Summer Training Report

ON
“TOP PERFORMING EQUITY IN THE LAST
FINANCIAL YEAR 2009-2010”
FOR

Submitted in partial fulfillment of the requirement for degree

of M.B.A. from U.P. Technical University, Lucknow
UNDER THE MENTORSHIP OF SUBMITTED
BY

Mrs. Alka Porwal Srishty

Shukla
Branch Manager, MBA 3rd
SEMESTER
Kotak Securities, 2009-11
Gomtinagar, Lucknow

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 GYAN INSTITUTE OF MANAGEMENT &
TECHNOLOGY, LUCKNOW
ACKNOWLEDGEMENT
“Knowledge is an experience gained in life, it is the choicest possession, which should

not be shelved but should be happily shared with others”.

Planning and motivation are two key factors in making any activity a success. Goal is a

result of a group effort rather than individual effort. It has been same in the case of this

report. The operation and support of many individual has made this project a success.

As we know that the employees are the foundation of an organization and the whole of the

organization is depended on the employees.

In preparation of this report by me, I feel great pleasure because it gives me extensive

practical knowledge in my career. I get idea about Indian financial Industry by this project.

I would like to express my sincere gratitude to my project guide Mrs. ALKA PORWAL

(Branch Manager), & MR. KULBHUSHAN SINGH (Cluster Head, e-broking division,

Lucknow) For valuable inspiration and guidance provided me throughout the course of this

project. They have patient and critically gone the subject matter.

I also owed my profound gratitude to my field guide Mr. Aviral Verma, Mr. Ratnesh

Mishra (TRADING STAFF), Mr. Avishekh Mishra and Mr. Abhijeet Bose (SALES

STAFF) for their guidance during the duration of project.

I also thank (Kotak Securities ltd.) for providing me the opportunity to work for this

project which was an excellent learning experience for me.

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Regard,
Srishty Shukla,
Gyan Institute of Management & Technology, Lucknow

DECLARATION
I, Srishty Shukla, Student of MBA III Semester, Gyan Institute of Management &

Technology, Lucknow, hereby solemnly declare that the Summer Training Project Report

titled “Top Performing Equity in the Last financial Year 2009-2010” is my own original

work and has not been submitted to any other University or institute for the award of any

degree or diploma.

PLACE: - Lucknow

Name of Student: Srishty Shukla

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 PREFACE

The Harder You Work…… The Luckier You Get.

In this era of globalization as a marketer it is essential to know the pulse of the consumer

and the market trends. Thus it is essential not only to have theoretical knowledge but also to

have the feel of the market as well.

It was a privilege for us to work in a reputed organization- Kotak securities Ltd. This has

given us an opportunity to work in a truly professional environment where team work score

over individual effort, where there is a helpful atmosphere.

A well planned, properly executed and evaluated training helps a lot in inoculating good

work culture. It provides linkage between student and industry in order to develop the

awareness of individual approach to problem solving based on the broad understanding of

plant machinery, process and mode of operation of individual organization.

The project training has provided me an opportunity to gain practical experience, which has

helped me to increase my sphere of knowledge to a greater extent. I have tried to

summarize all our experience and knowledge acquired up till now, in this report. This

project is a keen effort to obtain the expected results and fulfill all the information required.

At the end annexure and bibliography are given for effective understanding.

I am grateful to Kotak securities Ltd. for providing required support.

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I have tried to present this report to the best of my capability .In case of any errors kindly

pardon me.

Thank you for your interest in my project report.

Srishty Shukla

The whole study has been divided into various parts:

1. The First chapter includes the introduction about the Financial and Capital Market.

2. The Second chapter includes the Company Profile of Kotak Mahindra Group.

3. The Third chapter has reported facts and information gathered by student in the course

of study of topic.

4. The Fourth chapter is about Data Analysis regarding the Topic.

5. The Fifth chapter is about the Objectives of the Research and Research Profile.

6. The Sixth chapter is about the SWOT Analysis, which can help the organization to

solidify its position in the market.

7. The Seventh chapter includes the Suggestions and Recommendation for the further

development ands pointing out the weak points so that changes can be made.

Lastly, there is a Bibliography of the books, which was used by the researcher.

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 TABLE OF CONTENTS
CHAPTER 1: Introduction of Financial & Capital Market
10

a. Introduction of Financial Market

10
b. Introduction of Capital Market

CHAPTER 2: Overview of Kotak Mahindra Group 16-

39
a. Introduction of Kotak Mahindra Group
16
b. History of Kotak Mahindra group
18
c. Group Structure of Kotak Mahindra Bank
21
d. Awards and recognition of Kotak
23
e. Kotak Business
27
f.. Senior Management
30
g.. Introduction of Kotak securities ltd.
32
h. Awards and recognition of Kotak Securities
34
i. Why Kotak Securities?
35

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 j. What Kotak Securities Offer?
38
k.. Software provided by Kotak.
39

CHAPTER 3: Facts and findings 41-

58
a. Introduction of SEBI
41
b. Stock Exchange
44
c. Introduction of BSE
44
d. Introduction of NSE
47
e. Introduction to Security
50
f. Basic introduction about Equity
51
g. What is primary Market/New Issue Market?
56
h. What is Secondary Market/Stock Market?
58
CHAPTER 4: Data Analysis
65
a. Analysis of Top Performing Equity during the last financial Year 2009-2010
65

CHAPTER 5: Research Profile 73-

75
a. Objectives of the Study
73
b. Research methodology
74
c. Limitations of the Study
75
CHAPTER 6: SWOT analysis
77
a. Swot analysis of Kotak Securities
77

CHAPTER 7: Suggestions
80
a. Suggestions and recommendations
80

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CHAPTER 8: Bibliography
83
a. Bibliography
83

ABSTRACT

The basic objective of any financial services company would be to provide an absolute

tailor made products and services to the customer and to retain them into the organization,

but to retain a particular customer is not easy because customer expectations change by

time and it becomes a tough job for the companies to curb the needs of their customers

This research is conducted to understand the customer’s perception towards mutual fund.

Till yesterday people are having very less knowledge for mutual funds because of

brokerage companies in India have not made efforts to expand the market

Customer satisfaction is a measure of how products and services supplied by a company

can meet the customer’s expectations.

Customer satisfaction is still one of the single strongest predictors of customer retention.

It’s considerably more expensive to attract new customers than it is to keep old ones happy.

In a climate of decreasing brand loyalties, understanding customer service and measuring

customer satisfaction are very crucial.

There is obviously a strong link between customer satisfaction and customer retention.

Customer's perception of Service and Quality of product will determine the success of the

product or service in the market.

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With better understanding of customers' perceptions, companies can determine the actions

required to meet the customers' needs. They can identify their own strengths and

weaknesses, where they stand in comparison to their competitors, chart out path future

progress and improvement. Customer satisfaction measurement helps to promote an

increased focus on customer outcomes and stimulate improvements in the work practices

and processes used within the company.

Customer expectations are the customer-defined attributes of your product or service you

must meet or exceed to achieve customer satisfaction.1

There are many reasons why customer expectations are likely to change over time. Process

improvements, advent of new technology, changes in customer's priorities, improved

quality of service provided by competitors are just a few examples.

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10 | P a g e
 CHAPTER 1:

Introduction of
Financial And
Capital Market

FINANCIAL MARKET

Financial market is a mechanism that allows people to easily buy and sell (trade).

Financial securities (such as stocks and bonds), commodities (such as precious metals or

agricultural goods), and other fungible items of value at low transaction cost and at prices

11 | P a g e
that reflect the efficient market hypothesis. Financial markets have evolved significantly

over several hundred years and are undergoing constant innovation to improve liquidity.

India Financial Market promotes the savings of the economy, providing an effective

channel for transmitting the financial policies. It is a well-developed, competitive, efficient

and integrated financial sector. There are large numbers of buyers and sellers of the

financial product, the prices are fixed by the market forces of demand and supply within the

Indian Financial Market.

Financial markets facilitate –

• The raising of capital (in the capital markets);

• The transfer of risk (in the derivatives markets);

• International trade (in the currency markets)

Types of financial markets-

The financial markets can be divided into different subtypes:

• Capital markets which consist of:

• Stock markets, which provide financing through the issuance of shares or common

stock, and enable the subsequent trading thereof.

• Bond markets, which provide financing through the issuance of bonds, and enable

the subsequent trading thereof.

• Commodity markets, which facilitate the trading of commodities.

• Money markets, which provide short term debt financing and investment.

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 • Derivatives markets, which provide instruments for the management

of financial risk.

• Futures markets, which provide standardized contracts for trading products at

some future date.

• Insurance markets, which facilitate the redistribution of various risks.

• Foreign exchange markets, which facilitate the trading of foreign exchange

The Financial Market in India focuses on these features:

• Real-time India Financial Indices – BSE 30 Index, Sector Indexes, Stock Quotes, Sensex

Charts, Bond prices, Foreign Exchange, Rupee Dollar Chart

• Indian Financial Market news

• Stock News – Bombay Stock Exchange, BSE Sensex 30 closing index, S&P CNX-Nifty

NSE, stock quotes, company information, issues on market capitalization, corporate earning

statements, Indian Business Directory

• Fixed Income – Corporate Bond Prices, Corporate Debt details, Debt trading activities,

Interest Rates, Money Market, Government Securities, Public Sector Debt, External Debt

Service

• Foreign Investment – Foreign Debt Database composed by BIS, IMF, OECD,& World

Bank, Investments in India & Abroad

• Global Equity Indexes – Dow Jones Global indexes, Morgan Stanley Equity Indexes

• Currency Indexes – FX & Gold Chart Plotter, J. P. Morgan Currency Indexes

• National and Global Market Relations

• Mutual Funds

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 • Insurance

• Loans

• Forex and Bullion

The following table illustrates where financial markets fit in the relationship between

lenders and borrowers:

Relationship between lenders and borrowers

Financial Financial
Lenders Borrowers
intermediaries Markets
Interbank Individuals
Banks
Stock Exchange Companies
Individuals Insurance Companies
Money Market Central Government
Companies Pension Funds
Bond Market Municipalities
Mutual Funds
Foreign Exchange Public Corporations

From all those financial market, I did detailed study about Insurance market, Stock market, and

mutual fund market because mostly people usually invest their money in these markets.

CAPITAL MARKET

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The capital market (securities markets) is the market for securities, where companies and

the government can raise long-term funds. The capital market includes the stock market and

the bond market. Financial regulators, such as the U.S. Securities and Exchange

Commission, oversee the capital markets in their respective countries to ensure that

investors are protected against fraud.

Capital markets are like any other markets, but differ in terms of the products traded and

their organization. Capital markets deal with the trading of securities. Capital markets

provide avenue where companies can raise funds to expand on their businesses or establish

new ones by issuing securities owned by the companies. Like businesses in the private

sector, Government issue its securities to raise funds in capital markets to build electricity

damn, construct new roads, bridges by issues.

Role of Capital Market

Capital markets have an important role to play in stimulating economic development. The

following are some of the examples:

� Capital markets help mobilize domestic savings, hence facilitating the reallocation of

financial resources from dormant to more productive activities.

� Capital markets provide an avenue for the divestiture of State Owned Enterprises

(SOEs), whereby shares in these companies may be sold through the Stock exchange,

allowing members of the public to participate in the ownership of these companies. The

privatization of SOEs through a stock exchange helps to broaden the asset base by

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 providing a means through which ordinary citizens can acquire a share in the country’s

assets.

� Companies have the opportunity to raise long-term finance through equity and debt

financing (issuing shares and bonds respectively).

� Members of the public are given an opportunity to buy shares or bonds providing them

with an alternative method of investing their savings.

� Capital raised through the issue of shares, bonds or other instruments can be invested by

the company to expand production, invest in more efficient productive processes and

improve competitiveness.

� Increased investment by companies will lead to employment expansion, income

generation, and with a larger percentage of the population earning income, savings and

consumption will increase resulting in a cycle of increased investment, increased

production, enhanced economic growth and wealth creation.

� Through full disclosure requirements, companies are encouraged to observe better

accounting and management practices, hence leading to greater transparency in the

business sector and lower incidences of corruption. This will lead to good corporate

governance.

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� Capital markets enhance the inflow of international capital when international investors

participate in debt and equity instruments.

Structure of Capital Market

Capital Market

Financial Institution Securities Market

Gilt-edged Market Corporate Securities

Market

New Issue Market or Stock Exchange

Primary Market Market or Secondary
Market

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 CHAPTER 2:

Overview of Kotak
Mahindra Group

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 Introduction of Kotak Mahindra Group

Kotak Mahindra is one of the India’s leading financial conglomerates, offering complete

financial solutions that encompass every sphere of life. From commercial banking, to stock

broking, to mutual funds, to life insurance, to investment banking, the group caters to the

financial needs of individuals and corporate.

The group has a net worth of around Rs. 3200 crore, employs around 10,800 people in its

various business and has a distribution network of branches, franchisees, representative

offices and setellite offices across 300 cities and towns in india and offices in New York,

Londion, Dubai, Mauritius and Singapore. The Group services around 2.6 million customer

accounts.

The Group specializes in Offering top class financial services, catering to every segment of

the industry. The various Group companies include:

Kotak Mahindra Capital Ltd.

• Kotak Mahindra Securities ltd

• Kotak Mahindra Insurance
• Kotak Mahindra (international) ltd
• Kotak Mahindra Global investments Opportunities fund ltd
• Kotak Mahindra (UK) Ltd
• Kotak securities Ltd

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 • Kotak Mahindra Old Mutual Life Insurance Company Ltd
• Kotak Mahindra Asset Management Company Ltd
• Kotak Mahindra Investments Ltd
• Kotak Forex Brokerage ltd
• Kotak Mahindra Trusteeship Services ltd
• Kotak Mahindra prime ltd
The company has a full-fledges research division involves in Macro Economic studies

Sectoral research and Compancy Specific Equity Research combine with a strong and well

networked sales force which helps deliver current and up to date market information and

news.

History of Kotak Mahindra Group

The Kotak Mahindra Group was born in 1985 as Kotak Capita Management finance ltd.

This company was promoted by Uday Kotak, Sidney A.A. pinto and Kotak and Company.

Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that’s when

the company changes its name to Kotak Mahindra Finance ltd.

Since then it’s been a steady and confident journey to growth and success.

1986

Kotak Mahindra Finance Limited starts the activity of Bill Discounting

1987

Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market

1990

The Auto Finance division is started

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1991

The Investment Banking Division is started. Takes over FICOM, one of India's largest

financial retail marketing networks

1992

Enters the Funds Syndication sector

1994

Kotak Securities Ltd. was incorporated

1995

Brokerage and Distribution businesses incorporated into a separate company - Kotak

Securities. Investment Banking division incorporated into a separate company - Kotak

Mahindra Capital Company

1996

The Auto Finance Business is hived off into a separate company - Kotak Mahindra Prime

Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a

significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The

launch of Matrix Information Services Limited marks the Group's entry into information

distribution.

1998

Enters the mutual fund market with the launch of Kotak Mahindra Asset Management

Company

2000

Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. Kotak

Securities launches its on-line broking site (now

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www.kotaksecurities.com).Commencement of private equity activity through setting up of

Kotak Mahindra Venture Capital Fund.

2001

Matrix sold to Friday Corporation Launches Insurance Services

2003

Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian company to

do so.

2004

Launches India Growth Fund, a private equity fund

2005

Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly

known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra.

Launches a real estate fund

2006

Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital

Company and Kotak Securities

2008

Launched a Pension Fund under the New Pension System

2009

• Kotak Mahindra Bank Ltd. opened a representative office in Dubai

• Entered Ahmadabad Commodity Exchange as anchor investor.

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 AWARDS AND RECOGNITION

Kotak’s commitment to excellence whether it’s in banking or insurance or stock broking or

fund management has earned us great recognition in India and internationally.

Kotak Mahindra Group takes a client-centric view and constantly innovates to provide you

with the best of services and infrastructure. We have regularly received accolades that stand

testimony to our success in this endeavor. Some of our recent achievements are:

Banking

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 • IDRBT

Banking Technology Excellence Awards Best Bank Award in IT Framework and

Governance Among Other Banks' -2009 Banking Technology Award for IT

Governance and Value Delivery, 2008

• IR Global Rankings
Best Corporate Governance Practices-Ranked among the top 5 companies in Asia

Pacific, 2009

• Finance Asia
Best Private Bank in India, for Wealth Management business, 2009

• Kotak Royal Signature Credit Card

Was chosen "Product of the Year" in a survey conducted by Nielsen in 2009

• IBA Banking Technology Awards

Best Customer Relationship Achievement-Winner 2008 & 2009 Best overall

winner, 2007

Best IT Team of the Year, 4 years in a row from 2006 to 2009 Best IT Security

Policies & Practices, 2007

• Euro money

Best Private Banking Services (overall), 2009

• Emerson Uptime Champion Awards

Technology Senate Emerson Uptime Championship Award in the BFSI category, 2008

Insurance

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 • Outlook Money

Kotak Platinum Advantage Plan-Ranked 1st in Type II ULIP category, 2008 Kotak Long

Life Wealth Plus Plans - Ranked 4th in the Type I ULIPs category

Securities

• CNBC Financial Advisor Awards

Best Performing Equity Broker, 2008 & 2009

• Asia money Brokers Poll

Best Local Brokerage, 2006, 2007, 2008 & 2009

Best Analyst in India – Sanjeev Prasad, 2005, 2006, 2007, 2008 & 2009

• Finance Asia Country Awards for Achievement

Best Broker in India, 2006, 2009 & 2010

• Thomson Extel Surveys Awards

India's Leading Equity House, 2007

• Super Brands Council of India

Business Super brand India, 2008

• IFR Asia

India Equity House of the Year, 2008

• Global Finance

Best Investment Bank in India, 2008, 2009 & 2010

• Asset Asian Awards

Best Domestic Investment Bank, 2006, 2007, 2008 & 2009

Investment Banking

• Finance Asia Country Awards for Achievement

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 Best Investment Bank in India, 2006, 2007, 2008, 2009 & 2010

Best Equity House in India, 2008 & 2010

• Asia money Best Domestic Bank Awards

Best Domestic Equity House, 2008, 2009 & 2010

• IFR Asia

India Equity House of the Year, 2008

• Global Finance

Best Investment Bank in India, 2008, 2009 & 2010

• Asset Asian Awards

Best Domestic Investment Bank, 2006, 2007, 2008 & 2009

Asset Management

• ICRA Mutual Fund Awards 2009

Kotak Liquid (Regular Plan) - Ranked as a Seven Star Fund for its 1 year

performance

Kotak Flexi Debt Fund - Ranked as a Five Star Fund for its 1 year performance

Kotak Flexi Debt Fund - Ranked as a Five Star Fund for its 3 year performance

Kotak 30 - Ranked as a Five Star Fund for its 3 year performance

International Asset Management

• Global Investor (Editorial Award)

Asian Asset Manager of the Year, 2009

Miscellaneous

• GIREM

GIREM awarded Kotak Realty Funds Group, the "Investor of the Year" Award for 2009

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 • IBA Banking Technology Awards

Best Use of Business Intelligence - up, 2008

Best Enterprise Risk Management - Runner up, 2008

• The Great Places to Work Institute, India

Best Workplaces in India, 2008

• Hewitt

10th Best Employer in India, 2007, 2008 & 2009

• Financial Insights Innovation Award

Best Innovation in Enterprise Security Management in the Asia Pacific Region, 2009

• Frost & Sullivan

Best Passenger Vehicle Finance Company in India, 2006

• CNBC TV 18

Indian Business Leader of the Year, 2008 awarded to Uday Kotak, Executive Vice

Chairman & Managing Director

KOTAK BUSINESS
Kotak Mahindra Bank

• Kotak Mahindra Bank Ltd is a one stop shop for all banking needs. The bank

offers personal finance solutions of every kind from savings accounts to credit

cards, distribution of mutual funds to life insurance products. Kotak Mahindra Bank

offers transaction banking, operates lending verticals, manages IPOs and provides

working capital loans. Kotak Bank has one of the largest and most respected Wealth

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 Management teams in India, providing the widest range of solutions to high net

worth individuals, entrepreneurs, business families and employed professionals.

Kotak Mahindra Old Mutual Life Insurance Ltd.

• A joint venture between Kotak Mahindra Bank Ltd and Old Mutual, Kotak Life

Insurance offers a wide choice of life insurance products such as unit-linked plans,

traditional insurance policies and gratuity group plans to credit-term plans for

businesses. With the promise of complete financial independence, Kotak Life

Insurance aims to bring about a change in the mindset of today's informed insurance

customer.

Kotak Securities Ltd.

• Kotak Securities is one of the largest broking houses in India with a wide

geographical reach. Kotak Securities operations include stock broking and

distribution of various financial products including private and secondary placement

of debt, equity and mutual funds.

Kotak Securities operate in five main areas of business:

• Stock Broking (retail and institutional)

• Depository Services
• Portfolio Management Services
• Distribution of Mutual Funds
• Distribution of Kotak Mahindra Old Mutual Life Insurance Ltd products

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 Kotak Mahindra Capital Company (KMCC)

• Kotak Investment Banking (KMCC) is a full-service investment bank in India

offering a wide suite of capital market and advisory solutions to leading

domestic and multinational corporations, banks, financial institutions and

government companies.

Our services encompass Equity & Debt Capital Markets, M&A Advisory,

Private Equity Advisory, Restructuring and Recapitalization services, Structured

Finance services and Infrastructure Advisory & Fund Mobilization.

Kotak Mahindra Prime Ltd (KMPL)

• Kotak Mahindra Prime Ltd is among India's largest dedicated passenger vehicle finance

companies. KMPL offers loans for the entire range of passenger cars, multi-utility

vehicles and pre-owned cars. Also on offer are inventory funding and infrastructure

funding to car dealers with strategic arrangements via various car manufacturers in

India as their preferred financier.

Kotak International Business

• Kotak International Business specialises in providing a range of services to overseas

customers seeking to invest in India. For institutions and high net worth individuals

outside India, Kotak International Business offers asset management through a range of

offshore funds with specific advisory and discretionary investment management

services.

Kotak Mahindra Asset Management Company Ltd. (KMAMC)

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Kotak Mahindra Asset Management Company offers a complete bouquet of asset

management products and services that are designed to suit the diverse risk

return profiles of each and every type of investor. KMAMC and Kotak

Mahindra Bank are the sponsors of Kotak Mahindra Pension Fund Ltd, which

has been appointed as one of six fund managers to manage pension funds under

the New Pension Scheme (NPS).

Kotak Private Equity Group (KPEG)

Kotak Private Equity Group helps nurture emerging businesses and mid-size

enterprises to evolve into tomorrow's industry leaders. With a proven track

record of helping build companies, KPEG also offers expertise with a

combination of equity capital, strategic support and value added services. What

differentiates KPEG is not merely funding companies, but also having a close

involvement in their growth as board members, advisors, strategists and fund-

raisers.

Kotak Realty Fund

Kotak Realty Fund deals with equity investments covering sectors such as hotels, IT

parks, residential townships, shopping centres, industrial real estate, health

care, retail, education and property management. The investment focus here is

on development projects and enterprise level investments, both in real estate

intensive businesses.

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 Senior Management
Core Kotak Mahindra Group team

Mr. Uday S. Kotak

Executive Vice Chairman & Managing Director

Mr. Uday Kotak, B.Com, MMS (Masters in Management Studies), aged 50 years, is the

Executive Vice-Chairman and Managing Director of the Bank, and its principal founder

and promoter. Mr. Kotak is an alumnus of Jamnalal Bajaj Institute of Management Studies.

Mr. C Jayaram
Executive Director

Mr. C. Jayaram, aged 53 years, is an Executive Director of the Bank and is currently in

charge of the Wealth Management Business of the Kotak Group. He is the Director of the

Financial Planning Standards Board, India. He varied experience of over 25 years in many

areas of finance and business, has built numerous businesses for the Group and was CEO of

Kotak Securities Ltd. An avid player and follower of tennis, he also has a keen interest in

psephology.

Mr. Dipak Gupta

Executive Director

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An electronics engineer and an alumnus of IIM Ahmadabad, Mr. Gupta has been with the

Kotak Group since 1992 and joined the board in October 1999. Mr. Dipak Gupta, aged 48

years, is an Executive Director of Kotak Bank. He heads commercial banking, retail asset

businesses He was the first CEO of the resulting entity, Kotak Mahindra Primus Ltd.

Kotak Securities work as a team and have a flat management structure. Its top

management has many years of experience which has helped guide the company into a

position of leadership.

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 INTRODUCTION OF KOTAK SECURITIES LTD.
Kotak Securities Limited, a strategic joint venture between Kotak Mahindra Bank and

Goldman Sachs (holding 25% - one of the world’s leading investment banks and brokerage

firms) is India’s leading stock broking house with a market share of 5 - 6 %.

Kotak Securities Limited is one of the largest players in distribution of IPOs - it was ranked

number One in 2003-04 as Book Running Lead Manager in public equity offerings by

PRIME Database. It has also won the Best Equity House Award from Finance Asia - April

2004.

The Company has a full-fledged Research division involved in macro economic studies,

sectoral research and Company specific equity research combined with a strong and well

networked sales force which helps deliver current and up-to-date market information and

news.

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The Company has 113 branches servicing around 1,00,000 customers, through our own

offices and a large franchisee network. It’s has an Online presence through Kotakstreet.com

where we offer Internet Broking services and also online IPO and Mutual Fund

Investments.

Kotak Securities Limited manages assets over Rs. 1700 crores through it’s Portfolio

Management Services (PMS) servicing high net worth clients with a large investible

surplus through its preferred client services in the mass affluent and wealth management

segments.

Kotak Securities Ltd is also a depository participant with National Securities Depository

Limited (NSDL) and Central Depository Services Limited (CDSL), providing dual benefit

services wherein the investors can use the brokerage services of the company for executing

the transactions and the depository services for settling them.

Kotak Securities has 813 outlets servicing more than 3,15,000 customers and a coverage of

277 Cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers

Internet Broking services and also online IPO and Mutual Fund Investments.

Kotak Securities Limited manages assets around 2300 crores of Assets Under Management

(AUM) .The portfolio Management Services provide top class service, catering to the high

end of the market. Portfolio Management from Kotak Securities comes as an answer to

those who would like to grow exponentially on the crest of the stock market, with the

backing of an expert.

36 | P a g e
 AWARDS AND RECOGNITION OF KOTAK

SECURITIES LTD.

Securities has been graced with include;

• Euro money Award (2006 & 2007) - Best Provider of Portfolio Management :

Equities

• Asia money Award (2006)- Best Broker In India

• Euro money Award (2005)-Best Equities House In India

• Finance Asia Award (2005)-Best Broker In India

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• Finance Asia Award (2004)- India's best Equity House

• Prime Ranking Award (2003-04)- Largest Distributor of IPO's

The accolades that Kotak Securities has been graced with include:

• Prime Ranking Award (2003-04)- Largest Distributor of IPO's

• Finance Asia Award (2004)- India's best Equity House

• Finance Asia Award (2005)-Best Broker In India

• Euro money Award (2005)-Best Equities House In India

• Finance Asia Award (2006)- Best Broker In India

Euro money Award (2006) - Best Provider of Portfolio Management: Equities

Kotak Securities Ltd. is India's leading stock broking house with a market share of

around 8.5 % as on 31st March. Kotak Securities Ltd. has been the largest in IPO

distribution.

Kotak securities.com is a world class internet share trading website, offering investment

and trading options to individuals with speed & easy access. Led by Prasanth

Prabhakaran, Kotaksecurities.com has its presence in more than 78 cities in the Country

today.

Kotak securities.com is the only online trading website which gives real time Stock

Market access to clients via ‘KEAT’, its in-house developed product. Kotaksecurities.com

offers convenience of anywhere trading through the net and the telephone.

Why Kotak Securities?

38 | P a g e
 1. Kotak see investing from your perspective, and make recommendations based on

your needs. One of our important goals is to simplify investing for you; along with

this we also provide long term values to our customers.

We have a million reasons for you to choose us. Listed below are a few:

Stability: We are a 100% subsidiary of Kotak Mahindra Bank and one of the oldest and

largest stock broking firms in the Industry. We have been the first and only NBFC to

receive the license to be converted into a bank.

Innovators in the Industry: We have been the first in providing many products and

services which have now become industry standards.

• UTI MF – CNBC TV18 Financial Advisor Awards - Best Performing Equity Broker

(National) for the year 2009

• First to provide Margin Financing to the customers

• First to enable investing in IPOs and Mutual Funds on the phone

• Providing SMS alerts before execution of depository transactions

• Launching of Mobile application to track portfolio

• Auto Invest - A systematic investing plan in Equities and Mutual fund

• Provision of margin against securities automatically against shares in your Demat

account

Reliability: Our accolades are a testimony to our services and high standards. We have

been awarded as:

• Best Brokerage Firm in India by Asia money in 2009, 2008, 2007 & 2006

• Best Brokerage Firm in India for 2009 by Finance Asia

39 | P a g e
 • Best Performing Equity Broker in India – CNBC Financial Advisor Awards 2008

• Avaya Customer Responsiveness Awards (2007) in Financial Services Sector

• The Leading Equity House in India' in Thomson Extel Surveys Awards for the year

2007

• Euro money Award (2006 & 2007) - Best Provider of Portfolio Management:

Equities

Value: Whether you are a customer with a small or large wallet size, you can expect us to

bring value to you in every form.

• Quality Research

• Quick trade execution

• Low brokerages

• Accounts that suit your investment profile

• Risk Profiler

• Superior Customer Service

Service: We believe in high standards of service and that's precisely what we offer. It's an

honour to be awarded the most customer responsive company award in the Financial

Institution sector by AVAYA Global Connect Award both in 2006 and 2007.

Robust Technology: We have developed our own proprietary trading platform which is

robust and among the best in the industry. We have more than 150 technology professionals

constantly working on upgrading and speeding up all our systems.

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Centralized Risk Management System: Unlike many other players we have a

centralized risk management system. This allows us to offer the same levels of service to

customers across all locations.

Exceptional Research: Unlike most other competitors we have our own in house

research team. Our in house research team is among the best in the industry and they have

years of experience in the financial markets. They scan through the plethora of stocks and

find the scrips that have a high potential of providing you good returns. Our investors get

research Technical, Fundamental, Derivatives, Macro-economic and mutual fund research.

Large Presence: We are present in 400 cities with 1113 offices all over the country. Our

employee strength extends beyond 3475.

41 | P a g e
 What Kotak Securities Offer

Once you invest with Kotak Securities, you can enjoy access to a wide range of products

and services to help you make the most of your investments.

Easy Equity: Want your capital to appreciate fast? Invest in Easy Equity.

Easy Derivatives: The higher your risk, the greater the returns on your investments.

Easy IPO: Invest early for greater returns.

Easy Mutual Fund: Looking to diversify your risk? Invest in Easy Mutual Fund.

Easy Insurance: Secure your future and your family's. There's more to insurance than just

security.

Kotak Portfolio Management: The Portfolio Management Service combines competent

fund management, dedicated research and technology to ensure a rewarding experience for

its clients.

42 | P a g e
 SOFTWARE PROVIDED BY KOTAK

KEAT

If you are a first time-investor, use this free online tool to monitor what is happening in the

market and also view your gains and losses in real-time.

KEAT Pro

KEAT Pro, a free, easy-to-use integrated web based trading platform allows online trading

customers to trade in Equity, Derivatives and Currency Derivatives. KEAT Pro is a high

speed trading platform allows you to monitor the market real time. You can check live

market rates of scrips/contracts in NSE , BSE & NSE Currency, create multiple watchlists

and simultaneously place orders, view order reports, view positions etc.

KEAT Premium

KEAT Premium is an exclusive online tool that makes extensive use of detailed technical

charts to help you monitor what is happening in the market. It also enables you to view

your gains and losses in real-time.

43 | P a g e
 CHAPTER 3:

Facts and findings

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 Securities and Exchange Board of India(SEBI)
Securities and Exchange Board of India s

Formed 1992

Jurisdiction India
Headquarters Mumbai, Maharashtra,
India

Employees 525
Agency executive C B Bhave, Chairman
Website http://www.sebi.gov.in

SEBI Bhavan, Mumbai headquarters

SEBI is the regulator for the securities market in India. It was formed officially by the Government

of India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave,

SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and

has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and

Ahmedabad.

Organization structure of SEBI

Chandrasekhar Bhaskar Bhave is the sixth chairman of the Securities Market Regulator.

Prior to taking charge as Chairman SEBI, he had been the chairman of NSDL

(National Securities Depository Limited) ushering in paperless securities. Prior to

his stint at NSDL, he had served SEBI as a Senior Executive Director. He is a former

Indian Administrative Service officer of the 1975 batch.

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 Name Designation As Per
CB Bhave Chairman SEBI CHAIRMAN (S.4(1)(a) of the
SEBI Act, 1992)
KP Krishnan Joint Secretary, Ministry of Member (S.4(1)(b) of the
Finance SEBI Act, 1992)
Anurag Goel Secretary, Ministry of Member (S.4(1)(b) of the
Corporate Affairs SEBI Act, 1992)
Dr G Mohan Gopal Director, National Judicial Member (S.4(1)(d) of the
Academy, Bhopal SEBI Act, 1992)
MS Sahoo Whole Time Member, SEBI Member (S.4(1)(d) of the
SEBI Act, 1992)
Dr KM Abraham Whole Time Member, SEBI Member (S.4(1)(d) of the
SEBI Act, 1992)
Mohandas Pai Director, Infosys Member (S.4(1)(d) of the
SEBI Act, 1992)
Prashant Saran Whole Time Member, SEBI Member (S.4(1)(d) of the
SEBI Act, 1992)

Functions and responsibilities

SEBI has to be responsive to the needs of three groups, which constitute the market:

• the issuers of securities

• the investors
• the market intermediaries.
SEBI has three functions rolled into one body quasi-legislative, quasi-judicial and quasi-

executive. It drafts regulations in its legislative capacity, it conducts investigation and

enforcement action in its executive function and it passes rulings and orders in its judicial

capacity. Though this makes it very powerful, there is an appeals process to create

accountability. There is a Securities Appellate Tribunal which is a three-member tribunal

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and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A

second appeal lies directly to the Supreme Court.

SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and

successively (e.g. the quick movement towards making the markets electronic and

paperless rolling settlement on T+2 basis). SEBI has been active in setting up the

regulations as required under law.

SEBI has also been instrumental in taking quick and effective steps in light of the global

meltdown and the Satyam fiasco. It had increased the extent and quantity of disclosures to

be made by Indian corporate promoters. More recently, in light of the global meltdown, it

liberalized the takeover code to facilitate investments by removing regulatory strictures.

Objectives and Purpose of SEBI ACT

 To protect the interest of investors in securities.

 To promote the development of the securities markets

 To regulates the securities market

 For matters connected there with or incidental thereto

Management of the Board ACT (Section-4)

The SEBI will be managed by a board consisting of the following:

 Chairman

 Two members from amongst the officials of the ministers of Central

Government dealing with finance and law.

 One member from amongst the officials of the Reserve bank of India.

47 | P a g e
  Two other members to be appointed by the central Government.

 The management of SEBI will be vested in the board in Chairman shall have

the power of general superintendence and direction.

ADDITIONAL FUNCTIONS OF SEBI:

 Power to approve the bye- laws of stock exchange.

 Power to make or amend bye-laws of recognized stock

exchanges.

 Powers to inspect book of accounts and call periodical

return from recognized stock exchanges.
 Power to grant a license to any person for the business of

dealing in securities in certain areas.

 Power to compel listing of securities on any recognized

stock exchange.

 Power to delegate powers exercisable by it.

Limitations of SEBI:

Though SEBI has started a watch dog in protecting investors’ interest, regulating the

working of the stock exchange and promoting capital market, still it faces a number of

problems in its working some of these limitations are as follows:

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 1. The central government has authorized SEBI to frame its rules and regulation for

actively monitoring capital markets. There rules and regulation will have to be

approved by the government first. This will cause unnecessary delay and

interference by the finance ministry. The bureaucratic delays in clearing the rules

will hamper the working of SEBI. The government should direct SEBI to frame or

change the rule as per the demand of solution so that it able to achieve professional

efficiency.

2. SEBI will have to seek prior approval for filing criminal complaints for violations

of the regulation .This will again cause delay at government level.

3. SEBI has not been given autonomy. Its Board of Directors is dominated by
government nominees. Out of 5 directors only 2 can be from outside and there are to
represent the ministries of Finance, Law and Reserve Bank of India.
4. Rules and regulation will have to be approved by the government first.

Stock Exchange
Role of a Stock Exchange in buying and selling shares The stock exchanges in India, under the

overall supervision of the regulatory authority, the Securities and Exchange Board of India (SEBI),

provide a trading platform, where buyers and sellers can meet to transact in securities. The trading

platform provided by NSE is an electronic one and there is no need for buyers and sellers to meet at

a physical location to trade. They can trade through the computerized trading screens available with

the NSE trading members or the internet based trading facility provided by the trading members of

NSE. Demutualization of stock exchanges Demutualization refers to the legal structure of an

exchange whereby the ownership, the management and the trading rights at the exchange are

segregated from one another.

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 Bombay Stock Exchange

Type Stock Exchange

Location Mumbai, India C

Coordinates 18°55′47″N 72°50′01″E /

18.929681°N 72.833589°E
Founded 1875

Owner Bombay Stock Exchange Limited

Key people Madhu Kannan (CEO & MD)

Currency INR

No. of listings 4,900

Market Cap US$1.28 trillion (Feb, 2010)

Volume US$980 billion (2006)

Indexes BSE Sensex

Website www.bseindia.com

The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia and has the third

largest number of listed companies in the world, with 4900 listed as of Feb 2010. It is

located at Dalal Street, Mumbai, India. On Feb, 2010, the equity market capitalization of

the companies listed on the BSE was US$1.28 trillion, making it the largest stock exchange

in South Asia and the 12th largest in the world.

With over 4900 Indian companies listed & over 7700 scrips on the stock exchange, it has a

significant trading volume. The BSE SENSEX (SENSitive indEX), also called the "BSE

30", is a widely used market index in India and Asia. Though many other exchanges exist,

50 | P a g e
BSE and the National Stock Exchange of India account for most of the trading in shares in

India.

History
The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history

to the 1850s, when 4 Gujarati and 1 Parsi stockbroker would gather under banyan trees in

front of Mumbai's Town Hall. The location of these meetings changed many times, as the

number of brokers constantly increased. The group eventually moved to Dalal Street in

1874 and in 1875 became an official organization known as 'The Native Share & Stock

Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized

by the Indian Government under the Securities Contracts Regulation Act. The Bombay

Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure

overall performance of the exchange. In 2000 the BSE used this index to open its

derivatives market, trading Sensex futures contracts. The development of Sensex options

along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading

platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange

switched to an electronic trading system in 1995. It took the exchange only fifty days to

make this transition. This automated, screen-based trading platform called BSE On-line

trading (BOLT) currently has a capacity of 80 lakh orders per day. The BSE has also

introduced the world's first centralized exchange-based internet trading system,

BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE platform.

Awards

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 • The World Council of Corporate Governance has awarded the Golden Peacock

Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR).

• The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and

March 31 2007 have been awarded the ICAI awards for excellence in financial

reporting.

• The Human Resource Management at BSE has won the Asia - Pacific HRM awards

for its efforts in employer branding through talent management at work, health

management at work and excellence in HR through technology.

National Stock Exchange of India

Type Stock Exchange

Location Mumbai, India
Coordinates 19°3′37″N 72°51′35″E / 19.06028°N
72.85972°E

Founded 1992
Owner National Stock Exchange of India Limited
Key people Mr. Ravi Narain - MD
Currency INR No. of listings 1810

Market Cap Rs 47,01,923 crore (2009 August)

Indexes S&P CNX Nifty

CNX Nifty Junior
S&P CNX 500
The National Stock Exchange (NSE) is a stock exchange located at Mumbai, India. It is

the largest stock exchange in India in terms of daily turnover and number of trades, for both

equities and derivative trading. NSE has a market capitalization of around Rs 47,01,923

crore (7 August 2009) and is expected to become the biggest stock exchange in

52 | P a g e
India in terms of market capitalization by 2009 end. Though a number of other exchanges

exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges

in India and between them are responsible for the vast majority of share transactions. The

NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock

Exchange Fifty), an index of fifty major stocks weighted by market capitalisation.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance

companies and other financial intermediaries in India but its ownership and management

operate as separate entities. There are at least 2 foreign investors NYSE Euronext and

Goldman Sachs who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals,

2799 in total, cover more than 1500 cities across India. In October 2007, the equity market

capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the

second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the

world in terms of the number of trades in equities. It is the second fastest growing stock

exchange in the world with a recorded growth of 16.6%.

Origins
The National Stock Exchange of India was

promoted by leading Financial institutions at

53 | P a g e
 the behest of the Government of India, and was

incorporated in November 1992 as a tax-paying

company. In April 1993, it was recognized as a

stock exchange under the Securities Contracts

(Regulation) Act, 1956. NSE commenced

operations in the Wholesale Debt Market

(WDM) segment in June 1994. The Capital

market (Equities) segment of the NSE

commenced operations in November 1994, while

operations in the Derivatives segment

commenced in June 2000.

NSE building at BKC, Mumbai

Markets

Currently, NSE has the following major segments of the capital market:

• Equity

• Futures and Options

• Retail Debt Market

• Wholesale Debt Market

• Currency futures

• MUTUAL FUND

• STOCKS LENDING & BROWING

54 | P a g e
 SECURITY
A security is a fungible, negotiable instrument representing financial value. Securities are

broadly categorized into debt and equity securities such as bonds and common stocks

respectively. The company or other entity issuing the security is called the issuer. What

specifically qualifies as a security is dependent on the regulatory structure in a country. For

example private investment pools may have some features of securities, but they may not

be registered or regulated as such if they meet various restrictions.

Securities may be represented by a certificate or, more typically, by an electronic book

entry interest. Certificates may be bearer, meaning they entitle the holder to rights under the

security merely by holding the security, or registered, meaning they entitle the holder to

rights only if he or she appears on a security register maintained by the issuer or an

intermediary. They include shares of corporate stock or mutual funds, bonds issued by

corporations or governmental agencies, stock options or other options, limited partnership

units, and various other formal investment instruments that are negotiable and fungible.

55 | P a g e
 EQUITY MARKET

This publication reviews the reforms and other market developments in the securities

market in India during April 2003 to June 2004. As a result of the reforms/initiatives taken

by the Government and the Regulators, the market microstructure has been refined and

modernized.

The investment choices for the investors have also broadened. The securities market moved

from T+3 settlement period to T+2 rolling settlement with effect from April 1, 2003.

Further, straight through processing has been made mandatory for all institutional trades

executed on the stock exchange. Real time gross settlement has also been introduced by

RBI to settle inter-bank transactions online at real time mode. These reforms along with

other market developments have been discussed in detail in the following chapters. This

chapter, however, takes a general review of the stock market developments. These

developments in the securities market provide the necessary impetus for growth and

development, and thereby strengthen the emerging market economy in India.

Products and Participants

Mobilization of savings from surplus savers to deficit savers is most efficiently carried out

by the securities market through a range of complex products called “securities”. The

56 | P a g e
definition of securities as per the SCRA, 1956 includes shares, bonds, scripts, stocks or

other marketable securities of like nature in or of any incorporate company or body

corporate, government securities, derivatives of securities, units of collective investment

scheme, interest and rights in securities, security receipt or any other instruments so

declared by the central government.

The securities market has essentially three categories of participants, viz., the issuer of

securities, investors in securities and the intermediaries. The issuers are the borrowers or

deficit savers, who issue securities to raise funds. The investors, who are surplus savers,

deploy their savings by subscribing to these securities. The intermediaries are the agents

who match the needs of users and suppliers of funds for a commission. These

intermediaries pack and unpack securities to help both the issuers and investors to achieve

their respective goals. There are a large variety and number of intermediaries providing

various services in the Indian securities market.

This process of mobilization of resources is carried out under the supervision and overview

of the regulators. The regulators develop fair market practices and regulate the conduct of

issuers of securities and the intermediaries. They are also in charge of protecting the

interests of the investors. The regulator ensures a high

service standard from the intermediaries and supply of quality securities and non-

manipulated demand for them in the market.

MARKET SEGMENTS

57 | P a g e
The securities market has two interdependent segments: the primary and the secondary

market. The primary market is the channel for creation of new securities. These securities

are issued by public limited companies or by government agencies. In the primary market

the resources are mobilized either through the public issue or through private placement

route. It is a public issue if anybody and everybody can subscribe for it, whereas if the issue

is made available to a selected group of persons it is termed as private placement.

There are two major types of issuers of securities, the corporate entities who issue mainly

debt and equity instruments and the government (central as well as state) who issue debt

securities. These new securities issued in the primary market are traded in the secondary

market.

The secondary market enables participants who hold securities to adjust their holdings in

response to changes in their assessment of risks and returns. The secondary market operates

through two mediums, namely, the over-the-counter (OTC) market and the exchange-

traded.

INTERNATIONAL SCENARIO

Following the implementation of reforms in the securities industry during the last decade,

Indian stock markets have graduated to a better position vis-à-vis the securities market in

developed and emerging markets. As may be seen from Table 1-2, India has a turnover

ratio, which is comparable to the other developed market, and also one of the highest in the

emerging markets. At the end of 2003, Standard and Poor’s (S&P) ranked India 17th in

terms of market capitalization (19th in 2002), 16th in terms of total value traded in stock

58 | P a g e
exchanges (17th in 2002) and 6th in terms of turnover ratio (7th in 2002). India has the

number one ranking in terms of listed securities on the Exchanges followed by the USA.

These data, though quite impressive, do not reflect the full Indian market, as S&P (even

other international publications) does not cover the whole market. For example, India has

more than 9000 listed companies at the end of March 2004, while S&P considers only

5,644 companies. If whole market were taken into consideration, India’s position vis-à-vis

other countries would be much better.

Dependence on Securities Market

Corporate Sector

The 1990s witnessed the emergence of the securities market as a major source of finance

for trade and industry in India. A growing number of companies have been accessing the

securities market rather than depending on loans from financial institutions (FIs)/banks.

The corporate sector is increasingly depending on external sources (domestic market

borrowings and loans) for meeting its funding requirements. According to CMIE data

(Table 1-5), the share of capital market based instruments in resources raised externally had

been quite significant in the 1990s, however it declined to 21% in 2001-02. However, the

year 2002-03 witnessed the erosion of the corporates to raise money from capital market,

which was mainly because of the subdued conditions prevalent in the primary and

secondary market Table 1-6 presents sector-wise shareholding pattern of companies listed

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on NSE. It is observed that on an average the promoters hold more than 55% of total

shares. Though the non-promoter holding is about 44.9%, the public held only 17.7% and

the institutional holdings (by FIIs, MFs, FIs) accounted for 16.4%. There is not much

significant difference in the shareholding pattern of companies in different sectors.

Governments

Due to the increase in fiscal deficits of the Governments, their dependence on market

borrowings to finance fiscal deficits has also increased over the years (Table 1-5). During

the year 1990-91,

Households

According to the RBI data, household sector accounted for 85.6% of gross domestic

savings during 2002-03. They invested 41.5% of financial savings in deposits, 29.8% in

insurance provident funds, 14.3% on small savings, and 5.9% in securities (out of which

the investment in Gilts has been 4.3%), including government securities and units of mutual

funds during 2002-03 (Table 1-7). Thus the fixed income bearing instruments are the most

preferred assets of the Household sector.

Functions of Securities Market

Securities Markets is a place where buyers and sellers of securities can enter into

transactions to purchase and sell shares, bonds, debentures etc.

Further, it performs an important role of enabling corporate, entrepreneurs to raise

resources for their companies and business Ventures through public issues. Transfer of

60 | P a g e
resources from those having idle resources (investors) to others who have a need for them

(corporate) is most efficiently achieved through the securities market. Stated formally,

securities markets provide channels for reallocation of savings to investments and

entrepreneurship.

Savings are linked to investments by a variety of intermediaries, Through a range of

financial products, called ‘Securities’.

The securities one can invest in.

 Shares

 Government Securities

 Derivative products

♦ Units of Mutual Funds etc., are some of the securities

♦ investors in the securities market can invest in.

PRIMARY MARKET
The primary market provides the channel for sale of new securities. Primary market

provides opportunity to issuers of securities; Government as well as corporate, to raise

resources to meet their requirements of investment and/or discharge some obligation. They

may issue the securities at face value, or at a discount/premium and these securities may

take a variety of forms such as equity, debt etc. They may issue the securities in domestic

market and/or I international market.

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Issue of Shares
Most companies are usually started privately by their promoter(s). However, the promoters’

capital and the borrowings from banks and financial institutions may not be sufficient for

setting up or running the business over a long term. So companies invite the public to

contribute towards the equity and issue shares to individual investors. The way to invite

share capital from the public is through a ‘Public Issue’. Simply stated, a public issue is an

offer to the public to subscribe to the share capital of a company. Once this is done, the

company allots shares to the applicants as per the prescribed rules and regulations laid

down by SEBI.

Different kinds of issues

Primarily, issues can be classified as a Public, Rights or Preferential Issues (also known as

private placements). While public and rights issues involve a detailed procedure, private

placements or preferential issues are relatively simpler. The classification of issues is

illustrated below:

Initial Public Offering (IPO)

When an unlisted company makes either a fresh issue of securities or an offer for sale of its

existing securities or both for the first time to the public. This paves way for listing and

trading of the issuer’s securities.

A follow on public offering (Further Issue)

When an already listed company makes either a fresh issue of securities to the public or an

offer for sale to the public, through an offer document.

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Rights Issue

When a listed company which proposes to issue fresh securities to its existing shareholders

as on a record date. The rights are normally offered in a particular ratio to the number of

securities held prior to the issue. This route is best suited for companies who would like to

raise capital without diluting stake of its existing shareholders.

Preferential issue

An issue of shares or of convertible securities by listed companies to a select group of

persons under Section 81 of the Companies Act, 1956 which is neither a rights issue nor a

public issue. This is a faster way for a company to raise equity capital.

The issuer company has to comply with the Companies Act and the requirements contained

in the Chapter pertaining to preferential allotment in SEBI guidelines which inter-alia

include pricing, disclosures in notice etc.

SECONDARY MARKET
The secondary market is the financial market for trading of securities that have already

been issued in an initial private or public offering. Alternatively, secondary market can

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refer to the market for any kind of used goods. The market that exists in a new security just

after the new issue, is often referred to as the aftermarket. Once a newly issued stock is

listed on a stock exchange, investors and speculators can easily trade on the exchange, as

market makers provide bids and offers in the new stock.

In the secondary market, securities are sold by and transferred from one investor or

speculator to another. It is therefore important that the secondary market be highly liquid

and transparent. Before electronic means of communications, the only way to create this

liquidity was for investors and speculators to meet at a fixed place regularly. This is how

stock exchanges originated.

Secondary marketing is vital to an efficient and modern capital market. Fundamentally,

secondary markets mesh the investor's preference for liquidity (i.e., the investor's desire not

to tie up his or her money for a long period of time, in case the investor needs it to deal with

unforeseen circumstances) with the capital user's preference to be able to use the capital for

an extended period of time. For example, a traditional loan allows the borrower to pay

back the loan, with interest, over a certain period. For the length of that period of time, the

bulk of the lender's investment is inaccessible to the lender, even in cases of emergencies.

Likewise, in an emergency, a partner in a traditional partnership is only able to access his or

her original investment if he or she finds another investor willing to buy out his or her

interest in the partnership. With a securitized loan or equity interest (such as bonds) or

tradable stocks, the investor can sell, relatively easily, his or her interest in the investment,

particularly if the loan or ownership equity has been broken into relatively small parts. This

64 | P a g e
selling and buying of small parts of a larger loan or ownership interest in a venture is called

secondary market trading.

Under traditional lending and partnership arrangements, investors may be less likely to put

their money into long-term investments, and more likely to charge a higher interest rate (or

demand a greater share of the profits) if they do. With secondary markets, however,

investors know that they can recoup some of their investment quickly, if their own

circumstances change.

In financial markets, stock is the capital raised by a corporation or joint-stock company

through the issuance and distribution of shares. A person or organization which holds at

least a partial share of stocks is called a shareholder. The aggregate value of a corporation's

issued shares is its market capitalization.

In the United Kingdom, South Africa and Australia, the term share is used the same way,

but stocks there refer to either a completely different financial instrument, the bond, or

more widely to all kinds of marketable securities.

In finance a share is a unit of account for various financial instruments including stocks,

mutual funds, limited partnerships, and REIT's. In British English, the usage of the word

share alone to refer solely to stocks is so common that it almost replaces the word stock

itself.

A share is one of a finite number of equal portions in the capital of a company, entitling the

owner to a proportion of distributed, non-reinvested profits known as dividends and to a

65 | P a g e
portion of the value of the company in case of liquidation. Shares can be voting or non-

voting, meaning they either do or do not carry the right to vote on the board of directors and

corporate policy. Whether this right exists often affects the value of the share. Voting and

Non-Voting shares are also known as Class A and B shares.

An initial public offering (IPO) is the first sale of a corporation's common shares to

investors on a public stock exchange. The main purpose of an IPO is to raise capital for the

corporation. While IPOs are effective at raising capital, being listed on a stock exchange

imposes heavy regulatory compliance and reporting requirements. The term only refers to

the first public issuance of a company's shares. If a company later sells newly issued shares

(again) to the market, it is called a 'Seasoned Equity Offering'. When a shareholder sells

shares it is called a "secondary offering" and the shareholder, not the company who

originally issued the shares, retains the proceeds of the offering. These terms are often

confused. In distinguishing them, it is important to remember that only a company which

issues shares can make a "primary offering". Secondary offerings occur on the "secondary

market", where shareholders (not the issuing company) buy and sell shares with each other.

A mutual fund is a form of collective investment that pools money from many investors

and invests their money in stocks, bonds, short-term money market instruments, and/or

other securities. In a mutual fund, the fund manager trades the fund's underlying securities,

realizing capital gains or losses, and collects the dividend or interest income. The

investment proceeds are then passed along to the individual investors. The value of a share

of the mutual fund, known as the net asset value per share (NAV), is calculated daily based

66 | P a g e
on the total value of the fund divided by the number of shares currently issued and

outstanding.

Legally known as an "open-end company" under the Investment Company Act of 1940 (the

primary regulatory statute governing investment companies), a mutual fund is one of three

basic types of investment companies available in the United States.[2] Outside of the

United States (with the exception of Canada, which follows the U.S. model), mutual fund is

a generic term for various types of collective investment vehicle. In the United Kingdom

and western Europe (including offshore jurisdictions), other forms of collective investment

vehicle are prevalent, including unit trusts, open-ended investment companies (OEICs),

SICAVs and unitized insurance funds.

In Australia the term "mutual fund" is generally not used; the name "managed fund" is used

instead. However, "managed fund" is somewhat generic as the definition of a managed fund

in Australia is any vehicle in which investors' money is managed by a third party (NB:

usually an investment professional or organization). Most managed funds are open-ended

(i.e., there is no established maximum number of shares that can be issued); however, this

need not be the case. Additionally the Australian government introduced a compulsory

superannuation/pension scheme which, although strictly speaking a managed fund, is rarely

identified by this term and is instead called a "superannuation fund" because of its special

tax concessions and restrictions on when money invested in it can be accessed.

67 | P a g e
DERIVATIVES

Derivatives are the financial contracts that derive their value from an underlying asset,

which could be stocks or stock indices, commodities or currencies or even exchange rates

or the rate of interest the value of a stock may rise or fall, an exchange rate may swing in

favour of one currency or the other, the price of a commodity may increase or decrease. A

feature common to all underlying assets is that they carry the risk of change in value.

Derivative contracts seek to transfer these risks from a counterparty that is not comfortable

with the risk to the one that is.

PARTICIPANTS IN DERIVATIVES MARKET

HEDGERS

Hedgers are traders who wish to protect themselves from the risk involved in price

movements. They look for opportunities to pass on this risk to those who are willing to bear

it. They are also keen to rid themselves of the uncertainty associated with the price changes

that they may be even ready to do so at a predetermined cost.

SPECULATORS

68 | P a g e
While you may be averse to risks, there are people who embrace them, since risk and return

always go hand in hand. Speculators, unlike hedgers, look for opportunities to take on risk

in the hope of making returns.

In the Indian markets, there are two types of speculators- day traders and the position

traders. A day trader tries to take advantage of intra day fluctuations and the up and down

movement in prices. They do not leave any position open at the end of the day. On the other

hand, position traders greatly rely on tips and news and take a longer view, say a month, in

order to realize better profits.

MARGIN TRADERS

These are the speculators who make use of the payment mechanism, which is peculiar to

the derivative markets. When you trade in derivatives products, you are not required to pay

the total value of your position upfront. You are required to pay a fraction (called margin)

of the value of your outstanding position. This is called margin trading and results in a high

leverage factor in derivative trades, i.e., with a small deposit you are able to maintain a

large outstanding position.

ARBITRAGEURS

Life is not perfect and capital markets have their share of imperfections too. Arbitrageurs

exploit these imperfections and inefficiencies to their advantage. Arbitrage trade is a

riskless trade where a simultaneous purchase of securities is done in one market and a

corresponding sale is carried out in another market. These are done when the same

securities are being quoted at different prices in the two markets.

EQUITY SHARE

69 | P a g e
Equity Shares are commonly referred to common stock or ordinary shares. Even though the

word shares and stocks are interchangeably used, there is a difference between them. Share

capital of a company is divided into number of small units of equal value called shares.

Equity Shares have the following rights according to section 85 (2) of the companies Act

1956:

• Right to vote at the general body meeting of the company.

• Right to control the management of the company.

• Right to share in the profits in the form of dividends and bonus shares.

• Right to claim on the residual after repayment of all the claims in the case of

winding up of company.

• Right of pre-emption in the matter of issue of new capital.

• Right to apply to court if there is any discrepancy in the rights set aside.

• Right to receive a copy of the statutory report, copies of annual accounts along with

audited report.

• Right to apply the central government to call an annual meeting when a company

fails to call such a meeting.

• Right to apply the Company Law boards for calling an extraordinary general

meeting.

Preference Share

The Characters of the preferred stock are hybrid nature. Some of its features resemble the

70 | P a g e
bond and others the equity shares. Like the bonds, their claims on the company's income

are limited and they receive fixed dividend. In the event of liquidation of the company their

claims on the assets of the firm are also fixed.

Types of Preference Share-

a) Cumulative Preference Shares- The cumulative total of all unpaid preferred

dividends must be paid before dividends are paid on the common equity. The unpaid

dividends are known as arrearages. The arrearages do not earn interest.

b) Non- Cumulative Shares- As the name suggests, the dividend does not accumulate.

If there is no profit or inadequate profit in the company in a particular Year, the

company does not pay it. In the winding up of a company if the preference and equity

shares are fully paid, they have no further rights to have claims in the surplus.

c) Convertible Preference Shares- The convertibility feature makes the preference

share a more attractive investment security. The conversion feature is almost identical

with that of the bonds.

d) Redeemable Preference Shares- If there is a provision in the Articles of

Association redeemable preference shares can be issued. But redemption of the shares

can be done only when

• The partly paid up shares are made fully paid up

• The fund for redemption is created from the profits, which would otherwise be

Available for distribution of dividends or out of the proceeds of fresh issue of

71 | P a g e
 Shares for the purpose.

• If any premium has to be paid on redemption, it should be paid out of the Profits.

• When redemption is made out of profits, a sum equal to the nominal Value of the

redeemed shares should be transferred to the capital Redemption account.

e) Irredeem1able Preference Shares-This type of shares is not redeemable except on

occasions like winding up of the business. In India, this type of shares was permitted till

l5th June 1988.

Debenture – Debenture includes debenture stock, bond and any other securities of

company, whether constituting a charge on the assets of the company or not. Debenture are

generally issued by the private sector companies as a long-term promissory note for raising

loan capital.

Characteristic of Debentures –

♦ Form –It is given in the form of certificate of indebtedness by the company specifying

the date of redemption and interest rate.

♦ Interest – The rate of interest is fixed at the time of issue itself which is known as
contractual or coupon rate of interest. Interest is paid as a percentage of the par value of the

debenture and may be paid annually, semi annually or quarterly.

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♦ Redemption – As stated earlier the redemption date would be specified in the issue

itself. The maturity period may range from 5 years to 10 years India. They may be

redeemed in installments.

Indenture –Indenture is a trust deed between the company issuing debenture and the

debenture trustee whom represents the debenture holders. The trustee takes the

responsibility of protecting the interest of the debenture holders and ensures that the

company fulfills the contractual obligations.

Bonds –Bond is long term debt instrument that promises to pay a fixed annual sum as

interest for specified period of time. The basic features of the bonds are given below:

• Bonds have face value. The face value is called par value. The bonds may be issued

at par or at discount.

• The interest rate is fixed. Sometimes it may be variable in the case of floating rate

bond.

• The maturity date of the bond is usually specified at the issue time except in the

case of perpetual bonds.

73 | P a g e
 CHAPTER 4:

Data Analysis

MOST PERFORMING EQUITIES DURING THE

LAST FINANCIAL YEAR 2009-2010

74 | P a g e
1 RELIANCE 11. LARSEN & 21. STERLITE 31. TATA 41. ESSAR OIL
INDUS. LTD TOUBRO LTD INDS (IND) CONSULTANCY LTD
LTD SER. LTD
2. ICICI BANK 12. J.P. ASSO 22. JSW STEEL 32. IFCI LTD 42. BAJAJ HIND
LTD. LTD LTD LTD
3. UNITECH 13. INFOSYS 23.SATYAM 33. SAIL 43. HINDUSTAN
LTD TECH LTD COMP SER UNILEVER
LTD LTD
4. TATA 14. ABAN 24. SESA GOA 34. HINDALCO IND. 44. CAIRN INDIA
STEEL LTD OFFSHORE LTD LTD LTD
LTD
5. DLF LTD 15. RELIANCE 25. BHEL 35. PUNJ LLOYD 45. IVRCL
INFRA LTD LTD INFRA & PRO
LTD
6. SBI 16. TATA 26. RELIANCE 36. INFRA DEV FIN 46. LANCO INRA
MOTORS LTD COMM LTD CORP LTD TECH LTD
7. SUZLON 17. AXIS BANK 27. INDIA BULLS 37. ITC LTD 47. SHREE
ENERGY LIMITED REAL EST. RENUKA
LTD LTD SUGARS
LTD
8 RELIANCE 18. EDUCOMP 28. RELIANCE 38. MARUTI 48. HERO
CAP. LTD SOLUTIONS NAT. RES. SUZUKI INDIA HONDA
LTD LTD LTD MOTORS
LTD
9. HOUSING 19. HDFC LTD 29. HDFC BANK 39. NTPC LTD 49. KOTAK
DEV & LTD MAHINDRA
INFRA LTD BANK LTD
10. BHARTI 20.JINDAL STEEL 30. OIL AND 40. MAHINDRA & 50. LIC
AIRTEL & POWER NATURAL MAHINDRA HOUSING
LTD LTD GAS CORP LTD FIN LTD
LTD

Above are the Most Performing Equities during the last Financial Year 2009-2010. These

Equities are taken from the NSE’s (National Stock Exchange’s) website. I have taken these

equities to evaluate the Top Performing Equity of the last Financial Year 2009-2010.

There is a technique of Growth Percentage, which I used here to evaluate the Top

Performing Equity of the last Financial Year 2009-2010. The formula for this:-

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 Growth % = Growth change/open price * 100

Growth change = Close Price – Open Price

So as per the formula, to find the Growth percentage of the equities there is a need of

Growth change and to find out the Growth change of the equities, Open Price (01-04-2009)

and Close Price (31-03-2010) of the equities are needed.

OPEN AND CLOSE PRICE OF ABOVE EQUITIES

76 | P a g e
S.No Name of the Script Open Price Close Price Change % change
(1-04-2009) (31-03-2010)

1 RELIANCE INDUSTRIES LTD 1523.00 1074.25 -448.75 -29.46%

2 ICICI BANK LTD. 349.70 952.50 602.80 172.36%
3 UNITECH LTD 35.60 73.60 38.00 106.74%
4 TATA STEEL LIMITED 33.80 73.60 598.25 1769.79%
5 DLF LIMITED 167.30 308.90 141.60 84.63%
6 STATE BANK OF INDIA 1076.15 2078.20 1002.05 93.11%
7 SUZLON ENERGY LIMITED 43.45 71.85 28.40 65.36%
8 RELIANCE CAPITAL LTD 357.40 756.05 398.65 111.54%
9 HOUSING DEV & INFRA LTD 83.00 286.35 203.35 245.00%
10 BHARTI AIRTEL LIMITED 626.40 312.55 -313.85 -50.10%
11 LARSEN & TOUBRO LTD. 679.00 1630.85 951.85 140.18%
12 JAIPRAKASH ASSOCIATES LTD 84.90 149.55 64.65 76.14%
13 INFOSYS TECHNOLOGIES LTD 1331.15 2615.95 1284.80 96.51%
14 ABAN OFFSHORE LTD. 394.60 1162.55 767.95 194.61%
15 RELIANCE INFRASTRUCTURE LTD 520.00 999.05 479.05 92.12%
16 TATA MOTORS LIMITED 182.00 757.70 575.70 316.31%
17 AXIS BANK LIMITED 420.00 1168.25 748.25 178.15%
18 EDUCOMP SOLUTIONS LTD 2096.00 747.75 -1348.25 -64.32%
19 HDFC LTD 1411.00 2717.20 1306.20 92.56%
20 JINDAL STEEL & POWER LTD 1214.00 703.10 -510.90 -42.08%
21 STERLITE INDS (IND) LTD 360.00 849.95 489.95 136.0%
22 JSW STEEL LIMITED 234.20 1234.80 1000.60 427.24%
23 SATYAM COMPUTER SERVICES LTD. 38.95 92.35 53.40 137.90%
24 SESA GOA LTD 101.00 470.45 369.45 365.79%
25 BHEL 1520.00 2390.65 870.65 57.27%
26 RELIANCE COMMUNICATIONS LTD. 176.00 169.95 -6.05 -3.40%
27 INDIABULLS REAL EST. LTD 91.00 105.10 14.10 15.49%
28 REL. NAT. RESOURCES LTD. 44.80 62.25 17.45 38.95%
29 HDFC BANK LTD 985.00 1933.50 948.50 96.29%
30 OIL AND NATURAL GAS CORP. 780.00 1098.70 318.70 40.85%
31 TATA CONSULTANCY SERV LTD. 536.00 780.65 244.65 45.64%
32 IFCI LTD 19.45 48.95 29.50 151.67%
33 STEEL AUTHORITY OF INDIA 96.25 252.55 156.30 162.38%
34 HINDALCO INDUSTRIES LTD 52.00 181.25 129.25 248.55%
35 PUNJ LLOYD LIMITED 92.80 177.30 84.50 91.05%
36 INFRA. DEV. FIN. CO. LTD 54.00 160.95 106.95 198.05%
37 ITC LTD 185.50 263.05 77.95 42.11%
38 MARUTI SUZUKI INDIA LTD. 780.00 1417.95 637.95 81.78%
39 NTPC LTD 180.50 179.85 -0.65 -0.36%
40 MAHINDRA & MAHINDRA LTD 384.85 541.35 156.5 40.66%
41 ESSAR OIL LTD 68.15 138.20 70.05 102.78%
42 BAJAJ HINDUSTAN LTD 48.50 135.70 87.20 179.79%
43 HINDUSTAN UNILEVER LTD. 235.00 239.55 4.55 1.93%
44 CAIRN INDIA LIMITED 183.50 305.65 122.15 66.56%
45 IVRCL INFRAST & PROJ LTD 122.90 121.45 -1.45 -1.77%
46 77LANCO
| P a g eINFRATECH LTD. 141.25 145.30 4.05 2.86%
47 SHREE RENUKA SUGARS LTD 90.00 91.20 1.20 1.30%
48 HERO HONDA MOTORS LTD 1075.00 1070.15 -3.85 -0.35%
49 KOTAK MAHINDRA BANK LTD 284.80 282.20 -2.60 -0.91%
50 LIC HOUSING FINANCE LTD 225.00 871.55 646.55 253.54%
 TOP 15 PERFORMING EQUITIES IN THE LAST
FINANCIAL YEAR 2009-2010

S.no Script Name Industry & Sector Open Price Close Price Growth %
(01-04-09) (31-04-10) Growth
1 Tata steel Ltd Metal Sector 33.80 632.05 598.25 1769.97
2 JSW Steel Ltd. Metal Sector 234.20 1234.80 1000.60 427.24
3 Sesa Goa Metal Sector 101.00 470.45 369.45 365.79
4 Tata Motors Auto Sector 182.00 757.70 575.70 316.31
5 LIC Housing Finance Ltd Finance Sector 225.00 871.55 646.55 253.54
6 Hindalco Ind. Ltd Metal Sector 52.00 181.25 129.25 248.55
7 Housing Dev & Infra. Ltd. Reality Sector 83.00 286.35 203.35 245.00
8 Infra Dev Finance Co. Ltd. Finance 54.00 160.95 106.95 198.05
9 Aban Offshore Ltd. Oil &Gas Sector 349.60 1162.55 767.95 194.61
10 Bajaj Hind. Ltd. Sugar Sector 48.50 135.70 87.20 179.79
11 Axis Bank Banking Sector 420.00 1168.25 748.25 178.15
12 ICICI Banking Sector 349.70 952.50 602.80 172.37
13 SAIL Oil &Gas Sector 96.25 252.55 156.30 162.38
14 IFCI Ltd. Finance Sector 19.45 48.95 29.50 151.67
15 Larsen & Turbo Ltd. Capital Goods 679.00 1630.85 951.85 140.18
Sector

These 15 Equities are taken from the above 50 Equities according to their Growth
percentage.

78 | P a g e
Opening Price of the Equities:-

Closing Price of the Equities:-

79 | P a g e
Performance Graph of Equities:-

Script Name Growth

Tata steel Ltd 598.25
JSW Steel Ltd. 1000.6
Sesa Goa 369.45
Tata Motors 575.7
LIC Housing Finance Ltd 646.55
Hindalco Ind. Ltd 129.25
Housing Dev & Infra. Ltd. 203.35
Infra Dev Finance Co. Ltd. 106.95
Aban Offshore Ltd. 767.95
Bajaj Hind. Ltd. 87.2
Axis Bank 748.25
ICICI 602.8
SAIL 156.3
IFCI Ltd. 29.5
Larsen & Turbo Ltd. 951.85

80 | P a g e
Percentage Growth of Equities:-
Script Name % Growth
Tata steel Ltd 1769.97
JSW Steel Ltd. 427.24
Sesa Goa 365.79
Tata Motors 316.31
LIC Housing Finance Ltd 253.54
Hindalco Ind. Ltd 248.55
Housing Dev & Infra. Ltd. 245
Infra Dev Finance Co. Ltd. 198.05
Aban Offshore Ltd. 194.61
Bajaj Hind. Ltd. 179.79
Axis Bank 178.15
ICICI 172.37
SAIL 162.38
IFCI Ltd. 151.67
Larsen & Toubro Ltd. 140.18

81 | P a g e
As clearly depicted in the above table and Graph that the highest Growth

Percentage is shown by TATA STEELS LIMITED i.e. 1769.97.

So, according to this analysis

 Tata Steels Limited holds First Position with the Growth percentage of 1769.97

 JSW Steel Ltd. holds Second Position with the Growth Percentage of 427.24

 Sesa Goa holds Third Position with the Growth Percentage of 365.79

 Tata Motors holds Fourth Position with the Growth Percentage of 316.31

 LIC Housing Finance Ltd holds Fifth Position with the Growth Percentage of

253.54

 Hindalco Ind. Ltd holds Sixth Position with the Growth Percentage of 248.55

82 | P a g e
  Housing Dev & Infra. Ltd. holds Seventh Position with the Growth Percentage of

245

 Infra Dev Finance Co. Ltd. holds Eighth Position with the Growth Percentage of

198.05

 Aban Offshore Ltd. holds Ninth Position with the Growth Percentage of 194.61

 Bajaj Hind. Ltd. holds Tenth Position with the Growth Percentage of 179.79

 Axis Bank holds Eleventh Position with the Growth Percentage of 178.15

 ICICI holds Twelfth Position with the Growth Percentage of 172.37

 SAIL holds Thirteenth Position with the Growth Percentage of 162.38

 IFCI Ltd. holds Fourteenth Position with the Growth Percentage of 151.67 and

 Larsen & Toubro Ltd. holds Fifteenth or last Position with the Growth Percentage

of 140.18

83 | P a g e
 CHAPTER 5:

Research profile

OBJECTIVE OF THE STUDY

84 | P a g e
  To know the Consumer behavior towards financial products.

To create awareness of the brand among the customers who are not aware of the

Brand & its products-

• Building a good relation with the customers.

• Understanding the customers to enable pitching the right Set of products

• Educating the customers about the Health wise Policy (Most selling policy

of General Insurance) for them as well as for their family

 Analysis of Investment pattern of an individual

 To know about the satisfaction of individual on financial products.

 To know about various aspects regarding investments like whether

people Prefer Speculative market or they prefer secure market.

85 | P a g e
 RESEARCH METHODOLOGY

Primary Sources:

Discussion with Managers & Clients

Secondary Source:

 Internal Sources

 Website Leaflet

 Pamphlet

 Books

 Newspaper

Sample size:

Sample size is 50.

Nature of the Study:

The study undertaken is descriptive in nature, which tends to use data based on

interaction with the managers and clients.

86 | P a g e
 LIMITATIONS OF STUDY

Due to the following unavoidable and uncontrollable factors the factors, the result

might not be accurate. Some of the problems faced while conducting the survey are as

follows:-

• Time and cost constraints were also there.

• Chances of some biasness could not be eliminated.

• A Samples size of fifty has been use due to time limitations.

• A majority of respondents show lack of cooperation and are biased towards their

own opinions.

• My study is based on responses of client and guidance of corporation only, which

may not give a true picture.

• Since the study involved a through analysis of the insurance market and relative

study of various players offering the similar products and that of similar, it required

a dedicated labor in term of both time and effort. Since the curriculum did not

permit more time, the study had to be very limited

87 | P a g e
 CHAPTER 6:

SWOT Analysis

88 | P a g e
STRENGTHS:

I. Financial Acumen - Holds a stable and diversified portfolio and has received some

of the highest ratings in financial strength from industry’s independent rating

agencies.

II. Disciplined fund management - Years of experience in asset management, and a

strong track record in managing funds - backed by the acclaimed expertise of Old

Mutual plc

III. Innovativeness - Known for being an innovator in providing world-class pragmatic

financial solutions, with a constant focus on customization and flexibility

IV. Unrelenting Customer Focus - A highly committed sales force, with customer

satisfaction as the key driving force - a major differentiator

89 | P a g e
 V. Transparency in Services - Daily declaration of fund performances, regular

performance benchmarking, well regulated asset management, and monthly

newsletter on market updates

WEAKNESSES:

 Rural areas still not covered.

 Not very known among Indian population.

 Lack of credibility among the people because Kotak being a private player.

 Premiums are high as compared to its competitors.

 Very few branches in the country.

 Products:

» The policy doesn’t have the surrender option before third year.

» Plan does not offer any guarantee or assured return.

» Product profile is not very comprehensive.

» Mortality, management and administrative charges are sky scrapping as

compared to its competitors.

OPPORTUNITIES:

 Liberalization of Indian economy.

 As the industry is growing the whole market is virgin.

 The whole private sector is opened to be trapped even though the competition is

fierce from government owned insurance companies.

90 | P a g e
  It’s a volume business that is even if the company has few good corporate the

turnover cease to increase by manifold.

THREATS

 The government players will become aggressive thus growth is going to be tough.

 Entry of other players is not ruled out.

 Apprehension towards Kotak being a private life insurance company.

 We expect the industry to rationalize in future that is mergers and acquisitions will

happen, which will impact the industry and Kotak life fortunes.

CHAPTER 7:

91 | P a g e
 Suggestions &
Recomendations

SUGGESTIONS AND RECOMMENDATIONS

Some of the Suggestions and Recommendations for improving the present Image as well as

the Services of Kotak Securities Ltd. are as follows:

More Branches:

Some more branches should be opened so it become more easy and approachable for the

people to do their transaction. The branches should have well trained employees.

Customer Awareness:

92 | P a g e
The people should be updated with the new issues and the schemes started by the

organization to the existing customers.

The customers should be informed about the newly issued scrips.

Regular contact with the customers through telephone can be maintained for smooth

running of the business.

Feed back:

A poor feedback system should be designed to take care of the dissatisfied customers and

solving their problem as their bad words of mouth publicity can make Kotak Securities Ltd.

Loose its potential as well as existing customers.

Well Trained Customers Care Staff:

For satisfactorily handling queries to establish more good standards in trading can be done

through outstanding performance, courteous services and a high ethical benchmark.

Higher penetration in the Untapped Market:

Approaching all the potential clients, making them aware about various instruments and

convincing them

News Paper and Agents:

Newspaper and Agents are most effective tools for awareness, so Kotak Securities Ltd.

Should use these tools more for Advertisement.

93 | P a g e
94 | P a g e
 CHAPTER 7:

Bibliography

BIBLIOGRAPHY

Research Methodology: C.R. Kothari

Financial Management: Khan & Jain

Investment Management: Preeti Singh

95 | P a g e
 • Pamphlets and Brochures of Kotak Securities Ltd.

• Organizational profile of Kotak Securities Ltd.

• Click by Click user manual of Kotak Securities Ltd.

WEBSITES USED:

• www.kotaksecurities.com

• www.nseindia.com

• www.google.com

• www.businesstoday.com

96 | P a g e