Professional Documents
Culture Documents
1.CHAPTER-I
INTRODUCTION
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Online share trading is a service offered on the internet for purchase and
sale of shares. In the real world, one place orders on your stockbroker either
verbally (personally or telephonically) or in a written form (fax). In online
trading, one can access a stockbroker’s website through internet-enabled PC and
place orders through the broker’s internet based engine. These orders are routed
to the stock exchange without manual intervention and executed thereon in
matter of a few seconds.
Many companies have used the internet to increase their reach to bring the
convenience and access to the doorstep of the customers. Financial service
sector was no different. E-brokers have used the net lubricant the entire
investment process so as to speedup and increase the reach of E-broking
services. Online trading is essentially an extension of e-shopping experience.
NEAT System
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1. DEMAT(DEMATERIALISATION)
• Less paper work and the resultant cost saving, your corporation and the
country as a whole.
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2. Demat A/C
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3. Depository
4. DP (Depository Participant)
ICICI Direct
Share khan
5paisa.com
HDFC sec.
This is the account through which actual trading i.e. buying and selling
takes place.
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BACKGROUND OF TOPIC:-
Now, plenty of "common" people own stock. Online trading has given
anyone who has a computer, enough money to open an account and a
reasonably good financial history the ability to invest in the market. You don't
have to have a personal broker or a disposable fortune to do it, and most
analysts agree that average people trading stock is no longer a sign of
impending doom. The market has become more accessible, but that doesn't
mean you should take online trading lightly.
To develop an online share trading system, the first thing that you r going
to need if you do not already have one is computer. Learning how develop an
online share trading system can become a very painful and costly process if the
two critical steps are skipped. Securing adequate capital and creating a business
plan.
Not beginning their share trading career with enough money is the
biggest mistake new traders make; just like new businesses in general that are
just starting up. Failure to prepare to business plan and stick to it ranks a close
second to undercapitalization as biggest reason new, inexperienced stock traders
go bust so quickly. Well prepared and thoroughly thought out, your business
plan is actually going to be your online share trading system. The strategy of the
plan should be implemented before the first share is traded.
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COMPANY PROFILE:-
SPEED
CONVENIENCE
You can trade with Company online or on the phone from the
convenience of your home or office. Use the 3-in -1 account to seamlessly move
fund and securities across your bank, demat and trading account.
TRANSPARENCY
With our trusted pedigree, you can be assured that u get the best services
in a transparent manner. Total control of funds and stocks of investor.
EXPERTISE
CUSTOMER INTEREST
COMPANY OFFERINGS
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Basically my need of the study was know the all technical factor of stock
exchange and future prospect of investment market.
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The scope and limitation of the study are briefly discussed below:
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The study was conducted within Pune Region so the findings are
restricted to this region only.
On the whole, the scope of the study was more than the limitations of the
study.
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To know and work Invest in a good company and get a good return as
the company grows.
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2.CHAPTER-II
CONCEPTUAL BACKGROUND
OF THE STUDY
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The financial services sector has kept pace with the growing needs of
corporate and other borrowers, banks, capital market participants, insurers and
mutual fund companies have developed a wide range of products and services to
suit varied customer requirements. The Reserve Bank of India (RBI) has
successfully introduced a regime where interest rates are more in line with
market forces. Financial institutions have combated the reduction in interest
rates and pressure on their margins by constantly innovating and targeting
attractive consumer segments. Banks and trade financiers have also played an
important role in promoting foreign trade of the country.
Capital Markets:
The Indian capital markets have undergone a substantial change over the
last decade. The market has also witnessed substantial progress in terms of
regulatory reforms, application of technology to trading and settlement, and
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sophistication listed securities including single stock futures and options. These
have been accompanied by an accelerated growth in trading volumes, with BSE
and NSE combined average daily turnover expanding approximately from
Rs.4800 million in 1995-96 to approximately Rs.232, 094 million in April 2004.
India is now placed among the mature markets of the world. With over 20
million shareholders, India has the largest investor base in the world after USA
and Japan. Regulatory changes, increased capital requirement, greater customer
sophistication and application of technology have forced the brokerage industry
to consolidate. Over the last 7 years, the market share of the top 5 brokers has
increased from 6% (1998-99) to 15% (December, 2006), with most of the
consolidation coming in the last 2 years.
The consolidation in the online business is even greater, with the top 5
players owning more than 90% of the market. This consolidation is expected to
continue, and provide an opportunity for the top broker to own 15% market
share or more over the next 3-4 years.
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• NSE, which in the recent past has accounted for the largest trading
volumes, has a fully automated screen based system that operates
in the wholesale debt market segment as well as the capital market
segment.
As the Indian capital markets are evolving, they are undergoing rapid
consolidation spurred primarily due to continuous increase in capital
requirements, increased regulatory oversight, customer sophistication,
availability of technology to provide high quality service to a large customer
base increased back-office requirements.
The margin requirements for exposure and mark to market have increased
as the regulator and major exchanges enhance the risk management processes
and system in order to be in line with global practices. Moreover the shorter
settlement cycle has required stronger back office capabilities thus necessitating
heavy capital investments. From T+5 settlement regime till 2000, markets are
now in T+2 regime.
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Share trading in India, until the arrival of online brokerages in about 2000
or so, was like driving on Indian roads. It was familiar story of might is right,
big trucks (brokers) ruled the market and there were potholes and pitfalls in the
shape of bad deliveries, dishonoured contracts, fakes and what not. Unlike the
highways, which have remained out of the reach of the aam admi, the share
markets have changed. Somewhere in the nineties there was a whole move into
the digital world at the NSDL. Then trading became electronic. First it was a
few of the blue chips, then it was most of the blue chips and slowly it has taken
over most of the market. New issues are today, exclusively electronic. If
digitisation took care of the back end, it has also made life easy at the front end.
In the physical delivery world, one had to talk to a broker who told you
the quotes. There was no way of knowing if the quote was right. There was no
way of knowing if your trade was made, especially if you made a good call
(Bad calls, almost inevitably got made). The broker could say that this was the
best price I got and nobody would be wiser. You would not know if the shares
came from his account or from the market. You would not know if the shares
were fake or unsigned, as it happened sometimes.
All this and more were true for the small investor. Odd lots, which were
inevitably awarded during splits, mergers were as good as stocks which would
never got sold or the broker would purchase them at a price way below the
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market price. Starting at about 2pct, online trading forms about 10pct in terms
of volume. Some of these have gone on to become the biggest “brokers” in
India. It has opened the market to a whole segment of people. Earlier, investing
in shares till they wanted money. Now, not only has online trading made life
easier for these people, it has opened up investing and trading to segments that
never before participated in it.
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system (Badla). The ‘F’ group represent the dept market (fixed income
securities) segment. The ‘Z’ group scrip is the blacklisted companies. The ‘C’
group covers the odd lot securities in ‘A’, ‘B1’, & ‘B2’ groups and rights
renunciations. The key regulator governing stock exchanges, brokers,
depositories, depository participants, mutual funds, FIIs and other participants
in Indian Secondary and primary market is the Securities and Exchange Board
of India (SEBI) Limited.
About 400 schemes of mutual funds with total asset base of nearly
US $ 22 billion.
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BSE INTRODUCTION:
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NSE INTRODUCTION:
The National Stock Exchange of India Limited has genesis in the report
of the High powered Study Group on Establishment of New Stock Exchanges,
which recommended promotion of a National Stock Exchange by financial
institutions (FIs) to provide access to investors from all across the country on an
equal footing. Based on the recommendations, NSE was promoted by leading
Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paying company unlike other stock
exchanges in the country. 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.
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You have some money to dabble with. Trading shares on BSE/NSE has
always been your dream. When will you ever find the time? And besides, the
hassle of finding a broker is not easy.
There are 2 types of online trading service: discount brokers and full
service online broker. Discount online brokers allow you to trade via Internet
at reduced rates. Some provide quality research, other don’t. Full service
online brokerage is linked to existing brokerages. These brokers allow their
clients to place online orders with the option of talking/chatting to brokers if
advice is needed. Brokerage rates here are higher. 5paisa.com,
ICICIDirect.com, IndiaBulls.com, Sharekhan.com, Geojit securities.com,
HDFCsec.com, Tatatdw.com, Kotakstreet.com are some of the online
broking sites in India.
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1.BSE Trading Y Y
2.NSE Trading Y Y
3.Margin Trading Y Y
4.Telephonic Trading Y Y
5.Online Trading Y N
6.Mutual Funds Y N
7.Derivaties Y Y
8.Govermenat securities & Bonds Y N
9.Personal Finance Y N
10. Insurance Y N
11. Multiple Broking A/C Y N
Who can open an A/C?
1.Individuals Y Y
2.HUF Y Y
3.Paartnership Firm Y Y
4.Company N N
5.NRI Y N
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Note: - Y: Yes
N: No
COMPTITIVE ANALYSIS
The major players in online trading:
• ShareKhan.com
• 5paisa.com
• KotakStreet.com
• IndiaBulls.com
• ICICIDirect.com
• HDFCsec.com
SHAREKHAN.COM
Company Background:
• Share khan is the retail broking arm SSKI Securities Pvt Ltd. SSKI owns
56% in Share Khan; balance ownership is HSBC, First Caryle, and Intel
Pacific.
5PAISA.COM
Company Background:
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Investor Terminal
e) Brokerage:
Trader Terminal
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KOTAKSTREET.COM
Company Background:
• Free Way: Flat Rs 999 Cover charge p.m. 0.03% per transaction.
For Kotak Fast Lane/ Keat Lite / Keat Desktop are trading interfaces. Keat
Desktop with advanced tools comes at a charge of Rs 500 p.m. Non refundable.
Pricing Of Kotak:
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e) Brokerage Slab wise: Higher the volume, lower the brokerage. Even
older customer (on0.25%&0.40%)have been moved to the slab wise
structure.
INDIABULLS
Company Background:
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Pricing Of IndiaBulls:
b) Demat: Rs200
d) Brokerage: Negotiable
b) Demat: Rs 200
d) Brokerage: Negotiable
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ICICI Direct
Company Background:
Account Types:
1. Cash on spot
2. Margin plus
c) Demat: NILL, 1st year charges included in account opening plus a facility
to open additional 4 DP’s without 1st year AMC. Only Rs 100 as linking
charges per DP.
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HDFC SECURITIES
Company Background:
HDFC Securities Ltd, is promoted by the HDFC Bank, HDFC and Chase
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• HDFC Online Trading A/C: Plain Vanilla Account with focus on 3in 1
advantage.
d) Brokerage:
• Min Brokerage Rs 15
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Competitor’s Rate
In-house,
Geojit Intraday:0.03 Rs 500 Free outsourced, 2.45 pm
Delivery:0.3 SMS,Daily
e-mail
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3.CHAPTER-III
RESEARCH METHODOLOGY:
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METHODOLOGY OF STUDY:-
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Data Sources:
The sources of data collection arc primarily categories are two types they
are as follows:
O Primary Data
O Secondary Data
Primary data:
Primary data is the first hand information, which is carried as for even
project report. Primary data can be collected by various ways, they are as
follows:
O Questionnaire
O Summary
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Secondary Data:
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SAMPLE DESIGN:
The area selected by me for the actual marketing of the project was
Market Yard, Camp, Swarget, Tilak Road, Vadgaon, Pune-Satra Road, Deccan,
FC road, Koregaon park, D P Road, Viman Nagar, AUNDH. My basic
objective was to find awareness of online share trading in these areas. The
survey was conducted to analyze the prospective customer awareness for
various online trading services available in the market. For this purpose I
designed a questionnaire under the guidance of Miss Rashmi singh to conduct
the survey.
Probability sampling:-
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Sampling size:-
Large sample gives reliable result than small sample. However, it is not
feasible to target entire population or even a substantial portion to achieve a
reliable result. So, in this aspect selecting the sample to study is known as
sample size. Hence, for my project my sample size was 210.
The Sample Size of 210 is not enough to draw a conclusion but as per
the time assigned it was difficult to take a sample size more than 210.
The Sample Size consists of both the Professional and Business class
people. IT peoples, Doctors, Jewellers, Timber Merchants & Real estate
Agents are taken as Sample.
Region.
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There was secondary data available for the study and also primary data
collected by carrying out by the survey which has been carried out to through
personal interviews of the customers. The sample size was roughly 210.
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a. Preparation of questionnaire.
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4.CHAPTER-IV
ANALYSIS,PRESENTATION AND
INTERPRETATION OF THE DATA
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The survey was conducted in the above mentioned different areas in pune. The
total numbers of areas were 12 which included 210 people from various
categories.
In the survey involvement of male was 76% and of females it was 24%. This
represented the growing numbers of women in the trading process.
In the survey, it was found that out of 210 people 196 know the equity and
derivative and derivative market i.e. 93% awareness was there amongest the
people.
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In the survey it was found that out of 210 people,182 were aware of the online
share trading i.e. 87% of awareness was found amongst the people.
The survey showed 95% of people preferred to go for online share trading this
is because of the ease, transparency and speed of online trading while rest of 5%
of people preferred to go for traditional sahre trading.
4. Are you aware of the companies which provides online share trading?
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In the survey it was found that 78% of the people were found to be awere of the
major online trading firms in Pune.
In the survey it was found that out of 210 people only 145 people were familiar
with concepts of the e-broking i.e. 69% people. This familiarity was mostly
amongst the professionals followed by business class people and the rest.
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The main feature which fascinated the surveyed people is time saving in
online share trading, then the transparency in the operating concepts of online
trading helped to know about the transactions that were made during trading.
Hassle free and economical were the features which fascinated the people but
with less favor shown in it.
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In the survey it was found that most of the people invested in the equity
which contributes to 47%, investment in derivative was around 20%, and
commodity it was 17% investment. While investment in mutual funds was
around 9% and rest 7% of people were not investing in anything.
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In the survey diffrent areas were selected in pune Region and the
participation of various kind of people included business class, professionals,
student, housewife and others which inclyded retired people,Goverment
employee etc.so the major number of people were from professional category
i.e.43% followed by business class 30% and the rest of the other categories.
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5.CHAPTER-V
FINDINGS,SUGGESTIONS
AND CONCLUSION
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Findings
People are aware of these online service providers like HDFC Securities,
With advent of IT people are using mostly online services. And they
referred various website of the services provides to get conversant with
online concepts.
95% people said that they prefer online trading and rest opted for
traditional one.
The reason behind people opting for traditional system of trading are:-
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Business class which can be defined as the people who are self employed
entrepreneurs are found to take interest in online trading.
The others, which can be, defined as the people who are below Rs 20,000
incomes per month and which rarely trade or make small transactions are
very unwilling to go online, as they cannot afford the service charges.
Therefore in all the response towards online system was positive and is
gaining more importance in the minds of people for its functioning aspect
and people showing interest because there is more transparency in online
share trading.
Suggestions
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Although people have heard about online trading of securities still have
great doubts about its operational feasibility, as they are not clear about
the concept. Special awareness programs using various media mixes
should be carried out to remove fear from the mind of people and make it
familiarize. Word to mouth publicity would be the ideal medium.
There is demand for services like insurance, mutual funds and other
capital market instruments. Some other E- trading company if offering
this like India Bulls. Introduction of these products will surely increase
the number of registrations.
Conclusion
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Internet has changed the way the retail investor invests. Stock prices,
volume information, investment tools, technical analysis is at his fingertips.
Many sites offer a spot review of news breaks and results analysis, which help
investor to form an opinion on particular stock. As the world is networked with
the web you can consult with experts from across cities states. As the internet is
flooded with information, an overload, its imperative that you learn to figure out
which information is useful and which is not.
Internet made the securities market as transparent for investors as it was for
sophisticated professionals and investments gurus in the market.
The biggest impact of internet was that it made a large amount of
information available “out there.” Gone are the days when the key financial
data that investors need to make informed and profitable decisions was
available only to the lucky few “on the inside”. Now the turnover and profit
figures, brokers forecast, details of how and why company directors buy
shares and all the rest of it are just a few mouse click away for everybody.
Small trades could be executed at a fraction of the cost that was previously
Charged to customer for similar trades. This encouraged a number of small
investor to invest the money they can spare from the banks into share market.
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Common Issues:
The spread of PCs and telephony infrastructure determines the growth of e-
business. This might be a non issue in developed countries,but in developing
countries, it is still the availability of PCs, download speed and reliability of
telephony services that determines the success of e-business and hence
online stock broking.
High competition among stock brokers has put significant pressure in the
prices.
Market consolidation and mergers are expected to keep the broking industry
viable in the long run.
Efficient comparison shopping is now available for retail customers who
always look out for faster and cheaper alternatives.
Demanding customers expert 24/7/365 transaction capability, instant access
to information, immediate delivery and customers service. Providing all
these with minimum overheads requires innovative ways to cut costs.
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BIBLIOGRAPHY
Books Referred:
• Financial market:
By L. M. BHOLE
• Research Methodology
By C. R. Kothari
Websites:
• www.bseindia.com
• www.sebi.com
• www.nse.com
• www.hdfcsec.com
• www.icicidirect.com
• www.sharekhan.com
ANNEXURE
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Dear Respondents,
Kindly fill the questionnaire; it will not take much of your time. We
will be highly obliged for your kind cooperation. Please respond on this address
amitmaxmonu@yahoo.co.in.
HDFC SECURITIES
Hdfcsec.com
Phone:-020-26286700
Personal Information
1. Name:-
2. Email(optional):-
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Questionnaire
1. Do you know equity/derivative market?
( ) Yes ( ) No
( ) Yes ( ) No
( ) Yes ( ) No
4. Are you aware of the companies which provides online share trading?
( ) Yes ( ) No
( ) Yes ( ) No
( ) Yes ( ) No
( ) Yes ( ) No
( ) Intraday ( ) Delivery
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