Académique Documents
Professionnel Documents
Culture Documents
on
TITLED
“CORPORATE GOVERNANCE”
SESSION :-2008-2010
work is done in the company.. In this Project Report I gave all the
In this Project Report I gave all the information which not only
serve the comprehensive knowledge base but also helps the reader
“CORPORATE GOVERNANCE OF
INDIA INFOLINE”
is based on my original & genuine work and indebtedness to other
work duplication have been duly acknowledgment at relevant place.
Finally, I would also like to thank all my dear friends for their
kind cooperation, advice and encouragement during the long and
arduous task of preparing this report and carrying out the project.
TABLE OF CONTENT
5 Research Methodology
6 Learnings
9 Recommendations
10 Conclusion
11 Annexure
12 Questionaire
13 Bibliography
1.1 Introduction Of Corporate
Governance
Mathiesen
1.5 History
In the 19th century, state corporation lawless enhanced the rights of corporate
boards to govern without unanimous consent of shareholders in exchange for
statutory benefits like appraisal rights, to make corporate governance more
efficient. Since that time, and because most large publicly traded corporations in
the US are incorporated under corporate administration friendly Delaware law,
and because the US's wealth has been increasingly securitized into various
corporate entities and institutions, the rights of individual owners and
shareholders have become increasingly derivative and dissipated. The concerns
of shareholders over administration pay and stock losses periodically has led to
more frequent calls for corporate governance reforms.
In the 20th century in the immediate aftermath of the Wall Street Crash of 1929
legal scholars such as Adolf Augustus Berle, Edwin Dodd, and Gardiner C.
Means pondered on the changing role of the modern corporation in society.
Berle and Means' monograph "The Modern Corporation and Private Property"
(1932, Macmillan) continues to have a profound influence on the conception of
corporate governance in scholarly debates today.
From the Chicago school of economics, Ronald Coase's "Nature of the Firm"
(1937) introduced the notion of transaction costs into the understanding of why
firms are founded and how they continue to behave. Fifty years later, Eugene
Fama and Michael Jensen's "The Separation of Ownership and Control" (1983,
Journal of Law and Economics) firmly established agency theory as a way of
understanding corporate governance: the firm is seen as a series of contracts.
Agency theory's dominance was highlighted in a 1989 article by Kathleen
Eisenhardt (Academy of Management Review).
Since the late 1970’s, corporate governance has been the subject of significant
debate in the U.S. and around the globe. Bold, broad efforts to reform corporate
governance have been driven, in part, by the needs and desires of shareowners
to exercise their rights of corporate ownership and to increase the value of their
shares and, therefore, wealth. Over the past three decades, corporate directors’
duties have expanded greatly beyond their traditional legal responsibility of duty
of loyalty to the corporation and its shareowners.
In the first half of the 1990s, the issue of corporate governance in the U.S.
received considerable press attention due to the wave of CEO dismissals (e.g.:
IBM, Kodak, Honeywell) by their boards. CALPERS led a wave of institutional
shareholder activism (something only very rarely seen before), as a way of
ensuring that corporate value would not be destroyed by the now traditionally
cozy relationships between the CEO and the board of directors (e.g., by the
unrestrained issuance of stock options, not infrequently back dated).
In 1997, the East Asian Financial Crisis saw the economies of Thailand,
Indonesia, South Korea, Malaysia and The Philippines severely affected by the
exit of foreign capital after property assets collapsed. The lack of corporate
governance mechanisms in these countries highlighted the weaknesses of the
institutions in their economies.
It’s not the Big that beats the SMALL …. It’s the FAST that beats the SLOW
That’s the title of Jason Jennings book that emphasizes the necessity to maintain
competitive advantage and talks about the need for speed while doing business.
E-broking is all about speed of execution, classy service and above all simplicity.
E-broking is offering broking services through the Internet. SEBI, the regulatory
authority for capital markets, has recently framed the guidelines pertaining to
Internet based trading. Brokers who offer trade services through the Internet are
called E-brokers. In this fast moving world you have run like rabbit and mot
move like a tortoise or else you will be left behind and the world will move
forward.
Overview
Internet scheme is successful because web proposals are built that influence
their offline brand value, customer lists and distribution channels. This involves
designing and evolving electronic value propositions.
In India, the guidelines for electronic trading were formed in January 2000. The
Securities and Exchange Board of India (SEBI) has framed the guidelines for
Internet trading in January 2000. SEBI registered brokers can introduce the
service after obtaining permission from respective Stock Exchanges and
clearance from SEBI. Exchanges while giving permission require to ensure
minimum conditions specified in the report that is available on the SEBI’s web
site (www.sebi.com) The two major stock exchanges in India (National Stock
Exchange of India Ltd. & The Bombay Stock Exchange) accounting for 90% of
the trading activity have already implemented the system for Internet trading.
With the successful implementation of depository system in India and larger
volume of securities getting converted to electronic form, e-broking is expected
to be successful e-commerce in India and is growing with a fast pace. It is
growing day after day and may reach the echelons of the capital markets.
Vision
Our vision is to be the most respected company in the financial services space.
The India Infoline group, comprising the holding company, India Infoline Limited
and its wholly-owned subsidiaries, straddle the entire financial services space
with offerings ranging from Equity research, Equities and derivatives trading,
Commodities trading, Portfolio Management Services, Mutual Funds, Life
Insurance, Fixed deposits, GoIe bonds and other small savings instruments to
loan products and Investment banking. India Infoline also owns and manages the
websites www.indiainfoline.com and www.5paisa.com
The company has a network of 758 business locations (branches and sub-
brokers) spread across 346 cities and towns. It has more than 800,000
customers.
India Infoline Limited is listed on both the leading stock exchanges in India, viz.
the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE)
and is also a member of both the exchanges. It is engaged in the businesses of
Equities broking, Wealth Advisory Services and Portfolio Management Services.
It offers broking services in the Cash and Derivatives segments of the NSE as
well as the Cash segment of the BSE. It is registered with NSDL as well as
CDSL as a depository participant, providing a one-stop solution for clients trading
in the equities market. It has recently launched its Investment banking and
Institutional Broking business.
A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to
clients. These services are offered to clients as different schemes, which are
based on differing investment strategies made to reflect the varied risk-return
preferences of clients.
The content services represent a strong support that drives the broking,
commodities, mutual fund and portfolio management services businesses.
Revenue generation is through the sale of content to financial and media
houses, Indian as well as global.
India Infoline Marketing and Services Limited is the holding company of India
Infoline Insurance Services Limited and India Infoline Insurance Brokers Limited.
(a) India Infoline Insurance Services Limited is a registered Corporate Agent with
the Insurance Regulatory and Development Authority (IRDA). It is the largest
Corporate Agent for ICICI Prudential Life Insurance Co Limited, which is India's
largest private Life Insurance Company. India Infoline was the first corporate
agent to get licensed by IRDA in early 2001.
(b) India Infoline Insurance Brokers Limited India Infoline Insurance Brokers
Limited is a newly formed subsidiary which will carry out the business of
Insurance broking. We have applied to IRDA for the insurance broking license
and the clearance for the same is awaited. Post the grant of license, we propose
to also commence the general insurance distribution business.
IIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated
in Singapore to pursue financial sector activities in other Asian markets. Further
to obtaining the necessary regulatory approvals, the company has been initially
capitalized at 1 million Singapore dollars.
We are a one-stop financial services shop, most respected for quality of its
advice, personalized service and cutting-edge technology.
Equities
India Infoline provided the prospect of researched investing to its clients, which
was hitherto restricted only to the institutions. Research for the retail investor did
not exist prior to India Infoline. India Infoline leveraged technology to bring the
convenience of trading to the investor’s location of preference (residence or
office) through computerized access. India Infoline made it possible for clients to
view transaction costs and ledger updates in real time.
PMS
Research
Sound investment decisions depend upon reliable fundamental data and stock
selection techniques. India Infoline Equity Research is proud of its reputation for,
and we want you to find the facts that you need. Equity investment professionals
routinely use our research and models as integral tools in their work.
Commodities
India Infoline’s extension into commodities trading reconciles its strategic intent
to emerge as a one-stop solutions financial intermediary. Its experience in
securities broking has empowered it with requisite skills and technologies. The
Company’s commodities business provides a contra-cyclical alternative to
equities broking. The Company was among the first to offer the facility of
commodities trading in India’s young commodities market (the MCX commenced
operations only in 2003). Average monthly turnover on the commodity
exchanges increased from Rs. 0.34 bn to Rs 20.02 bn. The commodities market
has several products with different and non-correlated cycles. On the whole, the
business is fairly insulated against cyclical gyrations in the business.
Mortgages
During the year under review, India Infoline acquired a 75% stake in Money tree
Consultancy Services to mark its foray into the business of mortgages and other
loan products distribution. The business is still in the investing phase and at the
time of the acquisition was present only in the cities of Mumbai and Pune. The
Company brings on board expertise in the loans business coupled with existing
relationships across a number of principals in the mortgage and personal loans
businesses. India Infoline now has plans to roll the business out across its pan-
Indian network to provide it with a truly national scale in operations.
Home Loans
Get expert advice that suits Personal Loans
your needs Freedom to choose from 4
flexible options to repay
Loan against residential
and commercial property Expert recommendations
Expert recommendations Easy documentation
Easy documentation Quick processing and
Quick processing and disbursal
disbursal No guarantor requirement
No guarantor requirement
Invest Online
India Infoline has made investing in Mutual funds and primary market so
effortless. All you have to do is register with us and that’s all. No paperwork no
queues and No registration charges.
INVEST IN MF
India Infoline offers you a host of mutual fund choices under one roof, backed by
in-depth research and advice from research house and tools configured as
investor friendly.
APPLY IN IPO’s
You could also invest in Initial Public Offers (IPO’s) online without going through
the hassles of filling ANY application form/ paperwork.
SMS
The trader of today, you are constantly on the move. But how do you stay
connected to the market while on the move? Simple, subscribe to India Infoline's
Stock Messaging Service and get Market on your Mobile!
An entry into this segment helped complete the client’s product basket;
concurrently, it graduated the Company into a one-stop retail financial solutions
provider. To ensure maximum reach to customers across India, we have
employed a multi pronged approach and reach out to customers via our Network,
Direct and Affiliate channels. Following the opening of the sector in 1999-2000, a
number of private sector insurance service providers commenced operations
aggressively and helped grow the market.
The Company’s entry into the insurance sector derisked the Company from a
predominant dependence on broking and equity-linked revenues. The annuity
based income generated from insurance intermediation result in solid core
revenues across the tenure of the policy.
Imagine a financial firm with the heart and soul of a two-person organization. A
world-leading wealth management company that sits down with you to
understand your needs and goals. We offer you a dedicated group for giving you
the most personal attention at every level.
Newsletters
The Daily Market Strategy is your morning dose on the health of the markets.
Five intra-day ideas, unless the markets are really choppy coupled with a brief on
the global markets and any other cues, which could impact the market.
Occasionally an investment idea from the research team and a crisp round up of
the previous day's top stories. That's not all. As a subscriber to the Daily Market
Strategy, you even get research reports of India Infoline research team on a
priority basis.
The India Infoline Weekly Newsletter is your flashback for the week gone by. A
weekly outlook coupled with the best of the web stories from India Infoline and
links to important
Investment ideas, Leader Speak and features are delivered in your inbox every
Friday evening.
Equities
India Infoline provided the prospect of researched investing to its clients, which
was hitherto restricted only to the institutions. Research for the retail investor did
not exist prior to India Infoline leveraged technology to bring the convenience of
trading to the investor’s location of preference (residence or office) through
computerized access. India Infoline made it possible for clients to view
transaction costs and ledger updates in real time.
Over the last five years, India Infoline sharpened its competitive edge through
the following initiatives:
Multi-channel delivery model:
The customer can trade on the BSE and NSE, in the cash as well as the
derivatives segment all through the available multiple options of Internet, phone
or branch presence.
Multiple-trading options:
The Company harnessed technology to offer services at among the lowest rates
in the business. Membership: The Company widened client reach in trading on
the domestic and international exchanges.
Technology:
The Company has leveraged its research capability to provide regular updates
and investment picks across the short and long-term.
Service:
Clients can access the customer service team through various media like toll-
free lines, emails and Internet- messenger chat for instant query resolution. The
Company’s customer service executives proactively contact customers to inform
them of key changes and initiatives taken by the Company. Business World
rated the Company’s customer service as ‘Best’ in their survey of online trading
sites carried out in December 2003.
*Key features
You get recessions. You have stock market declines. If you don't understand
that's going to happen, then you're not ready; you won't do well in the markets.
No need to worry. We at India Infoline would take care of all issues related to
managing your hard earned money.
It is all about your money, being managed by the experts, while you continue
with your routine life. Isn't it simple and totally hassle free.
What's more, you can keep track of your dividends / bonus / rights issues with
paperless tracking. So you always know how fast your investment is growing. It
basically means assigning the right job to the right person.
Rates:
The Company harnessed technology to offer services at among the lowest rates
in the business. Membership: The Company widened client reach in trading on
the domestic and international exchanges.
*Key Features
Enjoys memberships with the MCX and NCDEX, two leading Indian
commodities exchanges.
EBROKING –
-New customer segments are evolving; those that were practically non- existent
some years back.
Mexico
Spain
Indonesia
Canada
Russia
Brazil
France
Italy
Korea (South)
United Kingdom
Germany
N
D
A
India
I
Japan
Users
China
United States
0
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
Inter
Post the 1999-2000 dotcom bust the first question that popped up was-Why
choose the Net? The answer lies in two words:
Internet negates two barriers namely 1) Time and 2) Distance
The key factors required to succeed in an Internet based model are:
Develop a unique website
Control the product line
Introduce new products on a regular basis
Ensure easy and reliable payment methods
Provide Customer Friendly service
On-time delivery
Develop a clever marketing strategy
One of the greatest success stories of recent times, Google was started
by two Stanford graduates Larry Page and Sergey Brin in 1998 as
privately held company.
Its IPO in 2007 raised $1.87 billion making it a $35 billion company. Which
other company has grown that fast?
What started as a simple search engine company is today a mammoth in
the Internet space.
Today Google has companies like Orkut(Social networking), Blogger, You
tube etc in its fold
Ask yourself this question-Whom does Wal-Mart, the world’s largest
retailer think as its biggest competition in business?
The answer is Google since it has the power of information to let people
know about competitive prices
What is E-broking?
To put it very simply, it is the facility to place trades in the stock markets using
the internet, be it from your office, home or your flight back home.
• The E-broking space primarily has 4-5 major players with some big names
still slated to make their presence felt
• In India, around 12-15% of the total volumes in cash market are done
Online whereas in the West around 50% of the cash market trades are
done online
• Unlike Offline broking, online broking works on a more defined slab based
system based on type of account that a customer opts.
• The E commerce market is supposedly around Rs.23 billion of which E-
broking is a very small percentage
• The population trading in stock markets in India is just about 1%.
All these companies have entered the online ring and promises exciting times
ahead.
But even this innovation gave Sharekhan only a small head start over its
peers. Kotakstreet.com, which launched its e-broking services in August,
not only halved the flat fee from Rs.1000 to Rs.500, but also allowed
short sales and offered clients the option of trading against securities up
to three times sales marked for delivery. Clearly, innovation offers
limited scope for it is a matter of time before almost all the schemes offer
more or less identical features.
INTERNET
Client
Client Terminal
Terminal
Advantages of E-broking
• No necessity of paperwork once initial account Opening form is opened.
International brokerage houses like Charles Schwab will make an entry very
soon.
New customer segments have evolved-e.g. housewives, fresh management
graduates, first timers to stock market, etc.
Increasing trend of alliance tie ups between brokers and banks
This space is poised for a growth of 100% in volume YOY
Icicidirect.com
Invest smart
5paisa.com / India Infoline.com
Indiabulls
Kotakstreet
Sharekhan Securities
Motilal Oswal Securities
Indiabulls-creating a world of smarter investors
The stock markets are like a jungle .And to be the king, you need simple and
understandable solutions which is what they claim to offer. Their first steps
program is aimed at educating the novice investor .The ad shows a man who
enters a mall and is looking for the Flush button. He doesn’t know what to do
until he tries to open the door and ultimately ends up clicking the flush button.
The ad says that stock markets can be like a jungle but with Sharekhan, you can
rest assured.
Tracking Competition/Focus
For I direct it has always been nos., every person is a prospect, now with
11 lakh accounts their focus is customer acquisition
For Indiabulls, every marketing guy is a revenue generator, target is to
achieve rev of 5 times salary in first three months else exit. (acquire and
retain)
For kotaksecurities.com its no of accounts and margin money, rest will be
taken care of by 100 customer service agents sitting at one place
For sharekhan its nos., clear differentiation between speed trade and
classic account and focus is only on acquiring customer.
5 paisa, Angel, and other players are also have dedicated team focusing
only on acquisition
Keeping in mind, our twin fold objectives of providing quality service and
acquiring and retaining customers, the E-broking wing has been clearly divided
into the following streams:
Direct customers
• E-franchisee Customers
• Franchisee Customers
• Alliance customers
⇒ Online Broking will witness a sea change in the way the business will
function. Newer products, stiff competition and improved trading
engines will characterize the industry
⇒ Cross selling multiple products will be a key area of focus. The concept
of financial planners will gain immensely.
⇒ The Future looks Bright. It will happen at the click of a button. That will
in essence be Business @ the speed of thought
Basic Concept And Principle
carried out by statutory auditors (Board of Statutory Auditors), who review the
Management Council.
The auditing function is carried out by statutory auditors (Board of Statutory
Auditors), who review the Board of Directors as well as operational execution
functions, and attend important meetings, including meetings of the Board of
Directors as well as the Management Council. .
The main objective behind corporate governance is to protect long term share
holder value along with the other stakeholders. It is the foundation to build
market confidence and encouraging stable and long term investment flows.
Corporate institutions should have a sound frame work for their operation to
achieve their objective and creating wealth for the welfare of the society as a
whole. Corporate governance is very wide term, which covers a wide range of
activities that relate to the way business organization is directed and governed. It
deals with the policies and practices that directly impact on the organization’s
performance, stewardship sand its capacity to be accountable to its various
stakeholders.
Over all objectives of corporate governance are as
follows :
2. follow provisions of the companies Act, FEMA factory Act and other statutes .
4. utilize funds taken from financial institutions and the capital market for the
purposes for which they were intended.
6. manage and check the diversification of funds by the way of loans, advances
or investment to subsidiary or investment companies.
8. conduct ethical and fair practices towards its share holders, customers,
suppliers, employees and the public at large.
10.motivate institutional and non executive directors to play active role in the
functioning of the company.
12. adopt transparent financial reporting and audit practices and the accounting
practices.
Business Goal & Corporate Governance
2. Board of composition.
Parties involved in corporate governance include the regulatory body (e.g. the
Chief Executive Officer, the board of directors, management and shareholders).
Other stakeholders who take part include suppliers, employees, creditors,
customers and the community at large.
One area of concern is whether the accounting firm acts as both the independent
auditor and management consultant to the firm they are auditing. This may result
in a conflict of interest which places the integrity of financial reports in doubt due
to client pressure to appease management. The power of the corporate client to
initiate and terminate management consulting services and, more fundamentally,
to select and dismiss accounting firms contradicts the concept of an independent
auditor. Changes enacted in the United States in the form of the Sarbanes-Oxley
Act (in response to the Enron situation as noted below) prohibit accounting firms
from providing both auditing and management consulting services. Similar
provisions are in place under clause 49 of SEBI Act in India.
Many years ago, worldwide, buyers and sellers of corporation stocks were
individual investors, such as wealthy businessmen or families, who often had a
vested, personal and emotional interest in the corporations whose shares they
owned. Over time, markets have become largely institutionalized buyers and
sellers are largely institutions
The rise of the institutional investor has brought with it some increase of
professional diligence which has tended to improve regulation of the stock
market (but not necessarily in the interest of the small investor or even of the
naïve institutions, of which there are many). Note that this process occurred
simultaneously with the direct growth of individuals investing indirectly in the
market (for example individuals have twice as much money in mutual funds as
they do in bank accounts). However this growth occurred primarily by way of
individuals turning over their funds to 'professionals' to manage, such as in
mutual funds. In this way, the majority of investment now is described as
"institutional investment" even though the vast majority of the funds are for the
benefit of individual investors.]
Top managers need to recognize that they are not in sole charge. Global
strategy is an equilibrium game among corporate governance players. Managers
need to work on building coalition and aligning interest behind a common
approach.
In the continental system managers have to align trade off and meet other
stakeholders' interest halfway. They have to craft their language and rhetoric to
meet the other players' expectations. The main things here are consensus and
social cohesion.
In the extended (Japanese) system companies have generally capitalized in their
export oriented model and high innovation driven employees loyalty. But
because of rigid of their corporate governance system, they have not exploited
as much as they could different dimension of global strategy. So the system
must be open in term of the diversity of the top management team and more
flexible in their governance by introducing leaner boards as well as allowing
greater levels of shareholder activism. If government care to sustain national
competitiveness and to help their companies to
globalize, then they should assess the degree to which the players in their
corporate governance system are aligned with each other and with their intended
global strategy. Government policies should become less inimical to foreign
owners and use such capital to provide the much needed global knowledge. This
can only be accomplished if the right mechanisms are in place to give a voice to
these foreign owners. The government has the responsibility as well as the
policy tools to gear the country's corporate governance system so that it
enhances national competitiveness.
Functions of the Management
2. The Committee believes that the management should carry out the following
functions:
Assisting the board in its decision making process in respect of the company’s
strategy, policies, code of conduct and performance targets, by providing
necessary inputs.
Implementing the policies and code of conduct of the board.
Managing the day to day affairs of the company to best achieve the targets
and goals set by the board, to maximize the shareholder value.
Providing timely, accurate, substantive and material information, including
financial matters and exceptions, to the board, board-committees and the
shareholders.
Ensuring compliance of all regulations and laws.
Ensuring timely and efficient service to the shareholders and to protect
shareholder’s rights and interests.
Setting up and implementing an effective internal control systems,
commensurate with the business requirements.
Implementing and comply with the Code of Conduct as laid down by the board.
C
o-operating and facilitating efficient working of board committees.
Shareholders
The shareholders are the owners of the company and as such they have
certain rights and responsibilities. But in reality companies cannot be managed
by shareholder referendum. The shareholders are not expected to assume
responsibility for the management of corporate affairs. A company’s
management must be able to take business decisions rapidly. The shareholders
have therefore to necessarily delegate many of their responsibilities as owners of
the company to the directors who then become responsible for corporate
strategy and operations. The implementation of this strategy is done by a
management team. This relationship therefore brings in the accountability of the
boards and the management to the shareholders of the company. A good
corporate framework is one that provides adequate avenues to the shareholders
for effective contribution in the governance of the company while insisting on a
high standard of corporate behaviour without getting involved in the day to day
functioning of the company.
Responsibilities of shareholders
2. The effectiveness of the board is determined by the quality of the directors and
the quality of the financial information is dependent to an extent on the efficiency
with which the auditors carry on their duties. The shareholders must therefore
show a greater degree of interest and involvement in the appointment of the
directors and the auditors. Indeed, they should demand complete information
about the directors before approving their directorship.
Shareholders’ rights
1. The basic rights of the shareholders include right to transfer and registration
of shares, obtaining relevant information on the company on a timely and regular
basis, participating and voting in shareholder meetings, electing members of the
board and sharing in the residual profits of the corporation.
5. A company must have appropriate systems in place which will enable the
shareholders to participate effectively and vote in the shareholders’ meetings.
The company should also keep the shareholders informed of the rules and voting
procedures, which govern the general shareholder meetings.
6. The annual general meetings of the company should not be deliberately held
at venues or the timing should not be such which makes it difficult for most of the
shareholders to attend. The company must also ensure that it is not inconvenient
or expensive for shareholders to cast their vote.
2. Given the weight of their votes, the institutional shareholders can effectively
use their powers to influence the standards of corporate governance. Practices
elsewhere in the world have indicated that institutional shareholders can
sufficiently influence because of their collective stake, the policies of the
company so as to ensure that the company they have invested in, complies with
the corporate governance code in order to maximize shareholder value. What is
important in the view of the Committee is that, the institutional shareholders put
to good use their voting power
Objective:
Hypothesis:
Sample:
Company Synopsis
Product offerings
Company Name Product Name Target
Margin funding Research Advice
India Infoline TTADV Yes Yes Yes All types
Kotak Gateway Yes Yes No Retail
Kotak Value Yes Yes No Retail
Kotak Privilege circle Yes Yes Yes HNI
Kotak Kotak Freeway No Yes No Trader
Kotak High Trader No Yes No HeavyTrader
Kotak Assist (Asset
Yes Yes Yes HNI
allocator & advisory)
Classic Yes Yes Yes All Investors
Sharekhan Speed trade Yes Yes Yes Traders
Speed trade Plus Yes Yes Yes Heavy Traders
ICICI Idirect Yes Yes No All Investors
Indiabulls Power Indiabulls Yes Yes, but charged Yes All Investors
Sales Activity
FIRM INDIA
ACTIVITY MOSL KOTAK ICICI INFOLINE SHAREKHAN INDIABULLS
DIRECT
Cold calls not so not so not so often yes not so often yes
often often
Tele calling yes yes yes yes yes yes
Client yes yes not so often yes yes yes
references
Company yes yes yes yes yes yes
Website
Enquiry/ walk-in yes yes yes yes yes yes
Personal leads not so not so not so often yes not so often yes
of employees often often
Account opening charges
C o m p a n y P ro d . N a m e P ro d . T y p e A /c o p e n in g c h a r gMe sin . B r o k . C o m m it m e n t
SSKI C la s s ic A /c W eb 500 No
S p e e d T ra d e A p p lic a tio n 750 1000
S p e e d T r a d e P lu s A p p lic a tio n 1500
K o ta k : G a te w a y 500 No
V a lu e n il No
P r iv ile g e C ir c le n il No
F re e w a y 500 No
H ig h T r a d e & A s s is t 500 No
I C I C I D ir e c t W eb 750
A p p lic a tio n > 3 0 ,0 0 0 p . m
I n d ia b u lls W e b & A p p lic a tio n 750 No
I n v e rs tm a rt S m a rt In ve s t W eb 750
S m a r t o n lin e A p p lic a tio n 1500 1500
S m a rt T ra d e W eb 750
I n d ia I n f o lin e T r a d e r s T e r m inWa l e b , A p p lic a tio n & O fflin e5 5 5 No
India Infoline has only web which is more preferred and which
gives application and offline facility too.
2. Designing questionnaire.
9.How to analyze index value :- current market capitalization X base value. Base
market capitalization
1. According to the survey most of the customers of “Infoline Ltd” says that it is
pocket friendly.
2. Coming to faith 70% say IndiaInfoline Ltd is better than others stock brokers
due to customers satisfaction.
5. Investors take risk as well as returns into their mind while making the
investment.
6. Businessmen are more interested in the stock market than the others.
8. People want to invest their money in the security market but they have not the
proper knowledge.
Strengths:
2.India Infoline is able to respond very quickly as we have no red tape, no need
for higher management approval, etc.
3.India Infoline is able to give really good customer care, as the current small
amount of work means we have plenty of time to devote to customers
1. New entrant in the market which is dominated by big brand names like ICICI,
Reliance Money etc.
2.Company has a small staff with a shallow skills base in many areas.
Opportunities
1. The share trading sector is expanding, with many future opportunities for
success.
Threats
1. Developments in technology will change the share market beyond the ability to
adapt.
2.A small change in focus of a large competitor is a threat for the market
position.
According to me all the companies are good in their own respective way. Some
are good at their brokerage whereas some are good at their services; some have
good products whereas some offer cheap products. All the companies are
fighting competition in different ways:
• For I direct it is the market share as they were the first ones to enter this
business. They had a plus point there as they were the first ones to start it
but again they don’t have a service where the can take orders on the
phone and book it. They don’t get a screen to watch.
• For Indiabulls it is their aggressive marketing which counts for them the
most and them customer acquisition and then retaining them. India bulls
in a very short time have got in a lot more than expected and the very less
brokerage that they offer attracts customers.
• For Kotak it’s their name and which counts and their services to their
customers which they have been providing since a very long time.
• For India Infoline it’s their terminal which is the best. They provide with
excellent features and a lot of options for their different type of customers.
• Angel, Religare and other players are also are also providing with
excellent features but still not in the bull run till now.
No one company can be recommended as they all are good in their own way
and all are competitive in their own way. All the companies are good at providing
their services in their own way. The companies are very competitive, if one
company takes a step the other company takes two steps and all the benefits go
the customer towards the end. Therefore the only benefit that someone achieves
is the customers who gain from these competitive firms in terms of service
provided by them as well as in cost terms.
10. CONCLUSION
But then there are also factors which may have a negative effect on E- Broking
like the market conditions etc. ignoring the risks involved, one might be drowned
while sailing the in the ocean. But then it is more convenient for the people. The
customers are getting a lot of comfort level and their work gets much simpler and
online broking is much cheaper to than going to a broker to get your trades
booked. And the most important thing is the increase and penetration of online
use in the India which has increased the potential market size for online broking
on an annual basis. A large share of the expected growth in Internet can be
attributed to the increase in the online population and thus online trading too.
Internet-based stock trading, while still in its infancy in the country, has the
potential to really benefit the investor, with its ability to offer greater speed and
transparency at a much lower cost. The essential component of Internet-based
trading is the interface between broker, bank and depository participant, and as
Net-based trading becomes a reality this interface will develop.
The advent of Internet-based trading in the country will change the face of the
Indian capital market very soon in terms of the volume of transactions, the nature
and settlement of trade, and the profile of market participants. I personally don’t
think many of our colleagues in the business have really understood the impact
the Net can have on the broking business. The growth of Internet-based trading
as a mass trading technique in the country is unstoppable, going by the
indicators available and the signals for the future. When it ultimately gathers
momentum, the biggest beneficiary will be the investor, who will be able to trade
with greater speed and transparency, and at lower costs.
11. ANNEXURE
11.1 TRANSCRIPTS:
RESPONDENT 1:
• Live intra day /positional / and delivery calls on your terminal helps you
take informed decision.
• Multiple market watch, with NSE/BSE cash and derivatives on single
screen.
• Execution through Exe/Web based trading platform.
• Online transfer of funds through multiple banks.
• Technical Charts: Intra day/ Daily/ Weekly/ Monthly/ Quarterly/ Yearly
• View live NSE cash / derivatives and BSE cash on the same screen.
• Research reports, daily market diary, pivot points and Derivatives diary.
• Advisor helps you evaluate & restructure your portfolio continuously. You
can get a detailed perspective on the markets, sectors & individual
companies from your advisor (Selected customers)
• Dealer/advisor support during trading hours
6. What are the types of accounts and the brokerage that the company provides?
1. Freedom Account
Ideally for Intra day Traders/ Speculators.
No Access to Research, however the client will get intraday flash calls,
pop ups, positional calls, technical recommendation on trading screen.
Application Money: Rs.500000 (Cash or Scrip Margin)
Monthly Brokerage Commitment Rs.500
Brokerage:
⇒ Delivery Based = 0.02 %
⇒ Intra day = 0.15%
⇒ F&O = 0.02%
Brokerage is exclusive of Service Tax, STT.
Brokerage:
⇒ Delivery Based = 0.02 %
⇒ Intra day = 0.15%
⇒ F&O = 0.02%
Brokerage is exclusive of Service Tax, STT.
3. Easy Account
Brokerage:
RESPONDENT 2:
Mr.Varun Singhal
Company Name: ShareKhan
Email: varunsinghal@sharekhan.com
Designation: Co – Head Advisory E-Broking
Phone no.: 9819200501
What are the types of accounts provided by you and their feature?
Features:
RESPONDENT 3:
⇒ Delivery – 2 times, (if deposit Rs.2000, then can trade only for
Rs.4000/-)
⇒ Trading – 10 times, (if Rs2000 is deposited as margin, you will be
allowed an exposure of up to Rs.20000).
What are products offered by the company and their features and the brokerage
of the company?
Features:
Live streaming quotes and margin, position, marked to market profit &
loss report. Price watch on any number of scripts.
Intra day charts, updated live, tick-by-tick.
Live margin, position, marked to market profit & loss report.
Set any number of price alerts on any number of scripts.
Flexibility to customize screen layout and setting.
Market depth, i.e. Best 5 bids and offers, updated live for all scripts
Instant trade confirmation.
Online access to both accounts and DP.
Live updated Order and Trade Book.
Facility to place orders on the phone in all major cities.
Facility to place after market orders
Online fund transfer facility from leading Banks
Online intra-day technical calls.
Exhaustive database of over 5000 companies
Historical charts and technical analysis tools.
Brokerage
⇒ Intra day trading = 0.05%
⇒ Delivery = 0.25%
Investors, who invest quite often, churn their portfolios regularly and
keep a close watch on the market. They need to watch live quotes and
live charts.
Active stock market traders with medium volumes
Students and researchers who need live streaming quotes and intra
day charts
Corporate treasury people
Brokerage
RESPONDENT 4:
Mr.Chintan Kotak
Company Name: Kotak Securities
Email: chintankotak@kotak.com
Designation: Marketing Manager Online Broking
Phone no.: 9920103588
What are the types of products that the company offers and their features and
the brokerage offered by each?
Features:
In this the clients enjoy premier and top-line trading services. Brokerage same
as kotak gateway account.
Features:
Features:
Kotak Securities Freeway enables the clients to trade as many times as they like
- at a fixed brokerage. They just have to pay a fixed brokerage of Rs.999/-
Features
6. NRI Account
7. Assist Account:
Provides assistance to the clients to make the right decisions at the right time
and also gives them assistance as to where to invest and when.
Features
Brokerages:
RESPONDENT 5:
Mr.Mihir Shah
Company Name: ICICI Direct
Email: mihirshah@icicidirect.com
Designation: Senior Relationship Manager
Phone no.: 9819616622
Brand name
Integrated products (banking, trading and demat) and therefore secure
and safe so there is no need to worry about credit/debit of shares or the
amount.
128-bit encryption enabled Secure Socket Layer (SSL) to ensure that the
information transmitted across the Internet is safe and cannot be
accessed by a third party
Invest online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings
Schemes all from one place. One can also get insurance through ICICI
Lombard General Insurance.
Banking – ICICI
Demat – ICICI
Transaction Charges:
a) Market Buy - 0.03% of the transaction value subject to a min. of Rs.25/-
per transaction
b) Market Sell - 0.04% of the transaction value subject to a min. of Rs.25/-
per transaction
c) Rejection/fails - Rs.25/- per entry (within 24 hours)
Extra late payment charge of 0.10% subject to a min. of Rs.50/- per
transaction.
Demat Charges –
Remat Charges –
0.10% of the value of the securities rematerialized subject to a minimum of
Rs.25/- per request
Pledge Creation - 0.02% of the transaction value subject to a minimum of
Rs.25/- per ISIN and per request.
Invocation/ Revocation - 0.03% of the transaction value subject to a minimum
of Rs.25/- per ISIN (International Securities Identifying Number) and per
request.
RESPONDENT 6:
Margin exposure: 4 times (which the clients have to pay within 5 days failing
which they are charged up to16% of interest)
Margin funding: 2 times, (which the clients have to pay in 3 days failing which
they are charged interest up to 16-20%)
⇒ Delivery - 0.30%
⇒ Intraday - 0.20%
Services:
Live news about economy, corporate, market reports, industry, board
meetings, market commentary’s etc.
Indiabulls equity analysis report – gives objective guidance to the clients
to buy or sell.
Enjoy priority telephone access that gives the clients direct access to the
Relationship Manager.
Benefit from full access to India bulls Equity Analysis their objective, fact-
based approach to rating stocks.
Stay on the top of the investments with a snapshot of Account
Statements. Get access to Portfolio statement and access to digital
contract notes.
RESPONDENT 7
: Mr.Piyush Pandey
Company Name: Unicorn Securities Pvt. Ltd.
Email: piyush_utsahi@yahoo.co.in
Designation: Team Leader
Phone no.: 988745096
⇒ Delivery - 0.03%
⇒ Intraday - 0.30%
1.1. Questionnaire:
Preparing a rough draft of the questionnaire to get a proper format
Type of questions, which should be asked.
The flow of the questions
1.2. Date when the Guide was consulted: 24th July 2008
1.4. The Progress of the Thesis: I have started calling all the companies for
appointments. I have also started working on the literature part of my thesis.
2.2. Date when the Guide was consulted: 28th may 2010
3.1. Questionnaire:
With the interview pattern being qualitative, the basic questionnaire keeps getting
modified and customized for each interview.
3.2. Date when the Guide was consulted: 12th August 2008
4.1. Questionnaire:
With the interview pattern being qualitative, the basic questionnaire keeps getting
modified and customized for each interview.
4.2. Date when the Guide was consulted: 14th may 2010
5.1. Questionnaire:
With the interview pattern being qualitative, the basic questionnaire keeps getting
modified and customized for each interview.
5.2. Date when the Guide was consulted: 18thAugust 2008
6.1. Questionnaire:
Done with all the interviews
6.2. Date when the Guide was consulted: Very often since the last week
6.3. The outcome of the discussion: The final copy was read by the external
guide and he asked me to make a few corrections in the report.
Questionnaire
Dear Sir/Madam,
We are doing a survey on the different kinds of Internet Trading Services offered
by the Leading Brokerage companies of India
We would appreciate if you could participate in the same and contribute your
valuable insights
OFFICE - RECORD
Name of Respondent:
Designation:
Email-ID:
Phone No.:
=============================================================
====================================
2. What are the different Segments in which your company operates or have
future plans?
Capital Market
Futures and Options
Commodities
Forex
Mutual Funds
IPO’s
Margin Financing
PMS
3. What are the types of online products your company offers?
6. What Value Added Features make you different from the competitors?
One thing that sets you apart from the competition!
9. How are u handling the competition who charge flat fees viz; Reliance
Money
Banking
Demat
Offline Interface
MOU Signed with bank etc
Online
Offline
13. BIBLIOGRAPHY
Firms Contacted:
My colleagues at India Infoline Limited and my thesis guide and colleague Mr.
Jugal Maheshwari helped me out and used their contacts to get these Broking
firms to participate in the interview.
I have read & collected some matter from the books of my syllabus. I have got
some knowledge about the meaning of corporate governance from magazines of
Institute Of Charted Accountance which is provided by my supervisor & guide
Websites:
www.indiainfoline.com
www.sharekhan.com
www.financialexpress.com/fe_full_story.php?content_id=147783
www.en.wikipedia.org/wiki/India
www.censusindia.net/results/provindia3.html
www.sify.com/sifyimagine/fullstory.php?id=13213758
www.sify.com/sifyimagine/fullstory.php?id=13213758
www.forbes.com/facesinthenews/2005/04/21/0421autofacescan02.html
www.thehindubusinessline.com/iw/2006/10/08/stories/2006100800591300.htm
www.kotaksecurities.com
www.moneypore.com
www.icicidirect.com
www.hinduonnet.com/businessline/iw/2000/09/03/stories/0703g051.htm
A
of
TITLED
“CORPORATE GOVERNANCE”
SESSION :-2008-2010
Submitt ed By: Submitted To: