A

SUMMER PROJECT REPORT

On
“AN OVERVIEW OF INDIAN STOCK MARKET”

Submitted in Partial fulfillment for the award of the degree

MASTER IN BUSINESS ADMINISTRATION.

(Batch—2016-20018)

Under Guidance Of, Submitted By,

Mr.Maya Sarin ANANT KUMAR

(Relationship Manager) Roll No-0615170003
MBA 3rd semester

G.L BAJAJ INSTITUTE

OF
MANAGEMENT & RESEARCH

Knowledge Park-III,
Greater Noida,(U.P)
 CANDIDATE DECLARATION

I solely declare that the report titled “An Overview Of Indian Stock
Market” is a bonafiede record of work carried by me, submitted partial
fulfillment of requirement for the award of degree Master Of Business

administration under the guidance of Mr.Maya Sarin (Relationship

Manager)

This research is solely the work of me based upon secondary data , printed
material given in bibliography. The matter embodied in this report has not been
submitted for the award of any other degree.

Dated ANANT KUMAR

(0615170003)
 ACKNOWLEDGMENT

This project report reflects the help and advice of many people. I express my profound
thanks to Mr.K.M.Bopanna (Regional Manager) Indiabulls Securities Ltd. for giving me an
opportunity to do this project in the company.

I am grateful to Mr.Tamal Som, (Relationship Manager), Mr. Gururaj, (Relationship

Manager), Mr Maya Sarin (Relationship Manager) and all other employees of Indiabulls
Securities for guiding me throughout the project. I also like to thank my Professors for
their support and guidance.

Once again I like to convey my acknowledgment to all people directly and indirectly
associated with this project work. I thank one and all.

DATE: ANANT KUMAR

PLACE:
 Executive Summary

Indian securities markets have undergone many changes during the last decade.
Exponential growth in trading volumes is pushing existing trading systems and processes
to capacity and increasing settlement risk. With Indian market moving to a T+3 rolling
settlement cycles in line with global markets, SEBI is continuing its efforts to increase the
efficiency and transparency in Indian markets. Indeed it has been SEBI endeavor to make
the Indian markets, one of the most competitive and efficient markets of the world.

Income, Savings mobilization and promotion of investment are functions of the stock and
capital markets which are a part of the organized financial system in India.

This Project titled ‘An Overview of Indian stock market’ is an attempt to understand
the stock market and role played by Indian retail Brokerage Firms in stock market. The
objective of brokerage firms is to help the investor to minimize the risk involved in
investment and maximize the return. Some of the main characteristics of the brokerage
industry include growth in e-broking; growing derivatives market, decline in brokerage
fees etc. An endeavor was also made to understand the role played by Indiabulls
Securities compared to its competitors in Indian retail brokerage market.

The role played by Indian retail brokerage industry is of immense significance, taking into
account the health of the capital markets and the intensity of competition among the
brokerage companies.
 Table of Contents
Particulars

Chapter 1 Outlook on Indian Stock market...........................

Chapter 2 Overview of Indiabulls..........................................

Chapter 3 Overview of Indiabulls Securities.........................

Chapter 4 Financial Analysis..................................................

Chapter 5 Understanding Capital market..............................

Chapter 6 Derivatives............................................................

Chapter 7 Competitors..........................................................

Chapter 8 Competitive Analysis.............................................

Chapter 9 SWOT Analysis......................................................

Chapter 10 Research Methodology ………………………………

Chapter 11 Findings & Suggestions.......................................

Questionnare……………………………………………………………

Conclusion ………………………………………………………………

Bibliography..........................................................................

Appendix...............................................................................
Chapter 1

OUTLOOK ON INDIAN STOCK MARKET

1.1 Introduction

Indian Stock Markets is one of the oldest in Asia. Its history dates back to nearly 200
years ago. The earliest records of security dealings in India are meager and obscure. The
East India Company was the dominant institution in those days and business in its loan
securities used to be transacted towards the close of the eighteenth century.

By 1830's business on corporate stocks and shares in Bank and Cotton presses took place
in Bombay. Though the trading list was broader in 1839, there were only half a dozen
brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed
a rapid development of commercial enterprise and brokerage business attracted many
men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the
American Civil War broke out and cotton supply from United States to Europe was
stopped; thus, the 'Share Mania' in India began. The number of brokers increased to
about 200 to 250.

At the end of the American Civil War, the brokers who thrived out of Civil War in 1874,
found a place in a street (now appropriately called as Dalal Street) where they would
conveniently assemble and transact business. In 1887, they formally established in
Bombay, the "Native Share and Stock Brokers' Association”, which is alternatively
known as “The Stock Exchange". In 1895, the Stock Exchange acquired a premise in
the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay
was consolidated.

The Indian stock market has been assigned an important place in financing the Indian
corporate sector. The principal functions of the stock markets are
  enabling mobilizing resources for investment directly from the investors
 providing liquidity for the investors and monitoring
 Disciplining company management.

The two major stock exchanges in India are National Stock Exchange (NSE) and
Bombay Stock Exchange (BSE).

1.2 National Stock Exchange

With the liberalization of the Indian economy, it was found inevitable to lift the Indian
stock market trading system on par with the international standards. On the basis of the
recommendations of high powered Pherwani Committee, the National Stock Exchange
was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and
Investment Corporation of India, Industrial Finance Corporation of India, all Insurance
Corporations, selected commercial banks and others.

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. It has set up facilities that serve as a model for the securities industry in
terms of systems, practices and procedures.

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

Trading at NSE can be classified under two broad categories:

 Wholesale debt market

 Capital market

Wholesale debt market operations are similar to money market operations - institutions
and corporate bodies enter into high value transactions in financial instruments such as
government securities, treasury bills, public sector unit bonds, commercial paper,
certificate of deposit, etc.

Capital market: A market where debt or equity securities are traded.

There are two kinds of players in NSE:

 Trading members
 Participants

Recognized members of NSE are called trading members who trade on behalf of
themselves and their clients. Participants include trading members and large players like
banks who take direct settlement responsibility.

Trading at NSE takes place through a fully automated screen-based trading mechanism
which adopts the principle of an order-driven market. Trading members can stay at their
offices and execute the trading, since they are linked through a communication network.
The prices at which the buyer and seller are willing to transact will appear on the screen.
When the prices match the transaction will be completed and a confirmation slip will be
printed at the office of the trading member.

NSE has several advantages over the traditional trading exchanges. They are as follows:
  NSE brings an integrated stock market trading network across the nation.

 Investors can trade at the same price from anywhere in the country since inter-
market operations are streamlined coupled with the countrywide access to the
securities.

 Delays in communication, late payments and the malpractice’s prevailing in the

traditional trading mechanism can be done away with greater operational
efficiency and informational transparency in the stock market operations, with the
support of total computerized network.

NSE Nifty
S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the
economy. It is used for a variety of purposes such as benchmarking fund portfolios, index
based derivatives and index funds.
NSE came to be owned and managed by India Index Services and Products Ltd. (IISL),
which is a joint venture between NSE and CRISIL. IISL is India's first specialised company
focused upon the index as a core product. IISL have a consulting and licensing
agreement with Standard & Poor's (S&P), who are world leaders in index services. CNX
stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the
identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N'
stands for NSE and X stands for Exchange or Index. The S&P prefix belongs to the US-
based Standard & Poor's Financial Information Services.

1.3 Bombay Stock Exchange

The Bombay Stock Exchange is one of the oldest stock exchanges in Asia. It was
established as "The Native Share & Stock Brokers Association" in 1875. It is the
first stock exchange in the country to obtain permanent recognition in 1956 from the
Government of India under the Securities Contracts (Regulation) Act, 1956. The
Exchange's pivotal and pre-eminent role in the development of the Indian capital market
is widely recognized and its index, SENSEX, is tracked worldwide.

SENSEX

The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that
subsequently became the barometer of the Indian stock market.

SENSEX is not only scientifically designed but also based on globally accepted
construction and review methodology. First compiled in 1986, SENSEX is a basket of 30
constituent stocks representing a sample of large, liquid and representative
companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is
widely reported in both domestic and international markets through print as well as
electronic media

The Index was initially calculated based on the "Full Market Capitalization" methodology
but was shifted to the free-float methodology with effect from September 1, 2003. The
"Free-float Market Capitalization" methodology of index construction is regarded as an
industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P
and Dow Jones use the Free-float methodology.

Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the
pulse of the Indian stock market. As the oldest index in the country, it provides the time
series data over a fairly long period of time. Small wonder, the SENSEX has over the
years become one of the most prominent brands in the country.

The SENSEX captured all these events in the most judicial manner. One can identify the
booms and busts of the Indian stock market through SENSEX.

The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of
BSE National Index (Base: 1983-84 = 100). It comprised of 100 stocks listed at five
major stock exchanges. The Exchange launched dollar-linked version of BSE-100 index
i.e. Dollex-100 on May 22, 2006.

In order to fulfill the need of the market participants for still broader, segment-specific
and sector-specific indices, the Exchange has continuously been increasing the range of
its indices. The launch of BSE-200 Index in 1994 was followed by the launch of BSE-500
Index and 5 sectoral indices 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.

The values of all BSE indices are updated every 1 seconds during the market hours and
displayed through the BOLT system, BSE website and news wire agencies.

All BSE-Indices are reviewed periodically by the "Index Committee" of the Exchange.
Chapter 2

OVERVIEW OF INDIABULLS

2.1 Introduction

Indiabulls is India’s leading Financial and Real Estate Company with a wide presence
throughout India. Indiabulls Financial Services Limited was established in the year 2000
by three promoters all of whom are engineers from Indian Institute of Technology, New
Delhi, and has attracted over Rs 700 million of investments from venture capital firms,
private equity funds and institutional investors.

History

 Indiabulls Financial Services Limited was incorporated on January 10, 2000 as

Orbis Infotech Private Limited at New Delhi.
 The name of the Company was changed to Indiabulls Financial Services Private
Limited on March 16, 2001 due to change in the main objects of our Company
from Infotech business to Investment & Financial Services business.

 It became a Public Limited Company on February 27, 2004 and the name of the
Company was changed to Indiabulls Financial Services Limited.

Indiabulls has over 700 branches all over India. The customers of Indiabulls are more
than 4,50,000 which covers from a wide range of financial services and products
from securities, derivatives trading, depositary services, research & advisory services,
consumer secured & unsecured credit, loan against shares and mortgage & housing
finance. The company employs around 4000 Relationship managers who help the
clients to satisfy their customized financial goals. Indiabulls entered the Real Estate
business in the year 2005 with its group of companies.
 Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay
Stock Exchange and Luxembourg Stock Exchange. The market capitalization of
Indiabulls is around USD 153.6 Billion (29th December 20016). Indiabulls and its group
companies have attracted USD 500 million of equity capital in Foreign Direct
Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are
the largest financial institutions of the world such as Fidelity Funds, Goldman Sachs,
Merrill Lynch, Morgan Stanley and Farallon Capital.

2.2 Growth of Indiabulls

Year 2000-01:

One of India’s first trading platforms was set up by Indiabulls Financial Services Ltd. with
the development of an in-house team.

Year 2001-03: The service offered by Indiabulls was increased to include Equity, F&O,
Wholesale Debt, Mutual fund, IPO Financing/Distribution and Equity Research.

Year 2003-04: In this particular year Indiabulls ventured into Distribution and
Commodities Trading business.

Year 2004-05: This was one of the most important years in the history of Indiabulls. In
this year:

 Indiabulls came out with its initial public offer (IPO) in September 2004.
 Indiabulls started its Consumer Finance business.
  Indiabulls entered the Indian Real Estate market and became the first company to
bring FDI in Indian Real Estate.
 Indiabulls won bids for landmark properties in Mumbai.

Year 2005-06: The world renowned investment banks like Merrill Lynch and Goldman
Sachs increased their shareholding in Indiabulls. It also became a market leader in
securities brokerage industry, with around 31% share in Online Trading. The world’s
largest hedge fund, Farallon Capital and its affiliates committed Rs. 2000 million for
Indiabulls subsidiaries Viz. Indiabulls Credit Services Ltd. and Indiabulls Housing Finance
Ltd. In the same year, the Steel Tycoon Mr. LN Mittal promoted LNM India Internet
venture Ltd. acquired 8.2% stake in Indiabulls Credit Services Ltd.

Year 2006-07: In this year, Indiabulls Financial Services Ltd. was included in the
prestigious Morgan Stanley Capital International Index (MSCI). The company also
received an “in principle approval” from Government of India for development of multi
product SEZ in the state of Maharashtra.

YEAR 2008: Indiabulls was conferred the status of a Business Superbrand by The Brand
Council, Superbrands India

YEAR 2012: IBHFL was awarded "Best Employer Brand",for its human resource practice
by The Institute of Public Enterprises

YEAR 2014: Indiabulls Housing Finance was awarded the Presidential Award for ‘The
Fastest Growing Company' by NAREDCO

YEAR 2015: Indiabulls Real Estate project, Indiabulls Golf City, Mumbai was awarded by
International Property Awards as the Best Golf Development in India for Asia Pacific
 Diversified Business Group of Indiabulls

Securities &
Asset
Derivatives
management
Broking

Mortgage & Financial

Housing Products
Finance Distribution

Consumer
Financing

Fig 2.1: Diversified Business Groups of Indiabulls

2.3 IndiaBulls Subsidiaries

Indiabulls securities limited: business comprises of Securities & Derivatives broking.

Indiabulls Credit services limited: business comprises of personal loans, secured and
unsecured loans, and housing and auto loans.

Financial products distribution: distribution of mutual funds and insurance products.

Indiabulls commodities Pvt ltd: deals with commodity brokerage business

Indiabulls Realities limited: is into development of Real estate and mining.

Indiabulls housing loans: is into mortgage of properties and housing loan business.

2.4 Organizational Structure of Indiabulls

The organizational structure of Indiabulls is Functional, which consist of several

departments.

Functioning Online: serving clients primarily through an Internet based relationship

targeted towards clients who value anytime, anywhere access and can be serviced at low
incremental costs.

Functioning Offline: serving clients primarily through an office based relationship

targeted towards clients who value physical interaction.

Online & offline business consist of following departments

 Administration
 Operations & Service quality

 Technology

 Finance

 Corporate affairs

 Human resources

 Marketing

 Corporate communications

 Legal
 Department based Organizational Structure:

Director-Online Director-Offline

Administration Operations Technology Finance Corporate Human Corporate Legal

& Affairs Resources Communi
Service cation

Customer Recruitment Marketing Training

Service

Sr. Vice President

Regional Manager

Branch Manager

Relationship
Manager
Figure 2.2 Department based organizational Structure of Indiabulls

Regional Hierarchy of Indiabulls

 Senior Vice President

Regional Manager

Branch Manager
Senior Sales Manager

Support System Sales Function

RM/SRM
Back Office Local Compliance
Executive Officer

ARM

Dealer
 Figure 2.3 Regional hierarchies of Indiabulls

Key Positions :-

Chairman

CFO & President

Securities Consumer Finance Real Estate

Chief Executive
Executive Director Executive Director
Officer

Figure 2.4 Key Positions

2.5 Products and Services of Indiabulls

Indiabulls offer the following products and services in the financial markets:

 Stocks
 Options and Futures
 Currency
 Depository Services
 Commodities
 Insurance Products
 Mutual Funds
 Bonds and Debt Products
 Online IPO

Services

Commercial Vehicle Loans:

In April 2006 Indiabulls started Commercial Vehicle Finance under the flagship of
Indiabulls Credit Services Ltd. in order to provide refinance to its commercial vehicle
clients. Their fundamentals, competent management and expertise in financing the
transporters are pretty sound. The company’s unique market position enables it to excel
in client contentment, quick service and growth–led profitability.
Mortgage Loans:

Indiabulls Housing Finance Ltd. which is a flagship of Indiabulls has started lending of
Mortgage Loans to prospective customers. This company enables the home-seekers to
access finance to buy their homes. They provide different types of loans like plot loans,
Loan against Residential, Commercial and Rental Property, thereby enabling the borrower
to leverage the property owned to fund any genuine needs be it Business Expansion,
Child's Education, Child's Marriage or for Holiday Abroad.

Online Platform:

It proves the online platform for the clients to trade online trading. which makes the
trade so easy and fast.

 Web best
 Application best

Consumer Finance:

Indiabulls is a retail focused organization that fulfills the credit needs of a large
percentage of population in India. The key aspect of Indiabulls business model is to
provide an extremely unique customer experience.
Chapter 3

OVERVIEW OF INDIABULLS SECURITIES LTD

3.1 Introduction
Indiabulls Securities Ltd is engaged in the business of Internet based trading and is
registered with SEBI as a stockbroker, trading and clearing member of NSE, member of
BSE and as a depositary participant with National Securities Depository Limited (“NSDL”)
and Central Depository Services (India) Limited (“CDSL”). ISL is also a member of the
National Securities Clearing Corporation Limited.

History
Indiabulls Securities Limited (ISL) was incorporated as GPF Securities Private Limited on
June 9, 1995.
The name of the company was changed to Orbis Securities Private Limited on December
15, 1995 to change the profile of the company and subsequently due to the conversion of
the company into a public limited company; the name was further changed to Orbis
Securities Limited on January 5, 2004.
The name of the company was again changed to Indiabulls Securities Limited on
February 16, 2004 so as to capitalize on the brand image of the term “Indiabulls” in the
company name. ISL is a corporate member of capital market & derivative segment of The
National Stock Exchange of India Ltd.
 Trading With Indiabulls

This section will introduce us about the process and instruments used to help a customer or a
client to trade with Indiabulls securities. This process is almost similar to any other trading firm
but there will be some difference in the cost of brokerage commission.

Trading: It is a process by which a customer is given facility to buy and sell share this buying
and selling can only be done through some broker and this is where Indiabulls help its customer.
A customer willing to trade with any brokerage house need to have a demat account, trading
account and saving account with a brokerage firm. Any one having following document can open
all the above mentioned account and can start trading.

Document Required
• 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 favoring “India bulls Securities Ltd”. of the required
amount. The amount for Demat as well as trading will be Rs. 900/-(free Demat +900
Trading Account) the minimum amount being Rs. 900 a cheque can be given for a larger
amount.
• Copy of PAN Card is mandatory.
• Registration Kit
• CDSL Demat Kit
• Bank and address proof declaration. (Master undertaking)
• 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.
3.2 Business Model & Operations of Indiabulls Securities Ltd

The three distinct internal business segments are:

 Online business

 Offline business

 Other Sales

Online business: serving clients primarily through an Internet based relationship

targeted towards clients who value anytime, anywhere access and can be serviced at low
incremental costs. The Online sales force sells all products and services and follows the
relationship manager model.

Offline business: serving clients primarily through an office based relationship targeted
towards clients who value physical interaction and are typically larger accounts. The
Offline Sales force sells all products and services and follows the relationship manager
model. The Institutional business serving clients such as mutual funds and pension funds
is considered part of the offline business due to largely similar client servicing and
channel needs as required for high net worth clients. Indiabulls Securities Limited has
established relationships with some large institutional players in India and is qualified
broker for Equities, F&O and Debt markets for 145 such institutional clients.

Other Sales: includes insurance, research services and other offerings

3.3 Basic Requirement for doing Trading

Trading requires Opening a Demat account. Demat refers to a dematerialized account.

You need to open a Demat account if you want to buy or sell stocks. So it is just like a
bank account where actual money is replaced by shares. We need to approach the
Depository Participants (DP, they are like bank branches), to open Demat account.

A depository is a place where the stocks of investors are held in electronic form. The
depository has agents who are called depository participants (DPs).

Think of it like a bank. The head office where all the technology rests and details of all
accounts held is like the depository. And the DPs are the branches that cater to
individuals.

There are only two depositories in India –

 The National Securities Depository Ltd (NSDL) and the

 Central Depository Services Ltd (CDSL).
3.4 Trading Products of Indiabulls Securities

Indiabulls Securities
Trading Products

Cash Derivatives
commodity

showing 3.1 Trading Products of Indiabulls securities

Indiabulls Securities provide three products for trading. They are

• Cash account
• Intraday account
• Margin trading (Mantra)

Cash account provides the client to buy 4 times of cash balance in his trading account.
Intraday product provides the client to buy 8 times of his cash balance in the trading
account.
Mantra account – called as margin trading, is a special account to buy on leverage for a
longer duration

Chapter 4

FINANCIAL ANALYSIS OF INDIABULLS SECURITIES

4.1 Income: Indiabulls Securities Ltd income unit has the following components

Income from Online business : The contribution of revenue from Online business
have grown from Rs. 31.85 million in FY 2002 to Rs. 242.26 million in FY 2004 and from
24.05% of total business in FY 2002 to 34.85% of business in FY 2004. The rapid growth
of the online business is driven by growth in total clients, increasing product flexibility and
quality, enhanced online-only features such as portfolio analysis and updates, streaming
tickers, enhanced product offering of Power Indiabulls.

 Brokerage
 Equities
 F&O

Income from Offline Business: The offline business unit has one of the widest branch
networks in India with a pan India presence with large market share. The revenues have
grown from Rs. 96.02 million in FY 2015 to Rs. 447.25 million in FY 2016 and have
changed from 72.52% of total business in FY 2001 to 64.34% of business in FY 2016.
The rapid growth of the Offline business is driven by growth in total clients, increased
geographical presence.
  Brokerage
 Equities
 F&O
 Wholesale Debt Markets

Brokerage Income

Brokerage Income comprises revenues earned from Equities, F&O and Wholesale debt
markets on all stock exchanges.

 The income from brokerage services is driven primarily by the number of active
clients.
 The rapid growth in total clients is driven primarily by increased geographical
presence.

 Equities constitute the largest portion of brokerage business.

 F&O brokerage is becoming an increasingly important component of its revenues

as Futures & Options trading gains more acceptance.

 Wholesale Debt market is focused on institutional clients.

Income from transaction and service charges and interest income

Related income comprises revenues earned from market related activities such as
transaction charges, service charges and interest levied on customer transactions. These
charges are dependent on trading volume, number of transactions completed and any
ledger debit amount in the client account.
Income from other Sales including Insurance, Mutual Fund Sales
and Other Products

Other income comprises revenues earned from sale of third party products such as
Insurance, Mutual Funds and new services such as Research Services. Revenues are a
function of volume of mutual funds sold, the type of fund sold (active managed equity,
passive fixed income etc.) and the commissions paid on the funds sold.

Brokerage Income of Indiabulls Securities

Bar Chart 4.1 Brokerage Income of Indiabulls Securities (in Crore)

Brokerage Income of Indibulls Securities of 3 Years( in Crore)

Brokerage Income

300
261.11

250

200

150
99.65
100
47.2
50

0
2015 2016 2017
Years

Mar-15 Mar-16 Mar-17

Segment wise Sales of Indiabulls securities for March 2016(in

Segmentwise Sales of Indiabulls Securities For March 2016(in Crore)

9.88, 9%
2, 2% 1.93, 2%

0.84, 1%
Brokerage
Income
Transaction
Interest From
Income
Charges
Depository
other Financial
Service
Activity 99.65, 86%
Segment wise Sales of Indiabulls securities for March 2017(in Crore)

Segmentwise sales of Indiabulls Securities For March 2017(in

Crore)
21.16, 7%
23.06, 7%
9.08, 3%

3.57, 1%

261.11, 82%

Brokerage Income Income From Depository Service

Income From other Financial Activity Interest
Transaction Charges
4.2 Financial Ratio Analysis of Indiabulls Securities Ltd

Profitability ratios:
Indiabulls Securities Ltd. Mar 20015 Mar Mar 2017
2016
Per cent (Non-Annualized) 12 months 12 12 months
months
-
Margins ratios (%)
-
As % of operating income
PBDT 43.05 44.75 58.76
PBT 41.45 42.87 56.7
PAT 25.92 27.25 37.49
PBDT (NNRT) 43.01 44.52 58.72
PBT (NNRT) 41.41 42.63 56.66
PAT (NNRT) 25.88 27.02 37.45
-
Corporate tax as per cent of PBT 35.83 33.69 32.47
-
Returns ratios (%)
-
As % of total assets
PBDT 18.95 31.35
PBT 18.15 30.25
PAT 11.54 20
PAT (NNRT) 11.44 19.98
Operating cash flow 77.78 65.19
-
As % of net worth
PBDT 53.48 128.77
PBT 51.23 124.25
PAT 32.57 82.16
PAT (NNRT) 32.29 82.07
Operating cash flow 219.53 267.75
-
As % of capital employed
PBDT 47.39 58.11
PBT 45.39 56.06
PAT 28.86 37.07
PAT (NNRT) 28.61 37.03
 Operating cash flow 194.53 120.82
-
Appropriation of profits (as % of
PAT)
Dividends 3.89 19.66 0.52
Equity dividends 0.44 2.27 0.07
Preference dividends 3.44 17.39 0.45
Retained profits 96.11 80.34 99.48
-
Dividends / net worth 6.4 0.43
Equity dividends / equity capital 3.98 0.45
Equity dividends / equity cap. & sh. 3.98 0.45
prem.

Liquidity ratios:
Indiabulls Securities Ltd. Mar 2015 Mar 2016 Mar 2017
Times (Non-Annualized) 12 months 12 months 12 months
-
Short term liquidity
-
Cash / current liabilities & provisions 0.67 0.86 1.7
Quick ratio 1.6 0.86 1.89
-
Medium to long term liquidity
-
Current ratio 1.776 1.141 2.137
Solvency ratio 1.567 1.561 1.269
Debt equity ratio 1.237 0.848 2.056
-
Interest incidence (%) 11.42 19.13 11.67
-
Interest cover
-
PBIT / interest 3.63 4.01 5.2
PBIT (NNRT) / interest 3.63 4 5.2
Operating cash flow / interest -2.99 11.97 8.91
-
(Rs. Crore)
Current assets 231.47 261.19 914.49
Current liabilities 130.34 228.86 427.87
Working capital 101.13 32.33 486.62
Net worth 83.34 108.43 181.77
Reserves & surplus 20.24 45.33 163.94

Asset utilization ratios

Indiabulls Securities Ltd. Mar Mar 2016 Mar 2017
2015
Times (Non-Annualized) 12 12 12 months
months months
-
Efficiency ratios
-
Operating cash flow / total assets 0 0.78 0.65
Operating cash flow / gross fixed 0 17.46 14.15
assets
Operating cash flow / capital 0 1.95 1.21
employed
-
Operating income / total assets 0.42 0.53
Operating income / GFA / leased 9.51 11.58
assets
Operating income / capital employed 1.06 0.99
-
PBDT (NNRT) / total assets 0.19 0.31
PBDT (NNRT) / gross fixed assets 4.23 6.8
PBDT (NNRT) / capital employed 0.47 0.58
-
PBT / total assets 0.18 0.3
PBT / gross fixed assets 4.05 6.56
PBT / capital employed 0.45 0.56
-
PAT / total assets 0.11 0.2
PAT / gross fixed assets 2.57 4.34
PAT / capital employed 0.29 0.37
4.3 Interpretation:

Profitability Ratios: Profitability is the net result of a number of policies and decisions.
The ratios examined thus far provide useful clues to the effectiveness of firms operations.

Liquidity Ratios: liquidity ratios deal with firm’s ability to pay off its debts. It includes

 Current ratio: The current ratio is calculated by dividing current assets by current
liabilities. The current ratio of Indiabulls securities is 1.776, 1.441, & 2.137 for year
2015, 2016 & 2017 respectively.

Current ratio = Current assets

Current Liabilities

 Quick ratio (acid test ratio): The quick ratio is calculated by deducting inventories
from current assets and then dividing the remainder by current liabilities. The
quick ratio is a measure of the firm’s ability to pay-off the short-term liabilities. A
large part of the firms current assets are tied up in slow paying debts. The
industry average for Acid test ratio is 2.1, but for Indiabulls securities quick ratio is
1.6, 0.86 & 1.89 for year 2015, 2016 & 2017 respectively, which is less than
Industry average. The quick ratio should be high which indicates the company’s
ability to pay-off short term obligations.
Debt equity Ratio:

Debt equity ratio is the related contribution of creditors and owners of the business in its
financing.

4.4 Financial performance Year on Year

(1)
Increasing Market Share of Indiabulls on NSE Trading Volumes

35
%
30.7
30 %
%
25 22.3
% % 21.9
18.8 %
20 %
% 17.5
%
15
%
10
%
5.5
5 3.4
%
% 1.1 1.9 2.2 %
% % %
0
(1)
%
FY2013 FY2014 FY2015 FY2016 FY2017

Share in Online Share in Total

Trading Trading

(1) Source: NSE data from NSE website (Equity Segment)

40%
35%
35%
30%
24%
25%
20%
Graph 4.3 Market share of Indiabulls on NSE trading Volumes
20%
14%
15% 12%
10% 7%
5%
0%
Top 5 Top 10 Top 25
FY015 FY016
 UNDERSTANDING CAPITAL MARKET

5.1 Project Framework

An Outlook on Indian Stock Market

Capital Market Derivative Segment

Intraday Delivery Futures Options

 Figure 5.1 Project Framework

The Indian capital markets have witnessed a transformation over the last decade. India
now finds its place amongst some of the most sophisticated and largest markets of the
world. With over 20 million shareholders, India has the third largest investor base in the
world after the USA and Japan. The Indian capital market is significant in terms of the
degree of development, volume of trading and its tremendous growth potential.

Over the past few years, the capital markets have also witnessed substantial reforms in
regulation and supervision. Reforms, particularly the establishment and empowerment of
SEBI, market-determined prices and allocation of resources, screen-based nation-wide
trading, dematerialization and electronic transfer of securities, rolling settlement and
derivatives trading have greatly improved both the regulatory framework and efficiency of
trading and settlement.

5.2 Indian Capital markets - Chronology

• 1994- Equity Trading commences on NSE

• 1995- All Trading goes Electronic
• 1996- Depository comes in to existence
• 1999- FIIs Participation- Globalization
• 2000- over 80% trades in Demat form
• 2001- Major Stocks move to Rolling Set
• 2003- T+2 settlements in all stocks
• 2003 - Demutualization of Exchanges

5.3 Capital Market Participants

• Banks
 • Exchanges
• Clearing Corporations
• Brokers
• Custodians
• Depositories
• Investors
• Merchant Bankers

5.4 Types of Investors

• Institutional Investors- MFs / FI / FIIs / Banks
• Retail Investors
• Arbitrageurs / Speculators
• Hedgers
• Day traders/Jobbers

5.5 Cash Market

The Spot Market or Cash Market is a commodities or securities market in which goods
are sold for cash and delivered immediately. Contracts bought and sold on these markets
are immediately effective. Spot markets can operate wherever the infrastructure exists to
conduct the transaction. The Spot market for most securities exists primarily on the
internet. The trading in this cash market can be further divided into Intraday and
Delivery.

5.6 Key Terms

 Intraday refers to buying or selling stocks today with an obligation to sell or buy
the stock on the same day. It means completing the trading cycle in the same day.
Here the stocks do not come to the Demat account.
 Delivery refers to buying stocks today with a plan of selling it in future. In India
there is a concept of T+2 settlements. Which means a stock bought on trade day
is credited to your Demat account (or delivered) into your Demat account after 2
days.

• Square off- making the position nil. Say selling off the stocks. (or buying back in
case of short selling)
• Short selling- selling without having the possession of the stocks (possible in
intraday trade). Selling the stocks initially and buying them back later. It is a
concept used in the falling markets.

• Demat Account- the account where in the shares are delivered. Every Demat
account is linked to a trading account and a savings bank account. Demat account
are provided by CDSL (central depository services limited) and NSDL (national
securities depository limited). Indiabulls is a depository participant which links the
depository to the beneficial owner of the account (client).

• Trading pool/margin account- the place where the stock is received after the
trade, it is the broker’s account called the broker pool account.

• T+2= Transaction + 2 days

Chapter 6

DERIVATIVES
By far the most significant event in finance during the past decade has been the
extraordinary development and expansion of financial derivatives. These instruments
enhance the ability to differentiate risk and allocate it to those investors most able and
willing to take it

6.1 Definition:
Derivatives are instruments whose value is ‘derived’, in whole or in part, from the value
of one or more underlying assets.

History of Derivatives

The history of derivatives is surprisingly longer than what most people think. Some texts
even find the existence of the characteristics of derivative contracts in incidents of
Mahabharata. Traces of derivative contracts can even be found in incidents that date
back to the ages before Jesus Christ. However, the advent of modern day derivative
contracts is attributed to the need for farmers to protect themselves from any decline in
the price of their crops due to delayed monsoon, or overproduction.

The first 'futures' contracts can be traced to the Yodoya rice market in Osaka, Japan
around 1650. These were evidently standardized contracts, which made them much like
today's futures.
The Chicago Board of Trade (CBOT), the largest derivative exchange in the world, was
established in 1848 where forward contracts on various commodities were standardized
around 1865. From then on, futures contracts have remained more or less in the same
form, as we know them today.

Derivatives have had a long presence in India. The commodity derivative market has
been functioning in India since the nineteenth century with organized trading in cotton
through the establishment of Cotton Trade Association in 1875. Since then contracts on
various other commodities have been introduced as well.

Exchange traded financial derivatives were introduced in India in June 2000 at the two
major stock exchanges, NSE and BSE. There are various contracts currently traded on
these exchanges. National Commodity & Derivatives Exchange Limited (NCDEX) started
its operations in December 2003, to provide a platform for commodities trading.

The derivatives market in India has grown exponentially, especially at NSE. Stock Futures
are the most highly traded contracts on NSE accounting for around 55% of the total
turnover of derivatives at NSE, as on April 13, 2005.

6.2 Understanding Derivatives

The primary objectives of any investor are to maximize returns and minimize risks.
Derivatives are contracts that originated from the need to minimize risk.

The word 'derivative' originates from mathematics and refers to a variable, which has
been derived from another variable. Derivatives are so called because they have no value
of their own. They derive their value from the value of some other asset, which is known
as the underlying.

Derivatives are specialized contracts which signify an agreement or an option to buy or

sell the underlying asset of the derivate up to a certain time in the future at a
prearranged price, the exercise price. The contract also has a fixed expiry period mostly
in the range of 3 to 12 months from the date of commencement of the contract. The
value of the contract depends on the expiry period and also on the price of the
underlying asset.

For example, a farmer fears that the price of soybean (underlying), when his crop is
ready for delivery will be lower than his cost of production.

Let's say the cost of production is Rs 8,000 per ton. In order to overcome this uncertainty
in the selling price of his crop, he enters into a contract (derivative) with a merchant,
who agrees to buy the crop at a certain price (exercise price), when the crop is ready in
three months time (expiry period).

In this case, say the merchant agrees to buy the crop at Rs 9,000 per ton. Now, the
value of this derivative contract will increase as the price of soybean decreases and vice-
a-versa.

If the selling price of soybean goes down to Rs 7,000 per ton, the derivative contract will
be more valuable for the farmer, and if the price of soybean goes down to Rs 6,000, the
contract becomes even more valuable.

This is because the farmer can sell the soybean he has produced at Rs 9000 per ton even
though the market price is much less. Thus, the value of the derivative is dependent on
the value of the underlying.
6.3 Difference between Commodity Derivative & Financial Derivative

If the underlying asset of the derivative contract is coffee, wheat, pepper, cotton, gold,
silver, precious stone or for that matter even weather, then the derivative is known as a
commodity derivative.

If the underlying is a financial asset like debt instruments, currency, share price index,
equity shares, etc, the derivative is known as a financial derivative.

Derivative contracts can be standardized and traded on the stock exchange. Such
derivatives are called exchange-traded derivatives. Or they can be customized as per the
needs of the user by negotiating with the other party involved.

Such derivatives are called over-the-counter (OTC) derivatives. Continuing with the
example of the farmer above, if he thinks that the total production from his land will be
around 150 quintals, he can either go to a food merchant and enter into a derivatives
contract to sell 150 quintals of soybean in three months time at Rs 9,000 per ton. Or the
farmer can go to a commodities exchange, like the National Commodity and Derivatives
Exchange Limited, and buy a standard contract on soybean.

The standard contract on soybean has a size of 100 quintals. So the farmer will be left
with 50 quintals of soybean uncovered for price fluctuations.

However, exchange traded derivatives have some advantages like low transaction costs
and no risk of default by the other party, which may exceed the cost associated with
leaving a part of the production uncovered.
In India we have several derivatives, two of the most famous derivatives traded on
National stock exchange are

• Futures
• Option

Futures and options are traded on the NSE platform, with a normal IndiaBulls trading
account the client get the access to trade in the F&O contracts.

6.4 Futures and Forwards

As the name suggests, futures are derivative contracts that give the holder the
opportunity to buy or sell the underlying at a pre-specified price some time in the future.

They come in standardized form with fixed expiry time, contract size and price. Forwards
are similar contracts but customizable in terms of contract size, expiry date and price, as
per the needs of the user.

6.5 Options

Option contracts give the holder the option to buy or sell the underlying at a pre-specified
price some time in the future.

 An option to buy the underlying is known as a Call Option.

 An option to sell the underlying at a specified price in the future is known as Put
Option.

In the case of an option contract, the buyer of the contract is not obligated to exercise
the option contract. Options can be traded on the stock exchange or on the OTC market.
6.6 Futures Terminology

• Spot Price: the price at which an asset trades in the spot market.
• Futures Price: the price at which the futures contract trades in the futures
market

• Contract Cycle: The period over which the contract trades. The index futures
contracts on the NSE have a one-month, two-month and three-month expiry
cycles which expire on the last Thursday of the month. On the Friday following
the last Thursday, a new contract having a three-month expiry is introduced for
trading.

• Expiry Date-the date specified in the futures contract. It is the last Thursday
of the month

• Contract Size: the amount of asset that has to be delivered less than one
contract. For instance, the contract size on NSE futures market is 100 Niftiest.
It is prescribed by NSE for stocks. Each stock had a different lot size.

• Basis – the futures price minus the spot price. There will be a different basis
for each delivery month for each contract. In a normal market, basis will be
positive. This reflects that futures prices normally exceed spot prices.

• Cost of Carry – the storage cost plus the interest that is paid to finance the
asset less the income earned on the asset.

• Initial Margin – the amount that must be deposited in the margin account at
the time the futures contract is first entered into. These margins are prescribed
by the exchange. It varies from stock to stock.

• Marking to Market – the adjustment made at the end of each trading day to
the investor’s margin account to reflect the investor’s gain or loss depending
 upon the futures closing price. It is the difference between today’s closing price
and yesterdays closing. The MTM profit /loss are credited to the client account
on day to day basis. Thus we call this a T+0 settlement.

• Maintenance Margin – somewhat lower than the initial margin; the balance
in the margin account must never become negative and in case it does, the
investor receives a margin call that must top-up the account to the initial
margin level before trade commences the following day.

Difference between Long Position & Short Position

A long position is an agreement to buy. You take a long position on a stock when
you are bullish or have a feeling that the stock will move up.

LONG => BUY

A short position is an agreement to sell. You take a short position on a stock when
you are bearish or have a feeling that the stock will move down.

SHORT => SELL

There are around 152 companies which are underlying for future and options in
NSE. There are

• index Futures (Nifty futures, Bank Nifty, CNX IT futures)

• Stock Futures (Infosys futures. ITC futures, etc linked to specific stocks)

• Index options (linked to indices)

• Stock option (linked to specific stocks).

6.7 Option Contracts: The owner of an option has the OPTION to buy or sell
something at a predetermined price. Option provides the buyer of the contract the right
but not the obligation to exercise.

Right to BUY / OWN – CALL OPTION

Or Right to SELL / WRITE – PUT OPTION

You buy a call option when you are bullish or have an upward target.

You buy a put option when you are bearish or have a downward target.

6.8 Options Terminology

• Stock options – options on individual stocks. A contract gives the buyer the right
to buy or sell shares at the specified price
• Buyer of an option – the one who by paying price (premium) buys the right but
not the obligation to exercise his/her option on the seller/writer

• Writer of an option – the one who by receiving premium, is obliged to sell/buy

the asset if the buyer exercises on him

• Call Option – gives the buyer the right but not the obligation to buy an asset by a
certain date for a certain price

• Put Option – gives the buyer the right but not the obligation to sell an asset by a
certain date for a certain price

• Spot Price – the price at which an asset trades in the spot market.

• Strike Price – the target price or the expected price.

• Contract Cycle – the period over which the contract trades. There are three
month contracts just like the futures.

• Expiry Date – the date specified in the option contract. It is the last Thursday of
the month, just as in futures.

• Contract Size – the amount of asset that has to be delivered under one contract.

• In-The-Money Option (ITM) – an option that would lead to a positive cash-flow

to the holder if it were exercised immediately.

• A call option on the index is said to be ITM if the current index stands higher
than the strike price (Spot Price > Strike Price).

• A put option is ITM if the index is below the Strike price (Spot Price < Strike Price).

• At-The-Money (ATM) – an option that would lead to zero cash flows to the
holder if it were exercised immediately.

• Out-Of-The-Money Option (OTM) – an option that would lead to a negative

cash-flow to the holder if it were exercised immediately.

• A call option on the index is said to be OTM if the current index stands at a level
which is less than the strike price (Spot Price < Strike Price).
Chapter 7

THE COMPETITORS
7.1 Major Competitors of Indiabulls Securities Ltd
Indiabulls Securities faces significant competition from companies seeking to attract client
financial assets, including traditional and online brokerage firms, mutual fund companies
and institutional players having wide presence and a strong brand name. They are;

 ICICI Securities Ltd.

 Kotak Securities Ltd.
 India Infoline
SSKI Ltd.
 Motilal Oswal Securities
 Karvy
 Geojit Securities
 HDFC Securities

7.2 India Infoline Ltd

India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the
Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India
Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries,
straddles the entire financial services space with offerings ranging from Equity research,
Equities and derivatives trading, Commodities trading, Portfolio Management Services,
Mutual Funds, Life Insurance, Fixed deposits and other small savings instruments to loan
products and Investment banking. India Infoline also owns and manages the websites,
www.indiainfoline.com and www.5paisa.com .
India Infoline Securities Pvt Ltd

India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is
engaged in the businesses of Equities broking and Portfolio Management Services. It
offers broking services in the Cash and Derivatives segments of the NSE as well as the
Cash segment of the BSE.

A choice of technologically advanced trading that is with the help of 5paisa.com. 5 paisa
also represents the availability of world class service to investors at the lowest possible
rate - 5 paisa for every trade of Rs100, i.e., a brokerage rate of 0.05%.

Features of 5 paisa.com:

Paisa sense - They offer a good value for money proposition. Their brokerage rates are
very competitive, charging only 5 paise for Rs100 of trade done, which is 0.05%
brokerage. They offer the most reasonable rates, independent of your net worth or
volumes. In case of trades that result in delivery, they charge an additional 0.20% for
back office and securities handling.

Personalized service - At 5paisa.com, they are committed to provide you with

unparalleled service, using e-mail, call centers and support staff. They have also invested
in physical infrastructure.

Protection – All transactions of 5paisa.com are secure and confidential. The orders are
electronically routed via sophisticated trading systems for execution. They follow a world
class security system that enables them to protect from any fraud or hacking.
Pedigree - 5paisa.com is a brand renowned for quality of information and services, they
are professionally managed, with a skill set which is of high standard. Their top
management has years of experience in financial services with leading banks and
institutions.

7.3 Sharekhan Securities

Sharekhan was created when SSKI Investor Services Pvt. Ltd., a company in the
securities and equities segment decided to harness the power of the Internet and offer
services to its customers through an online stock trading portal. Sharekhan brings and
provides a user-friendly online trading facility. They also have an extensive all-India
ground network of franchisees across the country.

The company offers its services through a combination of online and offline channels.
The online model comprises a portal, chat facilities, and 'speed trade' terminals. And the
offline model uses a combination of an IVR infrastructure and a team of customer agents
to receive orders over the telephone.

7.4 Motilal Oswal

Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just
two people running the show. Motilal Oswal Securities Limited has established itself as
the Best Local Brokerage House in India (Asia Money Brokers’ Poll 2005). Their
Institutional Equities Division combines the efforts of the Research and Sales & Trading
departments to best serve clients' needs. Consistent delivery of high quality advice on
individual stocks, sector trends and investment strategy has established them as a
reliable research unit amongst leading Indian as well as international investors.
Their sales & trading team, comprising top equity professionals, translates the research
findings into actionable advice for clients, based on their specific needs. Sophisticated
computerized tools are used to understand client investment profile and objectives, which
ensures proactive and timely service.

FEATURES
Integrity: A company honoring commitment with highest ethical and business practices.
Team Work: Attaining goals collectively and collaboratively.
Meritocracy: Performance gets differentiated, recognized and rewarded in an apolitical
environment.
Passion & Attitude: High energy and self motivated with a “Do It” attitude.
Excellence in Execution: Time bound results within the framework of the company’s
value system.

7.5 Karvy

The birth of Karvy was on a modest scale in the year 1982. It began with the vision and
enterprise of a small group of practicing Chartered Accountants based in Hyderabad, who
founded Karvy. They started with consulting and financial accounting automation, and
then carved inroads into the field of Registry and Share Transfers. Karvy has built a
reputation as an integrated financial services provider, offering a wide spectrum of
services for over 40 years.

In 1982, a group of Hyderabad-based practicing Chartered Accountants started Karvy

Consultants Limited with a capital of Rs.150, 000 offering auditing and taxation services
initially. Later, it forayed into the Registrar and Share Transfer activities and subsequently
into financial services.
Karvy made inroads into a host of capital-market services, - corporate and retail - which
proved to be a sound business synergy. In January 1998, Karvy became the first
Depository Participant in Andhra Pradesh.

Karvy Securities Limited

Deals in distribution of various investment products, viz., equities, mutual funds, bonds
and debentures, fixed deposits, insurance policies for the investor.

7.6 Kotak Securities

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and
distribution arm of the Kotak Mahindra Group. Kotak Mahindra is one of India's leading
financial institutions, offering complete financial solutions that encompass every sphere of
life. From commercial banking, to stock broking, to mutual funds, to life insurance, to
investment banking, the group caters to the financial needs of individuals and corporate.

Kotak Securities was set up in 1994. Kotak Securities is a corporate member of both The
Bombay Stock Exchange and the National Stock Exchange of India Limited.

Its operations include stock broking and distribution of various financial products -
including private and secondary placement of debt and equity and mutual funds.
Currently, Kotak Securities is one of the largest broking houses in India with wide
geographical reach. The company has four main areas of business:

 Institutional Equities,
 Retail (equities and other financial products),

 Portfolio Management and

 Depository Services.
Kotak Securities Ltd is also a depository participant with National Securities Depository
Limited (NSDL) and Central Depository Services Limited (CDSL), providing dual benefit
services wherein the investors can use the brokerage services of the company for
executing the transactions and the depository services for settling them.

Kotak Securities has 195 branches servicing more than 2, 20,000 customers and coverage
of 231 Cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers
Internet Broking services and also online IPO and Mutual Fund Investments.

Features of Kotak Securities

 AKSESS Kotak securities Electronic Search Service: AKSESS offers you an

easy way to get to Kotak Securities' institutional research. On this online archive
you will be able to access estimates, company reports, sector reports, strategy
reports and a bunch of other products including the daily India Market Flash
produced by Kotak Securities.
 High Quality of software (KEAT): K.E.A.T is special software that
Koataksecurities.com provides its customers using which they can view live market
rates of scrip’s on both the NSE and BSE.

 Research Reports: Kotak Securities provide Different reports to investors which

include

 Intraday calls

 Daily Technical View

 Daily Morning Brief

 Weekly Technical Report

 Sectoral Reports
 Stock Ideas

 Derivative Reports

 SMS Alerts: Kotak Securities also provides SMS alerts to customers providing
useful tips about stocks & shares.
7.7 ICICI SECURITIES

ICICI Securities, A subsidiary of ICICI Bank, was set up in February 1993 to provide
investment-banking services to investors in India. As on date ICICI Bank holds 99.9% of
the share capital of ICICI Securities.

ICICI Securities Limited is India’s leading full service investment bank with a dominant
position in all segments of its operations –
 Corporate Finance
 Fixed Income and
 Equities.

Features of ICICI securities ICICI provides multiple channels in banking like, which is
unique feature.

 Internet Banking
 Mobile Banking

 ATM banking

 Phone Banking

 ICICI Securities is amongst the largest arranger of funds in Debt and Equity
segments and also amongst the leading advisors in Mergers and Acquisitions.
Chapter 8

COMPETITIVE ANALYSIS FOR INDIABULLS SECURITIES

8.1 Indian Retail Brokerage Market

The Indian retail brokerage industry consists of companies that primarily act as agents for
the buying and selling of securities (e.g. stocks, shares, and similar financial instruments)
on a commission or transaction fee basis.

It has two main interdependent segments: Primary market and the Secondary
market.

Indian Retail Brokerage Market

Interdepende
nt

Segments

Primary Market Secondary Market

Figure 8.1 Interdependent Segments of Brokerage Market

Objective: The main objective is to
 Analyze retail brokerage industry taking into account the health of the capital
markets, Derivative Market and the intensity of competition among the brokerage
companies.
 Doing Competitive Analysis for Indiabulls

8.2 Major growth drivers for brokerage revenue and trading volume are:

• Continuous fall in brokerage fees

• Adoption of technology — screen-based trading, electronic matching, and
paperless securities.
• Centralized operations, effective risk management, and control on large
interconnected operations spanning multiple locations, which is enabled by telecom
connectivity and low costs
• Increasing access to capital and the ability to provide margin finance
8.3 Parameter Assessment for Doing Competitive analysis
A differentiating aspect is a comparative assessment of the top retail brokerages on
various value indicators, comprising of
 Product
 Pricing
 Service

Competitive analysis

Product Price Service Value Proposition

 Unique Value proposition.

8.4 Customers need to analyze the Brokerage Firms Based on these 5
Parameters.
 Brokerage & Miscellaneous charges
 Quote Software
 Execution Platform
 Demat Account, and finally
 Back office Support.

Brokerage & Miscellaneous charges: This accounts for all the charges that you incur
for your trading/investing. A few examples would be: Demat Account maintenance,
Brokerage, Annual account Fee, Telephone based trading charges, trading software
usage charges, etc.

Quote Software: This is used mainly for technical study and for live quotes. Many
people don’t evaluate quote software. Some Investors don’t pay attention to the quality
of data (how accurate it is). Or how fast and often it refreshes. Does it allow us to back
test our strategy? Does it allow customizing technical signals/parameters?? Does it allow
us to see historic data? For, what period is intra day data available? They might need all
this information. They should be clear on what they need and ensure quote software
provides it all.

Execution Platform: It’s nothing but a platform that allows us to execute our trade
fast. It should automate trade management and execution, and should automatically give
protection against human errors.

Demat Account: Demat account should only be opened with a well known and
established brokerage firm in the market.
Back office Support: People while trading face lots of problem because of lack of good
back office support. Relationship Managers trading without their client’s knowledge, funds
not being transferred, trades not being executed, slow execution etc are a few examples.

8.5 Brokerage Charges

Intraday Brokerage charges of the Competitors of Indiabulls Securities Ltd

 Graph 8.2 Intraday Brokerage Charges

Delivery Brokerage charges of the Competitors of Indiabulls Securities Ltd

Graph 8.3 Delivery Brokerage Charges

 8.6 Analyzing the Blogs from Web Site Traderji.com (online community for
Indian Investors & Traders)

We were interpreting the blogs written by customers, their experiences and their review
on brokerage firms.
In this web site they have conducted opinion poll on broker preferences of customers &
reasons for choosing the particular brokerage firm. In this poll opinion, customers have
shared their viewpoint about pros & cons of different brokerage firms.

Experiences of Customers

Poll Options

Which online broker u prefer and why - chose one

5paise
ShareKhan
Motilal Oswal
ICICI Direct
HDFC
India Bulls
Kotak
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Pie chart 8.4 showing Poll results

8.7 Competitive Strength of Indiabulls Securities

Indiabulls securities Ltd have a distinct set of competitive advantages that make it
uniquely capable of winning in the marketplace against its competitors
 Diverse Branch Network
 Bouquet of financial products and services
 Advanced technology team that delivers market leading product innovation
 Strong sales and marketing teams with continuous reinvestment and training
 Strong cross-selling opportunities.
 Strong and experienced promoters
 Leading product innovation and marketing strategies
  Well capitalized player, with strong banking relationships and credit ratings
 Ability to combine people and technology in unique ways
 Strong market presence and increased market share leading to a virtuous cycle of
growth and Profitability.

Core pillars of Business strategy

 Increase the number of Client Relationships.
 Offer Diversified Financial Products & Services.
 Multiple Channels – Enhance Customer Experience and Opportunities.
 Low cost and highly scalable business.

Merits of Indiabulls Securities

 Low brokerage charges (Competitive) with 0.10 for Intra-day and 0.50 % for
delivery.
 Indiabulls securities provide 8 times margin for Intra-day and 4 times margin for
delivery.
 Indiabulls is suitable for both Day trading & Long term investment
 IndiaBulls has software called Power IndiaBulls. It is a Java based application, with
real-time streaming quotes. It is fast in terms of speed and execution
 Research reports are free of cost to trading members.
 They Provide 3 in 1 interface, i.e. Demat Account, Trading account & bank account
all are linked in one interface.
De-Merits of Indiabulls Securities
 You have to open a bank account with the banks mentioned in Indiabulls site for
Credit/ Debit Facility as they don’t have their own bank. And In ICICI direct , you
have a direct debit/credit facility with the bank
 Most customers feel that it is difficult to understand the ledger reports of Indiabulls
securities, so proper customer guidance should be given.
 Lack of Banking arm
 Rural market is yet to be tapped.
 More importance should be given to promotions & advertisements.

Value Proposition of Indiabulls Securities

 ISL provide a very good Trading tools like Power Indiabulls & Indiabulls
market trader.
 Power Indiabulls: A desktop Trading application offering clients sophisticated
trading tools accessible at lightning fast speed.
 Indiabulls Market Trader: Browser based trading application built for retail
investor.
 Indiabulls Equity Analysis: Premium research on 400 plus companies.
 Indiabulls Professional Network: Offers real-time prices, detailed data and
news, intelligent analytics and electronic trading capabilities.
 Relationship manager: Indiabulls securities robust technology is integrated with
knowledgeable and customer-focused relationship managers who are available
24X7 to assist the clients.
 In Depth Market Analysis and Research
Their special research cell bring you intensive research reports on how the stock
market is faring, when is the right time to invest, when to execute your order and
 more. Depending on what kind of investor you are, they bring you fundamental or
basic research and technical research.

8.8 Number of Branches of Competitors compared with Indiabulls securities

Number of Customers of competitors compared with Indiabulls

8.9 Merits & De-merits of Competitors

ICICI securities: It provides products & services in fixed income, equity &
corporate finance.
Merits of ICICI Securities
 ICICI Direct is considered best for long term investment.( Indiabulls is suitable for
both Day trading & Long term investment)
 A direct debit/credit facility with the bank.
 All facilities available under one umbrella.
 BTST (Buy today & sell tomorrow) is available; this facility is available only in ICICI
Direct.
 Can apply for IPO online (we can’t do this in Indiabulls).
 Can apply for mutual funds online and can also sell them online.
 Internet banking demo which gives customers an opportunity to learn.

De-Merits of ICICI Securities

 Brokerage charges are high - intraday 0.3% and 0.75% delivery compared to
other brokerage firms (is considered as highest in the market).
 Day trading is a night mare in ICICI because of Web based terminal, which is very
slow. Orders placed at or around 10.00 hrs may be queued for a while. So
intra-day Margin trading could be annoying now & then. It's not much of a hassle
for Cash trading though.
(Indiabulls offers you a trading terminal 'powerIndiabulls', which is java based
software. It is fast in terms of speed and execution).
 ICICI Direct brokerages are not negotiable ( Where as Indiabulls Brokerage
Charges are negotiable)
 While opening Demat account, three accounts are opened ,the saving bank
account, trading account and Demat account and you have to maintain minimum
 of rs5000 in case if it is not a salaried account. (That Rs5000 sleeps without
earning any money)
 Other banks account cannot be linked with the ICICI trading account.
 They charge an annual maintenance charges are Rs540.

Value Proposition of ICICI Securities

 E-Instructions: You can transfer securities 24 hours a day, 7 days a week

through Internet & Interactive Voice Response (IVR) at a lower cost. Now with
"Speak to transfer", you can also transfer or pledge instructions through our
customer care officer.

 Mobile Request: Access your Demat account by sending SMS to enquire about
Holdings, Transactions, Bill & ISIN details.

 The equities research team tracks over 15 key sectors of the Indian economy and
publishes in-depth research reports every year.

 The equities team at ICICI Securities comprises of research desk, sales desk and
the trading desks.

ShareKhan
Merits of ShareKhan Securities
 Low brokerage charges, intraday 0.1% and 0.5% for delivery.
 Live streaming quotes
 Customer support is good
 No monthly charges
 Can trade in both BSE and NSE
De-Merits of ShareKhan Securities
No BTST (buy today sell tomorrow), in ShareKhan you can’t sell a share today which you
bought yesterday.
 You have to open a bank account with the banks mentioned in ShareKhan site.
 Streaming quotes requires JVM (Java Virtual Machine); this may be big headache
for customers.
 Annual charges are Rs330.
 Their trading terminals are certainly not for "investors", only for active traders.
That is because, you have to trade a certain volume every month, otherwise you
end up paying a fine

Comparing ShareKhan & ICICI Direct

Sharekhan ICICI Securities

Live Streaming quotes No live streaming quotes

but streaming quotes require JVM

No BTST facility BTST facility is available

(Buy today sell tomorrow)

Annual Maintenance charge Rs 450 Annual Maintenance charge Rs

750
You have to open a bank account other banks account cannot be

With the banks mentioned in ShareKhan linked with ICICI trading account
site
Can apply IPO online Can apply IPO online

Not necessary while opening a Demat account

you
Need to maintain a minimum of
Rs 5000
 Can trade in BSE & NSE Can Trade in BSE & NSE

No Monthly Charges No Monthly Charges

Cannot apply can apply mutual funds online

India Infoline
Merits of India Infoline (5 Paisa.com) Securities
 Low brokerage charges, intraday 0.10% and 0.50% for delivery and it is negotiable.
 Minimum brokerage per share will be 1 paisa for trading transactions and 5 paisa
for delivery based transactions.
 5 paisa provides 6 times margin for Intraday & 8 time’s margin for Delivery.
 All customers will get Digital Contract Notes. Physical contract notes could be
provided on request which would entail a nominal charge.

De- Merits of India Infoline (5 Paisa.com) Securities

 Registration Fees (one time) Rs.500/ and is non-refundable.
 Software License Fee Rs.799 is non-refundable.
 There is lot of Hidden costs.
 Annual Service Charges Rs.250.
 Customers who just want to have a depository relationship will be required to pay
Rs.500/-, for each Demat account, which will be adjusted against service charges.
 The information in their web based terminal is too much compressed in one screen.
 Trader terminal is good, but the interface is too complicated

Kotak Securities
Merits
 They provide streaming quote software free.
 Low Brokerage charges with 0.05% for Intra-day & 0.45% for delivery.
 Kotak Securities will offer small-time retail investors with invest able surpluses as
low as Rs.5, 000 a chance to invest in capital markets.
 Transactions are transparent with effective back office support.
 They provide Simple Ledger reports, which customers feel easy to understand
than any other brokerage firms.

 Mutual fund & IPO facility is available online.

 Flexibility of products - Once you invest with Kotak Securities, you can enjoy
access to a wide range of products and services to help you make the most of
your investments.

De-Merits
 Unethical act: Geojit Securities Ltd has accused kotak securities stock broking firm
of hacking into its account to steal critical business information and blocking
information access. (Report: dated 2002, Ref: www.domain-b.com).
 Some investors have bad experience with accounts opening & they complain that
it takes a long time for opening accounts.
 Some customers are not happy with customer care of Kotak securities.

Value Proposition of Kotak Securities

 Kotak Securities have a definite policy on brokerage, and they have different
slabs for different clients based on their turnover. You can always choose your
brokerage based on your style and quantum of trading.
 High Quality of software (KEAT)
K.E.A.T is a special software that Koataksecurities.com provides its customers
using which they can view live market rates of scrip’s on both the NSE and BSE,
create a watch list and simultaneously place orders, view order reports, research
companies etc. It is a complete online trading terminal.
 Mobile trading
The facility is exclusively designed to give you instant access to the stock market
through mobile phone.
 Phone Trading – Call and Trade
Call & Trade is a service offered by Kotak Securities for its customers, which
provides customers with a facility to trade over the phone. Kotak Securities
provides you a toll free number that you can call from anywhere in India.
Chapter 9

SWOT ANALYSIS OF INDIABULLS SECURITIES

9.1 STRENGTHS
 Integrated technology platform: - Since the launch of their website,
www.indiabulls.com their online trading platform, they have invested in building
a technology platform. They have also developed software called “power
Indiabulls”. Their trader terminal is an application which allows customers to
trade on both the BSE and the NSE, has features like live intra-day tick by tick
charts, historical charts, price alerts and other features. The features allow
them to seamlessly integrate across delivery channels, online or offline through
branches or telephone.
 Pan India distribution network: - They have 640 branches across India.
These branches help in customer acquisition as well as customer service. Their
distribution network is well spread to capture the target audience and cater to
the needs of their potential customers.
 Relationship manager facility: - This is one of the unique services that
Indiabulls offer’s its customers. Every customer is provided with a relationship
manager, where in the customers can contact these managers at anytime of
the day to get information on the market or get their queries clarified.
 Growth rate: - The Company is growing at a very rapid rate, from 25
branches in the year 2015 it has grown to 750 branches in the beginning of
20017. Not only has it seen a fast growth rate in the number of branches but
also it has grown in the number of clients and the employee strength. They
have a active customer base of more than 1500,000 active and over 4500
relationship managers. Indiabulls has been rated as the “Fastest Growing Large
Cap Company” in India in a report by Business Today magazine in April, 2006.
 Power Indiabulls has developed into brands: - Indiabulls.com and power
Indiabulls which is their software are well known brands amongst retail investors
across India. In all the cities that they have expanded into, they have been able
to leverage upon brand awareness and have established a customer base.
 Strong sales and marketing teams that deliver market leading product
innovation: - their relationship manager channel offers a single point contact to
all their retail customers. These managers offer personalized services to their
customers and help to build strong and continuing relationships with them. The
marketing associates help the company in client acquisition at minimal cost and
they also help the company and its subsidiaries in increasing their penetration
into smaller towns and cities.
 Strong banking relations and credit ratings: - Indiabulls has banking
relation with some of the major banking institutions in the country such as HDFC
Bank, ICICI Bank, Standard Chartered Bank, etc, for easy mobilization of funds
of the customers.
 Strong market presence and increased market share: - Their growing
client base and market share have increased their market presence and brand
recognition has enhanced their profitability. Their brand and profitability allows
them to recruit good and efficient employees, compensate them attractively and
provides the flexibility for them to invest in the business and technology systems
these attributes in turn has a positive effect on the growth of the company.
 9.2 WEAKNESSES

 Lack of a banking arm: - Indiabulls does not have a banking arm of its own
which otherwise would have helped the company to a large extent. Whereas a
few of its competitors like HDFC securities, ICICI securities, Kotak securities, etc
have their own banking arms which make the transactions easier and simpler.
 Loss of relationship managers leads to loss of clients: - Their business is
dependent on the team of relationship managers who directly manage client
relationships. Any events that harm these relationships including the loss of their
relationship managers may lead to the loss of client.

9.3 OPPORTUNITIES

 Changing demographics with higher disposable income: - India is one of

the fastest growing economies in the world. It has a large and rapidly growing
middle class of 300 million people with increasing levels of discretionary income
available for consumption and investment purposes. The options they have for
investments are fixed deposits, post office deposits etc,. This gives them a
limited interest rate on their investment; where as the stock market provides a
good scope for making good returns. The evolution in India’s demographic setup
with a median age of 24 years and higher consumption expenditure is expected
to have a virtuous cycle effect by improving the economic growth and per capita
income which would result in higher savings and investments.

 Rapid penetration of internet and computers: -Technology is vastly used in

stock market trading. Now, with the use of the computers and internet the stock
market trading has become fast. The traders can place orders through the
 internet and execute them. This saves the time of the investors, who earlier had
to make calls to their brokers in order to trade. These people are willing to use
advanced communication tools, such as computers and telephones, and want to
take charge of their personal investment decisions. The use of technology is
influencing more people to invest in the stock market.

 Market size and Characteristics: -India is a large and growing economy with
rapidly expanding financial services sector. The sector has witnessed a
transformation over the last decade as a result of the economic liberalization
which start.ed in 1991. India is the world’s 12th largest economy in dollar terms
and the 4th largest in PPP terms. The projected growth rate of real GDP is
greater than 9% per annum with higher growth in many sectors such as financial
services. Indian financial sector presents a huge retail finance opportunity. As a
result of falling interest rates, bank deposits, other traditional investment
opportunities are losing their attraction. Thus, Indian investors are getting
attracted towards alternate investments such as the equity markets and are
looking for newer financial products.

 Diversified business model: -Our Company and our subsidiaries offer various
financial services and products ranging from equity, F & O and wholesale debt,
insurance and IPO distribution, depository services to cater to the specific needs
of the retail and institutional investors thus providing all these services in a single
platform. Thus Indiabulls is not dependent on any single of its subsidiary for
survival and failure of any one subsidiary will not have an adverse effect on the
company as a whole.

9.4 THREATS
 Economic slowdown: - Terrorist attacks and other acts of violence or war,
including those involving India or other countries could adversely affect national
economy or world economy as a whole. Such act may also result in a loss of
business confidence. Travel restrictions as a result of such incidents may have
adverse affect on the ability to operate effectively. This will result in an economic
slowdown (example: the 9/11 attack on the World Trade Centre, New York).
 Political instability in the country: - The government of India has pursued the
policy of economic liberalization, including relaxing restriction on the private
sector. With the change in government, there is no assurance that these
liberalization polices will continue in the future. Any political instability could delay
the economic reforms and could have adverse effect on the market.
 Volatile movement in market indices: - The Indian stock market is very
volatile in nature and is capable of shedding or gaining several points in a single
day. Unless and until the market stabilizes the investors will be very hesitant to
invest in the market. Stock market falls will have a cascading effect on the
investors and economy of the country.

 Competition: - Indiabulls faces significant competition from companies seeking

to attract client’s financial assets, including traditional and online brokerage firms,
mutual fund companies, etc, which are having a wide presence and strong brand
name. As the company enters new markets their bound to face additional
competition from those who have longer operating history have grater retail and
brand presence than Indiabulls. If the company is unable to manage its business it
might impede their competitive position and their profitability.
 Substitutes: - Various alternative forms of investment including fixed deposits
with banks and post offices etc act as substitutes to retail broking products and
services. The stock market is very unpredictable with fluctuations; this may prompt
 many people to invest in fixed deposits, posy office deposits, etc in order to avoid
risk.
 Low product differentiation: - The retail broking services provided by the
various companies are homogeneous with very low product differentiation. This
does not allow the company to freely fix their prices due to the threat of
competition, which in turn reduces their profit.
CHAPTER 10

RESEARCH METHODOLOGY

Research in common paralance refers to a search for knowledge. One can also
define research as a scientific and systematic search for pertinent information on a
specific topic. Research is an art of investigation. The Advance Learner’s Dictionary of
Current English lays down the meaning of research as “a careful investigation or inquiry
especially through search for new facts in any branch of knowledge “. Some people
consider research as a movement, a movement from known to unknown .it is actually a
voyage of discovery
Research methodology mean what's method apply to do any type of research and.
how can you collect the data from the field'. Before conducting any type of research and
analysis and inference based on it, the first and the foremost thing is to collected the date
and after the proceeding in a systematic manner to finally reach at result. There are the
various steps to be followed such as:
 What should be the sample size?
 From where it can be taken?
 Compilation of data
 Presentation of data
 Analysis and presentation of data
 Making inference
Research can be conducted by researcher by:-

1. UNDERSTANDING THE ORGANIZATION:

An in depth study of the Organization's working was done. The motive was to know the
working of the Organization and why INDIA BULLS is considered as number one. Current
status of the competitors is considered as to analyse their competitive situation.
2. DEVELOP A SURVEY QUESTIONNAIRE:

A questionnaire was developed to understand the comfort and investment level of

customer in any Security and stock Market and his preference with the Organization. To
know the areas where INDIABULLS lack so that the Organization can improve upon its
weak areas and be able to extract best business.

3. CONDUCT SURVEY:

After finalizing the sample, who may be old or new, meetings were scheduled and survey
conducted. We contacted the Customers, fixed appointment with them and collected data.
Data obtained was then analyzed.

4. ANALYSIS AND INTERPRETATION OF INFORMATION

The collected data should be properly analyzed, so that some fruitful information can be
yield out of it. The data must then be interpreted in a manner that the analysis may be
easily presented before anyone and easy to understand.
TYPES OF RESEARCH:-

1. Descriptive and Analytical Research:-

Descriptive research include survey and fact finding enquiries of
different kinds.
In analytical research, the research has to use facts or information
already available, and analyze these to make a critical evaluation of the material.

2. Applied and fundamental Research:-

Applied research aim at finding a solution for an immediate problem
facing a society or an industrial /business organization.
Fundamental research is mainly concerned with generalizations and
with the formulation of a theory.

3. Quantitative and Qualitative Research:-

Quantitative research is based on the measurement of quantity or
amount.
Qualitative research is concerned with qualitative phenomenon, i.e.,
phenomena relating to or involving quality or kind.

4. Conceptual and Empirical Research:-

Conceptual research is used by the philosophers and thinkers to
develop new concepts or to reinterpret existing ones.
Empirical research relies on experience or observation alone, often
without due regards for system and theory.

The type of research adopted to perform the project work is Descriptive Research
as the information is collected through survey by questionnaire, without giving regards to
any theory and concepts. The need of primary information required for the project topic
can be done through Descriptive Research. The facts and information was surveyed and
various fact finding enquiries of different kinds. The description of current state of affairs in
the current situation of the stock market may be analysed.

The comparison of INDIA BULLS and other stock market companies depends on
the customer’s investment criteria and not in the hands of the company itself. The
performance of share market do not depends on the companies wish to earn profit, but
the investors wish to invest in share market and to earn profits.

The secondary information required to support the project topic findings is being
colleted through Analytical Research, in which the researcher has to use facts and
information already available, and analyse these to make a critical evaluation of the
material. In analytical research, the research has to use facts or information already
available, and analyze these to make a critical evaluation of the material.

The data colleted to conduct this type of research has been prepared from
Magazines, newspaper annual and weekly issues, books on stock exchanges.
Websites:
-
“Bombay Stock Exchange" Bseindia. 20 Mar. 2007 <http://www.bseindia.com>.

" Indiabulls Securities” Indiabulls.Com. 15 Mar. 2007 <http://www.Indiabulls.com>.

"National Stock Exchange” nseindia. 25 Mar. 2007 <http://www.nseindia.com>.

"Share khan Securities” Sharekhan.Com. 25 Mar. 2007 <http://www.sharekhan.com>.

“India Infoline Securities” India-Infoline.Com. 26 Mar. 2007 <http://trade.indiainfoline.com>.

" India Infoline Securities” 5paisa.Com. 26 Mar. 2007 <http://www.5paisa.com>.

" Kotak Securities” kotak securities.Com. 26 Mar. 2007 <http://www.kotaksecurities.com>.

"ICICI Securities” ICICI securities.Com..25 Mar. 2007 <http://www.ICICIsecurities.com>.

" Karvy” Karvy.Com. 25 Mar. 2007 <http://www.karvy.com>.

“Online Investors & Traders” 2 Apr. 2007 <http://www.traderji.com>.

" Motilal Oswal Securities” . 25 Mar. 2007 <http://www.motilaloswal.com>.

 METHOD AND PRINCIPLE USED:

INFORMATION REQUIRED IN DETAIL

PRIMARY INFORMATION:
To know why INDIA BULLS is standing at a reputative position among stock exchanges
and its competitive advantage. The competitor companies were also analysed to find out
their current status and how close competition exists.

SECONDARY INFORMATION:
To present the specialities of INDIA BULLS which are shown through secondary data
analysis.

METHOD OF DATA COLLECTION

The task of data collection begins after research problem has been defined and
research design /plan checked out. While deciding about the method of data collection to
be used for the study, the researcher should keep in mind the two types of data viz.
primary and secondary.
.
Primary Data

They are those which are collected a fresh and for the first time, and thus happened to be
in original in character. Data is collected by:-
-Survey
-Observation method
-Interview Method—personal interview, telephonic interview.
Secondary Data

Are those which has already been collected by someone else and which have already
been past through the statisal process. Data is collected by:-
-Publications of central state and local govt.
-Publication of foreign.
-Journal
-Books, magazines and newspaper
-Reports and publication of business house
-Reports and publication of scholars and universities.
-Public records

RESEARCH INSTRUMENT USED IN DETAIL:

PRIMARY

 Questionnaires: A formal list of the questions answered by the people who are
thought to have the desired information and later analyzing the responses is the
questionnaire method. It can be used to get some data relative to most problems.
We have used structured questionnaires as a formal list of questions produces
more reliable results.

For collecting the data we used questionnaire method. The questionnaire was design
mainly of objective nature and partially of descriptive nature to get suggestion
regarding housing finance compares. We visited various government department and
business organization and also to individuals for required information according to our
Performance knowing the views of the people and get their suggestions.
  Personal Interviews: Personal interview is the most versatile and flexible kind of
technique. Direct face-to-face conversation helps in getting accurate data.
Personal interview were done with the people in order to get the required
information.

SECONDARY

 Websites.
 Brochures
 and Company Magazines.

CANOPY PROGRAM

The conducted a five days canopy program in which we were asked get questionnaire
filled by the individuals. The activity was conducted in groups. Each group was allotted a
definite area for it’s work .Every evening the response of the day was given to the
reporting officer in INDIA BULLS. The reporting officer was Mr. Maya Sarin (Relationship
Manager).
The data collected from it was of 50 persons (in round figures). The area allotted to us
was at Noida, Greater noida, and in delhi at Lakshmi nagar.The response was good. This
program enabled them as a feedback program which would help them in further
innovation and make nessary changes
RESEARCH DESIGN

The formidable problem that follows the task of defining the research is preparation of the
design of the research project, popularly known as research design. Decisions regarding
what, where, when, how much by what means considering an inquiry or research study
constitute a research design .

Types:-

Research Design in case of exploratory research study .

Research Design in case of descriptive and diagnostic research study.
Research Design in case of hypothesis-testing research study.

RESEARCH STUDIES CONSIDERED :-

 EXPLORATORY RESEARCH

Exploratory research is based on secondary data and survey of knowledgeable persons.,

This research is usually designed to obtain the investigations of the investors prospective
of comparing the stock exchanges for his investment decision.Wide-ranging and versatile
approaches are employed. Exploratory research is appropriate for situations where
Management is searching for solutions and seeks new insights regarding the situation or
desires a more precise formulation of the problem. We have made use of exploratory
research in our project because it served our purpose to the maximum information.A new
knowledge is being discovered ,although it exists in the environment.
  DESCRIPTIVE RESEARCH

Descriptive research studies are those studies which are concerned with describing the
characteristics if a particular individual ,or of a group.this type of study is concerned with
specific predicitions, with narration of facts and characteristics considering individual and
groups. The decision regarding what to measure and find adequate method of measuring
along with the clear cut definition of ‘population’. “As data collected, they should be
examined for completeness, comprehensibility, consistency and reliability.”
This type of research design is adopted since it takes into account all the steps involved
in a survey concerning a phenomenon to be studied. This type of study makes enough
provision for protection against bias and must maximize reliability.
 SAMPLING PLAN

Research is basically depend up on the data and that data depend upon the size
of sample we want. So deciding of sample size is mainly based on the nature of objective
of the research. Sample size has to . confirm the objective on each and every
respect.Suppose we are going to decide any effective decision on the base of this report
or set up any new facts. On that position we have require large size of sample on
comparison to find out a trend.
Here our objective is simply go to "comparative analysis and make an overview of Indian
Stock Market "So we preferred to go with a sample size of only 250 data.

SAMPLING TECHNIQUES USED

 Systematic Sampling
In some instances , the most practical way of sampling is to select every next item
on the list. Sampling of this type is known as systematic sampling. An element of
randomness is introduced into this kind of sampling by using random numbers to pick up
the unit with which to start.
In the project the samples are drawn from different zone including 50 persons in
each zone constituting 250 persons all together.

 Stratified Sampling
If a population from which as ample is to be drawn does not constitute a
homogenous group stratified sampling technique is generally applied in order to obtain a
representative sampling. Under stratified sampling the poplation is divided into several
sub population that are individually more homogenous than the total population (the
different sub population are called ‘STRATA’ and then we select item from each stratum to
constitute a sample.
In the project ,the population was selected randomly from each zone having equal
chances to be selected as a sample. The population in each zone is called strata which
includes 25 persons from each zone.

 Sequential Sampling
This sampling design is somewhat complex sample design the number of sample one
more than two but it is neither certain nor decided in advance this type of system is often
referred to as sequential sampling. thus in brief we can say that in sequential sampling
one can go on taking samples one after another as long as one desire to do so.
In the project, the samples are being surveyed in a sequential manner from every zone.
SAMPLE DESIGN

The selected respondents constitute what is technically called a sample and the selection
process is called sampling technique. the survey so conducted is known as sample
survey.

Researcher must prepare a sample design for his study i.e., he must plan how a
sample should be selected and of what size such a sample would be.

1. Types of universe: - The sample design is clearly define the set of objects, technically
called the universe. The total population of India is universe for INDIA BULLS. The
population of the whole country may be considered as the sampling population.

2. Sampling unit: - Sapling unit may be a geographically one such as state, district,
village, etc. The sampling unit is decided by dividing into central, eastern, western,
northern and southern zones

3. Source list: - It is also known as sampling frame from with sample is to be drawn. It is
decided by considering the people who know about SHARE MARKET.

4 Size of sample: - This refers to the number of items to be selected from the universe to
constitute a sample size. The sample size chosen by me is 125 persons, 25 persons in
every zone.

5. Sampling procedure:-It decides about the technique to be used in selecting the items
for the sample. The procedure of deciding the sample is done zone wise.
Measurement and Scaling Techniques

Measurement is relatively complex and demanding task, especially so when it concerned

qualitative and abstract phenomena. By measurement we mean the process of assigning
numbers to objects or observation, the level of measurement been a function of the rules
under which the numbers are assigned. Measurement is a process of mapping aspects of
the domain onto other aspects of a range according to some rules of correspondence.

The method used to represent the collected data is tables, graphs, charts, pie
charts, bar graphs, supported by written statement.

Measurement technique are deliberately selected by the researcher.During the

research the researcher has to be quite alert about this aspect while measuring
properties of objects or of abstract concept.
Chapter 11

FINDINGS & SUGGESTIONS

Aggressive Promotions: Indiabulls Securities compared to its competitors concentrates

less on advertising and promotions, especially through electronic media. Its competitors
like Sharekhan, ICICI and Kotak are advertising aggressively through media. Hence
Indiabulls should concentrate more on advertising through print and electronic media.

Tapping Rural Market: The Indian rural investors market are relatively untapped, with
only small and private firms meeting the current demand. Indiabulls Securities can gain
the “First Mover Advantage” over its competitors, especially in areas were commercial
crops are grown and the standard of living is high. These people do not have much
option to invest other than banks and post offices.

Reduce the initial account opening charges: The charge for opening a trading and
demat account in Indiabulls securities is high compared to its competitors. This influences
the potential investors to open their account with another company which provides the
same at lower prices. Thus it acts as a mental barrier for potential customers, who tend
to overlook all other benefits offered by Indiabulls. Hence Indiabulls should consider
reducing their account opening charges.

Bring in more product differentiation: Product differentiation here means that

Indiabulls securities should bring in more customized services and more value proposition
for large investors. It can reduce the brokerage charges for large investors which will
encourage them to invest more in the company.
Invest more on R&D: Indiabulls should concentrate on its research and development
since most of its competitors are investing on R&D. This will help the company to read
the market better and will also be in a better position to understand the needs of the
customers. This can be extremely beneficial for Indiabulls in the long run.
 APPENDIX
Profit & loss Summary

Mar 2015 Mar 2016 Mar 2017

Rs. Crore (Non-Annualized) 12 months 12 months 12 months

-
Income 69.48 114.59 317.97
Leasing & hire services 0 0 0
Security transactions 0.18 0 0
Dividend income 0 0.29 0
Interest income 15.36 1.93 21.16
Others 53.94 112.37 296.81
Other income 0 0 0
Non-recurring income 0.03 0.27 0.13
-
Expenditure
Loss on security
transactions 0 0.28 0.04
Other operating expenses 3.58 7.92 13.84
Personnel cost 10.72 20.88 50.24
Other expenses 11.33 13.71 21.24
Finance charges 13.97 21.48 46.7
Lease rent 2.19 3.89 3.08
Less: expenses
capitalized 0 0 0
Non-recurring expenses 0 0 0
-
Profits / losses
PBDT 29.91 51.28 186.85
Depreciation 1.11 2.16 6.57
PBT 28.8 49.12 180.28
Tax provision 10.79 17.89 61.06
PAT 18.01 31.23 119.22
-
3

Appropriation of profit
Dividends 0.7 6.14 0.62
Retained earnings 17.31 25.09 118.6
 QUESTIONNAIRE

Format of Questionnaire For Doing Promotions

The format of Questionnaire given to people is as follows:

Name of Person:

Contact Number:

E-mail Id

Do you invest in Share market? Yes No

Are you aware of Indiabulls? Yes No

Do you have a Demat Account? Yes No

Presently in which security are you trading?

Signature
 Brokerage & Tax break up format of Indiabulls
(For Security reasons all data are not revealed)

Intraday (%) Delivery (%) Futures (%)

Buy Sell Buy Sell Buy Sell

Brokerage Charges 0.1 0.1 0.5 0.5 0.1 0.1

Security Transaction 0 0.025 0.125 0.125 0 0.017

Tax (STT)

GST (18% on brokerage)

Turn over Tax (TOT)

Stamp duty(.0001%)

Total
 CONCLUSION

Indiabulls faces significant competition from companies seeking to attract clients’ financial
assets including traditional and online brokerage firms, mutual fund companies and
institutional players, having wide presence and a strong brand name. As Indiabulls enter
newer markets, they are likely to face additional competition from those who may be
better capitalized, have longer operating history, have greater retail and brand presence,
and better management than Indiabulls. As new players like Reliance Money enters the
market the competition will only get more intense. If they are unable to manage their
business it might impede their competitive position and profitability.
Hence they should continue to compete vigorously to capture more market share and
should add more management personnel to manage their growth in an optimal way.

Post economic liberalization in 1991 the Indian financial services industry has experienced
significant growth. Exposure to global practices has made the Indian customer more
demanding. As a result of falling interest rates, bank deposits, other traditional
investment opportunities are losing their attraction. Thus, Indian investors are getting
attracted towards alternate investments such as the Retail Security Market and are
looking for newer financial products.

As the Indian Retail Security Market is still in a nascent stage and as a lot of potential for
growth, it’s a very good opportunity for companies like Indiabulls to increase their market
presence. They will have to concentrate more on the Research and Development and
come up with strategies which are beneficial for the company. Thus for the purpose of
Applied Research Projects in the company, they can do more research on the market and
identify the major factors which will drive the market in the future.
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