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FUNCTIONS OF STOCK MARKET IN INDIA (WITH RESPECT TO LEVEL OF CUSTOMER AWARENESS)

CERTIFICATE OF ORIGIN
This is to certify that has worked in the Finance Sector, under the able guidance and supervision of India Infoline Ltd. This Summer Internship report has the requisite standard for the partial fulfillment the Post Graduate Degree in "Finance". To the best of our knowledge no part of this report has been reproduced from any other report and the contents are based on original research.

ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide

for his able

guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible. I would also like to thank the entire team of India Infoline for the constant support and help in the successful completion of my project. Also, I am thankful to my faculty guide of my institute, for his/her continued guidance and invaluable encouragement.

TABLE OF CONTENT
S.No 1 2 3 3.1 3.2 3.3 3.4 3.5 3.6 4 4.1 4.2 4.3 4.4 4.5 5 6 7 7.1 7.2 7.3 8 9 10 10.1 10.2 11 12 Subject Executive Summary Objective of the Project Introduction National Stock Exchange (NSE) Bombay Stock Exchange (BSE) National Spot Exchange Ltd. (NSEL) Function and Purpose of the Stock Market Types Of Market Market Capitalization Company Profile History Milestones Management team of IIFL Company Structure Product and Services SWOT Analysis Competitor's Study Research Report Research Methodology Data Collection Data Analysis Findings and Conclusion Recommendations Annexure Annexure I Annexure II Bibliography Case Study Synopsis Page No.

01 02 03-18

19-44

45 46 52-56

58 59 60-80

81 82

13

Executive Summary
Indian securities markets have undergone many changes during the last decade. Exponential growth in trading volumes is pushing existing trading systems and processes to capacity and increasing settlement risk. With Indian market moving to a T+3 rolling settlement cycles in line with global markets, SEBI is continuing its efforts to increase the efficiency and transparency in Indian markets. Indeed it has been SEBI endeavor to make the Indian markets, one of the most competitive and efficient markets of the world. Income, Savings mobilization and promotion of investment are functions of the stock and capital markets which are a part of the organized financial system in India. This Project titled FUNCTION OF STOCK MARKET IN INDIA and LEVEL OF CUSTOMER AWARENESS wrt TO STOCK MARKET IN INDIA is an attempt to understand the stock market and role played by Indian retail Brokerage Firms in stock market. The objective of brokerage firms is to help the investor to minimize the risk involved in investment and maximize the return. Some of the main characteristics of the brokerage industry include growth in e-broking; growing derivatives market, decline in brokerage fees etc. The role played by Indian retail brokerage industry is of immense significance, taking into account the health of the capital markets .

Objective of project
To gain the maximum industry exposure in the span of 7 to 8 weeks.

To get the brief knowledge of NSE,BSE,SEBI and all about the Indian stock market how its functions,what all reasons it fluctuates .

Analyzing the India infoline Ltd as a firm, its functions, products, services etc.

To analyze the level of customer awareness .

To analyze the competitors of India Infoline as a Brokerage firm.

To analyze about different products and services catered by companies to their customers.

CHAPTER 3 INTRODUCTION TO STOCK MARKET INDIA

Introduction to Indian stock market


Introduction Indian Stock Markets is one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States to Europe was stopped; thus, the 'Share Mania' in India began. The number of brokers increased to about 200 to 250. At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association, which is alternatively known as The Stock Exchange". In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. The Indian stock market has been assigned an important place in financing the Indian corporate sector. The principal functions of the stock markets are

enabling mobilizing resources for investment directly from the investors providing liquidity for the investors and monitoring Disciplining company management.

The two major stock exchanges in India are National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

3.1 National Stock Exchange


With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualization of stock exchange governance, screen based trading, compression of settlement cycles,

dematerialization and electronic transfer of securities, market of debt and derivative instruments and intensive use of information technology.

Trading at NSE can be classified under two broad categories: Wholesale debt market Capital market

Wholesale debt market operations are similar to money market operations - institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc. Capital market: A market where debt or equity securities are traded. There are two kinds of players in NSE: Trading members Participants

Recognized members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and large players like banks who take direct settlement responsibility. Trading at NSE takes place through a fully automated screen-based trading mechanism which adopts the principle of an order-driven market. Trading members can stay at their offices and execute the trading, since they are linked through a communication network. The prices at which the buyer and seller are willing to transact will appear on the screen. When the prices match the transaction will be completed and a confirmation slip will be printed at the office of the trading member.

NSE has several advantages over the traditional trading exchanges. They are as follows:

NSE brings an integrated stock market trading network across the nation. Investors can trade at the same price from anywhere in the country since inter-market operations are streamlined coupled with the countrywide access to the securities.

Delays in communication, late payments and the malpractices prevailing in the traditional trading mechanism can be done away with greater operational efficiency and informational transparency in the stock market operations, with the support of total computerized network.

NSE Nifty S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. NSE came to be owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialized company focused upon the index as a core product. IISL have a consulting and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services. CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for NSE and X stands for Exchange or Index. The S&P prefix belongs to the US-based Standard & Poor's Financial Information Services.

NSE

3.2 Bombay Stock Exchange


The Bombay Stock Exchange is one of the oldest stock exchanges in Asia. It was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956. The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion . An investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups.

SENSEX The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market.

SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media The Index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Freefloat methodology. Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it provides the time series data over a fairly long period of time. Small wonder, the SENSEX has over the years become one of the most prominent brands in the country. The SENSEX captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through SENSEX. The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised of 100 stocks listed at five major stock exchanges. The Exchange launched dollar-linked version of BSE-100 index i.e. Dollex-100 on May 22, 2006. In order to fulfill the need of the market participants for still broader, segment-specific and sectorspecific indices, the Exchange has continuously been increasing the range of its indices. The launch of BSE-200 Index in 1994 was followed by the launch of BSE-500 Index and 5 sectoral indices in 1999. In 2001, BSE launched the BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECK Index. The Exchange shifted all its indices to a free-float methodology (except BSE PSU index) in a phased manner.

The values of all BSE indices are updated every 15 seconds during the market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE-Indices are reviewed periodically by the "Index Committee" of the Exchange.

3.3 NATIONAL SPOT EXCHANGE LIMITED National Spot Exchange Ltd (NSEL) is a state-of-the-art electronic, demutualised commodity spot market. The Exchange is promoted by Financial Technologies (India) Ltd (FTIL) and National Agricultural Cooperative Marketing Federation of India Limited (NAFED). It provides an electronic, transparent, well organized and centralized trading platform with the facility to access and participate the market remotely. It facilitates risk free and hassle free purchase and sell of quality and quantity specified commodities to commodity market participants including farmers, traders, processors, exporters, importers, arbitrageurs, investors and the retail market participants. Exchange also offers various other services such as quality certification, warehousing, warehouse receipt financing, etc. It has obtained licenses from various state governments to facilitate online delivery based trading in various agricommodities. NSEL commenced its live operations on15th October 2008. It has created efficient spot delivery platform, helping the sellers/producers to sell commodities directly to the end buyers comprises of processors/ exporters. Currently, NSEL holds a market share of over 98% of the Indian electronic commodity Spot market, and has more than 495 registered members operating through over 3000 trader work stations, across India. Government organizations like FCI , HAFED, MMTC, PEC, NAFED, APMARKFED, RAJFED, and CCI have been actively utilizing the Exchange platform for selling various commodities. More than 33 commodities are traded on NSEL Platform having delivery locations spread across 14 states. For the first time in India, NSEL has introduced demat delivery based instrument products called e-Series, in commodities like gold, silver, copper, zinc and lead. This is a unique market segment, which is functioning just like cash segment in equities, but offering commodities in demat form in smaller denominations. Some of the major achievements and initiatives that NSEL has undertaken are as under:

For the first time in India, farmers have started participation on an electronic Exchange and directly selling castor seed to the industry without any intermediary. NSEL has assisted farmers to access credit through warehouse receipt finance at lower interest rate and enhanced their holding power. For the growth and development of bullion trade and industry, NSEL launched, Indian Bullion Market Association (IBMA) which is consortium of leading bullion dealers

and jewellery merchants, bullion importers-exporters, Bullion Banks, refineries. Launched a unique investment product (e-Series) on its platform. Food Corporation of India (FCI) conducted electronic auction for wheat under the Open Market Sale Scheme-Domestic (OMSS-D) on NSEL. HAFED conducted electronic auction for Bajra, Basmati Paddy and Basmati rice. Customized contract for MMTC gold coin sales.

Introduced the procurement services to provide customized solutions to the bulk buyer and bring marketing efficiency in the supply chain of commodities. NSEL has tied-up with various banks to provide credit facilities to farmers and buyers of commodities. Introduced Customized Silver forward auction contract for Hindustan Zinc Limited at Ahmedabad and Jaipur delivery locations

3.4 Function and purpose of stock market


The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional financial capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up-and-coming economy. In fact, the stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'tre of central banks.

Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity.

Shareholder rights Although owning 51% of shares does mean that you own 51% of the company and that you have 51% of the votes, the company is considered a legal person, thus it owns all its assets, (buildings, equipment, materials etc) itself. A shareholder has no right to these without the company's permission, even if that shareholder owns almost all the shares. This is important in areas such as insurance, which must be in the name of the company not the main shareholder. In most countries, including the United States, boards of directors and company managers have a fiduciary responsibility to run the company in the interests of its stockholders. Nonetheless, as Martin Whitman writes: "...it can safely be stated that there does not exist any publicly traded company where management works exclusively in the best interests of OPMI [Outside Passive Minority Investor] stockholders. Instead, there are both "communities of interest" and "conflicts of interest" between stockholders (principal) and management (agent). This conflict is referred to as the principal/agent problem. It would be naive to think that any management would forego management compensation, and management entrenchment, just because some of these management privileges might be perceived as giving rise to a conflict of interest with IPOS." [Whitman, 2004, 5]

Trading

Shares of stock are usually traded on a stock exchange, where people and organizations may buy and sell shares in a wide range of companies. A given company will usually only trade its shares in one market, and it is said to be quoted, or listed, on that stock exchange. However, some large, multinational corporations are listed on more than one exchange. They are referred to as inter-listed shares.

Buying There are various methods of buying and financing stocks. The most common means is through a stock broker. Whether they are a full service or discount broker, they are all doing one thing arranging the transfer of stock from a seller to a buyer. Most of the trades are actually done through brokers listed with a stock exchange such as the New York Stock Exchange. There are many different stock brokers to choose from such as full service brokers or discount brokers. The full service brokers usually charge more per trade, but give investment advice or more personal service; the discount brokers offer little or no investment advice but charge less for trades. Another type of broker would be a bank or credit union that may have a deal set up with either a full service or discount broker. There are other ways of buying stock besides through a broker. One way is directly from the company itself. If at least one share is owned, most companies will allow the purchase of shares directly from the company through their investor's relations departments. However, the initial share of stock in the company will have to be obtained through a regular stock broker. Another way to buy stock in companies is through Direct Public Offerings which are usually sold by the company itself. A direct public offering is an initial public offering a company in which the stock is purchased directly from the company, usually without the aid of brokers. When it comes to financing a purchase of stocks there are two ways: purchasing stock with money that is currently in the buyers ownership or by buying stock on margin. Buying stock on margin means buying stock with money borrowed against the stocks in the same account. These stocks, or collateral, guarantee that the buyer can repay the loan; otherwise, the stockbroker has the right to sell the stocks (collateral) to repay the borrowed money. He can sell if the share price drops below

the margin requirement, at least 50 percent of the value of the stocks in the account. Buying on margin works the same way as borrowing money to buy a car or a house using the car or house as collateral. Moreover, borrowing is not free; the broker usually charges you 8-10 percent interest

Selling Selling stock in a company goes through many of the same procedures as buying stock. Generally, the investor wants to buy low and sell high, if not in that order; however, this is not how it always ends up. Sometimes, the investor will cut their losses and claim a loss. As with buying a stock, there is a transaction fee for the broker's efforts in arranging the transfer of stock from a seller to a buyer. This fee can be high or low depending on if it is a full service or discount broker. After the transaction has been made, the seller is then entitled to all of the money. An important part of selling is keeping track of the earnings. It is important to remember that upon selling the stock, in jurisdictions that have them, capital gains taxes will have to be paid on the additional proceeds, if any, that are in excess of the cost basis. Even though the board of directors runs the company, the shareholder has some impact on the company's policy, as the shareholders elect the board of directors. Each shareholder has a percentage of votes equal to the percentage of shares he owns. So as long as the shareholders agree that the management (agent) is performing poorly they can elect a new board of directors which can then hire a new management team. Owning shares does not mean responsibility for liabilities. If a company goes broke and has to default on loans, the shareholders are not liable in any way. However, all money obtained by converting assets into cash will be used to repay loans, so that shareholders cannot receive any money until creditors have been paid.

3.5 Types of Market


1. Primary market (IPOs) In financial markets, an initial public offering (IPO) is the first sale of a company's common shares to public investors. The company will usually issue only primary shares, but may also sell secondary shares. Typically, a company will hire an investment banker to underwrite the offering and a corporate lawyer to assist in the drafting of the prospectus. The sale of stock is regulated by authorities of financial supervision and where relevant by a stock exchange. It is usually a requirement that disclosure of the financial situation and prospects of a company be made to prospective investors. The Federal Securities and Exchange Commission (SEC) regulates the securities markets of the United States and, by extension, the legal procedures governing IPOs. The law governing IPOs in the United States includes primarily the Securities Act of 1933, the regulations issued by the SEC, and the various state "Blue Sky Laws". 2. Secondary market The secondary market (also called "aftermarket") is the financial market for trading of securities that have already been issued in its initial private or public offering. Stock exchanges are examples of secondary markets. Alternatively, secondary market can refer to the market for any kind of used goods.

3.6 MARKET CAPITALIZATION


Market capitalization represents the public consensus on the value of a company's equity. An entirely public corporation, including all of its assets, may be freely bought and sold through purchases and sales of stock, which will determine the price of the company's shares. Its market

capitalization is the share price multiplied by the number of shares in issue, providing a total value for the company's shares and thus for the company as a whole. Many companies have a dominant shareholder, which may be a government entity, a family, or another corporation. Many stock market indices such as the S&P 500, Sensex, FTSE, DAX, Nikkei,Ibovespa, and MSCI adjust for these by calculating on a free float basis, i.e. the market capitalization they use is the value of the publicly tradable part of the company. Thus, market capitalization is one measure of "float" i.e., share value times an equity aggregate, with free and public being others. Note that market capitalization is a market estimate of a company's value, based on perceived future prospects, economic and monetary conditions. Stock prices can also be moved by speculationabout changes in expectations about profits or about mergers and acquisitions. It is possible for stock markets to get caught up in an economic bubble, like the steep rise in valuation of technology stocks in the late 1990s followed by the dot-com crash in 2000. Hype can affect any asset class, such as gold or real estate. In such events, valuations rise disproportionately to what many people would consider the fundamental value of the assets in question. In the case of stocks, this pushes up market capitalization in what might be called an "artificial" manner. Market capitalization is therefore only a rough measure of the true size of a market. However it does represent the best estimate of all market participants at any point in time - bubbles are easy to spot retrospectively, but if a market participant believes a stock is overvalued, then of course they can profit from this by selling the stock (or shorting it, if they don't hold it).

3.5.1 Categorization of companies by capitalization


Traditionally, companies were divided into large-cap, mid-cap, and small-cap. The terms megacap and micro-cap have also since come into common use, and nano-cap is sometimes heard. Different numbers are used by different indexes;[3][4] there is no official definition of, or full consensus agreement about, the exact cutoff values. The cutoffs may be defined as percentiles rather than in nominal dollars. The definitions expressed in nominal dollars need to be adjusted over the decades due to inflation, population change, and overall market valuation (for example, $1 billion was a large market cap in 1950, but it is not very large now), and they may be different for different countries. A rule of thumb may look like:

Mega-cap: Over $100 billion Large-cap: $10 billion$100 billion Mid-cap: $1 billion$10 billion

Small-cap: $100 million$1 billion Micro-cap: $10 million-$100 million Nano-cap: Below $10 million

CHAPTER 4 COMPANY PROFILE INDIA INFOLINE

COMPANY PROFILE
India Infoline is one-stop nancial services shop, most respected for quality of its advice, personalized service and cutting-edge technology. Listed on Bombay and National Stock Exchange with a net worth of INR 200 crore and a market cap of over INR 1970 crore. The company has a network of 976 business locations(branches and sub-brokers) spread across 365 cities and towns. It has more than 800,000 customers. It is registered with NSDL as well as CDSL as a depository participant, providing a one-stop solution for clients trading in the equities mar-ket First Company in India to foray into the online distribution of Mutual Funds. Every modern economy is based on a sound nancial system.A nancial system is a set of institutional arrangements through which nancial surpluses are mobilized from the units generating surplus income and transferring them to the others inneed of them.The activities which include production, distribution, exchange and holding of nancial assets/instruments of dierent kinds by nancial institutions,banks and other intermediaries of the market.Among these organizations are banks, credit card companies, insurance companies, consumer nance companies,stock brokerages, investment funds and some government sponsored enterprises. The nancial markets have two major components; they are money market and capital market. Money market The Money Market refers to the market where borrowers and lenders exchange short-term funds to solve their liquidity needs. Capital Market The Capital Market is a market for nancial investments that are direct or indirect claims to capital Securities Market

It refers to the markets for those nancial instruments/claims/obligations that are commonly and readily transferable by sale.It has two inter-dependent andinseparable segments, the new issues (primary) market and the stock (secondary)market. The secondary market enables those who hold securities to adjust their holdings in response to changes in their assessment of risk and return.The Primary Markets provides the channel of sale of new securities. Stock Market A stock market, or equity market, is a private or public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market is estimated at about $36.6 trillion US at the beginning of October 2008.The total world derivatives market has been estimated at about $791 trillion face or nominal value . Forex Market The foreign exchange market (currency, forex, or FX) market is where currency trading takes place.It is where banks and other ocial institutions facilitate the buying and selling of foreign currencies.The FX market is one of the largest and most liquid nancial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. Derivative Market Derivatives are nancial contracts, or nancial instruments, whose values are de-rived from the value of something else (known as the underlying).The under lying on which a derivative is based can be an asset (e.g., commodities, equities (stocks),residential mortgages, commercial real estate, loans, bonds), an index (e.g., inter-est rates, exchange rates, stock market indices, consumer price index (CPI)see ination derivatives), or other items (e.g., weather conditions, or other derivatives).Credit derivatives are based on loans, bonds or other forms of credit Derivatives a product whose value is derived from the value of one or more basic variables. Underlying Asset can be Equity, Forex, commodity or any other asset. Forwards A forward contract is a customized contract between two entities, where settlement takes place on a specic date in the future at todays pre-agreed price.

Futures A future is contract to buy or sell an underlying asset at a specied future date,at a specied price.These contracts are traded and settled on exchanges.Futurecontracts can be on individual scrips or indices.

Corporation Information: IndiaInfoline originally incorporated on 18 Oct 1995 as Probity Research & Service Pvt. Ltd. at Mumbai under companys Act. The name of the company was changed to IndiaInfoline.com Ltd. on 23 marches 2000. Later on the name changed to IndiaInfoline Ltd on 23 marches 2001. Vision Statement: Our vision is to be the most respected company in the financial services space. India Infoline Group: The India Infoline group, comprising the holding company, India Infoline Limited and its whollyowned subsidiaries, straddle the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites www.indiainfoline.com and www.5paisa.com The Company has a network of 976 business locations (branches and sub-brokers) spread across 365 cities and towns. It has more than 800,000 customers. India Infoline Group subsidiaries:

India Infoline Media and Research Services Limited India Infoline Commodities Limited India Infoline Marketing & Services

India Infoline Investment Services Limited IIFL (Asia) Pte Limited

Our Global Presence: China, Brazil, Dubai, Russia, Singapore, UK, USA

4.1. HISTORY
We were founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as an independent business research and information provider. We gradually evolved into a one-stop financial services solutions provider. Our strong management team comprises competent and dedicated professionals We are a pan-India financial services organization across 1,361 business locations and a presence in 428 cities. Our global footprint extends across geographies with offices in New York, Singapore and Dubai. We are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). We offer a wide range of services and products comprising broking (retail and institutional equities and commodities), wealth management, credit and finance, insurance, asset management and investment banking. We are registered with the BSE and the NSE for securities trading, MCX, NCDEX and DGCX for commodities trading, CDSL and NSDL as depository participants. We are registered as a Category I merchant banker and are a SEBI registered portfolio manager. We also received the FII license in IIFL Inc. IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to carry out corporate advisory and dealing in securities operations. Two subsidiaries India Infoline Investment Services and Money line Credit Limited are registered with RBI as non-deposit

taking non-banking financial services companies. India infoline Housing Finance Ltd, the housing finance arm, is registered with the National Housing Bank.

4.2 MILESTONES
1995 Incorporated as an equity research and consulting firm with a client base that included leading FIIs, banks, consulting firms and corporate. 1999 Restructured the business model to embrace the internet; launched archives.indiainfoline.com mobilized capital from reputed private equity investors. 2000 Commenced the distribution of personal financial products; launched online equity trading; entered life insurance distribution as a corporate agent. Acknowledged by Forbes as Best of the Web and ...must read for investors. 2004 Acquired commodities broking license; launched Portfolio Management Service. 2005 Listed on the Indian stock markets. 2006 Acquired membership of DGCX; launched investment banking services. 2007 Launched a proprietary trading platform; inducted an institutional equities team; formed a Singapore subsidiary; raised over USD 300 man in the group; launched consumer finance business under the Money line brand. 2008 Launched wealth management services under the IIFL Wealth brand; set up India Infoline Private Equity fund; received the Insurance broking license from IRDA; received the venture capital license; received in principle approval to sponsor a mutual fund; received Best brokerIndia award from Finance Asia; Most Improved Brokerage- India award from Asia money.

2009 Received registration for a housing finance company from the National Housing Bank; received Fastest growing Equity Broking House - Large firms in India by Dun & Bradstreet 2010 Received in-principle approval for membership of the Singapore Stock Exchange Received membership of the Colombo Stock Exchange

4.3. Management Team Of India Infoline

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

Mr. Nirmal Jain is the founder and Chairman of India Infoline Ltd. He is a PGDM (Post Graduate Diploma in Management) from IIM (Indian Institute of Management) Ahmedabad, a Chartered Accountant and a rank-holder Cost Accountant. His professional track record is equally outstanding. He started his career in 1989 with Hindustan Lever Limited, the Indian arm of Unilever. During his stint with Hindustan Lever, he handled a variety of responsibilities, including export and trading in agro-commodities. He contributed immensely towards the rapid and profitable growth of Hindustan Levers commodity export business, which was then the nations as well as the Companys top priority. He founded Probity Research and Services Pvt. Ltd. (later re-christened India Infoline) in 1995;

perhaps the first independent equity research Company in India. His work set new standards for equity research in India. Mr. Jain was one of the first entrepreneurs in India to seize the internet opportunity, with the launch of www.indiainfoline.com in 1999. Under his leadership, India Infoline not only steered through the dotcom bust and one of the worst stock market downtrends but also grew from strength to strength.

Mr. R. Venkataraman Executive Director , India Infoline Ltd. Mr. R Venkataraman, Co-Promoter and Executive Director of India Infoline Ltd, is a B.Tech (electronics and electrical communications engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined the India Infoline Board in July 1999. He previously held senior managerial positions in ICICI Limited, including ICICI Securities Limited, their investment banking joint venture with J P Morgan of US, BZW and Taib Capital Corporation Limited. He was also the Assistant Vice President with G E Capital Services India Limited in their private equity division, possessing a varied experience of more than 19 years in the financial services sector.

Mr. Nilesh Vikamsey Independent Director , India Infoline Ltd. Mr. Nilesh Vikamsey Board Member since February 2005 - is a practicing Chartered Accountant for 25 years and Senior Partner at M/s Khimji Kunverji & Co., Chartered

Accountants, a member firm of HLB International, a world-wide organisation of professional accounting firms and business advisers, ranked amongst the top 12 accounting groups in the world. Mr. Vikamsey headed the audit department till 1990 and thereafter also handled financial services, consultancy, investigations, mergers and acquisitions, valuations and due diligence, among others. He is elected member of the Central Council of Institute of Chartered Accountant of India (ICAI), the Apex decision making body of the second largest accounting body in the world, 20102013. He is on the ICAI study group member for the introduction of the Accounting Standard 30 on financial instruments recognition and management. Convener of the Study group Formed by ASB of ICAI to formulate comments on various Exposure Drafts, Discussion Papers and other matters pertaining to IFRS originating from IASB, Representative of the Institute of Chartered Accountants of India on the Committee for Improvement in Transparency, Accountability and Governance(ITAG) of South Asian Federation of Accountants (SAFA), Member of Executive Committee & IFRS Implementation Committee of WIRC of Institute of Chartered Accountant of India (ICAI), Accounting and Auditing Committee of Bombay Chartered Accountant Society (BCAS) and also on its Core Group, member of Review, Reforms & Rationalisation Committee, IPR Committee of Bombay Chamber of Commerce and Industry (BCCI), Member of Legal Affairs Committee of Bombay Chamber of Commerce and Industry(BCCI), Corporate Members Committee of The Chamber of Tax Consultants (CTC), Regular Contributor to WIRC Annual Referencer on Bank Branch Audit, Study/ Sub Group formed by ICAI for Considering Developments on Fair Value Accounting (AS 30) post Sub Prime crisis, Sub Group formed by ICAI for approaching the Government and Regulatory Authorities for Convergence with IFRS.

He is also a Vice Chairman of Financial Reporting Review Board Accounting Standard Board and Member of Accounting Standard Board and various other Standing and Non Standing Committees. Mr. Vikamsey is also a Director of Miloni Consultants Private Limited, HLB Offices and Services Private Limited, Trunil Properties Private Limited, BarKat Properties Private Limited and India Infoline Investment Services Limited.

Mr. Kranti Sinha Independent Director , India Infoline Ltd. Mr. Kranti Sinha Board member since January 2005 completed his masters from the Agra University and started his career as a Class I Officer with Life Insurance Corporation of India. He served as the Director and Chief Executive of LIC Housing Finance Limited from August 1998 to December 2002 and concurrently as the Managing Director of LICHFL Care Homes (a wholly-owned subsidiary of LIC Housing Finance Limited). He retired from the permanent cadre of the Executive Director of LIC; served as the Deputy President of the Governing Council of Insurance Institute of India and as a member of the Governing Council of National Insurance Academy, Pune apart from various other such bodies. Mr. Sinha is also on the Board of Directors of Hindustan Motors Limited and Cinemax (India) Limited.

Mr. A. K. Purwar Independent Director , India Infoline Ltd. Mr. Purwar is currently the Chairman of IndiaVenture Advisors Pvt. Ltd., investment manager to IndiaVenture Trust Fund I, the healthcare and life sciences focussed private equity fund sponsored by the Piramal Group. He has also taken over as the Chairman of IL & FS Renewable Energy Limited in March 2008 and India Infoline Investment Services Ltd in November 2009. He is working as Independent Director in leading companies in Telecom, Steel, Textiles, Power, Auto

components, Renewable Energy, Engineering Consultancy, Financial Services and Healthcare Services. He is an Advisor to Mizuho Securities in Japan and is also a member of Advisory Board for Institute of Indian Economic Studies (IIES), Waseda University, Tokyo, Japan. Mr. Purwar was the Chairman of State Bank of India, the largest bank in the country from November 02 to May 06 and held several important and critical positions like Managing Director of State Bank of Patiala, Chief Executive Officer of the Tokyo branch covering almost the entire range of commercial banking operations in his illustrious career at the bank from 1968 to 2006. Mr. Purwar also worked as Chairman of Indian Bank Association during 2005 2006. Mr. Purwar has received the CEO of the year Award from the Institute for Technology & Management (2004); Outstanding Achiever of the year Award from Indian Banks Association (2004); Finance Man of the Year Award by the Bombay Management Association in 2006.

4.4. COMPANY STRUCTURE


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

A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to clients. These services are offered to clients as different schemes, which are based on differing investment strategies made to reflect the varied risk-return preferences of clients. India Infoline Media and Research Services Limited. The content services represent a strong support that drives the broking, commodities, mutual fund and portfolio management services businesses. Revenue generation is through the sale of content to financial and media houses, Indian as well as global. It undertakes equities research which is acknowledged by none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities where India Infoline is amongst the most read Indian brokers. India Infoline Commodities Limited. India Infoline Commodities Pvt Limited is engaged in the business of commodities broking. Our experience in securities broking empowered us with the requisite skills and technologies to allow us offer commodities broking as a contra-cyclical alternative to equities broking. We enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and

recently acquired membership of DGCX. We have a multi-channel delivery model, making it among the select few to offer online as well as offline trading facilities. India Infoline Marketing & Services India Infoline Marketing and Services Limited is the holding company of India Infoline Insurance Services Limited and India Infoline Insurance Brokers Limited. (a) India Infoline Insurance Services Limited is a registered Corporate Agent with the Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Limited, which is India's largest private Life Insurance Company. India Infoline was the first corporate agent to get licensed by IRDA in early 2001. (b) India Infoline Insurance Brokers Limited is a newly formed subsidiary which will carry out the business of Insurance broking. We have applied to IRDA for the insurance broking license and the clearance for the same is awaited. Post the grant of license, we propose to also commence the general insurance distribution business.

India Infoline Investment Services Limited Consolidated shareholdings of all the subsidiary companies engaged in loans and financing activities under one subsidiary. Recently, Orient Global, a Singapore-based investment institution invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services. This will help focused expansion and capital raising in the said subsidiaries for various lending businesses like loans against securities, SME financing, distribution of retail loan products, consumer finance business and housing finance business. India Infoline Investment Services Private Limited consists of the following step-down subsidiaries. (a) India Infoline Distribution Company Limited (distribution of retail loan products) (b) Money line Credit Limited (consumer finance) (c) India Infoline Housing Finance Limited (housing finance) IIFL (Asia) Pte Limited

IIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated in Singapore to pursue financial sector activities in other Asian markets. Further to obtaining the necessary regulatory approvals, the company has been initially capitalized at 1 million Singapore dollars.

4.5 OUR PRODUCTS & SERVICES


Equities Online Trading Commodities Insurances Wealth Management Asset Management Mutual Funds Loans Stock SMS Service Newsletters

Equities India Infoline provided the prospect of researched investing to its clients, which was hitherto restricted only to the institutions. Research for the retail investor did not exist prior to India Infoline. India Infoline leveraged technology to bring the convenience of trading to the investors location of preference (residence or office) through computerized access. India Infoline made it possible for clients to view transaction costs and ledger updates in real time.

In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists. In an accounting context, Shareholders' equity (or stockholders' equity, shareholders' funds, shareholders' capital or similar terms) represents the remaining interest in assets of a company, spread among individual shareholders of common or preferred stock.

At the start of a business, owners put some funding into the business to finance operations. This creates a liability on the business in the shape of capitalas the business is a separate entity from its owners. Businesses can be considered to be, for accounting purposes, sums of liabilities and assets; this is the accounting equation. After liabilities have been accounted for, the positive remainder is deemed the owner's interest in the business. This definition is helpful in understanding the liquidation process in case of bankruptcy. At first, all the secured creditors are paid against proceeds from assets. Afterward, a series of creditors, ranked in priority sequence, have the next claim/right on the residual proceeds. Ownership equity is the last orresidual claim against assets, paid only after all other creditors are paid. In such cases where even creditors could not get enough money to pay their bills, nothing is left over to reimburse owners' equity. Thus owners' equity is reduced to zero. Ownership equity is also known as risk capital or liable capital.

EQUITY 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 as Schroders, Fidelity Investments or The Vanguard Group. Such holdings allow individual 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 an equity and that of the long-term bond.

PMS : Our Portfolio Management Service is a product wherein an equity investment portfolio is created to suit the investment objectives of a client. We at India Infoline invest your resources into stocks from different sectors, depending on your risk-return profile. This service is particularly advisable for investors who cannot afford to give time or don't have that expertise for day-to-day management of their equity portfolio. Portfolio management involves deciding what assets to include in the portfolio, given the goals and risk tolerance of the portfolio owner. Selection involves deciding which assets to acquire/divest, how many to acquire/divest, and when to acquire/divest them. These decisions always involve some sort of performance measurement, most typically the expected return on the portfolio, and the risk associated with this return (e.g., the expected standard deviation of the expected return). However, due to the almost-complete uncertainty of future values, this performance measurement is often done on a casual qualitative basis, rather than a precise quantitative basis (which would give a false sense of precision). Typically the expected return from portfolios of different asset bundles are compared. The unique goals and circumstances of the investor must also be considered. Some investors are more risk averse than others.

Mutual funds have developed particular techniques to optimize their portfolio holdings. See fund management for details. Portfolio formation Many strategies have been developed to form a portfolio; among them:

equally-weighted portfolio capitalization-weighted portfolio price-weighted portfolio optimal portfolio (for which Risk-Adjusted Return is highest)

Research Sound investment decisions depend upon reliable fundamental data and stock selection techniques. India Infoline Equity Research is proud of its reputation for, and we want you to find the facts that you need. Equity investment professionals routinely use our research and models as integral tools in their work. They choose Ford Equity Research when they can clear your doubts.

Commodities India Infolines extension into commodities trading reconciles its strategic intent to emerge as a one-stop solutions financial intermediary. Its experience in securities broking has empowered it with requisite skills and technologies. The Companys commodities business provides a contracyclical alternative to equities broking. The Company was among the first to offer the facility of commodities trading in Indias young commodities market (the MCX commenced operations only in 2003). Average monthly turnover on the commodity exchanges increased from Rs 0.34 bn to Rs

20.02 bn. The commodities market has several products with different and non-correlated cycles. On the whole, the business is fairly insulated against cyclical gyrations in the business.

Mortgages During the year under review, India Infoline acquired a 75% stake in Money tree Consultancy Services to mark its foray into the business of mortgages and other loan products distribution. The business is still in the investing phase and at the time of the acquisition was present only in the cities of Mumbai and Pune. The Company brings on board expertise in the loans business coupled with existing relationships across a number of principals in the mortgage and personal loans businesses. India Infoline now has plans to roll the business out across its pan-Indian network to provide it with a truly national scale in operations.

Invest Online India Infoline has made investing in Mutual funds and primary market so effortless. All you have to do is register with us and thats all. No paperwork no queues and No registration charges. Invest In Mutual Funds India Infoline offers you a host of mutual fund choices under one roof, backed by in-depth research and advice from research house and tools configured as investor friendly. Apply In IPOs You could also invest in Initial Public Offers (IPOs) online without going through the hassles of filling ANY application form/ paperwork. SMS Stay connected to the market The traders of today; you are constantly on the move. But how do you stay connected to the market while on the move? Simple, subscribe to India Infoline's Stock Messaging Service and get Market on your Mobile!

There are three products under SMS Service: Market on the move. Best of the lot. VAS (Value Added Service)

Insurance An entry into this segment helped complete the clients product basket; concurrently, it graduated the Company into a one-stop retail financial solutions provider. To ensure maximum reach to customers across India, we have employed a multi pronged approach and reach out to customers via our Network, Direct and Affiliate channels. Following the opening of the sector in 1999-2000, a number of private sector insurance service providers commenced operations aggressively and helped grow the market.

The Companys entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues. The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy.

Wealth Management Service Imagine a financial firm with the heart and soul of a two-person organization. A world-leading wealth management company that sits down with you to understand your needs and goals. We offer you a dedicated group for giving you the most personal attention at every level. Newsletters The Daily Market Strategy is your morning dose on the health of the markets. Five intra-day ideas, unless the markets are really choppy coupled with a brief on the global markets and any other cues, which could impact the market. Occasionally an investment idea from the research team and a crisp round up of the previous day's top stories. That's not all. As a subscriber to the Daily Market Strategy, you even get research reports of India Infoline research team on a priority basis.

The India Infoline Weekly Newsletter is your flashback for the week gone by. A weekly outlook coupled with the best of the web stories from India Infoline and links to important investment ideas, Leader Speak and features is delivered in your inbox every Friday evening.

IIFL PReMIA : 'India Infoline Limited' acts only as an Introducing broker for 'Interactive Brokers LLC' for transactions in overseas investment products. The Trading platform for transacting in overseas investment products shall be provided to Investors by Interactive Brokers LLC. Investors should acquaint themselves with the complexities of trading in overseas investment products and the extent of their exposure to risk before investing in instruments traded on the overseas Exchanges. The contents herein shall not be considered as an invitation or persuasion to trade or invest. Investors should make independent judgement with regard to suitability, profitability, and fitness of any product or service offered by Interactive Brokers LLC. India Infoline Ltd, its affiliates, Group companies, including Directors and officials accept no liabilities for any loss or damage of any kind to any person arising out of any actions taken in reliance thereon. Investor by accessing this site agrees that anyone in the Interactive Brokers Group or their representative may contact the investor via phone or email with information on products and services and to guide the investors in the use of the trading platform. The site, all of its pages and the material contained therein are not oriented for persons belonging to jurisdictions in which due to the nationality of the person, their residence or other reasons access

to the site, consultation, availability or publications are restricted or prohibited. Persons subject to such restrictions or prohibition must not access the site. The distribution of this Service or content in other jurisdictions may be restricted by law and the persons who access the Service should inform themselves about, and observe, any such restrictions. This Service is not intended to be any form of an investment advertisement, investment advice or investment information and has not been registered under any securities law of any foreign jurisdiction and is only for the information of any person in any jurisdiction where it may be lawful to provide such information, otherwise the same shall not be considered an information. No information, opinions or other matter contained in the site shall be interpreted as an invitation, offer or suggestion to buy or sell shares, financial instruments, consultations, financial

services or transactions of any kind. It should not be viewed as a recommendation or for the purpose of soliciting any action. This Service on the Website does not constitute an offer to sell or a solicitation to any person in any jurisdiction where it is unlawful to make such an offer or solicitation. The use and interpretation of the Services offered may require skill and judgment and the products may involve significant risks, and that Investors shall at all time fully understand all such risks and exercise their own judgment in the use of the Products and Services. The services are subject to various risks including risks associated with internet based trading system. IIL shall not be responsible in any manner for communication failures, distortions or delays when trading via the Internet About PReMIA Priority Relationship Management & Investment Advisory (PReMIA) PReMIA is a multi-product, customized financial environment which aims to generate superior returns for IIFL's preferred clients, by investing across varied asset classes.

With PReMIA, you have access to a team that's vastly experienced and trained in different aspects of the stock market, assuring you a multi-faceted opinion for all your financial queries. Adjudging your risk profile, setting investment goals, chalking out strategies to attain all long term and short term financial objectives are just a few of the duties that we take care of. Our dedicated relationship managers & investment advisors work tirelessly studying market, presenting new opportunities, evaluating and interpreting them so that you get the best of every opportunity. Platinum class research, dedicated customer service teams coupled with easy access and complete account transparency make PReMIA a unique experience for all our Priority Clients.

The PReMIA Team Our Team of dedicated Relationship Managers and experienced Investment Advisors make sure that your money is invested in the best investment avenues depending on your future financial goals. We ensure that we have none but the best people servicing you. Our Relationship Managers and Investment Advisors are MBAs / CAs / CFAs, who come with a rich experience in Wealth Management / Private Client Group Broking / Priority Banking. They have sound knowledge of Financial Products and most importantly place their clients before everything else. WITH US AROUND YOU DONT HAVE TO WORRY ABOUT YOUR INVESTMENTS.

PReMIA Infrastructure 1. IIFL PReMIA has 23 branches across India to cater to your financial requirements 24*7

2. We have state-of-art Dealing Rooms 3. Robust back-end systems 4. Dedicated team of Analysts 5. Fund Management expertise 6. Product Desk to provide customized products which are a combination of Equity and Debt 7. Desk for International Equity

PRODUCT OFFERINGS Equity We offer a bouquet of Equity offerings suitable for high traders to long term investors, beginners to diverse class of capital market participants. We have a dedicated desk assisting clients on Asset allocation, trading strategies, portfolio optimization. Award winning research on Fundamental, Technical & Derivatives aimed at growing assets by outperforming market. Derivatives Extensive research coverage on strategies such as Hedging, Carry-overs, Spreads, etc., helps clients to balance the risk and rewards of derivative trading. Our experienced advisors support high traders to make most of this popular market segment. Mutual Funds A mixture of comprehensive coverage of all mutual fund offerings and seamless execution of instructions. IIFL research and Mutual Fund trackers helps clients to navigate the ever growing market of MF Offers with outmost ease.

Structured Product Customized Structures offering unique combination of coupons, market participation representing wide variety of Industry segment helps High Net worth Clients manage and preserve their wealth. Life Insurance IIFL -one of the largest insurance brokers presents its clients with a bouquet of products across multiple service providers in most convenient manner. Our expertise in different classes along with Insurance completes a client's financial planning process.

Services
Dedicated Team The highly experienced PReMIA team makes investment related decision-making much easier. Relationship Managers and Advisors constantly strive to add value in services by providing customized analytics and tools to meet clients unique requirements keeping in mind their risk taking abilities. World-class Research made simple for our clients IIFL PReMIA has a full-fledged research team involved in macro-economic studies, sectoral research and industry specific equity research covering Indian, emerging and global markets. Also, IIFL's 'Forbes-acclaimed' world-class research team offers IQ (Insights Quick), a customized, premium research offering, tailor-made for PReMIA customers. Easy Access and Complete Account Transparency Access to online back office systems, charting tools, real time terminals and research mines all integrated through an award winning trading platform. Now, keep track of your investments, anytime. Dedicated Customer Service IIFL PReMIA has a dedicated customer care service desk to ensure that all queries pertaining to your account, transaction details and fund status are clarified. Our experts are always keen on helping the Priority Clients take an informed decision as we understand the value of spotting an opportunity before others do.

Top-of-the-line Dealing Desk More than 25 state-of-the-art Central Dealing Rooms deliver an unparallel equity trading experience. Have the PReMIA edge with our expert teams handling all your investment worries.

Customized Investment Strategies The IIFL PReMIA team employs advanced strategies for trading with customized products in Equity, MF, Structured and many more. Every step is backed by a centralized, real time Risk Management System with cutting edge technology.

WHY PReMIA :

Your Investment Cycle and PReMIA

How do we handle your Investments ?

5. SWOT ANALYSIS

Strengths Integrated technology platform One Stop shop Pan - India distribution network India Infoline.com and 5paisa.com have developed into brands Weaknesses Lack of a banking arm to complete the bank-broker-depository chain Insignificant presence in institutional Segment Opportunities Changing demographics with higher disposable income and increasingly complex financial instruments will drive demand for investment advisory services Rapid penetration of Internet and computers means that technology enabled financial services will gain market share Threats Economic slowdown Volatile movement in indices events like May 17, 2004 Stock markets falls will have a cascading effect on our mutual fund mobilization Increase/decrease in interest rate can affect our debt/ income fund mobilizations Future changes in personal taxation rules can impact insurance sales Increasing competition from large and particularly foreign players

CHAPTER : 6 COMPETITORS OF IIFL

INDIA BULLS :
In middle of 1999, when e-commerce was just about starting in India, Sameer Gehlaut and his close IIT Delhi friend Rajiv Rattan got together and bought a defunct securities company with a NSE membership and started offering brokerage services . A Few months later, their friend Saurabh Mittal also joined them. By December 1999, the company embarked on its journey to build one of the first online platforms in India for offering internet brokerage services. In January 2000, the 3 founders incorporated Indiabulls Financial Services and made it as the flagship company. In mid 2000, Indiabulls Financial Services received venture capital funding from Mr L.N. Mittal & Mr Harish Fabiani. In late 2000, Indiabulls Securities, a subsidiary of Indiabulls Financial Services started offering online brokerage services and simultaneously opened physical offices across India. By 2003, Indiabulls securities had established a strong pan India presence and client base through its offices and on the internet. In September 2004, Indiabulls Financial Services went public with an IPO at Rs 19 a share. In late 2004, Indiabulls Financial Services started its financing business with consumer loans. In March 2005, Indiabulls Properties Private Ltd, a subsidiary of Indiabulls Financial Services, participated in government auction of Jupiter Mills, a defunct 11 acre textile mill owned by NTC in Lower Parel, Mumbai. Indiabulls Properties private Ltd won the mill in auction and that purchase started Indiabulls real estate business. A few months later, Indiabulls Real Estate company pvt ltd bought Elphinstone mill in Lower Parel, another textile mill auctioned by NTC. With real estate business gaining size, Indiabulls Financial Services demerged the real estate business under Indiabulls Real Estate and each shareholder of Indiabulls Financial Services received additional share of Indiabulls Real Estate through the demerger. Subsequently, Indiabulls Financial Services also demerged Indiabulls Securities and each shareholder of Indiabulls Financial Services also received a share of Indiabulls Securities.

In year 2007, Indiabulls Real Estate incorporated a 100% subsidiary, Indiabulls Power, to build power plants and started work on building Nashik & Amrawati thermal power plants. Indiabulls Power went public inSeptember 2009. Today, Indiabulls Group has a networth of Rs 16,796 Crore & has a strong presence in important sectors like financial services, power & real estate through independently listed companies and Indiabulls Group continues its journey of building businesses with strong cash flows. Indiabulls Group is one of the country's leading business houses with business interests in Power, Financial Services, Real Estate and Infrastructure. Indiabulls Group companies are listed in Indian and overseas financial markets. The Net worth of the Group is Rs 16,844 Crore and the total planned capital expenditure of the Group by 2013-14 is Rs 35,000 Crore.

Indiabulls Power is currently developing Thermal Power Projects with an aggregate capacity of 5400 MW. The first unit is expected to go on stream in May 2012. The net worth of Indiabulls Power is Rs 3,919 Crore. The company has a total capital expenditure of Rs 27,500 Crore. The company has been assigned 'BBB' rating.

Indiabulls Financial Services is one of Indias leading non-banking finance companies providing Home Loans, Commercial Vehicle Loans and Secured SME Loans. The company has a net worth of Rs 4,661 crore with an asset book of Rs 19,796 Crore. The company has disbursed loans over Rs 50,000 Crore to over 3,00,000 customers till date. Amongst its financial services and banking peers, Indiabulls Financial Services ranks amongst the top few companies both in terms of net worth and capital adequacy. Indiabulls Financial Services has been assigned AA+ rating and has presence in over 87 cities and towns with a total branch network of 170 branches.

Indiabulls Real Estate is among India's top Real Estate companies with development projects spread across residential complexes, integrated townships, commercial office complexes, hotels,

malls, Special Economic Zones (SEZs) and infrastructure development. Indiabulls Real Estate partnered with Farallon Capital Management LLC of USA to bring the first FDI into real estate in the country. The company has a networth of Rs 7,505 Crore and has purchased prime land, mostly in the metros and other Tier 1 cities worth Rs 4,000 Crore in government auctions alone. Indiabulls Real Estate is currently developing 61 million sqft into premium quality, high-end commercial, residential and retail spaces. The company has been assigned 'A+' rating.

Indiabulls Securities is one of India's leading capital markets companies providing securities broking and advisory services. Indiabulls Securities also provides depository services, equity research services and IPO distribution to its clients and offers commodities trading through a separate company. These services are provided both through on-line and off-line distribution channels. Indiabulls Securities is a pioneer of on-line securities trading in India. Indiabulls Securities in-house trading platform is one of the fastest and most efficient trading platforms in the country. Indiabulls Securities has been assigned the highest rating BQ-1 by CRISIL.

ANGEL BROKING :
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has emerged as one of the most respected Stock-Broking and Wealth Management Companies in India. With its unique retail-focused stock trading business model, Angel is committed to providing Real Value for Money to all its clients. The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is also registered as a Depository Participant with CDSL. Our Business

Equity Trading Commodities Portfolio Management Services Mutual Funds Life Insurance

IPO Depository Services Investment Advisory

Angel Group

Angel Broking Ltd. Angel Commodities Broking Ltd. Angel Securities Ltd.

Our Vision To provide best value for money to investors through innovative products, trading/investments strategies, state of the art technology and personalized service. Our Motto To have complete harmony between quality-in-process and continuous improvement to deliver exceptional service that will delight our Customers and Clients.

Our CRM Policy : Customer is King A Customer is the most Important Visitor on our premises. He is not dependent on us, but we are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so. - Mahatma Gandhi

Business Philosophy

Ethical practices & transparency in all our dealings Customers interest above our own Always deliver what we promise Effective cost management Our Quality Assurance Policy We are committed to providing world-class products and services which exceed the expectations of our customers, achieved by teamwork and a process of continuous improvement.

Products and Services : 1. Equity 2. Derivatives 3. Commodities 4. Life Insurance 5. Mutual Funds 6. Depository Services 7. PMS 8. Currency Trading 9. NRI Services 10. Investment Advisory 11. IPO

7. RESEARCH REPORT
7.1. RESEARCH METHODOLOGY The methodology section is the blue print for researcher activity and specifies bow the investigator intents to study the people or describe social settings. In other words the methodology section make explicit the study desire and constitutes the how to do it phase. I have put my best possible effort to do this research and collect the necessary information to learn about this topic thoroughly. Objective of research; The main objective of this project is concerned with getting the opinion of people regarding stock & equity and what they feel about availing the services of financial advisors. I have tried to explore the general opinion about equity. It also covers why/ why not investors are availing the services of financial advisors. Along with it a brief introduction to Indias largest financial intermediary, INDIA INFOLINE has been given and it is shown that how they operate in stocks deptt.

To know percentage of people invest in mutual fund, insurance, equity and other financial products and services.
To know future prospects of their investment in the financial products and services.

7.2 DATA COLLECTION

Primary Data: Primary data are data freshly gathered for a specific purpose. The various sources of primary data for my project are as Banks Students Local Residents Peoples from industries Malls Small Retailers

Secondary Data: Secondary data provide a starting point for research and offer the valuable source of information. The secondary data was the most important source for my project because it gave us information about company profile, competitors, market scenario, market share, etc. It also gives us information of the financial industry, its emergence,& its importance in country progress. The secondary data has been collected through various :

journals, websites India Infoline brochure

Sampling: !! Sampling procedure: The sample is selected in a random way, irrespective of them being investor or not or availing the services or not. It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using the measures of central tendencies like mean, median, mode. The group has been selected and the analysis has been done on the basis statistical tools available. !! Sample size: The sample size of my project is 320. Out of which only 300 people attempted all the questions. Other 20 not investing in Equities/Stock Market attempted only 2 questions. !! Sample design: Data has been presented with the help of bar graph, pie charts, line graphs etc. !! Limitation: Time limitation. Research has been done only near around Noida and Ghaziabad. Some of the persons were not so responsive.

Possibility of error in data collection

7.3 DATA ANALYSIS


1. Do you invest Your Money to grow? Yes No 89 11

Interpretation: 89% of the respondents say yes they invest there money to grow. This is because the respondents whos income is above 10000 are investing their money to grow. 2. Main reasons for investing in financial market. B C D E F . 3. Analysis of the preferred investment area. Bank Deposits being the most preferred area i.e.30% 25% goes for insurance plans 15% invest in shares 10% invests in mutual fund 8% in real estate because it require large investment 7% in commodity and 5% in currency. I rely on my investments to supplement my cash flow I want to safe for the Rainy days I want to grow my capital I rely on my investments to supplement my future income I want to protect the value of my capital I want to diversify my risk 6% 23.5% 25.5% 37% 3% 4.5%

4. Time frame for making investment decision. 30% of respondants goes for 5 to 10 yrs for making investment decision. 25% of respondents prefer 3 to 5 years.

20% of respondents prefer less than 1 yr 15% of respondents goes for 1 to 3 yrs 10% of respondents prefer more than 1 yrs.

5. Invested in securities before. 20% respondants Never invested in securities 25% invested through an investment manager 35% in mortgage and /or life insurance policy 20% through direct investment or mutual funds

6. Customer interested towards Share Market. INTERESTED IN STOCK MARKET-35% NOT INTERESTED IN STOCK MARKET-65% 7.Customers holding DEMAT A/C ACCOUNTS PERCENTAGE YES-33% NO-67% 8. Main resaons for not investing in stock market. 50% due to risk factor involved in the stock market 20% lack of knowledge 15% due the return involved in it 15% because of instability 9.Investment portfolio reviewed in future. 50% respondants says they will review once in a month 28% several times in a week 20% once in a quarter

10% once in a year only 2% never or rarely

10. More attractive would be 30% respondants are more attractive towards high risk with high returns 30% repondants higher return with higher loss 25%respondants lower rish with low returns 15% respondants low risk with moderate return

11.Effect on individual due to sharp drop in the investment. 35% says disappointed bt prepared to face the situation 30% would be disappointed 20% says it would effect them personally 15% says it will not effect them.

12. Proportion of assets involved in investment. 40% says less than 25% of their assets 25% respondants says that its depends on the market condition. 20% 13. Analysis of the factors for broking house.

30%% respondents choose their broking house on basis of brokerage charge by the broking house. 20% by services given by the firm 20% by investments tips given by the broking house 20% by expertise knowledge 10% by brand name

14 Most suitable stage for the investment. Young unmarried-50% Young married with children-10% Married with older children stage-15% Pre retirement stage-25%

15. Inflation as a significant risk. 65% respondants consider inflation as a significant risk 35% respondants does not consider.

16. The most important service parameter for trading. 40% respondants consider information as service parameter for trading 30% consider quality 10% consider speed and 10% self knowledge 5% market condition and financial position

8.

Findings and Conclusions

At the survey conducted upon 320 people, few are already equity investors or are Interested to invest in future and the remaining are not interested in it. So there is enough scope for the advisors to convert those participants into investors through their convincing power and great communication skills.

Now, when those few people were asked about the reason of not investing in equity or stock market, then most of the people held their ignorance responsible for that. They lacked knowledge and information about the equity & stocks. Whereas just 15% people enjoyed investing in other option. For 10% people, the benefits arousing from these investments were not enough to drive them for investment in Equities and few people expressed no trust over the fund managers decision. Again the financial advisors can tap upon these people by educating them about mutual funds.

Out of the 33% persons who already have invested in equity or stock market are interested to invest, only 18% have sound knowledge of Equity/Stocks, 34% people are aware of only the

schemes in which they have invested. 27% possess partial knowledge whereas 21% stands nowhere in knowledge about Equity. When asked about the most alluring feature of Equity or Stock, most of them opted for diversification, followed by reduction in risk, helps in achieving long term goals and helps in achieving long term goals respectively. Most of the investor preferred to invest at a young unmarried stage. Even 10% persons were ready to invest at a stage of young married with children but person with older children avoid investing due to increased expenses. But again the number rose to 25% at pre-retirement stage.

9. RECOMMENDATIONS

INDUCTION PROGRAMS must be held for the sales teams before letting them go into the field. In these induction classes the experienced sales staff employees should share their valuable live experiences and knowledge, which they have experienced while in field.

Weekly magazines must be published and distributed to the investors that can help them for making better investments. Sales team must be fully equipped with latest technology such as using Laptop that can be used for making presentation to the customers especially to the corporate clients about their product and services provided by them. Make your site user friendly so that more and more people know about trading and do the same also. Advertisement through Canopy, help to generate leads. Company should advertise with a concern that has a brand name in the market

CHAPTER 10 ANNEXURE

10.1. ANNEXURE-1

Name. Occupation Contact No.

SURVEY QUESTIONNAIRE Q1.Do you invest Your Money to grow? Yes No Q2: What can be the main reason for you investing in financial market? I rely on my investments to supplement my cash flow I want to safe for the Rainy days I want to grow my capital I rely on my investments to supplement my future income. I want to protect the value of my capital. I want to diversify my risk

Q3. Where do you prefer to invest your money? Bank Deposits Shares Mutual Funds Real estate Insurance Plans Currency Commodity

Q4. What is your time frame for making investment decision? Less than 1 year 1 to 3years 3 to 5 years .5 to 10 years more than 10 It would depend and could entail incurring a loss upon redemption

Q5. Have you invested in securities before? Never yes, through an investment manager Yes, in connection with a mortgage and /or life insurance policy Yes, through direct investment or mutual funds

Q6. Do you prefer to invest in shares? Yes No

Q7. Do you have a DEMAT A/C? Yes No

Q8. Why you have not invested in Share Market? Risk Lack of Knowledge Return Factor Instability

Q9. How often would you like to review your investment portfolio in the future? Rarely or never. At least once a year. At least once a quarter. At least once a month. Several times a week.

Q10. Which one seems more attractive? Higher risk with bigger chance of achieving higher returns. Higher returns with higher loss. Lower risk, low returns, low losses. Low risk, moderate returns, low loss.

Q11. How a sharp drop in your investments would affects you? It would personally affect me very much. It would be disappointed.

It would be disappointed, but do recognize that this is always possible. It would not affect you.

Q12. What proportion of assets would you wish to invest in instruments other than risk free deposits? Less than 25%.

Between 25% and 50%. Between 50% and 70%. More than 70%. Depends on market situations.

Q13. If you trade with India Infoline, then why? Services Investment Tips are good Brokerage Brand Name Expertise Knowledge Q14 According to you which is the most suitable stage to invest in equity? Young unmarried Young married with children Married with older children stage Pre retirement stage

Q15. Do you consider Inflation a significant risk? Yes No

Q16. What is the most important service parameter that you look for while trading? Information

Speed Quality If,others

10.2 ANNEXURE-2 Graphs and pie charts : Q1. Do you invest Your Money to grow?

Interpretation: : 89% of the respondents say yes they invest their money to grow. This is because the respondents whos income is above 10000 are investing their money to grow.

Q2. What can be the main reason for you investing in financial market?

Interpretation: 37% Respondants says that they rely on investments to supplement their future income because they feel it more reliable and by doing so they wants to secure their future bt

another 6% people who are having good income just wants to invest their cash to flow. 25% says they simply wants to grow their capital ,24% wants to keep themselves safe for the bad time, And 4.5 % people says they to diversify their risk they invest and only 3% wants to protect their capital.

Q3. Where do you prefer to invest your money?

Interpretation :As per the given survey maximum no. of peoples i.e. 30% invest their money in bank deposit as being on safer side .another 25% of people invest their money in insurance plans to secure their future from some mishappening and to save tax. 15% of peoples invest in share who are having good knowledge of share market and wants to earn a good amount of money in short duration by taking the risk ,10% invest in mutual fund because they wants to diversify their risk.

Another 8% of people how are having a goog source of income invest their money in real estate and only few people invest in commodity and currency due lack of knowledge.

Q4. What is your time frame for making investment decision?

Interpretation: According to the servey 30% of the respondants like to invest their money for a period of 5 to 10 years because many firms provides good returns during this period plans.

25% says they would like to invest for 3 to 5 years to get maximum return. 20% goes for less than 1 year, 15% goes for 1 to 3 years because they believe in short term plans and in cash flow.and another 10% prefer for more than 1 yr.

Q5. Have you invested in securities before?

Interpretation: 35% invest in life insurance policies to safe and secure future ,25% invest their money through investment manger due to lack of time and knowledge.20% through direct investment or mutual funds .while another 20% do not invest due to their lack of income to invest.

Q6. Do you prefer to invest in shares?

Interpretation:. As per our survey maximum number of peoples dont want to invest in share market as they dont have good knowledge of share and there is also a risk factor involved in it while 35% of people invest their money in share market as they have good knowledge of shares and want good and maximum returns with some risk involved.

Q7. Do you have a DEMAT A/C?

Interpretation: According to the survey on only 33% of peoples are having their demat account i.e. who invest in stock market while majority says they do not have because they dont want to take any risk and even not having enough knowledge about the stocks.

Q8. Why you have not invested in Share Market?

Interpretation: As per the survey 50 % of people not invest in share market due to involvement of risk factor,20% due to lack of knowledge as many peoples dont have any of idea what happening in share market and another 15% dont invest due to instability of share market and 15% of peoples not invest due to return involved in it.

Q9. How often would you like to review your investment portfolio in the future?

Interpretation: According to the survey maximum number of peoples around 50% review their investment portfolio once in a month just to have a watch on their investment while 28% of peoples review their portfolio on regular basis and 20% check their portfolio quarterly to invest or to review and 10% review once in a year as they dont have enough time or they have to pay on annual basis and very few peoples i.e. around 2% never check their portfolio as they invest through some agent or due to lack of knowledge.

Q10. Which one seems more attractive?

Interpretation: 30% of respondents are more attractive towards high risk with high returns as they want good return in short time with the involvement of risk factor in it while another 30% of respondents invest for good return in short period on the risk of higher loss like they invest in shares and other commodities while another 25% of respondents invest on the basis of low risk as they do not care about the returns they just dont want to take any type of risk in their capital while another 10% of respondents invest their capital on basis of low risk in order to get moderate return.

Q11. How a sharp drop in your investments would affects you?

Interpretation: 35% of peoples say that they disappointed but prepared to face the situation as they are aware of that risk and invest on that risk factor, and 30% of the peoples will say that they will be disappointed of it.20% say that they will affect them personally due to their large investment and while another 15% of peoples say that it will not affect them as they dont invest a lot in that and got better returns from it earlier.

Q12.What proportion of assets would you wish to invest in instruments other than risk free deposits?

Interpretation: 40% of people used their 25% of assets in investment beacuase they wants to keep themselves free from the risk , 25% says its all depend on the markt condition,20% invests 25% to 50% of their assets because they wants to more and 10% will invest between 50% to 70% and 5% are those who are ready to take risk n would like to invest more tah 70%.

Q13. If you trade with India Infoline, then why?

Interpretation: As per the survey maximum numbers peoples choose their broking house on the basis of their brokerage charge as the brokerage charge applied by different firms are vary and a large numbers of investors around 30% prefer them,20% of investor choose for better services and dont care about the brokerage charge another 20% attract towards the broking tips provided by the broking house as they will be much beneficial for their capital while very few investors around 10% attract by the brands name.

Q14. According to you which is the most suitable stage to invest in equity?

Interpretation: As per the survey the most suitable age of the investors to invest are young unmarried as they can take chances to invest their capital on higher risk to get better returns so around 50% of investors are young unmarried and while 10% of the investors are married with young childrens as they have some other responsibilities to where they have to invest and 15% of the investors are married with older children as their children are enough mature so that they can invest and 25% of the investor are old as they got retirement from their job and want to do something on their own to earn.

Q15. Do you consider Inflation a significant risk?

Interpretation: 65% of the respondents consider inflation consider inflation as a significant risk as they know that this time for higher loss and of higher gain while another 35% of respondents does not consider inflation as a significant risk as they are aware of it.

Q16.What is the most important service parameter that you look for while trading?

Interpretation: As per the survey information is the most desirable parameter for trading so a large number of respondents i.e. around 40% consider it as the most desirable parameter while 30% consider quality as the important parameter and 10% consider speed as the important parameter as they want quick return and 10% having self knowledge so do it on their own and 5% consider the market situation and they invest on basis of that only.

11. BIBLIOGRAPHY

WEBSITES:
www.indiainfoline.com www.5paisa.com www.moneycontrol.com www.yahoofinance.com www.economictimes.com

NEWSPAPERS & JOURNALS :


The Economic Times Business Standard Business India Financial Report of India Infoline (Annual 2010-11)

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