MINOR PROJECT ON “ANALYSIS OF CONSUMER BEHAVIOR TOWARDS SHARE TRADING IN INDIABULLS SECURITIES LTD” IN INDIA BULLS FOR THE PARTIAL FULFILMENT OF THE BBA PROGRAM OF G.G.S. INDERPRASTHA UNIVERSITY DELHI SESSION- 2006-2009 Submitted By:- NEHA VERMA B.B.A. (MARKETING) ENROL. NO. – 0101701706 Under Guidance:- Mr. RAJESH BAJAJ Project Supervisor 1
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MINOR PROJECT
ON
“ANALYSIS OF CONSUMER BEHAVIOR TOWARDS SHARE TRADING IN INDIABULLS
SECURITIES LTD”
IN
INDIA BULLS
FOR THE PARTIAL FULFILMENT OF THE BBA PROGRAM OF G.G.S. INDERPRASTHA UNIVERSITY DELHI
SESSION- 2006-2009
Submitted By:- NEHA VERMA
B.B.A. (MARKETING)ENROL. NO. – 0101701706
Under Guidance:- Mr. RAJESH BAJAJ
Project Supervisor
Guru Gobind Singh University
1
Kashmiri Gate; New Delhi
ACKNOWLEDGEMENTS
I Shivani Sharma student of sem-5 BBA would like to express my sincere thanks to India
bulls Securities Ltd., Delhi for giving me the opportunity to carry out the Summer
Internship Program in their organization. The whole period spent with the organization
has been of immense learning experience about the Indian Stock Market.
Preparing a project of such a kind was not an easy task in itself and I am sincerely
thankful to all those people who help me lot, in preparing and completing this project.
I am grateful to India bulls Securities Ltd. who has given me this opportunity to carry out
the project “Analysis of Consumer Behavior towards Share Trading in India bulls
Securities Ltd.” A study on investor’s perception their behavior about equities.
I sincerely thank to Mr. Vishal Kumar (Branch Manager) for providing me this
valuable learning opportunit
SHIVANI SHARMA
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CERTIFICATE
I, Miss. Annu Aggarwal, hereby certify that Miss. Shivani Sharma of Tecnia Institute
Of Avanced Studies of G.G.S.I.P.U [Semester V] has completed her project, titled
‘ANALYSIS OF CONSUMER BEHAVIOR’ in the academic year 2006-2009. The
information submitted herein is true and original to the best of my knowledge.
______________________
Signature Of The Project Co-ordinator
[Miss Annu Aggarwal]
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DECLARATION
I, Miss Shivani Sharma , of Tecnia Institute of Advanced Studies of G.G.S.I.P.U [Semester V] hereby declare that I have completed my project, titled ‘’ in the Academic Year 2006-2009. The information submitted herein is true and original to the best of my knowledge.
___________________
Signature of Student
[NEHA VERMA]
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EXECUTIVE SUMMARY
Investing in equities in a market like India is speculative and involves risk that may be
greater than other types of investment strategies. Before investing an Investor should be
careful enough about him investment decision to avoid erosion of wealth. As seen in the
recent times the volatility of market is more detrimental to the retail investors as it seems
to be lucrative for speculative gains of short duration of time. Hence an investor has to
evaluate his options carefully for a prudent investment, keeping long-term horizon in
mind.
The report has tried to bring out the parameters those are of paramount importance to
general public dealing in an equity trading on day-to day and delivery base trading. The
working methodology has been discussed i.e. the data collection methods, sampling
methods and the survey questionnaire methods. Thee questionnaire prepared is designed
so as to cover a wide range of customer “touch points”
The report given a view about the investors perception that what thy think while making
investments in shares.
A sample of 100 people was selected randomly and survey was done as per the
parameters of the questionnaire. The results of every parameter have been included in
this report and shown graphically (Pie Charts, bar graphs etc.) A complete structure of the
research design has been included.
Apart from above discussed points the brief history of India bulls Securities Ltd, its
business diversification and a brief introduction about the concept of share trading.
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Contents
S.No. Title Page No.
1. INTRODUCTION
1.1 OVERVIEW OF THE INDUSTRY
1.2 BOMBAY STOCK EXCHANGE
1.3 NATIONAL STOCK EXCHANGE
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2
4
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2. COMPANY PROFILE
2.1 PROFILE OF THE COMPANY
2.2 MAIN OBJECTIVE OF THE COMPNAY
2.3 CREDIT TRADING
2.4 PROBLEMS OF THE COMPANY
2.5 COMPETITION INFORMATION
2.6 SWOT ANALYSIS
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3. RESEARCH METHODOLOGY
3.1 SIGNIFICANCE
3.2 MANAGERIAL USEFULNESS OF THE STUDY
3.3 OBJECTIVE OF THE STUDY
3.4 SCOPE OF THE STUDY
3.5 METHODOLOGY
3.6 LIMITATIONS OF THE RESEARCH
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37
4. CONCEPTUAL DISCUSSION 38
5. DATA ANALYSIS 75
6. CONCLUSION 83
7. RECOMMENDATIONS 85
8. ANNEXURE 89
9. BIBLIOGRAPHY 93
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Chapter 1
INTRODUCTION
1
INTRODUCTION OF THE INDUSTRY
1.1 OVERVIEW OF THE INDUSTRY
The only stock exchanges operating in the 19th century were those of Bombay set up in
1875 and Ahemadabad set up in 1894. These were organized as voluntary non-profit
making organization of brokers to regulate and protect their interests. Before the control
on securities trading became a central subject under the constitution in 1950, it was a
state subject and the Bombay securities contract (CONTROL) Act of 1952 used to
regulate trading in securities. Under this Act, the Bombay stock exchanges in 1927 and
Ahemadabad in 1937.
During the war boom, a number of stock exchanges were organized in Bombay,
Ahemadabad and other centers, but they were not recognized. Soon after it became a
central subject, central legislation was proposed and a committee headed by A.D.
Gorwala went into the bill for securities regulation. On the basis of committee’s
recommendations and public discussions the securities contracts (regulations) Act
became law in 1956.
DEFINITION OF STOCK EXCHANGE
“Stock exchange means anybody or individuals whether incorporated or not, constituted
for the purpose of assisting, regulation or controlling the business of buying, selling or
dealing in securities.”
It is an association of member brokers for the purpose of self regulation and protecting
the internets of its members. It can operate only if it is recognized by the Govt. under the
securities contract (regulation) Act, 1956 the recognition is granted under section 3 of Act
by the Central Govt. ministry of finance.
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BYELAWS
Beside the above act, the securities contract (regulation) rules were also made in 1975 to
regulate certain matter of trading on Stock Exchange. These are also byelaws of the
exchanges, which are concerned with following subjects.
Opening/Closing of the Stock Exchange, timing of trading, regulation of blank transfer,
regulation of Badla or carryover business, control of statement, and other activities of
stock exchange, fixation of margins, fixation market price or making price, regulation of
intraday (jobbing), regulation of broker trading, brokerage charges, trading rules on
exchanges, attribution and settlement of disputes, settlement and clearing of the trading
etc.
REGULATION OF STOCK EXCHANGE
The securities contract (regulation) is the basis of the stock exchange in India. No
exchange can operate legally without the Govt. permission or recognition. Stock
exchanges are given monopoly in certain areas under section 19 of the above Act to
ensure that the control and regulation are facilitated. Recognition can be granted to a
stock exchange provided certain condition are satisfied and the necessary information is
supplied to the government. Recognition can also be withdrawn, if necessary. Where
there are no stock exchanges, the government can license some of the brokers to perform
the function of stock exchange in its absence.
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)
SEBI was setup as an autonomous regulatory authority by the Government of India in
1988 “to perform the interest of investors in the securities and to promote the
development of, and to regulate the securities market and for matters connected therewith
or incidental thereto.” It is empowered by two Acts namely the SEBI act, 1992 and the
securities contract (regulation) Act 1956 to perform the function of protecting investor’s
right and regulating the capital market.
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1.2 BOMBAY STOCK EXCHANGE
The stock exchange, Mumbai, popularly known as “BSE” was established in 1875 as
“The Native share and stock broker association”, as a voluntary non-profit making
association. It has an evolved over the year into its present status as the premiere stock
exchange in the country. It may be noted that the stock exchanges the oldest one in the
Asia, even older than the Tokyo Stock Exchange, which was founded in 1878.
The Exchange, while providing an effective and transparent market for trading in
securities, uphold the interest of the investors and ensure redressed of their grievances,
whether against the companies or its own member brokers. It also strives to educate and
enlighten the investors by making available necessary informative inputs and conducting
investor education programmes.
A governing board comprising of 9 elected directors, 2 SEBI nominees, 7 public
representatives and an executive director is the apex body, which decides the policies and
regulates the affairs of the exchanges.
The executive director as the chief executive officer is responsible for the day today
administration of the exchange. The average daily turnover of the exchange during the
year 2006-07 (April-March) was Rs. 6984.19 crores and average number of daily trades
15.69 lakhs.
BSE INDICES
In order to enable the market participants analysis etc., to track the various ups and
downs in the Indian stock market, the Exchange has introduced in 1986 an equity stock
index called BSE-SENSEX that subsequently became the barometer of the moments of
the share prices in the Indian Stock market. It is a “Market capitalization weighted”
index of 30 components stocks representing a sample of large, well-established and
leading companies. The base year of Sensex is 1978-79. The Sensex is widely reported
in both domestic and international markets through print as well as electronic media.
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Sensex is calculated using a market capitalization weighted method. As per this
methodology, the level of the index reflects the total market value of all 30-component
stocks form different industries related to particular base period. The total market value
of a company is determined by multiplying the price of its stock by the number of shares
outstanding. Statisticians call an index of a set of combined variables (such as price and
number of shares) a composite Index. An Indexed number is used to represent the results
of this calculation is order to make the value easier to work with the track over a time. It
is much easier to graph a chart based on Indexed values than one based on actual values
world over majority of the well-known Indices are constructed using “Market
capitalization weighted method”.
In practice, the daily calculation of SENSEX is done dividing the aggregate market value
of the 30 companies in the Index Divisor. The keeps the Index comparable over a period
or time and if the reference point for the entire Index maintenance adjustments. SENSEX
is widely used to describe the mood in the Indian Stock Markets. Base year average is
changed as per the formula new base year average = old base year average* (new market
value/old market value).
1.3 NATIONAL STOCK EXCHANGE
The NSE was incorporated in Now 1992 with an equity capital of Rs. 25 crores. The
international securities consultancy (ISE) of Hong Kong has helped in setting up NSE.
ISE has prepared the detailed business plans and installation of hardware and software
systems. The promotions for NSE were financial institutions, insurance companies,
banks an SEBI capital market ltd., Infrastructure leasing and financial services ltd. and
stock holding corporation ltd.
It has been set up to strengthen the move towards professionalisation of the capital
market as well as provide nation wide securities trading facilities to investors.
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NSE is not an exchange in the traditional sense where brokers own and mange the
exchange. A two tier administrative set up involving a company board and a governing
abroad of the exchange is envisaged.
NSE is a national market for share PSU bonds, debentures and government securities
since infrastructure and trading facilities are provided.
NSE-NIFTY
The NSE on April 22, 1996 launched a new equity Index. The NSE-50. The new index,
which replaces the existing NSE-100 index, is expected to serve as an appropriate Index
for the new segment of futures and options.“Nifty” means National Index for Fifty
Stocks.The NSE-50 comprises 50 companies that represent 20 board Industry groups
with an aggregate market capitalization of around Rs. 5,70,000 crores. All companies
included in the Index have a market capitalization in excess of Rs. 1000 crores each and
should have traded for 85% of trading days at an impact cost of less than 1.5%.
The base period for the close of prices on Nov 3, 1995, which makes one year of
completion of operation of NSE’s capital market segment. The base value of the Index
has been set at 1000.
NSE-MIDCAP INDEX
The NSE madcap Index or the Junior Nifty comprises 50 stocks that represents 21 abroad
Industry groups and will provide proper representation of the madcap segment of the
Indian capital Market. All stocks in the index should have market capitalization of
greater than Rs. 600 crores and should have traded 85% of the trading days at an impact
cost of less 2.5 %.
The base period for the index is Nov 4, 1996, which signifies two years for completion of
operations of the capital market segment of the operations. The base value of the Index
has been set at 1000.
Average daily turn over of the present scenario 258212 (Laces) and number of averages
daily trades 2160 (Laces).
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Chapter 2
COMPANY PROFILE
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COMPANY PROFILE
2.1 PROFILE OF THE ORGANIZATION
INTRODUCTION TO INDIABULLS
Indiabulls is India's leading retail financial services company with over 414 locations in
more than 124cities. While our size and strong balance sheet allow us to provide you
with varied products and services at very attractive prices, our over 5400 Client
Relationship Managers are dedicated to serving your unique needs.
Indiabulls is lead by a highly regarded management team that has invested crores of
rupees into a world class Infrastructure that provides our clients with real-time service &
24/7 access to all information and products. Our flagship Indiabulls Professional
Network offers real-time prices, 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 focused Relationship Managers.
Indiabulls offers a full range of financial services and products ranging from Equities to
Insurance to enhance your wealth and hence, achieve your financial goals. Indiabulls
Client Relationship Managers are available to you to help with your financial planning
and investment needs. To provide the highest possible quality of service, Indiabulls
provides full access to all our products and services through multi-channels.
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INNOVATION IS THE KEY TO SUCCESS- PROVED BY
INDIABULLS
Sameer Gehlaut and Rajiv Rattan
Sameer Gehlaut, Rajiv Rattan and Saurabh Mittal, friends got together to start the
company. For some years they worked in the oil field services industry. The idea to start
their own outfit on a technology platform was born in 1999 when Gagan Banga joined
the three IIT-Delhi engineers who promoted the company. These first generation
entrepreneurs knew very well that nothing small works. They didn’t want to build a small
business which would get overnight success and shut down; rather they wanted to build a
sustainable profitable business.
This idea was to target the huge untapped retail segment of the market. The first task of
course was to work out a sound business model, which was sustainable and profitable.
They soon realized the implicit strength of their model. India was toying around with the
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idea of brokerage getting done through the internet and clients directly managing their
accounts. Around the middle of 1999, the core promoters had got together and acquired a
shut down brokerage firm from its promoters at that time. The whole idea was to get a
brokerage license from the stock exchange and a membership of the stock exchange.
In 1999-2000, there was dotcom boom, there were a lot of dotcoms coming into being, lot
of venture capitalists were funding the dotcoms business but none of the dotcom had any
revenue model so the scope of a dotcom business was immense. Indiabulls came into
existence to take advantage of this. The three promoters got together and took over a
defunct brokerage company Orbis Securities- the whole idea was to get a brokerage
license and a membership of the stock exchange. This brokerage firm was restarted and it
started making miniscule amount of revenue for the company – it basically catered to the
HNIs - High Networth Individuals(?). Immediately after this the venture capitalists were
contacted. In this there were several models, which were discussed including involving a
strategic investor. Initially the company was promoted as a dotcom company. The
promoters chose the famous Charles Schwab model, which perfectly addressed their
need to have the business on a technology platform. The idea was that since it worked in
other parts of the world, it would work here also. The company thus had clear-cut
revenue model. It was very clear in the minds of the promoters that revenue was very
important. Profitability is the key to the entire thing. The emphasis on profitability was
there from day one. Indiabulls has been profitable for every financial year beginning
2000-01 the only financial year it has not been profitable has been 1999-2000. The
company focused on the retail segment and used Internet to exploit the massive scope in
the retail segment. The company also enjoyed the first mover advantage, as at that time
there was no company catering to the needs of retail segment through Internet Sameer
Gehlaut, took over as chairman and CEO, and now looks after sales, marketing and
external relationships, while Rajiv Rattan, in the role of CFO and president, manages
operations, finance and back office.
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THE INDIABULLS PHILOSOPHY – YOU COME FIRST
We have created a unique organization that is designed for you – the Smart Investor –.
We 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 414 locations across 124 cities. We have a strong team of over
4400 Client Relationship Managers focussed on serving your 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.
We invite you to learn more about Indiabulls by calling 1600 11 1130 (toll free) or visit
our 135 Indiabulls Offices Nationwide or explore the services we offer through the
Indiabulls Market Trader.TM
HISTORY AND OTHER CORPORATE MATTERS OVERVIEW
Indiabulls Financial Services Limited was incorporated on January 10, 2000 as M/s
Orbits InfoTech Private Limited at New Delhi under the Companies Act, 1956 with
Registration No. 55 – 103183. The name of the Company was changed to M/s.
Indiabulls Financial Services Private Limited on March 16, 2007 due to change in the
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main objects of the Company from Infotech business to Investment & Financial Services
business. It became a Public Limited Company on February 27, 2006 and the name of
Company was changed to M/s. Indiabulls Financial Services Limited. Company was
promoted by three engineers from IIT Delhi, and has attracted more than Rs.700
million as investments from venture capital, private equity and institutional investors
such as LNM India Internet Ventures Ltd., Transatlantic Corporation Ltd., Farallon
Capital Partners, L.P., R R Capital Partners L.P., and Infinity Technology Trustee Pvt.
Ltd. and has developed significant relationships with large commercial banks such as
Citibank, HDFC Bank, Union Bank, ICICI Bank, ABN Ambro Bank, Standard Chartered
Bank, Lord Krishna Bank and IL&FS. Company and there subsidiaries have facilities
from the above mentioned banks and financial institutions aggregating to Rs. 1760
million. Companies headquarters are co-located in Mumbai and Delhi, allowing it to
access the two most important regions for Indian financial markets, the Western region
including Mumbai, rest of Maharashtra and Gujarat; and the Northern region, including
the National Capital Territory of Delhi, nearby cities, parts of Haryana, Uttar Pradesh and
Punjab; and access the highly skilled and educated workforce in these cities. The
Marketing and Sales efforts are headquartered out of Mumbai; with a regional
headquarter in Delhi; and its back office, risk management, internal finances etc. are
headquartered out of Delhi, allowing our Company to scale these processes efficiently for
the nationwide network.
2.2 MAIN OBJECTS OF THE COMPANY
The main objects to be pursued by the Company on its incorporation are:
1. To hold investments in various step-down subsidiaries for investing, acquiring,
holding, purchasing or procuring equity shares, debentures, bonds, mortgages,
obligations, securities of any kind issued or guaranteed by our Company.
2. To provide financial consultancy services; to provide investment advisory services
on the internet or otherwise; provide financial consultancy in the area of personal
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and corporate finance; publish books and CD ROMs and any other information
related to the above.
3. To conduct the business of sale, purchases, distribution and transfer of shares, debts,
instruments and hybrid financial instruments and to perform all related, incidental,
ancillary and allied services.
4. To conduct depository participant services; to conduct de-materialization and re-
materialization of shares; set up depository participant centers at various regions in
India and to perform all related, incidental, ancillary and allied services.
5. To receive funds, deposits and investments from the public, Government agencies,
financial institutions and Corporate bodies; grant advances and loans; conduct
advisory services related to banking activities, project financing, funding of mergers
and acquisition activities; fund management and activities related to money market
operations.
6. To carry on the business of portfolio management services, investment advisory
services; custodial services; asset management services; leasing and hire purchase;
mutual fund services and to act as brokers of real estate and financial instruments.
7. To carry on the business of financing; provide lease and hire purchase services; to
provide consultancy in the area of lease and hire purchase financing.
8. To operate mutual funds; receive funds from investors; equity or debt instrument
research activity instrument in debt and/or equity instruments.
2.3 CREDIT RATING
The company ranks at 82nd position in the list of most valuable companies in India has a
market capitalization of approx US $ 800 million. The consolidated net worth of the
company is approx US $ 400 million.
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Indiabulls Securities Limited has been granted ‘PR1+’ rating for its unsecured short
term borrowing program of Rs. 300 million. Vide letter dated May 5, 2007 the rating
agency has increased the unsecured short term borrowing limit to Rs. 350 million
maintaining the ‘PR1+’ rating. ISL also enjoys ‘A+’ rating for medium to long term
unsecured borrowing program of Rs. 300 million. The Rating to the company has been
assigned by Credit Analysis Research Limited. As for the present issue of equity shares
of our Company, credit rating is not required.
SHAREHOLDERS AGREEMENT
Shareholders Agreement was entered into by and among our Company (formerly Orbis
Infotech Private Limited), Infinity Technology Trustee Private Limited as the trustee of
Infinity Venture India Fund, LNM India Internet Ventures Limited, Transatlantic
Corporation Limited (together the “VC Investors”) and the Promoters dated November 2,
2006. The VC Investors invested an aggregate amount of Rs. 206,000,000 in our
Company for which they were issued 55,425 equity shares at an average price of Rs.
3,716.73 per equity share. Pursuant to a letter agreement (the “Letter Agreement”) dated
May 27, 2006 between the parties to the Shareholders Agreement, each of the VC
Investors have agreed not to enforce rights that have accrued to them before the said
Letter Agreements and have agreed that the Shareholders Agreement, together with all
the rights and obligation on the parties will stand terminated immediately upon the listing
of the shares of our Company and consequent to the listing, the rights of the Shareholders
Agreement, including the rights that have arisen prior to such termination shall be
terminated. A copy of the Shareholders Agreement, and a copy of the Letter Agreement
terminating the Shareholders Agreement are available for inspection as material
documents at the corporate offices of our Company.
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Key Competitive Strengths
DIVERSE BRANCH NETWORK
Since Company inception in FY 2006 Company and its subsidiaries have grown from a
single location to a nationwide network spread over 414 Offices in 124 cities. They have
a pan India distribution networks for the purpose of distribution of financial products and
services. Such a diverse and integrated network provides a centralized platform to there
clients.
BOUQUET OF FINANCIAL PRODUCTS AND SERVICES
Company and its subsidiaries offer various financial services and products ranging from
equity, F & O and wholesale debt, mutual fund, insurance and IPO distribution, equity
research analysis, depository services to cater to the specific needs of the retail and
institutional investors thus providing all these services in a single platform.
Advanced Technology team that delivers market leading product innovation
There ongoing investment in technology is a key element in expanding there product and
service offerings, enhancing there delivery systems, providing fast and consistent client
service, reducing processing costs, and facilitating there ability to handle significant
increases in client activity without a corresponding rise in risk and staff. Company and its
subsidiaries have an in-house technology team of 27 people comprising of several
engineers. The in-house technology team has been responsible for developing the
technology products for operating at a large scale with efficient back office systems. The
application of technology allows Company and its subsidiaries to build scaleable product
and service offerings. The in-house technology team developed one of the first Internet
trading platforms in India, one of the first in-house real-time CTCL link with NSE.
Company and its subsidiaries introduced integrated accounts with automated gateways
with client bank accounts so that they can transfer funds to and from their bank account
to their brokerage account with the Company. This has enhanced customer ability to
access their funds for market related activities. The in-house technology team has good
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expertise to create mission critical applications and in the maintenance and upkeep of
high transaction processing of there web-site.
Strong Sales and Marketing Teams with continuous reinvestment and training
Company’s relationship manager channel (through a team of 4400 Relationship
Managers as on july 30, 2007) offers a single point contact to retail customers whereby
their high net worth clients have separate relationship managers catering to them. These
managers offer personalized services to the customers helping build strong and
continuing relationships with them. Also, our marketing associate channel helps
Company and its subsidiaries in client acquisitions at minimal costs with client loyalty.
The marketing associate’s channel also helps Company and its subsidiaries in increasing
their penetration in smaller town and cities.
STRONG CROSS SELLING OPPORTUNITIES
With 414 branches spread over 124 cities all over India and variety of financial products
and offerings coupled with online, relationship manager & marketing associate channels,
Company and its subsidiaries have strong cross product selling opportunities thus
providing a multi-channel delivery systems to there diverse client base of 3,25,000 clients
as on July 10, 2007.
STRONG TEAM OF EXPERIENCED PROMOTERS
Indiabulls has a strong team of promoters who are engineers from Indian Institute of
Technology and have several years’ experience in financial services industry. They
believe that their strong technical experience will help them in achieving our key
business strategies.
LEADING PRODUCT INNOVATION AND MARKETING STRATEGIES
Management is innovative and nimble and has historically introduced many new and
innovative products to the market place that have played a significant role in their
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growth. Company’s relationship manager model has introduced private banking
experience to the clients. The relationship managers are trained and incentives to work
with their client base and enhance ability to cross sell and leverage the large client base.
Indiabulls have launched marketing associate model, which replaces the traditional sub-
broker model with an authorized person that client can appoint independently and provide
them with the benefit of their trading, clearing and servicing strengths. Its equity analysis
product provides clients with unbiased research. Company plans to continuously innovate
and introduce market leading products and services to add to its competitive advantage.
WELL CAPITALIZED PLAYER, WITH STRONG BANKING RELATIONSHIPS
AND CREDIT RATINGS
Indiabulls consolidated net worth is Rs. 1023.19 million making us a well capitalized
companies. The Company and ISL have received sanctioned facilities of Rs. 1760 million
from 11 leading commercial banks and financial institutions. The details of the banking
relationships as of June 24, 2007 are as follows:
ABILITY TO COMBINE PEOPLE & TECHNOLOGY IN UNIQUE WAYS
They provide multiple distribution channels by combining people and technology. Clients
can visit one of the 414 offices in 124 cities or access via telephone, call centre or online
channel. Web enabled tools such as technical analysis, information, news, interactive web
based programs and tools and back office solutions for clients and marketing associates;
Power Indiabulls an order entry, routing and management technology through
technology platform, for actively- trading investors.
Strong market presence and increased market share leads to virtuous cycle of
growth and profitability
They’re growing client base and market share have increased their market presence,
brand recognition enhanced their profitability and increased the available credit facilities
from the banks further strengthening its strong balance sheet. Company’s brand and
profitability allows them to recruit good and efficient employees, compensate them
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attractively and provides the flexibility toes for investments in the business and
technology systems. These attributes in turn have a positive effect on the growth of its
client base thereby increasing its market share, leading to higher profits and credit
facilities and thus forming a virtuous circle.
KEY BUSINESS STRATEGIES
Their focus on the client has allowed Company and its subsidiaries to offer a range of
services that have changed the investing landscape and created a new model of financial
services that melds people and technology to provide an integrated human assisted
technology interface service for investors who range from self-directed full-time active
investor to those who prefer to deal with through a marketing associate in smaller towns
and cities. Their key strategies include:
Defend and maintain their differentiation as the firm that delivers ethical and useful
services
Build and expand “investing insight” through product offerings such as Equity
Analysis which is objective,
Uncomplicated and not driven by commission
Give clients new levels of choice tailored to their desire for help, tools for investing
their assets, their willingness to pay for additional services and the level of business
they can do with the company.
Provide clients with tools, relationship managers and choices that support their
desired investment outcomes. Indiabulls has developed a client specific approach as a
core element of its business strategy and are constantly focusing on acquiring new
clients and expanding their customer base. They believe that the strong secular
growth of the Indian financial Markets, due to increased household penetration of
financial assets; increasing liquidity and market capitalization of Indian Markets, led
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by the listing of many public sector entities; and the increasing affluence of Indian
households and savers provides an impetus to the growth perspective.
They believe that this diversification and growth strategy will continue to produce results
and allow Company and its subsidiaries to grow business at a rapid pace irrespective of
market conditions. In addition, management believes that the growth of the Indian
financial markets, due to increased household penetration of financial assets; increasing
liquidity and market capitalization of Indian markets, led by the listing of many public
sector entities; and the increasing affluence of Indian households and savers, favors our
long term growth outlook.
The table below encapsulates the financial metrics on an annual basis, and compares that
with the Market trading volume.
(NSE Yearly Trading Volume is taken as representative of Market activity).
The core pillars of our business strategy are discussed below:
Increase the number of Client Relationships
They are focused on increasing the number of client relationships through a wide network
of offices throughout India and having more number of relationship managers to service
these relationships. They plan to grow their business by growing the number of client
relationships. During a downturn of the markets they believe that increased number of
client relationships will add stability to their earnings.