CHAPTER-1 INTRODUCTION

1.1 GENERAL INTRODUCTION ABOUT THE SECTOR

Service sector is the lifeline for the social economic growth of a country. It is today the largest and fastest growing sector globally contributing more to the global output and employing more people than any other sector. For most countries around the world, services are the largest part of their economy. The real reason for the growth of the service sector is due to the increase in urbanization, privatization and more demand for intermediate and final consumer services. Availability of quality services is vital for the well being of the economy. In advanced economies the growth in the primary and secondary sectors are directly dependent on the growth of services like banking, insurance, trade, commerce, entertainment, social and personal, etc. The U.S. and other developed economies are now dominated by the services sector, accounting for more than two-thirds of their Gross Domestic Product (GDP). A growing economy changes the proportions and interrelations among its basic sectors agriculture, industry, and services and between other sectorsrural and urban, public and private, domestic- and export-oriented. One way to look at the structure of an economy is to compare the shares of its three main sectors agriculture, industry, and servicesin the countrys total output and employment. Initially, agriculture is a developing economys most important sector. But as income per capita rises, agriculture loses its primacy, giving way first to a rise in the industrial sector, then to a rise in the service sector. These two consecutive shifts are called industrialization and post industrialization. All growing economies are likely to go through these stages, which can be explained by structural changes in consumer demand and in the relative labor productivity of the three main economic sectors (Tatyana P. Soubbotina, 2004). Most high-income countries today are post industrializingbecoming less reliant on industrywhile most low income countries are industrializing becoming more reliant on industry. But even in countries that are still industrializing, the service sector is

growing relative to the rest of the economy. By the mid- 1990s services accounted for almost two thirds of world GDP up from about half in the 1980s. Between 1990 and 2000, growth of world services output was 2.9 per cent double that of agriculture which was only 1.4 per cent. As a result, the contribution of the service sector to world gross domestic product was 64 per cent in the year 2000, compared to 57 per cent in 1990. Between 1990 and 2000, the growth of exports of commercial services for developing countries (9 per cent) exceeded that for developed countries (5.5 per cent).

1.2 INDUSTRY PROFILE

The emergence of stock market can be traced back to 1830. In Bombay, business passed in the shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when the Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also quoted the prices of business ventures like the Bengal bonded warehouse, the Docking Company and the storm tug company. Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of brokers was about 60 and during the exciting period of the American Civil war, their number increased to about 200 to 250. The end of American Civil war brought disillusionment and many Failures and the brokers decreased in number and prosperity. It was in those troublesome times between 1868 and 1875 that brokers organized an informal association and finally as recited in the Indenture constituting the Articles of Association of the Exchange.

On or about 9th day of July,1875, a few native brokers doing brokerage business in shares and stocks resolved upon forming in Bombay an association for protecting the character, status and interest of native share and stock brokers and providing a hall or building for the use of the Members of such association. As a meeting held in the brokerHall on the 5th day of February, 1887, it was resolved to execute a formal deal of association and to constitute the first managing committee and to appoint the first trustees. Accordingly, the Articles of Association of the Exchange and the Stock Exchange was formally established in Bombay on 3rd day of December, 1887. The Association is now known as The Stock Exchange. The entrance fee for new member was Re.1 and there were 318 members on the list, when the exchange was constituted. The numbers of members increased to 333 in 1896, 362 in 1916and 478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in 1916 and Rs. 48,000 in 1920. At present there are 23 recognized stock exchanges with about 6000 stock brokers. Organization structure of stock exchange varies. 14 stock exchanges are organized as public limited companies, 6 as companies limited by guarantee and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have been permanent recognition. Others have to seek recognition on annual basis. There are two different type of trading environments available for online equity trading. 1. Installable software based Stock Trading Terminals

This trading environment requires software to be installed on investors computer. This software is provided by the stock broker. This software requires high speed internet connection. These kind of trading terminals are used by high volume intraday equity traders. 2. Web (Internet) based trading application

This kind of trading environment doesn't require any additional software installation. They are like other internet websites which investor can access from around the world through normal internet connection. Stock exchanges are like market places, where stockbrokers buy and sell securities for individuals or institutions. As per the SCRA (Securities Contracts Regulation Act) 1956, the definition of securities includes shares, bonds, stocks, debentures, government securities, derivatives of securities, units of collective investment scheme (CIS) etc. The securities market has two interdependent segments: the primary and secondary market. The primary market is the channel for creation of new securities issued by public limited companies or by government agencies. New securities issued in the primary market are traded in the secondary market.

Securities market can be divided into two markets. i. PRIMARY MARKET

The primary market is an intermittent and discrete market where the initially listed shares are traded first time, changing hands from the listed company to the investors. It refers to the process through which the companies, the issuers of stocks, acquire capital by offering their stocks to investors who supply the capital. In other words primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is called an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus.

ii.

SECONDARY MARKET

The secondary market is an on-going market, which is equipped and organized with a place, facilities and other resources required for trading securities after their initial offering. It refers to a specific place where securities transaction among many and unspecified persons is carried out through intermediation of the securities firms, i.e., a licensed broker, and the exchanges, a specialized trading organization, in accordance with the rules and regulations established by the exchanges.

1.2.1 ORIGIN AND DEVELOPMENT OF THE INDUSTRY

Many millions of people have a personal interest in what happens at a stock exchange. Some are directly concerned because they are part owners of companies through stock, others are holders of the government and other listed securities and yet another group is holders of insurance policies, since insurance companies invest much of their assets in listed securities. Stock exchange or bourse is a mutual organization which provides facilities for stock brokers and traders, in trading company stocks and other securities, and for the issue of redemption of securities and other financial tools and capital events like the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, but trade is less linked to such a physical place. Electronic networks run modern markets are, providing them great speed and cost of transactions. Stock exchange is often called the most important element of a stock market. The Demand and Supply in the stock markets is attracted by number of factors that affect the price of stocks. History of stock exchanges:

In 12th century France, the courratiers de change were concerned with managing the debts of agricultural communities on behalf of the banks and these men also traded in debts. These men were the first brokers. In the middle of the 13th century, Venetian bankers traded in government securities. In 1351, the Venetian Government outlawed spreading rumors about lowering the price of government funds. Because of this rumor people in Pisa, Verona, Genoa and Florence also started trading in government securities which was possible because there were independent city states ruled by a council of powerful citizens during the 14th century. Raising capital for businesses: The Stock Exchange helps current and newly-formed companies raise capital for building and expanding their business through selling shares to the investing public. Mobilizing savings for investment: When people draw their savings and invest in shares, it leads to a more balanced allotment of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized to promote business activity that benefits several economic sectors like agriculture, commerce and industry, resulting in a stronger economic growth. Creating investment opportunities for small investors: The Stock Exchange provides opportunity for small investors like the big investors to own shares of the same or different companies. Government capital-raising for development projects: Governments at various levels may decide to borrow money for financing infrastructure projects like sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds are raised through the Stock Exchange where public buy them, thus loaning money to the government. The issuance of such municipal bonds can prevent the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the

government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature. Listing requirements: Listing requirements are the set of conditions forced by any given stock exchange upon companies that want to be listed on that exchange. Requirements by stock exchange: For companies to have their stock and shares listed at the stock exchange have to meet certain requirements of the exchange. But requirements vary in different exchanges.

1.2.2 GROWTH AND PRESENT STATUS OF THE INDUSTRY

The Indian economy is estimated to have grown by 7.4 percent in 2009-2010. This is because this nation has seen growth in various sectors especially in stock market. The economy can see further boom in the coming years with full government support. With new and improved governmental policies, the nation can see growth in the service sector. With the immense expansion of the stock industry, more jobs can be vacated for the unemployed people. Also, banks can increase their depository capacities and become growing sector of India. As per the Securities and Exchange Board of India(SEBI) the total number of registered Foreign Institutional Investors (FII) had an inflow in equity of US$ 4.6 billion. This is good news for the growing economy that can give competition to countries like China and Hongkong. The growing economy has already shocked the US markets and the UKs financial markets. India in the coming years can prove itself to be a global economic power where foreign firms would want to invest in India. The FDI base of India has also strengthened due to the reason of strong cultural and economic influence. Many MNCs have established their base in India due to cheap labor. Also, the

nation has the advantage of many business people who speak good English. India could prove itself to be a nation where most of the population would become computer literates. This is because India is witnessing a change in the IT sector and many foreign firms are interested to invest in this sector. The growing importance of IT has become a need in every business. Even schools and colleges are educating students of the full use of various softwares. As the economy is changing, the stock market is expected to grow in the coming years. This is because the recession period that slowed the stock market is now over. According to data from Bloomberg, Indias market cap as a percentage of world market cap was 2.8 percent as on December 31, 2009. This proves that the financial market is rising where it has seen the establishment of new firms. This is because new firms are encouraged by the government. This has certainly created competition in the broking industry of India. This is why even the brokerage fees provided by any firm are low and proves to be competitive

STOCK MARKETS IN INDIA: Stock exchanges are the perfect type of market for securities whether of government and semi-government bodies or other public bodies as also for shares and debentures issued by the joint-stock companies. In the stock market, purchases and sales of shares are affected in conditions of free competition. Government securities are traded outside the trading ring in the form of over the counter sales or purchase. The bargains that are struck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basic laws of supply and demand.

MAJOR STOCK EXCHANGES ARE:

NSE (National Stock Exchange)

In the fast growing Indian financial market, there are 23 stock exchanges trading securities. The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and most advanced exchange with 1016 companies listed and 726 trading members. The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India. However, in the totally de-metalized Exchange, the ownership as well as the management does not have a right to trade on the Exchange. Only qualified traders can be involved in the securities trading. The NSE is one of the few exchanges in the world trading all types of securities on a single platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital Market (CM), and Futures & Options (F&O) Market. Each segment has experienced a significant growth throughout a few years of their launch. While the WDM segment has accumulated the annual growth of over 36% since its opening in 1994, the CM segment has increased by even 61% during the same period. The National Stock Exchange of India has stringent requirements and criteria for the companies listed on the Exchange. Minimum capital requirements, project appraisal, and company's track record are just a few of the criteria. In addition, listed companies pay variable listing fees based on their corporate capital size. The National Stock Exchange of India Ltd. provides its clients with a single, fully electronic trading platform that is operated through a VSAT network. Unlike most world

exchanges, the NSE uses the satellite communication system that connects traders from 345 Indian cities.

BSE (Bombay Stock Exchange)

The Stock Exchange, Mumbai, popularly known as BSE was established in 1875 as The Native Share and Stock Brokers Association. It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into Stock demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country to have obtained permanent recognition in 1956 from the government of India under the Securities Contracts (Regulation) act 1956. The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmed and making available to them necessary informative inputs.

REGULATORY FRAME WORK OF STOCK EXCHANGE A comprehensive legal framework was provided by the Securities contract Regulation Act, 1956 and Securities Exchange Board of India 1952. Three tier regulatory structure comprising: Ministry of finance

The Securities And Exchange Board of India Governing body

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolution of government of India. It was later made statutory body by the SEBI act 1992. According to this act, the SEBI shall constitute of a chairman and four other members appointed by the central government. With the coming into effect to the securities and Exchange board of India act, 1992 some of the powers and functions exercised by the central government, in respect of the regulation of stock exchange were transferred to the SEBI.

1.2.3 FUTURE OF THE INDUSTRY

Indian equities may sustain a discount to their long-term average and continue to appear cheap in the near future on that comparison. For, more than the price-to-earnings multiple of the benchmark index, it is the earnings growth which is likely to guide investor interest, say experts. Generally, buying equities when the market falls below its long-term valuations is termed as a prudent fundamental strategy, especially for investors with a long-term investment horizon.

However, given that the outlook for India Inc\'s earnings growth is increasingly getting subdued, this time around, the benchmark indices may continue to trade at a discount to their past averages. "There has to be a substantial improvement in the earnings outlook before the price-toearnings multiple expands and that does not look likely in the near term," said Andrew Holland, CEO-Investment Advisory, Ambit Capital. Holland believes that even the current earnings season may not point towards a big rebound in profit growth in FY14 and, to that extent, the consensus FY14 estimates may see downward adjustments. On Monday, the Sensex traded at 12.7 times its one-year forward earnings; its 10- and 15-average P/E multiple ranging 14-4.5. Experts also see contained economic growth being the primary reason for the muted earnings outlook. They expect a revival in India\'s GDP growth to drive the expansion of market multiple. As per Sankaran Naren, CEO, ICICI Prudential AMC, a revival in the GDP growth, especially that of the industrial sector, could lead to the Street pricing in higher earnings growth in 2014-15. "Even this alteration could lead to higher multiples," added Naren. In the quarter ended December, India clocked in a GDP growth of 4.5%, the lowest for any quarter in a decade. Various economists have pegged India's FY-14 GDP growth to range between 6% and 6.5%. An earlier study by FE revealed that in the last two decades, on an average, the Sensex earnings grew nearly two times the economic growth rate.

CHAPTER-2 PROFILE OF THE SHARE KHAN

2.1 ORIGIN OF THE ORGANISATION

Share khan is one of the leading retail broking House of SSKI Group which was running successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Share khan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advisory, Mutual Fund Advisory etc. The firms online trading and investment site - www.sharekhan.com - was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over two lakh customers. The number of trading members currently stands More than 6 Lacs. While online trading currently accounts for just over 8 per cent of the daily trading in stocks in India, Share khan alone accounts for 32 per cent of the volumes traded online. The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks. On April 17, 2002 Share khan launched Speed Trade, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net. On October 01, 2007Sharekhan again launched his another integrated Software based product Trade Tiger, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. It has another

quality which differs it from other that IT HAS THE COMBINED TERMINAL FOR EQUITY AND COMMODITIES BOTH. Share khans ground network includes over 1005 centers in 410 cities in India, of which 210 are fully-owned branches. Share khan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt. Ltd. to build its trading engine and content. Previously the Morakiya family holds a majority stake in the company but now a world famous brand CITI GROUP has taken a majority stake in the company. HSBC, Intel & Carlyle are the other investors. With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKIs institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organizations revenue, with a daily turnover of over US$ 4 million. The Corporate Finance section has a list of very prestigious clients and has many firsts to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shoppers Stop.

ABOUT SSKI GROUP

SSKI group also comprises institutional broking and corporate finance. While the institutional broking division caters to the largest domestic and foreign institutional investors telecom and media. SSKI holds a sizeable portion of the market in each of these segments.

As the forerunner of investment research in the Indian market, we provide the best research coverage among broking house in India. Our research team is rated as one of the best in the country. Voted 4 times as the top domestic house by Asia money survey. SSKI is consistently ranked amongst the top domestic brokerage houses in India.

PROFILE OF THE COMPANY

Name of the company Year of establishment Headquarters : Share khan Ltd : 1925 : Share khan SSKI A-206 Phoenix House Phoenix Mill Compound Lower Parel Mumbai-Maharashtra, India-400013 Nature of business Services research Number of employees Website Slogan : over 3500 : www.sharekhan.com : Youre guide to the financial judge : Service Provider : Depository services, online services and technical

VISION: to be the retail brokering brand in the retail business of the stock market.

MISSION: to educate and empower the individual investors to make better

investment decisions through quality advice and superior service.

2.2 ACHIEVMENT OF THE SHAREKHAN

Rated among the top 20 wired companies along with Reliance, HUJI, Infosys etc by Business Today Jan 2004 edition Awarded Top Domestic Brokerage House 4 times by euro money and Asia money Pioneers of online trading in India amongst the top 3 online trading website from India. Winners of Best Financial Website award. Indias most preferred broker within 5 years Awaaz customers Award 2005

2.3 PRESENT STATUS OF THE ORGANISATION

Share khan completes 10 years in Retail Broking Business: Share khan Ltd, Indias leading online retail broking house with a strong online trading platform, has completed a decade in the business offering services such as portfolio management, trade execution in equities, futures & options, commodities and distribution of mutual funds, insurance and structured products. In a short span of 10 years, the company has scripted a remarkable growth story. Starting from beginnings in 8th February 2000 as an online trading portal, Share khan today has a pan-India presence as well as global footprint in UAE and Oman with over 1,200 outlets serving 9,50,0000 customers across 400 cities. Mr. Tarun Shah, CEO, Share khan, Says - We are proud to be completing a decade of setting new standards in the industry. This journey has been eventful. And the journey couldnt have been such a rewarding one without the support of our patrons who infused immense faith in our services in the last 10 years. We profusely thank our patrons for the same.

Share khan in its decade-old journey has set category leadership through pioneering initiatives like Trade Tiger; a net based executable application that emulates a broker terminal besides providing information and tools relevant to traders. Through its First Step program Share khan has been guiding first-time investors and helping them makes informed decisions.

SWOT ANALYSIS
A SWOT analysis focuses on the internal and external environment examining strengths and weakness in the internal environment and opportunities and threats in the external environment.

STRENGHTS SERVICES: - As a product an externally innovative product with very less cost. Services like online trading facility institutional and domestic broking customized research report with almost 80% efficiency etc given Share khan an edge over its competitor. Share khan provides other support services that make retail investors more confident and assured with their providing. SMS, intangible features like imagery, equity driving preference.

DISTRIBUTION NETWORK: - Share khan with almost 250 branches spread across 123 cities beefed up by comprehensive online research, advice and transaction services. In near future expect to make 200000n plus retail customers being serviced through centralized call center web solution, 60 branches semi branches servicing affluent aggressive traders through highly skilled financial advisor 250 independent managers franchisees servicing 50000 highly valued clients

PRODUCTS: - Companys product line is quite flexible in the sense that there is a product for every kind of investors. Also all the products cover all the loop holes of all the products offered by the other competitors like low cost, user friendly online trading services etc.

WEAKNESS CUSTOMERS SATISFACTION: - As a customer satisfaction goes Sharekhan.com has to tighten their stocks. Many broking houses of the market can afford catering to heavy investors or small segment to and does provide relationship managers for their customers and advice accordingly. However a broking house like sharekhan.com which caters to the mass segment it is no position to provide relationship managers for individual customers.

BRANDING: - Though the company has efficient products but large part of invested interested population does not know the company. The most basic expectation for trader or investors when one begin trading is that one must get timely delivery of shares and proceed from sales of shares. Also one cash balances with the broker must be safe and secure.

COMPETITION FROM BANKS: - Most of the banks due to good branding have the faith of the customers of their banking database. So they enjoy the liberty of huge database and customers find it more reliable to trade their rather than with a unknown broker. Also banks like HDF & ICICI have the advantage of linking the trading a/c of their customers to saving a/c. This makes trading easier and the same time a trader withdraws exactly as much money from his a/c as is needed to complete the trade.

OPPORTUNITIES EVER INCREASING MARKET:- After the NSE brought the screen based trading system stock market are now more secured which has attracted lot of retail investors and the demand is increased is day by day. This has resulted in improved liquidity and heavy volumes on transaction. Share khan is one of the early entrants here. As to how much it will roar and how swift it can swoop on the market the future alone can answer such queries. Share khan has been a mega player and is known for being a mover of stocks. It is also known for putting big deals through and enjoys good networking with the FIIs.

IMPROVING TECHNOLOGY:- In country like India technology is always improving which gives the company a chance to keep on improving their product with time whereas for the small players like local brokers it will be difficult to keep the same pace as the changing technology. Also with SEBI lying down some strict guidelines small brokers are finding it harder to retain the customers with no research department and small capital. The traditional business model a highly dependent on a large network of sub brokers and many established players may not have system capable of directly servicing so many retail customers.

UNFULFILLED NEEDS OF THE CUSTOMERS: - With so many competitors offering their products in the market but no one is able to completely satisfy the customers. Some have the problem of lack of information or were scared of volatility of the stock market. Sharekahn.com has the opportunity to tap this unsatisfied set of customers and to make hold in the market. The internet serves to break all barriers to information as it offers an extremely hassle free investing platform.

EDUCATION LEVEL: - The transaction level in the country is improving year after as far as technology grass. With that the understanding of the stock market is

also increasing and a lot of retail investors are steeping in the markets which are being shown by increasing volumes transactions and indices.

THREATS THREATS NEW COMPETITORS: - A lot of new competitors are trying to enter the market in this bullish run to taste the flavor of this cherry. This is creating a lot of competition for large players like sharekhan.com and it is creating little confusion in the minds of the customers about the services provided by the broker. Also many banking firms are entering into the market with huge investment.

TECHNOLOGY BASED BUSINESS: - Online trading is totally based on the technology which is quite complex. Typically the technology solution has to start from the internet front-end. Then it needs to get into the middle tier of risk management system that assesses data from banks and depository participants calculate client risks at that point in time and give the go/no go advice to the trade. Though a lot of cyber laws are being are made but not yet executed.

2.4 ORGANISATION STRUCTURE AND ORGANIZATION CHART

MANAGEMENT TEAM

Owner of the company CEO of the company Director of the company

: Mr. Dinesh Murikya : Mr. Tarun Shah : Mr.ShankarVailaya

Head Research Trader/Sub Broker Assistant Manager HR Associate vice president Franchise business

: Mr. Gaurav Dua : Mr. V S Ganesh : Mr. Chethan Kumar : Mr. Hanumanth Rao

Branch head

Regional sales manager

Equity advisors

Back office department

Territory sales manager

Relationship manager

Customer care

Accounting department

Assistant manager

Trainees

Direct sales executive

2.5 PRODUCT AND SERVICES PROFILE OF THE ORGANISATION

PRODUCT AND SERVICES

A share khan outlet offers the following services. Online BSE and NSE executions (through BOLT & NEAT terminals). Free access to investment advice from share khan research teams. Daily research reports and market review. Pre-market report(morning cups) Daily trading calls based on technical analysis. Cool trading products. Personalized advice. Live market information.

Depository services. Derivatives trading (futures and options). IPOs and mutual funds distribution. Internet based online trading Speed Trade.

TYPES OF PRODUCTS
1. Classic account 2. Fast trade account 3. Trade tiger

1. Classic account The features about classic account are It is basically used for beginners i.e. fresher. Here the transaction can be done in BSE NSE and F&O internet based online trading. There can be a market watch. Here we can make four templates i.e. folders. You can add 20 scrips in each templates. Here you can add minimum 20 scrip and maximum 100 scrip. Its gives maximum access. You can keep lump sum amount in the account. There is a link which is-whats in whats out.

2.

Fast Trade Account The features of fast trade account are We can make 5 templates. You can monitor 125 companies.

You can also buy mutual funds and IPO online. You can also monitor circuits. You can see the market depth i.e. the logic of demand and supply. It will help to decide whether to buy or not. It can also add trigger as in it works as a reminder. The online trading platform is an applet based application that provides live. Streaming quotes from BSE and NSE.

Get live market prices and market statistics like best bid prices quantity best
offer price and quantity etc for chosen stock.

3. Trade Tiger Account Trade tiger is an application that brings you the power of a brokers terminal right from the desktop. Trade on multiple exchanges (BSE, NSE, MCX, NCDEX) from a single screen. Get access to technical tools and trade like a pro. Customize market watches by scripts or sector and view them on a single screen.

SHAREKHAN ONLINE TRADING FACILITIES

(A) Classic Account: A/c opening charges Rs. 750(life time charges).
DEMAT A/C free for 1st year and Rs. 300 from. 2ND year onwards (maintenance charges) Trading through our website www.sharekhan.com No volume and minimum margin money commitment required. NSE online and BSE offline. Live applet for watching prices and trading purposes.

(B) Speed Trade: A/C opening fee Rs. 1000(life time charge)
DEMAT ACCOUNT free for the 1st year and Rs. 300 from. 2nd year onwards (maintenance charges)

Trading through software/live terminal provided by share khan NSE& BSE online (through s/w as well as through website & phone).

Monthly access Fee (for SPEED TRADE only)

Rs. 500/month The access charges will be applicable to all the new customers signed up from 2nd month of activation. To explain if an account is signed up in January 2013 and the same is activated in Jan 2013 the access charge will be applicable for Feb 2013 month and the 1st debit charges for the a/c will happen by the 7th of March 2013.

Not Applicable of Month Access Fee

At the end of a month a client has contributed more than Rs. 1000 as gross brokerage the access charges of Rs. 500 will not be debited clients a/c. If the brokerage is less than Rs. 1000 the access charge of Rs. 500 will be debited in the subsequent month by 7th.

Exceptions applicable for access charges

The access charge of Rs. 500 is charged to a client can be refunded in full if the total brokerage by the client is above 3000 in a calendar year.

Brokerage
CASH BROKERAGE DELIVERY: 0.50% INTRADAY: 0.10%*

Other Features
Settlements of trade follow T+2 transaction cycle.

No De-mat transaction charges in case of buying and selling through online. For the fund t/f and withdrawal we have tie up with 4 banks HDFC, CITI, IDBI, UTI Bank. BTST (Buy and sell tomorrow) facility in all scripts. DIAL-N-TRADE CALL and trade through toll free no. from anywhere in India. (CUSTOMER CARE 1600 22 7500, TRADING 1600 22 7050, 30307600)

Online IPO facility

Freedom from paperwork trading facilities completely online. SMS alert on your mobile phones. Daily sharekhan.com research reports in your mailbox.

Trade in equity by using your phone

Free with share khan classic a/c the dial-n-trade services enables for customers to place orders for buying and selling shares through their telephone. All customers have to do is dial any one of share khan no. decide 986897298 enter their TPIN no. and on authentication customer will be directed to a tele broker who will buy and sell shares for them.

2.6 COMPETITORS
The major players in online trading: HDFC securities.com ICICI Direct.com IndiaBulls.com Kotakstreet.com

The need of study arises because of the reasons that a trainee must understand the company, its achievement and tasks, product and services and also to collect information about its competitors, it products and services offered. So that, after understanding and collecting information about the organization and its competitor a trainee will be able to work well for the organization. From the study we have learned very much about the company as well as the strategy of the customers, which help us a lot at our working days.

HDFC SECURITIES

HDFC Securities ltd is promoted by the HDFC Bank HDFC and chase capital partners and their associates. Pioneers in setting up dial-a-share service with the largest team of tele-brokers.

ICICI Direct

ICICI Direct is stock trading company oh ICICI Bank. Along with stock trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs, mutual funds and bonds. Trading is available in BSE and NSE. Products and Services of ICICI Direct Investing in Mutual Funds Personal Finance Customer Service Features IPOs Margin Trading

Margin PLUS Trading Call Trade Trading on NSE/BSE

INDIABULLS SECURITIES LIMITED

India bulls is Indias leading retail financial services company with 135 location spreads across 95 cities. While size and strong balance sheet allow it to provide you with varied products and services at very attractive prices its over 750 client relationship managers are dedicated to serving your unique needs. India bulls are lead by a highly regarded management that has invested cores of rupees into a world class infrastructure that provides our client with real time service & 24/7 accesses to all information and products. India bulls professional network offer real time prices detailed data and news intelligent analytical and electronic trading capabilities right at your figure tips. This powerful technology is complemented by knowledgeable and customer focused relationship managers. It is creating a world of smart investors.

KOTAK SECURITIES LTD (Kotakstreet.com)

Kotak securities ltd a strategic joint venture between Kotak Mahindra Bank and Goldman Sachs (holding 25% one of the world leadings investment bank and brokerage firm) is India leading stock broking house with a market share of 5-6% Kotak Securities ltd has been the largest in IPO distribution it was ranked number one in 2003-04 as book

running lead managers in public equity offering by PRIME database. It has also won the best equity award from finance Asia April 2004. The company has 42 branches servicing around 1,00,000 customers. Kotakstreet.com the online division of Kotak Securities ltd offers internet broking services and also online IPO and mutual funds investments.

2.7 MARKET PROFILE OF THE ORGANISATION

The company is new as of in the market, the complete investment is done by the all of the three Directors. The Company is offering the best services so as to fulfill all the requirements of the clients and to increase their clientage value. This will affect the company in the long run with higher number of clients and the good profits. As of now main motive of the company is to increase the size of the business. For this purpose the company is trying to higher more number of highly qualified staff. The Company is trying to meet the customer on personal level too so as to maintain the face to face relations.

2.8 REASON TO CHOOSE SHARE KHAN LIMITED

Experience SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia Money broker's poll held recently, SSKI won the 'India's best broking house for 2004' award. Ever since it launched Share khan as its retail broking division in February 2000, it has been providing institutional-level research and broking services to individual investors.

Technology With our online trading account you can buy and sell shares in an instant from any PC

with an internet connection. You will get access to our powerful online trading tools that will help you take complete control over your investment in shares.

Accessibility Share khan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for investors. These services are accessible through our centers across the country (Over 721 locations in 210 cities) over the internet (through the website www.sharekhan.com) as well as over the Voice Tool.

Knowledge In a business where the right information at the right time can translate into direct profits, you get access to a wide range of information on our content-rich portal, Share khan. You will also get a useful set of knowledge-based tools that will empower you to take informed decisions.

Convenience You can call our Dial-N-Trade number to get investment advice and execute your transactions. We have a dedicated call-centre to provide this service via a Toll Free Number 1800-22-7500, 1800-22-7050 from anywhere in India.

Customer Service Our customer service team will assist you for any help that you need relating to transactions, billing, De-mat and other queries. Our customer service can be contracted via a toll-free number, email or live chat on www.sharekhan.com.

Investment Advice Share khan has dedicated research teams of more than 30 people for fundamental and technical researches. Our analysts constantly track the pulse of the market and provide timely investment advice to you in the form of daily research emails, online chat, printed reports and SMS on your mobile phone.

CHAPTER- 3 DISCUSSION ON TRAINING

3.1STUDENT WORK PROFILE

ROLES AND RESPONSIBILITY

The main objective is to gain first-hand knowledge of the day to day operation of the company so that the analysis can be done in a proper manner. My work in the organization is to call the clients from job portals for the post of financial planner and calling customers for giving information about the derivatives. I used to give required and relevant information about the derivatives to the clients through telly-calling. I used to make follow-ups from the calls, ask for a meeting with a client so as to tell more unique features of the organization.

Derivatives: The term Derivative stands for a contract whose price is dependent upon an underlying asset. Derivative contracts are traded on electricity, weather, temperature and volatility Derivative market is useful for investors to invest their money to gain profit. It is very effective to invest their money.

TOOLS AND TECHNIQUES USED:

1. Maintain decorum in the workplace 2. Gathering information from the seniors 3. Giving feedback of all operation at the end of the day to the senior 4. Generate good relation with colleagues

3.2 KEY LEARNINGS

I have learnt many things in organization which are: 1. Improvement in confidence: By interacting with my seniors and experiencing new and positive things helps me in increase in confidence and improvement in conversation skills. 2. Dealing with Customers: Daily telly-calling helps me in dealing with the customers easily by simply giving them the required information about the product. 3. Gain knowledge about the stock market: I have also gained knowledge about stock by observing the fluctuations of the market on the terminal and practically performed the trading on the dummy software. 4. Gathering knowledge: I have gathered knowledge about the activities that are being performed in the organization. 5. Dealing with clients: Dealing with the client in a meeting helps me in learning about the client perception about the product.

CHAPTER-4 STUDY OF THE SELECTED RESEARCH PROBLEM

4.1 STATEMENT OF RESEARCH PROBLEM

To study about the derivative market in share khan. The study has been done to know the different types of derivatives and also to know the derivative market in India. This study also covers the recent developments in the derivative market taking into account the trading in past years. Through this study I came to know the trading done in derivatives and their use in the stock markets.

4.2 STATEMENT OF RESEARCH OBJECTIVE

The main objective is to make clients by giving them proper information regarding products and services of Share khan. Is to convince the clients that how Share khan is different from other brokerage firms by explaining them unique features of the company which helps in analyzing the interest of the client towards the company. It will also help in understanding the problem of clients and then finding ways to solve the queries at our level otherwise let the senior know about the query of the client. To know the investors perception towards investment in Derivative Market To know different types of Derivatives instruments To analyze the performance of Derivatives Trading since 2001with special reference to Futures & Options (a) In terms of Turnover (b) In terms of Traded Quantity (c) In terms of No of Contracts Traded

4.3 RESEARCH DESIGN AND METHODOLOGY

Research design
Exploratory research design is used. It includes surveys and fact finding enquire of different kinds. The main Characteristics of this method are that the researcher has no control over variables; he can only report what has happened or what is happening.

Data source
Research is partially based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various clients. The secondary data has been collected through various journals and websites.

Sampling design
Sampling techniques:Random sampling is used Sample size:100 people Tools and techniques of analysis:Tables, pie- charts, graphs Duration of the study:The study was carried out for a period of 45 days from 1 Jan to 15 Feb.

LIMITATION OF THE STUDY

The time available to conduct the study was only 1.5 months. Being a wide topic I had a limited time. Limited resources were available to collect the information about commodity trading The primary data has been collected through a structured questionnaire to a sample of 100 investors, which may not reflect the opinion of the entire population.

CHAPTER-5 ANALYSIS

1. Have you ever heard about share khan? Heard about share khan Percentage Yes 68 No 32

HEARD ABOUT SHARE KHAN

32

Yes 68 No

INTERPRETATION:This pie chart shows the Share khan has less amount of brand awareness in terms of premium retail stock broking company. The company is to increase its market share over its competitor should further leverage this brand image.

2. How do you know about derivatives of share khan? media advertisement Percentage 18 46 14 22 of Newspaper Internet Friends Other media

KNOW ABOUT SHARE KHAN

22 18 Newspaper 14 46 Internet Friends Other media

INTERPRETATION:Although there is not sufficient high brand equity among the traders audience yet that is why it is to be noted that the customers are not aware of the facilities provided by the company meaning there by the company that should concentrate more towards promotional tools and increase it focus on product awareness rather than brand awareness.

3. What percent of your monthly household income would you invest in derivative through Share Khan? Invest income Percentage 27 41 32 monthly 5- 10% 11- 15% 16- 20%

PERCENTAGE OF MONTHLY INCOME AVAILABLE FOR INVESTMENT

50 40 30 20 10 0 5- 10% 11- 15% 16- 20% 41 27 32 5- 10% 11- 15% 16- 20%

INTERPRETATION:41% of the respondents invest between 11 15% of the monthly household income in Derivatives, were as 32% of the respondents would invest between 16-20% and 27% of the respondents invest between 5 10% in Derivatives Market.

4. What kind of risk do you perceive while investing in Share Khan ? Kind of risk Uncertainty of return Slump market in Fear company wind up Percentage 43 34 9 14 of Other

KIND OF RISK PERCEIVE WHILE INVESTING IN DERIVATIVES

50 40 30 20 10 0

43

34 9 14 KIND OF RISK PERCEIVE WHILE INVESTING IN DERIVATIVES

INTERPRETATION:43% of the respondents feel that Uncertainty of Returns is the major risk they perceive while investing in Derivative Market, were as 34% of the respondents feel Slump in Market and 9% of the respondents feel that fear of company windup is the risk they perceive while investing in Derivatives.

5. What is the purpose of investing in Derivative Market through Share Khan? Purpose investment Percentage 33 29 21 of Hedge fund Risk control Stable income Direct investment 17

PURPOSE OF INVESTING IN DERIVATIVES MARKET

17 33 Hedge fund 21 Risk control Stable income 29 Direct investment

INTERPRETATION:33% of the respondents invest in Derivatives to hedge funds, 29% of them invest for risk control, 21% of the respondents for stable income and 17% invest as a direct investment.

6. In which of the following would you like to participate? Type of Index future 16 Index option 29 Stock future 19 Stock option 24 Currency future 12

participation Percentage

PARTICIPATION IN DIFFERENT TYPE OF DERIVATIVE INSTRUMENT

30 25 20 15 10 5 0 Index future Index option Stock future Stock Currency option future 16 29 19 24 12 Index future Index option Stock future Stock option Currency future

INTERPRETATION:From the above chart we find that 29% of the respondent would like to participate in Index Options were as 24% of the respondents would like to invest in Stock Options, Stock Futures and Index Futures attract 19 and 16% respectively and respondents liking to invest in Currency Futures and Options are 12%.

7. Which contract maturity period would interest you for trading in Share Khan? Time frame 1 month of investment Percentage 34 9 27 22 8 2 month 3 month 6 month 1 year

INTEREST OF INVESTMENT IN TERMS OF TIME FRAME

35 30 25 20 15 10 5 0

34 27 9 22 8

INTEREST OF INVESTMENT IN TERMS OF TIME FRAME

1 2 3 6 1 year month month month month

INTERPRETATION:34% of the respondents would like to invest their money for 1 Month, 27% of them for 3 months, 22% of the respondents for 6 months, 9% of the respondents for 2 months and 8% of the respondents for 1 Year.

8. What kind of time frame you invest in Derivative Market through share khan? Investment Percentage 1-10 times 62 11- 25 times 14 26- 50 times 15 Regularly 9

INVESTMENT IN DERIVATIVES MARKET

70 60 50 40 30 20 10 0

62 14 1-10 times 11- 25 times 15 26- 50 times

INVESTMENT IN DERIVATIVES MARKET 9 Regularly

INTERPRETATION:Majority of the respondents 60% of them invest between 1 10 times a year in Derivatives, were as respondents investing between 11 25 times, 26 50 times and regularly are 14%, 15% and 9% respectively.

9. What is the satisfaction of your Investment?

Result investment Percentage

of Great

Moderate acceptable

but Disappointed

17

50

33

SATISFACTION IN INVESTMENT

33

17 Great result Moderate but acceptable 50 Disappointed

INTERPRETATION:50% of the respondents are moderate about their results in investing in Derivatives market, 17% of the respondents have great results and 33% of the respondents are disappointed with their investment in Derivatives Market.

5.2 SUMMARY OF FINDINGS

News and internet are found to major source of information 11- 15%monthly household income invests in derivative market. Investors generally perceive uncertainty of returns type of risk while investing in derivative market.

Most of investors purpose of investing in derivative market is to hedge their funds. Most of investors participate in Index Options. From this survey we come to know that most of investors make a contract of 1 month maturity period. Investors invest 1 -10 times a year in Derivatives Market. The result of investment in derivative market is generally moderate but acceptable.

CHAPTER-6 SUMMARY AND CONCLUSIONS

6.1 SUMMARY OF LEARNING EXPERIENCE

I summarize my learning experience as how to behave in corporate world.

How to work under pressure How to handle team How to get work done from team To maximize the market share of the organization How to interact with the customer it is known What is the working process of the organization? How to fight with competitors How to find out the weakness of competitors How to convert competitors client in our organizational client How to analyze the need of Client How to satisfy the need of the client Being a good listener is the most important thing in the corporate world How to fulfill the needs of clients. How to fulfill the desires of customers How to interact with dynamic environment How to gain customers faith How to maximize the clientage of the organization

6.2 CONCLUSION AND RECOMMENDATIONS

Try to do more advertisement of the company.
Try to reduce cost, so that benefits can be passed on to customers. Senior managers at Share Khan Keep on telling that it is difficult to reduce cost, because of services we provides. But the fact is, India being a price sensitive market, people at times go for monetary benefits rather than for long term non-monetary benefits.

If charges cant be reduced because of costs involved, make the services customized, so that services are provided to only those customers who are willing to pay the price for services they are getting and let the other customers enjoy costs benefits without getting services.

Knowledge needs to be spread concerning the risk and return of derivative market. Investors should have knowledge of technical analysis, especially 5 Day moving averages as derivatives trading is for a short period of time Investors should analysis their script with the help of 5 Day moving average before making their trades.

Investors portfolio should only consist of 15 20% Derivatives contracts or scripts. As derivatives trading is very risky investors should have only a small portion of their portfolio consisting of derivatives.

SEBI should conduct seminars regarding the use of derivatives to educate individual investors. As FII play a prominent role in Derivatives trading, an individual investor should keep himself updated with various economic trends, government policies, and company and industry announcements.

ANNEXURE

QUESTIONNAIRE

1. Name: ___________________________________________ 2. Gender

a) Male b) Female

3. Age
a. Below 18 Years b. Between 18 24 Years c. Between 25- 34 Years d. Between 45 -54 Years e. Above 55 Years

4. Occupation
a. Employee b. c. d. Business Student Professional

5.

Educational Qualification
a. Undergraduate b. Graduate c. Post Graduate

d. Professional Degree Holder

6. Income per Annum a. Below 1,50,000 b. 1,50,000 3,00,000 c. 3,00,000 5,00,000 d. Above 5,00,000

7. Have you ever heard about share khan?

a. Yes b. No

8. How do you know about share khan?

a. Newspaper b. Internet c. Friends d. Other media

9. What percentage of your monthly household income would you invest in derivative market?
a. Between 5% to 10% b. Between 11% to 15% c. Between 16% to 20% d. e. Between 21% to 25% More than 25%

10. What kind of risk do you perceive while investing in the share khan?
a. Uncertainty of returns b. Slump in stock market c. d. Fear of being windup of company Other

11. What is the purpose of investing in Derivative market through share khan? a. To hedge funds b. Risk control c. More stable d. Direct investment 12. In which of the following would you like to participate? a. Index Futures

b. Index Options c. e.
Stock Futures

d. Stock Options
Currency Futures / Options

13. What contract maturity period would interest you for trading in share khan?
a. b. c. d. 1 month 2 months 3 months 6 months

e. 9 months f. 12 months

14. What kind of time frame you invest in derivative market through share khan?
a. 1-10 times in a year b. 11-50 times c. More than 50 times

d. Regularly

15. What is the satisfaction of your Investment? a. Great b. Moderate but acceptable c. Disappointed

BIBLIOGRAPHY

www.sharekhan.com www.google.com www.wikipedia.com www.indiainfoline.com www.economictimes.com www.nseindia.com