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Kotak Mahindra Group

Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions
that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds,
to life insurance, to investment banking, the group caters to the financial needs of individuals and
corporate.

The group has a net worth of over Rs.1, 550 crore and employs over 3,000 employees in its various
businesses. With a presence in 59 cities in India and offices in New York, London, Dubai and
Mauritius, it services a customer base of over 5,00,000.

Kotak Mahindra has international partnerships with Goldman Sachs (one of the world's largest
investment banks and brokerage firms), Ford Credit (one of the world's largest dedicated
automobile financiers) and Old Mutual (a large insurance, banking and asset management
conglomerate). It is the only company in India, which has Unlimited Liability.

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The Story of Success

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited.
Uday Kotak, Sidney A. A. Pinto and Kotak & Company promoted this company. Industrialists
Harish Mahindra and Anand Mahindra took a stake in 1986, and that is when the company changed
its name to Kotak Mahindra Finance Limited.
Since then, it has been a steady and confident journey to growth and success.

1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting

1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market

1990 The Auto Finance division is started

1991 The Investment Banking Division is started. Takes over FICOM, one of
India’s largest financial retail marketing networks

1992 Enters the Funds Syndication sector

1995 Brokerage and Distribution businesses incorporated into a separate company


- Kotak Securities. Investment Banking division incorporated into a separate
company - Kotak Mahindra Capital Company

1996 The Auto Finance Business is hived off into a separate company - Kotak
Mahindra Primus Limited. Kotak Mahindra takes a significant stake in Ford
Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of
Matrix Information Services Limited marks the Group’s entry into
information distribution.

1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.

2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business.
Kotak Securities launches kotakstreet.com - its on-line broking site. Formal

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commencement of private equity activity through setting up of Kotak
Mahindra Venture Capital Fund.

2001 Matrix sold to Friday Corporation


Launches Insurance Services

2003 Kotak Mahindra Finance Ltd. converts to bank

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Mission Statement

A mission statement is a relatively permanent part of an organization’s identity and can do much to
unify and motivate members of the organization. A mission statement, a broad based goal based on
managers’ assumptions about the organization’s purpose, competencies and place in the world.

“To Consistently Provide a Full Spectrum


of Intelligent Financial Choices and Be a
Preferred Provider of the Highest Quality
Service in Our Chosen Business Area.”

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Corporate Identity

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The Journey So Far

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Key Group Companies and their Businesses

Kotak Mahindra Bank Ltd.:

Kotak Mahindra Bank Limited (KMBL) is the holding company and the flagship of the Kotak
Mahindra Group. It was actually incorporated as Kotak Capital Management Finance Limited on
November 2, 1985 and obtained its ‘Certificate of Commencement of Business on February 11,
1986.

It commenced operations with Bill Discounting and soon started other fund-based activities like
corporate leasing and hire purchase, automobile finance and money market operation.
Subsequently, It also entered the funds syndication and the investment banking business.

With the liberalization of the Indian economy and the opening up of the financial markets, the
Company diversified and started offering a wider spectrum of financial services. To meet the
increasing competition, from global players, in the Indian financial markets in terms of capital
knowledge base, technology and systems, the company decided to restructure its investment
banking and car finance divisions into joint venture companies.

Kotak Mahindra Primus Ltd.:

Kotak Mahindra Primus Limited (KMPL) is a joint venture between Kotak Mahindra Bank Ltd and
(USA) (FCII) formed to finance all non-Ford passenger vehicles. The Joint venture is dedicated to
financing and supporting automotive and automotive related manufacturers. dealers and retail
customers. The Company was incorporated on 28th February 1996 and commenced its operations
on 1st November 1996. After incorporation and subsequent commencement of the business by the
joint venture, the business of financing non-Ford passenger cars and its related activities, previously
carried on by KMFL, is being undertaken by KMP. The company has immensely benefited from the
brand equity undertaken by KMP. The Company has immensely benefited from the brand equity of
“Kotak Mahindra” who was market leaders in the auto finance sector.

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KMPL has established a centralized customer service activity to ensure high quality and timely
response to customer needs. The robust system platform ensures the above standards are met.
KMPL’s launch of website is a commitment by the organization to provide all stakeholders,
including customers, accurate and up to date information.

Kotak Mahindra Capital Company Ltd.:

Kotak Mahindra Capital Compnay Limited (KMCC), India’s premier Investment Bank is a strategic
Joint Venture between Kotak Mahindra Bank Limited (KMBL) and the Goldman Sachs Group,
LLP.

The securities business of the Kotak Mahindra Group is represented by KMCC and Kotak
Securities (KS) a joint venture with Goldman Sachs involved in brokerage, distribution and
research.

KMCC, together with KS, is a full service Investment Bank bringing to the clients the global reach
and expertise of Goldman Sachs and the local knowledge and skills of Kotak Mhaindra. As a full
service Investment Bank, KMCC has been guided by its philosophy of ‘Ideas First’ and has
pioneered several innovative transactions in India, which has been the hallmark of our success has
pioneered several innovative transactions in India, which has been the hallmark of our success and
has enabled us to maintain our position as one of the India’s leading Investment Banks.

KMCC’s core business areas include Equity Issuances, Mergers & Acquisitions, Structured Finance
and Advisory Services, Fixed Income Securities and Principal Business.

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Kotak Mahindra Asset Management Company:

Kotak Mahindra Asset Management Company (KMAMC), a wholly owned subsidiary of KMBL, is
the asset manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in
December 1998 and has over 1,35,000 investors in various schemes. KMMF offers schemes
catering to investors with varying risk-return profiles and was the first fund house in the country to
launch a dedicated gilt scheme investing only in government securities.

Kotak Mahindra International Ltd.:

Kotak Mahindra International Limited (KMIL) is the international arm of the Kotak Mahindra
Group and was incorporated in 1994 in Mauritius, with a branch in Dubai. Today the international
operations also cover the United Kningdom, through Kotak Mahindra U.K.Limited and the US,
through Kotak Mahindra Inc. USA.These companies are subsidiaries of Kodak Mhaindra Capital
Company (KMCC)- the investment Banking Division of the Group. Services offered include GDR
and ADR trading and broking, debt syndication, placement of Indian securities and advisory
services. Kotak Mahindra was the first Indian group to be registered with the Securities and Futures
Authority, U.K.Also, Kotak Mahindra is the first Indian group register in the US providing service
to both institutional investors and High Net worth Clients in the US for their investments into the
Indian markets.

Kotak Mahindra Venture Capital Fund:

Kotak Mahindra Venture Capital Fund (KMVCF or the Fund), sponsored by Kotak Mahindra bank
Limited, was formed to provide growth capital to Indian corporate. This is the Group’s formal foray
into the venture capital / private equity arena, after having made proprietary investments in the past.

KMVCF is a SEBI registered fund, with KMBL as the principal investor, and 30 other private
investors. KMBL is the investment manager of the Fund.

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Chart of Management Structure

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An Overview of Indian Securities Market

Introduction

Securities market provides a channel for allocation of savings to those who have a productive need
for them. As a result, the savers and investors are not constraints by their individual abilities, but by
the economy’s abilities to invest and save respectively, which inevitably enhances savings and
investment in the economy.

Market Segments

The securities market has two interdependent and inseparable segments: the primary and the
secondary market. The primary market provides the channel for creation of new securities through
issuance of financial instruments by public companies as well as Governments and Government
agencies and bodies whereas the secondary market helps the holders of these financial instruments
to sale for exiting from the investment. The government and corporate sector raised a total of Rs.2,
520,179 million during 2002-03 as against Rs. 2,269,110 million during the preceding year.
Government raised about two third of the total resources, with central government alone raising
nearly Rs. 1,511,260 million. The price signals, which subsume all information about the issuer and
his business including associated risk, generated in the secondary market, help the primary market
in allocation of funds. The primary market issuance is not limiting any entity in investing while in
private placement; the issuance is done to select people. In terms of the Companies Act, 1956, an
issue becomes public if it results in allotment to more than 50 persons. This means an issue
resulting in allotment to less than 50 persons private placement. The secondary market enables
participants who hold securities to adjust their holdings in response to changes in their assessment
of risk and return. They also sell securities for cash to meet their liquidity needs. The exchanges do
not provide facility for spot trades in a strict sense. Closest to spot market is the cash market in
exchanges where settlement takes place after some time. Trades taking place over a trading cycle
(one day under rolling settlement) are settled together after a certain time. All the 23 stock
exchanges in the country provide facilities for trading of corporate securities. Trades executed on
NSE only are cleared and settled by a clearing corporation, which provides notation and settlement
guarantee. Nearly 100% of the trades in capital market segment are settled through demat delivery.
NSE also provides a formal trading platform for trading of a wide range of debt securities including
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government securities in both retail and wholesale mode. NSE also provides trading in derivatives
of equities, interest rate as well indices.

Products and Participants

Financial markets facilitate the reallocation of savings from savers to entrepreneurs. Savings are
linked to investments by a variety of intermediaries through a range of complex financial products
called “securities” which is defined in the Securities Contracts (Regulation) Act, 1956 to include
shares, bonds, scripts, stocks or other marketable securities of like nature in or of any incorporate
company or body corporate, government securities, derivatives of securities, units of collective
investment scheme, interest and rights in securities, security receipt or any other instruments so
declared by the central government.

A Profile

The past decade in many ways has been remarkable for securities market in India. It has grown
exponentially as measured in terms of amount raised from the market, number of stock exchanges
and other intermediaries, the number of listed stocks, market capitalization, trading volumes and
turnover on stock exchanges, and investor population. Along with this growth, the profiles of the
investors, issuers and intermediaries have changed significantly. The market has witnessed
fundamental institutional changes resulting in drastic reduction in transaction costs and significant
improvements in efficiency, transparency and safety.

Dependence on Securities Market

Three main sets if entities depend on securities market. While the corporate and governments raise
resources from the securities market to meet their obligations. The households invest their savings
in the securities.

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Corporate Sector
The 1990s witnessed emergence of the securities market as a major source of finance for trade and
industry. A growing number of companies are accessing the securities market rather than depending
on loans from Financial Institutes/banks. The corporate sector is increasing depending on external
sources for meeting its funding requirements. There appears to be growing preference for direct
financing (equity and debt) to indirect financing? (Bank loan) within the external sources. In the
sector-wise shareholding pattern of companies listed on NSE, it is observed that on an average the
promoters hold more than 55% of total sharers. Though the non-promoter holding is about 44%,
Indian public held only 17% and the public float (holding by FIIs, Mutual Funds, Indian public) is
at best 25%. There is not much difference in the shareholding pattern of companies in different
sectors. Strangely, 63% of shares in companies in media and entertainment sector are held by
private corporate bodies though the requirement of public offer was relaxed to 10% for them.

Government
Along with increase in fiscal deficits of the governments, the dependence on market borrowings to
finance fiscal deficits has increased over the years. During the year 1990-91, the state governments
and the central government financed nearly 14% and 18% respectively of their fiscal deficit by
market borrowings did not increase much during the decade 1991-2001. In case of central
government, it increased to 77.6% by 2002-03.

Household
According to RBI data, household sector accounted for 82.4% of gross domestic savings during
2001-02.They invested 38% of financial savings in deposits, 33% in insurance/provident funds,
11% on small savings, and 8% in securities, including government securities and units of mutual
funds during 2001-02.

Population Investor

The Society for Capital Market Research and Development carries out periodical surveys of
household investors to estimate the number of investors. Their first survey carried out in 1990
placed the total number of shareowners at 90-100 Lakhs. Their second survey estimated the number
of shareowners at around 140-150 Lakhs. as of mid-1993. Their latest survey estimates the number
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of shareowners at around two crore at 1997 end, after which it remained stagnant up to the end of
1990s. The bulk of increase in number of investors took place during 1991-94 and tapered off
thereafter. 49% of the shareowners at the end of 2000 had. For the first time, entered the market
before the end of 1990, 44% entered during 1991-94, 6.3% during 1995-96 and 0.8% since 1997.

Distribution of investors:

The Society for capital Market Research & Development estimates that 15% of urban households
and only 0.5%-1.0% of semi-urban and rural households own shares. It is estimated that 64% of all
households own shares.

_______________________________________________________
Sr. States/Union beneficial account
No. Territories _________________
Number % to total
_______________________________________________________
1 Andhra Pradesh 194,405 6.08
2 Bihar 27,340 0.85
3 Chandigarh 7,891 0.25
4 Delhi 323,693 10.12
5 Goa 11,374 0.36
6 Gujarat 536,720 16.78
7 Himachal Pradesh 3,706 0.12
8 Jammu & Kashmir 7,320 0.23
9 Karnataka 195,159 6.10
10 Kerala 76,793 2.40
11 Madhya Pradesh 71,158 2.23
12 Maharashtra 911,997 28.52
13 Orissa 14,701 0.46
14 Pondicherry 2,481 0.08
15 Punjab 52,434 1.64

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16 Rajasthan 72,316 2.26
17 Tamilnadu 230,407 7.20
18 Uttar Pradesh 188,835 5.90
19 West Bengal 214,432 6.71
20 Others 54,802 1.71
Total 3,197,964 100.00

Corporate Securities
Average annual capital mobilization from the primary market, which is to be about Rs. 70 crore in
the 1960s and about Rs. 90 crore in the 1970s, increased manifold during the 1980s, with the
amount raised in 1990-91 being Rs. 4,312 crore. It received a further boost during the 1990s with
the capital raised by non-government public companies rising sharply to Rs. 26,417 corer in 1994-
95. The capital raised which used to be less than 1% of gross domestic saving (GDS) in the 1970s
increased to about 13% in 1992-93. In real terms, the capital raised increased 4 times between 1990-
91 and 1994-95. During 1994-95, the amount raised through new issues of securities from the
securities market accounted for four-fifth of the disbursements by Financial Institutions. There is a
preference for raising resources in the primary market through private placement of debt
instruments. Private placements accounted for about 93% of total resources mobilized through
domestic issues by the corporate sector during 2002-03. Indian market is getting integrated with the
global market though in a limited way through euro issues. Since 1992, when they were permitted
access, Indian companies have raised about Rs. 34,264 million through ADRs/GDRs. By the end of
March 2003, 502 FIIs were with SEBI. They had net cumulative investments over of US $ 15.8
billion by the end of March 2003. Their operations influence the market as they do delivery-based
business and their knowledge of market is considered superior.

Government Securities
The primary issues of the Central Government have increased many fold during the decade of 1990s
from Rs. 89,890 million in 1990-91 toRs.1,511,260 million in 2002-03.The issues by state
governments increased by about twelve times from Rs. 25,690 million to Rs. 308,530 million
during the same period. The Central Government mobilized Rs. 1,250,000 million through issue of
dated securities and Rs.261,260 million through issue T-bills. After meeting repayment liabilities of
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Rs. 274,200 million for dated securities, and redemption T-bills of Rs 195,880 million, net market
borrowing of Central Government amounted to Rs 1,041,180 million for the year 2002-03.The state
governments collectively raised Rs. 305,830 million during 2002-03 as against Rs.187,070 million
in the preceding year. The net borrowings of state Governments in 2002-03 amounted to
Rs.290,640 million

Secondary market

Corporate security
The number of stock exchange increased from 11 in 1990 to 23 now. All the exchange are fully
computerized and offer 100% on-line trading. Today 9,413 companies were available for trading on
stock exchanges at the end of March 2003a. The trading platform of the stock exchange was
accessible to 9519 members from over 358 cities on the same date.
The relative importance of various exchanges in the market has undergone dramatic change during
this decade. The increase in turnover took place mostly at the large big exchanges and it was partly
at the cost of small exchanges that failed to keep the pace with the changes. NSE is the market
leader with more 85% of total turnover in 2002-2003. Top five exchanges accounted for 99.88% of
turnover, while the rest 18 exchanges for less than 0.12% during the year 2002-2003. About 10
exchanges reported nil turnovers.

Government Securities
The trading volumes in government securities exceeded the combined trading volumes in equity
segments of all the exchanges in the country during 2002-03. The aggregate turnover in central and
state government dated securities, including 195 treasury bills, through SGL transactions increased
by manifold between 1994-95 and 2002-03. During 2002-03 it reached a level of Rs. 19,557,313
million, recording about 24.3% growth over Rs.15,738,930 million in the previous year. Such
growing turnover reflects further deepening of the market. The bulk of transactions during 2000-02
were on outright basis. The share of outright transactions in government securities increased from
23.2% in 1995-96 to 71.2% in 2002-03. The share of repo transactions declined correspondingly
from 76.8% in 1995-96 to 29% in 2002-03.The shares of WDM segment of NSE in total turnover
for government securities decreased marginally from 58.9% in 2000-01 to 52% in 2002-03. As
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compared to the increase in overall turnover of government securities by 24%, the same on WDM
grew by 11% during 2002-03. Share of WDM in transactions of dated securities decreased from
61.1% in 2001-02 to 55.6% in 2002-03. Its share in transactions of T-bills decreased from 27.4% in
2001-02 to 21.5% in 2002-03.Government debts, which constitutes about three-fourth of the total
outstanding debt, has the highest level of liquidity amongst the fixed income instruments in the
secondary market. The share of dated securities in total turnover of government securities has been
increasing over the years. Two-way quotes are available for the active gilt securities from the
primary dealers. Though many trades in the gilts take place through telephone, a larger chunk of
trades is routed through NSE brokers.

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National Stock Exchange

The National Stock Exchange (NSE) is India's leading stock exchange covering 364 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, dematerializations and electronic transfer of
securities, securities lending and borrowing, professionalisation of trading members, fine-tuned risk
management systems, emergence of clearing corporations to assume counter party risks, market of
debt and derivative instruments and intensive use of information technology.

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Bombay Stock Exchange

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native
Share and Stock Brokers Association". It has evolved over the years into its present status as the
premier Stock Exchange in the country. A Governing Board having 20 directors is the apex body,
which decides the policies and regulates the affairs of the Exchange. The Executive Director as the
Chief Executive Officer is responsible for the day-to-day administration of the Exchange and he is
assisted by the Chief Operating Officer and other Heads of Departments.

The Exchange has inserted new Rule No.126 A in its Rules, Bye-laws & Regulations 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

Turnover on the Exchange

• The average daily turnover of the Exchange during the financial year 2000-2001 (April-
March), was Rs.3984.19 crores and the average number of daily trades was 5.69 lakhs
• The average daily turnover of the Exchange in the subsequent two financial years, i.e., 2001-
02 & 2002-03, has declined considerably to Rs. 1248.15 corers and Rs. 1251.29 corers
respectively.
• The average number of daily trades recorded during 2001-02 and 2002-03 numbered 5.17
lakhs and 5.63 lakhs respectively

The average daily turnover and average number of daily trades during the quarter April-June
2003 were Rs. 1101.05 crores and 5.70 lakhs respectively. The ban on all deferral products like

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Borrowing & Lending of Securities Scheme (BLESS) and Automated Lending & Borrowing
Mechanism (ALBM) in the Indian capital markets by SEBI. w.e.f. July 2, 2001, abolition of
account period settlements, introduction of Compulsory Rolling Settlements in all scripts traded
on the Exchanges w.e.f. December 31, 2001, etc. has adversely affected the liquidity in the
market and consequently there is a considerable decline in the average daily turnover at the
Exchange as reflected in above statistics.

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Stock Market Transaction

Delivery Based Transaction:


Delivery Based Transactions one where it results in actual delivery of the underlying scripts. These
are buy and sell transaction by which investors desire capital appreciation in their investments.

Intraday Transactions (Cash market):


Intraday transaction is one where the transaction is done without any intention of delivery of the
underlying scripts. Buying and selling is done within the same settlement day. The net difference is
paid by/received by the investor at the end of the day. This is not a kind of investment but its called
speculation.

Derivatives:
A financial instrument hose value is derived from the values of other, more basic underlying assets.
Underlying assets may be stock, indices, currency, bullion commodities etc. For example, Value
September 1 month future contract for Nifty will depend on the current value of Nifty.

Basic types of Derivative

• Forward Contracts
• Future Contracts
• Options

Forward Contracts:

• It is an agreement to buy or sell an asset (like stock, indices, currency etc) at a certain future
time for a certain price.
• The contract is usually between two parties without having any involvement of exchange
• Settled at maturity, when the holder of the short position (seller) delivers the asset to the
holder of the long position (Buyer) in return for a cash amount agreed upon.
• Risk of counter party default

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• Generally popular in foreign currency where different Banks and Corporation enter into
forward contracts for different currencies.

Future Contracts:

• Like a forward contract, a future contract is an agreement between two parties to buy or sell
an asset at a certain time in the future for a certain price.
• Counter party is an exchange and future contracts are traded on exchange.
• To make trading possible, the exchange specifies certain standardized feature of the contract
like minimum size of contract, delivery time (usually in terms of month), margin
requirement etc.
• Daily mark to market accounting is done by the exchange
• On maturity, it is not required to give actual delivery of an asset but contract is settled based
on spot price of an asset.

Options:

• Options name suggest is right but not an obligation of option holder


• Basic two types of Option
- Call Option
- Put Option

• A call option gives the holder right to buy the stock by a certain date for a certain price.
• A put option gives holder right to sell the stock by a certain date for a certain price.
• The price in the contract is called strike price; the date in contract is known as the
expiration date, exercise date, or maturity.
• The price paid for buying an option is known as option price or option premium.
• American option can be exercised at any time up to the expiration date while European
option can be exercised only on the expiration date itself.
• Most of the option that is traded on the exchange is American.

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Buyer of options
Writer of options
(long position on
(short position on
option) Exchange
Bubb options)

Four basic option positions are possible

1. A long positioning call option


2. A long position in a put option
3. A short position in a put option
4. A short position in a put option

Example of a Call Option

Suppose today I have purchased a following American call option on Reliance and I have paid Rs.
10/- to hold this option. (Spot price is Rs. 395/-)

Strike Price: Rs. 400/-

Maturity: Last Thursday of August 2001 (if working day)

Then, up to closing of trading session on last Thursday of August 2001, I have right to buy Reliance
@ Rs. 400/-. This is my right not an obligation. Obviously, I will exercise my right only if before
maturity spot price of Reliance is more than Rs. 410/- (assuming no other charges). If I do not
exercise my right than my maximum loss will be Rs. 10/- only.

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Why should I buy a Call option?

• I have sold Reliance @ Rs. 390/- that I have purchased @ Rs. 320/- in past. By paying
on Rs. 10/- I can take advantage of any unexpected price movement above Rs. 410/-
• My belief is that Reliance will go up to Rs. 425/- in near future, but I do not want to take
delivery in spot market I also want to leverage or my cash position. My downside risk is
limited up to Rs. 10/-

Why should one write a call option?

• If someone is very bearish about Reliance and think that it will not cross Rs. 410/- till august
then he can write a call option at strike rate of Rs. 400/- with a premium of Rs. 10/-. In turn
writer assumes an upside risk opportunity loss of option buyer at a premium of Rs. 10/-
• Pay off form buying a call option

Profit

400

-10 410 Price of Reliance

Example of a put option:

Suppose today I have purchased a following American put option on Infosysy, I have paid Rs. 150/-
to hold this option. (Spot price is Rs. 4100/-)

Strike Price: Rs. 3900/-

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Maturity: Last Thursday of August 2001 (if working day)

Then up to closing of trading session on last Thursday of August 2001, I have right to sell Infosys
@ Rs. 3900/-. This is my right not an obligation. Obviously, I will exercise my right only if before
maturity Spot price of Infosys is less than Rs. 3750. /- (assuming no other charges). If I do not
exercise my right than my maximum loss will be Rs. 150/- only.

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Why should I buy a put option?

• I have bought Infosys @ Rs. 3850/- with a bullish view and price target of Rs. 5200/- on
upside. By paying on Rs. 150/- I can hedge my position for any downfall below Rs.3750/-.
• My belief is that Infosys will go down to Rs. 3200/- in near future, but I do not have delivery
to sell in spot market and I have cash in hand to leverage. My downside risk is limited.

Why should one write a put option?

• If someone is very bullish about Infosys and think that it will not break below Rs. 3750/- till
August then he/she can write a put option at strike rate of Rs. 3900/- with a premium of Rs.
150/- In turn writer assumes a downside risk option buyer at a premium of Rs. 150/-

Pay off buying a put option

3000 Price of Infosys

3750

-150

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What is minimum contract size?

The Standing Committee on Finance, a Parliamentary Committee, at the time of recommending


amendment to Securities Contract (Regulation) Act, 1956 had recommended that the minimum
contract size of derivative contracts traded in the Indian Markets should be pegged not below Rs. 2
Lakhs. Based on this recommendation SEBI has specified that the value of a derivative contract
should not be less than Rs. 2 Lakh at the time of introducing the contract in the market.

What is the lot size of a contract?

Lot size refers to number of underlying securities in one contract. Additionally, for stock specific
derivative contracts SEBI has specified that the lot size of the underlying individual security should
be in multiples of 100 and fractions, if any, should be rounded off to the next higher multiple of
100. This requirement of SEBI coupled with the requirement of minimum contract size forms the
basis of arriving at the lot size of a contract.

For example, if shares of XYZ Ltd are quoted at Rs.1000 each and the minimum contract size is
Rs.2 Lacs, then the lot size for that particular scripts stands to be 200000/1000 = 200 shares i.e. one
contract in XYZ Ltd. covers 200 shares.

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Kotak Securities

The company raised over Rs. 19000 crore in the primary market in 1999-2000 alone, and this is
twice the amount raised by its closest competitor. In the secondary market, the broking turnover of
Kotak uncertainties today, it had become imperative to take control of your financial assets. With
lot of external factors affecting the volatility of the market, it is important to channelize investments
in an organized fashion. The virtual world of Kotakstreet provides that pedestal, where you as an
investor can take control of all investing needs.

Kotakstreet, the retail arm of Kotak Securities, caters exclusively to stock broking and investment
requirements. Kotak Securities needs no introduction as one of the largest stock broking houses in
the country and a leading distributor of primary market offerings. Kotak Securities limited is a joint
venture between Kotak Mahindra Bank and Goldman Sachs, the international investment banking
and brokerage firm was Rs. 40000 crore plus during2000-2001.

Kotak Securities is a corporate member of both the BSE and the NSE. It is also a depository
participant with the National Securities Depository Limited (NSDL) for trading and settlement of
dematerialized shares.

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Kotak Securities - Areas of businesses

Institutional Stock Broking:

It covers secondary market broking for foreign and Indian institutional investors in Indian equities.
It also has a special research cell with sectoral analysts.

Private Client Services:

This is a special investment division for high net-worth individuals, non-resident Indian investors,
trust, corporate and banks. This service is also available at the Group's offices in Dubai and
London.

Client Money Management:

This division provides portfolio management services to high net-worth individuals and corporate.
The expertise of Kotak in research and stock broking gives it the right perspective to provide all the
investments for advisory services.

Retail distribution:

Kotak Securities has a comprehensive retail distribution network, consisting of approximately 7000
agents, 13 branches and over 20 franchisees across India. This network is used for the distribution
and placement of company fixed deposits, mutual funds, Initial Public Offerings, secondary debt,
equity, and small savings schemes.

Depository Services:

Kotak Securities is a depository participant with the National Securities Depository Limited
(NSDL) for trading and settlement of dematerialized shares. Since we are also in the broking
business, investors who use the depository services get a dual benefit. They can use our brokerage
services to execute transactions and our depository services to settle them.

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Online Share Trading/ Internet Share Trading

Online share trading is a service offered on Internet for the purchase and sale of shares. In the real
world, we place orders verbally (personally or telephonically) or in a written form (fax). In online
share trading we access the stockbroker’s website enabled PC and place orders through the brokers
Internet based trading engine. These orders are routed to the stock intervention and executed
thereon in a matter of a few seconds.

Emergence of Online Share trading:

Electronic commerce is associated with buying and selling over computer communication networks.
It helps conduct traditional commerce through new ways of transferring and processing 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
interchange, electronic mail, electronic bulletin boards, electronic funds transfer and other network-
based technologies. It not only automates manual processes and paper transactions, but also helps
organizations move to an electronic environment and change the way they operate.
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 online and net broking enables him to trade on a click.

In Internet trading, the Net is used as a medium to communicate orders to the stock exchange
through the broker’s website.
• E-broking sites would also provide the client with the opportunity to buy or sell securities
from the client’s home or office.
• The investors would be able track the fluctuations in a particular stock and the market as a
whole, while deciding to execute the order and also while the order routing system on
which net trading will be done is compatible with screen based trading terminals used
today.
• Internet trading brings in total transparency between a broker and an investor in case of
secondary market operations. When the open outcry system was prevalent, only the broker
knew the actually transacted price. This practice diminished significantly when it was taken
Report on Summer Training at Kotakstreet.com 31
over by screen based trading. With online trading investors can now see for themselves the
price at which the deal takes place.
• Investors access a wealth of financial information on the same time as do market and
financial professionals including breaking news, developments and market data.
• Online brokerage provides investors the tools to analyze the information such as research
reports.
• Online trading is leads to freedom form paperwork.
• Online trading leads to trading from any part of the world in a completely secure
environment.

Objectives:

Internet trading is expected to:


• 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 (MIS).
• Introduce flexibility in system, 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 systematic risks.

Emergence of Online Share Trading In India:

The National Stock Exchange (NSE) has been the most proactive in bringing about most of these
technological innovations, including online trading. It started way back in February 2000 with the
Kochi based Geojit Securities which conducted their first Net transaction when 100 shared was
traded by SEBI chairman D R Mehta for Geojit owner Kurian.

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Importance of Online Trading to India:

Online trading is major step that takes India closer to the most advanced capital markets of the
world, where a large chunk of trade takes place on the Net. This shall also facilitate foreign
investment in India. It will also reduce transaction costs, increase liquidity in the market and ensure
total transparency. It allows quick and easy access to valuable research and information to an
investor and enables him execute transactions faster and more efficiently on a real time basis. The
volume of trade will also increase and will provide depth to the market.

Obstacles to the growth of online trading:

• Poor Internet penetration, bandwidth and ISP infrastructure have been obstacles to the
growth of online trading.
• Online trading faces some problems relating to infrastructure and understanding of the
concept.
• Inefficient or not so efficient banking system is also a hindrance.
• It is resisted by old brokers and even investors.
• Lack of investor education and resistance from stockbrokers also pose some problems.
• It changes the very basis of relationship of client-brokers, which is, from personalized to
professionalise relationship.
• Lack of confidence in the online model has prevented online broking from taking off. Not
only is consumer but also even broker have not been forthcoming to accept Internet trading.

While there are many factors that need to be understood to justify this as simple fact is worthy of
note. The average age of the Indian Internet user according to a recent IDC survey is 27 years. The
average age of the head of the Indian equity investor household revealed by the SEBI in 2000 is 45
years. The older, experienced equity investors online today and the fact that older, mature investors
are not ‘tech-savvy’ hence unlikely to move to online trading is a major barrier to the growth in
India.

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Will online share trading ever take off in India?

In the US markets, online brokerage has significantly changed the dynamics of the market place,
resulting in one of the biggest shifts in the individual investor’s relationship with their brokers.
In the US, 82% of the deals are done on line. The European on line broking market is expected to
be of $8 billions and is likely to raise five fold by 2002.

In a nation with a middle class population of 200 million, most of whom are better, financially
comfortable tomorrow, the stock market is obviously the perfect place to invest-especially when
you consider that stock markets can make you considerably rich in as short span of time.
However, India’s scam scarred bourses haven’t exactly inspired trust with investors who want to
strike it rich, but who aren’t too well-versed with the game. The last few years of
the last century a wave of technology enhancements sweeping though share markets, wiping out
archaic conventions. The processes like online trading are coming to India.

Playing the online game:

According to the BCG study estimates the on line trading in India is about 2% to total traded
volumes compared to countries like US (40%) and UK (20%). Nearly 70 brokers have taken
permission from NSE to trade online until date. However, all are not very active says market
participants.

There are currently close to 50 online brokers In India. The following are the some of the online
brokers:
• ICICI Direct.com
• Kotakstreet.com
• Sharekhan.com
• India Bulls.com
• Geojit secutities.com
• HDFC sec.com
• Tatadw.com
• 5 paisa.com
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Most of the volumes take place on NS. The daily volumes in cash market range between Rs.200-
300 corer and in F &O segment it ranges between Rs.200-400 crore. Better and reliable connectivity
is rapidly increasing the penetration of online trading. Although online is reportedly much more
profitable as compared to offline business, the waiting period is quiet high, as the initial expenditure
is high. According to an estimate, Rs.5-10 corer will need to be spent on infrastructure and
networking, depending on the scalability of the software. An equivalent amount will be required for
branding and distribution, as people still need human interface for filing up forms, etc. Few firms
are said to have major share in the business according to market sources. The major amongst them
are ICICI Direct.com, which is the market leader. The total number of accounts registered for online
trading ranges between Rs.3-4 lacs, out of which about 30,000 to 40,000 are active.

Choosing the Online Trading Broker:

Choosing an online trading brokerage may feel like a daunting task when you realize that there are
literally hundreds of them to choose from. So where does one begin?
First, it is important to make a self-assessment as to your familiarity with online trading concepts.
If you are the type of person that craves market news and information and you feel you have a good
grasp on the online trading requirements, or if you have had prior experience with trading in
general, then perhaps you can use an online trading firm with less hands on guidance from your
broker.

On the other hand, if you are a new trader with little experience in the online trading realm, then
perhaps it is better to get a higher personalized level of service from your broker. They can guide
you as you select your stock or other investment choices and help build a portfolio well founded in
sound investment principles. The slightly higher fees for such a service is going to be worth having
the extra guidance as you get things started.

Beyond looking at the basic services such as the quality of the market news and charts, and general
reputation of your online broker, it is also important to consider some other important factors.

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Checkpoints for choosing E-brokers:

The investors should check for reliability, easy access, speed and sturdiness and for this, checking
should be made to: Response time when investor is logged on to the site’s net trading screen. How
fast the data is displayed on the screen.
Time gap between the price shown on the market watch screen and tat on the stock exchange at any
point of time. This gap should be ideally 0-20 seconds.
Confirmation of the execution of trade should each the investor with least possible time, preferably
within 30 seconds. Uptime of the site’s net trading module during trading hours should be given
instant.

Safety measures:

For safety of transactions, world over, and sites protect the connection between the client’s
computer and broker’s server, using SSL technology with 128 bit encryption keys. SEIBI has also
asked stock exchanges to ensure that electronic records maintained by brokers are not prone to
manipulation. Adequate back up and storage facilities are also mandatory. User identification
numbers and passwords will also ensure safety and secrecy.

SEBI Guidelines:

According to SEBI guidelines on Internet trading, brokers providing E-trading must have a
minimum net worth of Rs. 50 lacs, besides obtaining specific permissions of the stock exchange
concerned. Stock exchanges should ensue that the systems used by the broker provide for security,
reliability and confidentiality of data through use of the encryption technology. For signatures,
participants should use authentication technologies and certification agencies as and when notified
later.
Stock exchanges should also ensure that brokers maintain adequate back-up systems and data
storage capacity. Brokers should have adequate system capacity for handling data transfer and
arrange for alternate means of communication in case of Internet failure. The following security
features are mandatory for all Internet related trading systems:

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• User ID.
• First level password
• Automatic expiry of password at the end of reasonable duration.
• All transaction logs with proper audit facilities to be maintained in the system.
• Secured socket level security server for access through Internet.
• Suitable firewalls between trading set up directly connected to an exchange trading system
and the Internet trading set up.

SEBI has decided that Internet trading can take place in India within the existing legal
framework through use of order routing systems, which will route orders from client to brokers,
for trade execution on registered stock exchanges. SEBI has also recommended minimum
technical standards for ensuring safety and security of transaction between clients and brokers,
which will be enforced by the respective stock exchanges.

Brokerage Cost:

It is important to weigh up the subscription and trading costs charged by an online broker
against benefits offered by the site. All online brokers display their charges on their sites. Some
make sure you find the charges easily, while with others you will have to search a bit.

Rate refresh:
Rate refresh has to be real time with no time lag. The speed and reliability comes with huge
investment in technology. It is always advisable to check rates of online broking sites with
BSE/NSE terminal rates.

Speed of execution:

System has to be fast and reliable that does just one job executes your trades. The last thing you
need is a site that is heavily congested with the users who are downloading heavy jpeg graphs or
pulling the latest story why market is moving. The site should be one click wonder where
squaring off all your positions or canceling all your pending order takes one click and a
confirmation of action.

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Trading limit:

For trading, all sites provide four times buy and sell limit against margin money put in by
customer. Couple of sites also provides margin funding for buying of shares.

Free trial period:

Site should allow users free trial period to familiarize yourself with system before you decide to
become trading member of the site.

Intra-day chart/historical chart:

The site should provide intraday chart tick by tick and price data/historical chart for technical
analysis by investors of particular scrip. Lot of people trade based on charting packages.

Before you can trade, you need to open an account and register as a trader as with online
broking site. This involves filling up trading account form, demat account form and for faster of
money- Internet enabled bank account. Please read terms and condition of each site before
commencing to deal with them. As per SEBI rule, photo id proof and current address proof is a
must for opening trading account.

Online share dealing on the Internet is now a way of life for thousands of investors. 80% of
South Korea and 30-40% US traders are executed online. If you want to deal in shares, there is
no easier way.

Technology and back office infrastructure:

In these early months, online trading is likely to attract a host of entrants as India has already
seen so far. However, the key differentiators will be the investment in technology and back-
office infrastructure. Even if small time e- broking outfits make the initial investments in
technology, the recurring expenses, which would also be high, may prove to a burden in the
long run. For investors looking at online trading from a medium to long-term perspective, sites
with deep pockets and a pedigree will be a good choice.
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Market evolution of online Share Trading

Market Evolution is a process that parallels the product life cycle. As a product category
matures, the industry goes through stages that mirror the five stages of a product life cycle. Market
Evoltion focuses on the what is happening to theoverall market , it yields the market-oriented
picture than the product-oriented picture.

Market Crystalization:

Latent demand for a product category is awakened with the introduction of the new product.

Market Expansion:

Additional companies enter the market and more consumers become aware of the product category.

Market Fragmentaion:

The industry is subdivided into numerous well populated competitive groupings as too many firms
enter.

Market Consolidation:

Firms start to leave the industry due to stiff competition, falling prices, and falling profits.

Market Termination:

Consumers no longer demand the product and companies stop producing it.

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Online Share Trading Business at its Growth stage

Market Crystlization (Emergence)

The need for speedy, simple and paperless job in share broking was realized in the market. The
intiation was taken by the Geojit secutities.com a Chennai based company.
In online share trading the clients of brokers neither gives cheques nor receive bills or contacts
notes. The Payment is done by Internet banking. The contract notes, bills even the memebrs
registration is online. Trading is also online no need to call up broker to ask quote and to buy and
sell the shares. The techonogy has smothen all the process.

Market Expansion

This market is now at grwoth stage. Additional palyers have come up. There are few major
players.

1. Kotaksteet.com
2. ICICIdirect.com
3. India Bulls
4. Sharekhan
5. 5paisa.com

Each payer has some diffentiation in its product. Each player is trying to establish in the same
market.

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Kotakstreet.com

Kotakstreet.com is the online trading service launched by Kotak Securities, a leading player in
India’s capital market. It is affiliate to Kotak Mahindra finance limited.Kotakstreet.com is the
largest stock broking houses in the country and is a registered Trading member on the Bombay
Stock exchange (NSE) and over the counter exchange of India (OTCEI). Kotakstreet.com is the
Internet share-trading arm of Kotak Securities Ltd. With kotakstreet.com, you can buy and sell
shares online, invest in mutual funds, make and receive payments from the comfort of your home or
office, anywhere in this world. Kotakstreet is also a depository participant with limited (NSDL).
Kotakstreet.com offers Internet trading facility on the National Stock Exchange of India (NSE).

Kotakstreet.com offers a wide array of products and services. Each service is designed to meet
specific objectives, catering to different investment needs and trading styles.

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Products and Services Offered by Kotakstreet:

Shares
Kotak offers a large range of products and services to meet all the investors needs (savvy or starter)

Cash Margin:

Kotak offers trade up to four times the cash margin deposited e.g. if 10,000 Rs. Are deposited with
Kotak than the investor can trade up to Rs. 40,000.

Green Channel:

In this the investor can deposit the shares lying ideal and Kotak will treat 60% of their market value
as equivalent cash margin and give the investor a trading limit that is four times the equivalent cash
margin.

Free Way:

Kotak allows the investor to pay cash margin and get a trading limit worth 4 times the margin
money deposited. Trade as much as investor wants within a maximum exposure of 5 lacks on a flat
fee of Rs999. per month. A sum of .03% will be charged on each transaction to cover levies, service
tax and other charges. Deliveries will be made as per normal delivery slabs.

High Trade:

Kotak allows the facility of trading up to 6 times the margin amount in the high trader plans. This is
auto square off product where all cash orders will be squared off after 2.55 per month; however sell
orders marked for delivery will automatically not be squared off. The investor also use high trader
in combination with cash margin, green channel of freeway.

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Cash Express Way:

As a customer to kotakstreet.com registered under any of our three plans listed above the investor
will have the facility of spot payments available at the transaction charge of 0.05%. The investor
can sell shares, deliver them to Kotakstreet, and then request for the payment by contracting any of
Kotak’s office or e-mailing at cashexpressway@kotakstreet.com, kotakstreet.com will process the
request and issue the payment within 48 hours of receipt of the complete request. Kotakstreet frees
the investor from the burden of going through the settlement cycle and waiting for pay out of the
stock exchange. This product can be used in conjunction with one or more of the products.
Maximum brokerage wills not exceed the limits prescribed by SEBI.

Derivatives Product
Trade and derivatives using any of Kotak’s products and get the four times multiple in case a stock
base derivative and a ten time multiple in case of an index based derivative.

Initial Public Offering (I.P.O.)


The investor can also apply for IPO’S at a click of a button.

Mutual funds
Place orders, swap, and create SIP/SWP in a range of mutual funds, all of this online, without any
paper work.

Research and value based products

Morning calls:

The investor will get per market analysis and recommendations, which are backed by research and
technical analysis in the shares in the derivatives and cash market.

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Hot picks:

The investors receive tips and intra day trading calls during the live market hours.

Equity Portfolio recommendations:

Create and track the equity portfolio, as advised by expert portfolio fund managers.

Stock ideas:

Kotak offers stock fundamentals analysis and include specific reports, which are based on critical
developments in the industry.

Product advantage of online

Instant credit for delivery marked traders is a great product advantage offered by Kotak Street.
When the investor sells shares, he does not realize the payment immediately. The exchange makes
the payment to the broker according to the settlement calendar. After receiving payment from the
exchange, the broker makes the payment to the client. Realization of the sale proceeds of the shares
take minimum 4days from the date of the sale depending on what day of the trading cycle the shares
were sold. But with on-line the moment the investor marks them for delivery on the site; it is
credited to the investor’s account and treats as the base capital. The investor can also pay the margin
money online through the Internet broking account of Citi Bank, Kotak Mahindra Bank, HDFC
Bank, UTI Bank.

The investor can also request for the change of product type by filling the on-line request form, and
the change of the product will be in effect from the first of the following month.

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Speciality of the products

The Three in One Account:

Integrate your banking and demat accounts and trade in shares without the botheration of taking
settlement cycles.

K.E.A.T: Kotak E- Trading Excess Terminal:

It is an online trading system that allows you to view tick by tick live rates of your watch list of
shares, set price and see derivative chains and many more features. The investor can view unlimited
historical charts for a script, sets scripts alert, use most of
the charting tools, view the graphs view dynamic net positions, dynamic profit and loss and select
indices\sectors of businesses. It also enables to see the trends in the market and take decisions based
on the rates. It gets excess to intraday charts EOD charts (right from NSE inception), scrip alerts
extra. All these charts come with almost indicators that help the investor decipher the market trends.
This software is full customizable as one can view all the4se charts on one screen. These are also
available with the order report, trade report and the net position on one screen helping the investor.

BNST-G:

Buy now and sell tomorrow with a guarantee. It lets the investor sell 75% of the specified shares the
investor has purchased before he gets the delivery of them from the exchange to increase the
liquidity and take the benefit of any opportunity that may arise in the market by settlement. It is
completely automated services. The investor need not worry about the short allotment. BNST-G is
available at no additional charges. The shares that have been bought in BNST-G and subsequently
sold will be first credited and then debited from the pay in and pay out. The customer here would
not require doing anything different from his normal transactions.

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Call and Trade:

The investor can place orders or get information on shares prices, while on the move. He can just
call on the toll free number 1600-22-5075, to speak to any of the Kotak’s dealers. The customer can
forward the request for selling the shares which are BSE shares and trade to trade settlement (script
will be sold in BSE, same will have to be forwarded by the customers else the order will not be
placed) AMO orders can be placed from 4:15 p.m. to 5:30 p.m. and post closing orders from 5:30
p.m. to 4:00 p.m.

After Market Orders:

Place orders or get information on share from Kotak after market hours. These orders will be
placed in the market on the next trading day.

Details of Accounts and Different Charges

To be a member of Kotakstreet client has open one Bank Account,E-broking account and one
Demat account.

Bank Account:

Bank account can be open with either of four banks, viz Kotak Mahindra Bank, UTI Bank, HDFC
Bank, CITI Bank. Client can use the facility E-Banking for making payment. Bank account of the
client will link with the E-broking account.

E-Broking Account:

The E-broking account for the maintained for Margin amount, brokerage payment, custody charges,
and DP charges and other miscellaneous charges. Margin money will be kept in this account.
Client’s brokerages and other charges will be debited in this account. If client sell the securities
then amount received form will be credited in this account. Clients ought to maintain minimum
balance of Rs. 1000/-.in this account. All the payment in this account will make through Bank
Account.

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Demat Account:

Demat Account is for preserving client’s share. Demat account will be registered with NSDL. Even
if the client has Demat account elsewhere he has to compulsorily with Kotak securities. In case
clients use Green Channel Product (Share as Margin) will have two Demat account. In One Demat
account this Margin Securities will be freeze.

Different Charges

Registration Charges Rs. 500/- (for lifetime)


Margin money Rs. 5000/- (minimum)
Brokerage As per Slab mentioned below*
Demat Maintenance Rs. 240/- p.a

Demat Transaction 4paisa on each buying and selling transaction

Custody charges Rs. 1.25/- per script (Monthly)

*Brokerage

CASH MARKET-SQUARRING UP
VOLUMES PER MONTH BROKERAGE
>5 CRORE 0.04%BOTH SIDES
2 CRORES-5CRORES 0.05%BOTH SIDES
25 LAKHS-2CRORES 0.06%BOTH SIDES
10LAKHS-20LAKHS 0.08%BOTH SIDES
<10 LAKHS 0.10%BOTH SIDES
(Subject to minimum brokerage of Rs. O.05 per share)

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CASH MARKET- DELIVERY VOLUME
VOLUMES PER MONTH
>2 CRORES 0.20%
60LAKHS-2CRORES 0.25%
20LAKHS-60LAKHS 0.30%
10LAKHS-20LAKHS 0.40%
5 LAKHS-5 LAKHS 0.50%
<1 LAKH 0.65%
(Charge of Rs.25 per call after the first 20 free calls in a month)

DERIVATIVES MARKET
VOLUMES PER MONTH BROKERAGE DAILY BROKERAGE
SQUARE UP SETTLEMENT

>10 CRORES 0.03% BOTH SIDES 0.05% BOTH SIDES

5.5 CRORES – 10 CRORES 0.04% BOTH SIDES 0.05% BOTH SIDES

2 CRORES - 5.5 CRORES 0.05% BOTH SIDES 0.08% BOTH SIDES

< 2 CRORES 0.07% BOTH SIDES 0.10% BOTH SIDES

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Functional areas at kotakstreet

A.) Lead generation


B.) Sales
C.) Activation
D.) Relationship Officer
E.) Advisory Desk

Lead Generation:
Keeping pipeline full of qualified lead is critically very important in today’s challenging business
climate. The consistent lead generation has become imperative for survival in many companies.
Kotakstreet uses following avenues for lead generation:

1. Customer relationship
2. Cold calls
3. Tele marketing
4. Flexi stalls
5. Participation in Business fair
6. Visitors of the website
7. References

Customer relationship:

Customer relationship Marketing is a practice that encompasses all marketing activities directed
toward establishing, developing, and maintaining successful customer relationship. The focus of
relationship marketing is on developing long-term relationships and improving corporate
performance through customer loyalty and customer retention.
With growing buyer concentration-up to 90% of business coming from 10% of customer in certain
industries-and declining effectiveness of incentive to channel partners, companies are on the
lookout for alternatives to traditional ways of influencing buying decision.

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BACK OFFICE WORK

MS. X MS.Y

DEBTORS LIST KC 3

FORM CHCEKING CRPS

DAY TO DAY QUERIES KIT ENTRY

OTHERS

Cold Calls:

Cold calls are visit to a sale’s prospects that do not know you. The objective of cold call is to gather
information about the prospects potential, educate the benefit of your product or services to get
appointment. There are several challenges to make a cold call and they include - fear, getting past
assistance, secretaries, and other gate keepers, finding the right contact, and finding the way to
make a pitch quickly that will move the sales process forward.

Tele Marketing:

Telemarketing is one way that business can advertise their product and offer their services. They
will often use professional telemarketer or call centre to make telephone calls and faxes to potential
customer on their behalf. Some telemarketing organization use automatic dialer to place telephone
calls or send faxes. A “dead air” or “hang-up” call will occur if a telemarketing representative is not
available when the call is answered. The product is explained to customer on phone and the
appointments are taken from the interested parties. The lead thus generated is distributed amongst
the sales executive in equal base. The telecallers use Tata Yellow Pages, and various other
databases like list of Chartered Accountants, Members of NSDL, etc.

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TELE CALLING
HEAD

A B C

Flexi stalls:

Flexi stalls are the folding and handy stalls that can be put up at any place within 5-7 minutes. Flexi
stalls are usually used to create awareness, promote the product and to generate lead. The stalls are
put up in any public place like road, commercial centers, parks, colonies, etc. otak’s sales
executives are expected to put up flexi stalls. They usually put up the stalls in commercial center
and the one visiting the stall is asked his details. This leads to lead generation. The sales executive
contact the interested person to sell the product
.
Participation in Business Fair:

Participation in Business fair leads to awareness and lead generation. The company puts up the
stalls with its banners on. The brouchers are distributed and the details of the contacted ones are
taken.
The interested ones are contacted again and after taking the appointment the sales executive visits
the client.

Visitors of the Website:

The details of the people visiting the site of Kotakstreet are collected and the data is thus gathered.
The lead is generated for entire country. The lead is thus then distributed according to the regions.

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References:

The existing clients when are satisfied with the product and the service gives references. The
references are contacted and explained the product.

Sales
This is the most important aspect of marketing as this leads to revenue generation for the company.
Selling of the product is done aggressively to increase the client base and the thus become the
market leader.
Sales executives are given the lead, generated by the telecallers or else sales executives generate
leads through flexi stalls, cold calls or references. Every month each sales executive is given a
target to be achieved. At the end of the month (28th) the target should be achieved. The target is
different for each executive. The target meet is organized every month to decide the target of each
sales executive. The target is decided on the basis of various criteria, which are as under:

• Experience with the current job


• Educational Qualification
• Past performance
• Personal abilities of the individual

Head of KotakStreet

Teritory Manager
(State level)

City Head City Head City Head

Team Leader Team leader Team leader Team leader Team leader Team leader

Team of Sales Team of Sales Team of Sales Team of Sales Team of Sales Team of Sales
executive executive executive executive executive excutive
(8-10) (8-10) (8-10) (8-10) (8-10) (8-10)

The sales executives who gets the maximum accounts in the month is considered as the ‘Star’
executive and his name is displayed on the notice board. Each sales executive is allocated a team
(Winners or Achievers) with a team leader who marks the performance of the team leader. The aim
is to develop healthy competition among the sales executive.

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Activation
The online product sold by Kotakstreet is technical in nature and hence requires assistance to the
customer in initial few days and later on as and when required. The activation personnel install the
product –KEAT in the personal computer of the client after the formalities are finished by the sales
executive. The activation personnel personally visit each client and demonstrate the product to the
client. The activation personnel actually deal on the behalf of the client to show how exactly it
functions. There are one more activation personnel who look after the day-to-day queries of the
client with the product.

Relationship Officer
Maintaining the long-term relationship with the existing clients is of utmost importance in any
business. It is rightly said that it is much more cheaper to maintain the old client than to generate a
new client. The major task of the relationship officer is to track the inactive clients and find out the
grievances and to make the new clients comfortable with the new system. The Relationship officers
are expected to visit the new clients after the week of the activation and keep in touch with the
existing clients and solving their queries.

The Advisory Desk


The advisory desk of Kotakstreet is its Unique Selling Point. The major drawback of the online
share trading is that it misses the touch of the personal guidance that one gets from the traditional
broker. Kotakstreet has developed an advisory desk that calls up its clients and gives the advice for
intraday, delivery and derivative market based on the equity research done at the Mumbai head
office. The advisor calls up the client in the morning and gives recommendations on daily basis.
The advisor usually focuses on the clients on three basis:
• HNI clients (High Net worth Individuals) – One who provides good brokerage
• Potential clients- One who provides good brokerage but can still gives better brokerage.
• Inactive clients- One who gives less brokerage or are not using the product of kotak.

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The main aim of the advisory is to see that the HNI clients are RETAINED
and the Potential clients are guided more and hence converted to HNI
and the inactive clients should be made active by guiding, solving their queries and motivating
them.

Report on Summer Training at Kotakstreet.com 54


Advertising and Promotion

Organizations handle advertising in different ways. In Kotakstreet advertising is handle by


Marketing Department at Mumbai. The Job this department is to propose the budget, develop
advertising strategy and approve ads and campaigns. Kotakstreet advertise itself on T.V as well
participate in business and trade shows. Kotakstreet is not aggressive in marketing but aggressive
in its performance. As Kotakstreet is in its inception stage advertisements are generally informative
in nature.

Kotakstreet does more promotion activities than advertising. It introduces many schemes often.
Following are some of recent schemes of kotakstreet.com

Clients get Client (Every one does marketing):

In new era as per Marketing concept, not only marketing department does marketing but everyone
does marketing. Here in Kotakstreet even clients do marketing. Kotak has introduced Clients Get
Clients scheme. This is the ongoing scheme of Kotakstreet. Under this the existing client will be
rewarded if he gives new clients.

No of Clients Reward

1 Rs. 300credit into ledger in July


2 Rs. 500credit into ledger in July
3 Rs. 800credit into ledger in July
4 Executive bag and pad folio
5 Travel bag
6 Discman-VCD/CD player
7 Digital organizers
8 Code less phone
9 VCD Player
10 5-in-1
11 DVD player

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12 LCD colour TV (970-2.3’’width)
13 5-in-1 VCD/MP3/GD/Radio player
14 Digital dairy
15 and above Kodak digital camera

Chartered accountants:

Under this Scheme in the month of June lifetime registration fees of Rs. 500/- for C.As and their
HUF was waived off. Special brochure was been sent to all the C.As of Ahmedabad and leads
were generated of the interested C.As by the telecalls. The first hundred entries also received a
wristwatch from Kotakstreet.com

Trading Mela:

Kotakstreet has tied up with some cyber cafes where Kotakstreet’s client can use internet for
trading in market hours at confessionals rates by this schemes even cyber cafes also gets
permanent customers. Owner of cyber cafes will be rewarded if it gives new client.

Awareness campaign:

Kotak often put flexi stall in different areas of the city. By that they generates leads as well create
the awareness.

Contest:

“PREDICT THE SENSEX AND FLY TO EUROPE”


In the month of July Kotakstreet had held the contest. One has to predict the after Budget closing
Sensex of July 9th 2004. The participants who wanted to play contest had to log on to Kotak’s
Website Kotakstret.com. Advertisements for the contest were given on CNBC TV 18 and in
Regional News papers. In Gujarat Advertisement was given in the Gujarat Samachar.

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This was pull strategy of Kotakstreet used by which thousands of entries were received for the
contest. Even if person could not predict the sensex will at least visit the site and will get to know
about the product. Large number of leads was generated as participants registered their name,
address

Our Contribution in Marketing and Promotional Activity

Commercial Complexes

During our tenure, we were asked to generate leads by cold calls. We covered many commercial
buildings in Ahmedabad. Like SAKAR- II, III, IV, ABHIJIT – I, II Madhuban (Asharam Road),
We generated leads form there and passed on the same to the Kotakstreet’s Sales-Executives.

Jwellers

We also visited many Jwellers at C.G Road as we thought they can our target market and we
certainly got some lead of HNIs, and same were passed on to the HNI desk.

New Cloth Market

We also made calls to the New Cloth market, were Ahmedabd’s big cloth merchants have their
offices, we found there that many merchants are HNIs and they all were dealing by Anagram as it
has its office in the same market. Convincing such client was very difficult.

Awareness Campaigns

During our tenure we put stall at Atira, Kamdhenu complex (ASE), Sahjanand complex
(Shahibaug) and DOS Colony (Vastrapur). We generated leads by putting flexi stalls. Putting
Flexi stalls was not permitted everywhere. We had to take prior permission form the respective
authorities at each place. We generated leads from each places and same were passed on to the
respective authority.

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Tie-ups with ISP Providers

During our tenure, we contacted ISP providers for the Cross-Promotional activities. We visited
ECOMM, IQURA, ICENET, JINDAL and SATYAM. We found that ECOMM was more into
cross-promotional activities. Cross promotion activities includes promoting to each other which
leads to win-win situation at the both ends.

ECOMM Private Ltd. also had its own products for promoting its client brand.
1. Bulk mails
2. Pop –up advertisements
3. Banner advertisements
4. Contest
5. Discount zones

We asked them give us proposal for all such branding advertisements. We submitted the proposal
with Mr. Arpit Desai (Territory Manager, Gujarat), which is been sent to Head Office (Mumbai)
for the further approval.

Report on Summer Training at Kotakstreet.com 58


Porter’s Five Force Corporate Strategy

In Michel Porter’s view an organization’s ability to compete in a given market is determined by


that organization’s technical and economical resources, as well as by five environment forces
each of which threatens the organization’s venture into a new market. The manager must
analyze these forces and propose programs for influencing against them.

Threat of
New
Entrants

Bargaining Jockeying Bargaining


Power of for position Power of
Suppliers among Customers
current
competitors

Threat of
Substitutes
products or
services

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Rivalry among Competitors

In the online share trading including kotakstreet there five major players.
1. ICICI direct.com
2. Kotakstreet
3. Share khan
4. India bulls
5. 5paisa.com

There are several other players like HDFC securities, Investmetz.com, Geojit. Securities Ltd.and
many more.

Comparison of various competitors:


Parameters Kotakstreet ICICIdirect Sharekhan Indiabulls 5paisa
Brokerage 65paisa 85 paisa 50 paisa 50paisa 50paisa

Advertise 1.T.V advt 1.Internet advt 1.Advt on CNBC 1.Advt on CNBC 1.Internet
(Banner advt 2.Newspaper 2. Newspaper advt.
pop-up advt ) 3. Internet 3.Internet
2.Advt on (Bulk mails, (Banner advt,
CNBC Banner mails.) Bulk mails)
Website Good OK Very Good Very good Good
technicality
Registration 500/- 750/- 750/- 500/- 500/-
fees

The competitors of Kotakstreet have aggressive style of marketing. ICICIdirect.com’s reach is


very high and it is market leader. India bulls has technical superiority whose server don’t goes down
as the problem with the rest of the all players, Share khan is spending huge amount on advertising it
has cover all most all media (T.V, Newspaper, Internet advt,). It invests 7% of its revenue on

Report on Summer Training at Kotakstreet.com 60


advertising and promotion. Where as Kotakstreet has advisory desk by which it attracts the new
retail investors. Kotak is well known for its research team who guides its client the stock market

Looking at the present scenario of cutthroat competition, Kotak has its future plan to advertise on
large scale. It is building up the infrastructure to posses’ technical superiority.

Threat of New Entrants

Getting into the online share trading business requires huge amount of investment. Kotak has
invested 400-500 corers. ICICIdirect and Kotakstreet are the oldest players had started their
operation in year 2000.

Later on Share khan, India bulls, 5Paisa, HDFC securities, UTI bank, Investmentz.com have come
up.

There is no big barrier to the entry by any company in this market. It requires around Rs.5-10 crore
to be spent on infrastructure and networking, depending on the scalability of the software. An
equivalent amount will be required for branding and distribution as people still need human
interface for filling up forms, etc. so many banks with strong financial support can certainly be the
threat. Motilal Oswal in Mumbai is now into online which is a threat in Mumbai’s market. In
future when NSE will permit only t+1 settlement then certainly online share trading will help the
investors, so looking at this future scenario many other players may take advantage and enter into
this market.

Threat of Substitutes

Because of high uncertainty of Indian stock market, Investors are now attracted towards other safest
mode of investments. Like RBI bonds, Bank F.Ds, Insurance, Mutual Funds, Pension plans, Post-
off ice schemes. So all these mode of investments can be threat to the retail broking businesses.

Report on Summer Training at Kotakstreet.com 61


RBI Bonds:
Safe mode of investment fixed return, which is generally higher than Bank F.Ds. The problem is
certainly with that; it is generally by the investors as secondary market is not very active.

Bank F.Ds:

Safe mode of investment fixed return, are liquid often. Now days Bank scams and all have created
some resistance as well bank rates are very low.

Mutual Funds:

A diversified Investment, which helps small investors to get good return even on their small
investments. This industry has made significant in the recent years. Good companies like Franklin
Templeton, HDFC mutual Funds, ICICI mutual funds, DSP Merylinch and JP Morgan and Of
course Kotak Mahindra Mutual Funds provides handsome return to their client through open ended
and close ended schemes. This industry now attracts many share investors to switch their
investment in mutual funds.

Insurance:
In recent year, Insurance is kind of saving as well investment. Generally, salary class people invest
some part of their savings in Insurance. Many private players have come up in this sector. People
invest in Life Insurance as well in General Insurance. There are many players in the both types of
Insurance. Insurance companies also introduces pension Plans as well Education plans.

Post office Savings:

Post Office offer varieties of schemes like Kisan Vikas Patra, Indira Vikas Patra that are like F.D
and gives good return as well the safe mode of investment.

All the above mentioned investments can be the substitute for share investors. The Mutual Fund
and Insurance sector is burgeoning in the recent days.

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As per the Findings from the Secondary data in the Investment pattern of 100 Investors as follows

Percentage of Investors
5%
2%
Stock Market
2% 19%
Bank
13%
Insurance
Govt. Sec

15% Mutual Funds


20%
IPO
Gold & Silver
24% Others

Offline broking as the Substitute for e-broking business:

In India, 98% of the retail broking business dominated by the traditional offline brokers. The offline
broker provides with the personal touch in their services. Moreover, in country like India the
technology breakthrough is possible any time.

Bargaining Power of Buyers

Offline Traditional Brokers:

Clients of Kotakstreet.com have strong bargaining power, as there are offline brokers who facilitate
trading at lower brokerage, which ranges between 15 – 30 paisa. They even do not ask for the
margin money, and facilitates 100% buy today and sell tomorrow facility. Moreover, offline brokers
provide guidance to investors where to invest? , When to buy shares? , and when to sell?

Online Share Brokers:

Clients can easily switch over to another competitor, as the switching cost is low. Clients have to
pay registration charges which ranges between Rs.500/ to 700/. This fee is waived off if clients put
high margin with many competitors. Moreover, client have to pay share transfer fees for

Report on Summer Training at Kotakstreet.com 63


transferring the share form one demat account to other demat account which very nominal. If clients
are dissatisfied, they can easily switch to the other online brokers. Even there are some brokers
whose brokerage is low and have superior technical facilities. This also kind of bargaining power in
the hands of buyers.

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Kotaksteet.com

A Market challenger

40% Market Leader

30% Market Challenger

Kotakstreet

20% Market Follower

10% Market Nichers

Market Leader:

Market leader is one who has largest market share. It usually leads others in price, new-product
introduction, distribution coverage and promotional activity. ICICIdirect.com is the market leader
who approximately gets 1000 accounts per month in overall Gujarat. It has high reach and invest
aggressively in promotional activities.

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Market Challenger:

Firm that occupies second, third and lower in an industry are called runner-up or trailing firms.
Kotakstreet is a Market challenger which holds the runner-up position in the market.

Market Followers:

Many companies prefer to follow rather than challenge the market leader. HDFC securities is one
of them.

Market Nichers:

Some companies do not be the follower in the large market but be leader in small market or niche.
Small firms generally avoid the competition with large firm by targeting markets of little or no
interest to the larger firms.

Strategies of Kotalsteet as a Market Challenger

Flnak Attack

The major principle for offensive warfare is concentration of strength against weakness. The
enemy’s weak points are natural target.

Kotaksteet has provided terminal of to its NSE client by specialized software KEAT. Client can get
accurate quotes. Clients do not need to access the site they directly access KEAT by their user ID
and Password. Client does not need to refresh the KEAT to get fresh quotes. System is automatic
and provides many more information. Where as ICICIdirect dose not have such facility. Clients
have to trade through the site and to get accurate quotes they have to refresh the site. This delays the
overall working and does not show the fluctuation of in shared price second through the market
hours.

KEAT gives Market depth, Companies financial details, Statement of holding, order note contract
note .So thus by providing KEAT Kotakstreet has given Flank attack to the market leader.

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Specific Attack Strategy

Improved Services

Time for Payment

In delivery base transaction, Kotak permits its clients to make payment as per the t+2 settlement. If
client buys securities on Monday then he has make payment until Wednesday Morning.

Where as ICICIdirect’s client has to make payment on the same day before market hours. Failing so
the transaction will be squared off at the end of the day.

As well in the Intra-day, transactions ICICIdirect clients are supposed to Square-off their position
before 2:30 pm. But in this case, clients miss the peak time gains. Where as with Kotaksteet clients
can square-off their position before 3.30pm.

Therefore, in this way Kotak’s client gets more time for making payment.

Banking Facility:

Clients of ICICIdirct.com have to have Bank account only with the ICICI Bank with minimum
balance of Rs.5000/. Where as Kotak’s client are free to open their bank account any of the from
Kotak Mahindra Bank, (Rs. 2500/-), HDFC bank (Rs. 2500/-), UTI Bank (Rs. 1000/-) and Citi Bank
(Rs. 10000/-). This gives client choices as per their convenience.

So client who have already bank account with either of bank will not need open another account.
They only have get activate the E-banking Facility.

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Product Life Cycle (PLC)

Believe it or not, the Product Life Cycle (PLC) is based upon the biological life cycle. For example,
a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down
roots as it becomes an adult (maturity); after a long period as an adult, the plant begins to shrink and
die out (decline).

In theory, it is the same for a product. After a period of development it is introduced or launched
into the market; it gains more and more customers as it grows; eventually the market stabilizes and
the product becomes mature; then after a period of time the product is overtaken by development
and the introduction of superior competitors, it goes into decline and is eventually withdrawn.
However, most products fail in the introduction phase. Others have very cyclical maturity phases
where declines see the product promoted to regain customers.

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Strategies for the differing stages of the PLC

Introduction:

The need for immediate profit is not a pressure. The product is promoted to create awareness. If the
product has no or few competitors, a skimming price strategy is employed. Limited numbers of
product are available in few channels of distribution.

Growth:

Competitors are attracted into the market with very similar offerings. Products become more
profitable and companies form alliances, joint ventures and take each other over. Advertising spend
is high and focuses upon building brand. Market share tends to stabilize.

Maturity:

Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a
decreasing rate and then stabilize. Producers attempt to differentiate products and brands are key to
this. Price wars and intense competition occur. At this point, the market reaches saturation.
Producers begin to leave the market due to poor margins. Promotion becomes more widespread and
uses a greater variety of media.

Decline:

At this point, there is a downturn in the market. For example, more innovative products are
introduced or consumer tastes have changed. There is intense price-cutting and many more products
are withdrawn from the market. Profits can be improved by reducing marketing spend and cost.

Kotakstreet at the stage of Introduction

Kotak Securities had started online share trading four years back. The Kotaksteet came into
existence in the year 2000. However, this business line is in focus for last one year. SEBI permits
the T+2 settlement. Now there is no rolling settlement. So now, investors need simple, fast and
paperless job.
Report on Summer Training at Kotakstreet.com 69
Direct marketing:

At its introduction, stage Kotakstreet put more efforts in creating awareness of its product. It does
direct marketing. It generates leads by own and visits the potential. It has 16 team Sales- executives
only at Ahmedabad office.

Promotion:

It induces the product trial by introducing various exciting schemes. It gives Registration fees
discount, as well negotiates the brokerage at large volumes.

Increasing Reach:

Kotakstreet is increasing its reach by setting up it branches in various cities. Recently it has set up
its branch in Gandhidham and Rajkot in Gujarat.

Choosing the Right Target Market:

Kotakstreet put conscious efforts to find out the right target market. It targets Businessmen,
Professional like C.A, Tax Consultants and high-salary income class.

Report on Summer Training at Kotakstreet.com 70


Recommendations

Distribution of investors
The Society for capital Market Research & Development the distribution of investors in India is as
follows:

Sr. State/Union Territory No. of investors %


No.
1 Andhra Pradesh 194,405 6.08
2 Bihar 27,340 0.85
3 Chandigarh 7,891 0.25
4 Delhi 323,693 10.12
5 Goa 11,374 0.36
6 Gujarat 536,720 16.78
7 Himachal Pradesh 3,706 0.12
8 Jammu & Kashmir 7,320 0.23
9 Karnataka 195,159 6.10
10 Kerala 76,793 2.40
11 Madhya Pradesh 71,158 2.23
12 Maharashtra 911,997 28.52
13 Orissa 14,701 0.46
14 Pondicherry 2,481 0.08
15 Punjab 52,434 1.64
16 Rajasthan 72,316 2.26
17 Tamil Naidu 230,407 7.20
18 Uttar Pradesh 188,835 5.90
19 West Bengal 214,432 6.71
20 Others 54,802 1.71

Total 3,197,964 100.00

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From the above distribution Kotakstreet can understand that there is great potentiality in
Maharashtra, Gujarat, Delhi and Tamilnadu, West Bengal and and Andhra Pradesh and
75.41% investors of India are from these six states. Kotakstreet has already branches in all these
states.

State/Union Territory City Branches


Gujarat Ahmedabad, Surat, Baroda,

Gandhidham, Rajkot
Maharastra Mumbai, Pune, Nasik,
Nagpur
Tamilnadu Chennai
Delhi Delhi
West Bengal Kolkata
Andhra Pradesh Hyderabad

But Kotakstreet can concentrate and focus these markets and should increase its reach in all these
markets because these are where its potential clients lie. Kotakstreet should have more promotional
activities in these six major states.

Advisory Desk

The advisory desk of the Kotakstreet, which is its unique selling point, should be more structure and
should be given targets for brokerage earnings. It can be structured as per the following model:

ADVISORY
DESK

MS P MS Q MS R

HNI CLIENTS POTENTIAL INACTIVE


CLIENTS CLIENTS

Report on Summer Training at Kotakstreet.com 72


• HNI clients ( High Net worth Individuals)- One who provides good brokerage
• Potential clients- One who provides good brokerage but can still give better brokerage.
• Inactive clients- One who trades rarely trough Kotakstreet.com.

By this segregation of the clients, the advisory should see that the HNI clients who are giving good
business should be given frequent information of the stock market. The Potential clients who can
still give better business to the company should be encouraged for more trading by providing them
with regular information of the market. The inactive clients should be converted into active clients
by guiding, solving their queries and motivating them.

• Kotakstreet can tie up with ISP providers who can offer the Internet service to its client at
the concessional rates and improved services. This will lead to win-win situation, where by
the ISP providers will get new clients and Kotak’s clients will also be benefited.

• Distribution of a Quarterly Magazine about the Kotak’s working to all its customers so it
would not only act as a tool of advertisement but also make the existing customers feel
Kotak’s concern for their investments.

• Internet can be used as a promotion media by giving pop-up advertisements, sending bulk
mails, banner advertisements and tie-ups with Google, MSN, Yahoo etc so that as soon as
one starts surfing for the stock market Kotak’s advertisements may spring up. This can act
as a great source of advertisement and lead generation.

• Kotakstreet can tie up with cyber cafes, which can offer the Internet access to its clients at
concessional rates during market hours. This can be beneficial to cyber cafes as they can
generate more clients during the afternoon timing, which are not the peak hours for cyber
cafes. Cyber cafes can be asked to display the brouchers of the Koatkstreet, which can
promote Kotak’s product and the cyber café owner will be given a specified incentive for
providing the facility.

Report on Summer Training at Kotakstreet.com 73


Bibliography:

www.kotakstreet.com
www.kotak.com
www.moneycontrol.com
www.nse.com
www.bseindia.com
www.icicidirect.com
www.indiabulls.com
www.sharekhan.com
www.mbateacher.com
www.wikipedia.org

• Kotler, P., Marketing Management, 11th edition, Pearson, Delhi.

• Stoner, Gilbert., Organisational Structure and Dynamics, 8th edition, Pearson, Delhi.

• Shah, Hina.,Focused on retail, Business India, 12-25th April, Business Standard Publication.

Report on Summer Training at Kotakstreet.com 74

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