Summer Training Project Report On

PERCEPTION AND BAHAVIOR OF INVESTOR ON CAPITAL MARKET

Submitted in partial fulfillment of Bachelor of Business Administration to Maharaja Ganga Singh University, Bikaner. Under the guidance of Mr. Ravi Kant Vyas Faculty, E.C.B Under the supervision of Mr. Santosh Acharya Branch Manager, Anand Rathi Shares And Stock Brokers ltd. Submitted By Renu Mahayach BBA 3rd Year Researcher Specialization: Marketing

Engineering College Bikaner

DEPARTMENT OF MANAGEMENT AND TECHNOLOGY BIKANER, RAJASTHAN 2010-2011 (AN AUTONOMOUS INSTITUTE OF GOVT. OF RAJASTHAN) KARNI INDUSTRIAL AREA, PUGAL ROAD,BIKANER.

Certificate from Faculty Guide

This is to certify that the summer training report entitled "Perception and Behavior of Investor on Capital Market" work carried out by Miss Renu Mahayach in the partial fulfillment of requirement for the award of Bachelor of Business Administration (BBA) second year 2009-10 affiliated to Maharaja Ganga Singh University, Bikaner (Raj.). To the best of my knowledge & belief this work is not submitted or published elsewhere for any degree or diploma examination. Best of luck

Mr. Ravi Kant Vyas (Faculty guide) Engineering College Bikaner Bikaner (Raj)

Preface
Beginning of the system project is entirely creative. This does not come all of a sudden, but it comes by result of discussion, consultation and contemplation. Problem unsolved here can never be satisfactory eliminated later. It is therefore a slow process. Moreover practical training is an important part of management courses. The theoretical studies are not sufficient to get into the corporate world. Only practical knowledge can help us to understand the complexities of large scale organizations. To develop healthy managerial and administration skill in potential managers, it is necessary that theoretical knowledge must be supplemented with exposure to the real environment. Actually, it is life for, a management itself is realized. In my case I confronted myself to Anand Rathi Group. And the exposure that I could not gained from the books. I found it very interesting and challenging. I did my training at BIKANER branch office and my topic of project is "Perception and Behavior of Investor on Capital Market with special reference to Anand Rathi Shares and Stock Brokers limited.

ACKNOWLEDGEMENT
Heartfelt thanks to the following people. A Few typewritten words of thanks can-not really express the sincerity of my gratitude. But I am still trying to put into words my gratefulness towards all who have helped & encouraged me in carrying out this project. I would like to thank Mr. Giriraj Kiradoo (HOD:BBA)to give me guidelines and my worthy thanks to my teacher Mr. Ravi Kant Vyas (faculty member) for their valuable contribution during the academic session and guidance in preparation of this project report. This report conveys my heartiest thanks to Mr. Santosh Acharya Branch Manager of ANAND RATHI SHARES AND STOCK BROKERS LIMITED. for giving me this project & helping me in completion of this project. No praise is ample for the never tiring efforts of my colleagues whose constant support feedback, guidance & practical suggestions helped me in completing this Project successfully.

TO THE GUIDE
Student owes a debt of gratitude to his esteemed guide, Mr. Ravi Kant Vyas, Lecturer in engineering College Bikaner, for his gifted guidance, encouragement, and unceasing inscription, throughout training and study. Student feels better than them to have him as his guide. Beside the path finder for him, his qualities of professional competence and way of working was constant inspire and encourage him to keep the flam of management study burning till the generation passes. Students extend his earnest feeling for the interest and affection that he graciously lavished upon this work. Students shall ever remain grateful and owe his regards for the masterly guidance.

(RenuMahaya ch)

DECLARATION
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\ I hereby declare that the project "Perception and Behavior of Investor on Capital in ANAND RATHI SHARES & STOCK LIMITED is original and bonafied work done by me. The project is being submitted in partial fulfillment requirements for the award degree of Bachelors of Business Administration, MAHARAJA GANGA SINGH UNIVERSITY.

EXECUTIVE SUMMARY

Investing in equities in a market like India is speculative and involves risk that may be greater than other types of investment strategies. Before investing an Investor should be careful enough about him investment decision to avoid erosion of wealth. As seen in the recent times the volatility of market is more detrimental to the retail investors as it seems to be lucrative for speculative gains of short duration of time. Hence an investor has to evaluate his options carefully for a prudent investment, keeping long-term horizon in mind.

The report has tried to bring out the parameters those are of paramount importance to general public dealing in an equity trading on day-to-day and delivery base trading. The working methodology has been discussed i.e. the data collection methods, sampling methods and the survey questionnaire methods. The questionnaire prepared is designed so as to cover a wide range of customer touch points The report gave a view about the investors perception that what they think while making investments in shares. A sample of 100 people was selected randomly and survey was done as per the parameters of the questionnaire. The results of every parameter have been included in this report and shown graphically (Pie Charts, bar graphs etc.) A complete structure of the research design has been included. Apart from above discussed points the brief history of Anand Rathi Group, its business diversification and a brief introduction about the concept of share trading.

Certificate from the corporation Certification from the faculty guide 6

Preface Acknowledgement Declaration Executive summary TABLE OF CONTENT

CONTENTS S.No.

Title GROUP INTRODUCTION FINANCIAL MARKET CAPITAL MARKET PRIMARY MARKET SECONDARY MARKET OVERVIEW OF THE INDUSTRY BOMBAY STOCK EXCHANGE NATIONAL STOCK EXCHANGE TRADING MECHANISM

Page No. 9 10 11 11 12 13 15 18 22

RESEARCH METHODOLOGY RESEARCH TITLE OF RESEARCH OBJECTIVE OF RESEARCH SIGNIFICANCE OF RESEARCH METHODOLOGY DATA COLLECTION RESEARCH DESIGN LIMITATIONS OF THE RESEARCH PROFILE OF THE COMPANY

23 24 24 24 24 25 25 26 26

COMPANY INTRODUCTION

27 28

EVOLUTION OF ANAND RATHI MANAGEMENT TEAM AR VISION MAIN OBJECTIVES OF THE COMPANY WHY ANAND RATHI GROUP SERVICE PROFILE OF ANAND RATHI MAIN CUSTOMERS OF ANAND RATHI COMPETITION INFORMATION

29 30 32 32 34 35 37 38 38

PRODUCTS AND SERVICES EQUITY IPO MUTUAL FUND LIP & SIP INSURANCE BROKING DEPOSITORY SERVICES COMMODITIES CURRENCY PMS

41 43 47 47 48 49 50 50 51 51 51

CONCEPTUAL DISCUSSION

53

SWOT ANALYSIS PROCESSING AND DATA ANALYSIS CONCLUSION AND RECOMMENDATIONS ANNEXURE BIBLIOGRAPHY

70 73 87 91 96

FINANCIAL MARKET

In economics, typically, the term market means the aggregate of possible buyers and sellers of a thing and the transactions between them. The term "market" is sometimes used for what are more strictly exchanges, organizations that facilitate the trade in financial securities, e.g., a stock exchange or commodity exchange. This may be a physical location (like the NYSE) or an electronic system (like NASDAQ). Much trading of stocks takes place on an exchange; still, corporate actions (merger, spin-off) are outside an exchange, while any two companies or people, for whatever reason, may agree to sell stock from the one to the other without using an exchange. Trading of currencies and bonds is largely on a bilateral basis, although some bonds trade on a stock exchange, and people are building electronic systems for these as well, similar to stock exchanges. Financial markets can be domestic or they can be international.

Types of financial markets

The financial markets can be divided into different subtypes: Capital markets which consist of: Stock markets, which provide financing through the issuance of shares or common stock, and enable the subsequent trading thereof. Bond markets, which provide financing through the issuance of bonds, and enable the subsequent trading thereof.

Commodity markets, which facilitate the trading of commodities. Money markets, which provide short term debt financing and investment. Derivatives markets, which provide instruments for the management of financial risk.

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Futures markets, which provide standardized forward contracts for trading products at some future date; see also forward market. Insurance markets, which facilitate the redistribution of various risks. Foreign exchange markets, which facilitate the trading of foreign exchange.

The capital markets consist of primary markets and secondary markets. Newly formed (issued) securities are bought or sold in primary markets. Secondary markets allow investors to sell securities that they hold or buy existing securities

Capital market
A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year[1], as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market (equity securities) and the bond market (debt). Financial regulators, such as the UK's Financial Services Authority (FSA) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions to ensure that investors are protected against fraud, among other duties. Capital markets may be classified as primary markets and secondary markets. In primary markets, new stock or bond issues are sold to investors via a mechanism known as underwriting. In the secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, over-the-counter, or elsewhere

Primary market
The primary market is that part of the capital markets that deals with the issue 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 an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus. Primary markets create long term instruments through which corporate entities borrow from capital market. Features of primary markets are: This is the market for new long term equity capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called the new issue market (NIM). In a primary issue, the securities are issued by the company directly to investors. The company receives the money and issues new security certificates to the investors. Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business.

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The primary market performs the crucial function of facilitating capital formation in the economy. The new issue market does not include certain other sources of new long term external finance, such as loans from financial institutions. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as "going public." The financial assets sold can only be redeemed by the original holder. Initial public offering; Rights issue (for existing companies); Preferential issue.

Methods of issuing securities in the primary market are:

Secondary market:The secondary market, also known as the aftermarket, is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold.[1]. The term "secondary market" is also used to refer to the market for any used goods or assets, or an alternative use for an existing product or asset where the customer base is the second market (for example, corn has been traditionally used primarily for food production and feedstock, but a "second" or "third" market has developed for use in ethanol production). Another commonly referred to usage of secondary market term is to refer to loans which are sold by a mortgage bank to investors such as Fannie Mae and Freddie Mac. With primary issuances of securities or financial instruments, or the primary market, investors purchase these securities directly from issuers such as corporations issuing shares in an IPO or private placement, or directly from the federal government in the case of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market. The secondary market for a variety of assets can vary from loans to stocks, from fragmented to centralized, and from illiquid to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies. Exchanges such as the New York Stock Exchange, Nasdaq and the American Stock Exchange provide a centralized, liquid secondary market for the investors who own stocks that trade on those exchanges. Most bonds and structured products trade over the counter, or by phoning the bond desk of ones broker-dealer. Loans sometimes trade online using a Loan Exchange.

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OVERVIEW OF THE INDUSTRY

The only stock exchanges operating in the 19th century were those of Bombay set up in 1875 and Ahemadabad set up in 1894. These were organized as voluntary non-profit making organization of brokers to regulate and protect their interests. Before the control on securities trading became a central subject under the constitution in 1950, it was a state subject and the Bombay securities contract (CONTROL) Act of 1952 used to regulate trading in securities. Under this Act, the Bombay stock exchanges in 1927 and Ahemadabad in 1937. During the war boom, a number of stock exchanges were organized in Bombay, Ahemadabad and other centers, but they were not recognized. Soon after it became a central subject, central legislation was proposed and a committee headed by A.D. Gorwala went into the bill for securities regulation. On the basis of committees recommendations and public discussions the securities contracts (regulations) Act became law in 1956.

DEFINITION OF STOCK EXCHANGE

Stock exchange means anybody or individuals whether incorporated or not, constituted for the purpose of assisting, regulation or controlling the business of buying, selling or dealing in securities. It is an association of member brokers for the purpose of self regulation and protecting the internet of its members. It can operate only if it is recognized by the Govt. under the securities contract (regulation) Act, 1956 the recognition is granted under section 3 of Act by the Central Govt. ministry of finance.

What is an Index? 13

To understand the use and functioning of the index derivatives markets, it is necessary to understand the underlying index. A stock index represents the change in value of a set of stocks, which constitute the index. A market index is very important for the market players as it acts as a barometer for market behavior and as an underlying in derivative instruments such as index futures. BYELAWS Beside the above act, the securities contract (regulation) rules were also made in 1975 to regulate certain matter of trading on Stock Exchange. These are also byelaws of the exchanges, which are concerned with following subjects. Opening/Closing of the Stock Exchange, timing of trading, regulation of blank transfer, regulation of Badla or carryover business, control of statement, and other activities of stock exchange, fixation of margins, fixation market price or making price, regulation of intraday (jobbing), regulation of broker trading, brokerage charges, trading rules on exchanges, attribution and settlement of disputes, settlement and clearing of the trading etc.

REGULATION OF STOCK EXCHANGE

The securities contract (regulation) is the basis of the stock exchange in India. No exchange can operate legally without the Govt. permission or recognition. Stock exchanges are given monopoly in certain areas under section 19 of the above Act to ensure that the control and regulation are facilitated. Recognition can be granted to a stock exchange provided certain condition are satisfied and the necessary information is supplied to the government. Recognition can also be withdrawn, if necessary. Where there are no stock exchanges, the government can license some of the brokers to perform the function of stock exchange in its absence.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

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SEBI was setup as an autonomous regulatory authority by the Government of India in 1988 to perform the interest of investors in the securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto. It is empowered by two Acts namely the SEBI act, 1992 and the securities contract (regulation) Act 1956 to perform the function of protecting investors right and regulating the capital market. The SEBI Act 1992 was enacted to empower SEBI with statutory powers for: Protecting the interests of investors in securities. Promoting the development of the securities market Regulating the securities market Its regulatory jurisdiction extends over corporate in the issuance of capital and transfer of securities. It has powers to register and regulate all the market all market intermediaries and also to penalize them in case of violations of the provisions of the ACT, rules and regulations made there under. SEBI has a full autonomy and authority to regulate and develop an orderly securities market

BOMBAY STOCK EXCHANGE

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The stock exchange, Mumbai, popularly known as BSE was established in 1875 as The Native share and stock broker association, as a voluntary non-profit making association. It has an evolved over the year into its present status as the premiere stock exchange in the country. It may be noted that the stock exchanges the oldest one in the Asia, even older than the Tokyo Stock Exchange, which was founded in 1878. The Exchange, while providing an effective and transparent market for trading in securities, uphold the interest of the investors and ensure redressed of their grievances, whether against the companies or its own member brokers. It also strives to educate and enlighten the investors by making available necessary informative inputs and conducting investor education programmes. A governing board comprising of 9 elected directors, 2 SEBI nominees, 7 public representatives and an executive director is the apex body, which decides the policies and regulates the affairs of the exchanges.The executive director as the chief executive officer is responsible for the day today administration of the exchange. The average daily turnover of the exchange during the year 2006-07 (April-March) was Rs. 6984.19 crores and average number of daily trades 15.69 lakhs.

BSE INDICES

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In order to enable the market participants analysis etc., to track the various ups and downs in the Indian stock market, the Exchange has introduced in 1986 an equity stock index called BSE-SENSEX that subsequently became the barometer of the moments of the share prices in the Indian Stock market. It is a Market capitalization weighted index of 30 components stocks representing a sample of large, well-established and leading companies. The base year of Sensex is 1978-79. The Sensex is widely reported in both domestic and international markets through print as well as electronic media. Sensex is calculated using a market capitalization weighted method. As per this

methodology, the level of the index reflects the total market value of all 30-component stocks form different industries related to particular base period. The total market value of a company is determined by multiplying the price of its stock by the number of shares outstanding. Statisticians call an index of a set of combined variables (such as price and number of shares) a composite Index. An Indexed number is used to represent the results of this calculation is order to make the value easier to work with the track over a time. It is much easier to graph a chart based on Indexed values than one based on actual values world over majority of the well-known Indices are constructed using Market capitalization weighted method. In practice, the daily calculation of SENSEX is done dividing the aggregate market value of the 30 companies in the Index Divisor. This keeps the Index comparable over a period of time and if the reference point for the entire Index maintenance adjustments. SENSEX is widely used to describe the mood in the Indian Stock Markets. Base year average is changed as per the formula new base year average = old base year average* (new market value/old market value).

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NATIONAL STOCK EXCHANGE

The NSE was incorporated in Now 1992 with an equity capital of Rs. 25 crores. The international securities consultancy (ISE) of Hong Kong has helped in setting up NSE. ISE has prepared the detailed business plans and installation of hardware and software systems. The promotions for NSE were financial institutions, insurance companies, banks an SEBI capital market ltd., Infrastructure leasing and financial services ltd. and stock holding corporation ltd. It has been set up to strengthen the move towards professionalization of the capital market as well as provide nationwide securities trading facilities to investors. NSE is not an exchange in the traditional sense where brokers own and manage the exchange. A two tier administrative set up involving a company board and a governing abroad of the exchange is envisaged. NSE is a national market for share PSU bonds, debentures and government securities since infrastructure and trading facilities are provided.

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NSE-NIFTY

The NSE on April 22, 1996 launched a new equity Index. The NSE-50 is the new index, which replaces the existing NSE-100 index, is expected to serve as an appropriate Index for the new segment of futures and options.Nifty means National Index for Fifty Stocks. The NSE-50 comprises 50 companies that represent 20 board Industry groups with an aggregate market capitalization of around Rs. 5, 70,000 crores. All companies included in the Index have a market capitalization in excess of Rs. 1000 crores each and should have traded for 85% of trading days at an impact cost of less than 1.5%. The base period for the close of prices on Nov 3, 1995, which makes one year of complete operation of NSEs capital market segment. The base value of the Index has been set at 1000.

NSE-MIDCAP INDEX

The NSE madcap Index or the Junior Nifty comprises 50 stocks that represents 21 abroad Industry groups and will provide proper representation of the madcap segment of the Indian capital Market. All stocks in the index should have market capitalization of greater than Rs. 600 crores and should have traded 85% of the trading days at an impact cost of less 2.5 %.

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The base period for the index is Nov 4, 1996, which signifies two years for completion of operations of the capital market segment of the operations. The base value of the Index has been set at 1000. Average daily turnover of the present scenario 258212 (Laces) and number of averages daily trades 2160 (Laces).

THE SENSEX AND NIFTY

In India the most popular indices have been the BSE Sensex and S&P CNX Nifty. The BSE Sensex has 30 stocks comprising the index which are selected based on market capitalization, industry representation, trading frequency etc. It represents 30 large wellestablished and financially sound companies. The Sensex represents a broad spectrum of companies in a variety of industries. It represents 14 major industry groups. Then there is a BSE national index and BSE 200. However, trading in index futures has only commenced on the BSE Sensex.

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While the BSE Sensex was the first stock market index in the country, Nifty was launched by the National Stock Exchange in April 1996 taking the base of November 3, 1995. The Nifty index consists of shares of 50 companies with each having a market capitalization of more than Rs 500 crore.

FUTURES AND STOCK INDICES

For understanding of stock index futures a thorough knowledge of the composition of indexes is essential. Choosing the right index is important in choosing the right contract for speculation or hedging. Since for speculation, the volatility of the index is important whereas for hedging the choice of index depends upon the relationship between the stocks being hedged and the characteristics of the index. Choosing and understanding the right index is important as the movement of stock index futures is quite similar to that of the underlying stock index. Volatility of the futures indexes is generally greater than spot stock indexes. Every time an investor takes a long or short position on a stock; he also has a hidden exposure to the Nifty or Sensex. As most often stock values fall in tune with the entire market sentiment and rise when the market as a whole is rising. Retail investors will find the index derivatives useful due to the high correlation of the index with their portfolio/stock and low cost associated with using index futures for hedging. 21

TRADING MECHANISM
Earlier trading on stock exchanges in India used to take place through open outcry, without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency National Stock Exchange introduced a nationwide on line fully automated screen based trading system where a member can punch in to the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a counter party. Screen based trading electronically matches orders on a price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It enables market participants, irrespective of their geographical locations to trade with one another and it provides equal access to everybody. NSE has main computer which is connected through Very Small Aperture Terminal (VSAT) installed at its office. The main computer runs on a default tolerant STRATUS mainframe computer at the exchange. Brokers have terminals installed at their premises which are connected through VSATs. An investor informs a broker to place an order on his behalf.

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RESEARCH METHODOLOGY

Research

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Research is used to choose the best line of action (in the light of growing competition and increasing uncertainty). Research in common context refers to a search for knowledge. It can also be defined as a scientific and systematic search for gaining information and knowledge on a specific topic of phenomena. In management research is extensively used in various areas. Research is a structured inquiry that utilizes acceptable scientific methodology to solve problems and create new knowledge that is generally applicable. It contains characteristics like Controlled, Rigorous, Systematic, Valid and verifiable, Empirical, Critical.

Title of Research
Perception and Behavior of Investor on Capital

Objective of Research
To gain practical insight about investor behavior relates to investment and their satisfaction level with depository services and broking institutions as like value added services and individual accounts of Anand Rathi group. To find out the intention of customers in which he/she wants to invest. To give suggestions or recommendations to the organization after analysing the facts and findings.

Scope of Research
The research was pertained to the Bikaner city. The researcher had taken those persons which are investors or non investor or want to invest in Anand Rathi. The research was conducted for a period of 45 days from June 2010 to July 2010.The researcher contacted to customers according to the systematic random sampling method in different area of Bikaner city fieldwork. The conclusion and interpretation hold good to the situation as of then.

Significance of Research
To Corporation: The research has provided the corporation comprehensive
information about its customers behavior. The researcher help the corporation to know about the need and wants of their customers and try to fulfill their genuine expectations so as to move with the current trend of Buying Market in which customer is the king of the market to prevent the customer from switching over and make them brand loyal. The study helps the corporations to critically analysis themselves so as to improve in respective fields.

To Researcher: The researcher not only fulfilled his requirement for the Degree of
BBA but also learnt a lot in the field of customers research.Researcher has got an opportunity of implementing his theoretical knowledge of management curriculum in practical life. To Others: The research is significant for the others who are interested to know in details about daily investment behavior of consumers and problem which have to

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face by investors. The research will also able to guide the other research scholars for further study.

Research Methods
Methodology used is explained in detail. Data collection, primary or secondary, is done using appropriate technique. The type of data (evidence, framework, argument) collected and used are evidently appropriate & justified. Contact Method with Personal Interview and Internet Connectivity. Data collection method used through survey for primary data and internet surfing for secondary data. Structured schedule and computer with internet research instrument was used. Universe type was Anand Rathi customers and their investment interested consumer from different-2 sectors.

Data Collection
Primary data: - It is collected for new research for the first time.
Personal interview Close interview Survey conduction Group discussion

Secondary Data: - Already existed data is called secondary data. I collected them from
following method. Internet Books Previous research

Pilot Survey
A schedule was prepared consisting of 15-20 questions from investors. The questions were both open and close ended. The survey was done in the terminals at Modern Market, Bothra Complex in Bikaner city. Respondents answered most of the questions but certain questions were unanswered for pilot survey which was shown as the dissatisfaction from the investment instruments and other services relates to market and other conditions, certain new questions were also generated, ten respondents were taken from different terminals.

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RESEARCH DESIGN
A research design is a specification of method and procedures or acquiring the information needed. It is the overall observational pattern or framework of the projects that stipulates what information is to be collected, from which source, by what procedure.

Sampling design
Sampling technique: Systematic Random Sampling- First hundred customers of Anand Rathi Group which receive billing and holding statement during the training period were chosen for the research. Unit Sample: Customers of Anand Rathi Group in Bikaner city. Sample size: 100

Limitations
Though tried to make utmost care, to make research work exhaustive, still the researcher could not rule out the presence of few unintentional and unavoidable flows in research:1. The research was confined to certain parts of Bikaner and does not necessarily shows a pattern applicable to all of Country. 2. Some respondents were reluctant to divulge personal information as income level, contact and reason for not investment orientation which can affect the validity of all responses. 3. In a rapidly changing industry, analysis on one day or in one statement can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings. 4. Stipulation due to instrument used for the collection of data. 5. This research is based on personal interview so there may be chances of business. 6. Majority of the customers accepted this system in order to abide by the regulations as set by SEBI. 7. Frustrations among investors due to market inflation which is major problem in ignoring the idea of investment by the investors. 8. The sample size is limited to 100 numbers of respondents, who represent the population. 9. The study is conducted for a period of 3-4 weeks.

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COMPANY PROFILE

COMPANY PROFILE

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INTRODUCTION TO ANAND RATHI GROUP

Anand Rathi is a leading full service investment bank founded in 1994 offering a wide range of financial services and wealth management solutions to institutions, corporations, highnet worth individuals and families. The firm has rapidly expanded its footprint to over 350 locations across India with international presence in Dubai, Hong Kong & New York. Founded by Mr. Anand Rathi and Mr. Pradeep Gupta, the group today employs over 2,500 professionals throughout India and its international offices AR provides a breadth of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and insurance - all of which are supported by powerful research teams. The firm's philosophy is entirely client centric, with a clear focus on providing long term value addition to clients, while maintaining the highest standards of excellence, ethics and professionalism. The entire firm activities are divided across distinct client groups: Individuals, Private Clients, Corporate and Institutions.

Company Profile
a. Member of Bombay Stock Exchange and National Stock Exchange (Cash and Derivatives) b. Depository Participant (Central Depository Services Limited and NSDL) c. Member of National Commodities Index and Multi Commodities Exchange d. Insurance Brokerage (IRDA) e. Member of Dubai Gold and Commodities Exchange f. Mutual Funds Distribution (Association of Mutual Funds of India

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EVOLUTION OF ANAND RATHI GROUP

1994: Started activities in consulting and Institutional equity sales with staff of 15 1995: Set up a research desk and empanelled with major institutional investors 1997: Introduced investment banking businesses Retail brokerage services launched 1999: Lead managed first IPO and executed first M & A deal 2001: Initiated Wealth Management Services 2002: Retail business expansion recommences with ownership model 2003: Wealth Management assets cross Rs1500 crores Retail Branch network exceeds 50 Insurance broking launched Launch of Wealth Management services in Dubai 2004: Retail Branch network expands across 100 locations within India Commodities brokerage and real estate services introduced Wealth Management assets cross Rs3000crores Institutional equities business re-launched and senior research team put in place 2005: Retail Branch network expands across 130 locations within India Real Estate Private Equity Fund Launched 2006: AR Middle East, WOS acquires membership of Dubai Gold & Commodity Exchange (DGCX) Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money 2006 poll 29

Ranked 6th in FY2006 for All India Broker Performance in equity distribution in the High Net worth Individuals (HNI) Category Ranked 9th in the Retail Category having more than 5% market share Completes its presence in all States across the country with offices at 300+ locations within India 2007: Citigroup Venture Capital International picks up 19.9% equity stake Retail customer base crosses 100 thousand Establishes presence in over 350 locations

Management Team
AR brings together a highly professional core management team that comprises of individuals with extensive business as well as industry experience. Our senior Management comprises a diverse talent pool that brings together rich experience from across industry as well as financial services.

Mr. Anand Rathi - Group Chairman Chartered Accountant Past President, BSE Held several Senior Management positions with one of India's largest industrial groups Prior to establishing his own company, Mr. Rathi headed Indian Rayon & Industries, as Senior President. He has held a series of responsible positions with the Birla group and was also instrumental in setting up of Birla Global Finance. In his 40 years of being in the corporate world, Mr. Rathi has held several key positions on various regulatory and professional boards, including, President, Bombay Stock Exchange (BSE), and Member, Central Council of Institute of Chartered Accountants (ICAI). As President of BSE, Mr. Rathi played a key role in the expansion plan of BOLT, the online trading system of the Exchange and setting up of the Trade Guarantee Fund. He was the moving force behind setting up of the Central Depository Services (India) Ltd. He is a gold medalist Chartered Accountant.

Mr. Pradeep Gupta - Managing Director Plus 15 years of experience in Financial Services With over twenty years experience in the securities market. Cofounder and key driver of the Retail and Institutional Equities business of the group

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Mr. Amit Rathi - Managing Director Chartered Accountant & MBA Plus 11 years of experience in Financial Services A rank holder Chartered Accountant and an MBA from Leonard N. Stern School of Business, New York University joined the group in 1998. He was instrumental in establishing the groups private wealth management and investment banking businesses. Calling him a financial guru, the Times of India group, listed Amit in 2008 amongst the top 51 young Marwari in India (under the age of 40).

P G Kakodkar | Director Former Chairman Bank of India. Director in Financial Technologies (India). Director in Sesa Goa Ltd. Director in SBI Funds Management Pvt Ltd & the Multi Commodity Exchange of India Ltd and a M. A. in Economics of State.

Dr. S A Dave | Director Former Chairman Securities & Exchange Board of India (SEBI) and Deputy Director of the RBI. Former Chairman Unit Trust of India (UTI). Member of General Committees of Government of India & Financial Reforms and Chairman CMIE 1998 till date. And a M. A. (USA) with Ph D in Economics.

C D Arha | Director Formerly Secretary in the Union Ministry of Mines. Special Secretary & Additional Secretary in the 31

Ministry of Coal. Resident Chief Information Commissioner AP (Right to Information Act). Commissioner Civil Supplies (AP). Chairman & MD, APSEC. With a M .A. (History) and diploma Management & Administration of Rural Development.

Ajit Bhushan | Director Managing Director Citi Venture Capital London Over 17 years experience with Citi. Joined CVC international in 2001. Worked on Strategy and business development for Citibank in CEEMEA region and managed Cash Management Business for Citi in Poland and India. B Tech (IIT Delhi) and an MBA (IIM Ahmadabad).

MAIN OBJECTS OF THE COMPANY

The main objects to be pursued by the Company on its incorporation are: To hold investments in various step-down subsidiaries for investing, acquiring, holding, purchasing or procuring equity shares, debentures, bonds, mortgages, obligations, securities of any kind issued or guaranteed by our Company.

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To provide financial consultancy services; to provide investment advisory services on the internet or otherwise; provide financial consultancy in the area of personal and corporate finance; publish books and CD ROMs and any other information related to the above.

To conduct the business of sale, purchases, distribution and transfer of shares, debts, instruments and hybrid financial instruments and to perform all related, incidental, ancillary and allied services.

To conduct depository participant services; to conduct de-materialization and rematerialization of shares; set up depository participant centers at various regions in India and to perform all related, incidental, ancillary and allied services.

To receive funds, deposits and investments from the public, Government agencies, financial institutions and corporate bodies; grant advances and loans; conduct advisory services related to banking activities, project financing, funding of mergers and acquisition activities; fund management and activities related to money market operations.

To carry on the business of portfolio management services, investment advisory services; custodial services; asset management services; leasing and hire purchase; mutual fund services and to act as brokers of real estate and financial instruments.

To carry on the business of financing; provide lease and hire purchase services; to provide consultancy in the area of lease and hire purchase financing.

To operate mutual funds; receive funds from investors; equity or debt instrument research activity instrument in debt and/or equity instruments

WHY ANAND RATHI GROUP

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Quick Information
Get access to information about a company, its background, any relevant news about the company in recent times. Let yourself be well versed with information of whereabouts of the company, owners & people who make a difference to the business and with whom you are most likely to identify the company.

Company Details
Get to know a company better in terms of key personnel related to its operations and its shareholding pattern. Get an insight as to the thought process behind the companys financing plans, the financing pattern followed by the company and the key personnel who are in control of the business.

Investor Information
Access information about how often has the company declared Dividends, Bonus issues and how has it been performing as compared to other companies in its peer group. Assess how beneficial will be your investment in the company according to its history of dividends, bonus and peer group comparison. See which companies are performing better within the same industry circle and make an informed decision.

Corporate Announcements
Be the first to know about any public announcement made by companies. Know the benefits that accrue to your investments before anyone else does. Read it firsthand & take necessary actions accordingly. Take note of the board meetings held, resolutions made and critical corporate decisions affecting your investment and identity of the company you have invested in.

Financial Statements
Analyze the financial wellbeing of a company, profits earned through its operations, cash flows during the year. Access the strength of a company in terms of financing its day to day operations, Fixed assets and its capability to take on future ventures successfully.

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Key Ratios
Evaluate the worth of your investments through the ratios that resemble the performance of a company. It is one of the easiest modes of performance comparison between companies. Compare the differences between standard ratios and actual ratios of the company that you want to invest into. Check what the tolerable level of disparity is before its time for you to reconsider your investments in the company.

Results
Access the latest company results posted on internet about any company of your choice. Be in touch with the results affecting your investments.

Research Reports provided by Anand Rathi Group

Equity & FNO Get access to Fundamental, Technical, FNO & Other reports to keep you updated on everyday performance of the market. Insurance View the performance of various insurance companies of your interest on monthly basis Investment Strategy Stay in touch with the changes in your economy and foreign trade status

Commodities Keep yourself updated on the commodity activities in the country and in abroad as well. Mutual Funds Stay updated with the latest NFO details, daily fund tracker and view What's In / Out Institutional Equities
View updates about a company, over a sector and latest results declared by the companies

SERVICES PROFILE OF ANAND RATHI

WEALTH MANAGEMENT
Centers located at Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Dubai and Bangkok Dealings in: 1. EQUITIES a) Stocks b) PMS 35

c) Derivatives d) Mutual Funds 2. FIXED INCOME SCHEMES Bonds 3. COMMODITIES AND PRECIOUS METALS 4. LIFE AND GENERAL INSURANC 5. REAL ESTATE PRIVATE EQUITY FUND 6. CURRENCIES 7. STRUCTURED PRODUCTS AND CAPITAL GUARANTEED NOTES 8. ALTERNATIVE AND NON CORRELATED INVESTMENTS

Value added services by Anand Rathi:

1. COMPREHENSIVE PRODUCT RANGE 2. RISK MANAGEMENTS SKILLS a) Sophisticated asset allocation and risk modeling processing b) In depth understanding of risks, opportunities and correlations across Markets 3) PROPERITARY GLOBAL ECONOMIC AND INVESTMENT RESEARCH Focusing on long term dynamics and trends 4) CLIENT CENTRIC RESEARCH Only third party products (no unbiased interest and research investment) 5) BANKING AND CORPORATE FINANCE 6. DEBT ADVISORY a. Rupee and Foreign Currencies b. Debt Raising and Restructuring / Negotiations c. Credit Settlement / OTS 7. COMPREHENSIVE SERVICES WITH STRONG DISTRIBUTION CAPABILITY 8. DEEP INDUSTRY AND SECTORAL KNOWLEDGE AND RESOURCES 9. LOCAL STRENGTH Underpinned by network of national offices 10. TRULY INDEPENDENT ADVICE Not tied to any product, market and bank 11. BROKERAGE AND DISTRIBUTION 36

MAIN CUSTOMERS OF Anand Rathi

INDUSTRIAL GROUPS
BIRLAs Birla Sunlife Insurance, Grasim Industries, Hindalco, Indal, Indian Rayon, Indo Gulf, Transworks VENDATAs Balco Industries, Hindustan Zinc Limited, Sterlite Industries, Vendata TATAs Tata Investments, Tata Steel, Tata Motors Limited, Videsh Sanchar Nigam Limited

MULTINATIONALS
Bayer, Clariant, Godfrey Philips, Goodlass Nerolac, Hindustan Lever Limited, Nestle, Thomas Cook Travels and many more BANKS Andhra Bank, Bank of India, Bank of Baroda, Canara Bank, HDFC Bank, General and Life Insurance Corp, Punjab National Bank and many more CORPORATES ACC Cement, Berger Paints, Boots Piramal, Century Textiles, CRISIL, Crompton Greaves, Dabur, DCM, Emami, GeneralElectrics Shipping, Globus, Godrej, Gujarat Ambuja, ICICIVentures, HCL, Infosys, Indian Tobacco Company, JetAirways, Jindal Steel, Larsen & Tubro, Mahindra & Mahindra, Radico Khaitan, Raymonds, Wipro, Varun Shipping and many more.

COMPETITORS OF Anand Rathi REMOTE COMPETITORS

INDIAN BANKS Kotak Bank Housing Development and Finance Corporation Bank Industrial Credit and Investment Corporation of India Bank State Bank of India Unit Trust of India Bank of Baroda Canara Bank

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ING Vysya Cholamandalam Lotus India Principal Optimix Sahara

INDIAN ASSET MANAGEMENT COMPANIES

FOREIGN BANKS and ASSET MANAGEMENT COMPANIES

ABN Amro Bank Deustche Bank Hongkong Shanghai Bank Corporation Franklin Templeton DSP Merill Lynch BNP Paribas Quantum Taurus

IMMEDIATE COMPETITORS
RELIGARE ENTERPRISES Religare Enterprises Limited group comprises of Religare Securities Limited, Religare Commodities Limited and Religare Finvest Limited which deals in equity, commodity and financial services business. Religare Securities Limited is one of the leading broking houses of India and is dealing into Equity Broking, Depository Services, Portfolio Management Services, Institutional Equity Brokerage &Research, Investment Banking and Corporate Finance. Religare is a member of National Commodities Index and Multi Commodities Exchange and provides platform for trading in commodities, which is an online facility also. Religare Finvest Limited, a Non Banking Finance Company is aggressively making a name in the financial services arena in India. In a fast paced, constantly changing dynamic business environment, Religare Finvest Limited has delivered the most competitive products and services. Religare Insurance Broking Limited as a composite insurance broker deals in both insurance and reinsurance, providing our clients risk transfer solutions on life and non-life sides. This service will take benefit of Religares

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vast business empire spread throughout the country, providing their valued clients insurance services across India. KARVY Karvy is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300corporates, comprising the who is who of Corporate India. Karvy covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products like mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, Initial Public Offers, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments. JM MORGAN STANLEY JM Morgan Stanley is a joint venture between the JM Financial Group, one of Indias leading financial services groups and Morgan Stanley, one of the worlds pre -eminent financial services firms. JM Morgan Stanley offers a diverse range of financial services including capital raising, mergers and acquisitions, institutional and retail equity sales and trading, private wealth management and fixed income securities. JM Morgan Stanley has been involved in several landmark investment banking transactions for Indian as well as global clients and is one of Indias leading institutional brokerage houses. JM Morgan Stanley commenced operations in April1999 and currently operates through four companies, all of which are headquartered in Mumbai. JM Morgan Stanley has extensive global reach through its offices in eight Indian cities and Morgan Stanleys operations in 27 countries. GEOJIT FINANCIAL SERVICES Mr. C.J. George and Mr. Ranajit Kanjilal founded Geojit as a partnership firm in the year 1987. In 1993, Mr. Ranajit Kanjilal retired from the firm and Geojit became a proprietary concern of Mr. C .J. George. In 1994, it became a Public Limited Company by the name Geojit Securities Ltd. The Kerala State Industrial Development Corporation Ltd., in 1995, became a co-promoter of Geojit by acquiring24% stake in the company, the only instance in India of a government entity participating in the equity of a stock broking company. Geojit listed at Bombay Stock Exchange in the year 2000. In 2003, the Company was renamed as Geojit Financial Services Ltd. The board of the company consists of professional directors; including a Kerala government nominee with 2/3rd of the board members being Independent Directors. With effect from July 2005, the company is also listed at The National Stock Exchange. Geojit is a charter member of the Financial Planning Standards Board of India and is one of the largest DP brokers in the country. INDIA BULLS India bulls are Indias leading Financial Services and Real Estate company having over 640 branches all over India. India bulls serves the financial needs of more than

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4,50,000 customers with its wide range of financial services and products from securities, derivatives trading, depositary services, research & advisory services, consumer secured & unsecured credit, loan against shares and mortgage & housing finance. With around 4000 Relationship Managers, India bulls help its clients to Satisfy their customized financial goals. India bulls through its group companies have entered Indian Real Estate business in 2005. It is currently evaluating several large-scale projects worth several hundred million dollars

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Products & services

PRODUCTS AND SERVICES

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Anand Rathi Group works in above shown sectors. Its main products and services are: -

Products
Equities I Bonds I Mutual Funds I Derivatives Managed Investment Services / PMS Commodities FX Trading Life Insurance General Insurance Alternative Assets - Private Equity Funds - Structured Products - Real Estate Opportunities Fund Special Situation Opportunities Offshore Structures & Global Investments

Services
Creation of a customized financial strategy 42

Diversification of assets based on a formal process of asset allocation Active tracking, monitoring and review of portfolios Creation of private trusts Tax planning Estate planning Structuring of family wealth

Equity & Derivatives

Equity
Investing in shares is akin to owning part of a business. A profitable business keeps ploughing back profit to earn more profits. Hence unlike in investing in assets like gold and real estate, investing in shares, which represent ownership in productive asset (business) , hold very high returns potential. Equity Business caters: Needs of independent investors. Active traders Non-Resident Indian (NRI) investors.

ANAND RATHI OFFERS: Broker assisted trade execution Automated online investing Access to all IPO's. Cash N Carry Deliveries on Margin Selling of Deliveries before settlements High Intra-day exposures 43

Margin Financing

Value Adds: Stock collateral benefits Digital Contract Notes Research calls through multiple channels Phone trade Personal Investment Advisory Anand Rathi offers the purchase and sale of securities, which includes Equity, Derivatives and Commodities Instruments listed on National Stock Exchange of India Ltd (NSEIL), The Stock Exchange, Mumbai (BSE) and NCDEX.

TYPES OF ACCOUNTS
Anand Rathi Signature Account - Comprehensive services including research and investing guidance for independent investors. Non-Resident Indian (NRI) Investor Services - With an extensive range of investment products, you will discover an unwavering commitment to helping you invest in India. All of this comes to you backed by your Relationship Manager available to you 24x7. Is complemented by our knowledgeable and customer focussed Relationship Managers. Provides our clients with real-time service & 24/7 access to all information and products. Anand Rathi offers a full range of financial services and products ranging from Equities to Insurance to enhance your wealth and hence, achieve your financial goals.

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POST REGISTRATION SERVICES:

Deliver and receive cheques and securities Obtain market information Place orders Get access to IPOs via the Book Building route as well as to all the fixed price issues.

DOCUMENTS REQUIRED FOR TRADING ACCOUNT AND D-MAT A/C

2-passport size photograph. Photocopy of Income Tax Permanent Account Number (PAN) Card - If you do not have a PAN, then you would be required to give a declaration to that effect and fill form 60.

IDENTITY PROOF - PHOTOCOPY OF ANY OF THE FOLLOWING:

Passport PAN Card Voter ID Driving License Ration Card

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Address Proof - Photocopy of any one of Driving License / Passport/Ration Card/Voter Card/ Bank Statement.

There are various types of orders that can be placed in equity investment; such orders have been listed below: Delivery order: Orders where shares are delivered into the client's demat account for settlement and they cannot be sold on the same day of order placement. Once can only sell such shares once their delivery has been received. Intraday order: Orders where shares are bought and sold on the same trading day and there is not delivery of shares into the client's demat account for settlement. For such orders, settlement is done on net payment basis where only monetary effects are given to the client's account. Market Order: An order placed at current market price of a share in order to get instant execution of the order. This order is placed when an investor expects the share price to rise sharply and is thus keen on buying it. Such orders may get executed at market price when your order is placed but there can be some difference in the price at which your order was executed as there could be a price change while you place your order. After Market Order: An order that can be placed to buy or sell a share even when the market session is over. Such orders are executed when the next market session opens for trading. After Market orders can be placed within a specific time period which varies between different brokers. Stop Loss Order: An order that allows you to decide the maximum loss that you are ready to bear in intraday trading. As in intraday trading, you enter and exit the position within the same trading session, Stop Loss order is placed to safe guard against potential losses that may occur once your order is executed. Suppose you place a buy order at Rs.125 and it gets executed, in order to minimize the losses if any adverse price movement takes place; you need to place a reverse stop loss order. This order will be a sell order with the same quantity of stock that you have received as a result of the buy order. Now you need to specify the price at which you think you would like to exit the position which can be Rs. 120 and also the price at which your order should enter the market which can be Rs.123. This price (Rs.123) is called trigger price. If you think that the price may fall, from the current market price, then you can put this trigger in stop loss order to make sure that it enters the market only after the trigger price has been reached

IPO
Initial Public Offerings are one of the best rewarding investment options that provide an investor the opportunity to get into Primary Market investments, thus be a part of a Company and own a share in it. Subscribing to equity capital of a company is like owning a stake in the company. Investing early in a good company gives an opportunity to reap the benefits of it in the long run. IPO (primary market)

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investing is rewarding for both short term as well as long term investors.
ARG is a leading primary market distributor across the country. We have been consistently ranked among the top 10 distributors of IPOs on all major offerings. Our strong performance in IPOs has been a result of our vast experience in the Primary Market, a wide network of branches across India, strong distribution capabilities and a dedicated research team. Our IPO research team provides clients with in-depth overviews of forthcoming IPOs as well as investment recommendations.

Offerings of ARG

MUTUAL FUND

A mutual fund is a pool of money that is invested according to a common investment objective by an asset management company (AMC). The AMC offers to invest the money of hundreds of investors according to a certain objective - to keep money liquid or give a regular income. Investors buy a scheme if it fits in with their investment goals, like getting a regular income now or letting the money accumulate over the long term. Investors pay a small fraction of their total funds to the AMC each year as investment management fees. ARG provide following offers: 1. Strong AUM base Anand Rathi Financial Services is one of India's top mutual fund distribution houses having Assets Under Management (AUM) of Rs.4, 000 crores. 2. Wide Branch Network - Anand Rathi Financial Services has over 250 branches spread across 47

India. 3. Diversified Product offerings - Anand Rathi Financial Services offers the products of all leading Mutual Fund Houses. 4. Research backed advisory support - Our philosophy is to provide consistently superior, independent and unbiased advice to our clients backed by in-depth research. 5. Superior Service - Our employees are well trained and better equipped to take care of your investments. Our sales staff functions on the motto "the best services for our esteemed clients".

Lumpsum Investment Plans

We offer Lumpsum investment plans as well as systematic investment plans of all Mutual Fund houses to our customers Lumpsum Investment: Long term investment horizon - The Lumpsum option is best suited for investors with a medium to long term investment appetite & can withstand the periodic volatility. 2. Value picking - Lumpsum investments are apt for investors who wish to pick up funds investing in specific sectors or stocks.

Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP) - Advantages: 1. Volatility of market - Indian markets remain at their volatile best at most times. Timing investments in this market is difficult. SIP helps you tide over lows and ride the highs of the stock market. 2. Rupee Cost Averaging Advantage - When you invest the same amount in a fund at regular intervals over time, you buy more units when the price is lower. Thus, you may reduce your average cost per share over time.

3. Benefits of compounding Saving a small sum of money regularly makes money work with greater power of compounding with significant impact on wealth accumulation. 4. Disciplined & Regular Investing - SIP requires the investor to allocate a specific amount regularly over a period of time. This develops a habit of regular savings through market ups and downs, so that your investment behavior is not affected by short term market moves. 5. Small Amounts of Investments - One can start a SIP with lesser amounts when

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compared with other market linked products. Thus investors need not wait till they have accumulated a large capital to begin investing

Insurance Broking
As an insurance broker, we provide to our clients comprehensive risk management techniques, both within the business as well as on the personal front. Risk management includes identification, measurement and assessment of the risk and handling of the risk, of which insurance is an integral part. The firm deals with both life insurance and general insurance products across all insurance companies.Our guiding philosophy is to manage the clients' entire risk set by providing the optimal level of cover at the least possible cost. The entire sales process and product selection is research oriented and customized to the client's needs. We lay strong emphasis on timely claim settlement and post sales services.

ARGs services

: Risk Management Due diligence and research on policies available Recommendation on a comprehensive insurance cover based on clients needs Maintain proper records of client policies Assist client in paying premiums Continuous monitoring of client account Assist client in claim negotiation and settlement

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Depository Services
AR Depository Services provides you with a secure and convenient way for holding your securities on both CDSL and NSDL. Our depository services include settlement, clearing and custody of securities, registration of shares and dematerialization. We offer you daily updated internet access to your holding statement and transaction summary. Anand Rathi is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. Anand Rathi performs clearing services for all securities transactions through its accounts. We offer depository services to create a seamless transaction platform execute trades through Anand Rathi Securities and settle these transactions through the Anand Rathi Depository Services. Anand Rathi Depository Services is part of our value added services for our clients that create multiple interfaces with the client and provide for a solution that takes care of all your needs.

Commodities
Commodities broking Our commodities broking services include online futures trading through NCDEX and MCX and depository services through CDSL. Commodities broking is supported by a dedicated research cell that provides both technical as well as fundamental research. Our research covers a broad range of traded commodities including precious and base metals, Oils and Oilseeds, agro-commodities such as wheat, chana, guar, guar gum and spices such as sugar, jeera and cotton. In addition to transaction execution, we provide our clients customized advice on hedging strategies, investment ideas and arbitrage opportunities.

Currencies

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Anand Rathi is an established market leader in the exchange traded currencies in India, which delivers a consistent unparallel service and advice in the Rupee and other currencies. It offers various solutions to varied needs of the currency clients across the business segment. We offer complete hedging solutions to the end clients and help corporate in planning their remittances and receivables. This offers an all new segment to the trading community; the recently opened Rupee/Dollar is an excellent instrument for the retail investors with fewer amounts of margin (Low entry barrier), limited volatility, lower transaction costs and high transparency. We at Anand Rathi, thrive to give you the best of advise and help you trade.

Portfolio Management Services(PMS)

The Advanced Portfolio Tracker through our web site is available only for Registered Account holders of Anand Rathi Financial Services. The Portfolio Management System is an intuitive and easy to use tool which helps you keep track of your investments in Equity and Mutual Funds and also evaluate the performance based on the current market valuation. It gives you a 360-degree view about how your investments are performing. Its unmatched features, reports and tools will help you in your investment decisions.

Features of Portfolio Tracker

1 Family or Individual Account level access You could login as head of Family and enjoy multiple viewing options with graphical view of your portfolio. Viewing options include Asset allocation across family portfolios and family account wise holdings 2 Auto Sudation Transactions done through Anand Rathi on NSE/BSE are updated automatically at the end of the day in the Portfolio. We also auto update any corporate benefits accruing on your investments to give you a truly Automated experience. 3 Manual Entries allowed You can add/ edit and delete transactions to correct or build a accurate, single view of investments. 51

Option to add details for Rights/ Bonus and IPO Allotment for Equity and SIP/ SWP, etc. for MF. 4 Tracking of Equity & MF Investments Track your investments in Equities and Mutual funds. We will soon be adding other assets such as Futures & Options, Commodities, Gold, Currency etc. 5 Multiple Viewing Options of Holdings You could view investments through multiple lenses, aiding your investment decisions by using our viewing filter options. 6 Transaction History Access transaction level information of your investments across date range, with facility to edit / delete records, giving you the controls to your Portfolio Tracker. 7 Gains & Losses reporting Determine which investments have given what returns, segregated on Realized / Unrealized. Added feature of booked gains & losses bifurcated into Long Term & Short Term make handy inputs for filing your Tax returns. 8 Content Integration You can track your investments with the latest prices for BSE (15 min delayed) and NSE (5 minute delayed) and ascertain your realized and unrealized gain/ loss from time to time. Additionally get access to in-depth information on your investments with Company Info / Scheme profile along with news options with a click on your holdings.

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CONCEPTUAL DISCUSSION

CONCEPTUAL DISCUSSION INTRODUCTION AND CONCEPT OF SHARE TRADING

Trading in shares is old phenomena its regulation had been started when securities contract act had been formed in 1956. Transfer of resources from those with idle resources to others

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who have a productive need for them is most efficiently achieved through the securities market. It provides a channel for reallocation of savings to investments.

EQUITY MARKET AND DERIVATIVE MARKET

What is equity?
Financing a company through the sale of stock in a company is known as equity financing. Alternatively, debt financing (for example issuing Bonds) can be done to avoid giving up shares of ownership of the company. Unofficial financing known as trade financing usually provides the major part of a company's working capital (day-to-day operational needs). Trade financing is provided by vendors and suppliers who sell their products to the company at short-term, unsecured credit terms, usually 30 days. Equity and debt financing are usually used for longer-term investment projects such as investments in a new factory or a new foreign market. Customer provided financing exists when a customer pays for services before they are delivered, e.g. subscriptions and insurance.

EQUITY MARKET
Public equity markets are those where corporate raise resources through IPOs by getting listed in the stock exchanges. Public equity markets are subjected to a wide range of

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governance, disclosure, transparency and compliance norms set by the securities exchanges commissions/government agencies and also the self-regulatory functions set by the exchanges themselves. Institutional and retail investors mostly use this channel. The distinct advantages of the public equity capital are: a. b. c. d. Lower cost of capital for the firm Provide liquidity for current stockholders Shift monitoring costs for private lenders Firm can learn from information contained in the stock price movements.

However, public equity capital has some costs too. These include a. b. c. d. e. Disclosure of proprietary information Agency costs of outside equity Costs of reporting/filing with regulators/exchanges Costs of corporate control Under-pricing

A few features generally observed in the respect of the IPO markets include: Typically, IPO prices are below the level that they reach on the market a few days or weeks later, when more public information is available (under pricing). However the extent of under-pricing will narrow with several companies coming up for listing.

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Each IPO generates beneficial information externalities for other companies that are about to go public.

Privatized companies tend to list in public equity markets that offering better legal protection of shareholders.

The decisions to go public are affected by firms ownership structure. When company has only one owner or when banks holds majority shares, companies are less likely to prefer public equity.

UNDERSTANDING INDEX FUTURES

A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Index futures are all futures contracts where the underlying is the stock index (Nifty or Sensex) and helps a trader to take a view on the market as a whole. Index futures permits speculation and if a trader anticipates a major rally in the market he can simply buy a futures contract and hope for a price rise on the futures contract when the rally occurs. We shall learn in subsequent lessons how one can leverage ones position by taking position in the futures market. In India we have index futures contracts based on S&P CNX Nifty and the BSE Sensex and near 3 months duration contracts are available at all times. Each contract expires on the last Thursday of the expiry month and simultaneously a new contract is introduced for trading after expiry of a contract.

EXAMPLE:
Futures contracts in Nifty in July 2007 Contract month July 2007 Expiry/settlement July 27 56

August 2007 September 2007 On July 27 Contract month August 2007 September 2007 October 2007

August 24 September 28

Expiry/settlement August 25 September 28 October 26

The permitted lot size is 100 or multiples thereof for the Nifty. That is you buy one Nifty contract the total deal value will be 100*3000 (Nifty value)= Rs 3,00,000. In the case of BSE Sensex the market lot is 50. That is you buy one Sensex futures the total value will be 50*4000 (Sensex value)= Rs 2,00,000. The index futures symbols are represented as follows: BSE BSXJUN2007 (June contract) BSXJUL2006 (July contract) BSXAUG2006 (Aug contract) NSE FUTDXNIFTY28-JUN2007 FUTDXNIFTY28-JUL2007 FUTDXNIFTY28-AUG2007

OPTIONS
Stock markets by their very nature are fickle. While fortunes can be made in a jiffy more often than not the scenario is the reverse. Investing in stocks has two sides to it a)

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Unlimited profit potential from any upside (remember Infosys, HFCL etc) or b) a downside which could make you a pauper. Derivative products are structured precisely for this reason -- to curtail the risk exposure of an investor. Index futures and stock options are instruments that enable you to hedge your portfolio or open positions in the market. Option contracts allow you to run your profits while restricting your downside risk. Apart from risk containment, options can be used for speculation and investors can create a wide range of potential profit scenarios. We have seen in the Derivatives School how index futures can be used to protect oneself from volatility or market risk. Here we will try and understand some basic concepts of options.

What are options?

An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date. Option, as the word suggests, is a choice given to the investor to either honour the contract; or if he chooses not to walk away from the contract. To begin, there are two kinds of options: Call Options and Put Options. A Call Option is an option to buy a stock at a specific price on or before a certain date. In this way, Call options are like security deposits. If, for example, you wanted to rent a certain property, and left a security deposit for it, the money would be used to insure that you could, in fact, rent that property at the price agreed upon when you returned. If you never returned, you would give up your security deposit, but you would have no other liability. Call options usually increase in value as the value of the underlying instrument rises.

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When you buy a Call option, the price you pay for it, called the option premium, secures your right to buy that certain stock at a specified price called the strike price. If you decide not to use the option to buy the stock, and you are not obligated to, your only cost is the option premium. Put Options are options to sell a stock at a specific price on or before a certain date. In this way, Put options are like insurance policies If you buy a new car, and then buy auto insurance on the car, you pay a premium and are, hence, protected if the asset is damaged in an accident. If this happens, you can use your policy to regain the insured value of the car. In this way, the put option gains in value as the value of the underlying instrument decreases. If all goes well and the insurance is not needed, the insurance company keeps your premium in return for taking on the risk. With a Put Option, you can "insure" a stock by fixing a selling price. If something happens which causes the stock price to fall, and thus, "damages" your asset, you can exercise your option and sell it at its "insured" price level. If the price of your stock goes up, and there is no "damage," then you do not need to use the insurance, and, once again, your only cost is the premium. This is the primary function of listed options, to allow investors ways to manage risk. Technically, an option is a contract between two parties. The buyer receives a privilege for which he pays a premium. The seller accepts an obligation for which he receives a fee.

CALL OPTION
An option is a contract between two parties giving the taker (buyer) the right, but not the obligation, to buy or sell a parcel of shares at a predetermined price possibly on, or before a

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predetermined date. To acquire this right the taker pays a premium to the writer (seller) of the contract. There are two types of options: Call Options Put Options

CALL OPTIONS
Call options give the taker the right, but not the obligation, to buy the underlying shares at a predetermined price, on or before a predetermined date. ILLUSTRATION 1: Raj purchases 1 Satyam Computer (SATCOM) AUG 150 Call --Premium 8 This contract allows Raj to buy 100 shares of SATCOM at Rs 150 per share at any time between the current date and the end of next August. For this privilege, Raj pays a fee of Rs 800 (Rs eight a share for 100 shares). The buyer of a call has purchased the right to buy and for that he pays a premium. Now let us see how one can profit from buying an option. Sam purchases a December call option at Rs 40 for a premium of Rs 15. That is he has purchased the right to buy that share for Rs 40 in December. If the stock rises above Rs 55 (40+15) he will break even and he will start making a profit. Suppose the stock does not rise and instead falls he will choose not to exercise the option and forego the premium of Rs 15 and thus limiting his loss to Rs 15.

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Let us take another example of a call option on the Nifty to understand the concept better. Nifty is at 3000. The following are Nifty options traded at following quotes. Option contract JUNE Nifty Strike price 3000 3100 JULY Nifty 3000 3100 Call premium Rs 90 Rs 65 Rs 160 Rs 130

A trader is of the view that the index will go up to 3100 in July 2007 but does not want to take the risk of prices going down. Therefore, he buys 10 call of July contracts at 3100. He pays a premium for buying calls (the right to buy the contract) for 130*10*100= Rs 130000/-. In July 2006 suppose the Nifty index goes up to 3100. He sells the call or exercises the option and takes the difference in spot index price which is (3100-3000) * 100 (market lot) = 10,000 per contract. Total profit = 100,000/- (10,000*10). He had paid Rs 130,000/- premium for buying the call option. So he earns by buying call option is Rs 40,000/- (130,000-60,000).

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If the index falls below 3100 the trader will not exercise his right and will opt to forego his premium of Rs 60,000. So, in the event the index falls further his loss is limited to the premium he paid up front, but the profit potential is unlimited.

CALL OPTIONS-LONG & SHORT POSITIONS

When you expect prices to rise, then you take a long position by buying calls. You are bullish. When you expect prices to fall, then you take a short position by selling calls. You are bearish.

HEDGING
We have seen how one can take a view on the market with the help of index futures. The other benefit of trading in index futures is to hedge your portfolio against the risk of trading. In order to understand how one can protect his portfolio from value erosion let us take an example. ILLUSTRATION: Ram enters into a contract with Shyam that six months from now he will sell to Shyam 10 dresses for Rs 4000. The cost of manufacturing for Ram is only Rs 1000 and he will make a profit of Rs 3000 if the sale is completed. Cost (Rs) 1000 Selling price 4000 Profit 3000

However, Ram fears that Shyam may not honor his contract six months from now. So he inserts a new clause in the contract that if Shyam fails to honors the contract he will have to pay a penalty of Rs 1000. And if Shyam honors the contract Ram will offer a discount of Rs 1000 as incentive.

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Shyam defaults 1000 (Initial Investment) 1000 (penalty from Shyam) - (No gain/loss)

Shyam honors 3000 (Initial profit) (-1000) discount given to Shyam 2000 (Net gain)

As we see above if Shyam defaults Ram will get a penalty of Rs 1000 but he will recover his initial investment. If Shyam honors the contract, Ram will still make a profit of Rs 2000. Thus, Ram has hedged his risk against default and protected his initial investment. The above example explains the concept of hedging. Let us try understanding how one can use hedging in a real life scenario. Stocks carry two types of risk company specific and market risk. While company risk can be minimized by diversifying your portfolio market risk cannot be diversified but has to be hedged. So how does one measure the market risk? Market risk can be known from Beta. Beta measures the relationship between movements of the index to the movement of the stock. The beta measures the percentage impact on the stock prices for 1% change in the index. Therefore, for a portfolio whose value goes down by 11% when the index goes down by 10%, the beta would be 1.1. When the index increases by 10%, the value of the portfolio increases 11%. The idea is to make beta of your portfolio zero to nullify your losses. Hedging involves protecting an existing asset position from future adverse price movements. In order to hedge a position, a market player needs to take an equal and opposite position in the futures market to the one held in the cash market. Every portfolio has a hidden exposure to the index, which is denoted by the beta. Assuming you have a portfolio of Rs 1 million, which has a beta of 1.2, you can factor a complete hedge by selling Rs 1.2 mn of S&P CNX Nifty futures.

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STEPS: Determine the beta of the portfolio. If the beta of any stock is not known, it is safe to assume that it is 1. Short sell the index in such a quantum that the gain on a unit decrease in the index would offset the losses on the rest of his portfolio. This is achieved by multiplying the relative volatility of the portfolio by the market value of his holdings. Therefore in the above scenario we have to short sell 1.2 * 1 million = 1.2 million worth of Nifty Now let us study the impact on the overall gain/loss that accrues:

Index up 10% Gain/(Loss) in Portfolio Gain/(Loss) in Futures Net Effect Rs 120,000 (Rs 120,000) Nil

Index down 10% (Rs 120,000) Rs 120,000 Nil

As we see, that portfolio is completely insulated from any losses arising out of a fall in market sentiment. But as a cost, one has to forego any gains that arise out of improvement in the overall sentiment. Then why does one invest in equities if all the gains will be offset by losses in futures market. The idea is that everyone expects his portfolio to outperform the market. Irrespective of why the same methodology can be applied to a single stock by deriving the beta of the scrip and taking a reverse position in the futures market. Thus, we have seen how one can use hedging in the futures market to offset losses in the cash market Either the market goes up or not, his portfolio value would increase.

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SPECULATION
Speculators are those who do not have any position on which they enter in futures and options market. They only have a particular view on the market, stock, commodity etc. In short, speculators put their money at risk in the hope of profiting from an anticipated price change. They consider various factors such as demand supply, market positions, open interests, economic fundamentals and other data to take their positions. EXAMPLE: Ram is a trader but has no time to track and analyze stocks. However, he fancies his chances in predicting the market trend. So instead of buying different stocks he buys Sensex Futures. On May 1, 2006, he buys 100 Sensex futures @ 3600 on expectations that the index will rise in future. On June 1, 2006, the Sensex rises to 4000 and at that time he sells an equal number of contracts to close out his position. Selling Price: 4000*100 = Rs 4, 00,000

Less: Purchase Cost: 3600*100 = Rs 3, 60,000 Net gain Rs 40,000 Ram has made a profit of Rs 40,000 by taking a call on the future value of the Sensex. However, if the Sensex had fallen he would have made a loss. Similarly, if would have been bearish he could have sold Sensex futures and made a profit from a falling profit. In index futures players can have a long-term view of the market up to at least 3 month

ARBITRAGE
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An arbitrageur is basically risk averse. He enters into those contracts were he can earn risk less profits. When markets are imperfect, buying in one market and simultaneously selling in other market gives riskless profit. Arbitrageurs are always in the lookout for such imperfections. In the futures market one can take advantages of arbitrage opportunities by buying from lower priced market and selling at the higher priced market. In index futures arbitrage is possible between the spot market and the futures market (NSE has provided special software for buying all 50 Nifty stocks in the spot market. Take the case of the NSE Nifty. Assume that Nifty is at 1200 and 3 months Nifty futures is at 1300. The futures price of Nifty futures can be worked out by taking the interest cost of 3 months into account. If there is a difference then arbitrage opportunity exists

Let us take the example of single stock to understand the concept better. If Wipro is quoted at Rs 1000 per share and the 3 months futures of Wipro is Rs 1070 then one can purchase ITC at Rs 1000 in spot by borrowing @ 12% annum for 3 months and sell Wipro futures for 3 months at Rs 1070. Sale Cost = = 1070 1000+30

Arbitrage profit = 1040 These kinds of imperfections continue to exist in the markets but one has to be alert to the opportunities as they tend to get exhausted very fast.

PUBLIC EQUITY CAPITAL

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Governments: The scope of government in further development of public equity markets could consist of: Extend the realm of regulation to other markets as well Extend fiscal support to corporate accessing public equity markets Evolve policy framework that will streamline compliance requirements and thereby costs of regulation Refine regulation so as to make it cohesive, comprehensive and more integrated. Choice of public equity markets in case of privatization and divestment process of government stake.

DERIVATIVE MARKET
A derivative security can be defined as a security whose value depends on the values of other underlying variables. Very often, the variables underlying the derivative securities are the prices of traded securities. In fact, a derivative transaction helps cover risk, which would arise on the trading of securities on which the derivative is based and a small investor can benefit immensely. Let us take an example of a simple derivative contract: Ram buys a futures contract. He will make a profit of Rs 1000 if the price of Infosys rises by Rs 1000. If the price is unchanged Ram will receive nothing. If the stock price of Infosys falls by Rs 800 he will lose Rs 800.

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As we can see, the above contract depends upon the price of the Infosys scrip, which is the underlying security. Similarly, futures trading have already started in Sensex futures and Nifty futures. The underlying security in this case is the BSE Sensex and NSE Nifty.

DERIVATIVES AND FUTURES ARE BASICALLY OF 3 TYPES:

Forwards and Futures Options Swaps

FORWARD CONTRACT
A forward contract is the simplest mode of a derivative transaction. It is an agreement to buy or sell an asset (of a specified quantity) at a certain future time for a certain price. No cash is exchanged when the contract is entered into. ILLUSTRATION 1: Shyam wants to buy a TV, which costs Rs 10,000 but he has no cash to buy it outright. He can only buy it 3 months hence. He, however, fears that prices of televisions will rise 3 months from now. So in order to protect himself from the rise in prices Shyam enters into a contract with the TV dealer that 3 months from now he will buy the TV for Rs 10,000. What Shyam is doing is that he is locking the current price of a TV for a forward contract. The forward contract is settled at maturity. The dealer will deliver the asset to Shyam at the end of three months and Shyam in turn will pay cash equivalent to the TV price on delivery. ILLUSTRATION 2: Ram is an importer who has to make a payment for his consignment in six months time. In order to meet his payment obligation he has to buy dollars six months from today. However, he is not sure what the Re/$ rate will be then. In order to be sure of his expenditure he will enter into a contract with a bank to buy dollars six months from now at 68

a decided rate. As he is entering into a contract on a future date it is a forward contract and the underlying security is the foreign currency. The difference between a share and derivative is that shares/securities is an asset while derivative instrument is a contract

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Swot analysis

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Strength:
Breadth of Services

In line with its client-centric philosophy, the firm offers to its clients the entire spectrum of financial services ranging from brokerage services in equities and commodities, distribution of mutual funds, IPOs and insurance products, real estate, investment banking, merger and acquisitions, corporate finance and corporate advisory. Clients deal with a relationship manager who leverages and brings together the product specialists from across the firm to create an optimum solution to the client needs. Management Team

AR brings together a highly professional core management team that comprises of individuals with extensive business as well as industry experience. In-Depth Research

Our research expertise is at the core of the value proposition that we offer to our clients. Research teams across the firm continuously track various markets and products. The aim is however common - to go far deeper than others, to deliver incisive insights and ideas and be accountable for results Online Trading The do-it-yourself' framework of online share trading offers retail investors the three benefits of transparency, access and efficiency. Paperwork diminishes significantly, and no more painful trips to your broker to check if everything's in order. Online trading has made it possible to universalize access to retail investors. This was earlier very difficult, as the cost of servicing often-outweighed transaction volumes. Online brokerage ranges between 0.05-0.20 per cent of the value of transactions for non-delivery-based trades, and between 0.25-0.95 per cent for delivery-based trades. Once major investments in online infrastructure are over and done with - and with the economies of scale coming into play it is expected that brokerage rates would head further downwards.

Weakness:
The name of the organization ANAND RATHI indirectly indicates that it belongs to an individual.

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Small range of product line. Everything in the world has a flip side to it - Transaction velocity is crucial. And more often than not, connections are lousy. There's also a degree of investor skepticism about online payment and settlement mechanisms in spite of all the encryption and fire walling brought into play. Time and technology will soon assuage these concerns, which hark back to the `physical' days.

Opportunities:
Ever-increasing market After the NSE brought the screen based trading system stock markets are more secured which has attracted lot of retail investors and the demand is increasing day by day. Education level With the improvement in education level, the knowledge about the stock market is increasing day by day and a lot of retail investors are steeping in the market Improving technology In country like India technology is always improving which gives a company a chance to keep on improving their product with time whereas for small players like local brokers it is difficult to keep the same pace as the changing technology.

Threat:
On to some threat perception - Domestic funds, foreign institutional investors and operators comprise the three main market constituents. And all three include term investors as well as opportunists in their pecking order. Some, for instance, hitch their fate with what the FIIs are up to.

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PROCESSING & ANALYSIS OF DATA

ANALYSIS OF THE PREFERRED INVESTMENT AREA

The investment was broadly divided into five areas, mainly-Bank deposits. Shares, Mutual Fund, Real Estate and insurance plans.

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Following observations can be made on the basis of above analysis: Bank Deposits being the most preferred area, 43% respondents out of hundred invested in bank deposits.

The second preferred area was Shares as 27% respondents were investing in the share market.

Then preferred area was the Mutual Funds with 13% of respondents Real estates were the least preferred area i.e. only 7%

ANALYSIS OF THE FACTORS AFFECTING THE INVESTMENT

The factors are categorized in to four parameters to know the purpose of investment made by the investor.

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52% respondents go invests for higher returns. 29% respondents prefer Moderate Return for their investments. 15% prefer moderate risk. Only 4% for Low risk.

ANALYSIS FOR INTERMEDIATING COMPANY

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These factors are categorized into brokerage, Information provided by them the exposure limit or loan facility provided by them and their Brand Name.

14% respondents choose Angel Broking Securities Ltd. 21% respondents choose Anand Rathi Securities Ltd. for trading. 19% respondents choose India Infoline. 13% respondents choose Religare. 33% go for others. 77

ANALYSIS OF THE FACTORS FOR BROKING HOUSE

These factors are categorized into brokerage, Information provided by them the exposure limit or loan facility provided by them and their Brand Name.

14% respondents choose their broking house on basis of information provided by them. 30% prefer by the exposure limit and the loan facility provided to them. 40% by the brokerage charge by the broking house. 16% by Brand Name.

ANALYSIS OF THE INFLUENCE OF THE PAST PROFILE OF A COMPANY

YES NO

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58% respondents say yes they study profile of the company before making investment.

42% respondents say no.

ANALYSIS OF THE REQUIREMENT OF EXPERTISE

YES NO

93% respondents say yes, they required expertise knowledge. 7% respondents say no.

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MOST IMPORTANT SERVICE PARAMETER

The most important service parameter that came up as a result of survey is Quality of service.

Second major parameter is Information. 30% investors feel that the quickness of service is above par than any other aspect.

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ANALYSIS OF FREQUENCY OF TRADING

54 respondents daily transact in shares. 13 respondents transact on weekly basis which merely shows their interest in delivery of shares.

11 opted monthly option. 22 selected the option that their transaction depends on the market condition and share price of particular share.

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ANALYSIS OF THE REASON FOR PREFERING ANAND RATHI

The customers give priority to government participation as to preferring Anand Rathi.40 respondents choose government participation as their first priority.

The next option is safety and confidentiality for the customers as they want full privacy of their account.30 respondents gave safety and confidentiality second priority.

The next priority of customers was professional staff as they want proper utilization of their money and get maximum benefit of their experience.

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The last priority was services as in this cut throat competition every broking house is giving their best in services.

ANALYSIS OF EXPECTED SERVICES BY CUSTOMERS

4 respondents choose only depository services. 8 respondents selected margin financing. 10 respondents selected the option of PMS. 28 respondents selected trading as their main service. 20 respondents selected research and technical services from AR group.

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30 respondents selected all the above options.

ANALYSIS OF STAFF BEHAVIOR OF ARG

2 respondents found behavior of ARG staff conservative. 9 said staff is bureaucratic. 56 respondents found ARG staff cooperative as I perceived them during my training session.

Since ARG goes with the concept of EMPLOYEE RETENTION so the customers become very well known to them.

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ANALYSIS PEOPLE

OF

REFRENCE

ABOUT

ARG

AMONG

9 respondents became aware of ARG services through advertisements. 25 respondents got to know about ARG through their friends. Since relationship manager of ARG is so efficient I have come to know by the respondents that 49 of them were contacted by the Relationship manager.

11 became aware through the previous customers of ARG. 4 from press articles and 2 through franchise.

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ANALYSIS OF PREFRENCE OF TRADING

26 respondents do offline trading. 74 respondents do online trading.

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ANALYSIS OF CUSTOMER SATISFACTION

70 respondents are satisfied with their current DP. 10 respondents are unsatisfied with their current DP. 20 respondents gave no response.

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ANALYSIS OF OVERALL EXPERIENCE WITH ANAND RATHI FINANCIAL SERVICES LIMITED

15 respondents were very much impressed by AR financial services limited. Experience of 32 respondents was very good. 25 respondents thought that services of ARG are good. 22 out of 100 respondents found services of ARG so-so. 6 felt that they are not that much good.

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Conclusion & recommendations

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FINDINGS
The perceptions of people about share markets are very strong. But they can be influenced, if not completely changed. The reason people prefer staying away from the share markets is lack of confidence - about their own understanding of the market and the very nature of the market. The fact that stock markets themselves are volatile and wide open to changes in external forces makes it much more difficult for people to consider them as an investment alternative. The right kind of campaigning directed towards increasing the awareness of people will get new customers. But more than that, this campaign will help retain customers, which is the key to staying ahead in the market. Anand Rathi Securities is currently one of the biggest broking houses in the country and its strategies to penetrate further into the market will certainly take it way ahead of its competitors.

RECOMMENDATIONS
INTRODUCTION PROGRAMS must be held for the sales teams before letting them go into the field. In these induction classes the experienced sales staff employees should share their valuable live experiences and knowledge, which they have experienced while in field. Weekly magazines must be published and distributed to the investors that can help them for making better investments.

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Sales team must be fully equipped with latest technology such as using Laptop that can be used for making presentation to the customers especially to the corporate clients about their product and services provided by them.

Make your site user friendly so that more and more people know about trading and do the same also.

Advertisement through Canopy, help to generate leads. Company should advertise with a concern that has a brand name in the market.

OTHER RECOMMENDATIONS
Strong Need Of Brand Building Promotional Strategies Solid Network Required To Develop The Business Further Make The Branch Self Informative The RM should provide an in depth demonstration of the software and client should be assisted regularly. Provision of a manual for online clients for ease of operation. Time lag between the complaints put and follow up should be reduced. Database should be verified properly, so that repeated entries do not occur. This will reduce inconvenience to the clients, who complained about multiple calls received.

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PROMOTIONAL STRATEGIES
Press publicity: Outdoor publicity:

Press publicity: Paper inserts Advertisements in newspaper (local and national). Interest cards distribution Mailers/personal invitations to selective section of the society Leaflets

OUTDOOR PUBLICITY:
Banners in commercial areas and prime sites. Air balloons at shopping complex. Bus stands shelters. Off site ATM for developing business

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Annexure

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SURVEY QUESTIONNAIRE Name Address Phone no : : :

1. Where do you prefer to invest your money? a) Bank Deposits c) Mutual Funds e) Insurance Plans 2. Do you prefer to invest in shares? a) Yes b) No 3. If yes, out of following, which intermediating company would you go for? a) Angel Broking c) ICICI d) Others, please specify 4. If Anand Rathi, What are the factors, which attract you to deal with Anand Rathi? b) Anand Rathi Securities d) Religare b) Shares d) Real estate

5. If Others, What are the factors, which attract you, please specify?

6. How do you come to know about ARG? a) Advertisement c) Relationship Manager e) ARG customers b) Sub broker d) Friends f) Press Article

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7. What are the factors, which attracts you for the investment? a) High Return c) Low Risk b) Moderate Return d) Moderate Risk

8. What attracts you to invest in Shares? a) Brokerage c) Exposures/loan 9. On what basis do you prefer to trade in shares? a) Daily c) Yearly b) Monthly d) other, please specify b) Expertise Knowledge d) Brand

10. Does the companies profile matter for the investment decisions? a) Yes b) No

11. Do you require the opinion of portfolio managers to manage your investment? a) Yes b) No

12. What is the most important service parameter that you look for while trading? a) Information c) Quality b) Speed d) Other

13. What factors would you look for, while selecting DP? Kindly rank 1 (for most important) to 4 to each factor in order of preference. Factors Safety & confidentiality Government Participation Professional Staff Services Rank

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14. What extra services do you expect from your broker? Extra services Depository Services Margin Financing Portfolio Management Services Trading Research & Technical Services All Above 15. How do you find the behavior of the staff of Anand Rathi Group? a) Conservative c) Cooperative 16. Which mode of trading do you prefer? a) Online b) Offline 17. Are you satisfied with your current DP? a) Yes b) No 18. What is your overall experience with ARG? a) Excellent c) Good e) Poor 19. Any recommendation / Suggestion b) Very good d) Fair b) Bureaucratic d) Friendly Respondents

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Bibliography

BIBLIOGRAPHY Kothari C. R. Research Methodology Methods and Techniques, 2nd Edition, Willeys Publication, New Delhi, 2000. Avadhani V. a. Investment Management Revised Edition, Himalaya Publication House, 2000. S.Basu, Investment Performance of Common Stocks in Relation to Their Price-Earning Ratios: A Test of the Efficient Market Hypothesis, Journal of Finance, June 1977. 98

INTERNET WEBSITE www.rathi.com www.nseindia.com www.bseindia.com www.sebi.gov.in www.moneycontrole.com

JOURNALS & ARTICLES Economics Times

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