PAGE NO. 1) s c e n a r i o o f I n d i a n S t o c k Market .4 2) Executive Summary............................................................................5 3) Introduction........................................................................................6 4) Background........................................................................................ 6i)Karvys Mission.........................................................................6ii)Karvy Milestones......................................................................7iii)KARVY Credo............................................................................8iv)Quality Policy............................................................................95)Achievements................................ .....................................................106)KARVY Wings......................................................................................

11i)KARVY Stock Broking Limited...................................................14 7) Organization Structure........................................................................15 i) Structure of SME Segment........................................................16 ii) Process.....................................................................................17 8) Product & Services..............................................................................19 i) Products....................................................................................19 (a) D e m a t A c c o u n t ( I Z o n e P l u s ) .19 (b) Mutual Funds..................................................................19 (c) Insurance........................................................................31 (d) Equities..........................................................................35 (e) Bonds.............................................................................38 (f) Derivatives.....................................................................41(8)Camparitiveanalysis .63 3

(9)QUESTIONNAIRE 66(10)Learning..69(11)bibl iography..74 Scenario of Indian Stock market The financial scene is worldwide. The crisis had left the stock market in a deep crisis.It is slowly regaining its breath and there are now investments made all through theworld. Stock brokers as well as general public are making money out of investing inshares and stocks. The financial trauma that all of us faced are over and the recoveryof the market is now being witnessed. Throughout the world the market is limping back to its normal trading life, as compared to other financial markets all over theworld, the Indian stock market came back to life quite fast.Th e In di an Stock Market is the undisputed leader in th e Asias market. It has areputation among the foreign institutions. During the past few years from the time of crash in 2004 there have been many swings in the Indian stock market. But, the gainsfrom the market have been quite modest. The traders have made money by investingin shares and stocks and have made handsome profits. The rate of inflation in India ishigh so the brokers are more interested in selling than in buying stocks. The FDIshave also reduced considerably and the market has seen a rigorous financial criticalcondition. EXECUTIVE SUMMARY This internship report consists of the overall experience of working as a part at KARVYS T O C K B R O K I N G L I M I T E D . T h i s e x p e r i e n c e h e l p e d m e u n d e r s t a n d t h e b a s i c functioning of the Broking House where I was inducted.My In tern ship consisted of th e On Job Train ing as A Marketin g Executive. Th e best learning experience was that I started from the very basics of getting to that position andnot from th e posi tion i ts elf . Thi s h elp ed me get us ef ul insi ght an d unders tandin g of various financial products, the market details about them and the benefits provided bythem to the customers. Emphasis was given in analysis of the investor behavior of theclients. Another interesting fact was that all these products were suggested to clients not just based on their market performance and returns, but on the clients financial conditionas well as their risk taking capacity.Training sessions were held to give me insights about the various products that KARVYSTOCK BROKING deals in like: Demat accounts and Insurance. Presentations on thesame after self study and analysis were a part of this internship session. I provided advice and suggestions to the investors for online trading and which may prove prudent to them. INTRODUCTION KARVY is a premier integrated financial services provider and ranked among the top fivein the country in all its business segments. It services over 16 million individual investorsin various capacities and provides investor services to over 300 corporates, comprisingwho is who of Corporate India.It is a member of all three:

National Stock Exchange (NSE) Bombay Stock Exchange (BSE) Hyderabad Stock Exchange (HSE) Karvy utilized its experience and superlative expertise to capitalize on its strengths and better its service, innovate and provide new ones. It diversified in the process and thusevolved as Indias premier integrated financial service enterprise. Karvyhas been a customer centric company since its inception. It offers a single platformservicing multiple financial instruments in its bid to offer complete financial solutions to he varying needs of both corporate and retail investors, where an extensive range of services are provided with great volume-management capability. KARVY covers the entire spectrum of financial services such as Stock b r o k i n g , Depository Participants, Distribution of financial products - mutual funds, bonds, fixeddeposit, equities, Insurance Broking, Commodities Broking, Personal Finance AdvisoryServices, Merchant Banking & Corporate Finance, placement of equity, IPOs, amongo t h e r s . K a r v y h a s a p r o f e s s i o n a l m a n a g e m e n t t e a m a n d r a n k s a m o n g t h e b e s t i n technology, operations and research of various industrial segments. BACKGROUND The Karvy group was formed in 1983 at Hyderabad, India. Karvy ranks among thetop player in almost all the fields it operates. Karvy Computershare Limited is Indiaslargest Registrar and Transfer Agent with a client base of nearly 500 blue chipcorporates, managing over 2 crore accounts. Karvy Stock Brokers Limited, member of National Stock Exchange of India and the Bombay Stock Exchange, ranksamong the top 5 stock brokers in India. With over 6,00,000 active accounts, it ranksamong the top 5 Depositary Participant in India, registered with NSDL and CDSL. KarvyComtrade, Member of NCDEX and MCX ranks among the top 3 commodity brokers inthe country. Karvy Insurance Brokers is registered as a Broker with IRDA and ranksamong the top 5 insurance agent in the country. Registered with AMFI as a corporateAgent, Karvy is also among the top Mutual Fund mobilizer with over Rs. 5,000 croresunder management. Karvy Realty Services, which started in 2006, has quickly establishedi ts elf as a broker who adds value, in the realty s ector. Karvy Global off ers n ich e off Karvyhas 575 offices over 375 locations across India and overseas at Dubai and NewYork. Over 9,000 highly qualified people staff Karvy. Organization: was started by a group of five chartered accountants in 1979. The partners decidedto of f er , oth er th an the audit s ervi ces , value added ser vices li ke cor porate advi sor yservices to their cli en ts . Th e first firm in th e group,

Karvy Consultants Limited wasincorporated on 23rd July, 1983. In a very short period, it became the largest Registrar and Transfer Agent in India. This business was spun off to form a separate joint venturewith Computershare of Australia, in 2005. Karvys foray into stock broking began withmarketing IPOs, in 1993. Within a few years, Karvy began topping the IPO procurementleague tables and it has consistently maintained its position among the top 5. Karvy wasamong the first few members of National Stock Exchange, in 1994 and became a member of The Stock Exchange, Mumbai in 2001. Dematerialization of shares gathered pace inmid-90s and Kar vy was in th e foref ront educ ati ng invest ors on th e advantages of dematerializing their shares. Today Karvy is among the top 5 Depositary Participant inIndia.While the registry business is a 50:50 Joint Venture with Computershare of Australia, wehave equity participation by ICICI Ventures Karvyhas always believed in adding value to services it offers to clients. A topnotchresearch team based in Mumbai and Hyderabad supports its employees to advise clientson their investment needs. With the information overload today, Karvys team of analystshelp investors make the right calls, be it equities, mf, insurance. On a typical working day Karvy: Has more than 25,000 investors visiting our 575 offices Publishes / broadcasts at least 50 buy / sell calls Attends to 10,000+ telephone calls Mails 25,000 envelopes, containing Annual Reports, dividend cheques / advises,allotment / refund advises Executes 150,000+ trades on NSE / BSE Executes 50,000 debit / credit in the depositary accountsAdvises 3,000+ clients on the investments in mutual funds. Karvy Stock Broking Limited is a member of the National Stock Exchange of India andThe Stock Exchange Mumbai. We rank among the top 5 brokers on the NSEI, with over 130,000 trades per day. We began with the aim of serving the small investors today wehave over 3,50,000 clients trading through us. We are uniquely positioned to offer the bestto you, with over 575 branches, one is located near your office / home. If you prefer totrade from the comfort of your home or officeour online platform provides the ideal wayto trade. Our laser focused approach to serving the retail investors remains the karvy.

Karvy h as tr aveled a success route over the past 20 years and posi ti oned i ts elf as an emerging financial service giant in which embeds the confidence and support of enviable patrons across the financial world. Patrons are also of diversified fields which includesover 16 million individual investors in various capacities and 300 corporates comprisingthe best out of the whole lot .Years of experi ence of h o lis ti c financial s ervi ces andexpertise in this industry has helped it gain the status it enjoys and cherishes today KARVY CREDO Following are the system of principles or beliefs followed by Karvy Group.Our Clients, Our Focus Clients are the reason for our being Personalized service, professional care; pro-activeness are the values that helps KARVYnurture enduring relationships with their clients. Teamwork N one of us is more important than all of us Each team member is the face of Karvy. Together they offer diverse services with speed,accuracy and quality to deliver only one product: excellence. Transparency, co-operation,invalu able indivi dual contri bution f or a collecti v e goal , and res pect for individualuniqueness within a corporate whole, is what KARVY aims at. Responsible CitizenshipA social balance sheet is as rewarding as a business one. As a responsible corporate citizen, KARVY believes that its duty is to foster a better en vironmen t in th e soci ety where th ey li ve and work. To abide by its norms, and to behave in a r es p onsib le mann er towards the environment, are some of its gro win ginitiatives towards realizing this.

KARVY WINGS
As discussed earlier, KARVY of f er s a single platf orm servicin g multi ple financi al instruments in its bid to offer complete financial solutions to the varying needs of bothcorporate and retail investors. The range of products and services are provided by thefollowing wings.This is the flagship company of

Karvy Group and it controls the organizational affairs,channels of progress, work affairs and pioneering business policies. This was the first business the KARVY

group ventured into, but now they have

transferred it into a joint

company services around 6 lakh customer accounts in a spread of 250 cities/towns inIndia.This wing of Karvy is registered with SEBI as a category 1 merchant banker and is alsorecogni zed as a lead in g merchan t banker of the country. It has built i ts reputati on bycapitalizing the opportunities as and when it comes, be it in corporate consolidations,mergers and acquisitions or corporate restructuring. Involvement in raising resources for corporate or government undertaking successfully over the past two decades has given it atremendous confidence boost.This wing of Karvy has traversed wide spaces to tie up with the worlds largest transfer agent, the leading Australian company Computershare Limited. This company servicesmore than 75 million shareholders across 7000 clients and makes its presence felt in over 12 countries across 5 continents. It has also entered into a 50-50 joint venture with Karvy. After transferring completely to this new entity it has tried to enrich the financial services

his is a specialist Business Process Outsourcing unit of the Karvy Group. The legacy of experience in financial services of Karvy Group acts as a big support for entering theglobal arena with confidence of delivering the best. This wing offers several models onth e understan din g of bus iness needs that are un iqu e and th erefore on ly a customi zed service could possibly fit the bill. Their service matrix has permutations and combinationst h a t c r e a t e s e v e r a l o p t i o n s t o c h o o s e f r o m . I t s S e r v i c e s m e e t t h e m o s t s t r i n g e n t International standards, be it re-engineering and managing processes or delivering newefficiencies. Karvy Commodities focuses on takin g commodities trading to new dimen sions of reliability and profitability. They have made commodities trading, an essentially ageold practice, into a sophisticated and scientific investment option. It helps in enabling trade in ORGANIZATION STRUCTURE There are various departments and segments in KARVY STOCKBROKING LIMITED.The segment of which I was a part of during my training process is the SME segment .This segment caters especially to the needs of the SMALL & MEDIUM ENTERPRISES. Small and Medium Enterprises refers to organizations that are larger than SOHOs (Smalloffice/Home office) and smaller than the Fortune 1000. An important point to be noted isthat The SME segment is emphasizing more on Mutual Funds instead of equity, insuranceand other products. This segment concentrates approximately:60% on Mutual Funds30% on Equity10% on Insurance and other products So far, the performance of this segment has been good and it has been a contributingfactor in increasing the customer base of KARVY STOCK BROKING LIMITED . Thus plans for opening of SME Segment in other branches are shaping up.

STRUCTURE OF SME SEGMENT: sssWHE RE: Relates to Back OfficeRO Relationship officer SRM Service Relationship Manager 23

Subdealer Maindeale r Sub back office personM Fdesk HEAD WealthManager Wea lthManager S R M S R M S R M S R M S R M S R M

R OR OR OR OR OR OR OR OR OR OR O RO

TeleSalesTeleSales

PROCESS: The process of the entire working of the SME segment takes place in the followingmanner: First the data is collected by the ROs, SRMs, Wealth Managers, Main Dealer andthe Head himself. This is done at all levels so that the data is collected from all theresources available and is qualitative in terms of conversions. Once the data is acquired or sourced it is given to the Tele Marketing or Salesteam. They are expected to achieve a target of 60% through their calls. The mainaim of them is to get to the right client and convince him for a meet. Then the Tele callers fix appointments and forward the details of the same to theROs i.e. the Relationship Officers. Next the ROs visit the client and inform them about the entire products that wouldcater to th e customer s needs. Hi s work is not just confined to impartin g th einformation to the client; moreover he has to extract information from the client as well. He has to understand the customers needs, risk taking ability and gives thedetails to the SRM if the client is prospective. Th en the SRM meets th e prospective cli en ts and caterin g to the need of th emgathers information regarding the financial details of client, his past investments,future investment capability etc. and gives it to the Wealth Manager. The Wealth Manager then designs the portfolio for the client b a s e d o n h i s analysis, study and advices from the R&D department and closes the deal.In the whole process mentioned above, there are 4 back office persons, who assist thesegment at all times in various works. Main Dealer Equity Desk Sub Dealer Assistant to Main Dealer MF Research - Research on mutual funds Sub Back office person Responsible for sending reports and MISRep orts are s en t wee kly for Equity an d Mut ual Funds and month ly for futur es and options. This whole process is controlled and managed by the Segment Head nvestment platform launched by KARVY for the discerning clients.This product provides the requisite advise & resources to clientsfor making judicious investments INDRODUCTION:

decisionsamongst various assetclasses & products, based on specific risk and return profile of theclient as well as on the time horizon for the investments. Theinvestment advise is provided based on in-depth researchconducted by KARVY.I-Zone Plus offers the advantage of confident investmenttransactions in equities, commodities and currency derivatives,mutual funds, IPOs of equity shares through a state-of-the-artonline investment platform with fully secure online paymentgateways with multiple banks. ADVANTAGES Advisory servi ce with a comprehensive online investment platform Free financial advise on portfolio allocation in various asset classes Free online stock-broking and attractive margin funding options Daily equity market research reports and calls through SMS Life time free demat account Free Mutual Fund transactions to an unlimited extent, including unlimited SIP transactions

Insurance Free online commodities broking account Application in IPOs with attractive loan options for applications Regular portfolio statement for better planned future investments Loans against securities Free subscription of KARVY FinaPolis magazine Provides comprehensive advisory service for smart investments Offers comprehensive product range Enables transaction in NSE, BSE, MCX and NCDEX Enables both cash and derivative trading in equities Enables trading in currency and commodity derivative Unlimited transactions in Mutual Funds Enables online application for IPOs

 Easy transfer of money through secured online payment Gateways with multiple banks ICICI, HDFC, IDBI, Axis, Bank of Rajasthan Safe and secure transaction engine.

INSTANT INFORMATION PROVISION Live market news Quality research help available live on the trading screen Top analysts providing inputs on strategies and recommendations SMS Alert facility for tracking investments Updated information on personal finance through a free subscription of FinaPolis Portfolio tracker with quarterly portfolio statement Seamless integration between bank, broking, MF and DP Accounts EASE OF TRANSACTION 1.Provides Advisory Service in multiple products.

.Uses top quality technology and also gives call center service for their clients andother investors.3 . W i d e s t n e t w o r k . Ease in tracking Comprehensive net worth statement Quarterly investment portfolio statement Live tracking of investments Corporate news a click away Streaming quotes and news from the exchange on your desktop High quality support team to enable you to invest profitably MUTUAL FUNDS: CONCEPT: A Mutual Fund is a form of collective investment that pools money from m a n y investors, who share common financial goals and invests their money in stocks, bond,short term money market instruments and/or other securities.The income earned through these investments and the capital appreciations realized areshared by its unit holders in proportion to the number of units owned by them. Thus aM u t u a l F u n d i s t h e m o s t s u i t a b l e i n v e s t m e n t f o r t h e c o m m o n m a n a s i t o f f e r s a n opportunity to invest in a diversified, professionally managed basket of securities at arelatively low cost. The flow chart below describes broadly the working of a mutual fund: Mutual Fund Operation Flow Chart33

RGANISATION OF A MUTUAL FUND There are many entities involved and the diagram below illustrates the organizational setup of a mutual fund:

TYPES OF MUTUAL FUNDS:

EXPLAINATION: Open ended Mutual Funds: It is a type of mutual fund where there are no restrictions on the amount of shares the fundwill issue. If demand is high enough, the fund will continue to issue shares no matter howmany investors there are. Open-end funds also buy back shares when investors wish tosell. Most of the mutual funds available in the marketplace are open-end funds. Open-endfunds are generally managed actively and are priced according to their net asset value( N A V ) . O p e n - e n d f u n d s a r e w i d e - r a n g i n g . S o m e O p e n - e n d f u n d s a r e m o r e conservative and provide consistent returns with low risk, and some are more aggressivein seeking to make capital gains through constant trading. Close ended Mutual Funds: When an investment company issues a fixed number of shares in an actively managed portfolio of securities, it is referred to as close ended mutual funds. The shares are tradedin the market just like common stock. The main difference with closedend funds is thatmarket price of the shares is determined by supply and demand and not by net-asset value(NAV).Its stipulated maturity period ranges from 3 to 15 years. INSURANCE:CONCEPT: Insurance , in law and economics, is a form of risk management primarily used to hedgeagainst the risk of a contingent loss. Insurance is defined as the equitable transfer of therisk of a potential loss, from one entity to another, in exchange for a premium. Insurer , in economics, is the company that sells the insurance. Insurance rate is a f actor us ed to determi ne the amount, called th e premi um, to b echarged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. Sum Assured: It is the amount of money an insurance policy guarantees to pay before any bonuses areadded.Factors included in the calculation of sum assured are: Date of birth Gender Duration

Health conditions Job profileTYPES OF INSURANCE:

Life Insurance: All policies are not the same. Some give coverage for your lifetime and others cover youfor a specific number of years. Following are the different types of life insurances: Whole life Term policy Money pack Endowment Pension plan ULIP General Insurance: General insurance typically comprises any insurance that is not determined to be lifein surance. It is called prop er ty and cas ualty (P&C) insurance in the U.S . General FACTORS THAT INFLUENCE THE PRICE OF THE STOCK: Broadly there are two factors:(1) Stock specific(2) Market specificThe stock-specific factor is related to peoples expectations about the company, its futureearnings capacity, financial health and management, level of technology and marketingskills.The market specific factor is influenced by the investors sentiment towards the stock market as a whole. This factor depends on the environment rather than the performance of any particular company. nt like high economicgro wth, fri en dly budget, stable govern ment etc . can f u el euphori a in the invest ors, res ultin g in a boom in th e market. On th e o th er hand, unfavorable events like war,e c o n o m i c c r i s i s , c o m m u n a l r i o t s , m i n o r i t y g o v e r n m e n t e t c . d e p r e s s t h e m a r k e t irrespective of certain companies performing well. However, the effect of market-specificfactor is generally short-term.Despite ups and downs, price of a stock in the long run gets stabilized based on the stock specific factors. Therefore, a prudent advice to all investors is to analyze and invest andnot speculate in shares. ACQUIRING EQUITY SHARES: There are two methods: You may subscribe to issues made by corporates in the primary market. In the primary market, resources are mobilized by the corporates through fresh publicissues (IPOs) or through private placements. OR


You may purchase shares from the secondary market. To buy and sell securitiesyou should approach a SEBI registered trading member (broker) of a recognizedstock exchange. (Wikipedia.com) The documents required for opening an account with KARVY are: PAN card no. Address proof Passport size photos Cheque (initial one time investment amount) BONDS:CONCEPT: A Bon d is a long term con tract under which a borrower agrees to make p ayments of interest and principal, on specific dates, to the holders of the bond.

CLASSIFICATION OF BONDS: SLR is the percentage of deposits that has to be invested in certain designated securities.The current SLR is 25%. Also, in SLR Banking system is very important. SLR Bonds constitute of: Government securities/ Gilt/GOI (govt. of India) Bonds SDL( State Development Loans) T- Bills (Treasury Bills) 46 BONDSSLR Statutory LiquidityRatio NON SLR Non StatutoryLiquidity Ratio


Designated SLR Bonds Non SLR Bonds constitute of: Public sector units bonds like: IRFC (Indian Railway Finance Corporation) Power Finance Corporation NHAI Bank Bonds State Guarantee Bonds DERIVATIVES: CONCEPT As the name suggests, derivative is a financial instrument that offers a return based on thereturn of some other underlying asset. In this sense, its return is derived from another instrument.The def inition s tates, a der ivati ve' s p erfor man ce is b as ed on th e p er formance of anunderlying asset. This underlying asset is often referred to simply as the underlying. Ittrades in a market in which buyers and sellers meet and decide on a price; the seller then delivers the asset to the buyer and receives payment. The price for immediate purchase of the underlying asset is called the cash price or spot price.A derivative also has a defined and limited life: A derivative contract initiates on a certaindate and terminates on a later date. Often the derivative's payoff is determined and/or made on the expiration date, although that is not always the case. In accordance with theusual rules of law, a derivative contract is an agreement between two parties in whicheach does something for the other. In other words, no money need change hands up front. Types of Derivatives Over-the-counter (OTC) derivatives are contracts that are traded (and privatelynegotiated) directly between two parties, without going through an exchange or other intermediary. Products such as swaps,forward rate agreements , and exoticoptions are almos t always traded in thi s way. The OTC derivatives market is huge. According to the Bank for International Settlements , the total outstandingnotional amount is USD 298 trillion.

Exchange-traded derivatives are those derivatives products that are traded viaspecialized Derivatives exchanges or other exchanges. A derivatives exchangeacts as an intermediary to all related transactions, and takes Initial margin from both sides of the trade to act as a guarantee. Few Major competitors are: 1 . I n d i a b u l l s 2 . I n d i a n i n f o l i n e 3 . S B I C A P S . 4 . S S K I L t d . ( S h a r e k h a n ) 5 . B A J A J C A P I T A L 6 . I D B I C A P I T A L 7 . U N I C O N 8 . T A T A 9 . K O T A K To get first hand details about them we visited a few stock broking houses and talkeda b o u t t h e financial instruments available with their company, their charges f o r investments and the documents required by them.Followings are the list of the companies we visited:1 0 . I n d i a b u l l s 1 1 . I n d i a n i n f o l i n e 1 2 . S B I C A P S . 13.SSKI Ltd. (Sharekhan)1 4 . B A J A J C A P I T A L 1 5 . I D B I C A P I T A L 1 6 . U N I C O N 1 7 . T A T A Comparative Analysis S . N O B A S I S K A R V Y S T O C K BROKING LTDI N D I A B U L L S K O T A K SECURITIESS H A R E K H A N B 1 R E A C H NO. OF BRANCHESO V E R 2 0 0 O V E R 6 4 0 O V E R 2 0 0 1 1 6 0 2 . 1 B R O K E R A G E INTRADAY5 P A I S E 1 0 P A I S E 5 P A I S E 3 0 P A I S E 2 . 2 B R O K E R A G E DELIVER Y5 0 P A I S E 5 0 P A I S E 5 0 P A I S E 3 0 P A I S E M A R G I N M O N E Y R s . 1 0 , 0 0 0 R s . 5 7 5 0 R s . 5 0 0 0 3.1DEMAT A / C & T R A D I N G A / C OPENING CHARGER s . 5 2 0 R s . 9 0 0 R s .

7 5 0 R s . 3 7 5 3 . 2 D E M A T A / C ANNUAL MAINTENANCECHARGEN I L N I L N I L R s . 4 5 0 4 E X P O S U R E INTRADAY Delivery DependsDepends12 Times3 Times7 Times4 Times2 TimesDepends5 P M S MINIMUM INVESTMENTR s . 1 L A C S R s 5 L A C S R s 2 5 L A C S R s 5 L A C S (Self collected Data) On the basis of the survey 70% peoples are satisfiedwith servises of karvy.