INDIABULLS SECURITIES

in Securities Market

Submitted by:Anupama Shukla Garima Diwan Kanuj Sharma Priyanka Kathuria Vivek Kar Debjani Samantara 061007 061013 061019 061033 061051 061061

INTRODUCTION TO INDIABULLS
India bulls Securities Ltd. a Technology Oriented Financial Services Company offering Integrated Equity analysis, Stock Trading, Derivatives trading, Depositary & Insurance services, Margin Trading facilities etc. backed by real time risk management systems and fast trade execution. India bulls also provides its clients with valuable real-time information, access to breaking news and market happenings, along with in-depth and insightful analysis. The organization has an established presence in 104 main cities through its 205 branch offices and has a base of over 2, 67,000 clients. Ranked as the top retail brokers in the country with average daily trading volumes of over Rs.2500 crores in the current markets and holds over Rs.150 crores of assets in its own depository services.
* Company history Appendix Pg.81

UNIQUE FEATURES Trading via branch network, telephones and Internet account. Integrated Trading and Depositary Account Technology transforming desktop into NEAT like terminal for Internet trading One Screen for both Cash and Derivatives Trading. Equity Analysis Reports on different sectors Indiabulls is India's leading retail financial services company with 135 locations spread across 95 cities. Over 1500 Client Relationship Managers are dedicated to serving clients unique needs. 24 hours access to all information and products. POST REGISTRATION SERVICES: Professional advice from dedicated Relationship Manager Market information through Research Team. Access to IPOs via the Book Building route as well as to all the fixed price issues. Subscription to Mutual Funds of various AMCs through Indiabulls. NSE, BSE and Commodities trading through one branch itself. USP: Personal relationship Manager - 24x7. Most competitive brokerage. Only one time account opening charges, no annual maintenance charges and for corporate clients there is no account-opening fee subject to availability of 20-25 clients from one corporate office. Margin trading of 2 times the cash deposited for delivery based trade. Margin trading of 10 times the cash deposited for intra-day based trade. Electronic transfer of funds can also be provided. Brokerage Charges are negotiable based on the volumes (Minimum in Industry). 2

 Virtual trading screen on which one would be able to track their portfolio. For this no extra charge is levied.

FUNCTIONAL AREAS OF INDIABULLS

The product range offered by India bulls includes: Equity Analysis Equities & Derivatives Depository Services Commodities Loans

A. India bulls Equity Analysis

To build and maintain an ideal portfolio demands objective, dependable information. India bulls Equity Analysis helps satisfy that need by rating stocks based on carefully selected, fact-based measures. And because it isnt focused on investment banking, they don't have the same conflicts of interest as traditional brokerage firms. What is India bulls Equity Analysis? India bulls Equity Analysis provides clients with an objective stock rating system for more than 500+ stocks. An unbiased approach to help in deciding which shares to buy and sell. Includes third party opinions to facilitate more informed investing decisions.
* Features of India bulls equity analysis Appendix Pg.82

B. Depositories services
India bulls is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. India bulls performs clearing services for all securities transactions through its accounts. It offers depository services to create a seamless transaction platform execute trades through India bulls Securities and settle these transactions through the India bulls Depository Services. India bulls Depository Services is part of India bulls value added services for its clients that create multiple interfaces with the client and provide for a solution that takes care of all your needs.

C. Personal Loans
India bulls offers the shortest route to a loan with minimum paperwork and procedures. With Easy money, one can avail easy loans for a minimum of Rs.10, 000 to a maximum amount of Rs.1, 00,000. Features of Easymoney are: Flexible loan tenor of up to 4 years (i.e. 1 month to 48 months). Loans available from a minimum of Rs.10, 000 up to a maximum of Rs.100, 000. Easy monthly repayment through equated monthly installments (EMI). Mediclaim Insurance bundled with every loan you avail. Easy documentation and quick disbursal. You take today and you can pay it tomorrow with no penalties Documents required: Residence Proof Identity Proof Income Proof

D. Equity and derivatives

Equity Business caters: Needs of independent investors. Active traders Non-Resident Indian (NRI) investors. Indiabulls offers: Broker assisted trade execution Automated online investing Access to all IPOs.

Types of Accounts
Indiabulls Signature Account Comprehensive services including research and investing guidance for independent investors.

 Power Indiabulls Indiabulls is dedicated to empower Active Traders through personal service and advanced trading technology. Non-Resident Indian (NRI) Investor Services With an extensive range of investment products, you will discover an unwavering commitment to helping you invest in India.

E. Indiabulls Resources Ltd

Indiabulls Resources Ltd, a 100 per cent subsidiary of Indiabulls Financial Services Ltd., has been established with the objective of evolving as an independent oil company over time. The immediate short-term goal is to partner with oil companies who are willing to come to India and bid in the current NELP-6 round. Through its group companies, Indiabulls is also engaged in real estate development. The company is in the process of developing modern commercial complexes in the heart of Mumbai. Indiabulls Estates Pvt Ltd. The real estate arm of Indiabulls Financial Services, will set up an integrated township spread across 100 acres in Sonepat, 15 km from Delhi.

REGULATIONS & POLICIES AND GOVERNMENT APPROVALS

Indiabulls Financial Services Limited
The company is registered as a NBFC not accepting public deposits with the RBI under the Reserve Bank of India Act, 1934 (RBI Act). The RBI Act was enacted to constitute the Reserve Bank of India to regulate the issue of bank notes and the keeping of reserves with a view to securing monetary stability in India and to generally operate the currency and credit system of India to its advantage. The RBI Act has been amended from time to time and now provides inter-alia that a NBFC can commence business after obtaining a certificate of registration and should have a minimum net owned fund of Rs.20 million. Every NBFC should create a reserve fund and transfer thereto a sum not less than 20.0 per cent of its net profit every year as disclosed in the profit and loss account before any dividend is declared. Such fund is to be created by every NBFC irrespective of the fact whether it accepts public deposits or not. Further no appropriation can be made from the fund for any purpose without prior written approval of the RBI. The Non Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 (Prudential Norms) provide for certain compliances to be made by NBFCs such as having a well defined investment policy, applicability of Accounting Standards and Guidance Notes issued by Institute of Chartered Accountants of India (ICAI) in so far as they are not inconsistent with the guidelines of RBI etc. The Prudential Norms would not be applicable to an NBFC, being an investment company, which is (a) Holding investments in the securities of its group/holding/subsidiary companies, (b) The book value of such holding is not less than ninety (90) percent of its total assets, (c) Is not trading in such securities and (d) Is not accepting/holding public deposit. Since the company is presently registered as a NBFC not accepting public deposits and satisfies all the above conditions, the Prudential Norms would not be applicable. However, it has applied to the RBI for raising public deposits in the company based on the consolidated financials of Indiabulls Financial Services Ltd and ISL. On receipt of the approval from the RBI, our Company would be subject to and will have to comply with all the Prudential Norms.

The SEBI (Prohibition of Insider Trading) Regulations, 1992 The provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992 (Insider Trading Regulations) will be applicable our Company immediately upon the listing of the Equity Shares on the Stock Exchanges. The Insider Trading Regulations provide that an insider cannot deal in securities of a company listed on any stock exchange when in possession of any unpublished price sensitive information or communicate, counsel or procure directly or indirectly any unpublished price sensitive information to any person who while in possession of such unpublished price sensitive information shall not deal in securities. Further, a company cannot deal in the securities of another company or associate of that other company while in possession of any unpublished price sensitive information. The term insider has been defined under the Insider Trading Regulation to mean inter alia any person who, is or was connected with the company or is deemed to have been connected with the company, and who is reasonably expected to have access to unpublished price sensitive information in respect of securities of a company or who has received or has had access to such unpublished price sensitive information. The Insider Trading Regulations further provide that all listed companies and capitalization associated with the securities market including inter alia intermediaries as defined under the SEBI Act, asset management companies, trustees of mutual funds etc should frame a code of internal procedures and conduct based on the Model Code of Conduct specified under the Insider Trading Regulations. Our Company has framed a code of internal procedures and conduct for the prevention of insider trading.

II. Indiabulls Securities Limited (ISL)

ISL is engaged in the business of Internet based trading and is registered with SEBI as a stockbroker, trading and clearing member of NSE, member of BSE and as a depositary participant with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). ISL is also a member of the National Securities Clearing Corporation Limited. 1. The Securities and Exchange Board of India Act, 1992 (SEBI Act) provides for the establishment of a Board namely the SEBI to protect the interests of investors in securities and to promote the development of, and to regulate the securities market by such measures as it thinks fit. Such measures may inter alia provide for: (a) Regulating the business in stock exchanges and any other securities markets; (b) registering and regulating the working of stock brokers, sub-brokers, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner; (c) Registering and regulating the working of the depositories, participants and other intermediaries; (d) Prohibiting fraudulent and unfair trade practices relating to securities markets; (e) Prohibiting insider trading in securities; (f) Regulating substantial acquisition of shares and take-over of companies. Pursuant to the SEBI Act, and the rules, regulations and guidelines issued by SEBI, a stockbroker, sub-broker and depository participant can buy, sell or deal in securities only after obtaining a certificate of registration from SEBI in accordance with the applicable regulations. 2. The Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules, 1992 read with the Securities and Exchange Board of India (Stock Brokers and SubBrokers) Regulations, 1992 provides the eligibility criteria, procedure for obtaining the certificate of registration to carry on business as a stock broker and/or a sub-broker who is required to be affiliated to a stock broker registered under the aforesaid regulations. On registration, the stockbroker and sub-broker are required to adhere to a code of conduct prescribed under the above regulations. A part from registration of stockbrokers and sub-brokers, the regulations provide for registration of trading and clearing members. A trading member is a member of the derivatives exchange or derivatives segment of a stock exchange and who settles the trade in the clearing corporation or clearing house through a clearing member. A clearing member is a member of a clearing corporation or clearing house of the derivative

exchange or derivatives segment of an exchange, who clears and settles transactions in securities. The code of conduct specified for stockbrokers are applicable mutatis mutandis to the trading and clearing members.

3. The Depositories Act, 1996 provides for regulation of depositories in securities and other related matters. Every person subscribing to securities offered by an issuer has the option either to receive the security certificates or hold securities with a depository. A depository after obtaining a certificate of commencement of business from SEBI can enter into an agreement with one or more participants as its agent. Any person, through a participant, may enter into an agreement with any depository for availing its services. The depository is deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner. The depository does not have any voting rights or any other rights in respect of securities held by it. The beneficial owner of the securities is entitled to all the rights and benefits and is subjected to all the liabilities in respect of his securities held by a depository. 4. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 provides inter alia the eligibility criteria, procedure for obtaining the certificate of registration to carry on business as a depository participant, rights and obligations of the depository participants. On registration, the depository participant is required to adhere to a code of conduct prescribed under these regulations. 5. The Securities Contract (Regulation) Act, 1956 (SCRA) seeks to prevent undesirable transactions in securities by regulating the business of dealing in securities and other related matters. The SCRA provides for grant of recognition for stock exchanges by the Central Government. Every recognized stock exchange is required to have in place a set of rules relating to its constitution and byelaws for the regulation and control of contracts. The bye-laws normally provide for inter alia (i) The opening and closing of markets and the regulation of the hours of trade; (ii) The fixing, altering or postponing of days for settlements; (iii) The determination and declaration of market rates, including the opening, closing highest and lowest rates for securities; (iv) the terms, conditions and incidents of contracts, including the prescription of margin requirements, if any, and conditions relating thereto, and the forms of contracts in writing; (v) The regulation of the entering into, making, performance, recession and termination of contracts, including contracts between members or between a member and his constituent. If the securities of a public company are listed in any recognized stock exchange, the said company must comply with the conditions of the listing agreement entered into with the stock exchange. NSE and BSE of which ISL is a member are such recognized stock exchanges.

6. The Insider Trading Regulations would be applicable to ISL since ISL is a person, which is deemed to be a connected person as defined under the said regulations. As per the Insider Trading Regulations, a person deemed to be a connected person includes an intermediary under the SEBI Act. Such intermediary includes a stockbroker, sub-broker and investment advisor. 7. ISL as a member of the NSE and is required to adhere to the rules and regulations framed by the NSE. The National Stock Exchange of India Limited Bye-laws prescribes regulations relating to inter alia (i) norms, procedures, terms and conditions to be complied with for inclusion of securities in the official list of NSE securities; (ii) norms and procedures for admission of trading members (iii) forms and conditions of contracts to be entered into, and the time, mode and manner for performance of contracts between trading members inter se or between trading members and their constituents; (iv) determination of fees, system usage charges, deposits, margins and other monies payable to the NSE by trading members, participants and by issuers whose securities are admitted/to be admitted to dealings on the NSE and the scale of brokerage chargeable by trading members; (v) settlement of disputes, complaints, claims arising between trading members inter-se as well as between trading members and persons who are not trading members relating to any transaction in securities made on the NSE including settlement by arbitration (vi) norms and procedures for settlement and clearing of deals.

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COMPETITORS ANALYSIS
MAJOR PLAYERS OF STOCK MARKET: IndiaBulls Sherkhan Religare Kotak Mahindera

SHAREKHAN

Sharekhan is the retail broking arm of SSKI, an organization with more than 80 years of trust and credibility in stock market. Sharekhan is Indias leading retail financial services company. They have over 250 share shops across 115 cities in India.

RELIGARE

Religare, a company promoted, controlled and managed by the promoters of Ranbaxy, Religare was founded with the vision of providing integrated financial care driven by the relationship of trust. Religare Enterprises Limited, through Religare Securities Limited, Religare Finvest Limited, Religare Commodities Limited and Religare Insurance Advisory Services Limited provides integrated financial various financial services which include Investment Banking, Corporate solutions to its corporate, retail and wealth management clients. Today, it provides Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance and Mutual Funds.

KOTAK SECURITIES
Kotak Mahindra is one of Indias leading financial institutions, offering complete financial, from commercial banking, to stock broking, mutual funds, life insurance and investment banking. The group has a net worth of over Rs.1550 crore and employs over 11

3000 employees in its various businesses. With a presence in 59 cities in India and offices in New York, London, Dubai and Mauritius, it services a customer base of over 500,000.

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COMPARATIVE ANALYSIS BETWEEN INDIABULLS AND OTHERS:

Sharekhan Account Opening Charges Brokerage (%) 0.20 Exposure on Cash Exposure on Securities Annual Maintenance Charges Trading with other Demat Account Banking facility Net Banking facility Off-line Trading Relationship Manager NIL NIL Rs.300 N.A. IDBI Bank/City Bank/ OBC/UTI/ HDFC bank IDBIBank/City Bank/OBC/UTI/HDF C N.A. N.A. 0.05 4 times 0.50 4 times NIL Rs.260 N.A. Kotak/HDFC/CITI Kotak/HDFC/CITI N.A. N.A. 0.15 4 times 0.5 4times 0.05 10 times 0.02 10 times NIL NIL Possible 0.20 2 times Rs.375/Rs 750 Delivery Intraday Kotak Rs.500 Delivery Intraday Indiabulls Religare Free Rs.900/Rs.1650 Delivery Intraday Intraday Delivery

2 times of the Market Value NIL Possible All private Banks HDFC/ICICI/Citibank Through Phone & SMS& messenger Assigned to every client

N.A Assigned to every client

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SURVEY REPORT
We surveyed 150 people, in Saket area, educating them about the various services provided by Indiabulls. The targeted people were in the age group of 25+.

FINDINGS OF SURVEY CONDUCTED:

1) PEOPLE INTRESTED IN STOCK MARKET INVESTMENT People interested in stock market investment Yes No Percentage 40% 60%

% Of people interested in stock market

40% 60%

yes

no

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2) PEOPLE INTRESTED IN TRADING HAVING A D-MAT AND TRADING ACCOUNT % Of People having D-Mat & Trading a/c Yes No Percentage 80% 20%

% Of People having Dmat & Trading a/c

No 20%
Yes No

Yes 80%

3) PERCENTAGE OF ACCOUNT OPENED IN VARIOUS HOUSES Investors having their D-Mat A/C in various brokerage house IndiaBulls Kotak Religare Sharekhan Percentage 40 15 15 20

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% of opening of D-Mat A/C

50 40 30 20 10 0 IndiaBulls Kotak Religare Sharekhan Brokerage House 40 20

Percentage

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4) ACCOUNT OPENING CHARGES Expected a/c opening charges 500 700 750 800 Percentage 80 % 10% 10% 0%

5) BROKERAGE ON DELIVERY Expected Brokerage on Delivery 0.2-0.5 0.05-0.7 0.7-1.0 Percentage 90% 10% 0%

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Percentage of Brokerage
100% 80% 60% 40% 20% 0% 0.2-0.5 0.05-0.7 0.7-1.0 Percentage

6) BROKERAGE ON INTRADAY Expected Brokerage on Intraday .01-.05 % .05-.07 % .07-.10 % 75% 20% 5% Percentage

CONCLUSION: 1. 60% of the people were not interested in share market, and around 90% of them were not even aware of the opportunities present. They are of the opinion that its a Jua or gamble. 2. 80% of the people who were interested already had a D-mat A/c, amongst which 40% of them had it with Indiabulls.

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3. Majority of the respondents were of consensus that account opening charges should be around Rs500. 4. 90% of the respondents were of view that Brokerage on delivery should be between 0.2% - 0.5%. 5. People were of the opinion that Intraday brokerage should be in between 0.01% to 0.05%

LIMITATION: The various Limitations are:-1. Lack of awareness of Stock market: - Since the area is not known before it takes lot of time in convincing people to start investing in shares primarily in IPOs. 2. Mostly people comfortable with traditional brokers: - As people are doing trading from there respective brokers, they are quite comfortable to trade via phone. 3. Lack of Technology Savvy people and poor internet penetration: - Since most of the people are quite experienced and also they are not techno savvy. Also internet penetration is poor in India. 4. Some respondents are unwilling to talk: - Some respondents either do not have time or willing does not respond as they are quite annoyed with the phone call. 5. Misleading concepts:- Some people think that shares are too risky and just another name of gamble but they dont know its not at all that risky for long investors.

COMPETITIVE STRENGTHS TO BE THE MARKET LEADER What keeps Indiabulls ahead of the competition is the competitive edge that it has over other players in the market. Diverse Branch Network Bouquet of financial products and services Advanced technology team that delivers market leading product innovation Strong sales and marketing teams with continuous reinvestment and training Strong cross selling opportunities Strong and experienced promoters Leading product innovation and marketing strategies Well capitalized player, with strong banking relationships and credit ratings 18

 Ability to combine people and technology in unique ways Strong market presence and increased market share leading to a virtuous cycle of model (with the employees) that it pursues is another major high of the core competency.

KEY BUSINESS STRATEGIES Their focus on the client has allowed the company to offer a range of services that have changed the investing landscape and created a new model of financial services that melds people and technology to provide an integrated human assisted technology interface service for investors who range from self-directed full-time active investor to those who prefer to deal with through a marketing associate in smaller towns and cities. Their key strategies include: Defend and maintain differentiation as the firm that delivers ethical and useful services Build and expand investing insight through product offerings such as Equity Analysis which is objective, uncomplicated and not driven by commission Give clients new levels of choice tailored to their desire for help, tools for investing their assets, their willingness to pay for additional services and the level of business they can do with us Provide clients with tools, relationship managers and choices that support their desired investment outcomes They have developed a client specific approach as a core element of their business strategy and are constantly focusing on acquiring new clients and expanding their customer base. They believe that the strong secular growth of the Indian financial markets, due to increased household penetration of financial assets; increasing liquidity and market capitalization of Indian markets, led by the listing of many public sector entities; and the increasing affluence of Indian households and savers provides an impetus to our growth perspective. The company believes that this diversification and growth strategy will continue to produce results and allow the Company and its subsidiaries to grow the business at a rapid pace irrespective of market conditions. In addition, management believes that the growth of the Indian financial markets, due to increased household penetration of financial assets; increasing liquidity and market capitalization of Indian markets, led by the listing of many public sector entities; and the increasing affluence of Indian households and savers, favors their long-term growth outlook.

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RECOMMENDATION / FINDINGS
Analysis of Client Interaction (Already existing clients) Client interaction and after sales services are the most crucial aspects for any business. We carried out a study to gauge the level of satisfaction of the clients with the services of Indiabulls. This helped us in understanding why Indiabulls has become one of the most trusted brands within a span of five years. The Relationship Managers (RM) should be made responsible to ensure that the clients are well catered, thus, reducing switching over of routing, thereby reducing loss of business to the firm. A lot of time lag is there between the follow up and the change of RM, as a result, the calls could not leave a positive impact on the clients, so contacted. Therefore, follow up should be done fast without any time lag. Many clients did not know about the change of RM. This leaves a bad impression on the concerned client, damaging the reputation of the firm. So, heed is taken in this regard. The customers, who were satisfied with the services, appreciated this kind of follow up. Therefore, such follow-ups are done from time to time, to gain customer confidence. After getting Leads attention should be made on following points: The calls made should be more informative and assertive. The RM should provide an in depth demonstration of the software and client should be assisted regularly. Provision of a manual for online clients for ease of operation. Time lag between the complaints put and follow up should be reduced. Database should be verified properly, so that repeated entries do not occur. This will reduce inconvenience to the clients, who complained about multiple calls received.

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