Professional Documents
Culture Documents
Dial-n-Trade
Mutual Fund
Commodity
Derivative
Depository Participants
Distribution oI Financial Services
Advisory Services
Private Clients Group
Research Based Advices
PortIolio Management System
OIIline
Karvy`s Services
Online
Other Services
44
OFFLINE
ARKETING DE!ARTENT
The main aim oI marketing activities at Karvy is that the customer should get enough
guidance to join the company and how he can get the best service than any other
stockbroker. There is an oIIicer Ior handling the marketing activities Iollowed by two
executives and it is not limited to them but the other people are also having some
responsibilities to increase the no. oI clients and retain them by providing them the
services needed by them.
There are many services those are designed such that the speciIic target segments oI the
customers are covered and the products are positioned in the minds oI customers as the
best one in India. The services are as given below:
Karvy is India's leading national network oI stock-broking outlets. It is having the largest
retail distribution chain in India. Karvy is not only a share-broking Iirm, but it avails oI
various services and other Iinancial products to its clients.
1. OIIline Trading Iacility
2. Online BSE and NSE executions (through BOLT, i.e. BSE Online Trading and
NEAT, i.e. National Exchange Automated Trading)
3. Free access to investment advice Irom Karvy`s Research team.
4. Depository services: Demat and Remat transactions
5. Derivatives trading, i.e. Futures and Options (through NEAT F&O)
6. Internet based online trading.
7. Other investment products: Mutual Funds, RBI Bonds, Insurance, etc.
56
7 !S OF KARVY
(1) !RODUCT
!roduct Variety
Karvy oIIers 3 types oI online trading accounts Ior its customers specially
designed according to their volume in share trading. Those 3 varieties are:
For retail investors
For high net worth investors with large and active equity portIolio who need to
monitor and action swiItly
For high net worth investors dealing in derivative market.
"uality
User Friendly, attractive & colourIul Website.
Design
The website oI Karvy namely www.karvy.com has been specially designed to
Iacilitate its users to buy and sell shares in an instant at anytime and Irom
anywhere they like. The site is user Iriendly allowing even a layman to easily
operate without any hassles.
Features:
Karvy`s product comes with the Iollowing Ieatures:
Trade execution in a Iraction oI a second!
Single Screen Trading Terminal
Real time streaming quotes. Price watch on any number oI scripts.
Hot keys similar to Brokers Terminal.
Customized Alerts based on Multiple Parameters.
Back up Facility to place trades on Direct Phone Lines.
Intra day charts, updated live, tick-by-tick.
Instant Order\ Trade ConIirmation in the same window
Live margin, position, marked to market proIit & loss report.
Competitive Brokerage.
Flexibility to customize screen layout and setting.
57
Facility to customize any number oI portIolios & watch lists.
Facility to cancel all pending orders at one click.
Facility to square oII all transactions at one click.
Top Gainers, Top Losers, and Most Active, updated live.
Index inIormation; index chart, index stock inIormation live.
Market depth, i.e. Best 5 bids and oIIers, updated live Ior all scripts
Online access to both accounts and DP.
Live updated Order and Trade Book.
Details oI pending executed and rejected orders.
Online access to Customer Service.
128 - bit super saIe encryption.
Facility to place aIter market orders
Online Iund transIer Iacility Irom leading Banks
Online intra-day technical calls.
Exhaustive database oI over 2000 companies
Historical charts and technical analysis tools.
Last but not the least, ideas that help you to make money!!!
Services
Karvy oIIers its customers, depository services and trade execution Iacilities Ior equities,
derivatives and commodities backed with investment advice tempered by decades oI
broking experience. The teams oI its dedicated analysts are constantly at work to track
perIormance and trends.
Dial-n-trade is also an exclusive service available to all Karvy customers Ior trading in
shares via the telephone. On dialing the toll Iree number 1800-425-1900 and on entering
the customers TPIN number, the customer will be directed to a telebroker who will buy or
sell shares Ior him.
(2) !RICE
Less !rice
On Line OII Line
One time
registration Iee
750 300
Minimum brokerage
Charges Quarterly
Nil Nil
58
Brokerage
Karvy in its online business charges brokerage as Iollows:
- In equity Market:
On Trading: 0.1 (Total brokerage) On Delivery: 0.5
- In Derivative Market
On Trading: 0.12 (Total brokerage) On Delivery: 0.1
Service Tax
12.24 on Brokerage.
Custody Charge
Re. 1 per script held per month.
Discounts
For investors with High Net worth, there are slabs in brokerage rates.
!ayment !eriod
The transaction settlement date in the securities market is T 2 days i.e.
the payment oI the transaction taken place has to be made within two days
oI its occurrence.
Credit terms
Karvy allows its customers to trade up to 4 times i.e. by keeping 1/4th
margin with them.
() !ROOTION
Online share trading is totally a new concept in Indian Market. Generally investor
doesn`t like to come out Irom conventional way oI share trading. Karvy has
introduced this product in. The concept and Product are still new in the market.
ThereIore the company has undertaken extensive promotion campaign to create
awareness about the product. Karvy adopts the Iollowing tools Ior promoting the
product
59
Advertising
Company advertises its product through TV media on channels like CNBC, Print
Media-in leading dailies and outdoors media. Besides attractive and colorIul
brochures as well as posters are used giving Iull details about the product.
Mails are sent to people logging on to sites like moneycontrol.com and rediII.com.
Also, stalls are opened up now and then at places where prospective customers can
be approached.
!rints and Broadcast Advertisement
Karvy gives advertisement oI the product oI on-line account through various
media, through advertisement in various newspapers in diIIerent web site like
3iinIotech.com, monster.com.
Motion picture.
Brochure and leaIlet
Karvy also distribute some brochure to the person who is interested in online
trading.
Poster and booklets (value line)
Video Tapes
Give a live demonstration
Karvy also provide the Iacility to give live demonstration oI the product online
between the market hours between 10:30 am to 3:00 pm in the big companies like
Reliance, ONGC, Hotel Galaxy, Rotary Club Irom where they except crowd to
see the live demo oI online trading service or Irom they can except a more
customer or investor who can understand this product.
Sales !romotion
Karvy participating in trade Iairs like PCEXPO-2003
Exhibition.
Karvy also provide some scheme which help to increase in sale the product.
60
Sales Force
The Company has
an aggressive sales Iorce, which is given incentives, based on their sales. The sales
Iorce is given intensive training continuously.
Seminar
The Company also arranges seminar in corporate world Ior creating awareness
about the product. Recently, it had organized Ior a seminar in ONGC, IIM.
Direct arketing
Company emphasizes more on direct marketing, as many people are still not aware
oI this new way oI smart trading. For this, the company recruits and trains sales
representatives so as to explain the product and solve customer queries related to the
product. This is the most eIIective way to communicate the three-in-one concept
which company oIIers.
Telemarketing
This is another promotional tool company is using to boost up its sales. For this, the
company collects the database oI the people belonging to diIIerent proIessional
segments.
4) !LACE
Channels
Karvy uses various channel alternatives to reach to its customers through
Internet
Tele Marketing
Retail Share Shops
Franchisee Owners
Sales Force
61
Coverage
Locations
Karvy has the large chain oI retail share shops in India. It has 238 OIIices located in
162 cities all over India like Pune, Thane, Chennai, Kolkata, Banglore, Luckhnow,
Darjleeng, Kanpur, Baroda, Midnapore, Surat, Delhi, Gaziabad, Hydrabad,
Allahbad, etc.
Ground Network in India
Presence in 162 cities with a network oI over
238 oIIices
Over 450 NSE & BSE trading terminals
spread across the country
Around 6,000 active business associates
across the country
Over 3000 employees comprising oI
proIessionals & management graduates
62
(5) !EO!LE
Employees
Selection: Employees are selected on the basis oI their experience and
qualiIication as applicable to the job.
Training: Intensive training is provided to the employees till a week once
they join and even at times required aIter that.
Motivation: The employees are motivated through incentives they are
provided.
Research Team
karvy has a team oI dedicated analysts who have years oI working experience in the
industries that they track, and a proven track record in using their knowledge oI the
investment science to deliver results.
Customers,
The heart oI karvy is really treated loyally like the kings. The customer care,
which comprises oI highly trained executives are operating it Irom 9:30 to 11:00
p.m.
(6) !HYSICAL EVIDENCE
Office Environment:
The ambience within the oIIice is what can make the customer Ieel comIortable in
trading. The cordial and Iriendly atmosphere at oIIice is like a Iull time motivation
Ior the employees.
Interiors and Infrastructure:
The oIIice is well Iurnished and has 14 computer terminals on which tick-
by-tick price movements oI the securities are displayed.
63
(7) !ROCESS
In this service organization, the ways in which the customers receive delivery oI
the service constitutes the process. Here, the process involves adding value` or
utility` so that the customers get Iull satisIaction Ior the money spent by them.
Here the process begins Irom the step when customer wants to open e-invest
account and ends when his account is actually activated.
All Indian residents and NRI are eligible to avail this service.
Customers can open a karvy e-invest account by Iilling a single application Iorm.
This Iorm includes 9 agreements like
. Main Iorm with customer details
. Agreement between karvy and client in respect oI the ONLINE-
INVESTMENT SUPPORT service oIIered.
. Agreement between the Depository Participant and the client Ior providing the
transaction statement through Internet.
4. Irrevocable power oI attorney
5. Agreement between the DP and the person seeking to open an account with
the DP.
6. Maintenance oI client`s account on a running account bases by KSBL.
7. Agreemen4 giving the right oI lien on the credit balance oI client in NSE
trading.
8. Agreement giving the right oI lien on the credit balance oI client in BSE
trading.
9. Risk disclosure document (cash segment)
64
Customer Satisfaction (Theoretical Framework):
The only way towards leading the market and Iighting tough with the competitors is:
Customer SatisIaction.
-PHILIP KOTLER
Just when you thought customer satisIaction was surpassed only by exceeding
expectation, customer satisIaction rules are changing again. New horizons will alter how
we think about customer satisIaction and will shape Iuture oI homebuilding. Here is a
preview oI what is to come.
Stage : Customer Satisfaction
Customer satisIaction is the Iirst stage because it seeks only to meet customer
expectations and avoid disappointment. The problem is that as you drive customers to
lower their expectations, you drive them Iurther away Irom what they actually want.
Meeting or even exceeding customer expectations may not provide them with everything
they want, but it is a requirement Ior moving to the stages beyond customer satisIaction.
Stage : Customer Fulfillment
'Customers . just want exactly what they want, says Joseph Pine in his book, The
Experience Economy. Since customers can not always get everything they want, they buy
Irom the builder who minimizes the diIIerence between what they want and what they
expect to get termed Customer SacriIice.`
The IulIillment strategy aims to reduce customer sacriIice by promising them what they
want and backing the promise up with superior delivery capabilities. The winning
builders in the customer IulIillment marketplace will have the capability to eIIiciently
deliver exactly what customers want while providing extraordinary value.
Stage : Customer Delight
Pleasant surprises delight customers. Surprises create transIorming experiences unique to
the builder who creates them. Breakstone Homes, a Florida luxury home builder, is
opening an elaborate 14,000 square Ioot custom home design center. The center`s goal is
to amaze customers with designs and material possibilities that allow customers to create
homes that surpass the home oI their dreams. Breakstone is creating customer-
transIorming experiences impossible Ior their customers to duplicate elsewhere.
It is no Ionger enough to sutisfy customers; you
must deIight them|
65
Surprises during the homebuilding process delight customers oI Shea Homes San Diego,
an NHQ winner. Every customer contact is treated as an opportunity to create a rewarding
relationship. 'We get inside the mind oI the customer to anticipate their needs beIore they
even know what they want. Says Diane Rivera. Like a well-scripted play, Shea
employees provide pre-planned individual attention to customers with predictable results.
At scheduled intervals construction personal contacts keep customers inIormed on the
progress oI their home and answer questions. Shea University seminars impress
customers with unexpected attention to quality deals. 11 months aIter closing customers
are surprised when Shea calls to schedule and inspection to Iind any items that they can
Iix while the home is under warranty.
It is likely that you can Iind examples oI customer satisIaction, IulIillment, and delight in
your company. Use the experience to create new ideas that continue to drive your
company beyond customer satisIaction.
Customer Touch with KARVY
66
INDUSTRY ANALYSIS USING PORTER`S 5 FORCES
MODEL
Error
SUPPLIERS
Web maintainers
NSCL
CSDL
NSE
BSE
MCX
NCDEX
SUBSTITUTES
Mutual Funds
Insurance
Bank FD
BUYERS
Small Investors
Franchise/Business
Partners
HNI`s
MF Companies
HUF
Institutional
Investors
POTENTIAL ENTERANT
Investmart
Various Banks
Geojit
Cipher
UTI Securities Ltd.
ReIco Group Ltd.
IDBI Capital Mkt. Services Ltd.
COMPETITORS
ICICI Web Trade Ltd
Sharekhan Securities.
Kotak Securities Ltd
India Bulls
HDFC Securities Ltd
Marwadi Finance Ltd
67
. SUPPLIERS
NSE & BSE are playgrounds where common an investor trade through stock broking
houses, Ior which they have to take permission Irom NSE/BSE.
NSE & BSE are under the purview oI SEBI, that`s why stock broking houses like
KSBL, have low bargaining power. But here there is one advantage that NSE/BSE
have i.e. they cannot go Ior Iorward integration.
MCX & NCDEX are stock exchanges which trade in commodities and derivatives.
Here again stock broking houses have to Iollow rules and regulation oI the same.
Web maintainers are companies which maintain web sites & technical aspects oI the
same. Here stock broking houses like KSBL can have more bargaining power due to
stiII competition among web maintaining companies.
Web maintainers are companies who make and maintain soItware`s Ior stock broking
houses. II say Ior example stock broking houses switches over to other web
maintainers then that company cannot understand the mechanisms oI soItware`s. So it
is quite high switching cost.
. BUYERS
There are various types oI investors who trade through stock broking houses like
KSBL, which includes investors like small investors, medium net worth investors,
business partners, institutional investors and mutual Iund companies.
Here the bargaining power oI stock broking houses depends on how big the investor
is.
So here we can say that bargaining power oI stock broking houses is high in case oI
small investors & HUF.
While its moderate in HNI/MNI`s and business partners.
While its less in case oI mutual Iund companies and institutional investors.
There is competitive buzz in stock broking industry, competitors are oIIering low
brokerage and best services with added Ieature. So switching cost is pretty much less.
So the buyer can easily switch over to competitors product.
68
. Entry Barriers
Huge capital: - Capital is necessary not only Ior Iixed Iacilities but also Ior
customer`s credit and absorbing start up losses. To start a stock broking house, one
needs huge capital Ior technology up gradation and skilled manpower.
Technology: - Technology Ior stock broking houses is liIe saving device. Stock
broking requires huge capital to make their products user Iriendly, which in turn
requires capital to employ skilled manpower. Thus, technology could be one oI the
entry barriers.
Regulatory Constraints: - Obtaining a license is a tedious job Ior a stock broking
house. It should comply with the regulation oI the governing bodies like SEBI,
NSDL, etc. For a stock broking houses to plunge into the stock broking industry, it
needs to have some kind oI Iinancial background and expertise. Thus, regulators
constraints could be an entry barrier.
Experience curve: - The core competency in this industry is the services which
are provided to the end-users and the research based activities which includes 'TIPS,
Iundamental as well as technical script analysis. Also the most important thing which
helps already established Iirms is-'TRUST which people would be having on Iirms
like Karvy, SSKI, India InIoline, etc. this is very diIIicult Ior new companies to
imitate.
Network:- the 'Reach to the customer is the key Iactor in the industry. The
network oI the companies like Karvy Motilal Oswal, Sharekhan, ICICI is very
eIIicient and spreded all over India. It will take time Ior a new entrant to establish
such a huge network (e.g. Marwadi), which say that, Network can come up as most
diIIicult entry barrier to overcome.
Expected Retaliation: - Whenever a new player comes in the industry, the old
companies have an option to reduce the prices oI their product. This kind oI practice
is called expected Retaliation which is also possible in this industry in terms oI less
brokerage rates and reduced account opening charges. E.g. beIore the entry oI so
many new companies
4. COMPETITORS
The company is Iacing the competition Irom local as well as national level
players. The local players provide Iacility Ior oII-line trading while the national
players like Sharekhan, ICICIdirect.com and www.kotakstreet.com, HDFC Security
provide online trading services.
There are also other big names like Indiabulls, India InIoline and Marwadi
encircles the company Iorm both the sides by providing online and oII-line trading
with competitive services.
69
5. POTENTIAL ENTRANT
Few entrants, which may take away the share oI current players.
The potential entrant in Bhavnagar city like Invest mart, Jeojit and Cipher which
are coming in near Iuture.
Nationalized banks are also thinking to enter in this Iield by tying up with broking
houses. E.g. Bank OI Baroda.
6. SUBSTITUTES
Here substitutes are such instruments which can be used instead oI investing in
shares
The instruments like Bank FD, insurance, mutual Iunds are the substitutes.
II the use oI this instruments increase this may be disadvantage Ior the stock
broking houses.
The companies and banks which are having these instruments can plunge into this
industry.
Banks are planning to jump while others may come.
70
CO!ETITIVE ANALYSIS
Follower:
The Iollowers are just blindly Iollowing the other player which is leader and
challengers.
The players like Sharekhan, Motilal Oswal, HDFC Securities, and Kotakstreet
are the Iollowers.
LEADER:
Karvy has highest no. oI Sub Brokers (15000) in all over India.
Largest registrar to issue : ~ 700 issues
ICICIdirect.com is a leader in the online account which is having 1, 24,000
account in the country.
While in oIIline account Sharekhan is leading with 64,000 oIIline accounts
NICHER:
ICICIdirect.com and Kotakstreet.com are the two stock broking houses which
are Iocusing only on online investors.
CHALLENGER:
Sharekhan, Kotakstreet and Indiabulls come under this head.
Indiabulls is also challenging with low brokerage rates and class one service.
71
SEVEN 'S ODEL
Style
Systems
Structure
Strategy
Skills
Staff
Super ordinate
72
STRUCTURE:
Karvy is Ilexible in terms oI making temporary structural changes to cope up
with speciIic strategic tasks without any hassles. II need arises, the top
management can assign the role to any oI its employees which it considers
capable and skillIul.
STRATEGY:
Karvy believes not only in developing the strategies but also in its successIul
execution.
SYSTES:
This constitutes oI all the training and development systems, estimating budgets
and the accounting system oI Karvy.
STYLE:
Style reIers to all the symbolic actions undertaken by top managers oI Karvy and
its inIluence on the subordinates.
STAFF:
Karvy values its employees as its assets and thereIore careIully trains and
motivates them by giving them incentives at regular intervals. Talented
employees are assigned as mentors and given real responsibility and moved into
higher positions.
SKILLS:
The term skills reIer to those activities organizations do best and Ior which they
are known. Karvy is known Ior its timely advice (suggestions/tips), which it
caters to its customers and it boasts oI 70-90 strike rates in booking
recommendations.
73
SU!ERORDINATE GOALS:
This reIers to guiding concepts, values and aspirations that unite an
organization in some common purpose. It provides the customers the best service
as it believes in customer satisIaction and retention.
74
75
FINANCE DE!ARTENT
Like Blood is the most important in our body, in business Finance is the blood oI any
business. Finance is needed Ior all the activities like production or services as well as
their distribution. The Iinance department directly inIluences all the Iunctions oI the
other departments. Also Iinance has to give equal importance to all departments. Finance
is that administrative area or set oI administrative Iunction in an organization, which
relate with the arrangements oI cash & credit so that they organization may have the
means to carry out its objective as satisIactorily as possible. Karvy has special
accounts department Ior separate calculation oI pay-in and pay-out oI Iunds according to
the client's ProIit/Loss. Finance management is done at Karvy is done by managing the
stocks in the Demat accounts and Iunds in the margin & trading accounts
Finance is the liIeblood oI an organization to continue its activities and the Iinance
management at Karvy can be divided into two major parts viz. DP (depository
participation) and Accounts management, which are shown in the Iigure given below.
Finance
DP is treated as a separate department at Karvy and is covered in the back oIIice
management in the organization structure. In simple words, DP means providing the
Iacility to the clients Ior managing the stock bought/sold by them. DP covers two major
terminologies viz. settlements and the auctions which is a part oI managing Demat
account. Settlements as deIined by SEBI (Securities Exchange Board of India) are
T2, currently and it means that the Demat account oI the clients are prone to be
suIIicient Ior selling a script with no debit at all, i.e., the account must have the sold
DP
Account
76
Amount oI stock have to IulIill the settlement aIter two days Irom trade-day. The
settlements Ior Day-Traders is not needed because they buy/sell stocks in that
particular day, only the delivery trades are needed to be settled because iI you sell
1000 shares oI, say SAIL then your account must have the stock beIore you sell it or
it must be there in your Demat beIore the next day's trading begins (market opens).
Generally, the timings are 9:30 and 3:00 as a deadline Ior the client and he must
provide the stock Ior giving a delivery to the buyer. The chart shows the total
transaction between two clients.
The chart shows the process that the request Ior selling and buying passes through
the DPs oI the respective clients and Iinally the exchanges like Marwadi becomes the
controlling intermediary Ior the delivery oI stocks and this process is done in two
days. Nowadays, as banks are becoming Iast Ior E-Fund TransIer (EFT) and Phone-
banking is getting more popularity, SEBI is thinking to make the Iinancial market
oI India to have a maximum speed oI transactions just like the other nations in the
world and proposing Ior Tl settlement scheme but the system is not enough
competent Ior that thing. But soon or later we will have such a settlement system in
India, as said by Mr. J. N. Bajpai, chairman oI SEBI.
The client, iI not capable oI providing the delivery oI say, 1000 shares oI SAIL then
the Auctions are initiated by the exchanges and the client has to pay Ior the price
prevailing in the market with 4-5 penalty. The penalty can go on maximum to 20
more than the market price oI the sold stock. Generally, it is known as a buying
auction and a same kind oI auction is Ior selling the stock Ior which the buyer was
proved unable to pay the price is carried out by exchange, known as the selling
auction. And a debit or credit note is provided in the respective case oI auction to the
clients, i.e., Ior buying auction debit note is given on the T4 basis and in case oI
selling auction the credit note is given on T5 basis. There are two types oI
auctions called as Internal auctions & Market auctions, the internal auctions are
deIined as the auctions carried out between the other shops oI Karvy and market
auctions are those as explained earlier, the auction carried out in the market..
This is all about settlements but now switch to Iunds management or accounts
management at Karvy. The accounts are diIIerent that is the margin a/c Ior deposits oI
the client and trading a/c Ior which ProIit/Loss are settled. The collection oI Iunds
Irom the clients who had a debit balance or made a loss are made on the next day oI
DP (Karvy)
C E
DP(anyone)
C
The Settlement between two Clients
77
trading and the payments to the proIiting traders are made aIter two days oI trading
because the cheques are received Irom H/O and then pay-out is done and Pay-in is as
explained that amounts to be taken Irom the clients.
In this way, accounts are managed but in case iI the client is unable to pay, the deposit
Irom the margin a/c is cut down to the payments and in case iI a client is having a credit
balance in F&O trading though he had a debit balance in cash-NSE & BSE trading, a
JV request is sent to H/O Ior totaling the three balances. The main aim Ior accounts
management is that the clients must have a credit or no debit on the next day.
The DP services provided by Karvy are Ialling under the regulation oI NSDL
(National Securities Depository Limited) and CDSL (Central Depository Services
Limited), organizations governed by SEBI to regulate the depository services in the
interest oI the investors. So the Iinancial market in India is governed by Ministry oI
Iinance under which two major bodies viz. SEBI & RBI are covered and under RBI the
banks and other Iinancial institutions are covered while SEBI covers the exchanges,
NSDL & CDSL and the whole DP service providers with the brokers to the investors at
the lower end oI the Iinancial market.
In this way we have gained a meaningIul knowledge about India's Iinancial market and
its structure Irom this training at Karvy. In this way, the Iinance Iunction is carried out
at Karavy by Iollowing the guidelines given by SEBI. And the company is a private
limited one with its own policies Ior disclosing its Iinancial statements, so we are not
able to give any Iigures Ior showing the Iinancial position oI the company.
Function of Finance Department
Raising Find
Allocation oI Fund
Receivable
Insurance
Salary
78
79
HUAN RESOURCE DE!ARTENT
Human resource is the crucial resource that a company can use to grow with the
work or the employees. HRM activities at Karvy start Irom induction to the
speciIic job training and are done by H/O at Hyderabad. H/O takes a written test and
selection interview Ior Iilling up vacancies in branches but the recruitment is done
by the branch itselI and the selection is perIormed by H/O Irom the screened
applicants.
Any new recruit is Iirstly inducted to the company and sent to T & D department that
is covered under HRD and T & D programmers makes employees aware about all the
activities/jobs within the department he/she is to be recruited. Suppose iI, I would be
recruited Ior Iinance department then the Iinance related employees are known to
me with their work proIiles, that is, what they really do?
Then the speciIic job training is provided at H/O and the person has to keep in touch
with the concerned department at H/O on internet because he/she has to solve many
conIlicts arising in the investor's mind and to have an up-to-date inIormation
regarding the procedures and any new Iacilities or policies to resolve the problems oI
the clients. It is a must Ior each employee because the employee is the people by
whom the company gets its customers and retains them.
HRP (Human Resource Planning), HRIS (Human Resource InIormation System),
Recruitment & Selection, Career planning and development, Assessment &
development oI employees Ior PerIormance appraisal, etc. activities oI managing the
HR at Karvy is maintained in a way to meet the requirements.
The corporate culture at Karvy is maintained in such a way that the people are
helpIul to each other and eager to get the work done as soon as possible with a
cooperative thinking. An additional Rs. 10000 is provided Ior each outlet oI Karvy to
motivate its employees by perIormance appraisal and also the heads oI each
departments and braches has to go through a 360
6
perIormance appraisal Ior
maintaining the consistency in growth oI the company. In the end we can say that
the human resource oI Karvy is a best managed and used Ior the continuous growth
and development oI the company Ior its Iuture plans to be achieved time-to-time.
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Confidentiality Agreement
On joining Karvy it is imperative Ior all employees to sign and abide by a
conIidentiality agreement, which is legally binding.
It is an agreement stating both during and aIter employment
all data pertaining to any businesses involving Karvy is to
be kept conIidential and protected and not to be shared with
anyone. InIormation relating to the company's business,
dealings, methods, appointments, practices, transactions,
designs and processes or aIIairs is oI substantial value and
shall be treated as being conIidential, whether or not it is
individually identiIied as conIidential. It is the subject oI
reasonable eIIorts to maintain its secrecy and is being
provided and disclosed to you solely Ior use in connection with your employment by
the company.
This agreement also binds employees to uphold all ethical practices espoused by the
company.
KARVY`S massage to all members
This handbook has been designed to communicate to our team the various Human
Resource (HR) policies/practices that we are trying to institutionalize in our
organization.
This handbook disseminates inIormation on all the KSBL (Karvy) policies,
procedures, beneIits and responsibilities oI the employees. The policies have been
designed with a Iocus on introducing market aligned HR practices at Karvy while
meeting the needs oI individual employees and addressing their concerns.
This handbook is not an agreement or contract oI employment and thereIore need not
be construed as a contract. The management oI Karvy reserves the right to modiIy
this handbook Irom time to time at its sole discretion.
This handbook is Ior internal circulation only. We would request you to read,
understand and comply with all the provisions oI this handbook. II you need any
clariIications or Iurther inIormation on any aspect oI this handbook, you can get in
touch with your immediate superior or the HR team.
We welcome you to the Karvy Iamily and hope your association with us is mutually
EXCITING, FUN FILLING and CHALLENGING!!
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KARVYS Belief and Expectations
Our vision at Karvy is "to empower the investor to make better investment decisions
through quality service and superior advice."
Karvy believes in and promote a culture that:
Stimulates the employees' drive to excel
Nurture their entrepreneurial spirit by providing them exposure to challenging
work opportunities and imparting autonomy to Iunction eIIectively
Support the employees to deliver by incorporating practices aimed at
Employee development/skill acquisition
Enhancing transparency and trust, being non-discriminative to any
practice/procedure/system
Establishing norms towards enIorcing discipline in the organisation as
regards work etiquettes
Promotes collaboration and team spirit amongst the employees
Acknowledges and rewards individual and team contribution through appropriate
rewards, recognition and compensation
Build a sense oI ownership across the organisation Ior adherence to risk and
compliance procedures amongst all employees and channel partners.
What Karvy Expect from their team?
In our industry, relationships with clients are highly critical. Developing customer
Iocused solutions and managing their expectations eIIectively and delighting them is
the key to our success. Karvy believes that an Engaged & Committed workIorce is
indispensable Ior high quality customer service.
Karvy is in an industry that is governed by stringent regulations and non-
compliances can lead to Iinancial loss and loss oI goodwill. They expect there team
to Iunction in tandem with the organization and support the management to inculcate
a strong discipline across the organization
At Karvy we believe in having a strong perIormance-oriented culture. We are
convinced that this is the best way to encourage employees to set high perIormance
standards and goals that are tracked, and perIormance that is evaluated to decide the
rewards.
Karvy strongly believe in employee development and growth. In this competitive
environment, Karvy expect there employees to be abreast oI the external changes and
take initiatives to adopt the new changes. As part oI there HR initiatives, they will
identiIy training needs, design appropriate training programmes and conduct them on
regular basis.
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JOINING FORALITIES
Karvy welcomes all employees and is conIident that this
association will be mutually enriching and challenging. It is
essential Ior the HR team to keep record oI your personal and
proIessional inIormation to enable speedy processing oI
inIormation and planning relating to areas such as tax and medical
insurance as well as allowing us to assist you in the time oI
emergency.
In this regard we request all new employees to please Iurnish HR with the Iollowing
inIormation. The documentation needed Ialls into three primary categories: personal
inIormation, joining report and other Iorms.
!ersonal Information
For the personal record oI the employee the Iollowing documents should be
submitted to the HR team on the day oI joining:
Duly completed Application Form
Two passport size photographs
ProoI oI date oI birth
Copy oI educational certiIicates: graduation/post graduation/diplomas/NCFM
certiIicates (wherever applicable)
Relieving certiIicate Irom the previous employer, iI applicable
ProoI oI last drawn salary
Medical examination reports
Bank account details
Insider Trading Agreement (only Ior designated employee)
ConIidentiality Agreement
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Joining Report
In addition the employee is required to Iill out a Joining Report as per the Iormat
attached in the annexure.
Other Forms
The Iollowing Iorms/agreements also need to be completed:
O Medi-claim insurance application Iorm
O Provident Fund transIer/application Iorm
O Provident Fund nomination Iorm
O Gratuity nomination Iorm
O Accident Insurance nomination Iorm
O Tax estimate/Savings declaration Iorm
Induction:
Induction Iorms an integral part oI Karvy's culture. The
induction programmes are designed with the Iollowing
objectives:
O Provide an overview oI the company's business
and product portIolio.
O Enable the new employee to understand the work
culture and processes/systems.
O Provide an opportunity to interact with his/her superiors/colleagues and
enable him to understand them better.
During induction, employees are:
O Provided their own workspace
O Given a copy oI this Employee Handbook
O Introduced to assignments related to their role
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Induction Process
The Iunction heads along with the HR team designs the induction programme. The
duration oI the induction programme varies Irom two days to a week depending upon
the role on the new joiner. The induction programme in the company covers three
broad areas:
I. About Karvy
Introduction to Karvy: vision, business, products and clientele
Organisation structure: key Iunctions and their accountabilities, Iunction
heads
IT systems and policies
II. HR philosophy and practices
Karvy values
Overview oI HR policies, systems and practices
Overview oI risk & compliance practices
III. About the job
Key responsibilities and expectations oI the job
Goal setting and perIormance measurements
Leave and Holiday
At KSBL we have established a set oI leave rules that are
legally compliant and that provide Ior reasonable leave
requirements oI employees, giving them the opportunity
to
Maintain a work-liIe balance.
Leaves at KSBL
KSBL provides the Iollowing types oI leaves/holidays:
Holidays
Privilege leave
Maternity leave
Paternity leave
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eave accounting year
The year Ior calculation oI leave would be the same as the Iinancial yearApril 1st
to March 31st.
Pro rata adjustments will be made to bring entitlements in line with this.
The current leave policy will be valid up to 31st March 2007 and the revised policy
that is listed below will be eIIective 1st April 2007.
Detailed Guidelines
A. Holidays
The company will declare a list oI 12 holidays every year based on the holidays
declared by the exchanges, bank holidays and regional Iestivals. Please contact your
Iunction head or branch head Ior the current list.
B. Classification of leave & eligibility
Leave type No of days (annual)
a. Privilege leave 25 working days
b. Paternity leave 2 working days
c. Maternity leave 12 weeks
a. !rivilege leaves (!L)
Eligibility - All conIirmed employees
- All employees on probation/trainees will be eligible Ior one
working day leave per
month. On conIirmation, the leave balance will be updated on a
prorated basis.
Accumulation 15 days per year, up to maximum 45 days
Encashment Privilege leave can be encased only at the time oI retirement or
resignation. The leave balance up to maximum oI 45 days will be
encased as per the basic salary at the time oI encashment and all
excess leave will lapse.
b. !aternity leave (!L)
Scope For all male employees. Leave taken Ior the birth oI Iirst two
children.
Eligibility Two working days
Accumulation Not applicable
Encashment Not applicable
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Leave planning and application
KSBL encourages employees to plan their leave careIully in order to meet the needs
oI the employees and the company. You must Iill out the Leave Application Form
when requesting time oII, which must be signed and approved by your
manager/supervisor. Employees are encouraged to actively communicate leave plans
and details to their supervisors so that all team members can adjust their schedules.
The company will try at all times to meet any reasonable requests Ior leave; however
consideration oI your co-workers and any existing Leave oI all types availed in the
month must be updated on the leave card. Till leave cards are provided, an e-mail
with the approval oI leave by the immediate manager must be sent to HR and Payroll
Ior easy tracking and updating in monthly payroll.
Leave Between Holidays
The company does not permit its employees to take leave
prefixed and suffixed to the holidays.
For instance iI a holiday is on Friday and a weekly oII on Sunday, then the employee
is not supposed to take leave on Saturday. In case the employee takes leave on
Saturday, then all three days, i.e. Friday, Saturday and Sunday, will be considered as
leave.
Leave Extensions
The company does not encourage extensions oI leave. They will be granted only iI
the employee communicates such an intention in writing only in unIoreseen
circumstances at the discretion oI the management.
Leave Without !ay
Any leave availed in excess oI the entitlement will be treated as leave without pay
and proportionate salary will be deducted Ior the same. The company does not
encourage employees to take leave without pay. The leave without pay can be
waived oII only in unIoreseen circumstances at the discretion oI the management
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OTHER BENEFITS
Karvy contribute towards enhancing their employees' and their
Iamilies' liIe by extending beneIits that are oI relevance and
importance to their employees.
I. Employee Marriage Gift Policy
We believe that our employees are part oI a large Karvy Iamily. Just as employees
are an integral part oI all the developments and celebrations oI Karvy, we too would
like to be a part oI one oI the most important event in the liIe oI our employee
Marriage.
II. Medi-claim Policy
Karvy provides Medi-claim cover to all employees. The detailed inIormation on the
policy, relevant processes and the TPA (Third Party Administrator) appointed by the
company is attached in the annexure.
Coverage and limits
The Company bears the cost oI insurance premium Ior all employees as per
Iollowing limits:
Monthly CTC Coverage
Up to Rs25,000 per month Rs100,000
Above Rs25,000 per month Rs150,000
Employees have the option oI covering their dependents under this policy Ior any
amount not exceeding the limit Ior the employee; however the cost oI the same will
have to be borne by individual employees.
III. Term Insurance Policy
Karvy provides term insurance cover (death in case) to all employees. The details oI
the coverage are as mentioned below:
Annual CTC Coverage
Up to Rs100,000 Rs200,000
Up to Rs300,000 Rs500,000
Up to Rs800,000 Rs1,000,000
Up to Rs1,500,000 Rs2,000,000
Above Rs1,500,000 Rs4,000,000
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Term of Employee
!robation
All regular Iull-time employees will undergo a six-month probation period as
speciIied in the appointment letter. The probation period helps the organization to
assess the employee's on-the-job perIormance and his cultural Iit with the
organization.
Either party may give 15 days' Iormal notice oI separation oI employment at any
time during probation.
Confirmation
Completion oI the probationary period should not be construed as conIirmation till
such time that the conIirmation review process is completed.
The employee's immediate superior at the conclusion oI the probation period shall
conduct a Iormal perIormance review Ior conIirmation. The perIormance review
shall include selI-Ieedback, perIormance review by the managers with speciIic
suggestions Ior improvement.
An oIIicial letter will be issued in case oI conIirmation. In case the perIormance is
not satisIactory, the probation period can be extended Ior three months. The
conIirmation appraisal Iormat is attached in the annexure.
Either party may give a minimum oI 30 days' Iormal notice oI separation oI
employment at any time aIter conIirmation.
Transfer !olicy
TransIers become essential in the spate oI growing business requirements. To meet
them appropriately, the Company may decide to transIer any employee to any
location based on the business requirements. With the purpose to Iacilitate the same,
it is essential to have a transIer policy in place. It is necessary Ior the company to
assist employees in this process.
All employees oI the organization will be covered under this policy. The employee
will be communicated in writing regarding his / her transIer and other relevant
inIormation i.e. reporting authority, work responsibilities etc
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ode of travel for self and family
Fare Ior selI, spouse and the company on producing the tickets will reimburse two
dependent children at actuals. The mode oI travel remains the same as per
employees` eligibility in the Travel Policy.
!ost-transfer expenses
The employee and his / her Iamily will be eligible Ior Hotel stay at the new location
as per eligibility under the Travel policy. The total period oI hotel stay post transIer
with Iamily will not exceed 5 days.
Transport of Goods
The employee will be eligible Ior reimbursement oI cost oI one truckload oI personal
belonging on actual Irom his current location to the transIerred location. However,
the employee is required to submit quotations Irom minimum two transporters and
needs to have pre-sanction Ior the expense. Transport allowance will include
packing, loading and unloading charges and insurance premium. The insurance
premium should not exceed Rs.10,000.
In case oI Iunction heads / branch heads / Managers, the company will reimburse
additional cost oI transportation oI one car on actual. However, the employee is
required to submit estimated cost and needs to have pre-sanction Ior the expense.
Temporary Transfer
II an employee is deputed to any other location/ oIIice Ior a minimum period oI one
month and not exceeding six months, it will be considered a temporary transIer.
An employee on temporary transIer will be eligible Ior a monthly Deputation
Allowance equivalent to 25 oI his current CTC and the same will be paid along
with the monthly salary.
Any temporary transIer exceeding six months will be considered as permanent
transIer and all beneIits associated with temporary transIer will cease to be
applicable.
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!ersonal Conduct
Karvy`s business is dependent on there reputation and the level oI trust that is
reposed in us by our customers. However this calls Ior a very high inclination
towards adherence to regulations and being ethical in all our dealings. They believe
each and every employee's behavior needs to reIlect our philosophy. The onus is on
each and every member to reIrain Irom any illegal, dishonest or unethical conduct
and report to the management any incidents oI malicious nature occurring around
him.
Employee Responsibilities
The job perIormance and personal conduct oI each employee directly aIIect the
image and reputation oI Karvy. Employees are required to observe the Iollowing
guidelines to maintain ethical standards:
Ensure there is no theIt, embezzlement, misappropriation oI Iunds, Ialse
entries in any book report or statement with intent
To deIraud and IalsiIy the expense accounts is a cause Ior immediate
dismissal.
It is the responsibility oI each employee to report to the management any
knowledge that a crime has been or will be committed. Not reporting is a
cause Ior immediate dismissal. A client's conIidential inIormation must not be
divulged to third parties except with proper authority Irom the client and the
immediate superior.
An employee will not discuss nor enter into agreements with competitors
concerning Karvy's dealings, prices/services etc.
Karvy`s physical properties, inIormation and inIluence will not be used Ior
the private advantage oI any employee or other person.
Outside activities must be acceptable and compatible with the employee's
identity with Karvy. This includes the prohibition oI business and personal
investments, and outside employment, any oI which would create a conIlict
oI interest.
Employees must not accept Irom or give to clients and suppliers personal
giIts; or accept bequests, commissions or Iees oI any nature Irom clients; or
borrow Irom clients or suppliers.
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Recruitment & Selection process
Give the advertisement
Receiving application
Shortlist the candidate (who are qualified)
Interview call
Interview
Selection of candidate
Offer letter
1oining the organization
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an !ower !lanning
Employee oI Karvy (Bhavnagar Branch)
Branch Manager
Web Dealer
On line Dealer
Off line Dealer
Commodity Dealer
Marketing 6
Customer Care
Sales Coordinator
Receptionist
Account Department
Office boy
------------------
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94
95
Conversion !rocess
The main aim oI it is to make proIit with customer satisIaction. The conversion oI
Inputs, works as the Karvy earn brokerage Irom the customers. The proIits are
generated Irom getting a higher return on the invested amount oI money than the
amount payable to the customers. The process is Iacilitated by a centralized
computer system in which the data is stored and recovered Ior the whole INDIA
and it is having the CPU at the H/O in Hyderabad. Karvy is regulating the
brokerage rates all over India by keep watch on each transaction done Irom the
branch oIIice. The data oI a customer will be stored in the central computer and
all Iacilities such as bills, credit/debit reports etc. are provided by that computer to
all customers on-line on the Internet.
The conversion process is also Iacilitated by some adjustments to the inputs and
then the random Iluctuations are also handled in the process and lastly the
monitoring oI the process is done and a Ieedback is given to do the adjustments
Ior the process as indicated in the Iigure given.
Outputs
Outputs are those services generated by Karvy with the help oI the inputs and using
the conversion process. These services are as listed in the Iigure below.
96
Quality
Reliability
Flexibility
Creditability
Dependability
EIIiciency
Process Capacity Facility Vertical Integration InIrastructure
Automation Maximum size, Supplier Plan and
structure
Centralization possible Location, control, Work Iorce
Regulation oI serving Focus on Customer Quality control
Operation capability locating serving control, R & D, T & D
Service center
SpeciIicity
Operations strategies are implemented in Karvy as shown in the chart given above and
the main points oI consideration are EIIiciency, Dependability, Quality and
Flexibility.
The points demand a Iacility mission that is made up oI process, capacity, Iacilities,
vertical integration, and inIrastructure Iacilities provided to get the desired outputs as per
the plan.
Operations Strategy at KARVY
Facility Mission
Operation strategy at KARVY
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Transaction cycle
Placing Order
Settlement oI
trades
Decision to
trade
Trade
Execution
Clearing oI
Trades
Funds or
Securities Transaction
Cycle
98
!RODUCTION TO DERIVATIVES
Introduction to derivatives
The emergence oI the market Ior derivative products, most notably Iorwards, Iutures and
options, can be traced back to the willingness oI risk-averse economic agents to guard
themselves against uncertainties arising out oI Iluctuations in asset prices. By their very
nature, the Iinancial markets are marked by a very high degree oI volatility. Through the use
oI derivative products, it is possible to partially or Iully transIer price risks by locking-in
asset prices. As instruments oI risk management, these generally do not inIluence the
Iluctuations in the underlying asset prices. However, by locking-in asset prices, derivative
products minimize the impact oI Iluctuations in asset prices on the proIitability and cash Ilow
situation oI risk-averse investors.
Derivatives Defined
Derivative is a product whose value is derived Irom the value oI one or more basic
variables, called bases (underlying asset, index, or reIerence rate), in a contractual
manner. The underlying asset can be equity, Iorex, commodity or any other asset. For
example, wheat Iarmers may wish to sell their harvest at a Iuture date to eliminate the risk
oI a change in prices by that date. Such a transaction is an example oI a derivative. The price
oI this derivative is driven by the spot price oI wheat which is the "underlying".
Example :-
A very simple example oI derivatives is curd, which is derivative oI milk. The price oI curd
depends upon the price oI milk, which in turn depends upon the demand, and supply oI milk.
See it this way. The price oI Reliance Triple Option Convertible Debentures (Reliance
TOCD) used to vary with the price oI Reliance shares. And the price oI Telco warrants
depends upon the price oI Telco shares. Do American depository receipts/ global
depository receipts oI ICICI, Satyam and InIosys traded on stock exchanges in the USA and
England have their own values? No. They draw their price Irom the underlying
99
Shares traded in India. Consider how the value oI mutual Iund units changes on a day-today
basis. Don't mutual Iund units draw their value Irom the value oI the portIolio oI securities
under the schemes? Aren't these examples oI derivatives? Yes, these are. And you know
what, these examples prove that derivatives are not so new to us. NiIty options and Iutures,
Reliance Iutures and options, Satyam Iutures and options etc are all examples oI derivatives.
Futures and options are the most common and popular Iorm oI derivatives. In the Indian
context the Securities Contracts (Regulation) Act, 1956 (SC(R)A) deIines "derivative" to
include -
1. A security derived Irom a debt instrument, share, loan whether secured or
unsecured,
risk instrument or contract Ior diIIerences or any other Iorm oI security.
2. A contract, which derives its value Irom the prices, or index oI prices, oI
underlying
securities.
Derivatives are securities under the SC (R) A and hence, the regulatory Iramework under the
SC (R) A governs the trade in derivatives.
History of Derivatives
The derivatives markets has existed Ior centuries as a result oI the need Ior both users and
producers oI natural resources to hedge against price Iluctuations in the underlying
commodities. Although trading in agricultural and other commodities has been the
driving Iorce behind the development oI derivatives exchanges, the demand Ior products
base on Iinancial instruments - such as bonds, currencies, stocks and stock indiceshave
now Iar outstripped that Ior the commodities contracts.
India has been trading derivatives contracts in silver, gold, spices, coIIee, cotton and oil etc
Ior decades in the gray market. Trading derivatives contracts in organized market was legal
beIore Morarji Desai's government banned Iorward contracts. Derivatives on stocks were
traded in the Iorm oI %0and ,3/in unorganized markets. Recently Iutures contract in
various commodities was allowed to trade on exchanges. In June 2000, National Stock
Exchange and Bombay Stock Exchange started trading in
Futures on Sensex and NiIty. Options trading on Sensex and NiIty commenced in June
2001. Very soon thereaIter trading began on options and Iutures in 31 prominent stocks in
the month oI July and November respectively. The market lots keeps on changing Irom time
to time. The minimum quantity you can trade in is one market lot.
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Derivative as a term conjures up visions oI complex numeric calculations,
speculative dealings and comes across as an instrument which is the prerogative oI a Iew
smart Iinance proIessionals`. In reality it is not so. In Iact, a derivative transaction helps
cover risk, which would arise on the trading oI securities on which the derivative is based
and a small investor can beneIit immensely. ~A derivative security can be defined as a
security whose value depends on the values of other underlying variables. Very
often, the variables underlying the derivative securities are the prices of traded
securities
Derivatives and futures are basically of types:
Forwards and Futures
Options
Swaps
Types of Derivatives
DERIVATIVES
Options Futures Swaps Forwards
Commodit
y
Security
Interest
Rate
Currency
Put Call
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FORWARDS:
A forward contract is the simplest mode of a derivative transaction. It is an
agreement to buy or sell an asset (of a specified quantity) at a certain future time for
a certain price. No cash is exchanged when the contract is entered into.
Illustration: - Shyam wants to buy a TV, which costs Rs 10,000 but he has no cash to
buy it outright. He can only buy it 3 months hence. He, however, Iears that prices oI
televisions will rise 3 months Irom now. So in order to protect himselI Irom the rise in
prices Shyam enters into a contract with the TV dealer that 3 months Irom now he will
buy the TV Ior Rs 10,000. What Shyam is doing is that he is locking the current price oI
a TV Ior a Iorward contract. The Iorward contract is settled at maturity. The dealer will
deliver the asset to Shyam at the end oI three months and Shyam in turn will pay cash
equivalent to the TV price on delivery.
FUTURES:
It is an agreement between two parties to buy or sell an asset at a certain time in the
Iuture at a certain price through exchange traded contracts.
A Future represents the right to buy or sell a standard quantity and quality oI an asset or
security at a speciIied date and price. Futures are similar to Forward Contracts, but are
standardized and traded on an exchange, and are valued, or "Marked to Market daily.
The Marking to Market provides both parties with a daily accounting oI their Iinancial
obligations under the terms oI the Future. Unlike Forward Contracts, the counterparty to
a Futures contract is the clearing corporation on the appropriate exchange. Futures oIten
are settled in cash or cash equivalents, rather than requiring physical delivery oI the
underlying asset. Parties to a Futures contract may buy or write Options on Futures.
O!TIONS:
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An option is a contract, which gives the buyer the right, but not the obligation to
buy or sell shares of the underlying security at a specific price on or before a
specific date.
Option`, as the word suggests, is a choice given to the investor to either honor the
contract; or iI he chooses not to walk away Irom the contract. There are two kinds oI
options: Call Options and Put Options.
A Call Option is an option to buy a stock at a speciIic price on or beIore a certain date.
When you buy a Call option, the price you pay Ior it, called the option premium, secures
your right to buy that certain stock at a speciIied price called the strike price. II you
decide not to use the option to buy the stock, and you are not obligated to, your only cost
is the option premium.
Put Options are options to sell a stock at a speciIic price on or beIore a certain date. In
this way, Put options are like insurance policies. With a Put Option, you can "insure" a
stock by Iixing a selling price. II something happens which causes the stock price to Iall,
and thus, "damages" your asset, you can exercise your option and sell it at its "insured"
price level. II the price oI your stock goes up, and there is no "damage," then you do not
need to use the insurance, and, once again, your only cost is the premium.
Technically, an option is a contract between two parties. The buyer receives a privilege
Ior which he pays a premium. The seller accepts an obligation Ior which he receives a
Iee.
CALL O!TIONS
Call options give the taker the right, but not the obligation, to buy the underlying shares
at a predetermined price, on or beIore a predetermined date.
Call OptionsLong S Short Positions
When you expect prices to rise, then you take a long position by buying calls.
You are bullish.
When you expect prices to fall, then you take a short position by selling calls.
You are bearish.
!UT O!TIONS
A Put Option gives the holder oI the right to sell a speciIic number oI shares oI an
agreed security at a Iixed price Ior a period oI time.
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Put OptionsLong S Short Positions
When you expect prices to fall, then you take a long position by buying Puts. You
are bearish.
When you expect prices to rise, then you take a short position by selling Puts.
You are bullish.
CALL OPT!ONS PUT OPT!ONS
!f you expect a fall in price(Bearish) Short Long
II you expect a rise in price (Bullish) Long Short
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Requirement of Karvy Branch
Infrastructure
Karvy SB/ AP is required to invest in inIrastructure and take care oI the recurring
expenses. The set-up should be as Iollows:
1. Minimum 400 sq. It oI oIIice space
2. Connectivity- BSE, NSE, MSC, NCDEX (details with cost attached)
3. Proper inIrastructure (Latest PC`s, UPS, etc.)
4. At least 2 certiIied and trained dealers to start with
5. At least 5 sales executives to start with
Operations
1. Billing: Centralized billing system where the end client will receive contract oI
Karvy.
2. Certification: For Cash, F&O, Commodity, Internet terminal and Depository
Services operations, you will have to produce the requisite NCFM certiIication.
2. Compulsory DP and digital contract: The client would compulsorily need to
open DP accounts with Karvy with mandatory POA and Digital Contracts.
3.
Risk anagement:
1. 100 risk oI the business is borne by the Karvy SB/ AP
2. Client wise risk monitoring- upIront margins required Ior placing orders
3. Responsibility oI managing client`s risk, collection
4. Payment oI delay pay-in charges in case not borne by client
Compliance:
Business will Iully compliant with the requirements oI regulators- SEBI, Exchanges
1. SEBI/ Exchange registration must to commence the business
2. NCFM certiIication (NSE Cash, F&O, DP and NCDEX)
3. Client registration must beIore trade execution
4. No Third party payments and securities, Cash Transactions, unauthorized transIer oI
Iunds Irom one client to other
5. All marketing and brand norms to be adhered to completely.
105
106
ETHODOLOGY
Research Objective
The main objective of the study is to analysis the CUSTOMER
BUYING PREFERENCES and their potential market among the
people of Bhavnagar City.
SA!LING DESIGN
Sampling design is one oI the most important aspects where the design must be
appropriate in order to have the desired result. Sampling design includes various aspect
and they are as Iollows:
O Sampling Area : Bhavnagar city
O Sample Population : above 15,000
O Sample Size : 00
ethods:
The method used in the research (survey) is oI probability type as we are unaware
about the results. It can be either oI the side. It is area oI Bhavnagar city under which we
have to conduct the research.
107
The research is based on Convenience Method s. and the take the sample Irom to
various stock broking company.
ERROR
4 Some oI the respondents were not giving the proper attention on the
questioner and they were marking without reading the questions. So
Irom these respondents we were not able to get the proper and accurate
data.
Although to minimize the error eIIect we have removed such type
oI respondent`s responds and not taken them in calculations.
4 Some questions are related to each other so some error may occur due
to the diversiIication oI the meaning.
To minimize the error we made the questionnaire as simple as
possible and avoid multiple questions.
4 Fear oI consequences
To minimize the error we ensure them to keep their identity in
conIidential.
108
RESEARCH DESIGN:
Research : Descriptive & Objective
Data Source : Primary data
Research Method : Survey Method
Research Technique : Questionnaire
Type of
Questionnaire : Structured
Type of Questions : Closed & Open ended
Questions
No of Questions : 11
Place : Bhavnagar city
Data Collection
109
The research is conducted with the help oI questionnaire thereIore the main
source oI inIormation is the response oI the respondents and this can be considered as a
primary method oI collecting the data.
Limitations
Analyst Ability:
Analysis is totally depending on surveyors and analyst ability. So the personal
bias or inability may aIIect the result oI the survey.
Area:
The area was limited to Bhavnagar City only, so we cannot know the degree oI
the literacy outside the city.
The limitations oI the study are as Iollow:
Personal Bias:
Individuals may have personal bias towards
particular investment option so they may not
give correct inIormation and due to which the
conclusion may be derived.
110
O General information
Gender
Male Female
185 15
Gender
92%
8%
male
female
Finding :-
From the research conducted I Iound that there are 92 oI the total who have Iill
question are male. And remaining are Iemale. So we can say it is male dominating
Iield.
Recommendation: -
As per the result we can say that 92 oI the total is male and interested as well as
investing in stock market. They can provide some Iacilities and good environment to
women also. So, that segment also can be covered.
111
Age
21-35 36-50 Above - 50
112 63 25
ge
56%
31%
13%
21-35
36-50
51-65
Finding: -
There are 56 people who belong to age group oI 21-35 and more than 31 are
Irom 36-50 and remaining are the other age group.
Recommendation: -
These means is most oI the investor are oI young age. So company should Iocus
on this age group.
112
Income
50,000-1lacks 1lacks-2lacks Above 2lacks
74 101 25
Income
37%
51%
12%
50,000-1lacks
1lacks-2lacks
aboove 2lacks
Finding :-
From our research nearly 37 people are earning less than 1lacks it has been
Iound that there are 51 people in the income group oI 1lack to 2lacks and and the
reaming are more than 2lacks.
Recommendation: -
The result show that there are almost 63 people whose income Rs. 1 lack and
above. So the company should Iocus on this two income group because they are position
invest there surplus money in various investment pattern available in market.
113
Occupation
ProIessional Pvt. Firm Businessmen Govt. oIIicer Other
32 64 40 30 34
ccupation
32
64
40
30
34
0
10
20
30
40
50
60
70
p
r
o
f
e
s
s
i
o
n
a
l
P
v
t
.
F
i
r
m
B
u
s
i
n
e
s
s
m
e
n
G
o
v
t
.
o
f
f
i
c
e
r
o
t
h
e
r
Series1
Finding: -
All most 67 oI the total is working with either in pvt. Firm or in govt. Iirms or
doing there own business and remaining 33 are proIessional people and might be
student also.
Recommendation: -
From the result, we can predict that people working with Govt. will have Iield
income and people working with pvt. Firm will be having higher pay scale and
businessman who are in one or another business will be knowing the important oI risk as
well as beneIit that can be enjoyed aIter taking risk. So the company must concentrate in
these three groups because they will be potential investor Ior tomorrow.
114
Q. Do you invest your surplus money in saving Instrument?
Yes No
200 0
"1
100%
0%
Yes
No
Finding: -
There are 100 people; those are 200 out oI 200 are regularly investing in various
investing options.
Recommendation: -
As per the result, we can say that company has a whole bunch oI people, who
believes that iI they invests their money in any oI the investment pattern, it will going to
grow and in addition to that they believes that investments are necessary to earn more
money. So Ior these people iI proper inIormation is given to them about the company
product and about share market, they may invest in share market.
115
Q. If YES, Where do you invest your saving?
F.D P.O Insurance M.F Commodity Equity Derivative Other
152 112 117 134 44 156 10 36
152
112
117
134
44
156
10
36
0
50
100
150
200
F
.
D
P
.
O
n
s
u
r
a
n
c
e
M
.
F
C
o
m
m
o
d
i
t
y
E
q
u
i
t
y
D
e
r
i
v
a
t
i
v
e
O
t
h
e
r
Series1
Findings:
People might be investing in more than one investment option. Result also shows
similar trend because they are people who may investing in bank FD or in equity or any
other combination.
Recommendation:
II we look at Iigure, there are many persons investing in bank FD and post oIIice
savings, which reveals that these people believe in Iixed return at a lower risk, but now
days there are increasing number oI people who are investing in insurance, equity and in
mutual Iunds. Still there are many persons who want to have Iixed return on their
investment so the company should explain them about the importance, beneIit iI they
invest in stock market and the return oI investment, which is going to be higher in stock
market than any other.
116
Q. Which stock market would you prefer to carry out your
transaction?
STOCK COMMODITIES BOTH
156 28 16
78%
14%
8%
Stock
Commodity
Both
Findings:
Once there are many options available Ior the people Ior the investment purpose
and there are many exchanges Ior trading. Figure shows that most oI the people trading
with STOCK and their Iigure is nearly about 156 each while remaining preIer
COMMODITIES and BOTH.
Recommendation:
II we look at KARVY, it is providing the Iacility oI investing in all these
exchanges so the company should also Iocus on MCX as well as NCDEX, which are
considered to be emerging markets and its beneIits to the people who are investing in
other options including stock markets so that they can increase their business.
117
Q.4 If you select broker or agent than which broking company selects
you?
Share khan Karvy ICICI Marwadi Kotak security Other
71 55 14 19 25 16
".4
71
55
14
19
25
16
0
20
40
60
80
Share
khan
Karvy CC Marwadi Kotak
security
Other
Series1
Findings:
The result shows that 72 people out oI the total preIer Share khan as their broker
and the almost same Iigure is Ior Karvy also. Next challenger is Kotak Security where
12 people preIer it to trade with it. Remaining are with other companies.
Recommendation:
We can see that Share khan is their (Karvy`s) main competitor, which maximum
number oI people preIerring. And KOTAK Security can come close and can give
challenge.
ThereIore in order to come on the top position, Karvy must provide its existing
customer better services, viable advises because this will increase their Iaith in Karvy.
118
Q.5 What does influence you to invest your amount?
Independently Broker
News
paper Internet Tax consultant
160 129 40 25 46
0
50
100
150
200
n
d
e
p
e
n
d
e
n
t
l
y
B
r
o
k
e
r
N
e
w
s
p
a
p
e
r
n
t
e
r
n
e
t
T
a
x
c
o
n
s
u
l
t
a
n
t
Series1
Findings:
There are diIIerent means oI communication to pass your message to the general
people. With the help oI these means, company can market its products. There are 32
people who preIer broking Iirm Ior their decision making, next comes is the independent
decision makers, 40 out oI total number. Others take their decision with the help oI
news
Channel, news paper as well as tax consultant.
Recommendation:
II the company wants to increase their customer base, the marketing oI the
company`s products should be done in an eIIective manner so that more and more people
come to the broking Iirm Ior their investment.
It should also use news channel, newspaper and Internet medium Ior their product
marketing so that they have more scope oI expanding their business.
119
Q.6 Which style would you prefers most for the trading purpose?
Online OIIline
28 172
".6
14%
86%
Online
Offline
Finding: -
The result shows that the in 172 people mainly preIer most oIIline and 28 people
are preIerred online.
Recommendation: -
There are more people who preIer oIIline trading which on the other hand
increasing company burden books record and Iormality but thereIore in order to reduce
this burden the company should Iocus on online trading it should have easy operating oI
online trading so the customer can easy operate it. And also make them understand about
the beneIit oI online trading like Iast processing, the customer will not have to come
down the oIIline can perIormance his/her transaction Irom anywhere.
120
Q.7 Name of any Stock Broking Company?
This question was put in the Questionnaire to know the customer`s mindset and
which company they know or whom they like to give Iirst preIerence. This question will
give idea whether they know Karvy or not. The result showed that most oI the people in
Bhavnagar know Share khan very well and next comes is Karvy.
So this is a positive sign Ior Karvy and so the Iirst task is to convince these people
to invest with Karvy. And attract more people
Share khan
Karvy
India Bulls
Kotak street 4
Marwadi 5
ICICI Direct 6
Angel Broking 7
121
Q.8 Which of these you would like to go for trading in future?
Equity Derivative Commodity
80 75 45
".8
39%
38%
23%
Equity
derivative
Commodity
Findings:
No one can predict the Iuture because it is uncertain. This question was put in the
Questionnaire to know in which market they will invest in Iuture time, because it will
give idea about the people`s mindset. Result showed that there are increasing number oI
people who will invest in commodities as well as Iuture and options. In number it is
around 60 so it is good Ior the company.
Recommendation:
The recommendation can be given to the company is that the company must Iocus
on all the products which are oIIered to its existing customers as well as proper guidance
must be given to potential customers to increase their business.
Also the investment in Commodity and Derivative is saIe as compared to stock
markets and the return is also good Ior the investors.
122
Q.9 How many of your surplus amount do you invest?
0-25 26-50 51-75 76-100
28 90 64 18
14%
45%
32%
9%
0-25 %
26-50 %
51-75 %
76-100 %
Findings:
By observing result, we can say that most oI the people take moderate risk and
invest near about 50, halI oI the surplus amount in stock market. And very less number
oI people takes more risk or wants more return aIter investment more than 75 oI
surplus amount.
Recommendation:
So, every company have try to provide more satisIactory services to customer and
more concentrate to give them good returns against their investment. AIter all every body
want to earn more income Irom their investment and it is possible when they invest more
or total surplus money.
123
$ Which are the constraints that you might consider while
investing?
Risk taking
ability Fund Iacility Return on invt.
Time
Duration
Company invt.
Position
102 75 53 60 24
".10
102
75
53
60
24
0
20
40
60
80
100
120
Risk taking
ability
Fund facility Return on
invt.
Time
Duration
Company
invt. Position
Series1
Findings:
This is probably the most important question oI the questionnaire; the result oI
this question is that most oI the people think oI (RISK TAKING ABILITY) because it is
the most crucial constraint. Next comes is the Iacilities given to them under the Iunds and
also the ROI (return on investment). There are other Iactors also like time duration oI
their investment and Company reputation in the market.
Recommendation:
As we saw it in the results that most oI the people see How much oI risk involve
iI they do investment in any oI the market. So the company must do activities which
yields maximum return so that they take more risk and which cab balance the uncertainty.
They must provide all the possible Iacilities to its customer so that they remain with the
company only and also help in expanding their business. Now a day`s people want
services also and thereIore it must be the main Iocus oI the company because iI not
provided to the people, they are surely going to leave the company.
124
Q. Suggestion________________________________________________________
Finally overall suggestion was asked to the respondents to know what they want
and iI they are already with Karvy then what changes are to be made and whether they
are satisIied with the services oI the company?
The response got Irom them reveals Iollowing points:
1. Return on Investment is must but the risk also should be minimizing at the same
time.
2. No one loves to loose its hard earned money thereIore it should be invested in
saIer place.
3. Services are must Ior them and thereIore the company must also concentrate on
this aspect.
4. Good advisory services, secrecy oI the data given to the company as well as every
people must treated as they all are equal i.e. no biasness.
5. Charges oI the services provided to them should be reasonable and viable.
6. Finally, last but not the least the company should maintain good relations with the
people to have deal Ior a longer period.
125
Karvy has enough number oI branches all over India and thereIore it is a great
advantage Ior the company and the company also planning to expand its network.
Karvy also provides the Iacility oI trading in almost all the exchanges and
thereIore whatever the customer demands the company has in its package.
The company also has a very good research team at its Head OIIice and this is
meant Ior the better working as well as Ior the customer oI Karvy only.
The company also has the advantage oI the existing customers where their level
oI Iaith and their view about the company to the outside world will be a helping hand
Ior the company to expand its business.
Karvy has various products and services in its portIolio, so Ior the people they
have variety oI options to choose Irom, thereIore it should market its product in such
a manner that more and more people come to Karvy and deal with the company.
From the research conducted, that the customer are satisIied with the company
services and there is a competition Irom the Share khan thereIore the company should
regularly check its various departments and make continuous changes required.
ConcIu
126
Reference Books:
Philip Kotler, The Millennium Edition, ~marketing Management, Prentice
Hall of India Pvt Ltd., New Delhi
Cooper, 8
th
edition, ~Business Research Methods, Tata McGraw-Hill
Publishing Company Ltd., New Delhi
K. Aswathapa,
rd
edition ~Human Resource and Personnel Management, Tata
McGraw-Hill Publishing Company Ltd., New Delhi
Websites:
www.karvy/about.asp Dt.-8/07/07
www.bseindia/about.asp
www.nseindia.com
www.mcx.com
www.ncdex.com
ibIiogruphy
127
ANNEXURE
STUDY OF CUSTOMER BUYING PREFERENCE
Name:-
Gender:- Male Female
Age group: - 21-35 36-50 51-65 Above 66
Income:- 50000-100000
100000-200000
2, 00,000 above
Occupation:- ProIessional Businessmen
Govt. Employee Pvt.Firm
Other
Q.1 Do you invest your surplus money in saving Instrument?
Yes No
Q.2 II YES, Where do you invest Your saving?
Bank F.D Equity
Post oIIice
Insurance Derivative
Mutual Fund
Others Commodities
Q.3 Which market would you preIer to carry out your transaction?
STOCK COMMODITIES BOTH
128
Q.4 II you select broker or agent than which broker company select you?
Share Khan Karvy Kotak Street
ICICI Direct Marwadi Other
Q.5 What does inIluence you to invest your amount?
Independently
Broker/Agent
News Papers
Internet
Tex Consultant
Why
Q.6 Which style would you preIer most Ior the trading purpose?
Online OIIline
Q.7 Name oI any 2 Stock Broking Company?
1 2
Q.8 Which oI these you would like to be in Ior trading?
Equity Derivatives Commodity
Q.9 How many oI your surplus amount do you invest?
0-25 51-75
26-50 76-100
Q.10 Which are the constraints that you might consider while investing?
Risk Taking ability Fund Facility Return On Invest
Time Duration Company Investment position
Q.11 Suggestions: