poddar final UNICON

8/7/2019 poddar final UNICON

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A

Project Report

ON

ANALYSIS OF THE POTENTIAL OF EQUITY

MARKET AND EQUITY PRODUCT

at Unicon Investment

Submitted in partial fulfillment of therequirement of MIB program of

University of RajasthanCompany Guide

VIKAS AGGARWALBranch Head (Alwar)

SUBMITTED TO: SUBMITTED BY:

RAMESHWAR PRASAD

MIB II nd year

PODDAR INTERNATIONAL COLLEGE1


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(2009 2011)

DECLARATION

I Rameshwar Prasad, student of MIB-II, hereby declare that the

survey report entitled to me is

ANALYSIS OF THEPOTENTIAL OF EQUITY MARKET AND EQUITY

PRODUCT .This report is a result of my own efforts which

is based on the guidance given by the company guide &

faculty guide.

PLACE: Jaipur

(Rameshwar Prasad)

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ACKNOWLEDGEMENT

Its my privilege and pleasure to thank to all thosewho have extended their full cooperation

individually or collectively to me and encouragedme to carry out this project as a part of mytraining.

I take this opportunity to express mygratitude towards division of Unicon investment &solution ltd. as a whole. I am extremely thankful to

Mr Vijay Chopra Regional Head, for permitting meto carry out the summer project in thisorganization.

I am highly grateful to Mr.Vikas Aggarwal,Branch Head and to Mr. Jitendra Jaiswal,Relationship Manager for their valuable guidanceto carry out this study. It is only because of hisunavoidable cooperation I managed to successfullycomplete my project on time.

I am also very thankful to all the concernedrelationship officers and staff members who aredirectly or indirectly involved in carrying out myproject and have extended their able guidance andcooperation in this project work.

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Finally I thank to Mr. S K Khandelwal, Directorof Poddar International College and all other facultymembers and all my colleagues those whoprovided their guidance and enthusiastic supportto carry out this project work.

(Rameshwar Prasad)

PREFACE

To excel in any field practical training is integral part to imply

theoretical studies to a practical approach. It makes the individual to the

actual practical condition, which could have been impossible to betought in classroom. A trainee learns dealing with the client and

management-working environment along with todays market, which is

changing at incredible pace.

It is good to have good knowledge. It is good to have good will but it

is essential to have a good training.

(Pandit Jawaharlal Lal Nehru)

In addition technological changes we are witnessing power shift

from old hectic and weird ways of doing business. These technological

developments have brought revolutionary changes in the market and also

in the mindset of the people, which might be positive and encouraging

for a section of society and adverse for the others. Introduction of paper

less working in stock market and any where trading has given a fresh

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impetus to the market and has secure a distinct image in the minds of the

potential clients.

It is always desirable by the management to know the perception

and the new segment if any to foray to increase the consumer base and

business eventually.

CONTENTS

COMPANY PROFILE

1. ORGANIZATION & MANAGEMENT2. HR PROCESS

3. PRODUCT & SERVICE

4. COMPETITORS

5. VISION & MISSION

6. FUTURE PLAN

7. ON THE JOB TRAINING

8. ACCOUNT OPNINIG

9. DEMAT PROCESS

OBJECTIVE OF THE STUDY

RESEARCH & METHADOLOGY5


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1. ABOUT MARKET

2. BSE

3. NSE

4. OPPURTUNITIES AVAILABLE OF FOREIGN INVESTERS

QUESTIONNAIRES

FINDINGS

CONCLUSION

BIBLIOGRAPHY

COMPANY PROFILE

Unicon has been founded with the aim of providing world classinvesting experience to hitherto underserved investor community. The

technology today has made it possible to reach out to the last person in

the financial market and give him the same level of service which was

available to only the selected few.

We give personalized premium service with reasonable

commissions on the NSE, BSE & Derivative market through our Equity

broking arm Unicon Securities Pvt Ltd. and Commodities on NCDEX

and MCX through our Commodity broking arm Unicon Commodities

Pvt. Ltd. With our sophisticated technology you can trade through your

computer and if you want human touch you can also deal through our

Relationship Managers out of our 97 branch network spread across the

nation.

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We also give personalized services on Insurance (Life & General)& Investments (Mutual Funds & IPO's) needs, through our Insurance &

Investment distribution arm Unicon Insurance Advisors Pvt. Ltd. Our

tailor-made customized solutions are perfect match to different financial

objectives. Our distribution network is backed by in-house back office

support to serve our customer promptly.

The company, created to provide premium service with reasonablecommissions, currently maintains more than 40000 individual accounts.

Unicon distributes Insurance (Life & General) and Mutual Funds

through it's subsidiary Unicon Insurance Advisors Pvt. Ltd. We

alsodistributes IPO's through the same entity. The objective here is to

offer our customers all the investments related products under same roof.

Unicon is staffed by financial and technology experts, unicon

provides a certified, skilled environment for individuals to receive

trading information and execute trades, both online and offline. Thecompany consists of over 2000 employees nationwide, including over

400 at the headquarters. Unicon employees work together as a team to

continue the tradition of excellent customer service and support.

ORGANISATION AND

MANAGEMENT7


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Unicon is a professionally managed organization with a board

of directors consisting of eminent persons who represent variousfields. The board primarily focuses on strategy formulation, policy

and control, designed to deliver increasing value to shareholders.

Mr. Gajendra Nagpal, Founder & CEO: Mr. Nagpal is responsible

for day to day running of the company. A management graduate by

qualification, Mr. Nagpal brings with him over 14 years of experience

in the stock market. Before joining Unicon he has served at seniorpositions for 5 years with Kotak securities at a regional level and

Indiabulls securities for 4 years at national level assignments. Mr.

Nagpal brings with him the rich experience of building a retail

broking network.

Mr. Ram M Gupta, Co-Founder & President: Mr. Gupta through

his aggression and dynamism brings energy to the team. He has 8years of stock market experience behind him and is responsible for

driving the sales team. Mr. Gupta has held senior level positions in

Karvy stock broking and Indiabulls Securities. Mr. Gupta is

supported by a team of over 850 relationship mangers spread over 94

locations across the country.

Mr. Sandeep Arora, Chief Operating Officer:

Mr. Arora bringswith him over 11 years of experience of managing operations of stock

broking company. Mr. Arora before taking over as head of operations

at Unicon was responsible for managing the operations of Indiabulls

Securities Ltd. Mr. Arora is supported by his team of over 400 people

helping him to give world class service to the clients.

Mr. Vikas Mallan, Chief Financial Officer: Mr. Mallan A

Chartered Accountant, Company Secretary and Cost Accountant byprofession. Mr. Mallan has over 14 years of experience in the area of

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finance. Before joining Unicon he has served at senior level positions

with Rediff.com, Reliance Telecom and Koshika Telecom. Hisexperience includes a Nasdaq listing of an Indian internet company

and Head of Finance of a leading Law firm. Mr. Mallan is heading

Distribution / Mutual Fund initiative and is supported by 850

employees nationwide.

Ms. Anjali MukhijaCCO: heads compliance. She brings with her 12

years of experience in the stock markets. Her current job profile

includes broking operations, client relations & grievance redressal,coupled with Public dealings. Prior to joining Unicon, she was with

the National Stock Exchange, Delhi Regional Office for 10 years and

had held senior position for a brief period in a reputed broking house.

Mr.Trinadh Kiran National Head(E-Broking): is an MBA

marketing professional from Aligarh Muslim University and has done

10 months research in Capital Markets from IIM-Ahmedabad. Hebrings with him a total work experience of 7 years and has worked

with almost all big giants of capital market like India Infoline, India

Bulls and Net worth Stock Broking. He is associated with Unicon

since June 2005. He has extensive knowledge of Retail Broking and

expertise in E-Broking.

Mr.Vijay Chopra National Head (Business Alliances): Mr. Vijay

Chopra is a management graduate from Indian Institute of ForeignTrade, New Delhi. He has a illustrious professional track record of

spanning over 11 years wherein he has handled various assignments

at a senior levels with some of the best names in the Consulting,

FMCG & healthcare space. His forte has been supply chain

management, New Product Launches, Sales, Marketing, Product

management & Training. Mr. Chopra along with his team handles

over 300 business partner network which is spread over the entire

geographical spread of the country.

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Mr.Ashish Kukreja Head-PCG: Has the responsibility of handlingPCG business with Unicon. He brings with him a wide industry

exposure and joined Unicon in July 2006 after rendering his services

to Kotak Securities, where he was taking care of franchisee business

and later started handling HNI desk. He is an MBA (finance) from

ICFAI Business School.

Ms. Deepa Mohamed Vice President -HR & Training: Sqn. Ldr.

(Retd.) Deepa Mohamed, pioneer as first batch of women Officer in

Indian Air Force is an Electronics & Communications engineer from

Netaji Subhas Institute of Technology(Delhi). She has also undergone

Aeronautical Engineering course from AFTC, Bangalore and Post

graduation specialization in Human Resource Management from

XLRI-Jamshedpur. She has 12 years of working experience in

personnel management and administration and is associated with

Unicon since September, 2006. She has been instrumental in setting

up Human resource and Training division. She has worked as an ODconsultant and her expertise lies in Organization development and

change management.

HUMAN RESOURCES

PROCESSES

Unicon prides itself on being an employee friendly company. We have

adopted an extremely positive HR policy that ensures the best possible

results through effective pre-induction and post-induction of personnel

and imparting of requisite training.

Retention :10


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In order to get the best out of its employees and retain them in a high

attrition rate industry, Unicon has established a number of attractiveschemes and incentive programs for its employees. All employees are

full time salaried employees. These salaries, which are among the top

tier of industry earnings, are complemented by performance based

incentives. Impeccable attendance rates and employee longevity are also

recognized and bonuses paid accordingly. Unicon believes that

recognition programs are vital to maintaining the highest levels of

motivation. Career Development

For promising employees, Unicon has a career development program inplace. Employees ready to take on higher responsibilities are identified

and relevant training is imparted upon them. Employees are also

encouraged to upgrade their skills from external sources if these skills

are relevant to their current profiles. Training

Unicon adopts a scheduled training process and a modular approach for

imparting theoretical and practical knowledge in its trainees.

Training Schedule :

Employees, on being hired, go through an intensive induction training

module, which covers technical enhancement and orientation in cross

cultural sensitization. The induction training is followed by process

specific training, which is tailor-made to the client's requirement

Training Tools

Unicon's trainers make use of a wide variety of training tools and

applications to make the learning process both fun and interesting. Tools

and methodologies used include Discussions, Lecture Debates,

Assignments, Shadowing Process, Movie Clips, Reading exercises.

Portfolio:

The Portfolio Tracker is a simple yet powerful tool that lets you monitor

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the value of your investments and other securities you have got your eye

on. To set up your portfolio, all you need to do is enter the quantities ofyour investments in different things, and the price you made your

purchases and sales at. The Portfolio Tracker is an information service

only. You do not buy, sell, exchange or hold securities through the

Portfolio Tracker. Although the Portfolio Tracker lets you monitor

certain securities, it is not intended to reflect your actual holdings or

account information at any broker/dealer.

PRODUCT AND SERVICES

Unicon customers have the advantage of trading in all the market

segments together in the same window, as we understand the need of

transactions to be executed with high speed and reduced time. At the

same time, they have the advantage of having all kind of Insurance &

Investment Advisory Services for Life Insurance, General Insurance,Mutual Funds, and IPO's also.

Unicon is a customer focused financial services organization providing a

range of investment solutions to our customers. We work with clients to

meet their overall investment objectives and achieve their financial

goals. Our clients have the opportunity to get personalized services

depending on their investment profiles. Our personalized approach

enables clients to achieve their Total Investment Objectives. Our keyproduct offerings are as follows:

1. Equity Trading

2. Commodity Trading

3. PCG

4. NRI Services

5. Mutual Fund12


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6. Life Insurance

7. General Insurance

8. Depository Services

9. Portfolio Tracker

10. Backoffice

1) Equity Trading Unicon offers a unique feature where our customersget to trade on NSE, BSE and Derivatives all on one screen. Unicon also

provides the facility to put orders over the phone through Relationship

Managers. You can always have access to our 97 branch offices located

in the prime locations of the city, should you wish to trade "walk in".

Products offerings for Trading

Unicon Plus

Unicon Swift

i)UniconPlus

It enables users to get a browser based trading terminal that can be

accessed by a unique ID and password. This facility is available to all

our customers the moment they get registered with us. Features

Trading at NSE, BSE and Derivatives on single screen.

Add multiple scraps on the market watch.

Greater exposure for trading on the available margin.

Common window for display of market watch and order execution.

Real time updating of exposure and portfolio while trading.

Offline order placement facility.

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Stop-loss feature.

Competitive commissions.

Banking integration with ICICI Bank and HDFC Bank.

Online Integration of trading a/c with two common depositories to

help move your shares to and fro with ease.

Proxy link to enable trading behind firewalls.

ii) Unicon swift

Self directed investors get an application based terminal which is replica

of NEAT terminal for trading actively with more speed , greater

analytical features and priority access to relationship manager to trade

over the phone.

COMPETITORS

These are the competitors of our company: -

Motilal oswal securities

India Bulls

KARVY

Religare

Reliance Money

Anand Rathi

VISION14


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To provide the most useful and ethical Investment Solutions - guided

by values driven approach to growth, client service and employee

development.

MISSION

To create long term value by empowering individual investors

through superior financial services supported by culture based on

highest level of teamwork, efficiency and integrity.

Retail Broking Arm of unicon

Share Holding Pattern

55%

18%

19%

8%

Promoters HSBC Pvt Equity India Fund Ltd

First Cartyle Ventures Mauritius Intel Pacific Inc

SERVICES OFFER BY UNICON15


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FUTURE PLANS

Maximum use of available resources and maintaining the clients,

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Training and

Seminars

Investment and

Trading Services

Research BasedInvestment

Advice

Integrated Demat

Facility

Technology Based

Investment Tools

EQUITIES

DERIVATIVES

COMMODITIES


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Strong advisory role through Fundamental & technical research.

New initiatives - Portfolio Management Services & Commodities

trading

Maintaining a highly professional team.

Developing our own highly developed software.

By 2009 Unicon will be listed among the most reputed

companies in India.

ON THE JOB TRAINING

Objective:-

The objective of the on the job training are-

To open Demat a/c according to target given to me.

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To create awareness among the customers about the demat a/c &

now to open it.

To Undertake assignment/jobs along with the day-to-day

functions of the company.

To gain a deeper understanding of the work culture, deadlines,

pressure etc. of an organization.

Strategy:-

The Strategies employed to achieve the proposal target are: -

Generate the leads by work in branch and talk to the

target customer and take their contact no. and address.

Call the customers on the given contact no. And take

appointment and meet them personally and convince them to

open demat a/c.

Arrange canopy and contact the customer.

Visit any corporate office and take where H.R. manager

appointment and given all detail about the schemes which is

offer by the Unicon like open a/c free of cost.18


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Use the references of the existing customers.

Use personal contacts.

Limitation:-

In On the job training when we try to open demat a/c some problem

that we face it this is some limitation: -

Some time customer doesnt know about demat a/c and how to the

process is done so we need to gives more explanations to customer.

Some customer compare Unicon brokerage rate to another

companys brokerage.

Some time old or existing customer complains Unicon facilities.

Unawareness about the allotted area for survey

Lack of cooperation from the employees of other companies:

During the visit to the area of the project the customers were not

co-operative. They were engrossed in their work and could hardly

spare much time for detailed discussions.

Customers dont have trust in private companies.

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To get contact numbers of individual is a difficult task.

Even after getting contact numbers of individuals it is somewhat

difficult to make them interested towards different schemes and get

the next appointment.

METHODOLOGY

My training includes the following stages:

In the first phase we are trained and they taught us different things

about capital market as well as share market.

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After that they conduct a mock viva & asked about the real life

problems faced by the customers and our understanding with the

services offered by Unicon.

I got practical understanding of the services by the seniors.

They provide leads and I have tried converting them into clients.

Providing them live information about stock trading.

Understanding of technical as well as fundamental researchreports.

Help company in its promotional activities, as company is an

expansion mode.

ACCOUNT OPENING

The investor can open an account with any depository participant of

CDSL. An investor may open an account with several DPs or he may

open several accounts with a single DP. There are several DPs offering

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various depository-related services. Each DP is free to fix its own fee

structure.

Investors have the freedom to choose a DP based on criteria like

convenience, comfort, service levels, safety, reputation and charges.

After exercising this choice, the investor has to enter into an agreement

with the DP. The form and contents of this agreement are specified bythe business rules of CDSL.

1. TYPE OF ACCOUNT

Type of depository account depends on the operations to be performed.There are three types of Demat accounts, which can be opened with a

depository participant viz.

(a)Beneficiary Account

(b)Clearing Member Account and

(c) Intermediary Account.

2. DOCUMENT FOR VERIFICATION

For the purpose of verification, all investors have to submit the

following documents along with the prescribed account opening form.

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2.1 PROOF OF IDENTITY

A beneficiary account must be opened only after obtaining a proof of

identity of the applicant. The applicant's signature and photograph must

be authenticated by an existing account holder or by the applicant's bank

or after due verification made with the original of the applicant's

Valid passport,

Voter ID, driving license

PAN card with photograph;

And further,

2.2 PROOF OF ADDRESS

The account opening form should be supported with proof of address

such as :

Verified copies of ration card

Passport

Voter ID

PAN card

Driving license

Bank passbook.

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An authorized official of the Participant, under his signature, shall verify

the original documents. In case any account holder fails to produce the

original documents for verification within the aforesaid period of 30

days, it must be immediately brought to the notice of CDSL.

Failure to produce the original documents within the prescribed time

would invite appropriate action against such account holders, which

could even include freezing of their accounts.

THE DEMAT PROCESS

A holder of depository eligible securities may get his physical holding

converted into electronic form by making a request through the DP with

whom he has his beneficiary account.

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1. He company/issuer should have established connectivity with CDSL.

Only after such connectivity is established, the securities of that

company/issuer are recognized to be "available for dematerialization".

2. The holder of securities should have a beneficiary account in the same

name as it appears on the security certificates to be dematerialized.

3 The request should be made in the prescribed dematerialization request

form.

STEPS

1. Client/ Investor submit the DRF (Demat Request Form) and physical

certificates to DP. DP checks whether the securities are available for

demat. Client defaces the certificate by stamping Surrendered for

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Dematerialization. DP punches two holes on the name of the company

and draws two parallel lines across the face of the certificate.

2. DP enters the demat request in his system to be sent to CDSL. DP

dispatches the physical certificates along with the DRF to the R&T

Agent.

3. CDSL records the details of the electronic request in the system and

forwards the request to the R&T Agent.

4. R&T Agent, on receiving the physical documents and the electronic

request, verifies and checks them. Once the R&T Agent is satisfied,

dematerialization of the concerned securities is electronically confirmed

to CDSL.

5. CDSL credits the dematerialized securities to the beneficiary account

of the investor and intimates the DP electronically. The DP issues a

statement of transaction to the client.

STEPS FOLLOWED TO OPEN AN

ACCOUNT

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Step: 1 Step: 2

Get the Leads Make calls

Step: 4 Step: 3

Attend the Appointment Fix the Appointment

Step: 5 Step: 6Documentations Account Opened

Step: 8 Step: 7

Make the client traded Trading Kit

OBJECTIVES OF THE STUDY

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INTRODUCTION: STOCK MARKET

One of the major factors causing todays volatility is the unanimity

in investors inclination towards new economy stocks and their shunning

of old economy stocks. This has led to a huge polarization in the

markets. Todays markets are characterized by large investment flows

into companies with emerging businesses -- which typically have lowfloating stock -- leading to wild price swings.

Volatility has gone up as actively managed funds churn their

portfolios more often. Momentum investing by day traders and fund

managers exacerbates this. Soon, stocks are not bought on the basis of

their fundamental value but on the greater fool theory.

Unrealistic investor expectations driven by the recent history of the

boom in IT stocks is a cause for concern: now, the quality of the stock

and fundamentals are ignored in a market characterized by daily

assessment of profits and losses. Recent price history clouds the

investors minds so much that they start treating that price as the real

value of the stock and dont take a longer perspective of the company.

The new economy stocks are a different breed. There is a lot of

theme or concept investing taking place in these stocks now. It is

difficult to quantify the future of the businesses and put a value to those.

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To discount all the future cash flows and put a value to the company is

passe and PEG ratios based on the next couple of years earnings is inthe near term high growth rate in these businesses is overshadowing the

pricing of risk and technological obsolescence for a particular company.

Market volatility is a sign that investors are unsure of how to value these

stocks. In the minds of investors, there is a battle going on between this

great new paradigm and the valuations of the stocks. In such a scenario,

mood swings between hope and fear cause volatility.

The volatility in new economy stocks reflects systemic changes

taking place in the underlying businesses. In the boardrooms of

companies, long gone are the months of planning and debate on capital

allocation, mergers/acquisitions and joint ventures. In the Internet age, a

three-month delay can be the difference between success and failure.

Also, we are now in an age when companies can think of becoming

multinationals in a short span (e.g. Yahoo, Amazon), when established

age old companies see their fortunes dip very fast (e.g. Britannica) and

when companies can go boom and then come tumbling down in a couple

of years (e.g. Netscape). When businesses are witnessing such rapid

stratospheric booms and busts, it is natural to expect their stocks to be

volatile.

In times of extreme volatility, investments in diversified equity

funds offer a hedge against stock specific risk. The regulator should

leave the pricing of the stocks to markets and its play on fear and greed,

but should come down heavily on rigging induced volatility. It should

clamp down on insider trading and selective information leaks.

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Information dissemination when done timely and uniformly to all

investors would bring in transparency and should help arrest volatility tosome extent.

The margin requirement in the new economy stocks should be

fixed at a high level, as investors will have to learn to live with high

volatility in these stocks.

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ABOUT BOMBAY STOCK EXCHANGE

(BSE)

INTRODUCTION

The Stock Exchange, Mumbai, which was established in 1875 as "The

Native Share and Stockbrokers Association" (a voluntary non-profit

making association), has evolved over the years into its present status as

the premier Stock Exchange in the country. It may be noted that the

Stock Exchange is the oldest one in Asia, even older than the Tokyo

Stock Exchange, which was founded in 1878.

The Stock Exchange, Mumbai (BSE) is generally referred to as the

Gateway to the capital market in India. It is a lynchpin of the IndianCapital market. Its governing board and administration are keenly aware

of the future needs of the exchange to maintain its lead role. As Indian

economy is opening up, the Exchange has brought its operations at par

with international standards. It is poised to take advantage of changes in

Indian economic deregulation to expand the market and make the

security market, in India, more transparent and more liquid.

However, the objectives and the role of the Stock Exchange, Mumbai

has remained the same as enunciated by our founding fathers and given

to us as a mandate in 1887 through the charter. These objectives are:

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1. To safeguard the interest of investing public having dealings on the

Exchange and the members.

2. To establish and promote honorable and just practices in securities

transactions.

3. To promote, develop and maintain a well-regulated market for

dealing in securities.

4. To promote industrial developments in the country throughefficient resource mobilization by way of investment in corporate

securities.

The Exchange while providing an efficient market also upholds the

interests of the investors and ensures redressal 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.

A Governing Board comprising of 9 elected directors (one third of them

retire every year by rotation), an Executive Director, three Government

nominees, a Reserve Bank of India nominee and five public

representatives, is the apex body, which regulates the Exchange anddecides its policies.

The Governing Board following the election of directors annually

elects a President, Vice-President and an Honorary Treasurer from

among the elected directors.

The Executive Director as the Chief Executive Officer is

responsible for the day-to-day administration of the Exchange.

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The Exchange has obtained permission from Securities and

Exchange Board of India (SEBI) for expansion of its BSE-On-Line-Trading (BOLT) network to locations outside Mumbai. In terms of the

permission granted by SEBI, the members of the Exchange are free to

install their trading terminals to cities where there are no Stock

Exchanges. However, at centres where the other Exchanges are located,

the Exchange is required to sign a Memorandum of Understanding with

these Exchanges permitting it to install the BOLT terminals in their

jurisdictional areas.

In terms of organization structure, the Board formulates larger

policy issues and exercises over-all control. The committees constituted

by the Board are broad-based. The Managing Director and a

management team of professionals manage the day-to-day operations of

the Exchange.

The Exchange has a nation-wide reach with a presence in 417

cities and towns of India. The systems and processes of the Exchange

are designed to safeguard market integrity and enhance transparency in

operations. During the year 2005-2006, the trading volumes on the

Exchange showed robust growth.

The Exchange provides an efficient and transparent market for

trading in equity, debt instruments and derivatives. The BSE's On Line

Trading System (BOLT) is a proprietary system of the Exchange and is

BS 7799-2-2002 certified. The surveillance and clearing & settlement

functions of the Exchange are ISO 9001:2000 certified.

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LISTING OF SECURITIES

Listing means admission of the securities to dealings on a

recognized stock exchange. The securities may be of any public limited

company, Central or State Government, quasi-governmental and other

financial institutions/corporations, municipalities, etc.

The objectives of listing are mainly to:

Provide liquidity to securities;

Mobilize savings for economic development;

Protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for

listing of securities of companies in accordance with the provisions of

the Securities Contracts (Regulation) Act, 1956, Securities Contracts

(Regulation) Rules, 1957, Companies Act 1956, Guidelines issued by

SEBI and Rules, Bye-laws and Regulations of the Exchange.

A company intending to have its securities listed on the Exchange has tocomply with the listing requirements prescribed by the Exchange, which

are as under:

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[I] New Companies

a. Minimum Capital: New companies can be listed on the Exchange,

if their Issued & Subscribed Equity Capital after the public issue, is

Rs.5 crores and above.

b. Minimum Public Offer: As per Rule 19(2) (b) of the Securities

Contracts (Regulation) Rules, 1957, securities of a company can be

listed on a Stock Exchange only when at least 25% of each class or

kind of securities is offered to the public for subscription. For this

purpose, the term "offered to the public" means only the portion

offered to the public and does not include reservations of securities on

firm or competitive basis.

SEBI may, however, relax this condition on the basis of

recommendations of stock exchange(s), only in respect of a Government

company defined under Section 617 of the Companies Act, 1956.

[II] Companies listed on other stock exchanges

The companies listed on other Stock Exchanges and seeking listing on

this Exchange are required to fulfill the following criteria:

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Minimum Issued Equity Capital of Rs.3 crores to Rs.10 crores;

Profit track record for at least three years;

Minimum Market Capitalisation of Rs.20 Crores, based on average

price of last six months;

Trading for a minimum 50% of the total trading days during the

same six months on any stock exchange;

Minimum average volume traded per day during the last three

complete months should be 500 shares and minimum 5 trades per

day;

25% of the issued capital should be with public (including body

corporates) and minimum 15 shareholders per Rs. 1 lakh of capital in

the public category.

[III] Companies delisted by this Exchange seeking relisting on this

Exchange

The companies delisted by this Exchange and seeking relisting are

required to have a minimum Issued & Subscribed Equity Capital of

Rs.10 crores

"Z" Group

The Exchange has introduced a new category called "Z Group" from

July 1999 for companies who have not complied with and are in breach

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of provisions of the Listing Agreement. The numbers of companies

placed under this group as of August 31, 1999 are 293.

One Window Clearance

Since April 1997, the Exchange has introduced the concept of "One

Window Clearance" for listing of public issue of securities of

companies, by allocating the companies public issues alphabeticallyamongst the Exchange officials. A company is served by one official of

the Listing Department during the entire process of listing of its

securities, commencing from approval of its Memorandum and Articles

of Association upto granting of trading permission for its securities and

release of 1% security deposit.

The number of companies listed at the Exchange as on August 31, 1999

was 5852. This is the highest number among the Stock Exchanges in the

country.

TRADING

The Exchange has switched over from the open outcry trading system to

a fully automated computerized mode of trading known as BOLT (BSE

On Line Trading) System. This system, which is both order and quote

driven, was commissioned on March 14, 1995. It facilitates more

efficient processing, automatic order matching and faster execution of

trades. Above all, the system is more transparent. The members now

enter orders/quotes on their Trader Work Stations (TWSs) in their

offices instead of assembling in the trading ring.

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The scrips traded on the Exchange have been classified into A, B1,

B2, C F and Z group. The number of scrips listed on the Exchange

under A, B1 and B2 groups which represent the equity segments as

on August 1999 was 149, 1116 and 4740 respectively. The F group

represents the debt market (fixed income securities) segment wherein

650 securities were

listed as at the end of August 1999. The 'Z group comprises of 293

scrips as of August 1999. The C group covers the odd lot securities in

A, B1 & B2 groups and Rights renunciations.

The Stock Exchange, Mumbai, is the only Stock Exchange in the

country to provide a facility of on-line trading in odd lot securities and

Rights renunciations. This facility of trading in odd lots of securities and

Rights renunciations not only offers an exit route to investors to dispose

of their odd lot of securities but also provides them an opportunity to

consolidate their securities into market lots. Trading in this segment

covers all the scrips listed in the equity segment.

The trading cycle for all these groups of securities is weekly.

The trading cycle for A, B1, B2 and C group securities representing

the physical segment is from Monday to Friday and that for F group

securities is from Thursday to Wednesday. The transactions in A group

scripts are allowed to be carried forward from one settlement to another

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settlement subject to a maximum of 75 days from the date of original

transaction. The Stock Exchange, Mumbai is the first Exchange in thecountry to provide the facility of carry-forward of outstanding positions

in A group scrips. The trading session for carry forward of transactions

from one settlement to another is conducted on Saturdays, i.e., at the end

of every trading cycle in the physical segment.

Trading on the BOLT system is conducted from Monday to Friday

between 10:00 a.m. and 3:30 p.m. while the carry-forward session for

A group securities is conducted on Saturdays between 10:00 a.m. and

12:30 p.m.

The Information Systems Department of the Exchange generates the

following statements, which can be downloaded by the members in their

back offices on a daily basis:

a. Statements giving details of the daily transactions entered into by the

members.

b. Statements giving details of margins payable by the members in

respect of the trades executed by them.

The members are allowed to enter into transactions on behalf of their

Institutional clients, viz., Scheduled Commercial Banks, Indian

Financial Institutions (IFIs) & Foreign Institutional Investors (FIIs) andMutual Funds registered with SEBI. The settlement of the trades (money

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and securities) done on behalf of the Institutions may be either through

the member himself or through a SEBI registered Custodian appointedby an Institution. In case the delivery/payment is to be given or taken by

a Custodian on behalf of an Institution, the former has to confirm the

trade done by a member. For this purpose, the Custodians have been

admitted as members of the Clearing House. In case the Custodian does

not confirm an institutional transaction, the liability for pay-in of funds

or securities devolves on the concerned member.

SETTLEMENT AND CLEARING

Pay-in and Pay-out for "A, B1, B2 & C group of securities

The trades done by the members during the weekly trading period from

Monday to Friday are settled by payment of money and delivery ofsecurities in the following week. All deliveries of securities are required

to be routed through the Clearing House, except for certain off-market

transactions, which, although are required to be reported to the

Exchange, may be settled directly between the members concerned.

The Information Systems Department of the Exchange nets off all

deliverable trades (purchases and sales in each scrip) done by a member

during a settlement and generates delivery/receive orders and money

statements which are downloaded by the members in their back offices.

The delivery orders provide information like scrip, quantity and the

name of the receiving member to whom the securities are to be delivered

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through the Clearing House. The Money Statement provides details of

payments/receipts for the settlement.

Earlier the members were required to submit along with the balance

sheet (Form 31-A) which includes the details of Money Statement,

margins payable/receivable, and other credits/debits arising out of

auction for shortages, objections, bad delivery, etc., a cheque /draft

depending on whether the settlement liability is a payable or receivable

position on Thursday, i.e., pay-in day. However, with effect from

December 22, 1997 (i.e., Sett.No.39/97-98), the bank accounts of

members maintained with Bank of India, Stock Exchange Branch, the

only clearing bank at that time, were directly debited through

computerized posting on the pay-in day for their settlement dues. The

list of clearing banks has since been expanded to include HDFC Bank

Ltd., Global Trust Bank Ltd. and Standard Chartered Bank. Thus, the

members are no longer required to submit physical Form 31-A and

cheque/draft, as was the earlier practice.

Auction is conducted for those securities which members fail to

deliver/short deliver during the Pay-in. In case the securities are not

received in an auction, the positions are closed out as per the closeout

rate fixed by the Exchange in accordance with the prescribed rules. The

close out rate is calculated as the highest rate of the scrip recorded in the

settlement in which the trade was executed or in the subsequent

settlement upto the day prior to the day of auction or 20% above the

closing price on the day prior to the day of auction, whichever is higher.

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The following table summarizes the steps in the trading and settlement

cycle for "A+B1, B2& C group securities:

DAY ACTIVITY Monday to Friday

(Monday is the 1st day

and Friday is the last

day of trading)

Trading on BOLT and daily

downloading of statement showing

details of transactions and margin

statement, at the end of each trading

day.

Saturday Carry Forward Session (for A Group

Securities) and downloading of

money statement.

Monday Marking the mode of delivery -

physical or demat

Wednesday Pay-in of physical securities.Thursday Delivery of securities in the Clearing

House as per prescribed time slots

upto 1:00 p.m. only. Debiting of

members bank accounts having

payable position at 5:00 p.m.

Reconciliation of securities delivered

and amounts claimed.

Friday Pay-out (Physical securities only)

Saturday Funds pay-out

If a transaction is entered on the first day of the settlement, i.e., Monday,

the same will be settled on the 8th

working day excluding the day of

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transaction. However, if the same is done on the last day of the

settlement, i.e., Friday, it will be settled on the 4th working day excluding

the day of transaction.

The trading and settlement cycle for "F" group, i.e., Debt Market is

indicated below:

DAY ACTIVITY Thursday First day of TradingWednesday Last day of Trading

Thursday Issue of Delivery Orders, Money

statements

Friday Debiting of the members bank

accounts at 10:30 a.m. Payout of

securities from 4.30 p.m. to 5.30 p.m.

and crediting the bank accounts of

members with payout.

The settlement schedules for various groups of securities have been

strictly adhered to by the Exchange and there has been no case of

clubbing of settlements or postponement of pay-in and pay-out during

the last over three years. The Exchange is also maintaining a database of

fake/forged/stolen securities with the Clearing House so that distinctive

numbers submitted by members on delivery may be matched against the

database to weed out bad paper from circulation.

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Introduction of the Demat Segment

The Exchange has commenced trading in the Dematerialized

(Demat) segment with effect from December 29, 1997 where there is no

physical delivery of securities as in the physical segment. Trading in the

Demat segment is on a Rolling Settlement basis (T+5) where T stands

for Trade Day. The pay-in and payout for the transactions in this

segment are both conducted on a single day. The Pay-in & Pay-out for

transactions executed on Monday is conducted on the following

Monday, i.e., corresponding day in the following week. Auction session

for shortages in demat segment is conducted on BOLT on the day after

pay-in/pay-out. The pay-in / pay-out (money part) takes place through

computerized posting of debits and credits in the members bank

accounts as in the case of physical segment.

With effect from April 6, 1998, deliveries in the demat mode are

permitted in the physical segment. This is so because sellers are allowed

to give delivery in demat or electronic form. As of today, this is

applicable to 278 scrips. As such, a break-up session is scheduled every

Monday where members may mark the mode of delivery, i.e., physical

or demat. They, however, have an option to change the mode of delivery

till the pay-in day, i.e., Thursday.

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SEBI has directed the stock exchanges in January 1998 that all the trades

done by institutional investors, viz., domestic financial institutions,

banks, mutual funds, FIIs and overseas corporate bodies in certain select

scrips should be compulsorily settled in dematerialized form. This list

has been expanded by SEBI from time to time and as on December 31,

1998 trades in 114 scrips for institutional investors are required to be

compulsorily settled in dematerialized form. 29 more scripts have been

specified for compulsory demat trading for institutional investors with

effect from April 15, 1999 making the total scrips in demat form for

institutional investors to 143.

Further, under directions from SEBI, trades in 12 and 19 scrips are to be

compulsorily settled by all investors in dematerialized form with effect

from January 4, 1999 and February 15, 1999 respectively. Further,

trades in another 33 scrips and 40 scrips are to be compulsorily settled in

demat form by all investors with effect from April 5 & May 31, 1999

respectively. Thus, as of now, trades in 104 scrips are to be compulsorily

settled by all investors in dematerialized form.

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ABOUT NATIONAL STOCK EXCHANGE (NSE)

THE ORGANISATION

The National Stock Exchange of India Limited has genesis in the report

of the High Powered Study Group on Establishment of New Stock

Exchanges, which recommended promotion of a National Stock

Exchange by financial institutions (FIs) to provide access to investors

from all across the country on an equal footing. Based on the

recommendations, NSE was promoted by leading Financial Institutions

at the behest of the Government of India and was incorporated in

November 1992 as a tax-paying company unlike other stock exchanges

in the country.

On its recognition as a stock exchange under the Securities Contracts

(Regulation) Act, 1956 in April 1993, NSE commenced operations in

the Wholesale Debt Market (WDM) segment in June 1994. The Capital

Market (Equities) segment commenced operations in November 1994

and operations in Derivatives segment commenced in June 2000.

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NSE Milestones

November

1992Incorporation

April 1993 Recognition as a stock exchange

May 1993 Formulation of business plan

June 1994 Wholesale Debt Market segment goes live

November

1994Capital Market (Equities) segment goes live

March 1995 Establishment of Investor Grievance Cell

April 1995Establishment ofNSCCL, the first Clearing

Corporation

June 1995 Introduction of centralized insurance cover for alltrading members

July 1995 Establishment of Investor Protection Fund

October 1995 Became largest stock exchange in the country

April 1996Commencement of clearing and settlement by

NSCCL

April 1996 Launch ofS&P CNX Nifty

June 1996 Establishment of Settlement Guarantee Fund

November

1996

Setting up ofNational Securities Depository

Limited, first depository in India, co-promoted by

NSE

November

1996 Best IT Usage award by Computer Society of India

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December

1996

Commencement of trading/settlement in

dematerialized securities

December

1996Dataquest award for Top IT User

December

1996Launch ofCNX Nifty Junior

February

1997 Regional clearing facility goes live

November

1997Best IT Usage award by Computer Society of India

May 1998Promotion of joint venture, India Index Services &

Products Limited (IISL)

May 1998 Launch of NSE's Web-site: www.nse.co.in

July 1998Launch ofNSE's Certification Programme in

Financial Market

August 1998CYBER CORPORATE OF THE YEAR 1998

award

February

1999

Launch of Automated Lending and Borrowing

Mechanism

April 1999 CHIP Web Award by CHIP magazine

October 1999 Setting up ofNSE.IT

January 2000 Launch ofNSE Research Initiative

February

2000Commencement ofInternet Trading

June 2000 Commencement of Derivatives Trading (Index

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Futures)

September

2000Launch of'Zero Coupon Yield Curve'

November

2000

Launch ofBroker Plaza by Dotex International, a

joint venture between NSE.IT Ltd. and i-flex

Solutions Ltd.

December

2000 Commencement ofWAP trading

June 2001 Commencement of trading in Index Options

July 2001Commencement of trading in Options on Individual

Securities

November

2001

Commencement of trading in Futures on Individual

Securities

December

2001Launch ofNSE VaR for Government Securities

January 2002 Launch ofExchange Traded Funds (ETFs)

May 2002

NSE wins the Wharton-Infosys Business

Transformation Award in the Organization-wide

Transformation category

October 2002 Launch ofNSE Government Securities Index

January 2003 Commencement of trading in Retail Debt Market

June 2003 Launch ofInterest Rate Futures

August 2003 Launch of Futures & options in CNXIT Index

June 2004 Launch of STP Interoperability

August 2005 Launch of NSEs electronic interface for listed51
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companies

Feb. 2006 Launch of Futures & options in BANK Nifty Index

Developments on the Exchange

NSE and NSCCL went live with the inaugural session for

Automatic Lending and Borrowing Mechanism (ALBM) for lending

and borrowing of securities on February 10,1999. This is the first

time an Indian agency approved by SEBI will be conducting the

securities lending & borrowing transactions based on international

practices.

Membership

890 trading members on the Capital Market

segment, of which around 86% account for corporates

and the remaining are individuals and firms.

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Out of these 890 trading members, 89 trading

members are also members of Wholesale Debt Market

segment, all of which are corporates and there are 7

trading members excclusively on Wholesale Debt

Market Segment.

Geographic Distribution

Over 6839 trading terminals given to the members as on November

25, 1999

Over 2342 VSAT's across the country with a 24 hour Network

monitoring system in over 291 cities as of November 01, 1999.

Future Plans

The Capital Market segment of the Exchange became operational in

November 1994.The entire turnover accounted from Mumbai.

After stabilizing operations in Mumbai, NSE expanded its

operations to other cities. The turnover from Mumbai accounts for

43%, Delhi accounts for 19%, Calcutta accounts for 11% and 28%

from other centres. NSE will add more terminals in cities where it

already has presence to provide better services to investors.

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The satellite hub and computer equipment for the disaster recovery site

at Pune has been procured, installed and tested for proper operations. A

detailed Business Continuity Plan (BCP) has been worked out to put the

disaster recovery site for live operations. The back-up site of the

Exchange at Pune will be made operational soon. This facility is in line

with international practices and the NSE will be able to commence

normal business operations within a very short time frame should adisaster occur.

In keeping with the fast changing scenario in the Capital Markets, NSE

has chalked out plans for the various business segments, some of which

are.

Initial Public Offerings

Initial Public Offerings in India have been typically fixed price

offers. A major problem with such fixed price offerings has been the

information asymmetries between the issuers and the investors. To

revive the primary market, NSE is proposing to provide a facility for

conducting primary issues for Initial Public Offers (IPOs), subsequent

issues by companies, private placements as well as book building

through screen based automated trading system. The advantages of this

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system will be on-line issue of securities thereby reducing the cost of

issue of securities and an efficient retail distribution network among

others.

Retail Debt Market

Fixed income securities such as debentures are an ideal

investment avenue for risk adverse investors. It provides a fixed and

regular income with safety of capital. The deregulation of interest rates

has led to borrowings by the Government, Corporates and Institutions at

market-determined rates. This has enabled retail investors to invest in

fixed income securities particularly Corporate and Institutional bonds in

favourable terms vis a vis other investment opportunities.

With a view to providing liquidity to these instruments, the

Exchange plans to start a retail debt segment to cater to the growing

demands of the investors in the debt segment. Debentures are presently

traded on the Capital Market (CM) and the Wholesale Debt Market

(WDM) segment of the Exchange. However, as WDM segment

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continues to be wholesale in nature and CM segment focuses on equity,

there was a need for a separate market for debentures. A separate RDM

trading system would be developed for the same.

The securities traded on the Retail Debt Market segment

would comprise of Corporate Debentures and Institutional Bonds.

Members of the Exchange from all the NSE centres would be eligible to

trade on the RDM system.

The National Securities Clearing Corporation Ltd. (NSCCL)

would settle the trades done on the RDM segment on a net basis. The

NSCCL would also extend settlement guarantee for trades done on NSE.

OPPORTUNITIES AVAILABLE FORFOREIGN INVESTORS

DIRECT INVESTMENT

Foreign companies are now permitted to have a majority stake in their

Indian affiliates except in a few restricted industries. In certain specific

industries, foreigners can even have holding upto 100 percent.

INVESTMENT THROUGH STOCK EXCHANGES

Foreign Institutional Investors (FII) upon registration with

the Securities and Exchange Board of India (SEBI) and the Reserve

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Bank of India (RBI) are allowed to operate in Indian stock exchanges

subject to the guidelines issued for the purpose by SEBI.

Important requirements under the guidelines are as under:

1. Portfolio investment in primary or secondary markets will be

subject to a ceiling of 30 percent of issued share capital for the

total holding of all registered FII's. In any one company an FII

holding is subject to a ceiling of 10 percent of the total issued

capital. However, in applying the ceiling of 30 percent the

following are excluded:

Foreign investment under a financial collaboration, which is,

permitted upto 51 percent in all priority areas.

Investment by FII's through offshore single/regional funds,

GDR's and euro convertibles.

2.Disinvestment is allowed through a broker of a Stock Exchange.

3.A registered FII is required to buy or sell only for delivery. It is not

allowed to offset a deal. It is also not allowed to sell short.

Investment in Euro Issues/Mutual Funds floated overseas

Foreign investors can invest in Euro issues of Indian companies and in

India-specific funds floated abroad.

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Broking Business

Foreign brokers upon registration with the SEBI are now allowed to

route the business of registered FIIs. Guidelines for the purpose have

been issued by SEBI.

Asset Management Companies / Merchant Banking

Foreign participation in Asset Management Companies and Merchant

Banking Companies is permitted.

STOCK AUCTIONS

The word auction, in simple terms, implies a public sale in

which property or items of merchandise are sold to the highest bidder.

Did you know that auctions used to take place way back

during the Homeric period in Greece? It was a means of transferring the

ownership of slaves from one person to the other. This same underlying

concept of auction has taken a more refined form in recent times - like

the auction of commodities or the belongings of famous personalities.

Have you ever been to an auction house like Christie or Sotheby's,

where works of art are sold to the highest bidder in auction?

Now, you are probably beginning to wonder what we are

doing discussing auctions of slaves and commodities or art auction

houses like Christie and Sotheby's here, in the investment jungle! Allow58


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us to clarify that our intention is not to discuss art auctions per se, but

auctions conducted on the bourses. Auctions are not conducted only to

sell merchandise or works of art in big auction houses; they are also a

common feature on stock exchanges.

Why conduct auctions in the stock market?

Auctions are conducted on the exchanges when, for some reason,shares (physical or demat) are not delivered to the exchange on time.

Exchanges conduct auctions to penalize the party for defaulting

on delivering the shares on time, and thereby to protect the sanctity of

settlements. It is a necessary evil - imagine the chaos if the defaulting

party went scot-free and delivered shares at its own free will. This wouldtrigger a chain reaction of defaults.

If the defaulting party fails to deliver the shares on time to the

exchange, the exchange in turn is unable to deliver the shares to the

party who purchased them. The purchasing party in turn might have

already sold those shares before receiving them from the exchange andnow it would be unable to deliver those shares on time. This vicious

chain could go on and on.

Therefore, it becomes imperative that auctions are held so that pay-

in and payout of shares take place on time, in accordance with the

settlement cycle of the respective exchanges.

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Reasons for shares to go on auction

Shares come under the hammer when they have been either delivered

short or found to be objectionable by the exchange. Based on the reasons

why shares qualify for auction, they have been categorized into two

types:

1. Auction due to shortages

2. Auction due to objection

Auction due to shortages

As has been discussed above, an auction due to shortages

takes place when the delivering party fails to deliver its share on time to

the exchange, thereby triggering the vicious chain reaction of the

exchange being unable to deliver the shares on time to the purchasing

party and purchasing party in turn being unable to deliver shares on time

if it has already sold it and so on... One of the common reasons why

shares come under auction due to shortages is the confusion that arises

about the delivery date of the shares, if they are going into the 'no

delivery' period.

Auction due to objection

Physical shares go in for auctions not only if they are

delivered short, but also if they are found to be objectionable and not

rectified on time by the party concerned. There are many reasons why

shares could come under objection. To list a few:

Transfer deed attached to the share certificate is out of date

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Details like distinctive number, folio number, certificate number,

transferor names etc are not filled or filled incorrectly on thetransfer form attached with the share certificate

Witness stamp or signature on transfer deed is missing

Signature of the transferor is missing

Delivering broker's stamp is missing on the reverse of the transfer

deed.

QUESTIONNAIRES

Dear sir/madam,

I am student of Poddar International College, Jaipur. I

am conducting a survey to find out the potential market for securities.

For this purpose, I would like to spare few minute and share your view

with me.

Q1 Do you have your own demat account?

Yes No

Q2 Are you planning to get a demat account?

Yes No

Q3 what type of investment do you want?

a. Securities

b. Mutual Funds

c. Life Insourance

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Q4 If security, which of the following institutions will go for enquiry?

a. Unicon

b. Icici direct.com

c. Share khan

d. India bulls

Q5 Through which source did you get to know about the oboveinstitution?

a. Television

b. Newspaper

c. Camps and canopies

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Q.1 Do you have their own DEMAT Account?

Yes No

4, 40%

6, 60%

YES NO

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Q.2 Are you planning to get a DEMAT Account?

Yes No

8, 80%

2, 20%

YES NO

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Q.3 What type of investment do you want?

Securities

Mutual Funds

Life Insurance

3, 30%

5, 50%

2, 20%

Security Mutual fund Life insourance

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Q4 If security, which of the following institutions will go for enquiry?

Unicon

Icici direct.com

Share khan

India bulls

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4, 40%

2, 20%

1, 10%

3, 30%

UNICON ICICI DIRECT.COM SHAREKHAN INDIABULLS

Q5 Through which source did you get to know about the obove

institution?

d. Television

e. Newspaper

f. Camps and canopies

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5, 50%

2, 20%

3, 30%

TELEVISION NEWSPAPER CHAMPS & CANOPIES

FINDINGS

The stock market plays a cardinal role in promoting thelevel of capital formation by assisting in the effective mobilization (and

also augmentation) of savings and their canalization into appropriate

avenue of investment. This it does by providing an organized market in

diverse type of securities to suit the varying notions and whims of a vast

mass of savers about liquidity, profitability and risk element in their

investments. The opportunity of constant evaluation of returns on ones

investment compared to others, the liquidity that is imparted to

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investment in fixed capita and price continuity that is being ensured,

instill confidence in the minds of savers. On the other hand, by creatingconditions, which reasonably ensure availability of financial resources

for creating real capital, whether in private sector or in public sector they

give impetus to development.

In underdeveloped economies not only is the volume of

savings low but a large part of it is dissipated in conspicuous

consumption and in hoards because of lack of knowledge of investment

opportunities, high liquidity preference and other factors mainly of a

non-economic character. The stock market promoters conditions which

take care of some of these inhibiting factors. It offers a ready market for

conversion of securities into cash and thus encourages investment and

discourages hoardings. Again, its widely published operations and price

quotations bring home to the savers the various productive and desirable

opportunities of investment. In the absence of this institution not only

would the saving of the community the sinews of economic progress

and productive efficiency be used much less completely owing to the

absence of adequate incentive to save? Moreover, the health and vitality

of an industry and the individual units comprising it and the savers

preferences are reflected on the stock exchanges in the relative prices of

different securities and movements therein. This ensures finaldisposition of funds in right amounts and in the most desirable directions

of investment decisions in a judicious and rational manner which stock

exchanges permit, ensures canalization of only the optimum amount of

funds into any line of industries and checks the inflow of capital into an

industry just when it begins to show the signs of subnormal return. Stock

exchanges are thus pre-requisites for mobilization and creation of

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savings, their proper and profitable allocation and also for inducing

large-scale investment.

A stock exchange creates a cluster of shares and stockbrokers,

underwriters and other well-versed in financial matters who educate

public opinion about the soundness of the new issues and offer expert

advice to the prospective investors regarding the appropriate securities

and the opportune time for transaction in them.

Alongside extending help to the private sector industrial

enterprises, a stock exchange also proves to be a boon for governments

who need to borrow large funds for financing developmental

programmes, which it has taken upon itself for betterment of the

economic lot of the people. This it does through providing an organized

market for government bonds.

Thus a stock exchange serves the nation in several ways

through its diversified economic services, which include imparting

liquidity to investments and providing marketability, enabling evaluation

and ensuring price continuity of securities.

INDIAN stock markets are still attractive for foreign investors,according to Mr. Alan Jacobs, Senior International Economist and

Strategist, AMP Capital, Australia.

Return on equity in India was higher than in countries such

as the US, China and Japan, he said, adding that Indian corporate

earnings were rising faster than earnings of companies in other countries

ever since the reforms process was set in motion.

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Besides, the present stock market rally was qualitatively better

than the boom of 2000, because, this time around, stock prices trackedcorporate earnings closely.

The Indian economy would grow by 6.6 per cent in 2005 with

the potential to grow further. But the country faced two risks: inflation

and government backtracking on reforms. Liquidity overhang and rising

oil prices could lead to inflation.

As long as the deficit was less than the nominal GDP growth

rate, the situation was not alarming. It was important that India did not

have any external debt.

Stressing that it was important for the country to attract more

foreign direct investments, he said it needed to build better

infrastructure. He also added that the economic outlook for India

depended much upon whether the government stayed on the reformscourse.

Over-capacity in China was a potential problem, he said. In the

previous years, China had invested too much about half its GDP in

creating capacities.

How it managed the slowdown of the current year would have a

bearing on economies such as India. China could be "exporting"

problems arising out of over-capacity.

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SIGNIFICANCE OF THE STUDY

Investors want to get higher rate of returns at a lower risk. For

this purpose he makes several investments strategies and market

efficiency has an influence on the investments strategy of an investor,

because if market is efficient, trying to pick up winners will be a waste

of time. In efficient market there will be no undervalued securities

offering than deserved expected returns, given their risk. On the other72


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hand if markets are not efficient, excess returns can be made correctly

picking the winners.

For this purpose analysis will be carried out to test the

efficiency level in Indian stock market using run test analysis and the

auto correlation function.

CONCLUSION

Indian economy has been globalizes and the capital

market has been linked to the international financial market. Foreign

individuals and institutional investors have encouraged participating into

it. So, there is a need for raising the Indian Capital market in to the

international standards in terms of efficiency and transparency. One such

measure is the passing out of the Depository Act during the year 1996.

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Dematerialization of securities and under this system is one of

the major steps aimed at improving and modernizing the capital market

and enhancing the levels of investors protection measures which

aims at eliminating the bad deliveries and forgery of shares and

expediting the transfer of shares.

During this whole process of training I came to learn a lots of new thing

regarding

The demat-process, how it works & what is the future aspect of it.

This part of the project is purely learning processes, which make me

teach on the following:

Concept of Financial Product Selling

Customer Handling

Day to day Fluctuation in Stock Market --- Why?

Major Players in this field

Potentiality of this market

How to analyze the Research Report

Finally, practical knowledge of Group Activity

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So, to conclude I want to say that these two months of summer

training is very much beneficial for me that enriches my knowledge at a

greater level?

BIBLIOGRAPHY

Macroeconomics Theory and Policy: Gardner Ackley, MacMillan

Publishing Co., Inc. New York, International Edition, 1978.

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The Rise and the fall of the big bull, Business World, April 16, 2004,

pp. 18-26.

Indias Stock Markets, Business Today

Will BSE Survive, CFA, August 2004, pp. 24-28.

Dalal Street, Outlook

Valueline, May 2007 July 2007 issues

Business Standard, July 2007

WEBSITES:

www.nseindia.com

www.bseindia.com

WWW.indiabulls.com

www.indiaweekly.com

www.indiainfoline.com

www.CDSL.com

www. investopedia.com

www. Uniconindia.com

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Valueline, May 2007 July 2007 issues

Business Standard, July 2007

Research Reports

Unicon research report

Book

Fundamental Statistics, by Goon, Gupta & Dasgupta, Vol. 2

Marketing Research, by Kotler

1

Documents

poddar final UNICON