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PROJECT REPORT
On
ANALYSIS OF CONSUMER BEHAVIORTOWARDS SHARE TRADING AND
SALES PROMOTION OF INDIABULLSSECURITIES LTD
In the partial fulfillment of the two year full time PGDBM(Equivalent to MBA)
Project GuideFaculty Guide
Mr. Vijay Babbar MissRashmi SundryalDivisional Sales Head
NDIMIndianbulls Securities Ltd. New DelhiNew Delhi
Submitted by:
Uttam SethRoll No: 68
PGDBM (2004-06)
New Delhi Institute of Management60-61 Tughlakabad Institutional Area \
New Delhi-110062
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ACKNOWLEDGEMENTS
I would like to express my sincere thanks to Indiabulls
Securities Ltd., Delhi for giving me the opportunity to carry out the
Summer Internship Program in their organization. The whole period
spent with the organization has been of immense learning experience
about the Indian Stock Market.
Preparing a project of such a kind is not an easy task in itself and I
am sincerely thankful to all those people who help me lot, in
preparing and completing this project.
I am grateful to Indiabulls Securities Ltd. who has given me this
opportunity to carry out the project Analysis of Consumer
Behavior Towards Share Trading and Sales Promotion of
Indiabulls Securities Ltd. A study on investors perception their
behavior about equities.
I sincerely thank to Mr. Vijay Babbar (Divisional Sales Head,
Indiabulls Securities Ltd., Delhi) for providing me this valuable
learning opportunity.
I would also like to thank Ms. Rashmi Sundryal Faculty Guide,
NDIM- Delhi for her valuable guidance and insight amidst her busy
schedule.
Finally I would like to thank Mr. Vineet Chandani (Relationship
Manager) my project supervisor without his help and guidance the
completion of this project would have become difficult task.
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INDEX
OBJECTIVE
HISTORY OF STOCK EXCHANGE
COMPANY PROFILE
a) Introduction
b) Philosophy
c) History and other corporate matters overview
SHARE TRADING
ORGANIZATION CHART
PRODUCTS AND SERVICES
INDIABULLS IN NEWS 2005
RESEARCH METHODOLOGY
FINDINGS AND ANALYSIS
RECOMMENDATIONS
BIOBLIOGRAPHY
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EXECUTIVE SUMMARY
Investing in equities in a market like India is speculative and involves
risk that may be greater than other types of investment strategies.
Before investing an Investor should be careful enough about him
investment decision to avoid erosion of wealth. As seen in the recent
times the volatility of market is more detrimental to the retail
investors as it seems to be lucrative for speculative gains of short
duration of time. Hence an investor has to evaluate his options
carefully for a prudent investment, keeping long-term horizon in
mind.
The report has tried to bring out the parameters those are of
paramount importance to general public dealing in an equity trading
on day-today and delivery base trading. The working methodology
has been discussed i.e. the data collection methods, sampling
methods and the survey questionnaire methods. Thee questionnaire
prepared is designed so as to cover a wide range of customer touch
points
The report given a view about the investors perception that what
they think while making investments in shares.
A sample of 100 people was selected randomly and survey was done
as per the parameters of the questionnaire. The results of every
parameter have been included in this report and shown graphically
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(Pie Charts, bar graphs etc.) A complete structure of the research
design has been included.
Apart from above discussed points the brief history of Indiabulls
Securities Ltd, its business diversification and a brief introduction
about the concept of share trading.
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OBJECTIVE
To study investors behavior towards different attributes such as
risk, return, liquidity etc. of investment in Equities.
To study the issues and challenges that investors face while
making investment in share market.
To study the preferences and perceptions of investors regarding
various financial products from the stable of Indiabulls Securities
Ltd. so that the firm can benefit from the findings of the report in
launching any new investment product in future.
To study the consumers perception in respect of investment in
shares Trading.
To study about Risk Management with the help of equities.
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HISTORY OF STOCK EXCHANGE
The only stock exchanges operating in the 19th century were those of
Bombay set up in 1875 and Ahemadabad set up in 1894. These were
organized as voluntary non-profit making organization of brokers to
regulate and protect their interests. Before the control on securities
trading became a central subject under the constitution in 1950, it
was a state subject and the Bombay securities contract (CONTROL)
Act of 1952 used to regulate trading in securities. Under this Act, the
Bombay stock exchanges in 1927 and Ahemadabad in 1937.
During the war boom, a number of stock exchanges were organized
in Bombay, Ahemadabad and other centers, but they were not
recognized. Soon after it became a central subject, central legislation
was proposed and a committee headed by A.D. Gorwala went into
the bill for securities regulation. On the basis of committees
recommendations and public discussions the securities contracts
(regulations) Act became law in 1956.
Definition of Stock Exchange
Stock exchange means anybody or individuals whether incorporated
or not, constituted for the purpose of assisting, regulation or
controlling the business of buying, selling or dealing in securities.
It is an association of member brokers for the purpose of self
regulation and protecting the internets of its members. It can operateonly if it is recognized by the Govt. under the securities contract
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(regulation) Act, 1956 the recognition is granted under section 3 of
Act by the Central Govt. ministry of finance.
Byelaws
Beside the above act, the securities contract (regulation) rules were
also made in 1975 to regulate certain matter of trading on Stock
Exchange. These are also byelaws of the exchanges, which are
concerned with following subjects.
Opening/Closing of the Stock Exchange, timing of trading, regulation
of blank transfer, regulation of Badla or carryover business, control of
statement, and other activities of stock exchange, fixation of
margins, fixation market price or making price, regulation of intraday
(jobbing), regulation of broker trading, brokerage charges, trading
rules on exchanges, attribution and settlement of disputes,
settlement and clearing of the trading etc.
Regulation of stock exchange
The securities contract (regulation) is the basis of the stock exchange
in India. No exchange can operate legally without the Govt.
permission or recognition. Stock exchanges are given monopoly in
certain areas under section 19 of the above Act to ensure that the
control and regulation are facilitated. Recognition can be granted to a
stock exchange provided certain condition are satisfied and the
necessary information is supplied to the government. Recognition can
also be withdrawn, if necessary. Where there are no stock
exchanges, the government can license some of the brokers to
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perform the function of stock exchange in its absence.
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SECURITIES AND EXCHANGE BOARD OF
INDIA (SEBI)
SEBI was setup as an autonomous regulatory authority by the
Government of India in 1988to perform the interest of investors in
the securities and to promote the development of, and to regulate
the securities market and for matters connected therewith or
incidental thereto. It is empowered by two Acts namely the SEBI
act, 1992 and the securities contract (regulation) Act 1956 to
perform the function of protecting investors right and regulating the
capital market.
Bombay Stock Exchange
The stock exchange, Mumbai, popularly known as BSE was
established in 1875 as The Native share and stock broker
association,as a voluntary non-profit making association. It has an
evolved over the year into its present status as the premiere stock
exchange in the country. It may be noted that the stock exchanges
the oldest one in the Asia, even older than the Tokyo Stock
Exchange, which was founded in 1878.
The Exchange, while providing an effective and transparent market
for trading in securities, uphold the interest of the investors and
ensure redressed of their grievances, whether against the companies
or its own member brokers. It also strives to educate and enlighten
the investors by making available necessary informative inputs and
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conducting investor education programmes.
A governing board comprising of 9 elected directors, 2 SEBI
nominees, 7 public representatives and an executive director is the
apex body, which decides the policies and regulates the affairs of the
exchanges.
The executive director as the chief executive officer is responsible for
the day today administration of the exchange. The average daily
turnover of the exchange during the year 2000-01 (April-March) was
Rs. 3984.19 crores and average number of daily trades 5.69 lakhs.
However the average daily turn over of the exchange during the year
2001-02 has declined to Rs. 1244.10 crores and number of average
daily trades during the period to 5.17 lakhs.
The average daily turn over of the exchange during the year 2002-03
had declined and number of average daily trades during the period is
also decreased.
The Ban on all deferral products like BLESS AND ALBM in the Indian
capital markets by SEBI with effects from July 2, 2001, abolition of
account period settlements, in all scripts traded on the exchanges
with effect from Dec 31, 2001, etc., have adversely impacted the
liquidity and consequently there is a considerable decline in the daily
turn over at the exchange. The average daily turn over of the
exchange present scenario is 110363 (laces) and number of average
daily trades 1057 (laces).
BSE Indices
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In order to enable the market participants analysis etc., to track the
various ups and downs in the Indian stock market, the Exchange has
introduced in 1986 an equity stock index called BSE-SENSEX that
subsequently became the barometer of the moments of the share
prices in the Indian Stock market. It is a Market capitalization
weighted index of 30 components stocks representing a sample of
large, well-established and leading companies. The base year of
Sensex is 1978-79. The Sensex is widely reported in both domestic
and international markets through print as well as electronic media.
Sensex is calculated using a market capitalization weighted method.
As per this methodology, the level of the index reflects the total
market value of all 30-component stocks form different industries
related to particular base period. The total market value of a
company is determined by multiplying the price of its stock by the
number of shares outstanding. Statisticians call an index of a set of
combined variables (such as price and number of shares) a
composite Index. An Indexed number is used to represent the
results of this calculation is order to make the value easier to work
with the track over a time. It is much easier to graph a chart based
on Indexed values than one based on actual values world over
majority of the well-known Indices are constructed using Market
capitalization weighted method.
In practice, the daily calculation of SENSEX is done dividing the
aggregate market value of the 30 companies in the Index Divisor.
The keeps the Index comparable over a period or time and if the
reference point for the entire Index maintenance adjustments.
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SENSEX is widely used to describe the mood in the Indian Stock
Markets. Base year average is changed as per the formula new base
year average = old base year average* (new market value/old
market value).
National Stock Exchange
The NSE was incorporated in Now 1992 with an equity capital of
Rs. 25 crores. The international securities consultancy (ISE) of Hong
Kong has helped in setting up NSE. ISE has prepared the detailed
business plans and installation of hardware and software systems.
The promotions for NSE were financial institutions, insurance
companies, banks an SEBI capital market ltd., Infrastructure leasing
and financial services ltd. and stock holding corporation ltd.
It has been set up to strengthen the move towards
professionalisation of the capital market as well as provide nation
wide securities trading facilities to investors.
NSE is not an exchange in the traditional sense where brokers own
and mange the exchange. A two tier administrative set up involving
a company board and a governing abroad of the exchange is
envisaged.
NSE is a national market for share PSU bonds, debentures and
government securities since infrastructure and trading facilities are
provided.
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NSE-NIFTY
The NSE on April 22, 1996 launched a new equity Index. The NSE-
50. The new index, which replaces the existing NSE-100 index, is
expected to serve as an appropriate Index for the new segment of
futures and options.Niftymeans National Index for Fifty Stocks.The
NSE-50 comprises 50 companies that represent 20 board Industry
groups with an aggregate market capitalization of around Rs.
1,70,000 crores. All companies included in the Index have a market
capitalization in excess of Rs. 500 crores each and should have
traded for 85% of trading days at an impact cost of less than 1.5%.
The base period for the close of prices on Nov 3, 1995, which makes
one year of completion of operation of NSEs capital market segment.
The base value of the Index has been set at 1000.
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NSE-MIDCAP INDEX
The NSE madcap Index or the Junior Nifty comprises 50 stocks that
represents 21 abroad Industry groups and will provide proper
representation of the madcap segment of the Indian capital Market.
All stocks in the index should have market capitalization of greater
than Rs. 200 crores and should have traded 85% of the trading days
at an impact cost of less 2.5 %.
The base period for the index is Nov 4, 1996, which signifies two
years for completion of operations of the capital market segment of
the operations. The base value of the Index has been set at 1000.
Average daily turn over of the present scenario 258212 (Laces) and
number of averages daily trades 2160 (Laces).
At present, there are 24 stock exchanges recognized under
the securities contact (regulation) Act, 1956.
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INTRODUCTION
Indiabulls Group is one of the country's leading business houses with business interests in
Power, Financial Services, Real Estate and Infrastructure. Indiabulls Group companies are
listed in Indian and overseas financial markets. The Net worth of the Group is Rs 18,593
Crore and the total planned capital expenditure of the Group by 2013-14 is Rs 35,000 Crore.
Indiabulls Securities (ISL) is one of India's leading capital markets companies providing
securities broking and advisory services. Indiabulls Securities also provides depository
services, equity research services and IPO distribution to its clients and offers commodities
trading through a separate company.
These services are provided both through on-line and off-line distribution channels.
Indiabulls Securities is a pioneer of on-line securities trading in India. Indiabulls Securities
in-house trading platform is one of the fastest and most efficient trading platforms in the
country. Indiabulls Securities has been assigned the highest rating BQ-1 by CRISIL.
Indiabulls Securities Ltd is India's leading capital markets company with All-India Presence
and an extensive client base. The company is engaged in the securities brokerage industry.
They provide range of services to their clients in securities brokerage, including equities,
commodities, wholesale debt, futures and options, depositary services, research services,
insurance, initial public offering (IPO), and mutual fund distribution.
They have a pan India presence with a network of 123 branches spread across 70 cities. The
company's primary business activity is to carry on business of stock and share broker on
National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd, and other related
ancillary services.
They are a depositary participant with the National Securities Depository Ltd (NSDL) and
Central Depository Services (India) Ltd (CDSL) for settlement of dematerialized shares.
They perform clearing services for all securities and commodities transactions. The
company is the first and only brokerage house in India to be assigned the highest rating BQ-
1 by CRISIL. They possesses state of the art trading platform, best broking practices and is
the pioneer in trading product innovations.
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Power Indiabulls, in-house trading platform, is one of the fastest and most efficient trading
platforms in the country. Their subsidiaries include Indiabulls Commodities Limited,
Devata Tradelink Ltd, Indiabulls Distribution Services Ltd and Indiabulls Brokerage Ltd.
Indiabulls Securities Ltd was incorporated on June 9, 1995 as a private limited company
with the name GPF Securities Pvt Ltd. The name of the company was changed to Orbis
Securities Pvt Ltd on December 15, 1995 to change the profile of the company and
subsequently due to the conversion of the company into a public limited company, the name
was further changed to Orbis Securities Ltd on January 5, 2004. The name of the company
was again changed to Indiabulls Securities Ltd on February 16, 2004 so as to capitalize on
the brand image of the term 'Indiabulls' in the company name.
During the year 2007-08, pursuant to a court approved composite scheme of arrangement
inter-alia between the company, Indiabulls Financial Services Ltd and Indiabulls Credit
Services Ltd and their respective shareholders and creditors, the securities broking and
advisory business of Indiabulls Financial Services Ltd comprising of business providing
advisory business with respect to risk management, equity analysis and securities data
management, securities brokerage including equities, wholesale debt, futures and options,
depository services, research services, mutual fund and IPO distribution its clients which
Indiabulls Financial Services Ltd carries on by itself and through their subsidiaries including
the company, a registered member of the BSE and NSE and Indiabulls Commodities Pvt Ltd
which is a member of National Commodities Derivatives Exchange of India and Multi
Commodity Exchange and operates the business of an intermediary for trading in securities
and derivatives was transferred by the way of de-merger and vested with the company.
The de-merger of Indiabulls Securities Ltd was effective form December 24, 2007. As per
the scheme, every shareholder of Indiabulls Financial Services Ltd as on January 8, 2007,received a share of Indiabulls Securities Ltd. In January 9, 2008, the company incorporated
Devata Tradelink Ltd as a subsidiary company. The equity shares of the company were
listed on National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd with
effect from April 2, 2008 and GDRs were listed on Luxembourg Stock Exchange with effect
from July 16, 2008.
During the year 2008-09, the company formed wholly owned subsidiary company namely
Indiabulls Brokerage Ltd. During the year 2009-10, the company formed a wholly owned
subsidiary company, namely, Indiabulls Distribution Services Ltd. They opened 58,224 new
equity trading accounts during the year. Also, they added 8,612 new trading accounts for
commodities during the year.
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In December 2009, they created a full fledged division for institutional sales. The company
is focused on building a long term stable business with emphasis on retail brokerage that
does not rely on highly-leveraged trading clients. Their position will be further strengthened
by the set-up of their Institutional Equity business and their future foray into Portfolio
Management, Wealth Management and Investment Banking.
Other main listed companies:
Indiabulls Housing Finance Ltd. (IBHFL)is Indias 3rd largest Housing Finance
Company (HFC). The company is registered as a Housing Finance Company (HFC) and is
regulated by the National Housing Bank (NHB). IBHFL is a leading provider of home
loans, loan against properties and commercial vehicle loans.
The company has a loan asset book of over Rs. 34,400 Cr and has, since inception,
disbursed over Rs. 71,000 Cr to over 5.5 lakh customers.
With a net worth of over Rs. 5,300 Cr, IHFL is one of the best capitalized companies
amongst its peer with a CRAR of 18.47% as at March 31st, 2013. Further, the company is
one of the least levered amongst its peer set with a net debt-to-equity ratio of only 4.67. Thecompany enjoys a credit rating of AA+.
IBHFL has 200 well appointed and customer accessible walk-in branches spread across the
country. Companys national and International reach is further enhanced from tie-ups
with Yes Bank and Doha Bank
Indiabulls Real Estate (IBREL) is among India's top Real Estate companies with
development projects spread across residential complexes, integrated townships,
commercial office complexes, hotels, malls, Special Economic Zones (SEZs) and
infrastructure development. Indiabulls Real Estate partnered with Farallon Capital
Management LLC of USA to bring the first FDI into real estate in the country.
The company has a networth of Rs 7,403 Crore and has purchased prime land, mostly in the
metros and other Tier 1 cities worth Rs 4,000 Crore in government auctions alone.
Indiabulls Real Estate is currently developing 71.55 million sqft into premium quality, high-
end commercial, residential and retail spaces. The company has been assigned 'A+' rating.
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Indiabulls Power (IBPOW) is currently developing Thermal Power Projects with an
aggregate capacity of 5400 MW. The first unit is expected to go on stream in May 2012.
The net worth of Indiabulls Power is Rs 5,507 Crore. The company has a total capital
expenditure of Rs 27,500 Crore. The company has been assigned 'BBB' rating.
Products
Indiabulls Securities Limited (ISL) is the pioneer in Retail Broking Industry having a pan
India presence and providing services to a customer base exceeding half a million. ISL is in
the business of providing securities broking and advisory services and is a corporate
member of capital market, wholesale debt market and derivative segment of NSE and of the
capital market and derivative segment of BSE. ISL is the first and only brokerage house to
be assigned the highest rating BQ-1 by CRISIL.
The company through various types of brokerage accounts provides product and services
related to purchase and sale of securities listed in NSE and BSE. It also provides depository
services, equity research services, mutual fund, IPO distribution to its clients. The company
provides these services through on-line and off-line distribution channel.
1) Power Indiabulls
Power Indiabulls (PIB)is the advanced online trading platform from Indiabulls Securities
Limited. PIB provides the best in the class internet trading features and delivers a seamless
and rich online trading experience for its users. PIB comes with a whole host of online
features for the internet trading users ranging from real-time stock prices, to live trading
reports, charting, News Room. PIB provides an integrated online trading platform for the
internet trading community to invest in equity, F&O, Online IPOs and base their decision on
sound fundamental research and technical analysis. It also provides various kinds of trading
reports,each developed to cater to internet trading users distinct needs.
With whole host of advanced online trading features, PIB aims to fulfill the needs of
every genre of investors & help them gain profits in every possible way.
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Why PIB?
PIB is the internet based stock trading application, which provides you an unparalleled edge
to trade in Indian stock markets. Here are some of the compelling reasons, why you should
subscribe for Power Indiabulls (PIB)
Integrated market watch for Equities and Derivatives
Live Streaming Quotes
Fast Order Entry
Tic by Tic Live Intraday Charts
Technical Analysis
Live Market News
Customizable Alerts
Extensive Reports
Real Time Market Statistics
World Market Summary
Introducing Intraday Futures
2) Indiabulls Signature Account
With Indiabulls Signature account you will always remain on top of your investments. It
provides you the platform to trade in Equity and Derivatives. With an unmatched service
and nationwide presence, the Indiabulls Signature account comes bundled with a variety of
exclusive features.
Ease of trading With Indiabulls Signature account you have the flexibility to
place your orders either by logging on the website, calling at the branch or walking
in the branch.
Dedicated Service Branch and Relationship Manager: You can get in touch with
your Relationship Manager and Service Branch for all your trading related
requirements.
Power Indiabulls (PIB): You can trade smarter and faster using the Power
Indiabulls application. Access the broad spectrum of sophisticated trading tools andget an edge in the stock markets.
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Online Payment Gateways: Use our online payment gateways facility and get
instant credit in your Trading Account. We currently provide online gateway
payment facility with five major banksHDFC, ICICI, AXIS, CITI and IDBI.
IPOs Indiabulls provides you the flexibility to apply in ongoing IPOs through
either online or offline channels. For applying online, you do not need to fill tedious
forms and write cheques. You can apply conveniently in IPOs from the comfort of
your home / office through our Website/PIB. For applying offline, you can contact
your Relationship Manager/ Service Branch.
Portfolio Tracker: You can track your investments online through our portfolio
tracker functionality. You can conveniently track the daily movement, notional /
booked profits and losses in your portfolio.
Equity Analysis Report
A qualified and dedicated team of equity analysts at
Indiabulls publishes various research reports. You can view these reports to gain
insight into the companies of your interest.
News Room: The News Room provides real-time news from stock-markets,
corporate sector, economy and other segments that have a bearing on the market
sentiment.
Market Statistics: This functionality facilitates tracking the market trend by
providing you real time data on top gainers, top losers, volume toppers and most
volatile stocks.
Mobile Power Indiabulls (MPIB): MPIB is a mobile-phone based application,
developed exclusively for Indiabulls customers. Using MPIB, you can view the live
market rates of your favorite stocks and futures contracts on your mobile device.
Thus with MPIB, you can always remain connected with the market, even on the
move.
Electronic Contract Notes on Email: This facility enables you to get digitallysigned Electronic Contract Notes on email within 24 hours of executing trades in
your Trading Account.
Introducing Intraday Futures: Intraday Futures Product enables you to take
intraday positions in various future contracts at lower margins. These positions have
to be necessarily squared-off at the day end.
Comprehensive Reports: Track your financials and portfolio efficiently through
various reports like Ledger Statements, Account Summary, Net Portfolio Report,
Daily Transaction Report, Daily Transaction report etc.
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HISTORY AND OTHER CORPORATE MATTERS
OVERVIEW
Indiabulls Financial Services Limited was incorporated on January10, 2000 as M/s
Orbits InfoTech Private Limited at New Delhi under the Companies Act, 1956 with
Registration No. 55 103183. The name of the Company was changed to M/s. Indiabulls
Financial Services Private Limited on March 16, 2001 due to change in the main
objects of the Company from Infotech business to Investment & Financial Services business.
It became a Public Limited Company on February 27, 2004 and the name of Company was
changed to M/s. Indiabulls Financial Services Limited. Company was promoted by three
engineers from IIT Delhi, and has attracted more than Rs.700 million as investments from
venture capital, private equity and institutional investors such as LNM India Internet
Ventures Ltd., Transatlantic Corporation Ltd., Farallon Capital Partners, L.P., R R Capital
Partners L.P., and Infinity Technology Trustee Pvt. Ltd. and has developed significantrelationships with large commercial banks such as Citibank, HDFC Bank, Union Bank,
ICICI Bank, ABN Ambro Bank, Standard Chartered Bank, Lord Krishna Bank and IL&FS.
Company and there subsidiaries have facilities from the above mentioned banks and financial
institutions aggregating to Rs. 1760 million.
Companies headquarters are co-located in Mumbai and Delhi, allowing it to access the two
most important regions for Indian financial markets, the Western region including Mumbai,
rest of Maharashtra and Gujarat; and the Northern region, including the National
Capital Territory of Delhi, nearby cities, parts of Haryana, Uttar Pradesh and Punjab; and
access the highly skilled and educated workforce in these cities.
The Marketing and Sales efforts are headquartered out of Mumbai; with a regional
headquarter in Delhi; and its back office, risk management, internal finances etc. are
headquartered out of Delhi, allowing our Company to scale these processes efficiently for the
nationwide network.
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Main Objects Of The Company:
The main objects to be pursued by the Company on its incorporation are:
1. To hold investments in various step-down subsidiaries for investing, acquiring,
holding, purchasing or procuring equity shares, debentures, bonds, mortgages, obligations,
securities of any kind issued or guaranteed by our Company.
2. To provide financial consultancy services; to provide investment advisory services on the
internet or otherwise; provide financial consultancy in the area of personal and corporate
finance; publish books and CD ROMs and any other information related to the above.
3. To conduct the business of sale, purchases, distribution and transfer of shares, debts,
instruments and hybrid financial instruments and to perform all related, incidental, ancillary
and allied services.
4. To conduct depository participant services; to conduct de materialization and
re-materialization of shares; set up depository participant centers at various regions in
India and to perform all related, incidental, ancillary and allied services.
5. To receive funds, deposits and investments from the public, Government agencies,
financial institutions and Corporate bodies; grant advances and loans; conduct advisory
services related to banking activities, project financing, funding of mergers and acquisition
activities; fund management and activities related to money market operations.
6. To carry on the business of portfolio management services, investment advisory services;
custodial services; asset management services; leasing and hire purchase; mutual fund
services and to act as brokers of real estate and financial instruments.
7. To carry on the business of financing; provide lease and hire purchase services; to
provide consultancy in the area of lease and hire purchase financing.
8. To operate mutual funds; receive funds from investors; equity or debt instrument
research activity instrument in debt and/or equity instruments.
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Key Business Strategies
Their focus on the client has allowed Company and its subsidiaries to offer a range of
services that have changed the investing landscape and created a new model of financial
services that melds people and technology to provide an integrated human assisted
technology interface service for investors who range from self-directed full-time active
investor to those who prefer to deal with through a marketing associate in smaller towns and
cities. Their key strategies include:
Defend and maintain their differentiation as the firm that delivers ethical and useful
services
Build and expand investing insight through product offerings such as Equity
Analysis which is objective,
Uncomplicated and not driven by commission
Give clients new levels of choice tailored to their desire for help, tools for investing their
assets, their willingness to pay for additional services and the level of business they can do
with the company.
Provide clients with tools, relationship managers and choices that support their desired
investment outcomes. Indiabulls has developed a client specific approach as a core element
of its business strategy and are constantly focusing on acquiring new clients and expanding
their customer base.
They believe that the strong secular growth of the Indian financial Markets, due to increased
household penetration of financial assets; increasing liquidity and market capitalization of
Indian Markets, led by the listing of many public sector entities; and the increasing affluence
of Indian households and savers provides an impetus to the growth perspective.
They believe that this diversification and growth strategy will continue to produce
results and allow Company and its subsidiaries to grow business at a rapid pace irrespective
of market conditions.
In addition, management believes that the growth of the Indian financial markets, due
to increased household penetration of financial assets; increasing liquidity and market
capitalization of Indian markets, led by the listing of many public sector entities; and the
increasing affluence of Indian households and savers, favors our long term growth outlook.
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The core pillars of our business strategy are discussed below: Increase the
Number of Client Relationships
They are focused on increasing the number of client relationships through a wide network of
offices throughout India and having more number of relationship managers to service these
relationships. They plan to grow their business by growing the number of client
relationships. During a downturn of the markets they believe that increased number of client
relationships will add stability to their earnings.
Offer Diversified Financial Products & Services
Capture
Greater Share of Wallet
Company and its subsidiaries offer to their clients a wide range of financial services and
products allowing the clients to leverage their relationship with Indiabulls and get
products suiting their varied needs. This strategy allows them to gain share of walletof
the clients consumption of financial services. They offer to the client a comprehensive
product offering and are able to increase their revenues per client by selling different
products to the same client. Indiabulls offer equity, debt & derivatives brokerage, IPO
distribution, mutual funds and insurance products. Their strategy is to increase the
number of client relationships and then leverage those client relationships into offering in a
whole suite of financial products.
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Multiple Channels Enhance Customer Experience and
Opportunities to interact with us
These multiple channels provide flexibility to the clients and allow them to utilize their
existing business Relationship with them through any channel from any part of India.
Companys strategy is to provide the most convenient, efficient and value added channel to
the client at the lowest possible cost, and allow the clients with choice and varied access
points. Indiabulls believe that their multiple channel strategy has been particularly
effective in the affluent segment where many sophisticated clients like to have a close-by
office they can access and yet have the flexibility of Internet account management,
transactions and electronic funds transfer and settlement.
Relationship Manager driven sales model, provide high quality service and
exploit cross-sell opportunities
Companys clients benefit from the personal attention and advice of the trained and
motivated relationship managers. All its relationship managers are qualified and educated
professionals, who have been extensively trained in-house to provide the products and
services to the clients. These relationship managers are encouraged to develop long-term
relationships with the clients and can access a variety of resources within the Company,
such as insurance specialists, research services and others to add value to their clients.
Most of the clients have dedicated relationship managers irrespective of the channel they use.
Low cost and highly scalable business
Indiabulls has utilized the technologies available and have constantly invested in products
and innovations to provide an enhanced experience to its customers. The benefits of such
infrastructure include integrated customer trading account with depositary services; electronic
gateway for instant funds transfer to and from the bank to the brokerage account; and
comprehensive client systems that track all activity in various segments.
They believe that technology and systems are one of the key competitive edges in terms of
lowering their operating costs; managing the business; reducing risk and providing an
enhanced experience to the clients with superior service standards.
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Brokerage Offering
Companysretail equity business primarily covers secondary market equity broking. It caters
to the needs of individual Indian and Non- resident Indian (NRI) investors. They offer broker
assisted trade execution and automated online investing and trading facilities to their
customers. Automated online investing and trading includes automated order placement and
execution of market and limit equity orders; and advanced trading platforms for active
traders. All investors have full access to real - time quotes, personalized portfolio tracking,
charting and quote applications, real-time market commentary, real-time quotes and news.
Online Automated Channel
Automated Online Business contributes more than 34.6% of its overall revenues. They
control more than 20% market share in the online business. Clients are able to obtain
financial information and execute trades on an automated basis through their online channel
using product offerings like Power Indiabulls and Indiabulls Market Trader.
This channel is designed to provide added convenience for clients and minimize its costs of
responding to and processing routine client transactions. Online channels include theIndiabulls Group Professional Network that provides access via their web-site
www.indiabulls.comto information and trading service on the Internet.
Additionally, Power Indiabulls online trading system is designed for the high volume trader
and provides enhanced trade information and order execution integrated software-based
trading.platforms. While most client transactions are completed through the online channel,
they continue to stress the importance of blending the power of the Internet with personal
service to create a full- service client interface. They offer an online portal where the clients
can execute securitiespurchase and sales transactions through the Internet.
This covers the Equity, Debt & Derivatives segment in the Indian securities market. With an
objective of assisting our customers in taking investment decisions, the portal also provides
financial information on various companies listed. For executing a transaction clients can
directly log on to our website without requiring any assistance from offline
intermediaries
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Third Party Financial Products Offering
They distribute third party products and services through our comprehensive retail
distribution network. The products offered include third party insurance, mutual funds andinitial and secondary public offerings.
ACCOUNTS AND FEATURES
Through various types of brokerage accounts, they offer purchase and sale of securities,
which includes Equity, Derivatives and Commodities listed on NSE, BSE and NCDEX.
Additionally, they provide their clients access to a variety of insurance products like life, term
and annuity products through third-party insurance companies like Birla Sunlife Insurance
Company.
Indiabulls Group Signature Client is designed to serve self-directed individual investors
who want to manage their own portfolios. For these clients, they offer this account, which is
a stock trading account that allows clients to combine investments and cash in one-
account and trade securities. Clients are also eligible to subscribe to Indiabulls Equity
Analysis, a fee based research offering.
Other features of Indiabulls Group Signature Account include priority handling of their
service calls at the Centralized Customer Service Centre and through dedicated relationship
managers.
Indiabulls Group Signature account features include online integrated net transfers via
integrated payment gateways with banks such as HDFC Bank. Power Indiabulls - For active
traders, They offer Power Indiabulls accounts that include access to special features and
services such as advanced trading tool dedicated team of relationship managers.
Indiabulls offers a full range of financial services and products ranging from Equities to
Insurance to enhance your wealth and hence achieve your financial goals.
Indiabulls Professional Network offers real-time prices, detailed data and news, intelligent
analytics, and electronic trading capabilities, right at your finger-tips. This powerful
technology is complemented by our knowledgeable and customer focused Relationship
Managers.
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Indiabulls' Relationship Managers are available to you to help with your financial planning
and investment needs. To provide the highest possible quality of service, Indiabulls provides
full access to all products and services through multi-channels.
Equities and Derivatives
Our Retail Equity Business caters to the needs of individual Indian and Non-Resident
Indian (NRI) investors. Indiabulls offers broker assisted trade execution, automated online
investing and access to all IPO's.
Through various types of brokerage accounts, Indiabulls offers the purchase and sale of
securities which includes Equity, Derivatives and Commodities Instruments listed on
National Stock Exchange of India Ltd (NSEIL), The Stock Exchange, Mumbai (BSE) and
NCDEX.
THE FACILITIES PROVIDED BY INDIABULLS
Indiabulls Signature Account
A multitude of ways to access your account either through priority access to Relationship
Manager over phone or online access to your Account & Research Tools.
Indiabulls Signature Account Features
Priority Service Enjoy priority telephone access that gives you direct access to your
Relationship Manager.
Premium Research Benefit from full access to Indiabulls Equity A n a l y s i s
our objective, fact-based approach to rating stocks.
Online Accounting Stay on the top of your investments with a snapshot of your Account
Statements. Get access to Portfolio statement and access to digital contract notes.
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Benefits
ControlStay on top of your investments with convenient access to your account online or
by phone.
ConfidenceSupport your investing decisions with premium in- depth research -Indiabulls
Equity Analysis.
ValueEnjoy competitive commissions and get the service and support you need at a fair
price.
Power IndiabullsIndiabulls is dedicated to empower Active Traders through personal service and advanced
trading technology.
Active Trader - Get More At Indiabulls
Regardless of how the market is performing or which way the economic winds are blowing,
you, as a trader, are researching, charting, crafting a strategy, buying and selling. You are
getting in, getting out and moving on to the next trade.
Choose from a comprehensive offering of accounts, platforms and products. Customize our
technology and services to support the way you work.
Features of Power Indiabulls
Live Streaming Quotes
Fast Order Entry
Tic by Tic Live Charts
Technical Analysis Live News
and Alerts Extensive Reports
for Real-time Accounting
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Benefits
Comprehensive Financial Services As an Active trader, you'll have the tools,
resources and support you need to execute your trading strategy, plus your choice of a wide
range of investment products and services.
Dedicated Support and ServicesEnjoy priority access to Relationship Managers who
are dedicated to supporting your trading and investing needs.
Non-Resident Indian (NRI) Investor Services
With an extensive range of investment products, you will discover an unwavering
commitment to helping you invest in India.
Facilities
Indiabulls NRI Trading Account - Provides access to comprehensive trading tools for
independent NRI investors
Indiabulls Depository Services - Integrated services for seamless delivery
HDFC Bank Account - NRE/NRO Accounts with built in tax management solutions andfacility to source all regulatory approvals.
Indiabulls Equity Analysis - Premium Research on 200 companies updated daily.
Benefits
Indian Investments Brings You More Choices
Investing in India, one of the world's fastest emerging financial markets, means a
wider choice of investment opportunities and industries. At Indiabulls, you can take fulladvantage of the emerging Indian market.
See what indiabulls offer
Indiabulls provide you with a Seamlessly integrated trading, depository and bank account
enabling you to trade from anywhere in the world.
Investing in India, one of the world's fastest emerging financial markets, means a
wider choice of investment opportunities and industries. At Indiabulls, you can take full
advantage of the emerging Indian market. Indiabulls provide you with a Seamlessly
integrated trading, depository and bank account enabling you to trade from anywhere in the
world.
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INTRODUCTION AND CONCEPT OF SHARE TRADING
Trading in shares is old phenomena its regulation had been started when securities contract
act had been formed in 1956. Transfer of resources from those with idle resources to
others who have a productive need for them is most efficiently achieved through the
securities market. It provides a channel for reallocation of savings to investments.
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) is a regulatory
governing body of security market. The SEBI Act 1992 was enacted to empower SEBI
with statutory powers for:
(a) Protecting the interests of investors in securities.
(b) Promoting the development of the securities market
(c) Regulating the securities market
Its regulatory jurisdiction extends over corporate in the issuance of capital and transfer of
securities. It has powers to register and regulate all the market all market intermediaries
and also to penalize them in case of violations of the provisions of the ACT, rules and
regulations made there under. SEBI has a full autonomy and authority to regulate and
develop an orderly securities market.
The share market can be segmented in two parts
PrimaryMarket
Secondary Market.
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Primary Market
It provides opportunity to issuers of securities government as well as corporate to raise
resources to meet their requirements of investments. In this market companies issue
fresh security sin exchange of funds through public issues or private placements. The
market design for primary market is provided in the provision of Companies Act, 1956
which deals with issues, listing and allotment of securities. The investors have to
apply the shares by filling the application form issue by the company along with the
application money. According to Disclosure and Investor Protection guidelines of SEBI,
1992 company has to disclose all the necessary information regarding pricing of issues,
listing requirements, disclosure norms lock-in-period for promoters contribution,
contents of offer documents pre and post issue obligations etc.
Company can issue shares at face value, at premium or at discount. Another method of
pricing which is now days common is issuing the securities through online system of the
stock exchange has to comply with the section 55 to 68a of the companies Act, 1956
and SEBI guidelines 2000. The company is required to enter in to an agreement
with the stock exchanges which have the requisite system for online offer of
securities. The advantages for this new system are:-
(a) The investors part with money only after allotment.
(b) It eliminates refunds except in case of direct applications.
(c) It reduces the time taken for issue process.
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Secondary Market
Secondary market is the place for sale and purchase of existing securities. It enables an
investor to adjust his holdings of securities in response to changes in his assessment about
risk and return. It enables him to sell securities for cash to meet his liquidity needs. It
essentially comprises of the stock exchanges which provide platform for trading of securities
and a host of intermediaries who assist in trading of securities and clearing and settlement of
trades. The securities are traded, cleared and settled as per prescribed regulatory framework
under the supervision of the exchanges and oversight of SEBI.
Trading Mechanism
Earlier 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 National Stock Exchange
introduced a nation wide on line fully automated screen based trading system where a
member can punch in to the computer quantities of securities and the prices at which he likes
to transact and the transaction is executed as soon as it finds a matching sale or buy
order from a counter party. Screen based trading electronically matches orders on a
price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud
resulting in improved operational efficiency. It enables market participants, irrespective of
their geographical locations to trade with one another and it provides equal access to
everybody.
NSE has main computer which is connected through Very Small Aperture Terminal (VSAT)
installed at its office. The main computer runs on a default tolerant STRATUS mainframe
computer at the exchange. Brokers have terminals installed at their premises which are
connected through VSATs. An investor informs a broker to place an order on his behalf.
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THE INDIABULLS PHILOSOPHY YOU COME FIRST
We have created a unique organization that is designed for you the
Smart Investor . We passionately believe in the Smart Investor
who wants to make his own educated investment choices and
demands world class access to a full range of services and products
ranging from Equities to Insurance, combined with the highest level
of integrity, service and professionalism.
Indiabulls is India's leading retail financial services company with 135
locations spread across 95 cities. While its size and strong balance
sheet allow them to provide you with varied products and services at
very attractive prices, over 750 Client Relationship Managers are
dedicated to serving your unique needs.
Indiabulls is lead by a highly regarded management team that has
invested cores of rupees into a world class Infrastructure that
provides there clients with real-time service & 24/7 access to all
information and products. Their flagship Indiabulls Professional
Network TM offers real-time prices, detailed data and news,
intelligent analytics, and electronic trading capabilities, right at yourfinger-tips. This powerful technology is complemented by there
knowledgeable and customer focused Relationship Managers.
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We are Creating a World of Smart Investor
Indiabulls offers a full range of financial services and products
ranging from Equities to Insurance to enhance your wealth and
hence, achieve your financial goals.
Indiabulls' Client Relationship Managers are available to you to help
with your financial planning and investment needs. To provide the
highest possible quality of service, Indiabulls provides full access to
all our products and services through multi-channels
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THE INDIABULLS PHILOSOPHY
YOU COME FIRST
We have created a unique organization that is designed for you the
Smart Investor . We passionately believe in the Smart Investor
who wants to make his own educated investment choices and
demands world class access to a full range of services and products
ranging from Equities to Insurance, combined with the highest level
of integrity, service and professionalism.
Indiabulls is a full service investment firm offering clients access to a
tremendous range of financial services from 135 locations across 95
cities. We have a strong team of over 750 Client Relationship
Managers focussed on serving your unique needs. Our world class
infrastructure, built with tens of crores of investment, provides our
clients with real-time service, multi-channel & 24/7 access to all
information and products. As we've expanded and developed to serve
the needs of all kinds of investors, we've been guided by one
underlying philosophy: You come first.
We are proud to introduce to you Indiabulls Professional
NetworkTM that offers real-time prices, equity analysis, detailed data
and news, intelligent analytics, and electronic trading capabilities,
right at your finger-tips. This powerful technology is complemented
by our knowledgeable and customer focussed Relationship Managers
who are available to help with your financial planning and investment
needs.
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We invite you to learn more about Indiabulls by calling 1 600 11
1130 (toll free) or visit our 135 Indiabulls Offices Nationwide or
explore the services we offer through theIndiabulls Market Trader.TM
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HISTORY AND OTHER CORPORATE MATTERS
OVERVIEW
Indiabulls Financial Services Limited was incorporated on January
10, 2000 as M/s Orbits InfoTech Private Limited at New Delhi under
the Companies Act, 1956 with Registration No. 55 103183. The
name of the Company was changed to M/s. Indiabulls Financial
Services Private Limited on March 16, 2001 due to change in the
main objects of the Company from Infotech business to Investment &
Financial Services business. It became a Public Limited Company on
February 27, 2004 and the name of Company was changed to M/s.
Indiabulls Financial Services Limited. Company was promoted by
three engineers from IIT Delhi, and has attracted more than Rs.700
million as investments from venture capital, private equity and
institutional investors such as LNM India Internet Ventures Ltd.,
Transatlantic Corporation Ltd., Farallon Capital Partners, L.P., R R
Capital Partners L.P., and Infinity Technology Trustee Pvt. Ltd. and
has developed significant relationships with large commercial banks
such as Citibank, HDFC Bank, Union Bank, ICICI Bank, ABN Ambro
Bank, Standard Chartered Bank, Lord Krishna Bank and IL&FS.
Company and there subsidiaries have facilities from the above
mentioned banks and financial institutions aggregating to Rs. 1760
million. Companies headquarters are co-located in Mumbai and Delhi,
allowing it to access the two most important regions for Indian
financial markets, the Western region including Mumbai, rest of
Maharashtra and Gujarat; and the Northern region, including the
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National Capital Territory of Delhi, nearby cities, parts of Haryana,
Uttar Pradesh and Punjab; and access the highly skilled and educated
workforce in these cities. The Marketing and Sales efforts are
headquartered out of Mumbai; with a regional headquarter in Delhi;
and its back office, risk management, internal finances etc. are
headquartered out of Delhi, allowing our Company to scale these
processes efficiently for the nationwide network.
Main Objects Of The Company
The main objects to be pursued by the Company on its
incorporation are:
1. To hold investments in various step-down subsidiaries for
investing, acquiring, holding, purchasing or procuring equity
shares, debentures, bonds, mortgages, obligations, securities of
any kind issued or guaranteed by our Company.
2. To provide financial consultancy services; to provide investment
advisory services on the internet or otherwise; provide financial
consultancy in the area of personal and corporate finance; publish
books and CD ROMs and any other information related to theabove.
3. To conduct the business of sale, purchases, distribution and
transfer of shares, debts, instruments and hybrid financial
instruments and to perform all related, incidental, ancillary and
allied services.
4. To conduct depository participant services; to conduct de-
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materialization and re-materialization of shares; set up
depository participant centers at various regions in India and to
perform all related, incidental, ancillary and allied services.
5. To receive funds, deposits and investments from the public,
Government agencies, financial institutions and Corporate bodies;
grant advances and loans; conduct advisory services related to
banking activities, project financing, funding of mergers and
acquisition activities; fund management and activities related to
money market operations.
6. To carry on the business of portfolio management services,
investment advisory services; custodial services; asset
management services; leasing and hire purchase; mutual fund
services and to act as brokers of real estate and financial
instruments.
7. To carry on the business of financing; provide lease and hire
purchase services; to provide consultancy in the area of lease
and hire purchase financing.
8. To operate mutual funds; receive funds from investors; equity or
debt instrument research activity instrument in debt and/or
equity instruments.
Credit Rating
Indiabulls Securities Limited has been grantedPR1+rating for its
unsecured short term borrowing program of Rs. 200 million. Videletter dated May 5, 2004 the rating agency has increased the
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unsecured short term borrowing limit to Rs. 320 million maintaining
the PR1+ rating. ISL also enjoys A+ rating for medium to long
term unsecured borrowing program of Rs. 200 million. The Rating to
the company has been assigned by Credit Analysis Research Limited.
As for the present issue of equity shares of our Company, credit
rating is not required.
Shareholders Agreement
Shareholders Agreement was entered into by and among our
Company (formerly Orbis Infotech Private Limited), Infinity
Technology Trustee Private Limited as the trustee of Infinity Venture
India Fund, LNM India Internet Ventures Limited, Transatlantic
Corporation Limited (together theVC Investors)and the Promoters
dated November 2, 2000. The VC Investors invested an aggregate
amount of Rs. 206,000,000 in our Company for which they were
issued 55,425 equity shares at an average price of Rs. 3,716.73 per
equity share. Pursuant to a letter agreement (the Letter
Agreement) dated May 27, 2004 between the parties to the
Shareholders Agreement, each of the VC Investors have agreed not
to enforce rights that have accrued to them before the said Letter
Agreements and have agreed that the Shareholders Agreement,
together with all the rights and obligation on the parties will stand
terminated immediately upon the listing of the shares of our
Company and consequent to the listing, the rights of the
Shareholders Agreement, including the rights that have arisen prior
to such termination shall be terminated. A copy of the Shareholders
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Agreement, and a copy of the Letter Agreement terminating the
Shareholders Agreement are available for inspection as material
documents at the corporate offices of our Company.
Key Competitive Strengths
Diverse Branch Network
Since Company inception in FY 2000 Company and its subsidiaries
have grown from a single location to a nationwide network spread
over 135 offices in 95 cities. They have a pan India distribution
networks for the purpose of distribution of financial products and
services. Such a diverse and integrated network provides a
centralized platform to there clients.
Bouquet of financial products and services
Company and its subsidiaries offer various financial services and
products ranging from equity, F & O and wholesale debt, mutual
fund, insurance and IPO distribution, equity research analysis,
depository services to cater to the specific needs of the retail and
institutional investors thus providing all these services in a single
platform.
Advanced Technology team that delivers market leading
product innovation
There ongoing investment in technology is a key element in
expanding there product and service offerings, enhancing there
delivery systems, providing fast and consistent client service,
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reducing processing costs, and facilitating there ability to handle
significant increases in client activity without a corresponding rise in
risk and staff. Company and its subsidiaries have an in-house
technology team of 27 people comprising of several engineers. The
in-house technology team has been responsible for developing the
technology products for operating at a large scale with efficient back
office systems. The application of technology allows Company and its
subsidiaries to build scaleable product and service offerings. The in-
house technology team developed one of the first Internet trading
platforms in India, one of the first in-house real-time CTCL link with
NSE. Company and its subsidiaries introduced integrated accounts
with automated gateways with client bank accounts so that they can
transfer funds to and from their bank account to their brokerage
account with the Company. This has enhanced customer ability to
access their funds for market related activities. The in-house
technology team has good expertise to create mission critical
applications and in the maintenance and upkeep of high transaction
processing of there web-site.
Strong Sales and Marketing Teams with continuous
reinvestment and training
Companys relationship manager channel (through a team of 1050
Relationship Managers as on April 30, 2004) offers a single point
contact to retail customers whereby their high net worth clients have
separate relationship managers catering to them. These managers
offer personalized services to the customers helping build strong and
continuing relationships with them. Also, our marketing associate
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channel helps Company and its subsidiaries in client acquisitions at
minimal costs with client loyalty. The marketing associates channel
also helps Company and its subsidiaries in increasing their
penetration in smaller town and cities.
Strong cross Selling Opportunities
With 135 branches spread over 95 cities all over India and variety of
financial products and offerings coupled with online, relationship
manager & marketing associate channels, Company and its
subsidiaries have strong cross product selling opportunities thus
providing a multi-channel delivery systems to there diverse client
base of 71,000 clients as on July 10, 2005.
Strong Team of Experienced Promoters
Indiabulls has a strong team of promoters who are engineers from
Indian Institute of Technology and have several yearsexperience in
financial services industry. They believe that their strong technical
experience will help them in achieving our key business strategies.
Leading Product innovation and marketing strategies
Management is innovative and nimble and has historically introduced
many new and innovative products to the market place that have
played a significant role in their growth. Companys relationship
manager model has introduced private banking experience to the
clients. The relationship managers are trained and incentives to work
with their client base and enhance ability to cross sell and leverage
the large client base. Indiabulls have launched marketing associate
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model, which replaces the traditional sub-broker model with an
authorized person that client can appoint independently and provide
them with the benefit of their trading, clearing and servicing
strengths. Its equity analysis product provides clients with unbiased
research. Company plans to continuously innovate and introduce
market leading products and services to add to its competitive
advantage.
Well capitalized player, with strong banking relationships and
credit ratings
Indiabulls consolidated net worth is Rs. 1023.19 million making us a
well capitalized companies. The Company and ISL have received
sanctioned facilities of Rs. 1760 million from 9 leading commercial
banks and financial institutions. The details of the banking
relationships as of July 24, 2004 are as follows:
Ability to combine People & Technology in unique ways
They provide multiple distribution channels by combining people and
technology. Clients can visit one of the 70 offices in 55 cities or
access via telephone, call centre or online channel. Web enabled tools
such as technical analysis, information, news, interactive web based
programs and tools and back office solutions for clients and
marketing associates; Power Indiabulls an order entry, routing and
management technology through technology platform, for actively-
trading investors.
Strong market presence and increased market share leads to
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virtuous cycle of growth and profitability
Theyre growing client base and market share have increased their
market presence, brand recognition enhanced their profitability and
increased the available credit facilities from the banks further
strengthening its strong balance sheet. Companys brand and
profitability allows them to recruit good and efficient employees,
compensate them attractively and provides the flexibility toes for
investments in the business and technology systems. These
attributes in turn have a positive effect on the growth of its client
base thereby increasing its market share, leading to higher profits
and credit facilities and thus forming a virtuous circle.
Key Business Strategies
Their focus on the client has allowed Company and its subsidiaries to
offer a range of services that have changed the investing landscape
and created a new model of financial services that melds people and
technology to provide an integrated human assisted technology
interface service for investors who range from self-directed full-time
active investor to those who prefer to deal with through a marketing
associate in smaller towns and cities. Their key strategies include:
Defend and maintain their differentiation as the firm that delivers
ethical and useful services
Build and expand investing insight through product offerings
such as Equity Analysis which is objective,
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Uncomplicated and not driven by commission
Give clients new levels of choice tailored to their desire for help,
tools for investing their assets, their willingness to pay for
additional services and the level of business they can do with the
company.
Provide clients with tools, relationship managers and choices that
support their desired investment outcomes. Indiabulls has
developed a client specific approach as a core element of its
business strategy and are constantly focusing on acquiring new
clients and expanding their customer base. They believe that the
strong secular growth of the Indian financial Markets, due to
increased household penetration of financial assets; increasing
liquidity and market capitalization of Indian Markets, led by the
listing of many public sector entities; and the increasing affluence
of Indian households and savers provides an impetus to the
growth perspective.
They believe that this diversification and growth strategy will
continue to produce results and allow Company and its subsidiaries to
grow business at a rapid pace irrespective of market conditions. In
addition, management believes that the growth of the Indian
financial markets, due to increased household penetration of financial
assets; increasing liquidity and market capitalization of Indian
markets, led by the listing of many public sector entities; and the
increasing affluence of Indian households and savers, favors our long
term growth outlook.
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The table below encapsulates the financial metrics on an annual
basis, and compares that with the Market trading volume.
(NSE Yearly Trading Volume is taken as representative of Market
activity).
The core pillars of our business strategy are discussed below:
Increase the number of Client Relationships
They are focused on increasing the number of client relationships
through a wide network of offices throughout India and having more
number of relationship managers to service these relationships. They
plan to grow their business by growing the number of client
relationships. During a downturn of the markets they believe that
increased number of client relationships will add stability to their
earnings.
Offer Diversified Financial Products & Services Capture
Greater Share of Wallet
Company and its subsidiaries offer to their clients a wide range of
financial services and products allowing the clients to leverage their
relationship with Indiabulls and get products suiting their varied
needs. This strategy allows them to gain share of wallet of the
clients consumption of financial services. They offer to the client a
comprehensive product offering and are able to increase their
revenues per client by selling different products to the same client.
Indiabulls offer equity, debt & derivatives brokerage, IPO distribution,
mutual funds and insurance products. Their strategy is to increase
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the number of client relationships and then leverage those client
relationships into offering in a whole suite of financial products.
Multiple Channels Enhance Customer Experience and
Opportunities to interact with us
Companys clients can access their products and services through
135 offices spread across 95 cities; through operator assisted call
Centers; or through their website www.indiabulls.com; or through
their respective relationship managers or through marketing
Associates. These multiple channels provide flexibility to the clients
and allow them to utilize their existing business Relationship with
them through any channel from any part of India. Companys
strategy is to provide the most convenient, efficient and value added
channel to the client at the lowest possible cost, and allow the clients
with choice and varied access points. Indiabulls believe that their
multiple channel strategy has been particularly effective in the
affluent segment where many sophisticated clients like to have a
close-by office they can access and yet have the flexibility of Internet
account management, transactions and electronic funds transfer and
settlement.
Relationship Manager driven sales model, provide high quality
service and exploit cross-sell opportunities
Companysclients benefit from the personal attention and advice of
the trained and motivated relationship managers. All its relationship
managers are qualified and educated professionals, who have been
extensively trained in-house to provide the products and services to
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the clients. These relationship managers are encouraged to develop
long-term relationships with the clients and can access a variety of
resources within the Company, such as insurance specialists,
research services and others to add value to their clients. Most of the
clients have dedicated relationship managers irrespective of the
channel they use.
Low cost and highly scalable business
Indiabulls has utilized the technologies available and have constantly
invested in products and innovations to provide an enhanced
experience to its customers. The benefits of such infrastructure
include integrated customer trading account with depositary services;
electronic gateway for instant funds transfer to and from the bank to
the brokerage account; and comprehensive client systems that track
all activity in various segments. They believe that technology and
systems are one of the key competitive edges in terms of lowering
their operating costs; managing the business; reducing risk and
providing an enhanced experience to the clients with superior service
standards.
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Brokerage Offering
Companysretail equity business primarily covers secondary market
equity broking. It caters to the needs of individual Indian and Non-
resident Indian (NRI) investors. They offer broker assisted trade
execution and automated online investing and trading facilities to
their customers. Automated online investing and trading includes
automated order placement and execution of market and limit equity
orders; and advanced trading platforms for active traders. All
investors have full access to real - time quotes, personalized portfolio
tracking, charting and quote applications, real-time market
commentary, real-time quotes and news.
Online Automated Channel
Automated Online Business contributes more than 34.6% of its
overall revenues. They control more than 20% market share in the
online business. Clients are able to obtain financial information and
execute trades on an automated basis through their online channel
using product offerings like Power Indiabulls and Indiabulls Market
Trader. This channel is designed to provide added convenience for
clients and minimize its costs of responding to and processing routine
client transactions. Online channels include the Indiabulls Group
Professional Network that provides access via their web-site
www.indiabulls.com to information and trading service on the
Internet. Additionally, Power Indiabulls online trading system is
designed for the high volume trader and provides enhanced trade
information and order execution integrated software-based trading
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platforms. While most client transactions are completed through the
online channel, they continue to stress the importance of blending
the power of the Internet with personal service to create a full-
service client interface. They offer an online portal where the clients
can execute securities purchase and sales transactions through the
Internet.
This covers the Equity, Debt & Derivatives segment in the Indian
securities market. With an objective of assisting our customers in
taking investment decisions, the portal also provides financial
information on various companies listed. For executing a transaction
clients can directly log on to our website without requiring any
assistance from offline intermediaries
Third Party Financial Products Offering
They distribute third party products and services through our
comprehensive retail distribution network. The products offered
include third party insurance, mutual funds and initial and secondary
public offerings. They have a pan India retail distribution network,
comprising 1050 relationship managers and 135 branches spread
over 95 cities.
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INTRODUCTION AND CONCEPT OF SHARE
TRADING
Trading in shares is old phenomena its regulation had been started
when securities contract act had been formed in 1956. Transfer of
resources from those with idle resources to others who have a
productive need for them is most efficiently achieved through the
securities market. It provides a channel for reallocation of savings to
investments.
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) is a
regulatory governing body of security market. The SEBI Act 1992
was enacted to empower SEBI with statutory powers for:
(a)Protecting the interests of investors in securities.
(b) Promoting the development of the securities market
(c) Regulating the securities market
Its regulatory jurisdiction extends over corporate in the issuance of
capital and transfer of securities. It has powers to register and
regulate all the market all market intermediaries and also to penalize
them in case of violations of the provisions of the ACT, rules and
regulations made there under. SEBI has a full autonomy and
authority to regulate and develop an orderly securities market.
The share market can be segmented in two parts one is Primary
Market another is Secondary Market.
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Primary Market
It provides opportunity to issuers of securities government as well as
corporate to raise resources to meet their requirements of
investments. In this market companies issue fresh security sin
exchange of funds through public issues or private placements. The
market design for primary market is provided in the provision of
Companies Act, 1956 which deals with issues, listing and allotment of
securities. The investors have to apply the shares by filling the
application form issue by the company along with the application
money. According to Disclosure and Investor Protection guidelines of
SEBI, 1992 company has to disclose all the necessary information
regarding pricing of issues, listing requirements, disclosure norms
lock-in-period for promoters contribution, contents of offer
documents pre and post issue obligations etc.
Company can issue shares at face value, at premium or at discount.
Another method of pricing which is now days common is issuing the
securities through online system of the stock exchange has to comply
with the section 55 to 68a of the companies Act, 1956 and SEBI
guidelines 2000. The company is required to enter in to an
agreement with the stock exchanges which have the requisite system
for online offer of securities. The advantages for this new system
are:-
(a)The investors part with money only after allotment.
(b) It eliminates refunds except in case of direct applications.
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(c) It reduces the time taken for issue process
Secondary Market
Secondary market is the place for sale and purchase of existing
securities. It enables an investor to adjust his holdings of securities in
response to changes in his assessment about risk and return. It
enables him to sell securities for cash to meet his liquidity needs. It
essentially comprises of the stock exchanges which provide platform
for trading of securities and a host of intermediaries who assist in
trading of securities and clearing and settlement of trades. The
securities are traded, cleared and settled as per prescribed regulatory
framework under the supervision of the exchanges and oversight of
SEBI.
Trading Mechanism
Earlier 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 e