SUMMER TRAINING REPORT SUBMITTED TOWARDS

THE PARTIAL FULFILLMENT OF POST GRADUATE

DEGREE IN INTERNATIONAL BUSINESS

Working of A Capital Market

Dubbhi Choudhary

INDUSTRY GUIDE FACULTY GUIDE

Mr. RAMAN TALWAR. PROF. (Dr.) AJIT
MITTAL
AVP (Associate vice president)

AMITY INTERNATIONAL BUSINESS SCHOOL,

NOIDA
AMITY UNIVERSITY – UTTAR PRADESH

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 Company Certificate

TO WHOM IT MAY CONCERN

This is to certify that Kushal Panjwani, a student of Amity International

Business School, Noida, undertook a project on “Working of a Brokerage
industry” at Religare Securities Limited From 1st may 2008 to 24th June
2008. Mr. Kushal Panjwani has successfully completed the project under the
guidance of Mr. Raman Talwar (AVP). He is a sincere and hard-working
student with pleasant manners.

We wish all success in his future endeavors.

Signature with date

(Name)
(Designation)
(Company Name)

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 CERTIFICATE OF ORIGIN

This is to certify that Mr. D.Choudhary, a student of Post Graduate Degree

in MBA (IB), Amity International Business School, and Noida has worked
in the Religare Securities Limited, under the able guidance and supervision
of Mr. Raman Talwar, designation AVP (Associate Vice President),
Company Religare Securities Limited. The period for which he was on
training was for 8 weeks, starting from 1st May, and 2008 to 24th June, 2008.
This Summer Internship report has the requisite standard for the partial
fulfillment the Post Graduate Degree in International Business. To the best
of our knowledge no part of this report has been reproduced from any other
report and the contents are based on original research.

Signature Signature
(Faculty Guide) (Student)

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 ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. Raman Talwar,

AVP (Associate Vice President), Religare Securities limited, for his able
guidance, continuous support and cooperation throughout my project,
without which the present work would not have been possible.

I would also like to thank the entire team of Religare Securities limited, for
the constant support and help in the successful completion of my project.

Also, I am thankful to my faculty guide Prof. (Dr.) Ajit Mittal of my

institute, for his continued guidance and invaluable encouragement.

Signature
(Student)

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 TABLE OF CONTENTS

S.No Particulars
Page no.
1. EXECUTIVE SUMMARY
2. OBJECTIVE OF THE REPORT
3. RESEARCH METHODOLOGY
4. INDUSTRY PROFILE
• Primary market and Secondary Market
• Introduction

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 EXECUTIVE SUMMARY

The Indian Brokerage Industry consists of companies that primarily act as agents for the
buying and selling of securities (e.g. stocks, shares, and similar financial instruments) on
a commission or transaction fee basis. In actuality the brokerage industry continues to
develop rapidly. Many of the traditional restrictions against banking activities within the
brokerage industry are being eliminated and the barriers are disappearing. Due to this,
some commercial banks have as subsidiaries, brokerage houses that offer discounts and
some of them have available accounts that offer all of the services that are offered by a
checking account.

The summer training done in Religare securities limited was done with the objective to
study the working of capital market in India , How actually trade takes place once if order
is being entered in the system, Signals are transferred from broker to NSE’s mainframe
office through VSAT lines. If order finds a match order is being executed else it goes into
a pending option and it gets executed once it finds a perfect match. Then in my project
work how order management takes place how orders are entered modified and cancelled
and then understanding about clearing and settlement procedure is explained. how share
trading is done and how trading is carried out, done online as well as offline. If we look
from India’s point of view although online share trading is growing at a very fast pace but
still maximum investor goes for offline trading because of lack of internet facility and
also because of various disadvantages attached to online share trading.

Other objective of doing my project was to understand the working of a brokerage

industry. The basic function of a brokerage firm is to execute buy and sell orders for
clients. Traditionally these firms have offered the investigation of the quality and the
possibilities of investing in a variety of investment products. It is still accustomed for
brokerage firms to offer information about possible investments free of charge. This
activity of bringing free of charge stock investment reports is one of the main tools that

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are utilized by brokerage houses to compete against other firms and to investors it
continues to be an important service.

OBJECTIVE OF PROJECT:

PRIMARY OBJECTIVE:

1 .The primary objective of doing this project work is to have a basic understanding of a
capital market.

2. The other objective of doing this project is to understand the working and dynamics of
equity market.

SECONDARY OBJECTIVE:

1 .Understanding the various clearing and settlement procedure of a trade.

2. Comparing online share trading with offline share trading.

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 RESEARCH METHODOLOGY:

The primary objective of my project is to study the working of capital market in

India.The other objective is to understand the working and dynamics of equity market
and to understand how share trading is done.

RESEARCH DESIGN:
This work is no based on primary data; secondary data is being used for my project work.
Apart from this, information gathered was by tele calling, personal interactions with
clients for the purpose of analyzing the awareness of Religare as a brand and also for
analysis of other graphs, Interaction with RM as well as my personal experience was used
to gain understanding about capital market and also a help was taken from NCFM
module.

SCOPE OF THE STUDY:

I was faced with problem about what can be defined as a work on capital markets. A
variety of work in economics, accounting and finance has some linkages with capital
markets. For my project therefore, I considered functioning of the stock markets.

LIMITATION:
Limitation of my study is that it is based on secondary data as well on my interaction
with the RM to gain the understanding about topic, so it may not give the exact
understanding of capital market.

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 INDUSTRY PROFILE:

CRITICAL REVIEW OF LITERATURE:

The Indian Brokerage Industry consists of companies that primarily act as agents for the
buying and selling of securities (e.g. stocks, shares, and similar financial instruments) on
a commission or transaction fee basis.
Hence, to understand this industry we have to study Security Market:
Security market has two main interdependent segments: Primary market and the
Secondary market.

PRIMARY MARKET:
The primary is that part of the capital markets that deals with the issuance of new
securities. Companies, governments or public sector institutions can obtain funding
through the sale of a new stock or bond issue. This is typically done through a syndicate
of securities dealers. The process of selling new issues to investors is called underwriting.
In the case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a
commission that is built into the price of the security offering, though it can be found in
the prospectus.
In primary market certain companies issue their shares directly to the public, collect
applications and after sorting out the good issues, they put in their applications. The share
brokers get their brokerage on the transactions made.

SECONDARY MARKET:
The secondary market is that market in which trading is done of securities that have
already been issued in an initial private or public offering.
The secondary market comprises of brokerage that a broker earns in the buying and
selling of companies that are listed in the stock exchange. These stock broker are in

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charge of the conformation and carrying out of transactions. Orders are taken and
executed on behalf of the clients. The fluctuation of rates in the share market makes the
activity in a trade market a dynamic process. It is necessary for a broker to have adequate
knowledge about the economic and political factors as they affect the share market.

DEVELOPMENT IN BROKERAGE INDUSTRY

In actuality the brokerage industry continues to develop rapidly. Many of the traditional
restrictions against banking activities within the brokerage industry are being eliminated
and the barriers are disappearing. Due to this, some commercial banks have as
subsidiaries, brokerage houses that offer discounts and some of them have available
accounts that offer all of the services that are offered by a checking account. The basic
function of a brokerage firm is to execute buy and sell orders for clients. Traditionally
these firms have offered the investigation of the quality and the possibilities of investing
in a variety of investment products. It is still accustomed for brokerage firms to offer
information about possible investments free of charge. This activity of bringing free of
charge stock investment reports is one of the main tools that are utilized by brokerage
houses to compete against other firms and to investors it continues to be an important
service.

Despite the previously, not all investors consider that investment reports is an important
service. Some investors prefer other types of services since many investors don’t believe
that these investment reports are useful. In order to capture this vast diverse clientele, the
brokerage industry has segmented itself. After the restrictions in commissions were
eliminated, several brokerages began to open up their doors as discount brokerage firms.
In actuality, brokerage firms may be classified into full service brokers and discount
brokers.

Full service brokerage firms continue to offer informative stock reports and a level of
service much higher than other brokerage houses. Discount brokerage houses only
dedicate themselves to execute orders for clients. Full service brokers are sellers looking
for purchasing and selling for clients and offering more customer service than is available

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from discount brokers. It is many times possible that a client will not even know who is
taking care of the buy or sell order that they placed. These differences in services and
philosophies may lead to great differences in commission costs. It is evident that these
differences may be an important factor in the return of an investment. This is particularly
true when we see that these commissions are added to the purchase as well as to the sale
of a stock or other investments.

MAJOR STOCK EXCHANGES IN INDIA:

BOMBAY STOCK EXCHANGE

Background: The BSE Sensitive Index (1978-79=100) has, to a considerable extent,

been serving the purpose of quantifying the price movements as also reflecting the
sensitivity of the market in an effective manner.
The number of companies listed on the Bombay Stock Exchange has registered a
phenomenal increase from 992 in the year 1980 to about 4800 companies by the end of
July 2005 and their combined market capitalization rose from Rs. 5,421 crores to around
Rs. 18, 00,000crores at end of July 2005.
These factors necessitated compilation of a new broad-based index series reflecting the
present market trends in a more effective manner and providing a better representation of
the increased equity stocks, market capitalization as also the newly emerged industry
groups. Towards this end, the Exchange constructed and launched on 27th May 1994,
two index series viz. the BSE-200 and the DOLLEX.

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Coverage: The equity shares of 200 selected companies from the specified and non-
specified lists of this Exchange have been considered for inclusion in the sample for
`BSE-200'. The selection of companies has primarily been done on the basis of current
market capitalization of the listed scripts on the exchange. Besides market capitalization,
the market activity of the companies as reflected by the volumes of turnover and certain
fundamental factors were considered for the final selection of the 200 companies.

Choice of Base Year: The financial year 1989-90 has been chosen as the base year
for the price stability exhibited during that year and due to its proximity to the current
period.

Graph depicting the turnover of BSE:

BSE TURNOVER

250,000.00

200,000.00

150,000.00
Rs. in Billions
100,000.00

50,000.00

0.00
1

1996-97 1997-08 1998-99 1999-00 2000-01 2001-02 2002-03

2003-04 2004-05 2005-06 2006-07 2007-08

The above graph shows the turnover in BSE from the year 1996-97 to the year 2007-08.
The graph easily shows that the turnover of BSE has increased in leaps and bounds
over the given period.

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NATIONAL STOCK EXCHANGE

The 13-year-old National Stock Exchange (NSE) has outshined the 130 years old
Bombay Stock Exchange (BSE) in terms of turnover and volumes. The BSE has lost its
market share in these segments from 36 per cent to 31 percent in last three years. The
turnover in BSE stood at around Rs 2,950 crore as on August 17, 2005 while the turnover
in NSE was Rs 3,926 crore. The volumes (numbers of shares traded) of NSE at 2.94 crore
was also much higher than the volumes of BSE. The NSE has rewritten a number of rules
and upset many traditions. As the derivatives segment has immense effect on the cash
market, the movement in this segment mostly determines the trend in the market.
Against nearly 1,400 companies listed on the NSE, the BSE has nearly 4,800 listed
companies. Despite such a huge number of listed companies, the total market
capitalization of BSE is around Rs 20 lakh crore while on the other hand NSE has a total
market capitalization of Rs 19.7 lakh crore.
The most tracked index on NSE, CNX Nifty also has more number of stocks than the
BSE Sensex. Nifty represents 50 stocks while the Sensex represents only 30 stocks. The
presence of more stocks on Nifty gives a better valuation than Sensex.

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 Graph depicting the turnover in NSE

NSE TURNOVER

4,000,000
3,500,000
3,000,000
2,500,000
Rs. in Crore 2,000,000
1,500,000
1,000,000
500,000
0
1

2007-2008 2006-2007 2005-2006 2004-2005 2003-2004

2002-2003 2001-2002 2000-2001 1999-2000 1998-1999
1997-1998 1996-1997 1995-1996 1994-1995

The above graph depicts the turnover of BSE from 1994-05 to 2007-08,the graph shows
from a mare turnover of below 500,000 crore in the year 1994-05 how it has increased to
more than 3,500,000 crore in the year 2007-08, constant increase in turnover itself
proves the growth and attractiveness of this market.

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 COMPETETORS OF RELIGARE:

Company Background:

India infoline was founded in 1995 and was positioned as a research firm. In 2000
e-broking was started under the brand name of 5 paisa.com. Apart from offering online
trading in stock market the company offers mutual funds online. It also acts as a
distributor of various financial services i.e. GOI securities, Company Fixed Deposits,
Insurance. It has a limited ground network, present in 20 Cities.

Online Account Types

•Investor Terminal: Investors / Students

•Trader Terminal: Day Traders / HNI’s

Pricing for retail clients

Investor Terminal:-

•Account Opening: Rs 500

•Demat 1st Yr: Rs 250
•Initial Margin: Rs 2500(Compulsory)

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•Min Margin Retainable: Rs 1000
•Brokerage:
Trading 0.10% each side + ST
Delivery 0.50% each side + ST

Pricing for hni clients

•Account Opening: Rs 500

•Demat 1st Yr: Rs 250
•Initial Margin: Rs 5000(Compulsory)
•Min Margin Retainable: Rs 1000

Brokerage:
Trading 0.10% each side + ST
Delivery 0.50% each side + ST
(Negotiable to 0.05% each side & 0.25%)

Account Access Charges

Monthly Rs 800, adjustable against Brokerage
Yearly Rs 8000, adjustable against brokerage

Problems Of 5 Paisa

Downtime

Recent past 5 paisa Trader Terminal (T.T) is experiencing high frequency downtime
between 3 – 3:30p.m due to server load.

Manual Accounting

The 5 paisa accounting system is manual, Online fund transfer through bank is not
credited instantly. Limit is provided EOD for shares sold from DP, or call Similarly limit
released for shares sold under BTST is manual Delay in receiving pay-out of clear funds
from trading to Bank Account.

Min Account Balance

Concept of Min Rs1,000 is to be maintained in form of cash / securities to keep account

active. This can be withdrawn only on closure of account.

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 KOTAK SECURITIES

Company background

Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman
Sachs.

Online Account Type

• Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction
• High Trader: 6 Times Exposure Cash & Derivatives, Auto sq off 2:55

Pricing of Kotak

• Account Opening: Rs 500

• Demat: Rs 22.5 p.m
• Initial Margin: Rs 5000(Compulsory)
• Min Margin Retainable: Rs 1000
• Brokerage Slab wise: Higher the volume, lower the brokerage. Even older
customers (on 0.25% & 0.40%) have been moved to the slab wise structure.

Problems of Kotakstreet

• Rigid Account Opening Terms

• No Flexibility of A/c opening charges (Rs 500) + Compulsory margin Rs 5000/-
Account opening free with Rs 10,000 Margin OR Competitor Contract Note.

• No Flexibility in Leverage – Dependent on Type of Account (4 to 6 times only)

No flexibility in Brokerage, driven by slab structure.
• No Customization of commercial Terms.

• Restricted Access to Terminal like product

• KEAT Desktop restricted distribution on payment of Rs 500, Non refundable

Many Other Charges:

• Rs 22.5 p.m towards DP AMC charges
• DP incoming charges extra, 0.02%
• Rs 1,000 as retainable Margin to keep account active
• Rs 25 per call after 20 calls for the month

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 INDIABULLS

Company Background

India Bulls is a retail financial services company present in 70 locations covering 62

cities. It offers a full range of financial services and products ranging from Equities to
Insurance. 450 + Relationship Managers who act as personal financial advisors

Online Account Type

•Signature Account: Plain Vanilla Account with focus on Equity Analysis. The equity
analysis is a paid service even for A/c holders

•Power India bulls: Account with sophisticated trading tools, low commissions and
priority access to R.M

Pricing of IB Accounts

Signature Account

•Account Opening: Rs 250

•Demat: Rs 200 if POA is signed, No AMC for this DP
•Initial Margin: NIL
•Brokerage: Negotiable

Power India Bulls

•Account Opening: Rs 750

•Demat: Rs 200 if POA is signed, No AMC for this DP
•Initial Margin: NIL
•Brokerage: Negotiable

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 Problems Of India Bulls

Paid Research Services

Access to a research even for an IB trading account holder is charged a min of Rs 500 a
month.

Margin funding hoax

The interest on funding starts on leveraged delivery trades from T+1 day itself @21% p.a
, on a daily basis.

The role of Relationship Manager

Each RM is looked upon as a revenue generator and he gets a % on business generated

from client. This can lead to over leveraged (Interest) & high frequency (Brokerage)
trading, which may not be in the best interest of the client.

ICICI DIRECT

Company Background:

ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is an affiliate of

ICICI Bank Limited and the Website is owned by ICICI BankLimited.

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Account Types:

ICICI Direct e-invest Account:

Premium trading interface of ICICI Direct Link is given to DBC partners and HNI’s
Plain Vanilla Account with focus on 3 in 1 advantage .Differentiated in services within
the account.

1. Cash on spot
2. Margin Plus

Account Opening: Rs 750

Schemes: For short periods Rs 750 is refundable against brokerage generated in a qtr.
These schemes are introduced 3-4 times a year.
Demat: NIL, 1st year charges included in Account Opening Plus a facility to open
additional 4 DP’s without 1st yr AMC.
Initial Margin: Nil
Brokerage: All brokerage is inclusive of stamp duty and exclusive of other taxes.
Slab wise brokerage ranges from 0.75% to 0.25% depending on volume.

Problems of ICICI Direct

Poor online Interface

Slow website interface with no real-time quotes creates dissatisfaction among high
frequency traders

Margin trading restriction

The margin trading system is available up to 2:45 p.m, with outstanding net positions
under margin segment automatically squared off at any time between 2:45 – 3:30 p.m.
Thus no control of square off price.

Morning Trades Issue

Being one of the websites with largest no of after hour orders which are pushed 1 st thing
in the morning, creates a choking of orders to the exchange, causes delay of
confirmations for new order placed during the early morning trades.

Restriction of BTST

The sale of shares purchased is restricted to T+1 day and is not permitted on T+2 Day.

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No leverage for Delivery trades

Delivery is restricted to the total money allocated into the trading account.

No flexibility on leverage on Intra-day trades

The leverage of 4 times is available for intra- day trades.

Restriction of Bank Account

The choice of bank is restricted to ICICI Bank.

Higher Brokerage rates with slabs

The delivery brokerage is pegged at 0.75% and trading at 0.10% each side, this makes is
very unviable for customers dealing in large volumes. Although progressively the
delivery and trading brokerage reduce as volumes go up.

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 Demat Account Market

12%
26% Religare
ICICI Direct
Kotak Securities
31% IndiaBulls
24% Others
7%

Interpretation: Religare ranks only 3rd amongst the Demat account providers. This is
probably because of two main reasons:

1. Lack of promotion and unfocussed approach towards Product awareness

2. Company is relatively new in the market.

Hence, the company should indulge in aggressive marketing and promotion.

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 COMPANY PROFILE:

Review of literature of a company:

Religare is driven by ethical and dynamic process for wealth creation. Based on this, the
company started its endeavor in the financial market.
Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through Religare
Securities Limited, Religare Finvest Limited, Religare Commodities Limited and
Religare Insurance Broking Limited provides integrated financial solutions to its
corporate, retail and wealth management clients. Today, it provides various financial
services, which include Investment Banking, Corporate Finance, Portfolio Management
Services, Equity & Commodity Broking, Insurance and Mutual Funds. Plus, there’s a lot
more to come your way.
Religare is proud of being a truly professional financial service provider managed by a
highly skilled team, who have proven track record in their respective domains. Religare
operations are managed by more than 3000 highly skilled professionals who subscribe to
Religare philosophy and are spread across its countrywide branches.
Today, it has a growing network of more than 300 branches and more than 580 business
partners spread across more than 300 cities/towns in India and a fully operational
international office at London.
Unlike a traditional broking firm, Religare group works on the philosophy of partnering
for wealth creation. We not only execute trades for our clients but also provide them
critical and timely investment advice. The growing list of financial institutions with
which Religare is empanelled as an approved broker is a reflection of the high-level
service standard maintained by the company.

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GROUP COMPANIES

Religare Enterprises Limited group comprises of Religare Securities Limited, Religare

Commodities Limited, Religare Finvest Limited and Religare Insurance Broking Limited
which deal in equity, commodity and financial services business.

1. Religare Securities Limited

RSL is one of the leading broking houses of India and are dealing into Equity Broking,
Depository Services, Portfolio Management Services, Internet Trading, Institutional
Equity Brokerage & Research, Investment Banking, Merchant Banking and Corporate
Finance.
To facilitate free and fare trading process Religare is a member of major financial
institutions like, National Stock Exchange of India, Bombay Stock Exchange of India,
Depository Participant with National Securities Depository Limited and Central
Depository Services (I) Limited, and a SEBI approved Portfolio Manager.
RSL serves a platform to all segments of investors to avail the opportunities offered by
investing in Indian equities either on their own or through managed funds in Portfolio
Management

2. Religare Commodities Limited

Religare is a member of NCDEX and MCX and provides platform for trading in
commodities, which is an online facility also.
RCL provides platform to both agro and non-agro commodity traders to derive the actual
price of the commodity and also to trade and hedge actively in the growing commodity
trading market in India.
With this realization, Religare Commodities is coming up with its branches at mandi
locations. It is a flagship effort from our team which would be helpful in facilitating trade
and speculating price of commodities in future.

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3. Religare Finvest

Religare Finvest Limited (RFL), a Non Banking Finance Company (NBFC) is

aggressively making a name in the
Financial services arena in India. In a fast paced, constantly changing dynamic business
environment, RFL has delivered the most competitive products and services.
RFL is primarily engaged in the business of providing finance against securities in the
secondary market. It also provides finance for application in Initial Public Offers to non-
retail clients in the primary market .
RFL is also planning to initiate personal loan portfolio as fund based activity and mutual
fund distribution as fee based activities.
Along with this, the company also undertakes non-fund based advisory operations in the
field of Corporate Financing in the nature of Credit Syndication which includes inter
alias, bills discounting, inter corporate deposit, working capital loan syndication,
placement of private equity and other structured products.

4. Religare Insurance Broking Ltd.

Religare has been taking care of financial services for long but there was a missing link.
Financial planning is incomplete without protective measure i.e. structured products to
take care of event of things that may go wrong
Religare Insurance Broking Limited. As composite insurance broker, deals in both
insurance and reinsurance, providing our clients risk transfer solutions on life and non-
life sides. This service will take benefit of Religare’s vast business empire spread
throughout the country -- providing our valued clients insurance services across India.
We aim to have a wide reach with our services – literally! That’s why we are catering the
insurance requirements of both retail and corporate segments with products of all the
insurance companies on life and non-life Still, there is more in store. We also cater
individuals with a complete suite of insurance solutions, both life and general to mitigate
risks to life and assets through our existing network side.

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For corporate clients, we will be offering value based customized solutions to cover all
risks, which their business is exposed to. Our clients will be supported by an operations
team equipped with the best of technology support
Religare Insurance Broking aims to provide neutral, transparent and professional risk
transfer advice to become the first choice of India

Why customer trade with Religare?

1. Personal Assistance

• Dedicated dealers for facilitating trading and post trade needs.

• Dedicated Relationship Managers for assisting multiple investments needs.

2. Research & Advisory

• Regular news and updates on market

• Research service over SMS to keep one
• Daily and weekly technical reports
• A complete information report on results and performance individual companies.
Complete reports on various economic sectors and their performance along with
analysis of few major companies in that sector
• Trading calls in Futures & Options
• Daily capsule of Market indices and index movement, national and international
corporate news, and their performance along with forth coming IPO tracker.

3. Add-Ons

• Access to all your accounts through your Customer Relationship Number (CRN)

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 • Access your ledger balances and account information over internet, branch and
call center

PRODUCT & SERVICES

 Equity & Derivatives

 Commodity
 Depository
 Portfolio Management Services
 International Equity & Commodity
 NRI Services
 Investment Banking
 Corporate Advisory Group

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 SWOT Analysis Of Religare
Strengths
1. It is a Ranbaxy promoter Group
Company.
2. provides multi-channel access to all
its customers through a strong
online presence with
www.religare.in, 580 branches in
130 cities and a call-center based
Dial-n-Trade facility
3. has dedicated research teams for
fundamental and technical research,
Which constantly track the pulse of
the market and provide timely
investment advice free of cost.
Opportunities
1. Can easily tap the retail investors
with small saving through
promotional channels like print
media, electronic media, etc.
2. more and more small investors are
entering into stock market.
3. Increasing usage of Internet through
broadband connectivity may boost a
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Weakness
1. Localized presence due to
insufficient investments for
countrywide expansion.
2. Lack of awareness among
customers because of non-
aggressive promotional strategies
(print media, newspapers, etc).
3. Lesser emphasis on customer
retention.
4. Focuses more on HNIs than retail
investors which results in meager
market-share as compared to close
competitors.
Threats
1. Aggressive promotional strategies
by close competitors may hamper
Religare’s acceptance by new
clients.
2. Lack of sufficient branch-offices for
speedy delivery of services.
3. More and more players are
venturing into this domain.
4. current market condition is very
 whole new breed of investors for bad, so its not easy to convince
trading in securities. clients to trade in share market.

ABOUT CAPITAL MARKET:

A capital market is a market where a government and company can raise money to fund
their operations and investment for long term. Bond market and capital market are a part
of capital market

BOND MARKET:

A bond is a fixed interest financial asset issued by governments, companies, banks,

public utilities and other large entities. Bonds pay the bearer a fixed amount a specified
end date. A discount bond pays the bearer only at the ending date, while a coupon bond
pays the bearer a fixed amount over a specified interval (month, year, etc.) as well as
paying a fixed amount at the end date.

SHARE MARKET:

Share market is a place where share of the companies are listed. Share market provides a
common place where a buyer and a seller can come together and sale and purchase share
or other securities.

HISTORY OF CAPITAL MARKET:

The trading on stock exchanges in India used to take place through open out cry without
the use of information technology for immediate matching or recording of trades, this
was very time consuming and inefficient. This imposed limits on trading volumes and
efficiency, in order to provide efficiency, liquidity and transparency, NSE introduced a
nation-wide on-line fully automated screen based trading system (SBTS)., where a
member can punch into the computer quantities of securities and the price at which he
likes to transact and the transaction is executed as soon as it finds a matching sale or buy
order from a counter party.

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SBTS matches order on a strict price/time priority and hence cuts down on time, cost and
risk of errors, as well as fraud resulting in improved operational efficiency, it enables
market participants, irrespective of their geographical locations, to trade with one other
simultaneously, improving the depth and liquidity of the market. It provides full
anonymity by accepting orders, big or small, from members without revealing their
identity, thus providing equal access to everybody.

TRADING NETWORK:

NSE has mainframe computer which is connected through Very Small Aperture Terminal
(VSAT). Installed at its office. The main computer runs on a fault tolerant STRATUS
mainframe computer at the Exchange broker have terminal installed at their premises
which are connected through VSATs/leased lines.
An investor informs a broker to place an order on his behalf, the broker enters the order
through his PC and it send signals to VSAT lines. The signal are directed to mainframe
computer at NSE via vsat at NSE’S office. A message related to the order activity to the
order activity is broadcast is broadcast to the respective member. The order confirmation
matches with the existing passive orders, otherwise it waits for the active orders to enters
the system. On order matching a message is flashed is broadcast to the respective
member. The trading system operates on a strict price time priority. All orders received
on the system are sorted with the best priced order getting the first priority for matching
i.e.

30
Order is cancelled or modified. The best buy order match with the best sell order. Similar
priced orders are sorted on the time priority basis, i.e. the one that came in early gets
priority over the later one. Orders are matched automatically by the computer keeping the
system transparent, objective and fair. Where an order does not find a match , it remains
in the system and is displayed to the whole market, till a fresh order comes in or the
earlier.

31
 CORPORATE HIRERCHY:

The trading member has the facility of defining a hierarchy amongst its user of the NEAT
system. This hierarchy comprises.
CORPORATE MANAGER

BRANCH 2
BRANCH 1

Dealer Dealer Dealer Dealer

CORPORATE MANAGER:
The corporate manager is a term assigned to a user placed at the highest level in trading
firm. Such a user receives the end day report for all branches of the trading member. The
facility to set Branch Order Value Limits and User Value Limits is a available to the
corporate manager.

BRANCH MANAGER:
The branch manager is a term assigned to a user placed under the corporate manager. The
branch manager receives the end day report for the entire dealer under that branch.
The branch manager can set user order value limit for each of his branch.

DEALER.

32
Dealers are users at the lower most level of the hierarchy. A dealer can view and perform
order and trade related activities only for one and does not have access to information on
other dealer under either the same branch or the other.

ORDER MANAGEMENT:

Order Management consists of entering orders, order modification,

order Cancellation and order matching.

ENTERING ORDER:
The trading member can enter orders in the normal market, odd lot,
Retdebt and auction market. A user can place orders in any of the
above mentioned markets By invoking the respective order entry
screens. After doing so, the system automatically picks up information
as entered by trading member.

Active & Passive Order:

When any order enters the trading system, it is an active order. It tries
to find a Match. If it finds a match, a trade is generated. If it does not
find a match, the order becomes a passive order and goes and sits in
the order book.

Order Books;
As and when valid orders are entered or received by the trading
system, they are First numbered, time stamped and then scanned for a
potential match. This means that each order has a distinctive order
number and a unique time stamp on it. If a Match is not found, and
then the orders are stored in the books as per the price/time Priority.

Quantity Freeze:

33
All orders with very large quantities are sent for Exchange approval. If
the quantity
for the order is greater than x% of the issue size of the security or is
greater than Rs. x value of the order (‘x’ is as specified by the
Exchange) whichever is less, then the order is sent as a quantity freeze
to the Exchange for approval. The Exchange may either approve or
reject the quantity freeze request.

Order Modification:
All orders can be modified in the system till the time they do not get
fully traded And only during market hours. Once an order is modified,
the branch order value Limit for the branch gets adjusted
automatically.

Order Cancellation:
Order cancellation is performed only for orders which have not been
fully or partially Traded.

Order Matching:
The best sell order is the order with the lowest price and a best buy
order is the Order with the highest price. The unmatched orders are
arranged in the system by the following priority:
.(a) By Price: A buy order with a higher price gets a higher priority and
similarly, a sell order with a lower price gets a higher priority. E.g.
Consider the following buy orders:
1) 100 shares @ Rs. 35 at time 9:30 a.m.
2) 500 shares @ Rs. 35.05 at time 9:43 a.m.
The second order price is greater than the first order price and
therefore is the best buy order.
34
(b) By Time: If there is more than one order at the same price, the
order entered earlier gets a higher priority. E.g. consider the following
sell orders:
1) 200 shares @ Rs. 72.75 at time 9:30 a.m.
2) 300 shares @ Rs. 72.75 at time 9:35 a.m.
Both orders have the same price but they were entered in the system
at different time. The first order was entered before the second order
and therefore is the best sell order.

Trade Management:
A trade is an activity in which a buy and a sell order match with each
other. Matching of two orders is done automatically by the system.
Whenever a trade takes place, the system sends a trade confirmation
message to each of the users involved in the trade. The trade
confirmation slip gets printed at the trader workstation of the user with
a unique trade number.

Clearing and Settlement

Introduction:
The clearing and settlement mechanism in Indian securities market
has witnessed Significant changes and several innovations during the
last decade. These include use of the information technology,
emergence of clearing corporations to eliminate counterparty risk,
shorter settlement cycle, dematerialization and Electronic transfer of
securities, though many of these are yet to enter the whole market.
Till recently, the stock exchanges in India were following a system of
account period settlement for cash market transactions. T+2 rolling
settlement is recently been introduced for all securities. The members
receive the funds/securities in accordance with the pay-in/pay-out
schedules notified by the exchanges. The growing volume of trades

35
and market volatility, the time gap between trading and settlement
gives rise to risk in settlement. The trades are settled irrespective of
default by a member and the exchange follows up with the defaulting
member for recovery of his dues to the exchange.
Due to setting up of the Clearing Corporation, the market has full
confidence that settlements will take place on time and will be
completed irrespective of possible default by trading members.
Movement of securities now days takes place normally in the
dematerialized environment. Two depositories viz., National Securities
Depositories Ltd. (NSDL) and Central Depositories Services Ltd. (CDSL)
provide electronic transfer of securities and more than 99% of turnover
is settled in dematerialized form. All actively traded scripts are held,
traded and settled in demat form Selected banks have been suggested
by clearing agency for electronic transfer of funds. The members are
required to maintain accounts with any of these banks. The members
are informed electronically of their pay-in obligations of funds. The
members make available required funds in their accounts with clearing
banks by the prescribed pay-in day. The clearing agency forwards
funds obligations file to clearing banks which, in turn, debit the
accounts of members and credit the account of the clearing agency. In
some cases, the clearing agency runs an electronic file to debit
members’ accounts with clearing banks and credit its own account. On
pay-out day, the funds are transferred by the clearing banks from the
account of the clearing agency to the accounts of members as per the
member’s obligations. In the T+2 rolling settlement, thepay-in and
pay-out of funds as well as securities take place 2 working days after
the trade date.

Transaction Cycle

36
A person decides to buy or sell the securities. He selects a broker and
instructs him to place buy/sell order on an exchange. The order is
converted to a trade as soon as it finds a matching sell/buy order. At
the end of the trade cycle, the trades are calculated to determine the
obligations of the trading members to deliver securities/funds.
Buyer/seller delivers funds/securities and receives securities/ funds and
acquires ownership of the securities.

Settlement Process:
While NSE provides a platform for trading to its trading members, the
National Securities Clearing Corporation Ltd. (NSCCL) determines the
funds/securities obligations of the trading members and ensures that
trading members meet their obligations. NSCCL becomes the legal
counterparty to the net settlement obligations of every member.NSCCL
settles every transaction regardless of member default. Once a
member fails on any obligations, NSCCL immediately cuts off trading
and does recovery.

37
The process of settlement is:
(a) Determination of Obligation: NSCCL determines what counter-
parties owe, and what counter-parties are due to receive on the
settlement date.

(b) Pay-in of Funds and Securities: The members bring in their

funds/securities to the NSCCL. They make available required securities
in designated accounts with the depositories by the prescribed pay-in
time. The depositories move the Securities available in the accounts of
members to the account of the NSCCL. Likewise members with funds
obligations make available required funds in the Designated accounts
with clearing banks by the prescribed pay-in time.

(c) Pay-out of Funds and Securities: payout of funds is affected by

NSCCL. NSCCL sends instructions to the depositories and clearing
banks to release pay-out of securities/funds. The depositories and
clearing banks debit accounts of NSCCL and credit settlement accounts
of members. Settlement is complete upon release of pay-out of funds
and securities to custodians/members.

STOCK BROKERS:

Introduction:

A broker is an intermediary who arranges to buy and sell securities on

behalf of Clients (the buyer and the seller). Stock broker is a member
of a recognized stock exchange. Stockbroker is not allowed to buy, sell
or deal in securities, unless he has a certificate of Registration granted
by SEBI. A stockbroker applies for registration to SEBI through a stock

38
exchange or stock Exchanges of which he or she is admitted as a
member.
Subject to the conditions that:
a) He holds the membership of any stock exchange;
b) He shall abide by the rules, regulations and bye-laws of the stock
exchange or Stock exchanges of which he is a member;
c) In case of any change in the status and constitution, he shall obtain
prior Permission of SEBI to continue to buy, sell or deal in securities in
any stock Exchange.
d) He shall pay the amount of fees for registration in the prescribed
manner; and
e) He shall take adequate steps for redressal of grievances of the
investors within one month of the date of the receipt of the complaint
and keep SEBI informed about the number, nature and other
particulars of the complaints.

While considering the application of an entity for grant of registration

as a stock
Broker, SEBI shall take into account the following namely, whether the
stock
Broker applicant -
a) is eligible to be admitted as a member of a stock exchange;
b) Has the necessary infrastructure like adequate office space,
equipment and man
Power to effectively discharge his activities;
c) Has any past experience in the business of buying, selling or dealing
in
Securities;
d) Is being subjected to any disciplinary proceedings under the rules,
regulations

39
And bye-laws of a stock exchange with respect to his business as a
stockbroker
Involving either himself or any of his partners, directors or employees.

Rules of SEBI regarding Stock Brokers & Sub-Brokers:

Government has made SEBI (Stock-brokers and Sub-brokers) Rules,

1992.
, ‘Stock-broker’ means a member of a stock exchange, ‘Sub-broker’
means any person not being a member of a stock exchange who acts
on behalf of a stock-broker as an agent or otherwise for assisting the
investors in buying, selling, dealing in securities through such stock
broker. A stock-broker or sub-broker shall not buy, sell, and deal in
securities,
Unless he holds a certificate granted by SEBI.

Capital Adequacy Norms for Brokers

Each stockbroker is subject to capital adequacy requirements
consisting of two
Components:
(1) Base minimum capital, and
(2) Additional or optional capital related to volume of business.
The amount of base minimum capital varies from exchange to
exchange. The form
In which the base minimum capital has to be maintained is also
stipulated by SEBI.
Exchange may stipulate higher levels of base minimum capital at their
discretion.

Conditions for grant of certificate to stock-broker.

40
SEBI may grant a certificate to a stock-broker subject to the following
conditions
Namely:
(a) He holds membership of any stock exchange,
(b) He shall abide by the rules, regulations and bye-laws of the stock
exchange or
Stock exchanges of which he is a member;
(c) In case of any change in the status and constitution, the stock
broker shall
Obtain prior permission of SEBI to continue to buy, sell or deal in
securities in
Any stock exchange;
(d) He shall pay the amount of fees for registration in the manner
provided in the
Regulations; and
(e) He shall take adequate steps for redressal of grievances of the
investors within
One month of the date of the receipt of the complaint and keep SEBI
informed
About the number, nature and other particulars of the complaints
received from
Such investors.

Conditions of grant of certificate to sub-broker

SEBI may grant a certificate to a sub-broker subject to the following

conditions,
Namely:
(a) He shall pay the fees in the manner provided in the regulations,

41
(b) He shall take adequate steps for redressal of grievances of the
investors within
One month of the date of the receipt of the complaint and keep SEBI
informed
About the number, nature and other particulars of the complaints
received,
(c) In case of any change in the status and constitution, the sub- broker
shall obtain

TYPES OF SHARE TRADING:

ONLINE SHARE TRADING:

Online Trading is a service offered on the internet for purchase and sale of shares. In the
real world, one place orders on one’s stockbroker either verbally (personally or
telephonically) or in a written form (fax). In Online Trading, one has to access
stockbroker's website through one’ internet-enabled PC and place orders through the
broker's internet-based trading engine. These orders are directed towards the Stock
Exchange without any intervention.
There are 2 types of online trading service: discount brokers and full service online
broker. Discount online brokers allow you to trade via Internet at reduced rates. Some
provide quality research, other don't. Full service online brokerage is linked to existing
brokerages. These brokers allow their clients to place online orders with the Option of
talking/ chatting to brokers if advice is needed. Brokerage rates here are higher. The
various transactions involved in online trading can be shown from the point of view of
the
• Client
• Broker
• Stock Exchange

42
The client places an order from his net by logging on to his broker’s site. The broker
accepts and executes the order, and places it with the exchanges. The exchange accepts
the order after checking the share limit for the day. The brokers makes the payment either
directly via the client’s bank account or pays through his own account and recovers it
later from the client. The exchange receives money and completes the settlement. The
client is intimated about the settlement either through the demat account or via E-mail.

BENEFITS OF ONLINE TRADING:

This mode of trading has benefited to a great extent to many users and nowadays more
and more people are attracted towards advantages are that it:

1. Ensures the best price for investors

This technique offers the best price for the buying and selling transactions of the
investors, by ensuring proper matching of their orders. Also due to the high level of
transparency because of display of information relating to the specific stocks and
company profiles, the investors are able to get the best quote for the shares. This leads to
a reduction in the transaction cost for the investors.

2. Enables paperless trading

Online trading integrates the bank, the brokerage and the demat accounts, which leads to
easy and paperless trading for the client.

3. Allows quick trading

The investor will be able to execute the entire trading transaction, right from logging on
to the broker's site, to the execution and settlement of his bank account, in a very short
period of time.

4. Reduces the settlement

This method of trading reduces the settlement risk for the investor, as in this case no short
sale is possible. That is .the seller will not be able to sell the securities unless he has their
actual possession. In the case of a demat account (required for an online transaction),

43
when a seller wants to sell the securities, his demat account is checked by the Depository
Participant before executing the sale transaction. This reduces the settlement risk for the
buyer, who is assured of the delivery of the securities.

HURDLES FOR ONLINE SHARE TRADING

1. Internet fraud:
In India, internet frauds are not a very uncommon thing we see this kind of frauds
happening in different ways.

2. Internet connectivity is not everywhere in India:

As we all know that internet connectivity is to very less percentage of people and the
people who are about internet are reluctant to go for online trading.

3. Older and experienced investor is not tech savvy.

One of the biggest drawbacks that a country like India faces is that the older and
experienced people are not that tech savvy so they trust offline trading only.

OFFLINE SHARE TRADING:

As the name suggest offline share trading is that trading in which client come to the RM
or call their RM to trade on behalf of them. In a country like India maximum share
trading is done offline, as internet facility is not available everywhere in our country and
various disadvantages that are attached to online share trading, many investor prefer
offline share trading, which may be time consuming but a safer option.

Working of offline share trading:

Normally in all broking firms each client is appointed one RM (Relationship manager)
and one dealer, RM looks and performs the transaction on behalf on of their client,
suppose client will call up the RM, then RM will enter the order in his computer as stated

44
by the client. RM also provides him various other information like margin short and other
intra day report. in case of offline share trading, RM dealer can only advice their client
but he cant commit a benefit in doing a particular transaction.
All the telephone calls are recorded in case any problem may arise in future.

ADVANTAGES OF OFFLINE SHARE TRADING

1. safer in comparisons to online share trading.

Offline share trading is always considered to be a safer option than online share
trading, because of increasing internet fraud.

2. Share trading can be done without internet connectivity at one’s home.

In a country like India where internet connectivity is not available everywhere trading
online is not possible for everyone, this is also the reason which enhances the growth of
offline trading.

3. Better for new investors:

offline share trading is considered to be better for new investor because in that case he
can take a help of RM, but I case of online share trading he himself must have a complete
knowledge about share market.

4. Brokerage charged is less as compared to online trading.

Brokerage charges are more in case of online share trading but less in offline share
trading, if we compare the brokerage charge of Religare itself brokerage charges for
offline are .3p and .30p on Intra day and Delivery respectively.

DISADVANTAGE OF OFFLINE TRADING:

45
1. It is a time consuming process as everything is done offline. it is quite obvious that
in case of offline share trading takes more time in comparisons to online share trading,
2. RM may not provide the correct information as required by his client and may also
trade without permission of client in order to achieve his brokerage target.

Online Trading Competes with Traditional Brokerage:

There is an increasing demand for online trading due to consumer's growing preference
for internet as compared to offline share trading, but still maximum investor goes for
offline share trading, because it is being used from years, and they feel it to be a safer
option, other reason could be as not much people in India are tech savvy so the
percentage of people doing online share trading is less. The study done in this report
regarding this parameter clearly shows that although 91% of the people those who do
share trading are aware about online share trading but still they don’t prefer it.

Awareness Of Online Share Trading

No
9%

Yes
91%

Interpretation: With the increase in cyber education, the awareness towards online
share trading has increased by leaps and bounds. This awareness is expected to increase
further with the increase in Internet education. Online share trading has proved to be very

46
beneficial as it save lots of time and money of the investor,the only problem that India is
facing is lack of computer education, as it will improve online trading will dominate
offline trading.

OTHER INVESTMENT OPPURTINITIES:

If we talk about our equity market there are various other option available to the investor
apart from only share trading, though it is seen that dealing in share is the most popular
among all but there are a lot of investor who prefer other forms of investment. these are
as follows.
1. Mutual Funds
2. Derivatives
3. Other Financial Instrument

MUTUAL FUNDS:
A Mutual Fund is a trust that pools the savings of a number of investors who have a
common financial goal. The money thus collected is invested by the fund manager in
different securities. This could range from shares to debentures to money market
instruments. The income earned through these investments is shared by its unit holders in
proportion to the number of units owned by them .Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed portfolio at a relatively low cost.
A mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. Markets for equity Share market and other fixed income instruments, real
estate, derivatives and other assets is very much information driven. A typical individual

47
is unlikely to have the knowledge, skills, inclination and time to keep track of events,
understand their implications and act speedily. An individual also finds it difficult to keep
track of ownership of his assets, investments, brokerage dues and bank transactions etc.
A sponsor then hires an asset management company to invest the funds according to the
investment objective. It also hires another entity to be the custodian of the assets of the
fund and perhaps a third one to handle registry work for the unit holders (subscribers) of
the fund.

DERIVATIVES:
Derivative is a product whose value is derived from the value of one or more basic
variable called as bases. the underlying asset can be equity , forex, commodity. For
example a wheat farmer may wish to sell their harvest at a future date to eliminate the
risk of change in prices by that date. Such a transaction is a called a derivative
transaction.

Types of derivative:
Future:
Options:

FUTURE CONTRACTS:
Futures Contract is a legal binding agreement to buy or sell the underlying security on a
future date. Future contracts are the organized contracts in terms of quantity, quality (in
case of commodities), delivery time and place for settlement on any date in future. The
contract expires on a pre-specified date which is called the expiry date of the contract. On
expiry, futures can be settled by delivery of the underlying asset or cash. Cash settlement
enables the settlement of obligations arising out of the future/option contract in cash.

OPTION CONTRACT:

Options Contract gives the holder of the contract the right to buy/sell the underlying
asset at a predetermined price within or at end of a specified period. The buyer of the
option purchases the right from the seller for a consideration which is called the

48
premium. The seller of an option is obligated to settle the option as per the terms of the
contract when the buyer exercises his right. An Option to buy is called Call option and
option to sell is called Put option the price at which the option is done is called Strike
price or Exercise price.

GOVERNMENT SECURITIES:

Government securities are one of the safest in the market, they are available in both
primary and secondary market, and all financial institution wants to keep them as they are
safest modes of investment.

Who can invest in it?

Either organization or individual can invest in them. One can buy them through two
kind of organizations. The first is the Legacy Treasury Direct, in which the individual
buys the security directly from the US Government. The other one is the Commercial
Book-Entry System, where brokers, dealers and other kind of intermediaries buy them to
the US Government.

Types of government securities:

• zero coupon bond
• treasury bill
• treasury note
• treasury bonds

49
 Preference of Investment

7% 2%
16% Only shares
M utual funds
Bonds
Derivatives
75%

Interpretation: above graph shows that although the mutual funds market is on the
rise yet, the most favored investment continues to be in the Share Market. So, with a
more transparent system, investment in the Stock Market can definitely be increased. and
if we look at derivative segment very few investor goes for derivative ,normally day
trader deals in derivative market.

50
 Reflection of what has been learned during placement
experience:

The 8 weeks of summer training done at Religare securities limited was a great learning
experience for me, my training started on 1st of May 2008, for first few days we were told
about the company its various offers, and also a basic understanding of share market was
given, we were made to sit with the RM during the market to gain maximum knowledge
about the trading, we were told how buy order sell order is executed.

• Basic of share trading was given, how share trading is done, how a order is
executed.
• A brief understanding about capital market was given, how capital market works,
how a clearing and settlement procedure is being effected in case of trade. since
the establishment of NSCCL, investor have gain lots of confidence in the
functioning of market, as know trade is settled irrespective of the failure of any of
the party, this has proved to be very beneficial as investor trades in the market
without any fear in his mind.
• Formalities for opening up a demat account and what are the problems faced in
selling demat accounts.
• What are the various other investment opportunities available for investor other
then shares. And why dealing in share is the mostly preferred by investors.

51
 Recommendation:

Indian Equity Market at present is a lucrative field for the investors and investing in
Indian stocks are profitable for not only the long and medium-term investors, but also the
position traders, short-term swing traders and also very short term intra-day traders.
The current position of share market is because of temporary factors rather than
fundamental factors, an investor having a good knowledge and a bit of patience will earn
a lot in this market.
• Investing in either government securities, derivative or direct equity depends upon
individual to individual, investor who doesn’t have much knowledge about capital
market would normally go for mutual fund, which would give a little but safer
return, one with the high risk taking ability would go for shares of a company.
• If we talk about whether to go for online share trading or offline share trading,
this also depends upon individual because if a person is having good knowledge
of share market and have internet connection he can go for online share trading,
this will save a lot of time as settlement of trade in case of online share trading
takes place immediately, otherwise he/she must go for offline share trading.
• There should be a experienced RM to suggest their clients, because relation
building is more important in this industry, if client have a trust on their RM they
only they will trade through that company.

52
 Bibliography

WEB LINKS:
• http://www.theinvestor.tv/money/thebrokerageindustry.htm
• http://www.economywatch.com/market/share-market/share-market-trading.html
• http://indiainfoline.com/mf/mf_intro.asp?
lmn=7&bChkFlg=0&co_code=&fdcd=&shcd=
• http://bseindia.com/deri/Deri/Introduction.htm?L=2&id=hd1&Lid=0
• http://bseindia.com/deri/Deri/Eligibility.htm?L=2&id=hd1&Lid=1#
• http://economics.about.com/od/stocksandmarkets/a/cap_market.htm
• nseindia.com
• bseindia.com
• religaresecuritieslimted.com
• http://www.sebi.gov.in/faq/derivativesfaq.html

BOOK:
• NCFM Capital Market

53
 ANNEXTURE:

Awareness Of Religare As a Brand

27%

Yes
No

73%

Interpretation: This pie chart shows that Religare has a reasonable amount of Brand
awareness in terms of stock broking company. The company to increase its market share
over its competitors should further enhance this brand image.

54
 Frequency of Trading

Daily- 9%
W eekly- 27%
Monthly-53%
Yearly-11%

Interpretation: In spite of the huge returns that the share market offers, we see that
there is still a very few active traders and investors. This is because of the non –
transparent structure of the Indian share market, and also because of lack of knowledge
about share market, because it is not possible for a layman to have technical knowledge
about share market.

Percentage of earnings invested in

Share trading

Upto 10%--71%
Upto 25%--19%
Upto 50%-- 7%
Above 50%--3%

Interpretation: This shows that people invest only unto 10% of their earnings in the
stock market, because of the volatility and non-transparent structure of the Indian stock
market, it is not considered to be safe to invest more than 25%-30% of savings in share
market, people investing above it does normally because of their greed to earn more.

55
 Financial Instruments v/s Occupation table

60 59

50
44
40 SHARE
35
MF
30 26 BONDS
DERIVATIVES
20
TOTAL

10 9
6 6 6
4
1 2 2
0 0 0
0
BUSINESS SERVICE RET

INTERPRETATION: the above indicates that in all age groups maximum percentage of
people are attracted towards share only, derivative and bond are least preferred and one
mode of investment that is becoming very much popular these days is mutual funds.

56
 CASE STUDY:

ABSTRACT:

The following case study deals with the inadequacy of Religare to increase its turnover
by the same rate by which the industry is growing. As we all know share market is on a
boom from last couple of years (current decline though being temporary) ,but the
problem that Religare is facing is hard o understand, though it has a strong brand image
being a Ranbaxy promoter group. Major reasons that were analyses for this were the lack
of adequate promotional expenditure and also because of not handling the customer
problems properly, these are very basic but very prominent problem are which are being
faced by any service industry. And especially if we talk about a brokerage industry this
becomes more important.
From the case it was analyzed that it should focus more and more on promotional
expenditure, the current position of the industry could be understood, but still company
must have definite plans, if it want to become one of the most prominent player in
brokerage industry.
Company has understood the problem and it can be seen that they are now focusing on
promotional expenditure to increase its brand image. And it could further focus on
various cheaper modes

INTRODUCTION:

Case deals with the inadequacy of Religare to increase its turnover by the same rate by
which the industry is growing. handling its client’s problem, and lack of promotional
expenditure are citied to be the major factors for this, yes it is obvious that these sorts of

57
problem would arise in a brokerage house, although clients grievance could not be
eliminated but it can definitely be minimized, and promotion should be done to attract
more and more client’s .Religare though being a Ranbaxy promoter group doesn’t have
that good awareness in the market,many people dosent even know about the name of the
company ,people recognizes it with the name of “FORTIS” .If we compare the research
provided by Religare it is one of the best and has a strike of 80%.,but such a strong
research is also of no use if RM are not properly aware about the research and they are
not able to give proper guidance to their client’s.

BACKGROUND:

Religare is driven by ethical and dynamic process for wealth creation. Based on this, the
company started its endeavor in the financial market.
Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through Religare
Securities Limited, Religare Finvest Limited, Religare Commodities Limited and
Religare Insurance Broking Limited provides integrated financial solutions to its
corporate, retail and wealth management clients. Today, it provides various financial
services, which include Investment Banking, Corporate Finance, Portfolio Management
Services, Equity & Commodity Broking, Insurance and Mutual Funds. Plus, there’s a lot
more to come your way.
Religare is proud of being a truly professional financial service provider managed by a
highly skilled team, who have proven track record in their respective domains. Religare
operations are managed by more than 3000 highly skilled professionals who subscribe to
Religare philosophy and are spread across its countrywide branches.
Today, it has a growing network of more than 300 branches and more than 580 business
partners spread across more than 300 cities/towns in India and a fully operational
international office at London.
Unlike a traditional broking firm, Religare group works on the philosophy of partnering
for wealth creation. We not only execute trades for our clients but also provide them
critical and timely investment advice. The growing list of financial institutions with

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which Religare is empanelled as an approved broker is a reflection of the high-level
service standard maintained by the company.

GROUP COMPANY:

• Religare securities limited

• Religare finvest limited
• Religare brokerage limited
• Religare broking limited

Services provide by company to its clients:

1. Personal Assistance

• Dedicated dealers for facilitating trading and post trade needs.

• Dedicated Relationship Managers for assisting multiple investments needs.

2. Research & Advisory

• Regular news and updates on market

• Research service over SMS to keep one
• Daily and weekly technical reports
• A complete information report on results and performance individual companies.
Complete reports on various economic sectors and their performance along with
analysis of few major companies in that sector
• Trading calls in Futures & Options
• Daily capsule of Market indices and index movement, national and international
corporate news, and their performance along with forth coming IPO tracker.

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3. Other assistances

• Access to all your accounts through your Customer Relationship Number (CRN)
• Access your ledger balances and account information over internet, branch and
call center

These are the services that company promises to offers to its clients but unfortunately RM
and other employees are not able to cope up with all these.

PRODUCT & SERVICES

 Equity & Derivatives

 Commodity
 Depository
 Portfolio Management Services
 International Equity & Commodity
 NRI Services
 Investment Banking
 Corporate Advisory Group

KEY ISSUES OF THE CASE:

• Lack of adequate promotional expenditure which has resulted in the inadequate

awareness about the brand.

• Inadequacy of Religare to increase its turnover by the same rate by which the
industry is growing.

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 • Inadequacy to fulfill the promises to the clients. Religare promises to make a
regular calls to its client those who are engaged in a day trading, about the various
up’s and down’s in the market and any other news which may effect the portfolio
of any clients, but unfortunately many clients does not receive any such calls,
which could.

• Normally it is assumed that for the clients RM would be a sort of financial

adviser, and they are required to keep their clients updated regularly, but quite a
few number of clients doesn’t even know who their RM is, the reason being that
RM are changed,and information about the same is not provided to their clients,
and even if information is provided about the change in RM, the client doesn’t
finds it easy to trust new RM easily.

• Although this is not quite a common problem but some times RM in order to meet
their target trade on behalf of their client without even informing them, as they
know the complete details and client code of their clients.

ANALYSIS OF THE CASE:

After analyzing the case it was found that Religare securities limited is not able to
increase its turnover, although industry as a whole is growing by leaps and bounds, firstly
because of the improper client handling, client face regular problem, to quote a few
“As per promise I was supposed to get day trading calls from the RM (Relationship
Manager!!!!!!!!!!!) over the phone and RM will execute all the calls. Alternatively I can
do the same online.”
“Reality is opposite - No one call me for any day trade. I would be calling them, but
most of the time they don’t have good day calls. Even if they are they will tell you
execute the call yourself at online terminal.”

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Problems and issue like this must be taken care of well if Religare has to improve upon
its brand image.
• RM should be kept under a strict scrutiny whether they are solving the queries of
the of client in proper way and also if they are providing correct information or
not
• The RM should clear NCFM modules to keep assure that they have the basic
understanding of how market works and also they are aware about the latest
updates and changes in the market.
• The research that is being provided by the research team should reach the entire
RM and from the RM to the respective client, so that the research provide is
utilized up to the optimum.
• Focus should be promotional expenditure so that maximum people become aware
about Religare.
• The current position of market is not unknown to anyone so these sort of expenses
should be avoided at this point of time, but a proper plan must be made for future
once market regain momentum.
• A system should be adopted so that RM cannot misuse the account details of its
client. Probably as soon as trade is being done by any RM on behalf of client
client must be awarded about it by sending a confirmation then and there either by
way of E-mail or SMS.

CONCLUSION OF THE CASE:

The final conclusion that can be drawn from the case is that the company must increase
its awareness in the market by increasing its promotional expenditure, and also the
company must have a strong human resource with a definite focus to serve their
customers well, for this purpose special training could be provided to the RM and other
staff, to handle the clients in a proper way. If the company doesn’t come out with
immediate action plan other competitors will easily eat up the share of Religare in the
coming future.

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END NOTES:

Although Religare has a huge financial back support still they are not able to concentrate
on aggressive promotional measures, matched with the competitor’s promotional activity,
therefore they are lacking behind their competitors.

REFERENCES:

• www.religaresecuritieslimted.com
• Consultation with RM.

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 SYNOPSIS

Religare Securities Limited

Student’s name: Kushal Panjwani

Industry Guide: Mr. Raman Talwar
Faculty Guide: Prof. (Dr.) Ajit Mittal

Indian Equity Market at present is a lucrative field for the investors and
investing in Indian stocks are profitable for not only the long and
medium-term investors, but also the , short-term swing traders and
also very short term intra-day traders. The recent ups and down is a
temporary phenomenon. Indian stock market has a huge potential for
growth.
The summer training done in Religare securities limited was done with
the objective of understanding the working of a stock market and how
capital market works and how trading is done, and what are the
various forms of trading.
It was analyzed in the report that Indian capital market has changed its nature of working
in leaps and bound. Trading that was done with an open out cry now because of use on
information technology trading cycle has completely changed. The formation of NSCCL
has brought in the confidence to the investor as regard t other settlement and clearing
procedure. Next in the report it was found that though many people are aware about the

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online share trading but still they are not willing to go for it because of the fear of
technology and various other risks attached.
My industry Guide is a young and dynamic personality, although he is young in age but
he is vastly experienced person, his behaviors with his staff is too good, in all he has got
everything in him to be a future CEO of Religare securities limited.

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