A PROJECT REPORT ON

“COMPARATIVE STUDY ON
SHARE MARKET & MUTUAL FUND
IN SHAREKHAN”
FOR

SHAREKHAN LIMITED

BY

RAJNEESH KUMAR

In Partial fulfillment for the award of the degree

BACHLER OF BUSINESS ADMINISTRATION
2010-2013
KASTURI RAM COLLEGE OF HIGHER EDUCATION
(Affiliated to GGS Indraprastha University, Delhi)
Narela Delhi-110040

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 “COMPARATIVE STUDY ON SHARE
MARKET & MUTUAL FUND IN
SHAREKHAN”
For
SHAREKHAN LIMITED
Under the supervision
Of
Mr. RAJESH ANTIL
(Assistant Manager)

Submitted To- Submitted By-

Mr. Rajesh Antil Rajneesh Kumar

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 CERTIFICATE OF THE ORGANISATION

To
The Training officer
Rajesh Antil
New Delhi

This is to certify that Mr. Rajneesh Kumar Studying in Third Year of

‘Bachelor of Business Administration’ in Academic Year 2010 to
2012 at has Completed Project on “COMPARATIVE STUDY ON
SHARE MARKET & MUTUAL FUND IN SHAREKHAN”, Under
my guidance for Two Months.

The Information Presented in this project is true and Original to the

Best of my Knowledge.

Date; _________
Place; _________ Authorized signatory

ACKNOWLEDGEMENT

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I express my deepest and most sincere thanks to VIKRANT AGGARWAL
(Faculty Guide) and all my teachers who provided me their valuable time and
information. The summer internship program and Project could not be possible
without their able support and guidance. It was a great opportunity for me to
work with Share khan, pioneers in the field of online trading and the retail
broking arm of SSKI Investors Pvt. Ltd. I am extremely grateful to those who
have shared their expertise and knowledge with us and without whom the
completion of this project would have been virtually impossible.
Specially, I would like to thank my company guide Mr. RAJESH ANTIL
(Assistant Manager), Share khan Ltd., who has been a constant source of
inspiration for me during the completion of this project. He gave me invaluable
inputs during our endeavor to complete this project.
I am indebted to all staff members of Share khan Ltd. for their valuable
support and cooperation during the entire tenure of this project. Not to forget,
all those who have kept our spirits surging and helped me in delivering my best
Last but most important I thank ‘God Almighty’ above who guided me and
bestowed me with the wisdom and an opportunity to carry out the project.

(RAJNEESH KUMAR)

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 DECLARATION

I hereby declare that the Project work entitled “COMPARATIVE

STUDY ON SHARE MARKET & MUTUAL FUND IN
SHAREKHAN” is an authentic record carried out at SHAREKHAN,
New Delhi as Requirements of 2 Month Summer Internship for the
Award of BBA Degree, Under the Guidance of Mr. Rajesh Antil, The
Deputy Asst. Manager of Share khan it, New Delhi.

SIGNATURE OF THE STUDENT

RAJNEESH KUMAR
E.NO- 05419301710

ABSTRACT
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In the corporate world of today customer is considered as the King
and is placed at the top and if you have won the customer then the
gold coin is in your pocket. For those two rules are to be followed
they are:
Rule 1 –Customer is always right
Rule 2 = if not, refer to rule 1.
If these two rules are followed then the customers will always be
happy and would be having a better relation with the market. In
business, building long term relationship is very important.
Relationship management plays a vital role while dealing with
financial instruments.
The project also is an endeavor towards unearthing the psyche of the
end-users of these financial products.
For completion of this respective task, personal interaction with the
executive was done so as to get the first hand information.

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 TABLE OF CONTENT
1. INTRODUCTION
1.1 Introduction to the topic
1.2 Types of Mutual Funds
1.3 How to invest in Mutual Funds
1.4 Advantages of Mutual Funds
1.5 Objectives of the Study

2. COMPANY PROFILE
2.1 About company
2.2 Reason to choose Sharekhan
2.3 Products of Sharekhan
2.4 Types of Account
3 SHARE MARKET OVER VIEW
3.1 About share market
3.2 Difference Between Primary and Secondary Market
3.3 Terminology used in Share Market
3.4 How to get a Demat Account?
3.5 Role of Stock Exchange
3.6 Listing of Securities

4 RESEARCH METHODOLOGY
4.1 Data collection

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 Primary Data
Secondary Data
4.2 Proposed methodology
4.3 Limitations

5 OBSERVATIONS & ANALYSIS

5.1 Data Analysis
5.2 Interpretations

6 FINDINGS & RECOMMENDATION

6.1 Findings
6.2 Recommendations

7 CONCLUSSION
8 BIBLIOGRAPHY

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 INTRODUCTION

EXECUTIVE SUMMARY

Indian Capital Market has been linked to the International Financial Market and the
Standard has been increased in terms of efficiency and transparency through
Dematerialization of the Indian Capital Market in terms of handling and dealing in securities
in paper mode , the main objective of this study is to analyze trends in growth of
dematerialization process was not keeping pace with the Indian Capital Market due to un
popularity of Demat, lack of information , and short direction after the inception of the
scheme or the earliest time taken to evaluate its popularity. My project is base on study about
dematerialization in the Indian Capital Market .The project covers issues related to
depository and Sharekhan as depository .Project start with objective , Methodology ,and
limitation of project than it highlight company profile with product details, than it explains
capital market and depository part of this capital market . This project cover trading in
equity of capital market, settlement of trade in depository, comparative analysis of structure
and services offers in the same industry , analysis of structure and services offers in the same
industry, analysis of dematerialization , issues related to demat e.g. opening account ,
nomination dematerialization ,transmission ,freezing defreezing.

SHAREKHAN

(DEPOSITORY DEPOSITORY SHARE CAPITAL

MARKET MARKET

PARTICIPANT)

1.1 MUTUAL FUND

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is invested by the fund manager in different types of
securities depending upon the objective of the scheme. These could range from shares to
debentures to money market instruments. The income earned through these investments and
the capital appreciations realized by the scheme are shared by its unit holders in proportion to
the number of units owned by them. Thus a Mutual Fund is the most suitable investment for
the common man as it offers an opportunity to invest in a diversified, professionally managed
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portfolio at a relatively low cost. The small savings of all the investors are put together to
increase the buying power and hire a professional manager to invest and monitor the money.
Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual
Funds. Each Mutual Fund scheme has a defined investment objective and strategy.

MUTUAL FUND FLOW CHART

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1.2 TYPES OF MUTUAL FUND SCHEME
Mutual fund schemes may be classified on the basis of its structure and its
investment objective.

A. BY STRUCTURE
1. Open-end Funds
An open-end fund is one that is available for subscription all through the year. These
do not have a fixed maturity. Investors can conveniently buy and sell units at Net
Asset Value ("NAV") related prices. The key feature of open-end schemes is
liquidity.

2. Closed-end Funds
A closed-end fund has a stipulated maturity period which generally ranging from 3 to
15 years. The fund is open for subscription only during a specified period. Investors
can invest in the scheme at the time of the initial public issue and thereafter they can
buy or sell the units of the scheme on the stock exchanges where they are listed. In
order to provide an exit route to the investors, some close-ended funds give an option
of selling back the units to the Mutual Fund through periodic repurchase at NAV
related prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor.

3. Interval Funds
Interval funds combine the features of open-ended and close-ended schemes. They are
open for sale or redemption during pre-determined intervals at NAV related prices.

B. BY INVESTMENT OBJECTIVE
1. Growth Funds
The aim of growth funds is to provide capital appreciation over the medium to long
term. Such schemes normally invest a majority of their corpus in equities. It has been
proved that returns from stocks, have outperformed most other kind of investments
held over the long term. Growth schemes are ideal for investors having a long-term
outlook seeking growth over a period of time.

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2. Income Funds
The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate
debentures and Government securities. Income Funds are ideal for capital stability
and regular income.

3. Balanced Funds
The aim of balanced funds is to provide both growth and regular income. Such
schemes periodically distribute a part of their earning and invest both in equities and
fixed income securities in the proportion indicated in their offer documents. In a rising
stock market, the NAV of these schemes may not normally keep pace, or fall equally
when the market falls. These are ideal for investors looking for a combination of
income and moderate growth.

4. Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital
and moderate income. These schemes generally invest in safer short-term instruments
such as treasury bills, certificates of deposit, commercial paper and inter-bank call
money. Returns on these schemes may fluctuate depending upon the interest rates
prevailing in the market. These are ideal for Corporate and individual investors as a
means to park their surplus funds for short periods..

Three Common Investment Goals

Goal No. 1: Retirement

Most individuals buy mutual funds for long-term goals, especially retirement. It is
estimated that retirees will need 70 to 80 percent of their final, pre-tax income to
maintain a comfortable lifestyle in retirement. If you plan to retire at age 65,
retirement savings should last for at least 18.5 years, since the average life expectancy
for a 65-year-old is 83.5, and continues to rise. Ideally, individuals use a
Combination of sources to fund retirement, such as Social Security benefits,
employer-sponsored retirement plans-like 401(k) plans—and personal savings,
including Individual Retirement Accounts (IRAs).

Goal No. 2: Education

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Many parents and grandparents use mutual funds to invest for children’s college
educations. Your time horizon is an essential consideration when investing for
education: if you start when the child is born, you have 18 years to invest. However, if
a child or grandchild is in your future, the time horizon can be lengthened by
investing now.

Goal No. 3: Emergency Reserves and Other Short-

Term Goals
Emergency reserves are assets you may need unexpectedly on short notice. Many
investors use money market funds for their reserves. Money market funds alone, or in
combination with short-term bond funds, can also be appropriate investments for
other short-term goals.

OTHER SCHEMES
1. Tax Saving Schemes
These schemes offer tax rebates to the investors under specific provisions of the
Indian Income Tax laws as the Government offers tax incentives for investment in
specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and
Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The
Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB
by investing in Mutual Funds.

2. Special Schemes
 Index Schemes
Index Funds attempt to replicate the performance of a particular index such as
the BSE Sensex or the NSE 50

 Sect oral Schemes

Sect oral Funds are those that invest exclusively in a specified sector. This
could be an industry or a group of industries or various segments such as 'A'
Group shares or initial public offering.

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1.3 How to invest in Mutual Fund

Step one - Identify your Investment needs

Your financial goals will vary, based on your age, lifestyle, financial independence,
family commitments, and level of income and expenses among many other factors.
Therefore, the first step is to assess your needs. You can begin by defining your
investment objectives and needs, which could be regular income, buying a home or
finance a wedding or educate your children or a combination of all these needs, the
quantum of risk you are willing to take and your cash flow requirements.

Step Two - Choose the right Mutual Fund

The important thing is to choose the right mutual fund scheme, which suits your
requirements. The offer document of the scheme tells you its objectives and provides
supplementary details like the track record of other schemes managed by the same Fund
Manager. Some factors to evaluate before choosing a particular Mutual Fund are the
track record of the performance of the fund over the last few years in relation to the
appropriate yardstick and similar funds in the same category. Other factors could be the
portfolio allocation, the dividend yield and the degree of transparency as reflected in the
frequency and quality of their communications.

Step Three - Select the ideal mix of Schemes

Investing in just one Mutual Fund scheme may not meet all your investment
needs. You may consider investing in a combination of schemes to achieve your
specific goals.

Step four - Invest regularly

The best approach is to invest a fixed amount at specific intervals, say every month. By
investing a fixed sum each month, you buy fewer units when the price is higher and
more units when the price is low, thus bringing down your average cost per unit. This is
called rupee cost averaging and do investors all over the world follow a disciplined
investment strategy. You can also avail the systematic investment plan facility offered
by many open-end funds.

Step Five- Start early

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It is desirable to start investing early and stick to a regular investment plan. If you start
now, you will make more than if you wait and invest later. The power of compounding
lets you earn income on income and your money multiplies at a compounded rate of
return.

1.4 ADVANTAGES OF MUTUAL FUNDS

Mutual funds make saving and investing simple, accessible, and affordable. The
advantages of mutual funds include professional management, diversification, variety,
liquidity, affordability, convenience, and ease of recordkeeping—as well as strict
government regulation and full disclosure.

 Diversification:
The best mutual funds design their portfolios so individual investments will react
differently to the same economic conditions. For example, economic conditions
like a rise in interest rates may cause certain securities in a diversified portfolio
to decrease in value. Other securities in the portfolio will respond to the same
economic conditions by increasing in value. When a portfolio is balanced in this
way, the value of the overall portfolio should gradually increase over time, even
if some securities lose value.

 Professional Management:
Most mutual funds pay topflight professionals to manage their investments.
These managers decide what securities the fund will buy and sell.

 Regulatory oversight:
Mutual funds are subject to many government regulations that protect
investors from fraud.

 Liquidity:
It's easy to get your money out of a mutual fund. Write a check, make a
call, and you've got the cash.

 Convenience:
You can usually buy mutual fund shares by mail, phone, or over the
Internet.
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  Low cost:
Mutual fund expenses are often no more than 1.5 percent of your investment.
Expenses for Index Funds are less than that, because index funds are not actively
managed. Instead, they automatically buy stock in companies that are listed on a
specific index

 Transparency

 Flexibility

 Tax benefits

DRAWBACKS OF MUTUAL FUNDS

 No Guarantees: No investment is risk free. If the entire stock market declines
in value, the value of mutual fund shares will go down as well, no matter how
balanced the portfolio. Investors encounter fewer risks when they invest in
mutual funds than when they buy and sell stocks on their own. However, anyone
who invests through a mutual fund runs the risk of losing money.

 Fees and commissions: All funds charge administrative fees to cover their
day-to-day expenses. Some funds also charge sales commissions or "loads" to
compensate brokers, financial consultants, or financial planners. Even if you
don't use a broker or other financial adviser, you will pay a sales commission if
you buy shares in a Load Fund.

 Taxes: During a typical year, most actively managed mutual funds sell
anywhere from 20 to 70 percent of the securities in their portfolios. If your fund
makes a profit on its sales, you will pay taxes on the income you receive, even if
you reinvest the money you made.

 Management risk: When you invest in a mutual fund, you depend on the
fund's manager to make the right decisions regarding the fund's portfolio. If the
manager does not perform as well as you had hoped, you might not make as
much money on your investment as you expected. Of course, if you invest in
Index Funds, you forego management risk, because these funds do not employ
managers.

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 COMPANY PROFILE
2.1 ABOUT SHAREKHAN
Share khan is one of the leading retail brokerage firms in the country. It is the retail
broking arm of the Mumbai-based SSKI Group, which has over eight decades of
experience in the stock broking business. Sharekhan offers its customers a wide range
of equity related services including trade execution on BSE, NSE, Derivatives,
depository services, online trading, investment advice etc.
The firm’s online trading and investment site – www.Sharekhan.com was
launched on Feb. 8, 2000. The site gives access to superior content and transaction
facility to retail customers across the country. Known for its jargon-free, investor
friendly language and high quality research, the site has a registered base of over one-
lakh customers. The number of trading members currently stands at over 3 lakh. While
online trading currently accounts for just over 1 percent of the daily trading in stocks in
India, Sharekhan alone accounts for 22 percent of the volumes traded online.
The content-rich and research oriented portal has stood out among its
contemporaries because of its steadfast dedication to offering customers best-of-breed
technology and superior market information. The objective has been to let customers
make informed decisions and to simplify the process of investing in stocks.
On April 17, 2002 Sharekhan launched speed trade, a net-based executable
application that emulated the broker terminals along with host of other information
relevant to the day traders. This was for the first time that a net-based trading station of
this caliber was offered to the traders. In the last six months Speed Trade has become a
de facto standard for the Day Trading community over the net.
Share khan’s ground network includes over 250 centers in 123 cities in India, of
which 20 are fully-owned branches.
Sharekhan has always believed in investing in technology to build its business.
The company has used some of the best-known names in the IT industry like Sun
Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette,
VeriSign Financial Technologies India Ltd., Spider Software Pvt. Ltd. to build its
trading engine and content. The Morakhia family holds a majority stake in the
company. HSBC, Intel & Carlyle are the other investors.

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With a legacy of more than 80 years in the stock markets, the SSKI group ventured into
institutional broking and corporate finance 18 years ago. Presently SSKI is one of the
leading players in the institutional broking and corporate finance activities. SSKI holds
a sizeable portion of the market in each of these segments. SSKI’s institutional broking
arm accounts for 7% of the market for Foreign Institutional portfolio investment and
5% of all Domestic Institutional portfolio investment in the country. It has 60
institutional clients spread over India, Far East, UK and US. Foreign Institutional
Investors generate about 65% of the organization’s revenue, with a daily turnover of
over US$ 2 million. The Corporate Finance section has a list of very prestigious clients
and has many ‘firsts’ to its credit, in terms of the size of deal, sector tapped etc. The
group has placed over US$ 1 billion in private equity deals. Some of the clients include
BPL Cellular holding, Gujarat Pipavav, Essar, Hutchison, Planet Asia and Shopper’s
Stop.

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2.2 Reasons to choose Share khan ltd
Experience
SSKI has more than eight decades of trust and credibility in the Indian stock market. In
the Asia Money broker’s poll held recently, SSKI won the ‘India’s best broking house
for 2004 award. Ever since it launched Sharekhan as its retail broking division in
February 2000, it has been providing institutional-level research and broking services to
individual investors.

Technology
With our online trading account you can buy and sell shares in an instant from any PC
with an Internet connection. You will get access to our powerful online trading tools
that will help you take complete control over your investment in shares.

Accessibility
Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for
investors. These services are accessible through our centers across the country (over
250 locations in 123 cities), over the internet (through the website
www.sharekhan.com) as well as over the voice tool.

Knowledge
In a business where the right information at the right time can translate into direct
profits, you get access to a wide range of information on our content-rich portal,
sharekhan.com. You will also get a useful set of knowledge-based tools that will
empower you to take informed decisions.

Convenience
You can call our Dial-N-Trade number to get investment advice and execute your
transactions. We have a dedicated call-centre to provide this service via a toll free
number from anywhere in India.

Customer Service
Our customer service team will assist you for any help that you need relating to
transactions, billing, Demat and other queries. Our customer service can be contracted
via a toll-free number, email or live chat on sharekhan.com.

Investment Advice
Sharekhan has dedicated research teams for fundamental and technical research. Our
analyst constantly track the pulse of the market and provide timely investment advice to

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you in the form of daily research emails, online chat, printed reports and SMS on your
phone.

Benefits
 Secure Order by Voice Tool Dial-n-Trade.
 Automated Portfolio to keep track of the value of your actual purchases.
 24x7 Voice Tool access to your trading account.
 Personalized Price and Account Alerts delivered instantly to your cell phone
& email address.
 Special Personal Inbox for order and trade confirmations.
 On-line customer service via web chat.
 Anytime Ordering.

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2.3 PRODUCTS OF SHAREKHAN

1- Equity Trading Platform (Online/Offline).

2- Commodities Trading Platform (Online/Offline).
3- Portfolio Management Service.
4- Mutual Fund Advisory and Distribution.
5- Insurance Distribution.
6- Depository Services.
7- Research Report.

2.4 TYPES OF ACCOUTNS

1- CLASSIC ACCOUNT
2- TRADE TIGER ACCOUNT
1. Classic Account – This account allows the client to trade through our
website www.sharekhan.com and is suitable for the retail investor who is risk
averse and hence prefers to invest in stocks or who does not trade too
frequently.

Features
 Online trading account for investing in equity and derivatives via
www.sharekhan.com
 Live terminal (NSE Online, BSE Offline)
 Integration of on-line trading, saving bank and Demat account.
 Instant cash transfer facility against purchase & sale of shares.
 Competitive transaction charges.
 Instant order and trade confirmation be email.
 Streaming Quotes. (Cash & Derivatives)
 Personalized market watch.
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  Single screen interface for cash and derivatives and more.
 Provision to enter price trigger and view the same online in market watch.

Dial-n-trade – Along with enabling access for your trade online, the
CLASSIC also gives you our Dial-n-trade services. With this service, all
you have to do is dial our dedicated phone lines 1-800-22-7500 and 1-800-
22-7050.

2. Tiger Trade Account – It is an internet-based software application that

enables you to buy and sell in an instant.
It is ideal for active trades and jobbers who transact frequently during day’s
session to capitalize on intra-day price movement.
Features
A single platform for multiple exchanges BSE, NSE, MCX, NCDEX,
Mutual funds and IPO’s.
 Multiple Market Watch available on a single screen.
 User can save his own defined screen as well as graph template, that is, can
save the layout for future use.
 User-defined alert settings on an input Stock Price trigger tools available to
gauge market such as Tick Query, Ticker, Market Summary, Action Watch,
Option Premium Calculator, and Span Calculator.
 Shortcut key for FAST access to order placements & reports.

FEES STRUCTURE
Charge Classic Account Tiger trade account

Account Opening Rs. 750 /- Nil

Monthly Maintain Charges Rs.300/- Rs. 300/-

Brokerage Intra-day 0.10% Intra-day 0.05%

Delivery 0.50% Delivery 0.25%

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Note:-

 Minimum margin cheque – Rs. 5000with the classic account that is

must deposit in account opening time.
 If margin cheque exceeds Rs. 50000, account opening free.
 Minimum brokerage cheque – Rs. 6000 (adjusted towards brokerage
within one year) that is applicable for only tiger trade account.
 Annual maintenance charges – Rs. 300 (chargeable in second year)
that is applicable for both account.
 No account closing charges.

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 Comparison with leading companies in share brokerage

FIRMS NAME HDFC ICICI RELIGARE INDIABULL SHAREKHAN

FACTS

OPENING RS.750/- Rs.750/- Rs.500/- Rs.1250/500 Free

CHARGES

AMC Rs. 750/- Rs. 750/- Rs .16 per Rs.16per Rs. 400/-
transaction transaction

RESEARCH NO NO R. M. R.M. DAILY BASIS

REPORT

DIAL N TRADE Rs.20per call Rs.20per call NO NO FREE

chargeable chargeable

BROKRAGE INT .15% INT .15% INT .10% INT .10% INT .05%

DEL.75% DEL.75% DEL.50% DEL .50% DEL .25%

LIVE TERMINAL NO NO YES YES YES

EXPOSURE NO NO 8timeonly 8time only trading 5time

trading
2days+trading

TRADING TIMING 9:00to3:30 9:00to3:30 9:00to3:30 9:00to3:30 9:00to3:30

Note
 In India bull provide two types of account cool and demat account and both
charge is shown on the table.
 In this table Religare and India bull provide only R.M. facility insists of research
report.

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 OBJECTIVES OF THE STUDY

 To know the work culture and methodology of the share market

 To know the rules and regulation of SEBI.
 To know the rules and regulation of AMC (Assets Management Company)
 To know the brokerage system of the share market
 To know the difference between share market and mutual funds.
 To know the various competitors in the mutual funds market.
 To know the various exchanges of share markets all over the world.
 To know the timing of the share market.
 To know how the value of shares and mutual funds is calculated.
 To know the various factors on which prices of shares and mutual funds
fluctuates.
 To know the benefits of investing in share market and mutual funds.
 To know about the services of the share market and mutual funds.

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 Share Market Overview

3.1 What is share?

Share or stock is a document issued by a company, which entitles its
holder to be one of the owners of the company. A share is issued by a
company or can be purchased from the stock market.

Shares in the Share Market are either traded through:-

(a) Stock Exchange
These are organized market places where stocks, bonds are other
equivalents are traded between the buyers and sellers where exchange
acts as a counter - party to both the participants in case of any default.

(b) Over-the -Counter (OTC)

These are not centralized exchanges and the trade takes place through a
network of dealers.

Basically, Share Market can be divided into two parts :-

1. Primary Market It is the market where new issues of securities are
offered to the investors.

2. Secondary Market An investor of a secondary market buys a

security from another participant of the same and not from any
issuing corporation (as in case of Primary Market).

PRIMARY MARKET
The first time that a company shares are issued to the public, it is by a process
called the initial public offering (IPO). In an IPO company offloads a certain
percentage of its totals shares to the public at a certain price. Most IPOs these days
do not have a fixed offer price instead they follow a method called the book

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building process, where the offer price is placed in a hand or a range with the
highest and the lowest value (refer to the newspaper ad). The public can bid for

the shares at any price in the band specified. Once the bid come in the company
evaluates all the bids and decides on an offer price in that range. After the offer
price is fixed the company either allots its shares to the people who had applied for
its shares or returns them their money.

SECONDARY MARKET

Stock Broker
Company
Exchange Individual
Investors

Companies get themselves listed on popular stock exchanges like BSE

and NSE

SECONDARY MARKET
Once the offer price is fixed and the shares are issued to the people, stock
exchanges facilitate the trading of shares for the general public. Once a stock is
listed on an exchange, people can start trading in its shares. In a stock exchange
the existing shareholders sell their shares to anyone who is willing to buy them at
a price agreeable to both the parties. Individuals cannot buy or sell shares in a
stock exchange directly they have to execute their transactions through authorized
members of the stock exchange who are also called stock brokers.

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DYNAMICS OF THE SHARE MARKET

Buyer Broker Seller

Stock Broker
He pays the His broker Exchange
money to pays it to the Seller’s broker
The exchange finally pays the
his broker exchange
pays it to the money to the
seller’s broker seller

Similar process happens for the transfer of shares from the seller’s end.

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MULTI CHANNEL ACCESS TO THE STOCK MARKET

Relationship Manager
Live chat

Call centre
SMS

Website Email
CUSTOMER SUPPORT

Multi Channel

Investment Option

Share Shops Dial n Trade

Online Trading

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TRANSACTION CYCLE IN SHARE MARKET

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HOW TOREAD SHARE MARKET TABLE

Columns 1 & 2: column 1&2 shows 52- Week High and Low price rate of
shares.

Column 3: column shows Company Name & Type of Stock.

Column 4: column 4 shown Ticker Symbol of company name which

companies share has shown.

Column 5: column 5 shown Dividend Per Share.

Column 6: Column 6 shown Dividend Yield per share.

Column 7: column 7 shown Price/Earnings Ratio of per share.

Column 8: column 8 shown Trading Volume in hundred volumes.

Column 9 & 10: column 8 shown Day High and Low rate of share.

Column 12: column 8 shown Net Change of shares which share goes up or
down that thing is shown with the help of this table.

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Why shares
Historically shares have outperformed all the other investment instruments and
given the maximum returns in the long run. In the twenty-five year period of
1980-2005 while the other instruments have barely manage to generate returns at
a rate higher than the inflation rate(7.10%), on an average shares have given
returns of about 17% in a year and that does not even take in account the dividend
income from them. Were we to factor in the dividend income as well, the shares
would have given even higher returns during the same period.

WHY INVESTING IN SHARE MARKET

Dividend income:
Investments in shares are attractive as much for the appreciation in the share
prices as for the dividends their companies pay out.

Tax advantages:
Shares appear as the best investment option if you also consider the unbeatable tax
benefits that they offer. First, the dividend income is tax-free in the hands of
investors. Second, you are required to pay only a 10% short term capital gains
tax on the profits made from investments in shares, if you book your profits within
a year of making the purchase. Third, you don't need to pay any long-term
capital gains tax on the profits if you sell the shares after holding them for a
period of one year. The capital gains tax rate is much higher for other investment
instruments: a 30% short-term capital gains tax (assuming that you fall in the 30%
tax bracket) and a 10% long-term capital gains tax

Easy liquidity:

shares can also be made liquid anytime from anywhere (on sharekhan.com you
can sell as here at the click of a mouse from anywhere in the world) and the
investments can be realized in just two working days .Considering the high
returns, the tax advantages and the highly liquid nature, shares are the best
investment option to create wealth.

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 3.2 DIFFERENCE BETWEEN PRIMARY AND SECONDARY
MARKETS
In the primary market securities are issued to the public and the proceeds go
to the issuing company. Secondary market is a term used for stock exchanges,
where stocks are bought and sold after they are issued to the public.

Individuals
apply to get
shares of the
company
Company
IPO

Companies share ownership by issuing shares

PRIMARY MARKET

3.3 Terminology used in share market

1. Stock Broker / Sub – Broker: - People like you and me cannot just go to a stock
exchange and buy and sell shares. Only the members of the stock exchange can.
These members are called stockbrokers and they buy and sell shares on our behalf.
So, if you want to start investing in shares, you can do it only through a broker. Every
stockbroker has to be registered with the Securities and Exchange Board of India,
which is the stock market regulator. directly registered with SEBI) or a sub-broker

Company Owners
Companies allocateKasturi
sharesRam
to individuals and those
College of Higher who get
Education
33
the shares become part owners of the company.
 (people licensed by brokers to work under them).
2. Demat account: - Gone are the days when shares were held as physical certificates.
Today, they are held in an electronic form in demat accounts. Demat refers to a
dematerialized account. Let's say your portfolio of shares looks like this: 40 shares of
Infosys, 25 of Wipro, 45 of HLL and 100 of ACC. They will show in your demat
account. You don't have to possess any physical certificates showing you own these
shares. They are all held electronically in your account. Periodically, you will get a
Demat statement telling you what shares you have in your Demat account.

3.4 How to get a Demat account ?

To get a Demat account, you will have to approach a Depository Participant. A
depository is a place where an investor's stocks are held in electronic form. There are
only two depositories in India -- the National Securities Depository Ltd and the
Central Depository Services Ltd.

The depository has agents who are called Depository Participants. In India, there are
over a hundred DPs. Think of it like a bank. The head office, where all the technology
rests and the details of all the accounts are held, is like the depository. The DPs are
like the branches of banks that cater to individuals.
A broker, however, is not similar to a DP. A broker is a member of the stock
exchange and he buys and sells shares for his clients and for himself. A DP, on the
other hand, gives you an account where you can hold those shares.

To get a list of the registered DPs, visit the NSDL and CDSL Web sites.

3. Get a PAN: - The taxman demands that you get yourself a Permanent Account
Number. This is a unique 10-digit alphanumeric number (AABPS1205E, for
example) that identifies and tracks an individual in the taxman's database.
Almost every money transaction demands the use of a PAN.

4. Trading / Square off Transaction:-

Whenever a trader / investor buys or sells a security and on the same day before the
market closes, he sells or buys that particular security (in the same quantity), the
transaction is called as square off transaction or a trading transaction. Shares lying in
the T, TS and T are not square off the same day.

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5. Delivery Transaction:-

Delivery transactions are those transactions which are not squared off at the day end,
and the investor/trader is ready to take / give the delivery of the security.

Charges such as brokerage, service tax on brokerage, STT, stamping charges etc. are
very high on the delivery transactions.

6 Settlement period
Currently the settlement period is T+2. Settlement period i.e. T+2 means one has to
give the delivery of the shares sold within 2 days of the date of the transaction. In case
of purchase transaction, one will get the delivery within 2 days of the date of
transaction.

7 Shares Category:-

The stock exchange has divided the shares into the categories according to the
performance of the company.

The different categories are A, B1, B2, S (BSE Indonext), T, TS, Z

8 Auction:-

In case of failure of delivery of shares for sale transaction within the stipulated time
period, the BSE auction those shares as per the rules and regulations.

9 Close Out:-

In case of failure of delivery of shares for purchase transaction within the

stipulated time period, the person buying the shares gets the benefit in the form
of Close Out as per the BSE’s rules and regulations.

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3.5 ROLE OF STOCK EXCHANGE

1. Raising capital for business.

2. Mobilizing saving for investment.
3. Facilitate Company growth.
4. Redistribution of wealth.
5. Corporate governance.
6. Create investment opportunities for small investors.
7. Government raises capital for development projects.

3.6 Listing of Securities

Listing means admission of the securities to dealings on a recognised stock exchange.

The securities may be of any public limited company, Central or State Government,
quasi-governmental and other financial institutions/corporations, municipalities, etc.

The objectives of listing are mainly to:

 Provide liquidity to securities;

 Mobilize savings for economic development;
 Protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for listing of
securities of companies in accordance with the provisions of the Securities Contracts
(Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies
Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of the
Exchange.
A company intending to have its securities listed on the Exchange has to comply with
the listing requirements prescribed by the Exchange.

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 RESEARCH METHODOLOGY

Objective of the present study can be accomplished by conducting a systematic

market research. Market research is the systematic design, collection, analysis and
reporting of data and findings that are relevant to different marketing situations
facing the company. The marketing research process that will be adopted in the
present study consists of the following stages

a) Defining the problem and the research objective: The research

objective states what information is needed to solve the problem. The objective of
the research is to find out the facilities provided in mutual funds and share market
and what will be its benefits in the future.

b) Developing the research plan: Once the problem is identified, the next step
is to prepare a plan for getting the information needed for the research. The
present study will adopt the exploratory approach wherein there is a need to gather
large amount of information before making a conclusion. If required, the
descriptive and casual approaches may also be used.

c) Collection and Sources of data: Market research requires two kinds of

data, i.e., primary data and secondary data. Preparing questionnaires that will
contain both open-ended and close-ended questions may collect the primary data.
Secondary data will be collected from various journals, books and web sites.

d) Analyze the collected information: This involves converting raw data into
useful information. It involves tabulation of data and using statistical measures on
them for developing frequency distributions and calculating the averages and
dispersions.

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e) Report research findings: This phase will mark the culmination of the
marketing research effort. The report with the research findings is a formal written
document. The research findings and personal experience will be used to propose
recommendations to develop the market in online trading.

PROPOSED METHODOLOGY
Methodology of the project starts with:

 In the first phase we are trained and they teach us different things
about market.
 After that they conduct a mock viva, in this they ask about the real life
problem faced by the customers.
 They provide leads and after that we make calls.
 Then after that we have to provide details of product and convince
them
 Then we have to visit them and get the formed filled from them.
 Maintaining dairy of clients and contacting them at regular basis.
 Get the knowledge of technical as well as fundamental methods.
 Observe the patterns of the scripts.

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 Limitations

Though the present study aims to achieve the above-mentioned objectives in full
earnest and accuracy, it may be hampered due to certain limitations. Some the
limitations of this study may be summarized as follows:

 Getting accurate responses from the respondents.

Locating the target customers of mutual funds is very time consuming.

Types of data collection

There are two types of data collection methods available.

1. Primary data collection
2. Secondary data collection

1) Primary data collection method

The primary data is that data which is collected fresh or first hand, and for first
time which is original in nature. Primary data can collect through personal
interview, questionnaire etc. to support the secondary data.

2) Secondary data collection method

The secondary data are those which have already collected and stored.
Secondary data easily get those secondary data from records, journals, annual
reports of the company etc. It will save the time, money and efforts to collect the
data. Secondary data also made available through trade magazines, balance sheets,
books etc.

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This project is based on primary data collected through personal interview of
head of account department, head of SQC department and other concerned staff
member of finance department. But primary data collection had limitations such as
matter confidential information thus project is based on secondary information
collected through five years annual report of the company, supported by various
books and internet sides. The data collection was aimed at study of working
capital management of the company

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 DATA ANALYSIS & INTERPRETATION
Q1. Where do you invest your savings?

OPTIONS NO OF RESPONDENTS
Equity 59

Mutual fund 25

Fixed deposits 9
insurance 7

70
EQUITY
59
60

50
MUTUAL FUND
Percentage

40

30 FIXED DEPOSITS
25

20
INSURANCE
9
10 7

0
Sector

INTERPRATATIONS
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This figure says that most people go for at 1st EQUITY investment then for
MUTUAL FUND, FIXED DEPOSITS AND INSURANCE. Because equity gives
good return in short time as well as long term as compared to mutual fund.

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Q2. Which sectors give more return?

OPTIONS NO OF RESPONDENTS

Share market 23

Mutual fund 77

23%

77%

Sharemarket Mutual funds

INTERPRATATIONS:

This pie chart shows that share market give return 77% as compared to
mutual fund at 23% return. It signifies mostly more people go for share
market as compared to mutual funds.

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 Q3. Your investment decisions are influenced by

Options No of respondents
Oneself 24
Broker 36
Eco policies 20
Market research 12
Friends/relatives 8
Any other

40
36
Oneself
35

30 Brokers
Percentage

24
25
20 Eco. Policies
20

15 Market Ramous
8
10
Friends/Relatives
5

0
Investment Decisions

INTERPRATATIONS:

How do investors take their investment decisions is presented in this bar

graph. In this graph it is evident that mostly investment decision are taken on
the insistence of the brokers firms and companies and that percentage is 36%.

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In this area Sharekhan has its own research report and that strike rate has 80%.
This is an advantage to the customers of Sharekhan.

Q4. Are you satisfied with your current investment?

OPTIONS NO OF RESPONENTS
YES 42
NO 58

42%
58%

Yes No

INTERPRATATIONS:

That chat is show the satisfaction level of current investment( in share) and
long term investment(mutual fund) than here shows that the satisfaction level in
current investment (shares) is 58% and satisfaction in long term investment
(mutual fund) is 42%.

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 Q6.What is the factors which you considered before investing in particular
company?

OPTIONS NO OF RESPONDENTS
Financial potions 24
Current market position 36
Goodwill 20
Future prospects 12
Any other 08

40
36 Financial Positions
35

30
Current market Positions
Percentage

24
25
20
20 Goodwill

15 12
Future Prospects
10 8

5 Any other

0
factors

INTERPRATATIONS:
What factors are necessary before the investment in company or in firm
is show in this bar graph. It is evident that in the current market position
accounts for 36% , most investors go for investment after seeing the
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current market positions and after that the financial position of
company which is at 24%, then goodwill of company at 20%,future
prospects at 12%,and any other factors at 8%.

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  What is the market of share khan in the earning share
brokerage?

Comparison between different broker company according to earn brokerage

5paise 40 1 3 .2 3 %

sharekhan 70 2 3 .3 4 %

motilaloswal 11 3 .5 3 %

icicidirect 61 2 0 .0 5 %

hdfc 15 5 .0 1 %

indiabulls 38 1 3 .0 6 %

kotak 19 6 .3 3 %

any other 46 1 5 .4 5 %

Voters: 300.

INTERPRATATIONS:
Share khan earn more brokerage in share trading as compared to all the leading
firms and companies and share khan get 284 vote and 23.34% regarding to
other firms and companies earning that is shown that satisfied level, share khan
strike rate all things are shown share khan ‘s profit and market share.

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 OBSERVATIONS & FINDINGS

 most people go for at 1st EQUITY investment then for MUTUAL FUND,
FIXED DEPOSITS AND INSURANCE. Because equity gives good
return in short time as well as long term as compared to mutual fund.

 77% as compared to mutual fund at 23% return. It signifies mostly more

people go for share market as compared to mutual funds.

 mostly investment decision are taken on the insistence of the brokers

firms and companies and that percentage is 36%. In this area Sharekhan
has its own research report and that strike rate has 80%. This is an
advantage to the customers of Sharekhan.

 the satisfaction level of current investment( in share) and long term

investment(mutual fund) than here shows that the satisfaction level in
current investment (shares) is 58% and satisfaction in long term
investment (mutual fund) is 42%.

 the investment in company or in firm is show in this bar graph. It is

evident that in the current market position accounts for 36% , most
investors go for investment after seeing the current market positions and
after that the financial position of company which is at 24%, then
goodwill of company at 20%,future prospects at 12%,and any other
factors at 8%.

 Share khan earn more brokerage in share trading as compared

to all the leading firms and companies and share khan get 284
vote and 23.34% regarding to other firms and companies
earning that is shown that satisfied level, share khan strike rate
all things are shown share khan ‘s profit and market share.

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 CONCLUSION

The strategy adopted by me in completion of this project help me a lot till

now in making comparison between share market and mutual funds. From the
analysis we can say that if there is more risk there is more return and we can say
that share market is totally dependent on the risk taken by the investors in
investing in shares. And in mutual funds there is less risk as the money of
investors invested in different sectors so it can divide the risk in different
portfolio adopted by mutual funds companies.

At last I can say that money invested in this rise and fall market it is
better to invest in mutual funds for those investors who are risk adverse and for
those who are risk taker it is better for them to invest in share market.

We can also say that in share market customers is decision maker while
in mutual funds investors is totally dependent on assets management company,
investors do not have active control on money invested by him/her.

In OJT the strategy adopted by me in achieving my target helped me a

lot. This strategy helped me in knowing the customer reaction towards share
market, customer’s attitude towards share broking firms and in this I helped
how to interact with the customers which is beneficial for me in future .

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 SUGGESTIONS

After interpretation and analysis, I am giving certain suggestions to the company

which I hope may be helpful for the company.

 The company should utilize its stock more efficiently.

 The company should pay attention towards the proper and efficient
utilization of working capital.

 The company can reduce the time for purchase order. The buffer should be
maintained in case of emergency. Insurance should be covered especially
fire in case of transit journey also.

 The company should provide some Opportunity to the New Customer of

Shares.

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 BIBLIOGRAPHY

 www.sharekhan.com

 www.mutualfunds.com

 www.amfi.com

 www.google.com

 Training kit provided by Sharekhan

 www.altavista.com

 www.dogpil.com

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