Final Project of Caital Market

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Industry Profile
History of Indian Stock Market
Indian stock market marks to be one of the oldest stock market in Asia. It dates back to
the close of 18th century when the East India Company used to transact loan securities. In the
1830s, trading on corporate stocks and shares in Bank and Cotton presses took place in Bombay.
Though the trading was broad but the brokers were hardly half dozen during 1840 and 1850.An
informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of
Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1. This banyan
tree still stands in the Horniman Circle Park, Mumbai. In 1860, the exchange flourished with 60
brokers. In fact the 'Share Mania' in India began with the American Civil War broke and the
cotton supply from the US to Europe stopped. Further the brokers increased to 250. The informal
group of stockbrokers organized themselves as The Native Share and Stockbrokers Association
which, in 1875, was formally organized as the Bombay Stock Exchange (BSE).BSE was shifted
to an old building near the Town Hall. In 1928, the plot of land on which the BSE building now
stands (at the intersection of Dalal Street, Bombay Samachar Marg and Hammam Street in
downtown Mumbai) was acquired, and a building was constructed and occupied in
1930.Premchand Roychand was a leading stockbroker of that time, and he assisted in setting out
traditions, conventions, and procedures for the trading of stocks at Bombay Stock Exchange and
they are still being followed.
In 1956, the Government of India recognized the Bombay Stock Exchange as the first
stock exchange in the country under the Securities Contracts (Regulation) Act. The most decisive
period in the history of the BSE took place after 1992. In the aftermath of a major scandal with
market manipulation involving a BSE member named Harshad Mehta, BSE responded to calls
for reform with intransigence. The foot-dragging by the BSE helped radicalize the position of the
government, which encouraged the creation of the National Stock Exchange (NSE), which
created an electronic marketplace. NSE started trading on 4 November 1994. Within less than a
year, NSE turnover exceeded the BSE. BSE rapidly automated, but it never caught up with NSE
KLE’S College of Business Administration Lingaraj College Belgaum Page 1

spot market turnover. The second strategic failure at BSE came in the following two years. NSE
embarked on the launch of equity derivatives trading. BSE responded by political effort, with a
friendly SEBI chairman (D. R. Mehta) aimed at blocking equity derivatives trading. The BSE
and D. R. Mehta succeeded in delaying the onset of equity derivatives trading by roughly five
years. But this trading, and the accompanying shift of the spot market to rolling settlement, did
come along in 2000 and 2001 - helped by another major scandal at BSE involving the then
President Mr. Anand Rathi. NSE scored nearly 100% market share in the runaway success of
equity derivatives trading, thus consigning BSE into clearly second place. Today, NSE has
roughly 66% of equity spot turnover and roughly 100% of equity derivatives turnover. Stock
Exchange provides a trading platform, where buyers and sellers can meet to transact in securities.
Capital Market
The capital market is divided into two segments viz:
a) Primary Market
b) Secondary Market
a) Primary Market:
Most companies are usually started privately by their promoters. However the promoters‘capital
and the borrowed capital from banks or financial institutions might not be sufficient for running
the business over the long term. That is when corporate and the government looks at the primary
market to raise long term funds by issuing securities such as debt or equity. These securities may
be issued at face value, at premium or at discount.
b) Secondary Market:
The secondary market provides liquidity to the investors in the primary market. Today we would
not invest in any instrument if there was no medium to liquidate our position. The secondary
markets provide an efficient platform for trading of those securities initially offered in the
primary market. Also those investors who have applied for shares in an IPO may or may not get
allotment. If they don‘t then they can always buy the shares (sometimes at a discount or at a
premium) in the secondary market. Trading in the secondary market is done through stock

exchange. The Stock exchange is a place where the buyers and sellers meet to trade in shares in
an organized manner.
Introduction to BSE
BSE was established in 1875 as “The Native Share and Stock Brokers Association". It is a
voluntary non-profit making Association of Persons (AOP) and has converted itself into
demutualised and corporate entity. It has evolved over the years into its present status as the
Premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have
obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts
(Regulation) Act, 1956.The Exchange, while providing an efficient and transparent market for
trading in securities, debt and derivatives upholds the interests of the investors and ensures
redressal of their grievances whether against the companies or its own member-brokers. A
Governing Board having 20 directors is the apex body, which decides the policies and regulates
the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from
the broking community (one third of them retire every year by rotation), three SEBI nominees,
six public representatives and an Executive Director & Chief Executive Officer and a Chief
Operating Officer. The Executive Director as the Chief Executive Officer is responsible for the
day-to-day administration of the Exchange and he is assisted by the Chief Operating Officer and
other Heads of Department the Exchange has inserted new Rule in its Rules, Bye-laws &
Regulations pertaining to constitution of the Executive Committee of the Exchange.
Introduction to NSE
The National Stock Exchange (NSE) is India's leading stock exchange covering 364 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, securities lending and borrowing,
professionalization of trading members, fine-tuned risk management systems, emergence of
clearing corporations to assume counterparty risks, market of debt and derivative instruments
and intensive use of information technology. On its recognition as a stock exchange under the
Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment
commenced operations in November 1994 and operations in Derivatives segment commenced in
June 2000.NSE's mission is setting the agenda for change in the securities markets in India.
The NSE was set-up with the following objectives:
 establishing a nation-wide trading facility for equities, debt instruments and hybrids,
 ensuring equal access to investors all over the country through an appropriate
communication network,
 providing a fair, efficient and transparent securities market to investors using electronic
trading systems,
 enabling shorter settlement cycles and book entry settlements systems, and
 Meeting the current international standards of securities markets.
Company Profile
Background & Inception of Reliance Capital
Reliance Capital Limited (RCL) was incorporated in year 1986 at Ahmedabad in Gujarat as
Reliance Capital & Finance Trust Limited. The name RCL came into effect from January 5,
1995. In 2002, RCL shifted its registered office to Jamnagar in Gujarat before it finally moved to
Mumbai in Maharashtra, in 2006.
In 2006, Reliance Capital Ventures Limited merged with RCL and with this merger the
shareholder base of RCL rose from 0.15 million shareholders to 1.3 million.

RCL entered the Capital Market with a maiden public issue in 1990 and in subsequent years
further tapped the capital market through rights issue and public issues. The equity shares were
initially listed on the Ahmedabad Stock Exchange and The Stock Exchange Mumbai. Presently
the shares are listed on The Stock Exchange Mumbai and the National Stock Exchange of India.
RCL has since diversified its activities in the areas of asset management and mutual fund; life
and general insurance; consumer finance and industrial finance; stock broking; depository
services; private equity and proprietary investments; exchanges, asset reconstruction; distribution
of financial products and other activities in financial services.
Nature of business carried
Reliance Capital, branded as ‘Reliance Money’has a comprehensive financial services and

solution provider, providing customers with access to life and general Insurance products, money
transfer, currency exchange, loans and gold coins. It gives service of online trading with less
brokerage charge and it also has financial products like Life Insurance, Equity and Mutual funds.
About company
Reliance Securities, A Reliance Capital Limited Company, is the financial services division of
Reliance Anil Dhirubhai Ambani (ADA) Group. Reliance ADA group is among top 3 business
houses in India with wide range of presence across various sectors.
Reliance Securities, the broking arm of Reliance Capital is the one of the India’s leading retail
broking houses in India, providing customers with access to equities, equity options and
commodities futures, wealth management, wealth management services, mutual funds, IPOs and
investment banking.
Reliance Securities has 7 lac retail broking accounts through its pan India presence with over
6,300 outlets.

Vision, Mission and Quality policy
Vision
To become a world class diversified financial services

company through excellent quality services with the
highest value of integrity (reliable).
Mission
To broaden its ability to deliver comprehensive financial

solutions.
To focus in developing human resources competency.
To develop an integrated infrastructure services.
Quality policy
Talented, efficient and competent team of youngsters rolling out high profile applications for the
global business community, keeping in mind true quality, total customer satisfaction.
Creatively involved in providing high quality products and services through:
 Responsiveness to customer needs.
 Provision of work satisfaction and promising careers.
 Constant measurement and monitoring of all operations.
 Continuous improvements of procedures, products and services.
 Performance of operations in a responsible manner.

Products and service profile

1. Trading Portal (with almost negligible brokerage)
 Equity Broking
 Commodity Broking
 Derivatives (futures and option)
 Offshore investments (contracts for differences)
 D-Mat Account.
2. Financial Products
 Mutual Funds
 Life Insurance
o ULIP Plan
o Term Plan
o Money back Plan
 General Insurance
o Vehicle / motor Insurance
o Health Insurance
o House Insurance
 IPO’s
 NFO’s
3. Value Added Service
 Retirement Plan
 Financial Planning
 Tax Savings
 Children Future Plan
4. Gold Coins Retailing

Area of operation
Reliance Securities offers the services not only all over India but also outside. it is one of the
leading brokerages and distributors of financial products in India the following is a list of
opening and closing times for stock and futures exchanges worldwide. It includes a list of
stock exchanges and the corresponding times the exchange opens and closes, along with
the time zone within which the exchange is located.
Operations in India
Scale of Operation ON 31 March 2011 ON 31 March 2012

No of Outlets 10350 8512
Franchise 10125 8279
Owned 225 233
No of Broking accounts 1010000 713636
Total no of customers 3300000 2000000
Daily average stock 15 15
exchange turn over (Rs
billion)
Reliance Capital has over 96 offices all over India.
Overseas branch of Reliance

 Hong Kong
 Malaysia
 Muscat
 Nigeria
Ownership pattern
Reliance capital is one of India’s leading and fastest growing private sector financial services
companies and ranks the top 3 in terms of net worth
Reliance capital is a part of Reliance Anil Dhirubhai Ambani Group. it is a comprehensive
financial services and solution provider providing customers with access to equity and
commodity Derivatives, Portfolio management Services , mutual Funds , IPO’s life and General
insurance and gold coins
Customers can avail Loans Credit Cards Money Transfer and money changing services. The
Reliance Anil Dhirubhai Ambani Group has a market capitalization of Rs. 325000 crores (US$
81 billion) net access in excess of 115000 crores (US$ 29billion) and net worth to the tune of Rs
55000 Crores (US$ 14 billion). Across different companies the group has a customer base of
over 100 million, the largest in India and a shareholder base of over 12 million, among the
largest in the world. It has a business presence that extends to over 2000 towns and 4.5 lakhs
village in India 5 continents across the world.
Founder of Reliance
Few men in the history have made as dramatic a contribution to their country’s economic
fortunes as did the founder of Reliance, DhirubhaiH Ambani

There is more than one unique way of describing true genius of Dhirubhai: The corporate
visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of India’s
capital market, and the champion of shareholder interest.
Chairman’s profile
Shri Anil D. Ambani, regarded as one of the foremost corporate leaders of

contemporary India, Shri Anil D. Ambani, is the Chairman of Reliance
Capital Limited, Reliance Infrastructure Limited, Reliance
Communications Limited and Reliance Power Limited. He is also on the
Board of Reliance Infratel Limited and Reliance Anil Dhirubhai Ambani
Group Limited. He is the President of the Dhirubhai Ambani Institute of
Information and Communication Technology, Gandhi nagar, Gujarat.
An MBA from the Wharton School of the University of Pennsylvania, Shri Ambani is credited
with pioneering several path-breaking financial innovations in the Indian capital markets. He
spearheaded the country’s first forays into overseas capital markets with international public
offerings of global depositary receipts, convertibles and bonds. Under his Chairmanship, the
constituent companies of the Reliance Group have raised nearly US$ 7 billion from global
financial markets in a period of less than 3 years.
Shri Ambani has been associated with a number of prestigious academic institutions in India and
abroad.
He is currently a member of:
 Wharton Board of Overseers, The Wharton School, USA
 Board of Governors, Indian Institute of Management (IIM), Ahmedabad
 Executive Board, Indian School of Business (ISB), Hyderabad
In June 2004, Shri Ambani was elected as an Independent member of the Rajya Sabha – Upper
House, Parliament of India, a position he chose to resign voluntarily on March 29, 2006.

Competitors Information
Reliance capital has many competitors like SCHIL, Karvy Consultancy, BSEG, Share Kahn,
ICICI, HSBC, IDBI, and Standard Charted Services provided by main companies are given
below.
ICICI Direct
 Trading in Shares and Funds
 Investing in Mutual funds Derivatives
 IPO’s and bonds online
 Overseas Trading
 Personal Finance
 Risk analyzer and asset Allocator
Share khan
 Technical Research
 Equity and Derivatives Trading
 Depositary services
 Fundamental Research
 Share shops
 Portfolio Management

 Online Services
 Commodities Trading
HDFC Securities
 Trading in Equity Derivatives
 Mutual Funds and IPO
 Weekly Derivative future report
 Aggressive portfolio
 Research and charting
Religare
 CRN Login
 Call N Trade
 Portfolio tracker
 Research
KOTAK Securities
 Easy equity and derivatives
 Currency derivatives
 Easy mutual fund
 Kotak Research
 NRI Service

Infrastructural Facilities
The Reliance capital Ltd located in Belgaum: congress road
The company has rented property
Total area rented by the company is located: 2000 square feet
Built in area of the company: 2000 square feet
All the members of the company employees are good in communication. Cleanliness is given
utmost importance of the company
There are Air-conditioner’s proper lighting and ventilation and Tele=communication facilities.
The company also provides travel allowance and Medical allowance to employees and parking
facility is also available
Awards and Achievements
 Awarded by Light Readings as the Person of the Year – 2008 for outstanding
achievements inthe communication industry
 Voted 'the Businessman of the Year' in a poll conducted by The Times of India – TNS,
December,2006
 Voted the 'Best role model' among business leaders in the biannual Mood of the Nation
pollconducted by India Today magazine, August 2006
 Conferred 'the CEO of the Year 2004' in the Platts Global Energy Awards
 Conferred ‘The Entrepreneur of the Decade Award’ by the Bombay Management
Association,October 2002
 Awarded the First Wharton Indian Alumni Award by the Wharton India Economic
Forum (WIEF) in recognition of his contribution to the establishment of Reliance as a
global leader in many of its business areas, December, 20

Work flow model
Reliance Money
Bank Interface
Surveillance
Administrative
Server
BSE/NSE
Terminal
DP Interface

Future growth & prospects

The growth of financial sector in India at present is nearly 9% per year. The rise in the growth
rate suggests the growth of the economy. The financial policies and the monetary policies are
able to sustain a stable growth rate. The reforms pertaining to the monetary policies and the
macroeconomic policies over the last few years have influenced the Indian economy to the core
The major step towards opening up of the financial market further was the nullification of the
regulations restricting the growth of the financial market further the nullification of the
regulations restricting the growth of financial sector in India. To maintain such a growth for a
long term the inflation has to come down further. The financial in India had an over al growth of
15%, which has exhibited stability over the last few years, although several other markets across
the Asian region were going through turmoil. The development of the system pertaining to the
financial sector was the key to growth of the same. With the opening of the financial market
variety of products and services were introduced to suit the need of the consumer. The Reserve
Bank of India (RBI) played a dynamic role in the growth of the financial sector of India.
Future Prospects of Reliance Capital

Reliance capital plans to launch portfolio management services (PMS) were managers will create
a basket of stocks for each client based on individual needs for amounts as low as 5 lakhs such
services are popular in India but almost all the offerings of large finance companies target high
Net worth individuals (HNIs) with the ability to invest rupees 1crore and above. Reliance capital
helps clients in invest in equities, derivatives and commodities, will typically offer such services
for amounts between Rs 5 lakhs and Rs 75 lakhs; Rs 5 lakhs is the smallest amount the industry’s
regulator mandates for PMS. Reliance Money will launch its PMS on December and will
especially target executives and professionals in metros and smaller towns.
Reliance Money would not take a fee unless the portfolio earns a return higher than 8%. If the
client earns a return of 8-20%, the fee charge will be 10% of absolute returns and if the client
earns more than 20% the fee will be 20%. The company plans to offer a large-cap investment
portfolio (where the stocks invested in will be those of large0cap companies), blue chip portfolio
(blue chip companies) and an infrastructure portfolio (companies in the infrastructure sector).
Reliance money, started its operations in April, already has around 2,50,000 invest or accounts
and 3,000 outlets by law, while others are optional agreeing to the claims of an insurance
policies.

TRUST
ENTREPRISE INTEGRITY
GROWTH DRIVERS
FOR
DEDICATION
HARD
RELIANCE CAPITAL
WORK &
TEAM PLAY
EMPATHY& COMMITIMENT
HUMANITY
LEARNING &
INNOVATION
Mckensy’s 7s Model
The McKinsey 7S Framework is a management model developed by well-known business
consultants Robert H. Waterman and Tom Peters in the 1980s. This was a strategic vision for
groups, to include businesses, business units, and teams. The 7S are structure, strategy, systems,
skills, style, staff and shared values.
The model is most often used as a tool to assess and monitor changes in the internal situation of
an organization.
The model is based on the theory that, for an organization to perform well, these seven elements
need to be aligned and mutually reinforcing. So, the model can be used to help identify what
needs to be realigned to improve performance, or to maintain alignment (and performance)
during other types of change.

Hard & Soft Elements:
The 7 S elements are distinguished in so called Hard S’s and Soft S’s. The 4 Soft
S’s like Style, Skill, Staff and Shared Values are hardly feasible.
HARD ELEMENTS
Hard elements are easier to define or identify and management can directly influence them.
These are strategy statements, organization charts and reporting lines and formal processes and
IT systems. The hard elements like structure, system strategy are flexible and easy to identify
Soft Elements
Soft elements on the other hand , can be more difficult to describe and are less tangible and
more influenced by culture. However, these soft elements are as important as the hard elements
if the organization is going to be successful .
The way the model is presented in below depicts the interdependency of the elements and
indicates show a change in one affects all the other

Structure
Strategy Systems
Shared
values
Skills Style
Staff
Staff:
 What positions or specializations are represented within the team?

 What positions need to be filled?
 Are these gaps in required competencies?
Skills
 What are the strongest skills represented withinthe company/team?

 Are there any skill gaps?
 What is the company/team known for doing well?
 Do the current employees/team members have the ability to do jobs?
 How are skill monitored and assessed?

Strategy
Strategy is the planning devise to maintain and build competitive advantage over the
competition. The main strategies made by Reliance capital
 The main strategy is to maintain consistency in quality and provide good quality services
to their clients
 To Attain global best practices and become world class financial services
Enterprise-guided by its purpose to move towards greater degree of sophistication and

maturity
 To adapt new technologies fast
7S model can be better understood by analyzing the following questions
 What are our objectives?

 How do we intend to achieve our objectives?
 How do we deal with competitive pressure?
 How are changes in customer demands dealt with?
 How is strategy adjusted for environmental issues?
Structure
 How is the company/team divided?

 What is the hierarchy?
 How do the various departments coordinate activities?
 How do the team members organize and align themselves?
 Is decision making and controlling centralized or decentralized? Is this as it should be,
given what were doing?
 Where are the lines of communication? Explicit and Implicit?

Systems
 What are the main systems that run the organization? consider financial and HR systems
as well as communications and document storage
 Where are the controls and how are they monitored and evaluated?
 What internal rules and processes does the team use to keep on track?
Shared Values
 What are the core values?

 What is the corporate/team culture
 How strong are the values?
 What are the fundamental values that the company/team was built on?
Style
 How participative is the management/leadership ship style?

 How effective is the leadership?
 Do employees/team members tend to be competitive or co-operative?
 Are there real teams functioning within the organization or are they just nominal
Structure
Reliance capital
RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE

GENERAL CONSUMER
MUTUAL LIFE MONEY
INSURANCE FINANCE
FUND INSURANCE

Departments of Reliance Capital
Reliance
Capital
Sales & Marketing Human Resource Operation Administratio Finance

Distribution Department Department Department n Department Department
Department
Administration Department
Administrators are basically facilitators of the company. They take care of all the facitating
activities of all the departments. They help in coordinating different activities in an organization
from selecting the location of the outlet to providing necessary infrastructure and maintaining the
same
Main activities of administration Department
 Selecting the location

 Providing with the required infrastructures like computers, furniture, fittings fixtures, air
conditioners etc
 Providing storage facility
 Looking after marketing, Branding, and Legal, Sales and Distribution, payment of
Salaries and other
Sales and Distribution
In Reliance Capital sales and distribution department plays an important role in the following
way
 Collecting the leads from the website, kiosks and trainees

 Contracting the clients through direct contact or mails

 Explaining the features of the product
 Explain about the essential documents.
 Facilitates the customers with the demo
Marketing Department
Marketing is the delivery of customer satisfaction at a profit. Marketing customer value and
satisfaction are the height therefore to fold gold marketing is to attract new customers by
promising superiors value and to keep current customers by delivering satisfaction.
In Reliance Capital Marketing highlights on
 Understanding customer needs and wants.

 Value satisfaction and quality.
 Products and services.
 Exchange, transfer and relationship.
Human Resource Department
HR adds considerable value when it creates a customer focused corporate culture. In Reliance
Capital they follow that HR professional must be highly knowledgeable of specific customer
issues, but also of key aspects of the micro-societal environment such as:
 Changing values.
 Nature problems and the challenges which are shared by the large segments of the
population.
 Structures of inter-personal relationship that influences buying process.
 Talent management.
HR functions in Reliance Capital:
 Talent acquisition.
 Talent development.
 Talent management.

Talent National Head Zonal Head Regional

Acquisition Head
Reliance Learning & National Head Zonal Head

Money Head Department
HR
Talent
Management
Operation Department
The role of operation department is to carry out the policies and underwriting works. The other
functions include performing the day to day activities as well as smooth functioning of enterprise
business.
Following are the important functions of the operations department of Reliance Capital
 Issuing the policies.

 Verification of the documents.
 Settling down the claims.
 Charges deduction.
 Dispatching the policy documents.
 Settling the customer’s problems.
 Making records related with the customers.
 Follow up.

Finance Department
Finance is the life blood of the organization it is one of the main departments in the company. To
run any organization it should have sufficient fund and it should carry the cost as minimum as
possible. The company may arrange required finance by the way of the equity fund or by way of
debt fund. Whatever it may be the ultimate goal of the finance department is to maximize that
value of the firm to its equity shareholders.
Responsibilities of Finance Department in Reliance Capital are:
 To provide account and complete systematic information of financial activities.

 To maintain all the books of account and other financial documents.
 To prepare periodic financial statements have the company like profit and loss account
and balance sheet.
The four main functions of Finance Department of Reliance Capital are:
 Financial decision
 Investment decision
 Dividend decision
 Capital structure decision
Skills
It means the actual skills and competencies of the employees working for the company and the
company it what the company does the distinctive capabilities and competencies that reside in
the organization. Reliance Capital is the best known for its network. It’s all India presence gives
a competitive look.
The company is doing well in adopting new products and services.
Style
All organization has their own management style. The style refers to how managers behave in an
organization and how collectively spent their time to achieve the organizational goal.
In Reliance Capital the leadership is not much effective as the groups are not performing as real
team. In the team also they have competition which affects the team culture.

Systems
The systems consist of formal and informal procedures, including innovation systems,
compensation systems. This system also includes data collection, storage and utilization record
and appraisal purposes. (Management Information System) i.e. reports of various departments,
financial information system i.e. marketing and sales information, employee information system.
Staff
The staff of Reliance Capital is divided into national head, regional head, zonal head, cluster
head and center manager.
Reliance Capital adopts various training facilities like:
 To upgrade the skills of the employees.
 To enable the employees to contribute towards organizational objectives.
 To facilitating self learning.
 The company has developed skills and expertise in sales and Marketing of Demat,
insurance, Reliance My Gold plan and other products.
Shared values
Shared values also refer to the values and beliefs of the company. The value helps the members
in the organization to achieve effective goals.
The Reliance Capital is committed to abide to the following values and responsibilities:
 Be lean, responsive and learning in organization.
 Continuously improve to achieve service to the customer.
 Ensure a common culture and a common set of values throughout the organization.
 Recognize individual’s contributions.
 Develop stronger leadership skills, greater teamwork and a global perspective.
SWOT Analysis
SWOT analysis means analysis of the internal strengths and weakness of the company and also
analysis of external opportunities and threats of the company.

Strength
 On line share trading.
 Low brokerage services.
 High speed trading.
 Brand name of the company.
 No hidden charges.
 Customer education center.
 Convenient and safe.
 Single – window access.
 Cost effective.
 Value-Added services.
Weakness
 No service in rural segment.
 For the intraday system automatically sell the shares at 3:20pm.

Opportunities
 More potential market.
 Awareness through media.
 Foreign direct investment and Foreign Institutional Investors in Indian markets.
Threats
 Market fluctuations.
 Government policies and war atmosphere from neighboring countries.
 Competition from bank and insurance sectors.
 Indian market is still in the infant stage in on line trading.
 Internet is not available in the major part of nation.

Part B Indian Financial Market

In economics, a finance market is a mechanism that allows people to buy and sell (trade)
financial securities (such as stocks and bonds), commodities (such as precious metals or
agricultural goods), and other fungible items of value at low transaction costs and at prices that
reflect the efficient-market hypothesis. Both general markets (where many commodities are
traded) and specialized markets (where only one commodity is traded) exist. Markets work by
placing many interested buyers and sellers in one “place”, thus making it easier for them to find
each other.
FINANCIAL MARKETS FACILITATE:

 The raising of capital (in the capital market )
 The transfer of risk (in the derivatives markets )
 International trade (in currency markets )
Typically a borrower issues a receipt to the lender promising to pay back the capital.
These receipts are Securities which may be freely bought or sold. In return for lending money to
the borrower, the lender will expect some compensation in the form of interest or dividends.
Types of Financial Market
Financial Markets
Capital Money Commodities Forex
Equity Derivatives Debt Bonds Energy Metals Bullion Agri

Capital Market
Capital market is a market for long-term investments (debt and equity shares). In this market, the
capital funds comprising of both equity and debt are issued and traded. This also includes private
placement sources of debt and equity as well as organized markets like stock exchanges. Capital
market includes financial instruments with more than one year maturity
Significance of Capital Markets
A well functioning stock market may help the development process in an economy through the
following channels:
1. Growth of savings,
2. Efficient allocation of investment resources,
3. Better utilization of the existing resources.
Money market
Money market is a wholesale debt market for low-risk, highly liquid, short term instrument.
Funds are available in this market for periods ranging from a single day up to a year. This market
is dominated mostly by Government, bank and financial institutions.
Commodity market
Commodity markets are markets where raw or primary products are exchanged. These raw
commodities are traded on regulated commodities exchanges, in which they are bought and sold
in standardized contracts.
Forex Market
The Forex market deals with multi currency requirements, which are met by exchange of
currencies. Depending on exchange rates that are applicable, the transfer of funds takes place in
this markets. This is one of the most developed and integrated market across the globe.
Ministry of Finance for Financial Market
SEBI
Mutual Venture Capital

funds capital funds Market

Macro Economic Terms
GROSS DOMESTIC PRODUCT – GDP

The monetary value of all the finished goods and services produced within a country’s
borders in a specific time period
GDP = C +G + I + NX
“C” Is equal to all private consumption, or consumer spending, in a nation’s economy

“G” is the sum of government spending
“I” is the sum of all the country’s businesses spending on capital
“NX” is the nation’s total net exports, calculated as total minus total imports.
(NX = export –imports)
GDP is commonly used as an indicator of the economic health of a country, as well as to
gauge a country’s standard of living. Critics of using GDP as an economic measure says the
statistic does not take into account the underground economy
INDUSTRIAL PRODUCTION INDEX / INDEX OF INDUSTRIAL PRODUCTION –
IPI / IIP
Index of industrial production (IIP) in simplest term is index which details out the growth
of various sectors in an economy. E.g. Indian IIP will focus on sectors like mining, electricity,
manufacturing & general.
INFLATION
In economics inflation means, a rise in general level of prices of goods and services in a
economy over a period of time. When the general price level rises, each unit of currency buys
fewer goods and services. Thus, inflation results in loss of value of money.
In case the price of say only one commodity rise sharply but prices of other commodities falls, it
will not be termed as inflation. Similarly, in case due to rumors if the price of a commodity rises
during the day itself, it will not be termed as inflation.

Broadly speaking inflation is divided into two categories i.e.

(a) DEMAND - PULL INFLATION: In this type of inflation price increase results from an
excess of demand over supply for the economy as a whole. Demand inflation occurs when
supply cannot expand any more to meet demand; that is, when critical production factors are
being fully utilized, also called Demand inflation.
(b) COST - PUSH INFLATION: This type of inflation occurs when general price levels rise
owing to rising input costs. In general, there are three factors that could contribute to Cost-Push
inflation: rising wages increases in corporate taxes, and imported inflation. [imported raw or
partly-finished goods may become expensive due to rise in international costs or as a result of
depreciation of local currency]
Indian financial market
Money market Capital market Commodity

market
Debt market Equity market

CAPITAL MARKET
Capital Market may be defined as a market dealing in medium and long-term funds. It is
an institutional arrangement for borrowing medium and long-term funds and which provides
facilities for marketing and trading of securities. So it constitutes all long-term borrowings from
banks and financial institutions, borrowings from foreign markets and raising of capital by issue
various securities such as shares debentures, bonds, etc.
The market where investment instruments like bonds, equities and mortgages are traded
is known as the capital market. The primal role of this market is to make investment from
investors who have surplus funds to the ones who are running a deficit.
The market where securities are traded known as Securities market. It consists of two
different segments namely primary and secondary market. The primary market deals with new or
fresh issue of securities and is, therefore, also known as new issue market
THE CAPITAL MARKET FINANCIAL INSTRUMENTS:

 Equity instruments
 Credit market instruments,
 Insurance instruments,
 Foreign exchange instruments,
 Hybrid instruments an
 Derivative instruments.
NATURE OF CAPITAL MARKET

The nature of capital market is brought out by the following facts:
 It Has Two Segments
 It Deals In Long-Term Securities
 It Performs Trade-off Function
 It Creates Dispersion In Business Ownership

 It Helps In Capital Formation

 It Helps In Creating Liquidity
TYPES OF CAPITAL MARKET

There are two types of capital market:
 Primary market
 Secondary market
PRIMARY MARKET

Primary capital market- A market where new securities are bought and sold for the
firsttimeIt is usually done through privateplacement to friends, relatives and financial institutions
or by making public issue. In anycase, the companies have to follow a well-established legal
Procedure and involve a numberof intermediaries such as underwriters, brokers, etc. who form
an integral part of theprimary market. You must have learnt about many initial public offers
(IPOs) made recentlyby a number of public sector undertakings such as ONGC, GAIL, NTPC
and the privatesector companies like Tata Consultancy Services (TCS), Biocon, Jet-Airways and
so on.It is that market in which shares, debentures and other securities are sold for the first time
for collecting long-term capital.
FEATURES OF PRIMARY MARKET

 It Is Related With New Issues
 It Has No Particular Place
 It Has Various Methods Of Float Capital
Following are the methods of raising capital in the primary market:

 Public Issue
 Offer For Sale
 Private Placement
 Right Issue
 Electronic-Initial Public Offer

SECONDARY MARKET
It provides a place where these securities can be enchased without anydifficulty and
delay. It is an organized market where shares and debentures are tradedregularly with high
degree of transparency and security. In fact, an active secondary marketfacilitates the growth of
primary market as the investors in the primary market are assuredof a continuous market for
liquidity of their holdings.
FUNCTION OF SECONDARY MARKET

 The secondary market is that market in which the buying and selling of the previously
issued securities is done.
 The transactions of the secondary market are generally done through the medium of stock
exchange.
 The chief purpose of the secondary market is to create liquidity in securities.
 If an individual has bought some security and he now wants to sell it, he can do so
through the medium of stock exchange to sell or purchase through the medium ofstock
exchange requires the services of the broker presently, there are 24 stock exchanges in
India.

FEATURES OF SECONDARY MARKET

 It Creates Liquidity
 It Comes After Primary Market
 It Has A Particular Place
 It Encourage New Investments
ROLE OF CAPITAL MARKET

The primary role of the capital market is to raise long-term funds for governments, banks,
and corporations while providing a platform for the trading of securities. This fundraising is
regulated by the performance of the stock and bond markets within the capital market. The
member organizations of the capital market may issue stocks and bonds in order to raise funds.
Investors can then invest in the capital market by purchasing those stocks and bonds.
The capital market, however, is not without risk. It is important for investors to
understand market trends before fully investing in the capital market. To that end, there are
various market indices available to investors that reflect the present performance of the market.
REGULATION OF THE CAPITAL MARKET

Every capital market in the world is monitored by financial regulators and their
respective governance organization. The purpose of such regulation is to protect investors from
fraud and deception. Financial regulatory bodies are also charged with minimizing financial
losses, issuing licenses to financial service providers, and enforcing applicable laws.

THE CAPITAL MARKET’S INFLUENCE ON INTERNATIONAL TRADE

Capital market investment is no longer confined to the boundaries of a single nation.
Today’s corporations and individuals are able, under some regulation, to invest in the capital
Market of any country in the world. Investment in foreign capital markets has caused substantial
enhancement to the business of international trade.
THE PRIMARY AND SECONDARY MARKETS

The capital market is also dependent on two sub-markets – the primary market and the
secondary market. The primary market deals with newly issued securities and is responsible for
generating new long-term capital. The secondary market handles the trading of previously-issued
Securities ,and must remain highly liquid in nature because most of the securities are sold by
investors. A Capital market with high liquidity and high transparency is predicated upon a
secondary market with the same qualities.
ROLE OF CAPITAL MARKET IN INDIA:

India’s growth story has important implications for the capital market, which has grown
sharply with respect to several parameters — amounts raised number of stock exchanges and
other intermediaries, listed stocks, market capitalization, trading volumes and turnover, market
instruments, investor population, issuer and intermediary profiles.
The capital market consists primarily of the debt and equity markets. Historically, it
contributed significantly to mobilizing funds to meet public and private companies’ financing
requirements. The introduction of exchange-traded derivative instruments such as options and
futures has enabled investors to better hedge their positions and reduce risks.
Debt and equity markets raised from 75 per cent in 1995 to 130 per cent of GDP in
2005.But the growth relative to the US, Malaysia and South Korea remains low and largely
skewed, indicating immense latent potential. India’s debt markets comprise government bonds
and the corporate bond market (comprising PSUs, corporate, financial institutions and
banks).India compares well with other emerging economies in terms of sophisticated market

design of equity spot and derivatives market, widespread retail participation and resilient
liquidity.
SEBI’s measures such as submission of quarterly compliance reports and company
valuation on the lines of the Sarbanes-Oxley Act have enhanced corporate governance. But
enforcement continues to be a problem because of limited trained staff and companies not being
Subjected to substantial fines or legal sanctions. Given the booming economy, large skilled
labour force, reliable business community, continued reforms and greater global integration
vindicated by the investment-grade ratings of Moody’s.
FACTORS AFFECTING CAPITAL MARKET IN INDIA

The capital market is affected by a range of factors. Some of the factors which influence
capital market are as follows:-
A) PERFORMANCE OF DOMESTIC COMPANIES:-

The performance of the companies’ or rather corporate earnings is one of the factors
which have direct impact or effect on capital market in a country. Weak corporate earnings
indicate that the demand for goods and services in the economy is less due to slow growth in Per
capita income of people. Because of slow growth in demand there is slow growth in Employment
which means slow growth in demand in the near future. Thus weak corporate earnings indicate
average or not so good prospects for the economy as a whole in the near term. In such a scenario
the investors (both domestic as well as foreign) would be wary to invest in the capital market and
thus there is bear market like situation. The opposite case of it would be robust corporate
earnings and its positive impact on the capital market. The corporate earnings for the April –
June quarter for the current fiscal has been good.
The companies like TCS, Infosys, Maruti Suzuki, Bharti Airtel, ACC, ITC, Wipro,
HDFC, Binani Cement, IDEA, Marico Canara Bank, Primal Health, India cements, Ultra Tech,
L&T, Coca-Cola, Yes Bank, Dr. Reddy’s Laboratories, Oriental Bank of Commerce, Ranbaxy,
Fortis, Shree Cement ,etc have registered growth in net profit compared to the corresponding
Quarter a year ago. Thus we see companies from Infrastructure sector, Financial Services,

Pharmaceutical sector, IT Sector, Automobile sector, etc. doing well. This across the sector
growth indicates that the Indian economy is on the path of recovery which has been positively
reflected in the stock market (rise in sensex& nifty) in the last two weeks. (July 13-July 24).
B) ENVIRONMENTAL FACTORS:-
Environmental Factor in India’s context primarily means- Monsoon. In India around 60
% of Agricultural production is dependent on monsoon. Thus there is heavy dependence on
monsoon. The major chunk of agricultural production comes from the states of Punjab, Haryana
&Uttar Pradesh. Thus deficient or delayed monsoon in this part of the country would directly
affect the agricultural output in the country. Apart from monsoon other natural calamities like
Floods, tsunami, drought, earthquake, etc. also have an impact on the capital market of a country.
The Indian Met Department (IMD) on 24th June stated that India would receive only 93
%rainfall of Long Period Average (LPA). This piece of news directly had an impact on Indian
capital market with BSE Sensex falling by 0.5 % on the 25th June. The major losers were
automakers and consumer goods firms since the below normal monsoon forecast triggered
concerns that demand in the crucial rural heartland would take a hit. This is because a deficient
monsoon could seriously squeeze rural incomes, reduce the demand for everything from
motorbikes to soaps and worsen a slowing economy.
C) MACRO ECONOMIC NUMBERS:-
The macroeconomic numbers also influence the capital market. It includes Index of
Industrial Production (IIP) which is released every month, annual Inflation number indicated by
wholesale Price Index (WPI) which is released every week, Export – Import numbers which are
declared every month, Core Industries growth rate ( It includes Six Core infrastructure industries
– Coal, Crude oil, refining, power, cement and finished steel) which comes out every month, etc.
This macro –economic indicators indicate the state of the economy and the direction in which the
economy is headed and therefore impacts the capital market in India. A case in the point was
declaration of core industries growth figure. The six Core Infrastructure Industries – Coal, Crude
oil, refining, finished steel, power & cement –grew 6.5% in June; the figure came on the 23 rd of

July and had a positive impact on the capital market with the Sensex and nifty rising by 388
points & 125 points respectively.
D) GLOBAL CUES:-
In this world of globalization various economies are interdependent and interconnected.
An event in one part of the world is bound to affect other parts of the world; however the
magnitude and intensity of impact would vary. Thus capital market in India is also affected by
developments in other parts of the world i.e.U.S., Europe, Japan, etc.
Global cues includes corporate earnings of MNC’s, consumer confidence index in developed
countries, jobless claims in developed countries, global growth outlook given by various
agencies like IMF, economic Growth of major economies, price of crude –oil, credit rating of
various economies given by Moody’s, S & P, etc.An obvious example at this point in time would
be that of subprime crisis & recession. Recession started in U.S. and some parts of the Europe in
early 2008 .Since then it has impacted all the countries of the world- developed, developing, and
less- developed and even emerging economies.
E) POLITICAL STABILITY AND GOVERNMENT POLICIES:-

For any economy to achieve and sustain growth it has to have political stability and pro-
growth government policies. This is because when there is political stability there is stability and
consistency in government’s attitude which is communicated through various government
policies. The vice- versa is the case when there is no political stability .So capital market also
reacts to the nature of government, attitude of government, and various policies of the
Government. The above statement can be substantiated by the fact the when the mandate came in
UP government’s favor ( Without the baggage of left party) on May 16 2009, the stock markets
on Monday , 18th May had a bullish rally with Sensex closing 800 point higher over the previous
day’s close. The reason was political stability. Also without the baggage of left party government
can go ahead with reforms.

F) GROWTH PROSPECTUS OF AN ECONOMY:-

When the national income of the country increases and per capita income of people
increases it is said that the economy is growing. Higher income also means higher expenditure
and higher savings. This augurs well for the economy as higher expenditure means higher
demand and higher savings means higher investment. Thus when an economy is growing at a
good pace capital market of the country attracts more money from investors, both from within
and outside the country and vice -versa. So we can say that growth prospects of an economy do
have an impact on capital markets.
G) INVESTOR SENTIMENT AND RISK APPETITE:-

Another factor which influences capital market is investor sentiment and their risk
appetite. Even if the investors have the money to invest but if they are not confident about the
returns from their investment, they may stay away from investment for some time. At the same
time if the investors have low risk appetite, which they were having in global and Indian capital
market some four to five months back due to global financial meltdown and recessionary
situation in U.S. & some parts of Europe, they may stay away from investment and wait for the
right time to come.
RECENT DEVELOPMENT IN INDIAN CAPITAL MARKET
 NEW MEASURES OF RISK MANAGEMENT SYSTEM IN INDIAN CAPITAL

MARKET
Every shareholder or investor wants to protect his investment and promote it as his source
of earning. So, my always concentration is on new measures the Risk management system of
SEBI which is the controller of Indian Capital Market. SEBI did several steps in this regards.

{A} MEASURES FOR REDUCING PRICE VOLATILITY

Price volatility is the relative rate at which the price of a security moves up and down.
But this technique of profit maximization which is used by bad guys for wrong purposes. They
buy shares at very cheap rates and sell when overpriced. Because, they get idea of trend of next
price. This is another recent development in Indian Capital Market. We all know an excessive
speculation is always risky for every investor. For reducing it, SEBI has introduced place circuit
breakers.
{B}CIRCUIT BREAKER
The system which stops to trade in stock market when prices move after a specific level.
For example, if a stock is at Rs. 100 and circuit breaker is fixed at 5%, then stock trading will
stop if it hit of Rs. 95 or Rs. 105. There are mainly two types of circuit breakers. One is index
wise circuit breakers and other is stock wise circuit breakers.
{C} INTRADAY TRADING LIMIT

Intraday Trading, also known as Day Trading, is the system where you take a position on
a stock and release that position before the end of that day's trading session. Thereby making a
profit for you in that buy-sell or sell-buy exercise.
{D} MARK TO MARKET MARGIN

MTM margin is imposed to cover loss that a member may incur, in case the transaction is
closed out at a closing price different from a price at which the transaction has been entered. It is
just collection in cash for all futures contracts and adjusted against the available Liquid Net
worth for option positions. In the case of futures Contracts MTM may be considered as Mark to
Market Settlement.

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History of Indian Stock Market

KLE’S College of Business Administration Lingaraj College Belgaum Page 1

The capital market is divided into two segments viz:

KLE’S College of Business Administration Lingaraj College Belgaum Page 2

KLE’S College of Business Administration Lingaraj College Belgaum Page 3

stock exchange governance, screen based trading, compression of settlement cycles,

The NSE was set-up with the following objectives:

Background & Inception of Reliance Capital

KLE’S College of Business Administration Lingaraj College Belgaum Page 4

Nature of business carried

Reliance Capital, branded as ‘Reliance Money’has a comprehensive financial services and

KLE’S College of Business Administration Lingaraj College Belgaum Page 5

Vision, Mission and Quality policy

To become a world class diversified financial services

To broaden its ability to deliver comprehensive financial

Creatively involved in providing high quality products and services through:

 Responsiveness to customer needs.

 Provision of work satisfaction and promising careers.

 Constant measurement and monitoring of all operations.

 Continuous improvements of procedures, products and services.

 Performance of operations in a responsible manner.

KLE’S College of Business Administration Lingaraj College Belgaum Page 6

Products and service profile

KLE’S College of Business Administration Lingaraj College Belgaum Page 7

Scale of Operation ON 31 March 2011 ON 31 March 2012

Reliance Capital has over 96 offices all over India.

Overseas branch of Reliance

KLE’S College of Business Administration Lingaraj College Belgaum Page 9

Shri Anil D. Ambani, regarded as one of the foremost corporate leaders of

 Board of Governors, Indian Institute of Management (IIM), Ahmedabad

 Executive Board, Indian School of Business (ISB), Hyderabad

KLE’S College of Business Administration Lingaraj College Belgaum Page 10

 Trading in Shares and Funds

 Investing in Mutual funds Derivatives

 IPO’s and bonds online

 Risk analyzer and asset Allocator

 Equity and Derivatives Trading

KLE’S College of Business Administration Lingaraj College Belgaum Page 11

 Trading in Equity Derivatives

 Mutual Funds and IPO

 Weekly Derivative future report

 Research and charting

 Easy equity and derivatives

 Easy mutual fund

KLE’S College of Business Administration Lingaraj College Belgaum Page 12

The Reliance capital Ltd located in Belgaum: congress road

The company has rented property

Total area rented by the company is located: 2000 square feet

Built in area of the company: 2000 square feet

Awards and Achievements

KLE’S College of Business Administration Lingaraj College Belgaum Page 13

Work flow model

KLE’S College of Business Administration Lingaraj College Belgaum Page 14

Future growth & prospects

Future Prospects of Reliance Capital

KLE’S College of Business Administration Lingaraj College Belgaum Page 15

KLE’S College of Business Administration Lingaraj College Belgaum Page 16

Hard & Soft Elements:

KLE’S College of Business Administration Lingaraj College Belgaum Page 17

 What positions or specializations are represented within the team?

 What are the strongest skills represented withinthe company/team?

KLE’S College of Business Administration Lingaraj College Belgaum Page 18