1. Study of Indian equity market and various financial
instruments of SHCIL
Submitted By:
Manish Sonowal
Symbiosis Institute of International Business
Symbiosis International University
External Guide: Internal Guide:
Mr R Keshav Mrs. Asmita Chitnis
Branch Manager Faculty
SHCIL, Guwahati SIIB, Pune
Submitted in partial fulfillment of the requirements for the award of degree of
Master of Business Administration of Symbiosis International University.
Session 2010-2012

2. ACKNOWLEDGEMENT
I would like to express my sincere gratitude to all those who have given their
valuable time, guidance, support and have been a source of inspiration during the
course of this project.
My sincere thanks go to Mr R Keshav, Branch Manager SHCIL Guwahati, for
giving me an opportunity to gain more knowledge and for his support, guidance
and cooperation throughout to accomplish this project. I would also like to
express my deep sense of gratitude to my Project guide, Mr Jugma Jyoti
Bordoloi, Executive/Sub Broker SHCIL Guwahati, for his valuable guidance,
continuous encouragement and patience in discussing my problems. Words fall
short acknowledging immense support lent to me by the entire team of SHCIL
Guwahati, who have been of the greatest help in bringing out my task in the
present shape.
I would like to thank all the respondents who have offered their opinions and
suggestions through the survey.
I am equally grateful to my college mentor Ms. Asmita Chitnis and Finance
Professor Ms. Madhvi Sethi for their continuous help and support throughout the
project.
Best Regards,
Manish Sonowal
SIIB, Pune
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3. DECLARATION
I hereby declare that the project work entitled
“Study of Indian Equity Market and the Financial Instruments of SHCIL”
conducted at Stock Holding Corporation of India Ltd., Guwahati
Submitted in partial fulfillment of the requirements for the degree of
Master of Business Administration of Symbiosis International University,
is a record of an original work done by me under the guidance of my college
mentor Mrs. Asmita Chitnis, Symbiosis Institute of International Business, Pune.
This project work has not been submitted for the award of any other degree/
diploma/ fellowship of other similar titles or prizes.
Regards,
Manish Sonowal
SIIB, Pune
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4. TABLE OF CONTENT
1. INTRODUCTION
a. Preface…………………………………………………………5
i. Increasing popularity of investment
ii. Objective of investment
iii. Top 10 investment options in India
b. Objectives of the study…………………………………………10
c. Research Methodology…………………………………………11
i. Title of the study
ii. Duration of the study
iii. Significance and need of the study
iv. Research type
v. Source of the data
vi. Data collection method
vii. Sample size
viii. Preliminary study
ix. Questionnaire design
x. Analysis technique
xi. Limitations of the study
2. COMPANY PROFILE
a. About the company……………………………………………14
i. Subsidiaries
ii. Credentials
iii. Accolades and certifications
iv. Financials
b. Services offered by SHCIL……………………………………..17
3. LITERATURE REVIEW
a. Equity market………………………………………………...20
b. Indian Equity Market……………………………………….....21
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5. c. SEBI securities and exchange board of India…………………...22
d. Role of Stock Exchanges……………………………………..23
e. Index……………………………………………………….25
f. Sensex the barometer of Indian Capital Market………………..25
i. Sensex Calculation Methodology
ii. BSE Sensex
iii. Maintenance of SENSEX
g. NIFTY………………………………………………………28
h. Depository…………………………………………………..28
i. Listing of Securities…………………………………………..29
j. The big picture of equity market………………………………30
k. Equity as an investment……………………………………….30
l. Market trend in equity investment…………………………….31
i. Bull Trend
ii. Bear Trend
m. Fluctuation in Stock Market…………………………………..35
4. ANALYSIS AND INTERPRETATION
a. Analysis of the market trend of some companies……………….39
b. SWOT analysis for equity investment…………………………41
c. Analysis of the questionnaire………………………………....43
i. Sub-Brokers
ii. Investors
5. SUGGESTIONS AND RECOMMENDATION……………………..54
6. CONCLUSION…………………………………………………...55
7. ANNEXURE
a. Questionnaire……………………………………………….56
b. Bibliography…………………………………………………60
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6. Preface
Personal finance discipline demands every individual to plan for expenditure and
savings against current income. As investors are getting more educated, aware
and prudent, they look for innovative investment instruments so that they are
able to reduce investment risk, minimize transaction costs and maximize returns
along with certain level of convenience. As a result there has been advent of
numerous innovative financial instruments such as bonds, company deposits,
insurance, equity and mutual funds.
In the present situation where stock market is going up and down, it is necessary
to invest consciously in the market. This study is about the trend in the stock
market which enables the investor in taking decision regarding investment.
Before working on the project a brief study was done on some of the various
investment options in India and reasons for the increasing popularity of
investment, these are:
Increase in gross domestic savings.
Change in risk adverse nature of Indian investors.
Increase in working population.
Larger family incomes.
Provision of tax initiatives in respect of investment in specified channels.
Attractive investment alternatives.
Increase in investment related publicity.
Ability of investment to provide income and capital gains.
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7. OBJECTIVE OF INVESTMENT
An investor has various avenues for investment for his savings to flow on. Savings
can be invested in assets depending on their risk and return characteristics. The
objective of the investor is to minimize the risk involved in the investment and
maximize the return from the investment. Rise in price or inflation erodes the
value of the money. When the general price of the goods rises, each unit of
currency buys fewer goods and services. The value of money declines. Thus
saving is invested to provide a hedge or protection against inflation. Thus the
objective of investor can be stated as:
Objective of
Investment
Maximization Minimization of Hedge against
of return the Risk inflation
Investor should be prepared to assume higher risk only if he expects to get
proportional high returns. There is trade-off between risk and return. The
expected return is directly proportional to the risk. There are different financial
assets with varying risk return combinations in financial markets. Debentures
and preference shares of the companies constitute the medium risk category,
whereas equity shares are high risk category of financial assets. Investor tries to
maximize his wealth by choosing the optimum combination of risk and expected
return in accordance to his preference and capacity.
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8. TOP 10 INVESTMENTS OPTIONS IN INDIA:
Fixed Deposit(FD)
Fixed deposit accrues 10% of yearly profits, depending on the bank’s tenure and
guidelines, which makes it widely sought after and safe investment alternative.
The minimum tenure of FD is 15 days and maximum tenure is 5 years and
above. Senior citizens are entitled for exclusive rate of interests on FD.
Insurance Policies
Insurances features among the best investment alternative as it offers services to
indemnify your life, assets and money besides providing satisfactory and risk free
profits. Indian Insurance market offers various investment options with
reasonably prices premium. Some of the popular insurance policies in India are
Home Insurance policies, Life Insurance policies, Health Insurance policies and
Car Insurance policies.
National Saving Certificate(NSC)
National Saving Certificate (NSC) is subsidized and supported by government of
India as it is a secure investment technique with a lock in tenure of 6 years.
There is no utmost limit in this investment option while the highest amount is
estimated as 100. The investor is entitled for the calculated interest if 8%
which is forfeited two times in a year. National Saving Certificate falls under
Section 80 C of IT Act and the profit accrued by the investors stands valid for tax
deduction up to 1,00,000.
Real estate
Indian real estate industry has huge prospects in sectors like commercial,
housing, hospitality, retail, manufacturing, healthcare etc. termed as the “money
making industry”, reality sector of India promises annual profits of 30% to 100%
through real estate investment.
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9. Public Provident Fund
Like NSC, Public Provident Fund (PPF) is also supported by the Indian
government. An investment of minimum 500 and maximum 70,000 is
required to be deposited in a fiscal year. The prospective investor can create a
PPF account in a GPO or head post office or in any sub divisions of the
centralized bank.
PPF also falls under Section 80C of IT Act so investors could gain income tax
deduction of up to 1,00,000. The rate of interest of PPF is evaluated yearly
with a lock in tenure of maximum 15 years. The basic rate of interest in PPF is
8%.
Stock Market
Investing in share market yields higher profits. Influenced by unanticipated turn
of market events, stock market to some extent cannot be considered as the safest
investment options. However, to accrue higher gains, an investor must update
himself on the recent stock market news and events.
Mutual Funds
Mutual funds firm accumulate cash from willing investors and invest it in share
market. Like stock market, mutual fund investment are also entitled for various
market risks but with a fair share of profits.
Equity
Private equity is expanding at a fast pace. India acquired US $13.5 billion in
2008 under equity shares and featured among the top 7 nations in the world. In
2011, the total equity investment is predicted to increase up to USD 20 billion.
Indian equities promise satisfactory returns and have more than 365 equity
investment firms functioning under it.
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10. Gold Deposit Scheme
Controlled by SBI, gold deposit scheme was instigated in the year 1999.
Investments in this scheme are open for trusts, firms and HUFs with no specific
upper limit. The investor can deposit invest minimum of 200 gm in exchange for
gold bonds holding a tariff free rate of interest of interest of 3%-4% in the basis
of the period of the bond varying with a lock in period of 3 to 7 years.
Moreover, gold bonds are not entitled of capital gains tax and wealth tariff. The
sum insured can be accrued back in cash or gold, as per the investor’s
preferences.
Non Resident Ordinary(NRO) Funds
Investing in domestic (NRO) is one of the best investment alternatives for NRIs
who wish to deposit their income accrued abroad and maintain it in Indian
rupees. Investment can be done in Indian financial institutions including the
Non-banking Finance Companies which are listed with RBI. The interest returns
accrued on in this account is entitled under the IT Act and is subject to 40 % tax
reduction at source including the appropriate surcharge and education-cess. The
NRI investor can repatriate up to USD 1 million every year, for genuine reasons,
by forfeiting valid tariffs.
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11. Objectives of the study
To study the trend in equity market.
To understand the reasons for fluctuation in the equity market.
To know the effect of these fluctuations on the Indian Economy.
To know the basis on which the money is invested in equities by
brokers/investors.
To know the various financial instruments of SHCIL.
To know the level of awareness among the people about the services of
SHCIL.
To know the level of satisfaction among the investors with the services of
SHCIL.
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12. Research Methodology
TITLE OF THE STUDY
The Study of Indian Equity market and various financial instruments of SHCIL
DURATION OF THE STUDY
The study was conducted during 2 months training from April 18, 2011 to
June13, 2011.
SIGNIFICANCE AND NEED OF THE STUDY
Being the fourth largest economy in the world that has second largest GDP
among the developing countries, in purchasing power terms, India is poised for
growth with macro-economic stability and by 2025 Indian economy is projected
to be about 60% in size of the US economy.
The investment scenario in India has gone through area fall changes than what it
was twenty years back, after the liberation policy of 1991. The study is an
attempt to acquire knowledge on the trend of equity market and to know about
the various financial instruments provided by SHCIL and also to know the level
of awareness and satisfaction among the investors of SHCIL.
RESEARCH TYPE
The research type used is Descriptive in nature as this research is used to obtain
information on the current status of the phenomena to describe “what exists”
with respect to the variables or conditions in a situation. The research carried
out is both quantitative and qualitative in nature.
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13. SOURCE OF THE DATA:
Data and information for the study were collected from both primary and
secondary sources. The primary data are collected from the investors and sub-
brokers through personal and telephonic interview.
Secondary data were collected from books, magazine and internet.
DATA COLLECTION METHODS:
a. Questionnaire
b. Personal interview
c. Telephonic interview
d. Observation
SAMPLE SIZE:
The study on the financial instruments of SHCIL was done with its 100 existing
investors.
PRELIMINARY STUDY:
Prior to the actual questionnaire design and data collection, preliminary study
was conducted through general discussion with the experienced personals of
SHCIL.
QUESTIONNAIRE DESIGN:
The questionnaire was designed on basis of the information available from the
preliminary study. Most of the questions were multiple choices. Special care was
taken while designing the questionnaire to gather maximum information.
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14. ANALYSIS TECHNIQUE:
Data collected from the observation and respondents were analyzed using
standard statistical techniques. Further discussions were held with the
organizational guide in this connection. The conclusion of the study and
recommendation were made on the basis of findings and analysis of the survey.
LIMITATIONS OF THE STUDY:
The survey was restricted to only a small sample of respondents as compared
to the total clientele of SHCIL. The sample size may not adequately represent
the actual market.
The research was conducted within a short period of two months. So this may
not reflect the actual picture of the market.
Lack of interest and busy life of the customers may have influenced the
responses.
As some of the questions are related to the financial status of the respondents
and people generally don’t want to reveal their financial status, the answers
may not be genuine.
As the study also has some secondary data, the study has gained vulnerability;
the correctness of this report is restricted and limited by the data so collected
and with the sincerity of the respondents.
Some of the data have been collected from the telephonic interview, so the
respondents were not properly able to go through the questionnaire.
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15. ORGANIZATIONAL PROFILE
Stock Holding Corporation of India
Stock Holding Corporation of India Ltd. (SHCIL) was incorporated as a special
initiative of the Government of India as a Public Limited Company in 1986. It
has been jointly promoted and owned by leading Banks and Financial Institutions
viz., IDBI Bank Ltd., ICICI Bank Ltd., SU-UTI, IFCI Ltd., LIC, GIC, NIA, NIC,
UIC, and TOICL, all leaders in their fields of business.
SHCIL has established itself in India as a one-stop solution provider in the
Financial Services domain. It has 192 offices/facilitation centers across the
country and 225 branches all over India and is now expanding its presence in the
North Eastern region.
SHCIL provides a portfolio of clearing and settlement, physical custody (vault),
institutional DP, asset servicing, client relationship management and ancillary
services for corporate customers. The products offered by the company
are Equibuy, Fund Invest, GOI Bonds, Insurance, STOCK direct and Pension
Fund.
The company also offers derivatives clearing, PF fund accounting, SGL
constituent account services, distribution of mutual funds and other capital
market instruments, besides distribution of life and non-life insurance policies.
The Internet services of the company entail online net trading, loan against
shares, Western Union Money Transfer and E-stamping.
It is a proud recipient of Computer Society of India award for best IT usage in
the country. It also received Medal from Smithsonian Institute, Washington
D.C, for Visionary and Innovative use of Technology in Finance, Banking and
Insurance Industry.
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16. Subsidiaries
SHCIL SERVICES LIMITED
SHCIL PROJECTS LIMITED
SHCIL COMMODITIES AND DERIVATIVES TRADING LIMITED
UNITEC VALUE SOLUTIONS PTE. LIMITED, SINGAPORE
Credentials:
SHCIL, apart from being the country’s premier Custodian and Depository
Participant, is also the largest Professional Clearing Member; backed by an
immense capacity to process volumes with precision.
 Every year it processes around40% of number of transactions on
BSE and NSE.
 20% of the market capitalization of all scripts listed on BSE, in
terms of value processes.
Well integrated front and back office, paper and electronic systems. A
focussed Client Relation Team to manage your needs & queries. A single point
contact for your comfort.
In-house capability to address all IT needs in terms of software development,
maintenance, back office processing, database administration, network
maintenance, backups and disaster recovery.
Multilevel security is maintained in software, applications and guards to
access to various data, client and internal reports.
Expertise in running processes utilising digital signatures.
Regular Audits internal and external, by SEBI, Depositories, Clients and
compliance to rules and regulations
Constant review and benchmarking of processes to ensure adherence to
global best practices
Insurance cover with international re-insurance.
Full Confidentiality of business operations.
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17. Accolades and certification:
SHCIL has been conferred with the prestigious ISO/IEC 27001:2005
certification for “Data Centre and its Operations” by TUV-NORD, Germany.
ISO/IEC 27001:2005 certification for SHCIL’s Data Centre and its
Operations is an assurance to customer and other stockholders that SHCIL
has benchmarked itself with the highest standards of security and due
diligence in their IT system.
Citation and Medal from Smithsonian Institute, Washington D.C, U.S.A. for
“Visionary and Innovative use of Technology in Finance, Insurance and Real
Estate". First South Asian Corporate to receive this.
Computer Society of India Award for best IT usage in the Country.
Our software processes have been assessed at SEI CMM Level 3.
Accepted industry leader and pioneer in Custodial Systems.
Financials:
A zero-debt, financially sound company with healthy reserves.
Have a consistent dividend-paying track record.
During the financial year 2009-2010, SHCIL earned Profit Before Tax (PBT)
of 38,100 lakh as against 9,020 lakh in the previous year recording increase
by 322%.
Profit After Tax (PAT) recorded growth of 329% to 28, 440 lakh after
making a provision for tax of 9,660 lakh as against PAT of 6,640 lakh in
2008-09.
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18. SERVICES OFFERD BY SHCIL
The company focuses to direct its product and services for the all-round benefit
of the investors. Making available more and more financial services under one
roof has always been a priority and investors have been the hallmark of SHCIL’s
products and services.
The various products and services provided by SHCIL are:
 Institutional segment
Custodial Services provided by SHCIL to institutional clients, include post
trade settlement, safe-keeping, corporate actions and customized
reporting.
 Retail segment
Depository services, sub-broking services, distribution of large number of
financial products auxiliary services are offered to clients in the retail
segment.
 Depository services
Since 1998, SHCIL has been extending depository related services to retail
segment. The services offered by SHCIL include account opening,
dematerializing and rematerialisation of securities, transaction processing
and certain/ closure of the pledge.
 Sub broking services
As a part of its endeavor to be a market leader in financial services and
provide quality services to its clients, SCHIL offers sub-broking operations
through its subsidiary company, SHCIL Services Ltd (SSL) on the Bombay
Stock Exchange (BSE). SCHIL through SSL, provides speedy, safe, reliable
17

19. and affordable broking services to the retail, HNI and corporate clients,
through its wide network of branches spread across the country. The
clients also have the option of trading online through internet. The
forthcoming initiatives are trading platform for Cash and Futures &
Options Segment on the NSE.
 Distribution of third party products
SHCIL has tied up with all leading mutual fund houses for distributing
their mutual fund schemes. The corporation is a corporate agent of LIC of
India and the new India Assurance Company Ltd for promoting their Life
and non-Life insurance products. SHCIL has tied up with reputed
institutions, NBFCs & companies for distribution of their Fixed Deposit
Schemes. It also distributes various other investment products viz. Capital
gain bonds, Debt instruments, Initial Public Offers and Western Union
Money Transfer. The Corporation has tied up with IDBI Bank Ltd for
providing its investors Loan against Securities.
 The auxiliary services
The auxiliary services provided by SHCIL include extension of
Professional Clearing Member service in Futures and Options (F&O)
segment of stock exchanges, constituent SGL account services and PF
accounting services. SHCIL is one of largest clearing member of the
country.
 E-stamping
The corporation is authorized by the Ministry of Finance, Government of
India to act as a Central Record keeping Agency (CRA) to design and
implement an electronic method of stamp duty collection. The
Corporation has entered into agreements and implemented the e-
Stamping systems in the states of Gujarat, Karnataka, NCT of Delhi,
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20. Maharashtra and Assam. SHCIL has signed agreements with the
governments of Tamil Nadu and Bihar.
SHCIL is in discussion with the other State Governments.
 Investment in advisory services
The services provided by SHCIL include market insight, covering
overview of all markets, morning report Indian Equity market to retail
investors, comprehensive newsletter covering the daily news, Insurance
reports and Mutual Fund report to investors. SHCIL brings out an analysis
of quarterly results of selected top companies every quarter and a journal
on mutual funds titled as, “M.F. Guide to Gain” every month.
 Information technology
SHCIL has in-house capability to address all IT needs in terms of software
development and maintenance, back-office processing, data base
administration and network maintenance methodologies. The
Corporation’s Disaster Recovery Centre has become operational in
respect of intuitional, retail back office and e-stamping segment.
 Web initiative
The Corporation’s website www.shcil.com provides a host of value added
features to its clients. End of day (EOD) reports, intra-day statements and
other time-critical settlement reports like delivery out and pay out receipt
report re made available to all registered clients through the website.
Clients can access personalized portfolio tracker, which tracks changes in
their portfolio validation update to the hour. The corporate action tracker
alert clients of the fourth coming corporate events relevant to their
holding. As before the website continues to offer live stock quotes and
various updated capital market and company related information
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21. Literature Review
EQUITY MARKET
An equity market or stock market is a public market for trading of company
stock and derivatives at an agreed price; these are listed on a stock exchange as
well as those only traded privately.
The stocks are listed and traded on stock exchanges which are entities of a
corporation or mutual organization specialized in the business of bringing buyers
and sellers of the organizations to a listing of stocks and securities together.
The World Federation of Exchanges reported that the total value of equities
trading on the world’s major stock exchanges reached $54.9 trillion in
December 2010.
Hong Kong France Germany WORLD STOCK MARKET
4.90% 3.60% 3.00% CAPITALIZATION(JANUARY 2011)
England
6.39% Rest of the
World
Canada
26.47%
4.10%
Japan
7.79%
Russia
1.40%
Brazil
2.80%
India
2.80% United States
China 30.07%
6.69%
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22. THE INDIAN EQUITY MARKET
The Indian Equity Market is more popularly known as the Indian Stock Market.
The Indian equity market has become the third biggest after China and Hong
Kong in the Asian region.
The Indian equity market depends on three factors -
 Funding into equity from all over the world
 Corporate houses performance
 Monsoon
The stock market in India does business with two types of fund namely private
equity fund and venture capital fund. It also deals in transactions which are
based on the two major indices - Bombay Stock Exchange (BSE) and National
Stock Exchange of India Ltd. (NSE).
The equity market is also affected through trade integration policy. The
country has advanced both in foreign institutional investment (FII) and trade
integration since 1995. This is a very attractive field for making profit for
medium and long term investors, short-term swing and position traders and
very intraday traders.
The Indian market has 23 stock exchanges. The larger companies are enlisted
with BSE and NSE. The smaller and medium companies are listed with
OTCEI (Over The counter Exchange of India). The functions of the Equity
Market in India are supervised by SEBI (Securities and Exchange Board of
India).
Structure and size of equity market
The two national exchanges, the Bombay Stock Exchange (BSE) and the National
Stock Exchange (NSE), each have fully electronic trading platforms with around
9400 participating broking outfits. Foreign brokers account for 29 of these.
The combined market capital nears $126billion with over 10000 companies
listed on the exchanges.
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23. SEBI- SECURITIES AND EXCHANGE BOARD OF INDIA
SEBI is the Regulator for the Securities Market in India. It was formed officially
by the Government of India in 1992 with SEBI Act 1992 being passed by the
Indian Parliament. SEBI is headquartered in the business district of Bandra-Kurla
complex in Mumbai, and has Northern, Eastern, Southern and Western regional
offices in New Delhi, Kolkata, Chennai and Ahmedabad.
The basic objectives of the board were defined as:
to protect the interest of investors in securities
to promote the development of securities market
to regulate the securities market and
for matters connected therewith or incidental thereto
SEBI has introduced the comprehensive regulatory measures, prescribed
registration norms, the eligibility criteria, the code of obligations and the code of
conduct for different intermediaries like, bankers to issue, merchant bankers,
brokers and sub-brokers, registrars, portfolio managers, credit rating agencies,
underwriters and others. It has framed by-laws, risk identification and risk
management systems for Clearing houses of stock exchanges, surveillance system
etc. which has made dealing in securities both safe and transparent to the end
investor.
SEBI has the right to search and seizure where just cause can be given. In matters
of security trading, SEBI has the power to restrict and allow trading in a
given scrip without any external (i.e. judicial or executive) intervention.
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24. ROLE OF STOCK EXCHANGES
Stock exchanges have multiple roles in the economy, this may include the
following:
1. Raising capital for businesses
The Stock Exchange provides companies with the facility to raise capital for
expansion through selling shares to the investing public.
2. Corporate governance
By having a wide and varied scope of owners, companies generally tend to
improve on their management standards and efficiency in order to satisfy the
demands of these shareholders and the more stringent rules for public
corporations imposed by public stock exchanges and the government.
3. Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more rational
allocation of resources because funds, which could have been consumed, or kept
in idle deposits with banks, are mobilized and redirected to promote business
activity with benefits for several economic sectors such as agriculture, commerce
and industry, resulting in stronger economic growth and higher productivity
levels and firms.
4. Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market
forces. Share prices tend to rise or remain stable when companies and the
economy in general show signs of stability and growth. An economic recession,
depression, or financial crisis could eventually lead to a stock market crash.
Therefore the movement of share prices and in general of the stock indexes can
be an indicator of the general trend in the economy.
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25. 5. Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines, increase
distribution channels, hedge against volatility, increase its market share, or
acquire other necessary business assets. A takeover bid or a merger agreement
through the stock market is one of the simplest and most common ways for a
company to grow by acquisition or fusion.
6. Creating investment opportunities for small investors
As opposed to other businesses that require huge capital outlay, investing in
shares is open to both the large and small stock investors because a person buys
the number of shares they can afford. Therefore the Stock Exchange provides the
opportunity for small investors to own shares of the same companies as large
investors.
7. Government capital-raising for development projects
Governments at various levels may decide to borrow money in order to finance
infrastructure projects such as sewage and water treatment works or housing
estates by selling another category of securities known as bonds. These bonds can
be raised through the Stock Exchange whereby members of the public buy them,
thus loaning money to the government. The issuance of such bonds can obviate
the need to directly tax the citizens in order to finance development, although by
securing such bonds with the full faith and credit of the government instead of
with collateral, the result is that the government must tax the citizens or
otherwise raise additional funds to make any regular coupon payments and
refund the principal when the bonds mature.
8. Redistribution of wealth
Stock exchanges do not exist to redistribute wealth. However, both casual and
professional stock investors, through dividends and stock price increases that
may result in capital gains, will share in the wealth of profitable businesses.
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26. INDEX
An index is basically an indicator. The Sensex is an "index". It gives a general
idea about whether most of the stocks have gone up or most of the
stocks have gone down. The Sensex is an indicator of all the major companies of
the BSE. The Nifty is an indicator of all the major companies of the NSE. If the
Sensex goes up, it means that the prices of the stocks of most of the major
companies on the BSE have gone up. If the Sensex goes down, this tells you
that the stock price of most of the major stocks on the BSE have gone down.
On-Line Computation of the Index
During trading hours, value of the Index is calculated and disseminated on real
time basis. This is done automatically on the basis of prices at which trades in
Index constituents are executed.
SENSEX- THE BAROMETER OF INDIAN CAPITAL MARKET
SENSEX, first compiled in 1986, was calculated on a "Market Capitalization-
Weighted" methodology of 30 component stocks representing large, well-
established and financially sound companies across key sectors. The base year of
SENSEX was taken as 1978-79. SENSEX today is widely reported in both
domestic and international markets through print as well as electronic media. It
is scientifically designed and is based on globally accepted construction and
review methodology. Since September 1, 2003, SENSEX is being calculated on a
free-float market capitalization methodology. The "free-float market
capitalization-weighted" methodology is a widely followed index construction
methodology on which majority of global equity indices are based; all major
index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the free-
float methodology.
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27. The growth of the equity market in India has been phenomenal in the present
decade. Right from early nineties, the stock market witnessed heightened
activity in terms of various bull and bear runs. In the late nineties, the Indian
market witnessed a huge frenzy in the 'TMT' sectors. More recently, real estate
caught the fancy of the investors. SENSEX has captured all these happenings in
the most judicious manner. One can identify the booms and busts of the Indian
equity market through SENSEX. As the oldest index in the country, it provides
the time series data over a fairly long period of time (from 1979 onwards). Small
wonder, the SENSEX has become one of the most prominent brands in the
country.
Sensex Calculation Methodology
SENSEX is calculated using the "Free-float Market Capitalization" methodology,
wherein, the level of index at any point of time reflects the free-float market
value of 30 component stocks relative to a base period. The market capitalization
of a company is determined by multiplying the price of its stock by the number
of shares issued by the company. This market capitalization is further multiplied
by the free-float factor to determine the free-float market capitalization.
The base period of SENSEX is 1978-79 and the base value is 100 index points.
This is often indicated by the notation 1978-79=100. The calculation of
SENSEX involves dividing the free-float market capitalization of 30 companies in
the Index by a number called the Index Divisor. The Divisor is the only link to
the original base period value of the SENSEX. It keeps the Index comparable
over time and is the adjustment point for all Index adjustments arising out of
corporate actions, replacement of scrips etc. During market hours, prices of the
index scrips, at which latest trades are executed, are used by the trading system
to calculate SENSEX on a continuous basis.
26

28. BSE Sensex
The Bombay Stock Exchange SENSEX (acronym of Sensitive Index) more
commonly referred to as SENSEX or BSE 30 is a free-float market capitalization-
weighted index of 30 well-established and financially sound companies listed
on Bombay Stock Exchange. The 30 component companies which are some of
the largest and most actively traded stocks are representative of
various industrial sectors of the Indian economy. Published since January 1,
1986, the SENSEX is regarded as the pulse of the domestic stock markets in
India. The base value of the SENSEX is taken as 100 on April 1, 1979, and its
base year as 1978-79. On 25 July, 2001 BSE launched DOLLEX-30, a dollar-
linked version of SENSEX. As of 21 April 2011, the market capitalization of
SENSEX was about 29,733 billion (US$660 billion) (42.34% of market
capitalization of BSE), while its free-float market capitalization was 15,690
billion (US$348 billion)
Maintenance of SENSEX
One of the important aspects of maintaining continuity with the past is to update
the base year average. The base year value adjustment ensures that replacement
of stocks in Index, additional issue of capital and other corporate announcements
like 'rights issue' etc. do not destroy the historical value of the index. The beauty
of maintenance lies in the fact that adjustments for corporate actions in the Index
should not per se affect the index values.
The BSE Index Cell does the day-to-day maintenance of the index within the
broad index policy framework set by the BSE Index Committee. The BSE Index
Cell ensures that SENSEX and all the other BSE indices maintain their
benchmark properties by striking a delicate balance between frequent
replacements in index and maintaining its historical continuity. The BSE Index
Committee comprises of capital market expert, fund managers, market
participants and members of the BSE Governing Board.
27

29. NIFTY
NIFTY is an Index computed from performance of top stocks from different
sectors listed on NSE (National Stock Exchange). NIFTY consists of 50 different
companies from 24 different sectors. NIFTY stands for National Stock
Exchange’s Fifty. The companies which form index of NIFTY may vary from
time to time based on may factors considered be NSE. NIFTY is for NSE
similarly SENSEX is for BSE.
Some mutual funds use NIFTY as a benchmark meaning the mutual fund’s
performance is compared against the performance of NIFTY. On NSE there are
futures and options available for trading with NIFTY as underlying index.
India Index Services and Products Ltd. (IISL) own NIFTY. IISL is a joint venture
with NSE and CRISIL. CRISIL is a subsidiary of Standard and Poor (S&P). And
so NIFTY is also called as S&P CNX NIFTY.
DEPOSITORY
A depository holds shares and other securities of investors in electronic form.
Through Depository Participants (DPs),it also provides services related
to transactions insecurities. Its structure and functioning are similar to the
Bank. Presently in India, there are two depository viz. National Securities
Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
Both of them are registered with SEBI.
What is a DP?
DP is a member of a Depository who offers its services to hold securities of
Investors (Beneficial Owners) in dematerialized form. DP is like a Bank
branch. It is an agent of the depository. DP works as an interface between
Depository and Investors. DPs are required to be registered with SEBI. If
an investor wants to avail the services offered by Depository, he has to open a
Demat account with DP similar to opening of a bank account with a branch of
the bank.
28

30. Depository is responsible for keeping stocks of investors in electronics form.
There are two depositories in India, NSDL (National Securities Depository Ltd)
and CDSL (Central Depository Services Ltd).
LISTING OF SECURITIES
Listing means admission of securities to dealings on a recognized stock exchange.
The securities may be of any public limited company, Central or State
Government, quasi-governmental and other financial institutions/corporations,
municipalities, etc.
The objectives of listing are mainly to:
Provide liquidity to securities; mobilize savings for economic development;
Protect interest of investors by ensuring full disclosures.
The Bombay Stock Exchange (BSE) has a dedicated Listing Department to grant
approval for listing of securities of companies in accordance with the provisions
of the Securities Contracts (Regulation) Act, 1956, Securities Contracts
(Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued by SEBI and
Rules, Bye-laws and Regulations of BSE.
BSE has set various guidelines and forms that need to be adhered to and
submitted by the companies. These guidelines will help companies to expedite
the fulfillment of the various formalities and disclosure requirements that are
required at various stages of
 Public Issues  Indian Depository Receipts
 Initial Public Offering  Amalgamation
 Further Public Offering  Qualified Institutions Placements
 Preferential Issues
29

31. THE BIG PICTURE OF EQUITY MARKET
Everything that rises has to fall in the equity market. There is no solid proof way
to determine the trend of the equity market. Anything could happen to make all
of this information collected to study the trend of the equity market worthless,
but you do have to at least consider the past trends and understand that there is a
chance the market will behave similarly and we’ll enter a period of significant
decline.
The best thing is to continuously invest in a diversified portfolio. If you keep
buying even as the market falls, you’re just adding more shares at a lower price.
Could you make more money if you only invested at the low points and sold at
the high points compared to rupee cost averaging? Sure , but the likelihood of
succeeding on a regular basis is low. For most people, the best thing to do is just
continue investing bi-weekly, monthly or quarterly into the same diversified
portfolio regardless of market conditions. When the market is down markets are
choppy you’re just buying stocks or fund on sale. It will eventually come up
again.
EQUITY AS AN INVESTMENT
An equity investment generally refers to the buying and holding of shares
of stock on a stock market by individuals and firms in anticipation of income
from dividends and capital gains, as the value of the stock rises. It may also refer
to the acquisition of equity (ownership) participation in a private (unlisted)
company or a startup company. When the investment is in infant companies, it is
referred to as venture capital investing and is generally understood to be higher
risk than investment in listed going-concern situations.
The equities held by private individuals are often held via mutual funds or other
forms of collective investment scheme, many of which have quoted prices that
are listed in financial newspapers or magazines; the mutual funds are typically
managed by prominent fund management firms. Such holdings allow individual
30

32. investors to obtain the diversification of the fund(s) and to obtain the skill of the
professional fund managers in charge of the fund(s). An alternative, which is
usually employed by large private investors and pension funds, is to hold shares
directly; in the institutional environment many clients who own portfolios have
what are called segregated funds, as opposed to or in addition to the pooled
mutual fund alternatives.
A calculation can be made to assess whether an equity is over or underpriced,
compared with a long-term government bond. This is called the Yield Gap or
Yield Ratio. It is the ratio of the dividend yield of equity and that of the long-
term bond.
MARKET TREND IN EQUITY INVESTMENT
Trends refer to the direction of share price movement for a long period of time
such as month and quarter. The terms bull market and bear market describe
upward and downward market trends, respectively, and can be used to describe
either the market as a whole or specific sectors and securities
Bull Trend:
The Accumulation Phase
The first stage of a bull market is referred to as the accumulation phase,
which is the start of the upward trend. This is also considered the point at
which informed investors start to enter the market.
The accumulation phase typically comes at the end of a downtrend, when
everything is seemingly at its worst. But this is also the time when the price of
the market is at its most attractive level because by this point most of the bad
news is priced into the market, thereby limiting downside risk and offering
attractive valuations.
Public Participation Phase
When informed investors entered the market during the accumulation phase,
they did so with the assumption that the worst was over and a recovery lay
31

33. ahead. As this starts to materialize, the new primary trend moves into what is
known as the public participation phase.
During this phase, negative sentiment starts to dissipate as business conditions
- marked by earnings growth and strong economic data - improve. As the
good news starts to permeate the market, more and more investors move
back in, sending prices higher.
This phase tends not only to be the longest lasting, but also the one with the
largest price movement.
The Excess Phase
The last stage in the upward trend, the excess phase, is the one in which the
smart money starts to scale back its positions, selling them off to those now
entering the market. This is also usually the time when the last of the buyers
start to enter the market - after large gains have been achieved. The late
entrants hope that recent returns will continue. Unfortunately for them, they
are buying near the top.
During this phase, a lot of
attention should be placed on
signs of weakness in the
trend, such as strengthening
downward moves. Also, if
the upward moves start to
show weakness, it could be
another sign that the trend
may be near the start of a
primary downtrend.
32

34. Bear Trend
The Distribution Phase
The first phase in a bear market is known as the distribution phase, the period in
which informed buyers sell (distribute) their positions. This is the opposite of the
accumulation phase during a bull market in that the informed buyers are now
selling into an overbought market instead of buying in an oversold market.
In this phase, overall sentiment continues to be optimistic, with expectations of
higher market levels. It is also the phase in which there is continued buying by
the last of the investors in the market, especially those who missed the big move
but are hoping for a similar one in the near future.
As was the case in the accumulation phase, the distribution phase can be difficult
to spot in its early stages. The reason for this is that it may be disguised as a
secondary downward trend within the primary upward trend.
From a technical standpoint, the distribution phase is represented by a topping of
the market where the price movement starts to flatten as selling
pressure increases. The mid to latter stages of the distribution phase will see
prices start to fall as more and more investors, anticipating weakness, exit their
positions.
A new downward trend will be confirmed when the previous trend fails to make
another consecutive higher high and low.
33

35. Public Participation Phase
This phase is similar to the public participation phase found in a primary upward
trend in that it lasts the longest and will represent the largest part of the move -
in this case downward.
During this phase it is clear that the business conditions in the market are getting
worse and the sentiment is becoming more negative as time goes on. The market
continues to discount the worsening conditions as selling increases and buying
dries up.
This is also the point at which most trend followers and technical traders start
to dump their positions and take short positions as the new downward trend has
confirmed itself.
The Panic Phase
The last phase of the primary downward market tends to be filled with market
panic and can lead to very large sell-offs in a very short period of time. In the
panic phase, the market is wrought up with negative sentiment, including weak
outlooks on companies, the economy and the overall market.
During this phase we see many investors selling off their stakes in panic. Usually
these participants are the ones that just entered the market during the excess
phase of the previous run-up in share price.
But just when things start to look their worst is when the accumulation phase of
a primary upward trend will begin and the cycle repeats itself.
34

36. FLUCTUATIONS IN STOCK MARKET
These fluctuations occur partly because companies make money, or lose money,
but it is much more involved than that. A stock is only worth what someone will
pay for it. Usually, if a company makes a lot of money, its value rises, because
people are willing to pay more for a company’s stock if the company is doing
well. There are many other factors that affect the value of stocks. It is very hard
to say just one or two factors affect the share prices.
So, let us have a look at some of the factors that affect share prices.
INTEREST RATES
Interest rates, or the amount of money we have to pay a bank to loan money, or
how much it has to pay us to keep our money in the bank. If interest rates are
high, stock prices generally go down, because if people can make a decent
amount of money, by keeping their money in banks, or buying bonds, they feel
like they should not take the risk in the stock market.
THE STATE OF THE ECONOMY
If there is more money floating around, there is more flowing into companies
making their prices rise.
TIME OF THE YEAR
Many stocks are seasonal, meaning they do well during certain parts of the year,
and worse during the others. An example is an ice company. During the summer
their products sell well, and thus their stock price goes up. But during the
winters their price goes down.
35

37. PUBLICITY
Publicity has an effect on stock prices. If an article comes out saying that
company ABC, has just invented this new type of ice that will revolutionize the
industry, odds are their price will increase. Conversely, if an article comes out
saying that company ABC’s president is a crook, and stole the pension funds, it is
a good bet that the price will go down.
DEMAND AND SUPPLY
This is the first factor that affects share prices. When we get to see that more
people are buying stocks, then there is an increase in the price of that particular
stock. On the other hand price of stocks falls when people are setting their
stocks. So it is very difficult to predict the Indian Stock Market. This is the
main reason why we need to get in touch with a good stock market consultant.
MARKET CAPITALIZATION
It is very big mistake when we try to guess a company’s worth from the price of
a stock. We should know that the more important is the market capitalization of
the particular company. This helps determine the worth of a company. So
market cap serves as an important use to determine share prices.
EARNING PER SHARE
Now when it comes to the term, “earning per share”, it means the profit that a
particular company has made per share and that too on the last quarter. If need
to know the health of the company then this is the most important factor.
What’s more earning per share also influences the buying tendency in the market
that results in the increase of the particular stock price. This is the reason why it
is very important for every public company to bring out the quarterly report. So
when we wish to make a profitable investment, then the best thing for us would
36

38. be to keep a gapped watch on the quarterly reports of different companies. This
is very important before we wish to invest our hard earned money in the share
market.
IMPACT OF THE NEWS
News is another factor that affects the share price. When there is positive news
about a particular stock or company, people try to invest their money in that
particular stock or market. This leads to increase in the interest of buying the
stock. But there are many circumstances where we can invest our money so that
it grows within a very short period of time.
So, we have come to know about the factors affecting share prices.
Remember that is very important to make a good market research before
investing in any stock or company.
If we want to profit from buying a stock, we must decide one successful
company to invest our money in. there are many factors about the company we
have to base our decision on. By analyzing all of the aspects, we have a better
chance of predicting whether or not the stock will rise in value. Some questions
to keep in mind are:
How much profit the company has made recently?
If the company has not recently made a lot of profit, chances are it may never
profit and it is not a good idea to invest in it. If the company has made a lot of
profit recently, then it may be a good investment, since the profit may continue
to rise.
37

39. Is the product or services provided popular and in demand?
If the company offers an undesirable product, then the company may fail, since
no one will but from them. If the company dies, then we suffer massive losses,
so we do not want to invest in companies with undesirable product or service.
We want to invest in a company with a service or product that is in high
demand. If a company invests a new kind of food that is incredible, and everyone
wants tons of it, then we can profit greatly, since the company will make tons of
profit.
Is there lot of close competition?
If the company is the only company that offers something, then everyone has to
buy from that company, meaning the company will grow larger, and profit will
grow larger, and profit a lot. For example, if there was a company called
Sneakiest and it was the only company to offer sneakers, then everyone would be
forced to buy from them, and that would result in huge profits for Sneakiest. In
real life, though, there are big time competitors, such as Nike and Reebok.
Therefore, Sneakiest would not make whole lot of profit, and neither would we.
Stock analysts regularly get the answers to these questions, and many others, and
make a prediction about the stock’s value in the future.
38

40. ANALYSIS AND INTERPRETATION
Analysis of the market trend of some of the companies sector wise:
OIL AND
SECTOR STEEL NATURAL REALITY BANKING IT POWER AUTO
GAS
COMPANIES
MAHINDRA
HINDALCO RIL L&T SBI INFOSYS NTPC AND
DATE(year MAHINDRA
2011)
19-Apr 204.1 1010.15 1679.55 2752.95 2905.2 184.75 721.55
26-Apr 220.25 1039.95 1703 2860.35 2909.25 186.9 766.15
4-May 206.5 943.95 1537.95 2583.1 2910.75 178.3 707.85
9-May 201.6 955.4 955.4 2642.95 2886.9 174.9 712.55
16-May 198.3 948.65 945.65 2649.05 2880.05 175.05 691.9
23-May 188.5 908 908 2252.85 2835.7 168.1 687.1
30-May 186.7 933.25 933.1 2188.85 2779.3 170.6 682.65
6-Jun 186.35 938.1 938.1 2311.65 2838.45 173.6 657.1
13-Jun 180.35 908 908 2252.85 2877.55 180.1 664.25
39

41. Following is a graph of the above readings:
3500
3000
2500
Hindalco
RIL
2000 L&T
SBI
1500 Infosys
NTPC
1000 Mahindra & Mahindra
500
0
April April May May May May May June June
19,2011 26,2011 4,2011 9,2011 16,2011 23,2011 30,2011 6,2011 13,2011
Interpretation: It is observed from the graph that the stock of no
company stays the same. There has been up and down in the market.
These fluctuations have occurred because of the reasons already
discussed. Stock price can either go up or go down depending upon the
demand and supply and is also affected by the volume of a particular
stock.
40

42. SWOT ANALYSIS:
STRENGTHS:
For Shareholders:
One of the primary advantages of investing in stocks is the possibility of
greater returns. As companies grow, the value of stocks also increases. If
an investor picks the right companies to buy stocks from, the probability
of profit is very high due to the tendency of the market to have an upward
trend. Further, if the investor traded actively, he may profit more and in
such a short period of time.
Another advantage of investing in stocks is its accessibility. There are many
stocks available in the market today. With proper research and analysis of
the stocks and the companies that issued them, anybody with sufficient
capital can acquire ownership of stocks.
The stocks traded in the market also have greater liquidity than other
securities. This means that it can be easily converted into cash by selling
the equities with other traders in the market.
Last, but not the least, investing in stocks can also reduce the amount of
taxes from capital gains. This is done by offsetting the capital gains from
the losses incurred with stocks, which value significantly decreased in the
market.
For company:
The funding is committed to the business and the intended projects.
Investors only realize their investment if the business is doing well, e.g.
through stock market flotation or a sale to new investors.
The right business angels and venture capitalists can bring valuable skills,
contacts and experience to the business. They can also assist with strategy
and key decision making.
Common to the company, investors have a vested interest in the business'
success, i.e. its growth, profitability and increase in value.
Investors are often prepared to provide follow-up funding as the business
grows.
41

43. WEAKNESS:
For Shareholders:
One of the main disadvantages of trading in the stock market is the risk
involved. The value of the stocks highly depends on the financial capability
of the company, which issued them. Once the company goes bankrupt,
the investors owning their stocks also lose money. Further, the general
status of the economy of a country determines how a company fares in the
stock market. If the companies are down such as in the case of recession,
the prices of stocks also go down.
Another disadvantage of investing in stocks is the extra cost due to
brokerage services. Employing the services of a broker is necessary in
order to effectively find the best deals in the market. Their services,
however, are not free, which entails reduction in the income gained from
the profits acquired in stock ownership.
For company:
Raising equity finance is demanding, costly and time consuming. Potential
investors will seek background information on the business - they will
closely scrutinize past results and forecasts and will probe the management
team. However, many businesses find this discipline useful regardless of
whether or not they actually receive any funding.
Depending on the investor, the company might lose a certain amount of
power to make management decisions.
The company will have to invest management time to provide regular
information for the investor to monitor.
At first the management will have a smaller share in the business - both as
a percentage and in absolute monetary terms. However, the reduced share
may become worth a lot more in absolute monetary terms if the
investment leads to the business becoming more successful.
There can be legal and regulatory issues to comply with when raising
finance, e.g. when promoting investments.
42

44. OPPORTUNITY
Lot of people want to invest but do not invest due to insufficient
knowledge.
Market is providing new opportunities and new options to invest.
THREATS
Recession
New government
Bubble burst
Fluctuating dollar prices
Competitors
Low brokerage rate of competitors
Analysis of the questionnaire
Sub-Brokers-
 How do you select the stock to invest
o Income level of the investor
o Income source of the investor, if the investor has retired
o Number of family members dependent on the investor
o Client wish to invest in long term of short term investment. For
long term investment investments are made in under value stocks
and for the short term investment it is invested in fluctuating stocks
 What market trend affects your business?
o Quarterly Results
o Dividends paid by the company
o FII holdings more FII holdings adds risk to the investment
43

45. Investors-
Age group of the respondent
Age Group of the Respondent
Greater than 55
45-55
35-45
22-35
Age Group 0 5 10 15 20 25 30 35 40
22-35 35-45 45-55 Greater than 55
Numbers 22 36 24 18
Interpretation: It is observed that mostly the investors are of the age
group 35-45 which mainly falls in the earning group and those greater than
55 are the least as people in this category are the ones who have or are
about to retire from their job.
Gender
Gender of the Respondent
Female
Male
0 10 20 30 40 50 60 70 80 90
Male Female
Number 77 23
Interpretation: It is observed that mostly male gender have invested in
various equities in SHCIL, Guwahati.
44

46. Occupation
Occupation of the Respondent
House wife
Business
Retired
Service
0 10 20 30 40 50 60
Occupation Service Retired Business House wife
Number 48 12 27 13
Interpretation: It is observed that mostly the service class people invest,
as they get a fixed salary at regular interval whereas retired people with no
source of income feel at a risk to invest with their saved money.
Annual income
Annual Income
No response
More than 5 lakh
1 lkah-5 lakh
Less than 1 lakh
0 10 20 30 40 50 60
More than 5
Less than 1 lakh 1 lkah-5 lakh No response
Income lakh
Number 16 56 24 4
Interpretation: Most of the investors are the middle income group
people earning 1lakh to 5 lakh per annum. Few people didn’t like to share
information about their income.
45

47. Awareness about different investment opportunities
Awareness of different investment oppurtunities
No
Yes
0 10 20 30 40 50 60 70 80 90
Yes No
Number 79 21
Interpretation: It is observed that mostly the investors are aware of the
various investment opportunities
Awareness about different investment options
Awareness about different Investment Options
Bond/Debenture
Shares
Bank Fixed Savings
Post Office
Mutual Funds
Investment 0 20 40 60 80 100 120
Option Bank Fixed Bond/Debent
Mutual Funds Post Office Shares
Savings ure
Number 88 51 80 96 28
Interpretation: The most popular investment options about which the
investors are well aware are Shares, Mutual Funds and Fixed Savings.
Though only a few know about Bond and Debentures.
46

48. Investment categories where investors have invested
Investment categories where Investors have
invested
Bonds/Debenture
Shares
Bank Fixed Deposit
Post Office Savings
Mutual Funds
0 10 20 30 40 50 60 70 80 90
Investment Options
Post Office Bank Fixed Bonds/Debe
Mutual Funds Shares
Savings Deposit nture
Number 48 8 48 84 16
Interpretation: Most of the investors have invested in shares. Only a
few of them have invested in Post office savings.
Duration of investment
Duration of the Investment(in years)
Greater than 5 years
1-5 years
Less than 1 year
0 5 10 15 20 25 30 35 40 45
Duration Less than 1 year 1-5 years Greater than 5 years
Number 29 39 32
Interpretation: Duration for which the investor invest their money for
is equally almost equally divided. The people investing for less than 1 year
are less than the ones investing for more than 1 year.
47

49. Investment in equities
Investment in Equity
No Response
More than 5 lakh
1 lakh-5 lakh
50,000-1 lakh
Less than 50,000
0 5 10 15 20 25 30 35 40 45
Amount
Invested Less than 50,000-1 More than 5
1 lakh-5 lakh No Response
50,000 lakh lakh
Number 40 20 8 8 24
Interpretation: It is observed that most of the investors have just
invested an amount with in Rs 50,000 though a lot many numbers of
investors didn’t like to give their details.
Satisfaction with investment
Satisfaction with Investment
No
Yes
0 10 20 30 40 50 60 70 80
Response Yes No
Number 68 32
Interpretation: Most of the investors are happy with the investments
they have made through SHCIL.
48

50. Satisfaction with the services of SHCIL
Satisfaction with the services of SHCIL
No
Yes
0 10 20 30 40 50 60 70 80
Yes No
Number 73 27
Interpretation: Majority of the people are satisfied with the services
that are offered at SHCIL.
Reasons for satisfaction with the services of SHCIL
Reasons for satisfaction with the services of
SHCIL
Less chance of default
Interaction with clients
Account maintenance
Prompt response
Market advice
Service Delivery System
0 10 20 30 40 50 60 70 80 90
Service Account Interaction Less
Market Prompt
Delivery maintenan with chance of
Reasons advice response
System ce clients default
Numbers 84 38 49 58 78 83
Interpretation: Various factors that add to the satisfaction level of the
investors are analyzed of which the most preferred is Service Delivery
System of SHCIL, interaction with the client and less chance of default.
49

51. Reason for dissatisfaction with the services of SHCIL
Reasons for dissatisfaction with the services of
SHCIL
Less chance of default
Interaction with clients
Account maintenance
Prompt response
Market advice
Service Delivery System
0 10 20 30 40 50 60 70
Reasons Service Account Less
Market Prompt Interaction
Delivery maintenanc chance of
advice response with clients
System e default
Numbers 4 61 36 32 24 24
Interpretation: Various reasons that dissatisfy the investors are analyzed
of which the most disturbing factor is the inability to give prompt response
and giving a good market advice.
50

52. Influence of various factors on the investment decision
Influence of various factors on Investment
decisions
General discussion with the friends
Experts of SHCIL
Own judgment
Dividend
Newspaper columns
Business news on TV
0 10 20 30 40 50 60 70 80
General
Influencing
Business Newspaper Own Experts of discussion
factors Dividend
news on TV columns judgment SHCIL with the
friends
Numbers 67 37 23 73 59 17
Interpretation: Of the various factors influencing the decisions of the
investors to invest in share market the most important ones are business
news on TV and own decisions of the investors.
51

53. Better time for investment
Better time for Investment
After quarterly results
April to July
Depends on the market situation
Bull market
Time for Bear market
Investment 0 10 20 30 40 50 60 70
Depends on After
Bear market Bull market the market April to July quarterly
situation results
Number 58 27 7 4 4
Interpretation: Many investors believe that the Bear market condition is
a better time to invest their money in various equities.
Are you satisfied with the brokerage charges of SHCIL
Satisfaction with the brokerage charge
No
Yes
0 20 40 60 80 100
Yes No
Number 23 77
Interpretation: It is observed that most of the investors are not satisfied
with the brokerage charges of SHCIL.
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54. How did you come to know about SHCIL
Number
Others
Friends and relatives
Internet
Newspaper and Banners
TV ad
0 10 20 30 40 50 60 70
Sources Newspaper Friends and
TV ad Internet Others
and Banners relatives
Number 0 17 21 62 0
Interpretation: It is observed that most of the people have come to
know about the services of SHCIL through friends and their relatives
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55. SUGGESTIONS AND RECOMMENDATION
A low rate of brokerage than the existing rate will encourage the existing
investors to invest more and would attract more new clients.
Providing more in depth insight of the market to the investors will
strengthen their confidence and help them to take quick decisions.
Introduction of market alerts through SMS and e-mails will raise the
satisfaction level of the clients.
Introduction of more flexibility in the process of investment should
increase the turnover of the company and will also be more convenient for
the clients.
Introduction of FUTURE and OPTIONS, should improve the market
holdings of the company, and will help to diversify the portfolio of the
clients.
A little promotion about the various services will go a long way in
attracting new clients.
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56. CONCLUSION
Everything that rises has to fall in the equity market. There is no solid proof way
to determine the trend of the equity market. Anything could happen to make all
of this information collected to study the trend of the equity market worthless,
but we have to at least consider the past trends and understand that there is a
chance the market will behave similarly and we’ll enter a period of significant
decline. Political, social happenings and emotions of the investors play a big role
in the equity market.
That’s why a good and constant study of the market and how the equity of
various companies behaves in the market should be studied well and if possible a
constant touch with the experts too helps a long way.
From the SHCIL point of view a better marketing of its product and a good
advice regarding investment can go a long way in attracting more investors. As it
is a period of stiff competition it is necessary that the instruments of SHCIL do
offer attractive returns.
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57. ANNEXURE
QUESTIONNAIRE
Name:
Gender:
Age:
Occupation:
Income: Less than 1 lakh
1-5 lakhs
More than 5 lakhs
1. Are you interested in investing your money through SHCIL?
YES NO
2. Which of the following investment opportunities you are aware of?
a. Mutual fund
b. Post office savings
c. Bank fixed deposits
d. Bonds/ Debentures
e. Shares
3. In which of the following options have you invested
a. Mutual fund
b. Post office savings
c. Bank fixed deposits
d. Bonds/ Debentures
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58. e. Shares
4. Do you have a trading account with SHCIL?
YES NO
5. How much have you invested in the stock market till date?
a. Less than 50,000
b. Between 50,000 & 1 lakh
c. Between 1 & 5 lakhs
d. More than 5 lakhs
6. Are you satisfied with your investment?
YES NO
7. How long have you been investing through SHCIL?
a. Less than 1 year
b. Between 1-5 years
c. More than 5 years
8. Are you satisfied with the services of SHCIL?
YES NO
Reasons for satisfaction/ dissatisfaction:
Satisfaction Reasons Dissatisfaction
Service delivery system
Market advice
Prompt response
Account maintenance
Interaction with clients
Less chance of default
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59. 9. How your investment decisions are influenced by the following?
Please indicate ranking with
5- Most important; 4-Important; 3- Not so important; 2-Least important;
1- Not applicable
a. Business news in T.V
b. Newspaper columns
c. Dividend
d. General discussion with friends/ colleagues
e. Experts view of SHCIL
f. Own judgment
10. How frequently you make your investments?
a. Daily
b. Monthly
c. Quarterly
d. Yearly
11. Are you aware of other services of SHCIL
a. NPS
b. e-stamping
c. Mutual funds
d. Fixed Deposits
e. Government Bonds
12. How did you come to know about SHCIL
a. TV ad
b. Newspaper
c. Friends and Relatives
58

60. d. Internet
e. Ohters
13. Are you satisfied with the investment decision made by sub-brokers
a. Very satisfied
b. Satisfied
c. Neutral
d. Dissatisfied
e. Very Dissatisfied
14. Are you happy with the brokerage charges of SHCIL?
a. Very satisfied
b. Satisfied
c. Neutral
d. Dissatisfied
e. Very Dissatisfied
15. What time do you invest in the shares?
a. Bear
b. Bull
c. Depends upon market situation
d. April to July
e. After quarterly result
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61. BIBLIOGRAPHY
www.shcil.com
www.business.mapsofindia.com
www.finance-advices.tk
www.moneycontrol.com
www.bseindian.com
www.wikepedia.com
www.investopedia.com › Tutorials
Study materials provided by the company-SHCIL
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