Arbitrage Trade Analysis of Top 10 Public Sector Banks of Indian Economy Listed in Bse and Nse

“ARBITRAGE TRADE ANALYSIS OF TOP 10 PUBLIC SECTOR
BANKS OF INDIAN ECONOMY LISTED IN BSE AND NSE”
A PROJECT REPORT SUBMITTED TO MANGALORE UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
AWARD OF MASTERS OF BUSINESS ADMINISTRATION
BY
MS. KEERTHI KUMARI U.P
Reg.No.169355137
UNDER THE VALUABLE GUIDANCE OF

Mrs. SUMATHI
SHRI DHARMASTHALA MANJUNATHESHWARA COLLEGE OF

BUSINESS MANAGEMENT POST GRADUATE CENTRE FOR
MANAGEMENT STUDIES AND RESEARCH
MANGALURU-575003
2017 - 2018
DECLARATION
I, Keerthi Kumari U.P hereby declare that the project report entitled “Arbitrage
Trade Analysis of Top 10 Public Sector Banks of Indian Economy listed in
BSE and NSE” is prepared by me during the academic year 2017-18 under the
guidance of Mrs Sumathi, Faculty, S.D.M. College of Business Management
Post Graduate Centre For Management Studies and Research, Mangalore and by
Mrs. Reshma Maroli (External Guide), Branch Manager, Inditrade Capital
Limited, Mangalore. This project work is towards the partial fulfilment of the
completion of Master of Business Administration under Mangalore University.
I also declare that this project work is based on the original study undertaken by
me and has not been submitted to any other university for the award of any
degree/diploma.
Place: Mangalore KEERTHI KUMARI U.P
Date: Reg. no: 169355137

SHRI DHARMASTHALA MANJUNATHESHWARA COLLEGE OF
BUSINESS MANAGEMENT POST GRADUATE CENTRE FOR
MANAGEMENT STUDIES AND RESEARCH
MANGALURU-575003
CERTIFICATE
This is to certify that MS. KEERTHI KUMARI U.P, student of final year MBA
bearing the Registration No- 169355137 has successfully undertaken a project
entitled, “ARBITRAGE TRADE ANALYSIS OF TOP 10 PUBLIC SECTOR
BANKS OF INDIAN ECONOMY LISTED IN BSE AND NSE” during the
year 2017-18. This is done in partial fulfillment of the requirements for award of
MBA of Mangalore University, and she has worked under my guidance and
supervision. The view expressed and study made is entirely her own and are based
on her empirical study.
ACCEPTED AND FORWARDED TO THE DIRECTOR FOR APPOVAL

Place: Mangalore
Date: MRS.SUMATHI
Project Guide
ACCEPTED AND FORWARDED TO MANGALORE UNIVERSITY

Place: Mangalore
Date: DR.SEEMA SHENOY
DIRECTOR
ACKNOWLEDGEMENT
The project report titled “Arbitrage Trade Analysis of Top 10 Public Sector Banks
of Indian Economy listed in BSE and NSE at Inditrade Capital Limited
Mangalore would not have seen the light of the day without the following people
and their priceless support and co-operation. Hence, I would extend my gratitude
to all of them.
I would like to thank Dr. Seema Shenoy., Director, S.D.M PG Centre for
Management Studies and Research, Mangalore for providing me an opportunity
to undertake the project.
I wish to express a deep sense of gratitude to my guide, Mrs.Sumathi, faculty

S.D.M. College of Business Management Post Graduate Centre for Management
Studies and Research , Mangalore who has sincerely supported me with the
valuable insights into the completion of this project.
I would also like to thank Mr. Reshma Maroli (Branch Manager) for providing
me with an opportunity to work with Inditrade Capital Limited. I am highly
indebted to all who have provided me with the necessary information and
valuable suggestions and comments on bringing out this report in the best
possible way.
Last but not the least: my heartfelt love for my parents, whose constant support
and blessings helped me through this project.
KEERTHI KUMARI U.P.

LIST OF CONTENTS
CHAPTER PAGE
PARTICULARS
NO. NO.
LIST OF TABLES (ⅰ) - (ⅳ)
LIST OF FIGURES (ⅴ) –(ⅵ)
EXECUTIVE SUMMARY (ⅶ)
1 INTRODUCTION 0-8
2 PROJECT DESIGN 9-11
3 INDUSTRY PROFILE 12-19
4 COMPANY PROFILE 20-38
5 DATA ANALYSIS AND INTERPRETATION 39-80
FINDINGS, SUGGESTIONS AND

6 81-84
CONCLUSION
BIBLIOGRAPHY
ANNEXURE
LIST OF TABLES
Table Title Page
No. No.
5.1(a) Arbitrage price difference between BSE and NSE of
STATE BANK OF INDIA for the month of Nov-17
5.1(b) Summary of statistics of arbitrage price difference between
BSE and NSE of STATE BANK OF INDIA for the month
of Nov-17
STATE BANK OF INDIA for the month of Dec-17
BSE and NSE of STATE BANK OF INDIA for the month
of Dec-17
PUNJAB NATIONAL BANK for the month of Nov-17
BSE and NSE of PUNJAB NATIONAL BANK for the
month of Nov-17
PUNJAB NATIONAL BANK for the month of Dec-17
BSE and NSE of PUNJAB NATIONAL BANK for the
month of Dec-17
BANK OF BARODA for the month of Nov-17
BSE and NSE of BANK OF BARODA for the month of
Nov-17
BANK OF BARODA for the month of Dec-17
BSE and NSE of BANK OF BARODA for the month of
Dec-17
CANARA BANK for the month of Nov-17
BSE and NSE of CANARA BANK for the month of Nov-
17
CANARA BANK for the month of Dec-17
BSE and NSE of CANARA BANK for the month of Dec-
17
BANK OF INDIA for the month of Nov-17
BSE and NSE of BOI for the month of Nov-17
BANK OF INDIA for the month of Dec-17
BSE and NSE of BANK OF INDIA for the month of Dec-
17
INDIAN BNK for the month of Nov-17
BSE and NSE of INDIAN BANK for the month of Nov-17
INDIAN BANK for the month of Dec-17
BSE and NSE of INDIAN BANK for the month of Dec-17
5.13(a) Arbitrage price difference between BSE and NSE of IDBI
for the month of Nov-17
BSE and NSE of IDBI for the month of Nov-17
5.14(a) Arbitrage price difference between BSE and NSE of IDBI
for the month of Dec-17
BSE and NSE of IDBI for the month of Dec-17
CENTRAL BANK for the month of Nov-17
BSE and NSE of CENTRAL BANK for the month of
Nov-17
CENTRAL BANK for the month of Dec-17
BSE and NSE of CENTRAL BANK for the month of
Dec-17
UNION BANK for the month of Nov-17
BSE and NSE of UNION BANK for the month of Nov-17
UNION BANK for the month of Dec-17
BSE and NSE of UNION BANK for the month of Dec-17
VIJAYA BANK for the month of Nov-17
BSE and NSE of VIJAYA BANK for the month of Nov-17
VIJAYA BANK for the month of Dec-17
BSE and NSE of VIJAYA BANK for the month of Dec-
17
5.21 Summary of statistics of arbitrage price difference between
BSE and NSE of ten public sector banks for the month of
Nov-17
5.22 Summary of statistics of arbitrage price difference between
BSE and NSE of ten public sector banks for the month of
Dec-17
LIST OF FIGURES
Figure
Title Page No.
No.
3.1 Organisation structure of Inditrade Capital Limited
Arbitrage pricing of STATE BANK OF INDIA in the

5.1
month of Nov-2017
Arbitrage pricing of STATE BANK OF INDIA in the
5.2
month of Dec-2017
5.3 Arbitrage pricing of PNB in the month of Nov-2017
5.4 Arbitrage pricing of PNB in the month of Dec-2017
Arbitrage pricing of BANK OF BARODA in the

5.5
month of Nov-2017
Arbitrage pricing of BANK OF BARODA in the
5.6
month of Dec-2017
Arbitrage pricing of CANARA BANK in the month of
5.7
Nov-2017
Arbitrage pricing of CANARA BANK in the month of
5.8
Dec-2017
Arbitrage pricing of BANK OF INDIA in the month
5.9
of Nov-2017
Arbitrage pricing of BANK OF INDIA in the month
5.10
of Dec-2017
Arbitrage pricing of INDIAN BANK in the month of
5.11
Nov-2017
Arbitrage pricing of INDIAN BANK in the month of
5.12
Dec-2017
5.13 Arbitrage pricing of IDBI in the month of Nov-2017
5.14 Arbitrage pricing of IDBI in the month of Dec-2017
Arbitrage pricing of CENTRAL BANK in the month

5.15
of Nov-2017
Arbitrage pricing of CENTRAL BANK in the month
5.16
of Dec-2017
Arbitrage pricing of UNION BANK in the month of
5.17
Nov-2017
Arbitrage pricing of UNION BANK in the month of
5.18
Dec-2017
Arbitrage pricing of VIJAYA BANK in the month of
5.19
Nov-2017
Arbitrage pricing of VIJAYA BANK in the month of
5.20
Dec-2017
EXECUTIVE SUMMARY
Arbitraging in India has been going on for several years. Arbitrage is an often-
used term in share markets. The arbitrageur is an important intermediary that
helps in price discovery mechanism in all markets be it equity, money forex or
derivatives. Arbitrage is the practice of taking advantage of a price difference
between two or more markets or exchanges. In Indian markets stocks are traded
in two major exchanges – NSE (National Stock Exchange) and BSE (Bombay
Stock Exchange), which means you can take advantage of buying the stock in one
exchange and selling it in other and bag the difference as profit.
Investing is about balancing risk and return. The risk and return relationship is a
fundamental concept in not only financial analysis, but also in every aspect of
life. Arbitrage is wherein, the purchase of securities on one market for immediate
resale on another market in order to profit from a price discrepancy. This results
in immediate risk-free profit. Thus, the investors seek to exploit such
inefficiencies that will manifest as mispricing in BSE and NSE markets.
The study is undertaken for the purpose of understanding the opportunities of

arbitrage available in two major exchanges – NSE and BSE. This is done by
selecting top10 Public Sector Banks stocks listed in NSE & BSE. Various tools
and techniques have been used to understand the concept of arbitrage in detail
and capitalize on the opportunity available for the investor.
Based on the calculations the investor can come to a conclusion and it will help
them to pick the right companies to invest their funds and yield maximum returns.
The study also helps the investor to capitalize on the opportunity of arbitrage by
taking advantage of a price difference between two major exchanges – NSE and
BSE, which means you can take advantage of buying the stock in one exchange
and selling it in other and bag the difference as profit.
CHAPTER-1
INTRODUCTION
ARBITRAGE PRICING THEORY (APT):
APT is an alternative asset pricing model to the Capital Asset Pricing Model.
Unlike the Capital Asset Pricing Model, which specifies returns as a linear
function of only systematic risk, Arbitrage Pricing Theory may specify returns as
a linear function of more than a single factor.
Stock strategies:
Learn about various strategies for investing in stocks, including the “buy and hold
approach,” analyzing market timing, and estimating a company’s potential for
growth.
Stocks and your portfolio:
‘I like this company, but should I add it to my portfolio?’ This article talks about
diversification and balancing risk with your stock selections.
The Arbitrage Pricing Theory (APT) was developed primarily by Ross. It is a

one-period model in which every investor believes that the stochastic properties
of returns of capital assets are consistent with a factor structure. Ross argued that
if equilibrium prices offer no arbitrage opportunities over static portfolios of the
assets, then the expected returns on the assets are approximately linearly related
to the factor loadings. (The factor loadings, or betas, are proportional to the
returns’ co variances with the factors.) Ross’ heuristic argument for the theory is
based on the preclusion of arbitrage. Ross’ formal proof shows that the Linear
pricing relation is a necessary condition for equilibrium in a market where agents
maximize certain types of utility. The subsequent work, which is surveyed below,
derives either from the assumption of the preclusion of arbitrage or the
equilibrium futility-maximization. A linear relation between the expected returns
and the betas is tantamount to an identification of the stochastic discount factor
(SDF).
The APT is a substitute for the Capital Asset Pricing Model (CAPM) in that both
assert a linear relation between assets’ expected returns and their covariance with
other random variables. (In the CAPM, the covariance is with the market
portfolio’s return.) The covariance is interpreted as a measure of risk that
investors cannot avoid by diversification. The slope coefficient in the linear
relation between the expected returns and the covariance is interpreted as a risk
premium. Such a relation is closely tied to mean-variance efficiency. An
empirical test of the APT entails a procedure to identify at least some features of
the underlying factor structure. Merely stating that some collection of portfolios
(or even a single portfolio) is mean-variance efficient relative to the mean-
variance frontier spanned by the existing assets does not constitute a test of the
APT, because one can always find a mean-variance efficient portfolio.
Consequently, as a test of the APT it is not sufficient to merely show that a setoff
factor portfolio satisfies the linear relation between the expected return and its
covariance with the factors portfolios.
Unfortunately, the APT does not necessarily preclude arbitrage opportunities

over dynamic portfolios of the existing assets. Therefore, the applications of the
APT in the evaluation of managed portfolios contradict at least the spirit of the
APT, which obtains price restrictions by assuming the absence of arbitrage.
Arbitrage is an often-used term in share markets. The arbitrager is an important

intermediary that helps in price discovery mechanism in all markets be it equity,
money forex or derivatives. There are three important participants that are
important in a cash market, the speculator, arbitrager and an investor. In futures
market the investor is replaced by a hedger. Arbitrager and Speculator are often
confused and both are termed as Speculators, but both are not same. The
difference between the two and how arbitrage works in the market and its
influence on market volatility are explained briefly as follows:
Arbitraging in India has been going on for several years. Initially arbitrage
activity was between Stock Exchange Mumbai and all other regional exchanges.
Mr. Babulal Bagri the founder of BLB Securities and Mr. Manubhai Maneklal
were legendary arbitrageurs of that era. They traded between Mumbai, Delhi and
Calcutta markets. Arbitraging in those days was done manually and not on any
online system. The way the fingers of these brokers flew on telex machines giving
trade instructions was an experience by itself. Then it shifted to cashing on price
difference between NSE and BSE limited. Today large amount of arbitrage
happens between cash and derivative markets. Arbitrage is also possible between
the current month and near or far month contracts. In case of Commodity
exchanges also there is an arbitrage opportunity between the local cash markets
and the future markets which are popularly known as National Commodity
Exchanges.
Speculator is one who gives liquidity to the markets. The buyers and sellers may
not often decide at the same time to buy or sell a security. There is a time gap as
well as a difference in price and quantity at which the buyer and seller intend to
do a transaction. The speculator fills this time gap and gives quotes to buyers as
well as sellers on a continuous basis. This imparts liquidity to the market since
each order has a counter offer from a speculator even if there is no counter party
to match the order.
The arbitrageur is one who plays the role of balancing the price differences across
the markets. The markets may be two exchanges trading in the same product or
two segments such as cash and derivatives or across international markets and
local markets. The arbitrageur continuously tracks prices across the chosen
segment. Are momentary price differences in two markets due to difference in
level of information as well as demand supply situation in the market? These price
differences are an Opportunity for the arbitrageur.
The arbitrageur has money power at his disposal. He takes deliveries in a
particular market segment and is able to give deliveries in another market
segment. There is a time gap between giving and taking deliveries. He holds the
stock for this time and earns an interest on the funds invested which comes by
way of price differential between buy and sell rates. The arbitrageur has a
particular interest return as his target. He does not have any open positions and
all his purchases or sells in a particular market segment have a counter position
in another market segment. At the net level his position is always zero. This is
how the arbitrager earns a risk free return.
The arbitrageur does not always wait for the expiry of the contract or the
settlement of the transaction. They may reverse the position before the actual
settlement date even if they have to compromise on some percentage of the price
difference earned by them. Lesser return is acceptable if it is earned with smaller
or no investment. All decisions are taken with reference to a benchmark-targeted
return.
To give example of an arbitrage transaction, assume that the arbitrageur has Rs.10
lacs available for doing arbitrage activity. His targeted return is say 18 percentage
p.a. which works to about 1.5 percentage p.m. We will take a simplistic
transaction where he does just one trade to earn the return. If some share is
quoting at Rs.1000 in one cash market he will look for opportunity to buy at
Rs.1000/- and sell at Rs.1015/- or more in another cash market simultaneously.
These markets must have different settlement dates otherwise in current rolling
settlement scenario it is not possible to give and receive delivery since both
happen on the same day.
Now the same example can be extended to cash and derivative segment. Shares
are purchased in cash market; and sold in futures market. Delivery of the shares
is received in the rolling settlement. Since deliveries are not permitted in futures
market a reversal opportunity is looked for before the expiry of contract,
otherwise the arbitrageur will be left with the delivery of shares. Hence if he
gained say Rs.25 per share on the first leg he will reverse the trades up to a loss
of Rs.10 in order to achieve his benchmark return of Rs.15.The returns are not
often as fantastic but opportunities are many. We also have to deduct from this
the cost of brokerage, Securities transaction tax, stock exchange charges and
stamp duty. Hence it becomes unviable for an investor unless the transaction costs
are very low. The price difference is only for a few minutes or seconds hence it
must be captured instantly through a speedy trading system. It should not so
happen that one transaction is done and the other one does not go through i.e. if
the arbitrageur buys and is unable to sell and the market falls then instead of
making a profit he will end up with a loss. Automated trading programs are used
in order to release both orders so that both the prices are captured simultaneously.
Arbitrage activity thus adds to liquidity in the markets and also helps in balancing
the prices of same shares across various markets. Prices continuously balance out
once the differences are cash upon. Arbitrage Helps in reducing volatility in
markets since continuous flow of orders reduces impact cost and more depth
means less volatility.
A small investor may not always be able to capture small differences in prices.
They are not constantly in front of the trading screen nor do they have
sophisticated trading systems to execute the orders. They are often linked to
internet or a network connection that is not direct feed into the stock exchange
system i.e., BOLT or NEAT. Streaming quotes on online trading is closest that is
available for such trading. Best strategy is to look for difference in shares prices
of stocks that you already have, hence delivery is not a problem. Otherwise it is
a volume game, small returns over thousands of transactions is the name of the
game. It is advisable to study the opportunities.
Arbitrage strategies:
Arbitrage is a strategy involving a simultaneous purchase and sale of identical or

equivalent instruments across two or more markets in order to benefit from a
discrepancy in their price relationship. It is a risk-free transaction, as the long and
short legs of the transaction offset each other exactly. Thus, arbitrage engages in
a strategy in order to reduce risk of loss caused by price fluctuations of securities
held in the portfolio. It involves buying and selling of equal quantities of a
security in two different markets, with the expectations that a future change in
price will offset by an opposite change in the other.
Daily turnover in the derivatives segment is around 3.5 times the cash market
volumes and is to the tune of Rs.30000 crores. Arbitrage activity is largely
concentrated in single stock futures, while index arbitrage is not very popular,
although it contributes about 25-30 percent of the total stock futures volumes. In
India, stock borrowing in the cash market is cumbersome, making the “Sell Stock
buy Futures” strategy difficult; hence, almost the entire arbitrage activity is
concentrated in “Buy Stock-Sell Futures”.
Advantages of arbitrage strategy:
 Capitalizes opportunities of mispricing (cost of carry) between cash and

derivatives.
 It is safe, as it does not carry equity market risk, as all equity positions are
completely hedged.
 Potential returns are higher than comparable investment avenues with
similar risks.
 Benefits of investing in an Arbitrage Fund
 Since the arbitrage fund is categorized as equity fund, there will be no tax
on Long-Term capital gains;
 Dividends are also tax-free.
 Potential returns are higher than those in comparable investment avenues
with similar risks like bank
 Fixed-deposits or liquid schemes.
 It does not carry risk equivalent to the equity market risk, as all equity
positions are hedged.
The Arbitrage Fund, in such uncertain times, can prove to be one of the good
choices by investors, other than putting the money in fixed deposits. The Fund
House is claiming a return of around 9-9.9 percent, which is much better than that
of many other savings instruments.
STOCK ANALYSIS:
Stock analysis is a term that refers to the evaluation of a particular trading

instrument, an investment sector or the market as a whole. Stock analysts attempt
to determine the future activity of an instrument, sector or market. There are two
basic types of stock analysis: Fundamental analysis and Technical analysis.
Fundamental analysis concentrates on data from sources including financial
records, economic reports, company assets and market share. Technical analysis
focuses on the study of past market action to predict future price movement.
 Fundamental analysis:
Fundamental analysis is the diagnosis of the underlying forces that affect the
future scenario of the economy, industry and companies. At the company level,
fundamental analysis involves scrutiny/inspection of financial data, management,
business plans and competition. At the industry level, there should be
study/investigation/analysis/consideration of supply and demand forces for the
products/services offered. About national economy, fundamental analysis may
focus on economic data to assess the present and future growth of the economy.
To predict future stock/share prices, fundamental analysis incorporates economic,
industry and company analysis to obtain a stock's current fair value and predict
future price potential. The Focus of Fundamental Analysis are,
 Economic Analysis
Economic Analysis covers the study of the country's economic indicators such as
new orders, money supply, stock price indices, and stocks of unfinished goods,
new business formations, and consumer price index and unit labour costs.
Important economic considerations would include interest rates and inflation and
its impact on the stock market, the level of government debt, and the level of
corporate debts, monetary and fiscal policy.
 Industry Analysis
Industry Analysis covers the structure and state of competition in the industry,
nature and prospects of demand for products and services of the industry, cost
conditions and profitability, technology and research requirements, the
immediate and long term outlook for sales and profit.
 Company Analysis
Company Analysis covers management analysis and financial analysis.
Management analysis would consider the business acumen of the CEO and top
managers, the past record and performance of the CEO and the corporate work
ethic. Financial Analysis would consider revenue, costs, earnings of the company
and the company's capital structure as reflected by its debt to equity ratio.
Financial Analysis in the form of financial ratio analysis compares the company's
current stock price to its earnings, dividends, and assets. Theses financial
valuation ratios and then compared the financial valuation of other companies in
the same industry to identify overvalued and undervalued companies in terms of
earnings, dividends and assets.
 Technical analysis :
Technical analysis is a method of evaluating securities by analyzing the data
generated by market activity, such as past prices and volume. Technical analysts
do not attempt to measure a security’s fundamental value, but instead use charts
and other tools to identify patterns that can suggest future activity.
Technical analysis tools:
 Simple Moving Average (SMA) gives you the daily average of the last “x”
number of days. Using the 20-day, 50-day, and 200-day time periods are
common. That provides three different levels of time information. The SMAs are
typically used to provide support and resistance areas, and the crosses are treated
as signals to buy, sell, or cover as the case may be. There are variations on the
moving averages, but the simple ones suffice for what most people need them for.
They are also effective to confirm another signal. Most indicators can be used
together to present stronger evidence. Just be aware that some indicators use
similar information so they are likely to arrive at the same conclusions.
 Moving Average Convergence/Divergence (MACD) is an example of an
indicator using similar data to the SMA, though with different calculations
resulting from it. This indicator is pretty versatile and the lines can be used along
with the bars. For the lines when the fast line crosses over the slow line it can be
treated as an early signal. Waiting for the bars to confirm the trend might work as
well, but a lot of gains could be left on the table. The bars flip when the lines
cross, but looking at the line can give you an earlier confirmation. If the slope on
the crossing line looks sharp, then that is a strong signal. The goal is always to
get fast moving gains and move on if you are short-term trading. The cross of the
bars from below the baseline to above can be fast moving because it might be a
correction or the opening of a reversal.
 Relative Strength Index (RSI) is tricky in its math. It compares gains to losses
and then charts whichever is greater and the magnitude of that. So, an RSI that is
climbing up rapidly means that the stock’s gains are rapidly out pacing its losses
on a daily basis for the time period chosen. The most common time period is 14-
days. So, 10 scattered days of 10 percent gains, with 4 scattered days of small
1percent losses would mean a sharp rise in the RSI. RSI is measured on a scale
of 0-100 and 30 and 70 are used as oversold and overbought lines respectively.
Above 70 is overbought, and below 30 is oversold. A lot of people actually treat
the lines are breakout indicators, which tends to work. Breaking into 70 can be a
sign that the stock is starting an upward breakout. It can also indicate that a stock
is overbought, which seems like divergent signals so it would be good to use
another indicator in conjunction. The RSI seems better suited to judging the
strength of a move. With a trend, it can tell you if the trend is strong or weak.
Weak trends can turn badly at any time. Strong trends generally throw off some
signals before turning.
 Line Charts are the most basic type of chart because it represents only the closing
prices over a set period. The line is formed by connecting the closing prices for
each period over the timeframe. While this type of chart doesn’t provide much
insight into intraday price movements, many investors consider the closing price
to be more important than the open, high, or low price within a given period.
These charts also make it easier to spot trends since there’s less ‘noise’ happening
compared to other chart types.
 Bar charts expand upon the line chart by adding the open, high, low, and close
or the daily price range. The chart is made up of a series of vertical lines that
represent the price range for a given period with a horizontal dash on each side
that represents the open and closing prices. The opening price is the horizontal
dash on the left side of the horizontal line and the closing price is located on the
right side of the line. If the opening price is lower than the closing price, the line
is often shaded black to represent a rising period. The opposite is true for a falling
period, which is represented by a red shade.
 A candlestick chart is a chart that displays the high, low, opening and closing
prices of a security for a specific period. The wide part of the candlestick is called
the "real body" and tells investors whether the closing price was higher or lower
than the opening price. Black/red indicates that the stock closed lower and
white/green indicates that the stock closed higher.
TREND DEFINES RISK AND RETURN:

Determining the trend of a share is the most important purpose for technical
analysis. When a trend has been identified, the possible upward or downward
space of a share can be determined. The risk and return can be extracted from this
movement space of a share. To be complete: when a trend shows a lot of space
for downward movement, the risk and possible return can be turned around by
going short. Lots of downward movement space can result in a positive return.
CHAPTER-2
PROJECT DESIGN
In the past recent years, it is being observed that, Arbitrage opportunities arise
due to market inefficiencies and the investors seek to exploit such inefficiencies
that will manifest as miss-pricing in BSE and NSE markets. Hence the topic
“Arbitrage Trade Analysis of Top 10 Public Sector Banks of Indian
Economy listed in BSE and NSE” is taken up to study whether this hypothesis
actually holds good or is it just a mere say.
OBJECTIVES OF THE STUDY

 To know the difference of share prices between BSE and NSE of top 10
public sector banks
 To find the mean value of the differences and to analyze the maximum mean
value and minimum mean value.
 To find out the maximum and minimum share price quoted during the
month of November 2017 and December 2017 for the individual bank.
 To analyze the possibility of taking advantage of arbitrage mechanism of
the top 10 public sector banks of Indian economy, listed in BSE and NSE.
 To guide the investors (current and potential) to understand the impact of
important happenings on the Indian Stock exchange.
RESEARCH METHODOLOGY
The methodology used in the study entitled “Arbitrage Trade Analysis of Top
10 Public Sector Banks of Indian Economy listed in BSE and NSE” is
collected through various means.
DATA COLLECTION
 Primary data collection

Personal interview method is adopted to gain in depth knowledge of the topic
and about the stock markets regarding the study.
 Secondary data collection

Data for analyzing the stock markets and information about the same is
collected from the following:
 BSE INDIA
 NSE INDIA
 Websites of Stock market
 Money control.com
TOOLS AND TECHNIQUES:
The various tools and techniques used for the study are:
 MEAN DIFFERENCES
 MAXIMUM DIFFERENCES
 MINIMUM DIFFERENCES
Using excel
 ARITHMETIC AVERAGE OR MEAN:
The arithmetic average measures the central tendency. The purpose of computing
an average value for a set of observations is to obtain a single value, which is
representative of all the items. The main objective of averaging is to arrive at a
single value which is a representative of the characteristics of the entire mass of
data and arithmetic average or mean of a series (usually denoted by x) is the value
obtained by dividing the sum of the values of various items in a series (sigma x)
divided by the number of items (n) constituting the series.
Thus, if X1, X2……………..Xn are the given n observations. Then
X1 + X2 + … … . Xn
X=
n
LIMITATIONS OF THE STUDY
 The study is restricted to selected stock markets and findings of the study
cannot be generalized for the other stock markets.
 The study is conducted for the 2 months that is November 2017 and
December 2017 of top 10 public sector banks of Indian economy, listed in
BSE and NSE.
 Any price fluctuations prior to this study or after this are not taken into
account.
 Situations in the stock markets are always volatile.
CHAPTER-3
INDUSTRY PROFILE
STOCK MARKET
Stock exchange is a regulated market place, in which listed securities are bought
and sold through the intervention of members (brokers) of stock exchanges, by
following an open system of two-way quotation; the settlement of trades is done
according to the bye-laws of stock exchange. Trading through member/broker,
trading in listed securities only, open system of quotation, completely regulated,
settlement through the stock exchange are the features of stock exchange.
Enrolment of members, making bye-laws of stock exchange, providing for listing
of securities, providing facilities for trading of securities, providing clearing
services, publishing information, arbitration, investor education and investor
protection are the main functions of a recognized stock exchange.
A broker can have several functional specializations like Speculator, Hedger,

Arbitrageur, Floor broker, Commission Broker, Jobber, Badliwala, and Bull &
Bear. For executing clients’ orders, a broker requires his client to deposit margin
money, which in turn is deposited with the stock exchange by the broker. Margin
can be initial margin, badla margin and mark-to-market margin.
The Securities and Exchange Board of India (SEBI) is the regulator for the
securities market in India. It was established in the year 1988 and given statutory
powers on 30 January 1992 through the SEBI Act, 1992. SEBI regulates primary
market activities, secondary market activities, intermediaries of capital market,
companies, and investors.
SEBI has been successful in achieving the following:
 Introduction of online trading

 Introduction of depository system and dematerialisation.
 Restriction on speculative activities.
 Introduction of rolling settlement.
 Ban on badla.
 Introduction of derivatives trading.
 Provision for takeover code of conduct.
 Regulation of mutual funds.
 Investor protection and education.
 Provisions to control insider trading.
 Free pricing of issues.
 Regulation of intermediaries
INDIAN CAPITAL MARKET
Capital market is a market in which money is offered for a longer period that is
for more than a year. In other words, capital market is a market where long term
funds are raised and through the money market short term funds are raised. Stock
and bonds presented by growth oriented companies of various sectors are sold to
investors. The capital market of India is among the top ten biggest capital markets
of the world.
Mainly there are two types of market in Indian capital market that is primary
market and another one is secondary market. The primary market deals with fresh
or new stocks where it issues the new stocks or bonds to the investors, generally
deals with the initial public offer (IPO). But in secondary market it deals with the
existing stocks which are purchased and sold among investors. Speculation can
be done in the secondary markets.
 Primary market :
The primary market deals with the fresh or new stocks, where it issues new or
fresh stocks to the investors. Government or public sector institution,
companies can raise funds through the issue of new securities or through the
issue of new bonds. This is generally done through bunch of securities dealers.
In case of fresh security issue, the sale is an IPO (Initial Public Offering).
 Secondary market :
Secondary market which deals with the sale of stocks that have been already
issued in an Initial Public Offering (IPO) in other words it deals with second
hand securities like share and bonds. Secondary market operation includes the
purchase and sale of stocks through registered stock brokers. They should
register with the stock exchange.
The intermediaries are as follow
 Stock exchange
 Depository participants/ stock broker
 Depository
 STOCK EXCHANGES IN INDIA

There are many stock exchanges in India. The major two stock exchanges are:
 Bombay stock exchange (BSE)
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich
heritage. Popularly known as "BSE", it was established as "The Native Share
Stock Brokers Association" in 1875. It is the first stock exchange in the country
to obtain permanent recognition in 1956 from the Government of India under the
Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-
eminent role in the development of the Indian capital market is widely recognized
and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons
(AOP), the Exchange is now a demutualized and corporative entity incorporated
under the provisions of the Companies Act, 1956.
BSE (Corporatization and Demutualization) Scheme, 2005 notified by the
Securities and Exchange Board of India (SEBI).With demutualization, the trading
rights and ownership rights have been de-linked effectively addressing concerns
regarding perceived and real conflicts of interest. The Exchange is professionally
managed under the overall direction of the Board of Directors. The Board
comprises eminent professionals, representatives of Trading Members and the
Managing Director of the Exchange. The Board is inclusive and is designed to
benefit from the participation of market intermediaries.
In terms of organization structure, the Board formulates larger policy issues and
exercises over-all control. The committees constituted by the Board are broad-
based. The day-to-day operations of the Exchange are managed by the Managing
Director and a management team of professionals.
History of the Bombay stock exchange
The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces
its history to the 1850s, when stockbrokers would gather under banyan trees in
front of Mumbai's Town Hall. The location of these meetings changed many
times, as the number of brokers constantly increased. The group eventually
moved to Dalal Street in 1874 and in 1875 became an official organization known
as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the
first stock exchange to be recognized by the Indian Government under the
Securities Contracts Regulation Act. The Bombay Stock Exchange developed the
BSE Sensex in 1986, giving the BSE a means to measure overall performance of
the exchange. In 2000 the BSE used this index to open its derivatives market,
trading Sensex futures contracts. The development of Sensex options along with
equity derivatives followed in 2001 and 2002, expanding the BSE's trading
platform. Historically an open-cry floor trading exchange, the Bombay Stock
Exchange switched to an electronic trading system in 1995. It took the exchange
only fifty days to make this transition.
 National stock exchange of India limited(NSE)
The National Stock Exchange of India Limited has genesis in the report of the
High Powered Study Group on Establishment of New Stock Exchanges, which
recommended promotion of a National Stock Exchange by financial institutions
(FIs) to provide access to investors from all across the country on an equal
footing. Based on the recommendations, NSE was promoted by leading Financial
Institutions at the behest of the Government of India and was incorporated in
November 1992 as a tax-paying company unlike other stock exchanges in the
country .
On its recognition as a stock exchange under the Securities Contracts
(Regulation) Act, 1956 in April 1993, NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The Capital Market
(Equities) segment commenced operations in November 1994 and operations in
Derivatives segment commenced in June 2000.
The National Stock Exchange of India Ltd. is the largest stock exchange of the
country. NSE is setting the agenda for change in the securities markets in India.
The last 5 years have seen us play a major role in bringing investors from 363
cities and towns online, ensuring complete transparency, introducing financial
guarantee of settlements, ensuring scientifically designed and professionally
managed indices and by nurturing the dematerialization effort across the country.
Career in NSE
The National Stock Exchange of India Ltd. is the largest stock exchange of the
country. NSE is setting the agenda for change in the securities markets in India.
NSE is a complete capital market prime mover. Its wholly-owned subsidiaries,
National Securities Clearing Corporation Ltd. (NSCCL) provides clearing and
settlement of securities, India Index Services and Products Ltd. (IISL) provides
indices and index services with a consulting and licensing agreement with
Standard & Poor's (S&P), and NSE.IT Ltd. forms the technology strength. As the
leading stock exchange and fiscal entity in the country, it believe in recruiting the
finest of talent in the industry.
WORKING OF STOCK MARKET
A person who wants to purchase or sell securities in the secondary market must
place his order with a stock broker. When the stock broker gets the purchase
order, he places order through his computer system to the stock exchange. If the
order does not match with the stated purchase limit, the order will remain in the
concatenation. It gets accomplished, if there is match between order and purchase
limit. The stocks which is bought will be sent to the purchaser by the stock broker
in the Demat format. Indian stock exchange declared holiday on Saturday and
Sunday so there is no trading on weekends. The stock market opens in the
morning at 9:15 am and closes in the evening at 3:30 pm. Pre-open session of
stock trade starts in the morning at 9:00 am and closes at 9:15 am. This is the
trade period for the NSE index’s 50 stocks.
 DEPOSITORY SYSTEM
Depository system is a means for holding stocks in uncertified or certified form
started to transfer stocks in an easiest way. Indian stock exchange follows
electronic mode of depository system, in which stocks are gathered in the
dematerialization mode of certificate. Before the presentation of the depository
system through the ‘Depository Act (1996)’, the activities in the secondary stock
market had created huge problem because of the various unfair practices like
theft, bad delivery etc.
Currently there are 2 depository systems in India:

 NATIONAL SECURITIES DEPOSITORY LTD. (NSDL)
 CENTRAL DEPOSITORY SERVICE LTD. (CDSL)
 STOCK BROKER
Stock brokers are the systematized professionals who purchases and sells shares
and other stocks on behalf of investors. They should get certificate from Security
and Exchange Board of India (SEBI) before operating as stock broker. Investors
are not permitted to purchase or sell directly from stock exchange. A stock broker
can enrol to any stock exchange. Stock broker gets commission from the client’s
as brokerage fees. Stock broker is also known as depository participant. A
depository participant is an agent of the depository. They are agents between
investors and depository. A depository participant who is enrolled with SEBI is
an entity under the section 12 and sub section of 1A of SEBI Act. Stock brokers
will help the investors to invest on right company and help to gain maximum
gains.
CHAPTER- 4
COMPANY PROFILE
Inditrade Capital Limited is engaged in the business of providing broking and
broking-related services, including depository participant services to primarily
retail clients. The Company also offers securities brokerage services. Its business
segments include Equity broking, which includes equity broking, Demat and
related services; Commodity broking, including commodity broking and related
services; financial distribution, including marketing support and other services;
Insurance broking, including insurance product distribution services, and Client
financing, including margin financing to broking clients loan against shares and
commodities, among others. It also offers depository services, commodity,
currency derivatives, initial public offering (IPO) and mutual fund. The Company
caters only to the needs of the domestic market. The Company has branch offices
spanning across the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh,
Telangana and Maharashtra in India. The company is headquartered in Kochi, in
the state of Kerala in the southern part of India.
INDITRADE Capital Ltd formerly known as JRG Securities Ltd is one of

India’s leading financial services providers with strong presence in South India.
It was started in 1992 and over the year it acquired a name of trust through equity
and commodity Broking businesses. Inditrade has undergone several
transformations- expanding into new geographies, adopting state-of-the-art
technology, strengthening credit and risk management systems, creating new
products and strengthening client relationships through service focus. The
company is committed to fully compliant with all regulatory compliances with
the exchanges, SEBI, IRDA, FMC and RBI. Inditrade is listed on the Bombay
Stock Exchange and has a diverse set of public shareholders.
As the company transforms itself to being a professionally run, high quality

brokerage house in India, the focus is on providing best-in-class services to the
customers. The new management team consists of high quality professional talent
from within the company and from the marketplace. The company strives to
attract and retain the best talent, which is amongst the key building blocks for the
company. The new growth strategy has four key building blocks – Trust,
Transparency, Technology and Talent.
The company is a member of the National Stock Exchange of India (NSE), the
Bombay Stock Exchange (BSE), NMCEIL, the National Commodities
Derivatives Exchange Ltd (NCDEX), MCX and the Indian Pepper and Spices
Trades Association (IPSTA). Inditrade is a full-fledged depository participant of
the National Securities Depository Ltd and Central Depository Services (India)
Limited. Besides these, it is also a leading Insurance Broker.
In order to expand its reach, Inditrade has launched its internet trading services
through WWW.inditrade.com. The online services will provide customers an
opportunity to trade from the comfort of their home or offices and also trade while
travelling. Inditrade.com will empower customers to trade and invest in equities,
commodities, currencies, mutual funds and insurance.
History of Inditrade:
The company took life as a partnership firm called JRG Associates, started by
Mr. Regi Jacob, Mr. Giby Mathew and Mr. Jiji Antony in 1992. The firm was
converted into a private limited company, JRG Associates Pvt. Ltd. in 1994 with
the inclusion of a few of their close relatives and associates on the board as
financial investors, and became a member of the Cochin Stock Exchange. The
company initially focused on developing a client base in Kerala and Tamil Nadu
and established several operation centres across these states.
In 1999, the company became a member of the NSE and in the following years,
began to cultivate clients from Karnataka, Andhra Pradesh and Maharashtra. As
the business developed, JRG intensified its operational reach in the southern
states.
In August 2003, the company changed its name to JRG Securities Pvt. Ltd. in
order to accurately reflect the business focus of the company. The following
month, i.e. September 2003, the company was converted into a public limited
company and over the next two years began operations in commodities and
insurance broking and distribution of financial products.
Milestones achieved
1992 Started secondary Stock Market Operations
1994 Became a member of The Cochin Stock Exchange Ltd.
1995 Sub Broker of National Stock Exchange Ltd.
1999 Became a member of Inter Connected Stock Exchange Ltd.
1999 Became a member of The National Stock Exchange Ltd.
2000 Depository Participant of the National Securities Depository Ltd.
2000 Became a Sub-Broker of Bombay Stock Exchange
2000 Derivatives Trading Membership.
2000 Developed Branches across Kerala.
2001 Established Branch in Bangalore.
2003 Established Branch at Chennai
2005 Became a member of The Bombay Stock Exchange Ltd.
2005 Started operations in Maharashtra, UP, AP, Delhi & Punjab.
2007 Company has designated an E-Mail ID for the purpose of registering

complaints from the Investors and redressing the same. Company's E-
Mail ID for investors communication is investorassistance@jrg.co.in
2009 Registered Office of the Company has been shifted from 1st Floor,
Velliappallil Buildings, T. B. Road, Pala- 686575, Kerala to JRG House,
Ashoka Road, Kaloor, Kochin-682017, Kerala
2010 Company has appointed Mr. Anand Tandon as Chief Executive Officer
(CEO) of the Company.
2012 Mr. Gopichand S has appointed as Additional Director and Managing

Director of the company.
2013 The company name has been changed from JRG Securities Ltd to Inditrade
Securities Ltd. -The company registered office has been shifted from JRG
House, Ashoka Road, Kaloor, Kochi - 682017 to XXXVI - 202 (old no:
XXX11373-D) J. J. Complex, Diary Methanam Road, Edappally, Kochi -
682024.
2014 Mr. P. Viswanathan, has been appointed as chairman of the company.
2016 Inditrade Cap gets RBI nod to change shareholding pattern.
Inditrade Capital gets 67 percent stake in Tree Microfinance Ltd.
Inditrade Capital Acquisition of 100% shareholding in Edel Commodities

Trading Ltd by Inditrade Business Consultants Ltd, a wholly subsidiary
of the Company.
VISION AND MISSION:

 Vision:
“Empowering the investors in you”
Inditrade provides a full array of financial products to you as per your needs
through a customer-centric approach and technology-oriented solutions.


 Mission:
To educate and empower the individual investor to make better investment better
decision through the reality advice and superior services.
PRODUCTS AND SERVICES:
Products:
 Indi Save: Earn higher interest than on your fixed deposits. Invest in
corporate debt, government bonds, debt funds and gold.
 Depository services.
 Bonds and corporate deposits.
 Debt/gilt and cash Mutual funds.
 Other liquid and money market instruments.
 50 percent same day fund transfer against a sell position.
 Buy back of specified bonds with a committed interest rate.
 Arbitrage opportunities/ market neutral strategies: Commodity,
securities.
 Indi Invest: Create wealth. Invest in equities, gold, mutual funds and
property.
 Gold
 Equity – medium and long term opportunities
 Equity Mutual funds
 IPOs
 Debt and gilt and liquid MFs and money market instruments when
required
 Property
 Portfolio Management Service
 Indi Lever: Leverage your margins, avail margin funding, take loan
against shares. Trade in equities, commodities and currency using our
advisory support.
 Equity trading
 Commodities trading
 Currencies trading
 Margin funding
 Limit against holdings
 Leverage
 Intraday, short term calls
 Access to the research team
 SMS alerts and research reports
 Indi Loans: Personal loans, home loans, business loans, loans against
property, Loan against securities, Loan against commodities/securities,
Gold Loan
 Indi Sure: Insure yourself and your assets. Protect your family’s future
with children’s education and health insurance.
 Indi Plan: Use our Financial Planning Services to set your financial
goals. We will help you achieve them.
Services:
 Online trading platform

 State of art Back end platform with source code giving us ability to
customize quickly
 Technological edge
 Advisory desk-Research and advisory calls, reports and services
 Hi tech state of art Customer help desk
 Centralized Risk management desk
 Investor Trainings – base level and advanced courses
 Centralized dealing support
 Daily research conference calls.
 Real time market information and updates.
 A world-class Tier 4 Data Centre and Business continuity.
 Business reports, productivity enhancement tools.
 Client management system.
SWOT ANALYSIS:
Strengths:
 Inditrade capital ltd shows the customer orientation .it is always ready to
sort out the problem of its clients.
 It has broad product range.
 Efficient and skilled manpower.
 Independent and insightful research drives the quality of its research and
differentiates it from competitors.
 One of the key strengths has been the successful establishment of the
franchisee business.
 Experienced top management helps the company to implement the
business strategies successfully.
 Inditrade capital ltd provides multi-channel access to all its customers
through a strong online presence with www.inditrade.com, 29 national
wide branches and 350 executive franchisees in 45 cities and a call centre
based Dial-trade facilities.
Weaknesses:
 Less penetration in rural areas

 Rate of brokerage is very high
 Software problems.
 Lack of strategic investment awareness guidance to clients.
 Promotional activities conducted by the company are not at par with
other firms.
 Lack of sufficient branch-offices for speedy delivery of services.
Opportunities:
 Rise in Discretionary income of residence of India.

 Long term economic outlook is a positive sign which will lead an
opportunity in capital market segment.
 Growing financial services industry’s share of wallet for disposable
income.
 Increasing liberalization and globalisation of Indian market. As a result
now in India more number of FII and FDI are coming. So this is a good
opportunity for stock broker to attract these foreign investments by
giving best services and attractive scheme.
 Growing Indian economy.
 As interest on fixed deposits with post office and banks are all time low,
more small investors are entering into stock market.
Threats:
 Sever competition from the banks as they also started to provide same
services as broking firms do.
 Stringent rules and regulations by government and RBI will adversely
hurt the firm.
 Indians are mostly conservative and prefer investing in gold and land.
 Short term economic slowdown impacting investors’ sentiments and
business activities.
PHILOSOPHY:
 Trust
Investors and top management team are of the highest pedigree with a
demonstrated track record in the industry professionally managed team with the
highest standard of ethics Best-in-class compliance and risk management systems
to ensure safety and data integrity more than 20 years’ experience in the systems
the financial services industry speaks by itself of company’s trust and integrity,
it’s long-term relationships speak for its commitment to trust and integrity in its
business dealings.
 Transparency
Highest standards of corporate governance with well-constituted board of
directors and management review committees that closely participate and monitor
business operations transparency, disclosure norms and accountability are of
paramount importance. Company follows industry best practices its commitment
extends further than its customers, investors and stakeholders, as company focus
on corporate social responsibility and aspiration to institutionalize it.
 Technology
Company believes that technology is one of the biggest in business, and commit
to investing continuously to ensure it delivers superior value to its MPLS
techniques.
 Talent
Company believes in a strong employee value proposition of “creating and
sharing value”. Company has built the organization based on the philosophy of
“professional entrepreneurship”. It aims to attain the preferred employer status
in respective industry. Company’s employees are wealth creators and it reward
them for their motivation. Company invest heavily in training its employees on
continuous basis to improve quality delivery levels.
ORGANISATION STRUCTURE:
Managing Director
(Gurmeet Singh)
CEO
(P .Viswanathan)
State head
(Nagendra)
Branch Manager
Relationship Human Back office in

Information
Manager Resources charge
Technology
Manager
Head
Sales Executive
Trainees
TOP MANAGEMENT:
Mr. Brij Gopal Daga, Independent Director
Mr. Gurmeet Singh, Non-Executive Director
Mrs. Jhuma Guha, Non-Executive Director
Mr. Kerachan Ayyappan Somasekharan, Independent Director
Mr. Naveen Kumar Jain, Chief Financial Officer
Mr. P Viswanathan, chief executive officer
Mr. Vinod Mohan, Company Secretary
Mr. Anand Maliwal, Chief Digital Officer
Mr. Shyam Sunder,Senior Vice President-IT
Mr. Shankar Anappindi, Vice President Human Resource
TOP 10 PUBLIC SECTOR BANKS OF INDIAN ECONOMY, LISTED IN BSE AND NSE:
STATE BANK OF INDIA (SBI)
State Bank of India is an Indian multinational, public sector banking

and financial services company. It is a government-owned corporation with its
headquarters in Mumbai, Maharashtra. On 1st April, 2017, State Bank of India,
which is India's largest Bank merged with five of its Associate Banks (State Bank
of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank
of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank with itself.
This is the first ever large scale consolidation in the Indian Banking Industry. With
the merger, State Bank of India will enter the league of top 50 global banks with
a balance sheet size of 33 trillion, 278,000 employees, 420 million customers,
and more than 24,000 branches and 59,000 ATMs. SBI's market share will
increase to 22 percent from 17 percent. It has 198 offices in 37 countries; 301
correspondents in 72 countries. The company is ranked 232 nd on the Fortune
Global 500 list of the world's biggest corporations as of 2016. State Bank of India
has 20 percent market share in deposits and loans among Indian commercial
banks.
PUNJAB NATIONAL BANK (PNB)
Punjab National Bank, India’s first Swadeshi Bank, commenced its operations on
April 12, 1895 from Lahore, with an authorised capital of Rs.2 lacks and working
capital of Rs.20000. The far-sighted visionaries and patriots like Lala Lajpat Rai,
Mr. E C Jessawala, Babu Kali Prasono Roy, Lala Harkishan Lal and Sardar Dyal
Singh Majithia displayed courage in giving expression to the spirit of nationalism
by establishing the first bank purely managed by the Indians with Indian Capital.
During the long history of over 122 years of the Bank, 7 banks have merged with
PNB and it has become stronger and stronger with a network of 6941 Domestic
branches and 9753 ATMs as on 30th September 2017.
The Bank has won many prestigious awards from influential domestic and
overseas awarding institutions. The Bank won recently Dun & Bradstreet
Banking Awards 2017- Best Public Sector Bank- Government Scheme
participation- Pradhan Mantri Mudra Yojana (PMMY). The Bank also
won National Award in SHG-Bank Linkage for the year 2016-17 under Large
Category Bank by Ministry of Rural Development, Govt. of India.
PNB regained its Number One slot amongst Nationalized Banks and 2nd place
amongst Public Sector Banks (PSBs) with overall rank at 191st amongst Top 1000
World Bank by ‘The Banker’ in 2017.
BANK OF BARODA
Bank of Baroda (BOB) is an Indian state-owned International banking
and financial services company headquartered in Vadodara (earlier known as
Baroda) in Gujarat, India. It has a corporate office in Mumbai.
Based on 2017 data, it is ranked 1145 on Forbes Global 2000 list. BOB has total
assets in excess of Rs.3.58 trillion (making it India’s 2nd biggest bank by assets),
a network of 5538 branches in India and abroad, and 10441 ATMs as of July,
2017.The bank was founded by the Maharaja of Baroda, Maharaja Sayajirao
Gaekwad III on 20 July 1908 in the Princely State of Baroda, in Gujarat. The
bank, along with 13 other major commercial banks of India, was nationalized on
19 July 1969, by the Government of India and has been designated as a profit-
making public sector undertaking (PSU).
In 2015, Bank of Baroda officials recently stumbled upon illegal transfers of a
whopping Rs.6,172 crore (US$970 million) in foreign exchange, made to Hong
Kong through newly opened accounts in the bank's Ashok Vihar branch.
CANARA BANK:
Canara Bank is one of the largest public sector banks owned by the Government
of India. Its headquarters is in Bengaluru. It was established at Mangalore in
1906(by Ammembal Subba Rao Pai). It one of the oldest public sector banks in
the country. The government nationalized the bank in 1969. As of 30 October
2017, the bank had a network of 6639 branches and more than
10600ATMs spread across The India. The bank also has offices abroad
in London, HongKong, Moscow, Shanghai, Doha, Bahrain, South
Africa, Dubai, Tanzania and New York.
Canara Bank established its international division in 1976. In 1983, Canara Bank
opened its first overseas office, a branch in London. Two years later, Canara Bank
established a subsidiary in Hong Kong, Indo Hong Kong International Finance.
In 2008-09, Canara Bank opened its third foreign operation, this one a branch in
Shanghai. Later Canara Bank established a branch each in Leicester and Bahrain,
and converted its Hong Kong subsidiary into a branch. It also has a representative
office in Sharjah.
Together with State Bank of India, Canara Bank established a joint venture in
Moscow, Commercial Bank of India LLC.
Canara Bank provides the general manager and the branch managers for Al
Razouki Intl Exchange Co (LLC), which a number of business leaders and non-
resident Indians (NRIs)established in 1981 in the United Arab Emirates to
facilitate remittances to India by tourists and NRIs.
Since 1983, Canara Bank has been responsible for the management of Eastern
Exchange Co. WLL, Doha, Qatar, which Abdul Rahman M.M. Al Muftah
established in 1979.
BANK OF INDIA:
Bank of India (BOI) is commercial bank with headquarters at Bandra Kurla
complex, Mumbai. Founded in 1906, it has been government-owned since
nationalization in 1969. Bank of India has 5100 branches as on 31 January 2017,
including 56 offices outside India, which includes five subsidiaries, five
representative offices, and one joint venture. BOI is a founder member
of SWIFT (Society for Worldwide Inter Bank Financial Telecommunications),
which facilitates provision of cost-effective financial processing and
communication services.
Bank of India was founded on 7 September 1906 by a group of eminent
businessmen from Mumbai, Maharashtra, India. The Bank was under private
ownership and control till July 1969 when it was nationalized along with 13 other
banks. Beginning with one office in Mumbai, with a paid-up capital of Rs.5
million (US$78,000) and 50 employees, the Bank has made a rapid growth over
the years and blossomed into a mighty institution with a strong national presence
and sizable international operations. In business volume, the Bank occupies a
premier position among the nationalized banks.
The bank has 4,963 branches in India spread over all states/ union territories
including specialized branches. These branches are controlled through 54 Zonal
Offices. There are 60 branches/ offices and 5 Subsidiaries and 1 joint venture
abroad. The Bank came out with its maiden public issue in 1997 and follow on
Qualified Institutions Placement in February 2008.
INDIAN BANK:
Indian Bank is an Indian state-owned financial services company established in
1907 and headquartered in Chennai, India. It has 20,924 employees, 2682
branches and is one of the top performing public sector banks in India. Total
business of the bank has touched Rs.3,14,654 crores as on 31.03.2017.Bank's
Information Systems & Security processes certified with ISO27001:2013
standard and is among very few Banks certified worldwide. It has overseas
branches in Colombo and Singapore including a Foreign Currency Banking Unit
at Colombo and Jaffna. It has 227 overseas correspondent banks in 75 countries.
The bank has two subsidiary companies-"Indbank Merchant Banking Services
Ltd" and "IndBank Housing Ltd. Since 1969 the Government of India has owned
the bank.
IDBI BANK:
IDBI Bank was established in 1964 by an Act of Parliament to provide credit and
other financial facilities for the development of the fledgling Indian industry.
Central government is the owner of this bank and employees will be called as
Central Government staffs. It is one among the public sector banks in India and
is a nationalized bank to be treated on par with SBI and other nationalized banks
with reference to the notification dated 26th February 2013. At present
Government holds 77 percentage stake in IDBI Bank, has reported yet another
surge in bad loans in the April-June quarter. The lender now has the highest
proportion of bad loans, with nearly a quarter of its book having turned bad. For
the first quarter of the current financial year, the bank reported a net loss of Rs.853
crore compared to a profit of Rs.241 crore in the year-ago period. In the fourth
quarter of financial year 2016-17, the bank had reported a loss of Rs.3200 crore.
While the reported loss was lower than the preceding quarter, bad loans continued
to surge. In the quarter ending July-September (FY18) the bank bounced back
with a loss of Rs.198 Crore compared to a loss of over Rs.2000 Crore in the
previous quarter. The Bank is expected to return to profit in near future. It is
currently has 3817 ATMs, 1995 branches, including one overseas branch at
Dubai, and 1382 centers. The Bank has an aggregate balance sheet size of INR
3.74 trillion as on 31 March 2016.
CENTRAL BANK OF INDIA
Established in 1911, Central Bank of India was the first Indian commercial bank
which was wholly owned and managed by Indians. The establishment of the Bank
was the ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder
of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi
Bank'. In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that
he proclaimed Central Bank of India as the “property of the nation and the
country's asset”. He also added that 'Central Bank of India lives on people's faith
and regards itself as the people's own bank'.
During the past 104 years of history the Bank has weathered many storms and
faced many challenges. The Bank could successfully transform every threat into
business opportunity and excelled over its peers in the Banking industry.
Central Bank of India, a government-owned bank, is one of the oldest and largest
commercial banks in India. It is based in Mumbai which is the financial capital
of India and capital city of state of Maharashtra. The bank has 4730 branches,
5319 ATM's and 4 extension counters across 27 Indian states and three Union
Territories. At present, Central Bank of India has overseas office
at Nairobi, Hong Kong and a joint venture with Bank of India, Bank of Baroda,
and the Zambian government. The Zambian government holds 40 per cent stake
and each of the banks has 20 percent. Recently it has also opened a representative
office at Nairobi in Kenya. It is one of 20 Public Sector banks in India to
get recapitalization finance from the government over the next 24 months.
UNION BANK OF INDIA:
Union Bank of India (UBI) is one of the largest government-owned banks of India
(the government owns 63.4 percentage of its share capital). It is listed on
the Forbes 2000, and has assets of USD 13.45 billion. All the bank's branches
have been networked with its 6909 ATMs as on 30 September 2015. Its online
Telebanking facility are available to all its Core Banking Customers - individual as
well as corporate. As of September 2016, UBI has 4214 branches. Four of these
are overseas in Hong Kong, Dubai International Financial Centre, Antwerp, and
Sydney (Australia). UBI also has representative offices at Shanghai, Beijing and
Abu Dhabi. Lastly, UBI operates in the United Kingdom through its wholly owned
subsidiary, Union Bank of India (UK).
Union Bank of India (Union Bank) was registered on 11 November 1919 as a

limited company in Mumbai and was inaugurated by Mahatma Gandhi. At the
time of India's Independence in 1947, Union Bank of India had only four branches
- three in Mumbai and one in Saurashtra. After Independence, the growth is
accelerated and by the time the Indian government nationalized it in 1969, it had
240 branches. Shortly after nationalization, Union Bank of India
acquired Belgaum Bank, a private sector bank established in 1930 that had itself
merged in a bank in 1964, the Shri Jadeya Shankarling Bank (Bijapur;
incorporated on 10 May 1948). Then in 1985 Union Bank of India
acquired Miraj State Bank, which was established in 1929, and which had 26
branches. In 1999 the Reserve Bank of India requested that Union Bank
acquire Sikkim Bank in a rescue after extensive irregularities had been
discovered at the non-scheduled bank.
Union Bank began its international expansion in 2007 with the opening of
representative offices in Abu Dhabi, United Arab Emirates, and Shanghai in
Peoples Republic of China. The next year, Union Bank established a branch in
Hong Kong, its first branch outside India. In 2009, Union Bank opened a
representative office in Sydney, Australia.
At present, the offshore banking operations of Union Bank of India are led by its
branches in Hong Kong and newly opened branch in Dubai at Dubai International
Financial Centre.
VIJAYA BANK:
Vijaya Bank was established by a group of farmers led by Shri.Attavar

Balakrishna Shetty on 23 October 1913 in Mangaluru in Dakshina Kannada
District of Karnataka state. Since it was established on the auspicious
Vijayadashami Day, it was named “Vijaya Bank”.
During the economic chaos created out of the Great Depression of 1927-30, Shri
AB Shetty approached leading Bunt personalities to start a bank with the
objective of extending credit facilities at a lower rate of interest to enable the
farmers to cultivate their lands and prevent them from falling into the clutches of
money lenders. Accordingly, Shri AB Shetty involved 14 Bunts and established
Vijaya Bank on 23 October 1931. In the beginning the bank had an authorized
capital of Rs.5 lakh and an issued capital of Rs.2 lakh. The paid up capital was
Rs.8670.
Vijaya Bank is a public sector bank with its corporate office in Bangalore,
Karnataka, India. It is one of the nationalized banks in India. The bank offers a
wide range of financial products and services to customers through its various
delivery channels.
CHAPTER-5
DATA ANALYSIS
AND
INTERPRETATION
Table No.5.1 (a): Arbitrage price difference of State Bank of India between
BSE and NSE for the month of Nov 2017.
Sl. No. Date Closing price Closing price Difference

BSE (Rs) NSE(Rs) (Rs)
1 1/11/2017 319.80 319.85 -0.05
2 2/11/2017 314.95 314.35 0.60
3 3/11/2017 325.00 325.00 0.00
4 6/11/2017 328.95 329.00 -0.05
5 7/11/2017 317.20 317.20 0.00
6 8/11/2017 309.75 309.55 0.20
7 9/11/2017 313.75 313.70 0.05
8 10/11/2017 333.20 333.55 -0.35
9 13/11/2017 331.20 331.05 0.15
10 14/11/2017 329.20 329.10 0.10
11 15/11/2017 325.20 324.95 0.25
12 16/11/2017 333.45 333.40 0.05

13 17/11/2017 337.40 337.50 -0.10
14 20/11/2017 333.05 333.00 0.05
15 21/11/2017 330.75 330.65 0.10
16 22/11/2017 335.20 335.30 -0.10
17 23/11/2017 334.90 334.95 -0.05
18 24/11/2017 332.25 332.40 -0.15

19 27/11/2017 335.25 335.65 -0.40
20 28/11/2017 332.65 332.00 0.65
21 29/11/2017 328.80 328.90 -0.10
22 30/11/2017 320.35 320.35 0.00
Table No.5.1 (b): Summary of statistics of arbitrage price difference of SBI
between BSE and NSE for the month of Nov-17
Mean 0.04
Maximum 0.65
Minimum -0.40
Maximum price(Rs) 337.5
Minimum price(Rs) 309.55
GRAPHICAL REPRESENTATION OF
ARBITRAGE PRICING OF SBI
0.80
0.60
0.40
DIFFERENCE
0.20
0.00
-0.20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.40
-0.60
SL.NO.
Fig.no.5.1
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of STATE BANK
OF INDIA stock trading in BSE and NSE. Here arbitrage price difference of
STATE BANK OF INDIA stock is arrived at by subtracting the prices of NSE
from BSE. In the month of NOV-2017 STATE BANK OF INDIA stock consists
minimum value of -0.40 and maximum value +0.65 and Mean is 0.04. As the
mean difference is positive, arbitration fetches a positive profit to arbitrageur.
Since, profit exists below five percent, there is no scope for arbitrage.
Table No. 5.2(a): Arbitrage price difference of State Bank of India between
BSE and NSE for the month of Dec 2017.
Sl. No Date Closing price Closing price Difference
1 1/12/2017 312.55 312.75 -0.20
2 4/12/2017 313.30 313.60 -0.30
3 5/12/2017 319.30 319.10 0.20
4 6/12/2017 312.25 312.40 -0.15
5 7/12/2017 316.60 316.40 0.20
6 8/12/2017 313.15 313.10 0.05
7 11/12/2017 318.30 318.40 -0.10
8 12/12/2017 318.40 318.45 -0.05
9 13/12/2017 313.25 313.30 -0.05
10 14/12/2017 314.05 314.00 0.05
11 15/12/2017 312.75 312.25 0.50
12 18/12/2017 318.90 318.90 0.00
13 19/12/2017 319.45 319.80 -0.35
14 20/12/2017 317.25 317.50 -0.25
15 21/12/2017 316.55 316.75 -0.20
16 22/12/2017 319.85 319.85 0.00
17 25/12/2017 319.85 319.85 0.00
18 26/12/2017 316.85 317.15 -0.30
19 27/12/2017 314.15 314.85 -0.70
20 28/12/2017 308.30 308.40 -0.10
21 29/12/2017 309.50 309.90 -0.40
Table No.5.2 (b): Summary of statistics of arbitrage price difference of SBI
between BSE and NSE for the month of Dec-17
Mean -0.10
Maximum 0.50
Minimum -1.75
ARBITRAGE PRICING OF SBI
0.60
0.40
0.20
DIFFERENCE
0.00
-0.20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.40
-0.60
-0.80
SL.NO
Fig.no.5.2
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of STATE BANK
OF INDIA stock trading in BSE and NSE. Here arbitrage price difference of
STATE BANK OF INDIA stock is arrived at by subtracting the prices of NSE
from BSE. In the month of DEC-2017 STATE BANK OF INDIA stock consists
minimum value is -1.75 and maximum value +0.50 and Mean is
-0.10. Hence, a negative mean difference would lead to loss to the arbitrageur,
there is no scope for arbitrage.
Table No.5.3 (a): Arbitrage price difference of Punjab National Bank
between BSE and NSE for the month of Nov 2017.

1 1/11/2017 198.90 198.90 0.00
2 2/11/2017 197.30 197.45 -0.15
3 3/11/2017 207.30 207.80 -0.50
4 6/11/2017 201.15 201.20 -0.05
5 7/11/2017 190.75 190.80 -0.05
6 8/11/2017 189.25 189.05 0.20
7 9/11/2017 192.10 192.30 -0.20
8 10/11/2017 190.05 190.10 -0.05
9 13/11/2017 187.40 187.65 -0.25
10 14/11/2017 184.15 184.05 0.10
11 15/11/2017 180.65 180.70 -0.05
12 16/11/2017 189.45 189.60 -0.15
13 17/11/2017 190.70 190.80 -0.10
14 20/11/2017 187.40 187.25 0.15
15 21/11/2017 186.15 186.30 -0.15
16 22/11/2017 189.25 189.20 0.05
17 23/11/2017 186.50 186.50 0.00
18 24/11/2017 186.05 186.10 -0.05
19 27/11/2017 185.90 185.85 0.05
20 28/11/2017 183.85 183.70 0.15
21 29/11/2017 181.50 181.60 -0.10
22 30/11/2017 176.15 176.10 0.05
Table No.5.3 (b): Summary of statistics of arbitrage price difference of PNB
between BSE and NSE for the month of Nov-17
Mean -0.05
Maximum 0.20
Minimum -0.50
ARBITRAGE PRICING OF PANJAB NATIONAL
0.40 BANK
0.20
DIFFERENCE
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.20
-0.40
-0.60 SL.NO.
Fig.no.5.3
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of PUNJAB
NATIONAL BANK stock trading in BSE and NSE. Here arbitrage price
difference of PNB stock is arrived at by subtracting the prices of NSE from BSE.
In the month of NOV-2017 PNB stock consists minimum value is -0.50 and
maximum value +0.20 and Mean is -0.05. Hence, a negative mean difference
would lead to loss to the arbitrageur, there is no scope for arbitrage.
Table No. 5.4(a): Arbitrage price difference of Punjab National Bank
between BSE and NSE for the month of Dec 2017.

1 1/12/2017 171.35 171.50 -0.15
2 4/12/2017 173.10 173.20 -0.10
3 5/12/2017 176.00 175.95 0.05
4 6/12/2017 172.05 172.10 -0.05
5 7/12/2017 173.75 173.90 -0.15
6 8/12/2017 172.55 172.70 -0.15
7 11/12/2017 172.85 172.95 -0.10
8 12/12/2017 173.55 173.70 -0.15
9 13/12/2017 167.80 167.80 0.00
10 14/12/2017 169.30 169.60 -0.30
11 15/12/2017 171.60 171.60 0.00
12 18/12/2017 178.40 178.75 -0.35
13 19/12/2017 178.35 178.75 -0.40
14 20/12/2017 170.60 170.50 0.10
15 21/12/2017 173.45 173.50 -0.05
16 22/12/2017 175.90 175.95 -0.05
17 25/12/2017 175.90 175.95 -0.05
18 26/12/2017 174.25 174.30 -0.05
19 27/12/2017 173.90 174.10 -0.20
20 28/12/2017 170.70 170.80 -0.10
21 29/12/2017 171.50 171.40 0.10
Table NO.5.4 (b): Summary of statistics of arbitrage price difference of
PNB between BSE and NSE for the month of Dec-17.
Mean -0.10
Maximum 0.10
Minimum -0.40
Maximum Price (Rs) 178.75
Minimum Price(Rs) 167.80
GRAPHICAL REPRESENTATION OF PANJAB NATIONAL

BANK
0.20
0.10
DIFFERENCE
0.00
-0.10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.20
-0.30
-0.40
-0.50
Sl.No
Fig.no.5.4
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of PUNJAB
NATIONAL BANK stock trading in BSE and NSE. Here arbitrage price
difference of PNB stock is arrived at by subtracting the prices of NSE from BSE.
In the month of DEC-2017 PNB stock consists minimum value is -0.10 and
maximum value +0.10 and Mean is -0.10.As mean difference is below five
percent, there is no scope for arbitrage
Table No.5.5 (a): Arbitrage price difference of Bank of Baroda between BSE
and NSE for the month of Nov 2017.
1 1/11/2017 172.35 172.45 -0.10
2 2/11/2017 169.40 169.55 -0.15
3 3/11/2017 171.75 171.75 0.00
4 6/11/2017 172.00 172.60 -0.60
5 7/11/2017 164.95 165.25 -0.30
6 8/11/2017 162.35 162.30 0.05
7 9/11/2017 165.30 165.55 -0.25
8 10/11/2017 169.55 169.80 -0.25
9 13/11/2017 171.80 172.10 -0.30
10 14/11/2017 174.40 174.35 0.05
11 15/11/2017 174.50 175.20 -0.70
12 16/11/2017 182.50 182.80 -0.30
13 17/11/2017 183.55 183.55 0.00
14 20/11/2017 184.50 184.45 0.05
15 21/11/2017 180.50 180.35 0.15
16 22/11/2017 180.55 180.65 -0.10
17 23/11/2017 178.00 178.10 -0.10
18 24/11/2017 176.85 176.85 0.00
19 27/11/2017 175.35 175.40 -0.05
20 28/11/2017 172.20 172.25 -0.05
21 29/11/2017 171.35 171.65 -0.30
22 30/11/2017 169.05 169.10 -0.05
Table No.5.5 (b): Summary of statistics of arbitrage price difference of
BANK OF BARODA between BSE and NSE for the month of Nov-17.
Mean -0.15
Maximum 0.15
Minimum -0.70
GRAPHICAL REPRESENTATION OF ARBITRAGE

PRICING OF BANK OF BARODA
0.20
0.00
DIFFERENCE
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.20
-0.40
-0.60
-0.80
SL.NO
Fig.no.5.5
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of BANK OF
BARODA stock trading in BSE and NSE. Here arbitrage price difference of BOB
stock is arrived at by subtracting the prices of NSE from BSE. In the month of
NOV-2017 BOB stock consists minimum value is -0.70 and maximum value
+0.15 and Mean is -0.15. Hence, a negative mean difference would lead to loss
to the arbitrageur, there is no scope for arbitrage.
Table No.5.6 (a): Arbitrage price difference of Bank of Baroda between BSE
and NSE for the month of Dec 2017.
1 1/12/2017 167.75 167.60 0.15
2 4/12/2017 169.40 170.10 -0.70
3 5/12/2017 169.80 170.00 -0.20
4 6/12/2017 165.95 165.95 0.00
5 7/12/2017 167.95 167.95 0.00
6 8/12/2017 167.50 167.45 0.05
7 11/12/2017 167.45 167.45 0.00
8 12/12/2017 165.50 165.60 -0.10
9 13/12/2017 163.80 163.75 0.05
10 14/12/2017 165.55 165.85 -0.30
11 15/12/2017 165.45 165.25 0.20
12 18/12/2017 169.25 169.40 -0.15
13 19/12/2017 168.30 168.30 0.00
14 20/12/2017 166.60 166.65 -0.05
15 21/12/2017 167.45 167.90 -0.45
16 22/12/2017 167.95 168.00 -0.05
17 25/12/2017 167.95 168.00 -0.05
18 26/12/2017 166.60 166.50 0.10
19 27/12/2017 165.95 166.00 -0.05
20 28/12/2017 162.75 162.75 0.00
21 29/12/2017 160.50 160.65 -0.15
Table5.6 (b): Showing summary of statistics of arbitrage price difference of
BANK OF BARODA between BSE and NSE for the month of Dec-17.
Mean -0.08
Maximum 0.20
Minimum -0.70
ARBITRAGE PRICING OF BANK OF BARODA
0.40
0.20
DIFFERENCE
0.00
-0.20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.40
-0.60
-0.80
SL.NO
Fig.no.5.6
INTERPRETATION:
BARODA stock trading in BSE and NSE. Here arbitrage price difference of BOB
stock is arrived at by subtracting NSE from BSE. In the month of DEC-2017 BOB
stock consists minimum value is -0.70 and maximum value +0.20 and Mean is -
0.08. Hence, a negative mean difference would lead to loss to the arbitrageur;
Table No.5.7 (a): Arbitrage price difference of Canara Bank between BSE
1 1/11/2017 411.45 412.50 -1.05
2 2/11/2017 402.65 402.70 -0.05
3 3/11/2017 403.95 404.10 -0.15
4 6/11/2017 406.10 406.30 -0.20
5 7/11/2017 391.00 390.75 0.25
6 8/11/2017 389.65 389.35 0.30
7 9/11/2017 389.30 388.95 0.35
8 10/11/2017 388.95 388.95 0.00
9 13/11/2017 383.40 382.95 0.45
10 14/11/2017 377.00 377.45 -0.45
11 15/11/2017 370.00 370.10 -0.10
12 16/11/2017 384.40 384.55 -0.15
13 17/11/2017 388.45 388.85 -0.40
14 20/11/2017 393.00 393.15 -0.15
15 21/11/2017 392.35 393.15 -0.80
16 22/11/2017 398.75 398.95 -0.20
17 23/11/2017 393.80 394.35 -0.55
18 24/11/2017 390.10 390.60 -0.50
19 27/11/2017 387.10 387.10 0.00
20 28/11/2017 385 385.10 -0.10
21 29/11/2017 377.90 378.15 -0.25
22 30/11/2017 373.40 372.85 0.55
CANARA BANK between BSE and NSE for the month of Nov-17.
Mean -0.15
Maximum 0.55
Minimum -1.05

PRICING OF CANARA BANK
1.00
0.50
DIFFERENCE
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.50
-1.00
-1.50
SL.NO
Fig.no.5.7
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of CANARA
BANK stock trading in BSE and NSE. Here arbitrage price difference of
CANARA BANK stock is arrived at by subtracting NSE from BSE. In the month
of NOV-2017 CANARA BANK stock consists minimum value is -1.05 and
maximum value +0.55 and Mean is -0.15. Hence, a negative mean difference
would lead to loss to the arbitrageur, there is no scope for arbitration
Table No. 5.8(a): Arbitrage price difference of Canara Bank between BSE
BSE (₹) NSE(₹) (₹)
1 1/12/2017 362.80 362.70 0.10
2 4/12/2017 367.00 367.25 -0.25
3 5/12/2017 373.30 373.85 -0.55
4 6/12/2017 363.00 364.05 -1.05
5 7/12/2017 366.80 366.70 0.10
6 8/12/2017 366.50 366.30 0.20
7 11/12/2017 366.95 366.80 0.15
8 12/12/2017 366.90 367.30 -0.40
9 13/12/2017 354.90 354.85 0.05
10 14/12/2017 357.15 357.20 -0.05
11 15/12/2017 355.70 355.40 0.30
12 18/12/2017 365.10 365.25 -0.15
13 19/12/2017 370.75 371.25 -0.50
14 20/12/2017 365.40 365.50 -0.10
15 21/12/2017 368.35 368.30 0.05
16 22/12/2017 369.95 370.25 -0.30
17 25/12/2017 369.95 370.25 -0.30
18 26/12/2017 374.60 375.20 -0.60
19 27/12/2017 368.15 368.20 -0.05
20 28/12/2017 360.95 360.70 0.25
21 29/12/2017 360.90 360.40 0.50
Table N0.5.8 (b): Summary of statistics of arbitrage price difference of
CANARA BANK between BSE and NSE for the month of Dec-17.
Mean -0.12
Maximum 0.50
Minimum -1.05
ARBITRAGE PRICING OF CANARA BANK
1.00
0.50
DIFFERENCE
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.50
-1.00
-1.50
SL.NO
Fig.no.5.8
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of CANARA
CANARA BANK stock is arrived at by subtracting NSE from BSE. In the month
of DEC-2017 Canara Bank stock consists minimum value is -1.05 and maximum
value +0.50 and Mean is -0.12. Hence, a negative mean difference would lead to
loss to the arbitrageur. Therefore, it is suggested to the arbitrageur to hold
CANARA BANK stocks in BSE as mean difference exist below five percen
Table No. 5.9(a): Arbitrage price difference of Bank of India between BSE
1 1/11/2017 193.85 194.15 -0.30
2 2/11/2017 193.60 194.25 -0.65
3 3/11/2017 201.65 201.10 0.55
4 6/11/2017 205.55 205.65 -0.10
5 7/11/2017 195.15 195.15 0.00
6 8/11/2017 194.30 193.90 0.40
7 9/11/2017 200.05 200.05 0.00
8 10/11/2017 196.25 196.35 -0.10
9 13/11/2017 198.95 199.00 -0.05
10 14/11/2017 195.80 195.60 0.20
11 15/11/2017 197.50 197.40 0.10
12 16/11/2017 207.55 207.50 0.05
13 17/11/2017 207.95 207.85 0.10
14 20/11/2017 205.20 205.30 -0.10
15 21/11/2017 201.70 201.50 0.20
16 22/11/2017 202.60 202.65 -0.05
17 23/11/2017 202.40 202.60 -0.20
18 24/11/2017 200.55 200.40 0.15
19 27/11/2017 200.35 200.40 -0.05
20 28/11/2017 199.20 199.15 0.05
21 29/11/2017 197.05 197.10 -0.05
22 30/11/2017 196.25 195.65 -0.40
BANK OF INDIA between BSE and NSE for the month of Nov-17.
Mean -0.01
Maximum 0.55
Minimum -0.65
ARBITRAGE PRICING OF BANK OF INDIA
0.80
0.60
0.40
DIFFERENCE
0.20
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.20
-0.40
-0.60
-0.80
SL.NO.
Fig.no:5.9
INTERPRETATION:
INDIA stock trading in BSE and NSE. Here arbitrage price difference of BOI
stock is arrived at by subtracting NSE from BSE. In the month of NOV-2017 BOI
0.01. Hence, a negative mean difference would lead to loss to the arbitrageur.
Therefore, it is suggested to the arbitrageur to hold BOI stocks in BSE as mean
difference exists below five percent
Table No.5.10 (a): Arbitrage price difference of Bank of India between BSE
Sl.No Date Closing price Closing price Difference

BSE(Rs) NSE(Rs)
1 1/12/2017 187.30 187.35 -0.05
2 4/12/2017 185.30 185.30 0.00
3 5/12/2017 184.40 184.00 0.40
4 6/12/2017 182.35 182.30 0.05
5 7/12/2017 186.45 186.75 -0.30
6 8/12/2017 185.15 185.25 -0.10
7 11/12/2017 181.85 181.90 -0.05
8 12/12/2017 179.35 179.40 -0.05
9 13/12/2017 174.40 174.10 0.30
10 14/12/2017 174.95 174.95 0.00
11 15/12/2017 176.95 176.95 0.00
12 18/12/2017 180.85 181.05 -0.20
13 19/12/2017 181.35 181.25 0.10
14 20/12/2017 174.20 174.10 0.10
15 21/12/2017 172.40 172.70 -0.30
16 22/12/2017 171.00 171.15 -0.15
17 25/12/2017 171.00 171.15 -0.15
18 26/12/2017 171.65 171.75 -0.10
19 27/12/2017 171.60 171.85 -0.25
20 28/12/2017 170.10 169.75 0.35
21 29/12/2017 169.70 169.75 -0.05
Table No. 5.10(b): Summary of statistics of arbitrage price difference of
BANK OF INDIA between BSE and NSE for the month of Dec-17.
Mean -0.02
Maximum 0.40
Minimum -0.30
ARBITRAGE PRICING OF BANK OF INDIA
0.60
0.40
DIFFERENCE
0.20
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.20
-0.40
SL.NO
Fig.no.5.10
INTERPRETATION:
INDIA stock trading in BSE and NSE. Here arbitrage price difference of BOI
stock is arrived at by subtracting NSE from BSE. In the month of DEC-2017 BOI
0.02. Hence, a negative mean difference would lead to loss to the arbitrageur,
Table No.5.11 (a): Arbitrage price difference of Indian Bank between BSE
and NSE for the month of Nov2017.
1 1/11/2017 322.75 323.20 -0.45
2 2/11/2017 335.60 335.95 -0.35
3 3/11/2017 347.20 347.20 0.00
4 6/11/2017 377.45 377.30 0.15
5 7/11/2017 362.10 362.35 -0.25
6 8/11/2017 370.00 370.45 -0.45
7 9/11/2017 400.25 401.50 -1.25
8 10/11/2017 405.75 405.40 0.35
9 13/11/2017 406.55 407.00 -0.45
10 14/11/2017 401.70 400.90 0.80
11 15/11/2017 392.30 391.30 1.00
12 16/11/2017 412.50 412.55 -0.05
13 17/11/2017 412.75 412.55 0.20
14 20/11/2017 417.60 417.60 0.00
15 21/11/2017 409.70 409.80 -0.10
16 22/11/2017 415.80 415.40 0.40
17 23/11/2017 412.10 411.50 0.60
18 24/11/2017 412.10 411.70 0.40
19 27/11/2017 413.35 413.10 0.25
20 28/11/2017 402.90 403.10 -0.20
21 29/11/2017 403.55 404.70 -1.15
22 30/11/2017 392.70 392.65 0.05
INDIAN BANK between BSE and NSE for the month of Nov-17.
Mean -0.02
Maximum 1.00
Minimum -1.25
ARBITRAGE PRICING OF INDIAN BANK
1.50
1.00
DIFFERENCE
0.50
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.50
-1.00
-1.50
SL.NO
Fig.no.5.11
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of INDIAN
BANK stock trading in BSE and NSE. Here arbitrage price difference of INDIAN
BANK stock is arrived at by subtracting NSE from BSE. In the month of NOV-
2017 Indian bank stock consists minimum value is -1.25 and maximum value
to the arbitrageur. Therefore, it is suggested to the arbitrageur to hold INDIAN
BANK stocks in BSE as mean difference exist below five percent.
Table No.5.12 (a): Arbitrage price difference of Indian Bank between BSE
1 1/12/2017 391.40 391.55 -0.15
2 4/12/2017 384.25 384.10 0.15
3 5/12/2017 387.55 387.40 0.15
4 6/12/2017 379.75 379.35 0.40
5 7/12/2017 383.70 383.70 0.00
6 8/12/2017 384.05 384.90 -0.85
7 11/12/2017 387.00 387.25 -0.25
8 12/12/2017 375.35 375.10 0.25
9 13/12/2017 374.10 374.05 0.05
10 14/12/2017 372.90 373.55 -0.65
11 15/12/2017 382.30 383.10 -0.80
12 18/12/2017 389.50 389.55 -0.05
13 19/12/2017 392.00 391.80 0.20
14 20/12/2017 391.05 392.25 -1.23
15 21/12/2017 391.35 391.40 -0.05
16 22/12/2017 391.25 391.80 -0.55
17 25/12/2017 391.25 391.80 -0.55
18 26/12/2017 388.55 388.25 0.30
19 27/12/2017 385.70 385.60 0.10
20 28/12/2017 380.45 380.25 0.20
21 29/12/2017 376.65 376.70 -0.05
INDIAN BANK between BSE and NSE for the month of Dec-17.
Mean -0.16
Maximum 0.40
Minimum -1.23
ARBITRAGE PRICING OF INDIAN BANK
0.60
0.40
0.20
0.00
DIFFERENCE
-0.20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.40
-0.60
-0.80
-1.00
-1.20
-1.40
SL.NO
Fig.no.5.12
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of INDIAN
BANK stock trading in BSE and NSE. Here arbitrage price difference of INDIAN
BANK stock is arrived at by subtracting NSE from BSE. In the month of DEC-
2017 Indian bank stock consists minimum value is -1.23 and maximum value
to the arbitrageur; there is no scope for arbitrage.
Table No.5.13 (a): Arbitrage price difference of IDBI Bank between BSE and
NSE for the month of Nov 2017.
1 1/11/2017 63.80 63.80 0.00
2 2/11/2017 65.90 65.85 0.05
3 3/11/2017 64.80 64.90 -0.10
4 6/11/2017 64.55 64.70 -0.15
5 7/11/2017 62.75 62.90 -0.15
6 8/11/2017 61.95 61.75 0.20
7 9/11/2017 62.10 62.15 -0.05
8 10/11/2017 63.55 63.80 -0.25
9 13/11/2017 60.75 60.85 0.10
10 14/11/2017 60.15 60.20 -0.05
11 15/11/2017 58.75 58.70 0.05
12 16/11/2017 59.45 59.40 0.05
13 17/11/2017 59.60 59.60 0.00
14 20/11/2017 61.10 61.20 -0.10
15 21/11/2017 60.60 60.70 -0.10
16 22/11/2017 61.65 61.75 -0.10
17 23/11/2017 61.90 61.95 -0.05
18 24/11/2017 61.95 62.05 -0.10
19 27/11/2017 62.10 62.10 0.00
20 28/11/2017 62.80 62.85 -0.05
21 29/11/2017 61.65 61.60 0.05
22 30/11/2017 60.60 60.55 0.05
IDBI BANK between BSE and NSE for the month of Nov-17.
Mean -0.03
Maximum 0.20
Minimum -0.25

PRICINGOF IDBI BANK
0.30
0.20
DIFFERENCE
0.10
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.10
-0.20
-0.30
SL.NO
Fig.no.5.13
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of IDBI BANK
stock trading in BSE and NSE. Here arbitrage price difference of IDBI BANK
stock is arrived at by subtracting NSE from BSE. In the month of NOV-2017
IDBI bank stock consists minimum value is -0.25 and maximum value +0.20 and
Mean is -0.03. Hence, a negative mean difference would lead to loss to the
arbitrageur. Therefore, it is suggested to the arbitrageur to hold IDBI BANK
stocks in BSE as mean difference exists below five percentage
Table No. 5.14(a): Arbitrage price difference of IDBI Bank between BSE and
NSE for the month of Dec 2017.
1 1/12/2017 59.75 59.70 0.05
2 4/12/2017 59.40 59.50 -0.10
3 5/12/2017 58.80 58.80 0.00
4 6/12/2017 58.80 59.00 -0.20
5 7/12/2017 59.40 59.35 0.05
6 8/12/2017 59.45 59.45 0.00
7 11/12/2017 60.60 60.70 -0.10
8 12/12/2017 59.90 59.95 -0.05
9 13/12/2017 58.85 58.85 0.00
10 14/12/2017 57.95 58.00 -0.05
11 15/12/2017 58.30 58.30 0.00
12 18/12/2017 58.70 58.80 -0.10
13 19/12/2017 58.60 58.65 -0.05
14 20/12/2017 58.95 58.90 0.05
15 21/12/2017 60.75 60.90 -0.15
16 22/12/2017 59.55 59.60 -0.05
17 25/12/2017 59.55 59.60 -0.05
18 26/12/2017 60.40 60.45 -0.05
19 27/12/2017 59.95 60.05 -0.10
20 28/12/2017 60.35 60.35 0.00
21 29/12/2017 59.85 59.85 0.00
IDBI BANK between BSE and NSE for the month of Dec-17.
Mean -0.04
Maximum 0.05
Minimum -0.20
GRAPHICAL REPRSENTATION OF ARBITRAGE

PRICING OF IDBI BANK
0.10
0.05
0.00
DIFFERENCE
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.05
-0.10
-0.15
-0.20
-0.25
SL.NO.
Fig.no.5.14
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of IDBI BANK
stock trading in BSE and NSE. Here arbitrage price difference of IDBI BANK
stock is arrived at by subtracting NSE from BSE. In the month of DEC-2017 IDBI
bank stock consists minimum value is -0.20 and maximum value +0.05 and Mean
is -0.04. Hence, a negative mean difference would lead to loss to the arbitrageur;
there is no scope for arbitration.
Table No.5.15 (a): Arbitrage price difference of Central Bank between BSE
1 1/11/2017 82.45 82.35 0.10
2 2/11/2017 82.95 82.75 0.20
3 3/11/2017 82.70 82.80 -0.10
4 6/11/2017 83.75 84.35 -0.60
5 7/11/2017 82.00 81.70 0.30
6 8/11/2017 79.85 80.00 -0.15
7 9/11/2017 80.40 80.25 0.15
8 10/11/2017 80.15 80.30 -0.15
9 13/11/2017 79.35 79.90 -0.55
10 14/11/2017 78.70 78.70 0.00
11 15/11/2017 78.10 78.05 0.05
12 16/11/2017 79.30 79.45 -0.15
13 17/11/2017 82.10 81.70 -0.60
14 20/11/2017 81.85 81.70 0.15
15 21/11/2017 80.80 81.05 -0.25
16 22/11/2017 80.20 80.05 0.15
17 23/11/2017 80.65 80.70 -0.05
18 24/11/2017 81.10 81.15 -0.05
19 27/11/2017 81.35 81.20 0.15
20 28/11/2017 81.05 81.25 -0.20
21 29/11/2017 80.50 80.80 -0.30
22 30/11/2017 79.75 79.75 0.00
CENTRAL BANK between BSE and NSE for the month of Nov-17.
Mean -0.09
Maximum 0.30
Minimum -0.60
ARBITRAGE PRICING OF CENTRAL BANK
0.40
0.20
DIFFERENCE
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.20
-0.40
-0.60
-0.80
SL.NO
Fig.no.5.15
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of CENTRAL
CENTRAL BANK stock is arrived at by subtracting NSE from BSE. In the month
of NOV-2017 central bank stock consists minimum value is -0.60 and maximum
value +0.30 and Mean is -0.09. Hence, a negative mean difference would lead to
loss to the arbitrageur, there is no scope for arbitrage.
Table No.5.16 (a): Arbitrage price difference of Central Bank between BSE
1 1/12/2017 78.85 78.75 0.10
2 4/12/2017 78.25 78.25 0.00
3 5/12/2017 77.50 77.80 -0.30
4 6/12/2017 77.35 77.60 -0.25
5 7/12/2017 78.55 78.50 0.05
6 8/12/2017 78.10 78.35 -0.25
7 11/12/2017 77.55 77.75 -0.20
8 12/12/2017 77.20 77.25 -0.05
9 13/12/2017 75.10 74.95 0.15
10 14/12/2017 74.60 74.60 0.00
11 15/12/2017 76.30 76.15 0.15
12 18/12/2017 76.40 76.45 -0.05
13 19/12/2017 76.25 76.25 0.00
14 20/12/2017 75.75 75.80 -0.05
15 21/12/2017 76.15 76.00 0.15
16 22/12/2017 75.60 75.65 -0.05
17 25/12/2017 75.60 75.65 -0.05
18 26/12/2017 75.15 75.00 0.15
19 27/12/2017 74.85 74.90 -0.05
20 28/12/2017 74.85 74.85 0.00
21 29/12/2017 72.60 72.15 0.45
CENTRAL BANK between BSE and NSE for the month of Dec-17.
Mean 0.00
Maximum 0.45
Minimum -0.30

PRICING OF CENTRAL BANK
0.60
0.40
DIFFERENCE
0.20
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.20
-0.40
SL.NO.
Fig.no:5.16
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of CENTRAL
CENTRAL BANK stock is arrived at by subtracting NSE from BSE. In the month
of DEC-2017 central bank stock consists minimum value is -0.30 and maximum
value +0.45 and Mean is 0.00. As mean difference reached to breakeven point,
Table No.5.17 (a): Arbitrage price difference of Union Bank between BSE
1 1/11/2017 179.20 179.65 -0.45
2 2/11/2017 170.85 171.05 -0.20
3 3/11/2017 173.30 173.50 -0.20
4 6/11/2017 176.40 176.55 -0.15
5 7/11/2017 166.10 166.05 0.05
6 8/11/2017 162.70 162.90 -0.20
7 9/11/2017 166.40 166.65 -0.25
8 10/11/2017 166.95 167.35 -0.40
9 13/11/2017 168.05 167.80 0.25
10 14/11/2017 164.20 164.30 -0.10
11 15/11/2017 164.35 164.75 -0.40
12 16/11/2017 173.35 173.50 -0.15
13 17/11/2017 170.40 170.65 -0.25
14 20/11/2017 170.60 170.60 0.00
15 21/11/2017 168.15 168.15 0.00
16 22/11/2017 169.70 169.85 -0.15
17 23/11/2017 166.60 166.00 0.60
18 24/11/2017 167.65 167.30 0.35
19 27/11/2017 167.95 168.10 -0.15
20 28/11/2017 165.25 165.15 0.10
21 29/11/2017 163.75 163.80 -0.05
22 30/11/2017 164.35 164.10 0.25
UNION BANK between BSE and NSE for the month of Nov-17.
Mean -0.07
Maximum 0.60
Minimum -0.45
ARBITRAGE PRICING OF UNION BANK
0.80
0.60
DIFFERENCE
0.40
0.20
0.00
-0.20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.40
-0.60
SL.NO.
Fig.no:5.17
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of UNION BANK
stock trading in BSE and NSE. Here arbitrage price difference of UNION BANK
stock is arrived at by subtracting NSE from BSE. In the month of NOV-2017
union bank stock consists minimum value is -0.45 and maximum value +0.60 and
Mean is -0.07. Hence, a negative mean difference would lead to loss to the
arbitrageur. Therefore, it is suggested to the arbitrageur to hold UNION BANK
stocks in BSE as mean difference exists below five percent
Table No. 5.18(a): Arbitrage price difference of Union Bank between BSE
BSE (Rs) NSE(Rs)

(Rs)
1 1/12/2017 157.80 158.00 -0.20
2 4/12/2017 159.10 159.05 0.05
3 5/12/2017 161.10 161.15 -0.05
4 6/12/2017 155.30 155.15 0.15
5 7/12/2017 157.85 157.60 0.25
6 8/12/2017 156.10 155.75 0.35
7 11/12/2017 154.55 154.65 -0.10
8 12/12/2017 151.05 150.75 0.30
9 13/12/2017 147.30 147.40 -0.10
10 14/12/2017 146.65 146.55 0.10
11 15/12/2017 148.25 148.20 0.05
12 18/12/2017 154.65 154.65 0.00
13 19/12/2017 150.85 150.60 0.25
14 20/12/2017 148.25 148.10 0.15
15 21/12/2017 148.15 148.10 0.05
16 22/12/2017 148.25 148.20 0.05
17 25/12/2017 148.25 148.20 0.05
18 26/12/2017 148.00 148.10 -0.10
19 27/12/2017 148.30 148.30 0.00
20 28/12/2017 145.90 145.90 0.00
21 29/12/2017 144.35 144.30 0.05
Table NO.5.18 (b): Summary of statistics of arbitrage price difference of
UNION BANK between BSE and NSE for the month of Dec -17.
Mean 0.06
Maximum 0.35
Minimum -0.20
ARBITRAGE PRICING OF UNION BANK
0.40
0.30
DIFFERENCE
0.20
0.10
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.10
-0.20
-0.30
SL.NO.
Fig.no.5.18
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of UNION BANK
stock trading in BSE and NSE. Here arbitrage price difference of UNION BANK
stock is arrived at by subtracting NSE from BSE. In the month of DEC-2017
union bank stock consists minimum value is -0.20 and maximum value +0.35 and
Mean is 0.06. As the mean difference is positive, arbitration fetches a positive
profit to arbitrageur. The above difference shows that there is scope for arbitrage
as profit exists above five percent.
Table No.5.19 (a): Arbitrage price difference of Vijaya Bank between BSE
1 1/11/2017 71.50 71.65 -0.15
2 2/11/2017 71.70 72.00 -0.30
3 3/11/2017 71.85 71.80 0.05
4 6/11/2017 71.65 71.90 -0.25
5 7/11/2017 69.45 69.90 -0.45
6 8/11/2017 67.60 67.75 -0.15
7 9/11/2017 70.00 70.00 0.00
8 10/11/2017 70.50 70.80 -0.30
9 13/11/2017 71.70 71.65 0.05
10 14/11/2017 69.55 69.70 -0.20
11 15/11/2017 68.55 68.75 -0.20
12 16/11/2017 69.70 69.35 0.35
13 17/11/2017 69.75 69.80 -0.10
14 20/11/2017 71.05 71.10 -0.05
15 21/11/2017 71.15 71.10 0.05
16 22/11/2017 72.30 72.35 -0.05
17 23/11/2017 74.80 74.70 0.10
18 24/11/2017 74.30 74.40 -0.10
19 27/11/2017 73.65 73.10 0.55
20 28/11/2017 72.00 72.05 -0.05
21 29/11/2017 71.10 70.75 0.35
22 30/11/2017 70.65 70.70 -0.05
VIJAYA BANK between BSE and NSE for the month of Nov-17.
Mean -0.04
Maximum 0.55
Minimum -0.45
GRAPHICAL REPRESENTATION OF ARBITRAGE PRICING OF

VIJAYA BANK
0.60
0.40
0.20
DIFFERENCE
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
-0.20
-0.40
-0.60
SL.NO.
Fig.no.5.19
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of VIJAYA
BANK stock trading in BSE and NSE. Here arbitrage price difference of VIJAYA
2017 vijaya bank stock consists minimum value is -0.45 and maximum value
Table No. 5.20(a): Arbitrage price difference of Vijaya Bank between BSE
1 1/12/2017 70.95 70.85 0.10
2 4/12/2017 70.10 70.35 -0.25
3 5/12/2017 69.10 69.10 0.00
4 6/12/2017 68.95 69.00 -0.05
5 7/12/2017 69.85 69.70 0.15
6 8/12/2017 70.25 70.50 -0.25
7 11/12/2017 70.70 70.75 -0.05
8 12/12/2017 69.90 70.10 -0.20
9 13/12/2017 69.60 69.70 -0.10
10 14/12/2017 68.65 68.50 0.15
11 15/12/2017 68.80 68.95 -0.15
12 18/12/2017 70.35 70.45 -0.10
13 19/12/2017 70.55 70.60 -0.05
14 20/12/2017 70.05 70.10 -0.05
15 21/12/2017 70.15 70.10 0.05
16 22/12/2017 70.85 70.95 -0.10
17 25/12/2017 70.85 70.95 -0.10
18 26/12/2017 70.15 70.00 0.15
19 27/12/2017 70.80 70.80 0.00
20 28/12/2017 70.35 70.25 0.10
21 29/12/2017 68.35 68.35 0.00
VIJAYA BANK between BSE and NSE for the month of Dec-17.
Mean -0.04
Maximum 0.15
Minimum -0.25
GRAPHICAL REPRESENTATION OF ARBITRAGE PRICING OF

VIJAYA BANK
0.20
0.10
DIFFERENCE
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-0.10
-0.20
-0.30
SL.NO.
Fig.No.5.20
INTERPRETATION:
The above table and graph represents arbitrage pricing analysis of VIJAYA
BANK stock trading in BSE and NSE. Here arbitrage price difference of VIJAYA
2017 vijaya bank stock consists minimum value is -0.25 and maximum value
Table No. 5.21: Summary of statistics of arbitrage price difference of ten
public sector banks between BSE and NSE for the month of Nov-17
Particular State Punjab Bank Canar Bank India IDBI Centra Union Vijay
s Bank nationa of a Bank of n l Bank a
Ban
of l Bank Barod India Bank k Bank Bank
India a
Mean 0.04 -0.05 -0.15 -0.15 -0.01 -0.02 -0.03 -0.09 -0.07 -0.04
Maximum
0.65 0.20 0.15 0.55 0.55 1.00 0.20 0.30 0.60 0.55
Difference
Minimum
-0.40 -0.50 -0.70 -1.05 -0.65 -1.25 -0.25 -0.60 -0.45 -0.45
Difference
Maximum 337.5 207.9 65.9 179.6

207.80 184.50 412.50 417.60 84.35 74.80
price (Rs) 0 5 0 5
Minimum 309.5 193.6 58.7 162.7

176.10 162.30 370.00 323.20 78.05 67.60
price (Rs) 5 0 0 0
INTERPRETATION:
The above table shows that in the month of November mean difference of all
banks script are valued below 0.05, hence all banks script are not eligible for
profitable arbitration.
Table No. 5.22: Summary of statistics of arbitrage price difference between
BSE and NSE of ten public sector banks for the month of Dec-17
Particulars State Punjab Bank Canara Bank Indian IDBI Central Union Vijaya
Bank national of Bank of Bank Bank Bank Bank Bank
of Bank Baroda India
India
Mean -0.10 -0.10 -0.08 -0.12 -0.02 -0.16 -0.04 0.00 0.06 -0.04
Maximum
0.50 0.10 0.20 0.50 0.40 0.40 0.05 0.45 0.35 0.15
Difference
Minimum
-1.75 -0.40 -0.70 -1.05 -0.30 -1.23 -0.20 -0.30 -0.20 -0.25
Difference
Maximum
319.85 178.75 170.10 375.20 187.35 392.25 60.90 78.85 16.15 70.95
price(Rs)
Minimum
308.30 167.80 160.50 354.85 169.70 372.90 57.95 72.15 144.30 68.35
price(Rs)
INTERPRETATION:
The above table shows that in the month of December Union bank script gives
positive scope for arbitration and rest of other scripts shows no scope for
arbitration, as its mean difference is found to be more than 0.05.
CHAPTER-6
FINDINGS,
SUGGESTIONS,
AND
CONCLUSIONS
FINDINGS
Arbitration describes the relationship between the returns of two markets and to
get benefited of these returns, the two markets taken into consideration for this
study are NSE and BSE; it is found that some companies’ returns move opposite
of arbitration, some along with the arbitration process. Some companies are less
volatile compared to the market and some are more volatile compared to market.
The scripts are studied for arbitration for a period of two months “NOV-17 and
DEC-17” The study shows that in the month of November none of the studied ten
scripts give positive scope for arbitration and in the month of November one of
the studied ten scripts give positive scope for arbitration.
From the study following major findings are made:
 SBI stock prices in Nov, Dec-2017 are in the range of Rs.309.55 and
Rs.337.50, 308.30 and 319.85 respectively. The mean difference in the month
of Nov is 0.04 which is less than five percentage, so it is not beneficial for
arbitration purposes where as in the month of Dec it is -0.10, which is negative
therefore it is not beneficial for arbitration.
 PNB stock prices in Nov Dec-2017 are in the range of Rs.176.10 and
Rs.207.80, Rs.167.80 and 178.75 respectively. The mean difference in the
month of Nov is -0.05 and in month of Dec -0.10 which are negative, so it is
not beneficial for arbitration purposes.
 BANK OF BARODA stock prices in Nov Dec-2017 are in the range of
Rs.162.30 and Rs.184.50, Rs.160.50 and 170.10 respectively. The mean
difference in the month of Nov is -0.15 and in the month of Dec -0.08 which
are negative, so it is not beneficial for arbitration purposes.
 CANARA BANK stock prices in Nov Dec-2017 are in the range of Rs.370.00
and Rs.412.50, Rs.354.85 and 375.20 respectively. The mean difference in the
month of Nov is -0.15 and in the month of Dec -0.12 which are negative, so it
is not beneficial for arbitration purposes.
 BANK OF INDIA stock prices in Nov Dec-2017 are in the range of Rs.193.60
and Rs.207.95, 169.70 and 187.35 respectively. The mean difference in the
month of NOV is -0.01 which is negative, so it is not beneficial for arbitration
purposes where as in the month of DEC it is -0.02 which is negative, so it is
not beneficial for arbitration.
 INDIAN BANK stock prices in Nov Dec-2017 are in the range of Rs.323.20
and Rs.417.60, Rs.372.90 And 392.25 respectively. The mean difference in
the month of Nov is -0.02 and in the month of Dec -0.16 which are negative,
so it is not beneficial for arbitration purposes.
 IDBI stock prices in Nov Dec-2017 are in the range of Rs.58.70 and Rs.65.90,
Rs.57.95 and Rs.60.90 respectively. The mean difference in the month of Nov
is -0.03 and in the month of Dec -0.04 which are negative, so it is not beneficial
for arbitration purposes.
 CENTRAL BANK stock prices in Nov Dec-2017 are in the range of Rs.78.05
month of Nov is -0.09 and in the month of Dec 0.00 which is less than five
percentage, so it is not beneficial for arbitration purposes.
 UNION BANK stock prices in Nov Dec-2017 are in the range of Rs.162.70
month of Nov is -0.07, which is negative, so it is not beneficial for arbitration
purposes. And in the month of Dec 0.06 is greater than five percentages, so it
is beneficial for arbitration purposes.
 VIJAYA BANK stock prices in Nov Dec-2017 are in the range of Rs.67.60
and Rs.74.80, 68.35 and 70.95 respectively. The mean difference in the month
of Nov and Dec it is -0.04, which is negative, so it is not beneficial for
arbitration.
 In the month of December Union bank script gives positive scope for
arbitration and rest of other scripts shows no scope for arbitration, as its mean
difference is found to be more than 0.05.
SUGGESTIONS
 Investors should be in a position to determine the benefits and risk involved in

the arbitration before going for it and should not entirely depend on the past
returns as the future is uncertain and stock market is highly volatile.
 Investors are suggested to go for arbitration when the maximum difference of
prices i.e. return of arbitration is above 5 percentage.
 Investors are suggested not to go for arbitration when the return is below 5
percent, because highest brokerage charged on trading (buying and selling of
script) is 2.5 percent + 2.5 percent = 5percent. If mean difference of two market
is less or equal to 5 percent does not yield any return to arbitrageur as it will go
to brokerage charges.
From the findings of the study the investors is suggested the following:
 The investor is suggested to invest in the UNION BANK to gain the benefits
of arbitration in the month of December.
Above given suggestions are based on the top 10 public sector banks. The
investors are also suggested to analyse the other companies influencing
arbitration before making an investment.
CONCLUSIONS
Arbitrage is the practice of taking advantage of a price difference between two or

more markets or exchanges. In Indian markets stocks are traded in two major
exchanges – NSE (National Stock Exchange) and BSE (Bombay Stock
Exchange), which means one can take advantage of buying the stock in one
exchange and selling it in other and bag the difference as profit. The markets may
be two exchanges trading in the same product or two segments or across
international markets and local markets. The arbitrageur continuously tracks
prices across the chosen segment are momentary price differences in two markets
due to difference in level of information as well as demand supply situation in the
market. These price differences are an opportunity for the arbitrageur. Thus,
Arbitrage activity adds to liquidity in the markets and also helps in balancing the
prices of same shares across various markets. Prices continuously balance out
once the differences are cash upon. Arbitrage helps in reducing volatility in
markets since continuous flow of orders reduces impact cost and more depth
means less volatility.
The study shows that the mean difference of Union Bank in December is greater
than 5 percent, hence, the arbitrageur is advised to take up the arbitration. The
remaining nine scripts are giving mean difference of less than five percent.
Therefore, the future returns for arbitrageur would be positive if he undertakes
the arbitration process in Union Bank script among the top ten public sector bank
scripts.
BIBLIOGRAPHY
BOOKS REFFERED:
 B.V RAGHUNANDAN, “Investment Management” (2015), Vyshnavi

Books, Modankap, 2nd Edition, p.p. 117 - 141.
 PUNITHAVATHY PANDIAN, “Security analysis and Portfolio
Management” (2013), Vikas Publishing House PVT LTD, Noida (UP), 2nd
Edition, p.p. 214 - 290.
 SUDHINDRA BHAT, “Security Analysis and Portfolio Management”
(2011), Excel Books, New Delhi, 1st Edition, p.p. 426 - 448.
 DHANESH KHATRI, “ security and portfolio management” (2011) ,
Macmillan publishers Indian Ltd, New Delhi , 1st Edition, p.p. 450 - 456
E-REFERENCE
 https://economictimes.indiatimes.com/inditradecapitalltd/infocompanyhis
tory/companyid-16223.cms
 http://www.moneycontrol.com/
 http://www.inditrade.com/
 http://jrg.acemf.co.in/
 https://en.wikipedia.org/wiki/State_Bank_of_India
 https://www.pnbindia.in/shareholding-pattern.html
 https://en.wikipedia.org/wiki/Punjab_National_Bank
 https://en.wikipedia.org/wiki/Bank_of_Baroda
 https://en.wikipedia.org/wiki/Canara_Bank
 https://en.wikipedia.org/wiki/Bank_of_India
 https://en.wikipedia.org/wiki/Indian_Bank
 https://en.wikipedia.org/wiki/IDBI_Bank
 https://www.centralbankofindia.co.in/English/profile.aspx
 https://en.wikipedia.org/wiki/Union_Bank_of_India
 https://en.wikipedia.org/wiki/Union_Bank_of_India
 https://en.wikipedia.org/wiki/Vijaya_Bank
 http://www.moneycontrol.com/stockcharts/statebankindia/charts/SBI#SB
I
 http://www.moneycontrol.com/stockcharts/punjabnationalbank/charts/PN
B05#PNB05
 http://www.moneycontrol.com/stockcharts/bankofbaroda/charts/BOB#B
OB
 http://www.moneycontrol.com/stockcharts/canarabank/charts/CB06#CB0
6
 http://www.moneycontrol.com/stock-charts/bankofindia/charts/BOI#BOI
 http://www.moneycontrol.com/stock-charts/indianbank/charts/IB04#IB04
 http://www.moneycontrol.com/stockcharts/idbibank/charts/IDB05#IDB0
5
 http://www.moneycontrol.com/stockharts/centralbankindia/charts/CBO01
#CBO01
 http://www.moneycontrol.com/stockcharts/unionbankindia/charts/UBI01
#UBI01
 http://www.moneycontrol.com/stockcharts/vijayabank/charts/VB03#VB0
3
ANNEXURE
ABBREVIATION:
APT-Arbitrage Pricing Theory
AOP – Association of Persons
ATM- Automated Teller Machine
BSE – Bombay Stock Exchange
BOB- Bank of Baroda
BOI- Bank of India
CAPM- Capital Asset Pricing Model
CEO- Chief Executive Officer
FIs – Financial Institutions
FII- Foreign Institutional Investors
FDI- Foreign Direct Investment
IISL- India Index Services and Products Ltd
IPO-Initial Public offering
IDBI – Industrial Development Bank of India
J
JRG- Jiji Regi Giby
MACD- Moving Average Convergence / Divergence
MCX- Multi commodity Exchange of India Ltd
MF- Mutual Fund
MPLS- Multiprotocol Label Switching
NSE- National Stock Exchange
NSCCL- National Securities Clearing Corporation Ltd
NEAT- National Exchange for Automated Trading
NMCEIL- National Multi Commodity Exchange of India Ltd
PVT- Private Ltd
PNB- Punjab National Bank
RSI – Relative Strength Index
SDF- Stochastic Discount Factor
SMA -Simple Moving Average
SEBI- Security and Exchange Board of India
S&P – Standard and Poor’s

SBI- State Bank of India
SENSEX – Sensitive Exchange
Sl. No – Serial Number
UBI- Union Bank of India
WDM- Wholesale Debt Market

Arbitrage Trade Analysis of Top 10 Public Sector Banks of Indian Economy Listed in Bse and Nse

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“ARBITRAGE TRADE ANALYSIS OF TOP 10 PUBLIC SECTOR

BANKS OF INDIAN ECONOMY LISTED IN BSE AND NSE”

A PROJECT REPORT SUBMITTED TO MANGALORE UNIVERSITY

UNDER THE VALUABLE GUIDANCE OF

SHRI DHARMASTHALA MANJUNATHESHWARA COLLEGE OF

Place: Mangalore KEERTHI KUMARI U.P

Date: Reg. no: 169355137

ACCEPTED AND FORWARDED TO THE DIRECTOR FOR APPOVAL

ACCEPTED AND FORWARDED TO MANGALORE UNIVERSITY

I wish to express a deep sense of gratitude to my guide, Mrs.Sumathi, faculty

KEERTHI KUMARI U.P.

LIST OF TABLES (ⅰ) - (ⅳ)

LIST OF FIGURES (ⅴ) –(ⅵ)

EXECUTIVE SUMMARY (ⅶ)

2 PROJECT DESIGN 9-11

3 INDUSTRY PROFILE 12-19

4 COMPANY PROFILE 20-38

5 DATA ANALYSIS AND INTERPRETATION 39-80

FINDINGS, SUGGESTIONS AND

3.1 Organisation structure of Inditrade Capital Limited

Arbitrage pricing of STATE BANK OF INDIA in the

5.3 Arbitrage pricing of PNB in the month of Nov-2017

5.4 Arbitrage pricing of PNB in the month of Dec-2017

Arbitrage pricing of BANK OF BARODA in the

5.13 Arbitrage pricing of IDBI in the month of Nov-2017

5.14 Arbitrage pricing of IDBI in the month of Dec-2017

Arbitrage pricing of CENTRAL BANK in the month

The study is undertaken for the purpose of understanding the opportunities of

Stocks and your portfolio:

The Arbitrage Pricing Theory (APT) was developed primarily by Ross. It is a

Unfortunately, the APT does not necessarily preclude arbitrage opportunities

Arbitrage is an often-used term in share markets. The arbitrager is an important

Arbitrage is a strategy involving a simultaneous purchase and sale of identical or

Advantages of arbitrage strategy:

 Capitalizes opportunities of mispricing (cost of carry) between cash and

Stock analysis is a term that refers to the evaluation of a particular trading

Technical analysis tools:

TREND DEFINES RISK AND RETURN:

OBJECTIVES OF THE STUDY

 Primary data collection

 Secondary data collection

Thus, if X1, X2……………..Xn are the given n observations. Then

LIMITATIONS OF THE STUDY

A broker can have several functional specializations like Speculator, Hedger,

SEBI has been successful in achieving the following:

 Introduction of online trading

 STOCK EXCHANGES IN INDIA

Currently there are 2 depository systems in India:

INDITRADE Capital Ltd formerly known as JRG Securities Ltd is one of

As the company transforms itself to being a professionally run, high quality

1992 Started secondary Stock Market Operations

1994 Became a member of The Cochin Stock Exchange Ltd.

1995 Sub Broker of National Stock Exchange Ltd.

1999 Became a member of Inter Connected Stock Exchange Ltd.

1999 Became a member of The National Stock Exchange Ltd.

2000 Depository Participant of the National Securities Depository Ltd.

2000 Became a Sub-Broker of Bombay Stock Exchange

2000 Derivatives Trading Membership.

2000 Developed Branches across Kerala.

2001 Established Branch in Bangalore.

2003 Established Branch at Chennai

2005 Became a member of The Bombay Stock Exchange Ltd.

2005 Started operations in Maharashtra, UP, AP, Delhi & Punjab.