, IPO’s and other financial products.
DIVISIONS
We have a nationwide presence with 135 plus branches, 1300 plus Sub Brokers & Business
Associates, 3000 plus terminals and a professionalized team of 1200 plus employees spread
across 200 plus cities. Our well - qualified staff will always be ready to fulfil your Stock
Broking needs or solve your queries over the telephone, or at the branches themselves.

HIERARCHY

HDFC Securities Ltd Brics
PRODUCT OFFERINGS
Anagram has divided its product and service offering under three broad client
interface categories:-
“Retail Spectrum”, “Wealth Spectrum” and “Institutional Spectrum” as per following
details:-
Retail Spectrum Wealth Spectrum Institutional Spectrum
↓ ↓ ↓
Caters to a large number To provide customized To forge and build strong
of retail clients by offering wealth advisory services to relationships with
all products under one high net worth individuals corporate and institutional
roof through our branch clients
network & online mode
Wealth Advisory
Equity & Services
Commodity Portfolio Institutional Equity
Trading Management Broking
Personal Financial Services Investment
Services International Banking
Distribution of Equity Merchant Banking
mutual funds Priority Client Transaction
Distribution of Equity Services Advisory Services
Insurance Arts Initiative
Distribution of
savings products
Personal Credit
Personal loan
services
Loans against
shares
Online Investment

Karvy Consultants Ltd Centrum

Prabhudas Lilladher Centuryfinvest
Sharekhan Chona Financial Services (P) Ltd.
AnandRathi CIL Securities Ltd
JM Financial Ltd Competent Finman Pvt Ltd
Kotak Securities Ltd Composite Investments Private Ltd
Motilal Oswal Securities Ltd Consortium Securities Pvt Ltd
Crimson Financial Services Ltd/ Crimson
Ambit Holdings Commodity Ltd
Indiabulls Crosseas Capital Services
Moneypore Crown Group
Parag Parikh Financial Advisory Services Ltd Dalmia Securities Pvt Ltd
RBS Broking India Dani Shares & Stocks Pvt Ltd
5Paisa.com Dawnay Day AV Securities Pvt Ltd
Edelweiss Dynamic
Enam Securities Pvt Ltd Elite Stock Management Ltd (ESML)
HSBC InvestDirect (India) Limited (HIL) Eureka Stock & Share Broking Services Ltd
Kisan Ratilal Choksey Shares & Securities Pvt Ltd Farsight Group
Mathew Easow Financial Services Fortune Financial Services (India) Ltd
DJS Stock and Shares Ltd Globe Group
Hybrid Financial Services Ltd Gogia International Securities Ltd (GISL)
India Cements Capital Ltd Goldmine Stocks Pvt Ltd
Mefcom Securities Ltd GRD Securities Ltd
Modern Shares & Stock Brokers Ltd Gupta Equities Pvt Ltd
Munoth Capital Market Ltd H. Nyalchand Financial Services Ltd
Munoth Financial Services Ltd (MFSL) Hem Group
Pioneer Investcorp Ltd (PINC) ICDS Securities Ltd
Ratnabali Capital Markets Ltd ICICI Securities
16anna.com IDBI Capital Market Services Ltd
A.G. Shares & Securities Ltd IDFC-SSKI Group
Abhipra India Infoline
Adroit Financial Services Pvt Ltd Indira Group
Ajay Natavarlal Securities Pvt. Ltd. Innovate Securities Pvt. Ltd.
Alankit Invest India
Almondz Capital Markets Pvt Ltd InvestMentor Securities Ltd.
Amit Nalin Securities Pvt Ltd (ANSec) ITI Financial Services Limited
Angel Broking Ltd Jaypee Capital Services Ltd.
Anugrah Stock & Broking Pvt Ltd Jhaveri Securities Pvt. Ltd.
Anush Shares and Securities Pvt Ltd JRG Securities Ltd
Apeejay Securities Private Limited JV Capital Services (P) Ltd
Apollo Sindhoori Capital Investments Ltd Kassa Finvest Pvt Ltd
Arcadia Share & Stock Brokers Pvt Ltd Kaynet Finance Ltd.

Asit C. Mehta Investment Intermediates Ltd Keynote India

Khajanchi & Gandhi Stock Broking
ASL Capital Holdings Private Ltd Khambatta Securities Ltd
Astha Credit & Securities (P) Ltd Khandwala Group
Best Bull Stock Trading Private Ltd Kunvarji Commodity Brokers Pvt. Ltd.
Bharat Bhushan & Company Labdhi Finance Corporation
Microsec Macquarie Securities (India) Pvt Ltd
Modex International Securities Ltd Magnum.co.in
Monarch Projects and Finmarkets Ltd Mansukh Securities & Finance Ltd
Moongipa Investments Ltd. Marck Securities Pvt. Ltd.
MSB Group Marfatia Stock Broking Pvt. Ltd.
Narayan Securities Pvt. Ltd. Master Trust Ltd
Navia Markets Ltd MG Group of Companies
NDA Securities Limited RR Investors Capital Services Pvt. Ltd
Networth Stock Broking Ltd Sajag Securities Pvt Ltd
Pace Financial Services SATCO Securities & Financial Services Ltd
Padmakshi Financial Services Pvt. Ltd Shah Investors Home Ltd (SIHL)
Parsoli Corporation Limited Shardul Securities Ltd
Pee Aar Securities Limited Share Mart
PKJ Share Brokers Ltd. Shree Naman Developers Limited
Prayas Securities Pvt. Ltd. Shreepati Holdings & Finance Pvt. Ltd
PSJ Securities Pvt. Ltd. Shreyas Stocks Pvt Ltd
R. Wadiwala Securities Pvt. Ltd. Shri Parasram Holdings Pvt Ltd
R.K. Global Shares & Securities Ltd SKP Securities Ltd
Rajvi Stock Broking Ltd SMC Investment Solutions & Services
Reflection Investments Star Finvest Pvt. Ltd
Reliable Stocks & Shares (India) Ltd Sugal & Damani Share & Stock Brokers
Reliance Money Sumedha Fiscal Services Ltd (SFSL)
Religare Enterprises Ltd Sushil Finance
Bonanza Portfolio Ltd Swastika Investmart Ltd
Wellworth Share and Stock Broking Ltd The Kasat Securities Pvt Ltd.
Yoha Securities Ltd Transparent Shares & Securities Pvt Ltd
Agroy Finance & Investment Ltd Twin Earth Securities Pvt Ltd (TESPL)
Amrapali Capital and Finance Services Ltd Unicon Investment Solutions
Aryan Share and Stockbrokers Ltd Ventura Securities Ltd
Above mentioned is the list of corporate stock brokers that are the competitors of
Anagram Capital Ltd.

OTHER INFORMATION ABOUT ANAGRAM
Edelweiss to acquire Anagram Capital:
Edelweiss has entered into an agreement to acquire Anagram Capital for Rs. 164 crore in an
all-cash transaction. With a nation-wide network of more than 137 branches and over 1,300
sub-brokers, Anagram has one of the widest geographical reach among retail broking firms.
The company has more than 1.80 lakh clients and estimated total revenue of Rs. 100 crore for
the nine months ended December 31, 2009. The company’s average daily equity trading
volume is about Rs. 800 crore. Edelweiss plans to operate Anagram as a 100 per cent
subsidiary with clear focus on continuity and building on the current business and people
with investments in research, products, training and technology.
“This acquisition is in synch with Edelweiss’ plan to expand the retail broking business. The
acquisition of Anagram, with its reach and large, high quality and diversified client base, will
give impetus to Edelweiss’ retail broking and distribution businesses.
What makes this transaction exciting is the minimal overlap between the broking operations
of both companies. We are also impressed with Anagram’s professional management team
and the consistent focus on client service and risk management. I welcome all employees,
Anagram’s clients and partners to the Edelweiss family,” said Rashesh Shah, Chairman,
Edelweiss Group, said.
With a view to focussing on its core business of textiles, Gujarat-based Lalbhai group on
Wednesday exited its domestic broking business by selling its firm, Anagram Capital, to
Edelweiss Capital.
“The Lalbhai group’s core business is textiles and it is a global leader in denim. It is also
diversifying into other businesses and since finance does not form a core business for the
group, it was decided to sell-off the business,” Anagram Capital’s CEO, Mayank Shah, told
PTI here. In the late-1990s, ICICI had acquired Anagram Finance, another Lalbhai group
company.

REGISTERATION DETAILS
Anagram Stockbroking Limited

BSE Cash SEBI Regn. No.: INB011257152, BSE F&O SEBI Regn. No.: INF010808537
PMS Regn. No.: INP000002031, NSDL DP SEBI Regn. No.: IN-DP-NSDL-180-2000,
Mutual Fund: ARN 3068
Anagram Capital Limited

NSE Cash SEBI Regn. No.: INB230597630, NSE F&O SEBI Regn. No.: INF230597630
NSE Currency Derivative SEBI Regn. No: INE230597630
Anagram Comtrade Limited

MCX-10425; NCDEX-00205; NMCE- CL0126, National Spot Exchange Limited – 11270
Registered Office
Anagram House, H. L. Commerce College - Stadium Road Near Commerce Six Circle,
Navrangpura, Ahmedabad 380 009
LIST OF STOCK EXCHANGES IN INDIA
OTC Exchange of India Madras Stock Exchange Ltd.
The Uttar Pradesh Stock Exchange Association Ltd. Cochin Stock Exchange Ltd.
Jaipur Stock Exchange Ltd. Bangalore Stock Exchange Ltd.
National Stock Exchange of India Ltd. Gauhati Stock Exchange Ltd.
The Ludhiana Stock Exchange Ltd. The Calcutta Stock Exchange Association Ltd
Bhubaneshwar Stock Exchange Ltd. The Delhi Stock Exchange Ltd.
Vadodara Stock Exchange Ltd. Madhya Pradesh Stock Exchange Ltd.
Bombay Stock Exchange Ltd. Magadh Stock Exchange
Ahmedabad Stock Exchange Ltd. Pune Stock Exchange Ltd.
Mangalore Stock Exchange MCX Stock Exchange Ltd
Hyderabad Stock Exchange

Saurashtra Kutch Stock Exchange (SKSE)
Coimbatore Stock Exchange

INTRODUCTION
Analysis of Indian Stock Market
In general, the financial market divided into two parts, Money market and capital market.
Securities market is an important, organized capital market where transaction of capital is
facilitated by means of direct financing using securities as a commodity. Securities market
can be divided into a primary market and secondary market.
PRIMARY MARKET
The primary market is an intermittent and discrete market where the initially listed shares are
traded first time, changing hands from the listed company to the investors. It refers to the
process through which the companies, the issuers of stocks, acquire capital by offering their
stocks to investors who supply the capital. In other words primary market is that part of the
capital markets that deals with the issuance of new securities. Companies, governments or
public sector institutions can obtain funding through the sale of a new stock or bond issue.
This is typically done through a syndicate of securities dealers. The process of selling new
issues to investors is called underwriting. In the case of a new stock issue, this sale is called
an initial public offering (IPO). Dealers earn a commission that is built into the price of the
security offering, though it can be found in the prospectus.
SECONDARY MARKET
The secondary market is an on-going market, which is equipped and organized with a place,
facilities and other resources required for trading securities after their initial offering. It refers
to a specific place where securities transaction among many and unspecified persons is
carried out through intermediation of the securities firms, i.e., a licensed broker, and the
exchanges, a specialized trading organization, in accordance with the rules and regulations
established by the exchanges.
A bit about history of stock exchange they say it was under a tree that it all started in
1875.Bombay Stock Exchange (BSE) was the major exchange in India till 1994.National
Stock Exchange (NSE) started operations in 1994.
NSE was floated by major banks and financial institutions. It came as a result of Harshad
Mehta scam of 1992. Contrary to popular belief the scam was more of a banking scam than a
stock market scam. The old methods of trading in BSE were people assembling on what as
called a ring in the BSE building. They had a unique sign language to communicate apart
from all the shouting. Investors weren't allowed access and the system was opaque and
misused by brokers. The shares were in physical form and prone to duplication and fraud.

NSE was the first to introduce electronic screen based trading. BSE was forced to follow suit.
The present day trading platform is transparent and gives investors prices on a real time basis.
With the introduction of depository and mandatory dematerialization of shares chances of
fraud reduced further. The trading screen gives you top 5 buy and sell quotes on every scrip.
A typical trading day starts at 10 ending at 3.30. Monday to Friday. BSE has 30 stocks which
make up the Sensex .NSE has 50 stocks in its index called Nifty. FII s Banks, financial
institutions mutual funds are biggest players in the market. Then there are the retail investors
and speculators. The last ones are the ones who follow the market morning to evening;
Market can be very addictive like blogging though stakes are higher in the former.

ORIGIN OF INDIAN STOCK MARKET
The origin of the stock market in India goes back to the end of the eighteenth century when
long-term negotiable securities were first issued. However, for all practical purposes, the real
beginning occurred in the middle of the nineteenth century after the enactment of the
companies Act in 1850, which introduced the features of limited liability and generated
investor interest in corporate securities.
An important early event in the development of the stock market in India was the formation
of the native share and stock brokers 'Association at Bombay in 1875, the precursor of the
present day Bombay Stock Exchange. This was followed by the formation of
associations/exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). In
addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to
recede into oblivion during depressing times subsequently.
Stock exchanges are intricacy inter-woven in the fabric of a nation's economic life. Without a
stock exchange, the saving of the community- the sinews of economic progress and
productive efficiency- would remain underutilized. The task of mobilization and allocation of
savings could be attempted in the old days by a much less specialized institution than the
stock exchanges. But as business and industry expanded and the economy assumed more
complex nature, the need for 'permanent finance' arose. Entrepreneurs needed money for long
term whereas investors demanded liquidity – the facility to convert their investment into cash
at any given time. The answer was a ready market for investments and this was how the stock
exchange came into being.
Stock exchange means anybody of individuals, whether incorporated or not, constituted for
the purpose of regulating or controlling the business of buying, selling or dealing in
securities. These securities include:
(i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like
nature in or of any incorporated company or other body corporate;
(ii) Government securities; and
(iii) Rights or interest in securities.
The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are
the two primary exchanges in India. In addition, there are 22 Regional Stock Exchanges.
However, the BSE and NSE have established themselves as the two leading exchanges and
account for about 80 per cent of the equity volume traded in India. The NSE and BSE are
equal in size in terms of daily traded volume. The average daily turnover at the exchanges has
increased from Rs 851 crore in 1997-98 to Rs 1,284 crore in 1998-99 and further to Rs 2,273
crore in 1999-2000 (April - August 1999). NSE has around 1500 shares listed with a total
market capitalization of around Rs 9, 21,500 crore.

The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9, 68,000
crore. Most key stocks are traded on both the exchanges and hence the investor could buy
them on either exchange. Both exchanges have a different settlement cycle, which allows
investors to shift their positions on the bourses. The primary index of BSE is BSE Sensex
comprising 30 stocks. NSE has the S&P NSE 50 Index (Nifty) which consists of fifty stocks.
The BSE Sensex is the older and more widely followed index.
Both these indices are calculated on the basis of market capitalization and contain the heavily
traded shares from key sectors. The markets are closed on Saturdays and Sundays. Both the
exchanges have switched over from the open outcry trading system to a fully automated
computerized mode of trading known as BOLT (BSE on Line Trading) and NEAT (National
Exchange Automated Trading) System.
It facilitates more efficient processing, automatic order matching, faster execution of trades
and transparency; the scrip's traded on the BSE have been classified into 'A', 'B1', 'B2', 'C', 'F'
and 'Z' groups. The 'A' group shares represent those, which are in the carry forward
system (Badla). The 'F' group represents the debt market (fixed income securities) segment.
The 'Z' group scrip's are the blacklisted companies. The 'C' group covers the odd lot securities
in 'A', 'B1' & 'B2' groups and Rights renunciations. The key regulator governing Stock
Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs and other
participants in Indian secondary and primary market is the Securities and Exchange Board of
India (SEBI) Ltd.

BACKGROUND OF STOCK EXCHANGE IN INDIA
The emergence of stock market can be traced back to 1830. In Bombay, business passed in
the shares of banks like the commercial bank, the chartered mercantile bank, the chartered
bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta,
Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well
as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when
the Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also
quoted the prices of business ventures like the Bengal bonded warehouse, the Docking
Company and the storm tug company.
Between 1840 and 1850, only half a dozen brokers existed for the limited business. But
during the share mania of 1860-65, the number of brokers increased considerably. By 1860,
the number of brokers was about 60 and during the exciting period of the American Civil
war, their number increased to about 200 to 250. The end of American Civil war brought
disillusionment and many failures and the brokers decreased in number and prosperity. It was
in those troublesome times between 1868 and 1875 that brokers organized an informal
association and finally as recited in the Indenture constituting the “Articles of Association of
the Exchange”. On or about 9th day of July,1875, a few native brokers doing brokerage
business in shares and stocks resolved upon forming in Bombay an association for protecting
the character, status and interest of native share and stock brokers and providing a hall or
building for the use of the members of such association.
As a meeting held in the broker’ Hall on the 5th day of February, 1887, it was resolved to
execute a formal deal of association and to constitute the first managing committee and to
appoint the first trustees. Accordingly, the Articles of Association of the Exchange and the
Stock Exchange was formally established in Bombay on 3rd day of December, 1887. The
Association is now known as “The Stock Exchange”.
The entrance fee for new member was Re.1 and there were 318 members on the list, when the
exchange was constituted. The numbers of members increased to 333 in 1896, 362 in
1916and 478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896,
Rs.2500 in 1916 and Rs. 48,000 in 1920. At present there are 23 recognized stock exchanges
with about 6000 stock brokers. Organization structure of stock exchange varies.14 stock
exchanges are organized as public limited companies, 6 as companies limited by guarantee
and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have
been permanent recognition. Others have to seek recognition on annual basis.

These exchange do not work of its own, rather, these are run by some persons and with the
help of some persons and institution. All these are down as functionaries on stock exchange.
These are
1. Stockbrokers
2. Sub-broker
3. Market makers
4. Portfolio consultants etc.
1.) Stockbrokers
Stock brokers are the members of stock exchanges. These are the persons
who buy, sell or deal in securities. A certificate of registration from SEBI is mandatory to act
as a broker. SEBI can impose certain conditions while granting the certificate of registrations.
It is obligatory for the person to abide by the rules, regulations and the buy-law. Stock
brokers are commission broker, floor broker, arbitrageur etc.
2.) Sub-broker
A sub-broker acts as agent of stock broker. He is not a member of a stock
exchange. He assists the investors in buying, selling or dealing in securities through
stockbroker. The broker and sub-broker should enter into an agreement in which obligations
of both should be specified. Sub-broker must be registered SEBI for a dealing in securities.
For getting registered with SEBI, he must fulfil certain rules and regulation.
3.) Market Makers

Market maker is a designated specialist in the specified securities. They
make both bid and offer at the same time. A market maker has to abide by bye-laws, rules
regulations of the concerned stock exchange. He is exempt from the margin requirements. As
per the listing requirements, a company where the paid-up capital is Rs. 3 crore but not more
than Rs. 5 crore and having a commercial operation for less than 2 years should appoint a
market maker at the time of issue of securities.
4.) Portfolio consultants

A combination of securities such as stocks, bonds and money
market instruments is collectively called as portfolio. Whereas the portfolio consultants are
the persons, firms or companies who advise, direct or undertake the management or
administration of securities or funds on behalf of their clients.

ABOUT NSE AND BSE

Formation
The National Stock Exchange of India was promoted by leading financial institutions at the
behest of the Government of India, and was incorporated in November 1992 as a tax-paying
company. In April 1993, it was recognized as a stock exchange under the Securities Contracts
(Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment of the NSE commenced
operations in November 1994, while operations in the Derivatives segment commenced in
June 2000.
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage.
Popularly known as "BSE", it was established as "The Native
Share&Stock Brokers Association" in 1875.
It was the first stock exchange in the country to obtain permanent recognition in 1956 from
the Government of India under the Securities Contracts (Regulation) Act, 1956. Earlier an
Association of Persons (AOP), the Exchange is now a demutualised and corporatized entity
incorporated under the provisions of the Companies Act, 1956, pursuant to the
BSE(Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and
Exchange Board of India (SEBI).Bombay Stock Exchange Limited received its Certificate of
Incorporation on 8th August, 2005 and Certificate of Commencement of Business on 12th
August, 2005. The Exchange has succeeded the business and operations of BSE ongoing
concern basis and its recognition as an Exchange has been continued by SEBI.
Members
While the BSE has over 874 members-brokers across the country, NSE has more than 1000
members. In NSE, a prospective trading member is admitted to any of the following
combinations of market segments: Wholesale Debt Market segment, Capital Market (CM)
and the Futures and Options segments, CM Segment and the WDM segment, or CM
Segment, the WDM and the F and O segment. There is no such thing at BSE and members
join as any of the following: Trading Members, Trading cum Clearing Members, Professional
clearing member, Limited trading member and Self Clearing member.
For NSE: In order to be admitted as a trading member, the individual trading member/at least
two partners of the applicant firm/at least two directors of the applicant corporate must be
graduates and must possess at least two years' experience in securities markets. The applicant
for trading membership/any of its partners/shareholders/directors must not have been
declared defaulters on any stock exchange, must not be debarred by SEBI for being
associated with capital market as intermediaries and must not be engaged in any fund-based
activity. The trades executed on the Exchange may be cleared and settled by a clearing
member.

The initial joining fee for a member at BSE is Rs. 90 Lakhs while that for an NSE member is
between 100 to 300 Lakh depending on the kind of membership one chooses.
In addition to annual fees, NSE members are required to pay transaction charges on trades
undertaken by them. They pay transaction charge at the rate of Rs. 3.5 for every Rs. 1 lakh of
turnover in the CM segment. The transaction charges payable to the exchange by the trading
member for the trades executed by him on the F&O segment are fixed at the rate of Rs. 2 per
lakh of turnover (0.002%) subject to a minimum of Rs. 1, 00,000 per year. At BSE, these fees
differ according to the various types of members.
For BSE, the requirements to becoming a member are:

1. Authorised By NSC As A Brokerage House
2. Authorisation Of BSE
3. Negotiation From NSC
4. Trained Staff At BSE(Brokers, Traders, Accountants)
5. Data On Member Registration
6. Company By-Laws
7. Membership Fee
8. Financial Statements
9. Company Mission Statements
10. Handbook On Internal Operations & Control
11. Personal Information File For Management And Specialized Staff
12. Contribution To The Guarantee Fund
13. Payment For The Licensed Access To Use The Operating System
Listing
Listing means formal admission of a security to the trading platform of the Exchange. In
BSE, 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.

At NSE, the following criteria’s are to be fulfilled when one applies to be listed:
Approval of Memorandum and Articles of Association

Approval of draft prospectus
Submission of Application
Listing conditions and requirements
Once a company fulfils these criteria’s then they have to submit the following to the board:
1. A brief note on the promoters and management.

2. Company profile.
3. Copies of the Annual Report for last 3 years.
4. Copies of the Draft Offer Document.
5. Memorandum & Articles of Association.
The listing fees depend on the companies paid up capital at both NSE and BSE. While the
initial listing fee at NSE is Rs.7500, it is Rs.20, 000 at BSE. The annual listing fees for a
company with a paid up capital up to Rs. 5 Crores is Rs. 10,000 at BSE while it is Rs. 8,400
at NSE. For a company with paid up capital between 5 to 10 crores, BSE charges Rs. 15,000
while NSE charges Rs. 10,000.
Indices
The main Index of BSE is SENSEX while that of NSE is CNX Nifty. The other indices at
BSE are: BSE 500, BSE 100, BSE 200, BSE PSU, BSE MIDCAP, BSE SMLCAP, BSE
BANKEX, BSE Teck, BSE Auto, BSE Pharma, BSE Fast Moving Consumer Goods
(FMCG), BSE Consumer Durables (SYMBOL: Cons Dura), BSE Metal.
NSE also set up as index services firm known as India Index Services & Products Limited
(IISL) and has launched several stock indices, including: S&P CNX Nifty, CNX Nifty
Junior, CNX 100 (= S&P CNX Nifty + CNX Nifty Junior), S&P CNX 500 (= CNX 100 +
400 major players across 72 industries), CNX Midcap (introduced on 18 July 2005 replacing
CNX Midcap 200).

CALCULATION OF SENSEX
SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As per this

methodology, the level of index at any point of time reflects the total market value of 30
component stocks relative to a base period. (The market capitalization of a company is
determined by multiplying the price of its stock by the number of shares issued by the
company). An index of a set of combined variables (such as price and number of shares) is
commonly referred as a 'Composite Index' by statisticians. A single indexed number is used
to represent the results of this calculation in order to make the value easier to work with and
track over time. It is much easier to graph a chart based on indexed values than one based on
actual values.
The base period of SENSEX is 1978-79. The actual total market value of the stocks in the
Index during the base period has been set equal to an indexed value of 100. This is often
indicated by the notation 1978-79=100. The formula used to calculate the Index is fairly
straightforward. However, the calculation of the adjustments to the Index (commonly called
Index maintenance) is more complex.
The calculation of SENSEX involves dividing the total market capitalization of 30 companies
in the Index by a number called the Index Divisor. The Divisor is the only link to the original
base period value of the SENSEX. It keeps the Index comparable over time and is the
adjustment point for all Index maintenance adjustments. During market hours, prices of the
index scrips, at which latest trades are executed, are used by the trading system to calculate
SENSEX every 15 seconds and disseminated in real time.
CLOSURE OF SENSEX
The closing SENSEX is computed taking the weighted average of all the trades on SENSEX
constituents in the last 15 minutes of trading session. If a SENSEX constituent has not traded
in the last 15 minutes, the last traded price is taken for computation of the Index closure. If a
SENSEX constituent has not traded at all in a day, then its last day's closing price is taken for
computation of Index closure. The use of Index Closure Algorithm prevents any intentional
manipulation of the closing index value.

MAINTAINENCE OF SENSEX
One of the important aspects of maintaining continuity with the past is to update the base year
average. The base year value adjustment ensures that additional issue of capital and other
corporate announcements like bonus etc. do not destroy the value of the index. The beauty of
maintenance lies in the fact that adjustments for corporate actions in the Index should not per
se affect the index values.
The Index Cell of the Exchange does the day-to-day maintenance of the index within the
broad index policy framework set by the Index Committee. The Index Cell takes special care
to ensure that SENSEX and all the other BSE indices maintain their benchmark properties by
striking a delicate balance between high turnover in Index scrips and its representative
character. The Index Committee of the Exchange has experts from different field of finance
related to the capital markets. They include Academicians, Fund-managers from leading
Mutual Funds, Finance - Journalists, Market Participants, Independent Governing Board
members, and Exchange administration.
ADJUSTMENTS TO SENSEX
The arithmetic calculation involved in calculating SENSEX is simple, but problem arises
when one of the component stocks pays a bonus or issues rights shares. If no adjustments
were made, a discontinuity would arise between the current value of the index and its
previous value. The Index Cell of the Exchange periodically adjusts the base value to take
care of such corporate announcements.
Adjustments for Rights Issues:

When a company, included in the compilation of the index, issues right shares, the market
capitalisation of that company is increased by the number of additional shares issued based
on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to
the Base Market Capitalisation
Adjustments for Bonus Issue:

When a company, included in the compilation of the index, issues bonus shares, the market
capitalisation of that company does not undergo any change. Therefore, there is no change in
the Base Market Capitalisation, only the 'number of shares' in the formula is updated.
Other Issues: Base Market Capitalisation Adjustment is required when new shares are issued
by way of conversion of debentures, mergers, spin-offs etc. or when equity is reduced by way
of buy-back of shares, corporate restructuring etc.
Base Market Capitalisation Adjustment: The formula for adjusting the Base Market
Capitalisation is as follows:

New Base Market Capitalisation = Old Base Market Capitalisation X (New Market
Capitalisation/Old Market Capitalisation)
To illustrate, suppose a company issues right shares which increases the market capitalisation
of the shares of that company by say, Rs.100 crores. The existing Base Market Capitalisation
(Old Base Market Capitalisation), say, is Rs.2450 crores and the aggregate market
capitalisation of all the shares included in the index before the right issue is made is, say
Rs.4781 crores. The "New Base Market Capitalisation " will then be: Rs.2501.24 crores =
2450 X (4781+100)/4781
This figure of 2501.24 will be used as the Base Market Capitalisation for calculating the
index number from then onwards till the next base change becomes necessary.
SENSEX UPDATION
During market hours, prices of the index scrips, at which trades are executed, are
automatically used by the trading computer to calculate the SENSEX every 15 seconds and
continuously updated on all trading workstations connected to the BSE trading computer in
real time.

BEING A MEMBER IN SENSEX
The general guidelines for selection of constituents in SENSEX are as follows:
Listed History: The scrip should have a listing history of at least 3 months at BSE. Exception
may be considered if full market capitalisation of a newly listed company ranks among top 10
in the list of BSE universe. In case, a company is listed on account of merger/ demerger/
amalgamation, minimum listing history would not be required.
Trading Frequency: The scrip should have been traded on each and every trading day in the
last three months. Exceptions can be made for extreme reasons like scrip suspension etc.
Final Rank: The scrip should figure in the top 100 companies listed by final rank. The final
rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average
full market capitalisation and 25% weightage to the liquidity rank based on three-month
average daily turnover & three-month average impact cost.
Market Capitalization Weightage: The weightage of each scrip in SENSEX based on three-
month average free-float market capitalisation should be at least 0.5% of the Index.
Industry Representation: Scrip selection would generally take into account a balanced
representation of the listed companies in the universe of BSE.
Track Record: In the opinion of the Committee, the company should have an acceptable track
record.

COMPANIES LISTED IN NIFTY
as on Friday, July 09th, 2010
ABB ltd. ACC ltd.

Ambuja cements BHEL
Axis bank ltd. Bharat petroleum corporation ltd.
Bharti Airtel ltd. Cairn India ltd.
Cipla ltd. DLF ltd.
GAIL HCL tech ltd.
HDFC bank ltd. Hero Honda motors ltd.

Hindalco Industries ltd. Hindustan Unilever ltd.
HDFC finance corporation ltd. ITC ltd.
ICICI Bank ltd. Idea cellular ltd.
Infosys Technologies ltd. Infrastructure Development Finance Co.
ltd.
Jaiprakash associates ltd. Jindal Steel and Power ltd.
Kotak Mahindra bank ltd. Larsen and Tubro ltd.
Mahindra and Mahindra ltd. Maruti Suzuki India ltd.
NTPC ltd. ONGC
Power grid corporation of India ltd. PNB
Ranbaxy Laboratories ltd. Reliance Capital ltd.
Reliance Infrastructure ltd. Reliance Communications ltd.
Reliance Industries ltd. Reliance Power ltd.
Siemens ltd. SBI
SAIL Sterlite Industries ltd.
Sun Pharmaceuticals Industries ltd. Suzlon Energy ltd.
TCS Tata Motors ltd.
Tata Power co. ltd. Tata Steel ltd
Unitech ltd. Wipro ltd.

COMPANIES LISTED IN SENSEX
As on Friday, 09th July at 4:02 pm
HDFC DLF
ONGC Reliance Infra
Sterlite India Mahindra and Mahindra
Tata Motors Reliance Communications
Wipro Tata Power
Tata Steel Reliance
NTPC Jaiprakash Associates
Maruti Suzuki Jindal Steel
SBI Larsen
ICICI Bank Infosys
Bharti Airtel TCS
HDFC Bank Hindalco
BHEL Hero Honda
Cipla ACC
HUL ITC

DIFFERENCE BETWEEN NSE AND BSE
BSE NSE
Market capitalization of listed Rs. 4,670,227 crore Rs. 3,367,350 crore.
companies
Number of members 951 (Oct 2007) 1,009 as on March 2007
Number of listed companies 4,867 OCT(2007) 1,288 (March 2007)
Geographical spread Presence in 417 cities Presence in 1,486 cities
Website www.bseindia.com www.nse-india.com
Main Index BSE Sensex S & P CNX Nifty
Owner Bombay Stock Exchange National Stock Exchange of
India Limited
Key people Rajnikant Patel (CEO) R.H.Patil (Founder, MD)
Claim to fame Oldest stock exchange in Third largest stock exchange
Asia. in the world in terms of
volumes.
What is it? Indian Stock exchange Indian Stock exchange
Location Mumbai Mumbai
Established in 1875 1993
Name Bombay Stock Exchange National Stock Exchange
Index value ( 2009) 17,326.01
Number of trader workstations 15,151(Oct 2007)
Index value (As on 11th December 6,097
2007)
Top trading companies in volumes Reliance Industries Limited,

in main index (Till March 2007) Infosys Technologies
Limited, Satyam Computer
Services.
Top companies in terms of market Reliance Industries Limited,
capitalization in each index (Till Oil and Natural Gas
March 2007 Corporation, Bharti Airtel
Limited

MARKET BASICS
Electronic trading
Electronic trading eliminates the need for physical trading floors. Brokers can trade from
their offices, using fully automated screen-based processes. Their workstations are connected
to a Stock Exchange's central computer via satellite using Very Small Aperture
Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer and
are matched electronically.
Exchanges in India
The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the
country's two leading Exchanges. There are 20 other regional Exchanges, connected via the
Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading via
their VSAT systems.
Index
An Index is a comprehensive measure of market trends, intended for investors who are
concerned with general stock market price movements. An Index comprises stocks that have
large liquidity and market capitalization. Each stock is given a weight age in the Index
equivalent to its market capitalization. At the NSE, the capitalization of NIFTY (fifty selected
stocks) is taken as a base capitalization, with the value set at 1000. Similarly, BSE Sensitive
Index or Sensex comprises 30 selected stocks. The Index value compares the day's market
capitalization vis-à-vis base capitalization and indicates how prices in general have moved
over a period of time.
Execute an order
Select a broker of your choice and enter into a broker-client agreement and fill in the client
registration form. Place your order with your broker preferably in writing. Get a trade
confirmation slip on the day the trade is executed and ask for the contract note at the end of
the trade date.
Need a broker
As per SEBI (Securities and Exchange Board of India.) regulations, only registered members
can operate in the stock market. One can trade by executing a deal only through a registered
broker of a recognized Stock Exchange or through a SEBI-registered sub-broker.

Contract note
A contract note describes the rate, date, time at which the trade was transacted and the
brokerage rate. A contract note issued in the prescribed format establishes a legally
enforceable relationship between the client and the member in respect of trades stated in the
contract note. These are made in duplicate and the member and the client both keep a copy
each. A client should receive the contract note within 24 hours of the executed trade.
Split
A Split is book entry wherein the face value of the share is altered to create a greater number
of shares outstanding without calling for fresh capital or altering the share capital account.
For example, if a company announces a two-way split, it means that a share of the face value
of Rs 10 is split into two shares of face value of Rs 5 each and a person holding one share
now holds `two shares.
Buy Back
As the name suggests, it is a process by which a company can buy back its shares from
shareholders. A company may buy back its shares in various ways: from existing
shareholders on a proportionate basis; through a tender offer from open market; through a
book-building process; from the Stock Exchange; or from odd lot holders. A company cannot
buy back through negotiated deals on or off the Stock Exchange, through spot transactions or
through any private arrangement.
Settlement cycle
The accounting period for the securities traded on the Exchange. On the NSE, the cycle
begins on Wednesday and ends on the following Tuesday, and on the BSE the cycle
commences on Monday and ends on Friday. At the end of this period, the obligations of each
broker are calculated and the brokers settle their respective obligations as per the rules, bye-
laws and regulations of the Clearing Corporation. If a transaction is entered on the first day of
the settlement, the same will be settled on the eighth working day excluding the day of
transaction. However, if the same is done on the last day of the settlement, it will be settled
on the fourth working day excluding the day of transaction.
Rolling settlement
The rolling settlement ensures that each day's trade is settled by keeping a fixed gap of a
specified number of working days between a trade and its settlement. At present, this gap is
five working days after the trading day. The waiting period is uniform for all trades. In a
Rolling Settlement, all trades outstanding at end of the day have to be settled, which means
that the buyer has to make payments for securities purchased and seller has to deliver the

securities sold. In India, we have adopted the T+5 settlement cycle, which means that a
transaction entered into on Day 1 has to be settled on the Day 1 + 5 working days, when
funds pay in or securities pay out takes place.
Advantages of Rolling Settlements
As mentioned earlier, this is the system practiced in developed countries. Pay outs are quicker
than in weekly settlements, and investors will benefit from increased liquidity. The other
benefit of the modified system is that it keeps cash and forward markets separate. In the
current system, the trader has five days to square off his transaction which leads to a high
level of speculation as people even without funds tend to "play" the market. During volatile
markets, especially in a bearish market, this often leads to a payment problem which has
dogged the Indian stock exchanges for a long time. It provides for a higher degree of safety,
and once mechanisms such as futures and stock-lending become popular, it would result in
quality speculation and genuine investor interest.
Short selling
Short selling is a legitimate trading strategy. It is a sale of a security that the seller does not
own, or any sale that is completed by the delivery of a security borrowed by the seller. Short
sellers take the risk that they will be able to buy the stock at a more favorable price than the
price at which they "sold short."
The selling of a security that the seller does not own, or any sale that is completed by the
delivery of a security borrowed by the seller, Short sellers assume that they will be able to
buy the stock at a lower amount than the price at which they sold short.
Auction
An auction is conducted for those securities that members fail to deliver/short deliver during
pay-in. Three factors primarily give rise to an auction: short deliveries, un-rectified bad
deliveries, and un-rectified company objections
Separate market for auctions
The buy/sell auction for a capital market security is managed through the auction market. As
opposed to the normal market where trade matching is an on-going process, the trade
matching process for auction starts after the auction period is over. If the shares are not
bought at the auction i.e. if the shares are not offered for sale, the Exchange squares up the
transaction as per SEBI guidelines. The transaction is squared up at the highest price from the
relevant trading period till the auction day or at 20 per cent above the last available Closing
price whichever is higher. The pay-in and pay-out of funds for auction square up is held
along with the pay-out for the relevant auction.

Bad Delivery
SEBI has formulated uniform guidelines for good and bad delivery of documents. Bad
delivery may pertain to a transfer deed being torn, mutilated, overwritten, defaced, or if there
are spelling mistakes in the name of the company or the transfer. Bad delivery exists only
when shares are transferred physically. In "Demat" bad delivery does not exist.
Dematerialization
Dematerialization in short called as 'demat' is the process by which an investor can get
physical certificates converted into electronic form maintained in an account with the
Depository Participant. The investors can dematerialize only those share certificates that are
already registered in their name and belong to the list of securities admitted for
dematerialization at the depositories.
Depository
The organization responsible to maintain investor's securities in the electronic form is called
the depository. In other words, a depository can therefore be conceived of as a "Bank" for
securities. In India there are two such organizations viz. NSDL and CDSL. The depository
concept is similar to the Banking system with the exception that banks handle funds whereas
a depository handles securities of the investors. An investor wishing to utilize the services
offered by a depository has to open an account with the depository through Depository
Participant.
Depository Participant
The market intermediary through whom the depository services can be availed by the
investors is called a Depository Participant (DP). As per SEBI regulations, DP could be
organizations involved in the business of providing financial services like banks, brokers,
custodians and financial institutions. This system of using the existing distribution channel
(mainly constituting DPs) helps the depository to reach a wide cross section of investors
spread across a large geographical area at a minimum cost. The admission of the DPs
involves a detailed evaluation by the depository of their capability to meet with the strict
service standards and a further evaluation and approval from SEBI. Realizing the potential,
all the custodians in India and a number of banks, financial institutions and major brokers
have already joined as DPs to provide services in a number of cities.

SENSEX AND NIFTY READINGS

COMPARISON OF CORPORATE BROKERS
Criteria Offers provided

Types of account 2
A/c opening fees(Trading + Demat) 500/- + 250/-
Brokerage Intraday 0.05% - 0.10%
Delivery 0.25% - 0.50%
AMC None
Lead time 1 week
Margin Intraday 3 times
Delivery 12 times
Interest rate None
Sauda expiry T+5
Software Power indiabulls(750/-)

Types of account 2
A/c opening fees(Trading + Demat) 555+300
Brokerage Intraday 0.05%
Delivery 0.5%
AMC 300/-
Lead time 1 week
Delivery 12 times
Interest rate 18%
Sauda expiry T+5
Software ODIN


Types of account 2
A/c opening fees(Trading + Demat) 500/- +40/-
Brokerage Intraday 1 paisa
Delivery 10 paisa
AMC 300/-
Lead time 4-5 days
Delivery 10 times
Interest rate 18%
Sauda expiry Never
Software ODIN

Types of account 2
A/c opening fees(Trading + Demat) 2520/-
Brokerage Intraday 3 paisa
Delivery 30 paisa
AMC 2000
Lead time 7-8 days
Delivery 10 times
Interest rate 18%
Sauda expiry T+3
Software GOTX


Types of account 2
Brokerage Intraday 0.01% to 0.03%.
Delivery 0.10% to 0.30%.
AMC 400/-
Lead time 1 week
Delivery 10 times
Interest rate 18%
Sauda expiry T+4
Software FLIP

Types of account 2
Brokerage Intraday 0.01% to 0.03%.
Delivery 0.10% to 0.30%.
AMC 350/-
Lead time 1 week
Delivery 10 times
Interest rate 18%
Sauda expiry T+5
Software ODIN

STATEMENT OF PROBLEM
To select a corporate broker that is rated highest on customer satisfaction level.
OBJECTIVE
1. To conduct a study on awareness level of people about stock brokers in Kanpur city.
2. To study the market share of Anagram Capital Ltd in the Kanpur city.
3. What factors should Anagram Capital Limited consider to become a market leader?
4. To find out the problems faced by clients while trading with Anagram Capital Ltd.
5. To identify the drawbacks in the current system of trading and suggesting improvements in
the same.
6. To get practically exposed to the trading market.
METHODOLOGY
• Research applied – Exploratory research.
• Size of sample - 20 investors of Anagram Capital Ltd. and 50 investors of other corporate
brokers.
• Population- Complete Kanpur City.
• Tool-Questionnaires, In-depth interview, Telephonic interview.
• Sampling Technique-Non probability sampling technique (judgemental sampling).

SOURCES OF DATA COLLECTION
1. Primary Data - Primary data is collected through questionnaire filling which was done by
investors of Anagram Capital Ltd. and other stock broking firms.
2. Secondary Data - Secondary data is collected from journals, textbook, website. These data
are located quickly and are also inexpensive.
Survey Method: - Survey refers to the method of securing information concerning

phenomena under study from all or selected number of respondents of the concerned area. In
a survey the investigator examines those phenomena which exist in the universe independent
of his action.
The data collected for the project is from 20 clients of Anagram Capital Ltd. and 50 other
investors of other corporate stock broking firm.
We visited different stock broking offices to collect the data for the company for their
comparison and also met some existing clients of the company, who filled the questionnaires
later.

ANALYSIS RESULTS AND FINDINGS
Comment: - On an average IIFL is rated highest on brokerage while on the other hand Angel
Stock Broking Limited is the company that charges the least brokerage on both intraday and
delivery transactions.
Comment: - Karvy Securities charges the maximum account opening fees and the Annual
Maintenience Charges while Angel Stock broking is on the other extreme.

ANALYSIS RESULTS AND FINDINGS(CLIENTS)
1) Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years
2) What is your favourite instrument of saving?
(a) Insurance (b) Stock market (c) Mutual funds (d) Others (specify) _________

3) What is the basic purpose of your investment?
(a) Liquidity (b) Returns (c) Capital appreciation
(d) Tax benefits (e) Risk covering (f) Others
4) Who you are?
(a) Trader (b) Investor

5) Your source of information of Anagram Capital Limited is.
(a) Newspaper (b) Internet (c) Television
(d) Friends/ Relatives (e) Existing clients of ACL

6) How would you rate the following elements of Anagram Capital Limited? (Please tick
for each statement)
Excellent Very good Good Fair Poor

Overall satisfaction
Charges levied
Knowledge of employees you deal with
Online services offered
Ability to resolve problems
Quality of advice
Performance of investments
Level of significance= 25%

Ho1= charges levied is not dependent on the overall satisfaction level of the people.
Ha1= charges levied is dependent on the overall satisfaction level of the people.
Comment- the significant value is less than the tabulated value i.e. 1.213 hence the null
hypothesis is accepted which concludes that charges levied is not dependent on overall
satisfaction.

Ho1= online services offered is not dependent on the overall satisfaction level of the people.
Ha1= online services offered is dependent on the overall satisfaction level of the people.
hypothesis is accepted which concludes that online services is not dependent on overall
satisfaction.

Ho1= ability to resolve problems is not dependent on the overall satisfaction level of the
people.
Ha1= ability to resolve problems is dependent on the overall satisfaction level of the people.
hypothesis is accepted which concludes that ability to resolve problems is not dependent on
overall satisfaction.

Ho1= quality of advice is not dependent on the overall satisfaction level of the people.
Ha1= quality of advice is dependent on the overall satisfaction level of the people.
hypothesis is accepted which concludes that quality of advice is not dependent on overall
satisfaction.

Ho1= performance of investments is not dependent on the overall satisfaction level of the
people.
Ha1performance of investments is dependent on the overall satisfaction level of the people.
hypothesis is accepted which concludes that performance of investments is not dependent on
overall satisfaction.

ANALYSIS RESULTS AND FINDINGS (NON CLIENTS)
1) Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years
2) Who you are? (a) Trader (b) Investor

3) What is your preferred medium of receiving research report and tips from your
dealer?
a) SMS facility b) Instant messaging c) E-mail d) Others (specify) ________
Comment: - SMS is the most preferred medium of receiving research report

4) In which company you have d-mat and trading account?
a) Karvy Securities b) India Infoline Security Private Limited
c) Indiabulls Securities Limited d) Angel stock broking limited e) Others
Comment:- Angel Stock broking limited is rated highest which signifies that Angel Stock
Broking Ltd. is the most popular company and Indiabulls is the least popular out of the ones
selected for research.

5) Are you satisfied with you present broking firm?
a)Yes b) No
Comment: - The chart signifies that Angel Stock Broking is the company whose clients are
most satisfied with the services of the company and other column signifies that some other
company(s) is rated as the least preferred companies of the respective clients.

6) What is the reason for your satisfaction?
a) Services b) Brokerage c) Operating expenses d) Others
Comment: - the chart signifies that brokerage is the most convenient factor on which the
respondents are satisfied. The brokerage chart (mentioned above) also displays that Angel
Stock Broking has the least brokerage charged from its clients

7) Write the name of the brand which comes immediately with respect to following
punch lines?
(a) It’s all about money honey ___________________________________________
(b) Service truly personalised ____________________________________________
(c) Bringing industry, finance and people together ____________________________
(d) One name for successful investing ______________________________________
(e) Trading just got faster _______________________________________________

ASUMPTIONS
• Only age and income level of people are taken as parameter to construct a paired
sample t testing, and qualification and gender are being ignored because it does not fit
in to the investment criteria.
• The filling up of the questionnaires by the respondents is least affected by the time in
which they fill the questionnaire.
• The sample of 70 respondents represent the whole Kanpur city
• As the sample size taken is quite small so the error rate taken is quite large.
FINDINGS
• According to the survey most of the clients of “Anagram Capital Ltd” say that the
research data provided is sufficient for them to take intelligent trading decisions.
• Anagram Capital Limited takes much in to account the budget of their clients and
then takes any investment decisions.
• People pay more emphasis on brokerage than service provided by brokerage houses.
• Angel stock broking Ltd. came out to be a leading company on the following points
Brokerage
Fees charged
Maximum customers
Customer satisfaction
Awareness
SUGGESTIONS TO ANAGRAM CAPITAL LIMITED

Improvement in the time delay of account opening is required.
There should be a specific number of clients under each relationship manger, so that
each client can be attended properly and can be imparted desired time.
Some promotional activities are required for the awareness of the customer, seminars
should be held for providing information to prospective and present customers.
People at young age should be encouraged to invest in stock market.
The company officials should maintain healthy relationship with their clients.

LIMITATIONS
Size of the research may not be substantial.
There was lack of time on the part of respondents.
There may be biasness in information by market participant.
Due to limitation of time a sample size of only 50 respondents were chosen.
The sample for research was chosen only from a limited area.
Some of the respondents may be biased in giving responses.
Complete data was not available due to company privacy and secrecy.
CONCLUSION
On the basis of the study it is found that Angel Stock Broking Ltd is better services provider
than the other stockbrokers because of their timely research and personalized advice on what
stocks to buy and sell.
Apart from this Anagram Capital Ltd. is also an upcoming challenging competitor to Angel.
Though Anagram has not flourished as a leading company, but still has a long way to go and
can acquire a place in the lead in the forthcoming years. As it has not been many years when
Anagram has opened its branch office in Kanpur so still the awareness is quite low, so
Anagram should focus on more and more promotional activities to gain high customer
response. The company should also organize seminars and similar activities to enhance the
knowledge of prospective and existing customers, so that they feel more comfortable while
investing in the stock market.

APPENDIX
QUESTIONNAIRE FOR CLIENT OF ANAGRAM CAPITAL LIMITED
Dear Respondent,
This information revealed by you will be used for institutional work only. This will be
a part of my Summer Training Project. No information will be disclosed to any outside party.
Please spare sometime to fill in this questionnaire.
Personal information
Name: -
Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years
Contact No. : -
Address: -
Gender: - (a) Male (b) Female
Marital status: - (a) Married (b) Unmarried
Education: - (a) Under Graduate (b) Graduate (c) Post Graduate (d) Other
Household income: - (a) Rs.100000 or less (b) Rs.100000 to Rs. 200000
(c) Rs. 200000 to Rs. 300000 (d) Above Rs.300000
Q1. What is your favourite instrument of saving?
(a) Insurance (b) Stock market (c) Mutual funds (d) Others (specify) _________
Q2. What is the basic purpose of your investment?
(a) Liquidity (b) Returns (c) Capital appreciation

(d) Tax benefits (e) Risk covering (f) Others
Q3. Who you are?
(a)Trader (b) Investor
Q4. If you are an investor then what is your portfolio size?
(a) 0-5 Lac (b) 5-10 Lac (c) 10-20 Lac (d) More than 20 Lac

Q5. What is the time horizon of your investment?
(a) 1-30 days (b) 1-6 months (c) more than 6 months (d) depends upon the profit
Q6. Your source of information of Anagram Capital Limited is.
(a) Newspaper (b) Internet (c) Television

(d) Friends/ Relatives (e) Existing clients of ACL
Q7.How would you rate the following elements of Anagram Capital Limited? (Please
tick)
Excellent Very good Good Fair Poor

Overall satisfaction
Charges levied
Knowledge of employees you deal with

Online services offered
Ability to resolve problems
Quality of advice
Performance of investments
Q9. Based on your experience with ACL, use a tick to indicate how you feel about the
online services (software provided and back office support) of ACL?
A B C D E F G
(a) Ease of access __ __ __ __ __ __ __ Unease of access
(b) Friendly __ __ __ __ __ __ __ Unfriendly
(c) Fast __ __ __ __ __ __ __ Slow
(d) Accurate __ __ __ __ __ __ __ Inaccurate
(e) Simple __ __ __ __ __ __ __ Complex
Feedback (if any)

___________________________________________________________________________
___________________________________________________________________________

QUESTIONNAIRE FOR NON CLIENTS
Dear Respondent,
This information revealed by you will be used for institutional work only. This will be
a part of my Summer Training Project. No information will be disclosed to any outside party.
Please spare sometime to fill in this questionnaire.
Personal information
Name: -
Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years
Contact No. : -
Address: -
Gender: - (a) Male (b) Female
Marital status: - (a) Married (b) Unmarried
Education: - (a) Under Graduate (b) Graduate (c) Post Graduate (d) Other
Household income: - (a) Rs.100000 or less (b) Rs.100000 to Rs. 200000

(c) Rs. 200000 to Rs. 300000 (d) Above Rs.300000
Occupation: - (a) Business (b) Service (c) Professional (d) Others
Q1. Do you have a pan card?
(a)Yes (b) No
Q2. Who you are?
(a) Trader (b) Investor
Q3. If you are an investor then what is your portfolio size?
a) 0-5 Lac b) 5-10 Lac c) 10-20 Lac d) More than 20 Lac
Q4. What is the time horizon of your investment?
a) 1-30 days b) 1-6 months c) more than 6 months d) depends upon the profit

Q5. What is your preferred medium of receiving research report and tips from your
dealer?
a) SMS facility b) Instant messaging c) E-mail d) Others (specify) ________
Q6. In which company you have d-mat and trading account?
a) Karvy Securities b) India Infoline Security Private Limited

c) Indiabulls Securities Limited d) Angel stock broking limited
e) Others
Q7. Are you satisfied with you present broking firm?

a)Yes b) No
Q8. State the reason for your satisfaction?
a) Services b) Brokerage c) Operating expenses d) Others
Q9. Write the name of the brand which comes immediately with respect to following
punch lines?
(a) It’s all about money honey ___________________________________________
(b) Service truly personalised ____________________________________________
(c) Bringing industry, finance and people together ____________________________
(d) One name for successful investing ______________________________________
(e) Trading just got faster _______________________________________________
Feedback (if any)

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

ABBREVIATIONS USED
BSE Bombay Stock Exchange

CSDL Central Securities Depository Limited
CARE Credit Analysis & Research Limited
CRISIL Credit Rating Information Services of India Limited
F&O Futures and Options
FPO Follow up Public Offering
IISL India Index Services & Products Ltd.
ICRA Investment Information and Credit Rating Agency of India
NCDEX National Commodity and Derivatives Exchange Ltd.
NSCCL National Securities Clearing Corporation Limited
CDSL Central Depositories Services Ltd.
DRF Demat Request Form
DCA Department of Company Affairs
DEA Department of Company Affairs
DP Depository Participant
EPS Earnings Per Share
FI Financial Institution
FII Foreign Institutional Investors
FMC Forward Markets Commission
IPO Initial Public Offer
ISIN International Securities Identification Number
NEAT National Exchange for Automated Trading
NSDL National Securities Depository Limited
NSE National Stock Exchange
NAV Net Asset Value
NYSE New York Stock Exchange
NCFM NSE’ Certification in Financial Markets
OTC Over The Counter
RRF Remat Request Form
RBI Reserve Bank of India
SBTS Screen Based Trading System
T+2 Second day from the trading day
SEBI Securities and Exchange Board of India

SAT Securities Appellate Tribunal

SCRA Securities Contract (Regulation) Act
SCRR Securities Contract (Regulation) Rules
S&P Standard & Poor
ICSE Inter-Connected Stock Exchange
CTCL Computer to Computer Link
VSAT’s Very Small Aperture Terminus
IBT Internet-based Trading

BIBLIOGRAPHY
G C. Beri – Marketing Research

TATA Mc Graw-Hill Publishing Company Ltd.
C.R.Kothari – Research Methodology

New Age International Ltd.
M.D. Rashikh Irfan -- Stock exchanges in India
WEBLIOGRAPHY
http://www.anagram.co.in
http://www.moneycontrol.com
http://www.capitaline.com
http://www.icicidirect.com
http://www.hdfcsecurity.com
http://www.karvy.com
http://www.bseindia.com
http://www.nseindia.com
http://www.nseindia.com/content/indices/ind_niftylist.csv
http://www.tradersedgeindia.com/bse_sensex.htm
http://www.indiahowto.com/what-is-sensex-nifty.html
http://shabbir.in/nifty-listed-companies/
http://www.moneycontrol.com/sensex/bse/sensex-live

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PREFACE

2 Dr. Gaur Hari Singhania Institute of Management and Research

BOMBAY STOCK EXCHANGE

Base Year- 1978-79

3 Dr. Gaur Hari Singhania Institute of Management and Research

NATIONAL STOCK EXCHANGE

4 Dr. Gaur Hari Singhania Institute of Management and Research

5 Dr. Gaur Hari Singhania Institute of Management and Research

6 Dr. Gaur Hari Singhania Institute of Management and Research

Retail Spectrum Wealth Spectrum Institutional Spectrum

7 Dr. Gaur Hari Singhania Institute of Management and Research

Karvy Consultants Ltd Centrum

8 Dr. Gaur Hari Singhania Institute of Management and Research

Asit C. Mehta Investment Intermediates Ltd Keynote India

9 Dr. Gaur Hari Singhania Institute of Management and Research

OTHER INFORMATION ABOUT ANAGRAM

Edelweiss to acquire Anagram Capital:

10 Dr. Gaur Hari Singhania Institute of Management and Research

Anagram Stockbroking Limited

Anagram Capital Limited

Anagram Comtrade Limited

LIST OF STOCK EXCHANGES IN INDIA

OTC Exchange of India Madras Stock Exchange Ltd.

Jaipur Stock Exchange Ltd. Bangalore Stock Exchange Ltd.

National Stock Exchange of India Ltd. Gauhati Stock Exchange Ltd.

Bhubaneshwar Stock Exchange Ltd. The Delhi Stock Exchange Ltd.

Vadodara Stock Exchange Ltd. Madhya Pradesh Stock Exchange Ltd.

Bombay Stock Exchange Ltd. Magadh Stock Exchange

Ahmedabad Stock Exchange Ltd. Pune Stock Exchange Ltd.

Mangalore Stock Exchange MCX Stock Exchange Ltd

Hyderabad Stock Exchange

Coimbatore Stock Exchange

11 Dr. Gaur Hari Singhania Institute of Management and Research

Analysis of Indian Stock Market

12 Dr. Gaur Hari Singhania Institute of Management and Research

13 Dr. Gaur Hari Singhania Institute of Management and Research

ORIGIN OF INDIAN STOCK MARKET

(ii) Government securities; and

(iii) Rights or interest in securities.

14 Dr. Gaur Hari Singhania Institute of Management and Research

15 Dr. Gaur Hari Singhania Institute of Management and Research

BACKGROUND OF STOCK EXCHANGE IN INDIA

16 Dr. Gaur Hari Singhania Institute of Management and Research

3.) Market Makers

4.) Portfolio consultants

17 Dr. Gaur Hari Singhania Institute of Management and Research

ABOUT NSE AND BSE

18 Dr. Gaur Hari Singhania Institute of Management and Research

For BSE, the requirements to becoming a member are:

19 Dr. Gaur Hari Singhania Institute of Management and Research

Approval of Memorandum and Articles of Association

1. A brief note on the promoters and management.

20 Dr. Gaur Hari Singhania Institute of Management and Research

SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As per this

21 Dr. Gaur Hari Singhania Institute of Management and Research

Adjustments for Rights Issues:

Adjustments for Bonus Issue:

22 Dr. Gaur Hari Singhania Institute of Management and Research

23 Dr. Gaur Hari Singhania Institute of Management and Research

BEING A MEMBER IN SENSEX

The general guidelines for selection of constituents in SENSEX are as follows:

24 Dr. Gaur Hari Singhania Institute of Management and Research

COMPANIES LISTED IN NIFTY

as on Friday, July 09th, 2010