A

Summer Internship Project Report

on
A Study of Online Trading in Indian stock market
at
Sumpoorna Portfolio Ltd

Submitted to
Dr. A.P.J. Abdul Kalam Technical University, Lucknow
(Formerly-Uttar Pradesh Technical University)

for the partial fulfillment of

Master of Business Administration
2015-17

Submitted To: Submitted By:

Prof.Namita Nath Kumar Mansi Dhingra

(Assistant. Professor) (1582070035)
AKGIM, Ghaziabad

AJAY KUMAR GARG INSTITUTE OF MANAGEMENT

27th K.M Stone, NH 24, Delhi Hapur Bypass Road, Adhyatmik Nagar,
Ghaziabad-201009 (U.P.)
DECLARATION

1
I hereby declare that the project work entitled on “A STUDY OF ONLINE TRADING

IN INDIAN STOCK MARKET” submitted to the Ajay Kumar Garg Institute of

Management, is a record of an original work done by me under the guidance of Prof.

Namita Nath Kumar (Faculty MBA) A.K.G.I.M, GHAZIABAD.

The project embodies the result of original work and studies carried out by me and the

contents of the project do not form the basis for the award of any other degree to me. I

have expressed my feelings in my own simple way. I hope who goes through it will find

interesting and worth reading.

Mansi Dhingra

(1582070035)

ACKNOWLEDGEMENT

2
One of the most pleasant aspects of writing an acknowledgement is the opportunity to

thank all those who have contributed to it. Unfortunately, the list of expression of

gratitude no matter how extensive- is always incomplete and inadequate. This

acknowledgement is no exception.

I would, at the very onset, like to thank Mr. ANAND TRIPHATI, SUMPOORNA

PORTFOLIO Ltd., Noida for providing me the opportunity to perform my Summer

Internship Project in the Company. I would like to give special thanks and gratitude to

monitoring and provide necessary data and information as a when required throughout

the project.

I also wish to express my sincere gratitude to Under super vision of Prof. Namita Nath

Kumar AKGIM, GHAZIABAD for giving me an opportunity to do the project and

providing me all support and guidance which made me complete the project on time. I am

extremely grateful to her for providing such a nice support and guidance. Because of her

inspiring guidance, motivation, positive criticism, continuous encouragement and

untiring supervision this work could be brought to its present shape.

I would like to thank all of them who in one way or the other have helped me.

Mansi Dhingra

(1582070035)

TABLE OF CONTENTS
3
S.No. Title Page No.

1. List of Tables 5

2. List of Graph/Charts 7

3. Executive Summary 8

PART-1

4. Company Profile 10

PART-2

5. Introduction to the project (In Online Trading in Stock Market) 27

6. Review of Literature 43

7. Objectives of Study 58

8. Research Methodology 60

10. Data Analysis & Interpretation 63

11. Findings 83

12. Conclusion 85

13. Recommendation 87

14. Limitations of the Study 89

15. Bibliography 91

16. Annexure 94

LIST OF TABLES

4
S.No. Title Page No.

1. Type Of Demat Account Terminal 13

2. Brokerage Structure 14

3. Investment 14

4. Comparative Analysis of Cash Market and Derivatives 39

Market Segment on NSE

5. Table -5 65

6. Table -6 66

7. Table -7 67

8. Table -8 68

9. Table -9 69

10. Table -10 70

11. Table -11 71

12. Table -12 72

13. Table -13 73

14. Table -14 74

15. Table -15 75

16. Table -16 76

17. Table -17 77

18. Table -18 78

5
19. Table -19 79

20. Table -20 80

21. Table -21 81

LIST OF GRAPHS/CHARTS

6
S.No. Title Page No.

1. Products And Service Of Sumpoorna Portfolio Limited 25

2. Figure -1 66

3. Figure -2 67

4. Figure -3 68

5. Figure -4 69

6. Figure -5 70

7. Figure -6 71

8. Figure -7 72

9. Figure -8 73

10. Figure -9 74

11. Figure -10 75

12. Figure -11 76

13. Figure -12 77

14. Figure -13 78

15. Figure -14 79

16. Figure -15 80

17. Figure -16 81

18. Figure -17 82

EXECUTIVE SUMMARY
7
This project is based on “A STUDY OF ONLINE TRADING IN STOCK MARKET”

at Sumpoorna Portfolio Limited. Further, this Project includes review of literature & the

introduction of the company wherein this project tells about the profile of Sumpoorna

Portfolio limited, Situation Review wherein it has been shown SWOT analysis of

company, financial analysis of company and finally Learning’s & Findings.

Sumpoorna Portfolio Ltd. Basically work to educate and empower the individual

investor to make better investment decisions through quality advice and superior service.

Sumpoorna is a depository participant. This means that the shares are kept in

dematerialized form in Sumpoorna.

MANSI DHINGRA

(1582070035)

8
PART-1

9
COMPANY

PROFILE

COMPANY PROFILE

10
Name of the company:-Sumpoorna Portfolio ltd.

Year of Establishment:-20th December 2010

Address: :- C-56A/13,6th Floor, Industrial Area, Sector 62, Noida, Uttar Pradesh

Nature of Business:- Service Provider

Services:- Depository Services, Online Services

Number of Employees:- 35 to 50

Website:-www.sumpoornaonline.com

Slogan:- Your Guide to The Financial Jungle

Vision

To be the best retail brokering Brand in the retail business of stock market

Mission

11
To educate and empower the individual investor to make better investment decisions

through quality advice and superior service.

.Sumpoorna is infact :

• Among the top 3 branded retail service providers.

• Best player in online business.

• Largest network of branded broking outlets in the country serving more than 8,00,000

clients.

Sumpoorna First Step

The Sumpoorna First Step is a brand new program designed especially for those who are

new to investing in shares. All one have to do is open a Sumpoorna First Step account

and they guide us through the investing process.

Sumpoorna Portfolio Ltd :

MOTHER COMPANY- SONNEN INSURANCE BROKING

SISTERS COMPANY - EASY POLICY.COM

SUMPOORNA REAL ESTATE PVT.LTD.

SUMPOORNA COMTRADE PVT.LTD.

12
Demat Account:-

Sumpoorna is a depository participant. This means that we can keep the shares in

dematerialized form in Sumpoorna. But for this one has to the demat account in

Sumpoorna. Dematerialization is the process by which a client can get physical

certificates converted into electronic balances maintained in his account with the DP.

In Sumpoorna, under demat account there are two types of terminals:-

TABLE: 1

TYPE OF DEMAT DEPOSIT (Refundable) CHARGES (non

ACCOUNT TERMINAL refundable)

CLASSIC Rs.5000 Rs.250

Rs.10000 Nil

TRADESUM Rs.5000 Rs.500

Rs.10000/25000 Nil

Account opening:-

 Opening a DP account with Sumpoorna -

 One can open a Depository Participant (DP) account, either through a Sumpoorna

branch or through a Sumpoorna Franchisee centre.

 There is no fee for opening DP accounts with Sumpoorna. However a nominal

deposit (refundable) is charged towards services which will be adjusted against all

future billings.

13
  All investors have to submit their proof of identity and proof of address along

with the prescribed account opening form.

BROKERAGE STRUCTURE OF SUMPOORNA

BROKERAGE:-

TABLE: 2

INTRADAY DELIVERY

CASH- EQUITIES 0.03% 0.3%

F&O 0.03%

PREPAID SCHEME 0.025% 0.25%

MINIMUM INVESTMENT IN MUTUAL FUND:-

TABLE: 3

INVESTMENT MINIMUM AMOUNT

Mutual Fund (Any Company) 5000

Systematic Investment Plan (Any 500

Company)

14
 PROCESS OF ACCOUNT OPENING

LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES

CONTACT

TELEPHONE AND PRESONAL VISIT

APPOINTMENT

DEMONSTRATION

AGREE DISAGREE (CLOSE)

DOCUMANTATION

FILLING THE FORM

SUBMISSION THE FORM

LOGIN OF THE FORM

SENDING THE ACCOUNT OPENING KIT TO THE CUSTOMER FOR TRADING

15
SUMPOORNA has tie up with the following banks:-

• HDFC

• Axis Bank

• IDBI

• Citi Bank

• Indus land Bank

• Union Bank

• ICICI Bank

CUSTOMER OF SUMPOORNA

 Business class people (high class)

 High Net worth Individuals

 Service class people

 Government Employees

 Young Adults (19-30 yrs.)

 Adults (35-50 yrs.)

 HUF (Hindu Undivided Family)

 Women (literate and working)

16
Market Share

Sumpoorna enjoyed about 20 per cent market share in Web business (Internet trading) in

stock markets. Three years ago, Web trading showed lot of promise but with the market

witnessing a downturn, there was not much interest among retail customers.

Profits

The share of Web trading constituted 22 per cent of the revenue. As Sumpoorna 's daily

trading volume was over Rs 200 crore, the share of Web trading at about Rs 40 crore a

day was substantial and a larger part of the volume was coming from day traders

Its core services are:-

 Equities, and Derivatives trading on the National Stock Exchange of India Ltd.

(NSE), and Bombay Stock Exchange Ltd. (BSE),

 Commodities trading on National Commodity and Derivatives Exchange India

(NCDEX) and Multi Commodity Exchange of India Ltd. (MCX),

 Depository services,

 Online trading services,

 IPO Services,

 Dial-n-Trade

 Portfolio management services,

 Fundamental and Technical Research services,

 In addition to this they also provide advisory services and distributions for

mutual funds.

 Sumpoorna Value Line (a monthly publication with reviews of recommendations,

stocks to watch out for etc.)

17
Documents Required :

 3 photographs ( signed across)

 Photo Identification Proof - any of the following - Voter ID/Driving License/Passport.

 Address Proof any of the following - Voter ID/Driving License/ Passport/ Bank statement or

pass book sealed and attestation by bank official/ BSNL landline bill.

 A crossed Cheque favouring “Sumpoorna Portfolio Ltd”. Of the required amount. The

amount for Demat as well as trading will be Rs. 300/-(free Demat +300 Trading Account)

the minimum amount being Rs. 1000 a cheque can be given for a larger amount.

 Copy of PAN Card is mandatory.

 Registration Kit

 Bank and address proof declaration.

 PAN name discrepancy form.

These documents may not be consumer friendly but it is to avoid illegal transaction and to

prevent black money this ensures that money invested is accounted.

Features of Trading With Sumpoorna:-

 Freedom from paperwork

 Instant credit and money transfer

 Trade from any net enabled PC

 After hour orders

 Online orders on the phone

 Timely advice and-research reports

 Real-time Portfolio tracking

18
COMPETITORS OF SUMPOORNA PORTFOLIO LTD

• Indian bulls Securities

Indian bulls is an Indian group with its headquarters in Mumbai. It has presence in

sectors ranging from Real Estate, Infrastructure, Housing Finance, and Securities India

bulls Group has several companies with presence in Housing Finance, Real Estate,

Securities. All the group companies are listed on the Bombay Stock Exchange, and the

National Stock Exchange. The combined market capitalization of these companies is

15,443 Crore. India bulls was conferred the status of a Business Super brand by The

Brand Council, Super brands India in 2008.

• Share khan Limited

Share khan is an online website portal for online trading, investments and stock

marketing. The company was founded in February 2000 by entrepreneur Shripal

Morakhia. Share khan is ranked 2nd largest stock broker portal and has its branches in

575 cities in India.

• Angel Broking Limited

Angel Broking is an Indian Stock Broking firm established in 1987. The company is a

member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE),

National Commodity & Derivatives Exchange Limited (NCDEX) and Multi Commodity

Exchange of India Limited (MCX). It is a depository participant with Central Depository

Services Limited (CDSL). The company has 8500+ sub-brokers and franchisee outlets in

more than 850 cities across India.

19
The company Angel Broking provides financial services to retail clients. Their services

include online stock broking, depository services, and commodity trading and investment

advisory services. Wealth management solutions such as personal loans and insurance are

also delivered by this company. In 2006, the company started its Portfolio Management

Services (PMS), IPOs business and Mutual Funds Distribution (MFD) arm. The company

publishes research reports on areas related to investment broking.

• Kotak Securities Limited

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking

and distribution arm of the Kotak Mahindra Group. One of the oldest broking houses in

India, its operations include stock broking and distribution of various financial products.

It is a corporate member of both the Bombay Stock Exchange and the National Stock

Exchange of India. Kotak Securities was founded in 1994 and is headquartered in

Mumbai, India. In 2014, Kotak Securities was ranked as number 1 in India's Institutional

Investor rankings by weighted average. Kotak Securities is well known with professional

traders for its comprehensive online trading portal offerings.

• India Info line Services

FL was co-founded on Oer 17, 1995 by Nirmal Jain and R. Venkatraman. Jain was

previously employed with Hindustan Lever Limited. The company was founded as

Probity Research and Services Private Limited which provided research on the Indian

economy, businesses and corporates. The name was later changed to India Info line

Limited.

20
A few years into the business, the organization found itself with clients which included

research organizations, banks and corporates. They then began launching their research

products to become more noticeable in the market. In the meanwhile, the dotcom

revolution was beginning to take place in India. Taking advantage of this revolution

would mean an increase in the number of readers to millions. The website was created in

1999.

5 PAISA.COM

Taking the business one step ahead this group of consultants opened a trading portal –

www.5paisa.com –in 2000 thus moved into the business of being a full service broking

agency. During this time they widened their distribution network.

In 2001, the Indian dotcom industry saw a downfall. During this time, sustaining became

tough. The organization then decided to tie-up with leading Life Insurance company

ICICI Prudential, thus putting to use its distribution network and becoming India’s first

corporate agent for insurance.

21
 SWOT ANALYSIS

Strengths

• It is a pioneer in online trading with a turn over of Rs.250 crores and more than

110 peoples working in the organization

• Sumpoorna has more than eight decades of trust and credibility in the Indian

stock market.

• Sumpoorna provides multi-channel access to all its customers through a strong

online presence with www.sharekhan.com, 250 share shops in 130cities and a

call-centre based Dial-n-Trade facility

• Sumpoorna has dedicated research teams for fundamental and technical research.

Which constantly track the pulse of the market and provide timely investment

advice free of cost to its clients which has a strike rate of 70-80%

• Easier access to the customer due to largest ground network of 280 branded share

shops in 120 cities

• Efficient research and analysis team, which is, interpreting the economy and

company’s performance accurately, is enhancing the profitability of the client

Weakness

• Localized presence due to insufficient investments for country wide Expansion

• Lack of awareness among customers because of non-aggressive promotional

strategies (print media, newspapers, etc)

• Lesser emphasis on customer retention

22
• Focuses more on HNIs than retail investors which results in meager market- Share

as compared to close competitors

• Promotional activities conducted by the company are not at par with the other

Firms

Opportunities

• With the booming capital market it can successfully launch new services and raise

its client’s base

• It can easily tap the retail investors with small saving through promotional

Channels like print media, electronic media, etc.

• As interest on fixed deposits with post office and banks are all time low, more and

more small investors are entering into stock market.

• Abolition of long term capital gain tax on shares and reduction in short term

capital gain is making stock market as hot destination for investment among small

investors.

• Increasing usage of internet through broadband connectivity may boost a whole

new breed of investors for trading in securities

Threats

• Aggressive promotional strategies by close competitors may hamper

Sumpoorna acceptance by new clients.

• Lack of sufficient branch-offices for speedy delivery of services.

23
 • Other players are providing margin funds to investors on easy terms where as

there is no such facility in Sumpoorna

• More and more players are venturing into this domain which can further

reduce the earnings of Sumpoorna

• Availability of Unit Linked Insurance Policies (ULIP’s) and mutual funds in

the market.

Behind the Picture: Why Sumpoorna?

The underlying picture forming answer for above question is given below.

24
PRODUCTS AND SERVICES OF SUMPOORNA :

FIGG

25
PART-2

26
INTRODUCTION

27
 INTRODUCTION

CONSUMER BEHAVIOUR:

Consumer behaviour is the study of individuals, groups, or organizations and the

processes they use to select, secure, use, and dispose of products, services, experiences,

or ideas to satisfy needs and the impacts that these processes have on the consumer and

society.

Customer behaviour study is based on consumer buying behaviour, with the customer

playing the three distinct roles of user, payer and buyer. Research has shown that

consumer behaviour is difficult to predict, even for experts in the field.

Overview of Online Trading

Stocks

The stock or capital stock of a business entity represents the original capital paid into or

invested in the business by its founders. It serves as a security for the creditors of a

business since it cannot be withdrawn to the detriment of the creditors. Stock is distinct

from the property and the assets of a business which may fluctuate in quantity and value.

Buying a stock for the long term means that you want to own part of a company and you

think that in the future the company will be profitable. If you buy stock in a company and

the company performs well, the stock's price should rise. If the company fails, then the

stock should fail you, too and go down. The stock exchanges actually compete with each

other for these listings, since companies that attract more trading make more money for

the stock exchange that listed it. Company stocks are assigned a "ticker" or trading

28
symbol by the listing exchange. You may notice some well-chosen tickers that are easy to

remember, like "DNA" for the company Genentech, a biotechnology firm. Or some

companies' ticker is the same as its name, Nike for example

Stock market

A stock market or equity market is a public market (a loose network of economic

transactions, not a physical facility or discrete entity) for the trading of company stock

and derivatives at an agreed price; these are securities listed on a stock exchange as well

as those only traded privately. The size of the world stock market was estimated at about

$36.6 trillion US at the beginning of October 2008. The total world derivatives market

has been estimated at about $791 trillion face or nominal value, 11 times the size of the

entire world economy. The value of the derivatives market, because it is stated in terms

of notional values, cannot be directly compared to a stock or a fixed income security,

which traditionally refers to an actual value. Moreover, the vast majority of derivatives

'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a

comparable derivative 'bet' on the event not occurring). Many such relatively illiquid

securities are valued as marked to model, rather than an actual market price. The stocks

are listed and traded on stock exchanges which are entities of a corporation or mutual

organization specialized in the business of bringing buyers and sellers of the

organizations to a listing of stocks and securities together. The largest stock market in the

United States, by market cap is the New York Stock Exchange, NYSE, while in Canada,

it is the Toronto Stock Exchange.

29
Trading

Historically, stock markets were physical locations where buyers and sellers met and

negotiated. With the improvement in communications technology in the late 20th

century, the need for a physical location became less important, as traders could transact

from remote locations. Participants in the stock market range from small individual stock

investors to large hedge fund traders, who can be based anywhere. Their orders usually

end up with a professional at a stock exchange, who executes the order. Some exchanges

are physical locations where transactions are carried out on a trading floor, by a method

known as open outcry. This type of auction is used in stock exchanges and commodity

exchanges where traders may enter "verbal" bids and offers simultaneously. The other

type of stock exchange is a virtual kind, composed of a network of computers where

trades are made electronically via traders. The shares of a company may in general be

transferred from shareholders to other parties by sale or other mechanisms, unless

prohibited. Most jurisdictions have established laws and regulations governing such

transfers, particularly if the issuer is a publicly-traded entity

The desire of stockholders to trade their shares has led to the establishment of stock

exchanges. A stock exchange is an organization that provides a marketplace for trading

shares and other derivatives and financial products. Today, investors are usually

represented by stock brokers who buy and sell shares of a wide range of companies on

the exchanges. A company may list its shares on an exchange by meeting and

maintaining the listing requirements of a particular stock exchange. Actual trades are

based on an auction market model where a potential buyer bids a specific price for a

stock and a potential seller asks a specific price for the stock. (Buying or selling at

30
market means you will accept any ask price or bid price for the stock, respectively.)

When the bid and ask prices match, a sale takes place, on a first-come-first-served basis if

there are multiple bidders or askers at a given price. The purpose of a stock exchange is

to facilitate the exchange of securities between buyers and sellers, thus providing a

marketplace (virtual or real). The exchanges provide real-time trading information on the

listed securities, facilitating price discovery

History

The two main stock markets of India are:-

• Bombay stock exchange(BSE)

• National Stock Exchange(NSE)

Bombay Stock Exchange(BSE):-

Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's

first & fastest Stock Exchange with the speed of 200 micro seconds and one of India's

leading exchange groups. Over the past 140 years, BSE has facilitated the growth of the

Indian corporate sector by providing it an efficient capital-raising platform. Popularly

known as BSE, the bourse was established as "The Native Share & Stock Brokers'

Association" in 1875. BSE is a corporatized and demutualised entity, with a broad

shareholder-base which includes two leading global exchanges, Deutsche Bourse and

Singapore Exchange as strategic partners. BSE provides an efficient and transparent

market for trading in equity, debt instruments, derivatives, mutual funds. It also has a

platform for trading in equities of small-and-medium enterprises (SME).

31
More than 5500 companies are listed on BSE making it world's No. 1 exchange in terms

of listed members. The companies listed on BSE command a total market capitalization

of USD 1.68 Trillion as of March 2015. It is also one of the world's leading exchanges

(5th largest in March 2015) for Index options trading (Source: World Federation of

Exchanges).

BSE also provides a host of other services to capital market participants including risk

management, clearing, settlement, market data services and education. It has a global

reach with customers around the world and a nation-wide presence. BSE systems and

processes are designed to safeguard market integrity, drive the growth of the Indian

capital market and stimulate innovation and competition across all market segments. BSE

is the first exchange in India and second in the world to obtain an ISO 9001:2000

certification. It is also the first Exchange in the country and second in the world to

receive Information Security Management System Standard BS 7799-2-2002 certification

for its On-Line trading System (BOLT). It operates one of the most respected capital

market educational institutes in the country (the BSE Institute Ltd.). BSE also provides

depository services through its Central Depository Services Ltd.(CDSL)arm.

BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked

stock market benchmark index. It is traded internationally on the EUREX as well as

leading exchanges of the BRCS nations (Brazil, Russia, China and South Africa).

BSE has won several awards and recognitions that acknowledge the work done and

progress made like India Innovation Award for the Big Data implementation , ICICI

32
Lombard & ET Now Risk Management BFSI Company 2013, SKOCH Order of Merit

Certificate was awarded to BSE for E -Boss for qualifying amongst India's Best 2013,

The Golden Peacock Global CSR Award for its initiatives in Corporate Social

Responsibility, NASSCOM - CNBC-TV18's IT User Awards, 2010 in Financial Services

category, Skoch Virtual Corporation 2010 Award in the BSE STAR MF category and

Responsibility Award (CSR) by the World Council of Corporate Governance. Its recent

milestones include the launching of BRICSMART indices derivatives, BSE-SME

Exchange platform, S&P BSE GREENEX to promote investme nts in Green

Introduction to BSE

Bombay Stock Exchange is the oldest stock exchange not only in India but in entire Asia.

Its history is synonymous with that of the Indian Share Market history. BSE started

functioning with the name, The Native Share and Stock Broker's Association in 1875. It

got Government of India's recognition as a stock exchange in 1956 under Securities

Contracts (Regulation) Act, 1956. At the time of its origin it was an Association of

Persons but now it has been transformed to a corporate and demutualized entity. BSE is

spread all over India and is present in 417 towns and cities. The total number of

companies listed in BSE is around 3500.The main index of BSE is called BSE SENSEX

or simply SENSEX. It is composed of 30 financially sound company stocks, which are

liable to be reviewed and modified from time-to-time.

Launch of Other BSE Indices

• The launch of SENSEX in 1986 was later followed up in January 1989 by

introduction of BSE National Index (Base: 1983-84 = 100).

33
• The BSE National Index was renamed as BSE-100 Index from October 14, 1996 and

since then it is calculated taking into consideration only the prices of stocks listed at BSE.

• The Exchange launched dollar-linked version of BSE-100 index i.e. Dollex-100 on

May 22, 2006.

• The Exchange constructed and launched on 27th May, 1994, two new index series

viz., the 'BSE-200' and the 'DOLLEX-200' indices.

• The launch of BSE-200 Index in 1994 was followed by the launch of BSE-500

Index and 5 sector alindices in 1999. In 2001, BSE launched the BSE-PSU Index,

DOLLEX-30 and the country's first free-float based index - the BSE TECK Index. The

Exchange shifted all its indices to a free-float methodology (except BSE PSU index) in a

phased manner.

National Stock Exchange(NSE):-

The National Stock Exchange (NSE) is India's leading stock exchange covering various

cities and towns across the country. NSE was set up by leading institutions to provide a

modern, fully automated screen-based trading system with national reach. The Exchange

has brought about unparalleled transparency, speed & efficiency, safety and market

integrity.

NSE has played a catalytic role in reforming the Indian securities market in terms of

microstructure, market practices and trading volumes. The market today uses state-of-art

information technology to provide an efficient and transparent trading, clearing and

settlement mechanism, and has witnessed several innovations in products & services viz.

demutualization of stock exchange governance, screen based trading, compression of

settlement cycles, dematerialization and electronic transfer of securities, securities

34
lending and borrowing, professionalization of trading members, fine-tuned risk

management systems, emergence of clearing corporations to assume counterparty risks,

market of debt and derivative instruments and intensive use of information technology

Introduction to NSE:

National Stock Exchange (NSE) founded although late than BSE, is currently the leading

stock exchange in India in terms of total volume traded. It is also based in Mumbai but

has its presence in over 1500 towns and cities. In terms of market capitalization, NSE is

the second largest bourse in South Asia. National Stock Exchange got its recognition as a

stock exchange in July 1993 under Securities Contracts (Regulation) Act, 1956. The

products that can be traded in NSE are: -

• Equity or Share

• Futures (both index and stock)

• Options (Call and Put)

• Wholesale Debt Market

• Retail Debt Market

NSE's leading index is Nifty 50 or popularly Nifty and is composed of 50 diversified

benchmark Indian company stocks. Nifty is constructed on the basis of weighted average

market capitalization method.

NSE's mission is setting the agenda for change in the securities markets in India.

The NSE was set-up with the following objectives:

35
• Establishing a nation-wide trading facility for equities, debt instruments and hybrids,

• Ensuring equal access to investors all over the country through an appropriate

communication network,

• Providing a fair, efficient and transparent securities market to investors using

electronic trading systems.

• Enabling shorter settlement cycles and book entry settlements systems.

• Meeting the current international standards of securities markets.

REGULATORS OF SECURITIES MARKET

The responsibility for regulating the securities market is shared by Department of

Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of

India (RBI) and Securities and Exchange Board of India (SEBI).

Securities and Exchange Board of India (SEBI)

SEBI or Securities and Exchange Board of India is entitled to protect the investors'

interests, regulate and develop securities market in India. The Securities and Exchange

Board of India (SEBI) is the regulatory authority in India established under Section 3 of

SEBI Act, 1992. SEBI Act, 1992 provides for establishment of Securities and Exchange

Board of India (SEBI) with statutory powers for (a) protecting the interests of investors

insecurities (b) promoting the development of the securities market and (c) regulating the

securities market. Its regulatory jurisdiction extends over corporates in the issuance of

capital and transfer of securities, in addition to all intermediaries and persons associated

36
with securities market. It passes laws for streamlining the Indian share market for

efficient outcomes.

Role of SEBI

SEBI has been obligated to perform the aforesaid functions by such measures as it

Thinks fit. In particular, it has powers for:

• Regulating the business in stock exchanges and any other securities markets

• Registering and regulating the working of stock brokers, sub–brokers etc.

• Promoting and regulating self-regulatory organizations

• Prohibiting fraudulent and unfair trade practices

• Calling for information from, undertaking inspection, conducting inquiries and

audits of the stock exchanges, intermediaries, self –regulatory organizations, mutual

funds and other persons associated with the securities market.

Security Measures and Operational Features of BSE and NSE:

The leading stock exchanges in India have developed itself to a large extent since its

emergence. These stock exchanges aim at offering the investors and traders better

transparency, genuine settlement cycle, honest transaction and to reduce and solve

investor grievances. The aim to describe these operational features is for better

understanding of the working of stock exchanges. This is done for the purpose of easy

understanding from the reader‘s point of view.

37
 DERIVATIVES:

Derivatives are assets, which derive their values from an underlying asset. These

underlying assets are of various categories like:

• Commodities including grains, coffee beans, etc.

• Precious metals like gold and silver.

• Foreign exchange rate.

• Bonds of different types, including medium to long-term negotiable debt securities

issued by governments, companies, etc.

• Short-term debt securities such as T-bills.

• Over-The-Counter (OTC) money market products such as loans or deposits.

• Equities

For example, a dollar forward is a derivative contract, which gives the buyer a right & an

obligation to buy dollars at some future date. The prices of the derivatives are driven by

the spot prices of these underlying assets.

However, the most important use of derivatives is in transferring market risk, called

Hedging, which is a protection against losses resulting from unforeseen price or volatility

changes. Thus, derivatives are a very important tool of risk management.

There are various derivative products traded. They are;

• Forwards

• Futures

• Options

• Swaps

38
Comparative Analysis of Cash Market and Derivatives Market

Segment on NSE

TABLE NO.4

39
MARKETING STRATEGY OF SUMPOORNA

Market Positioning:

Market positioning statements of Sumpoorna are “ same level of personal attention,

respect and support each time”

So, Sumpoorna focus on the consumers who prefer almost all investment activities at

same place by providing number of various financial services. At Sumpoorna a person

can purchase or sell shares, debentures etc. and at the same place also demat it.

Sumpoorna also provides other investment option to the same person at same place like

Mutual Fund, , Fixed Deposit, and Bonds etc. and help the person in designing his

portfolio. By this way Sumpoorna provides comfort to its customers.

Target Market:

Sumpoorna uses demographic segmentation strategy and segment people based on their

occupation. Karvy uses selective specialization strategy for market targeting. Target

person for the Sumpoorn are persons who can work as sub-broker for the companies.

Companies focus on Advisors of Insurance and post office, Tax consultants and CAs for

making sub-broker.

Marketing channel System:

Sumpoorna uses one level marketing channel for investment product distribution. Sub-

brokers work as intermediary between consumer and company. Company has both

40
forward and backward flow of activity through channel. Company distributes stationery,

brokerage, and information forward to its sub-broker. The sub-brokers send filled forms,

queries, amount of investment etc. back to the company.

PROJECT Channel Members:

Sumpoorna provides PROJECT to the sub-brokers because they will be viewed as the

company by the investors. The executives of Sumpoorna explain various new schemes of

investment to the sub-brokers with its objective, risk factors and expected return.

Company also periodically arrange seminar to guide sub-brokers.

Advertising and Promotion:

The objective of advertising of Sumpoorna is to create awareness about services of

Sumpoorna among investors and sub-brokers and increase sub-brokers of Sumpoorna.

Company doesn’t give advertisement in media like TV, Newspapers, and Magazines etc.

Sumpoorna’s advertisement is made indirectly by the companies associate with it.

Quality Objectives of Sumpoorna:

 Build in-house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of services.

 Establish a partner relationship with its investor service agents and vendors that

will help in keeping up its commitments to the customers.

41
 Provide high quality of work life for all its employees and equip them with

adequate knowledge & skills so as to respond to customer's needs.

 Continue to uphold the values of honesty & integrity and strive to establish

unparalleled standards in business ethics.

 Use state-of-the art information technology in developing new and innovative

financial products and services to meet the changing needs of investors and

clients.

 Strive to be a reliable source of value-added financial products and services and

constantly guide the individuals and institutions in making a judicious choice of

same.

 Strive to keep all stake-holders (shareholders, clients, investors, employees,

suppliers and regulatory authorities) proud and satisfied.

42
REVIEW OF

LITERATURE

43
 REVIEW OF LITERATURE

Charles (1999) has analysed that the astonishing growth in Americans' stock portfolios

in the 1990s has been a major force behind the growth of consumer spending. This article

reviews the relationship between stock market movements and consumption. Using

various econometric techniques and specifications, the authors find that the propensity to

consume out of aggregate household wealth has exhibited instability over the postwar

period. They also show that the dynamic response of consumption growth to an

unexpected change in wealth is extremely short-lived, implying that forecasts of

consumption growth one or more quarters ahead are not typically improved by

accounting for changes in existing wealth.

Bhardwaj (2003) has stated the literature on globalization, He found the pervasiveness

of the west’s perception of the world affect on Indian investors that affects the trends in

investor’s choice. They are hugely affected by the west’s views and so changes in Indian

trends occur.

Ranganathan (2003), has stated the investor behavior from the marketing world and

financial economics has brought together to the surface an exciting area for study and

research: behavioral finance. The realization that this is a serious subject is, however,

barely dawning. Analysts seem to treat financial markets as an aggregate of statistical

observations, technical and fundamental analysis. A rich view of research waits this

sophisticated understanding of how financial markets are also affected by the ‘financial

behavior’ of investors. With the reforms of industrial policy, public sector, financial

sector and the many developments in the Indian money market and capital market,

44
mutual funds that has become an important portal for the small investors, is also

influenced by their financial behavior. Hence, this study has made an attempt to examine

the related aspects of the fund selection behavior of individual investors towards Mutual

funds, in the city of Mumbai. From the researchers and academicians point of view, such

a study will help in developing and expanding knowledge in this field.

Shrotriya (2003) conducted a survey on investor preferences in which he depicted the

linkage of investment with the factor so considered while making investment. He says

“There are various factors and their linkage also. These factors help us how to ensure

safety, liquidity, capital appreciation and tax benefits along with returns.”

Dijk (2007) has conducted 25 years of research on the size effect in international equity

returns. Since Banz's (1981) original study, numerous papers have appeared on the

empirical regularity that small firms have higher risk-adjusted stock returns than large

firms. A quarter of a century after its discovery, the outlook for the size effect seems

bleak. Yet, empirical asset pricing models that incorporate a factor portfolio mimicking

underlying economic risks proxied by firm size are increasingly used by both academics

and practitioners. Applications range from event studies and mutual fund performance

measurement to computing the cost of equity capital. The aim of this paper is to review

the literature on the size effect and synthesize the extensive debate on the validity and

persistence of the size effect as an empirical phenomenon as well as the theoretical

explanations for the effect. We discuss the implications for academic research and

corporate finance and suggest a number of avenues for further research.

45
Vasudev (2007) analysed the developments in the capital markets and corporate

governance in India since the early 1990s when the government of India adopted the

economic liberalization programme. The legislative changes significantly altered the

theme of Indian Companies Act 1956, which is based on the Companies Act 1948 (UK).

The amendments, such as the permission for nonvoting shares and buybacks, carried the

statute away from the earlier “business model” and towards the 'financial model' of the

Delaware variety. Simultaneously, the government established the Securities Exchange

Board of India (SEBI), patterned on the Securities and Exchange Commission of US.

Through a number of other policy measures, the government steered greater investments

in the stock market and promoted the stock market as a central institution in the society.

The article points out that the reform effort was inspired, at least in part, by the

government’s reliance on foreign portfolio inflows into the Indian stock market to fund

the country’s trade and current account deficits.

Johnson (2008) has stated that Product quality is probably under-valued by firms

because there is little consensus about appropriate measures and methods to research

quality. The authors suggest that published ratings of a product's quality are a valid

source of quality information with important strategic and financial impact. The authors

test this thesis by an event analysis of abnormal returns to stock prices of firms whose

new products are evaluated in the Wall Street Journal. Quality has a strong immediate

effect on abnormal returns, which is substantially higher than that for other marketing

events assessed in prior studies. In dollar terms, these returns translate into an average

gain of $500 million for firms that got good reviews and an average loss of $200 million

for firms that got bad reviews. Moreover, there are some important asymmetries.

46
Rewards to small firms with good reviews of quality are greater than those to large firms

with good reviews. On the other hand, large firms are penalized more by poor reviews of

quality than they are rewarded for good reviews. The authors discuss the research,

managerial, investing, and policy implications.

Patnaik and shah (2008) has analysed on the preferences of foreign and domestic

institutional investors in Indian stock markets. Foreign and domestic institutional

investors both prefer larger, widely dispersed firms and do not chase returns. However,

we and evidence of strong differences in the behavior of foreign and domestic

institutional investors.

Bhatnagar (2009) has analysed of Corporate Governance and external finance in

transition economies like India. The problem in the Indian corporate sector is that of

disciplining the dominant shareholder and protecting the minority shareholders. Clearly,

the problem of corporate governance abuses by the dominant shareholder can be solved

only by forces outside the company itself particularly that of multilateral financial

institutions in the economic development. India has relied heavily on external finance as

their domestic saving rates have been much lower than their investment rates. The less

promising prospects for the global supply of external finance the need for an increase in

the multilateral financial institutions. India being a transition economy is changing from a

centrally planned economy to a free market. It is undergoing economic liberalization,

macroeconomic stabilization where immediate high inflation is brought under control,

and restructuring and privatization in order to create a financial sector and move from

public to private ownership of resources. These changes often may lead to increased

inequality of incomes and wealth, dramatic inflation and a fall of GDP.

47
Mayank (2009) has analysed the role of two important forces - the regulator and the

capital market as determinant of external finance in transition economies analyses the

changing pattern and future prospectus of external finance to India and reviews the role

of external finance. Under this framework, the study evaluates current Indian corporate

governance practices in light of external finance.

Rajeshwari and Moorthy has conducted the study and analysed that Mutual Fund is a

retail product designed to target small investors, salaried people and others who are

intimidated by the mysteries of stock market but, nevertheless, like to reap the benefits of

stock market investing. At the retail level, investors are unique and are a highly

heterogeneous group. Hence, their fund/scheme selection also widely differs. Investors

demand inter-temporal wealth shifting as he or she progresses through the life cycle. This

necessitates the Asset Management Companies (AMCs) to understand the fund/scheme

selection/switching behaviour of the investors to design suitable products to meet the

changing financial needs of the investors. With this background a survey was conducted

among 350 Mutual Fund Investors in 10 Urban and Semi Urban centers to study the

factors influencing the fund/scheme selection behaviour of Retail Investors. This paper

discusses the survey findings. It is hoped that it will have some useful managerial

implication for the AMCs in their product designing and marketing.

Atkinson (2000) There are several studies in the literature that attempt to discuss some of

the problems and challenges associated with online trading. The first problem discussed

in the literature is hidden costs and deceptive advertising associated with online trading.

supported this contention that buried in all the online trading hype resides the fine print.

48
This obscure data translates into a venture that is more costly than one was lead to

believe.

McNamee (2000) and Patel (1999) Delayed and varied execution speeds and self

serving market makers were among the items responsible for this pitfall of online trading

as was collaborated in the studies. Internet security is also a major concern to investors.

Computer hackers and viruses plague every sector of the computer community and with

certainty will continue to do so.

(Goldberg, 1998) Internet applications are endless and e-commerce companies are

developing innovative business models and making advancements everyday. One of the

fastest growing internet ventures is online trading. The first internet securities trading

occurred in 1994. By 1997, it has been estimated that 17 percent of all trades occurred

online via the internet. Online brokerage firms emerged and the wealth of information

available to many investors.

(Padhi and Naik, 2012) Stock markets play an essential role in growing industries that

ultimately affect the economy through transferring available funds from units that have

excess funds (savings) to those who are suffering from funds deficit (borrowings) .

(Poon and Swatman, 1999) Countries all over the world have invested heavily to

leverage the Internet and transform their conventional businesses into e-businesses. E-

businesses are defined as the use of Internet based information and communication

technologies (ICT) by organizations to conduct transactions, share information and

maintain relationships.

49
( Tversky, A and Kahenaman, D.) Other research has shown that psychological factors

may result in exaggerated stock price movements. Psychological research has

demonstrated that people are predisposed to seeing patterns and often will perceive a

pattern in what is , in fact, just noise. In the present context this means that a succession of

good news items about a company may lead investors to overreact positively. A period of

good returns also boost the investor’s self-confidence , reducing his risk threshold .

Calderon-Rossell (1991) was the first to develop a partial equilibrium model of stock

market growth. To date, this model represents the most “serious” attempt to lay the

foundations of a financial theory of stock market development. However, as a partial

equilibrium model, it fails to take into account, for instance, the potential effects of

government policies and institutional factors.

Henry (2000) finds a strong relationship between the growth rate of investment and

changes in stock market valuation measured by returns on the stock market, the turnover

ratio, and the traded value as a share of GDP. On the other hand, McCauley and

Remolona (2000) and Shah and Thomas (2001) find that the size of the economy is an

important factor in the development of liquid and well functioning securities markets.

Mishkin (2001) argues that financial liberalization promotes transparency and

accountability, which reduces adverse selection and moral hazard. It thus tends to reduce

the cost of borrowing in stock markets, which eventually increases their liquidity and

size. A large pool of studies has investigated the impact of inflation on capital markets.

An important finding of these studies has been that high levels of inflation are associated

50
with less liquid and smaller financial markets as financial intermediaries tend to lend less

and allocate less efficiently.

Boyd et al. (2001) find negative effects of inflation on private credit and equity

markets.They argue that the relationship between financial development and inflation

could be nonlinear, with a particular threshold level after which the financial sector

experiences an abrupt drop in performance.

Claessens et al. (2001) find that privatization programs and foreign direct investment

contribute to stock market development.

Naceur et al. (2007) show that macroeconomic factors such as income, saving rate, and

financial intermediary development are important determinants of stock market

development for a panel of countries in the MENA region.

El-Wassal (2005) examined the relationship between stock market growth and economic

growth, financial liberalization and foreign portfolio. The findings show that economic

growth, financial liberalization and foreign portfolio investments were the leading factors

in the expansion of stock markets.

Yartey and Adjasi, (2007) found that financial intermediary sector development tended

to increase stock market development in Sub-Sharan Africa, controlling for

macroeconomic stability, economic development and the quality of legal and political

institutions. In addition, Yartey (2008) has demonstrated that stock market development

has a nonlinear relationship with banking sector development. That is, stock market

development is initially supported by banking sector development through trade

intermediation.

51
North and Weingast (1989) show that improved checks and balances, credible

commitments and upgraded property rights in England during the seventeenth century led

to the development of stable capital markets.

Erb et al. (1996) show that expected returns and the magnitude of political risk are

positively related. They find that both in developing and developed countries, the lower

the level of political risk, the lower the required returns. The results suggest that political

risk plays an important role in investment decisions and decreases the cost of equity, and

consequently may have important implications for stock market development.

La Porta et al. (1997, 1998) argue that the origin of a country’s legal system affects the

level of financial development. A common law basis is more conducive to the

development of capital markets than a civil law basis, as the flexibility of the common

law legal system allows for protection of small investors. Moreover, they find that

countries with a lower quality legal regime and poorer law enforcement exhibit smaller

and narrower capital markets and that the listed companies on their stock markets are

characterized by more concentrated ownership.

La Porta et al. (2000, and 2002), Perotti and Van Oijen (2001), Galindo and Micco

(2004) and Djankov et al. (2005) argue that strengthening property rights, credit

protection and investor protection through company laws and commercial codes, as well

as disclosure of companies’ activities and proper accounting rules and practices are key

determinants of the development of corporate securities markets.

(Claessens et al, 2001) More recent empirical research emphasizes as well the important

role of access to international markets in fostering the development of local financial

52
markets. Capital account liberalization broadens the investor base, enhances efficiency by

weeding out inefficient institutions and creates pressure to reform .

Impavido et al. (2003) and Claessens et al. (2003) argue that the development and

particularly the liquidity of financial markets depend also on the existence of a diversified

class of institutional investors. Mutual funds, pension funds and insurance companies act

as a stable source of demand for equity and debt securities. They foster competitiveness

and efficiency in primary markets and create an incentive for the establishment of a

robust regulatory and supervisory framework. In this regard,, Catalan et al.(2000)

examine the determinants of stock market development for OECD countries and for some

emerging economies. Their findings suggest that, setting aside the issues of macro

stability and legal rights, contractual savings institutions positively affect stock market

development.

Yartey and Adjasi (2007) shows that political risk and institutional quality are strongly

associated with growth in stock market capitalization. The results suggest that the

establishment of quality institutions can be an important factor in the development of

stock markets. Other institutional factors as well, such as law and order, democratic

accountability and bureaucratic quality are important determinants of stock market

development.

Chami et al. (2009) argue that financial markets will develop if borrowers and lenders

are willing and able to enter into contracts, and liquidity providers find conditions

conducive to trading created financial instruments. They also emphasize the importance

of regulatory structure in supporting this process by removing obstacles that render

53
potential borrowers, lenders and liquidity providers unwilling or unable to play their roles

and by creating an appropriate incentive for each agent to fulfill their end of the bargain.

(Maunder et al., 1991) It is possible for stock markets to be large relative to their

economies, but still concentrated. That is, only a few companies dominate the given

market. Consequently, market concentration may be measured by looking at the share of

market capitalization accounted for by the large companies in the market. These large

companies are seen by some analysts as being the leading three to five companies in the

market.

(Goldberg, 1998) Online brokerage firms emerged and the wealth of information

available to many investors have promoted the practice of investing through the internet.

The opportunity that online investing present to investors is intriguing and returns often

seem very promising. Within these opportunities lie many problems and challenges that

are potential obstacles for the online investor. There are a variety of issues that online

investors will face today and continue to do so in the future.

A few studies have been undertaken to evaluate the effect of introduction of derivative

products on volatility of Indian spot markets. These studies have mainly concentrated on

the NSE.

Thenmozhi (2002) showed that the inception of futures trading has reduced the volatility

of spot index returns due to increased information flow.

Shenbagaraman (2003), the introduction of derivative products did not have any

significant impact on market volatility in India.

54
Raju and Karande (2003) also reported a decline in volatility of S&P CNX Nifty after

the introduction of index futures.

(Williams, Whalley, and Li 2000) A service product cannot be adopted without proper

infrastructure (Walsh and White 2000). This is also true of online trading where security,

reliability, and speed are vital for consumer trust and loyalty. Many online investors are

concerned about the security of Internet transactions: for example, the integrity of

information, secure payment mechanisms, and communication/information free from

interception and misrepresentation.

(Greenwald et al. 1998) Investor concerns could be alleviated with development of new

technology that would bring not only more security but enhanced network reliability and

speed as well .

The speed of stock transactions on the Internet is improved over that through traditional

channels, not only because of faster networks, but also because there are fewer

individuals between the investor and the final site where bids and offers meet to complete

a transaction. Further automation could also lower the transaction cost (Sarkar, Butler,

and Steinfield 1996). In an effort to earn client trust, Datek offers free real-time stock

quotes and promises to execute trades within 1 minute or refund the commission

(Greenwald et al. 1998).

(Sindell 1999, Ch. 16) Many online portfolio-tracking services are available on the

Internet or are offered as computer software programs. In response to services available

to online investors, full-service brokers contend that they can provide expert advice and

personal service (Emerson 1999).

55
(Jurek 1999) Other related services, such as advice on how to deal with the quick build

up of tax liabilities generated by short-term trades are offered.They argue that the biggest

hazard of e trading is trading itself, and the ability to buy and sell instantly should not be

confused with investing. Some people have neither the time nor the confidence to manage

their portfolios because being a skilled investor is a fulltime job (Online Investing 1999).

The brokers recommend that investors who fear new technology “talk to a live body” .

Ray (2000) and Turner (2000) Privacy, identification, and investor protection by using

trusted third parties and/or privacy statements, online brokers have tried to increase

consumer confidence and loyalty. Anonymity must be guaranteed, since investors,

individual and institutional, would like to hide their actions in order to buy and sell stock

at the best price. Online trading companies secure transactions over the Internet by

offering data encryption and requiring a unique user identity and password when the

investor logs on. They also provide clients further safety if they fail to achieve web

security.

Rogers and Shoemaker wrote (1971, 138), which focused on the provider of products

and services, discussed the benefits and drawbacks of online trading in general from the

traders‟ viewpoint. But their approach did not deal with the range of investor responses

to the innovation of online trading. Innovation-diffusion scholars shed light on this issue

by finding that attributes of innovations could appeal differently to users at different

stages of the innovation adoption process.

Rogers (1995, Ch. 5), an individual progresses through 5 different stages in the

innovation-decision process model: (1) From first knowledge (awareness) of an

56
innovation (2) to the persuasion (attitude formation and change) stage, (3) to a decision to

adopt or reject the innovation, (4) to implementation of the new idea, (5) to the

confirmation (reinforcement for the adoption or rejection of a prior decision) stage.

57
OBJECTIVES OF

THE STUDY

58
 OBJECTIVES OF THE STUDY

The Objective is to review the study of ONLINE TRADING at Sumpoorna Portfolio Ltd

as the exchange has changed it’s trading from the outcry mode to online trading on 20th

December 2010.

• To know the awareness level of customers regarding online trading.

• To study the attitude of the investor.

• To know the factors influencing investment decision.

• To make a comparative study of competitors of Sumpoorna Portfolio Ltd.

• To know the online screen based trading system adopted by Sumpoorna .

59
 RESEARCH

METHODOLOGY

60
 RESEARCH METHODOLOGY

The research methodology defines what the activity of research is, how to proceed, how

to measure progress, and what constitutes success. It provides us an advancement of

wealth of human knowledge, tools of the trade to carry out research, tools to look at

things in life objectively; develops a critical and scientific attitude, disciplined thinking to

observe objectively (scientific deduction and inductive thinking); skills of research

particularly in the ‘age of information’. Also it defines the way in which the data are

collected in a research project. In this paper it presents one components of the research

methodology from a real project; the theoretical design and framework respectively.

Sources of Data:- Data, facts ,figures, other relevant material of past and present and

surveying are the basis for study and analysis. Without an analysis of factual data no

specific inferences can be drawn on the questions under study. Inferences based on

imagination or guesses cannot provide correct answer to research questions. The

relevance adequacy and reliability of data determine the quality of the findings of a

study.

For the purpose of the present study, data from two sources has been collected, namely

primary data and secondary data.

 PRIMARY DATA: Primary data is source from which the researcher collects the

data. It is a first hand data, which is used directly for the analysis purposes.

Primary data always gives a researcher a fairer picture. In the present study

primary data has been collected using questionnaires. For the purpose of

collecting the same, 50 respondents have been randomly selected. Even the

61
 response of the respondents was taken into consideration. In this study, primary

data plays a vital role for analysis, interpretation, conclusion and suggestions.

 SECONDARY DATA: Secondary data is data which is collected and compiled

for other purposes. Secondary data also plays a key factor in providing more

information which will influence the analysis. Few of the main sources of

secondary data include newspapers, magazines, business journals, internet .

 Research Design: Exploratory research design is been taken.

 Exploratory research design: Exploratory research is research conducted

for a problem that has not been clearly defined. It often occurs before we know

enough to make conceptual distinctions or posit an exploratory relationship.

Exploratory research helps determine the best research design, data collection

method and selection of subjects.

 Sample Area : Noida city is being taken as a sample area for study.

 Sample Size : The research made use of primary data, which was collected by

the 50 respondents but out of which only 40 has responded to the questions

that’s why the research has been carried on 40 respondents.

 Data Collection Instrument: Structured Questionnaire

 Sampling Procedure : We have used a Non Probabilistic Sampling

Technique that is, Convenience Sampling.

62
DATA ANALYSIS

&

INTERPRETATION

63
 DATA ANALYSIS & INTERPRETATION

The data has been analyzed by using the SPSS software. Originally SPSS is an acronym

of Statistical Package for Social Science but now it stands for Statistical Product &

Service Solutions. It is one of the most popular Statistical Package which can perform

highly complex data manipulation & analysis with simple instruction.

It is used for quick analysis of high volume of Social Science data, collected from

different methods of research. SPSS is a computer program that is basically used for

survey, authoring & deployment, data mining, text analytics, statistical analysis &

collaboration.

Major functions of SPSS are:

• It summarizes the data.

• It determine, whether there are significant differences between groups or not.

• Inspect the relationships among variables and graph result.

We have tried to establish relationship between two factors i.e. satisfaction level of

services provided by the company and success of Sumpoorna in online trading of stock

by using correlation method of Karl Pearson applying two tailed test with the help of

SPSS Software.

64
 Table : 5
Correlations

Do you Are the stock

believe that broking
your services
trader/broker provided by
is very Sumpoorna is
successful in satisfactory ?
online
trading?

Pearson Correlation 1 .804 **

Do you believe that your trader/broker is very
Sig. (2-tailed) .000
successful in online trading?
N 40 40
Pearson Correlation .804** 1
Are the stock broking services provided by
Sig. (2-tailed) .000
Sumpoorna is satisfactory ?
N 40 40

**. Correlation is significant at the 0.01 level (2-tailed).

INTERPRETATION:

The analysis was done by performing a two tail test on Pearson correlation. It has been

found that there is high positive correlation of 0.804 at 1% level of significance between

two factors i.e. satisfaction level of services provided by the company and success of

Sumpoorna in online trading of stock.

65
 TABLE:6

Q1.Do you know about online trading?

Frequency Percent Valid Percent Cumulative Percent

Yes 35 87.5 87.5 87.5

Valid No 5 12.5 12.5 100.0

Total 40 100.0 100.0

(Figure:1)

INTERPRETATION:

In my study,87% of the respondents are aware about online trading in stock market.

66
 Table:7

Q 2. Do you have a DMAT Account ?

Frequency Percent Valid Percent Cumulative Percent

Yes 16 40.0 40.0 40.0

Valid No 24 60.0 60.0 100.0

Total 40 100.0 100.0

( Figure-2)

INTERPRETATION: 60% of respondents do not have demat account.

67
 TABLE: 8

Q 3. Do you feel safe while trading online?

Frequency Percent Valid Percent Cumulative Percent

Yes 22 55.0 55.0 55.0

Valid No 18 45.0 45.0 100.0

Total 40 100.0 100.0

(Figure-3)

INTERPRETATION: 55% of respondents feel safe while trading, whereas others

are not.

68
 TABLE: 9

Q4. In which stock you most trade online?

Frequency Percent Valid Percent Cumulative Percent

Mutual Funds 10 25.0 25.0 25.0

F&O Equities 2 5.0 5.0 30.0

Others 13 32.5 32.5 62.5

Valid
Equity 11 27.5 27.5 90.0

Commodities 4 10.0 10.0 100.0

Total 40 100.0 100.0

(Figure-4)

INTERPRETATION: 28% of respondents invests in Equities, 25% trade in

MutualFunds, 10% trade in Commodities, 5% in F&O Equities and 32% in Others.

69
 TABLE: 10

Q 5. Do you receive updated online information regarding the stock market

from your dealer/broker?

Frequency Percent Valid Percent Cumulative Percent

Yes 25 62.5 62.5 62.5

Valid No 15 37.5 37.5 100.0

Total 40 100.0 100.0

(Figure-5)

INTERPRETATION: 62% of respondents receive updated online information.

70
 TABLE: 11

Q 6. Do you believe that your trader/broker is very successful in online trading?

Frequency Percent Valid Percent Cumulative Percent

Strongly Agree 6 15.0 15.0 15.0

Agree 16 40.0 40.0 55.0

Moderate 12 30.0 30.0 85.0

Valid
Disagree 2 5.0 5.0 90.0

Strongly Disagree 4 10.0 10.0 100.0

Total 40 100.0 100.0

(Figure:6)

INTERPRETATION: 40% of respondents are agree that their trader is very

successful in online trading, whereas 15% are strongly agree, 5% are disagree ,10% are

strongly disagree and 30% are moderate views

71
 TABLE: 12

Q 7.Are the stock broking services provided by Sumpoorna is

Frequency Percent Valid Percent Cumulative Percent

Strongly Agree 6 15.0 15.0 15.0

Agree 15 37.5 37.5 52.5

Moderate 12 30.0 30.0 82.5

Valid
Disagree 3 7.5 7.5 90.0

Strongly Disagree 4 10.0 10.0 100.0

Total 40 100.0 100.0

(Figure7)

INTERPRETATION: 38% of respondents are agree that stock broking services

provided by Sumpoorna is satisfactory, whereas 15% are strongly agree, 7% are disagree

,10% are strongly disagree and 30% are moderate views.

72
 TABLE: 13

Q8.What percentage of your annual income do you invest in share market ?

Frequency Percent Valid Percent Cumulative Percent

More than 20% 3 7.5 7.5 7.5

10-15% 9 22.5 22.5 30.0

Valid
Upto 10% 28 70.0 70.0 100.0

Total 40 100.0 100.0

(Figure-8)

INTERPRETATION: 70% of people invest only upto 10% of their annual income

in share market

73
 TABLE: 14

Q9.No. of years of online trading experience in stocks at this firm?

Frequency Percent Valid Percent Cumulative

Percent

5-10 years 11 27.5 27.5 27.5

Valid Below 5 years 29 72.5 72.5 100.0

Total 40 100.0 100.0

(Figure-9)

INTERPRETATION: 72% of respondents have experience of Below 5 years and

remaining have experience of 5-10 years.

74
 TABLE: 15

Q 10. How was your DMAT Account opened ?

Frequency Percent Valid Percent Cumulative

Percent

Referral- Clients 7 17.5 17.5 17.5

Personal Acquaintance 9 22.5 22.5 40.0

Valid Others 19 47.5 47.5 87.5

Call/ Walk-in 5 12.5 12.5 100.0

Total 40 100.0 100.0

(Figure-10)

INTERPRETATION: 17% of respondents says that their account was opened

through referral clients, 22% through personal acquaintance, 13% through call/walk in,

and 48% through others.

75
 TABLE: 16

Q 11. What is your opinion relating to the rate of interest of margin funding

facility of Sumpoorna ?

Frequency Percent Valid Percent Cumulative Percent

Excellent 6 15.0 15.0 15.0

Average 14 35.0 35.0 50.0

Valid Poor 4 10.0 10.0 60.0

Good 16 40.0 40.0 100.0

Total 40 100.0 100.0

(Figure-11)

INTERPRETATION: 40% of respondents say that the margin funding facility of

Sumpoorna is good ,35% of respondents say average,15% says excellent and other

remaining say poor.

76
 TABLE: 17

Q12. Are you aware of T+2 method of trading?

Frequency Percent Valid Percent Cumulative Percent

Yes 18 45.0 45.0 45.0

Valid No 22 55.0 55.0 100.0

Total 40 100.0 100.0

(Figure-12)

INTERPRETATION: 55% of respondents are aware of T+2 method of trading

whereas others are not.

77
 TABLE: 18

Q 13.Do you feel that there is more transparency in online trading?

Frequency Percent Valid Percent Cumulative Percent

Yes 21 52.5 52.5 52.5

Valid No 19 47.5 47.5 100.0

Total 40 100.0 100.0

(Figure-13)

INTERPRETATION: 52% of respondents feel that there is transparency in online

trading whereas 48% of respondents feel that there is no transparency.

78
 TABLE: 19

Q 14. Any other company whose service you like?

Frequency Percent Valid Percent Cumulative Percent

Indian Bulls 13 32.5 32.5 32.5

Sumpoorna 9 22.5 22.5 55.0

Sharekhan 4 10.0 10.0 65.0

Valid
Angel Broking 7 17.5 17.5 82.5

Karvy 7 17.5 17.5 100.0

Total 40 100.0 100.0

(Figure-14)

INTERPRETATION: Majority of respondents feel that the service of Indian Bulls

is good than other companies including Sumpoorna.

79
 TABLE: 20

Q 15. AGE

Frequency Percent Valid Percent Cumulative Percent

15-30 23 57.5 57.5 57.5

31-45 8 20.0 20.0 77.5

Valid
45-60 9 22.5 22.5 100.0

Total 40 100.0 100.0

(Figure-15)

INTERPRETATION: In my research 57% of respondents are between the age

group of 15-30 , 20% are of 31-45 and 23% are of 46-60.

80
 TABLE:21

Q 16. Income per month

Frequency Percent Valid Percent Cumulative Percent

Below 15000 18 45.0 45.0 45.0

15000-30000 4 10.0 10.0 55.0

Valid 30000-45000 9 22.5 22.5 77.5

Above 45000 9 22.5 22.5 100.0

Total 40 100.0 100.0

(Figure-16)

INTERPRETATION: 45% of respondents have income Below 15000, 10% have

15000-30000, 23% have Above 45000 and 22% have 30000-45000

81
 TABLE: 22

Q 17. Educational Qualification

Frequency Percent Valid Percent Cumulative

Percent

Post Graduation 22 55.0 55.0 55.0

Graduation 11 27.5 27.5 82.5

Valid
Others 7 17.5 17.5 100.0

Total 40 100.0 100.0

(Figure-17)

INTERPRETATION: 55% respondents are Post Graduated, 27% are Graduated and

18% are of other categories.

82
FINDINGS

83
 FINDINGS

 The investment decision of investors is influenced by their own decision and

through friends & relatives.

 Majority of investors invest only upto 10% of their annual income in share market.

 Sumpoorna Portfolio Ltd has a great competition with other broking agencies like
Kodak, Angel etc. because they are also using new technologies to retain
customers.

 The number of players is increasing at a steady rate and today there are over a
dozen of brokerage houses who have opted to offer net trading to their customer
and prominent among them are Sumpoorna, India bulls, Kotak street, Karvy.

 Investors perception changes with the fluctuations in share market.

 On applying correlation analysis (using SPSS) on the primary data collected, it

has been found that there exists a positive relationship between the two factors

viz. the satisfaction level of services provided by Sumpoorna and its success in

online trading.

84
CONCLUSION

85
 CONCLUSION

In today’s scenario when all services are going to be online or in electronic form

Sumpoorna Portfolio Ltd. Is creating awareness of online trading so that the client can

trade from anywhere from the World. Sumpoorna Portfolio Ltd. takes care of client

portfolio and whenever the value of his/her portfolio will decrease by 30% then that

client is always informed by his/her relationship Manager. Sumpoorna is a company that

has helped in handling a vast amount of transactions and this can be an efficient trading,

delivering, settlement system with adequate protection to investors.

The introduction of on-line trading would influence the investors resulting in an increase

in the business of the exchange. Due to invention of online trading there has been greater

benefit to the investors as they could sell / buy shares as and when required and that to

with online trading.

The broker’s has a greater scope than compared to the earlier times because of invention

of online trading.

86
SUGGESTIONS

87
 SUGGESTIONS & RECOMMENDATIONS

• Allocation of news in such a way that Sumpoorna Portfolio Ltd maintain a consistency

level throughout the month.

• Can improve in that areas where service provide by other major competitors is very

strong in this area.

• To increase the awareness level of the company among the public.

• 24*7 customer support can increase its value.

• The company must spread the awareness to its clients for the service like F&O

Equities to increase the satisfaction level of clients as we have find that there is

positive aspect between the satisfaction level of services provided by Sumpoorna

success in online trading.

88
LIMITATIONS OF

THE STUDY

89
 LIMITATIONS OF THE STUDY

 It is always a problem to get an enthusiastic response. There were not many

willing participants; lack of cooperation remains an aberration in most of the

survey based researches.

 The respondents’ behavior changes according to stock market fluctuations.

 The study is only restricted to the Noida city.

 Time constraint is also one of the factor.

90
REFERENCES

91
 REFERENCES

WEBSITES :

 www.sumpoornaonline.com

 www.investopedia.com

 www.bseindia.com

 www.nseindia.com

 www.moneycontrol.com

NEWSPAPER :

 The Times of India

 The Economic Times

RESEARCH PAPERS:

 Bae, K., Bailey, W., Mao, C.X. (2006), Stock Market Liberalization and the

Information Environment, Journal of International Money and Finance, 25, 404-

428.

 Baker, H.K. (1996), Trading Location and Liquidity: An analysis of U.S. Dealer

and Agency Markets for Common Stocks. Financial Markets, Institutions &

Instruments, 5(4), 1-51.

 Money and Capital in Economic Development, Washington: Brookings

Institution. International Journal of Economics and Financial Issues, Vol. 3, No.

3.

92
  Dijk (2007). Economic Policy, The Size Effect in Equity Returns. Empirical
Research Findings. Journal of Financial Management and Analysis,
21(1).Available at http://papers.ssrn.com/sol3/results.cfm last accessed on July5,
2009.
 Charles (1999). Economic Policy, Astonishing growth in Americans' stock
portfolios. The Icfai Journal of Stock Market, 6 (3): 43-60. Available at
http://papers.ssrn.com/sol3/results.cfm last accessed on July5, 2009.

BOOKS:

 Beri G.C, Marketing Research

 Gupta C.B. , Marketing Management

93
ANNEXURE

94
 ANNEXURE

Dear respondent,

I am a student of MBA, is conducting a research on A Study of Online Trading in

Indian Stock Market”. I would be extremely thankful if you spare some time to answer

the following questions. All the facts disclosed by you will be used for academic purpose

only.

1. Do you know about online trading?

□ Yes □ No

2. Do you have a DMAT Account ?

□ Yes □ No

3. Do you feel safe while trading online?

□ Yes □ No

4. In which stock you most trade online?

□ Equity □ Mutual Funds

□ Commodities □ F&O Equities

□ Other

5. Do you receive updated online information regarding the stock market from your

dealer/broker?

□Yes □No

6.. Do you believe that your trader/broker is very successful in online trading?

□ Strongly Agree □Agree □Moderate

□Disagree □Strongly Disagree

95
7. Are the stock broking services provided by Sumpoorna is satisfactory ?

□ Strongly Agree □Agree □Moderate

□Disagree □Strongly Disagree

8. . What percentage of your annual income do you invest in share market ?

□ Up to 10% □ 10-15% 

□ 15-20% □ More than 20% 

9. . No. of years of online trading experience in stocks at this firm?

□ Below 5 years □ 5 to 10

10. How was your DMAT Account opened ?

□ Personal acquaintance □ Referral-Clients

□ Call/Walk in □ Others

11.What is your opinion relating to the rate of interest of margin funding facility of

Sumpoorna ?

□Excellent □Good

□ Average □ Poor

12. Are you aware of T+2 method of trading?

□Yes □No

13. Do you feel that there is more transparency in online trading?

96
□Yes □No

14. Any other company whose service you like?

□ Karvy □ Angel Broking □ Indian bulls

□ Share khan □ Sumpoorna

15. Name………………………

16. Age

□ 15 to 30 □ 31 to 45

□ 46 to 60 □ above 60

17. Income per month

□ Below 15,000 □ 15000 to 30,000

□ 30,000 to 45,000 □ above 45,000

18. Education qualification

□ Graduation □ Post graduation

□ Others

97