SUMMER TRAINING PROJECT REPORT

On
A comparative study of services of Ventura
Securities Ltd. (equity segment) with Karvy Stock
Broking Ltd. in Lucknow
Towards partial fulfillment of
Master of Business Administration (MBA)
School of Management, Babu Banarasi Das University, Lucknow

Submitted by
SURBHI MEHROTRA
IIIrd Semester
Roll No-1150672099

Under Supervision of
Dr. Shweta Srivastava
(BBD FACULTY)

Session 2016-2017

School of Management

CERTIFICATE FROM THE ORGANISATION

BONAFIDE CERTIFICATE OF DEAN-SCHOOL OF

MANAGEMENT

DECLARATION
I Surbhi Mehrotra (Roll No.1150672099) student of MBA, hereby declare that project entitled A
comparative study of services of Ventura Securities Ltd (equity segment) with Karvy Stock
Broking Ltd. in lucknow is an authentic work. The data mentioned in this report were obtained
during genuine work done and collected by me. The data obtained from other sources have been duly
acknowledged.
The project was undertaken as a part of course of curriculum of MBA program( Full Time).

Date:

Place: Lucknow

Roll No. 1150672099

ACKNOWLEDGEMENT
Any accomplishment requires the effort of many people and this work is no different. First of all, I am
grateful to the Almighty God for making me able to complete my summer internship.
I wish to express my sincere thanks to School of Management, BBDU, for providing me with all the
necessary facilities. I place on record, my sincere gratitude to our Dean Dr. Sushil Kumar Pandey for
his constant encouragement.
I would like to express my sincere regards to Dr. Shweta Srivastava ( Faculty BBD) for extending her
valuable guidance and at the same time strictly adhering to high quality of my work
I am highly thankful to Mr. Siddhartha Kanaujia- Marketing Manager of Ventura Securities Ltd.
(Lucknow Branch) for their guidance , valuable suggestions, encouragement, care and concern. He has
been the guiding light through the study.
I would like to express my gratitude to my parents, friends and all those persons for their contribution
to this work.

PREFACE
I respect to the allotted period, I have formed relationship with the organization as trainee but
informally it is a sacred place for me as its my first practical exposure to an organization to know and
get aware to an organizational real practical stressful environment.
Although I am student of M.B.A. It is a two year full time degree courses. So far this training is
scheduled for third semester syllabi as a separate topic to be asked in detail in viva-voice conducted by
external So far I have completed 3rd semester examination. Thus study will provided me a better
opportunity to survive in cut throat competition with a prosperous existence. I have tried my best to
gain out of well framed circumstances & with the help of experienced personnel who helped me out so
for become possible to them. As being a very confidential functioning many things are there which
cant be known but on the basis of gathered information and certain hints, the project has been formed.
It may have something missing but I have tried to present all things what I have received. Although this
report has been got checked by different

personnel but after that if there is some shortcomings I

expect it to be rectified. So the whole study bifurcated in different parts. Certain observations &
suggestions also have been stated which if possible to be reviewed.

EXECUTIVE SUMMARY
Since the early 90's , India has gradually opened up its markets through economic reforms by reducing
government control on foreign trade and investment. The Stock Exchanges have become a prominent
player in this economic reform and has now become a key driver of India's Economy.
With this, Indian stock broking firms are on an expansion drive. One such firm is Ventura Securities
Ltd.
After zeroing down on my research area, I have collected information through primary and secondary
sources. I had a constant discussion with Mr. Siddhartha Kanaujia (Marketing Manager) throughout my
trading and took valuable suggestions from him.
While working in the organization I was trained as a relationship personnel being engaged into various
jobs such as dealing with clients, answering customer queries through telephonic conversations and
providing them knowledge about new schemes and converting them into our customers.
As my summer internship project I was given the topic on A comparative study of services of
Ventura Securities Ltd equity segment with Karvy Stock Broking Ltd. in Lucknow. The project
work was for this research was conducted in Lucknow to study the customer satisfaction level. For this
survey was conducted through structured Questionnaire.
In today's competitive business world every customer is significant for the leading firms like Ventura
Securities Ltd. with competitive strategies, the customer expectations are very high so it should be kept
in mind and offer them best possible service.
The report deals with the comparative study of services of Ventura securities ltd with Karvy stock
broking ltd. The research has been conducted to gather information from 100 respondents & a
structured questionnaire will be used to collect the information from the respondents. The data which
7

was collected from them will be analyzed and classified. It was found that though the Ventura
securities ltd. and Karvy has the highest market share it needs to improve on its service quality and
retail services.
Company can start some good promotional activities to build its brand and to make recognition by all
the peoples in the market.
ABOUT EQUITY
A equity is a public (a loose network of economic transactions, not a physical facility or discrete)
entity for the trading of company stock (shares) 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 was estimated at about $36.6 trillion at the start of October 2008.
The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11
times the size of the entire world economy.
Function and purpose
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.
NATIONAL STOCK EXCHANGE OF INDIA

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock exchange. It is
the largest stock exchange in India and the third largest in the world in terms of volume of
transactions.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies

and other financial intermediaries in India but its ownership and management operate as
separate entities.
BOMBAY STOCK EXCHANGE OF INDIA

The Bombay Stock Exchange Limited (Marathi) (formerly, The Stock Exchange, Mumbai;
popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It
is located at Dalal Street, Mumbai, India.

The Bombay Stock Exchange was established in 1875. There are around 3,500 Indian
companies listed with the stock exchange, and has a significant trading volume. At October
2006, the market capitalization of the BSE was about Rs. 33.4 trillion (US $ 730 billion).

The BSE SENSEX (SENSITIVE INDEX), also called the "BSE 30", is a widely used market
index in India and Asia. As of 2005, it is among the five biggest stock exchanges in the world in
terms of transactions volume.

DEMAT (DEMATERIALIZED TRADING)

Indian investor community has undergone sea changes in the past few years. India now has a very large
investor population and ever increasing volumes of trades. However, this continuous growth in
activities has also increased problems associated with stock trading. Most of these problems arise due
to the intrinsic nature of paper based trading and settlement, like theft or loss of share certificates. This
system requires handling of huge volumes of paper leading to increased costs and inefficiencies. Risk
exposure of the investor due to this trading in paper.
Some of these risks are:
1. Delay in transfer of shares.
2. Possibility of forgery on various documents leading to bad deliveries, legal disputes etc.
3. Possibility of theft of share certificates in the market.
4. Multiplication or loss of share certificates in transit.
5. Prevalence of fake certificates in the market.
The physical from of holding and trading in securities also acts as a bottleneck for broking
community in capital market operations.
The introduction of NSE and BOLT has increased the reach of capital market manifolds. The increase
in number of investors participating in the capital market has increased the possibility of being hit by a
bad delivery. The cost and time spent by the brokers for rectification of these bad deliveries tends to be
higher with the geographical spread of the clients. The increase in trade volumes lead to exponential
rise in the back office operations thus limiting the growth potential of the broking members. The
inconvenience faced by investors (in areas that are far flung and away from the main metros) in
10

settlement of trade also limits the opportunity for such investors, especially in participating in auction
trading. This has made the investors as well as broker wary of Indian capital market. In this scenario,
Dematerialized trading is certainly a welcome move.
What is Dematerialization?
Dematerialization or DEMAT is a process whereby your securities like shares, debentures etc, are
converted into electronic data and stored in computers by a Depository. Securities registered in your
name are surrendered to depository participant (DP) and these are sent to the respective companies who
will cancel them after Dematerialization and credit your depository account with the DP. The
securities on Dematerialization appear as balances in your depository account. These balances are
transferable like physical shares. If at a later date, you wish to have these DEMAT securities
converted back into paper certificates; the Depository helps you to do this.

COMPANY PROFILE

Ventura Securities Ltd. (Ventura) commenced operations in 1994 as a stock broking house. Over the
past two decades, we have grown into a group of companies that provides a complete array of financial
products and services.
11

Through a large network of sub-brokers, we offer our clients the opportunity to invest and trade in
equity and equity derivatives, commodities, mutual funds, fixed income products and currency futures.
We also directly facilitate clients who wish to trade in equity online via our in-house, customized and
ready to use software Pointer which enables seamless processes and flawless execution. We adhere
to a well-defined risk management system and settlement mechanism thereby conducting fully
compliant operations.
Beyond investment avenues, the Ventura Group is constantly committed to providing investors with
access to timely and relevant research and data to ensure an informed and fruitful investment
experience.
Ventura Securities Ltd. (Ventura) commenced operations in 1994 as a stock broking house. Over the
past two decades, we have grown into a group of companies that provides a complete array of financial
products and services.
Through a large network of sub-brokers, we offer our clients the opportunity to invest and trade in
equity and equity derivatives, commodities, mutual funds, fixed income products and currency futures.

12

The Ventura Credo :

Building and valuing true partnerships
When it comes to our business partners, we see our success reflected in their progress. We have
facilitated them all the way with technology and marketing strategies and in turn have been rewarded
with their performance and loyalty.
'Think and it's there' approach
We envisage all our clients' diverse needs - ranging from financial planning to wealth management well in advance and provide them with resources, tools and solutions to fulfill them.
Constant innovation
Change for the better has become a way of life at Ventura. Innovations have always been customer
centric which has been amply reflected in the upgradation of systems to facilitate our network partners.
Team Ventura
Our dedicated and well trained people represent the pillar of strength and success at Ventura. Each of
our members has internalized our mission and are constantly striving to build on it.
Ventura spirit :
It is this spirit of "rising above oneself ", which we at Ventura have internalized since our inception in
order to deliver excellence to our clients.
When we conceive customer-centric solutions...
In the rationale behind our choice of technology and platforms...

13

When we plan our networking strategies...

In our risk management systems...
When we share our ideals with fellow workers in the organisation...
In our approach to problem solving...
...Ventura lives this spirit

14

KARVY STOCK BROKING

KARVY Stock Broking Limited, one of the cornerstones of the KARVY edifice, flows freely towards
attaining diverse goals of the Consumer through varied services. It creates a plethora of opportunities
for the Consumer by opening up investment vistas backed by research-based advisory services. Here,
growth knows no limits and success recognizes no boundaries. Helping the Consumer create waves in
his portfolio and empowering the investor completely is the ultimate goal. KARVY Stock Broking
Limited is a member of: 1) National Stock Exchange (NSE) , 2) Bombay Stock Exchange (BSE), 3)
MCX Stock Exchange(MCX-SX)
Member - National Stock Exchange (NSE) and The Bombay Stock Exchange (BSE).
Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards
attaining diverse goals of the Consumer through varied services. Creating a plethora of opportunities
for the Consumer by opening up investment vistas backed by research-based advisory services. Here,
growth knows no limits and success recognizes no boundaries. Helping the Consumer create waves in
his portfolio and empowering the investor completely is the ultimate goal.
OBJECTIVE OF STUDY

To analyze brand loyalty of customers towards the Ventura securities ltd. products range.

Analyze consumer satisfaction and sales position of Ventura securities ltd.

Analyze the after sales service provided by Ventura securities ltd.

15

To analyze the economy, comfortable and performance of Ventura securities ltd.

Analyze consumer satisfaction for after sales service provided by Ventura securities ltd.

Analyze the Consumer behavior of among Ventura securities ltd. and Karvy.

To analyze the awareness of customer of Ventura securities ltd.

To compare the services, trading features and various charges of Ventura Securities Ltd. and Karvy.

16

RESEARCH METHODOLOGY
Methodology explains the methods used in collecting information to the steps touch are as
follows.
DESCRIPTION OF RESEARCH
Marketing Research design specify the procedure for conducting a research project. The survey is
conducted with the objective to compare the services of Ventura Securities Ltd with Karvy Stock
Broking Ltd.
In this, two types of research methods are used.
1)DESCRIPTIVE RESEARCH.
Descriptive Research is used to collect various information from customer to study the Awareness,
Perception and Attitude, Opinion With the Life Insurance.
2)EXPLORATORY RESEARCH.
Exploratory Research is concerned with discovering the general nature of the problem and the
variables that are related to research study.
TYPES AND SOURCES OF DATA
For the purpose of research study the data from two sources has been collected mainly,

1)

Primary Data.

2)

Secondary Data.

PRIMARY DATA

17

Primary Data is the data collected for the first time for the purpose to solve the problem at hand. In
this study the primary data is collected by survey research.
i.e. collection of information directly from the respondents by a questionnaire method is used to
collect the information from the respondent.
SECONDARY DATA
The major sources of secondary data are Websites, newspapers, broachers.
SURVEY RESEARCH
The method used to collect data for the study was through survey research. Survey Research is the
systematic gathering of information from respondents for the purpose of understanding and predicting
some aspect of the behavior of the population of interest.
SAMPLING
SAMPLING PROCEDURE
Descriptive field studies require collection of first hand information or data pertaining to the units of
study from the field. The units of study may include the area covered under the Lucknow .
The process of drawing a sample from large population is called Sampling.
SAMPLING PROCESS

SAMPLE DESIGNThis research is Explorative and descriptive in nature because it aims to collect the data about the behavior
of investors towards stock market. The research approach used is survey based and the analysis is
largely based on the primary data.

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POPULATION: The Aggregate of all units pertaining to the study is called Population. The
population of this project is a survey of Walking Customers and Existing Customer.
SAMPLING UNIT: Sampling unit in my study is the people who were above 25 years and below 60
years.
UNIVERSE: Lucknow .
TIME PERIODS: The Period of study was also limited to 45 days.
SAMPLE TYPE:RANDOM
SAMPLE SIZE: The total Sample Size is 100 from different locations of lucknow. The selection of
sample was based on the following criteria: People belonging to different strata of society.
Servicemen working in government organization & private organization.
Professionals who includes doctors, lawyers, teachers etc.
STATISTICAL TOOL TO BE USED : Pie chart

FINDINGS

60% respondent said that they have DEMAT account while 40% said no.

45% respondent said that they have Equity, 35% no, but 20% cant say
40% respondent said that they know about equity for Ventura securities ltd. and Karvy from

advertisement, 20% about friend, 20 from internet and 20% are from another media.
40% respondent said that Ventura securities ltd provide better schemes on Equity, 60% Karvy.
60% respondent said Ventura securities ltd. gives better customer services, 40% Karvy .
60% respondent said Ventura securities ltd. charges higher brokerage on Equity, 40% Karvy
65% respondent said Ventura securities ltd. gives low documentation on Equity 35%

respondent said Karvy .

60% respondent said Ventura securities ltd.s advertisement is better, 40% said Karvy .
19

55% respondent said that Ventura securities ltd. provide better investment opportunity, 45%

respondent said Karvy

45% respondent said that Ventura securities ltd. gives best performance on Equity and 55%

Karvy .
65% respondent said that Ventura securities ltd information source is better and 35% Karvy

LIMITATION

Though, best efforts have been made to make the study fair, transparent and error free. But there might
be some inevitable and inherent limitations. Though outright measure are undertaken to make the
report most accurate.
The limitation of the survey are narrated below:

The project is valid for lucknow only.

It was not possible to cover each and every area due to time constrains.

There may be some biased response from the respondents

Some respondents did not provide the full data.

Unwillingness on the part of the customers to disclose the information as per the questionnaire.

The decisiveness on the part of the customers regarding some question hence difficulty faced in
recording and analyzing the data.

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CONCLUSION
The report comes to the following conclusion

The customers of Ventura securities ltd. are brand loyal with only a small percent want to shift over
to other brands. Trying of other brands by customers is mainly because the customer wants to try
something new.

The services provided by Ventura securities ltd. is fair in comparison to Karvy

Low interest rate on loan is the basic feature influencing to built brand Image.

The consumer of Ventura securities ltd. and Karvy is highly satisfied with services.

The competition of Ventura securities ltd. is majorly with Karvy .

Due to high brand loyalty the customers of Ventura securities ltd. and Karvy recommend its
product to others.

The customers are satisfied with the services of Ventura securities ltd.

Ventura securities ltd. gives high interest rate on equity in comparison with Karvy

RECOMMENDATION AND SUGGESTION

The brand loyalty for Ventura securities ltd. more can be increased if the economy of the products
are given due attention because Karvy has captured a major share of securities market.

The switch over of the Ventura securities ltd. customers can be prevented if more of new schemes
are launched more frequently like Karvy which launches new schemes with slight variations from
the previous.

21

Rate of interest wise very good but it still needs improvements.

On investment should be given some offer like diwali bumper offer.

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TABLE OF CONTENTS
S.NO

PARTICULAR

PAGE NO.

1.

INTRODUCTION

23-68

2.

COMPETITORS PROFILE

71-89

3.

OBJECTIVE OF THE STUDY

90-92

4.

RESEARCH METHODOLOGY

93-96

5.

DATA ANALYSIS AND INETRPRETATION

97-107

6.

FINDINGS

108-109

7.

LIMITATIONS

110-111

8.

CONCLUSION

112-113

9.

RECOMMENDATION AND SUGGESTIONS

114-115

10.

BIBLIOGRAPHY

116-117

11.

QUESTIONNAIRE

118-122

23

INTRODUCTION

24

INTRODUCTION
ABOUT EQUITY
A equity is a public (a loose network of economic transactions, not a physical facility or discrete)
entity for the trading of company stock (shares) 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 was estimated at about $36.6 trillion at the start of October 2008.
The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11
times the size of the entire world economy. The value of the derivatives market, because it is stated in
terms of notional values, cannot be directly compared to a stock or a fixed income security, which
traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out
(i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not
occurring). Many such relatively illiquid securities are valued as marked to model, rather than an actual
market price.
The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual
organization specialized in the business of bringing buyers and sellers of the organizations to a listing
of stocks and securities together. The largest stock market in the United States, by market
capitalization, is the New York Stock Exchange (NYSE). In Canada, the largest stock market is the
Toronto Stock Exchange. Major European examples of stock exchanges include the Amsterdam Stock
Exchange, London Stock Exchange, Paris Bourse, and the Deutsche Brse (Frankfurt Stock
Exchange). In Africa, examples include Nigerian Stock Exchange, JSE Limited, etc. Asian examples
include the Singapore Exchange, the Tokyo Stock Exchange, the Hong Kong Stock Exchange, the

25

Shanghai Stock Exchange, and the Bombay Stock Exchange. In Latin America, there are such
exchanges as the BM&F Bovespa and the BMV.
Trading
Participants in the stock market range from small individual stock investors to large hedge fund traders,
who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who
executes the order.
Some exchanges are physical locations where transactions are carried out on a trading floor, by a
method known as open outcry. This type of auction is used in stock exchanges and commodity
exchanges where traders may enter "verbal" bids and offers simultaneously. The other type of stock
exchange is a virtual kind, composed of a network of computers where trades are made electronically
via traders.
Actual trades are based on an auction market model where a potential buyer bids a specific price for a
stock and a potential seller asks a specific price for the stock. (Buying or selling at market means you
will accept any ask price or bid price for the stock, respectively.) When the bid and ask prices match, a
sale takes place, on a first-come-first-served basis if there are multiple bidders or askers at a given
price.
The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers,
thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on
the listed securities, facilitating price discovery.
The New York Stock Exchange is a physical exchange, also referred to as a listed exchange only
stocks listed with the exchange may be traded. Orders enter by way of exchange members and flow
down to a floor broker, who goes to the floor trading post specialist for that stock to trade the order.
26

The specialist's job is to match buy and sell orders using open outcry. If a spread exists, no trade
immediately takes placein this case the specialist should use his/her own resources (money or stock)
to close the difference after his/her judged time. Once a trade has been made the details are reported on
the "tape" and sent back to the brokerage firm, which then notifies the investor who placed the order.
Although there is a significant amount of human contact in this process, computers play an important
role, especially for so-called "program trading".
The NASDAQ is a virtual listed exchange, where all of the trading is done over a computer network.
The process is similar to the New York Stock Exchange. However, buyers and sellers are electronically
matched. One or more NASDAQ market makers will always provide a bid and ask price at which they
will always purchase or sell 'their' stock.
The Paris Bourse, now part of Euronext, is an order-driven, electronic stock exchange. It was
automated in the late 1980s. Prior to the 1980s, it consisted of an open outcry exchange. Stockbrokers
met on the trading floor or the Palais Brongniart. In 1986, the CATS trading system was introduced,
and the order matching process was fully automated.
From time to time, active trading (especially in large blocks of securities) have moved away from the
'active' exchanges. Securities firms, led by UBS AG, Goldman Sachs Group Inc. and Credit Suisse
Group, already steer 12 percent of U.S. security trades away from the exchanges to their internal
systems. That share probably will increase to 18 percent by 2010 as more investment banks bypass the
NYSE and NASDAQ and pair buyers and sellers of securities themselves, according to data compiled
by Boston-based Aite Group LLC, a brokerage-industry consultant.
Now that computers have eliminated the need for trading floors like the Big Board's, the balance of
power in equity markets is shifting. By bringing more orders in-house, where clients can move big
blocks of stock anonymously, brokers pay the exchanges less in fees and capture a bigger share of the
27

$11 billion a year that institutional investors pay in trading commissions as well as the surplus of the
century had taken place.
Market participants
A few decades ago, worldwide, buyers and sellers were individual investors, such as wealthy
businessmen, usually with long family histories to particular corporations. Over time, markets have
become more "institutionalized"; buyers and sellers are largely institutions (e.g., pension funds,
insurance companies, mutual funds, index funds, exchange-traded funds, hedge funds, investor groups,
banks and various other financial institutions).
The rise of the institutional investor has brought with it some improvements in market operations.
Thus, the government was responsible for "fixed" (and exorbitant) fees being markedly reduced for the
'small' investor, but only after the large institutions had managed to break the brokers' solid front on
fees. They then went to 'negotiated' fees, but only for large institutions.
However, corporate governance (at least in the West) has been very much adversely affected by the rise
of (largely 'absentee') institutional 'owners'.

28

History

Established in 1875, the Bombay Stock Exchange is Asia's first stock exchange.
In 12th century France the courratiers de change were concerned with managing and regulating the
debts of agricultural communities on behalf of the banks. Because these men also traded with debts,
they could be called the first brokers. A common misbelief is that in late 13th century Bruges
commodity traders gathered inside the house of a man called Van der Beurze, and in 1309 they became
the "Brugse Beurse", institutionalizing what had been, until then, an informal meeting, but actually, the
family Van der Beurze had a building in Antwerp where those gatherings occurred;[6] the Van der
Beurze had Antwerp, as most of the merchants of that period, as their primary place for trading. The
idea quickly spread around Flanders and neighboring counties and "Beurzen" soon opened in Ghent
and Amsterdam.
In the middle of the 13th century, Venetian bankers began to trade in government securities. In 1351
the Venetian government outlawed spreading rumors intended to lower the price of government funds.
Bankers in Pisa, Verona, Genoa and Florence also began trading in government securities during the
29

14th century. This was only possible because these were independent city states not ruled by a duke but
a council of influential citizens. Italian companies were also the first to issue shares. Companies in
England and the Low Countries followed in the 16th century. The Dutch East India Company (founded
in 1602) was the first joint-stock company to get a fixed capital stock and as a result, continuous trade
in company stock emerged on the Amsterdam Exchange. Soon thereafter, a lively trade in various
derivatives, among which options and repos, emerged on the Amsterdam market. Dutch traders also
pioneered short selling - a practice which was banned by the Dutch authorities as early as 1610.
There are now stock markets in virtually every developed and most developing economies, with the
world's biggest market being in the United States, United Kingdom, Japan, India, China, Canada,
Germany's (Frankfurt Stock Exchange), France, South Korea and the Netherlands.

30

Importance of stock market

Function and purpose

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.

31

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.
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.

NATIONAL STOCK EXCHANGE OF INDIA

32

National Stock Exchange Limited

Type:

Stock exchange

Founded:

November 1992

Headquarters: Mumbai, India

Website: www.nse-india.com

The National Stock Exchange of India

Limited (NSE) is a Mumbai-based
stock exchange. It is the largest stock
exchange in India and the third largest in the world in terms of volume of transactions.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies

and other financial intermediaries in India but its ownership and management operate as
separate entities.

As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India.

In March 2006, the NSE had a total market capitalization of 4,380,774 crores INR making it
the second-largest stock market in South Asia in terms of market-capitalization.

Origins
The National Stock Exchange of India was promoted by leading financial institutions at the behest of
the Government of India, and was incorporated in November 1992 as a tax-paying company. In April
33

1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956.
NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital
Market (Equities) segment of the NSE commenced operations in November 1994, while operations in
the Derivatives.

Innovations
NSE has remained in the forefront of modernization of Indias capital and financial markets, and its
pioneering efforts include:

Being the first national, anonymous, electronic limit order book (LOB) exchange to trade
securities in India. Since the success of the NSE, existent market and new market structures
have followed the "NSE" model.

Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in
India. NSCCL was a landmark in providing innovation on all spot equity market (and later,
derivatives market) trades in India.

Co-promoting and setting up of National Securities Depository Limited, first depository in

India.

Setting up of S&P CNX Nifty.

NSE pioneered commencement of Internet Trading in February 2000, which led to the wide
popularization of the NSE in the broker community.

Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly on an
equity index, in India. After four years of policy and regulatory debate and formulation, the
NSE was permitted to start trading equity derivatives three days after the BSE.
34

The first exchange to trade ETFs (exchange traded funds) in India.

Markets
Currently, NSE has the following major segments of the capital market:

Equity

Futures and Options

Retail Debt Market

Wholesale Debt Market

BO

MBAY

STOCK
EXCHANGE

35

The Bombay Stock Exchange Limited (Marathi) (formerly, The Stock Exchange, Mumbai; popularly
called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal
Street, Mumbai, India.
The Bombay Stock Exchange was established in 1875. There are around 3,500 Indian companies listed
with the stock exchange, and has a significant trading volume. At October 2006, the market
capitalization of the BSE was about Rs. 33.4 trillion (US $ 730 billion).
The BSE SENSEX (SENSITIVE INDEX), also called the "BSE 30", is a widely used market index in
India and Asia. As of 2005, it is among the five biggest stock exchanges in the world in terms of
transactions volume.

36

BSE Broadcast
NDTV Profit's Screen at BSE
The BSE Broadcast is a large ticker on the wall of the BSE, which continuously displays the latest
stock quotes from the market. It will also display on what is described as India's and South Asia's
largest video screen India's leading business-news channel: NDTV Profit.
This new system was unveiled on December 15, 2006, when Dr Prannoy Roy, the Managing Director
of New Delhi Television (NDTV) Ltd, struck the BSE's opening bell. Mr. Damodaran, the Chairman of
the Securities and Exchange Board of India (SEBI), said that the ticker would provide information and
analysis of the finance.

Market Capitalization
At 17 April 2007 BSE had 2,630 companies which were being actively traded. The cumulative market
capitalization of all these companies on the same day was INR 3,588,734 Crores. The biggest company
was Reliance Industries with a market capitalization of INR 205,688 Cr.
BSE indices
The BSE SENSEX (also known as the BSE 30) is a value-weighted index composed of thirty scrips,
with the base April 1979 = 100. The set of companies which make up the index has been changed only
a few times in the last twenty years. These companies account for around one-fifth of the market
capitalization of the BSE.
Apart from BSE SENSEX, which is the most popular stock index in India, BSE uses other stock
indices as well:

37

BSE 500

BSE 100

BSE 200

BSE PSU

BSE MIDCAP

BSE SMLCAP

BSE BANKEX

BSE Tech

BSE Auto

BSE Pharma

BSE Fast Moving Consumer Goods (FMCG)

BSE Consumer Durables (SYMBOL: Cons Dura)

BSE Metal

Relation of the stock market to the modern financial system

38

The financial system in most western countries has undergone a remarkable transformation. One
feature of this development is disintermediation. A portion of the funds involved in saving and
financing, flows directly to the financial markets instead of being routed via the traditional bank
lending and deposit operations. The general public's heightened interest in investing in the stock
market, either directly or through mutual funds, has been an important component of this process.
Statistics show that in recent decades shares have made up an increasingly large proportion of
households' financial assets in many countries. In the 1970s, in Sweden, deposit accounts and other
very liquid assets with little risk made up almost 60 percent of households' financial wealth, compared
to less than 20 percent in the 2000s. The major part of this adjustment in financial portfolios has gone
directly to shares but a good deal now takes the form of various kinds of institutional investment for
groups of individuals, e.g., pension funds, mutual funds, hedge funds, insurance investment of
premiums, etc.
The trend towards forms of saving with a higher risk has been accentuated by new rules for most funds
and insurance, permitting a higher proportion of shares to bonds. Similar tendencies are to be found in
other industrialized countries. In all developed economic systems, such as the European Union, the
United States, Japan and other developed nations, the trend has been the same: saving has moved away
from traditional (government insured) bank deposits to more risky securities of one sort or another.

39

The behavior of the stock market

NASDAQ in Times Square, New York City.

From experience we know that investors may 'temporarily' move financial prices away from their long
term aggregate price 'trends'. (Positive or up trends are referred to as bull markets; negative or down
trends are referred to as bear markets.) Over-reactions may occurso that excessive optimism
(euphoria) may drive prices unduly high or excessive pessimism may drive prices unduly low.
Economists continue to debate whether financial markets are 'generally' efficient.
According to one interpretation of the efficient-market hypothesis (EMH), only changes in
fundamental factors, such as the outlook for margins, profits or dividends, ought to affect share prices
beyond the short term, where random 'noise' in the system may prevail. (But this largely theoretic
academic viewpointknown as 'hard' EMHalso predicts that little or no trading should take place,
contrary to fact, since prices are already at or near equilibrium, having priced in all public knowledge.)

40

The 'hard' efficient-market hypothesis is sorely tested by such events as the stock market crash in 1987,
when the Dow Jones index plummeted 22.6 percentthe largest-ever one-day fall in the United States.
This event demonstrated that share prices can fall dramatically even though, to this day, it is impossible
to fix a generally agreed upon definite cause: a thorough search failed to detect any 'reasonable'
development that might have accounted for the crash. (But note that such events are predicted to occur
strictly by chance, although very rarely.) It seems also to be the case more generally that many price
movements (beyond that which are predicted to occur 'randomly') are not occasioned by new
information; a study of the fifty largest one-day share price movements in the United States in the postwar period seems to confirm this.
However, a 'soft' EMH has emerged which does not require that prices remain at or near equilibrium,
but only that market participants not be able to systematically profit from any momentary market
'inefficiencies'. Moreover, while EMH predicts that all price movement (in the absence of change in
fundamental information) is random (i.e., non-trending), many studies have shown a marked tendency
for the stock market to trend over time periods of weeks or longer. Various explanations for such large
and apparently non-random price movements have been promulgated. For instance, some research has
shown that changes in estimated risk, and the use of certain strategies, such as stop-loss limits and
Value at Risk limits, theoretically could cause financial markets to overreact. But the best explanation
seems to be that the distribution of stock market prices is non-Gaussian (in which case EMH, in any of
its current forms, would not be strictly applicable).
Other research has shown that psychological factors may result in exaggerated (statistically anomalous)
stock price movements (contrary to EMH which assumes such behaviors 'cancel out'). Psychological
research has demonstrated that people are predisposed to 'seeing' patterns, and often will perceive a
pattern in what is, in fact, just noise. (Something like seeing familiar shapes in clouds or ink blots.) In
41

the present context this means that a succession of good news items about a company may lead
investors to overreact positively (unjustifiably driving the price up). A period of good returns also
boosts the investor's self-confidence, reducing his (psychological) risk threshold.
Another phenomenonalso from psychologythat works against an objective assessment is group
thinking. As social animals, it is not easy to stick to an opinion that differs markedly from that of a
majority of the group. An example with which one may be familiar is the reluctance to enter a
restaurant that is empty; people generally prefer to have their opinion validated by those of others in
the group.
In one paper the authors draw an analogy with gambling. In normal times the market behaves like a
game of roulette; the probabilities are known and largely independent of the investment decisions of
the different players. In times of market stress, however, the game becomes more like poker (herding
behavior takes over). The players now must give heavy weight to the psychology of other investors and
how they are likely to react psychologically.
The stock market, as with any other business, is quite unforgiving of amateurs. Inexperienced investors
rarely get the assistance and support they need. In the period running up to the 1987 crash, less than 1
percent of the analyst's recommendations had been to sell (and even during the 20002002 bear
market, the average did not rise above 5 %). In the run up to 2000, the media amplified the general
euphoria, with reports of rapidly rising share prices and the notion that large sums of money could be
quickly earned in the so-called new economy stock market. (And later amplified the gloom which
descended during the 20002002 bear market, so that by summer of 2002, predictions of a DOW
average below 5000 were quite common.)
Irrational behavior

42

Sometimes the market seems to react irrationally to economic or financial news, even if that news is
likely to have no real effect on the fundamental value of securities itself. But this may be more
apparent than real, since often such news has been anticipated, and a counter reaction may occur if the
news is better (or worse) than expected. Therefore, the stock market may be swayed in either direction
by press releases, rumors, euphoria and mass panic; but generally only briefly, as more experienced
investors (especially the hedge funds) quickly rally to take advantage of even the slightest, momentary
hysteria.
Over the short-term, stocks and other securities can be battered or buoyed by any number of fast
market-changing events, making the stock market behavior difficult to predict. Emotions can drive
prices up and down, people are generally not as rational as they think, and the reasons for buying and
selling are generally obscure. Behaviorists argue that investors often behave 'irrationally' when making
investment decisions thereby incorrectly pricing securities, which causes market inefficiencies, which,
in turn, are opportunities to make money. However, the whole notion of EMH is that these non-rational
reactions to information cancel out, leaving the prices of stocks rationally determined.
The Dow Jones Industrial Average biggest gain in one day was 936.42 points or 11 percent, this
occurred on October 13, 2008.
Crashes
Robert Shiller's plot of the S&P Composite Real Price Index, Earnings, Dividends, and Interest Rates,
from Irrational Exuberance, 2d ed. In the preface to this edition, Shiller warns, "The stock market has
not come down to historical levels: the price-earnings ratio as I define it in this book is still, at this
writing [2005], in the mid-20s, far higher than the historical average... People still place too much
confidence in the markets and have too strong a belief that paying attention to the gyrations in their

43

investments will someday make them rich, and so they do not make conservative preparations for
possible bad outcomes."
Price-Earnings ratios as a predictor of twenty-year returns based upon the plot by Robert Shiller . The
horizontal axis shows the real price-earnings ratio of the S&P Composite Stock Price Index as
computed in Irrational Exuberance (inflation adjusted price divided by the prior ten-year mean of
inflation-adjusted earnings). The vertical axis shows the geometric average real annual return on
investing in the S&P Composite Stock Price Index, reinvesting dividends, and selling twenty years
later. Data from different twenty year periods is color-coded as shown in the key. See also ten-year
returns. Shiller states that this plot "confirms that long-term investorsinvestors who commit their
money to an investment for ten full yearsdid do well when prices were low relative to earnings at the
beginning of the ten years. Long-term investors would be well advised, individually, to lower their
exposure to the stock market when it is high, as it has been recently, and get into the market when it is
low."
A stock market crash is often defined as a sharp dip in share prices of equities listed on the stock
exchanges. In parallel with various economic factors, a reason for stock market crashes is also due to
panic and investing public's loss of confidence. Often, stock market crashes end speculative economic
bubbles.
There have been famous stock market crashes that have ended in the loss of billions of dollars and
wealth destruction on a massive scale. An increasing number of people are involved in the stock
market, especially since the social security and retirement plans are being increasingly privatized and
linked to stocks and bonds and other elements of the market. There have been a number of famous
stock market crashes like the Wall Street Crash of 1929, the stock market crash of 19734, the Black
Monday of 1987, the Dot-com bubble of 2000, and the Stock Market Crash of 2008.

44

One of the most famous stock market crashes started October 24, 1929 on Black Thursday. The Dow
Jones Industrial lost 50 % during this stock market crash. It was the beginning of the Great Depression.
Another famous crash took place on October 19, 1987 Black Monday. The crash began in Hong
Kong and quickly spread around the world.
By the end of October, stock markets in Hong Kong had fallen 45.5 %%, Australia 41.8 %%, Spain
31 %%, the United Kingdom 26.4 %%, the United States 22.68 %%, and Canada 22.5 %%. Black
Monday itself was the largest one-day percentage decline in stock market history the Dow Jones fell
by 22.6 %% in a day. The names Black Monday and Black Tuesday are also used for October 28
29, 1929, which followed Terrible Thursdaythe starting day of the stock market crash in 1929.
The crash in 1987 raised some puzzlesmain news and events did not predict the catastrophe and
visible reasons for the collapse were not identified. This event raised questions about many important
assumptions of modern economics, namely, the theory of rational human conduct, the theory of market
equilibrium and the hypothesis of market efficiency. For some time after the crash, trading in stock
exchanges worldwide was halted, since the exchange computers did not perform well owing to
enormous quantity of trades being received at one time. This halt in trading allowed the Federal
Reserve system and central banks of other countries to take measures to control the spreading of
worldwide financial crisis. In the United States the SEC introduced several new measures of control
into the stock market in an attempt to prevent a re-occurrence of the events of Black Monday.
Computer systems were upgraded in the stock exchanges to handle larger trading volumes in a more
accurate and controlled manner. The SEC modified the margin requirements in an attempt to lower the
volatility of common stocks, stock options and the futures market. The New York Stock Exchange and
the Chicago Mercantile Exchange introduced the concept of a circuit breaker. The circuit breaker halts
trading if the Dow declines a prescribed number of points for a prescribed amount of time.
45

New York Stock Exchange (NYSE) circuit breakers

% drop
10 %% drop
10 %% drop
10 %% drop
20 %% drop
20 %% drop
20 %% drop
30 %% drop

time of drop
close trading for
before 2 pm
one hour halt
2 pm 2:30 pm
half-hour halt
after 2:30 pm
market stays open
before 1 pm
halt for two hours
1 pm 2 pm
halt for one hour
after 2 pm
close for the day
any time during day close for the day

46

Stock market index

The movements of the prices in a market or section of a market are captured in price indices called
stock market indices, of which there are many, e.g., the S&P, the FTSE and the Euronext indices. Such
indices are usually market capitalization weighted, with the weights reflecting the contribution of the
stock to the index. The constituents of the index are reviewed frequently to include/exclude stocks in
order to reflect the changing business environment.
Derivative instruments
Financial innovation has brought many new financial instruments whose pay-offs or values depend on
the prices of stocks. Some examples are exchange-traded funds (ETFs), stock index and stock options,
equity swaps, single-stock futures, and stock index futures. These last two may be traded on futures
exchanges (which are distinct from stock exchangestheir history traces back to commodities futures
exchanges), or traded over-the-counter. As all of these products are only derived from stocks, they are
sometimes considered to be traded in a (hypothetical) derivatives market, rather than the (hypothetical)
stock market.
Leveraged strategies
Stock that a trader does not actually own may be traded using short selling; margin buying may be used
to purchase stock with borrowed funds; or, derivatives may be used to control large blocks of stocks for
a much smaller amount of money than would be required by outright purchase or sales.
Short selling
In short selling, the trader borrows stock (usually from his brokerage which holds its clients' shares or
its own shares on account to lend to short sellers) then sells it on the market, hoping for the price to
47

fall. The trader eventually buys back the stock, making money if the price fell in the meantime and
losing money if it rose. Exiting a short position by buying back the stock is called "covering a short
position." This strategy may also be used by unscrupulous traders in illiquid or thinly traded markets to
artificially lower the price of a stock. Hence most markets either prevent short selling or place
restrictions on when and how a short sale can occur. The practice of naked shorting is illegal in most
(but not all) stock markets.
Margin buying
In margin buying, the trader borrows money (at interest) to buy a stock and hopes for it to rise. Most
industrialized countries have regulations that require that if the borrowing is based on collateral from
other stocks the trader owns outright, it can be a maximum of a certain percentage of those other
stocks' value. In the United States, the margin requirements have been 50 % for many years (that is, if
you want to make a $1000 investment, you need to put up $500, and there is often a maintenance
margin below the $500).
A margin call is made if the total value of the investor's account cannot support the loss of the trade.
(Upon a decline in the value of the margined securities additional funds may be required to maintain
the account's equity, and with or without notice the margined security or any others within the account
may be sold by the brokerage to protect its loan position. The investor is responsible for any shortfall
following such forced sales.)
Regulation of margin requirements (by the Federal Reserve) was implemented after the Crash of 1929.
Before that, speculators typically only needed to put up as little as 10 percent (or even less) of the total
investment represented by the stocks purchased. Other rules may include the prohibition of free-riding:
putting in an order to buy stocks without paying initially (there is normally a three-day grace period for
delivery of the stock), but then selling them (before the three-days are up) and using part of the
48

proceeds to make the original payment (assuming that the value of the stocks has not declined in the
interim).
New issuance
Global issuance of equity and equity-related instruments totaled $505 billion in 2004, a 29.8 %
increase over the $389 billion raised in 2003. Initial public offerings (IPOs) by US issuers increased
221 % with 233 offerings that raised $45 billion, and IPOs in Europe, Middle East and Africa (EMEA)
increased by 333 %, from $ 9 billion to $39 billion.
Investment strategies
One of the many things people always want to know about the stock market is, "How do I make money
investing?" There are many different approaches; two basic methods are classified as either
fundamental analysis or technical analysis. Fundamental analysis refers to analyzing companies by
their financial statements found in SEC Filings, business trends, general economic conditions, etc.
Technical analysis studies price actions in markets through the use of charts and quantitative
techniques to attempt to forecast price trends regardless of the company's financial prospects. One
example of a technical strategy is the Trend following method, used by John W. Henry and Ed Seykota,
which uses price patterns, utilizes strict money management and is also rooted in risk control and
diversification.
Additionally, many choose to invest via the index method. In this method, one holds a weighted or
unweighted portfolio consisting of the entire stock market or some segment of the stock market (such
as the S&P 500 or Wilshire 5000). The principal aim of this strategy is to maximize diversification,
minimize taxes from too frequent trading, and ride the general trend of the stock market (which, in the
U.S., has averaged nearly 10 %/year, compounded annually, since World War II).

49

Taxation
According to much national or state legislation, a large array of fiscal obligations are taxed for capital
gains. Taxes are charged by the state over the transactions, dividends and capital gains on the stock
market, in particular in the stock exchanges. However, these fiscal obligations may vary from
jurisdictions to jurisdictions because, among other reasons, it could be assumed that taxation is already
incorporated into the stock price through the different taxes companies pay to the state, or that tax free
stock market operations are useful to boost economic growth.

50

Share trading
A Share trading is the aggregation of buyers and sellers (a loose network of economic transactions,
not

physical

facility

or

discrete

entity)

of stocks (also

called

shares);

these

may

include securities listed on a stock exchange as well as those only traded privately.
Size of market
At the close of 2012, the size of the world Share trading(total market capitalisation) was about US$55
trillion. By country, the largest market was the United States (about 34%), followed by Japan (about
6%) and the United Kingdom (about 6%). This went up more in 2013.
Stock exchanges
A stock exchange is a place to trade stocks. Companies may want to get their stock listed on a stock
exchange. Other stocks may be traded "over the counter", that is, through a dealer. A large company
will usually have its stock listed on many exchanges across the world.
Exchanges may also cover other types of security such as fixed interest securities or indeed derivatives.
Trade
Trade in stock markets means the transfer for money of a stock or security from a seller to a buyer. This
requires these two parties to agree on a price. Equities (stocks or shares) confer an ownership interest
in a particular company.
Participants in the Share trading range from small individual stock investors to large traders investors,
who can be based anywhere in the world, and may include banks, insurance companies or pension
funds, and hedge funds. Their buy or sell orders may be executed on their behalf by a stock exchange
trader.

51

Some exchanges are physical locations where transactions are carried out on a trading floor, by a
method known as open outcry. This method is used in some stock exchanges and commodity
exchanges, and involves traders entering oral bids and offers simultaneously. An example of such an
exchange is the New York Stock Exchange. The other type of stock exchange is a virtual kind,
composed of a network of computers where trades are made electronically by traders. An example of
such an exchange is the NASDAQ.
A potential buyer bids a specific price for a stock, and a potential seller asks a specific price for the
same stock. Buying or selling at market means you will accept any ask price or bid price for the stock,
respectively. When the bid and ask prices match, a sale takes place, on a first-come-first-served basis if
there are multiple bidders or askers at a given price.
The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers,
thus providing a market place (virtual or real). The exchanges provide real-time trading information on
the listed securities, facilitating price discovery.
The New York Stock Exchange (NYSE) is a physical exchange, with a hybrid market for placing
orders both electronically and manually on the trading floor. Orders executed on the trading floor enter
by way of exchange members and flow down to a floor broker, who goes to the floor trading
post specialist for that stock to trade the order. The specialist's job is to match buy and sell orders using
open outcry. If a spread exists, no trade immediately takes placein this case the specialist should use
his/her own resources (money or stock) to close the difference after his/her judged time. Once a trade
has been made the details are reported on the "tape" and sent back to the brokerage firm, which then
notifies the investor who placed the order. Although there is a significant amount of human contact in
this process, computers play an important role, especially for so-called "program trading".
The NASDAQ is a virtual listed exchange, where all of the trading is done over a computer network.
The process is similar to the New York Stock Exchange. However, buyers and sellers are electronically
52

matched. One or more NASDAQ market makers will always provide a bid and ask price at which they
will always purchase or sell 'their' stock.
The Paris Bourse, now part of Euronext, is an order-driven, electronic stock exchange. It was
automated

in the

late

1980s. Prior to the

1980s, it

consisted

of an open outcry

exchange. Stockbrokers met on the trading floor or the Palais Brongniart. In 1986, the CATS trading
system was introduced, and the order matching process was fully automated.
In some cases, active trading (especially in large blocks of securities) has tended to move away from
the 'active' exchanges. Securities firms, led by UBS AG, Goldman Sachs Group Inc. and Credit Suisse
Group, already steer 12% of U.S. security trades away from the exchanges to their internal systems.
That share probably will increase to 18 percent by 2010 as more investment banks bypass the NYSE
and NASDAQ and pair buyers and sellers of securities themselves, according to data compiled by
Boston-based Aite Group LLC, a brokerage-industry consultant.
Now that computers have eliminated the need for trading floors like the NYSE's "The Big Board", the
balance of power inequity markets is shifting. By bringing more orders in-house, where clients can
move big blocks of stock anonymously, brokers pay the exchanges less in fees and capture a bigger
share of the US $11 billion a year that institutional investors pay in trading commissions.

53

DEMAT (DEMATERIALIZED TRADING)

Indian investor community has undergone sea changes in the past few years. India now has a very large
investor population and ever increasing volumes of trades. However, this continuous growth in
activities has also increased problems associated with stock trading. Most of these problems arise due
to the intrinsic nature of paper based trading and settlement, like theft or loss of share certificates. This
system requires handling of huge volumes of paper leading to increased costs and inefficiencies. Risk
exposure of the investor due to this trading in paper.
Some of these risks are:
6. Delay in transfer of shares.
7. Possibility of forgery on various documents leading to bad deliveries, legal disputes etc.
8. Possibility of theft of share certificates in the market.
9. Multiplication or loss of share certificates in transit.
10. Prevalence of fake certificates in the market.
The physical from of holding and trading in securities also acts as a bottleneck for broking
community in capital market operations.
The introduction of NSE and BOLT has increased the reach of capital market manifolds. The increase
in number of investors participating in the capital market has increased the possibility of being hit by a
bad delivery. The cost and time spent by the brokers for rectification of these bad deliveries tends to be
higher with the geographical spread of the clients. The increase in trade volumes lead to exponential
rise in the back office operations thus limiting the growth potential of the broking members. The
54

inconvenience faced by investors (in areas that are far flung and away from the main metros) in
settlement of trade also limits the opportunity for such investors, especially in participating in auction
trading. This has made the investors as well as broker wary of Indian capital market. In this scenario,
Dematerialized trading is certainly a welcome move.
What is Dematerialization?
Dematerialization or DEMAT is a process whereby your securities like shares, debentures etc, are
converted into electronic data and stored in computers by a Depository. Securities registered in your
name are surrendered to depository participant (DP) and these are sent to the respective companies who
will cancel them after Dematerialization and credit your depository account with the DP. The
securities on Dematerialization appear as balances in your depository account. These balances are
transferable like physical shares. If at a later date, you wish to have these DEMAT securities
converted back into paper certificates; the Depository helps you to do this.
Dematerialization is the process of converting the securities held in physical form (certificates) to an
equivalent number of securities in electronic form and crediting the same to the investors DEMAT
account. Dematerialized securities do not have any certificate numbers or distinctive numbers and are
dealt only in quantity i.e.; the securities are fungible.
Dematerialization of your holdings is not mandatory. You can hold your securities either in DEMAT
form or in physical form. You can also keep part of your holdings (in the same scrip) in DEMAT form
& part in physical form. However, securities specified by SEBI can be delivered only in DEMAT form
in the stock exchanges connected to NSDL and / or CDSL.
What is Depository?

55

Depository functions like a securities bank, where the Dematerialized physical securities are traded and
held in custody. This facilitates faster, risk free and low cost settlement. Depository is much like a bank
and performs many activities that are similar to a bank. Following table compares the two.

Bank

Depository

Holds funds in accounts

Holds securities in account

Transfers funds between accounts

Transfers securities between accounts

Transfers without handling money

Transfers without handling securities

Safekeeping of money

Safekeeping of securities

NSDL and CDSL

At present there are two depositories in India, National Securities Depository Limited (NSDL) and
Central Depository Services Limited (CDSL). NSDL is the first Indian depository; it was inaugurated
in November 1996. NSDL was set up with an initial capital of US$28mn, promoted by Industrial
Development Bank of India (IDBI), Unit Trust of India (UTI) and National Stock Exchange of India
Ltd. (NSEIL). Later, State Bank of India (SBI) also became a shareholder.
The other depository is Central Depository Services (CDS). It is still in the process of linking with the
stock exchanges. It has registered around 20 DPs and has signed up with 40 companies. It had received
a certificate of commencement of business from SEBI on February 8, 1999.
These depositories have appointed different Depository Participants (DP) for them. An investor can
open an account with any of the depositories DP. But transfers arising out of trades on the stock
exchanges can take place only amongst account-holders with NSDLs DPs. This is because only NSDL

56

is linked to the stock exchanges (nine of them including the main ones-National Stock Exchange and
Bombay Stock Exchange).
In order to facilitate transfers between investors having accounts in the two existing depositories in the
country the Securities and Exchange Board of India has asked all stock exchanges to link up with the
depositories. SEBI has also directed the companies registrar and transfer agents to effect change of
registered ownership in its books within two hours of receiving a transfer request from the depositories.
Once connected to both the depositories the stock exchanges have also to ensure that inter-depository
transfers take place smoothly. It also involves the two depositories connecting with each other. The
NSDL and CDSL have signed an agreement for inter-depository connectivity.
What is a DP?
A depository is like a bank where securities are held in electronic (Dematerialized) form. In India, there
are two Depositories National securities Depositories Limited (NSDL) and Central Depository
Services Limited (CSDL).
Under the Depositories Act, investors can avail of the services of the Depositories through Depository
Participants (DP) . DPs are like bank branches wherein shares in physical form need to be deposited
for converting the same to electronic (DEMAT) form.
NSDL carries out its activities through various functionaries called business partners who include
Depository Participants (DPs), issuing corporate and their Registrars and Transfer Agents, Clearing
corporations/Clearing Houses etc. NSDL is electronically linked to each of these business partners via
a satellite link through Very Small Aperture Terminals (VSATs). The entire integrated system
(including the VSAT linkups and the software at NSDL and each business partners end) has been
named as the NEST [National Electronic Settlement & Transfer] system.

57

The investor interacts with the depository through a depository participant of NSDL. A DP can be a
bank, financial institution, a custodian or a broker.
Just as one opens a bank account in order to avail of the services of a bank, an investor opens a
depository account with a depository participant in order to avail of depository facilities.
SAVINGS
Trading in Dematerialized shares results in substantial savings for the investors. Following tables gives
an idea about these savings.
Savings for a person who buy shares for long term investment
(On a purchase of Rs10000)

Item

Physical (Rs)

Depository (DEMAT) (RS)

Savings (Rs)

75-100

50-75

25-50

50

50

Postal Charges

10-30

10-30

Company Objection (courier etc.)

10-30

10-30

Settlement charges

5-10

-(5-10)

#Custody (5 years)

10-50

-(10-50)

Brokerage
*Stamp Duty

Total

35-100

58

* Stamp duty of 0.5%

# Custody charge of 0.05%- 0.1%
Savings for an investor who sells Dematerialized shares
(For a sale of Rs10000)

Item

Physical (Rs)

Depository (DEMAT) (Rs)

Savings (Rs)

*Brokerage

75-100

50-75

25-50

Company Objection (courier, etc.)

10-30

10-30

-(5-10)

-(5-10)

Settlement charges
Total

25-75
Many brokers offer reduced brokerage for selling of Dematerialized securities since they will
not have the fear of bad delivery

Savings for a trader who buys and sells very often.

(For a trader who turns over his portfolio of Rs10000 ten times in a year.)

Item
Brokerage
Settlement charges

Physical (Rs)

Depository (DEMAT) (Rs)

Savings (Rs)

750-1000

500-750

250-500

50-100

-(50-100)

59

Custody (5 years)

2-10

Total

-(2-10)
140-390

* Many brokers offer reduced brokerage for sell of Dematerialized securities since they would not have
fear of bad delivery.
BANK ACCOUNTS
How to open a bank account with a DP
Opening a depository account is as simple as opening a bank account. You can open a depository
account with any DP convenient to you.
To open an account you have to:

Fill up the account opening form, which is available with the DP.

Sign the DP-client agreement, which defines the rights and duties of the DP and the person
wishing to open the account.

Receive your client account number (client ID).

This client ID along with your DP ID gives you a unique identification in the depository
system.

There is no restriction on the number of depository accounts a person can open. However, if your
existing physical shares are in joint names, you have to open the account in the same order of names
before you submit your share certificates for DEMAT. A sole holder of the share certificates cannot add
more names as joint holders at the time of Dematerializing his share certificates.
60

However, if the investor wants to transfer the ownership from his individual name to a joint name, he
should first open an account as the sole holder (account A) and Dematerialize the share certificates. He
should then open another depository account (account B) in which he is the first holder and the other
person is the second holder and make an off market transfer of the shares from the account A to
account B. The investor will incur a charge on this transaction. Alternatively, the certificates can be
transferred to the joint ownership and then sent for Dematerialization.
Right now, as per the Companies Act, there is no nomination facility for shares (whether in the physical
or in the electronic form). The nomination facility for shares can be availed of only when the relevant
provisions in the Companies Act are amended. NSDL captures the details of the nominee when the
account is opened so as to offer the facility as soon as the relevant amendments are effected in the Law.
A client can choose to open more than one account with same DP. In addition to this, he has a choice of
opening accounts with more than one DP. However a broker can open just one Clearing Member
account per card/ stock exchange for clearing purpose, but he can still open multiple beneficiary
accounts Beneficiary is the personal account wherein brokers can keep their personal holdings.
A broker has only one Clearing Member-pool-account. One Clearing Member pool account is opened
per card/ stock exchange to settle trades in the Dematerialized form. The Clearing Corporation/ House
just deals with one designated account for pay-in and payout and the broker's clients know to which
account they have to deliver and receive securities from.
A clearing member cannot hold his personal holdings in his clearing member account. A broker may
deal in the depository system as a clearing member only through a special account, known as the
Clearing Member account. This account can be used only for clearing purposes and not for holding his
own securities in it. As this is a transitory account, the securities held in this account are not eligible for

61

corporate actions. Therefore, the broker will have to open a separate beneficiary owner account to hold
his investments.
There is no compulsion for the client to open his account with the same DP as that of his broker. Even
if he has an account with another DP, he can carry out normal business with his broker. There is no loss
in operational efficiency. But it is possible that opening account with his broker's DP may work out to
his advantage, as some DPs may offer special charge structure if the broker and his clients are dealing
through him.
How to choose a DP
Following are the few aspects that you should consider before choosing a DP:
1. Branch-level service.
Most DPs offer depository services from their main branch as well as through other branches and
franchisees. Higher the number of branches your DP has, (which offer depository services) greater will
be the geographical convenience you will have.
Recently Department of Telecommunications has allowed the DPs (only bank-DPs at present) to
connect their entire internal network to NSDL. The NSDL is making changes in its software for DPs to
meet the conditions. After it is done DPs will be able to execute your instructions directly at the branch
level thus saving time and improving efficiency. So check before opening an account whether your DP
(if it is a bank-DP) intends to interconnect its branch network with that of NSDL. Before opening an
account with a DP you should also check whether the DP is offering all the services through its
branches.

62

DPs mandate a time limit for submission of debit instructions before settlement pay-in time. It should
be checked whether the time limit applies equally to all the branches (or franchisees) of the DP or
whether it varies.

63

Backup facilities
Having an adequate backup system is extremely necessary for a DP. In case of a system failure all the
data could be lost if backup facilities are not present. Although depositories too have the data with
them but a strong system with your DP ensures no risks and hassles.
So before opening an account get details from your DP about its computer system's technical
specifications and backup facilities.
Safe procedures
Your securities account can get debited only if you submit to your DP a duly filled and signed 'delivery
instruction' (debit instruction) form (separate for market trades and off-market transfers) that authorizes
the DP to debit your account. You will execute this form only when you have sold shares. But you
could have worries that someone else can forge your signature on such a form, which your DP will not
be able to detect, and your account will get debited .To get rid of these worries you should check that
delivery instruction form book that you get from your DP must be serial-numbered with numbers
unique to your account and recorded in the DP's system.
Whenever there is a debit or credit in an a/c the DP is supposed to send a transaction statement and a
holding statement to the investors within a fortnight. In case there have been no transactions they
generate just a holding statement every quarter. So check for the statements regularly since all DPs are
not very punctual about sending transaction and holding statements. These statements will ensure that
youre a/c is proper.
There is an additional safety feature available with the DPs. You can freeze your account on the debit
side if you do not want to sell the shares from your account, this will ensure that no debit is done in
your account. Your account will continue to receive credits arising from fresh purchases but no debit
64

will be permitted. A special form that you can get from the DP is executed that instructs your DP to
freeze your account (only for the debit side or completely). When you want to sell your shares you can
execute the same form to unlock your account.
Consumer Service
DPs should have adequate Consumer service facilities. This is one of the most important aspects while
deciding your DP. At some time or other you will need some information on your account. Your DP
should be able to provide you quick service, so check whether your DP has a dedicated Consumer
service department.
If you are not happy with the service, you get from your DP or you are not sure that your shares will be
safe you should not think twice of taking your shares to another DP.
TRADING A/C
Trading in Dematerialized securities is quite similar to trading in physical securities. The major
difference is that at the time of settlement, instead of delivery/ receipt of securities in the physical form,
it is done through account transfer.
An investor cannot trade in Dematerialized securities through his DP. Trading at the stock exchanges
can be done only through a registered trading member (broker) of the stock exchange irrespective of
whether the securities are held in physical or Dematerialized form. DPs role will only be to facilitate
settlement of trade in the Dematerialized form, by transferring securities from and to the account of the
investor, for selling and buying respectively.
Trading in Dematerialized securities is presently available at NSE, BSE, CSE, DSE, LSE, MSE, ISE &
OTCEI. These exchanges have a segment exclusive for trading in Dematerialized securities and a
segment where trades could be settled either in the physical or in the Dematerialized form as per the
65

choice of the delivering client. In unified (erstwhile - physical) segment securities can be delivered
either in the physical form or in the Dematerialized form at the choice of the delivering party.
However, securities that have to be mandatorily settled in DEMAT form (both by institutional investors
& all category of investors) cannot be settled in physical form. Also for securities that have to be
mandatorily settled in DEMAT form by all categories of investors the concept of market lot is
eliminated in the tradable lot is one share from the date they become compulsory.
SETTLEMENT
The settlement of trades in the stock exchanges is undertaken by the clearing corporation (CC)/
clearing house(CH) of the corresponding stock exchanges. While the settlement of Dematerialized
securities is effected through depository, the funds settlement is effected through the clearing banks.
The clearing members directly with the CC/ CH settle the physical securities.
Exclusive DEMAT segment follows rolling settlement (T+5) cycle and the unified (erstwhile physical) segment follows account period settlement cycle. In case of rolling settlement cycle, the
account period is reduced to one day.

In case of settlement of trades done in exclusive DEMAT segments, the pay-in and pay out of
funds and securities are affected on the same day afternoon and evening (same day) thus
reducing the blockage of funds and limiting exposure to the clearing corporation.

Settlement of funds is effected through the clearing banks and depository plays no role in this.

Settlement of securities is effected through NSDL depository system.

Clearing and settlement of the regular market trades is affected through the clearing members
of the clearing houses of respective stock exchanges. All trading members of stock exchanges
66

are clearing members of clearing houses. In addition, for settlement of institutional trades,
custodians are also allowed to act as clearing members.

Clearing members of clearing house, dealing in Dematerialized securities are expected to open
a clearing account with any DP for the purpose of settling trades in Dematerialized securities.
As, in the mixed (unified) segment, there is a possibility for all clearing members to receive
Dematerialized securities, they are expected to open clearing accounts.

If there is any short delivery at the time of pay-in of securities, these short positions are
auctioned in the DEMAT segment as done in the Unified (erstwhile-physical) segment.

For trades executed on Wednesday (TD 1):

Final/ Net obligation statement download - Friday (T+2nd working day)

Settlement day (SD 1) in pay in and pay out of funds and securities - next Wednesday (T+5th
working day)

Auction trade day (ATD 1) - next Thursday (T+6th working day)

Auction settlement day (ASD 1) - Monday (2nd working day from auction trade day ie T+8th
working day)

Similarly, for trades executed on Thursday (TD 2):

Final/ Net obligation statement download - Monday (T+2nd working day)

Settlement day (SD 2) - next Thursday (T+5th working day)

Auction trade day (ATD 2) - next Friday (T+6th working day)

67

Auction settlement day (ASD 2) - Tuesday (2nd working day from auction trade day ie T+8th
working day)

CHARGES
NSDL Charges for DPs
NSDL does not charge the investor directly but charges its DPs, who are free to charge their clients.
NSDL charges its DPs under the following heads:
1: Transaction Fees :
1. Market Trade :
Sale

- nil;

Purchase - 5 basis points (i.e. 0.05% of the value of net receipts to a clearing members account)
2. Off Market Trade:
Sale

- nil;

Purchase - 10 basis points (i.e. 0.1% of value of securities).

Custody Fees :
3.5

basis points p.a.(i.e. 0.035% p.a. of average value of securities)

68

COMPETITORS PROFILE

69

COMPANY PROFILE

Ventura Securities Ltd. (Ventura) commenced operations in 1994 as a stock broking house. Over the
past two decades, we have grown into a group of companies that provides a complete array of financial
products and services.
Through a large network of sub-brokers, we offer our clients the opportunity to invest and trade in
equity and equity derivatives, commodities, mutual funds, fixed income products and currency futures.
We also directly facilitate clients who wish to trade in equity online via our in-house, customized and
ready to use software Pointer which enables seamless processes and flawless execution. We adhere
to a well-defined risk management system and settlement mechanism thereby conducting fully
compliant operations.
Beyond investment avenues, the Ventura Group is constantly committed to providing investors with
access to timely and relevant research and data to ensure an informed and fruitful investment
experience.
Ventura Securities Ltd. (Ventura) commenced operations in 1994 as a stock broking house. Over the
past two decades, we have grown into a group of companies that provides a complete array of financial
products and services.
Through a large network of sub-brokers, we offer our clients the opportunity to invest and trade in
equity and equity derivatives, commodities, mutual funds, fixed income products and currency futures.

70

The Ventura Credo :

Building and valuing true partnerships
When it comes to our business partners, we see our success reflected in their progress. We have
facilitated them all the way with technology and marketing strategies and in turn have been rewarded
with their performance and loyalty.
'Think and it's there' approach
We envisage all our clients' diverse needs - ranging from financial planning to wealth management well in advance and provide them with resources, tools and solutions to fulfill them.
Constant innovation
Change for the better has become a way of life at Ventura. Innovations have always been customer
centric which has been amply reflected in the upgradation of systems to facilitate our network partners.
Team Ventura
Our dedicated and well trained people represent the pillar of strength and success at Ventura. Each of
our members has internalized our mission and are constantly striving to build on it.
Ventura spirit :
It is this spirit of "rising above oneself ", which we at Ventura have internalized since our inception in
order to deliver excellence to our clients.
When we conceive customer-centric solutions...
In the rationale behind our choice of technology and platforms...

71

When we plan our networking strategies...

In our risk management systems...
When we share our ideals with fellow workers in the organisation...
In our approach to problem solving...
...Ventura lives this spirit

72

BOARD OF DIRECTORS

Sajid Malik Co-promoter of Ventura and Director A chartered accountant by qualification, Sajid Malik
is also the Promoter and Managing Director of Genesys International, a company with focus on GIS
mapping and engineering designing services, listed on the NSE and BSE.

Hemant Majethia Co-promoter of Ventura, CEO and Director With over 2 decades of experience in
capital market intermediation and equity research Hemant Majethia is well connected and respected in
market circles for his technocratic approach to stock broking. He is a chartered accountant by
qualification and has been instrumental in the development of the online platform "POINTER".

Juzer Gabajiwala Director A member of the Institute of Chartered Accountants of India and The
Institute of Company Secretaries of India, heads the HR and operations functions at Ventura. He
initiated the launch of the alternate products platforms for mutual fund distribution and insurance. He
also spearheaded the wealth management and NRI cell. Prior to joining Ventura, has been associated
with the IIT group and the TATA group.

Our Mission
To build true relationships and strive towards customer delight, through constant innovation on a strong
foundation of dedicated and trained resources.

Partnership Commitment

73

We value our association with our Business Partners as they have been, and will be, the key drivers of
Venturas success. We are committed to enabling them to flourish through constant support by
providing them with business and product development enablers and trainings. We ensure that a
complete universe of financial products is made available to our franchisees and thereby enable them to
become financial supermarkets.

Partnership models
Ideal for
Entrepreneurs who have a flair for financial products and wish to run their own Franchisee outlet.
Practicing Accountants, Insurance Advisors and Financial Planners who are looking to channelize their
client's investments in an organized manner.
Business Focus
Large scale client servicing
Channelizing existing client's investments
Products
Equities, Commodities, Currency, Mutual Funds, Bonds & Corporate FD's, You may partner with us
for any combination of products.

SUBMIT

KARVY STOCK BROKING

74

KARVY Stock Broking Limited, one of the cornerstones of the KARVY edifice, flows freely towards
attaining diverse goals of the Consumer through varied services. It creates a plethora of opportunities
for the Consumer by opening up investment vistas backed by research-based advisory services. Here,
growth knows no limits and success recognizes no boundaries. Helping the Consumer create waves in
his portfolio and empowering the investor completely is the ultimate goal. KARVY Stock Broking
Limited is a member of: 1) National Stock Exchange (NSE) , 2) Bombay Stock Exchange (BSE), 3)
MCX Stock Exchange(MCX-SX)
Member - National Stock Exchange (NSE) and The Bombay Stock Exchange (BSE).
Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards
attaining diverse goals of the Consumer through varied services. Creating a plethora of opportunities
for the Consumer by opening up investment vistas backed by research-based advisory services. Here,
growth knows no limits and success recognizes no boundaries. Helping the Consumer create waves in
his portfolio and empowering the investor completely is the ultimate goal.

75

PRODUCT RANGE
Stock Broking Services
It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate as a
wealth management and wealth accumulation option. The difference between unpredictability and a
safety anchor in the market is provided by in-depth knowledge of market functioning and changing
trends, planning with foresight and choosing one's options with care. This is what we provide in our
Stock Broking services.
We offer services that are beyond just a medium for buying and selling stocks and shares. Instead we
provide services which are multi dimensional and multi-focused in their scope. There are several
advantages in utilizing our Stock Broking services, which are the reasons why it is one of the best in
the country.
We offer trading on a vast platform National Stock Exchange and Bombay Stock Exchange. More
importantly, we make trading safe to the maximum possible extent, by accounting for several risk
factors and planning accordingly. We are assisted in this task by our in-depth research, constant
feedback and sound advisory facilities. Our highly skilled research team, comprising of technical
analysts as well as fundamental specialists, secure result-oriented information on market trends, market
analysis and market predictions.This crucial information is given as a constant feedback to our
Consumers, through the following daily reports which are delivered to them thrice a day;

The Pre-session Report, where market scenario for the day is predicted

The Mid-session Report, timed to arrive during lunch break , where the market forecast for the
rest of the day is given and

76

The Post-session Report, the final report for the day, where the market and the report itself is
reviewed.

To add to this repository of information, we publish a monthly magazine called KARVY The Finapolis
which analyzes the latest stock market trends and takes a close look at the various investment options,
and products available in the market, while a weekly report, called KARVY Bazaar Baatein, keeps you
more informed on the immediate trends in the stock market. In addition, our specific industry reports
give comprehensive information on various industries. Besides this, we also offer special portfolio
analysis packages that provide daily technical advice on scrips for successful portfolio management
and provide customized advisory services to help you make the right financial moves that are
specifically suited to your portfolio.
Our Stock Broking services are widely networked across India, with the number of our trading
terminals providing retail stock broking facilities. Our services have increasingly offered Consumer
oriented convenience, which we provide to a spectrum of investors, high-net worth or otherwise, with
equal dedication and competence.
But true to our spirit, this success is not our final destination, but just a platform to launch further
enhanced quality services to provide you the latest in convenient, Consumer-friendly stock
management.
Over the years we have ensured that the trust of our Consumers is our biggest returns. Factors such as
our success in the Electronic custody business has helped build on our tradition of trust even more.
Consequentially our retail client base expanded very fast.

77

To empower the investor further we have made serious efforts to ensure that our research calls are
disseminated systematically to all our stock broking clients through various delivery channels like
email, chat, SMS, phone calls etc.
Our foray into commodities broking has been path breaking and we are in the process of converting
existing traders in commodities into the more organized mainstream of trading in commodity futures,
both as a trading and risk hedging mechanism.
In the future, our focus will be on the emerging businesses and to meet this objective, we have
enhanced our manpower and revitalized our knowledge base with enhances focus on Futures and
Options as well as the commodities business.

Depository Participants
The onset of the technology revolution in financial services Industry saw the emergence of Karvy as an
electronic custodian registered with National Securities Depository Ltd (NSDL) and Central
Securities Depository Ltd (CSDL) in 1998. Karvy set standards enabling further comfort to the
investor by promoting paperless trading across the country and emerged as the top 3 Depository
Participants in the country in terms of Consumer serviced.
Offering a wide trading platform with a dual membership at both NSDL and CDSL, we are a powerful
medium for trading and settlement of Dematerialized shares. We have established live DPMs, Internet
access to accounts and an easier transaction process in order to offer more convenience to individual
and corporate investors. A team of professional and the latest technological expertise allocated
exclusively to our DEMAT division including technological enhancements like SPEED-e, make our

78

response time quick and our delivery impeccable. A wide national network makes our efficiencies
accessible to all.
Distribution of Financial Products
The paradigm shift from pure selling to knowledge based selling drives the business today. With our
wide portfolio offerings, we occupy all segments in the retail financial services industry.
A 1600 team of highly qualified and dedicated professionals drawn from the best of academic and
professional backgrounds are committed to maintaining high levels of client service delivery. This has
propelled us to a position among the top distributors for equity and debt issues with an estimated
market share of 15% in terms of applications mobilized, besides being established as the leading
procurer in all public issues.
To further tap the immense growth potential in the capital markets we enhanced the scope of our retail
brand, Karvy - the Finapolis , thereby providing planning and advisory services to the mass affluent.
Here we understand the Consumer needs and lifestyle in the context of present earnings and provide
adequate advisory services that will necessarily help in creating wealth. Judicious planning that is
customized to meet the future needs of the Consumer deliver a service that is exemplary. The marketsavvy and the ignorant investors, both find this service very satisfactory. The edge that we have over
competition is our portfolio of offerings and our professional expertise. The investment planning for
each Consumer is done with an unbiased attitude so that the service is truly customized.
Our monthly magazine, Finapolis, provides up-dated market information on market trends, investment
options, opinions etc. Thus empowering the investor to base every financial move on rational thought
and prudent analysis and embark on the path to wealth creation.
Advisory Services
79

Under our retail brand "Karvy the Finapolis", we deliver advisory services to a cross-section of
Consumers. The service is backed by a team of dedicated and expert professionals with varied
experience and background in handling investment portfolios. They are continually engaged in
designing the right investment portfolio for each Consumer according to individual needs and budget
considerations with a comprehensive support system that focuses on trading Consumers' portfolios and
providing valuable inputs, monitoring and managing the portfolio through varied technological
initiatives. This is made possible by the expertise we have gained in the business over the years.
Another venture towards being investor-friendly is the circulation of a monthly magazine called
"Karvy - the Finapolis". Covering the latest of market news, trends, investment schemes and researchbased opinions from experts in various financial fields.
Private Client Group
This specialized division was set up to cater to the high net worth individuals and institutional clients
keeping in mind that they require a different kind of financial planning and management that will
augment not just existing finances but their life-style as well. Here we follow a hard-nosed business
approach with the soft touch of dedicated Consumer care and personalized attention.
For this purpose we offer a comprehensive and personalized service that encompasses planning and
protection of finances, planning of business needs and retirement needs and a host of other services, all
provided on a one-to-one basis.
Our research reports have been widely appreciated by this segment. The delivery and support modules
have been fine tuned by giving our clients access to online portfolio information, constant updates on
their portfolios as well as value-added advise on portfolio churning, sector switches etc. The
investment recommendations given by our research team in the cash market has enjoyed a high success
rate.
80

VISION AND MISSION

Vision
To be a leading loans provider delivering superior value to all stakeholders.

Mission
To be a loans provider focused on a friendly, fast, and balanced lending philosophy enabled through
strong Consumer advocacy, innovative distribution, superior risk profiling and robust processes.
81

82

Compare Ventura Securities Ltd vs Karvy Stock Broking

Broker Overview

Ventura Securities Ltd

Karvy Stock Broking

Ventura Securities is known for its simplicity with

basic site design nothing much fancy. The Broker
has maintained a pleasant customer service, user
friendly trading software and powerful research desk
all efforts towards gaining the portfolios of
m...

KSBL is one of the largest stock

broking houses in India offering
services in stock broking,
depository participant, distribution
of financial products, advisory and
private client group. The Broker is
well known for its leading edge
advice and high ...

Full Service Broker

Full Service Broker

BSE, NSE, MCX

NSE,BSE,MCX-SX,MCX,NCDEX

Broker Type

Exchanges Supported

Broker Enquiry

Account Opening Charges and AMC

Trading Account
Opening Fees

Ventura Securities Ltd

Karvy Stock Broking

Rs 450 (Trading + DEMAT

Account)

Free

83

Ventura Securities Ltd

Karvy Stock Broking

Trading AMC

NIL

Free

DEMAT Account Opening

Fees

NIL

Free

DEMAT AMC

Free

Rs 500

Own DP Service

Brokerage Charges

Plan Name

Plan Description

Ventura Securities Ltd

Karvy Stock Broking

Plan 1000

Basic Plan

This is Ventura's basic plan with high

brokerage rates,You have to deposit rs
Karvy have different plan and this is their
1000 which are refundable with your
basic plan, For more details about plan
yearly brokerage charges.but brokerage
you need to contact personally.
fees are higher compare to higher deposit
plans.

Equity Delivery

0.45%

0.3%

Equity Intraday

0.05%

0.03%

Equity Futures

0.05%

0.03%

Equity Options

Rs 50 per lot

Rs 50 per lot

Currency Futures

Rs 20 per lot

0.03%

Currency Options

Rs 20 per lot

Rs 50 per lot

84

Commodity Trading

Ventura Securities Ltd

Karvy Stock Broking

NA

0.03%

Bro Calc for Ventura

Bro Calc for Karvy

Minimum Brokerage

Brokerage Calculator

Share Broker's Transaction/Turnover Charges

Ventura Securities Ltd

Karvy Stock Broking

Equity Delivery

0.0038%

0.00325%

Equity Intraday

0.0038%

0.00325%

Equity Futures

0.0027%

0.0023%

Equity Options

0.075% (on premium)

0.055% on premium

Currency Futures

0.0025%

0.00325%

Currency Options

0.0025%

0.055% on premium

Commodity

0.003%

Trading Features

Ventura Securities Ltd

85

Karvy Stock Broking

3 in 1 Account

Mobile Trading

Charting

SMS Alerts

Online Demo

Online Portfolio

Desktop Trading
Platform

NEST

Web Trading
Platform

Mobile Trading
Platform

Karvy Online

Ventura Wealth

Karvy Online Mobile Trading App

Special Offers, Advantages, Disadvantages

Likes

Ventura Securities Ltd

Karvy Stock Broking

Tips and Recommendations, in-depth

research, useful DP services with various
features, NRI service, branch office across
major cities in India, user friendly trading
platform

Customer centric, leading edge

technology, top-notch research team,
professional management and a wide
network of offices across India.

More Advantages...

Dislikes

More Advantages...

Minimum brokerage charges; software

access charges; basic site design; corner no clear view of brokerage charges, not a
cutting on innovative tools, refundable
3 in 1 account; minimum brokerage
(with yearly brokerage fee) fixed yearly
charges
fees (minimum yearly Rs 1000)
More Disadvantages...
More Disadvantages...

86

Ventura Securities Ltd

Karvy Stock Broking

Free Brokerage Account (Zero

Account Opening Fee)

Special Offers/Promo

Open online stock trading account with

Ventura for FREE. This is a limited time
offer. Pay Rs Zero Account Opening Fees.
Simply leave your contact
information with us and Ventura
representatives will contact you.

Customer Service Offered

Ventura Securities Ltd

Karvy Stock Broking

Email Support

Online Live Chat

Phone Support

24/7 Customer Service

Toll Free Number

Through Branches

87

OBJECTIVE OF STUDY

88

OBJECTIVE OF STUDY

To analyze brand loyalty of customers towards the Ventura securities ltd. products range.

Analyze consumer satisfaction and sales position of Ventura securities ltd.

Analyze the after sales service provided by Ventura securities ltd.

To analyze the economy, comfortable and performance of Ventura securities ltd.

Analyze consumer satisfaction for after sales service provided by Ventura securities ltd.

Analyze the Consumer behavior of among Ventura securities ltd. and Karvy.

To analyze the awareness of customer of Ventura securities ltd.

To compare the services, trading features and various charges of Ventura Securities Ltd. and Karvy.

89

RESEARCH METHODOLOGY

90

RESEARCH METHODOLOGY
Methodology explains the methods used in collecting information to the steps touch are as
follows.
DESCRIPTION OF RESEARCH
Marketing Research design specify the procedure for conducting a research project. The survey is
conducted with the objective to compare the services of Ventura Securities Ltd with Karvy Stock
Broking Ltd.
In this, two types of research methods are used.
1)DESCRIPTIVE RESEARCH.
Descriptive Research is used to collect various information from customer to study the Awareness,
Perception and Attitude, Opinion With the Life Insurance.
2)EXPLORATORY RESEARCH.
Exploratory Research is concerned with discovering the general nature of the problem and the
variables that are related to research study.
TYPES AND SOURCES OF DATA
For the purpose of research study the data from two sources has been collected mainly,

3)

Primary Data.

4)

Secondary Data.

PRIMARY DATA
91

Primary Data is the data collected for the first time for the purpose to solve the problem at hand. In
this study the primary data is collected by survey research.
i.e. collection of information directly from the respondents by a questionnaire method is used to
collect the information from the respondent.
SECONDARY DATA
The major sources of secondary data are Websites, newspapers, broachers.

SURVEY RESEARCH
The method used to collect data for the study was through survey research. Survey Research is the
systematic gathering of information from respondents for the purpose of understanding and predicting
some aspect of the behavior of the population of interest.

SAMPLING
SAMPLING PROCEDURE
Descriptive field studies require collection of first hand information or data pertaining to the units of
study from the field. The units of study may include the area covered under the Lucknow .
The process of drawing a sample from large population is called Sampling.
SAMPLING PROCESS

SAMPLE DESIGN-

92

This research is Explorative and descriptive in nature because it aims to collect the data about the behavior
of investors towards stock market. The research approach used is survey based and the analysis is
largely based on the primary data.

POPULATION: The Aggregate of all units pertaining to the study is called Population. The
population of this project is a survey of Walking Customers and Existing Customer.
SAMPLING UNIT: Sampling unit in my study is the people who were above 25 years and below 60
years.
UNIVERSE: Lucknow .
TIME PERIODS: The Period of study was also limited to 45 days.
SAMPLE TYPE:RANDOM
SAMPLE SIZE: The total Sample Size is 100 from different locations of lucknow. The selection of
sample was based on the following criteria: People belonging to different strata of society.
Servicemen working in government organization & private organization.
Professionals who includes doctors, lawyers, teachers etc.

STATISTICAL TOOL TO BE USED : Pie chart

93

DATA ANALYSIS AND

INTERPRETATION

94

DATA ANALYSIS AND INTERPRETATION

1.- Do you have DEMAT Account?
Yes

60

No

40

Interpretation :
60% respondent said that they have DEMAT account while 40% said no.
2. Are you interested in Equity market?
Yes

45

No

35

Cant say

20

Interpretation :
45% respondent said that they interested in Equity, 35% no, but 20% cant say

95

3. How do you know about Equity for Ventura securities ltd. and Karvy?
Advertisement

40

Friend

20

Internet

20

Other

20

Interpretation :
40% respondent said that they know about equity for Ventura securities ltd. and Karvy
advertisement, 20% about friend, 20 from internet and 20% are from another media.

96

from

4. Which Company provide better schemes on Equity?

Ventura securities ltd.

40

Karvy

60

Interpretation :
40% respondent said that Ventura securities ltd provide better schemes on Equity, 60% Karvy.

97

5. Which companies provides better customer service?

Ventura securities ltd.

60

Karvy

40

Interpretation :
60% respondent said Ventura securities ltd. charges higher than Karvy .

98

6. Which company charges low brokerage on Equity?

Ventura securities ltd.

60

Karvy

40

Interpretation :
60% respondent said Ventura securities ltd. charges higher than Karvy.

99

7. Which companies gives you low documentation on Equity?

Ventura securities ltd.

65

Karvy

35

Interpretation :
65% respondent said Ventura securities ltd. gives low documentation on Equity 35% respondent said
Karvy .

100

8.Which companies advertisement is better in your view?

Ventura securities ltd.

60

Karvy

40

Interpretation :
60% respondent said Ventura securities ltd.s advertisement is better, 40% said Karvy .

101

9.Which company provide better investment offerings regarding equity?

Ventura securities ltd.

55

Karvy

45

Interpretation :
55% respondent said that Ventura securities ltd.provides better investment opportunity , 45%
respondent said Karvy

102

10.Which companies gives better performance on Equity in your view?

Ventura securities ltd.

45

Karvy

55

Interpretation :
45% respondent said that Ventura securities ltd. gives better performance on Equity and 55% Karvy .

103

11. Which companys information source is better in your view?

Ventura securities ltd.

65

Karvy

35

Interpretation :
65% respondent said that Ventura securities ltd information source is better and 35% Karvy .

104

FINDINGS

105

FINDINGS

60% respondent said that they have DEMAT account while 40% said no.

45% respondent said that they have Equity, 35% no, but 20% cant say
40% respondent said that they know about equity for Ventura securities ltd. and Karvy from

advertisement, 20% about friend, 20 from internet and 20% are from another media.
40% respondent said that Ventura securities ltd provide better schemes on Equity, 60% Karvy.
60% respondent said Ventura securities ltd. gives better customer services, 40% Karvy .
60% respondent said Ventura securities ltd. charges higher brokerage on Equity, 40% Karvy
65% respondent said Ventura securities ltd. gives low documentation on Equity 35%

respondent said Karvy .

60% respondent said Ventura securities ltd.s advertisement is better, 40% said Karvy .
55% respondent said that Ventura securities ltd. provide better investment opportunity, 45%

respondent said Karvy

45% respondent said that Ventura securities ltd. gives best performance on Equity and 55%

Karvy .
65% respondent said that Ventura securities ltd information source is better and 35% Karvy .

106

LIMITATIONS

107

LIMITATIONS

Though, best efforts have been made to make the study fair, transparent and error free. But there might
be some inevitable and inherent limitations. Though outright measure are undertaken to make the
report most accurate.
The limitation of the survey are narrated below:

The project is valid for lucknow only.

It was not possible to cover each and every area due to time constrains.

There may be some biased response form the respondents

Some respondents did not provide the full data.

Unwillingness on the part of the customers to disclose the information as per the questionnaire.

The decisiveness on the part of the customers regarding some question hence difficulty faced in
recording and analyzing the data.

108

CONCLUSION

109

CONCLUSION
The report comes to the following conclusion

The customers of Ventura securities ltd. are brand loyal with only a small percent want to shift over
to other brands. Trying of other brands by customers is mainly because the customer wants to try
something new.

The services provided by Ventura securities ltd. is fair in comparison to Karvy

Low interest rate on loan is the basic feature influencing to built brand Image.

The consumer of Ventura securities ltd. and Karvy is highly satisfied with services.

The competition of Ventura securities ltd. is majorly with Karvy .

Due to high brand loyalty the customers of Ventura securities ltd. and Karvy recommend its
product to others.

The customers are satisfied with the services of Ventura securities ltd.

Ventura securities ltd. gives high interest rate on equity in comparison with Karvy

110

RECOMMENDATIONS AND
SUGGESTIONS

111

RECOMMENDATIONS AND SUGGESTIONS

The brand loyalty for Ventura securities ltd. more can be increased if the economy of the products
are given due attention because Karvy has captured a major share of securities market.

The switch over of the Ventura securities ltd. customers can be prevented if more of new schemes
are launched more frequently like Karvy which launches new schemes with slight variations from
the previous.

Rate of interest wise very good but it still needs improvements.

On investment should be given some offer like diwali bumper offer.

112

BIBLIOGRAPHY

113

BIBLIOGRAPHY

BOOKS

AUTHORS

Marketing Management

Philip Kotler

Marketing Research

D. D. Sharma

Research Methodology

C. R. Kothari

1- Newspaper
Times of India
Economic Times
2- Magazines :
Business Today
Business world
3- Website :
www.ventura1.com
www.karvy.com
www.google.com

114

APPENDIX

115

QUESTIONNAIRE
Name
Occupation
Age
Annual Income
1.-Do you have DEMAT Account?
Yes
No

2. Are you interested in Equity market?

Yes
No
Cant say

3. How do you know about Equity for Ventura Securities Ltd. and Karvy?
Advertisement
Friend
Internet
Other

4. Which Company provide better schemes on Equity?

116

Ventura securities ltd.

Karvy

5. Which company provides better customer service ?

Ventura securities ltd.
Karvy

6. Which company gives you low documentation on Equity?

Ventura securities ltd.
Karvy

7. Which company charges lowest brokerage?

Ventura securities ltd
Karvy

8.Which companies advertisement is better in your view?

Ventura securities ltd.
Karvy

117

9. Which company provides better investment offerings regarding equity?

Ventura securities ltd.
Karvy

10.Which companies gives better performance on Equity in your view?

Ventura securities ltd.
Karvy

118

11. Which companys information source is better in your view?

Ventura securities ltd.
Karvy

119