1. CHAPTER I
INTRODUCTION
Overview of Industry as a whole
Indian stock market have been role during the past five years,genrating an annual
return of 28%(on the nifty index).Still general public prefers putting it money in
bank,rather than putting it in stock. Within Indian economy doing so well, return from
stock market have been far higher than return from any other investment.Avenue
rupees 1, 00,000 invested in the nifty in April would have been worth a little over
rupees 3, 00,000 by April, 2008.But the top value creatures have been delivered far
superior returns the same lakh invested in unitech would have been worth rupees
1.52cr if it had been invested in aban aban offshare.
Most of people are reluctant to put their money in shares,because of uncertainty of the
return.At times stock market is so volatile that it becomes very difficult for investors
to decide whether to purchase some more stocks or sell them,whether to enter the
market or book profit. with so much uncertainty prevailing, the case of investing in
stock market is totally different from the case of investing in some other places.
1

2. Market Participants 2010 2011
Securities Appellate Tribunal 1 1
Regulators* 4 4
Depositories 2 2
Stock Exchanges
With Equities Trading 21 19
With Debt Market Segment 1 1
With Derivative Trading 2 2
Brokers 9,443 9,487
Corporate Brokers 4,110 4,190
Sub-brokers 27,541 44,074
FIIs 996 1319
Portfolio Managers 158 205
Custodians 15 15
Share Transfer Agents 82 76
Merchant Bankers 152 155
Bankers to an Issue 47 50
Debenture Trustees 30 28
Underwriters 45 35
Venture Capital Funds 90 106
Foreign Venture Capital Investors 78 97
Mutual Funds 40 40
Collective Investment Schemes 0 0
Table no 1- Market Participants in Securities Market
Market segment
The securities market has two interdependent segments: the primary and the
secondary market. The primary market is the channel for creation of new securities.
These securities are issued by public limited companies or by government agencies.
In the primary market the resources are mobilized either through the public issue or
through private placement route. It is a public issue if anybody and everybody can
subscribe for it, whereas if the issue is made available to a selected group of persons it
is termed as private placement. There are two major types of issuers of securities, the corporate
entities who issue mainly debt and equity instruments and the government (central as well as state)
who issue debt securities.
These new securities issued in the primary market are traded in the secondary market.
2

3. The secondary market enables participants who hold securities to adjust their holdings
in response to changes in their assessment of risks and returns. The secondary market
operates through two mediums, namely, the over-the-counter (OTC) market
and the exchange-traded market. OTC markets are informal markets
where trades are negotiated. Most of the trades in the government securities are in
the OTC market. All the spot trades where securities are traded for immediate deliver
y and payment take place in the OTC market. The other option is to trade using the
infrastructure provided by the stock exchanges.
There are 23 exchanges in India and all of them follow a systematic settlement period.
All the trades taking place over a trading cycle (day=T) are settled together after a
certain time (T+2 day).
The trades executed on the National Stock Exchange (NSE) are cleared and settled by
a clearing corporation. The clearing corporation acts as a counterparty and guarantees
settlement.
Nearly 100% of the trades in capital market segment are settled through demat
delivery. NSE also provides a formal trading platform for trading of a wide range of
debt securities, including government securities. A variant of the secondary market is
the forward market, where securities are traded for future delivery and payment. A
variant of the forward market is Futures and options market. Presently only two
exchanges viz., NSE and Stock Exchange, Mumbai (BSE) provides trading in the
derivatives of securities.
Dependence on Securities Market
3

4. • Corporate Sector
• Government
• Households
The above mentioned sectors are dependent on the Capital Market for their
financial needs. The following table shows their percentage share respectively.
International scenario
Following the implementation of reforms in the securities industry during the last
decade, Indian stock markets have graduated to a better position vis-à-vis the
securities market in developed and emerging markets. As may be seen from Table 1-
2, India has a turnover ratio, which is comparable to the other developed market, and
also one of the highest in the emerging markets. At the end of 2005, Standard and
Poor’s (S&P) ranked India 17th in terms of market capitalization (19th in 2004), 16th
in terms of total value traded in stock exchanges (17th in 2004) and 6th in terms of
turnover ratio (7th in 2005). India has the number one ranking in terms of listed
securities on the Exchanges followed by the USA. These data, though quite
impressive, do not reflect the full Indian market, as S&P (even other international
publications) does not cover the whole market. For example, India has more than
9000 listed companies at the end of March 2009, while S&P considers only 5,644
companies.
If whole market were taken into consideration, India’s position vis-à-vis other countries would be
much better.
Singapore 91.2 57.9
France 89.5 42.2
Germany 83.6 44.6
Italy 95.5 55.9
United Kingdom 94.3 43.6
4

5. United States 93.8 16.4
India 75.0 36.5
Table no 2 –Growth in stock market among world
The stock markets worldwide have grown in size as well as depth over last one
decade. The turnover on all markets taken together has grown from US $ 5.5 trillion in
1990 to $ 38 trillion in 2005 when it reached a peak. Thereafter, it has witnessed a decline and
stood at US $ 34.6 trillion in 20011. It is significant to note that US alone accounted for about
47.4% of worldwide turnover in 20011. Despite having a large number of companies listed on its
stock exchanges, India accounted for a meager 2.96% in total world turnover in 20011. The
market capitalization of all listed companies taken together on all markets stood at US $ 34.6
trillion in 2011 ($ 23 trillion in 2009). The share of US in worldwide market capitalization
decreased from 47.24% as at end-2010 to 44.66% in end-2009, while Indian listed companies
accounted for 1.87% of total market capitalization in 2009.
International and Indian scenario in online broking
In US markets, online brokerage has significantly changed the dynamics of the market
place, resulting in one of the biggest shifts in the individual investor's relationship
with their brokers. Investors access a wealth of financial information on the same time
as do market and financial professionals including breaking news, developments and
market data. Online brokerage provides investors the tools to analyze the information
such as research reports. In the US, 82 per cent of the deals are done on line. The
European on line broking market is expected to be of $8 billions and has risen to
about $50 billion today.
Net trading shall initially faced some problems relating to infrastructure and
understanding of the concept. Presently, the legal framework is right in place and
there are organizations like SEBI, RBI etc. which provide investor guidelines to the
investors for protection of their right. Also, investor grievance handling and redressal
5

6. system is fast and efficient. Lack of investor education and resistance from
stockbrokers though has always posed some problems.
With Internet trading, investment in the stock market is just a click away, in the
comfort of office or a home. It makes it easy for anyone to access net brokers and
trade in stock. Even the smallest retail investor can access information that was till
now restricted to big traders. Net trading provides investors with seamless, real time
online access to stock markets.
6

7. Profile of the organization
SMC Global is one of the largest and most reputed Investment Solutions Company
that provides a wide range of services to its substantial and diversified client base.
Founded in 1990, by Mr. Subhash Chand Aggarwal and Mr. Mahesh Chand Gupta,
SMC, is a full financial services firm catering to all classes of investors. The company
is having its corporate office in New Delhi with regional offices in Mumbai, Kolkata,
Chennai, Ahemdabad, Cochin, Hyderabad, Jaipur plus a growing network of more
than 1250 offices across over 350 cities/towns in India and overseas office in Dubai.
• Enabling shorter settlement cycles and book entry settlements systems, and
meeting the current international standards of securities market.
Products & Services
SMC customers have the advantage of trading in all the market segments together in
the same window, as they understand the need of transactions to be executed with
high speed and reduced time. At the same time they have the advantage of having all
kind of Insurance & Investment Advisory Services for Life Insurance, General
Insurance, Mutual Funds, and IPO’s also.
SMC is a customer focused financial services organization providing a range of
investment solutions to their customers. They work with clients to meet their overall
investment objectives and achieve their financial goals. Their clients have the
opportunity to get personalized services depending on their investment profiles. Their
personalized approach enables clients to achieve their Total Investment Objectives.
7

8. Their key product offerings are as follows:
o Equity Trading
o Commodity Trading
o Depositary Services
o Portfolio Tracker
o Life Insurance
o General Insurance
o Mutual Fund
8

9. History of SMC
SMC acquired membership of the Delhi Stock Exchange in 1990 and later in 1995
became a trading member of NSE. In 2000 the company became a member of BSE
and a depository participant of CDSL India Ltd. In the same year, the company
acquired the Trading & Clearing Membership of NSE Derivatives and the
memberships of leading commodity exchanges i.e. NCDEX and MCX in subsequent
years. In 2006, SMC expanded globally and acquired the Trading & Clearing
Membership of Dubai Gold and Commodity Exchange (DGCX). In the same year, the
company also started its Insurance Broking division, IPO & Mutual Fund Distribution
Division and its Merchant Banking division.
Mission
• Establishing a nation-wide trading facility for equities, debt instruments and
hybrids,
• Ensuring equal access to investors all over the country through an appropriate
communication network,
• Providing a fair, efficient and transparent securities market to investors using
electronic trading systems,
• Enabling shorter settlement cycles and book entry settlements systems, and
meeting the current international standards of securities market.
Vision
• Their vision is to be the most respected company in the financial services
space.
9

10. Competition information
1. Icicidirect.com
Products and Services
A product for every need: ICICIdirect.com is the most comprehensive website,
which allows you to invest in Shares, Mutual funds, Derivatives (Futures and
Options) and other financial products. Simply put we offer you a product for
every investment need of yours.
ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is an Affiliate
of ICICI Bank Limited and the Website is owned by ICICI Bank
Limited
Product & Services:
Trading in shares: ICICIdirect.com offers you various options while trading in
shares.
Cash Trading: This is a delivery based trading system, which is generally done with
the intention of taking delivery of shares or monies.
Margin Trading: You can also do an intra-settlement trading up to 3 to 4 times your
available funds, wherein you take long buy/ short sell positions in stocks with the
intention of squaring off the position within the same day settlement cycle. (ONLY
for intraday)
10

11. 2. India bulls
India bulls Group is one of the top business houses in the country with business
interests in Real Estate, Infrastructure, Financial Services, Retail, Multiplex and
Power sectors. India bulls Group companies are listed in Indian and overseas markets
and have a market capitalization of over USD 7 billion. The Net worth of the Group
exceeds USD 2.5 billion. India bulls Group companies enjoy highest ratings from
CRISIL, a subsidiary of Standard and Poor’s. India bulls has been conferred the status
of a “Business Super brand” by The Brand Council, Super brands India.
India bulls Financial Services is an integrated financial services powerhouse
providing Consumer Finance, Housing Finance, Commercial Loans, Life Insurance,
Asset Management and Advisory services. India bulls Financial Services Ltd is
amongst 68 companies constituting MSCI - Morgan Stanley India Index. India bulls
Financial is also part of CLSA’s model portfolio of 30 Best Companies in Asia. India
bulls Financial Services signed a joint venture agreement with Sogecap, the insurance
arm of Societé Generale (SocGen) for its upcoming life insurance venture. India bulls
Financial Services in partnership with MMTC Limited, the largest commodity trading
company in India, is setting up India’s 4th Multi-Commodities Exchange.
3. Abhipra
Beginning as a Broking House, we grew into Business House. We broadened our
horizons and stepped into the field of Depository, Stock Broking, Full-Fledged
Money Changing Services, Category I Registrar & Transfer Agent, Commodity
Trading, Online Trading (Equity, F&O & Commodity), e-Return Intermediary.
Abhipra today commands the status of being one of the leading Depository
Participants of Northern India in Private Sector. Moreover, Abhipra has Trading
Terminal Outlets for NSE & BSE spread to almost every nook & corner of Northern India.
11

12. Abhipra Capital Limited is also empanelled as a Depository Participant with one of the
premier Commodity bourse, National Commodities and Derivatives Exchange Limited
(NCDEX). So a client now can open Commodity Demat Account with us. At Abhipra, we
offer our clients far more than merely a comprehensive range of financial services. We
offer them ideas, innovations, and solutions with extra-ordinary results. We feel that
quality is an essential ingredient in building successful businesses. Not only do products
and services need to be of high quality, but potential customers also need to have
assurance that the products will be of high quality. This is evidenced from the fact that
Abhipra is a ISO 9001 (Quality Assurance Systems) Registered Company.
4. Kotak securities
Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking
and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is one of India's
leading financial institutions, offering complete financial solutions that encompass
every sphere of life. From commercial banking, to stock broking, to mutual funds, to
life insurance, to investment banking, the group caters to the financial needs of
individuals and corporate.
Kotak Securities was set up in 1994. Kotak Securities is a corporate member of both
The Bombay Stock Exchange and the National Stock Exchange of India Limited.
12

13. The company has four main areas of business:
• Institutional Equities,
• Retail (equities and other financial products),
• Portfolio Management and
• Depository Services.
5. Motilal oswal
Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with
just two people running the show. It has established itself as the Best Local Brokerage
House in India (Asia Money Brokers’ Poll 2005). Their Institutional Equity Division
combines the efforts of the Research and Sales & Trading departments to best serve
clients' needs. Consistent delivery of high quality advice on individual stocks, sector
trends and investment strategy has established them as a reliable research unit
amongst leading Indian as well as international investors.
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14. S. W. O. T analysis of the organization
Strengths
• The `do-it-yourself' framework of online share trading offers retail investors the
three benefits of transparency, access and efficiency. Paperwork diminishes
significantly, and no more painful trips to your broker to check if everything's in
order. Online trading has made it possible to universalize access to retail investors.
This was earlier very difficult, as the cost of servicing often-outweighed
transaction volumes. Online brokerage ranges between 0.05-0.20 per cent of the
value of transactions for non-delivery-based trades, and between 0.25-0.95 per
cent for delivery-based trades. Once major investments in online infrastructure are
over and done with - and with the economies of scale coming into play - it is
expected that brokerage rates would head further downwards.
• Access to online trading and latest financial happenings, apart from quotes and
unbiased investment analyses, all consolidate into a value-added product mix in
tandem with evolving markets that are freer and fairer. The Net result: An
inquisitive, informed and demanding investor. Today's investor is more involved
in managing his or her assets and analyzing a vast array of investment options.
Technology and today's enabled investor have, in turn, driven competition,
resulting in reduced costs of trading, transparency in dealings, and pricing info
that is accurate and real-time. More and more investors now want to know how
their trades are executed, and whether they have received the best possible price.
Critical components of execution quality include the prices at which orders were
14

15. executed as well as the speed of execution. The quality of execution, in turn,
hinges on efficient order routing. We owe this to our investor fraternity.
Weakness
• Every thing in the world has a flip side to it - Transaction velocity is crucial.
And more often than not, connections are lousy. There's also a degree of
investor skepticism about online payment and settlement mechanisms in spite
of all the encryption and fire walling brought into play. Time and technology
will soon assuage these concerns, which hark back to the `physical' days.
• “The three main technology obstacles which have prevented Internet broking
from taking off are:
1. Lack of Internet penetration
2. Bandwidth infrastructure
3. Poor quality of ISP infrastructure.”
Opportunities
• You have some money to dabble with. Trading shares on BSE/NSE has
always been your dream. When will you ever find the time? And besides, the
hassle of finding a broker is not easy. This is your main opportunity.
• Realizing there is untapped market of investors who want to be able to execute
their own trades when it suits them, brokers have taken their trading rooms to
the Internet. Known as online brokers, they allow you to buy and sell shares
via Internet.
15

16. • There are 2 types of online trading service: discount brokers and full service
online broker. Discount online brokers allow you to trade via Internet at
reduced rates. Some provide quality research, other don’t. Full service online
brokerage is linked to existing brokerages. These brokers allow their clients to
place online orders with the option of talking/ chatting to brokers if advice is
needed. Brokerage rates here are higher. 5Paisa.com, ICICIDirect.com,
IndiaBulls.com, Sharekhan.com, Geojit securities.com, HDFCsec.com,
Tatatdw.com, Kotakstreet.com are some of the online broking sites in India.
• And daily trading turnover is estimated in the vicinity of 0.75 per cent of the
combined BSE and NSE daily turnover of about RS 11,000 crore!!! The point
is, there's tremendous scope for growth. Especially when you consider the US,
where trading over the Net accounts for about 55 per cent of the total volumes.
And, I believe, in some Asian markets the figures as high as 70 per cent.
Threats
• On to some threat perception - Domestic funds, foreign institutional investors and
operators comprise the three main market constituents. And all three include term
investors as well as opportunists in their pecking order. Some, for instance, hitch
their fate with what the FIIs are up to. All this spells spurting volumes. But
nobody gives a damn about the resultant volatility.
• And some, not all, offer free investment advice over the Net to lure rookie
investors with misleading information. Prices of scripts can also be influenced to
the advantage of vested interests, courtesy the Net. Unlike in the US, stockbrokers
16

17. out here willingly (or under the force of circumstance) assume the role of
`advisors', sans the neutral, non-vested stance.
Objectives of the study
Before starting any project, we should keep in mind the clear objectives of the project
because in the absence of the objectives one cannot reach the conclusion or end result
of the project.
So, the objective of my project is to:
• To analyze the market share & services of existing players.
• To analyze the facts that how much people are interested to invest in stocks.
• To judge the future prospects of online trading for SMC investment solutions.
Stock market of India is now been one of the fascinating market worldwide. Indian is
among the top ten destination of the world to which global player want to invest.
Research comprises defining and redefining problems, formulating hypothesis or
suggested solutions; collecting, organizing and evaluating data; making deductions
and reaching conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating hypothesis.
17

18. In short, the search for knowledge through Objective and Systematic method of
finding solutions to a problem is Research.
18

19. Scope of the study
Since better broadband connectivity across the country and wider awareness of equity
as an asset class will push the online trade volumes to over 50% of total Trade
therefore it is relevant to the future prospects emerging in the stock market.
In order to compete with the online trading market leader like ICICI the company has
to work a lot on Online Trading in order to get the competency with other players.
Since the online trading is accepted by major players in the Indian Stock Market, the
importance of Online Trading has increased over the past decade therefore it is very
important to consider the Online Trading as a future of the Indian Stock Market.
This project would also tell us about the working of the Indian Stock Market and the
forces acting in the Online Trading.
“SMC” a software used by SMC Investment Solutions & SERVICES is an edge for
gaining competitive advantage; therefore it is relevant to know the working of this
software which would be enlightened in our company.
Online Trading Account and Demat Account
After the introduction of the online trading systems it is very easy to do online trading
with just a PC and an Internet connection. All you need to do is just open a Demat
account and a trading account with a depository participant or DP. DP is connecting
19

20. Depository to investors. Depository is the people who stores shares in electronics
form. In India there are two depositories, NSDL and CDSL.
Most of the banks and brokerage houses provide trading account and Demat account.
To open a Demat account you need many things like PAN card, address proof, bank
account etc.
20

21. Methodology
Marketing Research
Is the systematic design collection, and analysis and reporting of Data and findings
relevant to specific marketing situation facing the company.
Research Design
Types of Research: - Descriptive research
Descriptive research includes Surveys and fact-finding enquiries of different kinds.
The major purpose of descriptive research is description of the state of affairs, as it
exists as the present. The main characteristic of this method is that the researcher has
no control over the variables; he can only report what has happened or what is
happening.
21

22. 1.Define the Problem and
Research Objectives
2. Develop the Research Plan
3. Collect the Information
4. Analyze the Information
5. Present the Findings
Figure no 1- Research process
1. Define the Research Problem and Objective
Objective
• To analyse the market share & services of existing players
• To judge the future prospects of online trading for smc investment solutions.
The respondents are stratified into offline share trading respondents and online share
trading respondents.
2. Develop the Research Plan
The second stage of Research calls for developing the most efficient plan for
gathering information.
Designing a research plan calls for decision on the data sources, research approaches,
research instruments, sampling plan & contact methods.
22

23. Data Sources
There are two types of data.
Primary data: The data that is collected first hand by someone specifically for the
purpose of facilitating the study is known as primary data. So in this research the data
is collected from respondents through questionnaire.
Secondary data: For the company information I had used secondary data like
brochures, websites of the company etc.
Survey Approach
Survey Research: - survey research is used to learn about need, perception and
awareness level of the customers for online share trading.
The method used by me is Survey Method as the research done is Descriptive
Research.
23

24. Research Instruments
Selected instrument for Data Collection for survey is Questionnaire.
Questionnaires: - A questionnaire consists of set of questions presented to
respondent for their answers. It can be Closed Ended or Open Ended.
Open Ended: - Allows respondents to answer in their own words & are difficult to
Interpret and Tabulate.
Close Ended: - Pre-specify all the possible answers & are easy to Interpret and
Tabulate.
Types Of Question Included:
Dichotomous Questions
Which has only two answers “Yes” or “No”?
Multiple Choice Questions
Where the respondent is offered more than two choices.
Rating Scale
A scale that rates some attributes from “excellent” to “very poor” and “very
inefficient” to “Very efficient”.
Sampling Plan
After deciding on the research approach and instrument, the marketing researcher
mustDesign a Sampling Plan. This includes:
Sampling Unit: - Who is to be surveyed? The marketing researcher must define the
target population that will be sampled.
24

25. The sample Unit taken by me; are General individual customer those who trade in
share market.
Sample Size/ Population Size: - How many people should be surveyed?
I have cover entire Delhi city for the survey. My sample size is 200.
Sampling Procedure: - How should the respondent be chosen?
In the Project, sampling done is on basis of area sampling for the Delhi city.
In which convenient sampling was done.
Contact Methods
Once the sampling plan had been determine, the marketing researcher must device
how the subject should be contacted: Mail, Telephone, Personal or On-line
Interviews.
In my project I went for personal Interviewing, as it’s necessary to go meet the
individual respondents at their place so I can collect the right information.
3. Collect The Information
The Data collection phase of marketing research is generally the most expensive and
the most prone to error.
I had visited all the respondents individually in the Delhi city and collected
information via questionnaire.
I used to talk with them and in that talk I asked them the relevant question of the
questionnaire so I could get correct information from them for the objective purpose.
For some questions I have to explain them about company, like different plans of the
company etc.
Generally most of the respondents had filled questionnaire themselves but some avoid
filling up so at that time myself filled according to their answer.
25

26. 4. Analysis of the Information or Data Collected
After the data have been collected, the researcher turns to the task of analysis then.
The analysis of data requires a number of closely related operations such as
establishment of categories, then application of these categories to raw data though
coding, tabulation and statistical inferences. The unwieldy data should necessarily be
condensed into a manageable groups and tables for further analysis.
The researcher can analyze the collected data with the help of various statistical
measures.
After collecting the data I used hand tabulation method for analysis.
5. Interpretation of survey:
Based on collected information the analysis is done. The questionnaire used by me is
given below.
26

27. CHAPTER II
CONCEPTUAL FRAMEWORK
Investor perception
SEBI in association with National Council of Applied Economic Research (NCAER)
conducted a Survey of Indian Investors in 2000-01 and then followed it up in 2004-
05. The survey of 2005-06 was based on a sample of 288,081 geographically
dispersed rural and urban areas. The findings of this survey were released in
September 2006. The survey estimated that a total of 13.1 million or 7.4 per cent of
all Indian households totaling 21 million individuals directly invested in equity shares
or debentures or both during 2007-08. The other findings are as listed below:
1. The number of debenture owning households and individual debenture holders
far exceeds household and individual equity investors. Of the total 13.1 million
investor households, 9.6 million households owned bonds or debentures,
whereas only 6.5 million investor households owned equity shares.
2. The percentage of households investing in equity or debentures is more in urban
areas than in rural areas. This divergence is more in case of equities compared
to debentures. Of the 51 million urban households, 7.8 million households
representing more than 12 million urban individual investors owned equity
shares or debentures or both. Whereas, of the 125 million rural households, only
5.3 million households representing more than 8 million individual investors
shows a definite migration of investors from equity market to bond market
during the period between the two surveys.
27

28. 3. The survey results also clearly reveal that number of non-investor households
have increased from about 156 million in 1998-99 to nearly 164 million in
2007-08 constituting nearly 92.6 per cent of all households.
4. It was also observed that the investor population and town size are directly
proportional. The largest city with more than 50 lakh population accounted for
about 17 per cent of investor households and the next higher segment, more
than 31 per cent investor households were in towns with population between 10
and 50 lakh.
Risk Management System
The risk management system ensures the minimization of inherent known risks with
appropriate tools and timely speedy flow of information. An effective risk
management system further ensures certain alerts by which unknown risks can be
predicted & informed in due course of time.
In stock market operation, the risk is too high to imagine and one can find instant
impact of every bit of information in terms of monetary gain or loss. So one has to be
very careful & particular to the alerts provided time to time by RMS for containing
the risks.
Further, RMS can’t ensure a complete elimination of risks. It can reduce the risk &
level of reduction of risk depends upon our own efforts. So it is advised that one
should follow set norms & put proper attentions on various alerts send by the RMS
during the day /at the end of day for controlling the risks.
28

29. To start with day to day processes which are implemented on daily basis to eliminate
Risk as much as one can with the stipulated tools and techniques. One should apply
these tools and techniques according to the requirement of their Management and the
Market conditions.
Primary Market
The government and corporate sector raised an aggregate of Rs. 2,676,600 million
during 2009-10 as against Rs.2,572,201 million during the preceding year.
Government raised about two third of the total resources, with central government
alone raising nearly Rs. 1,476,360 million.
(Source: SEBI)
Table no 3: Resources Mobilized from the Primary Market
29

30. Corporate Securities
The average annual capital mobilization from the primary market has grown manifold
since the last two-three decades. It received a further boost during the first half of
1990s with the capital raised by non-government public companies rising sharply
from Rs. 43,120 million in 1990-91 to Rs. 264,170 million in 1994-95. Thereafter,
there has been a decline due to conditions prevailing in the secondary market.
However, the year 2008-09 took a turnaround in its performance as compared to the
previous year by mobilizing Rs. 32,100 million. The capital raised, which used to be
less than 1% of gross domestic saving (GDS) in the 1970s increased to about 13% in
1992-93 but thereafter witnessed declines.
Indian market is getting integrated with the global market, though in a limited way
through Euro Issues. Since they were permitted access in 1992, Indian companies
have raised about Rs. 30,980 million through American Depository Receipts
(ADRs)/Global Depository Receipts (GDRs).
FIIs have invested heavily in Indian market in 2009-10. They had net cumulative
investments of US$ 38.75 billion as at end of March 2010. There were 745 FIIs
registered with SEBI as of end March 2010.
It appears that more and more people prefer mutual funds (MFs) as their investment
vehicle. This change in investor behavior is induced by the evolution of a regulatory
framework for MFs, tax concessions offered by Government and preference of
investors for passive investing. Starting with an asset base of Rs. 250 million in 1964,
the total assets under management at the end of March 2010 have risen to Rs.
1,396,160 million. During the last one decade, the resources mobilized by the MFs are
increased from Rs. 112,440 million in 1993-94 to Rs. 476,840 million in 2009-10.
30

31. Secondary Market
Corporate Securities
There are 23 exchanges in the country, which offer screen based trading system. The
trading system is connected using the VSAT technology from over 357 cities. There
were 9,368 trading members registered with SEBI as at end March 2011.
The market capitalization has grown over the period indicating more companies using
the trading platform of the stock exchange. The all India market capitalization is
estimated at Rs. 13,187,953 million at the end of March 2011. The market
capitalization ratio defined as the value of listed stocks divided by GDP is used as a
measure of stock market size. It is of economic significance since market is positively
correlated with the ability to mobilize capital and diversify risk. It increased sharply to
52.3% in 2010-11 against 28.5% in the previous year. The trading volumes on
exchanges have been witnessing phenomenal growth over the past decade. The
trading volume which peaked at Rs. 28,809,900 million in 2008-09, fell substantially
to Rs. 9,689,093 million in 2009-10. However, the year 2010-11 saw a turnaround in
the total trading volumes on the exchanges. It registered a volume of Rs. 16,204,977
million. The turnover ratio, which reflects the volume of trading in relation to the size
of the market, has been increasing by leaps and bounds after the advent of screen
based trading system by the NSE. The turnover ratio for the year 2010-11 accounted
at 122.9%.
The relative importance of various stock exchanges in the market has undergone
dramatic change during this decade. The increase in turnover took place mostly at the
big exchanges.
31

32. The NSE yet again registered as the market leader with more 85% of total turnover
(volumes on all segments) in 2010-11 Top 5 stock exchanges accounted for 99.88%
of turnover, while the rest 18 exchange for less than 0.12% during 2010-11. About ten
exchanges reported nil trading volume during the year.
S&P CNX Nifty is the most widely used indicator of the market, .The index
movement have been responding to changes in the government’s economic policies ,
the increase in FIIs inflows , etc. However, the year 2005-06 witnessed a favorable
movement in the Nifty, wherein it registered its all time high in January. The
movement of the S&P CNX Nifty, the most widely used indicator of the market. The
index movement have been responding to changes in the government’s economic
policies , the increase in FIIs inflows , etc. However, the year 2010-11 witnessed a
favorable movement in the Nifty, wherein it registered a high in January 2011 of
2014.65. The point-to-point return of Nifty was 80.14% for 2010-11.
Government Securities
The primary issues of the Central Government have increased manifold during the
decade of 1990s from Rs. 89,890 million in 1990-91 to Rs. 1,476,360 million in 2010-
11. The issues by state governments have also increased over this period from Rs.
25,690 million to Rs. 505,210 million. The Central Government mobilized Rs.
1,215,000 million through issue of dated securities and Rs. 261,360 million through
issue of T-bills. After meeting repayment liabilities of Rs. 326,930 million for dated
securities, and redemption of T-bills of Rs. 261,260 million, net market borrowing of
Central Government amounted to Rs. 888,160 million for the year 2010-11.
32

33. The net borrowings of State Governments in 2005-06 amounted to Rs. 463,760
million. The trading in government securities exceeded the combined trading in equity
segments of all the exchanges in the country during 2010-11. The aggregate trading in
central and state government dated securities, including treasury bills, increased by
manifold over a period of time. During 2010-11 it reached a level of Rs. 26,792,090
million. The share of WDM segment of NSE in total turnover for government
securities decreased marginally from 52% in 2004-05 to 47.6% in 2010-11. However,
the share of WDM segment of NSE in the total of Non-repo government securities
increased marginally from 74.01% in 2004-05 to 74.89% in 2010-11.
Along with growth of the market, the investor base has also widened. In addition to
banks and insurance companies, corporate and individual investors are also investing
in government securities. Due to the soft interest rate policy pursued by the RBI, the
coupon rates offered on government borrowings have fallen sharply. The weighted
average costs of its borrowing have declined to 5.71% in 2010-11. The maturity
structure of government debt is also changing. About 77% of primary issues were
raised through securities with maturities above 5 years and up to 10 years. As a result
the weighted average maturity of dated securities increased to 14.94 years in 2010-11.
Derivative Market
The number of instruments available in derivatives has been expanded. To begin with,
SEBI only approved trading in index futures contracts based on S&P CNX Nifty
Index and BSE-30 (Sensex) Index. This was followed by approval for trading in
options based on these two indices and options on individual securities and also
futures on interest rates derivative instruments (91-day Notional T-Bills and 10-year
33

34. Notional 6% coupon bearing as well as zero coupon bonds).
Now, there are futures and options based on benchmark index S&P CNX Nifty and
CNX IT Index as well as options and futures on single stocks.
The total exchange traded derivatives witnessed a value of Rs. 21,422,690 million
during 2010-11 as against Rs. 4,423,333 million during the preceding year. While
NSE accounted for about 99.5% of total turnover, BSE accounted for less than 1% in
2010-11. NSE has created a niche for itself in terms of derivatives trading in the
global market.
34

35. Government Intervention
As result of reforms in financial and real sector new investment alternatives have
emerged. There was a time when few individuals possessed majority of the wealth in
the society. With the efforts of government our economy witnessed significant
growth, which led to uniform distribution of income in society. As a result income of
masses started rising and they started looking for suitable investment avenues, to
achieve their financial goals. From savings accounts, fixed deposits, post office
savings schemes, several other investment alternatives have emerged such as capital
markets, mutual funds, commodities market, insurance derivatives etc. There has been
a major shift towards risky investments in order to earn higher returns. There were
also scams like US-64, Harshad Mehta’s scam, which forced investors to make
changes in their portfolio. But after government efforts investors’ confidence is
restored in equity markets, which led to growth in financial services sector. After this
period in today's market scenario we find Indian economy still struggling while the
world is facing massive recession. Indian economy is in such position because it is
still in its developing stage and so there is so much more to explore and develop.
Recently market has faced downtrend but still holding on and offering new
investment avenues to investors and still offers lucrative benefits to investors.
SMC GLOBAL AND SECURITY plays a very important role along with other
players in the market in current scenario by offering its financial services. Investors
today are going in for saving their money instead of investing it in the market due to
current market situation. Government of India is making constant efforts to support
the economy by decreasing interest rate on loans of all types. This showed a positive
growth in the market by investors turning back to the market.
35

36. Also constant efforts have made auto industry to lower down the rates of automotives
and private banks also lowered their interest rates on loans to help Indian investors to
come forward and step in the market.
Thus, this study helps in understanding current market volatility and solutions to deal
with it, so as to find future prospects for SMC GLOBAL AND SECURITY and
answer questions like, how to deal with recession evils? How to protect investors
interest? How to sustain market position and market share?
To understand it and deal with it one always has to go to the basics that is the
investors and the reason investor invests is his motive.
Motives for investment may vary from person to person, but there are some common
desires. Everybody expects some return out of investment. Investors are also
concerned about the safety of investment. And, in case of an emergency, people want
their money back, quickly. Hence, there are three criteria’s to evaluate every
investment avenue:
1. Safety
2. Liquidity
3. Returns
36

37. Company financials
Figure no. 2 –Company’s
Revenue Growth.
The above shown graph depicts the revenue generated by SMC in 6 months starting
from September, 2010 to March’2011. This graph shows an upward sloping trend
line. If we look at the numbers, we see a 343% growth in the revenues from 29.05
lakhs in Sept’10 to 128.89 lakhs in March’11.
Though, there have been a few slips in January and March but over all its presents
financials of a growth company.
37
Month
Revenue
(In Lakhs)
Sep ‘10 29.05
Oct ‘10 60.27
Nov‘10 79.61
Dec‘10 107.94
Jan’11 104.37
Feb’11 140.43
Mar’11 128.89
0
20
40
60
80
1 00
1 201 40
1 60
Sep‘10
Nov‘11
Jan’13
Mar’15
Rev enu e( in
Lak hs)
0
2 0
4 0
6 0
8 0
1 00
1 20
1 40
1 60
Sep
‘1 0
Nov
‘1 0
Jan’1 1 Mar’1 1

38. Online v/s offline trading
Internet trading is expected to:
• Increase transparency in the markets.
• Enhance market quality through improved liquidity, by increasing quote
continuity and market depth.
• Reduce settlement risks due to open trades, by elimination of mismatches.
• Provide management information system (MIS).
• Introduce flexibility in system, to handle growing volumes easily and to
support nationwide expansion of market activity.
• Besides, through Internet trading three fundamental objectives of securities
regulation can be easily achieved, these are: Investor protection, creation of a
fair and efficient market and, reduction of the systematic risks.
The investors would be able to track the fluctuations in a particular stock and the
market as a whole, while deciding to execute the order and also while the order is
being executed. The confirmation of the order would also be real time. The order
routing system on which net trading will be done is compatible with screen-based
trading terminals used today.
Internet trading brings in total transparency between a broker and an investor in case
of secondary market operations. When the open outcry system was prevalent, only the
broker knew the actually transacted price. This practice diminished significantly when
it was taken over by screen-based trading. With on-line trading, investors can now see
for themselves the price at which the deal takes place.
38

39. It will also reduce transaction costs, increase liquidity in the market and ensure total
transparency. It allows quick and easy access to valuable research and information to
an investor and enables him execute transactions faster and more efficiently on a real
time basis. The volume of trade has also increased and has provided depth to the
market. Thus, in a nut shell, we can summarize the difference between online and
offline trading as follows:
Online Offline
1. In online trading mechanism the
customer has full control on his Demat
and trading a/c.
2. Investor in online trading can easily
transfer it funds.
3. Broking houses providing online trading
also provides live terminals to their
clients.
4. The broker provides investor at online
trading with advisory facility.
5. Online investor can directly invest into
IPO’s and Mutual funds also.
6. Investor can place order even after the
market closes.
7. The client can globally access the
account and can trade anywhere in the
In offline the investor has no control.
The investor needs to deposit and withdraw
fund each time of trading.
No live terminal is provided.
Offline investors are deprived of advices.
Offline trader needs to open separate account.
Investor cannot place After Market Order
(AMO).
Trader cannot trade away for the place
where he/she has opened its account.
DI slips are required for trading.
39

40. world where Internet facility is
available.
8. No documents are required for trading.
9. Any Demat/DP account can be attached
with any company’s trading account.
10. Online trading is time effective
11. No pool account is maintained at online
process
The Demat account cannot be linked with
any trading account.
It is time consuming process.
In offline pool account are maintained.
Table no 4-Difference between online and offline trading
40

41. SEBI Guidelines for online Trading
According to SEBI guidelines on Internet trading, brokers providing e-trading must
have a minimum net worth of Rs. 50 lakhs, besides obtaining specific permission of
the stock exchange concerned. Stock exchanges should ensure that the systems used
by the broker provide for security, reliability and confidentiality of data through use
of the encryption technology. For signatures, participants should use authentication
technologies and certification agencies as and when notified later.
Stock exchanges should also ensure that brokers maintain adequate back-up systems
and data storage capacity. Brokers should have adequate system capacity for handling
data transfer and arrange for alternate means of communication in case of Internet
failure. The following security features are mandatory for all Internet-related trading
systems:
• User ID.
• First level password.
• Automatic expiry of password at the end of reasonable duration.
• All transaction logs with proper audit facilities to be maintained in the system.
• Secured socket level security server for access through Internet.
• Suitable firewalls between trading set up directly connected to an exchange
trading system and the Internet trading set up.
41

42. Internet Trading
At the end of March 2011, 78 trading members on the CM segment provided internet
based trading facility to investors. The members of the exchange in turn had
registered 849,696 clients for web based access as on June 30, 2012. In the CM
segment about 499 lakh trades for Rs.81,034 cores, constituting 7.11% of total trading
volume, were routed and executed through internet.
By the end of Dec. 2011 the number of clients doing the online trading has increased
to 13lacs.
Liquidity
The liquidity in the CM segment, as measured by the turnover ratio, has witnessed a
steady increase and reached nearly 10.13% during March 2007. More than 98.02% of
securities available for trading are being traded every month and 95.6% of the
securities were traded for at least 100 days during 2005-06, as indicated below:
Distribution of Turnover
The concentration of trading among top ‘N’ securities/brokers. It is observed that the
top ‘5’ and ‘100’ securities account for about 25.88% and 84.26% of total turnover in
the CM segment in 2009-10. The details of ‘50’ most active securities during 2009-10
which accounted for 78.40% of turnover Broker-wise distribution of turnover
increasing diffusion of trades among a large number of trading members over the
years. During 2009-10, top ‘5’ brokers accounted for only 13.52% of turnover, while
top ‘100’ brokers accounted for 65.09% of total turnover. The following shows the
turnover of the trade.
42

43. Table no 5– Distribution of turnover
43

44. Market capitalization
The total market capitalization of securities available for trading on the CM segment
increased from Rs. 363,350 crore as at end March 1995 to Rs. 1,585,585 crore as at
end March 2011. Top 50 companies account for 69.21% of total market capitalization
as at end March 2011.
Sectorial distribution
The share of top '50' companies, classified according to different sectors, in terms of
trading volume and market capitalization. A drastic change in the importance of
different sectors is observed since NSE commenced trading. The share of
manufacturing companies in trading volume of top '50' companies, which was more
than 23% in 2000-01, had witnessed a decline in the years 2007-08 and 2008-09, but a
turnaround was noticed in the year 2009-10 (it accounted for 37.66%) which was also
maintained till 2010-11 with the share of manufacturing companies rising to 41.81%.
As compared to this, the share of information technology (IT) companies in trading
volume, which had been quite high in the year 2007-08, witnessed a considerable
decline and stood at only 19.56% in 2009-10. A mixed trend has been noticed in these
sectors in terms of market capitalization. Sectors like manufacturing, which used to
dominate in terms of market capitalization in the year 2001-02 witnessed a dip in
2005-06, however this sector has witnessed a rebound and accounted for 31.13% and
23.35% in 2009-10 and 2010-11 respectively. The IT sector has also shown a
turnaround this year with 22.54% in the top ‘50’-market capitalization in 2008-09.
44

45. Online trading with SMC
SMC launched online trading in June, 2006 in addition to the traditional offline
mode of trading on NEATXSV4. Since then SMC has managed to a fair
share of client base which is very much visible from the company
financials.
SMC is doing a good job in the offline industry as it has established a good
brand name for itself in a short span of time.
But looking at the competition, the company decided to launch its online
trading portal in June, 2006.
Besides, being up in the line of competition, Online trading also helps the
company to cut recurring costs as it happens in offline trading.
Though, setting up online trading infrastructure requires one time set up cost
like the cost of software, bandwidth charges, skilled manpower etc. which is
quite high. But the benefits are recurring as the online trading is about volumes.
Larger the client base, higher the revenues.
Features of online trading
A browser based trading software that enables clients to access their accounts from
anywhere using internet by a unique ID and password. This facility is available to all
the online clients the moment they get registered with SMC investment.
45

46. Solutions & Services
The product has a lot of features which provides various benefits to clients:
1) The screen gives live streaming quotes from respective exchanges. The client has
an option of having “live” Multiple Windows for different exchanges and his personal
window where he can add the scrips of his choice and save it.
2) It provides a Common window for display of market watch and order execution
where the client can click + (plus) for Buy and – (minus ) for Sell or Click on the
scrip and Press F1 to Buy and F2 to sell which provides an easy trading facility to the
client. It also provides an Offline order placement facility.
3) Before Buying or Selling, the client can watch the Market Depth, which tells about
Best Buy/Sell rates and Quantities etc of that security & also enables the clients to use
the Stop-loss Feature to minimize their losses.
4) A very useful feature of the product is fire the trigger, which lets the client set an
“Alert” for itself to indicate a certain price of the scrip. The user can set a different
color or an audio alarm.
5) It enables clients to transfer funds online from their bank account
to SMC trading account. SMC has banking integration with PNB, HDFC,AXIS
Bank.
46

47. 6) It also enables the clients to view the transactions (Buy or Sell) done during the
day. Beside the rate, quantity, type of account etc, the client can also view the order
number, time of transaction & can also get the details of entire fortnight.
7) The client can see the Bids/Offers that are not yet executed by the Exchange and
has the options to “Modify” and “Cancel” the Order.
8) Greater exposure for trading on the available margin & DP MARGIN STOCK with
very competitive commission.
9) It also provides Real time updating of exposure and portfolio while trading &
Online Integration of trading a/c with two common depositories to help move clients
shares to and fro with ease.
They also have the authority to square of the positions of the clients who don’t pay
their margin money.
IT shares the responsibility of supporting the entire system so that it runs smoothly.
47

48. Default Limit and Exposure to the Clients
1. For Liquidated Value greater than or equal to 2 LAC, default limits will be opened
in Intraday ten times and Delivery Three times (Only on a Cat) on Cash market
and one time on FNO market of Net Margin.
2. For Liquidated Value less than 2 LAC, default limits will be opened in Intraday
five times and Delivery Three times (Only on a Cat) on Cash market and one time
on FNO market of Net Margin .
Square Up
It is a margin status when percentage of coverage is less then 25% when comparing
funding stock (A cat stock) with gross margin. It is a last alert that the position of
client may be squared up at any time if the Percentage of coverage goes below 25%. It
is a last alert that something must be done either by reducing the position or
enhancing the margin .It is a point where the position of the client is squared up.
Normal Square Off (Less Then 25%)
This activity has been done on daily basis with the help of software driven Batch file
(provided by the IT department). Codes which have been not uploaded in the Batch
file due to any exceptions are any commitment from Branch end are done manually if
commitment fails.
Sauda of a client below 25% will be compulsory squared off next morning, in case no
proper reply received from the concerned RM/Branch.
48

49. Proper Reply here shall mean:
• Amount is being transferred to top up the margins only through a transfer
Cheque or Demand draft subject to the condition that the transfer Cheque or
Demand draft is reflected in the bank as having been deposited before 2:00
P.M.
• The reply should Specify what positions shall be squared off before that 10.30
a.m. , in case the same is not done to the extent of bringing the clients margin
above the required 50% margin levels , the RMS shall block the client and
square off the balance position so as to bring the client above the required
margin levels.
Margin Call square off process:
1. Preparation of square off cases report.
2. Preparation of Batch File for Automated Square off.
3. Reconciliation of Batch File after and before it has been executed.
4. Consolidation of square off replies of margins from Branch end and make it
considered.
5. Preparation of Exceptions client List.
6. Making note of commitments from Branch and Regional Heads against
square off codes and make follow up accordingly.
7. Preparation clients Cheque deposit details.
49

50. Before: - We have to make sure that the batch file has been created according to
square off policy of RMS. All exceptions and necessary details has been taken into
consideration or not.
After: - After execution of the batch file we have to check that every order of the file
is properly executed or not and if there is any rejection then immediate action to be
taken (Rejection to be squared manually)
Square Off 5th Day Ledger Debit Clients (Non Las)
This activity is done on the Manual basis only. The process of square off 5th day
ledger debit is same as Normal Square off; only difference is that it is done manually.
To square off we have to prepare non las ledger debit report.
50

51. CHAPTER III
DATA ANALYSIS AND INTERPRETATION
Q 1. Do you know about investment options available?
Knowledge Percentage
Yes 80%
No 20%
Total 100
Table no 5 -Investment options
Figure no 3-Investment options
Interpretation
Only 80% people knows the exact meaning of investment. Because of remaining 20%
take his/her residential property as an investment. According to law purpose this is not
an investment because of it is not create any profit for the owner.
51

52. Q 2. Most important things you take into your mind while making investments?
Factor Percentage
Risk 8%
Returns 17%
Both 75%
Total 100
Table no 6- Investments Technique
Figure no 4- Investments Technique
Interpretation
75% people are considered the both factors risk as well as returns but, only 25%
considered the risk or returns factor.
52

53. Q 3. Awareness related to security markets
KNOWLEDGE PERCENTAGE
Complete 8%
Partial 75%
Nil 17%
TOTAL 100
Table no 7- Investments Awareness
Figure no 5- Investments Awareness
Interpretation
On that basis, we conclude that 17% people know nothing about the securities
investments and 75% people have partial knowledge about it, so, some promotional
activities are required for increasing the awareness about security market.
53

54. Q 4. What is the basic purpose of your investment?
INVESTMENT PURPOSE PERCENTAGE
Liquidity 30%
Returns 25%
Capital appreciation 10%
Tax benefits 20%
Risk covering 5%
Others 10%
TOTAL 100
Table no 8- Investments Purpose
Figure no 6- Investments Purpose
54

55. Interpretation
75% people are interested in liquidity, returns and tax benefits. And remaining 25%
are interested in capital appreciations, risk covering, and others.
55

56. Q 5: Since how long have you been investing in capital market?
Table no 9- Investments Period
39%
37%
24%
Figure no 7- Investments Period
Interpretation
Looking at the figures, we can observe that 39 % of people have been investing for
less than 3 years and so on. We know that the capital markets have picked up in past
4-5 years. Also, there are more stringent norms by SEBI and exchanges. That is the
reason why people have started to pose more trust in capital markets now.
56
Time Period Frequency Percentage
Less than 3 yrs
80 39
3-5 yrs
73 37
More than 5 yrs
47 24
Total
200 100

57. Q 6 : Do you trade Online?
Frequency Percentage
Yes 141 70.5
No 59 29.5
Total 200 100
Table no 10- Trade Online
141
59
0
50
100
150
Yes No
Figure no 8- Trade Online
Interpretation
Out of the people surveyed, 70 % people trade online. This shows a good prospect for
online trading in future.
57

58. Q. 7. COMPLICATED PROCESS
Complicated Process Frequency Percentage
Yes 60 30
No 46 23
No reply 94 47
Total 200 100
Table no 11- Investments Complications
30%
23%
47%
Yes No No reply
Figure no 9- Investments Complications
Interpretation
This table shows the consolidated table of number of people voting for different
factors as to why don’t they prefer to trade online.
58

59. Q. 8 . Why not online?
Factors No. of People
Yes No
Lack of market knowledge 36 21
No computer 20 110
Investment risk 100 75
Poor services 75 72
Complicated process 60 46
Table no 12- Online Trading Factors
Figure no 10- Online Trading Factors
Interpretation
We asked the people as to why they don’t trade online. Out of the reasons, given, we
observe that maximum people avoid doing online trading as they perceive it to be
more risky. Also, some of them have experienced poor services from their online
brokers. Hence, they avoid doing online trading.
At the same time the companies need to trap those 30% people who are still not aware
of the benefits of online trading and try to shift them towards online trading. The
59

60. companies should also try to find and analyze the reasons as to why these customers
are not trading online in spite of so many benefits the online trading offers.
60

61. Q 9.Name of the company you trade with.
Frequency Percentage
Kotak Securities 42 21
ICICI direct 35 17.5
IndiaBulls 60 30
Sharekhan 30 15
SMC Investments Solutions 15 7.5
Others 18 9
TOTAL 200 100
Table no 13- Company mostly choose
0
10
20
30
40
50
60
KotakSecurities
ICICIdirect
IndiaBulls
Sharekhan
UniconInvestment...
Others
Mkt. share
Figure no 11- Company mostly choose
Interpretation
61

62. India Bulls enjoy maximum market share of 30% followed by Kotak and ICICI direct.
SMC has only 7.5% share at present but is growing
62

63. Q 10 : Where ELSE do you invest your surplus fund?
Areas Frequency
Direct Equity 75
Mutual fund 65
Insurance 150
Real Estate 35
Banks 150
Table no 14- Other Investments option
Other investments
16%
14%
31%
7%
32%
Direct Equity Mutual fund Insurance Real Estate Banks
Figure no 12- Other Investments option
63

64. Interpretation
We also found that besides stock Market, people prefer to invest in Mutual funds.
Thus, it can also serve as a good opportunity to earn revenue for the company.
64

65. CHAPTER IV
SUMMARY AND CONCLUSION
Results of the study
Facts and figure speak in itself that as from the past years analysis of capital market
we could see the bullish trend of the Indian stock market. There has been a
tremendous pressure on the Indian industries to perform well as the expectations of
the investors are rising with bullish market sentiments. The Online trading has grown
tremendously since 2000-01 to 2007 form 7287.18 cr. to 81033.1 cr. respectively. The
client base has also improved form 1,23,578 to 8,49,696. This has raised to 12.70 lacs
till Dec. 2010.
Compared to the Western countries, online trading is still in its infancy in India. With
trading turnover at around Rs. 10 crores per day from online trading compared to a
combined gross turnover of around Rs. 9000-10,000 crores handled by the BSE and
NSE together, online trading has a long way to go. With some ten dotcom players,
such as icicidirect.com, investsmart, 5paisa.com, indiabulls, and a host of brokers,
such as kotaksecurities, sharekhan, motilaloswal, Geojit Securities and duttstock,
entering the online ring promises exciting times ahead.
However, the existing online trading system suffers from a major lacunae.
icicidirect.com currently offers online trading services only to investors who have a
bank or a demat account with ICICI. Or, investors can open an online trading account
with SMC only if they open a demat account with it and have a bank account either
with ICICI, HDFC Bank. If investors do not have these accounts, they have to go
65

66. through the entire rigmarole of opening up the bank and demat account again for easy
operation. Apart from the hassles involved, there may also be certain extra charges
involved in this exercise that may have to be built into the overall cost of online
trading.
66

67. Limitations of the project
A study on promotional tools used for marketing product offered by HDFCSL was
based on secondary data obtained. Therefore it had the following limitations:
• Quality of Research: There are some data which is collected from secondary
research. Therefore, the secondary research used must be scrutinized closely
since the origins of the information may be questionable. Moreover, the
researcher needs to take sufficient steps to critically evaluate the validity and
reliability of the information provided.
• Specific to Researcher’s Needs: In many cases, the Organization do not
provide its full information. Some informations are critical for the information
which is not revealed. Thus may include variation due to self interpretation.
• Incomplete Information: In many cases, researchers find information that
appears valuable and promising. The researcher may not get the full version of
the research to gain the full value of the study. This is because many research
suppliers offer free portions of their research and then charge expensive fees
for their full reports.
• Not Timely: When using secondary research, one must exercise caution when
using dated information from the past. With companies competing in fast
changing industries, an out-of-date research reports many have little or no
relevance to the current market situation.
67

68. Suggestions & Recommendations
As we worked with this project, we came across some good and some not
so good features of this product.
We take this opportunity to suggest some measures in order to make improvements to
the product.
1. SMC needs to be more flexible with account types and brokerage structure so
that it can cater to all types of client segments and hence, increase its client
base.
2. SMC need to focus on HNI and corporate accounts more as they bring in bulk
business.
3. It should also try to collaborate with more banks so that the investor doesn’t
have to go through the turmoil of opening new accounts.
4. Their were some features in SMC Plus that needed to be changed and so were
suggested by us.
• There was no feature of ‘Payment Gateway’ for fund transfer to and from the
client in case of Pay-in and Payout.
• The Margin report and Intra-day report though, contains all the necessary
details, are a little complicated from the client’s end.
• In case the client does some transactions for ‘Intra-day’ purpose but he gets
his orders in different lots. Now, if he wants to change his order type from
‘Intra-day’ to ‘Delivery’, then he has to go to trade log and change the ‘order
type’ for each of the order lots.
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69. This can be done away with by going to ‘Net Position’ feature and changing it in
one go.
• SMC Swift gives the client a facility to put an alarm if a certain rate of a
particular stock is achieved.
We suggest that a new feature should be introduced wherein an SMS facility
should be provided to the clients who are on the go most of the time. This feature
will be unique as no other software does it and can become the USP of this
product. This will also benefit the company n terms of revenue.
5. As a whole, if we look in general, we find a lot of frauds happening in this
field. Thus, there should be proper compliance measures taken up by the
company for investor protection like sending reports on the total trades done
on their accounts.
6. Also, looking at the competitive scenario, it is suggested that the company
should aggressively focus more on Sales and promotional activities by
efficiently utilizing the manpower resource it has.
7. The company can also introduce dial and trade facility in case online system
defunct.
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