Project Report Archit Sir

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    INDIAN INSTITUTE OFPLANNING AND MANAGEMENT

    JAIPUR

    Summer internship project report on title

    Having Market on Your Fingertips

    By Karishma Saboo

    Unique Id No J1012SSISBE-B10008 (JF-1126)

    ICICI Securities Limited

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    ACKNOWLEDGEMENT

    The bliss that accompanies the successful completion of any task would not

    be complete without the expression of appreciation of simple virtues of people who made it possible.

    I would like to sincerely thank my faculty guide Mr. Sai Gunaranjan Bose whose guidance has helped me to understand andcomplete my project in a timely and proper manner.

    I would also like to thanks to the Cluster Head Of ICICISecurities Limited Mr. Mohit Tondon , for giving me the opportunity todo my two month project training in their esteemed organization. I amhighly obliged to Mr. Rohit Kaul (key relationship manager) and Mr.Archit Saxena (senior relationship manager) for granting me to undertakemy training at M.I Road Branch.

    I express my thanks to all relationship mangers and otherregional managers under whose guidance and direction, I gave a good

    shape to my training. Their reviews and excellent suggestions throughout theproject are highly commendable. My heartfelt thanks go to all the executiveswho helped me to gain knowledge about the actual working and processesinvolved in various departments.

    Karishma Saboo

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    EXECUTIVE SUMMARY

    As per the title suggest the project report has been prepared regarding the online

    Share Trading in India. Online Trading was initiated by National Stock

    Exchange (NSE) in India and soon after the other exchanges also followed it.

    There was a major boom in year 2000 when lots of online trading

    Companies came with a bang but only few were survived because of lack of

    Computer Knowledge and low internet penetration.

    There are two types of online trading companies one is the

    banking Online trading companies and other is non-banking trading companies. A

    Few Examples of banking online trading companies are ICICI direct.com,

    HDFC Securities, UTI Securities etc.

    On the other hand non-banking trading companies are- Religare

    Securities, Angel Broking, Reliance Money etc. A study was undertaken to

    Determine that how trading by companies in India is done online, just by making a

    Single click and also about the services provided by them.

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    According to the survey it was seen that most of the investors prefer

    Online trading because of few major factors such as time convenience, protection

    Through Freudian brokers etc. Although during my research project I ve seen that

    Most of the respondents feel online trading a secure way of investing into stock

    Market but still a few of them feel that it is unsafe and a bit complicated but they

    Posses information about online trading.

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    INTRODUCTION

    1.1 GENERAL INTRODUCTION

    PHYSICAL CERTIFICATES - THE TRADITIONAL WAY

    The Indian capital market has seen an unprecedented boom in its activity in the last

    decade. We can now boast of a very large investor population and substantial volumes of

    trade. However, this surge in activity has brought with it, numerous problems that

    threaten the very survival of the Capital market in the long run. A closer inspection of the

    problems would reveal that most of them arise due to the intrinsic nature of paper based

    trading and settlement.

    This century-old system of trading and settlement requires handling of huge volumes of

    paper leading to increased costs and inefficiencies. Simultaneously, they expose the

    investors to greater risks putting them at a disadvantage. Some of these areas are:

    Unwarranted delay in transfer of shares. It takes 30 to 60 days for the investors to getthe shares lodged in their name;

    Possibility of forgery on various documents leading to bad deliveries, legal disputesetc;

    Theft of shares leading to defective title in shares purchased and subsequentlitigation;

    Prevalence of fake certificates in the market;

    Mutilation or loss of share certificates in transit;

    Increased transaction costs due to stamp duty, fake shares, rejection by registrars, etc.

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    This has made the investors, both retail and institutional, wary of entering the Indian

    capital market. In this scenario, it was felt that the getting up of a depository and the

    introduction of scrip less trading and settlement is imperative for the efficient functioning

    of the market.

    The Indian capital market has witnessed numerous changes in the recent

    past. Historically stock market booms have always resulted in a number of problems for

    the lay investor. Sometimes, the problem may magnify them and threatens to engulf the

    entire capital market. A close introspection of these problems will reveal that most of

    them are due to intrinsic nature of paper based trading and settlement. All this may have

    driven away many potential investors and Foreign Institutional Investors.

    Dematerialization of shares is looked upon as the remedy for the paper based problems.

    With effect from august 19, 1998 SEBI has granted certificate of registration of

    Central Depository Services (I) Ltd. (CDSL).

    Yet even with demat , from the point of view of investors there are numerous

    problems. Here Wallet Watch introduces you to setting up of a demat account and

    introduction of scrip less trading and settlement. There are numerous benefits of this scrip

    less trading and settlement, which Wallet Watch has discussed in detail.

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    COMPANY PROFILE:

    2.1 INTRODUCTION ABOUT THE COMPANYI Even as the European and American stock markets reckon with the changes brought

    about by the Internet and IT/telecom advances, the Indian stock market has quickly

    moved to global standards.

    The sheer breadth of the changes since the National Stock Exchange started

    operations in 1994 and with the Securities and Exchange Board of India (SEBI) also

    driving the changes in the market system, have enabled the Indian market to move well

    ahead in just five years.

    Even as online automated trading and better clearing and settlement mechanisms

    have been put in place, perhaps, the most significant change in the Indian market has

    been the coming of paperless trading; it may well be a precursor to the next big changes

    rolling settlements and Internet trading. But the push towards paperless trading stands out

    even in a decade when the market landscape has changed beyond recognition.

    Dematerialization (holding and trading securities in paperless mode) was an

    alien concept in India before 1995; in five years, large quantities of paper have been

    flushed out of the system. Since the entry of the foreign institutional investors (FIIs) and

    online trading, the old system, laden with paperwork at every conceivable stage, was out

    of place in an otherwise fast trading environment.

    As the FIIs complained about the paperwork as a major constraining factor, the

    government and SEBI took notice. The requisite legislative changes were put in placequickly - the Depositories Act, 1996 was passed and the NSE, with the UTI and the IDBI,

    set up the National Securities Depository Ltd (NSDL).

    But the depository concept did not gain popularity; the FIIs which

    had clamored for its introduction, now ignored it.

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    The reason: Lack of liquidity. But, unless the institutional investors stepped in, there

    could be no liquidity. This stalemate frustrated the push for a paperless environment.

    Until SEBI stepped in, that is.

    With regulatory pushes SEBI, in phases, made demat trading in stocksmandatory for institutions first and, then, for all investors. Mandatory paperless trading,

    forced the FIIs to dematerialize their holdings quickly.

    As a consequence of SEBI's action, most major stocks are traded in the

    paperless mode now. The second phase will involve some 200 stocks in a few months

    time. The effect of SEBI's action is evident from NSDL's statistics. A total of 698

    companies, with a market capitalization of Rs. 7,37,300 crores (almost 80 per cent of the

    market capitalization of all listed stocks), is enrolled with the NSDL.

    With 13.65 billion shares in the demat mode, nearly 19 million investor

    accounts, and securities valued at Rs. 3,96,800 crores ($91 billions) actually

    dematerialized, the concept of dematerialization can be said to have taken roots. If the

    regulatory direction is any indication, more paper will be flushed out of the system in the

    next two years.

    From a long-term perspective, demat in India is of considerable significance. Not only

    has the general trading environment improved and quickened, volumes too have perked

    up, even in the demat segment. With demat taking off, there is now scope for an

    improvement in the quality of investor services.

    As a consequence of dematerialization, the Indian market is also well prepared for web-

    based trading though the quality of telecom infrastructu