INTRODUCTION

GENERAL INTRODUCTION ABOUT THE SECTOR

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1.1 a. DEFINITION OF SECURITIES:

Securities as per the securities contracts Regulation Act (SCRA) 1956, includes

instruments such as shares, bonds, scripts, stocks or other marketable securities of similar

nature in or of any incorporate company or body corporate, government securities,

derivatives of securities units of collective investment scheme, interest and rights in

securities, security receipt or any other instruments so declared by the central

government.

FUNCTIONS OF SECURITIES MARKET:

It is a place where buyers and sellers of securities can enter into transactions to purchase

and sell shares, bonds, debentures etc. Further, it performs an important role of enabling

corporate, entrepreneurs to raise resources for their companies and business ventures

through public issues. Transfer of resources from those having idle resources (investors)

to others who have a need for them (corporate) is most efficiently achieved through the

securities market. Stated formally, securities markets provide channels for reallocation

savings to investments and entrepreneurship. Savings are linked to investments by a

variety of intermediaries, through a range of financial products, called ’Securities’.

ONE CAN INVEST IN:

Shares

Government securities

Derivative products

Units of Mutual funds etc. are some of the securities investors in the

securities market can invest in.

SECURITIES MARKETS NEED REGULATORS:

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The absence of conditions of perfect competition in the securities market makes the role

of the regulator extremely important. The regulator ensures that the market participants

behave in a desired manner so that securities market continues to be a major source of

finance for corporate and government and the interest of investors are protected.

REGULATION OF SECURITIES MARKET:

The responsibility for regulating the securities market is shared by

Department of Economic Affairs (DEA)

Department of Company Affairs (DCA)

Reserve Bank of India (RBI)

Securities and Exchange Board of India (SEBI)

SEBI AND ITS ROLE:

The Securities and Exchange Board of India (SEBI) is the regulatory authority in India

established under section 3 of SEBI Act, 1992. SEBI Act, 1992 provides for

establishment with statutory powers for

a) Protecting the interests of investors in securities

b) Promoting the development of the securities market and

c) Regulating the securities market.

Its regulatory jurisdiction extends over corporate in the issuance of capital and

transfer of securities, in addition to all intermediaries and persons associated with

securities market. SEBI has been obligated to perform the aforesaid functions by such

measures as it thinks fit. In particular, it has powers for:

Regulating the business in stock exchanges and any other

securities market

Registering and regulating the working of stock brokers, sub-

brokers etc

Promoting and regulating self-regulatory organizations

Prohibiting fraudulent and unfair trade practices

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Calling for information from, undertaking inspection, conducting

Inquiries and audits of the stock exchanges, intermediaries, self –

Regulatory organizations, mutual funds and other persons

associated with the securities market.

PARTICIPANTS OF SECURITIES MARKET:

The securities market essentially has three categories of participants, namely, the issuers

of securities, investors in securities and the intermediaries, such as merchant bankers,

brokers etc.

SEGMENTS OF SECURITIES MARKET:

The securities market has two interdependent segments:

Primary (new issues) market and Secondary market.

The Primary market provides the channel for sale of new securities while

Secondary market deals in securities previously issued.

1.1 b. PRIMARY MARKET:

The primary market provides the channel for sale of new securities. Primary

market provides opportunity to issuers of securities; Government as well as corporate, to

raise resources to meet their requirements of investment and/or discharge some

obligation. They may issue the securities at face value, or at a discount/premium and

these securities may take a variety of forms such as equity, debt etc. They may issue the

securities in domestic market and/or international market.

FACE VALUE OF SHARES/DEBENTURES:

The nominal or stated amount (in Rs.) assigned to a security by the issuer .For

shares, it is the original cost of the stock shown on the certificate; for bonds, it is the

amount paid to the holder at maturity. Also, known as par value or simply par.

For an equity share, the face value is usually a very small amount (Rs. 5, Rs. 10)

and does not have much bearing on the price of the share, which may quote higher in the

market, at Rs. 100 or Rs. 1000 or any other price.

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For a debt security, face value is the amount repaid to the investor when the bond

matures (usually, Government securities and corporate bonds have a face value of Rs.

100).The price at which the Security trades depend on the fluctuations in the interest rates

in the economy.

PURPOSE OF ISSUING SHARES TO PUBLIC:

Most companies are usually started privately by their promoter(s). However, the

promoters’ capital and the borrowings from banks and financial institutions may not be

sufficient for setting up or running the business over a long term. So companies invite the

public to contribute towards the equity and issue shares to individual investors. The way

to invite share capital from the public is through a ‘Public Issue’. Simply stated, a public

issue is an offer to the public to subscribe to the share capital of a company.

TYPES OF ISSSUES:

Primarily, issues can be classified as a Public, Rights or Preferential issues (also

known as private placements). While public and rights issues involve a detailed

procedure, private placements or preferential issues are relatively simpler. The

classification of issues is illustrated below:

Initial Public Offering (IPO) is when an unlisted company makes either a fresh issue of

securities or an offer for sale of its existing securities or both for the first time to the

public. This paves way for listing and trading of the issuer’s securities.

A follow on public offering (Further Issue) is when an already listed company makes

either a fresh issue of securities to the public or an offer for sale to the public, through an

offer document.

Rights Issue is when a listed company which proposes to issue fresh securities to its

existing shareholders as on a record date. The rights are normally offered in a particular

ratio to the number of securities held prior to the issue. This route is best suited for

companies who would like to raise capital without diluting stake of its existing

shareholders.

A Preferential issue is an issue of shares or of convertible securities by listed companies

to a select group of persons under Section 81 of the Companies Act, 1956 which is

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neither a rights issue nor a public issue. This is a faster way for a company to raise equity

capital. The issuer company has to comply with the Companies Act and the requirements

contained in 19th Chapter pertaining to preferential allotment in SEBI guidelines which

include pricing, disclosures in notice etc.

ISSUE PRICE:

The price at which a company's shares are offered initially in the primary market

is called as the Issue price. When they begin to be traded, the market price may be above

or below the issue price.

MARKET CAPITALIZATION:

The market value of a quoted company, which is calculated by multiplying

Its current share price (market price) by the number of shares in issue is called as market

capitalization. E.g. Company A has 120 million shares in issue. The current market price

is Rs. 100. The market capitalization of company A is Rs. 12000 million.

DIFFERENCE BETWEEN OFFER OF SHARES THROUGH BOOK BUILDING

AND OFFER OF SHARED THROUGH NORMAL PUBLIC SERVICE:

Price at which securities will be allotted is not known in case of offer of shares

through Book Building while in case of offer of shares through normal public issue, price

is known in advance to investor. Under Book Building, investors bid for shares at the

floor price or above and after the closure of the book building process the price is

determined for allotment of shares. In case of Book Building, the demand can be known

everyday as the book is being built. But in case of the public issue the demand is known

at the close of the issue.

CUT-OFF PRICE:

In a Book building issue, the issuer is required to indicate either the price band or

a floor price in the prospectus. The actual discovered issue price can be any price in the

price band or any price above the floor price. This issue price is called “Cut-Off Price”.

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The issuer and lead manager decides this after considering the book and the investors’

appetite for the stock.

WHO DECIDES PRICE BAND?

It may be understood that the regulatory mechanism does not play a role in setting

the price for issues. It is up to the company to decide on the price or the price band, in

consultation with Merchant Bankers.

WHAT IS THE MINIMUM NUMBER OF DAYS FOR WHICH THE BID

SHOULD REMAIN OPEN DURING BOOK BUILDING?

The Book should remain open for a minimum of 3 days.

CAN OPEN OUTCRY SYSTEM BE USED FOR BOOK BUILDING?

No. As per SEBI, only electronically linked transparent facility is allowed to

Be used in case of book building.

HOW DOES ONE KNOW IF SHARES ARE ALLOTED IN AN IPO/OFFER FOR

SALE? WHAT IS THE TIME FRAME FOR GETTING REFUND IF SHARES

NOT ALLOTED?

As per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009

the Basis of Allotment should be completed with 8 days from the issue close date. As

soon as the basis of allotment is completed, within 2 working days the details of credit to

demat account / allotment advice and dispatch of refund order needs to be completed. So

an investor should know in about 11 days time from the closure of issue, whether shares

are allotted to him or not.

HOW LONG DOES IT TAKES TO GET SHARES LISTED AFTER ISSUE?

It takes 12 working days after the closure of the book built issue.

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SEBI’S ROLE IN AN ISSUE:

Any company making a public issue or a listed company making a rights issue of

value of more than Rs 50 lakh is required to file a draft offer document with SEBI for its

observations. The company can proceed further on the issue only after getting

observations from SEBI. The validity period of SEBI’s observation letter is three months

only i.e. the company has to open its issue within three months period.

CAN COMPANIES IN INDIA RAISE FOREIGN CURRENCY RESOURCES?

Yes. Indian companies are permitted to raise foreign currency resources through

two main sources: a) issue of foreign currency convertible bonds more commonly known

as ‘Euro’ issues and b) issue of ordinary shares through depository receipts namely

‘Global Depository Receipts (GDRs)/American Depository Receipts (ADRs)’ to foreign

investors i.e. to the institutional investors or individual investors.

AMERICAN DEPOSITARY RECEIPT:

An American Depositary Receipt ("ADR") is a physical certificate evidencing

ownership of American Depositary Shares ("ADSs"). The term is often used to refer to

the ADSs themselves.

ADS:

An American Depositary Share ("ADS") is a U.S. dollar denominated form of

equity ownership in a non-U.S. company. It represents the foreign shares of the company

held on deposit by a custodian bank in the company's home country and carries the

corporate and economic rights of the foreign shares, subject to the terms specified on the

ADR certificate. One or several ADSs can be represented by a physical ADR certificate.

The terms ADR and ADS are often used interchangeably. ADSs provide U.S. investors

with a convenient way to invest in overseas securities and to trade non-U.S. securities in

the U.S. ADSs are issued by a depository bank, such as JPMorgan Chase Bank. They are

traded in the same manner as shares in U.S. companies, on the New York Stock

Exchange (NYSE) and the American Stock Exchange (AMEX) or quoted on NASDAQ

and the over-the-counter (OTC) market. Although ADSs are U.S. dollar denominated

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securities and pay dividends in U.S. dollars, they do not eliminate the currency risk

associated with an investment in a non-U.S. company.

GLOBAL DEPOSITARY RECEIPT:

Global Depository Receipts (GDRs) may be defined as a global finance vehicle

that allows an issuer to raise capital simultaneously in two or markets through a global

offering. GDRs may be used in public or private markets inside or outside US. GDR, a

negotiable certificate usually represents company’s traded equity/debt. The underlying

shares correspond to the GDRs in a fixed ratio say 1 GDR=10 shares.

1.1 c. SECONDARY MARKET:

Secondary market refers to a market where securities are traded after being

initially offered to the public in the primary market and/or listed on the Stock Exchange.

Majority of the trading is done in the secondary market. Secondary market comprises of

equity markets and the debt markets.

ROLE OF SECONDARY MARKET:

For the general investor, the secondary market provides an efficient platform for

trading of his securities. For the management of the company, Secondary equity markets

serve as a monitoring and control conduit—by facilitating value-enhancing control

activities, enabling implementation of incentive-based management contracts, and

aggregating information (via price discovery) that guides management decisions.

DIFFERENCE BETWEEN PRIMARY AND SECONDARY MARKET:

In the primary market, securities are offered to public for subscription for the

purpose of raising capital or fund. Secondary market is an equity trading venue in which

already existing/pre-issued securities are traded among investors. Secondary market

could be either auction or dealer market. While stock exchange is the part of an auction

market, Over-the-Counter (OTC) is a part of the dealer market.

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ROLE OF STOCK EXCHANGE IN BUYING AND SELLING SHARES:

The stock exchanges in India, under the overall supervision of the regulatory

authority, the Securities and Exchange Board of India (SEBI), provide a trading platform,

where buyers and sellers can meet to transact in securities. The trading platform provided

by NSE is an electronic one and there is no need for buyers and sellers to meet at a

physical location to trade. They can trade through the computerized trading screens

available with the NSE trading members or the internet based trading facility provided by

the trading members of NSE.

DEMUTUALIZATON OF STOCK EXCHANGE:

Demutualization refers to the legal structure of an exchange whereby the

ownership, the management and the trading rights at the exchange are segregated from

one another.

SCREEN BASED TRADING:

The trading on stock exchanges in India used to take place through open outcry

without use of information technology for immediate matching or recording of trades.

This was time consuming and inefficient. This imposed limits on trading volumes and

efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a

nationwide, on-line, fully automated screen based trading system (SBTS) where a

member can punch into the computer the quantities of a security and the price at which he

would like to transact, and the transaction is executed as soon as a matching sale or buy

order from a counter party is found.

WHAT IS NEAT?

NSE is the first exchange in the world to use satellite communication technology

for trading. Its trading system, called National Exchange for Automated Trading (NEAT),

is a state of-the-art client server based application. At the server end all trading

information is stored in an in memory database to achieve minimum response time and

maximum system availability for users. It has uptime record of 99.7%. For all trades

entered into NEAT system, there is uniform response time of less than one second.

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HOW TO PLACE ORDERS WITH THE BROKER?

You may go to the broker’s office or place an order on the phone/internet or as

defined in the Model Agreement, which every client needs to enter into with his or her

broker.

PRODUCTS IN SECONDARY MARKETS:

Following are the main financial products/instruments dealt in the Secondary market

which may be divided broadly into Shares and Bonds:

SHARES:

Equity Shares: An equity share, commonly referred to as ordinary share, represents the

form of fractional ownership in a business venture.

Rights Issue/ Rights Shares: The issue of new securities to existing shareholders at a

ratio to those already held, at a price. For e.g. a 2:3 rights issue at Rs. 125, would entitle a

shareholder to receive 2 shares for every 3 shares held at a price of Rs. 125 per share.

Bonus Shares: Shares issued by the companies to their shareholders free of cost based on

the number of shares the shareholder owns.

Preference shares: Owners of these kinds of shares are entitled to a fixed dividend or

dividend calculated at a fixed rate to be paid regularly before dividend can be paid in

respect of equity share. They also enjoy priority over the equity shareholders in payment

of surplus. But in the event of liquidation, their claims rank below the claims of the

company’s creditors, bondholders/debenture holders.

Cumulative Preference Shares: A type of preference shares on which dividend

accumulates if remained unpaid. All arrears of preference dividend have to be paid out

before paying dividend on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares where the

dividend payable on the same accumulates, if not paid. After a specified date, these

shares will be converted into equity capital of the company.

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Bond: is a negotiable certificate evidencing indebtedness. It is normally unsecured. A

debt security is generally issued by a company, municipality or government agency. A

bond investor lends money to the issuer and in exchange, the issuer promises to repay the

loan amount on a specified maturity date. The issuer usually pays the bond holder

periodic interest payments over the life of the loan. The various types of Bonds are as

follows:

Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No periodic

interest is paid. The difference between the issue price and redemption price represents

the return to the holder. The buyer of these bonds receives only one payment, at the

maturity of the bond.

Convertible Bond: A bond giving the investor the option to convert the bond into equity

at a fixed conversion price.

Treasury Bills: Short-term (up to one year) bearer discount security issued by

government as a means of financing their cash requirements.

EQUITY INVESTMENT:

If we take the Nifty index returns for the past fifteen years, Indian stock market

has returned about 16% to investors on an average in terms of increase in share prices or

capital appreciation annually. Besides that on average stocks have paid 1.5% dividend

annually. Dividend is a percentage of the face value of a share that a company returns to

its shareholders from its annual profits. Compared to most other forms of investments,

investing in equity shares offers the highest rate of return, if invested over a longer

duration.

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PORTFOLIO:

A Portfolio is a combination of different investment assets mixed and matched for

the purpose of achieving an investor's goal(s). Items that are considered a part of your

portfolio can include any asset you own-from shares, debentures, bonds, mutual fund

units to items such as gold, art and even real estate etc. However, for most investors a

portfolio has come to signify an investment in financial instruments like shares,

debentures, fixed deposits, mutual fund units.

DIVERSIFICATION:

It is a risk management technique that mixes a wide variety of investments within

a portfolio. It is designed to minimize the impact of any one security on overall portfolio

performance. Diversification is possibly the best way to reduce the risk in a portfolio.

ADVANTAGES OF DIVERSIFIED PORTFOLIO:

A good investment portfolio is a mix of a wide range of asset class. Different

securities perform differently at any point in time, so with a mix of asset types, your

entire portfolio does not suffer the impact of a decline of any one security. When your

stocks go down, you may still have the stability of the bonds in your portfolio. There

have been all sorts of academic studies and formulas that demonstrate why diversification

is important, but it's really just the simple practice of "not putting all your eggs in one

basket."

DEBT INSTRUMENT:

Debt instrument represents a contract whereby one party lends money to another

on pre-determined terms with regards to rate and periodicity of interest, repayment of

principal amount by the borrower to the lender. In Indian securities markets, the term

‘bond’ is used for debt instruments issued by the Central and State governments and

public sector organizations and the term ‘debenture’ is used for instruments issued by

private corporate sector.

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FEATURES OF DEBT INSTRUMENTS:

Each debt instrument has three features: Maturity, coupon and principal.

Maturity: Maturity of a bond refers to the date, on which the bond matures, which

is the date on which the borrower has agreed to repay the principal.

Term-to-Maturity refers to the number of years remaining for the bond to mature.

The Term-to-Maturity changes everyday, from date of issue of the bond until its maturity.

The term to maturity of a bond can be calculated on any date, as the distance between

such a date and the date of maturity. It is also called the term or the tenure of the bond.

Coupon: Coupon refers to the periodic interest payments that are made by the

borrower (who is also the issuer of the bond) to the lender (the subscriber of the bond).

Coupon rate is the rate at which interest is paid, and is usually represented as a

percentage of the par value of a bond.

1.1 d. DERIVATIVES:

TYPES OF DERIVATIVES:

Forwards: A forward contract is a customized contract between two entities, where

settlement takes place on a specific date in the future at today’s pre-agreed price.

Futures: A futures contract is an agreement between two parties to buy or sell an asset at

a certain time in the future at a certain price. Futures contracts are special types of

forward contracts in the sense that the former are standardized exchange-traded contracts,

such as futures of the Nifty index.

Options: An Option is a contract which gives the right, but not an obligation, to buy or

sell the underlying at a stated date and at a stated price. While a buyer of an option pays

the premium and buys the right to exercise his option, the writer of an option is the one

who receives the option premium and therefore obliged to sell/buy the asset if the buyer

exercises it on him. Options are of two types - Calls and Puts options:

‘Calls’ give the buyer the right but not the obligations to buy a given quantity of the

underlying asset, at a given price on or before a given future date.

‘Puts’ give the buyer the right, but not the obligation to sell a given quantity of

underlying asset at a given price on or before a given future date. Presently, at NSE

futures and options are traded on the Nifty, CNX IT, BANK Nifty and 116 single stocks.

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Warrants: Options generally have lives of up to one year. The majority of options traded

on exchanges have maximum maturity of nine months. Longer dated options are called

Warrants and are generally traded over-the counter.

New System Vs Existing System for Market Players

Figure 2.1Speculators

Existing SYSTEM New

Approach Peril &Prize Approach Peril &Prize

1) Deliver based 1) Both profit & 1)Buy &Sell stocks 1)Maximum

Trading, margin loss to extent of on delivery basis loss possible

trading& carry price change. 2) Buy Call &Put to premium

forward transactions. by paying paid

2) Buy Index Futures premium

hold till expiry.

Advantages Greater Leverage as to pay only the premium. Greater variety of strike price options at a given time.

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Figure 2.2

Arbitrageurs

Existing SYSTEM New

Approach Peril &Prize Approach Peril &Prize

1) Buying Stocks in 1) Make money 1) B Group more 1) Risk free

One and selling in whichever way the promising as still game.

Another exchange. Market moves. In weekly settlement

Forward transactions. 2) Cash &Carry

2) If Future Contract arbitrage continues

More or less than Fair price

Fair Price = Cash Price + Cost of Carry.

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Figure 2.3

Hedgers

Existing SYSTEM New

Approach Peril &Prize Approach Peril &Prize

1) Difficult to 1) No Leverage 1)Fix price today to buy 1) Additional

offload holding available risk latter by paying premium. cost is only

during adverse reward dependant 2)For Long, buy ATM Put premium.

market conditions on market prices Option. If market goes up,

as circuit filters long position benefit else

limit to curtail losses. exercise the option.

3)Sell deep OTM call option

with underlying shares, earn

premium + profit with increase prcie

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Advantages Availability of Leverage

Figure 2.4

Small Investors

Existing SYSTEM New

Approach Peril &Prize Approach Peril &Prize

1) If Bullish buy 1) Plain Buy/Sell 1) Buy Call/Put options 1) Downside

stocks else sell it. implies unlimited based on market outlook remains

profit/loss. 2) Hedge position if protected

holding underlying upside

stock unlimited.

Advantages Losses Protected.

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Stock Market in India

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Stock Market in India

Introduction: -

Stock markets refer to a market place where investors can buy and sell stocks. The price

at which each buying and selling transaction takes is determined by the market forces (i.e.

demand and supply for a particular stock).

Let us take an example for a better understanding of how market forces determine stock

prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an

upward movement in its stock price. More and more people would want to buy this stock

(i.e. high demand) and very few people will want to sell this stock at current market price

(i.e. less supply). Therefore, buyers will have to bid a higher price for this stock to match

the ask price from the seller which will increase the stock price of ABC Co. Ltd. On the

contrary, if there are more sellers than buyers (i.e. high supply and low demand) for the

stock of ABC Co. Ltd. in the market, its price will fall down.

In earlier times, buyers and sellers used to assemble at stock exchanges to make a

transaction but now with the dawn of IT, most of the operations are done electronically

and the stock markets have become almost paperless. Now investor’s don’t have to gather

at the Exchanges, and can trade freely from their home or office over the phone or

through Internet.

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History of the Indian Stock Market - The Origin

One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years old

history. 18th Century East India Company was the dominant institution and by end of the

century, business in its loan securities gained full momentum

1830's Business on corporate stocks and shares in Bank and Cotton presses started in

Bombay. Trading list by the end of 1839 got broader

1840's Recognition from banks and merchants to about half a dozen brokers

1850's Rapid development of commercial enterprise saw brokerage business attracting

more people into the business

1860's The number of brokers increased to 60

1860-61 The American Civil War broke out which caused a stoppage of cotton supply

from United States of America; marking the beginning of the "Share Mania" in India

1862-63 the number of brokers increased to about 200 to 250

1865 A disastrous slump began at the end of the American Civil War (as an example,

Bank of Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87)

Pre-Independence Scenario - Establishment of Different Stock Exchanges

1874 With the rapidly developing share trading business, brokers used to gather at a

street (now well known as "Dalal Street") for the purpose of transacting business.

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1875 "The Native Share and Stock Brokers' Association" (also known as "The Bombay

Stock Exchange") was established in Bombay

1880's Development of cotton mills industry and set up of many others

1894 Establishment of "The Ahmadabad Share and Stock Brokers' Association"

1880 - 90's Sharp increase in share prices of jute industries in 1870's was followed by

a boom in tea stocks and coal

1908 "The Calcutta Stock Exchange Association" was formed

1920 Madras witnessed boom and business at "The Madras Stock Exchange" was

transacted with 100 brokers.

1923 When recession followed, number of brokers came down to 3 and the Exchange

was closed down

1934 Establishment of the Lahore Stock Exchange

1936 Merger of the Lahore Stock Exchange with the Punjab Stock Exchange

1937 Re-organization and set up of the Madras Stock Exchange Limited (Pvt.) Limited

led by improvement in stock market activities in South India with establishment of new

textile mills and plantation companies

1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was

established

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1944 Establishment of "The Hyderabad Stock Exchange Limited"

1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and

Shares Exchange Limited" were established and later on merged into "The Delhi Stock

Exchange Association Limited"

Post Independence Scenario

The depression witnessed after the Independence led to closure of a lot of exchanges in

the country. Lahore Stock Exchange was closed down after the partition of India, and

later on merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was

registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in

a miserable state till 1957 when they applied for recognition under Securities Contracts

(Regulations) Act, 1956. The Exchanges that were recognized under the Act were:-

Bombay, Calcutta, Madras, Ahmadabad, Delhi, Hyderabad, Bangalore, and Indore

Many more stock exchanges were established during 1980's, namely:

1. Cochin Stock Exchange (1980)

2. Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982)

3. Pune Stock Exchange Limited (1982)

4. Ludhiana Stock Exchange Association Limited (1983)

5. Gauhati Stock Exchange Limited (1984)

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6. Kanara Stock Exchange Limited (at Mangalore, 1985)

7. Magadh Stock Exchange Association (at Patna, 1986)

8. Jaipur Stock Exchange Limited (1989)

9. Bhubaneswar Stock Exchange Association Limited (1989)

10. Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989)

11. Vadodara Stock Exchange Limited (at Baroda, 1990)

12. Coimbatore Stock Exchange

13. Meerut Stock Exchange

Trading Pattern of the Indian Stock Market:- Indian Stock Exchanges allow trading

of securities of only those public limited companies that are listed on the Exchange(s).

They are divided into two categories:

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Types of Transactions:- The flowchart below describes the types of transactions that can

be carried out on the Indian stock exchanges

Indian stock exchange allows a member broker to perform following activities:

1. Act as an agent,

2. Buy and sell securities for his clients and charge commission for the same,

3. Act as a trader or dealer as a principal,

4. Buy and sell securities on his own account and risk.

Over The Counter Exchange of India (OTCEI)

Traditionally, trading in Stock Exchanges in India followed a conventional style where

people used to gather at the Exchange and bids and offers were made by open outcry.

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This age-old trading mechanism in the Indian stock markets used to create much

functional inefficiency. Lack of liquidity and transparency, long settlement periods and

became transactions are a few examples that adversely affected investors. In order to

overcome these inefficiencies, OTCEI was incorporated in 1990 under the Companies

Act 1956. OTCEI is the first screen based nationwide stock exchange in India created by

Unit Trust of India, Industrial Credit and Investment Corporation of India, Industrial

Development Bank of India, SBI Capital Markets, Industrial Finance Corporation of

India, General Insurance Corporation and its subsidiaries and Can Bank Financial

Services.

National Stock Exchange

In order to lift the Indian stock market trading system on par with the international

standards. On the basis of the recommendations of high powered Pertain Committee, the

National Stock Exchange was incorporated in 1992 by Industrial Development Bank of

India, Industrial Credit and Investment Corporation of India, Industrial Finance

Corporation of India, all Insurance Corporations, selected commercial banks and others.

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INDUSTRY PROFILE

ORIGIN AND DEVELOPMENT OF THE INDUSTRY

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1.2 a. ORIGIN AND DEVELOPMENT OF THE INDUSTRY TILL 2008

The origin of the stock market in India goes back to the end of the eighteenth century

when long-term negotiable securities were first issued. However, for all practical

purposes, the real beginning occurred in the middle of the nineteenth century after the

enactment of the companies Act in 1850, which introduced the features of limited

liability and generated investor interest in corporate securities.

An important early event in the development of the stock market in India was the

formation of the native share and stock brokers 'Association at Bombay in 1875, the

precursor of the present day Bombay Stock Exchange. This was followed by the

formation of associations/exchanges in Ahmadabad (1894), Calcutta (1908), and Madras

(1937). In addition, a large number of ephemeral exchanges emerged mainly in buoyant

periods to recede into oblivion during depressing times subsequently.

Stock exchanges are intricacy inter-woven in the fabric of a nation's economic

life. Without a stock exchange, the saving of the community- the sinews of economic

progress and productive efficiency- would remain underutilized. The task of mobilization

and allocation of savings could be attempted in the old days by a much less specialized

institution than the stock exchanges. But as business and industry expanded and the

economy assumed more complex nature, the need for 'permanent finance' arose.

Entrepreneurs needed money for long term whereas investors demanded liquidity – the

facility to convert their investment into cash at any given time. The answer was a ready

market for investments and this was how the stock exchange came into being.

Stock exchange means any body of individuals, whether incorporated or not,

constituted for the purpose of regulating or controlling the business of buying, selling or

dealing in securities. These securities include:

(i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like

nature in or of any incorporated company or other body corporate;

28

(ii) Government securities; and

(iii) Rights or interest in securities.

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India

Ltd (NSE) are the two primary exchanges in India. In addition, there are 22 Regional

Stock Exchanges. However, the BSE and NSE have established themselves as the two

leading exchanges and account for about 80 per cent of the equity volume traded in India.

The NSE and BSE are equal in size in terms of daily traded volume. The average daily

turnover at the exchanges has increased from Rs 851 crore in 1997-98 to Rs 1,284 crore

in 1998-99 and further to Rs 2,273 crore in 1999-2000 (April - August 1999). NSE has

around 1500 shares listed with a total market capitalization of around Rs 9, 21,500 crore.

The BSE has over 6000 stocks listed and has a market capitalization of around

Rs 9, 68,000 crore. Most key stocks are traded on both the exchanges and hence the

investor could buy them on either exchange. Both exchanges have a different settlement

cycle, which allows investors to shift their positions on the bourses. The primary index of

BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE 50 Index (Nifty) which

consists of fifty stocks. The BSE Sensex is the older and more widely followed index.

Both these indices are calculated on the basis of market capitalization and contain

the heavily traded shares from key sectors. The markets are closed on Saturdays and

Sundays. Both the exchanges have switched over from the open outcry trading system to

a fully automated computerized mode of trading known as BOLT (BSE on Line Trading)

and NEAT (National Exchange Automated Trading) System.

The stock exchange facilitates more efficient processing, automatic order

matching, faster execution of trades and transparency; the scrip's traded on the BSE have

been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent

those, which are in the carry forward system (Badla). The 'F' group represents the debt

market (fixed income securities) segment. The 'Z' group scrip's are the blacklisted

companies. The 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups and

Rights renunciations. The key regulator governing Stock Exchanges, Brokers,

29

Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian

secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd.

The securities markets in India have witnessed several policy initiatives, which

has refined the market micro-structure, modernized operations and broadened investment

choices for the investors. The irregularities in the securities transactions in the last quarter

of 2000-01, hastened the introduction and implementation of several reforms. While a

Joint Parliamentary Committee was constituted to go into the irregularities and

manipulations in all their ramifications in all transactions relating to securities, decisions

were taken to complete the process of demutualization and corporatization of stock

exchanges to separate ownership, management and trading rights on stock exchanges and

to effect legislative changes for investor protection, and to enhance the effectiveness of

SEBI as the capital market regulator. Rolling settlement on T+5 basis was introduced in

respect of most active 251 securities from July 2, 2001 and in respect of balance

securities from 31st December 2001. Rolling settlement on T+3 basis commenced for all

listed securities from April 1, 2002 and subsequently on T+2 basis from April 1, 2003.

The derivatives trading on the NSE commenced with the S&P CNX Nifty Index

Futures on June 12, 2000. The trading in index options commenced on June 4, 2001 and

trading in options on individual securities commenced on July 2, 2001. Single stock

futures were launched on November 9, 2001. Due to rapid changes in volatility in the

securities market from time to time, there was a need felt for a measure of market

volatility in the form of an index that would help the market participants. NSE launched

the India VIX, a volatility index based on the S&P CNX Nifty Index Option prices.

Volatility Index is a measure of market’s expectation of volatility over the near

term. The Indian stock market regulator, Securities & Exchange Board of India (SEBI)

allowed the direct market access (DMA) facility to investors in India on April 3, 2008.

To begin with, DMA was extended to the institutional investors. In addition to the DMA

facility, SEBI also decided to permit all classes of investors to short sell and the facility

for securities lending and borrowing scheme was operationalised on April 21, 2008.

30

The Debt markets in India have also witnessed a series of reforms, beginning in

the year 2001-02 which was quite eventful for debt markets in India, with implementation

of several important decisions like setting up of a clearing corporation for government

securities, a negotiated dealing system to facilitate transparent electronic bidding in

auctions and secondary market transactions on a real time basis and dematerialization of

debt instruments. Further, there was adoption of modified Delivery-versus-Payment

mode of settlement (DvP III in March 2004). The settlement system for transaction in

government securities was standardized to 12 T+1 cycle on May 11, 2005. To provide

banks and other institutions with a more advanced and more efficient trading platform, an

anonymous order matching trading platform (NDSOM) was introduced in August 2005.

Short sale was permitted in G-secs in 2006 to provide an opportunity to market

participants to manage their interest rate risk more effectively and to improve liquidity in

the market. ‘When issued’ (WI) trading in Central Government Securities was introduced

in 2006. As a result of the gradual reform process undertaken over the years, the Indian

G-Sec market has become increasingly broad-based and characterized by an efficient

auction process, an active secondary market, electronic trading and settlement technology

that ensure safe settlement with Straight through Processing (STP). This chapter,

however, takes a review of the stock market developments since 1990. These

developments in the securities market, which support corporate initiatives, finance the

exploitation of new ideas and facilitate management of financial risks, hold out necessary

impetus for growth, development and strength of the emerging market economy of India.

31

GROWTH AND PRESENT STATUS OF THE INDUSTRY

(AFTER 2009 TILL DATE)

1.2 b. GROWTHS AND PRESENT STATUS OF THE INDUSTRY

32

The main concern for the emerging market economies (including India) may not be the

direct exposure to global financial institutions, but more about access to credit and the

slowdown it is causing in America and other European economies.

Economists point out that the extent of the effect will be decided by the nature of the US

recession. If it is shallow (and the US comes out of it quickly), India may not suffer much

of an impact. But if it is long and deep, India’s exports will be hit.

The Indian stock market is definitely not in one direction, and building positions

on both buy or short sides is not a fairly good idea to make money in such a tight market.

Analysts believe that the market is definitely going to see some action as soon some

breaking news come out, but the effect of such news on the Indian stock market would

not be lasting long, and there could be a major pull back leading the market to touch the

13000 levels.

Having said that, economists believe that the inflation would inch down to 10% in

the coming quarter that would become visible in retail and consumer durable products

soon, which would in turn boost consumer confidence. This would definitely push the

markets to bounce back from the 13000 levels, and we might see some fresh buying, and

both sensex and nifty might witness some rally.

These levels could be of great importance for those domestic as well as NRI

clients who did not get a chance to make investments into top Indian mutual funds when

the market was trading at 18000 levels. A prudent idea would be to invest 25% of your

savings at these levels, and when the market drops down 20% from here, another 40% of

the savings can be invested.

33

FUTURE OF THE INDUSTRY

34

1.2 c. FUTURE OF THE INDUSTRY

India just keeps getting better and better. The economy is growing rapidly surpassing

some of Asia’s biggest economies. India is now becoming the third largest country

in Asia economically. It has grown so much and is expected to continue to grow like this

for a long time.  The Indian Government is doing everything it can do to propel the

growth rates in the Indian Industry, primarily in: India Stock Market, Indian

Companies, India’s manufacturing index, India Business Sector, India’s Company sector

and other India investment industries.

The yearly salaries are rising and the command to buy is under the command to spend.

The Investment GDP ratio is at a high. It is now over 30 percent and between the years

1990 and 2004 the average was only 25 percent. It has been said that, once it reaches 30

percent, it is going to take off rapidly. So India is expected to move rapidly.

The down side to India’s big movement is that there is a limit to how high it can

go. India has grown so much, making the costs of everything go up so frequently. It can

turn into the most expensive country in the world. The companies are now working above

their finest ability.

A lot of people try to People undervalue India‘s accomplishment in growth. The growth

rates are very good and it wouldn’t be wrong for people to overvalue it. India has created

the best growth story that happen over a long time. Although India is growing, there can

still be corrections in the market. No matter how well a country is doing, there is always

something that can be fixed. Some say that they would like to wait until the market is

fixed to invest.

It is said that the Reserve Bank of India come up with a way that the domestic credit

cycle can last for an extensive time. This credit cycle and the investment cycle, of course,

will keep India in the bull market for a long time. They stopped/slowed the growth of the

bank credit. The bank is taking control of the credit and loans very well so

that India stays on the right track.

35

The Indian share market has been in a bull run since April 2011 and thus corrections are

part and parcel for any market. The share markets will see ups and downs but there will

be steady growth. There is a good atmosphere for investments in India and the share

markets will thrive under the circumstances. Firms which deal with securities will make

good business as more and more people will enter the share markets to make investments.

In the long run all securities firms have a bright future.

36

PROFILE OF THE ORGANISATION

37

2.1 ORIGIN OF THE ORGANIZATION:

STANDARD CHARTERED SECURITIES (INDIA) LIMITED:

Standard Chartered Securities (India) Limited is a leading broking company that

helps retail and institutional investors with their capital market investment requirements.

At Standard Chartered Securities, the aim is to offer simplified investment

solutions that provide long-term value to the customers. For institutional clients, they

offer products such as equity capital markets, equity and derivative broking. Retail

division caters to online as well as offline customers, offering products such as equity and

derivative broking, depository services, mutual funds, fixed income instruments and

company fixed deposits.

They have a dedicated team of research analysts who work independently to

provide investment and trading recommendation to our institutional and retail customers.

A network of relationship managers and customer care executives offer efficient

execution backed by in depth research and expertise to customers across the country.

SCSI has a large network with pan India presence in 112 locations through 34 branches

and 97 authorized centers.

Standard Chartered Securities is registered as a trading and clearing member with

Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited

(NSE) and MCX Stock Exchange Limited (MCX). The Company is also registered as

Depository Participant with Central Depository Services (India) Limited (CDSL) as well

as National Securities Depository Limited (NSDL).

Standard Chartered Securities is part of the Standard Chartered Group, an

international financial services group that offers a variety of financial services including

Consumer Banking, Wholesale Banking, Corporate Advisory, Capital Market Services,

SME Banking, and Private Banking. Standard Chartered PLC, listed on the London,

Hong Kong and Mumbai stock exchanges, ranks among the top 20 companies in the

FTSE-100 by market capitalization. The London-headquartered Group has operated for

38

over 150 years in some of the world's most dynamic markets, leading the way in Asia,

Africa and the Middle East.

The Standard Chartered Group in India is also represented by Standard Chartered

Bank, India's largest international Bank with 94 branches across 37 cities. To know more

about Standard Chartered Bank, India, click on www. standardchartered .co.in . To know

about Standard Chartered plc, click on www.standardchartered.com

History of Standard Chartered Securities (India) Limited:

Standard Chartered Securities (India) Limited is a wholly-owned subsidiary of

Standard Chartered Bank (Mauritius) Limited (SCBM), which acquired the company

from Securities Trading Corporation of India (STCI) over 2008-2010. Prior to the

acquisition, Standard Chartered Securities was known as UTI Securities Limited

(UTISEL).

On August 23, 2007, SCBM agreed to acquire UTISEL from STCI in three

tranches. As a part of first branch, SCBM acquired 49% stake in UTISEL on January 11,

2008, after which, the name of the Company was changed from UTISEL to Standard

Chartered-STCI Capital Markets Limited w.e.f. January 17, 2008.

SCBM acquired further 25.9% stake in the Company on December 12, 2008, as a

part of second leg of the transaction and increase its total stake from 49% to 74.9% in the

Company.

As a last part of the acquisition, SCBM increased its stake to 100% in the

Company by acquiring the residual stake of 25.1% from STCI on October 08, 2010.

Consequently the Company became the wholly owned subsidiary of SCBM and was re-

named Standard Chartered Securities (India) Limited.

39

REGISTERED OFFICE / CORPORATE OFFICE

Standard Chartered Towers,

1st Floor, 201 B/1,

Western Express Highway,

Goregaon – East,

Mumbai-400063

Telephone No: 022 – 67515999

Fax No: 022 – 67559607

BRANCHES IN CHENNAI:

Standard Chartered Securities (India) Limited.,

Jamals Santhini, 1/1,

II nd Main Road,

Seethammal Colony, Alwarpet,

Chennai - 600018.

TEL : 044-24328944/ 9759.

Standard Chartered Securities (India) Limited.,

W-123, 1st floor,

3rd Avenue, Anna Nagar,

Chennai - 600040.

TEL : 044-26264500/ 4300.

40

GROWTH AND DEVELOPMENT OF THE

ORGANIZATION

41

2.2 GROWTH AND DEVELOPMENT OF THE ORGANIZATION:

Standard Chartered Bank in India is the country’s largest international bank with

90 branches in 33 cities and India is one of the Group’s key markets worldwide.

Employing about 19,000 people, Standard Chartered Bank has played a significant role in

the history of the banking industry in India since opening its first branch in Kolkata, 150

years ago, on 12 April 1858.

Standard Chartered Bank considers India to be one of the prime economic

opportunities of the 21st century and is proud to be so strongly positioned here. SCSI

have ambitious plans to transform business in the country and to further expand our

operations in India.

On 11 January 2008, Standard Chartered Bank (Mauritius) Limited acquired 49%

stake of erstwhile UTI Securities Limited from Securities Trading Corporation of India

(STCI). Accordingly, the name of the Company was changed from ‘UTI Securities

Limited’ to ‘Standard Chartered – STCI Capital Markets Limited’ with effect from 17

January  17 2008. Subsequently, on 12 December 2008, SCBM acquired further 25.9%

stake in Standard Chartered – STCI Capital Markets Limited to increase its total stake in

Standard Chartered – STCI Capital Markets Limited from 49% to 74.9%.

The institutional division of Standard Chartered Securities (India) Limited has

been catering to the ever growing needs of the institution and corporate customers for

over 15 years by providing a wide range  of financial intermediation services.

SCSI has provided consistent service has made them the financial intermediary of

choice to over 800 institutional clients which bear testimony to our continuous effort of

reaching out to customers requirements.

Pan India presence ensures tailor made services for customers at their point of

presence ensuring seamless execution of their requirements. Further, parentage with

Standard Chartered Bank helps them to provide global transactional capability, to our

customers.

42

1.Equity Capital Markets 2.Institutional Equities 3.Fixed Income Group

Creation and execution of

capitalization strategy

Consistent, quality services,

with utmost confidentiality

and competitive edge

Complete solution in the

debt segment

SERVICES OFFERED BY STANDARD CHARTERED SECURITIES (INDIA)

LIMITED:

1. EQUITY CAPITAL MARKETS:

The Equity Capital Markets division at Standard Chartered Securities (India)

Limited aims to offer entrepreneurs, companies and investors, independent financial

advice and transaction execution of the highest standard. The endeavor is to provide

value to growing and mature companies by helping them in the creation and execution of

the best possible capitalization strategy.

Capital Markets

The experienced professionals of Standard Chartered Securities (India) Limited offer a

wide range of services such as:

Initial public offer (IPO)

Rights issue

Follow on offerings (FPO)

Qualified Institutions placement (QIP) / preferential allotments

Open offers

Equity buyback programs

Private equity placements in listed companies (PIPE)

43

Private Equity

SCSI provides advisory solutions to companies on their capitalization/ re-capitalization

strategies. The services provided include

Advice on business plan

Advice on optimum capital structure

Due diligence and preparation of information memorandum

Identifying and screening of investors

Assistance in valuation and most effective financial structure

Negotiating  the terms of the deal with  investors and assisting in drafting of

necessary legal documentation for closure

Post closure servicing for company and fund

2. INSTITUTIONAL EQUITIES:

The institutional equities division at Standard Chartered Securities (India) Limited

caters to the investment needs of corporate and institutional clients. Our endeavor

is to provide consistent quality services, enabling our clients to derive maximum

benefits out of the markets.

Innovative approach, incisive research, responsive sales teams, and intensive

execution method have enabled SCSI to uncompromisingly service our clients in

unique and different ways.

SCS have a strong sales team, comprising of top equity professional, which

translates the research findings into actionable advice for clients, based on their

specific needs. The team services more than 110 institutional clients which

include leading domestic mutual funds, insurance companies, domestic financial

institutions, banks and FIIs.

44

3. RETAIL:

Standard Chartered Securities (India) Limited are a leading broking company with

15 years of experience catering to the financial needs of our ever increasing

customer base. The aim is to help investors achieve their financial goals by

providing high quality investment services, in a simple, direct and cost-effective

manner.

SCSI has a large retail network with pan India presence in  112 locations through

34 branches and over 97 authorized centers  caters to both  online and offline

customers.

The experienced team of retail research analysts backed by in depth research,

knowledge and expertise guides customers with appropriate solutions

In addition to offline trading through the branches and authorized centers, they

also offer comprehensive trading solutions through our online trading portal

which is fully equipped to cater to your multiple trading needs.

Standard Chartered Securities (India) Limited 3-in-1 account facility provides

seamless integration of bank, demat and trading accounts.

45

PRESENT STATUS OF THE

ORGANISATION

46

2.3 PRESENT STATUS OF THE ORGANIZATION:

Standard Chartered Securities (India) Limited is a wholly-owned subsidiary of Standard

Chartered Bank (Mauritius) Limited (SCBM), which acquired the company from

Securities Trading Corporation of India (STCI) over 2008-2010. Prior to the acquisition,

Standard Chartered Securities was known as UTI Securities Limited (UTISEL).

On August 23, 2007, SCBM agreed to acquire UTISEL from STCI in three

tranches. As a part of first branch, SCBM acquired 49% stake in UTISEL on January 11,

2008, after which, the name of the Company was changed from UTISEL to Standard

Chartered-STCI Capital Markets Limited w.e.f. January 17, 2008.

SCBM acquired further 25.9% stake in the Company on December 12, 2008, as a

part of second leg of the transaction and increase its total stake from 49% to 74.9% in the

Company.

As a last part of the acquisition, SCBM increased its stake to 100% in the

Company by acquiring the residual stake of 25.1% from STCI on October 08, 2010.

Consequently the Company became the wholly owned subsidiary of SCBM and was re-

named Standard Chartered Securities (India) Limited.

Standard Chartered Bank has completed the acquisition of an additional 25.9 per cent

stake in Standard Chartered-STCI Capital Markets Limited (formerly UTI Securities

Limited) to take its total holding in the company to 74.9 per cent. The company currently

offers its services under the brand ‘Standard Chartered Wealth Managers’.

Standard Chartered bought 49 per cent of UTI Securities Limited from Securities Trading

Corporation of India Limited (STCI) in January 2008 following, receipt of regulatory

approvals for the transaction.

This move by Standard Chartered to increase its existing stake is in line with its original

intent reflected in the contract, under which both parties provided for the stake to be

increased in stages to 100 per cent by 2010. Regulatory approvals have been received for

47

the additional stake and change in the controlling interest in Standard Chartered-STCI

Capital Markets Limited.

Neeraj Swaroop, Regional CEO – India and South Asia, Standard Chartered Bank, said:

“This strategic initiative is a reflection of our long term commitment to the Indian

market, despite the current economic slowdown. I am delighted that we have been

successful in combining the strengths of Standard Chartered with UTI Securities, a

recognized leader in the financial services spectrum.”

He further commented, “We are extremely confident that with this partnership, we will

continue to offer our customers both competitive investment avenues and remain a

provider of choice in this challenging environment.”

Somasundaram PR, Managing Director, Standard Chartered Capital Markets also said,

“This has been a challenging year for the business but the acquisition of an additional

stake at this time reflects the underlying confidence of Standard Chartered Bank in the

Indian economy as a whole and in the Indian equity capital markets specifically. We have

tested our plans in both the institutional and retail segments of this business in the last

year and we are convinced we have a significant opportunity here and a global strategic

fit.” The company currently offers its services under a global brand – ‘Standard Chartered

Wealth Managers’. Standard Chartered will also invest additional capital of US $4.5

million in line with the FDI guidelines with the increase in stake.

Standard securities have a good standing in the market and the sale of securities and

trading is on the upswing. The future securities as an industry are good and have a bright

future.

48

FUNCTIONAL DEPARTMENTS OF

THE ORGANIZATION

49

2.4 FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION:

1.Online Broking 2.Offline Broking 3.Distribution of financial

products

Online trading portal is a

single gateway for your

multiple investment needs.

Investing in equities with

SCSI truly empowers you to

meet your financial needs

Wide range of services to

meet ever increasing

financial objectives

1. ONLINE BROKING:

Customer convenience is our top-most priority. Keeping this in mind, Standard Chartered

Securities (India) Limited brings ‘The power of 3 at the convenience of 1'. With the 3in-1

account, SCSI offers seamless integration of bank, trading and demat accounts. The bank

account offered is Standard Chartered Bank account while the broking and demat

accounts will be with Standard Chartered Securities (India) Limited.

The easy to use features of 3in1 account include:

Single login facility

this feature enables direct access to details of all 3 accounts with a single log-in -

no need to remember multiple user names and passwords.

Hassle-free and convenient trading

No need to write cheques or issue TIFD (DIS) slips.

Instant update on status of purchase/sale orders.

Automated pay-in of shares and pay-out of funds/shares to and from your

DP/bank account.

Access to multiple products

Invest/trade online in multiple products - equity and derivatives trading, IPO, GOI

50

bonds and mutual funds.

You can place orders online or through the Phone-2-Trade facility.

TRADING PLATFORM:

EASY TRADE:

Easy Trade

Customers can trade on website that is easy to navigate with advanced stock trading

features. They can manage your account and trade on exchanges.

Benefits of EASY Trade:

Trading on NSE & BSE

Integrated Bank, Demat and Trading Account

Get Current Order Status

Monitor your orders

Updated buying power

Any where access

Access to back end reports

51

ADVANCE TRADE:

Customers can trade on website with live streaming quotes. They can create multiple

watch lists to track market movements.

Benefits of ADVANCED Trade:

Streaming quotes

Market Depth Window

Trading on NSE & BSE

Create Multiple Watch lists

Equity and Derivatives orders in single window

Hot Key Navigation

Access to back end reports

Super Trade

Customers can trade from their desktop with live streaming quotes and advanced

technical tools.

Benefits of SUPER Trade

Personalized Stock Quote Lists

Fully Customizable display

Streaming Intraday, Daily and Weekly Charts

Streaming Quotes

Alert capabilities

Track your orders real time

Real time position updates

Lock terminal option

2. OFFLINE BROKING

52

Standard Chartered Securities (India) Limited, offers the convenience of trading

in equity, derivatives and currency derivatives through our network of 34 branches and

over 97 authorized centers.

Equity

Investing in equities with Standard Chartered Securities (India) Limited truly

empowers customers to meet your financial needs. Different investors foray into equities

for different reasons. SCSI understands the expectations of customers and accordingly

offers a wide range of products and services.

To serve the varied customers, SCSI offer both delivery and intra-day trading.

The extensive network of dealers provides prompt and efficient service, helping

customers to take quick and right decisions, to maximize your gains. SCSI provides both

market and limit orders, offering customers a choice to take time-based or price-based

decisions as they deem fit. SCSI are member of Bombay Stock Exchange Limited (BSE)

and National Stock Exchange (NSE).

Derivatives

If customers are looking at hedging your investments, or wish to gain through your

estimates about the movement of the Index or stocks, SCSI offers derivatives trading on

Future and Options segment of the NSE (National Stock Exchange).

Currency Derivatives

A new investment opportunity from Standard Chartered Securities (India) Limited for all

Resident Indians. Currency Derivatives are standardized foreign exchange contracts

traded on an exchange to buy or sell one currency against another on a specified future

date. The contracts will be traded online through the order-driven market mechanism,

quite similar to equity derivatives.

3. DISTRIBUTION OF FINANCIAL PRODUCTS:

53

The financial products that are being offered in the markets today provide an

opportunity to the investor to participate in the stock market with a small investment size.

Standard Chartered Securities (India) Limited has a large retail network with pan

India presence in 112 locations through 34 branches, saver 97 business associates caters

to the investment needs of both offline and online clients. SCSI representatives who have

been trained and facilitated with the best tools, enables them to offer customers with the

best services and deals.

SCSI brings a wide array of products such as IPOs, fixed income bonds and

different schemes from leading mutual funds to help you diversify investments.

IPO

Initial Public Offer (IPO) offers an excellent opportunity to be part of a

company’s growth story right from its foray into markets. All that is required is the

“Buying Power” and we take care of the rest for you.

Mutual fund

Mutual funds are today an integral part of an investor’s portfolio. SCSI offers a

wide variety of Mutual Funds schemes ranging from plain vanilla funds to exchange

traded funds. SCSI network offers customers with products from leading asset

management companies (AMCs) operating in the market. With online platform, mutual

fund investment is just at the click of a button.

54

ORGANIZATION STRUCTURE

55

PRODUCT AND SERVICE PROFILE OF

ORGANIZATION COMPETITORS

2.5 PRODUCT AND SERVICE PROFILE OF ORGANIZATION

COMPETITORS:

56

HDFC SECURITIES LIMITED:

HDFC securities Ltd, a trusted financial services intermediary is a subsidiary of

India's respected private sector Bank - HDFC Bank. A leading stock broking company

having completed 10 years in operation serves a diverse customer base of retail and

institutional investors.

Discerning investors experience a robust platform to trade in Equities, derivatives,

currency futures and mutual funds through both NSE & BSE and other investment

options like IPO's, bonds, corporate fixed deposits, insurance etc. Investors are also

provided with niche - Equity Investment advice and execution platform with superior

technology aid and unbiased research across sectors, economy and scripts.

Web portal is designed to meet the requirements of everyone from a beginner to a

savvy and well-informed trader with highest service standards, convenience and hassle-

free trading tools. The Web portal aims to provide a one stop window for all financial

needs with seamlessness and customer centric services

CONVENIENCE

Clients could adopt to trade with us either online, or on the phone, or relationship

managers from the convenience of their home or office.

The 4-in-1 Advantage account enables clients to seamlessly move funds and securities

across your bank demat and trading account.

Clients get to enjoy limits across exchanges to trade

No need to issue cheques or delivery instructions.

Place IPO / NCD applications via few clicks using the trading account or by the phone.

No standing in queues or filling application forms.

ASBA application facility.

Customer care centre to address all queries and grievances.

REACH

HDFC securities has a strong unified call centre catering to clients across India

and overseas aiding clients who wish to have their orders placed by a tele-agent. 7

57

Regional language call centre facility is available for clients. Over 128 exclusive

branches across India also service clients locally by dedicated relationship managers.

TRANSPARENCY

With trusted pedigree, a client can be assured of best services in a transparent

manner and is in total control of their funds and stocks.

EXPERTISE

With a decade of experience and a rating of A1+1, HDFC securities has a admired

lineage of providing financial services to customers in a transparent and trusted manner.

They have a dedicated, motivated and experienced team of professionals to provide

customers with top class service.

TIMELY AND RELEVANT INFORMATION

HDFC Securities realize the importance of making information available to

clients as it happens. Empowered with the latest news, developments and unbiased

research, enables a client to take informed decisions.

HDFC SECURITIES OFFERS ONE STOP SHOP, FOR ALL INVESTMENT

NEEDS OF CUSTOMERS:

Equity and Derivatives

IPO / PMS

Mutual Fund

Fixed Deposits

Non Convertible Debentures

General Insurance

Life Insurance

Bonds / Currency Derivatives

REGISTERED OFFICE / CORPORATE OFFICE

HDFC Securities Limited

Office Floor 8, "I THINK" Bldg,

58

Jolly Board Campus,

Kanjurmarg (East),

Mumbai - 400042. India.

Tel : 022 - 30753400

Fax : 022 -30753435

EQUITY

HDFC Securities provides a seamless online real-time platform to trade in stocks. You

can buy or sell shares on both the NSE and BSE. Trading in equities involves more than

stock trading. Equity trading in the stock markets can involve many different securities,

requiring diverse strategies and trading skills. Equities may be traded for short-term and

long-term profits. HDFC Securities are a one-stop financial services shop, most respected

for quality of its advice, personalized service and cutting-edge technology.

Products Offering:

Cash-n-Carry

Margin

Buy Today Sell Tomorrow

Exchange Traded Funds

Off Market Orders

Do It Yourself SIP (Equity SIP)

DERIVATIVES:

59

For the mature investor, who is aware of risks in the market, Derivatives could be a great

way to trade, and HDFC Securities offer a robust platform to trade Derivatives.

Derivatives let customers trade in a large number of stocks and also in Index for a small

margin. For example, if customers had only Rs 2 lakh instead of Rs 10 lakh to buy a

stock, by paying margin of Rs. 2 Lakh they can create position in Derivatives Futures for

higher value. HDFC Securities delivers crisp information on Futures and Options,

contract specifications, and calculators on Option pricing and cost of carry.

IPO:

Participating in Initial Public Offerings (IPOs) can be a financially rewarding exercise.

By investing early in a strong company, customers stand a good chance to reap benefits

over the long term. There are gains to be made in many IPOs, for both short term as well

as long term investor.

60

DISCUSSION ON TRAINING

61

OBJECTIVES & RESEARCH METHODOLOGY

OBJECTIVES FOR THE STUDY:

Primary Objective:

To analyse the stock market movements of the selected scrips in India during 2008-11

To predict the future movements of the selected stock prices for the year 2012

Secondary Objectives:

To understand and analyse the aggregate stock prices of the top scrip’s during 2008-11

To understand and analyse the stock prices of the selected industries during 2008-11

To predict the stock market movements with respect to prices of the scrips for the year 2012

To provide the basic tips and information for the successful investment in the

stocks based on the analysis

62

RESEARCH METHODOLOGY:

The current project is based on the combination of the Primary & Secondary data collection.

Primary Data

Data that has been collected from first-hand-experience is known as primary data. Primary data has not been published yet and is more reliable, authentic and objective. Primary data has not been changed or altered by human beings, therefore its validity is greater than secondary data.

Secondary Data

Secondary data is data collected by someone other than the user. Common sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research. Primary data, by contrast, are collected by the investigator conducting the research.

Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in the case of quantitative data, provides larger and higher-quality databases that would be unfeasible for any individual researcher to collect on their own. In addition, analysts of social and economic change consider secondary data essential, since it is impossible to conduct a new survey that can adequately capture past change and/or developments.

As this Finance project is based on the fundamental and technical analyses, the detailed process of Research Design and Sampling are relevant only to a limited extent. Accordingly, as mentioned before, data has been collected based on Primary & Secondary sources. The sampling is based on convenient random sampling having the justified reasons. The analysis has been made on the stock prices of the selected industries and on the aggregate stock prices of the top companies in NSE & BSE, as well. The basis for the convenient sampling applied for the selection of industries for analysis is frequency of the market fluctuations in the top industries in India during 2008-11.

63

LIMITATIONS TO THE STUDY:-

Personal Limitations:-

The findings and the conclusions in this project is based on my individual opinions.

The results may vary and it’s purely depends upon market conditions. Stock exchange is limited by the amount of companies trading, the money one

can invest, and the current risk given the economic situation. The stock market is by and large run by those who have the money.  Smaller investors such as a personal investor or someone like you cannot impact

the stock exchange by your investments only. It takes numerous personal investors to get the market to move. This is due to the funding limitations most of us have to invest in any of the stock market shares. 

Economic Limitations:-

The stock exchange is powered by investors who see the news from corporations, governments, and history of the company.

These investors will weigh the news and also the corporation's performance over the long term.

They will decide what is risky or not. When something changes in the economy the stock market can be directly affected. This can make the economy worse or better.

The fears of the crisis also created an issue with many stocks. Companies began to underperform on the market due to consumer fears. 

Corporations were backing off from investing in mutually beneficial stocks, as were personal investors. Given the cycle that the economy has it can place a limit on the stock exchange because it is also part of the cycle.

When money is tight or there is no money to spend the stocks will be sold or held onto with little fluctuation. 

64

ANALYSIS OF STOCK INDICES (DURING 2008-11)

I. AGGREGATE FUNDAMENTAL & TECHNICAL MOVEMENTS OF STOCK INDICES (BSE & NSE)

I.A. TABULAR & GRAPHICAL REPRESENTATION:

BSE 30 listed companies as on dec2011 data:-

Industry Curr Price Change (%) Prev.Close Open Mkt Cap(Rs cr)

ACC Ltd 1092.8 -3.28 1129.85 1133.8 21171.4BHEL 226.45 -2.20 231.55 234.7 58852.5Bh Airtel Ltd

326.4 -2.97 336.4 340 127711

Cipla Ltd 331 -0.47 332.55 332.75 26620.2DLF Ltd 188.25 -0.37 188.95 191 33097.9HDFC Bank 415.1 2.23 406.05 405.9 97351Hero Moto 1813 -5.06 1909.55 1909 38383.3Hinda Ind Ltd

120.85 -3.09 124.7 125.5 24046.1

Hul 397.4 0.29 396.25 397.9 86803.8Hdfc 627.1 1.32 618.95 621.65 92055.5ICICI Bank 656.8 -0.05 657.15 661.1 77916.8Infosys Ltd 2669.1 -0.19 2674.15 2686 156022ITC Ltd 200.05 1.37 197.35 198.05 152283Jp Asso Ltd 54.9 -5.10 57.85 58.1 12556.7Jindal Steel &

Power Ltd 480.9 -3.66 499.15 502 48263.7

L & T Ltd 1003.95 -2.73 1032.1 1029.7 65822.8M & M Ltd 640.7 -1.80 652.45 654 40479.7Maruti Suzuki

India Ltd 917.1 -0.16 918.55 926 26863.8

NTPC Ltd 156.15 -2.71 160.5 161.45 13279ONGC 253.4 2.47 247.3 250.05 213973Ril Comm Ltd

62 -4.17 64.7 65.1 13808.3

Ril Ind Ltd 722.65 -1.79 735.85 740 236755Ril Infa Ltd 348 -0.71 350.5 351.35 9196.81SBI 1605 -1.63 1631.55 1632 106709Sterl Ind Ltd

89.3 -0.78 90 91.9 30049.1

TCS Ltd 1142 -0.05 1142.55 1141 223806Tata Motors Ltd

176.3 -2.00 179.9 180.7 54660.1

65

Tata Pow Ltd

82.65 -4.01 86.1 86.3 20942.6

Tata Steel Ltd

349.5 -3.81 363.35 365.8 35006.4

Wipro Ltd 395.4 -1.85 402.85 403.5 99024.6

NIFTY 50 companies as on December 2011 data:-

Industry Curr Price

Change (%)

Prev.Close Open Mkt Cap(Rs cr)

ACC Ltd 1088.45 -3.64 1129.6 1131 21171.4Ambuja Cements Ltd

148.35 -3.73 154.1 154 23471

Axis Bank Ltd 813.4 -4.20 849.05 857.7 37142.7Bajaj Auto Ltd 1615.15 -1.58 1641.1 1654.95 47858.9Bharat Heavy Electricals Ltd

224.9 -3.08 232.05 235.25 58852.5

Bharat Petroleum Corporation Ltd

509.65 -2.89 524.8 525.15 18977.2

Bharti Airtel Ltd 327.1 -2.76 336.4 339.8 127711Cairn India Ltd 311.55 0.55 309.85 310.5 56612.2Cipla Ltd 330.35 -0.74 332.8 332.8 26620.2DLF Ltd 187.95 -0.79 189.45 190.4 33097.9Dr Reddys Laboratories Ltd

1583.45 -0.41 1590 1590 27231.5

GAIL (India) Ltd 378.4 0.58 376.2 381 47790HCL Technologies Ltd

395.3 -3.93 411.45 414 28472.7

HDFC Bank Ltd 414.75 2.16 406 406 97351Hindalco Industries Ltd

120.3 -3.61 124.8 125.3 24046.1

Hindustan Unilever Ltd

397.05 0.21 396.2 396.6 86803.8

Housing Development Finance Corporation Ltd

626 1.25 618.25 619.75 92055.5

ICICI Bank Ltd 656.5 -0.11 657.2 662 77916.8Infrastructure Development Finance Company Ltd

101.55 -0.54 102.1 103.1 15294

66

ITC Ltd 199.85 1.19 197.5 199 152283Jaiprakash Associates Ltd

54.2 -6.07 57.7 58.3 12556.7

Jindal Steel & Power Ltd

478 -4.20 498.95 504.4 48263.7

Kotak Mahindra Bank Ltd

441.6 -5.59 467.75 470 35579.5

Larsen & Toubro Ltd

1003.45 -2.85 1032.9 1028.3 65822.8

Mahindra & Mahindra Ltd

637.4 -2.28 652.3 656 40479.7

Maruti Suzuki India Ltd

918.9 0.25 916.65 924 26863.8

NTPC Ltd 155.8 -2.81 160.3 160.3 132793Oil & Natural Gas Corpn Ltd

253.15 2.45 247.1 251.4 213973

Power Grid Corporation of India Ltd

98.3 -0.86 99.15 99.45 45417.6

Punjab National Bank

782 -2.13 799.05 800 26344.3

Ranbaxy Laboratories Ltd

392.75 2.47 383.3 384.25 16046.5

Reliance Capital Ltd

237.4 -0.31 238.15 241.7 6068.29

Reliance Communications Ltd

61.25 -5.26 64.65 65.3 13808.3

Reliance Industries Ltd

722 -1.81 735.3 741.7 236755

(REL)Infrastructure Ltd

346.25 -1.58 351.8 352 9196.81

Reliance Power Ltd 70.2 -3.90 73.05 73.6 20968.3Sesa Goa Ltd 148.8 -5.85 158.05 161.2 14036Siemens Ltd 631.3 -1.95 643.85 643.05 22065.1State Bank of India 1594.85 -2.04 1628.1 1632 106709Steel Authority of India Ltd

76.8 0.20 76.65 77.2 30834.4

Sterlite Industries (India) Ltd

89.2 -0.83 89.95 91.5 30049.1

Sun Pharmaceuticals Industries Ltd

500.65 -1.50 508.25 513.7 53162.5

Suzlon Energy Ltd 17.7 -1.94 18.05 18.45 3385.85Tata Consultancy Services Ltd

1141 -0.23 1143.65 1145.35 223806

67

Tata Motors Ltd 176.25 -1.97 179.8 180 54660.1Tata Power Company Ltd

82.2 -4.92 86.45 86.8 20942.6

Tata Steel Ltd 347.8 -4.35 363.6 365.3 35006.4Wipro Ltd 394.05 -2.46 404 402.2 99024.6

NIFTY 50 Stock analysis (INDEX) :-year by year analysis

3 YEAR NIFTY 50 CHART:-

S&P CNX NIFTY (NSE: ^NSEI )

Index Value: 4,841.55Trade Time: 9:49AMChange: 24.45 (0.50%)Prev Close: 4,866.00Open: 4,844.00Day's Range: 4,835.95 - 4,852.0552wk Range: 4,531.15 - 5,944.45

68

1 YEAR NIFTY 50 CHART:-

S&P CNX NIFTY (NSE: ^NSEI )

Index Value: 4,832.05Trade Time: 9:53AMChange: 33.95 (0.70%)Prev Close: 4,866.00Open: 4,844.00Day's Range: 4,831.80 - 4,852.0552wk Range: 4,531.15 - 5,944.45

6 MONTHS NIFTY 50 CHART:-

69

S&P CNX NIFTY (NSE: ^NSEI)

Index Value: 4,832.25Trade Time: 9:52AMChange: 33.75 (0.69%)Prev Close: 4,866.00Open: 4,844.00Day's Range: 4,832.10 - 4,852.0552wk Range: 4,531.15 - 5,944.45

3 MONTHS NIFTY 50 CHART:-

As on from Jan 2012 out look

Scrip trigger Price SL T1 T2Buy above 4778 4756 4798 4818 4851Sell Below 4733  4756  4713  4693  4661

Technical’s ... Charts (India bulls) - Market Tracker @ NSE

- Excellent in trending markets- Useless for range bound stocks- Trade only after checking charts

High Low CloseLast 4779.80 4730.15 4749.95Prev. (adjusted) 4782.85 4728.85 4749.65Weekly 4800.50 4608.90 4624.30

70

52 week 5944.45 4531.15Monthly 5099.25 4531.15 4624.30

This stock has excellent liquidity

Intraday support & resistance:

S 2 S 1 Pivot R 1 R 24703.65 4726.80 4753.30 4776.45 4802.95

Moving averages (simple):

5 D 8 D 13 D 20 D 39 D 50 D 200 D4705 4704 4699 4715 4816 4909 5265

Other indicators:

- 5 day RSI: 60 - no indication.- 14 day RSI: 48 - no indication.- Volume: 0 .... 20 day av vol: 0- Williams % R(14): 81 (summation factor 100)- Average Directional Index ADX: 16- Average True Range: ATR(5) 77 - ATR(20) 97- Volatility based on ATR(20): 2.04 %

Trading range (historical)

5 day 10 day 20 dayHighest close 4765.30 4779.00 4866.70Lowest close 4624.30 4624.30 4544.20

Last close: 4749.95 ... 0.01%

EOD charts

71

Swing Commentary:

Swing Trend Eff. Date Price Reversal20 day DN 17-11-2011 4935 49185 day DN 30-12-2011 4624 47833 day UP 03-01-2012 4765 467620 day swing ATR SL: 4734

Support and Resistance:

Resistance (Swing High)Support (Swing Low)Weekly highWeekly lowMonthly highMonthly low

480145314800460950994531

Fibonacci price projections:

0% 61.8% 100% 161.8% 261.8%Up 4531 4698 4801 4968 5238Dn 4801 4634 4531 4364 4094

Technical Analysis

72

BSE SENSEX (BSE)

Overlays: Volume

BSE SENSEX

(BSE: ^BSESN )Index Value: 15,768.82Trade Time: 10:52PM ESTChange: 88.26 (0.56%)Prev Close: 15,857.08Open: 15,789.08Day's Range: 15,766.63 - 15,846.2952wk Range: 15,135.90 - 20,210.60Quotes delayed, except where indicated otherwise. Currency in INR.

Historical Prices

Prices

Date Open High Low Close Avg Vol Adj Close*

Dec 1, 2011 16,555.93 17,003.71 15,135.86 15,454.92 18,500 15,454.92

Nov 1, 2011 17,540.55 17,702.26 15,478.69 16,123.46 18,400 16,123.46

Oct 3, 2011 16,255.97 17,908.13 15,745.43 17,705.01 17,000 17,705.01

Sep 2, 2011 16,963.67 17,211.80 15,801.01 16,453.76 16,800 16,453.76

Aug 1, 2011 18,352.23 18,440.07 15,765.53 16,676.75 14,800 16,676.75

Jul 1, 2011 18,974.96 19,619.65 18,131.86 18,197.20 12,600 18,197.20

Jun 1, 2011 18,527.12 18,873.39 17,314.38 18,845.87 12,700 18,845.87

May 2, 2011 19,224.05 19,253.87 17,786.13 18,503.28 13,700 18,503.28

Apr 1, 2011 19,463.11 19,811.14 18,976.19 19,135.96 13,400 19,135.96

Mar 1, 2011 17,982.28 19,575.16 17,792.17 19,445.22 17,700 19,445.22

73

Feb 1, 2011 18,425.18 18,690.97 17,295.62 17,823.40 23,200 17,823.40

Jan 3, 2011 20,621.61 20,664.80 18,038.48 18,327.76 16,600 18,327.76

Dec 1, 2010 19,529.99 20,552.03 19,074.57 20,509.09 13,800 20,509.09

Nov 1, 2010 20,272.49 21,108.64 18,954.82 19,521.25 14,600 19,521.25

Oct 1, 2010 20,094.10 20,854.55 19,768.96 20,032.34 14,400 20,032.34

Sep 1, 2010 18,027.12 20,267.98 18,027.12 20,069.12 16,600 20,069.12

Aug 2, 2010 17,911.31 18,475.27 17,819.99 17,971.12 14,900 17,971.12

Jul 1, 2010 17,679.34 18,237.56 17,395.58 17,868.29 15,600 17,868.29

Jun 1, 2010 16,942.82 17,919.62 16,318.39 17,700.90 23,500 17,700.90

May 3, 2010 17,536.86 17,536.86 15,960.15 16,944.63 19,700 16,944.63

Apr 1, 2010 17,555.04 18,047.86 17,276.80 17,558.71 13,600 17,558.71

Mar 2, 2010 16,438.45 17,793.01 16,438.45 17,527.77 18,100 17,527.77

Feb 1, 2010 16,339.32 16,669.25 15,651.99 16,429.55 20,100 16,429.55

Jan 4, 2010 17,473.45 17,790.33 15,982.08 16,357.96 21,900 16,357.96

Dec 1, 2009 16,947.46 17,530.94 16,577.78 17,464.81 19,800 17,464.81

Nov 3, 2009 15,838.63 17,290.48 15,330.56 16,926.22 25,000 16,926.22

Oct 1, 2009 17,186.20 17,457.26 15,805.20 15,896.28 31,500 15,896.28

Sep 1, 2009 15,691.27 17,142.52 15,356.72 17,126.84 28,500 17,126.84

Aug 3, 2009 15,694.78 16,002.46 14,684.45 15,666.64 29,700 15,666.64

Jul 1, 2009 14,493.84 15,732.81 13,219.99 15,670.31 36,300 15,670.31

Jun 1, 2009 14,790.89 15,600.30 14,016.95 14,493.84 40,300 14,493.84

May 4, 2009 11,635.24 14,930.54 11,621.30 14,625.25 54,700 14,625.25

Apr 1, 2009 9,745.77 11,492.10 9,546.29 11,403.25 52,900 11,403.25

Mar 2, 2009 8,762.88 10,127.09 8,047.17 9,708.50 46,000 9,708.50

Feb 2, 2009 9,363.58 9,724.87 8,619.22 8,891.61 36,600 8,891.61

Jan 2, 2009 9,973.06 10,469.72 8,631.60 9,424.24 61,400 9,424.24

Dec 1, 2008 9,162.94 10,188.54 8,467.43 9,647.31 56,300 9,647.31

Nov 3, 2008 10,209.37 10,945.41 8,316.39 9,092.72 48,300 9,092.72

Oct 1, 2008 13,006.72 13,203.86 7,697.39 9,788.06 46,400 9,788.06

Sep 1, 2008 14,412.99 15,107.01 12,153.55 12,860.43 31,700 12,860.43

Aug 1, 2008 14,064.26 15,579.78 14,002.43 14,564.53 25,200 14,564.53

Jul 1, 2008 13,480.02 15,130.09 12,514.99 14,355.75 30,300 14,355.75

Jun 2, 2008 16,591.46 16,632.72 13,405.54 13,461.60 24,300 13,461.60

May 2, 2008 17,560.15 17,735.70 16,196.02 16,415.57 20,100 16,415.57

Apr 1, 2008 15,771.72 17,480.74 15,297.96 17,287.31 21,100 17,287.31

Mar 3, 2008 17,227.56 17,227.56 14,677.24 15,644.44 25,900 15,644.44

Feb 1, 2008 17,820.67 18,895.34 16,457.74 17,578.72 16,800 17,578.72

Jan 2, 2008 20,393.10 21,206.77 15,332.42 17,648.71 21,400 17,648.71

74

* Close price adjusted for dividends and splits.

Technical Analysis

BSE SENSEX (BSE)

BSE SENSEX

6 months

(BSE: ^BSESN )Index Value: 15,798.36Trade Time: 10:58PM ESTChange: 58.72 (0.37%)Prev Close: 15,857.08Open: 15,789.08Day's Range: 15,766.63 - 15,846.2952wk Range: 15,135.90 - 20,210.60Quotes delayed, except where indicated otherwise. Currency in INR.

Historical Prices

Prices

Date Open High Low Close Avg Vol Adj Close*

Dec 1, 2011 16,555.93 17,003.71 15,135.86 15,454.92 18,500 15,454.92

Nov 1, 2011 17,540.55 17,702.26 15,478.69 16,123.46 18,400 16,123.46

Oct 3, 2011 16,255.97 17,908.13 15,745.43 17,705.01 17,000 17,705.01

75

Sep 2, 2011 16,963.67 17,211.80 15,801.01 16,453.76 16,800 16,453.76

Aug 1, 2011 18,352.23 18,440.07 15,765.53 16,676.75 14,800 16,676.75

Jul 1, 2011 18,974.96 19,619.65 18,131.86 18,197.20 12,600 18,197.20

1.B. INFERENCES OF THE AGGREGATE ANALYSIS:

2. STOCK INDEX ANALYSIS – INDUSTRY WISE

2.A. TABULAR & GRAPHICAL REPRESENTATION (FOR SIX INDUSTRIES)

2.A.1. FMCG INDUSTRY:

HUL Stock analysis :-year by year analysis

5 YEAR HUL CHART:-

76

Company: HINDUNILVR High/Low prices for the period: 01-Jan-2008 to 31-Dec-2008

Symbol Total Traded Quantity Turnover in LacsHINDUNILVR 72,83,73,419 17,04,199.03

Particulars Price DatesOpen 213.25 01-Jan-2008High 267.80 19-Dec-2008Low 169.00 22-Jan-2008Close 250.30 31-Dec-2008All Time High 3,234.00 25-Feb-2000All Time Low 0.00 30-Apr-1999

3 YEAR HUL CHART:-

77

Company: HINDUNILVR High/Low prices for the period: 01-Jan-2009 to 31-Dec-2009

Symbol Total Traded Quantity Turnover in LacsHINDUNILVR 85,56,26,192 21,82,387.60

Particulars Price DatesOpen 251.00 01-Jan-2009High 306.70 27-Jul-2009Low 210.85 09-Mar- 2009Close 264.80 31-Dec-2009All Time High 3,234.00 25-Feb-2000All Time Low 0.00 30-Apr-1999

1 YEAR HUL CHART:-

Company: HINDUNILVR High/Low prices for the period: 01-Jan-2010 to 31-Dec-2010

Symbol Total Traded Quantity Turnover in LacsHINDUNILVR 59,54,14,623 15,62,235.76

Particulars Price Dates

78

Open 264.80 04-Jan-2010High 320.85 10-Nov-2010Low 218.00 15-Mar-2010Close 312.90 31-Dec-2010All Time High 3,234.00 25-Feb-2000All Time Low 0.00 30-Apr-1999

3 MONTHS HUL CHART:-

Company: HINDUNILVR High/Low prices for the period: 01-Jan-2011 to 31-Dec-2011

Symbol Total Traded Quantity Turnover in Lacs

HINDUNILVR 59,63,54,423 19,52,815.73

Particulars Price DatesOpen 310.05 03-Jan-2011High 420.25 26-Dec-2011Low 264.45 22-Mar-2011Close 407.40 30-Dec-2011All Time High

3,234.00 25-Feb-2000

All Time Low 0.00 30-Apr-1999

Company: HINDUNILVR High/Low prices for the period: 01-Jan-2012 to 2012

Symbol Total Traded Quantity Turnover in Lacs HINDUNILVR 1,51,53,665 60,049.12

Particulars Price DatesOpen 408.15 02-Jan-2012High 411.70 03-Jan-2012Low 388.35 06-Jan-2012

79

Close 392.50 11-Jan-2012All Time High 3,234.00 25-Feb-2000All Time Low 0.00 30-Apr-1999

Hindustan Unilever- Key Fundamentals

Market Cap (Rs Cr.): 85,459

EPS - TTM (Rs):9.86

P/E Ratio (x):39.60

Face Value (Rs):1.00

Latest Div. (%):350.00

Div. Yield (%):1.64

Book Value / sh. (Rs):12.19

P/B Ratio (x):32.45

Quarterly - Hindustan Unilever Ltd.

Sep'11 Jun'11 Mar'11 Dec'10 Sep'10

INCOME:

Net Sales Turnover 5,610.48 5,580.36 4,966.61 5,127.71 4,764.67

Other Income 77.67 50.60 55.98 77.02 76.82

Total Income 5,688.15 5,630.96 5,022.59 5,204.73 4,841.49

EXPENSES

Stock Adjustments -52.63 190.26 -195.18 -102.99 -103.44

Raw Material Consumed 2,290.54 2,114.10 2,104.98 1,941.51 1,799.51

Power and Fuel 0.00 0.00 0.00 0.00 0.00

Employee Expenses 287.31 286.23 234.60 231.04 245.01

Administration and Selling Expenses

651.37 632.95 623.29 743.26 646.48

Research and Development Expenses

0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00

80

Other Expenses 1,607.21 1,601.55 1,552.42 1,589.91 1,530.22

Provisions Made 0.00 0.00 0.00 0.00 0.00

TOTAL EXPENSES 4,783.80 4,825.09 4,320.11 4,402.73 4,117.78

Operating Profit 826.68 755.27 646.50 724.98 646.89

EBITDA 904.35 805.87 702.48 802.00 723.71

Depreciation 57.10 56.20 55.63 56.33 55.37

EBIT 847.25 749.67 646.85 745.67 668.34

Interest 0.54 0.02 0.02 0.06 0.07

EBT 846.71 749.65 646.83 745.61 668.27

Taxes 202.21 180.24 161.28 172.39 142.59

Profit and Loss for the Year 644.50 569.41 485.55 573.22 525.68

Extraordinary Items 0.00 0.00 0.00 0.00 0.00

Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00

Other Adjustments 0.00 -57.75 -83.60 0.00 0.00

Reported PAT 688.92 627.16 569.15 637.51 566.12

KEY ITEMS

Reserves Written Back 0.00 0.00 0.00 0.00 0.00

Equity capital 216.10 216.07 215.95 218.21 218.21

Reserves and Surplus 0.00 0.00 0.00 0.00 0.00

Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg. Non-Promoter Shares(lacks)

10,261.10 10,258.34 10,246.22 10,472.70 10,472.70

Agg. Non-Promoter Holding (%)

47.48 47.48 47.45 47.99 47.99

Government Share 0.00 0.00 0.00 0.00 0.00

Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00

81

EPS (Rs.) 3.19 2.90 2.64 2.92 2.59

2.A.2. PHARMACEUTICAL INDUSTRY

RANBAXY Stock analysis :-year by year analysis

5 YEARS RANBAXY CHART:-

Company : RANBAXY High/Low prices for the period: 01-Jan-2008 to 31-Dec-2008

Symbol Total Traded Quantity Turnover in Lacs RANBAXY 64,90,33,460 27,77,231.35

Particulars Price DatesOpen 428.00 01-Jan-2008High 660.00 16-Jun-2008Low 163.50 29-Oct-2008Close 252.35 31-Dec-2008All Time High 1,279.40 21-Dec-2004All Time Low 0.00 30-Apr-1999

3 YEARS RANBAXY CHART:-

Company: RANBAXY High/Low prices for the period: 01-Jan-2009 to 31-Dec-2009

82

Symbol Total Traded Quantity Turnover in LacsRANBAXY 53,19,48,311 14,72,520.95

Particulars Price DatesOpen 252.00 01-Jan-2009High 538.45 21-Dec-2009

Low 133.10 12-Mar-2009

Close 517.95 31-Dec-2009All Time High 1,279.40 21-Dec-2004

All Time Low 0.00 30-Apr-1999

Company: RANBAXY High/Low prices for the period: 01-Jan-2010 to 31-Dec-2010

Symbol Total Traded Quantity Turnover in LacsRANBAXY 29,11,14,502 14,38,032.78

Particulars Price DatesOpen 518.50 04-Jan-2010High 624.20 08-Nov-2010Low 394.00 05-Feb-2010Close 598.65 31-Dec-2010All Time High 1,279.40 21-Dec-2004All Time Low 0.00 30-Apr-1999

1 YEARS RANBAXY CHART:-

6 MONTHS RANBAXY CHART:-

83

Company: RANBAXY High/Low prices for the period: 01-Jan-2011 to 31-Dec-2011

Symbol Total Traded Quantity Turnover in Lacs

RANBAXY 19,78,75,488 9,53,847.39

Particulars Price DatesOpen 602.25 03-Jan-2011High 611.70 04-Jan-2011Low 365.50 19-Dec-2011Close 404.90 30-Dec-2011All Time High 1,279.40 21-Dec-2004All Time Low 0.00 30-Apr-1999

Company: RANBAXY High/Low prices for the period: 01-Jan-2012 to 31-Dec-2012

Symbol Total Traded Quantity Turnover in LacsRANBAXY 74,30,908 32,220.42

Particulars Price DatesOpen 403.90 02-Jan-2012High 447.20 09-Jan-2012Low 402.10 02-Jan-2012Close 443.70 11-Jan-2012All Time High 1,279.40 21-Dec-2004All Time Low 0.00 30-Apr-1999

Ranbaxy Laboratories- Key Fundamentals

Market Cap (Rs Cr.):18,441

84

EPS - TTM (Rs):-3.04

P/E Ratio (x):-144.69

Face Value (Rs):5.00

Latest Div. (%):40.00

Div. Yield (%):0.45

Book Value / sh. (Rs) :121.48

P/B Ratio (x):3.60

Quarterly - Ranbaxy Laboratories Ltd.

Sep'11 Jun'11 Mar'11 Dec'10 Sep'10

INCOME:

Net Sales Turnover 1,425.06 1,282.02 1,056.44 1,101.36 1,181.05

Other Income 104.20 44.74 80.62 -78.20 177.22

Total Income 1,529.26 1,326.76 1,137.06 1,023.16 1,358.27

EXPENSES

Stock Adjustments -15.80 -66.23 -86.90 -12.16 -50.91

Raw Material Consumed 424.46 485.18 497.30 425.51 429.36

Power and Fuel 0.00 0.00 0.00 0.00 0.00

Employee Expenses 223.86 227.22 226.92 192.73 192.38

Administration and Selling Expenses 0.00 0.00 0.00 0.00 0.00

Research and Development Expenses

0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00

Other Expenses 863.24 567.24 382.35 569.62 586.80

Provisions Made 0.00 0.00 0.00 0.00 0.00

TOTAL EXPENSES 1,495.76 1,213.40 1,019.68 1,175.70 1,157.63

85

Operating Profit -70.70 68.62 36.77 -74.34 23.42

EBITDA 33.50 113.35 117.39 -152.54 200.64

Depreciation 49.31 46.98 46.26 64.95 45.47

EBIT -15.81 66.38 -19.67 -217.50 155.16

Interest 14.24 14.83 35.36 -101.38 9.57

EBT -30.04 51.55 -55.04 -116.11 145.60

Taxes 9.00 -5.48 -0.1 0.68 22.31

Profit and Loss for the Year -39.04 57.02 -54.89 -116.79 123.28

Extraordinary Items 0.00 0.00 0.00 0.00 0.00

Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00

Other Adjustments 0.00 -93.35 1.98 0.00 0.00

Reported PAT -439.20 150.38 -52.91 55.23 221.77

KEY ITEMS

Reserves Written Back 0.00 0.00 0.00 0.00 0.00

Equity capital 210.75 210.68 210.63 210.52 210.38

Reserves and Surplus 0.00 0.00 0.00 4,915.28 0.00

Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg. Non-Promoter Shares(lacks) 1,454.62 1,454.68 1,460.31 1,459.97 1,462.08

Agg. Non-Promoter Holding (%) 34.51 34.52 34.67 34.68 34.75

Government Share 0.00 0.00 0.00 0.00 0.00

Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00

EPS (Rs.) -10.42 3.57 -1.26 1.31 5.27

2.A.3. AUTOMOBILES INDUSTRY

TATA MOTORS Stock analysis :-year by year analysis:-

86

5 YEARS TATA MOTORS CHART:-

Company: TATAMOTORS High/Low prices for the period: 01-Jan-2008 to 31-Dec-2008

Symbol Total Traded Quantity Turnover in LacsTATAMOTORS 30,17,65,777 12,22,505.12

Particulars Price DatesOpen 742.00 01-Jan-2008High 824.10 04-Jan-2008Low 124.80 21-Nov-2008Close 159.85 31-Dec-2008All Time High 997.80 09-May-2006All Time Low 0.00 31-Mar-1999

3 YEARS TATA MOTORS CHART:-

Company: TATAMOTORS High/Low prices for the period: 01-Jan-2009 to 31-Dec-2009

Symbol Total Traded Quantity Turnover in LacsTATAMOTORS 1,18,16,92,990 46,91,834.46

87

Particulars Price DatesOpen 160.95 01-Jan-2009High 799.60 31-Dec-2009Low 128.00 18-Feb-2009Close 791.55 31-Dec-2009All Time High 997.80 09-May-2006All Time Low 0.00 31-Mar-1999

Company: TATAMOTORS High/Low prices for the period: 01-Jan-2010 to 31-Dec-2010

Symbol Total Traded Quantity Turnover in LacsTATAMOTORS 97,75,21,776 89,43,184.02

Particulars Price DatesOpen 789.90 04-Jan-2010High 1,382.00 06-Dec-2010Low 633.75 08-Feb-2010Close 1,308.35 31-Dec-2010All Time High 997.80 09-May-2006All Time Low 0.00 31-Mar-1999

1 YEARS TATA MOTORS CHART:-

88

3 MONTHS TATA MOTORS CHART:-

Company: TATAMOTORS High/Low prices for the period: 01-Jan-2011 to 31-Dec-2011

Symbol Total Traded Quantity Turnover in LacsTATAMOTORS 1,58,70,51,389 66,89,874.50

Particulars Price DatesOpen 1,327.70 03-Jan-2011High 1,335.00 03-Jan-2011Low 137.55 13-Sep-2011Close 178.70 30-Dec-2011All Time High 997.80 09-May-2006All Time Low 0.00 31-Mar-1999

Company: TATAMOTORS High/Low prices for the period: 01-Jan-2012 to 31-Dec-2012

89

Symbol Total Traded Quantity Turnover in LacsTATAMOTORS 12,27,56,102 2,44,461.98

Particulars Price DatesOpen 180.95 02-Jan-2012High 207.30 11-Jan-2012Low 178.80 02-Jan-2012Close 204.90 11-Jan-2012All Time High 997.80 09-May-2006All Time Low 0.00 31-Mar-1999

Tata Motors- Key Fundamentals

Market Cap (Rs Cr.):63,622

EPS - TTM (Rs):6.91

P/E Ratio (x):14.52

Face Value (Rs):2.00

Latest Div. (%):200.00

Div. Yield (%):1.99

Book Value / sh. (Rs) :63.05

P/B Ratio (x):3.18

Quarterly - Tata Motors Ltd.Sep'11 Jun'11 Mar'11 Dec'10 Sep'10

INCOME:

Net Sales Turnover 12,953.80 11,897.89 14,600.58 11,519.55 11,504.07

Other Income 56.78 115.52 31.03 5.41 77.52

Total Income 13,010.58 12,013.41 14,631.61 11,524.96 11,581.59

EXPENSES

Stock Adjustments -31.80 -537.28 98.95 145.03 -139.76

Raw Material Consumed 8,107.32 7,378.61 8,177.16 6,498.97 6,541.77

Power and Fuel 0.00 0.00 0.00 0.00 0.00

Employee Expenses 682.85 621.10 622.38 580.88 580.96

Administration and Selling Expenses

0.00 0.00 0.00 0.00 0.00

Research and Development 0.00 0.00 0.00 0.00 0.00

90

Expenses

Expenses Capitalised -229.84 -198.44 -215.92 -219.80 -213.05

Other Expenses 3,552.34 3,667.31 4,671.52 3,346.20 3,639.48

Provisions Made 0.00 0.00 0.00 0.00 0.00

TOTAL EXPENSES 12,080.87 10,931.30 13,354.09 10,351.28 10,409.40

Operating Profit 872.93 966.59 1,246.49 1,168.27 1,094.67

EBITDA 929.71 1,082.11 1,277.52 1,173.68 1,172.19

Depreciation 386.91 365.14 384.69 337.07 331.64

EBIT 542.80 716.97 892.83 836.61 840.55

Interest 212.10 253.15 247.90 274.92 307.16

EBT 330.70 463.82 644.93 561.69 533.39

Taxes -65.52 64.98 17.17 121.13 104.47

Profit and Loss for the Year 396.22 398.84 627.76 440.56 428.92

Extraordinary Items 0.00 0.00 0.00 0.00 0.00

Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00

Other Adjustments 0.00 -2.44 0.00 0.00 0.00

Reported PAT 102.02 401.28 573.34 410.06 432.70

KEY ITEMS

Reserves Written Back 0.00 0.00 0.00 0.00 0.00

Equity capital 634.75 634.75 637.71 633.11 570.60

Reserves and Surplus 0.00 0.00 19,351.40 0.00 0.00

Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg. Non-Promoter Shares(lacks) 12,507.24 2,464.70 2,410.72 2,513.87 2,590.77

Agg. Non-Promoter Holding (%) 46.46 45.78 44.78 46.84 51.16

Government Share 0.00 0.00 0.00 0.00 0.00

Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00

EPS (Rs.) 0.38 7.45 10.65 7.64 8.54

2.A.4. HEAVY INDUSTRY

SAIL Stock analysis :-year by year analysis:-

5 YEARS SAIL CHART:-

91

Company: SAIL High/Low prices for the period: 01-Jan-2008 to 31-Dec-2008

Symbol Total Traded Quantity Turnover in LacsSAIL 2, 65, 93, 23,716 40, 26,058.56

Particulars Price DatesOpen 284.70 01-Jan-2008High 290.40 01-Jan-2008Low 55.25 20-Nov-2008Close 77.50 31-Dec-2008All Time High 293.00 06-Dec-2007All Time Low 3.10 24-Dec-1998

Company: SAIL High/Low prices for the period: 01-Jan-2009 to 31-Dec-2009

Symbol Total Traded Quantity Turnover in LacsSAIL 2,56,14,49,338 34, 99,769.52

Particulars Price DatesOpen 78.00 01-Jan-2009High 243.80 31-Dec-2009Low 69.50 03-Mar-2009Close 241.70 31-Dec-2009All Time High 293.00 06-Dec-2007All Time Low 3.10 24-Dec-1998

3 YEAR SAIL CHART:-

92

Company: SAIL High/Low prices for the period: 01-Jan-2010 to 31-Dec-2010

Symbol Total Traded Quantity Turnover in LacsSAIL 99,08,47,711 21,15,133.60

Particulars Price DatesOpen 240.70 04-Jan-2010High 267.00 06-Jan-2010Low 166.00 25-Nov-2010Close 182.50 31-Dec-2010All Time High 293.00 06-Dec-2007All Time Low 3.10 24-Dec-1998

1 YEAR SAIL CHART:-

3 MONTHS SAIL CHART:-

93

Company: SAIL High/Low prices for the period: 01-Jan-2011 to 31-Dec-2011

Symbol Total Traded Quantity Turnover in LacsSAIL 80,38,36,253 9,94,098.13

Particulars Price DatesOpen 183.50 03-Jan-2011High 189.70 04-Jan-2011Low 73.20 19-Dec-2011Close 81.50 30-Dec-2011All Time High 293.00 06-Dec-2007All Time Low 3.10 24-Dec-1998

Company: SAIL High/Low prices for the period: 01-Jan-2012 to 31-Dec-2012

Symbol Total Traded Quantity Turnover in LacsSAIL 2,75,20,602 23,768.83

Particulars Price DatesOpen 81.90 02-Jan-2012High 93.40 12-Jan-2012Low 79.70 02-Jan-2012Close 91.35 12-Jan-2012All Time High 293.00 06-Dec-2007 All Time Low 3.10 24-Dec-1998

Steel Authority of India (SAIL) - Key Fundamentals

94

Market Cap (Rs Cr.): 35,130

EPS - TTM (Rs):10.84

P/E Ratio (x):7.74

Face Value (Rs):10.00

Latest Div. (%):12.00

Div. Yield (%):2.82

Book Value / sh. (Rs) :89.75

P/B Ratio (x):0.95

Quarterly - Steel Authority of India (SAIL) Ltd

Sep'11 Jun'11 Mar'11 Dec'10 Sep'10

INCOME:

Net Sales Turnover 10,979.62 10,926.00 12,180.46 11,312.84 10,747.44

Other Income 490.26 463.04 407.98 271.08 375.38

Total Income 11,469.88 11,389.04 12,588.44 11,583.92 11,122.82

EXPENSES

Stock Adjustments -454.79 -279.94 3.40 36.26 286.52

Raw Material Consumed 5,608.45 5,228.96 5,404.03 5,262.31 4,879.43

Power and Fuel 1,123.72 1,017.05 945.06 887.61 876.61

Employee Expenses 1,980.80 2,251.18 2,047.78 1,863.47 1,700.37

Administration and Selling Expenses

0.00 0.00 0.00 0.00 0.00

Research and Development Expenses

0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00

Other Expenses 1,394.30 1,397.34 1,399.10 1,467.50 1,462.25

Provisions Made 0.00 0.00 0.00 0.00 0.00

TOTAL EXPENSES 9,652.48 9,614.59 9,799.37 9,517.15 9,205.18

Operating Profit 1,327.14 1,311.41 2,381.09 1,795.69 1,542.26

EBITDA 1,817.40 1,774.45 2,789.07 2,066.77 1,917.64

Depreciation 393.78 374.16 387.14 379.33 368.82

95

EBIT 1,423.62 1,400.29 2,401.93 1,687.44 1,548.82

Interest 200.01 170.95 177.03 59.24 109.04

EBT 1,223.61 1,229.34 2,224.90 1,628.20 1,439.78

Taxes 221.28 391.28 699.96 520.73 511.39

Profit and Loss for the Year 1,002.33 838.06 1,524.94 1,107.47 928.39

Extraordinary Items 0.00 0.00 0.00 0.00 0.00

Prior Year Adjustment 1.03 0.00 5.67 0.00 9.10

Other Adjustments 0.00 0.00 0.00 0.00 0.00

Reported PAT 494.64 838.06 1,530.61 1,107.47 1,090.01

KEY ITEMS

Reserves Written Back 0.00 0.00 0.00 0.00 0.00

Equity capital 4,130.53 4,130.40 4,130.40 4,130.40 4,130.40

Reserves and Surplus 0.00 0.00 0.00 0.00 0.00

Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg. Non-Promoter Shares(lacks) 5,852.23 5,850.98 5,850.96 5,850.84 5,850.82

Agg. Non-Promoter Holding (%) 14.17 14.17 14.16 14.16 14.16

Government Share 0.00 0.00 0.00 0.00 0.00

Capital Adequacy Ratio 0.00 0.00 0.00 0.00 0.00

EPS (Rs.) 1.20 2.03 3.70 2.68 2.64

2.A.5.BANK INDUSTRY

AXIS BANK Stock analysis:-year by year analysis:-

96

5 YEAR AXIS BANK CHART:-

Company: AXISBANK High/Low prices for the period: 01-Jan-2008 to 31-Dec-2008

Symbol Total Traded Quantity Turnover in LacsAXISBANK 58,05,15,805 38,91,032.05

Particulars Price DatesOpen 970.30 01-Jan-2008High 1,291.50 14-Jan-2008Low 352.50 28-Nov-2008Close 504.70 31-Dec-2008All Time High 1,368.90 16-Jul-2010All Time Low 12.00 26-Apr-1999

Company: AXISBANK High/Low prices for the period: 01-Jan-2009 to 31-Dec-2009

Symbol Total Traded Quantity Turnover in LacsAXISBANK 77,91,31,186 52,63,674.09

Particulars Price DatesOpen 508.50 01-Jan-2009High 1,064.00 03-Dec-2009Low 278.25 09-Mar-2009Close 989.20 31-Dec-2009All Time High 1,368.90 16-Jul-2010All Time Low 12.00 26-Apr-1999

3 YEAR AXIS BANK CHART:-

97

Company: AXISBANK High/Low prices for the period: 01-Jan-2010 to 31-Dec-2010

Symbol Total Traded Quantity Turnover in LacsAXISBANK 39,03,13,748 49,31,423.05

Particulars Price DatesOpen 993.90 04-Jan-2010High 1,608.50 14-Oct-2010Low 965.15 27-Jan-2010Close 1,350.10 31-Dec-2010All Time High 1,368.90 16-Jul-2010All Time Low 12.00 26-Apr-1999

1 YEAR AXIS BANK CHART:-

3 MONTHS AXIS BANK CHART:-

98

Company: AXISBANK High/Low prices for the period: 01-Jan-2011 to 31-Dec-2011

Symbol Total Traded Quantity Turnover in LacsAXISBANK 46,09,42,444 53,76,191.39

Particulars Price DatesOpen 1,365.00 03-Jan-2011High 1,460.45 08-Apr-2011Low 803.30 30-Dec-2011Close 808.10 30-Dec-2011All Time High 1,368.90 16-Jul-2010All Time Low 12.00 26-Apr-1999

Company: AXISBANK High/Low prices for the period: 01-Jan-2012 to 31-Dec-2012

Symbol Total Traded Quantity Turnover in LacsAXISBANK 2,38,56,175 2,07,621.86

Particulars Price DatesOpen 810.00 02-Jan-2012High 968.45 12-Jan-2012Low 784.00 02-Jan-2012Close 940.50 12-Jan-2012All Time High 1,368.90 16-Jul-2010All Time Low 12.00 26-Apr-1999

Axis Bank- Key Fundamentals

99

Market Cap (Rs Cr.):34,966

EPS - TTM (Rs):91.53

P/E Ratio (x):9.53

Face Value (Rs):10.00

Latest Div. (%):140.00

Div. Yield (%):1.65

Book Value / sh. (Rs) :460.54

P/B Ratio (x):1.84

Quarterly - Axis Bank Ltd.

Sep'11 Jun'11 Mar'11 Dec'10 Sep'10

INCOME:

Net Sales Turnover 5,275.97 4,881.40 4,366.66 3,838.31 3,624.25

Other Income 1,234.92 1,167.87 1,450.40 1,147.71 1,033.24

Total Income 6,510.89 6,049.27 5,817.06 4,986.02 4,657.49

EXPENSES

Stock Adjustments 0.00 0.00 0.00 0.00 0.00

Raw Material Consumed 0.00 0.00 0.00 0.00 0.00

Power and Fuel 0.00 0.00 0.00 0.00 0.00

Employee Expenses 498.62 509.96 396.02 396.16 405.30

Administration and Selling Expenses

0.00 0.00 0.00 0.00 0.00

Research and Development Expenses

0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00

Other Expenses 967.92 823.53 934.57 826.19 756.69

Provisions Made 405.58 175.84 254.39 313.88 378.76

TOTAL EXPENSES 1,872.12 1,509.33 1,584.98 1,536.23 1,540.75

Operating Profit 3,403.85 3,372.07 2,781.68 2,302.08 2,083.50

EBITDA 4,638.77 4,539.94 4,232.08 3,449.79 3,116.74

100

Depreciation 0.00 0.00 0.00 0.00 0.00

EBIT 5,044.35 4,715.78 4,486.47 3,763.67 3,495.50

Interest 3,268.71 3,157.30 2,665.66 2,105.19 2,009.15

EBT 1,775.64 1,558.48 1,820.81 1,658.48 1,486.35

Taxes 449.74 440.29 546.31 453.24 372.45

Profit and Loss for the Year 1,325.90 1,118.19 1,274.50 1,205.24 1,113.90

Extraordinary Items 0.00 0.00 0.00 0.00 0.00

Prior Year Adjustment 0.00 0.00 0.00 0.00 0.00

Other Adjustments -405.58 -175.84 -254.39 -313.88 -378.76

Reported PAT 920.32 942.35 1,020.11 891.36 735.14

KEY ITEMS

Reserves Written Back 0.00 0.00 0.00 0.00 0.00

Equity capital 412.33 411.88 410.55 409.90 408.84

Reserves and Surplus 0.00 0.00 0.00 0.00 0.00

Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg. Non-Promoter Shares(lacks) 2,146.93 2,177.70 2,200.56 2,198.19 2,200.26

Agg. Non-Promoter Holding (%) 52.07 52.87 53.60 53.63 53.82

Government Share 0.00 0.00 0.00 0.00 0.00

Capital Adequacy Ratio 11.35 12.53 12.65 12.46 13.68

EPS (Rs.) 22.32 22.88 24.85 21.75 17.98

2.A.6. INFORMATION TECHNOLOGY INDUSTRY

INFY Stock analysis:-year by year analysis :-

101

5 YEAR INFY CHART:-

3 YEAR INFY CHART:-

Company: INFY High/Low prices for the period: 01-Jan-2008 to 31-Dec-2008

102

Symbol Total Traded Quantity Turnover in LacsINFOSYSTCH 44,62,51,540 68,72,214.03

Particulars Price DatesOpen 1,766.60 01-Jan-2008High 2,046.50 06-Jun-2008Low 1,040.00 10-Oct-2008Close 1,115.45 31-Dec-2008All Time High 16,875.25 04-Jan-2000All Time Low 0.00 30-May-2001

Company: INFY High/Low prices for the period: 01-Jan-2009 to 31-Dec-2009

Symbol Total Traded Quantity Turnover in LacsINFOSYSTCH 37,45,94,208 65,16,071.04

Particulars Price DatesOpen 1,116.00 01-Jan-2009High 2,614.00 31-Dec-2009Low 1,111.75 01-Jan-2009Close 2,601.10 31-Dec-2009All Time High 16,875.25 04-Jan-2000All Time Low 0.00 30-May-2001

Company: INFY High/Low prices for the period: 01-Jan-2010 to 31-Dec-2010

Symbol Total Traded Quantity Turnover in LacsINFOSYSTCH 24,55,06,257 68,91,620.16

Particulars Price DatesOpen 2,610.00 04-Jan-2010High 3,454.00 30-Dec-2010Low 2,329.00 05-Feb-2010Close 3,442.75 31-Dec-2010All Time High 16,875.25 04-Jan-2000All Time Low 30-May-2001

1 YEAR INFY CHART:-

103

Company: INFY High/Low prices for the period: 01-Jan-2011 to 31-Dec-2011

Symbol Total Traded Quantity Turnover in LacsINFY 31,78,16,108 88,74,226.23

Particulars Price DatesOpen 3,444.00 03-Jan-2011High 3,499.00 04-Jan-2011Low 2,161.50 25-Aug-2011Close 2,767.65 30-Dec-2011All Time High 16,875.25 04-Jan-2000All Time Low 0.00 30-May-2001

3 MONTHS INFY CHART:-

Company: INFY High/Low prices for the period: 01-Jan-2012 to 31-Dec-2012

104

Symbol Total Traded Quantity Turnover in LacsINFY 1,75,19,748 4,78,264.78

Particulars Price DatesOpen 2,759.20 02-Jan-2012High 2,894.90 11-Jan-2012Low 2,552.25 13-Jan-2012Close 2,584.20 13-Jan-2012All Time High 16,875.25 04-Jan-2000All Time Low 0.00 30-May-2001

Infosys- Key Fundamentals

Market Cap (Rs Cr.): 163,892

EPS - TTM (Rs):119.24

P/E Ratio (x):23.87

Face Value (Rs):5.00

Latest Div. (%):300.00

Div. Yield (%):2.10

Book Value / sh. (Rs) :426.70

P/B Ratio (x):6.69

Basics

All figures in Rs. crore(s)

Attribute Dec'10 Mar'11 Jun'11 Sep'11 Dec'11

Sales 6,534.00 6,668.00 6,905.00 7,470.00 8,696.00

Operating profit 2,177.00 2,199.00 2,074.00 2,359.00 2,922.00

Interest - - - - -

Gross profit 2,452.00 2,586.00 2,489.00 2,742.00 3,344.00

105

Attribute Dec'10 Mar'11 Jun'11 Sep'11 Dec'11

EPS (Rs) 28.59 30.14 28.82 31.74 38.94

DetailsAll figures in Rs. crore(s)

Attribute Dec'10 Mar'11 Jun'11 Sep'11 Dec'11

Other income 275.00 387.00 415.00 383.00 422.00

Stock adjustment - - - - -

Raw material - - - - -

Power and fuel - - - - -

Employee expenses 3,208.00 3,208.00 3,534.00 3,713.00 4,175.00

Excise - - - - -

Admin and selling expenses 697.00 709.00 1,024.00 407.00 479.00

Research and development expenses

- - - - -

Expenses capitalized - - - - -

Other expenses 452.00 552.00 273.00 991.00 1,120.00

Provisions made - - - - -

Depreciation 184.00 189.00 191.00 201.00 198.00

Taxation 627.00 667.00 644.00 719.00 911.00

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Attribute Dec'10 Mar'11 Jun'11 Sep'11 Dec'11

Net profit / loss 1,641.00 1,730.00 1,654.00 1,822.00 2,235.00

Extra ordinary item - - - - -

Prior year adjustments - - - - -

Equity capital 287.00 287.00 287.00 287.00 287.00

Equity dividend rate - - - - -

Agg.of non-prom. shares (Lacs) 3,770.80 3,810.16 3,979.13 4,040.88 4,010.66

Agg.of non promotoholding (%) 65.67 66.36 69.30 70.37 69.84

OPM (%) 33.32 32.98 30.04 31.58 33.60

GPM (%) 36.01 36.65 34.00 34.92 36.67

NPM (%) 24.10 24.52 22.60 23.20 24.51

2. B. INFERENCES FOR THE INDUSTRY-WISE STOCK INDEX ANALYSIS

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PREDICTION OF STOCK PRICES IN 2012 BASED ON THE PAST ANALYSIS

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Market in 2011 and hope is 2012 will give a new beginning:-

Going into 2012:

We are standing at the cusp of 2012, will there be new beginning, and this is the question

every investor is asking. 2011 has seen much of the pain in terms of Euro Zone debt

crisis, US downgrade by S&P or emerging market reeling under the pressure of higher

interest rate and de-growth.

We expect some of the issue will get solved or at least the clarity over things would

emerge. What would be the important things to be seen is will Euro Nation get

downgraded in 2012.

Euro Zone Nation May be Downgraded in 2012:

We expect most of the Euro zone nation would get downgraded. Nation with AAA a

rating could be stripped off this coveted standard and gets AA rating. One could say that

world is moving into AA world, where no nation has AAA rating.

Euro nation will haunt the global market going forward into 2012. We expect some stern

action from EU. A fiscal union sort is possible.

What went wrong for the Indian Economy in 2011?

Inflation

High Interest rate

Depreciating Rupee

Costly Fuel

Slowing GDP growth and IIP

2G Scam and Anna asking for Lokpal

Commodity Prices

FII Outflow

High Fiscal and Current Account Deficit.

And Mother of all Euro Zone debt crisis hitting the Export

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India Macro Economic Outlook:

Inflation that was haunting the Indian economy is now under control and especially food

inflation has come down drastically. But Indian economy has sacrificed growth in order

to contain inflation. RBI may go for easing interest rate from Q1FY13; tone over the

interest rate would be dovish.

Rupee will keep to the major cause of concern as we expect rupee to decline further.

Declining FII inflow and slowdown in FDI will keep the rupee under pressure. Slowdown

in export due to Euro Zone debt crisis will see rupee sliding further. Adding to the woes

is US looking inwardly for creating job and taking every possible step to deter the

outsourcing.

Reform Process:

Some reform process could take off post state election. But the will of the government

and the outcome will determine the how govt will take the reform forward. Market would

be specially looking forward towards the FDI in multi brand retail.

WHAT’S FOREIGN INSTITUTION SAY FOR 2012?

GOLDMAN SACH:

Inflation to come off in 2012, RBI expected to cut interest rate by 150 bps in 2012. Rupee

could depreciate in the near term given the contagion from the Euro zone.

Top picks are:- Axis Bank, SBI, Tata Motors, JSPL, Dr Reddys

Macquarie:

Macquarie expects Sensex to drift to 14,000 levels. Slower economic growth of 6.9% in

FY13 is expected.

CLSA:

All the negatives are now built into the price. Top Picks of CLSA are:

ITC, Dr Reddys, M&M, ICICI Bank

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Bank of America Merrill:

BofML expects FY13 GDP to slow down to 6.8%. It also expects earnings to see

slowdown and margins to remain under pressure.

SECTORS OUTLOOK FOR 2012:

Auto: (Positive)

Going forward we expect sales growth for two wheelers to moderate on account of a

demanding base effect. We expect a recovery in car demand in the second half of

CY2012 as interest rates and inflationary pressures begin to moderate. Improvement in

CV typically lags consumer driven sectors such as cars and hence we do not expect any

meaningful improvement in M&H CV demand during CY2012.

Top Pick:-Tata Motors, Maruti

Banking: (Neutral)

We expect that the combination of factors including high interest rates, hindrances to

project execution, deteriorating business confidence and uncertainty about the global

economy to negatively impact investment demand and consequently banking sector will

witness slowdown in credit growth. At the same time, asset quality of banks is expected

to deteriorate in next 12 months as debt servicing capability of corporates will be

negatively impacted due to high interest rates and input prices and weak domestic &

international demand.

Cement: (Cautiously Positive)

Cost pressures for the cement industry are likely to remain due to higher imported coal

prices on account of rupee depreciation and lower availability of coal from Coal India.

However, we expect margins for most cement companies to be supported by increases in

cement prices across most regions. We also expect improved Y-o-Y demand during the

1st half of CY2012 on likely revival in rural housing and infrastructure segments and a

low base effect.

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Top Pick: - Madras Cement, Ambuja Cement

FMCG: (Neutral)

We expect category volume growths to taper off towards their respective long term

averages, because of a higher base. We foresee well diversified players to continue to

weather cost pressures through supply chain efficiencies and Advertising.

Top Pick: - ITC, Godrej Consumer

HEALTHCARE: (Positive)

With drugs worth USD 80-90 billion losing patent over the next 4-5 years the US market

remains the primary market for Indian companies, despite the intensifying competition.

US generic market is expected to touch USD 51.7 billion by 2015 from USD 38 billion in

2010. Of this the current share of top 6 Indian companies is not more than USD 2.5

billion. We believe that Indian companies are well placed to tap this opportunity given

that they have healthy pipeline of ANDA filings (30% market share), including a

substantial presence in Para IVs and FTFs, DMF Filings (50% market share) and highest

number of US FDA approved facility outside US (100).

Top Pick: - Dr Reddys, Cipla

IT: (Cautiously Positive)

Lot would depend on how the global economies shape up. A deeper crisis in Euro zone

can lead to significant pressure for Indian IT services companies. Demand in US has

remained strong so far but any macro shock to the slowly recovering economy will have

a detrimental impact on IT demand. While weakening currency will provide some

cushion to the profits, strength in demand will remain the main catalyst.

Top Pick: - Hexaware, KPIT Cummins

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Telecom: (Neutral)

We also expect New Telecom Policy to be finalized and implemented in 2012 which

should lead to some clarity on the regulatory stance. However, valuations are expensive

and to an extent, already discounting the better earning visibility. In this backdrop, we are

neutral on the sector with a bias towards large operators.

Oil & Gas: (Negative)

We remain negative on the sector. The under-recoveries on subsidized fuels remain high

due to a sharp depreciation of the rupee which has made imports costlier. A weak

government fiscal situation has meant that Rs 300 billion of cash reimbursements

promised to Oil Marketing Companies are yet to be disbursed, which has caused the

working capital requirements (and hence interest costs) to balloon.

While the government has stuck to 33% sharing by upstream firms for H1FY12, with the

ONGC FPO being delayed there is the likelihood of a higher share being borne by

ONGC/Oil India/GAIL in H2FY12E, which could hurt net realizations.

A push towards reforms may be the catalyst needed for stocks to re-rate.

With this we are wrapping up our 2012 outlook for the Indian economy and sector to look

for in 2012. We will keep you updated about the economy and latest update of the

market. Also we would be guiding you with our reports on the company specific value

pick.

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MARKET ROUND UP:

30-shares Sensex jumped by 394 points or 2.55% to close at 15,848.80 during the week

ended 7th January, 2012. On the other hand, the broad based Nifty moved up by 123

points or 2.67% to close at 4,747duirng the same period.

Mid-cap stocks climbed by 163 points or 3.17% to close at 5,298 during the week ended

7th January, 2012. While small-cap shares rose 211.47 points, or 3.81%, to 5,761.61

during the week.

The gain was primarily led by capital goods, PSU and banking shares. Capital goods

shares rallied on the back of optimistic manufacturing activity. Banking stocks gained on

easing food inflation and central bank`s emphasis on economic growth, reviving

optimism of rate cuts. Also ahead of IIP buying is being seen in the Capital Goods.

Inflation:

For the first time in at least five-and-a-half years, India witnessed food deflation.

Wholesale price-based food inflation fell to –3.36 per cent during the week ended

December 24 due to a high base (20.84 per cent a year ago), a number of items

witnessing a decline in prices and deceleration in the rate of price rise in others.

Rupee Update:

Four weeks of losing string, the Indian rupee rebounded by 39 paise to close the first

week of 2012 on a positive note at 52.71/72 against the Greenback in line with smart

bounce back in local equities amid sustained dollar selling by exporters and some banks.

FDI IN RETAIL:

FDI in multi brand retail is again picking up as the Govt is in favor of continuing with the

reform process. Govt to consult with the consumer body on 12th January in regards to

FDI multi brand retailing. Retail stocks were seen flying on the last two trading sessions.

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PSU Stocks in Demand:

After sales of stock via auction are cleared PSU stocks were seen gaining by more than

65% in last 5 trading session. Gain was seen in the stock where Government holding is

more than 90%.

Also on Saturday special trading session Fertilizer stocks got charged up on cut in the

subsidy on non urea fertilizers. Fertilizer companies can increase the price as non urea is

decontrolled.

MAJOR SECTORAL GAINERS:

BANKING 6.40%

CAPITAL GOODS 5.90%

METAL 5.20%

PSU 4.90%

CONSUMER DURABLE 1.80%

PHARMA 1.70%

REALTY 0.90%

AUTO 0.40%

MAJOR SECTORAL LOSERS:

FMCG -0.10%

MAJOR GAINERS IN NIFTY:

TATA MOTORS 13.90%

ICICI BANK 9.80%

L&T 8.40%

MAJOR LOSERS IN NIFTY:

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HERO HONDA -8.95%

BAJAJ AUTO -8.40%

DLF -4.60%

CLOSE WATCH FOR WEEK AHEAD:

IIP on 12th January

Infosys Result on 12th January

HDFC Result on 12th January

Monthly Inflation

TECHNICALS:

S3 S2 S1 NIFTY R1 R2 R3

4, 540 4, 620 4, 702 4, 747 4, 790 4, 856 4, 890

Nifty is expected to take support at 4, 690-4, 710 levels. On upside clearing the 4, 890

levels are important. Nifty is expected to face huge resistance in the zone of 4, 850- 4,

900 levels. 4, 890 also happen to be the 50 DMA.

14 Day RSI is at 48, suggesting it is in the neutral territory. We expect some rally during

the first half of the week but profit taking will bring down the market in the later half.

Nifty is expected to trade in the broader range of 4, 500- 5000 level.

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CONCLUSIONS

CONCLUSION:

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Result season to start from the next week. Market will swing on the either side to the tune

of the Q3FY12 results. We expected subdued performance by the corporate during the

quarter.

Swing trades could be used by the traders to play on the momentum. Retail sector stocks

to be area of focus as on 12th January, Government to consult with different consumer

bodies on FDI in Retail.

As per technical analysis on January 19, 2012

Indian stock markets continued to trade in the positive territory boosted by

positive global cues. The BSE 30-share Sensex advanced 135 points to 16,586 points,

while the NSE 50-share Nifty continued to trade above the 5000 mark.

Food inflation continued its downward trend, with prices dropping 0.42% for the week

ended January 7 2012, on the back of falling onion and vegetable prices. Inflation for fuel

group commodities however was at 14.45%, while primary articles inflation was at

2.47%.

Realty, metal, power and banking have performed well; all they are up between 1.3-2.3%.

BSE Realty was the top performer sector wise, with rise of 2.3%, to 1675 points. HDIL

gained 5%. DLF, the largest realty developer saw its share jump 3.6%, after the news that

it was trying to sell the Delhi government a convention centre in the city, and that it was

preparing to sell its wind power business for an estimated Rs 1,800 crore.

Stocks in Power rose after the Prime Minister Manmohan Singh gave his assurances to

heads of power companies who met him yesterday, that the government would make a

roadmap and take all necessary steps to resolve issues in power generation in a time

bound manner.

Technology stocks however are bearish, with the BSE IT falling 0.54%. Bharti Airtel was

the most prominent loser with its stocks declining 1.13%.

The market breadth is positive with 1574 stocks advancing as opposed to 931 declining.

What Affects Share Price?

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The price of a particular share is the value for which it is bought and sold, either first hand (from the company) or in the resale market on a stock exchange. Whilst every share has a price, it also has what is known as a ‘nominal value’, which is an amount altogether different. Knowing what a share price is and how a share price is affected by market factors is one of the first steps towards becoming a more prolific stock market investor, and is crucial if you are to realize a return on your investments.

Every share is nominally worth a set amount that is not variable depending on the particular market climate. This amount is usually small, and in any case should be far smaller than the amount actually paid for the share on the resale market. The nominal value of a share is used only in terms of ensuring there is capital in the business from which creditors can be paid, and in the event of insolvency those shareholder who have no fully paid up the nominal value of their share-stock will be liable to contribute accordingly.

The difference between the nominal value and the share price in known as the ‘share premium’, and where this is paid directly to the business issuing the shares it must be ring fenced within a specific share premium account. The price paid for a share is utterly variable, and this is the amount expressed in stock tickers and on the exchanges, given that this is the amount one would have to pay to acquire an individual share.

Share price is affected by a number of external factors, but at the simplest level it is affected by the demand for that particular security. Obviously, the number of shares available in a given company is limited at any given point, and thus as more and more shares are bought, the value of those shares automatically increases. Likewise where those shares are sold and the market becomes flooded with one type of security, the value falls.

Whilst share price is affected by the transactional side of things, indirectly transactions are affected by market externalities and company performance. In theory, only the performance of a company should impact upon its share price, with those reporting growing profits likely to be in higher demand. However in all truth, the current state of the marketplace and the economy as a whole has a bearing.

Take for example the terrorist attacks of September 11th 2001. Whilst these had nothing to do directly with the performance of many publicly traded businesses, stock markets around the world plummeted as investors sold shares in a fit of panic.

Ultimately, it is the behavior of the larger investors that sparks movements in a share’s pricing. When times are good, share prices boom. But when the economy starts to turn gloomy, or even when a particular piece of bad commercial news is announced, share prices tend to fall dramatically.

Basic rules in Indian stock market

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1. Whenever Market is High It Will Fall

2. Whenever Market is Low, if there is no external Factor, It Will rise

3. Same Rules Applies To Stocks Scripts

What you must NOT do:-

1. Don't panic

The market is volatile. Accept that. It will keep fluctuating. Don't panic.If the prices of your shares have plummeted, there is no reason to want to get rid of them in a hurry. Stay invested if nothing fundamental about your company has changed.Ditto with your mutual fund. Does the Net Asset Value deep dipping and then rising slightly? Hold on. Don't sell unnecessarily.

2. Don't make huge investments

When the market dips, go ahead and buy some stocks. But don't invest huge amounts. Pick up the shares in stages. Keep some money aside and zero in on a few companies you believe in. When the market dips --buy them. When the market dips again, , you can pick up some more. Keep buying the shares periodically. Everyone knows that they should buy when the market has reached its lowest and sell the shares when the market peaks. But the fact remains, no one can time the market. It is impossible for an individual to state when the share price has reached rock bottom. Instead, buy shares over a period of time; this way, you will average your costs.

3. Don't chase performance

A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically.

4. Don't ignore expenses

When you buy and sell shares, you will have to pay a brokerage fee and a Securities Transaction Tax. This could nip into your profits specially if you are selling for small gains (where the price of stock has risen by a few rupees).

If you sell your shares of equity funds within a year of buying, you end up paying a short-term capital gains tax of 10% on your profit. If you sell after a year, you pay no tax (long-term capital gains tax is nil).

What you MUST do:-

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1. Get rid of the junk

Any shares you bought but no longer want to keep? If they are showing a profit, you could consider selling them. Even if they are not going to give you a substantial profit, it is time to dump them and utilize the money elsewhere if you no longer believe in them.

Similarly with a dud fund; sell the units and deploy the money in a more fruitful investment.

2. Diversify

Don't just buy stocks in one sector. Make sure you are invested in stocks of various sectors. Also, when you look at your total equity investments, don't just look at stocks. Look at equity funds as well. To balance your equity investments, put a portion of your investments in fixed income instruments like the Public Provident Fund, post office deposits, bonds and National Savings Certificates. If you have none of these or very little investment in these, consider a balanced fund or a debt fund.

3. Believe in your investment

Don't invest in shares based on a tip, no matter who gives it to you. Tread cautiously. Invest in stocks you truly believe in. Look at the fundamentals. Analyze the company and ask yourself if you want to be part of it.Are you happy with the way a particular fund manager manages his fund and the objective of the fund? If yes, consider investing in it.

4. Stick to your strategy

If you decided you only want 60% of all your investments in equity, don't over-exceed that limit because the stock market has been delivering great returns.Stick to your allocation.

What Causes Stock Prices To Change?

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Stock prices change every day as a result of market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.

Understanding supply and demand is easy. What is difficult to comprehend is what makes people like a particular stock and dislike another stock. This comes down to figuring out what news is positive for a company and what news is negative. There are many answers to this problem and just about any investor you ask has their own ideas and strategies.

That being said, the principal theory is that the price movement of a stock indicates what investors feel a company is worth. Don't equate a company's value with the stock price. The value of a company is its market capitalization, which is the stock price multiplied by the number of shares outstanding. For example, a company that trades at $100 per share and has 1 million shares outstanding has a lesser value than a company that trades at $50 that has 5 million shares outstanding ($100 x 1 million = $100 million while $50 x 5 million = $250 million). To further complicate things, the price of a stock doesn't only reflect a company's current value, it also reflects the growth that investors expect in the future.

The most important factor that affects the value of a company is its earnings. Earnings are the profit a company makes, and in the long run no company can survive without them. It makes sense when you think about it. If a company never makes money, it isn't going to stay in business. Public companies are required to report their earnings four times a year (once each quarter). Wall Street watches with rabid attention at these times, which are referred to as earnings seasons. The reason behind this is that analysts base their future value of a company on their earnings projection. If a company's results surprise (are better than expected), the price jumps up. If a company's results disappoint (are worse than expected), then the price will fall.

Of course, it's not just earnings that can change the sentiment towards a stock (which, in turn, changes its price). It would be a rather simple world if this were the case! During the dotcom bubble, for example, dozens of internet companies rose to have market capitalizations in the billions of dollars without ever making even the smallest profit. As we all know, these valuations did not hold, and most internet companies saw their values shrink to a fraction of their highs. Still, the fact that prices did move that much demonstrates that there are factors other than current earnings that influence stocks. Investors have developed literally hundreds of these variables, ratios and indicators. Some you may have already heard of, such as the price/earnings ratio, while others are

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extremely complicated and obscure with names like Chaikin oscillator or moving average convergence divergence.

So, why do stock prices change? The best answer is that nobody really knows for sure. Some believe that it isn't possible to predict how stock prices will change, while others think that by drawing charts and looking at past price movements, you can determine when to buy and sell. The only thing we do know is that stocks are volatile and can change in price extremely rapidly.

The important things to grasp about this subject are the following:

1. At the most fundamental level, supply and demand in the market determines stock price.

2. Price times the number of shares outstanding (market capitalization) is the value of a company. Comparing just the share price of two companies is meaningless.

3. Theoretically, earnings are what affect investors' valuation of a company, but there are other indicators that investors use to predict stock price. Remember, it is investors' sentiments, attitudes and expectations that ultimately affect stock prices.

4. There are many theories that try to explain the way stock prices move the way they do. Unfortunately, there is no one theory that can explain everything.

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General Market Advice:

1. Never chase a stock.

2. Buy when markets are in the grip of panic.

3. Only buy fundamentally strong stocks, which are undervalued.

4. Buy stocks grown in top line and bottom line over the past years.

5. Invest in companies with proven management.

6. Avoid loss-making companies.

7. PE Ratio and Growth in earnings per share are the key.

8. Look for the dividend paying record.

9. Invest in stocks for sure returns.

10. Stocks have been the high yielding asset class over the past.

11. Stocks are an asset class.

12. The basic property of any asset class is to grow.

13. Buy when everyone is selling and sell when everyone buys.

14. Invest a fixed amount each month.

Last But not least Trust our tips and then invest to earn huge profit

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Bibliography

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Bibliography

www.standardcharteredtrade.co.in

www.hdfcsec.com

www.nseindia.com

http://www.sharetipsinfo.com

http://investmentsfordummieslikeme.blogspot.com/

http://www.yourmoneysite.com/

http://www.moneycontrol.com/stocksmarketsindia/

Magazines & news papers:-

Dalal street (monthly)

Business line

Economic times

Mint

Channel news:-

CNBC

Bloomberg TV

NDTV Profit

ETV Now

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