CHAPTER-I INTRODUCTION

INTRODUCTION TO ONLINE TRADING

Change is the law of nature. There were times when man was a wanderer or a normal. He himself had to go place to place in search of food, water and now everything is available at your doorstep just at the click of the mouse. The growth of information technology has affected almost all sectors of life. Internet has enabled us to get every information at our doorstep. When Internet has affected all sectors he could stock markets the most important player of the economy, has remained far behind? Like all other sectors Internet has set its feet in the stock markets also. Internet trading commissions are clearly posted on the websites of the various services, and are typically a fixed rate charge, depending upon the type of security being traded and the size of trade. In theory, therefore, an Interest investor always knows what commission he is being charged on each trade. Internet investors can take as much time as they would like to take prior to placing a trade order. Similarly the online investor likely does not have to worry that his broker is making unauthorized trades. Since there is no individual broker making a commission, the only person who is authorized to trace in the account is the actual investor. Furthermore, the internet investor can never become a victim of excessive trading (where for the broker) since the investor maintains total control over the number of transactions which take place in the account. All of these positive features of internet trading may lead the unwary investor to believe that Internet trading is a way to take control of their finances and save more money in the process. Unfortunately, this is not always the case. The advantages of Internet stock trading have also its weaknesses and these weaknesses present significant drawbacks for the average investor. First and foremost, the average investor is not an expert in the financial markets. There is a danger for allowing the autonomy of online trading to hull you into the belief that you are an expert investor. An online investor sitting at home at a personal computer 2

also foregoes proper investment advice and financial planning, perhaps among the most valuable services provided by traditional brokers. There are, of course, additional risks relative to performing transactions over the Internet especially on a shared computer. Those people whom investors have provided their account number and password can freely trade that account while the investor will have little, if any, resource against the brokerage firm for the breach of security. The online trading is simply defined as dealing securities on net. In online trading system, from a single location anywhere, can service investors across the country.

NEED FOR THE STUDY:

The present study to review the online trading procedure a case study of ONLINE TRADING at Religare Enterprises Ltd., as the exchange has changed its trading from it and there is need to assess the performance of the capital market.

OBJECTIVES OF THE STUDY:

It is to analyze the changes in trading after the exchange shifted from outcry to online trading system.

It is to study the functions of Religare Enterprises Ltd through various departments.

To know the online screen based trading system adopted by Religare Enterprises Ltd and about its communication facilities. The appropriate configuration to set the network, which would link the Religare Enterprises Ltd to individual / members.

To know about the latest and future development in the stock exchange trading system.

METHODOLOGY OF THE STUDY:

The data collection methods include both primary and secondary Collection methods. Primary method: This method includes the data collected from the personal interaction with authorized members of Religare Enterprises Ltd. Secondary method: The secondary data collection method includes: The lecturers delivered by the superintendents of respective departments. The brochures and material provided by Religare Enterprises Ltd. The data collected from the magazines of the NSE, economic times, etc. Various books relating to the investments, capital market and other related topics.

LIMITATIONS OF THE STUDY:

The study confines to the past and present system of the trading procedure in theand the Indiainfoline study is confined to the coverage of all the related issues in brief. The data is collected from the primary and secondary sources and thus is subject to slight variation than what the study includes in reality.

The study is confined to online trading procedure only. Problems of listing are not covered due to limited time and to keep the study in manageable limits.

CHAPTER-II INDUSTRY PROFILE & COMPANY PROFILE

Evolution Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as " The Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. Other leading cities in stock market operations Ahmadabad gained importance next to Bombay with respect to cotton textile industry. After 1880, many mills originated from Ahmadabad and rapidly forged ahead. As new 6

mills were floated, the need for a Stock Exchange at Ahmadabad was realized and in 1894 the brokers formed "The Ahmadabad Share and Stock Brokers' Association". What the cotton textile industry was to Bombay and Ahmadabad, the jute industry was to Calcutta. Also tea and coal industries were the other major industrial groups in Calcutta. After the Share Mania in 1861-65, in the 1870's there was a sharp boom in jute shares, which was followed by a boom in tea shares in the 1880's and 1890's; and a coal boom between 1904 and 1908. On June 1908, some leading brokers formed "The Calcutta Stock Exchange Association". In the beginning of the twentieth century, the industrial revolution was on the way in India with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel Company Limited in 1907, an important stage in industrial advancement under Indian enterprise was reached. Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies generally enjoyed phenomenal prosperity, due to the First World War. In 1920, the then demure city of Madras had the maiden thrill of a stock exchange functioning in its midst, under the name and style of "The Madras Stock Exchange" with 100 members. However, when boom faded, the number of members stood reduced from 100 to 3, by 1923, and so it went out of existence. In 1935, the stock market activity improved, especially in South India where there was a rapid increase in the number of textile mills and many plantation companies were floated. In 1937, a stock exchange was once again organized in Madras - Madras Stock Exchange Association (Pvt) Limited. (In 1957 the name was changed to Madras Stock Exchange Limited). Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with the Punjab Stock Exchange Limited, which was incorporated in 1936.

Indian Stock Exchanges - An Umbrella Growth The Second World War broke out in 1939. It gave a sharp boom which was followed by a slump. But, in 1943, the situation changed radically, when India was fully mobilized as a supply base. On account of the restrictive controls on cotton, bullion, seeds and other commodities, those dealing in them found in the stock market as the only outlet for their activities. They were anxious to join the trade and their number was swelled by numerous others. Many new associations were constituted for the purpose and Stock Exchanges in all parts of the country were floated. The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940) and Hyderabad Stock Exchange Limited (1944) were incorporated. In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947, amalgamated into the Delhi Stock Exchnage Association Limited. Post-independence Scenario Most of the exchanges suffered almost a total eclipse during depression. Lahore Exchange was closed during partition of the country and later migrated to Delhi and merged with Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in 1957 and recognized in 1963. Most of the other exchanges languished till 1957 when they applied to the Central Government for recognition under the Securities Contracts (Regulation) Act, 1956. Only Bombay, Calcutta, Madras, Ahmadabad, Delhi, Hyderabad and Indore, the well established exchanges, were recognized under the Act. Some of the members of the other Associations were required to be admitted by the recognized stock exchanges on a concessional basis, but acting on the principle of unitary control, all these pseudo stock

exchanges were refused recognition by the Government of India and they thereupon ceased to function. Thus, during early sixties there were eight recognized stock exchanges in India (mentioned above). The number virtually remained unchanged, for nearly two decades. During eighties, however, many stock exchanges were established: Cochin Stock Exchange (1980), Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982), and Pune Stock Exchange Limited (1982), Ludhiana Stock Exchange Association Limited (1983), Gauhati Stock Exchange Limited (1984), Kanara Stock Exchange Limited (at Mangalore, 1985), Magadh Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited (1989), Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990) and recently established exchanges Coimbatore and Meerut. Thus, at present, there are totally twenty one recognized stock exchanges in India excluding the Over The Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL). The Table given below portrays the overall growth pattern of Indian stock markets since independence. It is quite evident from the Table that Indian stock markets have not only grown just in number of exchanges, but also in number of listed companies and in capital of listed companies. The remarkable growth after 1985 can be clearly seen from the Table, and this was due to the favouring government policies towards security market industry. Trading Pattern of the Indian Stock Market Trading in Indian stock exchanges are limited to listed securities of public limited companies. They are broadly divided into two categories, namely, specified securities (forward list) and non-specified securities (cash list). Equity shares of dividend paying, growth-oriented companies with a paid-up capital of atleast Rs.50 million and a market capitalization of atleast Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified group and the balance in non-specified group. 9

Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery transactions "for delivery and payment within the time or on the date stipulated when entering into the contract which shall not be more than 14 days following the date of the contract" : and (b) forward transactions "delivery and payment can be extended by further period of 14 days each so that the overall period does not exceed 90 days from the date of the contract". The latter is permitted only in the case of specified shares. The brokers who carry over the outstandings pay carry over charges (cantango or backwardation) which are usually determined by the rates of interest prevailing. A member broker in an Indian stock exchange can act as an agent, buy and sell securities for his clients on a commission basis and also can act as a trader or dealer as a principal, buy and sell securities on his own account and risk, in contrast with the practice prevailing on New York and London Stock Exchanges, where a member can act as a jobber or a broker only. The nature of trading on Indian Stock Exchanges are that of age old conventional style of face-to-face trading with bids and offers being made by open outcry. However, there is a great amount of effort to modernize the Indian stock exchanges in the very recent times. Over The Counter Exchange of India (OTCEI) The traditional trading mechanism prevailed in the Indian stock markets gave way to many functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long settlement periods and benami transactions, which affected the small investors to a great extent. To provide improved services to investors, the country's first ringless, scripless, electronic stock exchange - OTCEI - was created in 1992 by country's premier financial institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India, Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services. Trading at OTCEI is done over the centres spread across the country. Securities traded on the OTCEI are classified into: 10

Listed Securities - The shares and debentures of the companies listed on the OTC can be bought or sold at any OTC counter all over the country and they should not be listed anywhere else

Permitted Securities - Certain shares and debentures listed on other exchanges and units of mutual funds are allowed to be traded

Initiated debentures - Any equity holding atleast one lakh debentures of a particular scrip can offer them for trading on the OTC.

OTC has a unique feature of trading compared to other traditional exchanges. That is, certificates of listed securities and initiated debentures are not traded at OTC. The original certificate will be safely with the custodian. But, a counter receipt is generated out at the counter which substitutes the share certificate and is used for all transactions. In the case of permitted securities, the system is similar to a traditional stock exchange. The difference is that the delivery and payment procedure will be completed within 14 days. Compared to the traditional Exchanges, OTC Exchange network has the following advantages:

OTCEI has widely dispersed trading mechanism across the country which provides greater liquidity and lesser risk of intermediary charges.

Greater transparency and accuracy of prices is obtained due to the screen-based scripless trading.

Since the exact price of the transaction is shown on the computer screen, the investor gets to know the exact price at which s/he is trading.

Faster settlement and transfer process compared to other exchanges.

11

In the case of an OTC issue (new issue), the allotment procedure is completed in a month and trading commences after a month of the issue closure, whereas it takes a longer period for the same with respect to other exchanges.

Thus, with the superior trading mechanism coupled with information transparency investors are gradually becoming aware of the manifold advantages of the OTCEI. National Stock Exchange (NSE) With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. Trading at NSE can be classified under two broad categories: (a) Wholesale debt market and (b) Capital market. Wholesale debt market operations are similar to money market operations - institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc. There are two kinds of players in NSE: (a) trading members and (b) participants.

12

Recognized members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and large players like banks who take direct settlement responsibility. Trading at NSE takes place through a fully automated screen-based trading mechanism which adopts the principle of an order-driven market. Trading members can stay at their offices and execute the trading, since they are linked through a communication network. The prices at which the buyer and seller are willing to transact will appear on the screen. When the prices match the transaction will be completed and a confirmation slip will be printed at the office of the trading member. NSE has several advantages over the traditional trading exchanges. They are as follows:

NSE brings an integrated stock market trading network across the nation. Investors can trade at the same price from anywhere in the country since intermarket operations are streamlined coupled with the countrywide access to the securities.

Delays in communication, late payments and the malpractices prevailing in the traditional trading mechanism can be done away with greater operational efficiency and informational transparency in the stock market operations, with the support of total computerized network.

Unless stock markets provide professionalized service, small investors and foreign investors will not be interested in capital market operations. And capital market being one of the major source of long-term finance for industrial projects, India cannot afford to damage the capital market path. In this regard NSE gains vital importance in the Indian capital market system. Preamble Often, in the economic literature we find the terms development and growth are used interchangeably. However, there is a difference. Economic growth refers to the sustained 13

increase in per capita or total income, while the term economic development implies sustained structural change, including all the complex effects of economic growth. In other words, growth is associated with free enterprise, where as development requires some sort of control and regulation of the forces affecting development. Thus, economic development is a process and growth is a phenomenon. Economic planning is very critical for a nation, especially a developing country like India to take the country in the path of economic development to attain economic growth. Why Economic Planning for India? One of the major objective of planning in India is to increase the rate of economic development, implying that increasing the rate of capital formation by raising the levels of income, saving and investment. However, increasing the rate of capital formation in India is beset with a number of difficulties. People are poverty ridden. Their capacity to save is extremely low due to low levels of income and high propensity to consume. Therefor, the rate of investment is low which leads to capital deficiency and low productivity. Low productivity means low income and the vicious circle continues. Thus, to break this vicious economic circle, planning is inevitable for India. The market mechanism works imperfectly in developing nations due to the ignorance and unfamiliarity with it. Therefore, to improve and strengthen market mechanism planning is very vital. In India, a large portion of the economy is non-monitised; the product, factors of production, money and capital markets is not organized properly. Thus the prevailing price mechanism fails to bring about adjustments between aggregate demand and supply of goods and services. Thus, to improve the economy, market imperfections has to be removed; available resources has to be mobilized and utilized efficiently; and structural rigidities has to be overcome. These can be attained only through planning. In India, capital is scarce; and unemployment and disguised unemployment is prevalent. Thus, where capital was being scarce and labour being abundant, providing useful employment opportunities to an increasing labour force is a difficult exercise. Only a centralized planning model can solve this macro problem of India. 14

Further, in a country like India where agricultural dependence is very high, one cannot ignore this segment in the process of economic development. Therefore, an economic development model has to consider a balanced approach to link both agriculture and industry and lead for a paralleled growth. Not to mention, both agriculture and industry cannot develop without adequate infrastructural facilities which only the state can provide and this is possible only through a well carved out planning strategy. The governments role in providing infrastructure is unavoidable due to the fact that the role of private sector in infrastructural development of India is very minimal since these infrastructure projects are considered as unprofitable by the private sector. Further, India is a clear case of income disparity. Thus, it is the duty of the state to reduce the prevailing income inequalities. This is possible only through planning. Planning History of India The development of planning in India began prior to the first Five Year Plan of independent India, long before independence even. The idea of central directions of resources to overcome persistent poverty gradually, because one of the main policies advocated by nationalists early in the century. The Congress Party worked out a program for economic advancement during the 1920s, and 1930s and by the 1938 they formed a National Planning Committee under the chairmanship of future Prime Minister Nehru. The Committee had little time to do anything but prepare programs and reports before the Second World War which put an end to it. But it was already more than an academic exercise remote from administration. Provisional government had been elected in 1938, and the Congress Party leaders held positions of responsibility. After the war, the Interim government of the pre-independence years appointed an Advisory Planning Board. The Board produced a number of somewhat disconnected Plans itself. But, more important in the long run, it recommended the appointment of a Planning Commission. The Planning Commission did not start work properly until 1950. During the first three years of independent India, the state and economy scarcely had a stable structure at all, while millions of refugees crossed the newly established borders of India and Pakistan, 15

and while ex-princely states (over 500 of them) were being merged into India or Pakistan. The Planning Commission as it now exists, was not set up until the new India had adopted its Constitution in January 1950. Objectives of Indian Planning The Planning Commission was set up the following Directive principles :

To make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of these resources as are found to be deficient in relation to the nations requirement.

To formulate a plan for the most effective and balanced use of the countrys resources.

Having determined the priorities, to define the stages in which the plan should be carried out, and propose the allocation of resources for the completion of each stage.

To indicate the factors which are tending to retard economic development, and determine the conditions which, in view of the current social and political situation, should be established for the successful execution of the Plan.

To determine the nature of the machinery this will be necessary for securing the successful implementation of each stage of Plan in all its aspects.

To appraise from time to time the progress achieved in the execution of each stage of the Plan and recommend the adjustments of policy and measures that such appraisals may show to be necessary.

To make such interim or auxiliary recommendations as appear to it to be appropriate either for facilitating the discharge of the duties assigned to it or on a consideration of the prevailing economic conditions, current policies, measures 16

and development programs; or on an examination of such specific problems as may be referred to it for advice by Central or State Governments. The long-term general objectives of Indian Planning are as follows:

Increasing National Income Reducing inequalities in the distribution of income and wealth Elimination of poverty Providing additional employment; and Alleviating bottlenecks in the areas of : agricultural production, manufacturing capacity for producers goods and balance of payments.

Economic growth, as the primary objective has remained in focus in all Five Year Plans. Approximately, economic growth has been targeted at a rate of five per cent per annum. High priority to economic growth in Indian Plans looks very much justified in view of long period of stagnation during the British rule

17

COMPANY PROFILE

18

COMPANY PROFILE
Religare is an emerging markets financial services group with a presence across Asia, Africa, Middle East, Europe, and the Americas. In India, Religares largest market, the group offers a wide array of products and services including broking, insurance, asset management, lending solutions, investment banking and wealth management. With 10,000-plus employees across multiple geographies, Religare serves over a million clients, including corporate and institutions, high net worth families and individuals, and retail investors. Vision "To be the leading emerging markets financial services group driven by innovation, delivering superior value for all stakeholders globally".

Religare is established in the January 30th 1984. It is one of the leading integrated financial services institutions of India, backed by a blue chip promoter pedigree and a proven track record. Religares businesses are broadly clubbed across 3 key verticals, the retail, institutional and the wealth spectrum, catering to a diverse and wide base of clients spread across the length and breadth of the country. Structurally, all business is operated through various subsidiaries held through the holding company Religare Enterprises Limited. The company offers a diverse bouquet of services and through its consolidated network reach, Religare is present in more than 1300 locations across more than 400 cities and towns. As part of its recent initiatives the group has also started expanding globally. Religare has also successfully partnered with Aegon, one of the global leaders to launch Life Insurance, Mutual Fund and Pension products in India and with Macquarie Bank, for a wealth management joint venture. The vision of the company is to build Religare as a globally trusted brand in the financial services domain and present it as the Investment Gateway of India. All employees of 19

the group relentlessly strive to provide financial care, driven by the core values of diligence and transparency Mission - To provide financial care driven by the core values of diligence & transparency Brand Essence The company Core essence is diligence and ethical and dynamic processes for wealth creation drive it.

Brand Identity
Religare is a Latin word that translates as 'to bind together'. This name has been chosen to reflect the integrated nature of the financial services the company offers. The name is intended to unite and bring together the phenomenon of money and wealth to co-exist and serve the interest of individuals and institutions, alike.

Symbol
The Religare name is paired with the symbol of a four-leaf clover. The four-leaf clover is used to define the rare quality of good fortune that is the aim of every financial plan. It has traditionally been considered good fortune to find a single four leaf clover considering that statistically one may need to search through over 10,000 three-leaf clovers to even find one four leaf clover.

The first leaf of the clover represents Hope. The aspirations to succeed. The dream of becoming. Of new possibilities. It is the beginning of every step and the foundation on which a person reaches for the stars. The second leaf of the clover represents Trust. The ability to place ones own faith in another. To have a relationship as partners in a team. To accomplish a given goal with the balance that brings satisfaction to all, not in the binding, but

20

in the bond that is built. The third leaf of the clover represents Care. The secret ingredient that is the cement in every relationship. The truth of feeling that underlines sincerity and the triumph of diligence in every aspect. From it springs true warmth of service and the ability to adapt to evolving environments with consideration to all. The fourth and final leaf of the clover represents Good Fortune. Signifying that rare ability to meld opportunity and planning with circumstance to generate those often looked for remunerative moments of success. Hope. Trust. Care. Good Fortune. All elements perfectly combine in the emblematic and rare, four-leaf clover to visually symbolize the values that bind together and form the core of the Religare vision.

Top Management Team

Mr. Sunil Godhwani - CEO & Managing Director, Religare Enterprises Limited Mr. Shachindra Nath - Group Chief Operating Officer, Religare Enterprises Limited Mr. Anil Saxena- Group Chief Finance Officer, Religare Enterprises Limited

Board of Directors - Religare Enterprises Limited

Mr. Malvinder Mohan Singh - Chairman (Non Executive) Mr. Sunil Godhwani - CEO & Managing Director Mr. Shivinder Mohan Singh - Non Executive Director Mr. Harpal Singh - Non Executive Director Mr.Deepak Ramchand Sabnani - Independent Director 21

Mr.Padam Bahl - Independent Director Mr. Baldev Singh Johal - Independent Director Mr. R. K. Shetty - Alternate to Mr. J. W. Balani Capt.G.P.S.Bhalla - Alternate to Mr. Deepak Sabnani

Awards & Accolades

Religare Broking TVC (archery creative) won Silver Abby in the Sound and Design craft category at Goafest 2011. Religare Capital Markets Limited has been awarded the coveted Starmine award for the 'Best Brokerage Research House'. Religare Commodities Ltd has been awarded the 'The Best Commodity Broker of the year' at the Bloomberg UTV's financial Leadership awards. Religare Enterprises Ltd presented the the Best Retail Marketing Campaign of the Year 2010 at Asia Retail Congress. Religare Enterprises Ltd received the coveted Master Brand Award for 2010 and Best Marketing Campaign of the year at World Brand Congress 2010.

RELIGARE SPECTUM
1.Retail spectrum Equity Trading Commodities Trading Online Investment Portal Personal Financial Services Personal Credit

22

2. Wealth Spectrum Wealth Advisory Portfolio Management Services Arts Initiative Priority Client Equity Services

3. Institutional Spectrum Institutional Broking Services Investment Banking Corporate Finance Insurance Advisory

RETAIL SPECTRUM
Equity Trading Trading in Equities with Religare truly empowers you for your investment needs. A highly process driven, diligent approach backed by powerful Research & Analytics and one of the best in class dealing rooms ensures that you have a superlative experience. Further, Religare also has one of the largest retail networks, with its presence in more than 1,217 locations across more than 392 towns & cities. This means, you can walk into any of these branches and connect toreligareshighly skilled and dedicated relationship managers to get the best services. You could also choose to enjoy the freedom to execute your own trades through Religares online mechanism

23

Commodities Trading Religare Commodities Limited (RCL) was initiated to spearhead Exchange based Commodity Trading. As a member of NCDEX, MCX and NMCE, RCL is a trade facilitator providing the platform to trade in commodities. Grounded in the Religare philosophy, highly skilled and dedicated professionals strive to offer the client best investment solutions across the country. Online Investment Investing online will never be the same again withreligares360 degree portal www.religareonline.com Now you can not just invest online in Equities, IPOs, Mutual Funds, Commodities and much more but, also get TRADE REWARDS each time you invest.

Personal Financial Services

Religare has recently entered into personal financial advisory services. It caters to the financial needs of individuals by advising them on various financial plans. Religares Personal financial advisors, also called financial planners or financial consultants, use their knowledge of investments, tax laws, and insurance to recommend financial options to individuals in accordance with the individuals short-term and long-term goals. Some of the issues that planners address are general investments, retirement and tax planning.

Product offerings

Mutual Funds Insurance - Life & Non - Life Bonds Deposits IPOs Small Savings Instruments 24

PHILOSOPHY
Define Refine. Achieve At Religare The Company believes Our clients are people, not accounts hence successful investment management relationship begins with a clear understanding of each clients specific needs, concerns and long term objectives. Religares investment philosophy applies a disciplined approach to building a customized strategy designed to meet your individual financial goals and tolerance for risk. PROCESS

The Religare Edge

Pan India foot print 25

Dedicated team of trained and skilled advisors Strong pedigree driven by diligent processes and ethical business practices Wide & varied platter of products & services to choose from Backed by strong & Credible research

Their Process

WEALTH SPECTRUM
Wealth Management @ Religare

To provide investment advisory and execution services To work hand in hand with clients to identify and analyze their long-term goals, risk tolerance and existing asset base

To Utilize Religares full-suite platform with an open architecture along with a fully focused client centric approach to offer customized solutions for clients

Supported by dedicated team of highly skilled and qualified wealth managers and research professionals.

Critical Steps in Religares Client Centric Operating Process

Risk Profiling 26

Research & Asset Allocation Product Recommendations Review & Rebalancing

International Advisory Funds Management Services (AFMS) - A new horizon for international investments Religares wealth clients is an opportunity to invest in international financial instruments (currently limited to the US). Equities, Mutual Funds and Debts are some the key instruments available and the clients have the option to choose from various asset allocation modules.

Portfolio Management Service

Religare offers PMS to address varying investment preferences. As a focused service, PMS pays attention to details, and portfolios are customized to suit the unique requirements of investors. Religare PMS currently extends five portfolio management schemes - Panther, Tortoise, Elephant, Caterpillar and Leo. Each scheme is designed keeping in mind the varying tastes, objectives and risk tolerance of Religares investors

Investment Philosophy
We believe that Religares investors are better served by a disciplined investment approach, which combines an understanding of the goals and objectives of the investor with a fine tuned strategy backed by research.

Stock specific selection procedure based on fundamental research for making sound investment decisions.

Focus on minimizing investment risk by following rigorous valuation disciplines. Capital preservation. Selling discipline and use of Derivatives to control volatility. 27

Overall to enhance absolute return for investors.

Schemes
Panther The Panther portfolio aims to achieve higher returns by taking aggressive positions across sectors and market capitalization. It is suitable for the High Risk High Return investor with a strategy to invest across sectors and take advantage of various market conditions. Tortoise The Tortoise portfolio aims to achieve growth in the portfolio value over a period of time by way of careful and judicious investment in fundamentally sound companies having good prospects. The scheme is suitable for the Medium Risk Medium Return investor with a strategy to invest in companies, which have consistency in earnings, growth and financial performance. Elephant The Elephant portfolio aims to generate steady returns over a longer period by investing in Securities selected only from BSE 100 and NSE 100 index. This plan is suitable for the Low Risk Low Return investor with a strategy to invest in blue chip companies, as these companies have steady performance and reduce liquidity risk in the market. Caterpillar The Caterpillar portfolio aims to achieve capital appreciation over a long period of time by investing in a diversified portfolio. This scheme is suitable for investors with a highrisk appetite. The investment strategy would be to invest in scrips which are poised to get a re-rating either because of change in business, potential fancy for a particular sector in the coming years/months, business diversification leading to a better operating

28

performance, stocks in their early stages of an upturn or for those which are in sectors currently ignored by the market.

Leo Leo is aimed at retail customers and structured to provide medium to long-term capital appreciation by investing in stocks across the market capitalization range. This scheme is a mix of moderate and aggressive investment strategies. Its aim is to have a balanced portfolio comprising selected investments from both Tortoise and Panther. Exposure to Derivatives is taken within permissible regulatory limits.

The Religare Edge

We serve you with a diligent, transparent & process driven approach and ensure that your money gets the care it deserves. PMS brought to you by Religare with its solid reputation of an ethical and scientific approach to financial management. While The Company offers you the services of a Dedicated Relationship Manager who is at your service 24x7, The Company do not depend on individual expertise alone. For you, this means lower risk, higher dependability and unhindered continuity. Moreover, you are not limited by a particular individuals investment style. The company ensures that a part of the broking at Religare Portfolio Management Services is through external broking houses. This means that your portfolio is not churned needlessly. Using more broking firms gives us access to a larger number of reports and analysis, enabling us to make better, more informed decisions. Furthermore, your portfolio is customized to suit your investment objectives. Religare Portfolio Management Services gives you daily updates on your investment. You can pinpoint where your money is being invested, 24x7, instead of waiting till the end of the month to keep track. 29

No charge till you profit*.So sure are The company of religares approach to Portfolio Management that The company do not charge you for Religares services, until your investments start showing profit. With customized investment options Religare Portfolio Management Services invites you to invest across five broad portfolios to suit your investment needs

Institutional Broking Services

The mission of this division is to institutionalize and implement a process driven approach to cater to the needs of leading corporate houses and institutions. The division would like to be seen as a one-stop investment gateway and knowledge repository for its clients servicing their unique and sophisticated needs. The division is structured as a separate SBU and is housed out of Mumbai, manned by a small yet fleet footed and extremely skilled group of top-notch professionals drawn from the best in the industry. The key highlights of Religares service platter are:

Highly skilled, dedicated dealing, research and sales teams Dealing capabilities on the NSE, BSE and in the cash and derivatives segment In-depth, detailed and insightful coverage of more than 60 stocks across diverse sectors. The sectors covered are FMCG, Hotels, Media, Pharma, Auto, Cement, Steel pipes, Logistics, Telecom, Construction and much more.

Companys Current clientele includes some major domestic mutual funds, insurance companies, banks and FIIs We provide innovative, integrated and best-fit solutions to Religares corporate customers. It is Religares continuous endeavor to provide value enhancement through diverse financial solutions on an on-going basis, through offerings like corporate debt, private equity, IPO, ECB, FCCB, GDR/ADR etc. Religare's Investment Banking Division offers the following services:

Corporate Finance
30

It focuses on finding partners for Religares clients, who not only help in adding value, but also improve the future valuation of the organization. The company specializes in structured financing and in providing advisory services related to financial planning, modeling and advising on financial requirements. Placement of Debt

Syndication of Domestic Loan / Foreign Currency Loan Securitisation Debt Swap & Loan Restructuring Short Term Corporate Debt Working Capital (Cash Credit & Short term Loan) Capital Market Instruments Overseas Acquisition

Placement of Equity (Private Equity)

Both for listed and unlisted companies

Merchant Banking

IPO/FPO/RIGHTS Mergers & Acquisitions Corporate Advisory Services ADR/GDR/FCCB Buy Back Of Shares

31

Service Offerings

Research Services
We at Religare believe in providing independent research for clients to make investment decisions, with strict emphasis on self-regulation, avoiding possible conflict of interest in objectivity. Varied research reports are prepared on different categories of Equities like

Fundamental research Technical research 32

Daily reports Intraday trading tech calls Intraday Derivative call Directional F&O calls Structured products Index Arbitrage

Arbitraging between Index (NIFTY) Futures and its constituents (Underlying Stock Futures).

Volatility Trading

Arbitrage between volatilities i.e. between implied volatility of Options and forecasted volatility of underlying stock futures.

Financial Data
Historically, we conducted business as separate companies. Their business was carried on by Fortis. Securities Limited, Fortis Comdex Limited and Fortis Finvest Limited, some of which were subsidiaries of certain of our Promoter Group companies. In order to integrate our financial services operations under the Religare name, the Company acquired a controlling stake in Fortis Securities Limited, Fortis Comdex Limited and Fortis Finvest Limited and subsequently, acquired a 100% stake in these entities and in Religare Insurance Broking Limited and Religare Venture Capital Private Limited. These entities are now our Companys subsidiaries. For further details regarding our acquisitions and subsidiaries, see the sectionistory and Certain Corporate Matters We have set forth in this Draft Red Herring Prospectus the following financial statements: 33

 Stand-alone financial statements of Religare Enterprises Limited for Fiscal 2003, 2004, 2005, 2006 and 2007 prepared in accordance with Indian GAAP and restated in accordance with SEBI Guidelines; Stand-alone financial statements of Religare Securities Limited for Fiscal 2003, 2004, 2005, 2006 and 2007 prepared in accordance with Indian GAAP and restated in accordance with SEBI Guidelines; Stand-alone financial statements of Religare Finvest Limited for Fiscal 2003, 2004, 2005, 2006 and 2007 prepared in accordance with Indian GAAP and restated in accordance with SEBI Guidelines; Stand-alone financial statements of Religare Commodities Limited for Fiscal 2004, 2005, 2006 and 2007 prepared in accordance with Indian GAAP and restated in accordance with SEBI Guidelines; Stand-alone financial statements of Religare Insurance Broking Limited for Fiscal 2006 and 2007, Prepared in accordance with Indian GAAP and restated in accordance with SEBI Guidelines.

Currency of Presentation
All references to Rupees or Rs. or INR are to Indian Rupees, the official currency of the Republic of India. All references to $, US$, USD, U.S. $, U.S. Dollar(s) or U.S. Dollar(s) are to United States Dollars, the official currency of the United States of America.

34

This Draft Red Herring Prospectus contains translations of certain U.S. Dollar and other currency amounts into Indian Rupees (and certain Indian Rupee amounts into U.S. Dollars and other currency amounts). These have been presented solely to comply with the requirements of Clause 6.9.7.1 of the SEBI Guidelines. These translations should not be construed as a representation that such Indian Rupee or U.S.Dollar or other amounts could have been, or could be, converted into Indian Rupees, at any particular rate, or at all. Unless otherwise specified, all currency translations provided herein have been made based on the exchange rates specified at www.oanda.com, a currency web site.

Industry and Market Data

Unless stated otherwise, industry data used throughout this Draft Red Herring Prospectus has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although the Company believes that the industry data used in this Draft Red Herring Prospectus is reliable, it has not been verified by any independent source. Further, the extent to which the market data presented in this Draft Red Herring Prospectus is meaningful depends on the readers familiarity with and understanding of the methodologies used in compiling such data and methodologies and assumptions may vary widely among different industry sources.

INTERNAL RISK FACTORS

1. There are certain criminal proceedings against one of our Promoters and Directors. Mr. Malvinder Mohan Singh, our Promoter and Director, is involved in a criminal proceeding wherein a Mr. Tarsem Lal has claimed that Mr. Singh and others have 35

dishonestly received Rs. 0.40 million from him. The High Court of Punjab and Haryana has stayed the proceedings before the concerned judicial authority. The defendants have filed a petition in the High Court of Punjab and Haryana to quash the complaint. The matter is currently pending. For further details, see the section Titled Outstanding Litigation and Material Developments beginning on page 377.

2. We have been in the past and may in the future be barred by securities regulators from dealing in the securities of certain Indian companies. From time to time, we are subject to SEBI investigations or other regulatory scrutiny in connection with our securities broking business. Typically, our equity broking business involves trading on national stock exchanges. Our clients use our terminals to trade on these stock exchanges and may engage in activities that result in price manipulation of the securities in which they trade. While we believe that our business is conducted in accordance with applicable regulations and market conduct norms, we cannot control every trading activity of our clients apart from implementing the prescribed Know Your Client norms. Share price manipulation by our clients may result in the SEBI or other regulatory authority commencing investigations or imposing sanctions on us. On January 17, 2007, the SEBI barred us along with five other day-traders from dealing in the securities of Nissan Copper Limited (Nissan Copper). This prohibition has been imposed on us as an interim measure pending SEBI investigations into allegations that we and other entities may have Manipulated Nissan Coppers share price following its listing on the BSE and the NSE in December 2006. SEBI has not currently concluded that we and other barred day-traders have manipulated Nissan Coppers share price but the role played by each of us in trading Nissans shares will be examined during the investigation. In the matter of Ind Tra Deco Limited, the SEBI observed a sharp increase in price and trading volume in the scrip of Ind Tra Deco Limited and issued an interim order, dated October 5, 2005, restraining RSL (along with other stockbrokers) and the promoters and 36

directors of Ind Tra Deco Limited from buying, selling or dealing in the securities of Ind Tra Deco Limited, directly or indirectly, from October 5, 2005 until the receipt of further orders. Subsequently, the SEBI confirmed its interim order on June 20, 2006. The SEBI in the matters of IFSL Limited, Mega Corporation Limited, Karuna Cables Limited and Millennium Cybertech Limited, issued orders restraining RSL, among other stock brokers, from buying, selling or dealing in the shares of the companies mentioned above, directly or indirectly, on behalf of certain promoters, directors and clients specified by the SEBI from the date of the respective orders until the receipt of further orders. SEBI is also investigating trading in the shares of Vijay Textile Limited, and has directed RSL to explain its reasons for entering into transactions. In these shares on behalf of certain clients, which allegedly resulted in artificial increases in the Vijay Textiles share price? The SEBI has also directed RSL to provide reasons for having undertaken certain transactions on behalf of its clients. The BSE, the NSE and the NSCCL have, in the period from April 2004 till date, issued various letters and show cause notices against RSL. An aggregate penalty/ fine of approximately Rs. 3.15 million has been imposed upon RSL in these matters. In addition, the National Securities Depositories Limited has levied penalties aggregating to Rs. 0.11 million on RSL. We intend to cooperate fully with all SEBI, stock exchange and other regulatory investigations and respond promptly to any notices. The outcome of any such investigations cannot be predicted and could result in our being censured, fined, deregistered, suspended or disqualified from dealing in the securities market, including as an underwriter or an asset management company. Any such action would restrict our trading activities and growth plans, severely impair our equity brokerage business, harm our reputation and materially and adversely affect our business, financial condition and results of operations. For details regarding other legal proceedings to which we are a party, see the section titled Outstanding Litigation and Material Developments.

SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY

37

We are a financial services company in India, offering a wide range of financial products and services targeted at retail investors, high net worth individuals and corporate and institutional clients. We are promoted by the promotes of Ranbaxy Laboratories Limited. We operate from six regional offices and 25 sub-regional offices and have a presence in 330 cities and towns controlling 979 locations managed by us and our Business Associates all over India, as well as a representative office in London. While the majority of our offices provide the full complement of our services, we also have dedicated offices for our investment banking, institutional brokerage, portfolio management services and priority client services. Religare Enterprises Limited is the holding company for our subsidiaries. Our principal subsidiaries include:

Retail Spectrum
covers equity brokerage services, commodity brokerage services, personal financial services (financial planning for the retail investor, including the distribution of mutual funds, savings products, life insurance and initial public offerings (IPOs) and personal credit (personal loans services (PLS) and loans against shares (LAS). Historically, the services offered in this spectrum have been the most substantial part of our business. Our Retail Spectrum services in India are being offered through a network of 979 business locations spread across 330 cities and towns and also through our online platform, www.religareonline.com,which is being developed as an integrated portal to offer financial and other services. Our business locations include intermediaries, or our Business Associates, who deliver a standard quality of service offering on the basis of a pre-determined revenue sharing ratio for the business generated through them. Our Retail Spectrum focuses on clients who keep less than Rs. 2.5 million on a continuing basis, in the form of either equity trading account margin, mutual fund investment, portfolio management investments or insurance premiums paid up. We have also increased our local commodity locations (or mandis) to 42 as of March 31, 2007 in order to expand our retail commodity brokerage services.

38

Wealth Spectrum
Covers products and services which are geared to service high net worth individuals and Provide wealth advisory services (on an asset allocation model), PMS (discretionary equity investments), priority client equity services (non-discretionary equity trading services), art initiatives (an art fund which we intend shortly to launch as an investment diversification product) and international equity investment advisory services. We have entered into an exclusive arrangement with Wall Street Electronics, Inc., a New York broker dealer, to give Indian clients access through us to U.S. markets. Our Wealth Spectrum focuses on clients who keep at least Rs. 2.5 million on a continuing basis or more in the form of equity trading account margins, mutual fund investments, portfolio management investment or insurance premiums paid up.

Institutional Spectrum
Covers products and services which cater under one service offering to corporate and institutional clients, including domestic mutual funds, FIIs, banks and corporate customers. The Institutional Spectrum provides services to the institutional investor community through institutional brokerage and

RISK FACTOR
This is a public issue of 11,364,152 Equity Shares for cash at a price of Rs. per Equity Share including a share premium of Rs. per Equity Share aggregating to Rs. million. The Issue would constitute 15% of the post Issue paid-up capital of our Company. Our Company is exploring the possibility of a Pre-IPO Placement. If the Pre-IPO Placement is completed, the number of Equity Shares issued pursuant to the Pre-IPO Placement, will be reduced from the Issue, subject to a minimum Issue size of 10% of the post-Issue share capital. In terms of Rule 19 (2) (b) of the SCRR, this being an issue for less than 25% of the postIssue capital, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Issue will be allocated on a proportionate basis to Qualified

39

Institutional Buyers (QIBs), out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, up to 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and up to 30% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Under-subscription, if any, in the Non-Institutional Portion and Retail Individual Portion would be met with spill over from other categories at the sole discretion of our Company in consultation with the BRLMs. For more information, see the section titled Issue Procedure - Basis of Allotment beginning on page 444. The average cost of acquisition of equity shares (on first in first out basis) by each of our Promoters, Mr. Malvinder Mohan Singh and Mr. Shivinder Mohan Singh is Rs. 17.33. For detail see the section titled Capital Structure beginning on page 24. The average cost of acquisition of Equity Shares by our Promoters has been calculated by taking the average of the amounts paid by them to acquire the Equity Shares currently held by them. The net worth of our Company, on a consolidated basis, is Rs. 3,209.88 million as at March 31, 2007, respectively, as per restated consolidated financial statements of our Company under Indian GAAP in the section titled Financial Statements beginning on page 132. The net asset value/book value per Equity Share of Rs. 10 each was Rs. 49.85 as at March 31, 2007, as per restated consolidated financial statements of our Company included in this Draft Red Herring Prospectus. For further information, see the section titled Capital Structure beginning on page 24. 40

 Our Promoters, Directors and key managerial personnel are interested in our Company to the extent of remuneration and the Equity Shares held by them or their relatives and associates or held by the companies, firms and trusts in which they are interested as directors, member, partner and/or trustee and to the extent of the benefits arising out of such shareholding, if any, in our Company. For further details, see the sections titled Capital Structure, Our Promoters and Promoter Group and Our Management beginning on pages 24, 105 and 92, respectively. Other ventures promoted by our Promoters are interested to the extent of their shareholding in our Company. For details, see the section titled Capital Structure Certain of our Promoter Group entities are engaged in similar businesses as ours, resulting in a conflict of interest with respect to our business strategies. For further details, see the sections titled Risk Factors and Our Promoters and Promoter Group beginning on pages xii and 105, respectively. Except as disclosed in the section titled Capital Structure beginning on page 24, we have not issued any Equity Shares for consideration other than cash.

Industry
Industry : Group : BSE Code : NSE Code : Market Lot : Book Closure : Market Cap : Face Value :

Finance - General

532915

11/08/2010

Religare

RELIGARE

Rs. 6,558.77 Cr.

ISIN No : INE621H01010

Rs. 10.00

Registered & Corporate Office D3, P3B, District Centre, Saket, New Delhi, Delhi - 110017

Registrar & Share Transfer Agent D3, P3B, District Centre, Saket, New Delhi, Delhi - 110017

41

Tel : +91 11 39125000 Tel : +91 11 39125000 Fax : +91 11 39126050 Email : info@religare.in Website: www.religare.in Fax : +91 11 39126050 Email : info@religare.in

CHAPTER-III REVIEW OF LITERATURE

42

REVIEW OF LITERATURE
ONLINE TRADING
Before getting in to the online trading we should know some things about the internet, e-commerce and etc.

1.

Internet

Internet is a worldwide, self-governed network connecting several other smaller networks and millions of computers and persons, to mega sources of information. This technology shrinks vast distances, accelerating the pace of business reforms and revolutionizing the way companies are managed. It allows direct, ubiquitous links to anyone anywhere and anytime to build up interactive relationships. A combination of time and space, called the Internet promises to bring unprecedented changes in our lives and business. Internet or net is an inter-connection of computer communication networks spanning the entire globe, crossing all geographical boundaries. It has re-defined the methods of communication, work study, education, business, leisure, health, trade, banking, commerce and what not it is virtually changing every thing and we are living in dot.com age. Net being an interactive two way medium, through various websites, enables participation by individuals in business to business and business to consumer commerce, visit to shopping arcades, games, etc. in cyber space even the information can be copied, downloaded and retransmitted. 43

The use of Internet has grown 2000 percent in last decade and is currently growing at 10 percent per month. In India, growth of Internet is of recent times. It is expected to bring changes in every functional area of business activity including management and financial services. It offers stock trading at a lower cost. Internet can change the nature and capacity of stock broking business in India.

2. E-commerce Electronic commerce is associated with buying and selling over computer communication networks. It helps conduct traditional commerce through new way of transferring and processing of information. Information is electronically transferred from computer to computer in an automated way. E-commerce refers to the paperless exchange of business information using electronic data inter change, electronic technologies. It not only reduces manual processes and paper transactions but also helps organization move to a fully electronic environment and change the way they operated. PCs and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstations of individual office works or serves where large databases and information reside. Network connects both categories of computers; the various operating systems are the most basis program within a computer. It manages the resources of the computer system in a fair and efficient manner. Now we can enter in to the concept known as online trading. In the past, investors had no option but to contact their broker to get real time access to market data. The net brings data to the investor on-line and net broking enables him to trade on a click of mouse. Now information has become easily accessible to both retail as well as big investor. EVOLUTION OF BROKING IN INDIA: 44

The evolution of a broking in India can be categorized in three phases

Stockbrokers will offer on their sites features such as live portfolio manager, live quotes, market research and news, etc. to attract more investors. Brokers will offer online broking and relationship management by providing and offering analysis and information to investors during broking and nonbroking hours based on their profile and needs, i.e. customized services.

Brokers (now e-brokers) will offer value management or services like initial public offering online, on-line asset allocation, portfolio management, financial planning, tax planning, insurance services, etc. and enables the investors to take better and well considered decisions. The actual definition of Online Trading is as explained below: Online trading is a service offered on the internet for purchase and sale of shares. In the real world you place orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax). In online trading, you will access a stockbrokers website through your internet enabled PC and place orders through the brokers internet based trading engine. These orders are routed to the stock exchange without manual intervention and executed thereon in a matter of a few seconds.The net is used as a mode of trading in internet trading. Orders are communicated to the stock exchange through website.

In India: Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Under the ORS the client enters his requirements (security, quantity, price buy/sell) on brokers site. Objectives: Internet trading is expected to 45

Increase transparency in the markets, Enhance market quality through improved liquidity, by increasing quote continuity and market depth, Reduce settlement risks due to open trades, by elimination of mismatches, Provide management information system, Introduce flexibility in system, so as to handle growing volumes easily and to support nationwide expansion of market activity.

Besides, through internet trading three fundamental objectives of securities regulation can be easily achieved, these are:

Investor protection Creation of a fair and efficient market, and Reduction of the systematic risks.

Some of the brokers offering net trading include ICICI direct, kotakstreet, etc. Requirements for net trading: For investors: 1. Installation of a computer with required specification 2. Installation of a modem 3. Telephone connection 4. Registration for on-line trading with broker 5. A bank account 6. Depository account 7. Compliance with SEBI guidelines for net trading The following should be produced to get a demat account and online trading account: As identity proof & address proof any one of the following: 46

Voter ID card Driving license PAN card( in case of to trade more than 50000) Ration card Bank pass book Telephone bill First page of the bank pass book and last 6 months statement. Bank managers signature along with banks seal, manager registration code on photograph.

Other requirements, which are necessary

For stock brokers: 1. Permission from stock exchange for net trading 2. Net worth of Rs. 50 lac 3. Adequate back-up system 4. Secured and reliable software system 5. Adequate, experienced and trained staff 6. Communication of order (trade confirmation to investor by e-mail) 7. Use of authentication technologies 8. Issue of contract notes within 24 hours of the trade execution 9. Setting up a website. The net is used as a medium of trading in internet trading. Orders are communicated to the stock exchange through website. Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Under the Order Routing System the client enters his requirements (security, quantity, price, and buy/sell) in broker's site. They are checked electronically against the clients 47

account and routed electronically to the appropriate exchange for execution by the broker. The client receives a confirmation on execution of the order. The customer's portfolio and ledger accounts get updated to reflect the transaction. The user should have the user id and password to enter into the electronic ring. He should also have demat account and bank account. The system permits only a registered client to log in using user id and password. Order can be placed using place order window of the website. Procedure for net trading Step 1: Those investors, who are interested in doing the trading over internet system i.e. NEAT-IXS, should approach the brokers and get them self registered with the Stock Broker. Step 2: After registration, the broker will provide to them a Login name, Password and personal identification number (PIN). Step 3: Actual placement of an order. An order can then be placed by using the place order window as under: (a) First by entering the symbol and series of stock and other parameters like quantity and price of the scrip on the place order window. (b) Second, fill in the symbol, series and the default quantity. Step 4: It is the process of review. Thus, the investor has to review the order placed by clicking the review option. He may also re-set to clear the values. Step 5: After the review has been satisfactory, the order has to be sent by clicking on the send option. Step 6: The investor will receive an "Order Confirmation" message along with the order number and the value of the order. Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit, an appropriate message will appear at the bottom of the screen. At present, a time lag of about 10 seconds is there in executing the trade. Step 8: It is regarding charging payment, for which there are different mode. Some brokers will take some advance payment from the investor and will fix their trading 48

limits. When the trade is executed, the broker will ask the investor for transfer of funds to his account. Internet trading provides total transparency between a broker and an investor in the secondary market. In the open outcry system, only the broker knew the actually transacted price. Screen based trading provides more transparency. With online trading investors can see themselves the price at which the deal takes place. The time gap has narrowed in every stage of operation. Confirmation and execution of trade reaches the investor within the least possible time, mostly within 30 seconds. Instant feedback is available about the execution. Some of the websites also offer; News and research report BSE and NSE movements Stock analysis IPO and mutual fund centers

Step by step procedure in online trading: Following steps explain the step by step approach to on-line trading:

Log on to the stock broker's website Register as client/investor Fill the application form and client broker agreement form on the requisite value stamp paper Obtain user ID and pass word Log on to the broker's site using secure user ID and password Market watch page will show real time on-line market data Trade shares directly by entering the symbol or number of the security Brokers server will check your limit in the on-line account and demat account for the number of shares and execute the trade Order is executed instantly (10-30 seconds) and confirmation can be obtained. Confirmation is e-mailed to investor by broker Contract note is printed and mailed in 24 hours Settlement will take place automatically on the settlement day Demat account and the bank account will get debited and credited by electronic 49

means. ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS:

Limit / stop orders: orders that can be go unfilled, but there is an extra Charge for this leeway facility since one need to hold a price. Market orders: orders can be filled at unexpected prices, but this type is much more risky, since you have to buy stock at the given price. Cash account: where funds have to be available prior to placing the order. Margin account: where orders can be placed against stocks, to increase Purchasing power.

ADVANTAGES OF ONLINE TRADING:

Online trading has made it possible for anyone to have easy and efficient access to more reports and charts than it was previously possible if one went to any brokers' office. Thus we have access to a lot more information online.

Online trading has let room for smaller organizations to compete with multinational organizations since it is no longer a leg it issue. Being online does not identify the size of any particular organization, therefore, this additional power to the underdogs.

Online trading has allowed companies to locate themselves where they want as physical location is not an issue anymore. Companies can establish themselves according to their gains and losses, for instance where tax (sales and value added taxes) is best suited to them.

Online trading gives control to individuals and they can exercise it over accounts thus comprehend what is going on when they trade. It is like going back to school and re-educating oneself on how to trade online.

Individuals benefit by saving comparatively a lot more when trading online as the cost per trade is less. Individuals can invest in a variety of products, unlike earlier when people bought bonds, mutual funds, and stock for long-term basis and sat on them. Now they can 50

invest in stocks, stock and index options mutual funds, government, and even insurance. INVESTORS REASONS TO TRADE ONLINE:

They have control over their accounts, can make their own decisions and dont have to give reasons for their actions. They are independent.

They have a reason to participate in the market and learn about it. It is interesting, cheap, easy, fast, and convenient. A lot of information is online so they can keep up-to-date with what is happening in the trading world.

It will give investors a greater choice and better realization. The immediate impact will be competition and benefits will accrue to the investors.

It will lead to brokerage commissions going down and brokers striving to increase business afloat.

Investors will now go to place, which have better trading conditions and also members to offer them better facilities.

They have access to numerous tools to invest, and can create their own portfolio.

HERE ARE THE POSSIBLE DISADVANTAGES:

When network crashes, there will be problems and delays due to a large influx of rapid online trading criteria.

Individuals are restricted to first-hand financial guidance. This simply means that the individual is himself / herself alone to.

51

A tax (sales tax and value added tax) evaluation becomes an issue, especially when you are trading internationally.

One has no idea with whom he is dealing with on the other end. According to a study conducted by Mary Rowland, careful investor: is online trading bad for your portfolio, the more one trades the less returns one gets, meaning that an addicted trader gets, carried away online and begins to trade for too much which causes losses for him / her.

Individuals think that they are trading with the market directly and know what they are doing, but the truth is that even though technology has taken over, the basic rules of trading are the same. It seems that the middleman has been removed, but that is not so. When the individuals click on the mouse, his trade goes through a broker. The commissions online pertain to the intermediary.

There is a need for more effective communication links over the Internet and the ability of the server to deal with a large volume of visitors.

STOCK EXCHANGES IN INDIA

Stock exchanges are the perfect type of market for securities whether of government and semi-govt bodies or other public bodies as also for shares and debentures issued by the joint-stock companies. In the stock market, purchases and sales of shares are affected in conditions of free competition. Government securities are traded outside the trading ring in the form of over the counter sales or purchase. The bargains that are struck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basic laws of supply and demand. Definition of a stock exchange:

52

Stock exchange means any body or individuals whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. The securities include: Shares of public company. Government securities. Bonds History of Stock Exchanges: The only stock exchanges operating in the 19th century were those of Mumbai setup in 1875 and Ahmedabad set up in 1894. These were organized as voluntary non-profitmarking associations of brokers to regulate and protect their interests. Before the control on securities under the constitution in 1950, it was a state subject and the Bombay securities contracts (control) act of 1925 used to regulate trading in securities. Under this act, the Mumbai stock exchange was recognized in 1927 and Ahmedabad in 1937. During the war boom, a number of stock exchanges were organized. Soon after it became a central subject, central legislation was proposed and a committee headed by A.D.Gorwala went into the bill for securities regulation. On the basis of the committees recommendations and public discussion, the securities contract (regulation) act became law in 1956. Functions of Stock Exchanges: Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed companies, they help trading and raise funds from the market. Over the hundred and twenty years during which the stock exchanges have existed in this country and through their medium, the central and state government have raised crores of rupees by floating public loans. Municipal corporations, trust and local bodies have obtained from the public their financial requirements, and industry, trade and commerce- the backbone of the countrys economy-have secured capital of crores or rupees through the issue of stocks, shares and debentures for financing their day-to-day activities, organizing new 53

ventures and completing projects of expansion, diversification and modernization. By obtaining the listing and trading facilities, public investment is increased and companies were able to raise more funds. The quoted companies with wide public interest have enjoyed some benefits and assets valuation has become easier for tax and other purposes.

Various Stock Exchanges in India: At present there are 23 stock exchanges recognized under the securities contracts (regulation), Act, 1956. Those are: Ahmedabad Stock Exchange Association Ltd. Bangalore Stock Exchange Bhubaneshwar Stock Exchange Association Calcutta Stock Exchange Cochin Stock Exchange Ltd. Coimbatore Stock Exchange Delhi Stock Exchange Association Guwahati Stock Exchange Ltd Hyderabad Stock Exchange Ltd.(Presently not working) Jaipur Stock Exchange Ltd 54

Kanara Stock Exchange Ltd Ludhiana Stock Exchange Association Ltd Madras Stock Exchange Madhya Pradesh Stock Exchange Ltd. Magadh Stock Exchange Limited Meerut Stock Exchange Ltd. Mumbai Stock Exchange National Stock Exchange of India OTC Exchange of India Pune Stock Exchange Ltd. Saurashtra Kutch Stock Exchange Ltd. Uttar Pradesh Stock Exchange Association Vadodara Stock Exchange Ltd. Out of these major stock exchanges were: NSE The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) 55

to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a taxpaying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000 NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of:

Establishing a nation-wide trading facility for equities and debt instruments. Ensuring equal access to investors all over the country through an appropriate communication network. Providing a fair, efficient and transparent securities market to investors using electronic trading systems. Enabling shorter settlement cycles and book entry settlements systems, and Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities. BSE The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock 56

Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act 1956.The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmers and making available to them necessary informative inputs. A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. The Executive Director as the Chief Executive Officer is responsible for the day-today administration of the Exchange and the Chief Operating Officer and other Heads of Department assist him. The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to constitution of the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting of three elected directors, three SEBI nominees or public representatives, Executive Director & CEO and Chief Operating Officer has been constituted. The Committee considers judicial & quasi matters in which the Governing Board has powers as an Appellate Authority, matters regarding annulment of transactions, admission, continuance and suspension of member-brokers, declaration of a member-broker as defaulter, norms, procedures and other matters relating to arbitration, fees, deposits, margins and other monies payable by the member-brokers to the Exchange, etc. REGULATORY FRAME WORK OF STOCK EXCHANGE

57

A comprehensive legal framework was provided by the Securities Contract Regulation Act, 1956 and Securities Exchange Board of India 1952. Three tier regulatory structure comprising Ministry of finance The Securities And Exchange Board of India Governing body Members of the stock exchange: The securities contract regulation act 1956 has provided uniform regulation for the admission of members in the stock exchanges. The qualifications for becoming a member of a recognized stock exchange are given below:

The minimum age prescribed for the members is 21 years. He should be an Indian citizen. He should be neither a bankrupt nor compound with the creditors. He should not be convicted for fraud or dishonesty. He should not be engaged in any other business connected with a company. He should not be a defaulter of any other stock exchange. The minimum required education is a pass in 12th standard examination.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) The securities and exchange board of India was constituted in 1988 under a resolution of government of India. It was later made statutory body by the SEBI act 1992.according to this act, the SEBI shall constitute of a chairman and four other members appointed by the central government. With the coming into effect of the securities and exchange board of India act, 1992 some of the powers and functions exercised by the central government, in respect of the regulation of stock exchange were transferred to the SEBI. OBJECTIVES AND FUNCTIONS OF SEBI

To protect the interest of investors in securities. Regulating the business in stock exchanges and any other securities market.

58

Registering and regulating the working of intermediaries associated with securities market as well as working of mutual funds. Promoting and regulating self-regulatory organizations. Prohibiting insider trading in securities. Regulating substantial acquisition of shares and take over of companies. Performing such functions and exercising such powers under the provisions of capital issues (control) act, 1947and the securities to it by the central government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

Board of Directors of Stock Exchange has to be reconstituted so as to include non-members, public representatives and government representatives to the extent of 50% of total number of members.

Capital adequacy norms have been laid down for the members of various stock exchanges depending upon their turnover of trade and other factors. All recognized stock exchanges will have to inform about transactions within 24 hrs.

TYPES OF ORDERS: Buy and sell orders placed with members of the stock exchange by the investors. The orders are of different types. Limit orders: Orders are limited by a fixed price. E.g. buy Reliance Petroleum at Rs.50.Here, the order has clearly indicated the price at which it has to be bought and the investor is not willing to give more than Rs.50. Best rate order: Here, the buyer or seller gives the freedom to the broker to execute the order at the best possible rate quoted on the particular date for buying. It may be lowest rate for buying and highest rate for selling. Discretionary order: The investor gives the range of price for purchase and sale. The broker can use his discretion to buy within the specified limit. Generally the

59

approximation price is fixed. The order stands as this buy BRC 100 shares around Rs.40. Stop loss order: The orders are given to limit the loss due to unfavorable price movement in the market. A particular limit is given for waiting. If the price falls below the limit, the broker is authorized to sell the shares to prevent further loss. E.g. Sell BRC limited at Rs.24, stop loss at Rs.22. Buying and selling shares: To buy and sell the shares the investor has to locate register broker or sub broker who render prompt and efficient service to him. The order to buy or sell specifying the number of shares of the company of investors choice is placed with the broker. The order may be of any type. After receiving the order the broker tries to execute the order in his computer terminal. Once matching order is found, the order is executed. The broker then delivers the contract note to the investor. It gives the details regarding the name of the company, number of shares bought, price, brokerage, and the date of delivery of share. In this physical trading form, once the broker gets the share certificate through the clearing houses he delivers the share certificate along with transfer deed to the investor. The investor has to fill the transfer deed and stamp it. The stamp duty is one of the percentage considerations, the investor should lodge the share certificate and transfer deed to the register or transfer agent of the company. If it is bought in the DEMAT form, the broker has to give a matching instruction to his depository participant to transfer shares bought to the investors account. The investor should be account holder in any of the depository participant. In the case of sale of shares on receiving payment from the purchasing broker, the broker effects the payment to the investor. Share groups: The scrips traded on the BSE have been classified into A,B1,B2,C,F and Z groups. The A group represents those, which are in the carry forward system. The F group represents the debt market segment (fixed income securities). The Z group scrips are of the blacklisted companies. The C group covers the odd lot securities in A, B1&B2 groups. ROLLING SETTLEMENT SYSTEM:

60

Under rolling settlement system, the settlement takes place n days (usually 1, 2, 3 or 5days) after the trading day. The shares bought and sold are paid in for n days after the trading day of the particular transaction. Share settlement is likely to be completed much sooner after the transaction than under the fixed settlement system. The rolling settlement system is noted by T+N i.e. the settlement period is n days after the trading day. A rolling period which offers a large number of days negates the advantages of the system. Generally longer settlement periods are shortened gradually. SEBI made RS compulsory for trading in 10 securities selected on the basis of the criteria that they were in compulsory demat list and had daily turnover of about Rs.1 crore or more. Then it was extended to A stocks in Modified Carry Forward Scheme, Automated Lending and Borrowing Mechanism (ALBM) and Borrowing and lending Securities Scheme (BELSS) with effect from Dec 31, 2001. SEBI has introduced T+5 rolling settlement in equity market from July 2001 and subsequently shortened the cycle to T+3 from April 2002. After the T+3 rolling settlement experience it was further reduced to T+2 to reduce the risk in the market and to protect the interest of the investors from 1st April 2003. Activities on T+1: conformation of the institutional trades by the custodian is sent to the stock exchange by 11.00 am. A provision of an exception window would be available for late confirmation. The time limit and the additional changes for the exception window are dedicated by the exchange. The exchanges/clearing house/ clearing corporation would process and download the obligation files to the brokers terminals late by 1.30 p.m on T+1. Depository participants accept the instructions for pay in securities by investors in physical form upto 4 p.m and in electronic form upto 6 p.m. the depositories accept from other DPs till 8p.m for same day processing. Activities on T+2: The depository permits the download of the paying in files of securities and funds till 10.30 a.m on T+2 from the brokers pool accounts. The depository processes the pay in requests and transfers the consolidated pay in files to clearing House/clearing Corporation by 11.00am/on T+2. The exchange/clearing house/clearing corporation executes the pay-out of securities and funds latest by 1.30 61

p.m on T+2 to the depositories and clearing banks. In the demat mode net basis settlement is allowed. The buy and sale positions in the same scrip can be settled and net quantity has to be settled.

CHAPTER-IV DATA ANALYSES AND INTERPRETATION

62

DATA ANALYSIS&INTERPRETATION
OUTCRY SYSTEM The broker has to buy or sell securities for which he has received the orders. For this, the broker or his authorized representatives goes to the stock exchange. This method is called the open outcry system. Basically the brokers shout while buying or selling the securities. The floor of the stock exchange is divided into a number of markets also known as post pit or wing based on particular securities dealt there. In the post pit or wing, the broker using open outcry method makes an offer or bid price. For making the necessary bargain, he quotes his purchase or sale price, also known as offer or bid price. The dealer, to whom the price is quoted, quotes his own price when the quotation of the dealer suits the broker, he may loose the bargain. If he is not satisfied with the quote price, he may turn to some other dealer. On the close of the bargain, the dealer as well as the broker makes a brief note of the particulars of the deal. Such notes are made on some pad and on it the number of shares, the price agreed upon, the name of the party, what membership number etc., are noted.

DISADVANTAGES OF OUTCRY SYSTEM:

It lacks transparency. The scope of manipulation, speculation and mal practice is more. Signal were more important in the outcry system any member who could not interpret the buy/sell signal correctly often landed himself in disaster situation. In audibility was another disadvantage of the outcry system. 63

Due to the above disadvantages of the outcry system the Networth Stock Broking Ltd has shifted from outcry system to online trading from February 29th 1997.

MANUAL TRADING Trading procedure before introduction of online trading Trading on stock exchanges is officially done in the trading ring. In the trading ring the space is provided for specified and non-specified sections, the members and their authorized assistants have to wear a badge or carry with them an identity card given by the exchange to enter the trading ring. They carry a sauda book or confirmation memos, duly authorized by the exchange and carry a pen with them. The stock exchanges operations are floor level are technical in nature .Non-members are not permitted to enter in to stock market. Hence various stages have to be completed in executing a transaction at a stock exchange .The steps involved in this method of trading have given below: Choice of broker: The prospective investor who wants to buy shares or the investors, who wants to sell shares and transact business, have to act through member brokers only. They can also appoint their bankers for this purpose as per the present regulations. Placement of order: The next step is the placing order for the purchase or sale of securities with a broker. The order is usually placed by telegram, telephone, letter, fax etc or in person. To avoid delay, it is placed generally over the phone. The orders may take any one of the forms such as At Best Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary Order, and Open Order, Stop Loss Order.

64

Execution of order or contract: Orders are executed in the trading ring of the BSE. This works from 11:30 to 2.30 P.M on all working days Monday to Friday, and a special one-hour session on Saturday. The members or the authorized assistants have to wear a badge given by the exchange to enter into the trading ring. They carry a sauda Block Book or conformation memos, which are duly authorized by the exchange when the deal is struck; both broker and jobber make a note in their sauda block books. From the sauda book, the contract notes are drawn up and posted to the client. A contract note is written agreement between the broker and his clients for the transaction executed. Drawing Up and Bills: Both sale and purchase bills are prepared along with the contract note and it is posted on the same day or the next day. This in a purchase transaction, once the shares are delivered to the client effects payment for the purchases and pays the stamp fees for transfer, a bill is made out giving the total cost of purchase, including other expenses incurred by the broker in the price itself. With this, the process ends. DEMATERLIZATION: Dematerialization is the process by which physical certificates of an investor are converted to an equipment number of securities in electronic from and credited in the investor account with his DP. In order to dematerialize the certificates, an investor has to first open an account with a DP and then request for the Dematerialization Request Form, which is DP and submit the same along with the share certificates. The investor has to ensure that he marks Submitted for Dematerialization on the certificates before the shares are handed over to the DP for demat. Dematerialization can only be done to those certificates, which are already registered in your name and belong to the list of securities admitted for Dematerialization at NSDL. Most of the active scrips in the market including all the scrips of S&P CNX NIFTY and BSE SENSEX have already joined NSDL. This list is steadily increasing. 65

Briefly, the process is as follows: after completion of transfer, the investor gets the option to dematerialize such shares. Investors willing to exercise this option sends a Demat request along with the option letter sent by the company to his DP. The company or its R&T agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit. Dematerialized shares do not have any distinctive or certificate numbers. These shares are fungible-which means that 100 shares of a security are the same as any other 100 shares of the security. Odd lot shares certificates can also be dematerialized. Dematerialization normally takes about fifteen to thirty days. To get back dematerialized securities in the physical form, request DP for Rematerialization of the same is made. Rematerialization is the process of converting electronic shares in to physical shares. Benefits of Demat:

It reduces the risk of bad deliveries, in turn saving the cost and wastage of time associated with follow up for rectification. This has lead to reduction in brokerage to the extent of 0.5% by quite a few brokerage firms.

In case of transfer of electronic shares, you save 0.5% in stamp duty. You avoid the cost of courier / notarization. You can receive your bonuses and rights issues into your DA as a direct credit, this eliminating risk of loss in transit. You can also expect a lower interest charge for loans taken against Demat shares as compared to loans against physical shares. There is no lost in transit, thus the overheads of getting a duplicate copy in such circumstances is reduced. RBI has also reduced the minimum margin to 25% for loans against dematerialized securities as against 50% for loans against physical securities.

TRADING AND SETTLEMENT AT SHARE KHAN 66

The NSE first introduced online trading in India. The Online trading system imparted a greater level of transparency and investors preferred exchanges that offered Online trading because of the following factors:

The ease of operation from the view of the both members and the investors. Increase in the confidence of the investors because of higher level of transparency. Facilities better monitoring of the market by the exchange. The best price achieved in buying and selling.

All these resulted in ever-increasing volumes on the exchanges offering the online trading. TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING Share Khan deals in buying and selling equity shares and debentures on the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE) and the Over-TheCounter Exchange of India (OTCEI).

Share Khan is provided with a computer and required software from their registered stock exchanges. These centers are called Broker Work Stations. These computers are connected to the server at the stock exchanges through cable. The member or broker sitting in his office can send the quotations, orders, negotiations, deals, in-house deals, auction orders etc., through the computer. The Central trading system (CTS) will accept these orders and send it for match. If there is any mistake in the order, CTS will reject the orders and send respective error message to the member concern. All these operations are in built. The main objective of CTS is to monitor the Stock Exchanges operations.

67

Order placed by the broker will be sent for a match and if the match is found suitable, the transaction will be executed. Otherwise, the order will be deleted automatically after completion of trading time. The carry forward transactions (Good Till cancellation) are forwarded to the next day. Even if the match is not found with in the prescribed period, the order will not cancel.

TRADING SESSION Trading timings are from 9:55 A.M. to 3:30 P.M. on all 5 days of the trading period. Monday to Friday is the trading period in all the stock exchanges. SEBI has stipulated that all the stock exchanges in India must have same trading period. BROKER WORK STATION: At the broker workstation the BBOs, the last traded price, the days opening price, previous days closing price, highest and lowest prices, the weighted average price and total trade value will be available continuously, as the BBO for each scrip. Other information will be available on query from the BWS. These include top gainers /losers of the day. Trader-wise, scrip wise net position, client wise net position, top scrip by the volume/value, market summary etc. Brokers are also provided with information relating to the companies in the matter of Book closure, Dividend declarations, resolutions in board meeting, information about liquidated companies, company report etc. ORDERS: Orders can be done one at a time or in a batch mode. The submitted order will be accepted at the CTS, after validation if it finds any invalid reason the order is return back to the BWS, with the appropriate error message. If Accepted at the CTS it will be added to the local pending order book.

68

 The order will then be taken up for matching, if it is a buy order the system tries to find a sell order, which fits the requirement of the buy order, when such match is found a trade gets executed. Each trade involves two brokers and respective traders who sent the order. Both these traders are informed of the trade being executed at their respective BWS. At the BWS the trade is added to the local trade book. Orders sent by the brokers are two types: Good for the day (GFD) Good till cancellation(GTC)

Good for the day: This is also called as market order. For an order if the member selects the deal as good for the day, the order is treated as market order. If a best bid founds match with best order then the transaction gets executed. If the match is not found then after trade time the order gets cancelled that day. Next day he has to place a new order. For example if a member wants to purchase 1000 shares of Wipro info @ 400 each through Good for Day order. If the correct match is not found, order gets cancelled automatically and new quotation has to be placed the next day. Good till cancellation: This order is forwarded to the last trading day of that settlement period. This is also called as carry forward order like GFD; broker has to select the option of GTC for the order. If the order finds match with in the trading settlement period, the order is executed. If no match is found, the order is cancelled on the last day of settlement period. This order is not carried forward to the next settlement period. For example, if a member a place purchase order of 500 shares of SBI @ 690 per share and selects the order as GTC and place an order. If the match is not found on that day it will be forwarded to the next day until trading settlement period day. 69

SETTLEMENT OF TRANSACTIONS: Clearing of transaction in the form of shares and cash is called settlement. Buyers will take the delivery of shares through the depository participants like Networth Stock Broking Ltd and others. Finally, the settlement is made by means of delivering the share certificates along with the transfer deeds. The transferor (or the seller) duly signed transfer deed. It bears a stamp of the selling broker. The buyer then fills up the certificates fills up the particulars in the transfer deed. Settlement can be done in the following way. Spot settlement: under this method, the delivery of securities and payment for them are affected on the day of the contract itself. Rolling settlement: Under this rolling settlement the trading is on T+2,basis i.e. if Monday is trading day then Wednesday is the paying day . In case on non-delivery, the securities will go for auction.

DETAILS OF PROCEDURES: Delivery in : The members who are in pay-out position delivers share certificates in to clearing house within the settlement period along with the delivery Chelan filled in with the details of share certificates which has folio numbers or distinctive numbers etc. Delivery out: The buyer of shares who made pay in position will take delivery of shares from the clearing house. Pay-in: The member who is in paying position shall pay for value of shares with in the trading settlement period (T+2). 70

Payout: The cheques paid in the clearinghouse will be paid to members who are in paying position. All disputes arising between members regarding non-deliveries, non-payments, good and bad deliveries pertaining to the settlement will be settled by the settlement committee of the exchange. The given flow chart clearly explains the process of online trading:

71

i n

B
T h e

u y

t r a n s c
w i l l c

a t i o S n e l l
h e T

t r a n s c

a t i o

s y s t e m l i m i t s

h e s y s t e m w i l l c dk p b ua cy ci n o g u n t q u a

r d e

r s

a c

p t e

d
c o

R m

e j e c t e d m u n i c

o r d e r s o w r do a t e d a l o n g

ue l r d s b w i t h

ae c
r e

y o

u r

r d

e r

i s

t r a n

s m

i t t e d

t o

p w

e n d i n g b u y o rn d ee xr s e c u t i o p n e n d i n g s e l l o u l d b e d i s op fl a y y oe du r o r d w e r o s u l d b e d i s o n y o u r s c r e e n o n y o u r s c r

y p

u e n

m a y y e o d u i t m y a o y u dr e l e t e y o u d i n g y oo ur d r e p r e n d i n g o r d p e er n

m d

a y i n g

e o

i t y o r d e r

y r o u m a y p e n d i n g

f l a s h e d o n s c r e e n i m m o n e x e c u t i

cy ed oe

oo nu fr o r m a t i o c no c n o t t o b ey o s d b i a e t e s l ey n d -n m a i l a n d m o or b h

rua lc t n o t e ue nr t t o b y i al e n d d e l i v

STOCK TRADES The stock order entry screen, located at the top of the platform, allows you to buy, sell, and sell short. The Save to Basket button can save any order that you may want to place later.

72

To Place An Order 1. Click the Equities tab at the top of the page. The screen will show "EQUITIES" at the top right-hand corner to let you know that you are in stock-trading mode. 2. Select Buy, Sell, or Short from the drop-down menu below SIDE. 3. Enter the number of shares in Qty box.

4 Enter the symbol m Symbol box. 5. For a market order, click Market. For a limit order, enter the limit price and click the Limit button. For a Good Till Canceled order, click GTC. 6. Click Submit to send the order, 7. If it is a GTC order, select 15 Days or 30 Days for the GTC order. Click OK to send the order. If you do not want to send the order or if you want to make changes, click Cancel.

8. A window will appear (as the picture) asking you to confirm the order. If all details are correct, click OK to send the order. If you do not want to send the order, or if you want to make changes, click Cancel. 73

To Save an Order into the Basket

You can enter an order and click the shopping cart icon to save it. Click Basket tab to see the trades you have saved. Orders saved to the Basket are not sent to the market until you decide to do so. This is not the same as placing Good Till Canceled or other open orders. To Place an Order from the Watch List You can also place an order from your Watch List

74

OPTION QUOTES AND OPTION TRADES To Get Option Quotes 1. Click the Option Chain tab to open the option quote screen. 2. Enter the stock symbol in the Equity Symbol field. 3. Select the strike price from By Strike. 4. Select the expired month from the By Exp. Month. 5. Select the range of option quotes you would like to view from Calls, Puts, or All 6. Click Go. The screen will list all the option symbols and current Market prices associated with your criteria. 7. To Place an Option Trade 1. Click the Option button at the top left hand corner to open the option order

entry screen. OPTION will appear at the upper right-hand corner to let you know that you are in Option mode. 1. Follow the above steps to open the option quote screen and get the option symbol. 2. In the Option Chain quote screen, double click the symbol, which you would like to place an order. 3. The option order entry screen at the top will show the real-time quote of the option. 4. Select: Buy to Open, Sell to Open, Buy to Close, or Sell to Close from the dropdown menu below SIDE. 5. Enter the number of contracts in the # of Contracts field. 6. Click Market, or enter a limit price and click Lim (Limit). For a Good Till Canceled order, click GTC. 7. Click Submit 75

8.

If it is a GTC order, select 15 Days or 30 Days for the GTC order. Click OK to

send the order. If you do not want to send the order or if you want to make changes, click Cancel.

9. A window will appear (as the picture) asking you to confirm your order. If the information is correct, click OK to send the order. If you click Cancel, the order will not be sent to market. LEVEL I QUOTE The Level I real-time streaming quote updates automatically every five seconds and continually throughout market hours. To Get Quotes 1. Enter a symbol in the field located on the left-hand side. You can also click the small arrow at the right to select a symbol you previously entered in the same day. 2. Press the Enter key on your keyboard or select Get Quotes (under the Select Action drop-down menu) to display real-time streaming quotes. a) Detailed Quotes: Detailed quote, intra-day charts, and the latest news. b)News: Recent News. 76

c) Charts: Six different chart types - intra-day, one month, three months, six months, one year and Interactive. d) SEC Filings: The company's reports to the SEC. e) Profile A description of the company and fundamental information about its stock. f) Historical: The open, high, low and closing prices, change and volume of any given stock in the past six years. Bid: Highest price at which someone currently offers to buy the stock. Bid Size: Number of shares, in hundreds, of the offer at the current Bid. Change: The difference between the price of the Last trade and the stock's previous Close price. % Change: The percent difference between the price of the Last trade and the stock's previous Close price. Close: The last trade price on the previous trading day. High: Highest trade price of the stock during the current trade date. Last: Most recent trade price of the stock during the current trade day. Low: 77

Lowest trade price of the stock during the current trade day. Open: The opening price for the stock on the current trade date. Tick: Located to the right of the symbol. Indicates whether the current Bid is higher or lower than the previous Bid. Current Bid is higher: Tick will show an arrow pointing up. Current Bid is lower: Tick will show an arrow pointing down. Current Bid is same: Tick will show "UC" (unchanged). Volume: Total number of shares of the stock traded during the current trade date Close: The last trade price on the previous trading day. High: Highest trade price of the stock during the current trade date. Last: Most recent trade price of the stock during the current trade day. Low: Lowest trade price of the stock during the current trade day. Open: The opening price for the stock on the current trade date. Tick: Located to the right of the symbol. Indicates whether the current Bid is higher or lower than the previous Bid. Current Bid is higher: Tick will show an arrow pointing up. Current Bid is lower: Tick will show an arrow pointing down. 78

Current Bid is same: Tick will show "UC" (unchanged). Volume: Total number of shares of the stock traded during the current trade date

79

ACCOUNT SCREEN To View Account Information 1. Click the Accounts tab to see your account information. To Switch to another Account 2. Click the Accounts tab to open the Account screen. 3. Click Change Account button. 4. Select the new account number.

80

ORDER SCREEN To View an Order You Placed 1. Click the Orders tab. The system will show all intra-day (same day) 2. Trades and their current status, which including pending, canceled,

filled. To View Detailed Log for a Specific Order 1. Open the Order screen by following the above steps. 2. Click order sequence number in the UOI field. 3. Click TRANSACTIONS button.

1. A detailed order log will be displayed in a pop-out window. 2. Click OK to close the window.

To Cancel an Open Order 1. Open the Order screen by following the above steps. 2. To cancel one open order, select it and click Cancel.

81

3.

To cancel all open orders, click Cancel All.

To Export Order Records to an Excel File 1. In the Order screen, click Import to Excel at the bottom. 2. Choose the location on your computer where you want to save the file and click Save. BASKET TRADING

You can fill your basket with orders in advance, and place them later with just one click. To Set Up Your Basket

1. Click the Basket tab to open the Basket window. 2. Select a basket from the drop-down menu at left. 3. To re-name the basket, click Rename Cart, type a new name into the popup window, and click OK.

82

To Enter Orders Directly into the Basket 1. Click the Basket tab to open the Basket window. 2. Select a basket from the drop-down menu at left. 3. Click New Row at left to add stocks to the basket. OK. 4. Double click the empty field under Action and select your action: Buy, Sell or Short 5. Double click on the empty field below Qty until it changes to written mode. Enter the number of shares you would like to trade.

6. Double click on the empty field under Symbol until it changes to written mode. Enter the stock symbol. 7. Double click on the empty field under Price. Enter a price for a limit order, or select Mkt for a market order. 8. Double click on the empty field under Account. Choose the account number from the drop-down menu. 83

To Save an Order to a Basket from the Order Entry Screen You can save an order to a basket from the order entry screen and send the order to market later. 1. In the Order screen, enter all the required information about the order. 2. Click the shopping cart icon. 3. From the drop-down menu, select the basket in which you want to save the order. Click OK to save, or Cancel to not save the order into the basket.

Remove an Order from the Basket 1. Click the Basket tab to see the Basket screen, and select one of the baskets from the drop-down menu. 2. Select the order you want to remove. 3. Click Remove at right. To Get Quotes for Stocks in the Basket 1. Click the Basket tab to see the Basket screen, and select one of the baskets from the drop-down menu.

84

2. Select the order for which you would like to see a quote.

To Execute an Order in the Basket 1. Click the Basket tab to see the Basket screen, and select one of the baskets from the drop-down menu. 2. To execute all orders listed in the basket, click Execute AH. 3. To execute only one order, select the order and then click Execute. When you Execute trade(s) in the Basket, the Basket Order(s) will still display in the basket until you remove the order(s).

KEYS USED FOR TRADING Fl - BUY

85

 F2 F3 F6 F7 F8

- SELL - PENDING ORDERS (BUYING & SELLING) - MARKET DEBTS (COMPANY ENQUIRY) - ARBITRAGE ORDERS - HOW MANY TRADING HAS BEEN DONE

SHIFT+F8 - NET POSITION OF THE COMPANY'S SHARES CTRL+F8 - SETTLEMENT OF NET POSITION FOR EXPOSURE SHIFT+F9 - NEWS F ll F12 - ADDING A NEW COMPANY IN TO THE N/W - TEMPORARY LOCKING OF WINDOWS

86

TECHNICAL ANALYSIS
Company :ICICI BANK LTD. 532174 Period: 14-Dec-2012 to 25-Jan-2013

Date

Open

High

Low

Close

WAP

No. of Shares

No. of Total Trades Turnover 14,23,91,623 21,66,16,452 23,43,92,246 27,70,00,479 11,30,96,861 44,99,93,041 18,69,08,337 21,58,72,019 45,53,09,956 49,36,91,875 14,46,13,370 18,86,76,187 87,73,03,503 12,34,29,097 17,21,10,912 19,13,99,219 12,45,17,990 20,78,92,669 17,94,90,176 10,07,42,769 14,96,55,940 18,80,86,463 18,34,51,404 14,26,28,165

25/01/13 1,167.00 1,180.65 1,164.25 1,172.75 1,173.79 1,21,309 3,717 24/01/13 1,178.10 1,186.55 1,159.40 1,163.85 1,172.31 1,84,778 5,295 23/01/13 1,178.00 1,190.90 1,161.45 1,180.50 1,170.45 2,00,258 4,537 22/01/13 1,177.70 1,194.50 1,164.00 1,170.60 1,185.08 2,33,739 5,534 21/01/13 1,178.00 1,181.00 1,165.10 1,176.50 1,173.58 96,369 3,303 18/01/13 1,168.90 1,185.00 1,166.00 1,175.20 1,177.92 3,82,025 8,536 17/01/13 1,179.00 1,186.60 1,158.80 1,162.65 1,171.84 1,59,500 6,043 16/01/13 1,200.00 1,200.05 1,175.20 1,179.05 1,189.34 1,81,506 6,244 15/01/13 1,184.80 1,209.70 1,174.95 1,202.85 1,193.55 3,81,474 9,401 14/01/13 1,160.00 1,191.95 1,160.00 1,184.70 1,184.40 4,16,828 6,721 11/01/13 1,181.00 1,184.00 1,161.10 1,165.30 1,168.69 1,23,740 4,060 10/01/13 1,185.00 1,187.80 1,161.50 1,179.15 1,173.11 1,60,834 6,038 9/01/13 8/01/13 7/01/13 4/01/13 3/01/13 2/01/13 1/01/13 1,178.00 1,188.00 1,173.55 1,179.90 1,180.71 7,43,030 4,388 1,179.00 1,182.15 1,170.10 1,179.30 1,176.55 1,04,908 3,466 1,185.20 1,188.00 1,177.10 1,181.60 1,182.00 1,45,610 5,835 1,168.00 1,184.75 1,164.45 1,182.20 1,176.63 1,62,667 5,198 1,177.05 1,178.60 1,165.10 1,172.00 1,170.53 1,06,377 3,616 1,170.00 1,176.00 1,165.50 1,172.95 1,171.16 1,77,510 5,864 1,147.00 1,162.00 1,143.05 1,159.15 1,153.14 1,55,653 6,084 2,768

31/12/12 1,140.00 1,143.80 1,134.00 1,137.30 1,138.32 88,501

28/12/12 1,140.00 1,147.00 1,129.30 1,142.25 1,137.62 1,31,552 3,892 27/12/12 1,152.80 1,154.00 1,133.30 1,137.45 1,142.72 1,64,595 5,093 26/12/12 1,123.60 1,149.80 1,121.50 1,147.95 1,140.87 1,60,800 4,987 24/12/12 1,124.00 1,129.40 1,113.50 1,121.25 1,120.44 1,27,297 4,850

87

21/12/12 1,135.00 1,138.00 1,119.30 1,122.70 1,130.73 1,15,587 4,057 20/12/12 1,144.00 1,144.55 1,129.40 1,138.15 1,138.45 1,27,908 4,576 19/12/12 1,154.00 1,159.00 1,132.65 1,138.50 1,141.25 1,50,856 5,219 18/12/12 1,148.00 1,153.05 1,117.30 1,148.75 1,140.81 3,79,488 9,414 17/12/12 1,131.55 1,149.00 1,131.50 1,143.60 1,145.26 1,62,265 4,601 14/12/12 1,115.00 1,139.00 1,113.55 1,136.30 1,124.13 5,34,353 7,479

13,06,97,338 14,56,17,073 17,21,64,396 43,29,21,934 18,58,35,507 60,06,81,427

INTERPRETATION:
On open value has increased from 1115.00 to 1200.00. Then compare to higher value of EPS 1129.40 to 1209.70. Then coming to lower price from 1113.50 to 1177.10. Wholly the conclusion is 1121.25 to 1202.85 increased. Then coming to the volume on the same dates or days volumes are increased. Because totally this session ICICI BANK. EPS value is increased i.e. percentage of 12.57%.

Company :HOUSING DEVELOPMENT FINANCE CORP.LTD. 500010 88

Period: 14-Dec-2012 to 25-Jan-2013

Date

Open

High

Low

Close

WAP

No. of Shares

No. of Total Turnover Trades 2,113 5,39,81,150 8,53,25,169 15,07,08,476 8,65,15,932 15,60,38,643 6,90,44,320 11,62,75,234 6,91,06,147 4,84,34,135 5,46,61,173 8,22,09,351 5,04,72,698 9,10,24,057 8,05,54,702 9,23,24,031 11,88,57,631 2,98,48,209 22,34,94,891 5,78,69,340 7,02,50,978 5,39,78,628 6,59,84,729 4,33,88,675 6,91,09,002 4,38,21,756 10,63,79,697 8,36,41,901 7,30,28,973

25/01/13 805.15 811.00 795.25 805.10 802.22 67,290

24/01/13 823.90 823.90 804.90 807.35 811.72 1,05,117 1,425 23/01/13 819.90 823.95 814.40 820.75 821.25 1,83,512 2,313 22/01/13 811.00 816.50 806.55 813.30 811.88 1,06,562 2,098 21/01/13 825.00 828.05 808.00 814.50 816.47 1,91,114 5,341 18/01/13 808.30 825.00 808.30 822.35 820.11 84,189 16/01/13 827.75 831.85 813.00 816.95 820.53 84,221 15/01/13 834.50 834.50 818.55 823.55 822.97 58,853 14/01/13 810.00 832.70 805.05 825.20 816.78 66,923 10/01/13 832.75 835.00 821.10 825.30 827.26 61,012 9/01/13 8/01/13 7/01/13 4/01/13 3/01/13 2/01/13 1/01/13 821.00 842.95 821.00 839.65 829.96 97,059 2,372 1,858 1,412 2,501 1,741 2,164 17/01/13 822.45 822.45 806.75 809.70 810.12 1,43,529 2,742

11/01/13 823.20 829.00 807.20 809.60 814.34 1,00,952 2,575 839.00 843.40 827.25 830.90 831.32 1,09,493 1,652 831.30 839.00 820.00 823.60 825.91 1,11,785 2,921 849.00 849.00 828.80 837.65 832.82 1,42,717 2,866 847.00 850.15 841.20 844.15 845.13 35,318 829.00 841.00 829.00 833.05 834.35 69,359 1,116 1,016 1,169 1,405 1,669 1,964 1,565 1,782 839.00 849.85 838.00 845.90 845.72 2,64,267 3,956

31/12/12 832.55 835.00 826.55 828.10 828.37 84,806 28/12/12 836.95 840.00 826.30 832.55 832.82 64,814 27/12/12 838.70 840.00 824.70 827.60 830.16 79,484 26/12/12 828.00 838.00 821.00 833.45 833.32 52,067 24/12/12 827.00 840.90 823.25 826.40 830.14 83,250 21/12/12 832.90 832.90 820.00 828.35 826.83 53,000

20/12/12 838.40 838.40 823.65 831.45 829.70 1,28,215 2,913 19/12/12 850.00 850.00 827.35 830.75 833.43 1,00,359 3,664 18/12/12 839.00 849.00 836.15 846.25 842.74 86,657 89 2,358

17/12/12 850.00 859.00 834.60 836.60 853.81 8,97,048 2,060 14/12/12 852.00 859.00 846.50 852.35 851.16 77,132 1,599

76,59,05,107 6,56,51,935

INTERPRETATION:
On open value has risen from 808.30 to 852.00. Then compare to higher value of EPS 816.50 to 859.00. Then coming to lower price from 804.90 to 846.50. Wholly the conclusion is 807.35 to 852.35 raised. Then coming to the volume on the same dates or days volumes are increased. Because totally this session HOUSING DEVELOPMENT FINANCE CORP.LTD. EPS value is increased i.e. percentage of 4.28%.

Company :HERO MOTOCORP LTD. 500182 Period: 14-Dec-2012 to 25-Jan-2013

90

Date 25/01/13 24/01/13 23/01/13 22/01/13 21/01/13 18/01/13 17/01/13 16/01/13 15/01/13 14/01/13 11/01/13 10/01/13 9/01/13 8/01/13 7/01/13 4/01/13 3/01/13 2/01/13 1/01/13 31/12/12 28/12/12 27/12/12 26/12/12 24/12/12 21/12/12 20/12/12 19/12/12 18/12/12 17/12/12

Open

High

Low

Close

WAP

No. of Shares

No. of Total Trades Turnover 1,474 1,476 2,722 1,660 1,638 3,780 1,478 3,760 1,117 1,220 2,130 1,007 1,643 1,097 1,312 2,220 999 763 1,201 972 1,260 779 1,140 1,894 1,646 909 810 2,89,38,557 4,74,50,055 5,80,57,654 9,42,63,763 4,24,11,593 15,29,64,568 11,04,98,926 7,71,11,785 29,25,84,031 6,13,37,012 3,34,66,965 4,91,31,341 2,89,96,642 3,71,50,807 2,62,34,430 3,23,56,981 7,43,10,664 2,57,99,922 1,76,58,222 2,51,37,889 2,88,51,271 3,17,41,333 1,59,11,411 3,63,47,163 5,28,06,122 4,03,05,731 2,40,70,921 4,56,86,174

1,771.10 1,780.00 1,752.05 1,764.20 1,765.84 16,388 1,779.00 1,790.00 1,755.00 1,771.10 1,767.03 26,853 1,761.25 1,789.00 1,750.15 1,779.20 1,769.40 32,812 1,780.00 1,780.00 1,752.00 1,761.25 1,760.98 53,529 1,766.55 1,782.00 1,754.30 1,773.05 1,772.17 23,932 1,838.00 1,844.45 1,802.30 1,818.50 1,818.56 84,113 1,832.00 1,852.00 1,828.00 1,835.45 1,834.01 60,250 1,830.00 1,895.00 1,810.00 1,844.80 1,830.63 42,123 1,862.00 1,870.00 1,825.00 1,835.35 1,840.40 33,328 1,851.00 1,865.75 1,843.25 1,849.15 1,854.23 18,049 1,891.75 1,894.00 1,845.20 1,849.95 1,862.45 26,380 1,899.00 1,903.50 1,872.50 1,879.10 1,880.82 15,417 1,889.80 1,909.95 1,885.00 1,898.75 1,900.69 19,546 1,890.00 1,894.00 1,870.70 1,884.85 1,881.95 13,940 1,914.00 1,922.00 1,880.00 1,887.60 1,899.44 17,035 1,925.00 1,935.00 1,900.00 1,904.15 1,912.41 38,857 1,910.00 1,912.45 1,886.90 1,898.15 1,900.83 13,573 1,899.70 1,912.85 1,881.00 1,898.35 1,903.03 9,279 1,870.05 1,903.00 1,870.05 1,894.00 1,892.91 13,280 1,882.00 1,891.00 1,855.00 1,868.75 1,873.46 15,400 1,886.40 1,890.00 1,865.00 1,874.80 1,874.86 16,930 1,914.00 1,917.00 1,875.00 1,890.85 1,898.28 8,382 1,895.00 1,912.00 1,893.00 1,896.70 1,901.40 19,116 1,918.00 1,933.00 1,886.25 1,910.85 1,915.07 27,574 1,887.90 1,924.45 1,884.50 1,918.50 1,906.25 21,144 1,869.35 1,888.20 1,861.00 1,881.50 1,875.41 12,835 1,868.00 1,884.35 1,857.00 1,867.10 1,863.22 24,520 91

1,751.00 1,782.00 1,720.00 1,766.55 1,750.77 1,73,973 10,875 30,45,86,739

1,830.00 1,855.00 1,820.00 1,846.35 1,830.86 1,59,807 2,370

14/12/12

1,882.00 1,885.00 1,851.40 1,868.30 1,864.55 12,754

986

2,37,80,465

INTERPRETATION:
On open value risen from 1751.00 to 1925.00 than compare to higher value of EPS 1780.00 to 1935.00. Then coming to lower price from 1720.00 to 1900.00. Wholly the conclusion is 1761.25 to 1918.50 rised. The comings to the volume on the same dates or days volumes are increased. Because on this session HERO MOTOCORP LTD value is raised i.e. percentage of 21.58%.

Company :MAHINDRA & MAHINDRA LTD. 500520 92

Period: 14-Dec-2012 to 25-Jan-2013

Date

Open

High

Low

Close

WAP

No. of Shares

No. of Total Turnover Trades 2,972 3,740 2,185 2,202 2,810 3,004 4,303 2,107 1,556 2,034 2,215 2,418 1,757 1,238 1,768 1,695 1,781 2,047 1,911 1,394 1,635 1,597 1,573 1,729 7,45,00,442 8,29,25,906 5,29,70,563 4,82,64,959 5,91,72,514 16,81,49,528 8,78,28,326 8,49,53,830 3,86,88,831 4,00,18,774 7,60,31,717 4,78,63,254 17,66,37,808 6,44,36,186 9,66,70,575 4,61,09,886 3,99,12,114 5,76,74,225 4,67,34,140 3,67,57,183 4,49,34,106 4,33,81,248 4,23,52,005 7,88,05,528 3,81,23,771 4,62,99,617 4,96,13,640 11,68,44,046

25/01/13 885.00 903.65 867.60 899.60 891.09 83,606 24/01/13 880.30 884.90 852.40 877.00 867.86 95,552 23/01/13 885.00 894.30 875.80 882.45 885.68 59,808 22/01/13 882.00 895.95 881.05 883.85 888.71 54,309 21/01/13 886.25 889.60 872.50 881.55 879.17 67,305 17/01/13 903.35 909.00 893.15 901.05 902.29 97,339 16/01/13 930.00 930.00 900.00 902.15 911.07 93,246 15/01/13 940.00 945.65 927.00 929.55 935.62 41,351 14/01/13 935.00 947.05 931.00 935.25 936.59 42,728 11/01/13 962.00 965.00 931.00 941.25 943.23 80,608 10/01/13 967.00 974.80 953.95 960.20 963.26 49,689 9/01/13 8/01/13 7/01/13 4/01/13 3/01/13 2/01/13 1/01/13 955.15 962.90 952.00 957.80 958.50 67,226 936.40 943.15 926.00 940.05 935.86 49,270 939.00 940.05 932.00 934.80 935.19 42,678 943.00 947.25 933.00 937.15 937.94 61,490 936.00 943.50 935.00 941.25 940.31 49,701

18/01/13 901.00 904.00 869.00 885.70 881.92 1,90,664 7,236

959.00 974.55 957.80 965.30 969.43 1,82,208 5,963 942.00 955.00 940.00 950.55 952.03 1,01,542 2,509

31/12/12 925.00 933.00 924.15 930.00 928.19 39,601 28/12/12 933.00 937.95 920.60 924.45 927.45 48,449 27/12/12 949.90 950.75 926.90 931.00 935.71 46,362 26/12/12 936.00 950.00 936.00 944.85 945.59 44,789 24/12/12 940.00 948.20 934.65 936.65 941.04 83,743 21/12/12 950.10 952.20 935.00 937.55 940.98 40,515 20/12/12 970.00 970.00 948.05 951.70 954.95 48,484 19/12/12 968.00 973.35 963.55 967.95 968.62 51,221

18/12/12 965.00 973.35 962.00 964.30 967.68 1,20,746 2,894 93

17/12/12 952.00 967.00 949.75 957.15 959.13 2,63,020 3,421 14/12/12 942.00 952.50 941.05 949.90 948.86 1,16,946 2,601

25,22,69,951 11,09,65,348

INTERPRETATION:
On open value has increased from 880.30 to 970.00. Then compare to higher value of EPS 884.90 to 974.80. Then coming to lower price from 852.40 to 963.55. Wholly the conclusion is 877.00 to 967.95 increased. Then coming to the volume on the same dates or days volumes are increased. Because totally this session MAHINDRA & MAHINDRA LTD. EPS value is increasedi.e. percentage of 07.51%.

94

CHAPTER-V
FINDINGS SUGGESSIONS CONCLUSIONS BIBLIOGRAPHY

FINDING

95

The volume on the same dates or days volumes are increased. Because totally this session MAHINDRA & MAHINDRA LTD. EPS value is increasedi.e. percentage of 07.51%.

The volume on the same dates or days volumes are increased. Because on this session HERO MOTOCORP LTD value is raised i.e. percentage of 21.58%. The volume on the same dates or days volumes are increased. Because totally this session HOUSING DEVELOPMENT FINANCE CORP.LTD. EPS value is increased i.e. percentage of 4.28%.

The volume on the same dates or days volumes are increased. Because totally this session ICICI BANK. EPS value is increased i.e. percentage of 12.57%.

CONCLUSION

96

 The comprehensive study of capital market instrument at Inter Connected stock exchange has been an enlightening experience stressing on the positive aspects on Dematerialization. And settlement of shares, derivative market and capital instrumentshas done in whole lot of good to the issuer, investor companies and country. The depository systems has reduced the lag in delivery and settlement of securities but also supported the cause of providing more liquidity to the security holder, the need for setting up of a depository paper less trading. Through online trading system and settlement became inevitable and unavoidable for the smooth and the efficient functioning of the capital market. This system has proved its worthiness by increasing in the speed of transactions within T+3 days which are earlier T+5 days. Now there is a proposal that the settlement will be done within T+1days in near future which is in it an indication of a boon in the system of demat and capital market instruments. It has been fairly long since derivative trading started off on the Indian Indexes. Actively has failed to really take off with low figures being transacted in terms of value and volumes.

97

 The introduction of derivative trading was hailed by the punters in the capital markets but has not really brought about a wave so as to speak. There are several factors, which impede the growth of the derivative markets in India. Of these factors the absence of clear guidelines on tax-related issues and the high cost of transactions are the most prominent. Now it is T+2days started from 1 April 2003.

98

SUGGESTIONS
There must be prohibition on disposal of promoters share holding, and also restrictions and the expansion without prior approval of the financial institutions for declaration of higher amount/ rate. The availability of derivative products in eluding index futures, index options, individual stock futures and individual stock options re-enforces the overall attractiveness of this market to foreign and domestic investors. Volume of paper work is small but it is very complicated to maintain data in system so tries to reduce that by regular audit and updating data. Most of the DPs do not have the necessary infrastructure to handle the high work load of transactions leading to may error by DPs, so by giving full infrastructure information to every DO can avoid this problem. The pool account doesnt know the true owner of the share and hence dividends are paid to the broker instead of owners by this the broker can do any manipulation or any fraud with the owner, for this the owner can loose his dividend. Hence for this try to pay the dividend directly to the owner. If the shares are fake/forged which delivery by the broker the share holder can loose that shares an have to receive another lot of issued shares from the broker in 21 days, this system stands abused. So minimize that waiting days are deliver the issued shares to the share holder as soon as Possible.

99

BIBLIOGRAPHY
BOOKS: Investment management -V.K.Bhalla Investment management -Preethi Singh Security Analysis And Portfolio Management -V.A.Avadhani Marketing of Financial Services -V.A.Avadhani Indian Financial System -M.Y.Khan

WEBSITES: www.religare.com www.bseindia.com www.sebi.com www.moneycontrol.com www.economictimes.com www.nseindia.com

100

MARKET WATCH WINDOWS: BLUE COLOUR INDICATE SHARE VALUE INCREASE RED COLOUR INDICATE SHARE VALUE DECREASE NSE Scrips

NSE & BSE Scrips

101

(BUY Order Form)

(Sell Order Form)

102

(Market Depth)

(Order Book)

103

Client Margin

Trade Book

104

Client Activity Report

Exercise Report

105

106