A

PROJECT REPORT
On
CONSUMER PERCEPTION ON EQUITY INVESTMENT BY INDIA
INFOLINE, BHUBANESWAR (SPECIAL REFERENCE TO STEEL
SECTOR)

At India infoline Ltd., Bhubaneswar

Projected report submitted for partial fulfillment of degree course in
Master of Finance and Control, Utkal University

Session 2009-11
Submitted by

Bibhuti bhusan naik

Roll number: 13767u092008

EXTERNAL GUIDE: INTERNAL GUIDE:

Mr.Sibajee Meher Mrs. Anamika Pattanaik

Relationship manager Faculty of finance

India Infoline Ltd. Arya School Of management & IT

Bhubaneswer Bhubaneswer
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to all those who have given their
valuable time, guidance, support & inspiration to undertake this challenging
work.

I must acknowledge my deep gratitude to Mr.Sibajee Meher, Relationship

Manager, India infoline Ltd, BBSR for giving me his valuable time &
necessary information for fulfillment of this project into its final shape.

I would also thankfully express my gratitude to Mrs. Anamika Pattanayak,

faculty of finance, ASMIT, BBSR and the entire faculty member who guided
me & provide their valuable time for preparation of this project report in time.

Lastly I thanks to my friends who have helped me in completion of this

project.

Bibhuti Bhusan Naik

 Roll No: 13767U093008

DECLARATION

I Mr. BIBHUTI BHUSAN NAIK do here declare that, this project report on
EQUITY INVESTMENT with special reference to India Infoline Ltd
submitted by me in ARYA SCHOOL OF MANAGEMENT AND
INFORMATION TECHNOLOGY (ASMIT), Bhubaneswar from Utkal
University is true to the best of my knowledge.

I declared that this project has not been submitted anywhere for any other
purpose except in ASMIT, BBSR.

Date: Name: BIBHUTI BHUSAN NAIK

Place: roll number: 13767U093008

CONTENTS
Chapter 1………………………………………………………………
 Introduction

 Place of Study

 Objective of the study

 Scope of Study

 Methodology

 Limitation

Chapter 2.................................................................................................
 Industry profile

 Company profile

Chapter 3……………………………………………………………….
 Review of literature……………………………………………………..

 Investment…………………………………………….

 Different investment option………………………….

 Equity investment…………………………………….

 Different analysis…………………………………….

 Role of market trends…………………………………

 Role of demat account……………………………….

Chapter 4……………………………………………………………….
 Data analysis and interpretation
Chapter 5……………………………………………………………….
 Findings……………………………………………………………………

 Suggestion ……………………………………………………………………

 Conclusion………………………………………………………………….

Chapter 6……………………………………………………………….
 Bibliography

PREFACE
Investment is the employment of funds on assets with the aim of earning
income or capital appreciation. Investment has two attributes namely time
and risk. Present consumption is sacrificed to get a return in the future. The
sacrifice that has to be borne is certain but the return in the future may be
uncertain.

The risk is undertaken with a view to reap some return from the investment.
To the economist, investment is the net addition made to the nation’s capital
stock that consists of goods and services that are used in the production
process. A net addition to the capital stock means an increase in the
buildings, equipment or inventories.

These capital stocks are used to produce other goods and services.
Financial investment is the allocation of money to assets that are expected to
yield some gain over a period of time. It is an exchange of financial claim
such as stock and bonds for money. They are expected to yield returns and
experience capital growth over the years.

• The first chapter provides a brief description about place of study,

methodology of study, Limitation and objective of study.
• The second chapter gives a brief description on profile of INDIA
INFOLINE.

• The third chapter reflects the Review Of literature.

• The fourth chapter describes Data analysis & Interpretation.

• The fifth chapter includes a brief description about findings,

suggestion &conclusion.

• The sixth chapter gives description about the list of references for the
project.

CHAPTER - 1
• Introduction
• Place of Study
• Objective of the study
• Scope of Study
• Methodology
 • Limitation

INTRODUCTION
The stock market plays a major role in mobilizing the savings into
investment. Stock market development is positively correlated with the
development of financial intermediaries and long-term growth. Stock
market also provides a different bundle of financial functions from
those provided by financial intermediaries. The stock market in India is
more efficient than banking system on account of the enabling
government policies and that stock market development has a key role
to play in the reforms of system by generating competition for funds
mobilization and allocation. Hence, an efficient capital market would
contribute to long-term growth. According to RBI the flow of funds in
the private corporate sector shows that there is growing reliance of the
private corporate sector on external financing.

The equity market in developing countries until the mid-1980s

generally suffered from the classical defects of bank-dominated
economies, that is, shortage of equity capital, lack of liquidity, absence
of foreign institutional investors, and lack of investor’s confidence in
the stock market. Since 1986, the capital markets of the developing
countries started developing with financial liberalization and the easing
of legislative and administrative barriers and the adoption of tougher
regulations to boost investor’s confidence. With the beginning of
financial liberalization in the developing countries, the flow of private
foreign capital from the developed to developing countries has
increased significantly and such inflow of foreign capital have been
mainly in the form of foreign direct investment and portfolio
investment. The latter type of inflows has mainly been through their
stock markets.

In the history of International Finance, the year 1992- 1993 may be

seen as a watershed year in which emerging markets came into their
own as capital raising mechanisms and became firmly established as a
distinct asset class for the word’s investment community with financial
liberalization, the east Asian capital markets like Singapore, Honkong
and Bangkok have developed over time to the extent that they are
presently regarded as international financial centers of Asia.

In the capital markets over the last few years that has made the markets
attractive to foreign institutional investors. This history shows us that
retail investors are yet to play a substantial role in the market as long-
term investors. Retail participation in India is very limited considering
the overall savings of households. Investors who hold shares in limited
companies and mutual fund units are about 20-30 million. Those who
participated in secondary markets are 2-3 million. Both SEBI and
retail participants should be active in spreading market wisdom and
 empowering investors in planning their finances and understanding the
markets.

PLACE OF STUDY

All the activities of this project are carried out in India Infoline ltd,
Bhubaneswar.

OBJECTIVE OF THE STUDY

In the process of share trading, Technical analysis is the crucial factor,
as it says the time when the securities are to be bought and sold. As
there are several types of investors involved in the market, their
perception varies. So to know the time of buying and selling the
stocks is the main objective of investment in share market. To gain
more knowledge about investment in share market is one of the
objectives of this study.

Following are the objectives

 To know different analysis made for trading of stocks.

 To evaluate the time of buying and selling of security.

 To determine the market prices of the security by the interaction of

supply and demand forces.

 To detect the irrespective of why the security occur, shifts in demand

and supply with the help of charts, graphs etc of market action.

 To calculate the average price of stocks

 To know the Support & Resistant level of a security

 Finally to compare different analysis made for transacting a security.

 How many people aware of online trading or Demat account.

 The risk tolerance of different segment of investor.

 Investment pattern with respect of age & sex.

 How many people are investing in share market (online/offline).

 From which source people are aware about share market.

SCOPE OF STUDY

• The data and information was gathering during 2 month training from
1st June 2010 to 31st July, 2010.
• The scope is limited to secondary data only.

METHODOLOGY
 While talking of research methodology we not only talk of research
methodology but also consider the logic behind it. Thus using the
content of research study and explain why it’s being used while rest
of technique are not.

SELECTION OF FIELD

My target was to make the people invest in share market so I took

judgment sampling. According to my target population and sampling
technique I took samples from different area. By considering research
objective, budget, time, authority, intuition constraint I selected my
research field. I took the following areas as my research field.

Jayadev vihar, Acharya vihar, Nayapalli, CRP square

COLLECTION OF DATA

Depending upon the sources utilized, whether the data has come from
actual observations or come e kept for normal purposes, statistical
data can be classified into two categories:

• Primary Data
• Secondary Data
Sample size: 100
Primary source:
Data collected by investigator him /herself for the purpose of specific
inquiry or studies are called primary data. Such data are original or
first hand in character. From the source it was collected is known as
primary source for that specific researcher.

Personal Interview:
For the personal interview we prepared a structured questionnaire.
You can watch out our questionnaire in appendix page.

“A questionnaire whether it is called a schedule interview from or

measuring instrument, it is a formalized set of question for obtaining
information from respondents”.

Secondary source: The secondary source refers to the source

from which the data collected are the secondary information means
this information is already collected for some purpose. Such as report
on company’s customer, etc.

LIMITATION
Some people were hesitating to open account through summer
trainees as we were not employee. This is also part of our SIP to open
few Demat Account.

The sample size for was small compared to the population of the main
township for haring a more value but time was not permissible.

Few respondents were reluctant to part with this feeling, truth with
regard to some parameters fearing of any untoward consequences was
one of the obstacles for my project, still then I have tried to put my
best efforts to make it a success in this short span of time.

Perception, mindset of the people towards share market industry is not

very positive one.

The time period allowed for the study is quite insufficient to catch all
the aspects.

The primary data collected has its own limitation. The same has been
incorporated in the basis after year.

Confidentiality of information was the biggest limitation that

corporate people were not willing to share their information with us.
 CHAPTER-2

• Industry profile
• Company profile

INDUSTRY PROFILE
The economic development of any country depends upon the existence
of a well organized financial system. It is the supplies the necessary
financial inputs for the productions of goods and services which in turn
promote the well being and standard of living of the people of a country.
Thus the “financial system” is a broader term which brings under its fold
 the financial market and the financial institutions which support the
system. An efficient functioning of a financial system facilitates the free
flow of funds to more productive activities and thus promotes
investment. Thus, the financial system provides the intermediations
between savers and investors and promotes faster economic
development.

These organized markets can be further classified into two.

These are
Capital market
Money market
Capital market

Importance of capital market

Absence of capital market acts as a deterrent factor to capital formation

and economic growth. Resource would remain idle if finances are not
funneled through capital market. The importance of capital market can
be briefly summarized as follows:

It provides an avenue for investors, particularly the household sector:

I- To invest in financial assets which are more than real assets.

II - to facilitate increase in production and productivity in economic and

thus enhances the economic welfare of the society.

Thus, it facilitates the movement of stream of command over capital to

the point of highest yield” towards those can apply them productively
and profitably to enhance the national income aggregate.

The operations of different institution in the capital market induce

economic growth. They give quantitative and qualitative directions to
the flow of funds and about rational allocation of scarce resources.
Indian capital market
It includes primary, secondary, OTC and derivatives segments. Due to
the consequence of the growing economic and the government’s policy
of liberalization and deregulation, the various segments of capital market
in India have grown at phenomenal rates. The first stock exchange –The
Bombay stock exchange – was established in 1857. Now there are 23
stock exchanges in India. The number of shareholders has increased to
about 30-40 million. There are about 9000 listed companies. Both the
market capitalization and volume of trades have shown general growth,
although they have fluctuated over years.

Stock exchanges in India have well developed procedures for listing,

trading, settlement etc... The recent changes include shortening of the
trading and settlement period, rolling settlement, index- based price
bands, dematerialization of share etc... A number of systems and rules
exist for the regulation of the stock exchanges. The Securities and
Exchange Board of India (SEBI) is the central regulatory authority
regulating capital market in India.

The capital market is a market for financial assets which have a long or
indefinite maturity. Generally, it deals with long term securities which
have a maturity period of above one year.

Capital market may be further divided into three namely:

1. Industrial securities market

2. Government securities market
3. Long term loans market
Industrial Securities Market
As the name implies, it is a market for industrial securities namely:
Equity Shares or Ordinary Shares, Preference Shares, Debenture or
Bonds.

It is a market where industrial concerns raise capital by issuing

appropriate instruments. It can be further sub divided into two. These
are:

• Primary market or new issue Market,

• Secondary Market or Stock Exchange

Primary market or new issue Market

The industrial securities market of India consists of new issue market and
Stock Exchanges. The new issue markets deals with the new securities
which are not previously available to the investment of public i.e. the
securities that are offered to investment of public first time. The market
therefore, makes available of new block of securities for public
subscription. In other words, new issue market deals with rising of fresh
capital by companies either for cash or for consideration of other than
cash.

Primary market is a market for new issue of securities. Hence, it is also

called New issue Market. The primary market deals with those securities
which are issued to the public for the first time. In the primary market,
borrowers exchange new financial securities for long term funds. Thus,
primary market facilitates for Capital Formation.

The new issue market encompasses all institutions dealing in fresh

claim. The forms in which these claims created are Equity Shares,
Preference Shares, debenture, right issues,. All financial institutions
which contribute underwrite and directly subscribe to the securities are
part of new issue market.
There are three ways by which a company may raise capital in a primary
market. They are: Public issue, Rights issue, Private placements

This is called public issue. When an existing company wants to raise

additional capital, securities are first offered to the existing shareholder
on a pre- emptive basis. This is called right issue. Private placement is a
way of selling securities privately to a small group of investors.

Secondary market or Stock Exchange:

A stock market is a place where securities of various types are openly
traded and where one can sell and purchase securities easily. It is an
organized market for purchase and sale of listed industrial and financial
securities. Securities traded in the stock exchanges include shares,
debentures and debt instruments of public limited companies. These
securities are in fact documented evidence of ownership of claim upon
the assets of the issuing company. The securities are also not fixed in
value that is determined at the time of their buying and selling. Hence
enormous capital is rose which is generally required to operate the
industrial and commercial enterprises of the country. Ti provides
opportunity for trading in newly issued securities and facilities
mobilization. It provides ready market and liquidity to the various type of
securities listed. It also ensures efficient allocation of available capital
resources to the users in the economy. It also acts as a barometer that
easily measure and detect the incipient system of an economic boom or
decline well in advance before such an eventuality actually occurs.

Secondary market deals with securities that have been previously issued.
Stock exchanges are secondary market where buyers and sellers trade in
already issued securities. A stock exchange provides the following useful
economic functions:
 1. It helps in determining fair price based on demand and supply
forces and all available information’s.

2. It provides easy marketability and liquidity for the investors.

3. It Facilitates allocation in capital allocation in primary market

through price signaling.

4. It Enables investor to adjusting portfolios of securities.

Secondary market is a market for secondary sale of securities. In other

words, securities which have already passed through the new issue market
are traded in the market. Generally, such securities are quoted in the stock
exchanges and it provides a continuous and regular market for buying and
selling of securities, this market consists of all stocks exchanges in India
are regulated under the Securities Contract Act, 1956. The Bombay Stock
Exchange is the principal stock exchange in India which sets the tone of
other stock markets.

BOMBAY
STOCK
EXCHANGE
(BSE)
The BSE is the
premier or apex
stock exchange in
India. It is the biggest in size in terms of the amount of fresh capital
raised, secondary market turnover and capitalization and the total
listed companies and their paid-up capital. It is also the oldest market
and has been recognized permanently, while the recognition for other
exchanges is renewed every five years. Its business is no longer
confined to Mumbai alone; at the end of 1997, there were 100 other
cities in which it had set up business. The BSE was established in
1857.

MERITS OF BSE:

Badla system: only BSE has been allowed to have the Badla system.
Broader market: nearly 6000 stocks are listed on BSE while in NSE
1500 are listed.

Odd lots trading: it facilitates trading of odd lots shares and such
transaction settled through the exchange’s clearing house.

More time for settlement: the BSE gives an investors, brokers or

custodian more time to make payments and effect deliveries.
NATIONAL STOCK EXCHANGE OF INDIA (NSE)

The NSE has a fully automated, electronics, screen-based trading

system. It is sponsored by the IDBI and co-sponsored by LIC, GIC,
other insurance Companies, commercial banks and other finical
institutions, viz., SBI caps, SHCIL and ILFs. Its objectives are:

 To provides nation-wide equal access and fair, efficient,

completely transparent securities trading system to investors by
using suitable communication network.

 To provides shorter settlement cycle and entry settlement

system.

 To brings the Indian stock market in line with international

markets.
  To promote the Indian secondary market in debt instrument
such as government and corporate bonds.

Merits of NSE
Unconditional counter-party guarantee: the NSE clearing house
guarantees timely settlement of trades executed in its normal market
segment against short and bad deliveries.

Depository: the NSE introduced the first depository system in India

and began to securities in a book-entry from in December 1996. The
system has freed trades from some persistent problems of the Indian
securities market, such as paper work, bad delivery and stump duty.

Options and futures trading:

Professionalism: it has dedicated, trained, technologically – literate
staff with a respective attitude on full – time basis and so today it
caters to a fairly large number of potential investors.

Public relations: It organizes various programs for public relations. It

is well prepared to disseminate information on the exchanges rules
regulations and activities to the public through print and electronic
media.

SECRITY EXCHANGE BOARD OF INDIA (SEBI)

The government has set up the securities & exchange Board of India
(SEBI) in 12th April, 1988. For more than three years, it had no
statutory powers. It is under the SEBI Act to

(i) protect the interest of the investor in securities and

(ii) Promote the development of, and regulate, the securities

market.
 Functions of SEBI

 It is the duty of SEBI to protect the interest of investors in securities

into promotes the development of, and to regulate the securities
market, by such measures as it thinks fit.

 Prohibiting fraudulent and unfair trade practices relating to the

securities market

 Prohibiting insider trading in securities.

 Regulating the business in stock exchange(s) and any other securities

market(s).

 Registering and regulating the working of stock brokers, sub- brokers,

share transfer agents, bankers to an issue, trustees of trust deeds,
registrars to an issue merchant bankers, underwriters, portfolio
managers, investor advisor, and such other intermediaries who may be
associated with the securities market.

 Registering and regulating the working of ventures capital and

collective investment schemes include Mutual funds.

 Promoting and regulating self-regulatory organizations.

 Promoting investor’s education and training of intermediaries of the

securities marked.

 Conducting research for the above purpose.

 Regulating substantial acquisition of shares and takeover of

companies.
 Calling for information and record form, undertaking inspection,
conducting inquiries and audits, stock exchanges, mutual funds and
other persons associated with the securities market intermediaries and
self-regulatory organizations in the securities market.

Performing such functions and exercises such powers under the

provisions of the Securities Contract Act, as may be delegated to it by
the Central Government.

COMPANY PROFILE

COMPANY HISTORY

We were originally incorporated on October 18, 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies
Act, 1956 with Registration No. 11 93797. We commenced our
operations as an independent provider of information, analysis and
research covering Indian businesses, financial markets and economy, to
institutional Customers. We became a public limited company on April
28, 2000 and the name of the Company was changed to Probity
Research and Services Limited. The name of the Company was changed
to India Infoline.com Limited on May 23, 2000 and later to India
Infoline Limited on March23, 2001. In 1999, we identified the potential
of the Internet to cater to a mass retail segment and transformed our
business model from providing information services to institutional
customers to retail customers. Hence we launched our Internet portal,
www.indiainfoline.com in May1999 and started providing news and
market information, independent research, interviews with business
leaders and other specialized features.

In May 2000, the name of our Company was changed to

IndiaInfoline.com Limited to reflect the transformation of our business.
Over a period of time, we have emerged as one of the leading business
and financial information services provider in India. In the year 2000,
we leveraged our position as a provider of financial information and
analysis by diversifying into transactional services, primarily for online
trading in shares and securities and online as well as offline distribution
of personal financial products, like mutual funds and RBI Bonds. These
activities were carried on by our wholly owned subsidiaries.

Our broking services was launched under the brand name of 5paisa.com
through our subsidiary, India Infoline Securities Private Limited and
www.5paisa.com, the e-broking portal, was launched for online trading
in July 2000. It combined competitive brokerage rates and research,
supported by Internet technology besides investment advice from an
experienced team of research analysts, we also offer real time stock
quotes, market news and price charts with multiple tools for technical
analysis.

Acquisition of Agri Marketing Services Limited (Agri) In March 2000,

we acquired 100% of the equity shares of Agri Marketing Services
Limited, from their owners in exchange for the issuance of 508,482 of
our equity shares. Agri was a direct selling agent of personal financial
products including mutual funds, fixed deposits, corporate bonds and
post-office instruments. At the time of our acquisition, Agri operated 32
branches in South and West India serving more than 30,000 customers
with a staff of, approximately 180 employees. After the acquisition, we
changed the company name to India Infoline.com Distribution Company
Limited.

KEY MILESTONE OF COMPANY-

• Incorporated on Oct 18, 1995 as Probity Research and Services.

• Lunched internet portal www.indiainfoline.com in may 1999.

• Commenced distribution of personal financial product like Mutual

Fund and RBI Bonds in April 2000.

• Lunched online trading in shares and securities branded as

www.5paisa.com in July 2000.
• Started life insurance agency business in December 2000 as corporate
agent of ICICI prudential life insurance.

• Become a depository participant of NSDL, in Sept 2001.

• Lunched stocks messaging services in May 2003.

• Acquired commodities broking license in March 2004.

• Lunched portfolio management services in August 2004.

• Listed on NSE and BSE on May 17, 2005.

• Acquired NBFC license in May 2005.

• Acquired 75% stake holding in money tree consultancy services,

which is a distribution of mortgagees and other loan products, in Oct
2005.

• Acquired 100% equity of March Mont capital adviser Pvt. Ltd. In Dec
2005, through which the company has venture into Merchant
Banking.

• DSP Merrill Lynch Capital subscribe to convertible bonds

aggregating Rs.80 crores in Dec2005.

• Become a depositary participant of CDSL. In June 2007.

• Enter into an alliance with Bank of Baroda for E-trading in Feb 2007.

• IRDA license for insurance broking in April 2007.

• CLSA institutional equities joined us 2007.

• Formed Singapore subsidiary IIFL(Asia) Pvt. Ltd. In 2007.

• Mr. Arun Kumar Purvar joined as independent director in March

2008.
 MANAGEMENT TEAM-

• Mr. Nirmal Jain ( Chairman & MD)

• Mr. R. Venkataraman ( Executive Director)

• Mr. Sat Pal Khattar (Non Executive Director)

• Mr. Nilesh Vikamsey (Independent Director)

Mr. Nirmal Jain

Chairman & Managing Director

India Infoline Ltd.

Nirmal Jain, MBA (IIM, Ahmadabad) and a Chartered and Cost

Accountant, founded India’s leading financial services company India
Infoline Ltd. in 1995, providing globally acclaimed financial services in
equities and commodities broking, life insurance and mutual funds
distribution, among others. Mr. Jain began his career in 1989 with
Hindustan Lever’s commodity export business, contributing tremendously
to its growth. He was also associated with Inquire-Indian Equity
Research, which he co-founded in 1994 to set new standards in equity
research in India.

Mr. R Venkataraman

Executive Director

India Infoline Ltd.

 R Venkataraman, co-promoter and Executive Director of India Infoline
Ltd., is a B. Tech (Electronics and Electrical Communications
Engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined the
India Infoline board in July 1999. He previously held senior managerial
positions in ICICI Limited, including ICICI Securities Limited, their
investment banking joint venture with J P Morgan of USA and with BZW
and Taib Capital Corporation Limited. He was also Assistant Vice
President with G E Capital Services India Limited in their private equity
division, possessing a varied experience of more than 16 years in the
financial services sector.

The Board of Directors

Apart from Nirmal Jain and R Venkataraman, the Board of Directors of

India Infoline Ltd. comprises:

Mr. Nilesh Vikamsey

Independent Director

India Infoline Ltd.

Mr. Vikamsey, Board member since February 2005 - a practising

Chartered Accountant and partner (Khimji Kunverji & Co., Chartered
Accountants), a member firm of HLB International, headed the audit
department till 1990 and thereafter also handles financial services,
consultancy, investigations, mergers and acquisitions, valuations etc; an
ICAI study group member for Proposed Accounting Standard — 30 on
Financial Instruments — Recognition and Management, Finance
Committee of The Chamber of Tax Consultants (CTC), Law Review,
Reforms and Rationalization Committee and Infotainment and Media
Committee of Indian Merchants’ Chamber (IMC) and Insurance
Committee and Legal Affairs Committee of Bombay Chamber of
Commerce and Industry (BCCI).
Mr. Vikamsey is a director of Miloni Consultants Private Limited, HLB
Technologies (Mumbai) Private Limited and Chairman of HLB India.

Mr. Sat Pal Khattar

Non Executive Director

India Infoline Ltd.

Mr. Sat Pal Khattar, - Board member since April 2001 - Presidential
Council of Minority Rights member, Chairman of the Board of Trustee of
Singapore Business Federation, is also a life trustee of SINDA, a
nonprofit body, helping the under-privileged Indians in Singapore. He
joined the India Infoline board in April 2001. Mr. Khattar is a Director of
public and private companies in Singapore, India and Hong Kong;
Chairman of Guocoland Limited listed in Singapore and its parent Guoco
Group Ltd listed in Hong Kong, a leading property company of
Singapore, China and Malaysia. A Board member of India Infoline Ltd,
Gateway Distriparks Ltd — both listed — and a number of other
companies he is also the Chairman of the Khattar Holding Group of
Companies with investments in Singapore, India, UK and across the
world.

Mr Kranti Sinha

Independent Director

India Infoline Ltd.

Mr. Kranti Sinha — Board member since January 2005 — completed his
masters from the Agra University and started his career as a Class I
officer with Life Insurance Corporation of India. He served as the
Director and Chief Executive of LIC Housing Finance Limited from
August 1998 to December 2002 and concurrently as the Managing
Director of LICHFL Care Homes (a wholly owned subsidiary of LIC
Housing Finance Limited). He retired from the permanent cadre of the
Executive Director of LIC; served as the Deputy President of the
 Governing Council of Insurance Institute of India and as a member of the
Governing Council of National Insurance Academy, Pune apart from
various other such bodies. Mr. Sinha is also on the Board of Directors of
Hindustan Motors Limited, Larsen & Toubro Limited, LICHFL Care
Homes Limited, Gremach Infrastructure Equipments and Projects Limited
and Cinemax (India) Limited.

Mr. Arun K. Purvar

Independent Director

India Infoline Ltd.

Mr. A.K. Purvar – Board member since March 2008 – completed his
Masters degree in commerce from Allahabad University in 1966 and a
diploma in Business Administration in 1967. Mr. Purwar joined the State
Bank of India as a probationary officer in 1968, where he held several
important and critical positions in retail, corporate and international
banking, covering almost the entire range of commercial banking
operations in his illustrious career. He also played a key role in co-
coordinating the work for the Bank's entry into the field of insurance.
After retiring from the Bank at end May 2006, Mr. Purwar is now
working as Member of Board of Governors of IIM-Lucknow, joined IIM–
Indore as a visiting professor, joined as a Hon.-Professor in NMIMS and
he is also a member of Advisory Board for Institute of Indian Economic
Studies (IIES), Waseda University, Tokyo, Japan. He has now taken over
as Chairman of India Venture Advisors Pvt. Ltd., as well as IL & FS
Renewable Energy Limited. He is also working as Independent Director
in leading companies in Telecom, Steel, Textiles, Auto parts, Engineering
and Consultancy.

VISON OF INDIAINFOLINE

Vision of India infoline to be the most respect financial services company in

India
CULTURE AND CORE VALUE

Owner Mindset is one of the key principles that drive life at Indiainfoline.
Every member of tem India infoline behaves thinks and act as owner not an
employee.

COMPANY BUSINESS MODEL

Business description - Advisory and execution services for the entire gamut
of India infoline of financial services.

Core competencies- Advisory services powered by world class research.

Execution backed by cutting edge technology and personalizes services.

Services offering-

• Equity broking

• Commodity broking

• Mutual Fund distribution

• Mortgages distribution

• Other debt product

• Portfolio management service

• Research and content services

• Life insurance agency

• Investment banking services

 (Corporate structure of IIFL)

CORPORATE STRUCTURE-

The various subsides company under the umbrella of indiainfoline group

are given below.

• Indiainfoline investment service Ltd.(NBFC for financing )

 • Indiainfoline commodities Ltd.(commodities broking)

• IIFL(ASIA) Pet Ltd. (new company for international operation)

• Indiainfoline Media and research.(equity research, portal and online

media)

• Indiainfoline marketing services Ltd.(Insurance distribution)

• Indiainfoline insurance broker Ltd.

• Indiainfoline insurance service Ltd.(corporate agency)

• Indiainfoline distribution Co ltd.

• Indiainfoline housing financing Ltd.

• Money line credit Ltd.

India Infoline Limited is listed on both the leading stock exchanges in India,
viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange
(NSE) and is also a member of both the exchanges. It is engaged in the
businesses of Equities broking, Wealth Advisory Services 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. It is registered
with NSDL as well as CDSL as a depository participant, providing a one-
stop solution for clients trading in the equities market. It has recently
launched its Investment banking and Institutional Broking business.
A SEBI authorized Portfolio Manager; it offers Portfolio Management
Services to clients. These services are offered to clients as different schemes,
which are based on differing investment strategies made to reflect the varied
risk-return preferences of clients.

India Infoline Media and Research Services Limited.

The content services represent a strong support that drives the broking,
commodities, mutual fund and portfolio management services businesses.
Revenue generation is through the sale of content to financial and media
houses, Indian as well as global.

It undertakes equities research which is acknowledged by none other than

Forbes as 'Best of the Web' and '…a must read for investors in Asia'. India
Infoline's research is available not just over the internet but also on
international wire services like Bloomberg (Code: IILL), Thomson First Call
and Internet Securities where India Infoline is amongst the most read Indian
brokers.

India Infoline Commodities Limited.

India Infoline Commodities Pvt. Limited is engaged in the business of

commodities broking. Our experience in securities broking empowered us
with the requisite skills and technologies to allow us offer commodities
broking as a contra-cyclical alternative to equities broking. We enjoy
memberships with the MCX and NCDEX, two leading Indian commodities
exchanges, and recently acquired membership of DGCX. We have a multi-
channel delivery model, making it among the select few to offer online as
well as offline trading facilities.

India Infoline Marketing & Services

India Infoline Marketing and Services Limited is the holding company of

India Infoline Insurance Services Limited and India Infoline Insurance
Brokers Limited.

(a) India Infoline Insurance Services Limited is a registered Corporate Agent

with the Insurance Regulatory and Development Authority (IRDA). It is the
largest Corporate Agent for ICICI Prudential Life Insurance Co Limited,
which is India's largest private Life Insurance Company. India Infoline was
the first corporate agent to get licensed by IRDA in early 2001.

(b) India Infoline Insurance Brokers Limited is a newly formed subsidiary

which will carry out the business of Insurance broking. We have applied to
IRDA for the insurance broking license and the clearance for the same is
awaited. Post the grant of license, we propose to also commence the general
insurance distribution business.

India Infoline Investment Services Limited

Consolidated shareholdings of all the subsidiary companies engaged in loans

and financing activities under one subsidiary. Recently, Orient Global, a
Singapore-based investment institution invested USD 76.7 million for a
22.5% stake in India Infoline Investment Services. This will help focused
expansion and capital raising in the said subsidiaries for various lending
businesses like loans against securities, SME financing, distribution of retail
loan products, consumer finance business and housing finance business.
India Infoline Investment Services Private Limited consists of the following
step-down subsidiaries.

(a) India Infoline Distribution Company Limited (distribution of retail loan

products)

(b) Money line Credit Limited (consumer finance)

(c) India Infoline Housing Finance Limited (housing finance)

IIFL (Asia) Pvt. Limited

IIFL (Asia) Pvt. Limited is wholly owned subsidiary which has been
incorporated in Singapore to pursue financial sector activities in other Asian
markets. Further to obtaining the necessary regulatory approvals, the
company has been initially capitalized at 1 million Singapore dollars.

Company’s philosophy on Corporate Governance

The India Infoline Group is committed to placing the Investor First, by

continuously striving to increase the efficiency of the operations as well as
the systems and processes for use of corporate resources in such a way so as
to maximize the value to the stakeholders. The Group aims at achieving not
only the highest possible standards of legal and regulatory compliances, but
also of effective management.

Committee :

Audit Committee
Terms of reference & Composition, Name of members and Chairman: The
Audit committee comprises Mr. Nilesh Vikamsey, Chairman of the
Committee, Mr. Sat Pal Khattar, Mr. Sanjiv Ahuja and Mr. Kranti Sinha,
three of whom are independent Directors. The Managing Director, the
Executive Director along with the Statutory and Internal Auditors are
invitees to the Meeting. The Terms of reference of this committee are as
under: - To investigate into any matter that may be prescribed under the
provisions of Section 292A of The Companies Act, 1956 - Recommendation
and removal of External Auditor and fixation of the Audit Fees. - Reviewing
with the management the financial statements before submission of the same
to the Board. - Overseeing of Company’s financial reporting process and
disclosure of its financial information. - Reviewing the Adequacy of the
Internal Audit Function.

Compensation/ Remuneration Committee

Terms of reference & Composition, Name of members and Chairman: The

Compensation / Remuneration Committee comprise Mr. Sanjiv Ahuja,
Chairman of the Committee, Mr. Nilesh Vikamsey and Mr. Kranti Sinha, all
of whom are independent Directors. The Terms of reference of this
committee are as under: - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors, Senior Employees and
officers i.e. Salary, perquisites, bonuses, stock options, pensions etc. -
Determination of the fixed component and performance linked incentives
along with the performance criteria to all employees of the company -
Service Contracts, Notice Period, Severance Fees of Directors and
employees. - Stock Option details: whether to be issued at discount as well
as the period over which to be accrued and over which exercisable. - To
conduct discussions with the HR department and form suitable remuneration
policies.

Share Transfer and Investor Grievance Committee

Details of the Members, Compliance Officer, No of Complaints received

and pending and pending transfers as on close of the financial year. The
committee functions under the Chairmanship of Mr. Kranti Sinha, a Non-
executive independent Director. The other Members of the committee are
Mr. Sanjiv Ahuja, Independent Director and Mr. R Venkataraman,
Executive Director. Ms Komal Parikh, Company Secretary is the
Compliance Officer of the Company.

CHAPTER-3
 Review of literature
 Investment
 Different investment option
 Equity investment
 Different analysis
 Role of market trends
 Role of demat account

INVESTMENT
Investment is the employment of funds on assets with the aim
of earning income or capital appreciation. Investment has two
attributes namely time and risk. Present consumption is sacrificed to
get a return in the future.
The sacrifice that has to be borne is certain but the return in the future
may be uncertain. The risk is undertaken with a view to reap some
return from the investment.

To the economist, investment is the net addition made to the nation’s

capital stock that consists of goods and services that are used in the
production process. A net addition to the capital stock means an
increase in the buildings, equipment or inventories.

These capital stocks are used to produce other goods and

services.
Financial investment is the allocation of money to assets that are
expected to yield some gain over a period of time. It is an exchange of
financial claim such as stock and bonds for money. They are expected
to yield returns and experience capital growth over the years.

INVESTMENT OBJECTIVE
The main investment objective are increasing the ray of return and
reducing the risk. Other objectives like Safety, Liquidity and hedge
against inflation can be considered as subsidiary objectives. These
objectives are of two types

• Primary objectives

• Secondary objectives

PRIMARY OBJECTIVES:

(i) RETURN:
Investors always expect a good rate of return from their investments.
Rate of return could define as the total income the investors receives
during the holding period stated as a percentage of the purchasing
price at the beginning of the holding period.
Return = End period value – Beginning period value + Dividend x 100

Beginning period value

(ii) RISK:

Risk is holding securities are related with the probability of actual

return becoming less than the expected return. The word risk is
synonymous with the phase variability of return. Risk is important
part in investment because high risk expected high profit and low risk
show minimum profit but it is depending on time to time. So every
investor likes to reduce the risk of his investment by proper
combination of different securities.

(iii) LIQUIDITY:

Marketability of the investment provides liquidity to the investment.

The liquidity depends upon the marketing and trading facility. If a
portion of the investment could be converted into cash without much
loss of time, it would help the investor meet the emergencies. Stocks
are liquid only if they command good market by proving adequate
return through dividends and capital appreciation.

HEDGE AGAINST INFLATION:

Since there is inflation in almost all the economic, the rate of return
should ensure a cover against inflation. The return rate should be
higher than the rate of inflation; otherwise the investor will have loss
in real terms. Growth stock would appreciate in their values overtime
and provide a protection against inflation. The return thus earned
should assure the safety of the principal amount, regular flow of
income be a hedge against inflation.

(iv) SAFETY:

The selected investment avenue should be under the legal and

regulatory frame work. If it is not under the legal frame work, it is
difficult to represent the grievances, if any. Approval of the law itself
adds a flavor of safety. Even through approved by law, the principal
differs from one mode of investment to another.

(v) GROWTH OF CAPITALS:

Capital gains are entirely different from return in that they are only
realized when the security is sold for a price that is higher than the
price at which it was originally purchased. Selling at a lower price is
referred to as a capital loss. Therefore, investors seeking capital gains
are likely not those who need a fixed, ongoing source of investment
returns from their portfolio, but rather those who seek the possibility
of longer-term growth.

Growth of capital is most closely associated with the purchase of

common stock, particularly growth securities, which offer low yields
but considerable opportunity for increase in value.

Capital gains offer potential tax advantages by virtue of their lower

tax rate in most jurisdictions. Funds that are garnered through
common stock offerings, for example, are often geared toward the
growth plans of small companies, a process that is extremely
important for the growth of the overall economy. In order to
encourage investments in these areas, governments choose to tax
capital gains at a lower rate than income. Such systems serve to
 encourage entrepreneurship and the founding of new businesses that
help the economy grow.

SECONDARY OBJECTIVES:

(i)TAX MINIMISATION

An investor may pursue certain investments in order to adopt tax

minimization as part of his or her investment strategy. For example a
highly-paid executive may want to seek investments with favorable tax
treatment in order to reduce his or her overall income tax burden by
Making contributions to an individual retirement account (IRA) or other
tax-sheltered retirement plan.

(ii)HEDGE AGAINST INFLATION:

Since there is inflation in almost all the economic, the rate of return
should ensure a cover against inflation. The return rate should be higher
than the rate of inflation; otherwise the investor will have loss in real
terms. Growth stock would appreciate in their values overtime and
provide a protection against inflation. The return thus earned should
assure the safety of the principal amount, regular flow of income be a
hedge against inflation.
DIFFERENT INVESTMENT OPTION

Investment Risks/Liquidity Returns Taxation Suitability

Option
Bank FDs Very low risk and Low returns, but Since returns are Good for very low
low liquidity. assured. Depending fully taxable, the risk investors and
on the tenure and post-tax returns those in the nil or
bank, could be will be still lower. low tax brackets.
around 6-9%
As interest rate
scenario seems to be
peaking, one could
consider investing in
3-5 year FDs.

MUTUAL Low risk and low No assured returns MFs attract much Good for low risk
FUND Liquidity. but depending on lower taxation and investors, but in high
tenure and the MF, hence give better tax brackets.
could be around 6- post-tax returns
9%. (Ability to vis-à-vis Bank Good for investing
deliver the FDs. the debt portion of
indicative returns). one’s portfolio.

Floating Rate Low risk and high Market linked. Lower taxation of Good for investing
Funds liquidity. Today could be MFs makes short-term money
around 5-7%. Floating Rate where one needs
funds attractive. higher liquidity.

Debt Funds Low to Medium Returns are market- Lower taxation of Can be avoided in a
risk. linked. Today MFs makes such rising interest rate
could be around 5- scenario but is good
 High Liquidity. 7%, but susceptible funds attractive. in a falling interest
to interest rate risk. rate scenario.

Post Office Low risk and low MIS scheme give Since returns are Good for very low
Schemes Liquidity. 8% interest. Time taxable, the post- risk investors and
deposit 6.25-7.5%. tax returns will be those in the nil or low
still lower. tax brackets.

PPF Low risk with 8% assured returns. Interest is tax-free. Good tax saving
very low liquidity investment option.
(15-year lock-in Also Sec 80C
period. Partial benefit. Hence a Good for investing the
withdrawal good scheme. debt portion of one’s
allowed after 6 portfolio.
years).

NSC Low risk with low 8% assured returns. Interest fully Not very attractive
liquidity (6 years taxable. But vis-à-vis other
lock-in). eligible for Sec options like 5-year
80C benefit. Bank FDs.

Equity High risk and high Market linked Attractive tax Needs high risk
liquidity. returns. Good treatment. No appetite.
potential. Long Term
Capital Gain Tax Ideal for those
and 10% Short investors who have a
Term Capital good corpus, good
Gains Tax. knowledge and time
to track the markets
regularly. Care should
be taken to invest in
good profit making
companies. Penny
stocks should be
avoided.

Equity Funds High risk and high Market linked Attractive tax Ideal for small and
liquidity in open- returns. Good treatment. No common investors,
ended funds. potential. Long Term but with high risk
Capital Gain Tax appetite. well-
and 10% Short diversified portfolio
Term Capital with say 50-60%
Gains Tax. money in 5-7
 diversified funds, 25-
35% money in 3-4
mid/small-cap funds
and 10-15% in 3-4
sector funds.

ELSS Funds High risk with low Market linked Attractive tax Good tax saving
liquidity (3 years returns. Good treatment. No investment option.
lock-in period). potential. Long Term Amounts beyond Rs.1
Capital Gain Tax lakh limit could be
and 10% Short invested in open-
Term Capital ended funds.
Gains Tax. Also
Sec 80C benefit. SIP in ELSS would
reduce the volatility
risk.

Balanced Medium to High Medium to high Attractive tax Though convenient as

Funds risk. returns. Market treatment. No both debt and equity
linked. Long Term investment is covered
High Liquidity. Capital Gain Tax under one fund, it
and 10% Short may be better to
Term Capital invest separately in
Gains Tax. equity and debt funds
for better control.

ULIPs Low to High Risk Low to high Tax free returns. Not an attractive
depending on the depending on the option due to high
investment option investment option. Also Sec 80 C charges, low
i.e. Pure Debt or Market linked benefit available. flexibility and low
Mixed or Pure returns. diversification. There
Equity. (3-5 years are other better
lock-in period). similar investment
products like MFs

Endowment/ Low risk and very Low returns. Tax free returns. Not an attractive
Money back low liquidity. Generally around option due to low
Plan 6-6.5%. Also Sec 80 C returns. There are
benefit available. other better similar
investment products.
Real Estate Variable risk and Market linked No tax High initial
variable liquidity returns. Good advantages, investment required
depending on the potential. except attractive which could make
type and location tax benefits on the one’s portfolio
of property. home loans. lopsided; high
transactions costs.

EQUITY INVESTMENT”
Equity investment means the engagement of savings in the stock of a
company for the purpose of earning income such as dividend, capital
appreciation, etc.

SHARES:

The capital of the company divided into different units with definite
and equal value called shares. Holders of these shares called
shareholders. There are two types of shares which a company may
issue.

(i) Preference Shares (ii) Equity Shares

PREFERENCE SHARES:

Shares which enjoy the preferential rights as to dividend and

repayment of capital in the event of winding up of the company over
the equity shares are called preference shares. The holder of
preference shares will get a fixed rate of dividend. Preference share
are classified into different types, these are:

1. Cumulative preference shares: Cumulative preference shares

will accumulate any dividend that is not paid when due. Any
unpaid dividend is added to the amount payable the following
year and no dividends can be paid on ordinary shares until the
 entire backlog of unpaid dividends on cumulative preference is
cleared.

2. Non-cumulative preference shares: Non-Cumulative

Preferred is preferred stock that no pay to the holder of any
unpaid or omitted dividends. If the corporation chooses no pay
dividends in a given year, the investor is to claim any of those
forgone dividends in the future is lost.
3. Redeemable preference share: Type of stock (shares) that is
liable to be bought back by the issuing firm on a specified date
or after a specified period of notice. Corporate legislation in
some jurisdictions prohibits the redemption if it jeopardizes the
financial health of the issuer.
4. Participating or non-participating preference shares:
Participating preference share is capital stock which provides a
specific dividend that is paid before any dividends are paid to
common stock holders, and which takes precedence over
common stock in the event of a liquidation. This form of
financing is used by private equity investors and venture capital
firms. Holders of participating preferred stock get both their
money back (with interest) and the money that is distributable
with respect to the percentage of common shares into which
their preferred stock can convert.

EQUITY SHARES:

Equity shareholders will get dividend and repayment of capital after

meeting the claims of preference share holders. There will be no
fixed rate of dividend to be paid to the equity shareholders and this
rate may vary from year to year. This rate of dividend is determined
by the directors and in case of large profits; it may even be more than
the rate attached to preference share. Such shareholders may go
without any dividend if no profit is made. Equity shares are most risk
bearing securities because holders of these shares will get repayment
of capital after meeting the claims of preference share holders,
debenture holders and other creditors. The value of these shares in
the market fluctuates upward or downward with the fortunes of the
company. Equity share holders enjoy voting right in case of any
decisions in the company.

SHARE MARKET:

Share market is a place where shares are issued or purchased or sold.

These shares may be new issue or existing shares. There are two
types of share markets:

(i) Primary Market (ii) Secondary Market

Primary Market:

This is the market where fresh issues of shares are made.

Secondary Market:

In this market existing shares are traded. BSE and NSE are two
major secondary markets in India. Apart these two exchanges there
are twenty one exchanges in India.

SHARE MARKET PARTICIPANT:

There are two basic market participants these are:

(i) Investor vs. Speculator

(ii) Institutional vs. Retail Investor

Investor: An investor may be people or company who make

investment in securities with an objective to get return in long term.
 Speculator: They involve in buying, holding, selling and short
selling of securities. All above these happen due to fluctuation in the
price of securities.

Institutional Investor: An institutional investor is investors such as

bank, insurance company, retirement fund, hedge fund or mutual
fund that is financially sophisticated and makes large investment,
often held in very large portfolio management.

Retail Investor: A retail investor is an individual investor possessing

shares of a given security. Retail investors can be further divided into
two categories of share ownership:

1. A Beneficial Shareholder is a retail investor who holds shares of

their securities in the account of a bank or broker, also known as “in
Street Name.” The broker is in possession of the securities on behalf
of the underlying shareholder.
2. A Registered Shareholder is a retail investor who holds shares
of their securities directly through the issuer or its transfer agent.

DIFFERENT INVESTMENT OPTIONS IN SHARE MARKET:

 Equity through secondary Market

 Equity through IPOs/Primary Market
 Equity through Derivatives

Equity through secondary market:

It is the investment on already existing equity shares of companies.

Equity through IPOs/Primary market:

When a company raises capital by issuing shares to general
investors, the process is called a public issue of share or a primary
market issue. If the company approaching the capital market with an
issue of shares for the first time, the issue is called an Initial public
offering.

Equity through derivatives:

Derivatives are a financial instrument which value is derived from

underlying assets (commodities, shares, forex and other assets).
Derivative is three types forward contract, future contract, option.

Forward contracts:

These are used in the foreign exchanges markets to reduce currency

risk and in the commodities market to reduce the price risk.

Future contract:

Derivative contract wherein you agree to buy or sell a specified

quantity of the underlying assets on a specified particular date in the
future, at he price agreed upon at the time of entering into contract. In
India equities future market, this price is the spot price (the price of
the underlying assets in the cash market) prevailing on the date of the
expiry of contract. Futures are legally binding and both parties are
bound to uphold the agreement.

Option:

This is a contract that gives you the right (but not the obligation or the
liability) to buy or sell a specified quantity of the underlying assets at
an agreed price (strike/agreed price) on or before the before the
specified future date (expiration date). To acquire this right, you pay a
price (option premium) to the seller of the option “option writer”. The
potential loss for the option seller is unlimited whiles his upside or
profit is limited to the premium that he receives. On the other hand
the maximum loss that the buyer could face is the option premium
that he pays, put his potential profit is unlimited.

DIFFERENT ANALYSIS FOR EQUITY INVESTMENT:

There are different analysis are made by the investor for investment
in equity. These are

(i) Fundamental analysis

(ii) Technical analysis

Fundamental analysis:

Fundamental analysis is really a logical and systematic approach to

estimating the future share price. It is based on the premises that
share price are determined by a number of fundamental factors
relating to the economy, industry, and company fundamentals.

Fundamental analysis is, in other words a detailed

analysis of the fundamental factors affecting the performance of the
company as well its share price.

Generally each share is assumed to be having an economic worth

based on its presents and future earning capacity, this is called
intrinsic value or fundamental value. The purpose of fundamental
analysis is to compare intrinsic value of share with the prevailing
market price of the share. The market price of the share is due to the
supply and demand of the share in the market. This helps to the
investor to make an investment decision.

The market price of the share is always trying to match with its
intrinsic price so that if the market price of the share is higher than its
intrinsic price then the investor should sell the share because the
share price will go down to match with its intrinsic price .if the
market price of the share is lower than the intrinsic price than the
investor should bought the share because the share price will go up to
match up with its intrinsic price.

Thus fundamental analysis provides an analytical framework for

rational investment decision making. This analytical framework is
known as EIC framework.

ECONOMY

I
NDUSTRY

COMPAN
Y

(EIC FRAMEWORK)
The logic behind this three tire analysis is that the share price
depends upon not only its own effort but also on general industry and
economic factor. A company belongs to an industry and an industry
belongs to an economy. So the effective industry and economy affect
the share price.

Classification of factors:

(i) Economic wide factor: such as growth rate of the

economy, inflation rate, foreign exchange rate which affect all
companies

(ii) Industry wide factors: such as demand supply gap in the

industry, the emergence of substitute product, change in government
policy etc these factor affecting those companies which belongs to an
specific industry.

(iii) Company specific factor: such as the age of its plant, the
quality of management, brand image of its products, its labour
management relationship, etc. These are the actors which affect the
performance of the company.

Technical analysis:

A technical analyst in technical analysis believes that the

share prices are determined by the demand and supply forces
operating in the market. These forces again influenced by a number
of fundamental factors as well as the emotional factors of the
investors. The combined impact of all these factors is reflected in the
share price movement. The technical analysis includes the past share
prices to forecast the future share price. So that technical analysis is
the forecasting technique to determine the future price of the stock by
taking historical price of the stock.

Basic principle of technical analysis:

(i) The market price of the share price is related to supply and
demand forces operating in the market.
(ii) Security prices movement are continuous in a particular
direction for some length of time.

(iii) Trends in stock price shows when there is a shift in demand and
supply factors.

(iv) The shifts in demand and supply forces can be detected through
charts prepared specially to show market action.

(v) These charts can show the resistance and support level of the
stock price.

ROLE OF MARKET TRENDS IN EQUITY INVESTMENT:

Trends refer to the direction of share price movement for a long

period of time such as month and quarter. Trend is divided into two
types. These are bullish trend and bearish trend.

(i) Bullish trend: During a bull market (up word moving market)
in the first phase the price would advanced with the revival of
Y
confidence in the future business. The future prospect of
business should be promising .this will promote the investor to
purchase share of companies .during second phase the price
would advanced due to the corporate earnings. In the third
phase price advances due to the inflation means the demand of
share increased. In the bullish trend the share price moves in a
up word direction for a long period of time.

0
X
 Inflation

Corporate
earning

Revival of
confidence

Bullish trend

So during the bullish trend the investors are investing their money to
gain profit from the up word movement of share price.

(ii) Bearish trend: bearish trend is the opposite of the bullish

trend here prices began to fall due to the lost of hope on
company and investor sell their shares in first phase and in the
second phase the fall in distributing dividend and causes
further fall in share price

So during the bearish trend the investors are selling their security to
avoid the loss of capitals.

Phase 1
 Phase 2

Phase 3

0 XX
Bearish trend

Support and resistance level of share price:

Support and resistance level are those price levels at which the down
trend and up trend in share price movements is reversed. Support
occurs when price is falling but bounce back or reverse direction
every time it reaches a particular level. When all these low points are
connected through a straight line it forms the support level. Support
level is the price level at which sufficient buying pressure is exerted t
defend the fall in price

Resistance occurs when the share price moves up word. The price
fall back every time it reaches a particular price level. A straight line
joining this price level forms the resistance level. Resistance level is
the price level at which sufficient selling pressure is exerted to
restrict the share price to move up word.

Y
 RESISTANCE

SUPPORT

0
X
Support and resistance
level

ROLE OF “DEMAT ACCOUNT”IN SHARE MARKET

Demat Services:

In India, a demat account, the abbreviation for dematerialized

account, is a type of banking account which dematerializes paper-
based physical stock shares. The dematerialized account is used to
avoid holding physical shares: the shares are bought and sold through
a stock broker.

This account is popular in India. The Securities and Exchange Board

of India (SEBI) mandates a demat account for share trading above
500 shares. As of April 2006, it became mandatory that any person
holding a demat account should posses a Permanent Account
Number (PAN).

Demat account allows you to buy, sell and transact shares without the
endless paperwork and delays. It is also safe, secure and convenient.
What is demat account?

Demat refers to a dematerialized account.

Just as you have to open an account with a bank if you want to save
your money, make cheque payments etc, 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. You have to
approach the DPs (remember, they are like bank branches), to open
your demat account.

Let’s say your portfolio has 100 of Satyam, 200 of IBM and 120 of
TCS shares. All these will show in your demat account. So you don’t
have to possess any physical certificates showing that you own these
shares. They are all held electronically in your account. As you buy
and sell the shares, they are adjusted in your account. Just like a bank
passbook or statement, the DP will provide you with periodic
statements of holdings and transactions.

Is a demat account a must?

Nowadays, practically all trades have to be settled in dematerialized

form. Although the market regulator, the Securities and Exchange
Board of India (SEBI), has allowed trades of up to 500 shares to be
settled in physical form, nobody wants physical shares any more. So
a demat account is a must for trading and investing. Now a days
demat account provides you the facility of 3 linked accounts which
are opened simultaneously.

SAVING
ACCOUNT

TRADING LINKED A/C DEMAT

ACCOUNT
ACCOUN
The linked account offers 24x7 investing, security, no paper work,
easy transfer of funds, instant order confirmations, speed and
transparency.

NOW to the crux:

The cost of opening and holding a demat account. There are four
major charges usually levied on a demat account: Account opening
fee, annual maintenance fee, custodian fee and transaction fee. All
the charges vary from DP to DP.

Account-opening fee

Depending on the DP, there may or may not be an opening account

fee. Private Banks, such as ICICI Bank, HDFC Bank and UTI Bank,
do not have one. However, players such as Karvy Consultants and
the State Bank of India do so. But most players levy this when you
re-open a demat account, though the Stock Holding Corporation
offers a lifetime account opening fee, which allows you to hold on to
your demat account over a long period.

Maintenance fee

This is also known as folio maintenance charges, and is generally

levied in advance.

Custodian fee

This fee is charged monthly and depends on the number of securities

(international securities identification numbers — ISIN) held in the
account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per
month. DPs will not charge custody fee for ISIN on which the
companies have paid one-time custody charges to the depository.

Transaction fee
 The transaction fee is charged for crediting/debiting securities to and
from the account on a monthly basis. While some DPs, such as SBI,
charge a flat fee per transaction, HDFC Bank and ICICI Bank pegs
the fee to the transaction value, subject to a minimum amount. The
fee also differs based on the kind of transaction (buying or selling).
Some DPs charge only for debiting the securities while others charge
for both. The DPs also charge if your instruction to buy/sell fails or is
rejected. In addition, service tax is also charged by the DPs.

Benefits of holding a demat account:

i. A safe and convenient way to hold securities;

ii. Immediate transfer of securities;
iii. No stamp duty on transfer of securities;
iv. Elimination of risks associated with physical certificates such
as bad delivery, fake securities, delays, thefts etc.;
v. Reduction in paperwork involved in transfer of securities; the
guidelines, the amount of interest so taken to income should be
reversed or should be provided for in full.
• With a view to ensuring uniformity in accounting the accrued interest
in respect of both performing and non-performing assets, the
following guidelines may be adopted notwithstanding the existing
provisions in the respective state co-operative Act:

i. Interest accrued in respect of non-performing advances should not be

debited to borrowed accounts but shown separately under interest
receivable account on ‘property and asset’ side of the balance sheets
and corresponding amount showed ‘under overdue interest reserve
account’ on the ‘capital and liabilities’ side of the balance sheet.

ii. In the respect of borrowed accounts, which are treated as performing

assets, accrued interest can be alternatively debited to the borrowable
account and credited to interest account and taken to income account.
In such case where the accrued interest has been to such borrowable
account but not actually received before the end of the accounting
year or the account has to be treated as NPA earlier as per guidelines,
 equivalent amount corresponding to such un realized interest should
be reversed by debit to be profit and loss account and credited to
‘Overdue Interest reserve’ account.

• In the above context, it may be clarified that overdue interest reserve

is not created out of the real or earned income received by the bank
and as such, the amounts held in the overdue interest reserve account
cannot be regarded as ‘reserve’ or a part of the owned funds of the
banks. It will also be observed that the balance sheet format
prescribed under the Third Schedule to the Banking Regulation Act ,
1949(As applicable to co-operative societies) specifically requires the
banks to show ‘overdue interest reserve’ as a distinct item on the
‘capital and liabilities’ side vide item 8 thereof.

CHAPTER -4
• Data analysis and interpretation
Stock prices movements of Jindal Steel and Power Limited. From 21st
June 2010 to 21st July 2010.

Date Open High Low Closing

21/06/2010 674 689 673 685
22/06/2010 675 677 667 671
23/06/2010 668 671 657 661
24/06/2010 664 668 650 657
25/06/2010 650 657 639 641
28/06/2010 641 647 631 637
29/06/2010 637 636 615 621
30/06/2010 622 626 610 624
01/07/2010 612 621 610 613
02/07/2010 614 621 611 615
05/07/2010 615 618 611 616
06/07/2010 614 632 614 630
07/07/2010 634 634 622 624
08/07/2010 631 632 619 621
09/07/2010 626 635 625 631
12/07/2010 634 639 623 625
13/07/2010 627 635 622 633
14/07/2010 636 641 627 629
15/07/2010 630 633 625 629
16/07/2010 631 632 623 624
19/07/2010 621 629 614 624
20/07/2010 629 629 617 619
21/07/2010 620 638 621 633

(Share price movement of JSPL)

This is the graphical presentation of above data. This graph is known as
Chinese candle stick chart. In the above graph the black candles shows that
the opening price is higher than the closing price, e.g. on 24 th June 2010 the
opening price was 664.00 and the closing price was 657.00.the white candle
stick shows that the opening price is lower than the closing price. E.g. on
21st June the opening price was 674.00 and the closing price was 685.00.
The hyphen (-) symbol shows that the opening price is equal or nearly equal
to closing price. E.g. on 1st July the opening price was 612.00 and the
closing price was 613.00.

From the above chart I know that the price of the JSPL is in a down word
direction so that the share is now risky to make any investment in it because
it may further go down.

Stock price movement of TATA STEEL from 21st June to 21st July

Date Open High Low Closing

21/06/2010 480 506 480 504
22/06/2010 508 508 492 494
23/06/2010 491 501 489 497
24/06/2010 498 506 495 498
25/06/2010 498 501 488 490
28/06/2010 490 501 490 500
29/06/2010 499 500 480 481
30/06/2010 470 487 470 485
01/07/2010 483 486 472 475
02/07/2010 475 481 471 474
05/07/2010 476 476 470 471
06/07/2010 473 481 468 480
07/07/2010 484 484 473 474
08/07/2010 485 488 478 484
09/07/2010 489 497 486 495
12/07/2010 495 506 491 497
13/07/2010 496 512 495 508
14/07/2010 515 519 504 506
15/07/2010 507 517 506 512
16/07/2010 514 518 507 509
19/07/2010 503 514 502 511
20/07/2010 515 519 505 509
21/07/2010 518 532 511 530

(Share price movement of TATA STEEL)

Form the table mention above the data are plotted in the above Chinese
candle stick chart. The chart shows that the share price of Tata steel is
moving in an up word direction. So from my point of view the share is now
profitable to make investment in it.

The above both security I examined during my project it is difficult to

determine the support and resistance level because there is no reversal trend
is shown in both securities. The support and resistance level is difficult to
determine in a long period of time and these support and resistance level is
easy to determine in a single day share price movement.

Analysis of the data collected (primary):

According to my target population and sampling technique I filled up
my questinnaire from those people whom I guess that he/she may
know/ invest in share market and give some benefit to my project.

Sample size: 100

My collection of data is on the basis of the following questionnaires:

1. Name of the investor.

2. Age of the investor.

3. Gender

4. What is the qualification of the investor?

5. What is his/her occupation?

6. How much his/her annual income?

7. What are their investment avenues?

 Bank fixed deposit

 Mutual fund

 Insurance

 Government security

 Share

 Real estate

8. How much knowledge they have about share market?

9. What is the purpose of investment?

 Short term

 Long term

 Daily transaction

10. Mode of investment in share market?

11. What is the source of information?

12. Do they aware about IIFL?

13. Do they prefer to invest in steel sector?

14. Do they satisfied by the service provided by IIFL?

The characteristics and the specification of the data collected based on

their age as follows:
To gather the information I used a questionnaire comprised of
different questions relative to the objective of the project. I also did
face to face interview which helped me to know their mentality
towards their investment plans and decisions. With regard to my
project objective this data are helpful to know about various segment
of society and their investment patterns.
Still today our culture is man dominated culture and most of the
housewife doesn’t know where her husband invests. So in our field
work I collected data from 85% of male & 15% female. Now most
female are aware about share market but they don’t like to enter in
share market.
Our Research indicates that majority of the individual i.e. 29.71% are
interested in life insurance and then comes bank & corporate fixed
deposit with 23.46% and mutual fund follow them with 17.40%.
Induvidual are interested in life insurance because it gives tax benefit
and security to future. Then comes banks fixed deposit as it gives risk
free return. At last but not the least govt. savings, Shares and real
assets follow the above investment pattern with 19.43%,5.40% and
4.60% respectively. Very less percentages of people are interested for
shares and real assets as because high risk and highly volatile market
condition and less knowledge about Share market.
Regarding investment in mutual funds, majority of investors prefer it,
i.e. 43%. This is due to diversification of risk and more profit margin
than other safe and risk free investments. Here we can see that 36%
are not interested in it , as because it is indirectly releated to stock
exchange and hence they donot want to take any risk. And rest 21%
are ignorant about mutual funds because lack of awareness.

When it comes about investment in life insurance, majority of

investors are investing in life insurance, i.e.,44%. These majority
portions are investing in life insurance as because they get tax
deduction and life insurance is consisdered as risk free investment and
guranteed money back return, but 37% investor don’t invest in life
insurance and 19% don’t have any idea about it.

24% investors are intrested in investing in real assets , 68% are not
intrested investing in real assets due to lack of knowledge & rest 8%
are ignorant about investing in real assets.

When investment pattern studied w.r.t. share, It is found that only

45% are interested in investing in shares & 38% are not at all intrested
a & remaining 17% are not aware of it. This is due to lack of
awareness & involvement of high risk, still then people are now
showing intrest towards investment in share due to high profit.

Mostely people invest on part of saving in Mutual fund (Equity fund)

i.e.37% than equity ( secondary market ) is 32% and 22% in equity
( primary market). And lastely few people are interested in derivative
9%.Due to people always thinking about getting more return without
taking risk.
Through my survey I ultimately found upon understanding of people
at Bhubaneswar on Share market 47% people have little
understanding, 28 % people have good unserstanding and only 15%
of people of Bhubaneswar are hignly experienced about Share Market
and rest 10 % people have no idea at all.

Through my study I have found that most of people prefer for

online investment i.e. 82% and because online trading/ investment is
very user friendly, convienence & speed,04% people go for offline
investment,14% of people invest in both online and offline mode.
Share market is fully link with risk and time so most of people
always consider precautionary (long term) purpose i.e. 53%, 29% of
people are interested to invest their money for speculative ( short
term) purpose and rest of 18% people prefer for daily transation
purpose due to the up and down of share price during the bussiness
hours.
From the above chart it shows that IIFL didnit creat its awareness
among the investor.
During my project I have seen that most of the people i.e. 47% in my
concern area are satisfied by the service provided by the india infoline
limited.34 % people say no and 19% of people remain neutral.
During my interaction with investor I have seen that most of the
them .i.e 67% are prefer to invest in steel sector because growing
demand of steel, & 33% people donot prefer to invest in it.

Between Age 21 -30 investor prefer both Fixed deposit and Insurance
i.e.31% and 21% respectively. 17% and16% investor go for Shares
and Govt. Saving Scheme, only 9% and 6% people like to invest own
part of saving in mutual fund and Real Assets respectively.

The age between 31- 40 group of people are risk taking in nature,
tharefore they mostly prefer to invest their savings in share market i.e
26% and 14% in mutal funds, 28% like to expend money for
Insurance. And 17% likely to invest in Bank FD , 8% in Govt. Saving
Scheme and just 7% investment in real aseets.

Between age 41-50, 29% are inclined towards life insurance,17% are
both Bank/corporateFD and Govt. Savings Scheme or 16% are both
 Mutual fund and Share and only 5% people are interested in Real
Assets.

Under Age group 51-60, 24% are interested towards Bank/Corporate

FD,23% are inclined towards Govt. Saving Scheme,21% are go for
Mutual Fund, 18% or 10% are interested towards Insurance and
Shares and only 4% people are interested towards Real Assets.

Mostely Above 60 Age group people are always think about govt.
Saving scheme and Bank/Corporate FD i.e. 36% or 35% respectively
because this age people have no more pasence for taking risk. Other
10% are interested towards Mutual Fund,9% are like to invest in
Insurance and 8% are interested towards Share and few are like to
invesr in Real Assets i.e 2% more clarity.

Investors under matric qualification mostly invest in fixed deposit

i.e.41% and 33% investor prefer on insurance , 12% invest in govt
savings scheme. But people fear to invest in share, mutual fund and in
real assets due to lack of awareness.

Investor in matric qualification most of the people are prefer to invest

their surplus earning in life insurance i.e. 35%, 33% of people consider
about the bank fixed deposit, 14% of people are taken into
consideration govt savings is one of the investment scheme, 9% people
are focouses towards mutal funds and rest 2% and 7% people are
prefer real assets and share respectively.

It is found that in intermediate group of qualification, the investment in

in share market increases from 7% to 9%,and also in mutual fund it
increasesby 3% in comparision to matriculation,and fixed deposit
reduced by 5%.

In Graduate mutual fund investments are incseases from 12% to 22%,

Insurance sector investment increases by 3%, Govt. saving investment
decreases by 7%, In shares the investment are incseases from 9% to
17%, Real assets decreases by 3% and bank fixed deposite decreases
from 28% to 11%. The above all are comparision between intermediate
and graduate.

In proffessional degree the investment in bank deposite increases from

11 % to 12%, Mutual fund investments increases by 6%, insurance
investment decreases by 15%, government savings decreases by 4%,
real assets increases from 5% to 9% and shares investment by 8%. The
above all are comparision between graduate and proffessional degree
holders.
Individuals with an income under 100000 mostly prefer bank fixed
deposite ie 53%, life insurance 37%, govt. saving Scheme 6%, Mutual
Fund 3% and Rest 1% are invested in Shares.

Individual with an income between 1- 2.5 lakh most of people are

perfer invest their surplus earning in Bank Fixed Deposit i.e. 37%,
Insurance 29%, govt. Saving Scheme 9%, Mutual fund 17%, Real
Assets 1% and Rest 8% People are investing in share.

Individual with an income between 2.5 – 5 lakh most of people are

interested to invest their surplus money in Bank Fixed Depositi.e.
30%,19% people are interested in Mutual Fund, 28% people are

interested in Insurance,7% people are go through Govt. Saving

Scheme, 3% people are prefer Real Assets and rest 13% people are
considered about Shares.

Individual with an income Above 5 lakh most of people are go

through Insurance i.e. 27%, 22% prefer people are prefer to invest in
real Assets and rest 5% People are invest their surplus money in Govt.
Saving Scheme.
It is found that student are mostly Interested to invest their money in
Insurance i.e. 37%, 6% of student prefer to invest in Bank FD, 5% of
Student are interested in Mutual fund and 3% of Student are prefer to
invest in Share.

Individuals with business Man as their occupation are investing 36%

in Insurance, 19% in Shares, 12% in Govt.Saving Scheme, 13% in
Mutual Fund, 11% in bank FD and rest 9% are investing their surplus
earning in Real Assets.

Individuals with Service Person as their occupation are investing

18% in Bank FD, 11% in mutual fund, 38% in insurance, 20% in
Govt. Saving Scheme, 6% in real Assets and rest 7% are investing in
Share.

In professional 38% of people are interested in Insurance, 15% are

interested in Govt. Saving Scheme, 19% are interested in Bank FD,
11% are interested in mutual Fund, 7% people are interested in Real
Assets and rest 10% are interested in Shares.
CHAPTER-5
• Findings
 • Suggestion
• Conclusion

FINDINGS
Above the above analysis and interpetation I found the following points

 According to age 21-30,31-40 age people know about the

investement.

 According to gender 85% of male and 15% female know about the
investment in sharemarket.
  According to qualification mainly graduates people know much more
about invesment in share market.

 According to income group it received fastest growing equity booking

house large firms’ on Indian by Dun & Brand street.

 Generally an up ward trend equity should be preferable to invest in it.

 Support and resistance level are important to determine the timing of

purchase of share in a single trading day.

 Demand and supply force of share is detemined the market price of

the share.

 45% are on intersted in investing in share & 38% are not & 17% are
hot aware of it.

 People invest on equity in secondary market is 32% and 22% in

primary market.

 45% people have little knowledge about share market. 30% have
good, 15% people of BBSR are well known & 10% have no idea.

 Most of the investors prefer to invest in steel sector.

 A huge part of the market have to be satisfied by the service proveide

by the IIFL.

SUGGESTION
 Generally demat account is a product where aggressive marketing through
televisions, news paper, hoardings etc are not of much help. The
marketing of such product is generally affected and influenced by its
customer’s itself. In fact the word of mouth publicity plays wonders
for it. So it is suggested to keep the existing customers utmost satisfied,
which will help the firm further to increase its customer base through
their reference to their friends and relatives.

 Depending on the client’s profile and level of knowledge proper

service structure should be built. Proper segmentation can help any
service provider to increase its customer base. Further it can help a
firm to cater the needs of individual in a better manner.

 It has been noticed through the survey conducted that easy

documentation and paper works is being highly favored by the
investors of Bhubaneswar. So my recommendation in this regard
would be bringing a change in the system or service structure which
would help the investors to lead a hassle free trading sessions with
nominal paper works. Another benefit of providing such services is
that, it will bring transparency in the system, helping the company to
win over investors trust.

 Review investors portfolio on a fixed interval basis, helping an

investor to develop a personalized Investment Policy Statement (IPS)
by measuring their risk tolerance can help any service provider to win
over the confidence of any investor. Intact this would make them feel
that their service is customized according to their needs.

 Conducting interactive sessions with market experts, training

programs for the beginners is worth in providing greater satisfaction
to any investor.

 Measurement of clients’ satisfaction level on a quarterly basis may

help the service provider to review its service structure according to the
prevailing market trends and investor’s need.
 General Do's and Don’ts for Investors

1. Don’t deal with unregistered intermediaries, as this would expose you to

counter party risk.

2. Give clear and unambiguous instructions to Broker / Sub–broker.

3. Keep a record of all instructions issued to the Broker / Sub–broker.

4. Confirm with Broker / Sub–broker whether delivery is in physical or

demat form before selling shares.

5. Don’t fall prey to promises of unrealistic high returns.

6. Don’t indulge in speculative trading, go by fundamentals.

7. Trade within predetermined limits.

8. Use the Investors’ Grievance Redressed system of the Exchanges to

redress your grievances if any.

9. Understand the working of the Investor Service Cell for complaint against
listed companies / Brokers.

10. You can trade on your own through Internet based trading by registering
with a Broker.

CONCLUSION
On equity investment:

 The price of the equity is determined through different analysis.

 Role of market trend is important to make an investment decision,

such as timing of investment and selling of securities.

The present scenario of the IIFL business highlights:

 Involvement and participation of highly educated people in capital

market.

 People in large numbers from business and service sector are

pouring into the business.

 People from younger generation are coming to join the capital

market.

 Customers have become much more learned and sophisticated to

use the advantages of the modern information technology.

 There is betterment of social and cultural life among the

customers.

 The interests and the motivational level of the customers have

risen up to significantly higher levels.

 Lower middle and middle class people have come forward to

invest in the business.

 Proper marketing required to create awareness among the people

of the society to enlarge the business.

 Finally, it has changed from a seasonal business to an all time

business.
 CHAPTER-6
• Bibliography

BIBILOGRAPHY:
BOOKS:
(i) Security analysis and portfolio management, S. Kevin, PHI
publication.

(ii) Bulls, Bears and The Mouse- an introduction to online stock

trading(2000), Dr. Kamlesh N Agrawala, Deeksha Agrawalal,
Macmillian Indian Limited

(iii) Stock market rules (2006), Michal D Shimon, Tata Mc

Grew Hill publishing company limited.
Journals and article:
• BSE journal, December 2005

• Solink B.(1990), the distribution of daily stock return and

settlement procedure: the Paris Bourse, Journal of finance
XLV(5),1601-1609

• Kyriacou, K&mase, B.(2000), Rolling settlement and market

liquidity, ”Applied financial Economics”

Reference:
Magazines:
(i) Business today

Website:
(i) www.google.com
(ii) www.bseindia.com
(iii) www.nseindia.com
(iv) www.moneycontrl.com
(v) www.topstockresearch.com