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A
Project Study Report
On
INDIABULLS
Titled
“A COMPARATIVE STUDY OF INDIABULLS WITH
ITS COMPETITORS”
Submitted in partial fulfillment for the
Award of degree of
Master of Business Administration
SUBMITTED BY: - SUBMITTED TO:-
KHUSHBU DADHICH DR. SHEHNAZ
MBA IV SEM (PRINCIPAL)
2009-2011
Akashdeep Institute of Management &
Technology, Jaipur
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DECLARATION
I,Khushbu Dadhich Hereby declare that this project report is the
record of authentic work carried out by me during the period of
15 days and has not been submitted earlier to any University or
institute for the award of degree/diploma etc.
Name of the student: Khushbu Dadhich
Date :
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PROJECT GUIDE CERTIFICATE
This is to certify that project report entitled
“A COMPEITIVE STUDY OF INDIABULLS WITH ITS COMPETITORS”
Submitted towards the partial fulfillment of the requirement for the
Degree of
MASTER OF BUSINESS ADMINISTRATION
TO
AKASHDEEP INSTITUTE OF MANAGEMENT & TECHNOLOGY
Affiliated to
RAJASTHAN TECHNICAL UNIVERSITY OF KOTA
Is a record of perfect programme carried out by
ROLL NO. 09MAKXX613
Under my supervision and guidance.
To the best of my knowledge and belief the represented report
Has not been submitted earlier. The work done by him has
found Satisfactory
I wish his great success in his career.
Mr. Dakshit Patel
(Project Guide)
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Preface
―A good broker system must be able to cope with an extremely complex and dynamic
environment.‖
The microstructure of the stock market in which brokers work is highly dynamic and
volatile. Many stocks are available to be bought and sold, each exhibiting its own
patterns and characteristics that are highly unpredictable. With so many options and
considerations that need to be taken into account, it is an extremely arduous task for
a broker to investigate aspects of the stock market and consistently provide effective
advice to their clients.
Thus, brokers perform their day-to-day tasks with the aid of a broker system. Such a
system should provide tools for interacting with exchanges and performing analysis.
As a consequence, these broker systems are quite large and complicated by
themselves.
This research aims is to analysis Stock broker on the basis of their services,
products, growth, and their subsidiaries. Because Stockbrokers are one of the main
participants in stock exchanges worldwide, they often act as an agent for their
clients, making trades on their behalf. They also act as advisors, providing
suggestions to their clients on what stocks to buy and sell.
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Acknowledgement
I express my sincere thanks to my project guide, Mr. Dakshit Patel
for guiding me right form the inception till the successful completion of
the project. I sincerely acknowledge her them for extending their
valuable guidance, support for literature, critical reviews of project and
the report and above all the moral support he had provided to me with all
stages of this project.
I would also like to thank the supporting staff of sales and distribution
Department, for their help and cooperation throughout our project.
(Signature)
KHUSHBU DADHICH
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EXECUTIVE SUMMARY
The commencement of E-broking and Demat has transformed the capital
market in India. With the help of them today, buying and selling of shares has
become a much faster and even process than trading with the assistance of a
physical broker. It provides for the assimilation of bank, broker, stock exchange and
depository participants. This helps to get rid of the painstaking procedure of investing
in stock exchange. Today, if one wants to invest in stock market, he has to contact a
broker on phone or meet him personally to place order.
A broker generally gives such importance and additional service only to high net
worth customers. But the introduction of Internet trading, even a common or a small
investor gets an opportunity to avail the service at an affordable price which is much
lesser than what is charged by a physical broker over the phone. Online trading has
given customer a real time access to account information, stock quotes elaborated
market research and interactive trading. The prerequisites of Internet trading are a
computer, a modem and a telephone connection, registration with broker, a bank a/c
and depository account.
The basic objective of study is to understand the various concepts of Demat, e-
broking and analyzing the investment pattern of individual, there knowledge about
security market, finding potential customers for Indiabulls, increase the client base of
the company by targeting new clients for Indiabulls, suggesting strategies to
Indiabulls regarding marketing of demat and trading a/c. and study the factors
affecting consumer behavior while taking decision before investing in Equities and
Derivative market. The scope of the study is to analyze the awareness level of
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customes and investment pattern of various individuals and examining the peer
group companies proving Demat services - Industry analysis.
The method used in study would be a mix of exploratory and descriptive type that
would provide help to investors and corporate houses related to these industries. The
data collection includes primary as wel as secondary sources like company
brochures, journals, news paper articles, the internet, etc. Also, primary data would
be collected by way of meeting some key people belonging to the concerned
industries. A survey would be conducted so as to acquire the views of the investors
regarding their investment preferences and to extract the factors that the investors
consider in an investment before putting in their money. The various data collected
would be analyzed through way of bar charts, tabular data and pie charts.
The major limitation of the study is the time and resource constraints, it involves
investors chosen at random which may not be the true representative of the
population. Hence cannot be generalized, the data collected pertains to the sample
behavior which may not be consistent with time, lack of awareness among investors
about the products and services, existence of strong competitors, especially Indian
Private Banks in the industry, dominance of nationalized banks in India.
This study will help to know the decisions taken by small investors while investing in
equity primary markets, the importance of investment based on the advice from the
broker, personal analysis of the offer document, confidence pertaining to electronic
trading and using analysts’ recommendations in investment decisions and the extent
to which they consider online trading as reliable.
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CONTENTS
Cover Page 1
Certificate from the Company/Organization 2
Preface/Prelude 3
Acknowledgement 4
Executive Summary 5
Contents
1. Introduction to the Industry 9
2. Introduction to the Organization 38
3. Research Methodology 75
3.1 Title of the Study 77
3.2 Duration of the Project 77
3.3 Objective of Study 77
3.4 Type of Research 77
3.5 Sample Size and method of selecting sample 78
3.6 Scope of Study 79
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3.7 Limitation of Study 80
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4. Facts and Findings 81
5. Analysis and Interpretation 90
6. SWOT 104
7. Conclusion 112
8. Recommendation and Suggestions 114
9. Bibliography 119
10. Appendix 120
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INTRODUCTION
OF
INDIAN
RETAIL BROKERAGE INDUSTRY
1
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INTRODUCTION OF INDIAN STOCK MARKET
Introduction
Stock markets refer to a market place where investors can buy and sell stocks. The
price at which each buying and selling transaction takes is determined by the market
forces (i.e. demand and supply for a particular stock).
Let us take an example for a better understanding of how market forces determine
stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an
anticipation of an upward movement in its stock price. More and more people would
want to buy this stock (i.e. high demand) and very few people will want to sell this
stock at current market price (i.e. less supply). Therefore, buyers will have to bid a
higher price for this stock to match the ask price from the seller which will increase
the stock price of ABC Co. Ltd. On the contrary, if there are more sellers than buyers
(i.e. high supply and low demand) for the stock of ABC Co. Ltd. in the market, its
price will fall down.
In earlier times, buyers and sellers used to assemble at stock exchanges to make a
transaction but now with the dawn of IT, most of the operations are done
electronically and the stock markets have become almost paperless. Now investors
do not have to gather at the Exchanges, and can trade freely from their home or
office over the phone or through Internet.
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History of the Indian Stock Market - The Origin
One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years
old history
18th
Century
East India Company was the dominant institution and by end of the
century, busuness in its loan securities gained full momentum.
1830's Business on corporate stocks and shares in Bank and Cotton presses
started in Bombay. Trading list by the end of 1839 got broader
1840's Recognition from banks and merchants to about half a dozen brokers
1850's Rapid development of commercial enterprise saw brokerage business
attracting more people into the business
1860's The number of brokers increased to 60
1860-61 The American Civil War broke out which caused a stoppage of cotton
supply from United States of America; marking the beginning of the
"Share Mania" in India
1862-63 The number of brokers increased to about 200 to 250
1865 A disastrous slump began at the end of the American Civil War (as an
example, Bank of Bombay Share which had touched Rs. 2850 could
only be sold at Rs. 87)
Pre-Independance Scenario - Establishment of Different Stock Exchanges
1874 With the rapidly developing share trading
business, brokers used to gather at a street (now well known as "Dalal
Street") for the purpose of transacting business.
1875 "The Native Share and Stock Brokers' Association" (also known as
"The Bombay Stock Exchange") was established in Bombay
1880's Development of cotton mills industry and set up of many others
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1894 Establishment of "The Ahmedabad Share and Stock Brokers'
Association"
1880 -
90's
Sharp increase in share prices of jute industries in 1870's was followed
by a boom in tea stocks and coal
1908 "The Calcutta Stock Exchange Association" was formed
1920 Madras witnessed boom and business at "The Madras Stock
Exchange" was transacted with 100 brokers.
1923 When recession followed, number of brokers came down to 3 and the
Exchange was closed down
1934 Establishment of the Lahore Stock Exchange
1936 Merger of the Lahoe Stock Exchange with the Punjab Stock Exchange
1937 Re-organisation and set up of the Madras Stock Exchange Limited
(Pvt.) Limited led by improvement in stock market activities in South
India with establishment of new textile mills and plantation companies
1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange
Limited was established
1944 Establishment of "The Hyderabad Stock Exchange Limited"
1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi
Stocks and Shares Exchange Limited" were established and later on
merged into "The Delhi Stock Exchange Association Limited"
POST INDEPENDANCE SCENARIO
The depression witnessed after the Independance led to closure of a lot of
exchanges in the country. Lahore Estock Exchange was closed down after the
partition of India, and later on merged with the Delhi Stock Exchange. Bnagalore
Stock Exchange Limited was registered in 1957 and got recognition only by 1963.
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Most of the other Exchanges were in a miserable state till 1957 when they applied for
recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that
were recognized under the Act were:
1. Bombay
2. Calcutta
3. Madras
4. Ahmedabad
5. Delhi
6. Hyderabad
7. Bangalore
8. Indore
Many more stock exchanges were established during 1980's, namely:
Cochin Stock Exchange (1980)
Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982)
Pune Stock Exchange Limited (1982)
Ludhiana Stock Exchange Association Limited (1983)
Gauhati Stock Exchange Limited (1984)
Kanara Stock Exchange Limited (at Mangalore, 1985)
Magadh Stock Exchange Association (at Patna, 1986)
Jaipur Stock Exchange Limited (1989)
Bhubaneswar Stock Exchange Association Limited (1989)
Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989)
Vadodara Stock Exchange Limited (at Baroda, 1990)
Coimbatore Stock Exchange
Meerut Stock Exchange
At present, there are twenty one recognized stock exchanges in India which does not
include the Over The Counter Exchange of India Limited (OTCEI) and the National
Stock Exchange of India Limited (NSEIL).
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Trading Pattern of the Indian Stock Market
Indian Stock Exchanges allow trading of securities of only those public limited
companies that are listed on the Exchange(s). They are divided into two categories:
Specified
securities
(Forward listed)
Non-Specified
securities
(Cash listed)
Equity share of company that
are-
Dividend paying
Growth oriented companies
Paid up capital at least Rs. 50 million
Market capitalization at least Rs. 100 million
Has more than 20,000 share holders
Equity share of
companies not covered in
specified securities.
Listed securities
of public limited
companies
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Types of Transactions
The flowchart below describes the types of transactions that can be carried out on
the Indian stock exchanges:
Indian stock exchange allows a member broker to perform following activities:
Act as an agent,
Buy and sell securities for his clients and charge commission for the same,
Act as a trader or dealer as a principal,
Buy and sell securities on his own account and risk.
Spot delivery transaction
Include transaction that requires Delivery and delivery within stipulated time period at the time of entering into the contract.
The period shall not be more than 14 days following the
date of the contract.
Forward transaction
Transactions in which delivery and payment can be extended by further period of 14 days each.
The overall period should not exceed 90 days from the date of contract.
Transaction permitted only in case of specified share.
Transaction on
Indian stock
exchange
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NATIONAL STOCK EXCHANGE-
In order to lift the Indian stock market trading system on par with the international
standards. On the basis of the recommendations of high powered Pherwani
Committee, the National Stock Exchange was incorporated in 1992 by Industrial
Development Bank of India, Industrial Credit and Investment Corporation of India,
Industrial Finance Corporation of India, all Insurance Corporations, selected
commercial banks and others.
NSE provides exposure to investors in two types of markets, namely:
1. Wholesale debt market
2. Capital market
Wholesale Debt Market - Similar to money market operations, debt market
operations involve institutional investors and corporate bodies entering into
transactions of high value in financial instrumets like treasury bills, government
securities, commercial papers etc.
Trading at NSE
Fully automated screen-based trading mechanism
Strictly follows the principle of an order-driven market
Trading members are linked through a communication network
This network allows them to execute trade from their offices
The prices at which the buyer and seller are willing to transact will appear on
the screen
When the prices match the transaction will be completed
A confirmation slip will be printed at the office of the trading member
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Advantages of trading at NSE
Integrated network for trading in stock market of India
Fully automated screen based system that provides higher degree of
transparency
Investors can transact from any part of the country at uniform prices
Greater functional efficiency supported by totally computerized network
TRADING AND SETTLEMENT
The procedure for buying and selling dematerialised securities is similar to the
procedure for buying and selling physical securities. The difference lies in the
process of settlement of shares i.e. delivery (in case of sale) and receipt (in case of
purchase) of securities.
Following procedure is followed for settlement:
In case of purchase:-
The broker will receive the securities in his account on the payout day from
the clearing corporation of the stock exchange.
The broker will give instruction to its DP to debit his account and credit
investor's account who has bough the shares.
Investor will give 'Receipt Instruction to DP for receiving credit by filling
appropriate form. However one can also give standing instruction for credit
of securities in his account, which is convenient way of receiving shares as
that will obviate the need of giving Receipt Instruction every time.
In case of sale:-
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The investor will give delivery instruction to DP to debit his account and credit the
broker’s account with correct ISIN of the number of securities sold by him. Such
instruction should reach the DP’s office at least 24 hours before the pay-in as
other wise DP will accept the instruction only at the investor’s risk. DP will debit
his account and credit the account of the broker through whom shares have been
sold. The broker would then transfer the shares to the clearing corporation of the
exchange where shares have been sold.
HISTORY OF ONLINE TRADING
Indian exchanges and brokering houses have been slow to move their
transactions online. This has been mainly due to Government regulations. There
was initial delay in laying down specifications for creating Closed User Groups
(CUGs). The issue was resolved between the DoT and the Finance Ministry
around 1998 and soon trade portals like India bulls sec. ltd.,
ICICIDirect.com, motilaloswal.com, and smartjones.com came into being.
ABOUT ONLINE TRADING
Traditionally stock trading is done through stock brokers, personally or through
telephones. As number of people trading in stock market increase
enormously in last few years, some issues like location constrains, busy
phone lines, miss communication etc start growing in stock broker offices.
Information technology (Stock Market Software) helps stock brokers in solving
these problems with Online Stock Trading.
Online Stock Market Trading is an internet based stock trading facility.
Online trading refers to buying and selling securities via the Internet or other
electronic means such as wireless access, touch-tone telephones, and other new
technologies. Investor can trade shares through a website without any manual
intervention from Stock Broker.
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Though the spread of internet has been slow in India, the players are catching
fas t a t leas t in the on l ine t rad ing bus iness . Given the suitability of the
product and rising demand of internet there is no surprise that E-broking is
picking up fast captivated the imagination of the consumer and created a new
breed of investor- the day trader investor who is impulse to buy, own and to sell
and must be matched by swift transaction processes.
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Two different type of trading environments available for online
equity trading.
1. Installable software based Stock Trading Terminals
This trading environment requires software to be installed on
investor’s computer. This software is provided by the stock broker. These
kind of trading terminals are used by high volume intraday equity traders.
Advantages
Orders directly send to stock exchanges rather than stock
broker. This makes order execution very fast.
It provides almost each and every information which is
required to a trader on a single screen including stock
market charts, live data, alerts, stock market news etc.
Disadvantages
Location constrains - You cannot trade if you are not
on the computer where you have installed trading
terminal software.
It requires high speed internet connection.
These trading terminals are not easily available for low
volume share traders.
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2. Web (Internet) based trading application
These kind of trading environment doesn't require any additional software
installation. They are like other internet websites which investor can access
from around the world through normal internet connection.
Advantages of Online Stock Trading (Website based)
Real time stock trading without calling or visiting broker's
office.
Check the trading history; demat account balance and
bank account balance at any time.
Provide online tools like market watch,
graphs and recommendations to do analysis of stocks.
Place offline orders for buying or selling stock.
Set alert to inform you certain activity on the stock through email or sms.
Disadvantages of Online Stock Trading (Website based)
Website performance - sometime the website is too slow or not enough user friendly.
Little long learning curve especially for people who don’t know much about computer and internet.
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BENEFITS OF ONLINE TRADING
Internet trading is expected to:
o Increase transparency in the market
o Provide management information system (MIS)
o Introduce flexibility in the system, to handle growing volumes and to
support nationwide expansion plans of market activity.
o Through internet trading three fundamental objectives of
SEBI.
o regulation can be easily achieved. These are:
Investor protection
Creation of fair and efficient market
Reduce risk of systematic risk
o Real time streaming quotes
o Instant trade execution and order confirmation
Benefits from the online trading are so much day by day numbers of clients prefer
online trading and also revenue coming from online trading is increasing at
tremendous speed.
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ONLINE TRADING PROCESS
The various transactions involved in online trading can be shown from the point of
view of the
Client
Broker Stock Exchange
The client places an order via the net by logging onto his
Broker’s site.
The broker accepts and executes the order
And places it with the exchange.
The exchange accepts the order after
Checking the share limit for the day.
The broker makes the payment either
Directly via the clients bank account or indirectly via broker
The exchange receives the money and
Completes the settlement.
The client is intimated about the settlement either
Through demat account or through e-mail.
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INTRODUCTION OF INDIAN RETAIL BROKERAGE MARKET
Overview of brokerage firm
A brokerage is a firm that acts as an intermediary between a purchaser and a
seller. More commonly, a brokerage is referred to as a brokerage firm. To
broker a deal is to communicate with both the buyer and seller as to
acceptable price on anything sold or purchased.
A broker, a single person, or the brokerage firm completes any necessary
legal paperwork, obtains the appropriate signatures, and collects money from
the purchaser to give to the seller. Since the buyer and seller are employing
the brokerage to complete the deal, the brokerage may collect a portion of
the money obtained. In some cases, a brokerage receives money from both
parties. In others, the brokerage receives a commission only from the seller.
Brokerage firms are most commonly thought of in relationship to the sale and
purchase of stock shares. Fees are variable, depending on the degree to
which the brokerage is involved in decisions about purchase. Some
stockowners give their brokers power of attorney to make decisions about
when to buy or sell stock and depend upon their brokers for researching new
stock for purchase. This type of brokerage firm usually assesses a fairly large
fee, and regardless of whether the owner loses or earns money, the firm is
paid.
Though the Indian brokerage industry has been consolidating steadily over
the last 10 years, the share of the top 10 brokers has risen to only around
one-fourth of the total industry revenues. In this fragmented market, leading
players like ICICI Direct, Kotak Securities, Indiabulls, Sharekhan, and 5
Paisa, apart from many small players, compete on the basis of low brokerage
fees and customer service.
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Buoyed by the bullish Indian stock market, foreign banks such as Société
Générale (SocGen), BNP Paribas, Standard Chartered, and Macquarie Bank
(Australia) are eyeing stakes in Indian retail brokerages.
The major growth drivers of the Indian retail brokerage industry are the
increasing appetite for equities among investors as an asset class, the
convenience of online trading, and declining brokerage fees.
The major growth drivers for brokerage revenue and trading volume are:
Continuous fall in brokerage fees
Adoption of technology — screen-based trading, electronic matching,
and paperless securities
Centralized operations, effective risk management, and control on
large interconnected operations spanning multiple locations, which is
enabled by telecom connectivity and low costs
Increasing access to capital and the ability to provide margin finance.
INDUSTRY DEFINITION AND SEGMENTATION
The Indian retail brokerage industry consists of companies that primarily act
as agents for the buying and selling of securities (e.g. stocks, shares, and
similar financial instruments) on a commission or transaction fee basis. It has
two main interdependent segments: Primary market and the Secondary
market.
primary market
The primary market is an intermittent and discrete market where the initially
listed shares are traded first time, changing hands from the listed company to
the investors. It refers to the process through which the companies, the
issuers of stocks, acquire capital by offering their stocks to investors who
supply the capital. In other words primary market is that part of the capital
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markets that deals with the issuance of new securities. Companies,
governments or public sector institutions can obtain funding through the sale
of a new stock or bond issue. This is typically done through a syndicate of
securities dealers. The process of selling new issues to investors is called
underwriting. In the case of a new stock issue, this sale is called an initial
public offering (IPO). Dealers earn a commission that is built into the price of
the security offering, though it can be found in the prospectus.
secondary market
The secondary market is an on-going market, which is equipped and
organized with a place, facilities and other resources required for trading
securities after their initial offering. It refers to a specific place where
securities transaction among many and unspecified persons is carried out
through intermediation of the securities firms, i.e., a licensed broker, and the
exchanges, a specialized trading organization, in accordance with the rules
and regulations established by the exchanges.
Products dealt in the Secondary Markets
Following are the main financial products/instruments dealt in the Secondary
market which may be divided broadly into Shares and Bonds: Shares:
Equity Shares: An equity share, commonly referred to as ordinary share,
represents the form of fractional ownership in a business venture.
Rights Issue/ Rights Shares: The issue of new securities to existing
shareholders at a ratio to those already held, at a price. For e.g. a 2:3 rights
issue at Rs. 125, would entitle a shareholder to receive 2 shares for every 3
shares held at a price of Rs. 125 per share.
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Bonus Shares: Shares issued by the companies to their shareholders free of
cost based on the number of shares the shareholder owns.
Preference shares: Owners of these kinds of shares are entitled to a fixed
dividend or dividend calculated at a fixed rate to be paid regularly before
dividend can be paid in respect of equity share. They also enjoy priority over
the equity shareholders in payment of surplus. But in the event of
liquidation,their claims rank below the claims of the company’s
creditors, bondholders/debenture holders.
Cumulative Preference Shares: A type of preference shares on which
dividend accumulates if remained unpaid. All arrears of preference dividend
have to be paid out before paying dividend on equity shares.
Cumulative Convertible Preference Shares: A type of preference shares
where the dividend payable on the same accumulates, if not paid. After a
specified date, these shares will be converted into equity capital of the
company.
TYPE OF BROKERAGE FIRM
Full service brokerage firm offers advice on investment strategies,
research and news. Since these firms offer multiple services, their fees
are also higher.
Discount brokerage firm is ideal for someone who is an experienced
trader who makes his or her own decisions. Discount brokerage firms
have lower commission costs than full service brokerage firms.
An introducing brokerage firm is one that specializes in futures
markets and buy or sell orders on commodities exchanges through
established firms that are clearing members of exchanges.
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Market Size
The Indian retail brokerage market is showing phenomenal growth. The total
trading volume of brokerage companies has increased from US$1239.1
billion in 2004 to US$1492.1 billion in 2005, and is expected to reach
US$6535.7 billion by 2015.
Name of Indian brokerage firm
1. Reliance money
2. 5paisa.com
3. Advani share brokers
4. Agroy
5. Anand rathi securities ltd.
6. Angel trade- part of angel group
7. Arcade share and stock broker
8. Dala and broacha stcok broking pvt. Ltd.
9. Dalmia securities
10. Emkay
11. Ethical investment solution pvt. Ltd.
12. Geojit financial services limited
13. Icici direct
14. IT&LS investsmart
15. Indiabull securities ltd.
16. Indianstockmarket.net
17. Indiara securities
18. Indus invest
19. Investmentor
20. Investment research & information services ltd. (IRIS)
21. Japyee capital services
22. Khandwala securities limited
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23. KRchoksey
24. LKP
25. Mangal keshav
26. Motilal oswal
27. Mumbaibull.com
28. Networth stock broking ltd.
29. Orient capital market
30. Pratibhuti
31. RBK share brokers
32. Religare securities Ltd.
33. Sivan securities
34. Toss financial services Pvt. Ltd.
35. UTI securities
PRODUCT OFFERED BY BROKERAGE FIRM
In the past couple of years, apart from trading, the firms have started offering
various investment related value added services. The sustained growth of the
economy in the past couple of years has resulted in broking firms offering
many diversified services related to IPOs, mutual funds, company research
etc. However, the core trading activity is still the predominant form of
business, forming 90% of the firms in the india. 67% firms are engaged in
offering IPO related services. The broking industry seems to have capitalised
on the growth of the mutual fund industry, which was pegged at 40% in 2006.
More than 50% of the broking houses deal in mutual fund investment
services. The average growth in assets under management in the last two
years is almost 48%. Company research is another lucrative area where the
broking firms offer their services; more than 33% of the firms are engaged in
providing company research services. Additionally, a host of other value
added services such as fundamental and technical analysis, investment
banking, arbitrage etc are offered by the firms at different levels.
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MAJOR DEVELOPMENTS IN EQUITY BROKERAGE
INDUSTRY IN INDIA
i) Corporate memberships
There is a growing surge of corporate memberships (92% in NSE and 75%
in BSE), and the scope of functioning of the brokerage firms has transformed
from that of being a family run business to that of professional organised
function that lays greater emphasis on observance of market principles and
best practices. With proliferation of new markets and products, corporate
nature of the memberships is enabling broking firms to expand the realm of
their operations into other exchanges as also other product offerings.
Memberships range from cash market to derivatives to commodities and a
few broking firms are making forays into obtaining memberships in
exchanges outside the country subject to their availability and eligibility.
ii) Wider product offerings
The product offerings of brokerage firms today go much beyond the
traditional trading of equities. A typical brokerage firm today offers trading in
equities and derivatives, most probably commodities futures, exchange
traded funds, distributes mutual funds and insurance and also offers
personal loans for housing, consumptions and other related loans, offers
portfolio management services, and some even go to the extent of creating
niche services such as a brokerage firm offering art advisory services. In the
background of growing opportunities for Investors to invest in India as also
abroad, the range of products and services will widen further. In the offing
will be interesting opportunities that might arise in the exchange enabled
corporate bond trading, soon after its commencement and futures trading
that might be introduced in the near future in the areas of interest rates and
Indian currency.
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iii) Greater reliance on research
Client advising in India has graduated from personal insights, market tips to
becoming extensively research oriented and governed by fundamentals and
technical factors. Vast progress has been made in developing company
research and refining methods in technical and fundamental analysis. The
research and advice are made online giving ready and real time access to
market research for investors and clients, thus making research important
brand equity for the brokerage firms.
iv) Accessing equity capital markets
Access to reliable financial resources has been one of the major constraints
faced by the equity brokerage industry in India since long. Since the banking
system is not fully integrated with the securities markets, brokerage firms
face limitations in raising financial resources for business and expansion.
With buoyancy of the stock markets and the rising prospects of several well
organized broking firms, important opportunity to access capital markets for
resource mobilization has become available. The recent past witnessed
several leading brokerage firms accessing capital markets for financial
resources with success.
v) Foreign collaborations and joint ventures
The way the brokerage industry is run and the manner in which several of
them pursued growth and development attracted foreign financial institutions
and investment banks to buy stakes in domestic brokerage firms, paving the
way for stronger brokerage entities and possible scope for consolidation in
the future. Foreign firms picked up stake in some of the leading brokerage
firms, which might lead to creating of greater interest in investing in
brokerage firms by entities in India and abroad.
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vi) Specialised services/niche broking
While supermarkets approach are adopted in general by broking firms, there
are some which are creating niche services that attract a particular client
group such as day traders, arbitrage trading, investing in small cap stocks
etc, and providing complete range of research and other support to back up
this function.
vii) Online broking
Several brokers are extending benefits of online trading through creation of
separate windows. Some others have dedicated online broking portals.
Emergence of online broking enabled reduction in transaction costs and
costs of trading. Keen competition has emerged in online broking services,
with some of these offering trading services at the cost of a few basis points
or costs which are fixed in nature irrespective of the volume of trading
conducted. A wide range of incentives are being created and offered by
online brokerage firms to attract larger number of clients.
viii) Compliance oriented
With stringent regulatory norms in operation, broking industry is giving
greater emphasis on regulatory compliance and observance of market
principles and codes of conduct. Many brokerage firms are investing time,
money and resources to create efficient and effective compliance and
reporting systems that will help them in avoiding costly mistakes and
possible market abuses. Brokerage firms now have a compliance officer who
is responsible for all compliance related aspects and for interacting with
clients and other stake holders on aspects of regulation and compliance.
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ix) Focus on training and skill sets
Brokerage firms are giving importance and significance to aspects such as
training on skill sets that could prove to be beneficial in the long run. With the
nature of markets and products becoming more complex, it becomes
imperative for the broking firms to keep their staff continuously updated with
latest development in practices and procedures. Moreover, it is mandated for
certain types of dealers/brokers to seek specific certification and
examinations that will make them eligible to carry business or trade. Greater
emphasis on aspects such as research and analysis is giving scope for in-
depth training and skills sets on topics such as trading programs, valuations,
economic and financial forecasting and company research.
x) From owners to traders
A fundamental change that has taken place in the equity brokerage industry,
which is a global trend as well, is the transformation of broking from owners
of the stock exchange to traders of the stock market. Demutualization and
corporatisation of stock exchanges bifurcated the ownership and trading
rights with brokers vested only with the later and ownership being widely
distributed. Demutualization is providing balanced welfare gains to both the
stock exchanges and the members with the former being able to run as
corporations and the latter being able to avoid conflict of interests that
sometimes came as a major deterrent for the long term growth of the
industry.
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EMERGING CHALLENGES AND OUTLOOK FOR THE
BROKERAGE INDUSTRY
Brokerage firms in India made much progress in pursuing growth and
building professionalism in operations. Given the nature of the brokerage
industry being very dynamic, changes could be rapid and so as the
challenges that emerge from time to time. A brief description on some of the
prospects and challenges of the brokerage firms are discussed below.
i) Fragmentation
Indian brokerage industry is highly fragmented. Numerous small firms
operate in this space. Given the growing importance of technology in
operations and increasing emphasis on regulatory compliance, smaller firms
might find it constrained to make right type of investments that will help in
business growth and promotion of investor interests.
ii) Capital Adequacy
Capital adequacy has emerged as an important determinant that governs
the scope of business in the financial sector. Current requirements
stipulation capital adequacy in regard to trading exposure, but in future more
tighter norms of capital adequacy might come into force as a part of the
prudential norms in the financial sector. In this background, it becomes
imperative for the brokerage firms to focus on raising capital resources that
will enable to give continuous thrust and focus on business growth.
iii) Global Opportunities
Broking in the future will increasingly become international in character with
the stock markets being open for domestic and international investors
including institutions and individuals, as also opportunities for investing
abroad. Keeping abreast with developments in international markets as also
familiarization with global standards in broking operations and assimilating
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major practices and procedures will become relevant for the domestic
brokerage firms.
iv) Opportunities from regional finance
Regional economic integration such as that under the European Union and
the ASEAN have greatly benefited businesses in the individual countries
with cross border opportunities that helped to expand the scope and
significance of the business. Initial measures to promote South Asian
economic integration is being made by governments in the region first at the
political level to be followed up in regard to financial markets. South Asian
economic integration will provide greater opportunities for broking firms in
India to pursue cross border business. In view of several of common
features prevailing in the markets, it would be easier to make progress in this
regard.
v) Product Dynamics
As domestic finance matures and greater flow of cross border flows
continue, new market segments will come into force, which could benefit the
domestic brokerage firms, if they are well prepared. For instance, in the last
three to four years, brokerage firms had newer opportunities in the form of
commodities futures, distribution of insurance products, wealth
management, mutual funds etc, and as the market momentum continues,
broking firms will have an opportunity to introduce a wider number of
products.
vi) Competition from foreign firms
Surging markets and growing opportunities will attract a number of
international firms that will increase the pace of competition. Global firms
with higher levels of capital, expertise and market experience will bring
dramatic changes in the brokerage industry space which the local firms
should be able to absorb and compete. Domestic broking firms should
always give due focus to emerging trends in competition and prepare
accordingly.
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vii) Investor Protection
Issues of investor interest and protection will assume centre stage. Firms
found not having suitable infrastructure and processes to ensure investor
safety and protection will encounter constraints from regulation as also class
action suits that investors might bring against erring firms. The nature of
penalties and punitive damages would become more severe. It is important
for brokerage firms to establish strong and streamlined systems and
procedures for ensuring investor safety and protection.
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INTRODUCTION
OF
ORGANIZATION
2
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INTRODUCTION TO INDIABULLS
Indiabulls Group is one of the top business houses in the country with
business interests in Real Estate, Infrastructure, Financial Services, Retail,
Multiplex and Power sectors. Indiabulls Group companies are listed in Indian
and overseas financial markets. The Networth of the Group exceeds USD 2
billion. Indiabulls has been conferred the status of a ―Business Superbrand‖
by The Brand Council, Superbrands India.
Indiabulls Financial Services is an integrated financial services powerhouse
providing Consumer Finance, Housing Finance, Commercial Loans, Life
Insurance, Asset Management and Advisory services. Indiabulls Financial
Services Ltd is amongst 68 companies constituting MSCI - Morgan Stanley
India Index. Indiabulls Financial is also part of CLSA’s model portfolio of 30
Best Companies in Asia. Indiabulls Financial Services signed a joint venture
agreement with Sogecap, the insurance arm of Societé Generale (SocGen)
for its upcoming life insurance venture. Indiabulls Financial Services in
partnership with MMTC Limited, the largest commodity trading company in
India, is setting up India’s 4th Multi-Commodities Exchange.
Indiabulls Real Estate Limited is India’s third largest property company with
development projects spread across residential projects, commercial offices,
hotels, malls, and Special Economic Zones (SEZs) infrastructure
development. Indiabulls Real Estate partnered with Farallon Capital
Management LLC of USA to bring the first FDI into real estate. Indiabulls
Real Estate is transforming 14 million sqft in 16 cities into premium quality,
high-end commercial, residential and retail spaces. Indiabulls Real Estate
has diversified significantly in the following three business verticals within the
real estate space: Real Estate Development, Project Advisory & Facilities
Management: Residential, Commercial (Office and Malls) and SEZ
Development. Power: Thermal and Hydro Power Generation. Retail:
Departmental Stores, Hypermarket Stores, Daily Needs Neighborhood
Stores.
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Indiabulls Securities Limited is India’s leading capital markets company with
All-India Presence and an extensive client base. Indiabulls Securities
possesses state of the art trading platform, best broking practices and is the
pioneer in trading product innovations. Power Indiabulls, in-house trading
platform, is one of the fastest and most efficient trading platforms in the
country. Indiabulls Securities Limited is the first and only brokerage house to
be assigned the highest rating BQ – 1 by CRISIL.
RECENT GROWTH AND DEVELOPMENTS IN INDIABULLS
One of India’s first trading platforms was set up by Indiabulls Financial
Services Ltd. with the development of an in-house team.
The service offered by Indiabulls was increased to include Equity,
F&O, Wholesale Debt, Mutual fund, IPO Financing/Distribution and
Equity Research.
In this particular year Indiabulls ventured into Distribution and
Commodities Trading business. Indiabulls came out with its initial
public offer (IPO) in September 2004.
Indiabulls started its Consumer Finance business.
Indiabulls entered the Indian Real Estate market and became the first
company to bring FDI in Indian Real Estate.
Indiabulls won bids for landmark properties in Mumbai.
The company acquired over 115 acres of land in Sonepat for
residential home site development. The world renowned investment
banks like Merrill Lynch and Goldman Sachs increased their
shareholding in Indiabulls. It also became a market leader in securities
brokerage industry, with around 31% share in Online Trading. The
world’s largest hedge fund, Farallon Capital and its affiliates committed
Rs. 2000 million for Indiabulls subsidiaries Viz. Indiabulls Credit
Services Ltd. and Indiabulls Housing Finance Ltd. In the same year,
the Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture
Ltd. acquired 8.2% stake in Indiabulls Credit Services Ltd.
Indiabulls Financial Services Ltd. was included in the prestigious
Morgan Stanley Capital International Index (MSCI). Indiabulls
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Financial Services Ltd. was benefited with the Farallon Capital
agreeing to invest Rs. 6,440 million in it. The company also received
an ―in principle approval‖ from Government of India for development of
multi product SEZ in the state of Maharashtra. Indiabulls Financial
Services Ltd acquired 100% of the equity share capital of Noble
Realtors Pvt Ltd. Noble Realtors is a Company engaged in the
business of construction and development of real estate projects.
Indiabulls Real Estate Business was demerged to become a separate
entity called Indiabulls Real Estate Ltd. The Board of Indiabulls
Financial Services Ltd. Resolved to Amalgamate Indiabulls Credit
Services Ltd and demerge Indiabulls Securities Limited.
PHILOSOPHY
Indiabulls has created a unique organization that is designed for you – the
Smart Investor –. it passionately believe in the Smart Investor who wants to
make his own educated investment choices and demands world class access
to a full range of services and products ranging from Equities to Insurance,
combined with the highest level of integrity, service and professionalism.
Indiabulls is a full service investment firm offering clients access to a
tremendous range of financial services from 135 locations across 95 cities.
We have a strong team of over 1000 Client Relationship Managers focussed
on serving customers unique needs. Our world class infrastructure, built with
tens of crores of investment, provides our clients with real-time service, multi-
channel & 24/7 access to all information and products. As we've expanded
and developed to serve the needs of all kinds of investors, we've been
guided by one underlying philosophy: You come first.
We are proud to introduce to you Indiabulls Professional NetworkTM that
offers real-time prices, equity analysis, detailed data and news, intelligent
analytics, and electronic trading capabilities, right at your finger-tips. This
powerful technology is complemented by our knowledgeable and customer
focussed Relationship Managers who are available to help with your financial
planning and investment needs.
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ABOUT FOUNDERS
The fast paced growth, diversification and consolidation of the Group has
been possible due to the vision and leadership of the co-founders of
Indiabulls.
Sameer Gehlaut is the Chairman, CEO and Whole Time Director of
Indiabulls. Sameer is an engineer from IIT, Delhi (1995) and has worked
internationally with Halliburton in its international services business in 1995.
He has utilized his experience with the international best practices and
professional work culture at Halliburton to lead Indiabulls successfully.
Rajiv Rattan is the President, CFO and Whole Time Director of Indiabulls.
Rajiv is an engineer from IIT, Delhi (1994) and has rich experience in the oil
industry, having worked extensively across the globe in highly responsible
assignments with Schlumberger. Rajiv has managed remote exploration
projects providing evaluation services for different clients in India as well as
abroad.
Saurabh Mittal is a Director at Indiabulls. Declared the best graduating
student in IIT, Delhi in (1995), Saurabh was also one of the engineers
selected by Schlumberger to work for its international services business in
1995 and gained experience of working in various global locations. He
graduated as a Baker Scholar with an MBA from the Harvard Business
School. He has also developed in-depth understanding of international
financial markets
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Indiabulls Financial Services Ltd.
Board of directors
The Bankers of Indiabulls Financial Services Ltd. are as follows:
ABN-Amro Bank
Andra Bank
Bank of Maharashtra
Canara Bank
Centurion Bank of Punjab Ltd.
Citibank
Punjab National Bank
Dena Bank
LKB Ltd
State Bank Of India
UTI Bank Ltd.
Yes Bank Ltd.
HDFC Bank Ltd
HSBC Ltd.
Corporation Bank
ICICI Bank Ltd.
IDBI Ltd
Industrial Bank Ltd.
ING Vysya Bank Ltd
Standard Chartered Bank
Karnataka Bank
Syndicate Bank
Union Bank Of India
Chairman Sameer Gehlaut
Director Gagan Banga
Director Karan Singh
Director Prem Prakash Mirdha
Director Rajiv Rattan
Director Saurabh K Mittal
Director Shamsher Singh
Director Aishwarya Katoch
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PERFORMANCE HIGHLIGHTS
The Consolidated Total Revenues of IndiaBulls have increased by 83% to
Rs. 641.5 cr in Q2 FY09 from Rs. 350.5 cr in Q2 FY08. The Consolidated
PAT has increased 21.4% to Rs. 135.7 cr from Rs. 111.8 cr in Q2 FY08. For
Indiabulls Securities(ISL), the fifth biggest retail broker, income stood at
Rs 193.2 cr (80% of total revenues) during H1FY09. It has declined by only
8% from the corresponding period of the last year despite significant
slowdown in trading volumes. ISL gained market share in retail brokerage
during this period. Its 12 lakh customers will help the group expand into other
financial services.
Key Highlights
The debt equity ratio of 2.4 times signifies very low leverage.
Personal Loans portfolio continued to shrink to Rs 274.4 cr
representing 2.5% of their total loan portfolio. Indiabulls have 0% of
Net NPAs and 1.1% of Gross NPAs. The company has provisions of
171.8%. Indiabulls has maintained a capital adequacy ratio of
27.11%. It has raised 1,000 cr in debt for a three-year period in
addition to the Rs 10,000 cr of current bank funding. Disbursements
during Q2 were at Rs 150 cr, which is almost half of the disbursements
during previous quarters
Indiabulls, the fifth-largest NBFC by sales , may be able to survive
the financial crisis as it is well capitalized with $250 cr in assets and
$100 cr in cash
Indiabulls plans has put expansion plans on hold, plans to cut about
1,000 of its 20,000 staff by not replacing workers who quit.
Some of its new ventures coming up are commodity exchange and
life insurance business. Indiabulls is waiting for insurance regulator's
approval for its life insurance venture with Societe Generale SA; while
expects trading to begin on its planned commodity exchange by the
end of this fiscal. Indiabulls plans to become a bank when the govt
permits to offer services like cash management, forex and letters of
credit. IB wants to emulate the conservative approach in banking.
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Asset under management –
Financial Snapshot
INCOME FROM SEGMENT
Q2FY08 Q2FY09 YOY growth (%)
Investing & financing related
activities
336.19 529.17 57%
Broking related activities 143.01 0 -100%
Fee ncome 11.51 3.18 -72%
other 2.59 11.35 4199%
Total income from operation 493.32 643.7 30%
AUM (Rs Cr.)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Q2FY08 Q1FY09 Q2FY09
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INDIABULLS SECURITIES LTD.
Indiabulls Securities Limited is India’s leading capital markets company with
All-India Presence and an extensive client base. Indiabulls Securities is the
first and only brokerage house in India to be assigned the highest rating BQ –
1 by CRISIL. Indiabulls Securities Ltd is listed on NSE, BSE & Luxembourg
stock exchange.
Products
Indiabulls Securities Limited (ISL) is the pioneer in Retail Broking Industry
having a pan India presence and providing services to a customer base
exceeding half a million. ISL is in the business of providing securities broking
and advisory services and is a corporate member of capital market,
wholesale debt market and derivative segment of NSE and of the capital
market and derivative segment of BSE. ISL is the first and only brokerage
house to be assigned the highest rating BQ-1 by CRISIL.
The company through various types of brokerage accounts provides product
and services related to purchase and sale of securities listed in NSE and
BSE. It also provides depository services, equity research services, mutual
fund, IPO distribution to its clients. The company provides these services
through on-line and off-line distribution channel.
Power Indiabulls
Power Indiabulls(PIB) is an online trading platform which brings you the
power of a broker’s terminal on your desktop. It is an in-house developed
internet enabled trading solution that supports securities and derivatives
trading with NSE and BSE. PIB is designed for the high volume traders that
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provide access to multiple market segments through the ease of a single
terminal.
Designed by the technology team of Indiabulls, PIB comes with several
enhanced features, which makes it the best desktop trading application in the
country today. You can create market watches where you can view ―live
broadcast‖ of stocks both in capital as well as F&O segment. Stock prices get
updated automatically every second without any manual intervention. PIB
provides you with extensive real time reports to evaluate the performance of
your portfolio.
Salient features of Power Indiabulls:
Integrated market watch for securities and derivatives
Live Streaming Quotes
Fast Order Entry
Tic by Tic Live Charts
Technical Analysis
Live News and Alerts
Extensive Reports for Real-time Accounting
Indiabulls Signature Account
With Indiabulls Signature account you will always remain on top of your
investments. It provides you the platform to trade in Equity and Derivatives.
With an unmatched service and nationwide presence, the Indiabulls
Signature account comes bundled with a variety of exclusive features.
Ease of trading – With Indiabulls Signature account you have the flexibility
to place your orders either by logging on the website, calling at the branch or
walking in the branch.
Dedicated Service Branch and Relationship Manager: You can get in
touch with your Relationship Manager and Service Branch for all your trading
related requirements.
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Power Indiabulls (PIB): You can trade smarter and faster using the Power
Indiabulls application. Access the broad spectrum of sophisticated trading
tools and get an edge in the stock markets.
Online Payment Gateways: Use our online payment gateways facility and
get instant credit in your Trading Account. We currently provide online
gateway payment facility with four major banks – HDFC, ICICI, AXIS and
IDBI.
IPOs – Indiabulls provides you the flexibility to apply in ongoing IPOs through
either online or offline channels. For applying online, you do not need to fill
tedious forms and write cheques. You can apply conveniently in IPOs from
the comfort of your home / office through our Website/PIB. For applying
offline, you can contact your Relationship Manager/ Service Branch.
Portfolio Tracker: You can track your investments online through our
portfolio tracker functionality. You can conveniently track the daily movement,
notional / booked profits and losses in your portfolio.
Equity Analysis Report – A qualified and dedicated team of equity analysts
at Indiabulls publishes various research reports. You can view these reports
to gain insight into the companies of your interest.
News Room: The News Room provides real-time news from stock-markets,
corporate sector, economy and other segments that have a bearing on the
market sentiment.
Market Statistics: This functionality facilitates tracking the market trend by
providing you real time data on top gainers, top losers, volume toppers and
most volatile stocks.
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Documentary Requirements for Equity Trading Account
Documents Valid as ID Proof:-
i. PAN card –Mandatory*
ii. Voter id card
iii. Passport
iv. Driving License/ Learning License
v. Photo Identity card issued by employer registered under MAPIN
if photo is not clear on Pan card, either of ii, iii, iv, v documents can be
given as additional ID proof.
Documents Valid as Address Proof:-
i. Ration Card
ii. Driving License/ Learning License
iii. Lease and License Agreement/ Rent Agreement
iv. Passport
v. Voter ID card
vi. Insurance Policy
i. Certificate issued by employer registered under MAPIN.
ii. Electricity Bill (not more than 2 month old from bill generation date)
iii. Landline Bill (not more than 2 month old from bill generation date)
iv. Bank Passbook
v. Bank Statement original/photocopy with Bank Logo (not more than 3
month old) must be accompanied with a Cheque copy
vi. Bank statement original/photocopy without Bank Logo (not more than
3 month old) must be attested by bank official stamp and signature
along with original cancelled Cheque copy
Note- i to vii proofs are valid for individuals only, whereas proofs from viii to
xii are acceptable both in the name of Firm & individual.
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Documents Valid as Bank Proof :-
i. Personalized Cheque copy(Client signature should be match with kit)
ii. Non personalized Cheque copy (Client signature should be match with
kit)
iii. Bank Statement with Bank Logo (not more than 3 month old)
iv. Bank statement original/photocopy without Bank Logo (not more than
3 month old) attestation by bank official stamp and signature.
v. Bank Passbook
vi. Original Banker verification letter
Documents required for individual account:-
1. Individual recent passport size photograph(s)
2. Individual pan card
3. Address proof in the name of the individual.
4. Bank proof in the name of the individual.
Note:- All the documents must be duly Self-attested in original.
Documents required for Proprietorship Firm Account
1. Recent passport size Photograph of Proprietor.
2. Proprietor Pan card
3. Address Proof in the name of the Proprietorship firm and Proprietor.
4. Bank proof in the name of the Proprietorship firm
5. Declaration by Firm – Sole Proprietorship on letter head of the firm as
per Annexure-4.
6. Affix rubber stamp at all places except at the bottom of the declaration
in Annexure-4.
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Documents required for HUF Account
1. Recent passport size Photographs of the Karta.
2. Pan card of the HUF & the Karta.
3. Address proof in the name of HUF & the Karta.
4. Bank proof in the name of HUF.
5. Signature of Karta and all the co-parceners(major &/Minor) on the
Declaration given in Annexure-7
6. HUF Stamp to be affixed on all client’s signature.
Documents required for Partnership Firm Account
1. Recent passport size photographs of all authorized partners.
2. PAN card of all the partners & the partnership firm
3. Address proof in the name of all the partners & the partnership firm
4. Bank proof in the name of Partnership firm
5. Notarized Partnership Deed along with the list of partners duly certified
and attested by all the partners.
6. Partnership firm stamp to be affixed with all signatures of partners.
7. Copy of the Latest ITR
8. Authority letter by all the partners in favour of Managing Partners on the
Original letterhead of the partnership firm, along with stamp & signature
as per Annexure-6.
Documents required for Corporate Account
1. Photograph(s) of all the authorized signatories.
2. PAN Card Copy of all authorized signatories & Corporate.
3. Address proof of all the authorized signatories & Corporate. Only
following documents can be accepted address proof of Corporate
4. Form 18 with ROC receipt
5. Bank statement
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6. Land line telephone bill or Electricity bill must be supported by ITR
copy (Validity date- 2 months from bill date)
7. Bank proof for the Corporate
8. Board Resolution on the original letter head in specified format given
in Trading kit & duly attested by Director / Chairman other than the
authorized signatory.
9. True copy of MOA and AOA Certified by Authorized signatory.
10. Valid Certificate of Incorporation with ROC seal attested by authorized
signatory
11. Certified true copy of Auditor Report with Balance Sheet for last 2
years
12. Networth certificate by a Chartered Accountant in original with their
stamp.
13. Copy of ITR for last two years.
14. Certified true copy of Annual Reports of Last 2 years
15. Banker’s Verification on Banker’s original letter head certifying the
signatures of the Authorized Signatories (as per the format given the
corporate kit)
16. List of director’s along with name, address and photographs across
signed with company stamp to be provided along with their signatures
on letterhead of the company.
17. List of Authorized Signatories along with their Name, address,
signatures & Photographs across signed with company stamp on the
company’s letterhead
18. Copy of latest shareholding pattern including list of all those holding
more than 5% in the share capital of the company duly certified by the
company secretary/whole time director/MD) (copy of the updated
shareholding pattern to be submitted every year)- Required On
Company Letter Head (Original).
19. Form-32 along with ROC receipt in case of change in director.
20. Form-18 along with ROC receipt in case of company address change
Note:- All the documents must be duly attested in original with company
stamp
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Depository Services
Indiabulls is a depository participant with the National Securities Depository
Limited and Central Depository Services (India) Limited for trading and
settlement of dematerialised shares. Indiabulls performs clearing services for
all securities transactions through its accounts. We offer depository services
to create a seamless transaction platform – execute trades through Indiabulls
Securities and settle these transactions through the Indiabulls Depository
Services. Indiabulls Depository Services is part of our value added services
for our clients that create multiple interfaces with the client and provide for a
solution that takes care of all your needs.
NRI Online Trading
Introduction to NRI Online Trading
Non-Resident Indians (NRIs) can also enjoy the state of the art Online
trading Platforms of Indiabulls to trade in Indian Capital Markets. We, at
Indiabulls, provide NRI clients a fast and secure trading platform which would
perfectly cater to NRI's Trading requirements. To start trading through
Indiabulls , the following simple steps need to be followed:
1. Opening of Online NRI Trading and NRI Demat account with
Indiabulls: Get in touch with your nearest Indiabulls service branch
(Branch Locator) to complete all the Trading and Demat account
opening formalities.
2. Opening of a NRI PIS account with Axis bank: A NRI is required to
open a PIS account (Portfolio Investment Scheme) with a designated
bank in India. Indiabulls Securities Limited has tied up Axis bank to
offer this facility to NRIs to enable them to trade in the Indian Capital
markets. The Indiabulls team would also help and assist you with
opening a PIS account with Axis Bank.
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3. Documentation required: The following proofs need to be submitted
along with the Trading and Demat account opening forms:
o Copy of PIS approval letter from Axis Bank
o Copy of passport (copy of the pages containing the Name,
address and photographs)
o Valid & self-attested Proof of Identity and Proof of Address
(Indian and Foreign).
Salient features of NRI Trading Account
Dedicated Service Branch and Relationship Manager: You can get
in touch with your Relationship Manager and Service Branch for all
your trading related requirements.
Online Trading: You can place your orders through our state-of-the-
art Online trading platforms (Power Indiabulls (PIB) & Website)
Power Indiabulls (PIB): You can trade smarter and faster using the
Power Indiabulls application. Access the broad spectrum of
sophisticated trading tools and get an edge in the stock markets.
Portfolio Tracker: You can track your investments online through our
portfolio tracker functionality. You can conveniently track the daily
movement, notional / booked profits and losses in your portfolio.
Equity Analysis Report – A qualified and dedicated team of equity
analysts at Indiabulls publishes various research reports. You can
view these reports to gain insight into the companies of your interest.
News Room: The News Room provides real-time news from stock-
markets, corporate sector, economy and other segments that have a
bearing on the market sentiment.
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Market Statistics: This functionality facilitates tracking the market
trend by providing you real time data on top gainers, top losers,
volume toppers and most volatile stocks
Electronic Contract Notes on Email: This facility enables you to get
digitally signed Contract Notes on email within 24 hours of executing
trades in your Trading Account.
Reporting of transactions to RBI: Indiabulls facilitates the reporting
of all transactions done in your account to RBI through the Axis bank.
Orders on Phone: Indiabulls also offers the facility of placing orders
through phone.
IPO Online
For various reasons, we often miss the opportunity of subscribing to an IPO.
It can either be because we could not procure the application form or we did
not have the time to fill up the form and submit it. The most important benefit
of the 'ONLINE IPO facility offered by Indiabulls Securities Ltd. is the
convenience in submission of applications from anywhere breaking the
limitations of time and geography. You don’t need to submit the application in
paper form, or write a cheque or go to submit it anywhere.
Now you have the convenience at your fingertip. You can quickly and
seamlessly apply to the latest public offerings with just a few clicks. Indiabulls
Securities Ltd. offers ONLINE IPO facility to its registered trading customers
at absolutely no cost.
Indiabulls Equity Analysis
Indiabulls Equity Analysis complements its equity broking and advisory
services with high quality comprehensive report which can be accessed
online. Research report assess the potential strength and investment risk by
doing in-depth and exhaustive analysis of operational and financial
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performance of company, Peer group analysis, present Industry scenario
using advanced and sophisticated forecasting tools and models. These
research reports identify, examine and distill attractive investment
opportunities to help you in building and maintaining your ideal portfolio.
Salient features of Indiabulls Equity Analysis:
Covers report of more than 540 company
Updated on a daily basis
Scorecard on Fundamentals, Valuations and risk
Peer Analysis
Valuation of potential growth
Industry Scenario
Expansion plan
Details of Mergers and Acquisitions
These reports are available to clients without any additional cost. If you are
not a client and wish to view a sample report, please share your details with
us.
Currency Derivatives
Indiabulls offers trading in the Currency Derivatives Segment in National
Stock Exchange (NSE)Currency Derivatives are similar in nature to Stock or
Index Futures contracts. Currency Futures Contracts, with INR:
USD exchange rate as the underlying, are available with a monthly expiry. At
any given time, Currency Future Contracts are available for trading for the
next 12 months.The Mark-to-Market for Currency Derivatives is settled on a
daily basis in a manner similar to Equity / Index Futures.
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Business Highlights
Brokerage & Capital Market related Income was Rs 193.22 crore (79.7% of
total revenues) during the six months ended Sep.08, roughly flat in Q1 and
Q2 of 08-09. This segment was down only 8% from last year first six months
despite significant declines in market activity (trading volumes) as ISL gained
market share in retail brokerage.
Sequential increase in Profits after tax despite market turmoil through strong
cost controls.
During the quarter, the Board of Directors has authorized the Company at its
meeting held on 23rd September, 2008 to subscribe to 24.5% of the paid up
share capital of Indiabulls Life Insurance Company Limited (ILICL), a joint
venture of Indiabulls Financial Services Limited (IBFSL) and Sogecap of
France. IBFSL will continue to own 49.5% and Sogecap will own 26% of the
life insurance business.
During the quarter, the final dividend of Rs. 7.50 per equity share (375% on
the face value of Rs. 2/- per equity share) amounting to Rs.19,007.02 lakhs
(excluding corporate dividend tax) approved at the Annual General Meeting
of the Company held on September 05, 2008 and was paid by the Company
on September 09, 2008 into the Dividend Account.
Networth of the company as on 30th September 2008 is Rs. 434.2 crores, as
compared to Rs. 359.4 crores on March 31, 2008. Book Value per share as
on 30th September 2008 is Rs. 17.14.
During the quarter, the company has launched its Trading Platform for trading
in the Currency Derivatives Segment on National Stock Exchange.
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ISL.s Internet Based Trading System (IBT) was concluded as being
.STRONG. based on an audit conducted by Tata Consultancy Services for
The National Stock Exchange, across the following parameters;
Risk Management
Security Policy & Implementation
Capacity Management
Disaster Recovery and Back-up
Vulnerability test.
This is the highest grading for the audit - the other.s being Medium and
Weak.
CRISIL has assigned a CRISIL BQ . 1 to ISL. This is an opinion on the quality
of operations and service offered by the graded broker. The grading is
expressed on a five point scale BQ-1 to BQ-5, with BQ-1 being the highest.
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THE COMPETITORS OF INDIABULLS SECURITIES LTD.
1. INDIA INFOLINE LTD.
INTRODUCTION:
India Infoline Ltd is listed on both the leading stock exchanges in
India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock
Exchange (NSE). The India Infoline group, comprising the holding company,
India Infoline Ltd and its subsidiaries, straddles the entire financial services
space with offerings ranging from Equity research, Equities and derivatives
trading, Commodities trading, Portfolio Management Services, Mutual Funds,
Life Insurance, Fixed deposits and other small savings instruments to loan
products and Investment banking. India Infoline also owns and manages the
websites, www.indiainfoline.com and www.5paisa.com .
India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities
and Exchange Board of India). 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 it is amongst the most
read Indian brokers.
India Infoline Securities Pvt Ltd
India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd,
which is engaged in the businesses of Equities broking and Portfolio
Management Services. It holds memberships of both the leading stock
exchanges of India viz. the Stock Exchange, Mumbai (BSE) and the National
Stock Exchange (NSE). It offers broking services in the Cash and Derivatives
segments of the NSE as well as the Cash segment of the BSE.
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As 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.com is making a great move towards giving the investor in
Indian equities market a choice. A choice of technologically advanced trading
that is with the help of 5paisa.com. 5 paisa also represents the availability of
world class service to investors at the lowest possible rate - 5 paisa for every
trade of Rs100, i.e., a brokerage rate of 0.05%.
2. SHAREKHAN
Sharekhan was created when SSKI Investor Services Pvt. Ltd., a company in
the securities and equities segment decided to harness the power of the
Internet and offer services to its customers through an online stock trading
portal. Sharekhan, one of India's leading brokerage houses, is the retail arm
of SSKI. With over 510 share shops in 170 cities, and India's premier online
trading firm.
Sharekhan is an equities focused organization tracing its lineage to SSKI, a
veteran equities solutions company with over five decades of experience in
Indian stock markets. Sharekhan brings and provides a user-friendly online
trading facility, coupled with a wealth of content that will help you stalk the
right shares. They also have an extensive all-India ground network of
franchisees across the country.
The company offers its services through a combination of online and offline
channels. The online model comprises a portal, chat facilities, and 'speed
trade' terminals. And the offline model uses a combination of an IVR
infrastructure and a team of customer agents to receive orders over the
telephone. The company claims to have around 150,000 current registered
users nationwide.
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The 'speed trade' channel offers the benefit of a terminal at the user end,
which is connected to the company's systems through a TCP/IP link. Unlike a
Web trade request, which travels with the help of HTTP or HTTPS a speed
trade transaction is a direct transfer of information with the trading system, is
live, and on real-time.
Sharekhan Depository Services offers dematerialization services to individual
and corporate investors. They have a team of professionals and the latest
technological expertise dedicated exclusively to the demat department, apart
from a national network of franchisee, making the services quick, convenient
and efficient.
3. MOTILAL OSWAL
Vision:-
To be a well respected and preferred global financial services organization
enabling wealth creation for all our customers
Introduction:
Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking
unit, with just two people running the show. Focus on customer-first-attitude,
ethical and transparent business practices, respect for professionalism,
research-based value investing and implementation of cutting-edge
technology have enabled them to blossom into an almost two thousand-
member team. Motilal Oswal Securities Limited (MOSt) has established itself
as the Best Local Brokerage House in India (Asia Money Brokers’ Poll 2005).
Their Institutional Equities Division combines the efforts of the Research and
Sales & Trading departments to best serve clients' needs. It believes that it is
their unflinching commitment to providing superior client service that makes
them stand out.
They have a dedicated research team, which is engaged in analyzing the
Indian economy and corporate sectors to identify equity investment ideas.
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They staunchly practice the value-investing philosophy and advise investors
to take a long-term view of equity investments. Consistent delivery of high
quality advice on individual stocks, sector trends and investment strategy has
established them as a reliable research unit amongst leading Indian as well
as international investors. Most is known for its equity research ideas. Asia
Money Broker's Polls have consistently rated their research as one of the
best in the industry.
Their sales & trading team, comprising top equity professionals, translates
the research findings into actionable advice for clients, based on their specific
needs. Each of the sales personnel has at least five years’ experience in
equity research. Sophisticated computerized tools are used to understand
client investment profile and objectives, which ensures proactive and timely
service.
4. KARVY
The birth of Karvy was on a modest scale in the year 1982. It began with the
vision and enterprise of a small group of practicing Chartered Accountants
based in Hyderabad, who founded Karvy. They started with consulting and
financial accounting automation, and then carved inroads into the field of
Registry and Share Transfers. Karvy has built a reputation as an integrated
financial services provider, offering a wide spectrum of services for over 20
years.
In 1982, a group of Hyderabad-based practicing Chartered Accountants
started Karvy Consultants Limited with a capital of Rs.150, 000 offering
auditing and taxation services initially. Later, it forayed into the Registrar and
Share Transfer activities and subsequently into financial services.
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A decade of commitment, professional integrity and vision helped Karvy
achieve a leadership position in its field when it handled the largest number
of issues ever handled in the history of the Indian stock market in a year.
Thereafter, Karvy made inroads into a host of capital-market services, -
corporate and retail - which proved to be a sound business strategy.
Today, Karvy has access to millions of Indian shareholders, besides
companies, banks, financial institutions and regulatory agencies. Over the
past one and half decades, Karvy has evolved as a veritable link between
industry, finance and people. In January 1998, Karvy became the first
Depository Participant in Andhra Pradesh. An ISO 9002 company, Karvy's
commitment to quality and retail reach has made it an integrated financial
services company.
Associate Companies of Karvy
Karvy Securities Limited
Deals in distribution of various investment products, viz., equities, mutual
funds, bonds and debentures, fixed deposits, insurance policies for the
investor.
Karvy Investor Services Limited
Deals in Issue management, Investment Banking and Merchant Banking.
Karvy Stock broking Limited
Deals in buying and selling equity shares and debentures on the National
Stock Exchange (NSE), the Hyderabad Stock Exchange (HSE) and the Over-
The-Counter Exchange of India (OTCEI).
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5. KOTAK SECURITIES
Introduction
Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock
broking and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is
one of India's leading financial institutions, offering complete financial
solutions that encompass every sphere of life. From commercial banking, to
stock broking, to mutual funds, to life insurance, to investment banking, the
group caters to the financial needs of individuals and corporate.
Kotak Securities was set up in 1994. Kotak Securities is a corporate member
of both The Bombay Stock Exchange and the National Stock Exchange of
India Limited.
Its operations include stock broking and distribution of various financial
products - including private and secondary placement of debt and equity and
mutual funds. Currently, Kotak Securities is one of the largest broking houses
in India with wide geographical reach. The company has four main areas of
business:
Institutional Equities,
Retail (equities and other financial products),
Portfolio Management and
Depository Services.
Kotak Securities Ltd is also a depository participant with National Securities
Depository Limited (NSDL) and Central Depository Services Limited (CDSL),
providing dual benefit services wherein the investors can use the brokerage
services of the company for executing the transactions and the depository
services for settling them.
Kotak Securities has 195 branches servicing more than 2, 20,000 customers
and coverage of 231 Cities. Kotaksecurities.com, the online division of Kotak
Securities Limited offers Internet Broking services and also online IPO and
Mutual Fund Investments.
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6. ICICI SECURITIES
Introduction
ICICI Securities, A subsidiary of ICICI Bank, was set up in February 1993 to
provide investment-banking services to investors in India. As on date ICICI
Bank holds 99.9% of the share capital of ICICI Securities.
ICICI Securities Limited is India’s leading full service investment bank with a
dominant position in all segments of its operations –
Corporate Finance
Fixed Income and
Equities.
In order to assist/provide corporate clients and institutional investors with
investment banking services in the United States of America, ICICI Securities
has set up two subsidiaries namely, ICICI Securities Holdings Inc and ICICI
Securities Inc, ICICI Securities Inc, has become the registered broker dealer
with the National Association of Securities Dealers Inc, empowering it to
engage in a variety of securities transactions in the U.S. market.
ICICI Securities Inc. is also registered with the Financial Services Authority,
UK (FSA) and the Monetary Authority of Singapore (MAS) to carry out
Corporate Advisory Services.
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COMPETITIVE ANALYSIS FOR INDIABULLS
The Indian retail brokerage industry consists of companies that primarily act
as agents for the buying and selling of securities (e.g. stocks, shares, and
similar financial instruments) on a commission or transaction fee basis .
It has two main interdependent segments: Primary market and the
Secondary market.
Objective: The main objective is to
Analyze retail brokerage industry taking into account the health of the
capital markets, Derivative Market and the intensity of competition
among the brokerage companies.
Doing Competitive Analysis for Indiabulls.
The major growth drivers for brokerage revenue and trading volume
are:
• Continuous fall in brokerage fees
• Adoption of technology — screen-based trading, electronic matching,
and paperless securities
• Centralized operations, effective risk management, and control on large
interconnected operations spanning multiple locations, which is enabled
by telecom connectivity and low costs
• Increasing access to capital and the ability to provide margin finance
Parameter Assessment for Doing Competitive analysis
A differentiating aspect is a comparative assessment of the top retail
brokerages on various value indicators, comprising of
Product
Pricing
Service delivery model
Unique selling proposition.
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Customers need to analyze the Brokerage Firms Based on these 5
Parameters.
Brokerage & Miscellaneous charges
Quote Software
Execution Platform
Demat Account, and finally
Back office Support.
Brokerage & Miscellaneous charges: This accounts for all the charges that
you incur for your trading/investing. A few examples would be: Demat
Account maintenance, Brokerage, Annual account Fee, Telephone based
trading charges, trading software usage charges, etc. We should understand
what all charges we are bound to incur from our broker.
Quote Software: This is used mainly for technical study and for live quotes.
Many people don’t evaluate quote software. We typically use software that
have stumbled upon and stick with it just because we have eventually grown
comfortable using it. We don’t pay attention to the quality of data (how
accurate it is). Or how fast and often it refreshes. Does it allow us to back test
our strategy? Does it allow customizing technical signals/parameters? Does it
allow adding new indicators? Does it allow us to see historic data? For, what
period is intra day data available? We might need all this information. We
should be clear on what we need and ensure our quote software provides it
all.
Execution Platform: It’s nothing but a platform that allows us to execute our
trade fast. It should automate trade management and execution, and should
automatically give protection against human errors.
Demat Account: Demat account should only be opened with a well known
and established brokerage firm in the market.
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Back office Support: People while trading face lots of problem because of
lack of good back office support. Relationship Managers trading without their
client’s knowledge, funds not being transferred, trades not being executed,
slow execution etc are a few examples.
COMPETITIVE STRENGTH OF INDIABULLS SECURITIES
Indiabulls securities Ltd have a distinct set of competitive advantages that
make it uniquely capable of winning in the marketplace against its
competitors
Diverse Branch Network
Bouquet of financial products and services
Advanced technology team that delivers market leading product
innovation
Strong sales and marketing teams with continuous reinvestment and
training
Strong cross-selling opportunities.
Strong and experienced promoters
Leading product innovation and marketing strategies
Well capitalized player, with strong banking relationships and credit
ratings
Ability to combine people and technology in unique ways
Strong market presence and increased market share leading to a
virtuous cycle of growth and Profitability.
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Core pillars of Business strategy
Increase the number of Client Relationships.
Offer Diversified Financial Products & Services.
Multiple Channels – Enhance Customer Experience and
Opportunities.
Low cost and highly scalable business.
Merits of Indiabulls Securities
Low brokerage charges (Competitive) with 0.10 for Intra-day and 0.50
% for delivery.
Indiabulls securities provide 8 times margin for Intra-day and 4 times
margin for delivery.
Indiabulls is suitable for both Day trading & Long term investment
IndiaBulls has software called Power IndiaBulls. It is a Java based
application, with real-time streaming quotes. It is fast in terms of speed
and execution
Research reports are free of cost to trading members.
They Provide 3 in 1 interface, i.e. Demat Account, Trading account &
bank account all are linked in one interface.
De-Merits of Indiabulls Securities
You have to open a bank account with the banks mentioned in
Indiabulls site for Credit/ Debit Facility as they don’t have their own
bank. And In ICICI direct , you have a direct debit/credit facility with the
bank
Most customers feel that it is difficult to understand the ledger reports
of Indiabulls securities, so proper customer guidance should be given.
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Value Proposition of Indiabulls Securities
ISL provide a very good Trading tools like Power Indiabulls &
Indiabulls market trader.
Power Indiabulls: A desktop Trading application offering clients
sophisticated trading tools accessible at lightning fast speed.
Indiabulls Market Trader: Browser based trading application built for
retail investor.
Indiabulls Equity Analysis: Premium research on 400 plus
companies.
Indiabulls Professional Network: Offers real-time prices, detailed
data and news, intelligent analytics and electronic trading capabilities.
Relationship manager: Indiabulls securities robust technology is
integrated with knowledgeable and customer-focused relationship
managers who are available 24X7 to assist the clients.
In Depth Market Analysis and Research
Their special research cell bring you intensive research reports on how
the stock market is faring, when is the right time to invest, when to
execute your order and more. Depending on what kind of investor you
are, they bring you fundamental or basic research and technical
research.
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MERITS & DE-MERITS OF COMPETITORS
ICICI SECURITIES
ICICI securities: It provides products & services in fixed income, equity &
corporate finance.
Merits of ICICI Securities
ICICI Direct is considered best for long term investment.( Indiabulls is
suitable for both Day trading & Long term investment)
A direct debit/credit facility with the bank.
All facilities available under one umbrella.
BTST (Buy today & sell tomorrow) is available; this facility is available
only in ICICI Direct.
Can apply for IPO online (we can’t do this in Indiabulls).
Can apply for mutual funds online and can also sell them online.
Internet banking demo which gives customers an opportunity to learn.
De-Merits of ICICI Securities
Brokerage charges are high - intraday 0.25% and 0.75% delivery
compared to other brokerage firms (is considered as highest in the
market).
Day trading is a night mare in ICICI because of Web based terminal,
which is very slow. Orders placed at or around 10.00 hrs may be
queued for a while. So intra-day Margin trading could be annoying now
& then. It's not much of a hassle for cash trading though.
(Indiabulls offers you a trading terminal 'powerIndiabulls', which is
java based software. It is fast in terms of speed and execution).
ICICI Direct brokerages are not negotiable ( Where as Indiabulls
Brokerage Charges are negotiable).
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SHAREKHAN
Merits of ShareKhan Securities
Low brokerage charges, intraday 0.1% and 0.5% for delivery.
Live streaming quotes
Customer support is good
No monthly charges
Can trade in both BSE and NSE
De-Merits of ShareKhan Securities
No BTST (buy today sell tomorrow), in ShareKhan you can’t sell a share
today which you bought yesterday.
You have to open a bank account with the banks mentioned in
ShareKhan site.
Streaming quotes requires JVM (Java Virtual Machine); this may be
big headache for customers.
Annual charges are Rs330.
Their trading terminals are certainly not for "investors", only for active
traders. That is because, you have to trade a certain volume every
month, otherwise you end up paying a fine
INDIA INFOLINE
Merits of India Infoline (5 Paisa.com) Securities
Low brokerage charges, intraday 0.10% and 0.50% for delivery and it is
negotiable.
Minimum brokerage per share will be 1 paisa for trading transactions
and 5 paisa for delivery based transactions.
5 paisa provides 6 times margin for Intraday & 8 time’s margin for
Delivery.
All customers will get Digital Contract Notes. Physical contract notes
could be provided on request which would entail a nominal charge.
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De- Merits of India Infoline (5 Paisa.com) Securities
Software License Fee Rs.799/- per month or 7999/- per annum and is
non-refundable.
There is lot of Hidden costs.
Annual Service Charges Rs.250.
Customers who just want to have a depository relationship will be
required to pay Rs.1000/-, for each Demat account, which will be
adjusted against service charges.
The information in their web based terminal is too much compressed in
one screen.
Trader terminal is good, but the interface is too complicated
KOTAK SECURITIES
Merits
Low Brokerage charges with 0.05% for Intra-day & 0.45% for delivery.
Kotak Securities will offer small-time retail investors with invest able
surpluses as low as Rs.5, 000 a chance to invest in capital markets.
Transactions are transparent with effective back office support.
They provide Simple Ledger reports, which customers feel easy to
understand than any other brokerage firms.
Mutual fund & IPO facility is available online.
Flexibility of products - Once you invest with Kotak Securities, you can
enjoy access to a wide range of products and services to help you
make the most of your investments.
De-Merits
Unethical act: Geojit Securities Ltd has accused kotak securities stock
broking firm of hacking into its account to steal critical business
information and blocking information access.
Some investors have bad experience with accounts opening & they
complain that it takes a long time for opening accounts.
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Value Proposition of Kotak Securities
Kotak Securities have a definite policy on brokerage, and they have
different slabs for different clients based on their turnover. You can
always choose your brokerage based on your style and quantum of
trading.
High Quality of software (KEAT)
K.E.A.T is a special software that Koataksecurities.com provides its
customers using which they can view live market rates of scrip’s on
both the NSE and BSE, create a watch list and simultaneously place
orders, view order reports, research companies etc. It is a complete
online trading terminal.
Mobile trading
The facility is exclusively designed to give you instant access to the
stock market through mobile phone.
Phone Trading – Call and Trade
Call & Trade is a service offered by Kotak Securities for its customers,
which provides customers with a facility to trade over the phone. Kotak
Securities provides you a toll free number that you can call from
anywhere in India.
Kotak Securities offers Variety of account types for different investors
Kotak Auto Invest
Kotak flat
Kotak Gateway
Kotak privilege circle
Kotak High Trader
Kotak free way
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RESEARCH
METHODOLOGY
3
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RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research
problem. The logic behind the method used, in context of research, is
explained; so that research results are capable of being evaluated either by
the researcher himself or by others. People undertake research in order to
find things in a systematic way, thereby increasing their knowledge. The
research project involves an explanation of the methods to collect
information, argue why the results are meaningful and explain any limitations
that are associated with them.
Research defined
Research in common parlance refers to a search for knowledge. One can
also define research as a scientific and a systematic search for pertinent
information on specific topic.
―A careful investigation (or) inquiry especially through search for new facts in
any branch of knowledge ‖.
-Oxford advance learner dictionary
Redman and Mory defined research as –―a systematized effort to gain new
knowledge.
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Title of the study
“A comperitive study of Indiabulls with its competitors”
Duration of the project
The Duration of the project of the study has 40 days period.
Objective of study
• To make a comparative study of competitors of Indiabulls.
• To study Indiabulls products and services.
• To find out potential investors for Indiabulls and present attitude of
investors regarding share market.
Type of research
A research design is considered as the framework or plan for a study that
guides as well as helps the data collection and analysis of data. The research
design may be exploratory, descriptive and experimental for the present
study.
Exploratory research studies are also termed as formulative
research studies. The major emphasis in such studies is the discovery
of ideas and insights. The main objective of exploratory research is to
fine-tune the broad problem (here, increasing turnover) into specific.
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Descriptive research studies are those studies, which are concerned
with describing the characteristics of a particular individual, or a group.
A sample was taken and statements about the population on the basis
of the samples were made. Descriptive research aims at drawing
inferences and making predictions (here, the number of prospective
Customers who may buy Nestle products).
The descriptive research design is adopted for this project.
Sample size
The study sample constitutes 100 respondents constituting in the
research area.
Method of selecting sample
Most of the data collected by the researcher is primary data through
questionnaire, where the researcher and the respondent operate face – to –
face.
Research Instrument
The researcher has used a structured questionnaire as a research
instrument tool which consists of open ended questions, multiple choice and
dichotomous questions in order to get data. Thus, Questionnaire is the data
collection instrument used in the study. All the questions in the questionnaire
are organized in such a way that elicit all the relevant information that is
needed for the study
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Scope of the study
This study is limited to Jaipur city.
This study emphasizes on the following aspects-
To identify the preferences of different investors in investment
instrument.
This study is helpful to that organisation for conducting further
research.
It is helpful to identify the customers interest level of investment in
share market.
This study is helpful to the organization for identifying the area of
dissatisfaction of their clients.
To identify the competitiveness of organization and its competitors.
This study helps to make a managerial decision to the company
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Limitations of the study
Through the present study aims to achieve the above-mentioned objective in
full earnest and accuracy, it may be hampered due to certain limitations.
Some of the limitations of this study may be summarized as follows:
Questionnaires are not filled properly by the respondents.
Respondents are not interested in filling the questionnaire.
Investors are not interested sharing their investing pattern.
Sample size is limited.
The selection of customers to cover the various strata of the society is
tedious and time consuming.
The data collected were totally depending on the respondents’ view,
which could be bias in nature.
Getting accurate responses from the respondents due to their inherent
problem is difficult .They may be partial or refuse to cooperate.
Since the study is wide in nature and the matters regarding the study
could not be analyzed and taken for consideration.The sample size is
small; it may not actually represent the whole population.
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FACTS
AND
FINDINGS
4
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Number of Branches of Competitors compared
with Indiabulls securities
0
100
200
300
400
500
600
700
INDIA
BULL
S
ICIC
I DIR
ECT
INDIA
INFO
LINE
SHAREK
HAN
KAR
VY
MO
TILAL
OSW
AL
KOTA
K
competitors
no
. o
f b
ran
ch
es
No.of branches
FINDING AND ANALYSIS
Number of Branches of Competitors compared with Indiabulls securities
Brokerage houses No. of branches
INDIABULLS 640
ICICI DIRECT 441
INDIAINFOLINE 605
SHAREKHAN 583
KARVY 581
MOTILAL OSWAL 80
KOTAK 330
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Number of Customers of competitors compared
with Indiabulls
0
100,000
200,000
300,000
400,000
500,000
600,000
INDIA
BULL
S
ICIC
I DIR
ECT
INDIA
INFO
LIN
E
SHAREK
HAN
MO
TILAL
OSW
AL
KOTA
K
competitors
no
. o
f c
om
pe
tito
rs
No.of customer
NUMBER OF CUSTOMERS OF COMPETITORS COMPARED WITH
INDIABULLS
Brokerage houses No. of customer
INDIABULLS 450,000
ICICI DIRECT 210,000
INDIAINFOLINE 500,000
SHAREKHAN 260,000
MOTILAL OSWAL 200,000
KOTAK 400,00
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COMPARISON OF COST- PHYSICAL VS DEMAT OF SHARES
TYPE OF ACCOUNT PHYSICAL DEMAT
Brokerage 0.75-1.25% 0.25-0.75%
Stamp Duty on transfer 0.5% of MV NIL
Postal Actual NIL
Transfer Deeds INR 0.35/TD NIL
Follow Ups Actual NIL
Settlement Changes NIL 0.05% of Transaction
Value
Custody Changes (Vault Cost) 0.02% of Share Value
Bad Delivery Not Quantifiable NIL
Loss/Theft/Mutilation Actual NIL
Non Receipt Of Bonus/right
Shares
Actual NIL
No bad delivery of shares.
No loss of share certificate in postal transit.
No courier\postal charges incurred in transferring them or changing
your address etc.
No requirement of stamp duty on transfer of shares. (This is 0.5% of
value in case of physical)
Shares are transferred in the name of purchaser within a day of
completion of settlement as against 45-60 days in physical mode.
Much faster payment on sale of shares.
No scope for theft\forgery damage of share certificates.
Minimum handling of paper.
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Corporate Offer
Sno. Parameters Competitors offer Indiabulls Offer
1 Facilities Only offline or online or
both
Both offline and
online
2 A/c Opening charges Rs 0 to Rs.750
(initially)
Rs 700(lifetime)
3
Annual Maintenance
charges
Rs 190 to Rs. 500 Nil
4 Brokerage-Intraday
0.15% to 0.02% 0.10(negotiable)
5 Delivery
0.75% to 0.20% 0.50(negotiable)
6 Min Charges Rs 10 to Rs 25 1 Paisa
7 Margin-Intraday Generally 6 to 10 times 8 times
8 Margin on Delivery Most of the competitors
do not provide
4 times
9 Automised margin lending
facility
Do not have Provided
10 Equity analysis Do not have Equity Analysis of
400+ companies
updated daily
11 Technical charts Do not provide Provided on trade
terminal
12 Transparency Not so transparent Everything
provided online
Online trading through Power Indiabulls is extremely fast and
convenient.
User can open charts for any number of scrips.
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Comparison of different Depository Participants
SNO. Name Of DP Demat
Charges
initial
Account
Maintenance
(AMC)
Charges for
Trading
Account
1 ICICI
DIRECT.COM
Rs. 750 Rs. 500/- PA Nil
2 IL&FS Rs. 270 Rs. 250/- PA Rs. 670
3 UTI SECURITIES Rs. 375 Rs. 240/- PA Nil
4 KOTAK
SECURITIES
Rs. 360 Rs. 30/- Per
Month
Nil
5 SHAREKHAN Nil Rs. 300/- PA Rs. 750
6 INDIABULLS
SECURITIES LTD.
Rs. 200 NIL Rs. 500
7 ANAGRAM Rs. 50 Rs. 300/- PA Rs. 300
(AMC)
8 INDIAINFOLINE Nil Rs. 250/-PA Rs. 425
9 ALANKIT
ASSIGNMENT
Rs.400 Rs. 260/-PA Rs. 50
10 MOTILAL OSWAL Nil Nil Rs. 500
11 ANANDRATHI Nil Rs. 330/- PA Rs. 200
12 FORTIS Rs. 350 Rs. 190/- PA Nil
13 HEM SECURITIES Rs. 100 Rs.250/- PA Nil
Demat charges per year taken by the entire depository participants are
almost similar.
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88
Local Brokers’ charges are the lowest among these. Many of them are
free.
Many depository participants are opening accounts in free but they are
charging annual maintenance (AMC).
A very few are not charging account maintenance (AMC) viz.
Indiabulls and Motilal Oswal.
Comparison of brokerage charges by different Depository Participants
SNO. Name Of DP Brokerage
Charges on
Delivery
Brokerage Charges on
Intraday settlement
1 ICICI DIRECT.COM 0.75-0.25% 0.10-0.08%
2 IL&FS 0.75% 0.25%
3 UTI SECURITIES 0.3% 0.08%
4 KOTAK SECURITIES 0.65-0.20% 0.07-0.03%
5 SHAREKHAN 0.35-0.20% 0.08-0.06%
6 INDIABULLS SECURITIES LTD. 0.50-0.20% 0.10-0.03%
7 ANAGRAM 0.30-0.25% 0.03%
8 INDIAINFOLINE 0.25-0.20% 0.05-0.04%
9 ALANKIT ASSIGNMENT 0.50-0.30% 0.05-0.03%
10 MOTILAL OSWAL 0 .40-0.30% 0.075%
11 ANANDRATHI 0.30-0.25% 0.08%
12 Religare 0.30-0.20% 0.03-0.02%
13 HEM SECURITIES 0.25-0.10% 0.03%
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89
Brokerage charges of almost all the broking firms are negotiable
according to the potential of the customer. But brokerage charged by
icicidirect.com is not negotiable (according to slab-rate).
In Alankit and Fortis brokerage is negotiable up to any level.
Indiabulls Securities Ltd. is encouraging the investors to trade more by
charging less brokerage as compared to other competitors.
Comparison of margin limits given by different Depository Participants
S.NO. Name Of DP Margin on Delivery Margin on Intraday
settlement
1 ICICI DIRECT.COM Nil 4t – 20t
2 IL&FS Nil Depends on volume
3 UTI SECURITIES 4t 10t
4 KOTAK SECURITIES 4t 6t
5 SHAREKHAN Depends on volume Depends on volume
6 INDIABULLS SECURITIES
LTD.
4t 8t – 15t
7 ANAGRAM Nil 5t
8 INDIAINFOLINE 4t 6t – 10t
9 ALANKIT ASSIGNMENT Nil 10t
10 MOTILAL OSWAL Nil 5t
11 ANANDRATHI Negotiable 4t
12 FORTIS 4t – 5t 8t
13 HEM SECURITIES Nil 10t
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90
Hem Securities requires Rs. 25000 as a minimum balance in trading
account. One cannot trade through Hem Securities without having Rs.
25000 minimum.
In UTI Securities it is Rs. 10000 and in Indiainfoline it is Rs. 5000.
And in Indiabulls Securities it is Rs. 500.
Most of the broking firms do not provide margin on delivery, on the
other hand some are allowing their customer to trade up to any limit,
which is very risky.
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ANALYSIS
AND
INTERPRETATION
5
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92
The process by which sense and meaning are made of the data gathered in
qualitative research, and by which the emergent knowledge is applied to
clients' problems. This data often takes the form of records of group
discussions and interviews, but is not limited to this. Through processes of
revisiting and immersion in the data, and through complex activities of
structuring, re-framing or otherwise exploring it, the researcher looks for
patterns and insights relevant to the key research issues and uses these to
address the client's brief.
Q1. OCCUPATION CLASS-
Class No. Of. Respondents
Business class 60
Service class 10
Professionals 30
occupation wise classification
0
10
20
30
40
50
60
70
Business class Service class Professionals
class
% o
f re
sp
on
de
nts
Percentage of
respondents (%)
Page 93
93
age wise classification
0
5
10
15
20
25
30
35
40
45
Below 35 35-45 46-55 Above55
Age range
% o
f re
sp
on
de
nts
Percentage of
Respondents (%)
Q2. AGE-WISE DISTRIBUTION
Age No. of Respondents
Below 35 42
35-45 24
46-55 20
Above55 14
Interpretation -This bar chart depicts the percentage of the respondents
belonging to different age groups like 21 no. (42%) of persons belongs to the
age group of below 35 years. This depicts that the maximum no. of investors
belongs to the age group of below 35 years.
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94
income wise classification
0
5
10
15
20
25
30
35
40
Below
10000
Rs.10000
to Rs.
20000
Rs. 20001
to Rs.
30000
above Rs.
30000
income range
% o
f re
sp
on
de
nts
Percentage of
Respondents (%)
Q3. INCOME RANGE-
Monthly Income No. of Respondents
Below 10000 18
Rs.10000 to Rs. 20000 22
Rs. 20001 to Rs. 30000 26
Above Rs. 30000 34
Interpretation - This bar chart depicts the no. of the respondents belonging
to different income groups like 18% of persons belongs to the income level of
below 10000 rupees per month. Maximum no. of investors are those who lies
in the income group of above 30000.
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95
PERCENTAGE OF RESPONDENTS (%)
0
10
20
30
40
0-
20%
20-
40%
40-
60%
Above
60%
% of investment
% o
f re
sp
on
den
ts
PERCENTAGEOFRESPONDENTS (%)
Q4. HOW MUCH PORTION OF YOUR SAVING DO YOU INVEST/WOULD INVEST IN SHARE MARKET-
% OF INVESTMENT NO. OF RESPONDENTS
0-20% 30
20-40% 32
40-60% 26
Above 60% 12
Interpretation - Majority of the respondents say that they would like to invest in
share market up to 20% to 40% of their savings.
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96
PERCENTAGE OF RESPONDENTS (%)
0
5
10
15
20
25
30
35
40
1 2 3 4
experience in year
% o
f re
sp
od
en
t
PERCENTAGE OF
RESPONDENTS (%)
Q5.EXPERIENCE IN SHARE TRADE
EXPERIENCE (IN
YEARS)
NO. OF RESPONDENTS
Less than 2 38
2-3 28
3-4 22
Above 4 12
Interpretation -This bar chart depicts the no. of the respondents having the
experience of online trading .Like 19 person out of 50 are having the
experience of less than 2 years. This data shows high surge in investment
trend in equity market in recent 2 years.
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97
Percentage of Respondents (%)
0
5
10
15
20
25
30
35
bank FD’s
small
savin
g sch
emes
bonds
equities/
deriv
atives
investment avenues
% o
f re
spo
nd
ents
Percentage of
Respondents (%)
6. TAKING THE FACTORS LIKE SECURITY, RATE OF RETURNS AND
TIME IN CONSIDERATION WHICH AMONG THE FOLLOWING YOU RATE
AS PER THE BEST OPTION-
Avenues Respondents
bank FD’s 14
small saving schemes 6
bonds 24
equities/derivatives 32
mutual funds 24
Interpretation - Majority of the respondents rated equities / derivatives as the
best option among the factors like security, rate of returns and time
consideration.
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98
Q7.INVESTOR’S PERCEPTION ABOUT SHARE MARKET
INVESTOR’S VIEWS NO. OF RESPONDENT
100 % risk 15
High risk less return 20
Low risk , high return 21
100 % return 44
Interpretation -This bar chart depicts the percentage of the respondents
having different opinion about equity market. Like 14% are having the opinion
that in equity market there is high risk and less return. Maximum no. of
persons are having the perception that the equity market gives the 100%
return on investment.
0
5
10
15
20
25
30
35
40
45
100%risk high riskless return
low risk,high return
100%return
Returns
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99
Q8. IF YOUR BASE TO CHOOSE THE SCRIP IS MARKET CALLS/
MARKET TIPS, AND THEN WHAT ARE THE SOURCES YOU TRUST
UPON MOST-
SOURCES NO. OF RESPONDENT
Market tips by securities 8
T.V channels 46
stock brokers 46
Interpretation - Majority of the respondents say that if their base is to
choose the scrip is market calls/market tips, then the sources they will trust
upon are share brokers, T.V. channels.
information sources
0
5
1015
20
25
30
3540
45
50
Market tips by
securities
T.V channels stock brokers
sources
% o
f re
sp
on
de
nts
PERCENTAGE (%)
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100
Q9. UP TO WHAT PERCENT MARKET TIPS ARE CORRECT
ACCORDING TO YOU -
INVESTORS VIEW NO. OF RESPONDENT
30% or less 68
30%-50% 10
50%-60% 10
More than 60% 12
Interpretation - Majority of the respondents say that 30% or less percent of
market tips are correct according to them.
PERCENTAGE (%)
0
10
20
30
40
50
60
70
80
30% or
less
30%-50% 50%-60% More than
60%
investors view
% o
f re
sp
od
en
t
PERCENTAGE (%)
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101
10. WITH WHICH BROKERAGE HOUSES ARE YOU ENGAGED-
Brokerage house NO. OF RESPONDENT
Indiabulls 25
India info line 20
ICICI direct 20
Karvy 18
Motilal oswal 8
Sharekhan 9
Interpretation -22 % of the respondents out of 50 say that they are engaged with
indiabulls sec. ltd., and minimum 2% with karvy.
0
5
10
15
20
25
Indiabulls India info line ICICI direct Karvy Motilal oswal Sharekhan
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102
Q11. WHY YOU HAVE CHOSEN ABOVE BROKING HOUSE -
Criteria No. Of respondent
Low brokerage fess 66
Services 18
Fast query solution 16
Interpretation - 66 % of the respondents out of 50 say that they are
engaged with their brokerage houses because of the low brokerage
charges.
Percentage (%)
0
10
20
30
40
50
60
70
Low brokerage
fess
Services Fast query
solution
Criteria
% o
f re
sp
on
de
nt
Percentage (%)
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103
Q12. HOW WILL YOU RANKED YOUR BROKERAGE HOUSE –
Investors view No. Of respondent
Excellent 30
Very good 20
Good 26
Satisfactory 24
Interpretation – 30 % of the respondents out of 50 say that brokerage
house with whom they are engaged are excellent and minimum 20%
investors says that their brokerage house very good.
How will you ranked your brokerage
house
05
101520253035
Exc
ellent
Ver
y go
od
Goo
d
Sat
isfa
ctor
y
investors view
% o
f re
sp
on
de
nts
Percentage (%)
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104
Are you satisfied with services
provided by your brokerage houses
0
10
20
30
40
50
60
70
YES NO
investors view
% o
f re
sp
on
de
nt
Percentage (%)
Q13. ARE YOU SATISFIED WITH SERVICES PROVIDED BY YOUR BROKERAGE HOUSES -
Investors view No. Of respondent
YES 60
NO 40
Interpretation – 60% of the respondents out of 50 say that they are satisfied with
services provided by their brokerage houses.
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105
SWOT ANALYSIS
OF
ORGANIZATION
6
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106
INTRODUCTION OF SWOT ANALYSIS
Introduction
It has always been important for a business to know and understand how it
fits in and interacts with the surrounding environment on both an internal
(office/factory/shop environment) and external view (how your business
operates with the outside world).
Researching your environment will benefit you and/or your management
team by putting you in a position to develop a strategy for both the long and
short term.
Analyzing the Business
The most influential way of doing this is to perform a SWOT analysis of the
company. It is a common phrase used to abbreviate Strengths, Weaknesses,
Opportunities and Threats.
Each term is a heading for a separate analysis of the business but they can
be related as seen below:
Strengths provide an insight to your business Opportunities &
Weaknesses in your business can cause immediate Threats
A guideline of how to carry out the analysis is explained in the next section,
but it is important to know that the SWOT analysis is only based upon
information that is known by the assessors (you), and is seen as perhaps the
more basic approach of analyzing a business’ position: but SWOT is still a
powerful tool when looking for immediate benefits.
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107
SWOT ANALYSIS OF INDIABULLS
Page 108
108
STRENGTHS
Integrated technology platform: - Since the launch of their website,
www.indiabulls.com their online trading platform, they have invested in
building a technology platform. They have also developed software
called ―power Indiabulls‖. Their trader terminal is an application which
allows customers to trade on both the BSE and the NSE, has features
like live intra-day tick by tick charts, historical charts, price alerts and
other features. The features allow them to seamlessly integrate across
delivery channels, online or offline through branches or telephone.
Pan India distribution network: - They have 640 branches across
India. These branches help in customer acquisition as well as
customer service. Their distribution network is well spread to capture
the target audience and cater to the needs of their potential
customers.
Relationship manager facility: - This is one of the unique services
that Indiabulls offer’s its customers. Every customer is provided with a
relationship manager, where in the customers can contact these
managers at anytime of the day to get information on the market or get
their queries clarified.
Growth rate: - The Company is growing at a very rapid rate, from 25
branches in the year 2003 it has grown to 650 branches in the
beginning of 2007. Not only has it seen a fast growth rate in the
number of branches but also it has grown in the number of clients and
the employee strength. They have a customer base of more than
450,000 and over 4500 relationship managers. Indiabulls has been
rated as the ―Fastest Growing Large Cap Company‖ in India in a report
by Business Today magazine in April, 2006.
Power Indiabulls has developed into brands: - Indiabulls.com and
power Indiabulls which is their software are well known brands
amongst retail investors across India. In all the cities that they have
expanded into, they have been able to leverage upon brand
awareness and have established a customer base.
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109
Strong sales and marketing teams that deliver market leading
product innovation: - their relationship manager channel offers a
single point contact to all their retail customers. These managers offer
personalized services to their customers and help to build strong and
continuing relationships with them. The marketing associates help the
company in client acquisition at minimal cost and they also help the
company and its subsidiaries in increasing their penetration into
smaller towns and cities.
Strong banking relations and credit ratings: - Indiabulls has
banking relation with some of the major banking institutions in the
country such as HDFC Bank, ICICI Bank, Standard Chartered Bank,
etc, for easy mobilization of funds of the customers.
Strong market presence and increased market share: - Their
growing client base and market share have increased their market
presence and brand recognition has enhanced their profitability. Their
brand and profitability allows them to recruit good and efficient
employees, compensate them attractively and provides the flexibility
for them to invest in the business and technology systems these
attributes in turn has a positive effect on the growth of the company.
Diversified business model: -Our Company and our subsidiaries
offer various financial services and products ranging from equity, F &
O and wholesale debt, insurance and IPO distribution, depository
services to cater to the specific needs of the retail and institutional
investors thus providing all these services in a single platform. Thus
Indiabulls is not dependent on any single of its subsidiary for survival
and failure of any one subsidiary will not have an adverse effect on the
company as a whole.
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WEAKNESSES
Lack of a banking arm: - Indiabulls does not have a banking arm of
its own which otherwise would have helped the company to a large
extent. Whereas a few of its competitors like HDFC securities, ICICI
securities, Kotak securities, etc have their own banking arms which
make the transactions easier and simpler.
Loss of relationship managers leads to loss of clients: - Their
business is dependent on the team of relationship managers who
directly manage client relationships. Any events that harm these
relationships including the loss of their relationship managers may
lead to the loss of client.
OPPORTUNITIES
Changing demographics with higher disposable income: - India is
one of the fastest growing economies in the world. It has a large and
rapidly growing middle class of 300 million people with increasing
levels of discretionary income available for consumption and
investment purposes. The options they have for investments are fixed
deposits, post office deposits etc,. This gives them a limited interest
rate on their investment; where as the stock market provides a good
scope for making good returns. The evolution in India’s demographic
setup with a median age of 24 years and higher consumption
expenditure is expected to have a virtuous cycle effect by improving
the economic growth and per capita income which would result in
higher savings and investments.
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111
Rapid penetration of internet and computers: -Technology is vastly
used in stock market trading. Now, with the use of the computers and
internet the stock market trading has become fast. The traders can
place orders through the internet and execute them. This saves the
time of the investors, who earlier had to make calls to their brokers in
order to trade. These people are willing to use advanced
communication tools, such as computers and telephones, and want to
take charge of their personal investment decisions. The use of
technology is influencing more people to invest in the stock market.
Market size and Characteristics: -India is a large and growing
economy with rapidly expanding financial services sector. The sector
has witnessed a transformation over the last decade as a result of the
economic liberalization which started in 1991. India is the world’s 12th
largest economy in dollar terms and the 4th largest in PPP terms. The
projected growth rate of real GDP is greater than 9% per annum with
higher growth in many sectors such as financial services. Indian
financial sector presents a huge retail finance opportunity. As a result
of falling interest rates, bank deposits, other traditional investment
opportunities are losing their attraction. Thus, Indian investors are
getting attracted towards alternate investments such as the equity
markets and are looking for newer financial products.
THREATS
Economic slowdown: - Terrorist attacks and other acts of violence or
war, including those involving India or other countries could adversely
affect national economy or world economy as a whole. Such act may
also result in a loss of business confidence. Travel restrictions as a
result of such incidents may have adverse affect on the ability to
operate effectively. This will result in an economic slowdown
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112
Political instability in the country: - The government of India has
pursued the policy of economic liberalization, including relaxing
restriction on the private sector. With the change in government, there
is no assurance that these liberalization polices will continue in the
future. Any political instability could delay the economic reforms and
could have adverse effect on the market.
Volatile movement in market indices: - The Indian stock market is
very volatile in nature and is capable of shedding or gaining several
points in a single day. Unless and until the market stabilizes the
investors will be very hesitant to invest in the market. Stock market
falls will have a cascading effect on the investors and economy of the
country.
Competition: - Indiabulls faces significant competition from
companies seeking to attract client’s financial assets, including
traditional and online brokerage firms, mutual fund companies, etc,
which are having a wide presence and strong brand name. As the
company enters new markets their bound to face additional
competition from those who have longer operating history have grater
retail and brand presence than Indiabulls. If the company is unable to
manage its business it might impede their competitive position and
their profitability.
Substitutes: - Various alternative forms of investment including fixed
deposits with banks and post offices etc act as substitutes to retail
broking products and services. The stock market is very unpredictable
with fluctuations; this may prompt many people to invest in fixed
deposits, posy office deposits, etc in order to avoid risk.
Low product differentiation: - The retail broking services provided by
the various companies are homogeneous with very low product
differentiation. This does not allow the company to freely fix their
prices due to the threat of competition, which in turn reduces their
profit.
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113
CONCLUSION
7
Page 114
114
CONCLUSION
This conclusion relates with not what is written in the report rather, it goes
beyond that, Indiabulls Securities Ltd is a company which is having maximum
number of branches and largest client base but stands second in term of
brokerage generation, this shows that there is further scope for its growth.
Since formation of Indiabulls in year 2000 Indiabulls have adopted strategy of
downsizing twice in year 2002, 2004 and surprisingly it is under process of
doing it again in year 2007. This cutting of cost center is not done directly;
employees are given high target of sales and those employees who are
uncomfortable with that leave the organization. Apart from this it has been
found that Indiabulls is having high labor turnover ratio.
The above given situation brings us to the conclusion that Indiabulls is
incurring high salary expenses with high labor turnover, as explained in
accounting a high turnover will always leads to high cost. This finally led us to
believe that Indiabulls can become a better company if it handles the above
mentioned issue efficiently.
There is another problem that exists is, lack of good guidance to clients so
that they can make better decision while making investments. The level of
this problem is not serious & neither customer are aware of it, customer are
given regular updates of stock market on daily basis they are quiet satisfied
with it. Thus customer satisfaction can enhance if, more attention is given to
technical analysis of stock which will help Relation Managers to deliver
calculated information to their customer.
The head office of Indiabulls is in Gurgoa (Haryana), on daily basis it sends
tips to all its branches through mail, which in turn is given to customer, this
transfer of data takes place only ones when market opens and for the rest of
the day Relation Manager has to depend on their own. Thus if this flow of
information is enhance customer as well as Relation Manager will reap more
benefits. Hiring of technical analyst for branch will be too costly so the best
way will be to improve the flow of information.
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115
RECOMMENDATION
AND
SUGGESTION
8
Page 116
116
RECOMMENDATION AND SUGGESTION
These are following problems that were observed while staying in Indiabulls
which also includes recommendations.
1. As per NSDL guideline clients have to change their password every 15th day.
It becomes very difficult for a client to change and remember a new password
after every 15 days. It increases the work of Relationship Manager also as he
has to tell the clients their new password every time.
Recommendation
Since this guideline of changing the password by NSDL is not mandatory to
follow. Other brokerage houses like ICICI DIRECT, HDFC, Share Khan, UTI
etc. are not following this guideline. It is advisable for Indiabulls to reconsider
this rule once again.
It may be good for the company if they modify this guideline in terms of
increasing the time limit from 15 days to 45-60 days.
Another thing that can be done is software could be made in such a way that
the client can directly send request of renewing password to the main server.
The main server will automatically generate new password and send it to
client’s mail ID. For this the client has to make sure that his/her mail Id is
updated regularly.
2. Both Screen Based and Power Indiabulls software do not show purchased
price and current market price of underlying on same screen at a time. To
see original purchased price of underlying, a client has to check from his/her
transaction history. That’s way system does not show percentage gain/loss of
client on screen.
Recommendation
It would be easy for the client to get this advantage on his/her screen.
Consider this recommendation while updating the software
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117
3. Relationship manager is the person who takes care of client’s account. Due to
frequent changes in the Relationship manager a client is in dilemma that to
whom he/she is supposed to contact. In general when the client calls, he/she is
not aware about his/her Relationship manager. This can be due to the high
attrition rate.
Recommendation
Client should be informed through Phone, E-mail by the new Relationship
manager personally. Confirmation should be sent from the H.Q to the client
about his/her new Relationship Manager.
4. Margin Product is the facility provided by Indiabulls through which clients
can utilize fund beyond their capacity of cash margin + stock margin on the
basis of predetermined rate of interest. Most of the clients are not aware
about this facility
Recommendation
Explain the clients through a simple example of how margin product works. A
format of the same can be prepared and send through E-mail to every client.
5. It is observed that majority of clients who have done trade in Futures and
Option Market, are in loss. Due to the lack of proper strategies most of the
clients losing their money in this segment.
Recommendation
Prepare some of the presentations in series starting from primary level to
advanced level on Futures and Option Market and send it to every client who
has signed Futures and Option agreement in time to time.
6. Most of the Brokerage Houses are using advertising strategy for promoting
their products. This is in form of print ads, TV commercials, holding seminars,
Web advertising etc. For example Share Khan advertises its product by
placing its advertisement on different other web sites. Some other companies
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like An and Rather, Stock Holding Corporation use seminars as a means to
promote their product
Recommendation
It would be an advantage if Indiabulls follows some kind of advertising
strategy. This can be done through,
Print Media.
Banners and Hoardings.
Web advertising (Placing ads into other popular web sites).
By conducting seminars. For example, people can be called in the
office at weekends, conducting presentations.
SMS promotional schemes. Etc
7. Indiabulls does not provide IPO subscription facility through its online
software. Many clients are facing this problem as they have to go through
paper work subscription method. Whereas all other competitors are providing
this facility online
Recommendation
Since most of the companies are coming with their IPOs/FPOs, it would be
beneficial for Indiabulls customers if they are provided with this facility online.
Consider this recommendation while updating the online software in future.
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SUGGESTIONS
Aggressive Promotions: Indiabulls Securities compared to its competitors
concentrates less on advertising and promotions, especially through
electronic media. Its competitors like Sharekhan, ICICI and Kotak are
advertising aggressively through media. Hence Indiabulls should concentrate
more on advertising through print and electronic media.
Tapping Rural Market: The Indian rural investors market are relatively
untapped, with only small and private firms meeting the current demand.
Indiabulls Securities can gain the ―First Mover Advantage‖ over its
competitors, especially in areas were commercial crops are grown and the
standard of living is high. These people do not have much option to invest
other than banks and post offices.
Reduce the initial account opening charges: The charge for opening a
trading and demat account in Indiabulls securities is high compared to its
competitors. This influences the potential investors to open their account with
another company which provides the same at lower prices. Thus it acts as a
mental barrier for potential customers, who tend to overlook all other benefits
offered by Indiabulls. Hence Indiabulls should consider reducing their account
opening charges.
Bring in more product differentiation: Product differentiation here means
that Indiabulls securities should bring in more customized services and more
value proposition for large investors. It can reduce the brokerage charges for
large investors which will encourage them to invest more in the company.
Invest more on R&D: Indiabulls should concentrate on its research and
development since most of its competitors are investing on R&D. This will
help the company to read the market better and will also be in a better
position to understand the needs of the customers. This can be extremely
beneficial for Indiabulls in the long run.
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BIBLIOGRAPHY
Books:
• Kotler Philip, Keller Kevin L., Koshy A., Jha Mithileshwar ―Marketing
Management‖ 12e, Pearson Education.
• Kothari C.R., Research Methodology Method &Techniques, Fourth
Edition, Wishwa Prakashan, New Delhi.
• Ramaswamy & Namakumari : MARKETING MANAGEMENT –MACMILLAN
NEW DELHI.
• Subhash C. Mehta: MARKETING ENVIRONMENT. CONCEPT AND
CASES, TATA MCGRAW HILL, NEW DEHLI.
Website
http://www.indiabulls.com/securities/
http://www.indiainfoline.com
http://www. kotaksecurities.com
http://www. karvy.com
http://www. icicidirect.com
http://www. sharekhan.com
http://www.motilaloswal.com
http://www.dnb.co.in/EquityBroking
https://www.arthamoney.com/Articles/
http:/www.wikipedia.org
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APPENDICES
8
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QUESTIONNAIRE I am Rohit Jain A student of MBA 4th sem of AIMS Mansarover,Jaipur.I am
conducting this research as part of MBA curriculum.The information provided
by you will kept confidential.
Name : ________________________________________________
Address: _______________________________________________
_______________________________________________
1. YOUR OCCUPATION CLASS-
(A) Business class (B) Service class (C) Professionals
2.AGE GROUP-
(A) Below 35 (B) 35-45 (C) 46-55 (D) Above 55
3.YOUR INCOME RANGE-
(A) Below 1000 (B) Rs.10000 to Rs. 20000
(C) Rs. 20001 to Rs. 30000 (D) Above Rs. 30000
4. HOW MUCH PORTION OF YOUR SAVING DO YOU INVEST/WOULD INVEST IN SHARE MARKET
(A) 0-20% (B) 20-40% (C) 40-60% (D) Above 60%
5. EXPERIENCE IN SHARE TRADE
(A) Less than 2 (B) 2-3 (C) 3-4 (D) Above 4
6. TAKING THE FACTORS LIKE SECURITY, RATE OF RETURNS AND TIME IN CONSIDERATION WHICH AMONG THE FOLLOWING YOU RATE AS PER THE BEST OPTION-
(A) Bank FD’s (B) Small saving schemes
(C) Bonds (D) Equities/derivatives
(E) Mutual fund
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7. INVESTOR’S PERCEPTION ABOUT SHARE MARKET
(A) 100% risk (B) High risk less return
(C) Low risks, high return (D) 100% return
8. IF YOUR BASE TO CHOOSE THE SCRIP IS MARKET CALLS/ MARKET TIPS, AND THEN WHAT ARE THE SOURCES YOU TRUST UPON MOST -
(A) Market tips by securities (B) T.V. Channels
(C) Stock broker
9. UP TO WHAT PERCENT MARKET TIPS ARE CORRECT ACCORDING
TO YOU –
(A) 30% or less (B) 30%-50% (C) 50%-60 (D) More than 60%
10. WITH WHICH BROKERAGE HOUSES ARE YOU ENGAGED-
(A) Indiabulls (B) India infoline (C) Icici direct (D) Karvy
(E) Motilal oswal (F) Sharekhan
11 WHY YOU HAVE CHOSEN ABOVE BROKING HOUSE –
(A) Low brokerage charges (B) Services
(C) Fast query solution
12. HOW WILL YOU RANKED YOUR BROKERAGE HOUSE -
(A) Excellent (B) Very good (C) Good (D) Satisfactory
13. ARE YOU SATISFIED WITH SERVICES PROVIDED BY YOUR BROKERAGE HOUSES -
(A) Yes (B) No
14. WHAT PROBLEM DO YOU FACE WITH BROKERAGE FIRM-
__________________________________________________
__________________________________________________
Thank you
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Sr. no. Q.1 Q.2 Q.3 Q.4 Q.5 Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.13
1 A A D B A E D C A F A A A
2 C A D B B C C A A A A C A
3 A A D A A B D C C B A C A
4 C A B D B C C B D C C A A
5 A D D C A D D B A C C C A
6 C A A B A B B C C F A C A
7 C C D B B C A C A B A A A
8 B D D D B A D C A D B B B
9 A A A C A E B B A E A B B
10 C B D A A A B B C B A A A
11 A C D A A C D A A F A B B
12 A A D C B D D C D C A C A
13 A A B D C C B B A F B C A
14 A B D B C E D C A C A A A
15 C C C B B D D B C A A C A
16 A A B C A D D A A D A B B
17 A A D B B D B C B D B B B
18 C C C D C C D B A B C A A
19 A C A A B C A B C A A C A
20 C B D A A A D C D D A D B
21 A C C A C E D C A D B A A
22 B B D A A A C B D F A B B
23 A D C B A C D C C B B A A
24 C A B D B D C B A E C C A
25 A A D C A D D C A C C D B
26 A A A D A A B C B A A B B
27 A A C A C C C B A D A A A
28 C C D B A D D C A B A D B
29 A B D C C E C B A B A B B
30 A C C C B C D C C A C A A
31 C B B B A E D B A D B C A
32 A D D C A A D C A B A A A
33 C C C B B E A B A C A C A
34 B B D B C D A C A A A C A
35 A A A A B A A B D D A D B
36 C A A C C E B B A B B A A
37 C C C B C B D C C F A B B
38 A B C C B C C B B A A C A
39 A A D C A D D C A B B D B
40 C D D B B C D A A E A A A
41 C A B A C C B B D C B C A
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42 A A D B C A C B C C A C A
43 B D A A C E A C A E A A A
44 C B B B A D D B A F C C A
45 A C C B B A D C A A A C A
46 B C D B A E B B B D C A A
47 A A D B B C A B A A A D A
48 C D D A A D D B A A A A A
49 B A D B A D C A 0 F B C A
50 A C C A C D A B A C A C A
51 C A D C D E D C A A A A B
52 C D B C A C C B A A A A A
53 C A D A B D D C A B A D B
54 A A D C A C C B A A C A A
55 A C B C B D D C C C C B B
56 C A A A A D B B A C A B B
57 A B B B D E A B A B A D A
58 A D D C A D B A A C B D B
59 A C A C D E D B B A A C A
60 B C C A A A B B A B B B B
61 A B D B A E B C A C A D A
62 B A B C B D D C A C A D B
63 C A B C C E B C A A B C A
64 A B B B A A A C D C A A A
65 A A D A B D B C A A A C B
66 A C B C A C D B A D A D A
67 B A B B D D A C A A B A A
68 A B D C C E C B A B A D B
69 C C A B D C D C B F C B B
70 A A B A B D C B A A A A A
71 A C C B C A A C A D B D B
72 A B B A A E D B A F A A A
73 A D C B A C D C B B A B B
74 C A A C D D C A A A A A A
75 A A B A A B C C A C A D B
76 C A A C A E A B A F A A A
77 A A C A C C D B B A B D B
78 C B B B B D B B A A A D A
79 A B C D C A C C A B A B B
80 A D C A B C D C D F C D B
81 A B A D A E B B A A A B B
82 A B D A A D D C A A A A A
83 A A C D D E B B A D B C A
84 A B C A A B A C A A C D A
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85 C A A B B D C B D D A A A
86 A A B D C A B C A B A C B
87 A B A B A D D B B D C A A
88 C B C D B C D C A A C B B
89 A D D D D D C B A B A D B
90 A B C B B E D C A D A D A
91 B A C A C C D B D C A B B
92 A A A C C E C C A D A A A
93 C A B A C D D B A B B B B
94 A B A A A E D C A C A D A
95 A B C B D D B A A D A A B
96 A C C C B C A C C F A C A
97 C A C A D E D B A C C D B
98 A D A C B D C C A D A B B
99 A A B A D B D B D C A C A
100 A D C A D D C C A B A D B
Q.1 Q.2 Q.3 Q.4 Q.5 Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.13
A 60 42 18 30 38 14 15 8 68 25 66 30 60
B 10 24 22 32 28 6 20 46 10 20 18 20 40
C 30 20 26 26 22 24 21 46 10 20 16 26
D 14 34 12 12 32 44 12 18 24
E 24 8
F 9
TOTAL 100 100 100 100 100 100 100 100 100 100 100 100 100