(i) Synopsis on:

“Stock Holding Corporation of India Limited”

(India’s Largest Depository Participant)

(ii) Review of literature and Problem Statement:

The Indian investor community has undergone a sea change in the past few years.
India now has a very large investor population and ever increasing volumes of trades

This study deals with various investment avenues like equity, bonds, debentures,
bank deposits, insurance, mutual funds etc. and the risk involved in it. Apart from this, it
also gives emphasis on the depository and various functions of depository participants.

This study also consists of the investment pattern of people who reside in an
economically developing area and how the investment pattern of people varies according
to their social classes like age, education, income etc. For this study, I have taken
Bangalore as an economically developing area. In Bangalore, people are generally
preferred to take risk in investment and invest in such avenues where the return is more.
Like that, the middle age group people are investing more in Insurance, Equity and
Mutual Funds, where as the old age group people prefer to invest in government
securities, Bank Deposits etc.

And among SHCIL product, investor is giving more preference to ‘Stock Direct’
rather than any other of its products. However, government securities are the more
preferred product among older age group investors. As is one of the major DP in India,
85 per cent of its client are dealing with Demat Transaction only and merely 15 per cent
of its client invested in other products.

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a) Profile of Study
Stock Holding Corporation of India Limited (SHCIL) was promoted by public financial
Institutions and insurance majors like IDBI, UTI, ICICI, LIC, GIC and its subsidiaries,
IFCI and IIBI. It was incorporated on 28th July, 1986. SHCIL acts an intermediary
between investors and NSDL/CDSL.
SHCIL was the first Depository participant to start Depository services. With the
introduction of the Depository system in the country, SHCIL commenced extending
Depository related services to the retail segment as well and over the last six years, it has
as come to acquire the stature of the largest Depository participant besides being the
country’s largest custodian. The Corporation provides Depository related services to its
retail segment through more than 140 offices located across the length and breadth of the
country.
Information Technology:
SHCIL handling large volumes of Securities has facilitated by the state-of-the-art
technology in use at SHCIL. Its highly automated set up and applications have been
acclaimed by both national and inter national organizations, including the prestigious
Smithsonian Institution in the US. SHCIL also has one of the best infrastructures in the
country in terms of networking and hardware equipment. The Wide Area Network
(WAN) nicknamed “SHCIL Net” is one of the largest WANs in the country. Further,
SHCIL in house development methodology has been certified at CMM level-3 by I-fex,
while its IT activities have been certified for ISO-9001:2000 by BVQI.
From a tentative foray in 1988 into the individual investor arena to servicing
around seven lakhs account, SHCIL has endeavored to constantly add and innovate to
make business a pleasure for investors. SHCIL has a network of more than 140 branches
spread across the country providing services at your doorstep. Across the country, 14
Depository Participant Machines (DPMs) connected to NSDL and 7 DPMs connected to
CDSL ensure fast and direct Processing of client’s instructions. SHCIL

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b) Justification of Study
The money you earn is partly spent and the rest saved for meeting future
expenses. Instead of keeping the savings idle, you may like to use savings in order to get
return on it in the future. This is called Investment.” There are various investment
avenues such as Equity, Bonds, Insurance, Bank deposit etc. A Portfolio is a combination
of different investment assets mixed and matched for achieving an investor’s goal. There
are various sources, which provide information to investor undergoes various analyses
some times he takes advice from experts. There are various factors, which affects
investor’s portfolio such as annual income, government policy, natural calamities,
economical changes etc.

Initiations floating financial securities

Corporate house, government bodies and mutual funds are the main source of
investment information many of these enterprises have their own website and post
investment related information on the site.

Financial market
Stock exchange and regulated bodies also provide useful information to investor
to make there investment decisions. With respects to secondary market, the securities
board if India uses various modes to promote investors education. And takes great effort
to achieve an investor friendly secondary market in India the reserve bank of India also
provide useful information relating to the prevent interest rates and non banking financial
intermediaries that mobiles money through deposit schemes.

Financial service intermediaries

These intermediaries promote securities among the public. Many of these
intermediaries are the agencies of specific instruments especially tax saving instruments.
These intermediaries offer to share their commission from there concerned organization
with the individual investor thus investor get additional advantages while investing
through intermediaries.

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Media
Press sources such as financial newspapers, financial magazine, business news
channel, internet website, and so on provide investment information to the public.
Besides information on securities, these sources also provide, to the some extent, analysis
of information and in certain instance suggest suitable investment decisions to be made
by investor.

(iii). Objectives of the proposed Study

• To understand the capital market and its various participants
• To study the depository system, its structure and operations
• To study investors preferences and trends.
• To understand investors behavior on various investment alternatives.
• To study portfolio of investor and basis of there study
Before making any investment, one must ensure to:

Obtain written documents explaining the investment

Read and understand such documents

Verify the legitimacy of the investment

Find out the costs and benefits associated with the investment

Assess the risk-return profile of the investment

Know the liquidity and safety aspects of the investment

Ascertain if it is appropriate for your specific goals

Compare these details with other investment opportunities available

Examine if it fits in with other investments you are considering or you have
already made

Deal only through an authorized intermediary

Seek all clarification about the intermediary and the investment

Explore the options available to you if something were to go wrong, and then, if
satisfied, make the investment.
These are called the twelve Important Steps to Investing

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(iv). Research Methodology & Analytical Tools

a) Source of Data:
Methodology:
Collection of data from primary and secondary source
Primary source
• Questionnaire
• Personal interaction
• Observation
Secondary Source
• Company website
• Customer data base
• Company report
• Books and publications
• Related information from net

b) Sampling & Sample Survey

Selection of sample
• Population : investor of SHCIL and BGSE
• Sample Frame: people who are investing regularly
• Sample size : 80 investors
• Sample method : Random Sample

c) Tools of Analysis
Measurement and analysis technique
• Simple percentage method

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 • Graphical representation using data code sheet
• Applying various mathematical calculation
The most used tools for performing economic analysis are
Gross Domestic Product
Monetary policy and liquidity
Inflation
Interest rate
International influences
Consumer sentiments
Fiscal policy etc
Industry Analysis:
It is very important to see how the industry to which the company belongs is
faring. Specifics like effect of Government policy, future demand of its products etc.
need to be checked. At times prospects of an industry may change drastically by any
alterations in business environment. For instance, devaluation of rupee may brighten
prospects of all export-oriented companies. Investment analysts call this as Industry
Analysis. Companies producing similar products are subset (form a part) of an
Industry/Sector. For example, National Hydroelectric power Company (NHPC) Ltd.,
National Thermal Power Company (NTPC) Ltd., Tata power company (TPC) Ltd.
Etc. belong to the Power Sector/Industry of India.
Tools for industry analysis
Cross study industry performance
Industry performance over times
Differences in industry risk
Prediction about market behaviors, and
Competition over the industry life cycle
Company Analysis:
Company analysis involved choice of investment opportunities within a specific
industry that companies of several individual companies. How ahs the company been
faring over the past few years? Seek information on its current operations, managerial
capabilities, growth plans, its past performance vis-à-vis its competitors etc.

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 Financial Analysis:
If performance of an industry as well as of the company seems good, then check if
at the current price, the share is a good buy. For this, look at the financial
performance of the company and certain key financial parameters like Earnings per
Share (EPS), P/E ratio, current size of equity etc. for arriving at the estimated future
price. This is termed as Financial Analysis. For that, you need to understand financial
statements of a company i.e. Balance Sheet and Profit and Loss Account contained in
the Annual Report of a company.

d) Limitations of Study

The study is conducted by taking a limited number of sample sizes which is stated earlier
and this study reflects the perceptions of those investors who are residing in Bangalore.
There might be a chance that the perceptions of the investors’ of different nature are
varied due to diversity in social life, living pattern, income level etc.

(v) . Scope/ Relevance of Proposed Study

Business research courses are recognition that students in business, not-for-profit, and
public organizations – in all functional areas – need training in the scientific method and
its application to decision making. Two factors stimulate an interest in more scientific
decision making:
(1) The manager’s increased need for more and better information and
(2) The availability of improved techniques and tools to meet this need.

These changes have created new knowledge needs for the manager. Other knowledge
demands have arisen from problems with mergers, trade policies, protected markets,
technology transfers, and macroeconomic savings – investment issues.

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(vi). Proposed questionnaire
1. Name of investor: _____________________

2. Age group:

 Below 20
 20 to 35
 35 to 50
 50 and above

3. Occupation:

 Employed:

О Private Sector
О Public Sector

 Self-Employed:

О Business

О Profession

 Retired:
 Not Employed:

4. Annual income:

 Below 150000
 150000 to 300000
 300000 to 450000

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  450000 and above

5. Are you short term investor or long term investor:

 Short term investment

 Long term investment
 Both

6. What is your investment per annum?

 Below 20000
 20000 to 40000
 40000 to 80000
 80000 to above

7. How frequently do you invest?

 Weekly
 Monthly
 Quarterly
 Half yearly
 Yearly

8. What are your various investment alternatives?

 Equity
 Real Estate
 PPF
 Mutual Fund
 Debentures/Bonds
 Gold/Silver
 Bank Deposits

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  Insurance
 Others Please specify: __________________
9. Basis of Investment:

 Self Analysis
 Financial Advice
 Brokers Advice
 Friends/Relatives Advice
 Charted Accountant Advice

10. Source of study

 Business Channels
 Business papers
 Business Magazines
 Internet

(vii). References

Web sites
www.onlinestockholding.com
www.nseindia.com
www.bseindia.com
www.shcil.com

Text Books
Financial management (PRASANNA CHANDRA)
Investment Analysis & Portfolio Management (M.RANGNATHAN)
Security Analysis & Portfolio Management (FISCHER & JORDAN)

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