A

PROJECT REPORT
On
Consumer Perception on EQUITY INVESTMENT by INDIA INFOLINE, BHUBANESWAR (special reference to steel sector)

At India infoline Ltd., Bhubaneswar

Projected report submitted for partial fulfillment of degree course in Master of Finance and Control, Utkal University

Session 2009-11
Submitted by Bibhuti bhusan naik Roll number: 13767u092008 Name of external guide:.Mr.Sibajee Meher Relationsh ip manager India Infoline Ltd,Bhubaneswer Name of internal guide:. Mrs. Anamika. Pattanayak Faculty of finance ASMIT, Bhubaneswar

ACKNOWLEDGEMENT

I would like to express my sincere gratitude to all those who have given their valuable time, guidance, support & inspiration to undertake this challenging work.

I must acknowledge my deep gratitude to Mr.Sibajee Meher, Relationship Manager, India infoline Ltd, BBSR for giving me his valuable time & necessary information for fulfillment of this project into its final shape.

I would also thankfully express my gratitude to Mrs. Anamika Pattanayak, faculty of finance, ASMIT, BBSR and the entire faculty member who guided me & provide their valuable time for preparation of this project report in time.

Lastly I thanks to my friends who have helped me in completion of this project.

Bibh uti Bhusan Naik ROLL NO: 13767U093008

DECLARATION

I Mr. BIBHUTI BHUSAN NAIK do here declare that, this project report on EQUITY INVESTMENT with special reference to India Infoline Ltd submitted by me in ARYA SCHOOL OF MANAGEMENT AND INFORMATION TECHNOLOGY (ASMIT), Bhubaneswar from Utkal University is true to the best of my knowledge.

I declared that this project has not been submitted anywhere for any other purpose except in ASMIT, BBSR.

Date:

Name: BIBHUTI BHUSAN NAIK

Place:

roll number: 13767U093008

CONTENTS
Chapter 1
Introduction Place of Study Objective of the study Scope of Study Methodology Limitation

Chapter 2.................................................................................................
Industry profile
Company profile

Chapter 3.
Review of literature.. Investment. Different investment option. Equity investment. Different analysis. Role of market trends Role of demat account.

Chapter 4.
Data analysis and interpretation

Chapter 5.
Findings Suggestion Conclusion.

Chapter 6.
Bibliography

PREFACE
Investment is the employment of funds on assets with the aim of earning income or capital appreciation. Investment has two attributes namely time and risk. Present consumption is sacrificed to get a return in the future. The sacrifice that has to be borne is certain but the return in the future may be uncertain. The risk is undertaken with a view to reap some return from the investment. To the economist, investment is the net addition made to the nations capital stock that consists of goods and services that are used in the production process. A net addition to the capital stock means an increase in the buildings, equipment or inventories. These capital stocks are used to produce other goods and services. Financial investment is the allocation of money to assets that are expected to yield some gain over a period of time. It is an exchange of financial claim such as stock and bonds for money. They are expected to yield returns and experience capital growth over the years.

The first chapter provides a brief description about place of study, methodology of study, Limitation and objective of study.

The second chapter gives a brief description on profile of INDIA INFOLINE. The third chapter reflects the Review Of literature.

The fourth chapter describes Data analysis & Interpretation. The fifth chapter includes a brief description about findings, suggestion &conclusion.

The sixth chapter gives description about the list of references for the project.

CHAPTER - 1
Introduction Place of Study Objective of the study Scope of Study

 Methodology Limitation

INTRODUCTION
The stock market plays a major role in mobilizing the savings into investment. Stock market development is positively correlated with the development of financial intermediaries and long-term growth. Stock market also provides a different bundle of financial functions from those provided by financial intermediaries. The stock market in India is more efficient than banking system on account of the enabling government policies and that stock market development has a key role to play in the reforms of system by generating competition for funds mobilization and allocation. Hence, an efficient capital market would contribute to long-term growth. According to RBI the flow of funds in

the private corporate sector shows that there is growing reliance of the private corporate sector on external financing. The equity market in developing countries until the mid-1980s generally suffered from the classical defects of bank-dominated economies, that is, shortage of equity capital, lack of liquidity, absence of foreign institutional investors, and lack of investors confidence in the stock market. Since 1986, the capital markets of the developing countries started developing with financial liberalization and the easing of legislative and administrative barriers and the adoption of tougher regulations to boost investors confidence. With the beginning of financial liberalization in the developing countries, the flow of private foreign capital from the developed to developing countries has increased significantly and such inflow of foreign capital have been mainly in the form of foreign direct investment and portfolio investment. The latter type of inflows has mainly been through their stock markets. In the history of International Finance, the year 1992- 1993 may be seen as a watershed year in which emerging markets came into their own as capital raising mechanisms and became firmly established as a distinct asset class for the words investment community with financial liberalization, the east Asian capital markets like Singapore, Honkong and Bangkok have developed over time to the extent that they are presently regarded as international financial centers of Asia. In the capital markets over the last few years that has made the markets attractive to foreign institutional investors. This history shows us that retail investors are yet to play a substantial role in the market as longterm investors. Retail participation in India is very limited considering the overall savings of households. Investors who hold shares in limited companies and mutual fund units are about 20-30 million. Those who participated in secondary markets are 2-3 million. Both SEBI and retail participants should be active in spreading market wisdom and

empowering investors in planning their finances and understanding the markets.

PLACE OF STUDY
All the activities of this project are carried out in India Infoline ltd, Bhubaneswar.

OBJECTIVE OF THE STUDY

In the process of share trading, Technical analysis is the crucial factor, as it says the time when the securities are to be bought and sold. As there are several types of investors involved in the market, their perception varies. So to know the time of buying and selling the stocks is the main objective of investment in share market. To gain more knowledge about investment in share market is one of the objectives of this study.

Following are the objectives

To know different analysis made for trading of stocks. To evaluate the time of buying and selling of security. To determine the market prices of the security by the interaction of supply and demand forces. To detect the irrespective of why the security occur, shifts in demand and supply with the help of charts, graphs etc of market action. To calculate the average price of stocks To know the Support & Resistant level of a security

 Finally to compare different analysis made for transacting a security. How many people aware of online trading or Demat account. The risk tolerance of different segment of investor. Investment pattern with respect of age & sex. How many people are investing in share market (online/offline). From which source people are aware about share market.

SCOPE OF STUDY
The data and information was gathering during 2 month training from 1st June 2010 to 31st July, 2010. The scope is limited to secondary data only.

METHODOLOGY

While talking of research methodology we not only talk of research methodology but also consider the logic behind it. Thus using the

content of research study and explain why its being used while rest of technique are not.

SELECTION OF FIELD My target was to make the people invest in share market so I took judgment sampling. According to my target population and sampling technique I took samples from different area. By considering research objective, budget, time, authority, intuition constraint I selected my research field. I took the following areas as my research field. Jayadev vihar, Acharya vihar, Nayapalli, CRP square

COLLECTION OF DATA Depending upon the sources utilized, whether the data has come from actual observations or come e kept for normal purposes, statistical data can be classified into two categories:

Primary Data Secondary Data

Sample size: 100 Primary source:

Data collected by investigator him /herself for the purpose of specific inquiry or studies are called primary data. Such data are original or first hand in character. From the source it was collected is known as primary source for that specific researcher.

Personal Interview:
For the personal interview we prepared a structured questionnaire. You can watch out our questionnaire in appendix page. A questionnaire whether it is called a schedule interview from or measuring instrument, it is a formalized set of question for obtaining information from respondents.

Secondary source: The secondary source refers to the source

from which the data collected are the secondary information means this information is already collected for some purpose. Such as report on companys customer, etc.

LIMITATION
Some people were hesitating to open account through summer trainees as we were not employee. This is also part of our SIP to open few Demat Account. The sample size for was small compared to the population of the main township for haring a more value but time was not permissible. Few respondents were reluctant to part with this feeling, truth with regard to some parameters fearing of any untoward consequences was one of the obstacles for my project, still then I have tried to put my best efforts to make it a success in this short span of time.

Perception, mindset of the people towards share market industry is not very positive one. The time period allowed for the study is quite insufficient to catch all the aspects. The primary data collected has its own limitation. The same has been incorporated in the basis after year. Confidentiality of information was the biggest limitation that corporate people were not willing to share their information with us.

CHAPTER-2

Industry profile Company profile

INDUSTRY PROFILE
The economic development of any country depends upon the existence of a well organized financial system. It is the supplies the necessary financial inputs for the productions of goods and services which in turn promote the well being and standard of living of the people of a country. Thus the financial system is a broader term which brings under its fold the financial market and the financial institutions which support the system. An efficient functioning of a financial system facilitates the free flow of funds to more productive activities and thus promotes investment. Thus, the financial system provides the intermediations

between savers development.

and

investors

and

promotes faster

economic

These organized markets can be further classified into two. These are Capital market Money market Capital market Importance of capital market Absence of capital market acts as a deterrent factor to capital formation and economic growth. Resource would remain idle if finances are not funneled through capital market. The importance of capital market can be briefly summarized as follows: It provides an avenue for investors, particularly the household sector: I- To invest in financial assets which are more than real assets. II - to facilitate increase in production and productivity in economic and thus enhances the economic welfare of the society. Thus, it facilitates the movement of stream of command over capital to the point of highest yield towards those can apply them productively and profitably to enhance the national income aggregate. The operations of different institution in the capital market induce economic growth. They give quantitative and qualitative directions to the flow of funds and about rational allocation of scarce resources.

Indian capital market

It includes primary, secondary, OTC and derivatives segments. Due to the consequence of the growing economic and the governments policy of liberalization and deregulation, the various segments of capital market in India have grown at phenomenal rates. The first stock exchange The Bombay stock exchange was established in 1857. Now there are 23 stock exchanges in India. The number of shareholders has increased to about 30-40 million. There are about 9000 listed companies. Both the market capitalization and volume of trades have shown general growth, although they have fluctuated over years. Stock exchanges in India have well developed procedures for listing, trading, settlement etc... The recent changes include shortening of the trading and settlement period, rolling settlement, index- based price bands, dematerialization of share etc... A number of systems and rules exist for the regulation of the stock exchanges. The Securities and Exchange Board of India (SEBI) is the central regulatory authority regulating capital market in India. The capital market is a market for financial assets which have a long or indefinite maturity. Generally, it deals with long term securities which have a maturity period of above one year.

Capital market may be further divided into three namely: 1. Industrial securities market 2. Government securities market 3. Long term loans market

Industrial Securities Market

As the name implies, it is a market for industrial securities namely: Equity Shares or Ordinary Shares, Preference Shares, Debenture or Bonds. It is a market where industrial concerns raise capital by issuing appropriate instruments. It can be further sub divided into two. These are:

Primary market or new issue Market,

Secondary Market or Stock Exchange

Primary market or new issue Market

The industrial securities market of India consists of new issue market and Stock Exchanges. The new issue markets deals with the new securities which are not previously available to the investment of public i.e. the securities that are offered to investment of public first time. The market therefore, makes available of new block of securities for public subscription. In other words, new issue market deals with rising of fresh capital by companies either for cash or for consideration of other than cash. Primary market is a market for new issue of securities. Hence, it is also called New issue Market. The primary market deals with those securities which are issued to the public for the first time. In the primary market, borrowers exchange new financial securities for long term funds. Thus, primary market facilitates for Capital Formation. The new issue market encompasses all institutions dealing in fresh claim. The forms in which these claims created are Equity Shares, Preference Shares, debenture, right issues,. All financial institutions which contribute underwrite and directly subscribe to the securities are part of new issue market.

There are three ways by which a company may raise capital in a primary market. They are: Public issue, Rights issue, Private placements This is called public issue. When an existing company wants to raise additional capital, securities are first offered to the existing shareholder on a pre- emptive basis. This is called right issue. Private placement is a way of selling securities privately to a small group of investors.

Secondary market or Stock Exchange:

A stock market is a place where securities of various types are openly traded and where one can sell and purchase securities easily. It is an organized market for purchase and sale of listed industrial and financial securities. Securities traded in the stock exchanges include shares, debentures and debt instruments of public limited companies. These securities are in fact documented evidence of ownership of claim upon the assets of the issuing company. The securities are also not fixed in value that is determined at the time of their buying and selling. Hence enormous capital is rose which is generally required to operate the industrial and commercial enterprises of the country. Ti provides opportunity for trading in newly issued securities and facilities mobilization. It provides ready market and liquidity to the various type of securities listed. It also ensures efficient allocation of available capital resources to the users in the economy. It also acts as a barometer that easily measure and detect the incipient system of an economic boom or decline well in advance before such an eventuality actually occurs. Secondary market deals with securities that have been previously issued. Stock exchanges are secondary market where buyers and sellers trade in already issued securities. A stock exchange provides the following useful economic functions:

1. It helps in determining fair price based on demand and supply forces and all available informations. 2. It provides easy marketability and liquidity for the investors. 3. It Facilitates allocation in capital allocation in primary market through price signaling. 4. It Enables investor to adjusting portfolios of securities.

Secondary market is a market for secondary sale of securities. In other words, securities which have already passed through the new issue market are traded in the market. Generally, such securities are quoted in the stock exchanges and it provides a continuous and regular market for buying and selling of securities, this market consists of all stocks exchanges in India are regulated under the Securities Contract Act, 1956. The Bombay Stock Exchange is the principal stock exchange in India which sets the tone of other stock markets.

BOMBAY STOCK EXCHANGE (BSE)

The

BSE is the premier or apex stock exchange in India. It is the biggest in size in terms of the amount of fresh capital raised, secondary market turnover and capitalization and the total listed companies and their paid-up capital. It is also the oldest market and has been recognized permanently, while the recognition for other exchanges is renewed every five years. Its business is no longer confined to Mumbai alone; at the end of 1997, there were 100 other cities in which it had set up business. The BSE was established in 1857.

MERITS OF BSE: Badla system: only BSE has been allowed to have the Badla system.

Broader market: nearly 6000 stocks are listed on BSE while in NSE 1500 are listed. Odd lots trading: it facilitates trading of odd lots shares and such transaction settled through the exchanges clearing house. More time for settlement: the BSE gives an investors, brokers or custodian more time to make payments and effect deliveries.

NATIONAL STOCK EXCHANGE OF INDIA (NSE)

The NSE has a fully automated, electronics, screen-based trading system. It is sponsored by the IDBI and co-sponsored by LIC, GIC, other insurance Companies, commercial banks and other finical institutions, viz., SBI caps, SHCIL and ILFs. Its objectives are:

To provides nation-wide equal access and fair, efficient, completely transparent securities trading system to investors by using suitable communication network. To provides shorter settlement cycle and entry settlement system. To brings the Indian stock market in line with international markets.

To promote the Indian secondary market in debt instrument such as government and corporate bonds.

Merits of NSE
Unconditional counter-party guarantee: the NSE clearing house guarantees timely settlement of trades executed in its normal market segment against short and bad deliveries. Depository: the NSE introduced the first depository system in India and began to securities in a book-entry from in December 1996. The system has freed trades from some persistent problems of the Indian securities market, such as paper work, bad delivery and stump duty.

Options and futures trading:

Professionalism: it has dedicated, trained, technologically literate staff with a respective attitude on full time basis and so today it caters to a fairly large number of potential investors. Public relations: It organizes various programs for public relations. It is well prepared to disseminate information on the exchanges rules regulations and activities to the public through print and electronic media. SECRITY EXCHANGE BOARD OF INDIA (SEBI) The government has set up the securities & exchange Board of India (SEBI) in 12th April, 1988. For more than three years, it had no statutory powers. It is under the SEBI Act to (i) (ii) protect the interest of the investor in securities and Promote the development of, and regulate, the securities market.

Functions of SEBI It is the duty of SEBI to protect the interest of investors in securities into promotes the development of, and to regulate the securities market, by such measures as it thinks fit. Prohibiting fraudulent and unfair trade practices relating to the securities market Prohibiting insider trading in securities.

Regulating the business in stock exchange(s) and any other securities market(s).

Registering and regulating the working of stock brokers, sub- brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue merchant bankers, underwriters, portfolio managers, investor advisor, and such other intermediaries who may be associated with the securities market. Registering and regulating the working of ventures capital and collective investment schemes include Mutual funds. Promoting and regulating self-regulatory organizations. Promoting investors education and training of intermediaries of the securities marked. Conducting research for the above purpose.

Regulating substantial acquisition of shares and takeover of companies. Calling for information and record form, undertaking inspection, conducting inquiries and audits, stock exchanges, mutual funds and

other persons associated with the securities market intermediaries and self-regulatory organizations in the securities market. Performing such functions and exercises such powers under the provisions of the Securities Contract Act, as may be delegated to it by the Central Government.

COMPANY PROFILE COMPANY HISTORY We were originally incorporated on October 18, 1995 as Probity Research and Services Private Limited at Mumbai under the Companies Act, 1956 with Registration No. 11 93797. We commenced our operations as an independent provider of information, analysis and research covering Indian businesses, financial markets and economy, to institutional Customers. We became a public limited company on April 28, 2000 and the name of the Company was changed to Probity Research and Services Limited. The name of the Company was changed to India Infoline.com Limited on May 23, 2000 and later to India Infoline Limited on March23, 2001. In 1999, we identified the potential of the Internet to cater to a mass retail segment and transformed our business model from providing information services to institutional customers to retail customers. Hence we launched our Internet portal, www.indiainfoline.com in May1999 and started providing news and market information, independent research, interviews with business leaders and other specialized features. In May 2000, the name of our Company was changed to IndiaInfoline.com Limited to reflect the transformation of our business. Over a period of time, we have emerged as one of the leading business and financial information services provider in India. In the year 2000, we leveraged our position as a provider of financial information and analysis by diversifying into transactional services, primarily for online trading in shares and securities and online as well as offline distribution

of personal financial products, like mutual funds and RBI Bonds. These activities were carried on by our wholly owned subsidiaries. Our broking services was launched under the brand name of 5paisa.com through our subsidiary, India Infoline Securities Private Limited and www.5paisa.com, the e-broking portal, was launched for online trading in July 2000. It combined competitive brokerage rates and research, supported by Internet technology besides investment advice from an experienced team of research analysts, we also offer real time stock quotes, market news and price charts with multiple tools for technical analysis. Acquisition of Agri Marketing Services Limited (Agri) In March 2000, we acquired 100% of the equity shares of Agri Marketing Services Limited, from their owners in exchange for the issuance of 508,482 of our equity shares. Agri was a direct selling agent of personal financial products including mutual funds, fixed deposits, corporate bonds and post-office instruments. At the time of our acquisition, Agri operated 32 branches in South and West India serving more than 30,000 customers with a staff of, approximately 180 employees. After the acquisition, we changed the company name to India Infoline.com Distribution Company Limited. KEY MILESTONE OF COMPANY Incorporated on Oct 18, 1995 as Probity Research and Services.

Lunched internet portal www.indiainfoline.com in may 1999.

Commenced distribution of personal financial product like Mutual Fund and RBI Bonds in April 2000.

Lunched online trading in shares and securities branded as www.5paisa.com in July 2000.

Started life insurance agency business in December 2000 as corporate agent of ICICI prudential life insurance.

 Become a depository participant of NSDL, in Sept 2001. Lunched stocks messaging services in May 2003. Acquired commodities broking license in March 2004. Lunched portfolio management services in August 2004. Listed on NSE and BSE on May 17, 2005. Acquired NBFC license in May 2005. Acquired 75% stake holding in money tree consultancy services, which is a distribution of mortgagees and other loan products, in Oct 2005. Acquired 100% equity of March Mont capital adviser Pvt. Ltd. In Dec 2005, through which the company has venture into Merchant Banking. DSP Merrill Lynch Capital subscribe to convertible bonds aggregating Rs.80 crores in Dec2005. Become a depositary participant of CDSL. In June 2007. Enter into an alliance with Bank of Baroda for E-trading in Feb 2007. IRDA license for insurance broking in April 2007. CLSA institutional equities joined us 2007.

Formed Singapore subsidiary IIFL(Asia) Pvt. Ltd. In 2007. Mr. Arun Kumar Purvar joined as independent director in March 2008.

MANAGEMENT TEAM Mr. Nirmal Jain ( Chairman & MD)

 Mr. R. Venkataraman ( Executive Director)

Mr. Sat Pal Khattar (Non Executive Director)

Mr. Nilesh Vikamsey (Independent Director)

Mr. Nirmal Jain Chairman & Managing Director India Infoline Ltd.

Nirmal Jain, MBA (IIM, Ahmadabad) and a Chartered and Cost Accountant, founded Indias leading financial services company India Infoline Ltd. in 1995, providing globally acclaimed financial services in equities and commodities broking, life insurance and mutual funds distribution, among others. Mr. Jain began his career in 1989 with Hindustan Levers commodity export business, contributing tremendously to its growth. He was also associated with Inquire-Indian Equity Research, which he co-founded in 1994 to set new standards in equity research in India. Mr. R Venkataraman Executive Director India Infoline Ltd.

R Venkataraman, co-promoter and Executive Director of India Infoline Ltd., is a B. Tech (Electronics and Electrical Communications Engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined the

India Infoline board in July 1999. He previously held senior managerial positions in ICICI Limited, including ICICI Securities Limited, their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited. He was also Assistant Vice President with G E Capital Services India Limited in their private equity division, possessing a varied experience of more than 16 years in the financial services sector. The Board of Directors

Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India Infoline Ltd. comprises: Mr. Nilesh Vikamsey Independent Director India Infoline Ltd. Mr. Vikamsey, Board member since February 2005 - a practising Chartered Accountant and partner (Khimji Kunverji & Co., Chartered Accountants), a member firm of HLB International, headed the audit department till 1990 and thereafter also handles financial services, consultancy, investigations, mergers and acquisitions, valuations etc; an ICAI study group member for Proposed Accounting Standard 30 on Financial Instruments Recognition and Management, Finance Committee of The Chamber of Tax Consultants (CTC), Law Review, Reforms and Rationalization Committee and Infotainment and Media Committee of Indian Merchants Chamber (IMC) and Insurance Committee and Legal Affairs Committee of Bombay Chamber of Commerce and Industry (BCCI). Mr. Vikamsey is a director of Miloni Consultants Private Limited, HLB Technologies (Mumbai) Private Limited and Chairman of HLB India.

Mr. Sat Pal Khattar Non Executive Director India Infoline Ltd. Mr. Sat Pal Khattar, - Board member since April 2001 - Presidential Council of Minority Rights member, Chairman of the Board of Trustee of Singapore Business Federation, is also a life trustee of SINDA, a nonprofit body, helping the under-privileged Indians in Singapore. He joined the India Infoline board in April 2001. Mr. Khattar is a Director of public and private companies in Singapore, India and Hong Kong; Chairman of Guocoland Limited listed in Singapore and its parent Guoco Group Ltd listed in Hong Kong, a leading property company of Singapore, China and Malaysia. A Board member of India Infoline Ltd, Gateway Distriparks Ltd both listed and a number of other companies he is also the Chairman of the Khattar Holding Group of Companies with investments in Singapore, India, UK and across the world. Mr Kranti Sinha Independent Director India Infoline Ltd. Mr. Kranti Sinha Board member since January 2005 completed his masters from the Agra University and started his career as a Class I officer with Life Insurance Corporation of India. He served as the Director and Chief Executive of LIC Housing Finance Limited from August 1998 to December 2002 and concurrently as the Managing Director of LICHFL Care Homes (a wholly owned subsidiary of LIC Housing Finance Limited). He retired from the permanent cadre of the Executive Director of LIC; served as the Deputy President of the Governing Council of Insurance Institute of India and as a member of the Governing Council of National Insurance Academy, Pune apart from various other such bodies. Mr. Sinha is also on the Board of Directors of

Hindustan Motors Limited, Larsen & Toubro Limited, LICHFL Care Homes Limited, Gremach Infrastructure Equipments and Projects Limited and Cinemax (India) Limited. Mr. Arun K. Purvar Independent Director India Infoline Ltd. Mr. A.K. Purvar Board member since March 2008 completed his Masters degree in commerce from Allahabad University in 1966 and a diploma in Business Administration in 1967. Mr. Purwar joined the State Bank of India as a probationary officer in 1968, where he held several important and critical positions in retail, corporate and international banking, covering almost the entire range of commercial banking operations in his illustrious career. He also played a key role in cocoordinating the work for the Bank's entry into the field of insurance. After retiring from the Bank at end May 2006, Mr. Purwar is now working as Member of Board of Governors of IIM-Lucknow, joined IIM Indore as a visiting professor, joined as a Hon.-Professor in NMIMS and he is also a member of Advisory Board for Institute of Indian Economic Studies (IIES), Waseda University, Tokyo, Japan. He has now taken over as Chairman of India Venture Advisors Pvt. Ltd., as well as IL & FS Renewable Energy Limited. He is also working as Independent Director in leading companies in Telecom, Steel, Textiles, Auto parts, Engineering and Consultancy.

VISON OF INDIAINFOLINE Vision of India infoline to be the most respect financial services company in India CULTURE AND CORE VALUE

Owner Mindset is one of the key principles that drive life at Indiainfoline. Every member of tem India infoline behaves thinks and act as owner not an employee.

COMPANY BUSINESS MODEL Business description - Advisory and execution services for the entire gamut of India infoline of financial services. Core competencies- Advisory services powered by world class research. Execution backed by cutting edge technology and personalizes services. Services offering Equity broking Commodity broking Mutual Fund distribution Mortgages distribution Other debt product Portfolio management service Research and content services Life insurance agency Investment banking services

(Corporate structure of IIFL) CORPORATE STRUCTUREThe various subsides company under the umbrella of indiainfoline group are given below. Indiainfoline investment service Ltd.(NBFC for financing ) Indiainfoline commodities Ltd.(commodities broking)

 IIFL(ASIA) Pet Ltd. (new company for international operation) Indiainfoline Media and research.(equity research, portal and online media) Indiainfoline marketing services Ltd.(Insurance distribution) Indiainfoline insurance broker Ltd. Indiainfoline insurance service Ltd.(corporate agency) Indiainfoline distribution Co ltd. Indiainfoline housing financing Ltd.

Money line credit Ltd.

India Infoline Limited is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory Services and Portfolio Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. It is registered with NSDL as well as CDSL as a depository participant, providing a onestop solution for clients trading in the equities market. It has recently launched its Investment banking and Institutional Broking business.

A SEBI authorized Portfolio Manager; it offers Portfolio Management

Services to clients. These services are offered to clients as different schemes, which are based on differing investment strategies made to reflect the varied risk-return preferences of clients.

India Infoline Media and Research Services Limited.

The content services represent a strong support that drives the broking, commodities, mutual fund and portfolio management services businesses. Revenue generation is through the sale of content to financial and media houses, Indian as well as global. It undertakes equities research which is acknowledged by none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities where India Infoline is amongst the most read Indian brokers.

India Infoline Commodities Limited. India Infoline Commodities Pvt. Limited is engaged in the business of commodities broking. Our experience in securities broking empowered us with the requisite skills and technologies to allow us offer commodities broking as a contra-cyclical alternative to equities broking. We enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and recently acquired membership of DGCX. We have a multichannel delivery model, making it among the select few to offer online as well as offline trading facilities.

India Infoline Marketing & Services India Infoline Marketing and Services Limited is the holding company of India Infoline Insurance Services Limited and India Infoline Insurance Brokers Limited. (a) India Infoline Insurance Services Limited is a registered Corporate Agent with the Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Limited, which is India's largest private Life Insurance Company. India Infoline was the first corporate agent to get licensed by IRDA in early 2001. (b) India Infoline Insurance Brokers Limited is a newly formed subsidiary which will carry out the business of Insurance broking. We have applied to IRDA for the insurance broking license and the clearance for the same is awaited. Post the grant of license, we propose to also commence the general insurance distribution business. India Infoline Investment Services Limited Consolidated shareholdings of all the subsidiary companies engaged in loans and financing activities under one subsidiary. Recently, Orient Global, a Singapore-based investment institution invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services. This will help focused

expansion and capital raising in the said subsidiaries for various lending businesses like loans against securities, SME financing, distribution of retail loan products, consumer finance business and housing finance business. India Infoline Investment Services Private Limited consists of the following step-down subsidiaries. (a) India Infoline Distribution Company Limited (distribution of retail loan products) (b) Money line Credit Limited (consumer finance) (c) India Infoline Housing Finance Limited (housing finance) IIFL (Asia) Pvt. Limited IIFL (Asia) Pvt. Limited is wholly owned subsidiary which has been incorporated in Singapore to pursue financial sector activities in other Asian markets. Further to obtaining the necessary regulatory approvals, the company has been initially capitalized at 1 million Singapore dollars. Companys philosophy on Corporate Governance The India Infoline Group is committed to placing the Investor First, by continuously striving to increase the efficiency of the operations as well as the systems and processes for use of corporate resources in such a way so as to maximize the value to the stakeholders. The Group aims at achieving not only the highest possible standards of legal and regulatory compliances, but also of effective management. Committee : Audit Committee Terms of reference & Composition, Name of members and Chairman: The Audit committee comprises Mr. Nilesh Vikamsey, Chairman of the

Committee, Mr. Sat Pal Khattar, Mr. Sanjiv Ahuja and Mr. Kranti Sinha, three of whom are independent Directors. The Managing Director, the Executive Director along with the Statutory and Internal Auditors are invitees to the Meeting. The Terms of reference of this committee are as under: - To investigate into any matter that may be prescribed under the provisions of Section 292A of The Companies Act, 1956 - Recommendation and removal of External Auditor and fixation of the Audit Fees. - Reviewing with the management the financial statements before submission of the same to the Board. - Overseeing of Companys financial reporting process and disclosure of its financial information. - Reviewing the Adequacy of the Internal Audit Function. Compensation/ Remuneration Committee Terms of reference & Composition, Name of members and Chairman: The Compensation / Remuneration Committee comprise Mr. Sanjiv Ahuja, Chairman of the Committee, Mr. Nilesh Vikamsey and Mr. Kranti Sinha, all of whom are independent Directors. The Terms of reference of this committee are as under: - To fix suitable remuneration package of all the Executive Directors and Non Executive Directors, Senior Employees and officers i.e. Salary, perquisites, bonuses, stock options, pensions etc. Determination of the fixed component and performance linked incentives along with the performance criteria to all employees of the company Service Contracts, Notice Period, Severance Fees of Directors and employees. - Stock Option details: whether to be issued at discount as well as the period over which to be accrued and over which exercisable. - To conduct discussions with the HR department and form suitable remuneration policies. Share Transfer and Investor Grievance Committee Details of the Members, Compliance Officer, No of Complaints received and pending and pending transfers as on close of the financial year. The committee functions under the Chairmanship of Mr. Kranti Sinha, a Nonexecutive independent Director. The other Members of the committee are Mr. Sanjiv Ahuja, Independent Director and Mr. R Venkataraman, Executive Director. Ms Komal Parikh, Company Secretary is the

Compliance Officer of the Company.

CHAPTER-3 Review of literature

 Investment Different investment option Equity investment Different analysis

Role of market trends

Role of demat account

INVESTMENT
Investment is the employment of funds on assets with the aim of earning income or capital appreciation. Investment has two attributes namely time and risk. Present consumption is sacrificed to get a return in the future. The sacrifice that has to be borne is certain but the return in the future may be uncertain. The risk is undertaken with a view to reap some return from the investment.

To the economist, investment is the net addition made to the nations capital stock that consists of goods and services that are used in the production process. A net addition to the capital stock means an increase in the buildings, equipment or inventories. These capital stocks are used to produce other goods and services. Financial investment is the allocation of money to assets that are expected to yield some gain over a period of time. It is an exchange of financial claim such as stock and bonds for money. They are expected to yield returns and experience capital growth over the years. INVESTMENT OBJECTIVE The main investment objective are increasing the ray of return and reducing the risk. Other objectives like Safety, Liquidity and hedge against inflation can be considered as subsidiary objectives. These objectives are of two types Primary objectives Secondary objectives

PRIMARY OBJECTIVES: (i) RETURN:

Investors always expect a good rate of return from their investments. Rate of return could define as the total income the investors receives during the holding period stated as a percentage of the purchasing price at the beginning of the holding period.

Return = End period value Beginning period value + Dividend x 100 Beginning period value

(ii)

RISK:

Risk is holding securities are related with the probability of actual return becoming less than the expected return. The word risk is synonymous with the phase variability of return. Risk is important part in investment because high risk expected high profit and low risk show minimum profit but it is depending on time to time. So every investor likes to reduce the risk of his investment by proper combination of different securities. (iii) LIQUIDITY:

Marketability of the investment provides liquidity to the investment. The liquidity depends upon the marketing and trading facility. If a portion of the investment could be converted into cash without much loss of time, it would help the investor meet the emergencies. Stocks are liquid only if they command good market by proving adequate return through dividends and capital appreciation. HEDGE AGAINST INFLATION: Since there is inflation in almost all the economic, the rate of return should ensure a cover against inflation. The return rate should be higher than the rate of inflation; otherwise the investor will have loss in real terms. Growth stock would appreciate in their values overtime and provide a protection against inflation. The return thus earned should assure the safety of the principal amount, regular flow of income be a hedge against inflation.

(iv)

SAFETY:

The selected investment avenue should be under the legal and regulatory frame work. If it is not under the legal frame work, it is difficult to represent the grievances, if any. Approval of the law itself adds a flavor of safety. Even through approved by law, the principal differs from one mode of investment to another.
(v)

GROWTH OF CAPITALS:

Capital gains are entirely different from return in that they are only realized when the security is sold for a price that is higher than the price at which it was originally purchased. Selling at a lower price is referred to as a capital loss. Therefore, investors seeking capital gains are likely not those who need a fixed, ongoing source of investment returns from their portfolio, but rather those who seek the possibility of longer-term growth. Growth of capital is most closely associated with the purchase of common stock, particularly growth securities, which offer low yields but considerable opportunity for increase in value. Capital gains offer potential tax advantages by virtue of their lower tax rate in most jurisdictions. Funds that are garnered through common stock offerings, for example, are often geared toward the growth plans of small companies, a process that is extremely important for the growth of the overall economy. In order to encourage investments in these areas, governments choose to tax capital gains at a lower rate than income. Such systems serve to encourage entrepreneurship and the founding of new businesses that help the economy grow.

SECONDARY OBJECTIVES:

(i)TAX MINIMISATION An investor may pursue certain investments in order to adopt tax minimization as part of his or her investment strategy. For example a highly-paid executive may want to seek investments with favorable tax treatment in order to reduce his or her overall income tax burden by Making contributions to an individual retirement account (IRA) or other tax-sheltered retirement plan. (ii)HEDGE AGAINST INFLATION: Since there is inflation in almost all the economic, the rate of return should ensure a cover against inflation. The return rate should be higher than the rate of inflation; otherwise the investor will have loss in real terms. Growth stock would appreciate in their values overtime and provide a protection against inflation. The return thus earned should assure the safety of the principal amount, regular flow of income be a hedge against inflation.

DIFFERENT INVESTMENT OPTION

Investment Option
Bank FDs Risks/Liquidi ty Very low risk and low liquidity. Returns Taxation Suitability

Low returns, but assured. Depending on the tenure and bank, could be around 6-9%

Since returns are fully taxable, the post-tax returns will be still lower.

Good for very low risk investors and those in the nil or low tax brackets. As interest rate scenario seems to be peaking, one could consider investing in 3-5 year FDs.

MUTUAL FUND

Low risk and low Liquidity.

No assured returns but depending on tenure and the MF, could be around 69%. (Ability to deliver the indicative returns). Market linked. Today could be around 5-7%.

MFs attract much lower taxation and hence give better post-tax returns vis--vis Bank FDs. Lower taxation of MFs makes Floating Rate funds attractive.

Good for low risk investors, but in high tax brackets. Good for investing the debt portion of ones portfolio. Good for investing short-term money where one needs higher liquidity.

Floating Rate Funds

Low risk and high liquidity.

Debt Funds

Low to Medium risk. High Liquidity.

Returns are marketlinked. Today could be around 57%, but susceptible to interest rate risk. MIS scheme give 8% interest.Time deposit 6.25-7.5%. 8% assured returns.

Lower taxation of MFs makes such funds attractive.

Can be avoided in a rising interest rate scenario but is good in a falling interest rate scenario. Good for very low risk investors and those in the nil or low tax brackets. Good tax saving

Post Office Schemes

Low risk and low Liquidity.

Since returns are taxable, the posttax returns will be still lower. Interest is tax-free.

PPF

Low risk with

very low liquidity (15-year lock-in period. Partial withdrawal allowed after 6 years). NSC Low risk with low liquidity (6 years lock-in). High risk and high liquidity. 8% assured returns.

investment option. Also Sec 80C benefit. Hence a good scheme. Good for investing the debt portion of ones portfolio.

Interest fully taxable. But eligible for Sec 80C benefit. Attractive tax treatment. No Long Term Capital Gain Tax and 10% Short Term Capital Gains Tax.

Not very attractive vis--vis other options like 5-year Bank FDs. Needs high risk appetite. Ideal for those investors who have a good corpus, good knowledge and time to track the markets regularly. Care should be taken to invest in good profit making companies. Penny stocks should be avoided. Ideal for small and common investors, but with high risk appetite.welldiversified portfolio with say 50-60% money in 5-7 diversified funds, 2535% money in 3-4 mid/small-cap funds and 10-15% in 3-4 sector funds. Good tax saving investment option. Amounts beyond Rs.1

Equity

Market linked returns. Good potential.

Equity Funds

High risk and high liquidity in openended funds.

Market linked returns. Good potential.

Attractive tax treatment. No Long Term Capital Gain Tax and 10% Short Term Capital Gains Tax.

ELSS Funds

High risk with low liquidity (3 years lock-in period).

Market linked returns. Good potential.

Attractive tax treatment. No Long Term

Capital Gain Tax and 10% Short Term Capital Gains Tax. Also Sec 80C benefit.

lakh limit could be invested in openended funds. SIP in ELSS would reduce the volatility risk. Though convenient as both debt and equity investment is covered under one fund, it may be better to invest separately in equity and debt funds for better control. Not an attractive option due to high charges, low flexibility and low diversification. There are other better similar investment products like MFs Not an attractive option due to low returns. There are other better similar investment products. High initial investment required which could make ones portfolio lopsided; high transactions costs.

Balanced Funds

Medium to High risk. High Liquidity.

Medium to high returns. Market linked.

Attractive tax treatment. No Long Term Capital Gain Tax and 10% Short Term Capital Gains Tax. Tax free returns. Also Sec 80 C benefit available.

ULIPs

Low to High Risk depending on the investment option i.e. Pure Debt or Mixed or Pure Equity. (3-5 years lock-in period). Low risk and very low liquidity.

Low to high depending on the investment option. Market linked returns.

Endowment/ Money back Plan

Low returns. Generally around 6-6.5%.

Tax free returns. Also Sec 80 C benefit available.

Real Estate

Variable risk and variable liquidity depending on the type and location of property.

Market linked returns. Good potential.

No tax advantages, except attractive tax benefits on the home loans.

EQUITY INVESTMENT

Equity investment means the engagement of savings in the stock of a company for the purpose of earning income such as dividend, capital appreciation, etc. SHARES: The capital of the company divided into different units with definite and equal value called shares. Holders of these shares called shareholders. There are two types of shares which a company may issue. (i) Preference Shares PREFERENCE SHARES: Shares which enjoy the preferential rights as to dividend and repayment of capital in the event of winding up of the company over the equity shares are called preference shares. The holder of preference shares will get a fixed rate of dividend. Preference share are classified into different types, these are:
1.

(ii) Equity Shares

Cumulative preference shares: Cumulative preference shares will accumulate any dividend that is not paid when due. Any unpaid dividend is added to the amount payable the following year and no dividends can be paid on ordinary shares until the entire backlog of unpaid dividends on cumulative preference is cleared. Non-cumulative preference shares: Non-Cumulative Preferred is preferred stock that no pay to the holder of any unpaid or omitted dividends. If the corporation chooses no pay dividends in a given year, the investor is to claim any of those forgone dividends in the future is lost. Redeemable preference share: Type of stock (shares) that is liable to be bought back by the issuing firm on a specified date or after a specified period of notice. Corporate legislation in

2.

3.

4.

some jurisdictions prohibits the redemption if it jeopardizes the financial health of the issuer. Participating or non-participating preference shares: Participating preference share is capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. This form of financing is used by private equity investors and venture capital firms. Holders of participating preferred stock get both their money back (with interest) and the money that is distributable with respect to the percentage of common shares into which their preferred stock can convert.

EQUITY SHARES: Equity shareholders will get dividend and repayment of capital after meeting the claims of preference share holders. There will be no fixed rate of dividend to be paid to the equity shareholders and this rate may vary from year to year. This rate of dividend is determined by the directors and in case of large profits; it may even be more than the rate attached to preference share. Such shareholders may go without any dividend if no profit is made. Equity shares are most risk bearing securities because holders of these shares will get repayment of capital after meeting the claims of preference share holders, debenture holders and other creditors. The value of these shares in the market fluctuates upward or downward with the fortunes of the company. Equity share holders enjoy voting right in case of any decisions in the company.

SHARE MARKET:

Share market is a place where shares are issued or purchased or sold. These shares may be new issue or existing shares. There are two types of share markets: (i) Primary Market (ii) Secondary Market

Primary Market: This is the market where fresh issues of shares are made. Secondary Market: In this market existing shares are traded. BSE and NSE are two major secondary markets in India. Apart these two exchanges there are twenty one exchanges in India. SHARE MARKET PARTICIPANT: There are two basic market participants these are: (i) (ii) Investor vs. Speculator Institutional vs. Retail Investor

Investor: An investor may be people or company who make investment in securities with an objective to get return in long term. Speculator: They involve in buying, holding, selling and short selling of securities. All above these happen due to fluctuation in the price of securities. Institutional Investor: An institutional investor is investors such as bank, insurance company, retirement fund, hedge fund or mutual fund that is financially sophisticated and makes large investment, often held in very large portfolio management.

Retail Investor: A retail investor is an individual investor possessing shares of a given security. Retail investors can be further divided into two categories of share ownership:

A Beneficial Shareholder is a retail investor who holds shares of their securities in the account of a bank or broker, also known as in Street Name. The broker is in possession of the securities on behalf of the underlying shareholder. 2. A Registered Shareholder is a retail investor who holds shares of their securities directly through the issuer or its transfer agent. DIFFERENT INVESTMENT OPTIONS IN SHARE MARKET: Equity through secondary Market Equity through IPOs/Primary Market Equity through Derivatives Equity through secondary market: It is the investment on already existing equity shares of companies. Equity through IPOs/Primary market: When a company raises capital by issuing shares to general investors, the process is called a public issue of share or a primary market issue. If the company approaching the capital market with an issue of shares for the first time, the issue is called an Initial public offering.

1.

Equity through derivatives: Derivatives are a financial instrument which value is derived from underlying assets (commodities, shares, forex and other assets). Derivative is three types forward contract, future contract, option. Forward contracts: These are used in the foreign exchanges markets to reduce currency risk and in the commodities market to reduce the price risk. Future contract: Derivative contract wherein you agree to buy or sell a specified quantity of the underlying assets on a specified particular date in the future, at he price agreed upon at the time of entering into contract. In India equities future market, this price is the spot price (the price of the underlying assets in the cash market) prevailing on the date of the expiry of contract. Futures are legally binding and both parties are bound to uphold the agreement. Option: This is a contract that gives you the right (but not the obligation or the liability) to buy or sell a specified quantity of the underlying assets at an agreed price (strike/agreed price) on or before the before the specified future date (expiration date). To acquire this right, you pay a price (option premium) to the seller of the option option writer. The potential loss for the option seller is unlimited whiles his upside or profit is limited to the premium that he receives. On the other hand the maximum loss that the buyer could face is the option premium that he pays, put his potential profit is unlimited.

DIFFERENT ANALYSIS FOR EQUITY INVESTMENT: There are different analysis are made by the investor for investment in equity. These are (i) (ii) Fundamental analysis Technical analysis

Fundamental analysis: Fundamental analysis is really a logical and systematic approach to estimating the future share price. It is based on the premises that share price are determined by a number of fundamental factors relating to the economy, industry, and company fundamentals. Fundamental analysis is, in other words a detailed analysis of the fundamental factors affecting the performance of the company as well its share price. Generally each share is assumed to be having an economic worth based on its presents and future earning capacity, this is called intrinsic value or fundamental value. The purpose of fundamental analysis is to compare intrinsic value of share with the prevailing market price of the share. The market price of the share is due to the supply and demand of the share in the market. This helps to the investor to make an investment decision. The market price of the share is always trying to match with its intrinsic price so that if the market price of the share is higher than its intrinsic price then the investor should sell the share because the share price will go down to match with its intrinsic price .if the market price of the share is lower than the intrinsic price than the investor should bought the share because the share price will go up to match up with its intrinsic price.

Thus fundamental analysis provides an analytical framework for rational investment decision making. This analytical framework is known as EIC framework.

ECONOMY I NDUSTRY

COMPAN Y

(EIC FRAMEWORK)
The logic behind this three tire analysis is that the share price depends upon not only its own effort but also on general industry and economic factor. A company belongs to an industry and an industry belongs to an economy. So the effective industry and economy affect the share price. Classification of factors: Economic wide factor: such as growth rate of the economy, inflation rate, foreign exchange rate which affect all companies
(i)

Industry wide factors: such as demand supply gap in the industry, the emergence of substitute product, change in government
(ii)

policy etc these factor affecting those companies which belongs to an specific industry. Company specific factor: such as the age of its plant, the quality of management, brand image of its products, its labour management relationship, etc. These are the actors which affect the performance of the company.
(iii)

Technical analysis: A technical analyst in technical analysis believes that the share prices are determined by the demand and supply forces operating in the market. These forces again influenced by a number of fundamental factors as well as the emotional factors of the investors. The combined impact of all these factors is reflected in the share price movement. The technical analysis includes the past share prices to forecast the future share price. So that technical analysis is the forecasting technique to determine the future price of the stock by taking historical price of the stock. Basic principle of technical analysis: (i) The market price of the share price is related to supply and demand forces operating in the market. (ii) Security prices movement are continuous in a particular direction for some length of time. (iii) Trends in stock price shows when there is a shift in demand and supply factors. The shifts in demand and supply forces can be detected through charts prepared specially to show market action.
(iv)

These charts can show the resistance and support level of the stock price.
(v)

ROLE OF MARKET TRENDS IN EQUITY INVESTMENT: Trends refer to the direction of share price movement for a long period of time such as month and quarter. Trend is divided into two types. These are bullish trend and bearish trend.
(i)

Bullish trend: During a bull market (up word moving market) in the first phase the price would advanced with the revival of confidence in the future business. The future prospect of business should be promising .this will promote the investor to purchase share of companies .during second phase the price would advanced due to the corporate earnings. In the third phase price advances due to the inflation means the demand of share increased. In the bullish trend the share price moves in a up word direction for a long period of time.

Inflation Corporate earning Revival of confidence

Bullish trend So during the bullish trend the investors are investing their money to gain profit from the up word movement of share price.
(ii)

Bearish trend: bearish trend is the opposite of the bullish trend here prices began to fall due to the lost of hope on company and investor sell their shares in first phase and in the second phase the fall in distributing dividend and causes further fall in share price

So during the bearish trend the investors are selling their security to avoid the loss of capitals.

Y
Phase 1 Phase 2 Phase 3

Bearish trend

X X

Support and resistance level of share price: Support and resistance level are those price levels at which the down trend and up trend in share price movements is reversed. Support occurs when price is falling but bounce back or reverse direction every time it reaches a particular level. When all these low points are connected through a straight line it forms the support level. Support level is the price level at which sufficient buying pressure is exerted t defend the fall in price Resistance occurs when the share price moves up word. The price fall back every time it reaches a particular price level. A straight line joining this price level forms the resistance level. Resistance level is the price level at which sufficient selling pressure is exerted to restrict the share price to move up word.
Y

RESISTANCE

SUPPORT

Support and resistance level ROLE OF DEMAT ACCOUNTIN SHARE MARKET Demat Services: In India, a demat account, the abbreviation for dematerialized account, is a type of banking account which dematerializes paperbased physical stock shares. The dematerialized account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should posses a Permanent Account Number (PAN). Demat account allows you to buy, sell and transact shares without the endless paperwork and delays. It is also safe, secure and convenient. What is demat account? Demat refers to a dematerialized account. Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Lets say your portfolio has 100 of Satyam, 200 of IBM and 120 of TCS shares. All these will show in your demat account. So you dont

have to possess any physical certificates showing that you own these shares. They are all held electronically in your account. As you buy and sell the shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions. Is a demat account a must? Nowadays, practically all trades have to be settled in dematerialized form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of up to 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing. Now a days demat account provides you the facility of 3 linked accounts which are opened simultaneously.

SAVING ACCOUNT

The linked account offers 24x7 investing, security, ACCOUNT ACCOUN no paper work, easy transfer of funds, instant order confirmations, speed and transparency. NOW to the crux: The cost of opening and holding a demat account. There are four major charges usually levied on a demat account: Account opening fee, annual maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP. Account-opening fee

TRADING

LINKED A/C

DEMAT

Depending on the DP, there may or may not be an opening account fee. Private Banks, such as ICICI Bank, HDFC Bank and UTI Bank, do not have one. However, players such as Karvy Consultants and the State Bank of India do so. But most players levy this when you re-open a demat account, though the Stock Holding Corporation offers a lifetime account opening fee, which allows you to hold on to your demat account over a long period. Maintenance fee This is also known as folio maintenance charges, and is generally levied in advance. Custodian fee This fee is charged monthly and depends on the number of securities (international securities identification numbers ISIN) held in the account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custody fee for ISIN on which the companies have paid one-time custody charges to the depository. Transaction fee The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, HDFC Bank and ICICI Bank pegs the fee to the transaction value, subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). Some DPs charge only for debiting the securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected. In addition, service tax is also charged by the DPs. Benefits of holding a demat account: i. ii. iii. A safe and convenient way to hold securities; Immediate transfer of securities; No stamp duty on transfer of securities;

iv. Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.; v. Reduction in paperwork involved in transfer of securities; the guidelines, the amount of interest so taken to income should be reversed or should be provided for in full. With a view to ensuring uniformity in accounting the accrued interest in respect of both performing and non-performing assets, the following guidelines may be adopted notwithstanding the existing provisions in the respective state co-operative Act: i. Interest accrued in respect of non-performing advances should not be debited to borrowed accounts but shown separately under interest receivable account on property and asset side of the balance sheets and corresponding amount showed under overdue interest reserve account on the capital and liabilities side of the balance sheet.
ii.

In the respect of borrowed accounts, which are treated as performing assets, accrued interest can be alternatively debited to the borrowable account and credited to interest account and taken to income account. In such case where the accrued interest has been to such borrowable account but not actually received before the end of the accounting year or the account has to be treated as NPA earlier as per guidelines, equivalent amount corresponding to such un realized interest should be reversed by debit to be profit and loss account and credited to Overdue Interest reserve account. In the above context, it may be clarified that overdue interest reserve is not created out of the real or earned income received by the bank and as such, the amounts held in the overdue interest reserve account cannot be regarded as reserve or a part of the owned funds of the banks. It will also be observed that the balance sheet format prescribed under the Third Schedule to the Banking Regulation Act , 1949(As applicable to co-operative societies) specifically requires the

banks to show overdue interest reserve as a distinct item on the capital and liabilities side vide item 8 thereof.

CHAPTER -4
Data analysis and interpretation

Stock prices movements of Jindal Steel and Power Limited. From 21st June to 21st July. Date 21/06/2010 22/06/2010 23/06/2010 24/06/2010 25/06/2010 28/06/2010 29/06/2010 30/06/2010 01/07/2010 02/07/2010 05/07/2010 06/07/2010 07/07/2010 08/07/2010 09/07/2010 12/07/2010 13/07/2010 14/07/2010 15/07/2010 16/07/2010 19/07/2010 20/07/2010 21/07/2010 Open 674 675 668 664 650 641 637 622 612 614 615 614 634 631 626 634 627 636 630 631 621 629 620 High 689 677 671 668 657 647 636 626 621 621 618 632 634 632 635 639 635 641 633 632 629 629 638 Low 673 667 657 650 639 631 615 610 610 611 611 614 622 619 625 623 622 627 625 623 614 617 621 Closing 685 671 661 657 641 637 621 624 613 615 616 630 624 621 631 625 633 629 629 624 624 619 633

(Share price movement of JSPL)

This is the graphical presentation of above data. This graph is known as Chinese candle stick chart. In the above graph the black candles shows that the opening price is higher than the closing price, e.g. on 24 th June 2010 the opening price was 664.00 and the closing price was 657.00.the white candle stick shows that the opening price is lower than the closing price. E.g. on 21st June the opening price was 674.00 and the closing price was 685.00. The hyphen (-) symbol shows that the opening price is equal or nearly equal to closing price. E.g. on 1st July the opening price was 612.00 and the closing price was 613.00. From the above chart I know that the price of the JSPL is in a down word direction so that the share is now risky to make any investment in it because it may further go down.

Stock price movement of TATA STEEL from 21st June to 21st July Date 21/06/2010 22/06/2010 23/06/2010 24/06/2010 25/06/2010 28/06/2010 29/06/2010 30/06/2010 01/07/2010 02/07/2010 05/07/2010 06/07/2010 07/07/2010 08/07/2010 09/07/2010 12/07/2010 13/07/2010 14/07/2010 15/07/2010 16/07/2010 19/07/2010 20/07/2010 21/07/2010 Open 480 508 491 498 498 490 499 470 483 475 476 473 484 485 489 495 496 515 507 514 503 515 518 High 506 508 501 506 501 501 500 487 486 481 476 481 484 488 497 506 512 519 517 518 514 519 532 Low 480 492 489 495 488 490 480 470 472 471 470 468 473 478 486 491 495 504 506 507 502 505 511 Closing 504 494 497 498 490 500 481 485 475 474 471 480 474 484 495 497 508 506 512 509 511 509 530

(Share price movement of TATA STEEL)

Form the table mention above the data are plotted in the above Chinese candle stick chart. The chart shows that the share price of Tata steel is moving in an up word direction. So from my point of view the share is now profitable to make investment in it. The above both security I examined during my project it is difficult to determine the support and resistance level because there is no reversal trend is shown in both securities. The support and resistance level is difficult to determine in a long period of time and these support and resistance level is easy to determine in a single day share price movement.

Analysis of the data collected (primary):

According to my target population and sampling technique I filled up my questinnaire from those people whom I guess that he/she may know/ invest in share market and give some benefit to my project. Sample size: 100 My collection of data is on the basis of the following questionnaires: 1. Name of the investor. 2. Age of the investor. 3. Gender 4. What is the qualification of the investor? 5. What is his/her occupation? 6. How much his/her annual income? 7. What are their investment avenues?

Bank fixed deposit

Mutual fund Insurance Government security Share

 Real estate 8. How much knowledge they have about share market? 9. What is the purpose of investment? Short term Long term Daily transaction 10. Mode of investment in share market? 11. What is the source of information?
12.

Do they aware about IIFL?

13. Do they prefer to invest in steel sector?

14.

Do they satisfied by the service provided by IIFL? The characteristics and the specification of the data collected based on their age as follows:

To gather the information I used a questionnaire comprised of different questions relative to the objective of the project. I also did face to face interview which helped me to know their mentality towards their investment plans and decisions. With regard to my project objective this data are helpful to know about various segment of society and their investment patterns.

Still today our culture is man dominated culture and most of the housewife doesnt know where her husband invests. So in our field work I collected data from 85% of male & 15% female. Now most female are aware about share market but they dont like to enter in share market.

Our Research indicates that majority of the individual i.e. 29.71% are interested in life insurance and then comes bank & corporate fixed deposit with 23.46% and mutual fund follow them with 17.40%. Induvidual are interested in life insurance because it gives tax benefit and security to future. Then comes banks fixed deposit as it gives risk free return. At last but not the least govt. savings, Shares and real assets follow the above investment pattern with 19.43%,5.40% and 4.60% respectively. Very less percentages of people are interested for shares and real assets as because high risk and highly volatile market condition and less knowledge about Share market.

Regarding investment in mutual funds, majority of investors prefer it, i.e. 43%. This is due to diversification of risk and more profit margin than other safe and risk free investments. Here we can see that 36% are not interested in it , as because it is indirectly releated to stock exchange and hence they donot want to take any risk. And rest 21% are ignorant about mutual funds because lack of awareness.

When it comes about investment in life insurance, majority of investors are investing in life insurance, i.e.,44%. These majority portions are investing in life insurance as because they get tax deduction and life insurance is consisdered as risk free investment and

guranteed money back return, but 37% investor dont invest in life insurance and 19% dont have any idea about it.

24% investors are intrested in investing in real assets , 68% are not intrested investing in real assets due to lack of knowledge & rest 8% are ignorant about investing in real assets.

When investment pattern studied w.r.t. share, It is found that only 45% are interested in investing in shares & 38% are not at all intrested a & remaining 17% are not aware of it. This is due to lack of

awareness & involvement of high risk, still then people are now showing intrest towards investment in share due to high profit.

Mostely people invest on part of saving in Mutual fund (Equity fund) i.e.37% than equity ( secondary market ) is 32% and 22% in equity ( primary market). And lastely few people are interested in derivative 9%.Due to people always thinking about getting more return without taking risk.

Through my survey I ultimately found upon understanding of people at Bhubaneswar on Share market 47% people have little understanding, 28 % people have good unserstanding and only 15% of people of Bhubaneswar are hignly experienced about Share Market and rest 10 % people have no idea at all.

Through my study I have found that most of people prefer for online investment i.e. 82% and because online trading/ investment is very user friendly, convienence & speed,04% people go for offline investment,14% of people invest in both online and offline mode.

Share market is fully link with risk and time so most of people always consider precautionary (long term) purpose i.e. 53%, 29% of people are interested to invest their money for speculative ( short term) purpose and rest of 18% people prefer for daily transation purpose due to the up and down of share price during the bussiness hours.

From the above chart it shows that IIFL didnit creat its awareness among the investor.

During my project I have seen that most of the people i.e. 47% in my concern area are satisfied by the service provided by the india infoline limited.34 % people say no and 19% of people remain neutral.

During my interaction with investor I have seen that most of the them .i.e 67% are prefer to invest in steel sector because growing demand of steel, & 33% people donot prefer to invest in it.

Between Age 21 -30 investor prefer both Fixed deposit and Insurance i.e.31% and 21% respectively. 17% and16% investor go for Shares and Govt. Saving Scheme, only 9% and 6% people like to invest own part of saving in mutual fund and Real Assets respectively. The age between 31- 40 group of people are risk taking in nature, tharefore they mostly prefer to invest their savings in share market i.e 26% and 14% in mutal funds, 28% like to expend money for Insurance. And 17% likely to invest in Bank FD , 8% in Govt. Saving Scheme and just 7% investment in real aseets. Between age 41-50, 29% are inclined towards life insurance,17% are both Bank/corporateFD and Govt. Savings Scheme or 16% are both

Mutual fund and Share and only 5% people are interested in Real Assets. Under Age group 51-60, 24% are interested towards Bank/Corporate FD,23% are inclined towards Govt. Saving Scheme,21% are go for Mutual Fund, 18% or 10% are interested towards Insurance and Shares and only 4% people are interested towards Real Assets. Mostely Above 60 Age group people are always think about govt. Saving scheme and Bank/Corporate FD i.e. 36% or 35% respectively because this age people have no more pasence for taking risk. Other 10% are interested towards Mutual Fund,9% are like to invest in Insurance and 8% are interested towards Share and few are like to invesr in Real Assets i.e 2% more clarity.

Investors under matric qualification mostly invest in fixed deposit i.e.41% and 33% investor prefer on insurance , 12% invest in govt savings scheme. But people fear to invest in share, mutual fund and in real assets due to lack of awareness. Investor in matric qualification most of the people are prefer to invest their surplus earning in life insurance i.e. 35%, 33% of people consider

about the bank fixed deposit, 14% of people are taken into consideration govt savings is one of the investment scheme, 9% people are focouses towards mutal funds and rest 2% and 7% people are prefer real assets and share respectively. It is found that in intermediate group of qualification, the investment in in share market increases from 7% to 9%,and also in mutual fund it increasesby 3% in comparision to matriculation,and fixed deposit reduced by 5%. In Graduate mutual fund investments are incseases from 12% to 22%, Insurance sector investment increases by 3%, Govt. saving investment decreases by 7%, In shares the investment are incseases from 9% to 17%, Real assets decreases by 3% and bank fixed deposite decreases from 28% to 11%. The above all are comparision between intermediate and graduate. In proffessional degree the investment in bank deposite increases from 11 % to 12%, Mutual fund investments increases by 6%, insurance investment decreases by 15%, government savings decreases by 4%, real assets increases from 5% to 9% and shares investment by 8%. The above all are comparision between graduate and proffessional degree holders.

Individuals with an income under 100000 mostly prefer bank fixed deposite ie 53%, life insurance 37%, govt. saving Scheme 6%, Mutual Fund 3% and Rest 1% are invested in Shares. Individual with an income between 1- 2.5 lakh most of people are perfer invest their surplus earning in Bank Fixed Deposit i.e. 37%, Insurance 29%, govt. Saving Scheme 9%, Mutual fund 17%, Real Assets 1% and Rest 8% People are investing in share. Individual with an income between 2.5 5 lakh most of people are interested to invest their surplus money in Bank Fixed Depositi.e. 30%,19% people are interested in Mutual Fund, 28% people are interested in Insurance,7% people are go through Govt. Saving Scheme, 3% people are prefer Real Assets and rest 13% people are considered about Shares. Individual with an income Above 5 lakh most of people are go through Insurance i.e. 27%, 22% prefer people are prefer to invest in real Assets and rest 5% People are invest their surplus money in Govt. Saving Scheme.

It is found that student are mostly Interested to invest their money in Insurance i.e. 37%, 6% of student prefer to invest in Bank FD, 5% of Student are interested in Mutual fund and 3% of Student are prefer to invest in Share. Individuals with business Man as their occupation are investing 36% in Insurance, 19% in Shares, 12% in Govt.Saving Scheme, 13% in Mutual Fund, 11% in bank FD and rest 9% are investing their surplus earning in Real Assets. Individuals with Service Person as their occupation are investing 18% in Bank FD, 11% in mutual fund, 38% in insurance, 20% in Govt. Saving Scheme, 6% in real Assets and rest 7% are investing in Share. In professional 38% of people are interested in Insurance, 15% are interested in Govt. Saving Scheme, 19% are interested in Bank FD, 11% are interested in mutual Fund, 7% people are interested in Real Assets and rest 10% are interested in Shares.

CHAPTER-5

 Findings Suggestion Conclusion

FINDINGS
Above the above analysis and interpetation I found the following points According to age 21-30,31-40 age people know about the investement. According to gender 85% of male and 15% female know about the investment in sharemarket.

 According to qualification mainly graduates people know much more about invesment in share market. According to income group it received fastest growing equity booking house large firms on Indian by Dun & Brand street.

Generally an up ward trend equity should be preferable to invest in it.

Support and resistance level are important to determine the timing of purchase of share in a single trading day. Demand and supply force of share is detemined the market price of the share. 45% are on intersted in investing in share & 38% are not & 17% are hot aware of it.

People invest on equity in secondary market is 32% and 22% in primary market.

45% people have little knowledge about share market. 30% have good, 15% people of BBSR are well known & 10% have no idea.

Most of the investors prefer to invest in steel sector.

A huge part of the market have to be satisfied by the service proveide by the IIFL.

SUGGESTION

 Generally demat account is a product where aggressive marketing through

televisions, news paper, hoardings etc are not of much help. The marketing of such product is generally affected and influenced by its customers itself. In fact the word of mouth publicity plays wonders for it. So it is suggested to keep the existing customers utmost satisfied, which will help the firm further to increase its customer base through their reference to their friends and relatives.

Depending on the clients profile and level of knowledge proper service structure should be built. Proper segmentation can help any service provider to increase its customer base. Further it can help a firm to cater the needs of individual in a better manner. It has been noticed through the survey conducted that easy documentation and paper works is being highly favored by the investors of Bhubaneswar. So my recommendation in this regard would be bringing a change in the system or service structure which would help the investors to lead a hassle free trading sessions with nominal paper works. Another benefit of providing such services is that, it will bring transparency in the system, helping the company to win over investors trust. Review investors portfolio on a fixed interval basis, helping an investor to develop a personalized Investment Policy Statement (IPS) by measuring their risk tolerance can help any service provider to win over the confidence of any investor. Intact this would make them feel that their service is customized according to their needs. Conducting interactive sessions with market experts, training programs for the beginners is worth in providing greater satisfaction to any investor. Measurement of clients satisfaction level on a quarterly basis may help the service provider to review its service structure according to the prevailing market trends and investors need.

General Do's and Donts for Investors

1. Dont deal with unregistered intermediaries, as this would expose you to counter party risk. 2. Give clear and unambiguous instructions to Broker / Subbroker. 3. Keep a record of all instructions issued to the Broker / Subbroker. 4. Confirm with Broker / Subbroker whether delivery is in physical or demat form before selling shares. 5. Dont fall prey to promises of unrealistic high returns. 6. Dont indulge in speculative trading, go by fundamentals. 7. Trade within predetermined limits. 8. Use the Investors Grievance Redressed system of the Exchanges to redress your grievances if any. 9. Understand the working of the Investor Service Cell for complaint against listed companies / Brokers. 10. You can trade on your own through Internet based trading by registering with a Broker.

CONCLUSION

On equity investment: The price of the equity is determined through different analysis. Role of market trend is important to make an investment decision, such as timing of investment and selling of securities. The present scenario of the IIFL business highlights: Involvement and participation of highly educated people in capital market. People in large numbers from business and service sector are pouring into the business. People from younger generation are coming to join the capital market. Customers have become much more learned and sophisticated to use the advantages of the modern information technology.

There is betterment of social and cultural life among the customers. The interests and the motivational level of the customers have risen up to significantly higher levels. Lower middle and middle class people have come forward to invest in the business.

Proper marketing required to create awareness among the people of the society to enlarge the business.

Finally, it has changed from a seasonal business to an all time business.

CHAPTER-6 Bibliography

BIBILOGRAPHY:
BOOKS:

(i)

Security analysis and portfolio management, S. Kevin, PHI publication. Bulls, Bears and The Mouse- an introduction to online stock trading(2000), Dr. Kamlesh N Agrawala, Deeksha Agrawalal, Macmillian Indian Limited

(ii)

(iii) Stock market rules (2006), Michal D Shimon, Tata Mc Grew Hill publishing company limited. Journals and article:
BSE journal, December 2005 Solink B.(1990), the distribution of daily stock return and settlement procedure: the Paris Bourse, Journal of finance XLV(5),1601-1609

Kyriacou, K&mase, B.(2000), Rolling settlement and market liquidity, Applied financial Economics

Magazines: (i)
Business today

Website: (i) (ii) www.google.com www.bseindia.com

(iii) www.nseindia.com (iv) www.moneycontrl.com (v) www.topstockresearch.com