Executive Summary There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose. Since this industry is growing having growth rate
that attract me for
doing my summer internship in this field that I can gather more and more knowledge about the share market. It was the great experience in that field and I am also very thankful to the India Infoline for giving me this opportunity to complete my project . Research was carried out to find that which brokerage house, people prefer and to figure out what people want while investing in stock market. This study suggests that people are reluctant while investing in stock and commodity market due to lack of knowledge. Main purpose of investment is returns and liquidity, commodity market is less preferred by investors due to lack of awareness. The major findings of this study are that the people are interested to invest in stock market but they have lack of knowledge.
Through this report we were also able to understand, what are our Company‟s (India Infoline Ltd.) strong and weak points, on the basis of which we come to know what can be the basis of pitching to a potential client.
OBJECTIVE OF THE PROJECT 1. To know about the awareness of the consumers towards stock brokers and share market.
2. To study the market share of India Infoline Ltd in the Share market and identify the areas of competitive advantage over other players.
3. To study about consumer awareness & satisfaction, about operational Services & procedures of India Infoline ltd.
4. To study about the difficulties faced by the clients/trades while trading with India Infoline.
5. To identify the lacunae in the present system suggesting the measures improvement in current Trading system.
6. To study about the on line terminal terms and Dmat account of India Infoline ltd
Sope of the study Actually I have got my summer internship on two topics-
1-awareness of online trading 2-comparative analysis of India Infoline and different stock brokers
I would like to tell that now a day on line trading is a booming field for investor because they can generate more returns as compared to other fields. I got golden experience regarding on line trading when I went to market for survey. Because I met no of person for knowing awareness of on line trading, Dmat account, and comparative analysis between different stock brokers.
This project will help for those who dose not have the knowledge about the trading and services offered by the different broker company. It will also help for the people who are interested in the trading and in share market.
This will also helpful for the company IIFL because it is containing the cooperative analysis of the different broker company, it also contains the strong and weak points of IIFL. By that way they can remove their weaknesses and can add more and more costumers in their series. Because people are facing a lot of problem regarding online trading.
Hence this project have multidimensional scope
INTRODUCTION OF STOCK MARKET A stock, also referred to as a share, is commonly a share of ownership in a corporation.
In British English, the word stock has another completely different
meaning in finance, referring to a bond. It can also be used more widely to refer to all kinds of marketable securities. Where a share of ownership is meant the word share is usually used in British English.
History The first company that issued shares is considered to be the Northern-European copper mining enterprise Stora Kopparberg, in the 13th century.
Ownership The owners and financial backers of a company may want additional capital to invest in new projects within the company. If they were to sell the company it would represent a loss of control over the company. Alternatively, by selling shares, they can sell part or all of the company to many part-owners. The purchase of one share entitles the owner of that share to literally share in the ownership of the company, including the right to a fraction of the assets of the company, a fraction of the decision-making power, and potentially a fraction of the profits, which the company may issue as dividends.
8 However, the original owners of the company often still have control of the company, and can use the money paid for the shares to grow the company.
In the common case, where there are thousands of shareholders, it is impractical to have all of them making the daily decisions required in the running of a company. Thus, the shareholders will use their shares as votes in the election of members of the board of directors of the company. However, the choices are usually nominated by insiders or the board of the directors themselves, which over time has led to most of the top executives being on each other's boards. Each share constitutes one vote (except in a co-operative society where every member gets one vote regardless of the number of shares they hold). Thus, if one shareholder owns more than half the shares, they can out-vote everyone else, and thus have control of the company.
Shareholder rights Although owning 51% of shares does mean that you own 51% of the company and that you have 51% of the votes, the company is considered a legal person, thus it owns all its assets, (buildings, equipment, materials etc) itself. A shareholder has no right to these without the company's permission, even if that shareholder owns almost all the shares. This is important in areas such as insurance, which must be in the name of the company not the main shareholder.
So as long as the shareholders agree that the management (agent) are performing poorly they can elect a new board of directors which can then hire a new management team.
Owning shares does not mean responsibility for liabilities. If a company goes broke and has to default on loans, the shareholders are not liable in any way. However, all money obtained by converting assets into cash will be used to repay loans, so that shareholders cannot receive any money until creditors have been paid.
Means of financing Financing a company through the sale of stock in a company is known as equity financing. Alternatively debt financing (for example issuing bonds) can be done to avoid giving up shares of ownership of the company.
Trading Shares of stock are usually traded on a stock exchange, where people and organizations may buy and sell shares in a wide range of companies. A given company will usually only trade its shares in one market, and it is said to be quoted, or listed, on that stock exchange. However, some large, multinational corporations are listed on more than one exchange. They are referred to as inter-listed shares.
Buying There are various methods of buying and financing stocks. The most common means is through a stock broker. Whether they are a full service or discount broker, they are all doing one thing – arranging the transfer of stock from a seller to a buyer. Most of the trades are actually done through brokers listed with a stock exchange such as the New York Stock Exchange. There are many different stock brokers to choose from such as full service brokers or discount brokers. The full service brokers usually charge more per trade, but give investment advice or more personal service; the discount brokers offer little or no investment advice but charge less for trades. Another type of broker would be a bank or credit union that may have a deal set up with either a full service or discount broker.
There are other ways of buying stock besides through a broker. One way is directly from the company itself. If at least one share is owned, most companies will allow the purchase of shares directly from the company through their investor's relations departments. However, the initial share of stock in the company will have to be obtained through a regular stock broker. Another way to buy stock in companies is through Direct Public Offerings which are usually sold by the company itself. A direct public offering is an initial public offering a company in which the stock is purchased directly from the company, usually without the aid of brokers. When it comes to financing a purchase of stocks there are two ways: purchasing stock with money that is currently in the buyers ownership or by buying stock on margin. Buying stock on margin means buying stock with money borrowed
11 against the stocks in the same account. These stocks, or collateral, guarantee that the buyer can repay the loan; otherwise, the stockbroker has the right to sell the stocks (collateral) to repay the borrowed money. He can sell if the share price drops below the margin requirement, at least 50 percent of the value of the stocks in the account. Buying on margin works the same way as borrowing money to buy a car or a house using the car or house as collateral. Moreover, borrowing is not free; the broker usually charges you 8-10 percent interest.
Selling Selling stock in a company goes through many of the same procedures as buying stock. Generally, the investor wants to buy low and sell high, if not in that order; however, this is not how it always ends up. Sometimes, the investor will cut their losses and claim a loss. As with buying a stock, there is a transaction fee for the broker's efforts in arranging the transfer of stock from a seller to a buyer. This fee can be high or low depending on if it is a full service or discount broker. After the transaction has been made, the seller is then entitled to all of the money. An important part of selling is keeping track of the earnings. It is important to remember that upon selling the stock, in jurisdictions that have them, capital gains taxes will have to be paid on the additional proceeds, if any, that are in excess of the cost basis.
Technology’s on Trading
Stock trading has evolved tremendously. Since the very first Initial Public Offering (IPO) in the 13th century, owning shares of a company has been a very attractive incentive. Even though the origins of stock trading go back to the 13th century, the market as we know it today did not catch on strongly until the late 1800s. Co-production between technology and society has led the push for effective and efficient ways of trading. Technology has allowed the stock market to grow tremendously, and all the while society has encouraged the growth. Within seconds of an order for a stock, the transaction can now take place. Most of the recent advancements with the trading have been due to the Internet. The Internet has allowed online trading. In contrast to the past where only those who could afford the expensive stock brokers, anyone who wishes to be active in the stock market can now do so at a very low cost per transaction. Trading can even be done through Computer-Mediated Communication (CMC) use of mobile devices such as hand computers and cellular phones. These advances in technology have made day trading possible. The stock market has grown so that some argue that it represents a country's economy. This growth has been enjoyed largely to the credibility and reputation that the stock market has earned.
Types of shares There are several types of shares, including common stock, preferred stock, treasury stock, and dual class shares. Preferred stock, sometimes called preference shares, have priority over common stock in the distribution of dividends and assets, and sometime have enhanced voting rights such as the ability to veto mergers or acquisitions or the right of first refusal when new shares are issued (i.e. the holder of the preferred stock can buy as much as they want before the stock is offered to others). A dual class equity structure has several classes of shares (for example Class A, Class B, and Class C) each with its own advantages and disadvantages. Treasury stocks are shares that have been bought back from the public.
Derivatives A stock option is the right (or obligation) to buy or sell stock in the future at a fixed price. Stock options are often part of the package of executive compensation offered to key executives. Some companies extend stock options to all (or nearly all) of their employees. This was especially true during the dotcom boom of the mid- to late- 1990s, in which the major compensation of many employees was in the increase in value of the stock options they held, rather than their wages or salary. Some employees at dot-com companies became millionaires on their stock options. This is still a major method of compensation for CEOs.
14 The theory behind granting stock options to executives and employees of a corporation is that, since their financial fortunes are tied to the stock price of the company, they will be motivated to increase the value of the stock over time.
Primary market (IPO’s) In financial markets, an initial public offering (IPO) is the first sale of a company's common shares to public investors. The company will usually issue only primary shares, but may also sell secondary shares. Typically, a company will hire an investment banker to underwrite the offering and a corporate lawyer to assist in the drafting of the prospectus. The sale of stock is regulated by authorities of financial supervision and where relevant by a stock exchange. It is usually a requirement that disclosure of the financial situation and prospects of a company be made to prospective investors. The Federal Securities and Exchange Commission (SEC) regulates the securities markets of the United States and, by extension, the legal procedures governing IPOs. The law governing IPOs in the United States includes primarily the Securities Act of 1933, the regulations issued by the SEC, and the various state "Blue Sky Laws".
Secondary market The secondary market (also called "aftermarket") is the financial market for trading of securities that have already been issued in its initial private or public offering. Stock exchanges are examples of secondary markets. Alternatively, secondary market can refer to the market for any kind of used goods.
History Secondary markets have a long history, beginning perhaps with a flourishing trade in commercial bills of exchange in 12th and 13th century France. It was the French King Philip the Fair who created the profession of broker, or "courtier de change," in order to regularize this market. Amsterdam's Bourse, which began operations in 1611, was the first true stock exchange, and this reflected the importance of Holland in world trade at that time.
Function In the secondary market, securities are sold by and transferred from one speculator to another. It is therefore important that the secondary market be highly liquid and transparent. The eligibility of stocks and bonds for trading in the secondary market is regulated through financial supervisory authorities and the rules of the market place in question, which could be a stock exchange.
What Does Online Trading Mean? The act of placing buy/sell orders for financial securities and/or currencies with the use of a brokerage's internet-based proprietary trading platforms. The use of online trading increased dramatically in the mid- to late-'90s with the introduction of affordable high-speed computers and internet connections.
Stocks, bonds, options, futures and currencies can all be traded online.
Investopedia explains Online Trading The use of online trades has increased the number of discount brokerages because internet trading allows many brokers to further cut costs and part of the savings can be past on to customers in the form of lower commissions.
Another benefit of online trading is the improvement in the speed of which transactions can be executed and settled, because there is no need for paperbased documents to be copied, filed and entered into an electronic forma
ON LINE STOCK MARKET TRADING STOCK EXCHANGE Stocks (Shares, equity) are traded in stock exchange. India has two big stock exchanges (Bombay Stock Exchange - BSE and National Stock Exchange NSE) and few small exchanges like Jaipur Stock Exchange etc. Investor can trade stocks in any of the stock exchange in India.
Stock exchanges of IndiaName of the Stock Sr_NoExchange OTC Exchange of 1 India
Addresses 92, Maker Towers F, Cuffe Parade, Mumbai 400005
The Uttar Pradesh Stock Exchange PadamTowers, 14/113, Association Civil Lines, Kanpur Ltd. 208001
STD Fax Code Phone no Numbers
022 22188164 22188503 22188511
0512 2338115 2338175 2338074 2338220
StockExchangeBuilding, Jaipur Stock JLN Marg, Malviya Nagar, Exchange Ltd. Jaipur - 302017 0141 2729094 2729082 2729041 2729100 5111152 P O Box no 183, New No: 30, (old no:11), Madras Stock SecondLineBeach, Exchange Ltd. Chennai - 600001 044 25228951 25244897 25224392 MES Dr P K Abdul Gafoor Memorial Cultural Complex, 36/1565, 4th Cochin Stock Floor, Judges Avenue, Exchange Ltd. Kaloor, Cochin - 682017 0484 3048521 2400330 3048522 Bangalore StockExchangeTowers, Stock 51, 1st Cross, J C Road, Exchange Ltd. Bangalore– 560027
080 41575234 [email protected] 41575235
ExchangePlaza, BandraNational Stock Kurla Complex, Exchange of Bandra(E), Mumbai India Ltd. 400051
022 26598235 26598237 26598236 26598238 26598346
H/NO, 57 2A, 2nd Floor, Shine Tower, Sati Jaymati Road, Arya Chowk, Gauhati Stock Rehabari, Guwahati - 781 Exchange Ltd. 008. 0361 2517883 2543273 2543273 The Ludhiana Stock Feroze Gandhi Market, Exchange Ltd. Ludhiana - 141001
0161 2774716 2404748 4612317 2401645
The Calcutta Stock Exchange Association 7, LyonsRange, Kolkata 10 Ltd. 700001 033 22206928 22202514 22206977 22104486 22203741 22104470 - 77 Stock Exchange Bhavan, BhubaneshwarP-2, Jayadev Vihar,P.O. – Stock Chandrasekharpur, 11 Exchange Ltd. Bhubaneswar – 751 023” 0674 2545082 2545094 2545093 The Delhi Stock DSE House, 3/1, Asaf Ali 12 Exchange Ltd. Road, New Delhi - 110002 011 23292417 23292181 23292418 23292176
Vadodara Stock FortuneTower, Sayajigunj, 13 Exchange Ltd. Vadodara - 390005 0265 2361534 2361452
Kamdhenu Complex, Opp, 079 26307971-26308877
19 Stock SahajanandCollege, Exchange Ltd. Panjarapole, Ambawadi, Ahmedabad - 380001 PalikaPlaza, Phase II, Madhya 201, 2nd Floor, MTH Pradesh Stock Compound, Indore 15 Exchange Ltd. 452001
2432842 48 2432849
Shivleela Chambers, 752, Sadashiv Peth, RB Pune Stock Kumthekar Marg, Pune 16 Exchange Ltd. 411030 020 24485702 24460082 PhirozeJeejeebhoyTowers Bombay Stock , Dalal Street, Mumbai 17 Exchange Ltd. 400023 022 22721234 22722082 22721233 22723132 Inter connected Stock Exchange of 18 India Ltd.
InternationalInfotechPark, Tower 7, 5th Floor, Sector 30, Vashi, Navi Mumbai – 400703 022 67941000 27812061 [email protected] Exchange Square, 3rd MCX Stock Floor, Suren Road, 19 022 67319000 67269575 www.mcx-sx.com Exchange Ltd Chakala, Andheri (East) Mumbai - 400 093. Due to pending litigation before the Hon'ble Madras High Court, Coimbatore Stock Exchange Ltd. (CSX) has not filed application for renewal of recognition which Coimbatore expired on 17.09.06. However, in terms of order dated 15.09.06 of the Hon'ble 20 Stock Court, the right of CSX to apply for renewal shall be subject to further orders of the Exchange court and the stock exchange shall not be entitled to oppose the renewal solely on the ground of lapse of time. De-recognized Stock Exchanges. "The Hyderabad Stock Exchange Ltd. (HSE) failed to dilute atleast 51% of its Hyderabad equity share capital to public other than shareholders having trading rights on or 1 Stock before the stipulated date i.e. August 28, 2007. Consequently, in terms of section Exchange 5(2) of the Securities Contracts (Regulation) Act, 1956, the recognition granted to HSE stands withdrawn with effect from August 29, 2007" Magadh Stock SEBI vide order dated September 3, 2007 refused to renew the recognition 2 Exchange granted to Magadh Stock Exchange Ltd. " Saurashtra Kutch Stock 3 Exchange SEBI vide order dated July 06, 2007 has withdrawn the recognition granted to (SKSE) Saurashtra Kutch Stock Exchange Limited.
Mangalore Stock Exchange
As per Securities Appellete Tribunal order dated October 4, 2006, the Mangalore Stock Exchange is a de-recognized Stock Exchange under Section 4 (4) of SCRA .
Types of online stock traders Basically there are four types of online stock traders: (1)Long-term traders – who hold their shares for one or more years (2) Medium-term traders – who hold their stock anywhere from 1 month to six months. (3) Short-term traders – who ordinarily hold stock for a week, but this can be up to one month (4) Day traders – who buy and sell stock in the same day.
Stock Charts If you are going to stand any chance of having a successful career as an online stock trader, you‟ll need to make sure that your software has the capability of producing stock charts. The most common types of stock charts in use are:
Line charts: This is simply a line connecting stock price over a period of time. Bar charts: a little more complex in that the information not only consists of stock price movements over a period of time, but will also include the opening, high, low and closing price of the stock for one particular day, from which you can construct a bar chart.
Reference chart: which track both the stock price and trading volume, which is then used to plot where the stock price should go.
Candlestick charts: uses the same information that bar charts do, but displays the information differently.
ONLINE STOCK TRADING COMPANIES 1- 5 PAISA
5-MOTILAL OSWAL SECURITIES