Prabu Karvy

A STUDY ON CUSTOMER PERCEPTION TOWARDS INDIAN
CAPITAL MARKET WITH SPECIAL REFERANCE TO KARVY

STOCK BROKING LTD
A PROJECT REPORT
SUBMITED TO THE
SCHOOL OF MANAGEMENT
In the partial fulfillment of the requirement for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION

BY
THAMIZH.P
Reg.No: 35106212
Under the guidance of

Mr.P.SARAVANAN B.B.A., M.B.A., PGDCA, M.Phil.
Senior Lecturer
SCHOOL OF MANAGEMENT STUDIES

FACULTY OF ENGINEERING AND TECHNOLOGY
SRM UNIVERSITY
SRM NAGAR, KATTANKULATHUR, KANCHEEPURAM
DISTRICT 603203
MAY 2008
SCHOOL OF MANAGEMENT STUDIES FACULTY

OF ENGINEERING AND TECHNOLOGY SRM
UNIVERSITY
SRM NAGAR, KATTANKULATHUR,
KANCHEEPURAM DISTRICT-603203
BONAFIDE CERTIFICATE
Certified that this project Report titled A STUDY ON CUSTOMER
PERCEPTION TOWARDS INDIAN CAPITAL MARKET WITH
SPECIAL REFERANCE TO KARVY STOCK BROKING LTD
Is a bonafide work of THAMIZH.P(Reg no. 35106212) who carried out the
research under my supervision. Certified further that to the best of my
knowledge the work reported here in does not form part of any other
project or dissertation on the basis of which a degree or award was
conferred on an earlier occasion on this or any other candidate.
Signature of the Guide Signature of Dean/ MBA

(P.Saravanan)
(Dr. Jayshree Suresh)
Internal Examiner External Examiner
Date :
ABSTRACT
The project report A STUDY ON CUSTOMER PERCEPTION

TOWARDS INDIAN CAPITAL MARKET WITH SPECIAL
REFERANCE TO KARVY STOCK BROKING LTD,
is a described study were a clear description of the organization working
and to know the application of management concepts has How to manage
the risk. It consists of analysis and findings of the study of the India Infoline
Limited. The report talks about the Risk management. The objective of the
study is to understand hedging and speculation through the derivative
trading. The scope of the study is limited to the company, methodology
followed is to study the company and its market analysis for a period of 3
months i.e., from February to April 2008. Calculation have been made from
the information obtained from stock market price of the NSE. Finally the
report ends with the finding and analysis of the study done at the company
and recommendations given to the management of the company for further
improvement of their working.
ACKNOWLEDGEMENT
I would like to thank KARVY STOCK BROKING LTD, for giving
me this opportunity to be associated with an esteemed organization.
I would especially like to express my gratitude towards
Mr. ANAND, Branch Manager, who was my project guide, for all
the support and constant feedback on my progress made during the project. I
would also like to thank Mr. SENTHIL, Manager for their support and
encouragement, which helped me to complete this project successfully.
I extend my sincere thanks to internal guide Mr.P. SARAVANAN,
B.B.A., M.B.A., PGDCA. M.Phil. for his valuable guidance during the
project work.
My sincere thanks to honorable founder and chairman
Mr. PACHAMUTHU,
S R M UNIVERSITY, KATTANKULATHUR
In particular, my sincere thanks to Dean Mrs. JAYSHREE SURESH,
SCHOOL OF MANAGEMENT, SRM UNIVERSITY, KATTANKULATHUR for
providing all the facilities to carryout the project work. Last but not the least, I
extend my thanks to my family and all my friends who helped me in
completing this project work successfully.
DECLARATION
I, THAMIZH.P (35106212) do here by declare that this project A STUDY
ON CUSTOMER PERCEPTION TOWARDS INDIAN CAPITAL

MARKET WITH SPECIAL REFERANCE TO KARVY STOCK
BROKING LTD submitted to SRM School of Management Studies, for
the award of the Master of Business Administration is the record of
original work done by me under guidance of
Mr.P.Saravanan.B.B.A.,M.B.A., PGDCA., M. Phil., faculty Guide ,
School of Management studies, and this project work has not formed the
basis for the award of any other Degree/Diploma/Associate ship/Fellow ship
of the similar title to any other Degree to any other University
Place : Kattankulathur
Date:
Signature of the Student
TABLE OF CONTENTS
CHAPTER.
NO
CONTENTS
Pg.No
INTRODUCTION
COMPANY PROFILE
15
REVIEW OF LITERATURE
23
RESEARCH METHODOLOGY
24
DATA ANALYSIS & INTERPRETATION
46
FINDINGS
95
SUGGESTIONS
98
CONCLUSION
101
BIBILOGRAPHY
10
ANNEXURE
102
103
LIST OF TABLES
Table
5.1
5.2
5.3
5.4
5.5
PARTICULARS
PAGE
Age vs. purpose of investment in share
46
market.
Gender vs
information they seek for
investing in stock market.

Gender vs. risk
taking ability of the
48
50
investors.
Investors perception
towards
stock
market
The most
preferred
sector by the
investors
52
54
Percentage of investors savings in stock

5.6
5.7
5.8
5.9
5.10
5.10
market
56
Reasons for investing
in the
stock
market
Time frame of the investment preferred
by the
58
60
respondent
Risk taking ability of the investors

Information
based
on
62
which
64
investments are made in stock market

Difficulties faced by the investors
66
LIST OF CHART
Chart
PARTICULARS
Investors perception towards
5.1
PAGE
stock
market from risk, return and savings
53
point of view
5.2
The most preferred
sector by the
investors
54
Percentage of investors savings in stock

5.3
5.4
5.5
5.6
5.7
market
57
Reasons for investing
in the
stock
market
Time frame of the investment preferred
by the respondent
Risk taking ability of the investors
Information
based
on
59
61
63
which
investments are made in stock market
65
5.8
Difficulties faced by the investors
66
5.9
Share Price Movement of ICICI Bank
70
5.10
5.11
Exponential Moving Average
(EMA)
for ICICI Bank

Relative Strength Index for ICICI Bank
71
72
LIST OF CHARTS
Chart
5.12
5.13
PARTICULARS
Comparison between ICICI Bank & NSE
Share price movement for HDFC Bank
PAGE
73
76
Exponential Moving Average (EMA) for

5.14
5.15
5.16
5.17
5.18
HDFC Bank
Relative Strength Index for HDFC Bank
Comparison between HDFC bank and
NSE index
Share price movement for SBI Bank
Exponential Moving Average for SBI
Bank
77
78
79
82
83
5.19
Relative Strength for SBI Bank
84
5.20
Comparison between SBI & NSE
85
5.21
Stock price movement on PNB bank
88
5.22
Exponential Moving Average for PNB
89
5.23
Relative Strength Index for PNB
90
5.24
Comparison between PNB & NSE
91
CHAPTER-1
INTRODUCTION
INTRODUCTION OF THE STUDY
Capital market can be classified as primary and secondary market. The fresh issue
of securities takes place in primary market and trading among investors takes place in
secondary market. Primary market is also known as new issues market. Equity investors
first enter capital market though investment in primary market. In India, common
investors participating in the equity primary market is massive. The number of companies
offering equity through primary markets increased continuously.
The Indian capital market saw good growth between May 2003 and January 2004
on the back of good GDP growth, encouraging corporate results, the Government's intent
to invest heavily in infrastructure, a strong rupee, and mounting forex reserves. The
market today is range bound and not much seems to be happening.
While this is the story of the equity market, a quick look at the debt market shows
that huge liquidity and low credit off take kept interest rates down most of the period.
There was mild volatility whenever there was news about U.S. interest rates. There has
been higher volatility more recently because of two things concerns over fiscal deficit
and inflation and rising interest rates in the key world economies. There could be
inflationary pressures and rising trade deficits, particularly for the developing countries.
As for the emerging scenario India's GDP growth promises to be better than what
it is now. Indian corporates may continue to show good growth and robustness. The
monsoon is expected to be good as also the agriculture growth. The rupee seems to be
holding fine while the forex reserves remain comfortable.
The balance sheets of Indian banks are getting stronger. The markets now seem to
be waiting for the Government's moves on the economic front. The equity markets are
bound to see a big rally. If this does not happen then the markets could see a choppy
period ahead. On the debt side, there are indications that interest rates might rise.
It is now fairly well established that making investments only in one channel does
not yield the desired results. Diversification and asset allocation is the new mantra. A
person needs to diversify to optimize returns. This will involve putting money in equities
choosing the type of equity fund that most suits the risk/return profile and also some
money in debt funds. The combination of equity and debt will depend upon the following
factors: risk orientation, quantum of return expected, time horizon and objective of
making the investment.
Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market
forces. Share prices tend to rise or remain stable when companies and the economy in
general show signs of stability and growth. An economic recession, depression, or financial
crisis could eventually lead to a stock market crash. Therefore the movement of share
prices and in general of the stock indexes can be an indicator of the general trend in the
economy.
INDIAN CAPITAL MARKET

The Indian capital market has undergone phenomenal changes. The magnitude of
growth could be gauged in terms of massive jumps in funds mobilization, the turnover on
the stock exchanges, the amount of market capitalization, and the expansion of investor
population. The regulatory framework has been strengthened and streamlined in order to
tackle effectively the problems associated with the massive growth of the market.
The main components of Indian Capital market are Guilt-edged Market and the
Industrial Securities Market. It is further classified as primary and secondary market.
Gilt-edged Market also known as Government Securities Market is the market for
government and semi government securities. An important feature of the securities traded
in this market is that they are stable in value and are much sought after banks. The fresh
issue of securities takes place in primary market and trading among investors takes place
in secondary market. Primary market is also known as new issues market. Equity
investors first enter capital market though investment in primary market.
Indian Capital Market
Guilt-edged
Market
Industrial
Securities Market
Primary Market
INDIAN STOCK MARKET

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly
200 years ago. The earliest records of security dealings in India are meager and obscure.
The 1850's witnessed a rapid development of commercial enterprise and brokerage
business attracted many men into the field and by 1860 the number of brokers increased
into 60.
The first stock exchange in India 1894 set up in Mumbai. These was organized as
voluntary non-profit making associations of brokers to evaluate and protect their interest
before the control on securities trading become a central subject under the constitution in
1950, it was a state subject and Bombay securities Contract Act 1925 used to regulate
trading in securities. Under this Act, the Bombay stock exchange was recognized in 1927
and Ahmedabad in 1937. The central Legislation was proposed and a committee headed
by A.D.Gorwala went into the Bill for securities regulation.
The securities contract Act become low in 1956. As per April 1998 there were 23
stock exchanges recognized by central Government. They are located in Ahmedabad,
Bangalore, Calcutta, Cochin, Coimbatore, Delhi, Guwahati, Hyderabad, Jaipur,
Ludhiana, Madhya Pradesh, Madras, Magadh, Mangalore, Meerut, OTC Exchange Of
India (Mumbai), Pune, Saurashtra, Kutch, Uttar Pradesh, Vadodara.
A stock exchange is a market where securities i.e., shares, debentures and
government securities are brought and sold. The securities contract act, 1956, defines the
stock exchange as an association, organization, or body of individuals where in
corporate are not established for the purpose of assisting, regulating and controlling of
business in buying, selling and dealing in securities.
The two main stock exchanges in India are:1 NSE (National Stock Exchange)
2 BSE (Bombay stock exchange)
NSE (National Stock Exchange)

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

1 Wholesale debt market and
2 Capital market.
Wholesale debt market operations are similar to money market operations institutions and corporate bodies enter into high value transactions in financial
instruments such as government securities, treasury bills, public sector unit bonds,
commercial paper, certificate of deposit, etc.
There are two kinds of players in NSE:
1 Trading members and
2 Participants.
Recognized members of NSE are called trading members who trade on behalf of
themselves and their clients. Participants include trading members and large players like
banks who take direct settlement responsibility.
BSE (Bombay stock exchange)

Bombay Stock Exchange Limited (the Exchange) is the oldest stock exchange in
Asia with a rich heritage. Popularly known as "BSE"; it was established as "The Native
Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country
to obtain permanent recognition in 1956 from the Government of India under the
Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role
in the development of the Indian capital market is widely recognized and its index,
SENSEX, is tracked worldwide.
6
The Exchange has a nation-wide reach with a presence in 417 cities and towns of
India. The systems and processes of the Exchange are designed to safeguard market
integrity and enhance transparency in operations. During the year 2004-2005, the trading
volumes on the Exchange showed robust growth.
The Exchange provides an efficient and transparent market for trading in equity,
debt instruments and derivatives. The BSE's On Line Trading System (BOLT) is a
proprietary system of the Exchange and is BS 7799-2-2002 certified. The surveillance
and clearing & settlement functions of the Exchange are ISO 9001:2000 certified.
NATURE OF STOCK MARKET

A stock exchange is a market where securities i.e., shares, debentures and
government securities are brought and sold. The securities contract act, 1956, defines the
stock exchange as an association, organization, or body of individuals where in
corporate are not established for the purpose of assisting, regulating and controlling of
business in buying, selling and dealing in securities.
Members of stock exchanges
The regulations governing the members of the recognized stock exchanges are
uniform in terms of the provisions of the securities contract act, 1957.
The statutory rules provide that no person shall be eligible to be elected as a

member if he is:1 Not an Indian Citizen.
2 Less than 21 years.
3 A judged bankrupt to be insolvent.
4 Convicted of an offence-involving frond.
5 Member of any other association in India where dealings in securities are
carried on.
6 Engaged as principal or employee in any business other than that of securities.
Functions
The three important functions of secondary markets are
1 Price discovery process which results from the interactions of buyer and
sellers in the market when they trade assets.
2 Provisions of liquidity by providing a mechanism for an investor to sell
financial assets.
3 Finally low cost of transactions and information.
Trading Pattern of the Indian Stock Market
Trading in Indian stock exchanges is limited to listed securities of public limited
companies. They are broadly divided into two categories, namely, specified\securities
(forward list) and non-specified securities (cash list). Equity shares of dividend paying,
growth-oriented companies with a paid-up capital of at least Rs.50 million and a market
capitalization of at least Rs.100 million and having more than 20,000 shareholders are,
normally, put in the specified group and the balance in non-specified group.
8
Two types of transactions can be carried out on the Indian stock exchanges: (a)
spot delivery transactions "for delivery and payment within the time or on the date
stipulated when entering into the contract which shall not be more than 14 days following
the date of the contract: and (b) forward transactions "delivery and payment can be
extended by further period of 14 days each so that the overall period does not exceed 90
days from the date of the contract". The latter is permitted only in the case of specified
shares. The brokers who carry over the outstanding pay carry over charges (cantango or
backwardation) which are usually determined by the rates of interest prevailing.
A member broker in an Indian stock exchange can act as an agent, buy and sell
securities for his clients on a commission basis and also can act as a trader or dealer as a
principal, buy and sell securities on his own account and risk, in contrast with the practice
prevailing on New York and London Stock Exchanges, where a member can act as a
jobber or a broker only. The nature of trading on Indian Stock Exchanges are that of age
old conventional style of face-to-face trading with bids and offers being made by open
outcry.
Over The Counter Exchange of India (OTCEI)
The traditional trading mechanism prevailed in the Indian stock markets gave way
to many functional inefficiencies, such as, absence of liquidity, lack of transparency,
unduly long settlement periods and benami transactions, which affected the small
investors to a great extent. To provide improved services to investors, the country's first
ringless, scripless, electronic stock exchange - OTCEI - was created in 1992 by country's
premier financial institutions - Unit Trust of India, Industrial Credit and Investment
9
Corporation of India, Industrial Development Bank of India, SBI Capital Markets,

Industrial Finance Corporation of India, General Insurance Corporation and its
subsidiaries and CanBank Financial Services.
Trading at OTCEI is done over the centres spread across the country. Securities traded on
the OTCEI are classified into:1 Listed Securities - The shares and debentures of the companies listed on the OTC
can be bought or sold at any OTC counter all over the country and they should not
be listed anywhere else
2 Permitted Securities - Certain shares and debentures listed on other exchanges
and units of mutual funds are allowed to be traded
3 Initiated debentures - Any equity holding at least one lakh debentures of
particular scrip can offer them for trading on the OTC.
10
1.2. STATEMENT OF PROBLEM
Capital Market
Capital market is generally classified in to two Markets. They are
1 Primary Market
2 Secondary Market
The fresh issue of securities takes place in primary market and trading among investors
takes place in secondary market.
The Statement of Problem is
1 To analyze investors perception towards the Indian capital market.
11
1.3 OBJECTIVES OF THE STUDY
Primary Objectives:
1 To analyze investors perception towards the Indian capital market.
2 To measure the risk taking ability of investors.
3 To study the difficulties faced by investors while investing in stock market.
Secondary Objectives:
1 To determine the most preferred sector by the investors.
2 To evaluate the performance of banking sector using technical and
fundamental analysis.
3 To find whether the continuous boom witnessed by bank sector will continue
in current year.
12
1.4.
SCOPE OF THE STUDY
2 The study covers the investors of Chennai.

3 The study helps to know about the objective of investments in the stock
market.
4 The study provided an insight into various problems faced by the investors
while investing in the stock market.
5 The study gave an understanding of the investors perception towards stock
market. It helped in determining the saving habit, investment objective and
risk taking ability of common investors.
6 The study also helped to evaluate the most preferred sector by the investor for
making investment.
7 The study also helps us to know the performance of banking sector in the
future.
13
1.5.
LIMITATIONS OF THE STUDY
2 Due to geographical constraint only the investors in Chennai were surveyed.

3 The respondents were reluctant to disclose their personal decisions on
investments.
4 It should be noted that there is possibility for the share price to undergo
changes from time to time on account of changes in the trading frequency of
stocks, market factors including regulatory changes in the stock market.
5 All the banks would not be studied, because all of them are not listed in Nifty
50.
6 In- depth study of each bank was not done due to time constraint.
14
CHAPTER-2
COMPANY PROFILE
KARVY, is a premier integrated financial services provider, and ranked among
the top five in the country in all its business segments, services over 16 million individual
investors in various capacities, and provides investor services to over 300 corporate,
KARVY covers the entire spectrum of financial services such as Stock broking,
Depository Participants, Distribution of financial products like mutual funds, bonds, fixed
deposit, Merchant Banking & Corporate Finance, Insurance Broking, Commodities
Broking, Personal Finance Advisory Services, placement of equity, IPOs, among others.
Karvy has a professional management team and ranks among the best in technology,
operations, and more importantly, in research of various industrial segments.
Karvy began its journey 15 years back with total service approach, taking the
investor as customer for a faster and better service. The company has come across many
challenges and it has met the challenges successfully since its inception.
In January 1998, Karvy became the first Depository Participant in Andhra

Pradesh. With a network of 12 branch offices and 64 services centers across the country,
Karvy has built up relationships with over 16 million investors & acting on behalf of over
175 corporate clients. The company has handled more of public issues that any other
registrar in the country.
15
A decade of commitment, professional integrity and vision helped Karvy attain a

leadership position in its field when it handled the largest number of issues ever handled
in the history of the Indian stock market in a year.
To ensure consistency in its service delivery, Karvy embarked upon the ISO 9002
certification exercise. This exercise has helped them in identifying redundancies and
streamlining the operations. The registration audit was carried out by KPMG, Peat
Marwick and incidentally, Karvy is the first certified company in India in their line of
business. Over the past one and half decades, Karvy has evolved as a veritable link
between industry, finance and people.
To achieve and retain leadership, Karvy aims for complete customer satisfaction,
by combining its human and technological resources, to provide superior quality financial
services. In the process, Karvy also strives to exceed Customers expectations.
MISSION
To be a leading and preferred service provider to the customer, and aim to achieve
the leadership position by building an innovative, enterprising and technology driven
organization which will set the highest standards of business and service ethics.
16
QUALITY OBJECTIVES
The Quality Policy of Karvy is to:1 Build in-house processes that will ensure transparent and harmonious relationship
with its clients and investors to provide high quality of services.
2 Establish a proper relationship with its investor service agents and vendors that
will help in keeping up its commitments to the customers.
3 Provide high quality of work life for all its employees and equip them with
adequate knowledge & skills so as to respond to customer's needs.
4 Continue to uphold the values of honesty & integrity and strive to establish
unparalleled standards in business ethics.
5 Use state-of-the art information technology in developing new and innovative
financial products and services to meet the changing needs of investors and
clients.
6 Strive to be a reliable source of value-added financial products and services and
constantly guide the individuals and institutions in making a judicious choice of
same.
SERVICES OFFERED BY KARVY

They offer various services such as:1 Corporate Registry services
2 Stock Broking services
17
1 Financial Product Distribution

2 Corporate Financial services
3 Depository Participant Services
4 IT enabled Services
5 Mutual Fund Investor Servicing
6 Investment banking
7 Shareholder Servicing
8 Personal finance Advisory Services
9 Debt Market Services
10 Global Services
IMPORTANT CLINTELE
1 Reliance Industries
2 Indian Oil Corporation
3 IDBI
4 LIC Mutual fund
5 Hindustan Lever
6 Principal Mutual Fund
7 Marico Industries
8 Patni Computers
9 Morgan Stanley
18
ACHIVEMENTS
1 Largest mobilize of funds as per PRIME DATABASE.
2 First ISO - 9002 Certified Registrar in India.
3 A Category- I -Merchant banker.
4 A Category- I -Registrar to Public Issues.
5 Ranked as The Most Admired Registrar" by MARG.
6 Handled the largest- ever Public Issue TCS.
7 Handled over 700 Public issues as Registrars.
8 Handling the Reliance Account which accounts for nearly 10 million account
holders.
9 First Depository Participant from Andhra Pradesh.
10 Largest independent distributor of financial products.
Mutual Fund Investment Advisor

Investment is the stepping stone to achieving one's financial dreams. Mutual
funds offer an opportune way to long-term wealth creation. However, with more and
more funds flooding the market, the task of selecting the most suitable scheme gets even
more complicated. Mutual Fund Advisory Service at Karvy guides you through this maze
and ensures that your investments are backed by our quality research.
19
Products of 33 AMCs are:1 Research reports (existing funds & NFOs; strategy reports etc.)
2 Customized mutual fund portfolios
3 Portfolio revision (depending on changing market outlook and evolving
trends)
4 Access to online consolidated portfolio statement
About KARVY Insurance Broking Ltd. (KIBL)

At KIBL we provide both life and non-life insurance products to retail
individuals, high net-worth clients and corporates. With the opening up of the insurance
sector, we are in a position to provide holistic and tailor made policies for different
segments of customers. With Indian markets seeing a sea change, both in terms of
investment pattern and attitude of investors, insurance is no more seen as only a tax
saving product but also as a product which provides a financial solution for the customer.
Our wide national network, spanning the length and breadth of India, further supports
these initiatives. Our strengths include personalized service provided by a dedicated team
committed in giving hassle-free service to the clients.
About KARVY Financial Planning

In its ambition to emerge as a complete financial advisor, KARVY has
recently launched its personal financial planning wing, KARVY Financial Planning. It
proposes to cater all advice to its customer pertaining to personal finance.
20
With India emerging as a strong market, the investments avenues have also increased, to
advice our customers the right avenue according to their suitability Our vision is "To
cater to the unique needs and requirements of the mass affluent by providing complete
financial solutions and thereby enabling them to transform their dreams into reality."
KARVY as an Income Tax Advisor

In line with KARVYs ambition of emerging as a personal finance advisor,
we are now launching a tax advisory module, thereby providing assistance with respect to
personal income tax planning. This service inter-alia includes the following:
1 Investment planning.
2 Tax planning.
3 Preparation of theme based reports on important events like Pre budget
expectations, Budget analysis, New Economic survey etc.
4 Regular strategy reports through a fortnightly tax refresher called HUM TUM.
5 Personalized assistance in the context of salary structuring.
6 Tax free retirement planning.
7 Other innovative strategies on tax planning.
21
Fixed Income Securities & Trading (K-FIST)

Products -
Central Government securities, State Development Loans, State
Guaranteed bonds, Public Sector Undertaking Bonds, Financial Institution Bonds, and
Bank bonds of SLR/Non-SLR category, both taxable and tax-free.
IPOs - Initial Public Offer

An IPO is a means of collecting money from the public by a company for the first
time in the market to fund its projects. In return, the company gives the share to the
investors in the company .In an IPO; the Lead managers decide the price of the issue. In a
book building offer, the syndicate members decide the indicative price range and the
investors decide the price of the issue through a tender method.
A draft prospectus provides the information on the financials of the company,
promoters, background, tentative issue price etc. It is filed by the Lead Managers with the
Securities & Exchange Board of India (SEBI) to provide issue details. The final
prospectus is printed after obtaining the clearance from SEBI and the Registrar of
Companies (ROC).
22
CHAPTER-3
REVIEW OF LITERATURE
Equity investors first enter in to capital market though investment in primary market. In
India, common investors participating in the equity primary market is massive. The
number of companies offering equity through primary markets increased continuously.
The Indian capital market saw good growth between May 2006 and January 2007 on the
back of good GDP growth, encouraging corporate results, the Government's intent to
invest heavily in infrastructure, a strong rupee, and mounting forex reserves. The market
today is range bound and not much seems to be happening.
The study concentrates on the investment decisions taken by the investors while investing
in capital markets. It appeared from the analysis that the investors give more importance
to brokers advice then any other source of information. They also consider market price
as a better indicator than analyst recommendations. The study also identifies risk
orientation, quantum of return expected, time horizon, objective of making the
investment and the difficulties faced by the investors in capital market. The study also
attempts to find out the most preferred sector by the investors.
23
CHAPTER-4
RESEARCH METHODOLOGY
RESEARCH refers to the systematic method of enunciating the problem
formulation of the hypothesis, collecting the facts or data analyzing the facts and reaching
conclusions towards the concerned problem.
METHODOLOGY is defined as the study of methods by which we gain
knowledge. It deals with cognitive processes imposed on research by the problems
arising from the nature of its subject matter.
RESEARCH DESIGN
Research design is the plan structure and the strategy of investing conceived so as
to obtain answer to research questions and to control variance.
According to Pavline Young (1949), a research design is the logical and systematic
planning and directing a piece of research. The design according to her is the result,
translating a general scientific model to a varied research procedure.
NATURE OF STUDY
Descriptive Research
Descriptive research is used to obtain information concerning the current status of
the phenomena to describe what exists with respect to variables or conditions in a
situation. The method uses the survey which describes the status quo, the correlation
study which investigates the relationship between variables to developmental studies seek
24
to determine changes over time. The information has been collected by conducting a
survey amongst the various retail investors available in Chennai.
Analytical Research
Analytical research is designed to analyze the facts/information already available
to make a critical evaluation of the material. Thus, in my study analytical research is used
to evaluate the Beta behavior of the securities and the investments of the portfolio. The
information for doing this research is collected from the NSE website.
Data Collection Method

Data refers to information or facts. It is not only refers numerical figures but also
includes descriptive facts. The method of data collection includes two types for the study,
such as primary data and secondary data.
Primary Data
Primary data is the data that is collected for the first time by the researcher. The
primary data are collected with specific set of objective to assess the current status of any
variable studied. Primary data is useful only particular period.
Primary data has been collected by conducting a survey among the various investors
available in Chennai.
25
Secondary Data
Secondary data is the data collected from the already available data which is well
structured and organized. The secondary data required for the study was obtained from
already available data in different sites like nseindia.com, amfi.com, moneypore.com, etc.
Sample Size
Primary Data
For the primary data the sample size collected was 250.
Secondary Data
For the secondary data the sample size was: Banks listed in Nifty 50.
Sampling Unit
Primary Data
Retail investors in Chennai.

Secondary Data
Banks listed n the S&P CNX NIFTY for the period of 5 years (Jan 2003 Dec 2007).
Sampling Technique
Primary Data
For the primary data the sampling method used was convenience sampling.
A convenience sample is obtained by selecting convenient population units.
26
Secondary Data
Closing price of each companys share price for the past five years is downloaded from
www.nseindia.com Website.
The sampling technique was based on the information available on stock prices
over the past five years. The sample includes four banks, which have been listed in the
NSE for over a period of five years and information on their share prices were already
available. Hence this sample is used for the comparative study. NSE index NIFTY is used
to calculate market returns.
Tools for Analysis

Primary Data
1 Simple Percentage Calculation

2 Weighted Average Calculation
3 Chi-Square Test
4 Pie charts
5 Bar diagrams
Secondary Data
1 Technical analysis
2 Fundamental analysis
3 Candlestick method
4 Exponential Moving Average
27
IN SHORT THE RESEARCH METHODOLOGY ARE
Primary Data
Sample Size
Sampling Unit
: Retail investors of various branches in Chennai
Sampling Type
: Descriptive
: 250
1 Sampling Method : Convenient sampling
Contact Method
: Personal interview & Telephonic Interview
Tools Used
: Simple Percentage Calculation, Weighted Average
Calculation, and Chi - Square Test, Pie charts and Bar diagrams
Secondary Data
Nature of Data
: Secondary data
Sample Size
: Four banks listed in Nifty 50
Method of Data Collection
: Secondary data collection closing price of
each banks share price for the past five years is down loaded from
www.nseindia.com
Tools Used
: Fundamental analysis, technical analysis,
candlestick chart, exponential moving average, relative strength index.
28
THEORY
Why Investors Prefer to Invest in Share Market?
Investment in equities is one of the asset classes that bring better returns over
Years Company to investment in bullion and real estate apart from conservative form of
investments in fixed deposits etc.
Investment equities, thus believed to be a good way of getting good returns.
Secondly, unlike other assets classes, it has the benefit of liquidity that is; it could be
encashed very quickly. Thirdly though investment in equities is risky, it is preferred by
millions of people world over.
IMPORTANCE OF STOCK MARKET

Function and Purpose
The stock market is one of the most important sources for companies to raise
money. This allows businesses to go public, or raise additional capital for expansion. The
liquidity that an exchange provides affords investors the ability to quickly and easily sell
securities. This is an attractive feature of investing in stocks, compared to other less
liquid investments such as real estate.
History has shown that the price of shares and other assets is an important part of
the dynamics of economic activity, and can influence or be an indicator of social mood.
Rising share prices, for instance, tend to be associated with increased business investment
and vice versa. Share prices also affect the wealth of households and their consumption.
Therefore, central banks tend to keep an eye on the control and behavior of the stock
29
market and, in general, on the smooth operation of financial system functions. Financial
stability is the raison d'tre of central banks.
Exchanges also act as the clearinghouse for each transaction, meaning that they
collect and deliver the shares, and guarantee payment to the seller of a security. This
eliminates the risk to an individual buyer or seller that the counterparty could default on
the transaction.
The smooth functioning of all these activities facilitates economic growth in that
lower costs and enterprise risks promote the production of goods and services as well as
employment. In this way the financial system contributes to increased prosperity.
Disadvantages
There are some difficulties, disadvantages and problems associated with
investment in shares.
1 Uncertainty and changing market prices
2 No Guarantee of Profits
3 Problems in dealing with brokers
4 Oversubscription of new issues
5 Need for constant Watch
6 Correct Timing
7 Uncertain Government Policies
8 Seeking professional guidance
30
Recent Trend in Share Market

Generally, trend following is the imitation of what is the current fashion also
called trend. In finance, trend following is an investment strategy that tries to take
advantage of long-term moves that seem to play out in various markets. The system aims
to work on the market trend mechanism and take benefit from both sides of the market
enjoying the profits from the ups and downs of the stock market.
Traders who use this approach can use current market price calculation, moving
averages and channel breakouts to determine the general direction of the market and to
generate trade signals. Traders who subscribe to a trend following strategy do not aim to
forecast or predict markets or price levels; they simply jump on the trend and ride it.
Considerations
Price
One of the first rules of trend following is that price is the main concern. Traders
may use other indicators showing where price will go next or what it should but as a
general rule these should be disregarded. A trader need only be worried about what the
market is doing, not what the market might do. The current price and only the price tell
you what the market is doing.
31
Money Management
Another decisive factor of trend following is not the timing of the trade or the
indicator, but rather the decision of how much to trade over the course of the trend.
Risk Control
A cut loss is the rule. This means that during periods of higher market volatility,
the trading size is reduced. During losing periods, positions are reduced and trade size is
cut back. The main objective is to preserve capital until more positive price trends
reappear.
Rules
Trend following should be systematic. Price and time are pivotal at all times. This
technique is not based on an analysis of fundamental supply or demand factors.
Trend Following answers the questions:1 How and when to enter the market.
2 How many contracts or shares to trade at any time.
3 How much money to risk on each trade.
4 How to exit the trade if it becomes unprofitable.
5 How to exit the trade if it becomes profitable.
In investing, financial markets are commonly believed to have market trends that
can be classified as primary trends, secondary trends (short-term), and secular trends
32
(long-term). This belief is generally consistent with the practice of technical analysis and
broadly inconsistent with the standard academic view of financial markets, the efficient
market hypothesis. That market prices do move in trends is one of the major assumptions
of technical analysis, and the description of market trends is common to Wall Street.
Market trends are described as periods when bulls (buyers) consistently
outnumber bears (sellers), or vice versa. A bull or bear market describes the trend and
sentiment driving it, but can also refer to specific securities and sectors.
Primary market trends

A bull market tends to be associated with increasing investor confidence,
motivating investors to buy in anticipation of further capital gains. The longest and most
famous bull market was in the 1990s when the U.S. and many other global financial
markets grew at their fastest pace ever.
In describing financial market behavior, the largest group of market participants is
often referred to, metaphorically, as a herd. This is especially relevant to participants in
bull markets since bulls are herding animals. A bull market is also described as a bull run.
Dow Theory attempts to describe the character of these market movements.
Secondary market trends

A secondary trend is a temporary change in price within a primary trend. These
usually last a few weeks to a few months. A temporary decrease during a bull market is
33
called a correction; a temporary increase during a bear market is called a bear market
rally. Whether a change is a correction or rally can be determined only with hindsight.
When trends begin to appear, market analysts debate whether it is a correction/rally or a
new bull/bear market, but it is difficult to tell. A correction sometimes foreshadows a bear
market.
Risk in a Traditional Sense
Risk in holding securities is generally associated with the possibility that realized
the return will be less than the returns that are expected. The source of such
disappointment is the failure of dividends (interest) and / or the securitys rice to
materialize as expected.
Forces that contribute to variation in return- price or dividend- constitute elements

of risk. Some influences are external to the firm, cannot be controlled, and affect large
numbers of securities. Other influences are internal to the firm and controllable to a large
degree. In investments, those forces that are uncontrollable, external, and broad in their
effect are called Source of Systematic Risk. Conversely, controllable, internal factors
somewhat peculiar to industries and /or firms are referred to as Sources of Unsystematic
Risk.
Systematic Risk refers to that portion of total variability in return caused by

factors affecting the prices of all securities. Economic, political and sociological changes
are sources of systematic risk.
34
Unsystematic Risk is the portion of total risk that is unique to a firm or industry.
Factors such as management capability, consumer preferences, and labor strikes cause
systematic variability of return in a firm. Unsystematic factors are largely independent of
factors affecting securities markets in general. Because these factors affect one firm they
must be examined for each firm.
TECHNICAL ANALYSIS
Technical analysis is the study of price using charts in order to "anticipate" their
future performance. The market can go up or down at any time; it is only the probability
(of each move) that varies. Technical analysis isn't a crystal ball that predicts the future,
but it is an investing strategy that helps to spot stock patterns that have the potential to
make huge moves.
The basic premise of technical analysis is that price moves in trend or waves
which may be upward or downward. It is believed that present trend are influenced by the
past trends and that projections of future trend is possible by an analysis of past price
trends. Technical analysis is really a study of past or historical price and volume
movements so as to predict the future stock price behaviour.
Sentiment drives the market
The price at which an investor is willing to buy or sell depends primarily on his
expectations. If he expects the security's price to rise, he will buy it; if the investor
expects the price to fall, he will sell it. As any trade requires a buyer and seller, it
35
automatically means they have entirely opposite views on the stock. The collective
majority of market participants ultimately decide the direction of the stock price and the
market.
Price reflects everything
Price is a function of demand and supply and nothing else. The price of a stock
reflects everything about the stock. This includes FII inflows, analyst reports, balance
sheets, impact of crude and interest rates, government policies, politicians and their antics
and whatever you may care add. Different people have varying degrees of access to this
information and form their own perception (rightly or wrongly) - this ultimately decides
the current price of the stock. Since everything about a stock is reflected in the price, it
makes sense to study price movements. In other words, "what is happening" is more
important than "why it is happening. Trying to identify the "why" is an exercise in
futility. One can arrive at any number of reasons depending on how many "experts" you
choose to listen to.
The beauty of technical analysis is that it applies to all time frames (intraday,
daily, weekly, monthly charts) and across equities, commodities (rice, gold, crude oil,
aluminum etc).
36
The easiest and safest way to earn excellent profits consistently is to simply follow
the trend and trade
By following the trend, we can always be on the "right" side of the market.
Trend analysis helps distinguish emotional decisions ("I think it's time to sell...")
from analytical decisions, ("I will hold until the current rising trend is broken"). Trend
analysis will also discourage you from going short in a bullish market or going long in
a bearish market
What is a trend
A trend is simply, the persistence of a security's price to move in a particular
direction. A trend can be bullish, bearish or flat. Also, a trend is in effect till it is reversed.
Markets are either bullish, or bearish or flat. However markets never go up or
down in a straight line. There are always corrections (in bullish markets) and pullbacks or
relief rallies (in bearish markets). By identifying trends and reversals, we can enter and
exit trends at the correct time and earn excellent profits with minimum risks.
This is the most basic chart. Take the following chart. A simple look reveals that
the stock has been in an uptrend and has minor corrections from time to time. Line charts
are plotted using the "closing" price of the stock. The red line represents the 50 day
moving average (DMA).
37
Japanese Candlesticks Chart

Japanese Candle sticks (a 300 year old Japanese technique) give the same
information as a bar but are visually easier to read. In this chart, the highest price, the
lowest price, the opening piece and the closing price of the share on a day-to-day basis.
The highest price and the lowest price are joined by vertical bar. The opening price and
the closing price of the day which would fall between the highest and the lowest price
would be represented by a rectangle so that the price bar chart looks like a candlestick.
Red candles mean stock closed lower relative to the previous close. Blue candles means
stock closed higher relative to the previous close.
38
There are three types of candlestick, the blue, the red and the doji or neutral
candlestick. A blue candlestick is used is represent a situation where the closing price is
higher than the opening price. A black candlestick is used when the closing price of the
day is lower than the opening price. Blue candlestick indicated a bullish trend and the red
indicates a bearish trend. A doji candlestick is one where the closing price and the
opening of the day are same.
Moving averages provide an excellent way to identify trends or confirm

reversals.
Moving averages are not "predictive" but are "lagging" indicators as a time delay
is always present. Moving averages are an extremely simple and convenient way to trade.
They are excellent in strongly trending markets but are practically useless in sideways
markets as they tend to generate too many whipsaws. The moving average removes
emotions from the stock. One should remain long as long as the stock remains above the
MA. When the stock cuts the MA from above, it indicates exit position.
39
The chart below has 20 DMA (grey), 50 DMA (red) and 200 DMA (blue).
Sometimes, the moving average will give a "whipsaw" or false buy / sell signals. This
means the stock is rangebound and the direction will be clear only a break out of the
trading range. As one can see from the chart, the 20 DMA has generated the highest
whipsaws while the 200 DMA has only given a hold (in relation the timeframe).
Oversold and overbought stocks

Interpretation of this is difficult and should be done in the context of the
prevailing trend. Overbought means great strength. It does NOT mean stock will correct
immediately. It is normal for a stock to remain overbought for considerable periods of
time. Oversold means great weakness. It does NOT mean stock will rally immediately. It
is normal for a stock to remain oversold for considerable periods of time. In an uptrend,
40
oversold stocks present a good buying opportunity near supports (buy on declines). In a
downtrend, one should exit overbought stocks (sell on rallies).
Oscillators
Oscillators are mathematical indicators calculated with the help of the closing
price data. They help to identify overbought and over sold conditions and also the
possibility of the trend reversal. These indicators are called oscillators because they move
across a reference point.
Rate of Change Indicator

It is a very popular oscillator which measures the rate of change of the current
price as compared to the price of a certain number of days or weeks back. To calculate a 7
day rate of change, each days price is dividend by the price which prevailed 7 days ago
and then 1 is subtracted from the price ratio.
The ROC values may be positive, negative or zero. In ROC chart, the overbought
zone is above the zero line and oversold zone is below the zero line. One should buy a
share that is oversold and sell a share that is over brought. Many analysts use the zero line
for identifying buying and selling opportunities. Upside crossing indicates buying
opportunities, while a downside crossing indicates selling opportunities.
ROC has to be used along with the price chart. The buying and the selling signals
indicated by the ROC should also be confirmed by the price chart.
41
ROC is calculated by using the following formula:-
ROC =
Current Price
Price n period age
-1
Relative Strength Index (RSI)

This is the most commonly used time period for the calculation of RSI I 14 days.
For calculation a 14 days RSI, the gain per day or loss per day or loss per day is arrived at
by comparing the closing price of a day with that of the previous day for a period of 14
days. The gains are added up and divided by 14 to get the average gain per day. Similarly
losses are added up and divided by 14 to get the average loss per day.
RSI is calculated by using the following formula:-
RSI = Average gain per day

Average loss per day
Buy and Sell signals

These are generated using custom designed swing trading algorithms. As one can
never know with certainty the extent of gains or losses, the concept of trailing stoplosses
is used.
42
If a stock is in a downtrend, a buy signal is generated if the stock closes above its
"N" days highest high. The trailing stoploss is the "N" days lowest low and will change
everyday till an exit is given. Here "N" refers to 2 or 5 or 20 days. Obviously a 2 day
swing will generate more signals than a 20 day swing. For best results, use the 2 day or 5
day swing to buy only if the stock is trading above the 20 day swing low. The
methodology is similar moving averages / crossovers. The advantage is reduced
whipsaws and more efficient stoplosses.
Rangebound trades, whipsaws and false signals

All technical indicators will fail in range bound stocks / markets and will generate
whipsaws and false signals. Whenever a swing trade results in a loss, it means the stock is
range bound. At this point, one should study the chart and identify areas of support and
resistance. Only a break above these levels will create a new trend.
Support and Resistance levels / targets

This is nothing but a "peak" and "trough" based on 5% change. These levels form
the basis for calculation of targets. A break above a "peak" gives a resistance break.
Similarly a break below a "trough" generates a support break.
43
FUNDAMENTAL ANALYSIS
The earnings of the company, the growth rate and the risk exposure of the
company have a direct bearing on the share .The shareholders are interested in assessing
the value of the shares. The value of the share depends on the performance of the firm
and the market factors. The valuation ratio provides a comprehensive measure of the
performance of the firm itself.
Book Value per Share (BVP)

This ratio indicates the share of equity shareholders after the company has paid all
its liabilities, creditors, debentures holders and preference shareholders. At the time of
liquidation, the shareholders can know what remains after making all the payments.
BVP can be calculated as:-
BVP= Equity share capital + Reserve

Total number of equity shares
outstanding
Earnings per Share (EPS)

Earnings per share is the earnings after tax dividend by number of common shares
outstanding. The ratio is calculated by dividing net profit after tax and dividend by
number of outstanding shares.
44
EPS can be calculated as:-
EVP = Earnings After Tax

Number of share outstanding
Price Earning Ratio (P/E)

One of the most common financial parameters used in the stock market is the
price earning ratio. It relates the share price with earnings per share. Most of the news
papers along with the stock price quotations give the P/E ratio too. Its the multiplying
factor that the market is willing to offer to the companys future earning.
P/E ratio can be calculated as:-
Price Earning Ratio = Market price per share

Earnings per share
45
CHAPTER-5
DATA ANALYSIS AND INTERPRETATION
CHI-SQUARE TEST-1
Background
A survey had been conducted among the investors of various branches and question were
asked to determine if there was a relationship between the age group of the investors and
purpose of investment in share market.
NULL HYPOTHESIS -HO: There is no significance difference between the age group
of the investors and purpose of investment in share market.
ALTERNATE HYPOTHESIS-H1: There is significance difference between the age
group of the investors and purpose of investment in share market.
TABLE-5.1
Table showing age vs. purpose of investment in share market
Savings
Liquidity
Capital
Appreciation
18-40yrs
50
25
85
165
41-60yrs
15
10
35
65
60yrs&
Above
20
TOTAL
70
40
125
15
250
Age
Dividend TOTAL
46
CALCULATION:
Observed
Frequency O(i)
Expected Frequency
E(i)
O(i)-E(i)
[[O(i)-E(i)]^2]/E(i)
50
46.2
3.8
0.312554113
15
18.2
-3.2
0.562637363
5.6
-0.6
0.064285714
25
26.4
-1.4
0.074242424
10
10.4
-0.4
0.015384615
3.2
1.8
1.0125
85
82.5
2.5
0.075757576
35
32.5
2.5
0.192307692
10
-5
2.5
9.9
-4.9
2.425252525
3.9
1.1
0.31025641
1.2
3.8
12.03333333
TOTAL
19.57851177
RESULT:
Calculated Value
19.57851
Degree Of Freedom
Table Value @ 5% Significance
12.592
INFERENCE:
As the calculated value is more than table value, null hypothesis H0 is rejected.
There is significance difference between the age group of the investors and purpose of
investment in share market.
47
CHI-SQUARE TEST-2
Background
A survey had been conducted among the investors of various branches and question were
asked to determine if there was a relationship between the gender and information they
seek before investing in the stock market.
NULL HYPOTHESIS - HO: There is no significance difference between the gender

and information they seek before investing in the stock market.
ALTERNATE HYPOTHESIS - H1: There is significance difference between the
gender and information they seek before investing in the stock market.
TABLE-5.2
Table showing gender vs information they seek for investing in stock market.
Information
Male
Female
TOTAL
Brokers
45
30
75
TV, Newspapers, internet
40
15
55
Self analysis
40
20
60
Colleagues & Friends
40
20
60
TOTAL
165
85
250
48
CALCULATION:
Observed
Frequency O(i)
Expected
Frequency E(i)
O(i)-E(i)
[[O(i)-E(i)]^2]/E(i)
45
49.5
-4.5
0.409090909
40
36.3
3.7
0.377134986
40
39.6
0.4
0.004040404
40
39.6
0.4
0.004040404
30
25.5
4.5
0.794117647
15
18.7
-3.7
0.732085561
20
20.4
-0.4
0.007843137
20
20.4
-0.4
0.007843137
Total
2.336196186
RESULT:
Calculated Value
2.336196186
3
Degree Of Freedom
Table
Value
Significance
5%
7.815
INFERENCE:
As the calculated value is less than table value, null hypothesis H0 is accepted.
There is no significance difference between the gender and information they seek before
investing in the stock market.
49
CHI-SQUARE TEST-3
Background
A survey had been conducted among the investors of various branches and questions
were asked to determine if there was a relationship between the gender and risk taking
ability of the investors.
NULL HYPOTHESIS - HO: There is no significance difference between the gender

and risk taking ability of the investors.
ALTERNATE HYPOTHESIS - H1: There is significance difference between the
gender and risk taking ability of the investors.
TABLE-5.3
Table showing gender vs. risk taking ability of the investors.
Risk
Male
Female
TOTAL
<10%
50
30
80
25%
60
20
80
50%
15
20
Not at all
40
30
70
TOTAL
165
85
250
50
CALCULATION:
Observed
Frequency O(i)
Expected
Frequency E(i)
O(i)-E(i)
[[O(i)-E(i)]^2]/E(i)
50
52.8
-2.8
0.148484848
60
52.8
7.2
0.981818182
15
13.2
1.8
0.245454545
40
46.2
-6.2
0.832034632
30
27.2
2.8
0.288235294
20
27.2
-7.2
1.905882353
6.8
-1.8
0.476470588
30
23.8
6.2
1.61512605
Total
6.493506494
RESULTS:
Calculated Value
Degree Of Freedom
Table
Value
@
Significance
6.493506494
3
5%
7.815
INFERENCE:
As the calculated value is less than table value, null hypothesis H0 is accepted.
There is no significance difference between the gender and risk taking ability of the
investors.
51
INVESTORS PERCEPTION TOWARDS STOCK MARKET
Background:
A survey had been conducted among the retail investors of various branches and question
were asked to determine their perception towards stock market from risk, return and
savings point of view.
TABLE-5.4
Table showing investors perception towards stock market
Rank
Perception
Weighted Average
Return point of view
2.86
Savings point of view
2.80
Risk point of view
2.36
INFERENCE:
On the basis of weighted average method it has been found that the majority of
the respondents (36%) consider stock market is a best avenue for investment from return
point of view. From savings point of view 35% of the respondent consider stock market
as a good option. Only 29% view it from risk point of view.
52
CHART-5.1
Chart showing investors perception towards stock market from risk, return and
savings point of view
Return point of
29%
36% view
Savings point of
view
Risk point of view
35%
53
SECTOR
Background
were asked to determine the most preferred sector by them.
TABLE-5.5
Table showing the most preferred sector by the investors
Rank
Sector
Weighted Average
Banking
4.16
Oil & gas
3.08
Construction
2.28
Infrastructure
1.7
Steel
0.88
I.T
0.54
Automobile
0.32
Others
0.30
INFERENCE:
The above table shows the top eight sectors from investors point of view. Its clear
that majority of them prefer banking sector (52%) followed by Oil & Gas (44%),
Construction (38%), Infrastructure (34%),Steel (22%), IT (18%), Automobiles (16%) and
others (30%). Other sector includes FMCG, Retail, Cement and Pharmaceutical.
54
CHART-5.2
Chart showing the most preferred sector by the investors
4.16
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
3.08
2.28
1.7
0.88 0.54
s
ga
g
B
ki
n
i
&
tio
c
tru
ns
frastr
re
ct
l
e
0.32 0.3
Ste
O
Automobil
55
PERCENTAGE OF INVESTORS SAVING IN STOCK MARKET
Background
were asked to determine their percentage of savings in stock market.
TABLE-5.6
Table showing the percentage of investors savings in stock market
Saving Percentage
In stock market
No. of Respondents
Percentage
(%)
<10%
75
30
11-30%
70
28
31-50%
35
14
50% & above
15
Not at all investing
55
22
Total
250
100
INFERENCE:
It is inferred from the above table that 30% of the investors invest less than 10%
of their in share market. 28% of them invest 11-30% and 14% of them invest 31-50% of
their savings in share market. Only 6% invest above 50% in the share market. However,
22 % do not invest in the market.
56
CHART-5.3
Chart showing the percentage of investors savings in stock market
80
70
75
70
55
60
50
35
40
30
15
20
10
0
<10%
11-30%
31-50%
50% &
above
savings in share market
Not at all
investing
57
REASON FOR INVESTING IN STOCK MARKET
Background
were asked to determine different factors based on which they save in the stock market
TABLE-5.7
Table showing various reasons for investing in the stock market
Reason for investing in

share market
No. of
Respondents
Percentage (%)
Savings
70
28
Liquidity
40
16
Capital Appreciation
125
50
Dividend
15
Total
250
100
INFERENCE:
Above table shows that majority of the (50%) investors invest in stock market for
capital appreciation. While 28% of them invest for saving purpose and 16% for liquidity.
Only 6% invest for earning dividend.
58
CHART-5.4
Chart showing various reasons for investing in the stock market
Savings
6%
28%
Liquidity
Capital
50%
16%
Appreciation
Dividend
59
TIME FRAME OF THE INVESTMENT PREFERRED BY THE INVESTORS
Background
were asked to determine the term of investment they prefer.
TABLE-5.8
Table showing the time frame of the investment preferred by the respondent
Time frame of the

investment preferred by
No. of Respondents
Percentage (%)
Short term
125
50
Medium term
75
30
Long term
50
20
Total
250
100
the respondent
INFERENCE:
The table shows that 50% of the respondents prefer short-term investment in the
stock market. While 20% of them would like to go for medium term, and only 20% of the
investors prefer long term.
60
CHART-5.5
Chart showing the time frame of the investment preferred by the respondent
Short term
20%
Medium term
50%
Long term
30%
61
RISK TAKING ABILITY OF THE INVESTORS
Background
were asked to determine risk-bearing capacity.
TABLE-5.9
Table showing the risk taking ability of the investors
Risk
No. of Respondents
Percentage (%)
10%
70
28
25%
90
36
50%
20
Not at all
70
28
Total
250
100
INFERENCE:
The above table shows that majority of the investors (36%) will take 25% of risk
on their invested capital. While 28% of then will bear 10% of risk. Only 8 % of them are
ready to take more than 50% of risk. However, 28% of the investors are not ready to take
any risk on their invested capital.
62
CHART-5.6
Chart showing the risk taking ability of the investors
10%
28%
28%
25%
50%
8%
36%
Not at all
63
\INFORMATION BASED ON WHICH INVESTMENTS ARE MADE IN THE

STOCK MARKET
Background
were asked to determine whose advice they would seek before investing in stock market.
TABLE-5.10
Table showing information based on which investments are made in stock market
Information
No. of Respondents
Percentage (%)
Brokers
70
28
Self analysis
60
24
TVchannels,
60
24
Colleagues & Friends
60
24
Total
250
100
Newspapers& Internet
INFERENCE:
The table shows that 28% of the respondents will seek stockbrokers advice
before investing in stock market. While rest of the investors would make investment
decision based on self analysis or TV channels, internet or colleges & friend for stock
market information and performances.
64
CHART-5.7
Chart showing information based on which investments are made in the
stock market
Brokers
24%
24%
28%
24%
Self analysis
TVchannels,
Newspapers&
Internet
Colleagues &
Friends
65
DIFFICULTIES FACED WHILE INVESTING IN STOCK MARKET

TABLE-11
Background
were asked to determine what are the difficulties faced by them while investing in the
stock market.
showing the Difficulties faced by the investors
Difficulties
No. of Respondents
Percentage (%)
No difficulties
60
24
Lack of
knowledge
about the market
60
24
Being cheated by the

brokers
25
10
False
rumors
55
22
Lack of funds
30
12
High brokerage
20
Total
250
100
information/
INFERENCE:
It is inferred from above table that majority of the respondents(24%) consider lack
of knowledge about the stock market is the biggest difficulty they face closely followed
by false information and rumors(22%). While other difficulties includes lack of funds
(12%), being cheated by brokers (10%) and high brokerage (8%). However, 24% of the
respondents do not face any difficulty while trading.
66
CHART-5.8
Chart showing the Difficulties faced by the investors while investing
in Stock market
Fals
e
info
rma
tion
/
30
60
55
No
difficulties
rum
Lack of
knowled
ge about
the
market
Being
cheated
by the
brokers
Lack
of
funds
ors
High
20 brokerage
6
7
ICICI BANK
Business Profile
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly-owned subsidiary. ICICI Bank is India's secondlargest bank with total assets of Rs. 3,767.00 billion (US$ 96 billion) at December 31,
2007 and profit after tax of Rs. 30.08 billion for the nine months ended December 31,
2007. ICICI Bank is second amongst all the companies listed on the Indian stock
exchanges in terms of free float market capitalisation.
The Bank has a network of about 955 branches and 3,687 ATMs in India and
presence in 17 countries. ICICI Bank offers a wide range of banking products and
financial services to corporate and retail customers through a variety of delivery channels
and through its specialised subsidiaries and affiliates in the areas of investment banking,
life and non-life insurance, venture capital and asset management. The Bank currently
has subsidiaries in the United Kingdom, Russia and Canada, branches in Unites States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance
Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. UK subsidiary has established a branch in
Belgium.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE)
68
Date of incorporation
: 1944
Market capitalisation
: Rs.123, 918.05
(Rs. in cores)
Price
: Rs.766.35
Percentage of change in price :-7.0%

(For one year)
: Rs.34.45
:22.24
Book Value per Share (BVP) :3.56

Face value
: Rs.10
52 weeks high/ low
: 1456.00 / 720
Sales (Rs. in cores)
: Rs.29957.2
Asset size (Rs. in cores)
:Rs.3, 44,658.11
69
TECHNICAL ANALYSIS
CHART-5.9
Chart showing Share Price Movement of ICICI Bank
INFERENCE:
The above chart shows that the performance of the bank is good. The price line
shows an increasing trend. The price has increased from Rs.120 to Rs.1500. Most of the
times the closing price of the day was higher than its opening price. White candles
indicate bullish trend. In the last quarter of 2007 the performance of the bank was at its
peak. In the beginning of 2008 do to various global phenomenons the price of the stock
was affected.
70
CHART-5.10
Chart showing Exponential Moving Average (EMA) for ICICI Bank
INFERENCE:
Movement of stock price line above the 200 days EMA indicates a buy signal. In
the beginning of 2003, and in the second quarter 2004, 2006 and 2007 the 10-days MVA
has cut 200- days EMV from below, which indicates a sell signal for the investors.
Throughout the year 2005, it has been a bullish trend. Whenever the short term EMV (10
days) intersects the long term EMA (200 day) from below it indicates the buy signal,
which will future increase the price of the share. Over all perform of the stock was good
in the past.
71
CHART-5.11
Chart showing Relative Strength Index for ICICI Bank
INFERENCE:
RSI values above 80 indicate that the stock is over bought and below 20 indicates
that the stock is over sold. In the first quarter of 2003 the stocks were over sold. During
the year 2005 the stock was initially over bough and quickly it reached below 20 and
there was a huge selling which followed for few months. When the line cross 80 its the
indication to sell the stock and below 20 indicates to buy the stock.
72
CHART-5.12
Chart showing comparison between ICICI Bank & NSE
INFERENCE:
While comparing the ICICIs price line with the NSE index. The performance of
the bank is good. It has out performed the market index.
73
HDFC BANK
The Housing Development Finance Corporation Limited (HDFC) was amongst

the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking
Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations
as a Scheduled Commercial Bank in January 1995.
The bank has won the Business Today Best Bank Award 2008, for the fifth
consecutive time... The authorised capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion).
The paid-up capital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of
the bank's equity and about 19.4% of the equity is held by the ADS Depository (in respect
of the bank's American Depository Shares (ADS) Issue). Roughly 31.3% of the equity is
held by Foreign Institutional Investors (FIIs) and the bank has about 190,000
shareholders. The shares are listed on the Stock Exchange, Mumbai and the National
Stock Exchange. The bank's American Depository Shares are listed on the New York
Stock Exchange (NYSE) under the symbol .In a milestone transaction in the Indian
banking industry, Times Bank Limited (another new private sector bank promoted by
Bennett, Coleman & Co. Times Group) was merged with HDFC Bank Ltd., effective
February 26, 2000. As per the scheme of amalgamation approved by the shareholders of
both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share
of HDFC Bank for every 5.75 shares of Times Bank.
74
: 1994
Market capitalization
: Rs. 51,441.31
(Rs. in cores)
Price (Rs.)
:1272.60
Percentage of change in price : 37.1%

(One year)
: Rs.40.15
:31.63

Face value
: Rs.10
52 weeks high/ low
: 1825.00/895.00
:Rs. 8483.6
:Rs.1, 09,718.39
75
TECHNICAL ANALYSIS
CHART-5.13
Chart showing share price movement for HDFC Bank
INFERENCE:
The price of the share has increased over a period from Rs200 to Rs.3000.From
the white candle, it is clear that most of the day closing price of the share was higher than
its opening price. This indicates a bullish trend. The price line touched Rs.3000 in the
year 2007. Even the volume traded was high in 2007 it touched ten millions.
76
CHART-5.14
Chart showing Exponential Moving Average (EMA) for HDFC Bank
INFERENCE:
Through out the year there has been lots of intersection between two EMVs lines.
From 2003 to 2005 there isnt much variation, it was flat. From 2006 to 2007 the 10 days
MVA has moved above the 200 days EVA. Marjory of the times it has indicated the signal
to buy. Only in the middle of the 2006 the stock was over sold.
77
CHART-5.15
Chart showing Relative Strength Index for HDFC Bank
INFERENCE:
In the beginning of the year 2003 it was a bearish trend. Later it gained
momentum and was over bought. Most of the time the line has crossed touched 80 which
indicate the stock is over bought. In the last three quarter of 2007 the stock was never
over sold and was bullish trend.
78
CHART-5.16
Chart showing comparison between HDFC bank and NSE index
INFERENCE:
Comparing the NSE index with HDFC bank, the performance of the bank and the
market index is almost same, with little variation. In the year 2007 the stock has out
performed the market index.
79
STATE BANK OF INDIA
Business Profile
The Bank is actively involved since 1973 in non-profit activity called Community
Services Banking. All our branches and administrative offices throughout the country
sponsor and participate in large number of welfare activities and social causes.
On 1st July State Bank of India was constituted under the State Bank of India Act
1955, for the purpose of taking over the undertaking and business of the Imperial Bank of
India. The Imperial Bank of India was founded in 1921 under the Imperial Bank of India
Act 1920. The Bank transacts general banking business of every description including,
foreign exchange, merchant banking and mutual funds. 1959 - The SBI was registered
with an Authorised capital of Rs.20 crores, and an issued and paid up capital of Rs.562,
50,000 divided into 562,500 shares of Rs.100 each.
State Bank of India is the countrys largest commercial Bank in terms of profits,
assets, deposits, branches and employees. SBI, with its heritage dating back to the year
1806, strives to continuously provide latest and upto date information on its financial
performance. It belives on the path of transparency and allow complete access to all the
stakeholders enabling total awareness about the Bank. The Bank communicates with the
stakeholders through a variety of channels, such as through e-mail, website, conference
call, one-on-one meeting, analysts meet and attendance at Investor Conference
throughout the world.
80
: 1955
: Rs.1, 31,525.33
(Rs. in cores)
Price
: Rs.1605.05
Percentage of change in price :

83.7% (For one year)
: Rs.120.44
:13.31
Face value
: Rs.10
52 weeks high/ low
: 2419.56/852.62
: 469990.0
:Rs.5, 66,565.24
81
CHART-5.17
Chart showing share price movement for SBI Bank
INFERENCE:
The price of the share has increased over a period from below Rs290 to Rs.2500.
From the white candle, it is clear that most of the day closing price of the share was more
than its opening price. It was bullish trend. In the beginning of 2007 the performance of
the stock has come down. But in the following months it has performed well.
82
CHART-5.18
Chart showing Exponential Moving Average for SBI Bank
INFERENCE:
The chart indicates that till the first quarter of 2004 the 10 days EVA was above to
200 days EVA. Later it has cut the 200 days EVA from above, which indicates a sell
signal to the investors which followed for few months. In 2007 it has cut the 200 days
EVA from below and the price was at its peak.
83
CHART-5.19
Chart showing Relative Strength for SBI Bank
INFERENCE:
Through the period the stock was over bought. It was a bullish trend. Only on
few occasions it has toughed 20. The performance of the stock was good in the year
2007.
84
CHART-5.20
Chart showing comparison between SBI & NSE
INFERENCE:
While comparing the NSE market index with SBI bank, till 2006 there is little
variation between the two. But in 2007 the stock movement has out performed the market
index.
85
PUNJAB NATION BANK
Business Profile
With its presence virtually in all the important centres of the country, Punjab
National Bank offers a wide variety of banking services which include corporate and
personal banking, industrial finance, agricultural finance, financing of trade and
international banking. Among the clients of the Bank are Indian conglomerates, medium
and small industrial units, exporters, non-resident Indians and multinational companies.
The large presence and vast resource base have helped the Bank to build strong links with
trade and industry. Punjab National Bank is serving over 3.5 crore customers through
4540 Offices including 421 extension counters - largest amongst Nationalized Banks.
Bank has Rupee Drawing Arrangements with 15 exchange companies in the Gulf
and one in Singapore. Bank is a member of the SWIFT and over 150 branches of the
bank are connected through its computer-based terminal at Mumbai. With its state-of-art
dealing rooms and well-trained dealers, the bank offers efficient forex dealing operations
in India.
Another step taken by PNB in meeting the changing aspirations of its clientele is
the launch of its Debit card, which is also an ATM card. It enables the card holder to buy
goods and services at over 99270 merchant establishments across the country. Besides,
the card can be used to withdraw cash at more than 25000 ATMs, where the 'Maestro'
logo is displayed, apart from the PNB's over 1094 ATMs and tie up arrangements with
other Banks.
86
: 1895
: Rs.18, 850.21
(Rs. in cores)
Price
: Rs.459.80
: Rs.71.06
:6.47

Face value
: Rs.10
52 weeks high/ low
: 721.00/419.00
: 13470.2
:Rs.1, 62,422.50
87
TECHNICAL ANALYSIS
CHART-5.21
Chart showing stock price movement on PNB bank
INFERENCE:
The performance of the bank was moderate. In the year 2003 the stock was traded
in the huge volume. The price was highly volatile. The trading volume has also
decreased. The maximum price was reached in 2007.
88
CHART-5.22
Chart showing Exponential Moving Average for PNB
INFERENCE:
There isnt huge variation between two EVA lines. The stock was over sold in
middle of 2006. Even in 2007 there was both bulling and selling by the investors.
89
CHART-5.23
Chart showing Relative Strength Index for PNB
INFERENCE:
Above chart shows that, majority of the times the stock of over sold. Only on few
occasion it was over bought i.e. only in year the 2004 it crossed 80.
90
CHART-5.24
Chart showing comparison between PNB & NSE
INFERENCE:
Comparing the NSE market index and the price movement of PNB, the bank is
traded lower then the market index.
91
CHART-5.25
Chart showing comparison between ICICI Bank & HDFC Bank
INFERENCE:
While comparing two Private sector banks performance of HDFC bank is good
compare to ICICI. But in the beginning of 2008 due to various global phenomena the
price of both the stock has decreased. There was a huge fall in price of ICICI bank share.
92
CHART-5.26
Chart showing comparison between SBI & PNB
INFERENCE:
While comparing two Public Sector Banks the performance of SBI is good in
terms of investment and return. It is far a head of Punjab Nation Bank.
93
CHART-5.27
Chart showing comparison between SBI & HDFC
INFERENCE:
While comparing the performance of HDFC bank from private sector and SBI
from public sector, there isnt much variation. Most of the times SBI was trading ahead of
HDFC. Its only few points a head of HDFC bank.
94
CHAPTER-6
FINDINGS
This study has dealt with investors confidence in Indian capital market and the
technical and fundamental analysis of the banks that constitute the market index, namely
S&P-CNX NIFTY. Most important findings of this study are as follows.
1 Based on the survey it was found that there is significance difference between
the age group of the investors and purpose of investment in share market.
2 It was also found that there is no significance difference between the gender and
information they seek before investing in the stock market.
3 It was found that there is no significance difference between the gender and risk
taking ability of the investors.
4 Majority of the investors prefer banking sector (52%) followed by Oil & Gas
(44%), Construction (38%), Infrastructure (34%), Steel (22%), IT (18%),
Automobiles (16%) and others (30%).
5 According to the 36% of the investors, stock market is better avenue for
investment from return point of view closely followed by savings (35%). And
29% from risk point of view.
6 From return point of view 36% of the investors consider stock market is average
and only 14% consider it as very good.
7 From savings point of view 32% of the investors consider stock market is
average and only 8% as very good.
95
1 From risk point of view majority of the investors (38%) consider it as poor
avenue and 3% as good.
2 Majority of the investors (36%) are willing to take 25% of risk on their invested
capital in the share market. Only 8% of the investors take more than 50% of
risk. Investors below 40yrs of the age are the maximum risk takers. But there
are 28% of the investors who are not willing to take any risk
3 The most commonly faced difficulties by the investors, irrespective of their age,
gender, occupation and education are lack of knowledge about the market and
the false information & rumors.
4 30% of the investors would like to invest less than 10% of their saving in stock
market. While 28% of the investors would like invest 11-30% of their saving in
the stock market. Only 6% male investors below 40yrs of age are willing to
invest above 50% of their savings in the stock market. However 26% are not
interested in stock market
5 Majority of the investors (50%) invest in the stock market only for capital
appreciation. Followed by savings (28%) and liquidity (16%).
6 Most of the investors prefer short-term investment (50%) for investment in
stock market. Only 20% of the investors below 40yrs of age would like to invest
for long term
7 It was determined from the study 28% of the investors take investment decision
based on brokers advice. While rest of the investors would make investment
decision based on self analysis or TV channels, internet or colleges & friend for
stock market information and performances
96
1 Investors feel that the current market price is a better indicator for investors to
invest.
2 Public Sector Banks (PSBs) are good and appear to be so. They have improved
a lot in the last five years.
3 Public Sector Banks have positive and strong equation with the regulation by
their sheer size, lineage and pan- India presence.
4 Strong entry barrier for foreign/private banks in growing rural market where
PSBs have an edge.
5 Private Banks in aggregate enjoys 30% higher market capitalisation than their
PSBs. One year forward target price, market capitalisation of PSBs is expected
to climb 36%-Private sector-16%On Price to Book Value basis, the PSBs are
trading much cheaper in the range of 1.12 to 2.91 times, while private banks
trade at much expensive valuation of 1.89 to 8.89 times.
6 Comparing the share premium PSUs has less share premium of 3-31% as
against 41-49% premium built in private banks.
7 Private Banks have a higher growth rate on a much smaller base compare to
PSBs - be it number of branches, total credit and advances, or deposits.
8 PSBs have shown significant improvement in reducing gross and net Non
Performing Asset (NPA), operating expenses, recoveries of NPAs and asset
quality.
9 State Bank of India is at the top with market capitalization of Rs.1, 31,525.53
crs and asset size of Rs. 5, 66,565.24crs.
97
CHAPTER-7
SUGGESTIONS
1 There should be latest and easy availability of information to the public.
Investors should be educated about the market trends, price movements; they
should have a wide knowledge about the market. Awareness about the primary
market should be improved. There should be more liquidity in primary market
investment.
2 Transparency in the system should be maintained. Insider trading should be
completely curbed in order to have transparent transactions. There should be
more transparency in activities of the company.
3 Sensitive information should be made available to everyone at the same time.
Information related to promoters background and project implementation
experience should be made available.
4 Advertisements on the improvements taking place in the market should be
released regularly.
5 There should be regulation to control scandals; regulatory bodies should
prevent corporate frauds.
6 Moral character of Board of Directors to be checked. Only experienced
promoters should be allowed to raise funds in the capital market. Dishonest
promoters should not be allowed to raise funds the promoter should at least
have five years of experience in the industry.
98
1 More active investor associations to be provided. General investors should

understand the riskiness associated with investment in shares. Grievance
redresses machinery should be more efficient.
2 Shareholders interest should be considered while companies take decisions.
3 Demat account information should be proper and regular.
4 Price rigging before issue of securities to be controlled.
5 Action should be taken against the issue managers, analysts and company for
providing over optimistic and false information
6 Companies should be encouraged to buyback shares if not listed or saleable.
7 Bogus companies should not be allowed to raise funds in the capital market
8 Insurance of stock market investments should be developed.
9 Government should improve infrastructure and economic condition. It should
check corruption at various levels and take steps to protect small investors.
10 Government should reduce political interference in markets.
11 Capital Gain Tax can be reduced by the Income Tax Department out of profits
made on intra day transactions.
12 Since most of the investors make investment decision based on brokers
advice brokers should guide them properly. .
13 Honesty and fair dealing in brokers should be encouraged Action should be
take action against brokers with bad conduct
14 Proper information on post listing activities should be made available by stock
exchanges to investors.
99
1 Investors should not invest in the same sector. And they should make long
term investment and should seek professional advice before investing.
2 Investors should be guided by the companys fundamental and not by
expectation of immediate return. And should also have broader view about the
market before investing. Do own research and not fall prey to rumors.
3 There is a positive correlation between stock price and the companys brand
visibility.
4 The Indian equity markets, as experts believe, will continue to follow the
global trends. This year (2008) could be a year of consolidation. Volatile will
persist for few months. Sensex will be around 15000-18000points for the next
six to eight months.
5 It is prudent to invest in large-cap stocks from these sectors-public sector
banks, capital goods, infrastructure and oil refineries.
6 Market related investment may not pay the same level of return they have
given in the last three years.
100
CHAPTER-8
CONCLUSION
The dream run in Indian capital market, which started in 2003, continued till
2007. The Sensex and the Nifty tripled during this period from 1, 912 in January 2004 to
6, 079 in December 2007, respectively. In 2007, 100 IPOs (Initial Public Offer) were
floated compared to 75 in 2006. The Economic Survey says market cap was 150 percent
of the GDP. In the mid January, Indian market came under global selling pressure and the
global meltdown coincided with higher valuation of the market.
Four initial IPOs which were launched in 2008, were withdrawn due to poor
investor interest. Investors risk appetite reduced after the sharp corrections. So, the fate
of the primary market will dependent of the secondary markets. The Economic Survey
points out that Indian stocks reflected price to earning multiples of around 27 times at
December end 2007 , the highest among the select emerging market economies. The
Indian equity markets, as experts believe, will continue to follow the global trends.
This year (2008) could be a year of consolidation. Moreover, if the economic

growth moderates, as is expected, corporate earnings may get affected. That will mean a
slower growth in the markets. So, market related investment may not pay the same level
of return they have given in the last three years.
101
CHAPTER-9
BIBILOGRAPHY
BOOKS
1 Bodie, Z. & Kane, A & Marcus, J.A. Investments. Tats McGraw-Hill. New
Delhi. 2002.
2 Donald E. Fisher & Ronald J.Jordan. Security Analysis And Portfolio
Management (6
th
edition). Pretice Hall of India Orivate Ltd. New Delhi.
2006.
3 I.M. Pandey. Financial Management (8
th
edition). Vikas Publishing House
Private Ltd. New Delhi .2003.
WEBSITES
1 http://finance.yahoo.com/
2 http://www.indiabulls.com/equities/techanalysis/tech_analysis.asp
3 http://www.moneycontrol.com/stocksmarketsindia/
4 http://www.valueresearchonline.com/stocks/snapshot.asp?code=1622
5 http://www.equitymaster.com/tm.asp
6 http://galatime.com/charts/banks.html
7 www.capitalmarket.com
8 www.nseindia.com
9 www.investopedia.com
102
ANNEXURE
QUESTIONNAIRE
1.
Name (Optional)
2.
Age:
3.
Gender:
4.
a.18-40 yrs (
a. Male (
)
)
b. 41-60yrs (
) c. 61yrs & above (
b. Female (
Educational Qualification:
a. Graduates ( ) b. Post Graduates ( ) c. Professionals ( ) d .Others ( )
5.
Occupation:
a. Service ( ) b. Professional ( ) c. Business ( ) d. Others (
6.
What percentage of income would you save?

a. <10 % (
7.
) b.11-20 % (
) c. 21-30 % (
) d. 31-50 % (
What percentage of savings would you invest in stock market?

a. 0-10 %
(
e. Not investing (
8.
) b.11-30% ( ) c. 31-50% ( ) d. 50% & above ( )

)
For what purpose investment are made in stock market?

a. Saving ( ) b. Liquidity ( ) c. Capital appreciation ( ) d. Dividend ( )
9.
Time frame of investment preferred by you for making investment:

a. Short term (
(<6months)
) b. Medium term (
(6months-1yr)
c. Long term (
(>1yr)
)
103
10.
Maximum risk you are ready to take on your invested capital.

a.10% ( ) b. 25% (
11.
) c.50% (
) d. Not at all ( )
Your general perception about the stock market.

Poor
Very
poor
Average
Good
Very
good
Return point of view

Risk point of view
Savings point of view
12.
Before investing in stock market whose advice do you seek?

a. Brokers
(
c. Self- Analysis (
)
)
b. TV channels, Newspapers or Internet (

d. Colleague & Friends
(
)
13. Sector preferred for making investment

a. Automobile
b.Contruction
c. FMCG
d. IT
e. Steel
14.
)
)
)
)
)
f. Oil & gas

g. Banking
h Cement
i. Infrastructure
j. Retail
(
(
(
(
(
)
)
)
)
)
Do you face difficulties while investing in stock market?

a. Yes (
15.
(
(
(
(
(
b. No (
What are the difficulties faced by Investors?

a. Lack of knowledge about the market (
c. Being cheated by the brokers
e. False information / rumors
(
(
) b. High brokerage
) d. Lack of funds
)
(
(
)
)
16. Your suggestions so as to enable you to make stock market a good avenue for
investment.
104

Prabu Karvy

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Prabu Karvy

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A STUDY ON CUSTOMER PERCEPTION TOWARDS INDIAN

CAPITAL MARKET WITH SPECIAL REFERANCE TO KARVY

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

SCHOOL OF MANAGEMENT STUDIES

SCHOOL OF MANAGEMENT STUDIES FACULTY

Signature of the Guide Signature of Dean/ MBA

Internal Examiner External Examiner

The project report A STUDY ON CUSTOMER PERCEPTION

I, THAMIZH.P (35106212) do here by declare that this project A STUDY

ON CUSTOMER PERCEPTION TOWARDS INDIAN CAPITAL

Signature of the Student

DATA ANALYSIS & INTERPRETATION

Age vs. purpose of investment in share

information they seek for

investing in stock market.

taking ability of the

Percentage of investors savings in stock

Reasons for investing

Risk taking ability of the investors

investments are made in stock market

market from risk, return and savings

The most preferred

Percentage of investors savings in stock

Reasons for investing

investments are made in stock market

Difficulties faced by the investors

Share Price Movement of ICICI Bank

Exponential Moving Average

for ICICI Bank

Share price movement for HDFC Bank

Exponential Moving Average (EMA) for

Relative Strength for SBI Bank

Comparison between SBI & NSE

Stock price movement on PNB bank

Exponential Moving Average for PNB

Relative Strength Index for PNB

Comparison between PNB & NSE

INDIAN CAPITAL MARKET

Indian Capital Market

INDIAN STOCK MARKET

NSE (National Stock Exchange)

Trading at NSE can be classified under two broad categories:

BSE (Bombay stock exchange)

NATURE OF STOCK MARKET

Members of stock exchanges

The statutory rules provide that no person shall be eligible to be elected as a

Corporation of India, Industrial Development Bank of India, SBI Capital Markets,

1.2. STATEMENT OF PROBLEM

1.3 OBJECTIVES OF THE STUDY

SCOPE OF THE STUDY

2 The study covers the investors of Chennai.

LIMITATIONS OF THE STUDY

2 Due to geographical constraint only the investors in Chennai were surveyed.

In January 1998, Karvy became the first Depository Participant in Andhra

A decade of commitment, professional integrity and vision helped Karvy attain a

SERVICES OFFERED BY KARVY

1 Financial Product Distribution

Mutual Fund Investment Advisor

About KARVY Insurance Broking Ltd. (KIBL)

About KARVY Financial Planning

KARVY as an Income Tax Advisor

Fixed Income Securities & Trading (K-FIST)

Central Government securities, State Development Loans, State