1

CHAPTER: 1
COMPANY PROFILE
Kotak Securities is headquartered in Mumbai, India. In 2014, Kotak Securities was ranked
as number 1 in India's Institutional Investor rankings by weighted average. Kotak Securities
is a well-known stock broker with professional traders for its comprehensive online trading
portal offerings. The company provides equity based products (research, equities, derivatives,
depository, margin funding, etc.). The Group has a wide distribution network through
branches and franchisees across India, and international offices in London, New York, Dubai,
Abu Dhabi, Mauritius and Singapore. It has 1128 branches including franchisees and satellite
offices spread across 352 cities in the country.
Kotak Securities is a corporate member of both the Bombay Stock Exchange and the National
Stock Exchange of India. It is also a depository participant with National Securities
Depository Limited (NSDL) and Central Depository Services Limited (CDSL). The company
also has a research division to study the macroeconomic indicators, sectors, company-specific
equity research, which regularly publishes stock market analysis. The Company's online
trading and investment site - www.Kotak Securities.com. The site gives access to superior
content and transaction facility to retail customers across the country. Known for its jargonfree, investor friendly language and high quality research, the content-rich and research
oriented portal has stood out among its contemporaries because of its steadfast dedication to
offering customers best-of-breed technology and superior market information.
Kotak Securities's management team is one of the strongest in the sector and has positioned
Kotak Securities to take advantage of the growing consumer demand for financial services
products in India through investments in research and an outstanding technology platform.

Effective April 1, 2015, ING Vysya Bank Ltd has merged with Kotak Mahindra Bank Ltd
creating a Rs 2 trillion institution (consolidated). The merged entity Kotak Mahindra Bank
Ltd. will have a significant national footprint, affording it the capacity and means to serve
even better.

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1.1 Vision:
The global Indian financial services brand:
Customers will enjoy the benefits of dealing with a global Indian brand that best
understands their needs and delivers customized pragmatic solutions across
multiple platforms. They will be a world class Indian financial services group. Technology
and best practices will be benchmarked along international lines while
their understanding of customers will be uniquely Indian. They will be more than a
repository of customers' savings. They, the Group, will be a single window to
every financial service in a customers universe.

The most preferred employer in financial services:

A culture of empowerment and a spirit of enterprise attracts bright minds with an
entrepreneurial streak to join us and stay with them. Working with a home-grown,
professionally-managed company, which has partnerships with international
leaders, gives people a perspective that is universal as well as unique.

The most trusted financial services company:

They will create an ethos of trust across all our constituents. Adhering to high
standards of compliance and corporate governance will be an integral part of
building trust.

Value creation:
Value creation rather than size alone will be their business driver.

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Significance of the groups logo:

The symbol of the infinite Ka reflects our global Indian personality. The Ka is uniquely
Indian while its curve forms the infinity sign, which is universal.One of the basic tenets of
economists is that mans needs are unlimited. The Infinite Ka symbolizes that we have
infinite number of ways to meet those needs.
1.2 SERVICES PROVIDED BY KOTAK SECURITIES:

Stock Broking services: Trade in the STOCK MARKET, invest in IPOs, Mutual
Funds or Currency Derivatives using whichever mode that suits best. Online, offline
or even on their STOCK TRADING app, they offer STOCK TRADING at fingertips.

Portfolio Management services: Not sure of what STOCKS TO BUY or sell?

Unable to keep all investments in one place? Dont know how to make money work?
Portfolio Management Service with expert advice is just the answer for everyones
woes.

Dual benefit: STOCK BROKERS + Depository Participants: Kotak Securities is

not just a stock broking firm. They are also participants with depositories like the
NSDL and the CSDL. That means we can now execute transactions using their stock
broking services and settle our trades using their depository services.

Research Expertise: They publish various sector-specific research, company-specific

research, macroeconomic studies, fundamental and technical analysis of stocks that
we can avail before investing our hard-earned money.

Updated Market Data: Apart from research that they offer, we benefit from the
street smart tips, up-to-the-minute market information and inside news that their
extensive sales teams deliver on a daily basis.

International Reach: Kotak Securities has a well-entrenched presence in the Asia

Pacific, European, Middle Eastern and American markets.

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1.3 PRODUCT PROFILE:

KOTAK SECURITIES is one of the leading Depository Participants (DP) in the country
with over 8 Lac D MAT accounts. Kotak securities DE mat services offers you a secure and
convenient way to keep track of your securities and investments, over a period of time,
without the hassle of handling physical documents that get mutilated or lost in transit. A
Kotak securities is Depository participants both with -National Securities Depositories
Limited (NSDL) and Central Depository Services Limited (CDSL).
1.3.1 TWO IN ONE ACCOUNT:Kotak Securities is providing 2-in- 1 account to its customer .The 2-in-1 trading account from
Kotak Securities gives us the dual benefit of a share trading account and a D-MAT account
rolled into one account.
We can link our third-party savings account to the 2-in-1 trading account and kick start our
journey on the stock market. Here are the banks whose savings accounts can be linked to the
2-in-1 stock trading account: Axis Bank, CitiBank, HDFC Bank, Kotak Mahindra Bank,
ICICI Bank, IndusInd Bank, State Bank of India (SBI)
D-MAT ACCOUNT:It is called as dematerialized account. It is used for keeping share in our account .After
placing order to BSE or NSE for share , the share transfer to our D-mat account and amount
price of that share we purchased deducted from our saving account.D-mat account is used for
holding share for particular period .
ONLINE TRADING ACCOUNT:Online trading account is used for purchasing the share or to sale the share of particular
company.
It is provided for Rs.700 to the customer.
Client has to give the cheque on name of KOTAK SECURITIES LTD.
ONLINE TRADING CONCEPT

ONLINE
TRADING
ACCOUNT
(SEBI)

2 IN 1 ACCOUNT

D-MAT
ACCOUNT
(NSDL)
(SEBI)

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PROCESS:
Create 2-in-1 trading account with Kotak Securities.
Link savings account to 2-in-1 trading account.
Transfer funds securely from savings account to the 2-in-1 trading account, via their
Payment Gateway. Remember, the amount of funds that can be transferred depend on
the limits set by the bank where we have our savings account.
Trade in equities, derivatives, currencies, futures, options and more with 2-in-1
account.
The shares will be paid into your 2-in-1 account in T+2, where T stands for the day
the trade was carried out.
FEATURES & BENEFITS:
As opposed to the earlier form of dealing in physical certificates with delays in
transaction, holding and trading in D MAT form has the following benefits :
Low Brokerage Rates.
Secure trading environment, using the highest levels of data encryption.
Trade in larger volumes and more scrips using the Super Multiple feature, which
offers us exposure up to 14 times our original margin during a single trading day.
Trade 24 x 7 x 365 days with their After Market Orders option. Place trade whenever
its convenient, and they send our trades to the markets as soon as they open for
trading the next working day.
Trade online using KEAT Pro X- a high speed trading software that allows you to
trade, monitor our portfolio, create watch lists and more.
Trade in equities, derivatives and currencies on smartphone with their free Stock
Trading App
Access to Trade Smart a unique tool that helps us spot bullish or bearish market
trends, set entry and exit positions for our stocks, set stock alerts and more.
Access to best in class stock market research and analysis through Easy Equity reports
and Easy Mutual Fund reports.
SMS alerts with important trading tips, stock alerts and latest market news.
24 x 7 customer support to handle any crises, day or night.
1.3.2 Trinity account: The Kotak Securities Trinity account is a seamless investment
platform that integrates a savings account, a D MAT account and a trading account into
one great service.
Forget the hassle of juggling three different banking partners for each account. With the
Trinity account we get all three benefits with a single application and a single entity
Kotak Securities.
Process:
Open a Trinity account by
a. Filling out online application
b. Calling toll free numbers (STD code) 3030 5757 / 1800 222 299
c. Visiting a Kotak Securities branch office
As part of the trinity account, a savings bank account will be opened with Kotak
Mahindra Bank.
With the Direct Access feature of the Trinity account, we will not need to manually
transfer funds from our savings account to our trading account. Funds can be moved
between accounts directly through the Kotak Securities website, and any unutilized

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money in our trading account comes back to our savings account at the end of the days
trades.
Unlike other linked accounts, the Trinity account has no upper limit for transfer of funds
from our savings account to our trading account in a single day.
FEATURES & BENEFITS:

Seamless, zero hassle trading:

Trade in equity, derivatives, IPO,ESOPS, bonds and ETFs through our 3-in-1 account.
Multiple trading platforms to choose from: With the Trinity account we are spoilt
for choice. We can choose between :
Trading online on www.kotaksecurities.com
Using the high-speed trading tool Keat Pro X
Trading on the phone by calling their toll free number 3030 5757
Using their smartphone trading app Kotak Stock Trader
Margin against Securities: Avail margin against securities for intraday trades in cash
segment at no additional cost. Even better, gets exposure against the shares lying idle
in D MAT account.
Trade after market hours: Kotak Securities unique After Market Orders facility
allows us to place trades even after the stock market is closed for the day. The trades
we place will get sent to the exchange as soon as the markets open for trading next.
Extensive and FREE research options to guide our investing decisions.
Educate about equities, futures, options and more at the Kotak Securities Knowledge
Bank.
Get SMS Alerts about latest stock market news, tips, and movements.
Best in class research and analysis through Easy equity reports and Easy Mutual Fund
reports.

1.4 INTRA DAY TRADING:

In intraday trading the share is purchase and sale on the same day. The
share market starts at 9.50 a.m. and close at 3.30 p.m. if the client purchases the share and
prices of share rise then he can sell his share and he will get the profit. If the prices of
share fall down then he will be in loss. If client purchases the share and he does not sell it
at market closing time then the share automatically sell i.e. called square off. If price of
share is high then client will get profit and price of share fall down the customer will be in
loss at time of square off.

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1.5 SWOT analysis:

Strengths:
Efficient management.
Innovators in the Industry
Robust Technology
Access to different financial
products/services within the Kotak group.
Good employee relations.
Research Team

Opportunities:
Utilize technology to provide solutions to
customers
Increase distribution strength
Good customer relation strategy so that it
create good opportunity to create goodwill .

Weakness:
Long Procedures for opening account
No access to rural market
Insufficient advertisement

Threats:
Volatile environment
Stiff Competition
New entry into market
Government Policy

1.6 Management:
Mr. Uday Kotak (Executive Vice Chairman and Managing Director)
Kotak Mahindra Bank Limited
As a young 26-year old entrepreneur in 1985, Uday Kotak started Kotak Capital
Management Finance Ltd. The vision was to eventually become a banking company. Private
Indian banks were not even a speck on the horizon at that time. On 22nd March 2003, Kotak
Mahindra Finance Ltd. became the first non-banking financial company (NBFC) in Indias
corporate history to be converted into a bank.
Mr. C. Jayaram (Joint Managing Director)
Kotak Mahindra Bank Limited
C. Jayaram, Joint Managing Director, Kotak Mahindra Bank Ltd., has been with the Kotak
Mahindra group since 1990. He was appointed as Executive Director of Kotak Mahindra
Finance Limited (now Kotak Mahindra Bank Limited) on 1st October 1999.
Jayaram heads the wealth management business and international operations for Kotak
Mahindra group. He also oversees the alternative investments business which includes private
equity funds and real estate funds, as well as the institutional equities business.
Mr. Dipak Gupta (Joint Managing Director) Kotak Mahindra Bank Limited Dipak
Gupta, Joint Managing Director, Kotak Mahindra Bank has been with Kotak Mahindra group
since 1992. He was appointed as Executive Director of Kotak Mahindra Finance Limited on
1st October 1999. Dipak overlooks Group Human Resources, Administration, Infrastructure,
Operations and IT. He also heads the Asset Reconstruction business of the Bank.

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2.1 Introduction about Online Trading:

Technological advances have influenced and facilitated the operations of business
transactions. The recent technological advancement is the Internet technology that has
transformed the entire business marketplace. With the help of the Internet, we can
communicate interactively and instantly over vast distances, receive a wide array of
information, and conduct business from remote without human assistance. Personal investing
is one of the areas facilitated by Internet. The do-it yourself investing originated in 1970s as a
result of the deregulation of the brokerage industry. However, due to the IT revolution, the
On-line approach has helped individual investors to have better control on their
investment. With the proliferation of the Internet, more banks and stock brokerage firms are
offering on-line financial services. Investors can gain access to various kinds of information
on financial planning, e.g., real-time stock prices, portfolio management, etc. Increasingly,
traders are attracted toward the on-line investing for advice and information. The trade
through Internet is executed and confirmed instantly.
The business of stock exchanges was originally done in mere two-and-half hours in the
trading rings through open outcry system. An investor, wishing to trade, had to call his
brokers office to place his order. In turn it is the duty of the broker to pass on the order to his
man assigned on the trading ring. The brokers man would then go to the stock counter to go
through the transaction, all the while jostling with a group of other sub-brokers who are also
trying to trade on the counter. Innumerable difficulties were there in the system since the
brokers man would have to revert to his office to consult with the client if the price quoted
did not match the order. All these took place in an era where there was no proper
communication system. In the absence of internet and business channels on television, the
only way to obtain the live stock quotes was the stock brokers. The final closing price of a
stock could be checked through the daily bulletin that was published every evening by the
stock exchange.
Internet trading is a method of trading in securities whereby it is possible for the
investors to buy and sell stocks through the internet. It is also called on-line trading; the
trading takes place under the Order Routing System [ORS] through registered stock
brokers on behalf of clients for execution of trades on stock exchange. Under this method of
trading the information about securities, brokers, dealers, prices etc, are communicated
through the official websites of concerned stock exchanges so as to facilitate buying and
selling of securities. Current developments are essentially converting off line practices to an
online equivalent. The private investor who may have received a stock brokers report
through the post and looked up share prices in the morning paper can access the information
online with the current market price being available. The investor who might have made
calculations about trends and valuations by hand can down load the information from the web
into a spreadsheet or a personal finance program that runs on their PC. That same private
investor who usually to rings up a stock broker to buy or sell, a process that might take some
time when the market is busy, can issue that same instruction online for immediate execution.

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On line share trading in India:

Many Indian investors are logging into the internet to put through their stock market trades.
The number of investors registered for online stock trading has raised three fold to 30 lakh,
over the past two years. Online trades now account for about 40 percent of the daily turnover
on the NSE, up from about 4 percent in 2004. According to brokerage industry estimates,
ICICI Bank claims to have a 60.65 percent share of the market, with eight lakh users on
ICICI direct, its online International Journal of Marketing, Financial Services &
Management Research ISSN 2277- 3622 Vol.2, No. 4, April (2013)
Online available at www.indianresearchjournals.com trading platform. The democracy of
online trading is the key factors why the retail investors prefer to transact over the internet
their broker.
Volumes are growing faster in the non metros, where transparency is low in offline trading.
Such high channel migration has changed the broking landscape from what it was in the late
1990s. The days are gone where the customers were made to pay higher charges by small
brokers, since they werent aware of the market rates. Traditional brokers are now scrambling
to scale up their online operations. This study is an attempt to evaluate the benefits and
problems towards online share trading practices in Ludhiana City.

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2.2 FINANCIAL MARKETS:

A financial market can be defined as the market in which financial assets are created
or transferred. Financial assets represents represent a claim to the payments of a sum of
money sometime in the future and/or periodic payment in the form of interest or dividend.
Financial Market performs an important function of mobilization of savings and channeling
them into the most productive uses. The participants in the financial markets are financial
institutions, agents, brokers, dealers, borrowers, lenders, savers and others who are interlinked by the laws, contracts and communication networks.
Financial markets consist of Primary and Secondary Markets. The Primary markets
deal in new financial claims and securities and hence are known as new issue markets. The
secondary market deals in securities already issued, existing or outstanding. Financial
markets are also classified as Money and Capital Markets. Money markets deals with
transactions in short-term instruments (with period of maturity one year or less, e.g. treasury
bills), while capital market deals with transactions in long-term instruments (with period of
maturity above one year, e.g. corporate debentures and government bonds).
On the basis of the type of the financial claim, financial markets are classified as Debt and
Equity markets. By the timing of delivery, financial markets are classified as Cash or Spot
markets and Forward or Future markets.
The classification of financial markets can be summarized as follows:
o Money Market
o Debt Market
o Forex Market
o Capital Market.

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MONEY MARKETS:
Money markets can be defined as a market for short term money and financial assets
that are near substitutes for money (any financial assets that can be quickly converted into
money with minimum transaction cost). One more important function of this market is to
channel savings into short term productive investments like working capital. Money market
aids banking, operates as a medium of integration between sub markets, promotes
maintaining of minimum reserve in the form of cash and liquidity and controls the interest
rates.
Money market is a collection of market for the instruments like Call money, Treasury
bills, Commercial papers, Certificate of deposits, Money Market Mutual Funds, etc. A certain
degree of flexibility in the regulatory framework exists and there are constant endeavors for
introducing a new instruments or innovating dealing techniques. It is a wholesale market and
the volume of funds or financial assets traded are very large i.e. in crores of rupees.

ORGANIZED MONEY MARKET:

Indian financial system consists of money market and capital market. The money market has
two components - the organized and the unorganized. The organized market is dominated by
commercial banks. The other major participants are the Reserve Bank of India, Life
Insurance Corporation, General Insurance Corporation, Unit Trust of India, Securities
Trading Corporation of India Ltd., Discount and Finance House of India, other primary
dealers, commercial banks and mutual funds. The core of the money market is the inter-bank
call money market whereby short-term money borrowing/lending is effected to manage
temporary liquidity mismatches. The Reserve Bank of India occupies a strategic position of
managing market liquidity through open market operations of government securities, access
to its accommodation, cost (interest rates), availability of credit and other monetary
management tools. Normally, monetary assets of short-term nature, generally less than one
year, are dealt in this market.

UN-ORGANIZED MONEY MARKET:

Despite rapid expansion of the organized money market through a large network of banking
institutions that have extended their reach even to the rural areas, there is still an active
unorganized market. It consists of indigenous bankers and moneylenders. In the unorganized
market, there is no clear demarcation between short-term and long-term finance and even
between the purposes of finance. The unorganized sector continues to provide finance for
trade as well as personal consumption.
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FOREIGN EXCHANGE MARKET:

Every sovereign country in the world has a currency, which is a legal tender in its
territory, and which does not act as money outside its boundaries. Foreign exchange or Forex
market is the one where a countrys currency is traded for another. The rate at which one
currency is converted to another is known as the rate of exchange. Forex market is the largest
financial market in the world having a daily turnover of couple of trillion dollars. The key
participants in the Forex market are importers (who need foreign currency to pay off their
imports), exporters (who want to convert their foreign currency receipts into domestic),
traders (who make a market in the foreign currency), foreign exchange brokers (who bring
together buyers and sellers), speculators (who tries to profit from exchange rate movements)
and portfolio managers who buy and sell foreign currency. Speculative transactions account
for more than 95% of the turnover on the Forex markets.
In India, the key participants in the Forex markets are RBI, banks and business
undertakings. Business undertakings can participate in the Forex market only to the extent
that they need cover for the exchange exposure arising from a merchant transaction or a
foreign currency borrowing and cannot resort to speculative transaction. One reason justified
for the existence of the Forex market is that each nation has decided to keep their sovereign
right to have control on their own currency. If every country had the same currency, then
there will be no need for a foreign exchange market.

CAPITAL MARKET
The function of the financial market is to facilitate the transfer of funds from surplus
sectors (lenders) to deficit sectors (borrowers). Normally, households have investible funds or
savings, which they lend to borrowers in the corporate and public sectors whose requirement
of funds far exceeds their savings. A financial market consists of investors or buyers of
securities, borrowers or sellers of securities, intermediaries and regulatory bodies. Financial
market does not refer to a physical location. Formal trading rules, relationships and
communication networks for originating and trading financial securities link the participants
in the market.
Capital markets provide the resources needed by medium and large-scale industries for
investment purposes unlike money markets that provide the resources for working capital
needs. While money markets deal in short-term claims (with a period of maturity 1 year or
less) capital market deals in long-term claims (with a period of maturity more than 1 year).
Stock market and Government bond markets are example of capital markets.

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Capital market consists of primary and secondary markets. The primary markets
create long-term instruments through which corporate entities borrow and the secondary
market provides liquidity and marketability to these instruments. Companies can raise capital
in the primary market through the issue of shares and debentures for which prior approval of
The SEBI is required. The secondary market that operates through the medium of stock
exchanges is that segment of the capital market where securities already issued are traded.
The primary market in which public issue of securities is made through a prospectus is a
retail market and there is no physical location. Offer for subscription to securities is made to
investing community. The secondary market or stock exchange is a market for trading and
settlement of securities that have already been issued. The investors holding securities sell
securities through registered brokers/sub-brokers of the stock exchange. Investors who are
desirous of buying securities purchase securities through registered broker/sub-broker of the
stock exchange. It may have a physical location like a stock exchange or a trading floor.
Since 1995, trading in securities is screen-based and Internet-based trading has also made an
appearance in India. The secondary market consists of 22 stock exchanges. The secondary
market provides a trading place for the securities already issued, to be bought and sold. It also
provides liquidity to the initial buyers in the primary market to re-offer the securities to any
interested buyer at any price, if mutually accepted.

CAPITAL MARKET PARTICIPANTS: There are several major players in the primary
market. These include the merchant bankers, mutual funds, financial institutions, foreign
institutional investors (FIIs) and individual investors. In the secondary market, there are the
stock exchanges, stock brokers (who are members of the stock exchanges), the mutual funds,
financial institutions, foreign institutional investors (FIIs), and individual investors.
Registrars and Transfer Agents, Custodians and Depositories are capital market
intermediaries that provide important infrastructure services for both primary and secondary
markets.

2.3 COMPONENTS OF CAPITAL MARKET:

Following are the three main components of capital market:
1. New Issue Market
2. Financial Institutions
3. Stock Market

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1. NEW ISSUE MARKET

The new issue market represents the primary market where new securities, i.e. shares or
bonds that have never been previously issued, are offered. Both the new companies and the
existing ones can raise capital on the new issue market. The prime function of new issue
market is to facilitate the transfer of funds from willing investors to the entrepreneurs setting
up new corporate enterprise or going for expansion, diversification, growth or modernization.
Besides, the helping corporate enterprise in securing their funds, the new issue market
channelizes saving of individuals and others into investors.
Issuing companies and the investors respectively represents the two facets of this market, i.e.
supply and demand. Also there is participation of intermediaries, which help, in selling,
transferring, underwriting etc. These agencies include financial institution, underwriters,
brokers, merchant bankers, etc.
It must be noted that although the functions and organization of new issue market are
quite different from that of the secondary (stock) market, the sentiment in the stock market
influence the activity of new issue market.
Successful issue of new securities is a highly specialized activity and requires both
experience and skill. There are number of methods of marketing new issue of securities. And
the choice of method selection depends upon number, character and sentiment of prospective
buyers.

2. FINANCIAL INSTITUTIONS
Specialized Financial Institutions are the most active constituent of the Indian Capital
Market. Such organizations provide medium and long-term loans on easy installments to big
business house. Such institutions help in promoting new companies during economic
depressions.
The need for establishing financial institutions was felt in many countries immediately after
the Second World War to reestablish war-shattered economies. Need for such institution was
more in underdeveloped countries.
Following are the main special financial institutions that are most active constituents of the
Indian Capital Market.
1.
2.
3.
4.
5.

The industrial Finance Corporation of India. (I.F.C.I)

The Industrial Credit and Investment Corporation of India. (I.C.I.C.I)
The Refinance Corporation of India. (R.F.C.)
State Financial Development Corporation. (S.F.Cs.)
National Industrial Development Corporations. (N.I.D.C.)
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6. State Industrial Development Corporations. (S.I.D.Cs.)

7. National Small Industries Corporations. (N.S.I.C.)
8. Industrial Development Bank of India. (I.D.B.I.)
9. Unit Trust of India. (U.T.I.)
10. Life Insurance Corporation of India. (L.I.C.)
11. Nationalized Commercial Banks. (N.C.B.)
12. Merchant Banking Institutions. (M.B.Is.)
3. STOCK MARKET
Capital Market also includes Stock market. It is a place where securities which have
been issued the past are traded. It is a secondary market. In stock market the participants are
Stock Exchanges, Brokers and the investors. The investors want liquidity of their
investments. The securities, which they hold, should be easily sold when they need cash.
Similarly there are others who want to invest in new securities. So there should be a place
where securities should be purchased and sold. Stock exchange provides such a place where
securities of different companies can be purchased and sold via stock market.
One can trade in stock market two ways:
1. On Market
2. Off Market
In On market trading is done via stock exchanges, where the buyer and seller dont know
each other. But one can also trade off market without the interference of stock exchange may
be through stock broker or not. For example: Raja and Gandhi are neighbors, Raja wants to
Sell the shares of Zodiac JRD, which he holds and Gandhi is ready to buy them at that price
they can enter into contract off market.

DEBT MARKET:
Traditionally debt instruments are known for generating a predetermined income for a given
period of time, other than in cases of default. Hence they are also known as fixed income
instruments. The debt markets in advanced are significantly larger and deeper than equity
markets. But in India, the trend is just the opposite. The development of debt market in India
has not been as remarkable as in the equity market. However the debt markets in India have
undergone a considerable change in the last few years. Characterized by regulated interest
rates, limited players and lack of trading earlier, the markets have become more integrated
and less regulated. The debt market in India is divided into two categories:
o Government securities market consisting of Central Government and State
Government securities.
o Bond market consisting of FI bond, PSU bonds and corporate bonds/debentures.

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2.4 PRIMARY AND SECONDARY MARKET:

There are two ways for investors to get shares from the primary and secondary markets. In
primary markets, securities are bought by way of public issue directly from the company. In
Secondary market share are traded between two investors.
PRIMARY MARKET
Market for new issues of securities, as distinguished from the Secondary Market,
where previously issued securities are bought and sold. A market is primary if the proceeds of
sales go to the issuer of the securities sold. This is part of the financial market where
enterprises issue their new shares and bonds. It is characterized by being the only moment
when the enterprise receives money in exchange for selling its financial assets.
Stocks available for the first time are offered through new issue market. The issue may be a
new company or an existing company. These issues may be of new type or the security used
in the past. In the new issuing houses, investment bankers act as the channel of distribution
for the new issues. They take responsibility of selling the stocks to the public.
THE FUNCTION OF PRIMARY MARKET:
The main service functions of the primary market are origination, under writing and
distribution. Origination deals with the origin of the view issue. The proposal is analyzed in
terms of the nature of security, the size of issue, and timing of the issue and floatation method
of issue. Underwriting contract makes the shares predictable and removes the elements of
uncertainty in the subscription. Distribution refers to the sale of the securities to the investors.
This is carried out with the help of the lead manager and broker to the issue.
IPO INITIAL PUBLIC OFFERING
Public issues can be classified into Initial Public offerings and further public
offerings. In a public offering, the issuer makes an offer for new investors to enter its
shareholding family. The issuer company makes detailed disclosures as per the DIP
guidelines in its offer document and offers it for subscription. Initial Public Offering (IPO) is
when an unlisted company makes either a fresh issue of securities or an offer for sale of its
existing securities or both for the first time to the public. This paves way for listing and
trading of the issuers securities.
IPO is new shares Offered to the public in the Primary Market .The first time the
company is traded on the stock exchange. A prospectus is issued to read about its risk before
investing. IPO is a company's first sale of stock to the public. Securities offered in an IPO are
18 | P a g e

often, but not always, those of young, small companies seeking outside equity capital and a
public market for their stock. Investors purchasing stock in IPOs generally must be prepared
to accept very large risks for the possibility of large gains. Sometimes, just before the IPO is
launched, Existing share Holders get very liberal bonus issues as a reward for their faith in
risking money when the project was new.
SECONDARY MARKET
The market where securities are traded after they are initially offered in the primary
market. Most trading is done in the secondary market. To explain further, it is trading in
previously issued financial instruments. An organized market for used securities. Examples
are the New York Stock Exchange (NYSE), Bombay Stock Exchange (BSE),National Stock
Exchange NSE, bond markets, over-the-counter markets, residential mortgage loans,
governmental guaranteed loans etc.The secondary market is the financial market for trading
of securities that have already been issued in an initial private or public offering.
Alternatively, secondary market can refer to the market for any kind of used goods. The
market that exists in a new security just after the new issue is often referred to as the
aftermarket. Once a newly issued stock is listed on a stock exchange, investors and
speculators can easily trade on the exchange, as market makers provide bids and offers in the
new stock.

2.5 PRODUCTS DEAL IN SECONDARY MARKET

EQUITY: The ownership interest in a company of holders of its common and preferred
stock. The various kinds of equity shares are as follows
EQUITY SHARES: An equity share, commonly referred to as ordinary share also represents
the form of fractional ownership in which a shareholder, as a fractional owner, undertakes the
maximum entrepreneurial risk associated with a business venture. The holders of such shares
are members of the company and have voting rights. A company may issue such shares with
differential rights as to voting, payment of dividend, etc.
RIGHTS ISSUE/ RIGHTS SHARES: The issue of new securities to existing shareholders
at a ratio to those already held.
BONUS SHARES: Shares issued by the companies to their shareholders free of cost by
capitalization of accumulated reserves from the profits earned in the earlier years.
19 | P a g e

PREFERRED STOCK/ PREFERENCE SHARES: Owners of these kind of shares are

entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before
dividend can be paid in respect of equity share. They also enjoy priority over the equity
shareholders in payment of surplus. But in the event of liquidation, their claims rank below
the claims of the companys creditors, bondholders / debenture holders.
CUMULATIVE PREFERENCE Shares. A type of preference shares on which dividend
accumulates if remains unpaid. All arrears of preference dividend have to be paid out before
paying dividend on equity shares.
CUMULATIVE CONVERTIBLE PREFERENCE SHARES: A type of preference shares
where the dividend payable on the same accumulates, if not paid. After a specified date,
these shares will be converted into equity capital of the company.
PARTICIPATING PREFERENCE SHARE: The right of certain preference shareholders
to participate in profits after a specified fixed dividend contracted for is paid. Participation
right is linked with the quantum of dividend paid on the equity shares over and above a
particular specified level.
SECURITY RECEIPTS: Security receipt means a receipt or other security, issued by a
securitisation company or reconstruction company to any qualified institutional buyer
pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an
undivided right, title or interest in the financial asset involved in securitisation.
GOVERNMENT SECURITIES : These are sovereign (credit risk-free) coupon bearing
instruments which are issued by the Reserve Bank of India on behalf of Government of India,
in lieu of the Central Government's market borrowing programme. These securities have a
fixed coupon that is paid on specific dates on half-yearly basis. These securities are available
in wide range of maturity dates, from short dated (less than one year) to long dated (upto
twenty years).
DEBENTURES: Bonds issued by a company bearing a fixed rate of interest usually payable
half yearly on specific dates and principal amount repayable on particular date on redemption
of the debentures. Debentures are normally secured/ charged against the asset of the company
in favour of debenture holder.

20 | P a g e

BOND: A negotiable certificate evidencing indebtedness. It is normally unsecured. A debt

security is generally issued by a company, municipality or government agency. A bond
investor lends money to the issuer and in exchange, the issuer promises to repay the loan
amount on a specified maturity date. The issuer usually pays the bond holder periodic interest
payments over the life of the loan. The various types of Bonds are as followsZERO COUPON BOND: Bond issued at a discount and repaid at a face value. No periodic
interest is paid. The difference between the issue price and redemption price represents the
return to the holder. The buyer of these bonds receives only one payment, at the maturity of
the bond
CONVERTIBLE BOND: A bond giving the investor the option to convert the bond into
equity at a fixed conversion price.
COMMERCIAL PAPER: A short term promise to repay a fixed amount that is placed on
the market either directly or through a specialized intermediary. It is usually issued by
companies with a high credit standing in the form of a promissory note redeemable at par to
the holder on maturity and therefore, doesnt require any guarantee. Commercial paper is a
money market instrument issued normally for a tenure of 90 days.
TREASURY BILLS: Short-term (up to 91 days) bearer discount security issued by the
Government as a means of financing its cash requirements.

2.6 ACCOUNT OPENING

To avail the services of depository one requires opening an account with any of the
depository participants. The e-invest account is an account which allows a customer
electronic trading on the exchange. Through this unique three in one trading every customer
opening an e-invest account gets a bank saving account.

You can open a Depository Participant (DP) Account, either through Kotak Securities
branches or through Kotak Securities Franchisee center.

There is no fee for opening DP accounts with Kotak Securities. However, deposit
(refundable) will be levied towards services which can be adjusted towards billing
charges.

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All investors have to submit their proof of identity and proof of address along with the
prescribed account opening form.
1. I. Proof of Identity: Your signature and photograph must be authenticated by an
existing D MAT account holder with the same DP or by a bank manager.
Alternatively, you can submit a copy of Passport, Voters Id Card, Driving Licence or
PAN card with photograph.
2. II. Proof of Address: You can submit a copy of Passport, Voters Id Card, Driving
Licence, PAN card with photograph, ration card or bank passbook as proof of address.
You must remember to take original documents to the DP for verification.
3. III Passport-size photograph.
CLIENT REGISTRATION PROCESS:

FORM SUBMISSION

SCRUTINY
SEGREGATE

OPEN A/C OR REJECT

BANK

VALID
FORM

INTIMATES
CPU

OPEN A/C OR REJECT

DP

22 | P a g e

23 | P a g e

CHAPTER: 3
ORGANISATION STRUCTURE

3.1 OVERALL ORGANISATIONAL STRUCTURE

HEAD OFFICE

REGIONAL HEAD
QUARTERS

REGIONAL HEAD
QUARTERS

REGIONAL HEAD
QUARTERS

3.2 FUNCTIONS OF DEPARTMENTS

REGIONAL HEAD
QUATERS
REGIONAL
BRANCHQUATERS

OPERATIONS
DIVISION

SUPPORT
FUNCTION

BRANCHES

ISO CELL

BROKING

ACCOUNTS

OPERATIONS DIVISION

FPO

SYSTEM

SUPPORT FUCTION

RIS

HRD

DP

ADMN.PURCHASE

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3.3 MARKETING

HEAD OF THE BRANCH

MARKETING MANAGER

SALES EXE.

ASSISTANT

TRAINEE

3.4 ACCOUNTS

HEAD OF THE BRANCH

ACCOUNTANT MANAGER

DOCUMENTRY

ASSISTANT

ACCOUNT MANAGER

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3.5 HR & ADMINISTRATION

HEAD OF THE BRANCH

HRM

HR DEVOLPMENT

PAY ROLE

SALES EXE.

RECURTMENT

TRAINEES

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27 | P a g e

CHAPTER: 4
STOCK EXCHANGES

4.1 FUNCTIONS OF STOCK EXCHANGES

The importance of stock exchanges will be clear from the following functions performed by
stock exchanges:
1. ENSURES LIQUIDITY OF CAPITAL: The stock exchange provides a place where
shares and stock are converted into cash. It provides a ready market for buyers and sellers of
securities. If exchanges were not there many persons would have fear of blocking their
savings in securities.
2. CONTINUOUS MARKET FOR SECURITIES: The securities once listed continue to
be traded irrespective of the fact that owners go on changing. Exchanges provide regular
market for trading in securities.
3. EVALUATION OF SECURITIES: The investors can evaluate the worth of their shares
from price quoted at different stock exchanges for those securities.
The securities are quoted under free atmosphere of demand and supply and prices are set on
the basis of free market.
4. MOBILIZING SURPLUS SAVINGS: Through stock exchanges the investors are given
a safe platform to invest their savings. Hence stock exchanges play an important role in
mopping up surplus funds of investors.
5. HELPFUL IN RAISING NEW CAPITAL: The new concerns raise capital for first time
and the existing units increase their capital for further expansion and diversification purposes.
The new concerns get themselves registered so that the shares they issue can be further traded
at exchanges.
6. SAFETY IN DEALINGS: The dealings in stock exchanges are governed by well defined
rules and regulations of Securities contract act; 1956. There is no scope of manipulating the
transactions. Every transaction is done according to the procedure laid done and there is no
fear in minds of trading parties.
7. LISTING OF SECURITIES: Only listed securities can be traded in stock exchanges.
Every company desires of listing its securities will apply to the exchange authorities. But
listing is allowed after critical examination of capital structure, management and prospectus
of company. Hence provide security to a limit but it does not guarantee the financial stability,
so the investors should make analysis before investing.
8. CLEARING HOUSE FOR BUSINESS INFORMATION: The companies listing
securities with exchange have to provide financial statements, annual reports and other
28 | P a g e

reports to ensure maximum publicity of corporations operations and working. The economic
and other information provided at stock exchanges help companies to make their policies.
9. PLATFORM FOR PUBLIC DEPTS.: The stock exchanges are also organized market
for government securities. However there is no any provision for a separate counter for
government securities but these are traded through brokers dealing in these securities.
10. FAIR PRICE DETERMINATION: The prices in the stock market are determined by
the interplay of forces of supply and demand. In stock exchange there is active bidding and a
two way auction takes place as a result there is a free competition in the stock market. The
price is determined where the bargain is stuck.
Stock exchanges also perform other functions that are useful for tax purposes and
hence protect the investors interest by eliminating dishonest and irregular practices in the
brokerage of trade.
4.2 THE BOMBAY STOCK EXCHANGE
Bombay Stock Exchange Limited is the oldest stock exchange
in Asia with a rich heritage. Popularly known as "BSE", it was
established as "The Native Share & Stock Brokers
Association" in 1875. It is the first stock exchange in the
country to obtain permanent recognition in 1956 from the
Government of India under the Securities Contracts
(Regulation) Act, 1956.The Exchange's pivotal and preeminent role in the development of the Indian capital market is
widely recognized and its index, SENSEX, is tracked
worldwide. Earlier an Association of Persons (AOP), the
Exchange is now a demutualised and corporatized entity
incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE
(Corporatization and Demutualization) Scheme, 2005 notified by the Securities and
Exchange Board of India (SEBI).
With demutualization, the trading rights and ownership rights have been de-linked
effectively addressing concerns regarding perceived and real conflicts of interest. The
Exchange is professionally managed under the overall direction of the Board of Directors.
The Board comprises eminent professionals, representatives of Trading Members and the
Managing Director of the Exchange. The Board is inclusive and is designed to benefit from
the participation of market intermediaries.

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In terms of organization structure, the Board formulates larger policy issues and
exercises over-all control. The committees constituted by the Board are broad-based. The
day-to-day operations of the Exchange are managed by the Managing Director and a
management team of professionals.
The Exchange has a nation-wide reach with a presence in 417 cities and towns of
India. The systems and processes of the Exchange are designed to safeguard market integrity
and enhance transparency in operations. During the year 2004-2005, the trading volumes on
the Exchange showed robust growth.

4.3 THE NATIONAL STOCK EXCHANGE

The National Stock Exchange (NSE) is India's leading stock exchange covering various cities
and towns across the country. NSE was set up by leading institutions to provide a modern,
fully automated screen-based trading system with national reach. The Exchange has brought
about unparalleled transparency, speed & efficiency, safety and market
integrity. It has set up facilities that serve as a model for the securities
industry in terms of systems, practices and procedures. NSE has played a
catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today
uses state-of-art information technology to provide an efficient and
transparent trading, clearing and settlement mechanism, and has witnessed several
innovations in products & services viz. demutualization of stock exchange governance,
screen based trading, compression of settlement cycles, Dematerialization and electronic
transfer of securities, securities lending and borrowing, professionalization of trading
members, fine-tuned risk management systems, emergence of clearing corporations to
assume counterparty risks, market of debt and derivative instruments and intensive use of
information technology.

30 | P a g e

31 | P a g e

Chapter-5

Literature Review
1). Balasubramanian et al. (1999) found seven basic reasons for adopting online trading:
feeling of empowerment, cost, speed and availability, convenience, easy access to reliable
information, lack of trust in and unsatisfactory experiences with traditional brokers, and
investors' discomfort when communicating directly with traditional brokers.

2).Cha et al. (2006) identified the diffusion factors of Internet-based financial services. It
was observed that perceived efficiency, system reliability, customer service, and personal
characteristics were significantly positive in explaining the degree of e-finance usage.

3).Chen and Hitt (2000) found that customers with high overall transaction volume have
high incentives to switch to an online broker. However, these studies used a cross-sectional
data set to investigate investors' investment characteristics and psychology after adopting
online trading. It is plausible that investors might change their investment behavior and
psychology in response to the new environment of online trading. For example, going online
may cause investors to trade more frequently, and if investors' profits decline because of
online trading, their confidence and investment risk propensity may change accordingly.
Therefore, the causality has not been established.

4.) Doherty et al. (2003) and (Akinci et al., 2004) found that male and young customers
were most likely to adopt the internet. The young, educated, and affluent embraced the
advent of personal computer as the new wave in digital technology

5).Hella Chemingui, Hajer Ben lallouna, (2013), study based on innovation acceptance and
explored consumer confidence drew reference from Rogers theory of innovations diffusion
(2003), observed that compatibility, trialability and perceived enjoyment were motivational
factors behind using mobile financial services among the Tunisian respondents and tradition
act as a barrier force.

6).Lau et al. (2001) found that perceived usefulness, perceived ease of use, and compatibility
significantly affected the attitude towards the use of on-line trading. Besides, on-line trading
was likely to improve the process of placing orders.

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7).Loh and Ong (1998), based on 151 responses, examined the impact of users evaluation
and their beliefs and attitudes, as well as their usage behaviour on adoption and acceptance of
a new innovation in Singapore. The study revealed that users concerns, expectations,
perceived ease of use, and the real value added of a new system as well as their trading
behavior were crucial determinants to the ultimate adoption of Internet stock trading.
8).Nidhi walia and Ravinder kumars (2007) research report examined the investors
preference for traditional trading and online trading, investors perception on online trading
and comparing current usage of online trading and offline trading. This study reveals that out
of every 100 investors only 28 trade online, which points out a question as why investors
were not able to realize the importance of technology in stock trading.

9).Peter Tobbin, (2012), through group discussions and experience sharing identified
economic benefits and trust to be the driving force behind accepting mobile banking services
especially among the unbanked rural respondents.

10).Rajagopalan, V, expressed the problem faced by him on online share trading. What he
cannot stomach is how his ID number was interchanged with another client, and his account
debited to pay for derivatives, while he did not order. Worse his scripts were sold to cover
losses which he had not incurred. Luckily, the broker admitted his mistake and compensated
him, but the episode has left Rajagopalan extremely chary of online trading.

11).Ramayah, (2007), advocated that subjective norm and perceived behavioural control had
a direct positive relationship towards behavioural intention to use internet stock trading with
specific reference to developing countries.

12).Richard Boateng, (2011), applied the transaction cost theory and developed a
conceptual model analyzing the impact of mobile phones on pre-trade, during-trade and posttrade activities using the descriptive survey technique. Differential usage was identified on
the basis of education level of traders, the educated trades used mobile phones for conducting
their trading activities while the uneducated traders used the phone was simple calculations.

33 | P a g e

13).Sohail and Shanmugham (2003) found three major factors affecting the adoption of
Internet banking services, namely, Internet accessibility, awareness of e-banking, and attitude
towards change in Malaysia.

14).Teo et al. (2000) examined the attitude of 208 adopters and 222 non-adopters towards
Internet stock trading in Singapore. It was observed that 78.4 percent of the Internet stock
trading respondents preferred using Internet to conventional means of trading. It was also
observed that adopters were more confident of the security of Internet stock trading than nonadopters.

15).Tommi Laukkanen, (2007) advocated that efficiency, convenience and safety are salient
in determining the differences in customer value perceptions between internet and mobile
banking following Means-end approach and laddering interviewing technique.

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35 | P a g e

CHAPTER: 6
RESEARCH METHODOLOGY
Online share trading is not a new concept for India too.NSE has started it in 1992.
Still share-trading is not very popular among middle class people and they think it as risky
investment. If we see the growth of the sensex .It has increased more than 15 times in 16
years. In 1992 it was at just 1000 and today it is about15000. It was at 21000 in January
2008.
6.1 NEED FOR THE STUDY:
Investments are both important and useful in the, context of present-day conditions.
Some factors that have made investment decisions increasingly important are: Longer life
expectancy or planning for retirement, increasingly rates of taxation High interest rates, High
rate of inflation, large incomes, Availability of a complex number of investment outlets.
During research it was my aim to find out different aspects of online trading and
peoples interest about it. Which companies are popular among them, how much they know
about these things, how much are they satisfied etc.?
Meanwhile I was also looking for prospect customers also for Kotak Securities Ltd.
Following are the main objectives of the research:

6.2 PRIMARY OBJECTIVES:

To find out potential customer by creating awareness among the people for
opening D MAT a/c

To study the awareness and interest of customers for online trading services.
To find out customers satisfaction level.
6.3 SCOPE OF THE STUDY:

To find out customers overall perception about the system.

To know what motivates prospective customer to think about going for online
share trading.

To know what options are used by customer in online trading.

To get information regarding the current market share of the company.
To know competitors of Kotak Securities in the market.

36 | P a g e

6.4 DEVELOPING RESEARCH PLAN

The second stage of marketing research calls for developing a most efficient plan for gathering
needed information. Designing a research plan calls for taking decision on data sources
research, approach, research instrument, sampling plan and contact methods.

6.5 DATA SOURCE

There are two types of methods used in data collection i.e. primary data & secondary data.
6.5.1 PRIMARY DATA
Those data which are collected at first hand by the researcher especially for the purpose of
the study ,are known as primary Data .The data is collected directly from the person in sample
population. In this project research the collection of data is directly interviewing customer. In
the collection of the primary data, I have used survey method and use the questionnaire
methods.
There are mainly two methods for the collection of the primary data which are given
below,
Observational Method.

Survey Method.

OBSERVATION METHOD:In the observation method, it requires the observer. The observer will keenly observe the
person at the time of the interview & record his behavior accurately. it is also one of The
important method for the collection of data but it requires good & experienced observer who
can observer The behavior of the respondent properly and record it with great accuracy.
SURVEY METHOD:It is most popular method for the collection of necessary data from the respondents. I have used
survey method for the collection of the necessary data.
Different types of the survey are given below,

Personal interview.

Telephonic survey.

PERSONAL INTERVIEW:In the personal interview, the interviewer will personally meet the respondent and will take is
interview. The interviewer will ask question in face to face direction to the respondents or
group of respondents.
37 | P a g e

TELEPHONIC SURVEY:In the telephonic interview, the interviewer will make call to respondents, inform the
respondents about the purpose of the call and then he will ask the related questions to the
respondents. This method is used, when the information to be collected is limited. It is mostly
used when information to be collected is limited.
6.5.2 SECONDARY DATA
Any data which had been gathered earlier for other purposes are secondary data in hand of
marketing research. These data has been collected from company dealer like Dealer profile,
industrial profile, company profile are collected from the internet.
The secondary data are collected from the magazines, internet and Web -sites. Different web
sites like www.Kotaksecurities.com and GOOGLE Search engine help in collecting the
detailed information.
6.6 RESEARCH APPROACH
Out of 4 ways of research approaches i.e.
1. Observation research.
2. Survey Research
3. Focus Group research
4. Experimental research.
In this project the approach used was survey approach because the main objective of our
survey was to study of the market potential and have an idea about the customer awareness.
6.7 SAMPLING
Research instruments can be of two types firstly questionnaire methods and secondly
mechanical instruments. In this survey the research instrument was questionnaire method.
6.8 SAMPLING PLAN:Sampling size
Field Work area

: 50
: Ludhiana City

Random sampling
SAMPLING PROCEDURE:The sampling Procedure can be of two types:
1. Probable Samplings
2. Non-probable sampling
In this survey expert Judgments sampling method can be used.

38 | P a g e

CONTACT METHODS:
The method of contacts can be three types
1. Personal Interview
2. Telephonic Interview.
3. Internet
6.9 STATEMENT OF PROBLEM
Problem definition is one of the most important parts of the study. It is very important to
properly define the problem. If the problem is properly defined then it will provide proper
guide line for the further study. The properly defined problem will direct the surveyor on the
proper path. And it is truly said that a properly defined problem is a half solve.
Here the main problem is to study on the INVESTOR PREFERENCES FOR ONLINE
TRADING (IN LUDHIANA). Market potential is nothing but the finding out potential
customers for the product of organization; which gives maximum profitability. To find out
market potential study of competitors; consumer behavior; brand positioning is must which
gives idea about the market scenario. Online share trading share trading is nothing but the
buying and selling shares as per the market position, this is done through broker. Brokerbroker is the person who brings buyer and seller together.
So the problem is to know the market potential of online share trading and the popularity of
online share trading among the people. It is also to know which options are preferred by
customers.

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40 | P a g e

CHAPTER: 7
DATA ANALYSIS
7.1 INVESTMENT OPTIONS

Investment
Option
Bank
Insurance
Post office
Mutual-fund
Total

Person
2
20
10
18
50

Percent %
4.0
40.0
20.0
36.0
100.0

Valid Percent
%
4.0
40.0
20.0
36.0
100.0

Cumulative
Percent %
4.0
44.0
64.0
100.0

INTERPRETATION
This shows that most of people, who are observed, are interested in investing in
Insurance or Mutual Fund. 20% people are also interested in investing in Post office.

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7.2 BRAND AWARENESS

Companies
ICICI
Sharekhan
Kotak Securities
HDFC Securities
Total

No. of Respondents
22
16
07
05
50

Percentage %
45%
31%
14%
10%
100%

BRAND AWARENESS

45%
40%
35%
30%

Percentage
of People

25%
20%
15%
10%
5%
0%
ICICI

ShareKhan

Kotak
HDFC
Securities Securities

INTERPRETATION
ICICI was at the top of the mind of 45% people out of 100% and Sharekhan securing
second position with 31%, followed by Kotak and HDFC with 14% and 10%
respectively.

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7.3 IS ONLINE TRADING EASY?

Percent Valid
Ans Respondents %
Percent %

Cumulative
Percent %

Yes 41

82.0

82.0

82.0

No 9

18.0

18.0

100.0

100.0

100.0

Total

50

INTERPRETATION
This proves most of people accept that online trading is easy. This is a plus point for
stock trading companies.

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7.4 DO YOU NEED TRAINING?

Ans
.

Percent Valid
Respondents %
Percent %

Cumulative
Percent %

Yes 42

84.0

84.0

84.0

No

16.0

16.0

100.0

50

100.0

100.0

Total

INTERPRETATION
This shows that people need proper training for using online trading although it is
easy.

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7.5 SOURCES OF ADVERTISEMENT

Sources
News papers & magazines
Friends
Internet & Other media
Total

No. of Respondents
32
10
08
50

Percentage %
64%
20%
16%
100%

SOURCES OF ADVERTISEMENT

70%
60%
50%

Percentage 40%
Of people 30%
20%
10%
0%
News papers
& magazines

Friends

Other
media
Internet
&

Other media

INTERPRETATION
63% people come to know about online share trading through news paper and
magazines whereas 20% people come to know through friends and 17%
people come to know through other media like internet, news channel etc.

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7.6 AWARENESS OF E-BROKING

Reply

No. of Respondents

Percentage %

Yes

20

40%

No

30

60%

Total

50

100%

NSE

Yes

NO

INTERPRETATION
60% people were unfamiliar of the term e-broking and only 40% people
aware were with the concept of e-broking.

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7.7 INTEREST IN E- BROKING

Reply
Yes
No
Total

No. of Respondents
48
02
50

Percentage %
96%
04%
100%

INTEREST IN E-BROKING

100%
90%
80%
70%
60%
Percentage 50%
Of people 40%
30%
20%
10%
0%
Yes

No

INTERPRETATION
Out of the total sample size 97% people found the concept of e-broking interesting
and 03% people do not find it interesting.

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7.8 PREFERRED SYSTEMS OF SHARE TRADING

System
Online
Traditional
Cant say
Total

No. of Respondents
26
21
03
50

Percentage %
52%
42%
06%
100%

PREFERED SYSTEMS OF SHARE TRADING

6%

52%

42%

Online

Traditional

Cant say

INTERPRETATION
Regarding the preferences towards the different systems of share trading,
online share trading emerged as a clear cut winner with 53% people preferring
it, followed by traditional with 41% while 06% people were unable to answer.

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7.9 TRADITIONAL- INFLUENCING FACTORS

Reason

No. of Respondents

Dependence on broker
Lack of computer
knowledge
Fear of fraudulence
Total

20
14

Percentage
%
40%
28%

16
50

32%
100%

TRADITIONAL- INFLUENCING FACTORS

32%

40%

28%

Dependence on broker
Fear of fraudulence

Lack of computer knowledge

INTERPRETATION
39% people opt for traditional system of share trading because of their
dependence on broker, 29% people opt for traditional system of share trading
because of the lack of computer knowledge and 32% people wants to stick
with traditional system due to fear of fraudulence.

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7.10 ONLINE INFLUENCING FACTORS

Factors
Transparency
Hassle Free Service
Economical
Time saving
Total

No. of Respondents
32
07
06
05
50

Percentage %
64%
14%
12%
10%
100%

INFLUENCING FACTORS

10%
12%

14%

Transparency

64%

Hassle Free Service

Economical

Time saving

INTERPRETATION: Out of the four fascinating factors of online share trading

transparency is at the top as 64% people has voted for it followed by hassle free with 14%,
economical with 12% and time saving with 10% respectively.

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7.11 FUTURE PLANNING FOR ONLINE TRADING

Reply
Yes
No
Cant say
Total

No. of Respondents
26
22
02
50

Percentage %
52%
44%
04%
100%

FUTURE PLANNING FOR ONLINE TRADING

Cant say

4%

No

44%

Yes

52%
Percentage of people

INTERPRETATION
Out of the total sample size 53% people are planning to go for online share
trading and 43% people do not want to go for it while 4% people have not yet
decided.

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7.12 REASONS FOR NOT ENTERING INTO E-BROKING

Reasons
Relationship with broker
Trade rarely
Other reasons
Total

No. of Respondents
27
15
08
50

Percentage %
54%
30%
16%
100%

REASONS FOR NOT ENTERING INTO E-BROKING

60%
50%
40%
Percentage of
30%
People
20%
10%
0%

Relationship Trade rarely Other reasons

With broker

INTERPRETATION
55% people do want to do online share trading because they have good
relationship with their broker, 30% people trade rarely and 15% have some
other reasons.

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7.13 Which attributes made you to choose Online Trading.

S.NO.
1
2
3
4
5

Null Hypothesis
Null Hypothesis
Statements
Perceived perception regarding the time saving is low
H0
Perceived perception regarding the flexibility is low
H0
Perceived perception regarding the one stop shop is low
H0
Perceived perception regarding the Informed Research is low
H0
Perceived perception regarding the Standardized Procedure is low
H0
Mean and Standard deviation

Attributes
Time Saving
Flexibility
One stop Shop
Informed Research
Standardized procedure

Mean
4.14
3.600
3.640
3.500
3.74

Standard deviation
0.70015
0.7284
0.82709
0.8391
0.6327

Z value and p value

Attributes
Time Saving
Flexibility
One stop Shop
Informed Research
Standardized procedure

Z value
-3.636
-3.883
-3.078
-4.214
-2.905

P value
0.001
0.000
0.003
0.000
0.005

Interpretation:1. Time Saving: Z value for this attribute is -3.636 and the p value is .001 which is smaller
than Level Of Significance i.e.0.05, we will reject the null hypothesis. The mean value is 4.14
and standard deviation is 0.70015 i.e. rejecting the null hypothesis. On the other side accepted
the alternative hypothesis i.e Perceived perception regarding the Time Saving attribute is
high.
2. Flexibility: Z value for this attribute is -3.883 and the p value is .000 which is smaller than
Level Of Significance i.e.0.05, we will reject the null hypothesis. The mean value is 3.600
and standard deviation is 0.7284 i.e. rejecting the null hypothesis. On the other side accepted
the alternative hypothesis i.e. perceived perception regarding the flexibility is high.

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3. One Stop Shop: Z value for this attribute is-3.078 and the p value is .003 which is smaller
than Level Of Significance i.e.0.05; we will reject the null hypothesis. The mean value is
3.6400 and standard deviation is 0.82709 i.e. rejecting the null hypothesis. On the other side
accepted the alternative hypothesis i.e. perceived perception regarding the One Stop Shop is
high.
4. Informed Research: Z value for this attribute is -4.214 and the p value is .000 which is
smaller than Level Of Significance i.e.0.05, we will reject the null hypothesis. The mean
value is 3.500 and standard deviation is 0.8391 i.e. rejecting the null hypothesis. On the other
side accepted the alternative hypothesis Perceived perception regarding the informed research
is high.

5. Standardized Procedure: Z value for this attribute is -2.905 and the p value is .005 which
is smaller than Level Of Significance i.e.0.05, we will reject the null hypothesis. The mean
value is 3.7409 and standard deviation is 0.6327 i.e. rejecting the null hypothesis. On the
other side accepted the alternative hypothesis. Perceived perception regarding the
Standardized Procedure is high.

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CHAPTER: 8
FINDINGS AND OBSERVATIONS
It is found that people who were observed, they are yet investing in Insurance. And
mutual funds are also a good option for them. Post office was 3rd favorable option for
investing. It may be due to less knowledge of Share market as well as it is considered
risky.
ICICI is found to be most popular among all. People are well aware of various services
providers like Kotaksecurities.com, kotakstreet.com, hdfcsecurities.com. Professionals
and executive category are found to be in favor of the online share trading. They
showed interest in going for online share trading.
It is also seen that people think that online trading is convenient and easy to operate
but they also need initial guidance and training. So it must be provided to them so that
they can trade comfortably via online.
News and magazines are found to be of major source of information.
93% people found to be aware of online trading of securities.
90% of the total population agrees that the concept is easy, convenient & interesting.
Still only 53% people are sure to go for online share trading. 41% people rarely want
to go for online trading.
People have highly voted for transparency feature of the online trading followed by
hassle free service, economical and time saving features.
Business class prefer off line share trading as most of them have good
relationship with their broker.
Business class which can be defined as the people who are self employed
entrepreneurs are found to be less interested and would like to stick to the traditional
system and are much dependent on their broker regarding investments.
.

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CHAPTER: 9
LIMITATIONS

There is no activity without limitations so it had too. The main Limitation has been faced
during project research are as follows:-

The research has been carried on time span of one an half month.
The research is totally based on the personal opinion of the respondents which
may vary depending upon their personal view.

The research has done along with achieving our target given by company.
Peoples response was also not favorable.
Due to instability of market people were afraid of it, so they were less interested in
these things.

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CHAPTER: 10
SUGGESTIONS AND RECOMMENDATIONS
1. Although people have heard about online trading of securities still people have great
doubt about its operational feasibility as they are not clear about the concept. Special
awareness programs using various media mixes should be carried out to remove fear
from the minds of people and make it familiarize.
2. More emphasis should be laid on the convenience that the trading facilities offer by
either introducing kiosks in the centre where the clients could have a demonstration
for themselves and understand the various features of the product. This could help
them determine how conventional mode of trading is.
3. There are large numbers of prospective customers, who trades in small volume or
make infrequent transactions or like to hold the stock as a long term investment. The
current price structures are not at all suitable for such population. E- Trading
companies should look at such class.
4. Awareness campaigns like giving idea about futures and options, derivatives,
dividend policies will create interest in online trading. And this helps organization for
market positioning as well as mind positioning.
5. Development in public relation management and customer relationship management
will lead organization towards strong brand image as well goodwill.
6. Comparative study of customer care and services provide by other companies will
help develop business strategies as well business policies.
7. Seminars can be conducted at corporate level so as to increase potential customer
base. Corporate people do not go for share trading due to lack of time. This kind of
seminar will motivate them and make them aware about e-trading.
8. Tie-up with banks will facilitate the customer as maximum customers have their
salary accounts in banks and this account can be used for net banking as well share
trading.

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CHAPTER: 11
CONCLUSION
Shares are the best kind of investment available over a long period of time. And also
share market is a place where money earns money. For investing in share market every
investor needs to have an agreement with a Depository Participants. Depository Participants
are the one who provide the services of D MAT.
Kotak Securities is very well known among the investors but from the analysis I found
that ICICI Direct Securities is one of the major competitors. During my research I found that
there is a large market which is untapped, as most of people find the concept of online share
trading very interesting but none of them have been visited by the representative of any
company.
During my research I also found that many people want to stick with the traditional system of
share trading because of lack of computer knowledge and also many people are dependent of
their personal broker. In the research I observed that Kotak Securities limited is not effective
in the advertisement of its products.

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Chapter-12
References

Aarati Krishnan online trading clicks big with investors, Business India. April 9,
2006.
Adikari Anand (2010), D-Street on Your Mobile, Stock trading promises to spread
as the BSE and NSE offer mobile trading platforms; Business Today; November
28 2010, pg 20
Anup Bagch; Net Broking in India, Business world, 5 Dec 2005.
Foster Bill (2000), Stock Trading goes mobile, down under they are staying in top
with direct access, Communications News, 2000, pg 92
Goswami, Chandana, How does internet stock trading works Vikalpa, Vol.28,
No.1. Jun-Mar 2003 page 91-96
Hella Chemingui, Hajer Ben lallouna, (2013) "Resistance, motivations, trust and
intention to use mobile financial services", International Journal of Bank
Marketing, Vol. 31 Iss: 7, pp.574 592
Lynnwoods, online trading investors take change, Kiplingers personal finance
Jan 2003.
M. Gopi, T. Ramayah, (2007) "Applicability of theory of planned behavior in
predicting intention to trade online: Some evidence from a developing country",
International Journal of Emerging Markets, Vol. 2 Iss: 4, pp.348 - 360
Madan Lal Bhasin, E-Broking as a Tool Journal of services Research volume 5
number 2 [Oct 2005 mar 2006].
Nidhi walia & Ravinder Kumar, online stock Trading in India, An Emprical
Investigation, Indian Journal at marketing volume xxx VIII, April 2007.
Pathak, V.Bharti,(2004), Indian Financial System, Pearson Education, page 122142
Shashi Prabha Singh, (2005) "The role of technology in the emergence of the
information society in India", Electronic Library, The, Vol. 23 Iss: 6, pp.678 690
Shergill, G.S., and Z. Chen (2005). Web-based shopping: consumers attitude
towards on-line shopping in New Zealand. Journal of Electronic Commerce
Research. 6(2):
79-94
Tommi Laukkanen, Suvi Sinkkonen, Marke Kivijrvi, Pekka Laukkanen, (2007)
"Innovation resistance among mature consumers", Journal of Consumer
Marketing, Vol. 24 Iss: 7, pp.419 427
Wong, W. (2000). On-line broking: look to us for direction. The Business Times :
Singapore. 25(2): 19.

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CHAPTER: 13
ANNEXURE

Questionnaire for Investors

I am a student of LOVELY PROFESSIONAL UNIVERSITY. I am conducting a research on
Investors preference for Online Trading as part of my summer internship project in partial
fulfilment of MBA degree. I would like you to help me in completing the project by kindly
filling the questionnaire as it forms an important part of my study.
RESEARCH-QUESTIONS:
1. Which is the best investment-option for you?
(a)Bank
(b) Insurance
(c)Post office
(d) Mutual Funds
(e) Others
2. Which is the best company according to you?
(a)ShareKhan
(b) ICICI
(c)Kotak Securitie
(d) HDFC
3. Do you agree that online trading is easy & convenient?
(a) Yes
(b) No
4. Do you need training for online trading?
(a) Yes
(b) No
5. Are you interested in e-broking?
(a) Yes

(b) No

6. Which is your preference for share trading?

(a) Online
(b) Traditional
(c) Cant say
7. Which is your traditional influencing factor?
(a) Dependent on broker
(b) Fear of fraudulence
(c) Lack of computer information
8. Which is your online Influencing factor?
(a) Transparency
(c) Hassle free service

(b) Economic
(d) Time saving

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9. Do you have future planning for online trading?

(a) Yes
(b) No
(c) Cant say
10. What is reason for not entering in E-Broking?
(a) The Relationship with broker
(b) Trade rarely
(c) Other reason
11. Rate the ATTRIBUTES on 5- point Likert scale which made you to choose Online
Trading (5-very high, 4-high, 3-medium, and 2-low, 1-very low)

Attributes

Time Saving
Flexibility
One stop Shop
Informed Research
Standardized Procedure

PERSONAL INFORMATION:
12. Name:
13. Gender:

(a) Male

14. Age:
(a) Between 20-22 years
(c) Between 25-30years
15. Are you employed?
(a) Yes

(b) Female

(b) Between 22-25years

(d) Above 30 years

(b) No

16. What is your monthly income? (In Rs)

(a) Below 10000/(b) 10000-20000/(c) 20000-30000/(d) Above 30000/-

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