Study on Investment Analysis

A Project Submitted To
University of Mumbai For Partial Completion Of
The Degree of Bachelor In Commerce
(Accounting And Finance)
SEMESTER-VI

Submitted By
Moni Rakesh Gupta

Roll No.81

Under the Guidance of

Prof. Kundan Tiwari

K.M. AGRAWAL COLLEGE.

ADDRESS: GANDHARE, PADGHA RD, KALYAN (W) 421-301, DIS-THANE
2021-22

1
 K.M. AGRAWAL COLLEGE.
ADDRESS: GANDHARE, PADGHA RD, KALYAN (W) 421-301,
DIS-THANE

Certificate
This is to certify that Moni Rakesh Gupta has worked and duly completed her/his Project
Work for the degree of Bachelor in Commerce (Accounting & Finance) under the Faculty of
Commerce in the subject of Accounting & Finance and his/her project is entitled,“Kundan
Tiwari ” under my supervision.
I further certify that the entire work has been done by the learner under my guidance
and that no part of it has been submitted previously for any. Degree or Diploma of
any University.
It is his/her own work and facts reported by her/his personal findings and
investigations.

Course Co-ordinator Principal

Project Guide External Examiner

Date of Submission: Internal Examiner

2
 DECLARATION

I, the undersigned Miss Moni Rakesh Gupta hereby, declare that the work embodied
in this project work tittle “ STUDY ON INVESTMENT ANALYSIS”, my own contribution
to the research work carried out under the guidance of Mr. Kundan Tiwari a result of my own
research work and has not been previously submitted to any other University for
any other Degree/ Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical conduct.

Ms. Moni Rakesh Gupta

Name and Signature of the learner

Certified by

Mr. Kundan Tiwari

ACKNOWLEDGEMENT
To list who all have helped me is difficult they are so numerus and the depth is so enormous.
would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.
would like to thank my Principal, DR. ANITA MANNA for rewording the necessary
facilities required for completion of this project.
I take this opportunity to thank our Coordinator, PROF. SUJEET SINGH for his moral support
and guidance.
I would also like to express my sincere gratitude towards my project guide
PROF. KUNDAN TIWARI whose guidance and care made the project successful.
I would like to thank my Library, for having provided various books and magazines related
to my project. Lastly.
I would like to thank each and every person who directly or indirectly help me
in the completion of the project especially my Parents and Peers who supported me
throughout my project.
S.No. CONTENTS

1. PREFACE

2. EXECUTIVE SUMMARY

3. INTRODUCTION

4. INDUSTRY PROFILE

5. COMPANY PROFILE

6. INTRODUCTION OF THE TOPIC

7. OBJECTIVES OF PROJECT

8. SCOPE OF STUDY

9. RESEARCH METHODOLOGY

10. ANALYSIS AND INTERPRETATION

11. FINDINGS

12. LIMITATIONS

13. SUGGESTIONS

14. CONCLUSION

15. BIBLIOGRAPHY

16. QUESTIONNAIRE
 PREFACE

The Data Collected for this purpose has been presented in a condensed form so that the deep

analysis of the data can be made to draw meaningful conclusion and make the project meaningful

and worthy .A good practice oriented management program include is its curriculum ,vocational

training because it is an important aspect. Every student has to undergo training in an industrial

commercial organization for specifically period and theoretical knowledge is imperfect and

incomplete with out practical knowledge and vice-versa.To develop healthy management and

administration skills in the potential managers it is very theoretical knowledge must be supported

with the real business environment the training enables also yhe management students to see the

working conditions under which they have to work in future. To have practical working experience

in

INDIA INFOLINE LTD.

The training enables and helped me in giving an insight into the working process system and role

and importance of Marketing in an organization to get a practical insight in the actual business

environment. The training also helped me in giving an insight into the working experience process

system of Marketing in an organization .

 EXECUTIVE SUMMARY

The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd (NSE:

INDIAINFO, BSE: 532636) and its subsidiaryes, is one of the leading players in the Indian

financial services space. IIFL offers advice and execution platform for the entire range of financial

services covering products ranging from Equities and derivatives, Commodities, Wealth

management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds

and other small savings instruments. IIFL recently received an in-principle approval for Securities

Trading and Clearing memberships from Singapore Exchange (SGX) paving the way for IIFL to

become the first Indian brokerage to get a membership of the SGX. IIFL also received membership

of the Colombo Stock Exchange becoming the first foreign broker to enter Sri Lanka. IIFL owns

and manages the website, www.indiainfoline.com, which is one of India’s leading online

destinations for personal finance, stock markets, economy and business. IIFL has been awarded the

‘Best Broker, India’ by FinanceAsia and the ‘Most improved brokerage, India’ in the AsiaMoney

polls. India Infoline was also adjudged as ‘Fastest Growing Equity Broking House - Large firms’ by

Dun & Bradstreet. A forerunner in the field of equity research, IIFL’s research is acknowledged by

none other than Forbes as ‘Best of the Web’ and ‘…a must read for investors in Asia’. Our research

is available not just over the Internet but also on international wire services like Bloomberg,

Thomson First Call and Internet Securities where it is amongst one of the most read Indian brokers.
CHAPTER – I

INTRODUCTION
 INDUSTRY PROFILE
INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have been around even

before the establishment of the BSE in 1875. Despite passing through number of changes in the

post liberalization period, the industry has found its way onwards sustainable growth. With the

purpose of gaining a deeper understanding about the role of the Indian stock broking industry in

the country’s economy, we present in this section some of the industry insights gleaned from

analysis of data received through primary research.

For the broking industry, we started with an initial database of over 1,800 broking firms that

were contacted, from which 464 responses were received. The list was further short listed based on

the number of terminals and the top 210 were selected for profiling. 394 responses, that provided

more than 85% of the information sought have been included for this analysis presented here as

insights. All the data for the study was collected through responses received directly from the

broking firms. The insights have been arrived at through an analysis on various parameters,

pertinent to the equity broking industry, such as region, terminal, market, branches, sub brokers,

products and growth areas.

Some key characteristics of the sample 394 firms are:

 On the basis of geographical concentration, the West region has the maximum

representation of 52%. Around 24% firms are located in the North, 13% in the South and

10% in the East

 3% firms started broking operations before 1950, 65% between 1950-1995 and 32% post

1995.

 On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7%

in Kolkata, 4% in Chennai and 29% are from other cities

 From this study, we find that almost 36% firms trade in cash and derivatives and 27% are

into cash markets alone. Around 20% trade in cash, derivatives and commodities

 In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both

exchanges. In the derivative segment, 48% trade at NSE, 7% at BSE and 45% at both,

whereas in the debt market, 31% trade at NSE, 26% at BSE and 43% at both exchanges

 Majority of branches are located in the North, i.e. around 40%. West has 31%, 24% are

located in South and 5% in East

 In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in North

and 4% in East

 Trading, IPOs and Mutual Funds are the top three products offered with 90% firms offering

trading, 67% IPOs and 53% firms offering mutual fund transactions

 In terms of various areas of growth, 84% firms have expressed interest in expanding their

institutional clients, 66% firms intend to increase FII clients and 43% are interested in

setting up JV in India and abroad

 In terms of IT penetration, 62% firms have provided their website and around 94% firms

have email facility

A BRIEF HISTORY

India Infoline was originally incorporated on October 18, 1995 as Probity Research and

Services Private Limited at Mumbai under the Companies Act, 1956 with Registration No. 11

93797. India Infoline commenced operations as an independent provider of information, analysis

and research covering Indian businesses, financial markets and economy, to institutional customers.

India Infoline became a public limited company on April 28, 2000 and the name of the Company

was changed to Probity Research and Services Limited. The name of the Company was changed to

India Infoline.com Limited on May 23, 2000 and later to India Infoline Limited on March 23, 2001.

In 1999, India Infoline.com identified the potential of the Internet to cater to a mass retail

segment and transformed our business model from providing information services to institutional

customers to retail customers. Hence India Infoline launched Internet portal,

www.indiainfoline.com in May 1999 and started providing news and market information,

independent research, interviews with business leaders and other specialized features.

In May 2000, the name of India Infoline was changed to India Infoline.com Limited to

reflect the transformation of our business. Over a period of time, India Infoline.com has emerged as

one of the leading business and financial information services provider in India.
 In the year 2000, India Infoline leveraged its position as a provider of financial

information and analysis by diversifying into transactional services, primarily for online trading in

shares and securities and online as well as offline distribution of personal financial products, like

mutual funds and RBI Bonds. These activities were carried on by our wholly owned subsidiaries.

India Infoline broking services was launched under the brand name of 5paisa.com through

our subsidiary, India Infoline Securities Private Limited and www.5paisa.com, the e-broking portal,

was launched for online trading in July 2000. It combined competitive brokerage rates and research,

supported by Internet technology besides investment advice from an experienced team of research

analysts, India Infoline also offer real time stock quotes, market news and price charts with multiple

tools for technical analysis.

Facilities

India Infoline’s main offices are located in approximately 4,000 square feet of office space

located in Mumbai, India. India Infoline Branches collectively occupy an additional 10,000 square

feet of office space located throughout India, As on March 31, 2005, India Infoline has 73 branches

across 36 locations in India.

Terminals

Almost 52% of the terminals in the sample are based in the Western region of India,

followed by 25% in the North, 13% in the South and 10% in the East. Mumbai has got the

maximum representation from the West, Chennai from the South, New Delhi from the North and

Kolkata from the East.

Branches & Sub-Brokers

The maximum concentration of branches is in the North, with as many as 40% of all

branches located there, followed by the Western region, with 31% branches. Around 24% branches

are located in the South and East constitutes for 5% of the total branches of the total sample.

In case of sub-brokers, almost 55% of them are based in the South. West and North follow,

with 30% and 11% sub-brokers respectively, whereas East has around 4% of total sub-brokers.

Financial Markets

The financial markets have been classified as cash market, derivatives market, debt market

and commodities market. Cash market, also known as spot market, is the most sought after

amongst investors. Majority of the sample broking firms are dealing in the cash market, followed

by derivative and commodities. 27% firms are dealing only in the cash market, whereas 35% are
into cash and derivatives. Almost 20% firms trade in cash, derivatives and commodities market.

Firms that are into cash, derivatives and debt are 7%. On the other hand, firms into cash and

commodities are 3%, cash & debt market and commodities alone are 2%. 4% firms trade in all the

markets.

In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both

exchanges. In the equity derivative market, 48% of the sampled broking houses are members of

NSE and 7% trade at BSE, while 45% of the sample operate in both stock exchanges. Around 43%

of the broking houses operating in the debt market, trade at both exchanges with 31% and 26%

firms uniquely at NSE and BSE respectively.

Products

The survey also revealed that in the past couple of years, apart from trading, the firms have

started offering various investment related value added services. The sustained growth of the

economy in the past couple of years has resulted in broking firms offering many diversified

services related to IPOs, mutual funds, company research etc. However, the core trading activity is

still the predominant form of business, forming 90% of the firms in the sample. 67% firms are

engaged in offering IPO related services. The broking industry seems to have capitalized on the

growth of the mutual fund industry, which was pegged at 40% in 2006. More than 50% of the

sample broking houses deal in mutual fund investment services. The average growth in assets

under management in the last two years is almost 48%. Company research is another lucrative area

where the broking firms offer their services; more than 33% of the firms are engaged in providing

company research services. Additionally, a host of other value added services such as fundamental

and technical analysis, investment banking, arbitrage etc are offered by the firms at different levels.
Of the total sample of broking houses providing trading services, 52% are based in the West,

followed by 25% from North, 13% from South and 10% from the East. Around 50% of the firms

offering IPO related services are based in the West as compared to 27% in North, 13% in South

and 10% in East. In providing mutual funds services, the Western region was dominant amounting

to 49% followed by 27% from North; The South and the East are almost at par with 13% and 11%

respectively.

Future Plans

68% of the firms from the sample have envisaged strategies for future growth. With the

middle class Indian investor as well as foreign investor willing to invest in the stock market,

majority of the firms preferred expansion of institutional and the Foreign Institutional Investor

clients in their areas of growth. Around 84% have shown interest in expanding their institutional
client base. Nearly 51% of such firms are located in the West, 25% in North, 15% are from South

and 9% from East. Since the past couple of years, India, along with Korea and Taiwan, has been

one of the preferred destinations for the FIIs. With corporate restructuring, rising market

capitalization and sectoral friendly policies helping the FIIs, more than two thirds of the firms are

interested in increasing their FII client base. Amongst these firms, west again has maximum

representation of 53%, followed by North with 22%. South has 15% firms and East makes up for

9%.
COMPANY PROFILE
 A PROFILE OF

INDIA INFOLINE LIMITED

INTRODUCTION

In most industrialized countries, a substantial part of financial wealth is not managed directly by

savers, but through a financial intermediary, which implies the existence of an agency contract

between the investor (the principal) and a broker or portfolio manager (the agent). Therefore,

delegated brokerage management is arguably one of the most important agency relationships

intervening in the economy, with a possible impact on financial market and economic developments

at a macro level.

In most of the metros, people like to put their money in stock options instead of dumping it

in the bank-lockers. Now, this trend pick pace in small but fast developing cities like .

As the per-capita-income of the country is on the higher side, so it is quite obvious that they

want to invest their money in profitable ventures. On the other hand, a number of brokerage houses

make sure the hassle free investment in stocks. Asset management firms allow investors to estimate

both the expected risks and returns, as measured statistically. There are mainly two types of

Portfolio management strategies.

1 .Passive Portfolio Strategy

2. Active Portfolio Strategy

 1. Passive Portfolio Strategy: A strategy that involves minimal expectation input, and instead

relies on diversification to match the performance of some market index. A passive strategy

assumes that the marketplace will reflect all available information in the price paid for

securities

2. Active Portfolio Strategy: A strategy that uses available information and forecasting

techniques to seek a better performance than a portfolio that is simply diversified broadly.

BACKGROUND OF STOCK EXCHANGE IN INDIA

The emergence of stock market can be traced back to 1830. In Bombay, business passed in the

shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the

oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman

reported the quotations of 4%, 5%, and 6% loans of East India Company as well as the shares of the

bank of Bengal in 1836. This list was a further broadened in 1839 when the Calcutta newspaper

printed the quotations of banks like union bank and Agra bank. It also quoted the prices of business

ventures like the Bengal bonded warehouse, the Docking Company and the storm tug company.

Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the

share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of

brokers was about 60 and during the exciting period of the American Civil war, their number

increased to about 200 to 250. The end of American Civil war brought disillusionment and many

failures and the brokers decreased in number and prosperity. It was in those troublesome times

between 1868 and 1875 that brokers organized an informal association and finally as recited in the

Indenture constituting the “Articles of Association of the Exchange”. On or about 9th day of
July,1875, a few native brokers doing brokerage business in shares and stocks resolved upon

forming in Bombay an association for protecting the character, status and interest of native share

and stock brokers and providing a hall or building for the use of the members of such association.

As a meeting held in the broker’ Hall on the 5th day of February, 1887, it was resolved to execute a

formal deal of association and to constitute the first managing committee and to appoint the first

trustees. Accordingly, the Articles of Association of the Exchange and the Stock Exchange was

formally established in Bombay on 3rd day of December, 1887. The Association is now known as

“The Stock Exchange”.

The entrance fee for new member was Re.1 and there were 318 members on the list, when the

exchange was constituted. The numbers of members increased to 333 in 1896, 362 in 1916and 478

in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in 1916 and Rs.

48,000 in 1920. At present there are 23 recognized stock exchanges with about 6000 stock

brokers. Organization structure of stock exchange varies.

14 stock exchanges are organized as public limited companies, 6 as companies limited by guarantee

and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have been

permanent recognition. Others have to seek recognition on annual basis.

These exchange do not work of its own, rather, these are run by some persons and with the help of

some persons and institution. All these are down as functionaries on stock exchange. These are

1. Stockbrokers

2. sub-broker

3. market makers

4. Portfolio consultants etc.

Stockbrokers

Stock brokers are the members of stock exchanges. These are the persons who buy, sell or deal in

securities. A certificate of registration from SEBI is mandatory to act as a broker. SEBI can impose

certain conditions while granting the certificate of registrations. It is obligatory for the person to

abide by the rules, regulations and the buy-law. Stock brokers are commission broker, floor broker,

arbitrageur etc.

Detail of registered brokers

Total no. of registered brokers as Total no. of sub-brokers as on

on 31.03.2008 31.03.2008

9000 24,000

Sub-broker

A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists the

investors in buying, selling or dealing in securities through stockbroker. The broker and sub-broker

should enter into an agreement in which obligations of both should be specified. Sub-broker must

be registered SEBI for a dealing in securities. For getting registered with SEBI, he must fulfill

certain rules and regulation.

Market Makers

Market maker is a designated specialist in the specified securities. They make both bid and offer at

the same time. A market maker has to abide by bye-laws, rules regulations of the concerned stock

exchange. He is exempt from the margin requirements. As per the listing requirements, a company
where the paid-up capital is Rs. 3 crore but not more than Rs. 5 crore and having a commercial

operation for less than 2 years should appoint a market maker at the time of issue of securities.

Portfolio consultants

A combination of securities such as stocks, bonds and money market instruments is collectively

called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who

advise, direct or undertake the management or administration of securities or funds on behalf of

their clients.

Partial fulfillment for degree of M.B.A. programme, we received the opportunity from India

Infoline Ltd. for our summer training project report. It is basically a stock brokering company

which deals in security and derivative market, Commodity market, mutual funds and Insurance etc.

The stock market plays a major role in mobilizing the savings into investment. Stock market

development is positively correlated with the development of financial intermediaries and

long-term growth. Stock market also provides a different bundle of financial functions from

those provided by financial intermediaries. The stock market in India is more efficient than

banking system on account of the enabling government policies and that stock market

development has a key role to play in the reforms of system by generating competition for

funds mobilization and allocation. Hence, an efficient capital market would contribute to

long-term growth. According to RBI the flow of funds in the private corporate sector shows

that there is growing reliance of the private corporate sector on external financing.
The equity market in developing countries until the mid-1980s generally suffered from the

classical defects of bank-dominated economies, that is, shortage of equity capital, lack of

liquidity, absence of foreign institutional investors, and lack of investor’s confidence in the

stock market. Since 1986, the capital markets of the developing countries started developing

with financial liberalization and the easing of legislative and administrative barriers and the

adoption of tougher regulations to boost investor’s confidence. With the beginning of

financial liberalization in the developing countries, the flow of private foreign capital from

the developed to developing countries has increased significantly and such inflow of foreign

capital have been mainly in the form of foreign direct investment and portfolio investment.

The latter type of inflows has mainly been through their stock markets.

In the history of International Finance, the year 1992- 1993 may be seen as a watershed year

in which emerging markets came into their own as capital raising mechanisms and became

firmly established as a distinct asset class for the word’s investment community with financial

liberalization, the east Asian capital markets like Singapore, Honkong and Bangkok have

developed over time to the extent that they are presently regarded as international financial

centers of Asia.

In the capital markets over the last few years that has made the markets attractive to foreign

institutional investors. This history shows us that retail investors are yet to play a substantial

role in the market as long-term investors. Retail participation in India is very limited

considering the overall savings of households. Investors who hold shares in limited

companies and mutual fund units are about 20-30 million. Those who participated in

secondary markets are 2-3 million. Both SEBI and retail participants should be active in
 spreading market wisdom and empowering investors in planning their finances and

understanding the markets.

About them

Are a one stop financial services shop, most respected for quality of its advice, are a one- stop

financial services shop, most respected for quality of its advice, personalized service and cutting-

edge technology.

Vision

India Infoline vision is to be the most respected company in the financial services space.

India Infoline Group

The India Infoline group, comprising the holding company, India Infoline Limited and its

wholly-owned subsidiaries, straddle the entire financial services space offerings ranging from Equity

research, Equities and derivatives trading, Commodities trading , portfolio Management Services,

Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small savings instruments to loan

products and investment banking. India Infoline also owns and manages the websites

www.indiainfoline.com and www.5paisa.com.

The company has a network of 596 branches spared across 345 cities and towns. It has more

than 500,000 customers.

India Infoline Ltd.

India Infoline Limited is listed on both the leading stock exchanges in India, viz. the stock

Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the

exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory Services and Portfolio

Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as

well as the Cash segment of the BSE

A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to clients. These

services are offered to clients as different schemes, which are based on differing investment

strategies made to reflect the varied risk-return preferences of clients.

India Infoline Media and Research Services Limited.

 The content services represent a strong support that drives the broking, commodities, mutual

fund and portfolio management services businesses. Revenue generation is through the sale of

content to financial and media houses, Indian as well as global.

It undertakes equities research which is acknowledged by none other than Forbes as 'Best of

the Web' and '…a must read for investors in Asia'. India Infoline research is available not just over

the internet but also on international wire services like Bloomberg.

India Infoline Commodities Limited.

India Infoline Commodities Pvt Limited is engaged in the business of commodities broking.

Our experience in securities broking empowered us with the requisite skills and technologies to

allow us offer commodities broking as a contra-cyclical alternative to equities broking. We enjoy

memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and recently

acquired membership of DGCX..

India Infoline Marketing & Services

India Infoline Marketing and Services Limited is the holding company of India Infoline

Insurance Services Limited and India Infoline Insurance Brokers Limited.

(a) India Infoline Insurance Services Limited is a registered Corporate Agent with the Insurance

Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI

Prudential Life Insurance Co Limited, which is India's largest private Life Insurance Company.

(b) India Infoline Insurance Brokers Limited India Infoline Insurance Brokers Limited is a newly

formed subsidiary which will carry out the business of Insurance broking. We have applied to IRDA
for the insurance broking licence and the clearance for the same is awaited.

India Infoline Investment Services Limited

 Consolidated shareholdings of all the subsidiary companies engaged in loans and financing

activities under one subsidiary. Recently, Orient Global, a Singapore-based investment institution

invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services. This will help

focused expansion and capital raising in the said subsidiaries for various lending businesses like

loans against securities, SME financing, distribution of retail loan products, consumer finance

business and housing finance business. India Infoline Investment Services Private Limited consists

of the following step-down subsidiaries.

(a) India Infoline Distribution Company Limited (distribution of retail loan products)

(b) Moneyline Credit Limited (consumer finance)

(c) India Infoline Housing Finance Limited (housing finance)

IIFL (Asia) Pte Limited

IIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated in Singapore to

pursue financial sector activities in other Asian markets. Further to obtaining the necessary

regulatory approvals, the company has been initially capitalized at 1 million Singapore dollars.

MILESTONES ACHIEVED

1995

Incorporated as an equity research and consulting firm with a client base that included leading FIIs,

banks, consulting firms and corporates.

1999

Restructured the business model to embrace the internet; launched archives.indiainfoline.com

mobilized capital from reputed private equity investors.

2000

Commenced the distribution of personal financial products, launched online equity trading; entered

life insurance distribution as a corporate agent. Acknowledged by Forbes as ‘Best of the Web’ and

‘...must read for investors’.

2004

Acquired commodities broking license; launched Portfolio Management Service.

2005

Listed on the Indian stock markets.

2006

Acquired membership of DGCX; launched investment banking services.

2007

Launched a proprietary trading platform; inducted an institutional equities team; formed a Singapore

subsidiary; raised over USD 300 mn in the group; launched consumer finance business under the

‘Moneyline’ brand.

2008

Launched wealth management services under the ‘IIFL Wealth’ brand; set up India Infoline Private

Equity fund; received the Insurance broking license from IRDA; received the venture capital

license; received in principle approval to sponsor a mutual fund; received ‘Best broker- India’ award

from Finance Asia; ‘Most Improved

‘Brokerage- India’ award from Asiamoney.

2009
Received registration for a housing finance company from the National Housing Bank; received

‘Fastest growing Equity Broking House - Large firms’ in India by Dun & Bradstreet.

2010

Received in-principle approval for Securities Trading and Clearing memberships from SGX.

KEY MILESTONE OF COMPANY-

 Incorporated on Oct 18, 1995 as Probity Research and Services.

 Lunched internet portal www.indiainfoline.com in may 1999.

 Commenced distribution of personal financial product like Mutual Fund and RBI Bonds in

April 2000.

 Lunched online trading in shares and securities branded as www.5paisa.com in July 2000.

 Started life insurance agency business in December 2000 as corporate agent of ICICI

prudential life insurance.

 Become a depository participant of NSDL, in Sept 2001.

 Lunched stocks messaging services in May 2003.

 Acquired commodities broking license in March 2004.

 Lunched portfolio management services in August 2004.

 Listed on NSE and BSE on May 17, 2005.

 Acquired NBFC license in May 2005.

 Acquired 75% stake holding in money tree consultancy services, which is a distribution of

mortgagees and other loan products, in Oct 2005.

 Acquired 100% equity of March Mont capital adviser Pvt. Ltd. In Dec 2005, through which

the company has venture into Merchant Banking.

 DSP Merrill Lynch Capital subscribe to convertible bonds aggregating Rs.80 crores in

Dec2005.

 Become a depositary participant of CDSL. In June 2007.

 Enter into an alliance with Bank of Baroda for E-trading in Feb 2007.

 IRDA license for insurance broking in April 2007.

 CLSA institutional equities joined us 2007.

 Formed Singapore subsidiary IIFL(Asia) Pvt. Ltd. In 2007.

 Mr. Arun Kumar Purvar joined as independent director in March 2008.

MANAGEMENT TEAM-

 Mr. Nirmal Jain ( Chairman & MD)

  Mr. R. Venkataraman ( Executive Director)

 Mr. Sat Pal Khattar (Non Executive Director)

 Mr. Nilesh Vikamsey (Independent Director)

MARKET SHARES OF COMPANY

 Retail broking :

IndiaInfoline has around 3 lakhs customers. It has a tie-up with Bank of Baroda for e-broking.

 Institutional broking :

IndiaInfoline has roped in Bharat Parajia, director of sales at CLSA in Singapore, H Nemkumar,

CLSA's country head for India, Aniruddha Dange, CLSA's head of research in India, and Vasudev

Jagannath, CLSA's head of sales in India. While Parajia will join as head of institutional sales at

India Infoline, Dange will be head of research and Nemkumar head of investment banking.

Each one of them is bringing in more than 10 years of experience with a top institutional

brokerage in Asia. The CLSA foursome will also pick up stakes in India Infoline through the

preferential allotment route. Their collective stake would add up to around 15%. Parajia already

holds a 2.88% stake in India Infoline. He will subscribe to 25 lakhs equity warrants at Rs 440 each.

Nemkumar will pick up another 25 lakhs, while Jagannath and Aniruddha Dange will subscribe to

20 lakhs warrants each. The preferential allotment includes the four men buying 90 lakh equity
warrants at a price of Rs 440 each, of which 10% will be paid up front as their sign-on bonus.

The remaining will be payable at the end of eighteen months when the warrants will be convertible

into shares. That is, all these guys will have to cough up about Rs 360 crore to convert their warrants

into shares. Currently, the company's institutional equities team has 35 people, including research

analysts and dealers.

Following are the objectives

 To know different analysis made for trading of stocks.

 To evaluate the time of buying and selling of security.

 To determine the market prices of the security by the interaction of supply and

demand forces.

 To detect the irrespective of why the security occur, shifts in demand and

supply with the help of charts, graphs etc of market action.

 To calculate the average price of stocks

 To know the Support & Resistant level of a security

 Finally to compare different analysis made for transacting a security.

 How many people aware of online trading or Demat account.

  The risk tolerance of different segment of investor.

 Investment pattern with respect of age & sex.

 How many people are investing in share market (online/offline).

 From which source people are aware about share market.

WHERE INDIA INFOLINE STAND IN THE MARKET

INDIA INFOLINE one of the leading financial intermediaries and India's most popular

website for business and investment. Its Website has been rated as 'Best of the Web' by Forbes,

under the Asia Investing category.

Besides providing up-to-date and comprehensive information on business and industry, It is

also a leading investment intermediary for Mutual Funds, Bonds, ICICI / IDBI Bonds, Govt. Relief

Bonds, Insurance, IPOs and Fixed Deposits in India. India Infoline is direct brokers/ agents with

leading financial institutions like RBI, UTI, LIC, GIC, ICICI, IDBI and other private mutual fund

like HDFC, Alliance, Prudential ICICI, Templeton, TATA, HSBC, Standard & Chartered, Sun

F&C, Birla, DSP Merrill Lynch, Kotak, IL&FS, Sundaram, Zurich and Reliance.

The company has more than 500 Investor points in all the leading cities across India, with a

team of trained and qualified investment advisors and 1500+associates (sub brokers). Company e-
broking web site 5paisa.com, which deals in shares, provides you fast, secure and easy to use

trading facilities combined with a wealth of outstanding products and features. Thus, we are

uniquely placed with both online and offline presence to maximize customer satisfaction.

India Infoline is a growing organization, which is an ideal place for individuals with high

ambitions. The working atmosphere is highly charged with a young and energetic team of qualified

professionals.

MARKETING STRATEGY OF INDIA INFOLINE

Market Positioning:

Market positioning statements of India Infoline are “At India Infoline we give you single

window service” and “We also ensure your comfort”. So, India Infoline focus on the consumers

who prefer almost all investment activities at same place by providing number of various financial

services. At India Infoline a person can purchase or sell shares, debentures etc. and at the same

place also demat it. India Infoline also provides other investment option to the same person at same

place like Mutual Fund, Insurance, Fixed Deposit, and Bonds etc. and help the person in designing

his portfolio. By this way India Infoline provides comfort to its customers.

Target Market:

India Infoline uses demographic segmentation strategy and segment people based on their

occupation. India Infoline uses selective specialization strategy for market targeting. Target person

for the India Infoline Stock Broking and India Infoline Investment Service are persons who can
work as sub-broker for the companies. Companies focus on Advisors of Insurance and post office,

Tax consultants and CAs for making sub-broker.

Marketing channel System:

India Infoline uses one level marketing channel for investment product distribution. Sub-

brokers work as intermediary between consumer and company. Company has both forward and

backward flow of activity through channel. Company distributes stationery, brokerage, and

information forward to its sub-broker. The sub-brokers send filled forms, queries, amount of

investment etc. back to the company.

Training Channel Members:

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors. The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective, risk factors and expected return. Company also

periodically arrange seminar to guide sub-brokers.

Advertising and Promotion:

The objective of advertising of India Infoline is to create awareness about services of India

Infoline among investors and sub-brokers.

India Infoline also publishes its weekly Stock Market Newsletter ‘Market Mantra’.
INVESTMENT

Investment is the employment of funds on assets with the aim of earning

income or capital appreciation. Investment has two attributes namely time and

risk. Present consumption is sacrificed to get a return in the future.

The sacrifice that has to be borne is certain but the return in the future may be

uncertain. The risk is undertaken with a view to reap some return from the

investment.

To the economist, investment is the net addition made to the nation’s capital

stock that consists of goods and services that are used in the production

process. A net addition to the capital stock means an increase in the buildings,

equipment or inventories.

These capital stocks are used to produce other goods and services.

Financial investment is the allocation of money to assets that are expected to

yield some gain over a period of time. It is an exchange of financial claim such

as stock and bonds for money. They are expected to yield returns and

experience capital growth over the years.

INVESTMENT OBJECTIVE

The main investment objective are increasing the ray of return and reducing the

risk. Other objectives like Safety, Liquidity and hedge against inflation can be

considered as subsidiary objectives. These objectives are of two types

 Primary objectives

 Secondary objectives

PRIMARY OBJECTIVES:

(i) RETURN:

Investors always expect a good rate of return from their investments. Rate of return could

define as the total income the investors receives during the holding period stated as a

percentage of the purchasing price at the beginning of the holding period.

Return = End period value – Beginning period value + Dividend x 100

Beginning period value

(ii) RISK:

Risk is holding securities are related with the probability of actual return becoming less than

the expected return. The word risk is synonymous with the phase variability of return. Risk

is important part in investment because high risk expected high profit and low risk show
minimum profit but it is depending on time to time. So every investor likes to reduce the risk

of his investment by proper combination of different securities.

(iii) LIQUIDITY:

Marketability of the investment provides liquidity to the investment. The liquidity depends

upon the marketing and trading facility. If a portion of the investment could be converted

into cash without much loss of time, it would help the investor meet the emergencies. Stocks

are liquid only if they command good market by proving adequate return through dividends

and capital appreciation.

HEDGE AGAINST INFLATION:

Since there is inflation in almost all the economic, the rate of return should ensure a cover

against inflation. The return rate should be higher than the rate of inflation; otherwise the

investor will have loss in real terms. Growth stock would appreciate in their values overtime

and provide a protection against inflation. The return thus earned should assure the safety of

the principal amount, regular flow of income be a hedge against inflation.

(iv) SAFETY:

The selected investment avenue should be under the legal and regulatory frame work. If it is

not under the legal frame work, it is difficult to represent the grievances, if any. Approval of

the law itself adds a flavor of safety. Even through approved by law, the principal differs

from one mode of investment to another.

(v) GROWTH OF CAPITALS:

 Capital gains are entirely different from return in that they are only realized when the

security is sold for a price that is higher than the price at which it was originally purchased.

Selling at a lower price is referred to as a capital loss. Therefore, investors seeking capital

gains are likely not those who need a fixed, ongoing source of investment returns from their

portfolio, but rather those who seek the possibility of longer-term growth.

Growth of capital is most closely associated with the purchase of common stock,

particularly growth securities, which offer low yields but considerable opportunity for

increase in value.

Capital gains offer potential tax advantages by virtue of their lower tax rate in most

jurisdictions. Funds that are garnered through common stock offerings, for example, are

often geared toward the growth plans of small companies, a process that is extremely

important for the growth of the overall economy. In order to encourage investments in these

areas, governments choose to tax capital gains at a lower rate than income. Such systems

serve to encourage entrepreneurship and the founding of new businesses that help the

economy grow.

SECONDARY OBJECTIVES:

(i) TAX MINIMISATION

An investor may pursue certain investments in order to adopt tax minimization as part of his or

her investment strategy. For example a highly-paid executive may want to seek investments
 with favorable tax treatment in order to reduce his or her overall income tax burden by Making

contributions to an individual retirement account (IRA) or other tax-sheltered retirement plan.

(ii) HEDGE AGAINST INFLATION:

Since there is inflation in almost all the economic, the rate of return should ensure a cover

against inflation. The return rate should be higher than the rate of inflation; otherwise the

investor will have loss in real terms. Growth stock would appreciate in their values overtime and

provide a protection against inflation. The return thus earned should assure the safety of the

principal amount, regular flow of income be a hedge against inflation.

DIFFERENT INVESTMENT OPTION

Investment Risks/Liquidity Returns Taxation Suitability

Option

Bank FDs Very low risk Low returns, but Since returns are Good for very low

and low assured. fully taxable, the risk investors and

liquidity. Depending on the post-tax returns those in the nil or

tenure and bank, will be still low tax brackets.

could be around lower. As interest rate

6-9% scenario seems to be

peaking, one could

consider investing
 in 3-5 year FDs.

MUTUAL Low risk and No assured MFs attract Good for low risk

FUND low Liquidity. returns but much lower investors, but in

depending on taxation and high tax brackets.

tenure and the hence give better Good for investing

MF, could be post-tax returns the debt portion of

around 6-9%. vis-à-vis Bank one’s portfolio.

(Ability to deliver FDs.

the indicative

returns).

Floating Rate Low risk and Market linked. Lower taxation Good for investing

Funds high liquidity. Today could be of MFs makes short-term money

around 5-7%. Floating Rate where one needs

funds attractive. higher liquidity.

Debt Funds Low to Medium Returns are Lower taxation Can be avoided in

risk. market-linked. of MFs makes a rising interest

High Liquidity. Today could be such funds rate scenario but is

around 5-7%, but attractive. good in a falling

susceptible to interest rate

interest rate risk. scenario.

Post Office Low risk and MIS scheme give Since returns are Good for very low
Schemes low Liquidity. 8% interest. Time taxable, the post- risk investors and

deposit 6.25- tax returns will those in the nil or

7.5%. be still lower. low tax brackets.

PPF Low risk with 8% assured Interest is tax- Good tax saving

very low returns. free. investment option.

liquidity (15- Also Sec 80C Good for investing

year lock-in benefit. Hence a the debt portion of

period. Partial good scheme. one’s portfolio.

withdrawal

allowed after 6

years).

NSC Low risk with 8% assured Interest fully Not very attractive

low liquidity (6 returns. taxable. But vis-à-vis other

years lock-in). eligible for Sec options like 5-year

80C benefit. Bank FDs.

Equity High risk and Market linked Attractive tax Needs high risk

high liquidity. returns. Good treatment. No appetite.

potential. Long Term Ideal for those

Capital Gain Tax investors who have

and 10% Short a good corpus, good

Term Capital knowledge and time

Gains Tax. to track the markets

regularly. Care
 should be taken to

invest in good profit

making companies.

Penny stocks

should be avoided.

Equity Funds High risk and Market linked Attractive tax Ideal for small and

high liquidity in returns. Good treatment. No common investors,

open-ended potential. Long Term but with high risk

funds. Capital Gain Tax appetite. well-

and 10% Short diversified portfolio

Term Capital with say 50-60%

Gains Tax. money in 5-7

diversified funds,

25-35% money in

3-4 mid/small-cap

funds and 10-15%

in 3-4 sector funds.

ELSS Funds High risk with Market linked Attractive tax Good tax saving

low liquidity (3 returns. Good treatment. No investment option.

years lock-in potential. Long Term Amounts beyond

period). Capital Gain Tax Rs.1 lakh limit

and 10% Short could be invested in

Term Capital open-ended funds.

 Gains Tax. Also SIP in ELSS would

Sec 80C benefit. reduce the volatility

risk.

Balanced Medium to High Medium to high Attractive tax Though convenient

Funds risk. returns. Market treatment. No as both debt and

High Liquidity. linked. Long Term equity investment is

Capital Gain Tax covered under one

and 10% Short fund, it may be

Term Capital better to invest

Gains Tax. separately in equity

and debt funds for

better control.

ULIPs Low to High Low to high Tax free returns. Not an attractive

Risk depending depending on the Also Sec 80 C option due to high

on the investment benefit available. charges, low

investment option. Market flexibility and low

option i.e. Pure linked returns. diversification.

Debt or Mixed There are other

or Pure Equity. better similar

(3-5 years lock- investment products

in period). like MFs

Endowment/ Low risk and Low returns. Tax free returns. Not an attractive

Money back very low Generally around Also Sec 80 C option due to low
 Plan liquidity. 6-6.5%. benefit available. returns. There are

other better similar

investment

products.

Real Estate Variable risk and Market linked No tax High initial

variable liquidity returns. Good advantages, investment required

depending on the potential. except attractive which could make

type and location tax benefits on one’s portfolio

of property. the home loans. lopsided; high

transactions costs.

EQUITY INVESTMENT”

Equity investment means the engagement of savings in the stock of a company for the purpose of

earning income such as dividend, capital appreciation, etc.

SHARES:

The capital of the company divided into different units with definite and equal value called shares.

Holders of these shares called shareholders. There are two types of shares which a company may

issue.

(i) Preference Shares (ii) Equity Shares

PREFERENCE SHARES:

Shares which enjoy the preferential rights as to dividend and repayment of capital in the

event of winding up of the company over the equity shares are called preference shares.

The holder of preference shares will get a fixed rate of dividend. Preference share are

classified into different types, these are:

1. Cumulative preference shares: Cumulative preference shares will accumulate any

dividend that is not paid when due. Any unpaid dividend is added to the amount

payable the following year and no dividends can be paid on ordinary shares until the

entire backlog of unpaid dividends on cumulative preference is cleared.

2. Non-cumulative preference shares: Non-Cumulative Preferred is preferred stock

that no pay to the holder of any unpaid or omitted dividends. If the corporation

chooses no pay dividends in a given year, the investor is to claim any of those

forgone dividends in the future is lost.

3. Redeemable preference share: Type of stock (shares) that is liable to be bought

back by the issuing firm on a specified date or after a specified period of notice.

Corporate legislation in some jurisdictions prohibits the redemption if it jeopardizes

the financial health of the issuer.

4. Participating or non-participating preference shares: Participating preference

share is capital stock which provides a specific dividend that is paid before any

dividends are paid to common stock holders, and which takes precedence over
 common stock in the event of a liquidation. This form of financing is used by private

equity investors and venture capital firms. Holders of participating preferred stock

get both their money back (with interest) and the money that is distributable with

respect to the percentage of common shares into which their preferred stock can

convert.

EQUITY SHARES:

Equity shareholders will get dividend and repayment of capital after meeting the claims of

preference share holders. There will be no fixed rate of dividend to be paid to the equity

shareholders and this rate may vary from year to year. This rate of dividend is determined

by the directors and in case of large profits; it may even be more than the rate attached to

preference share. Such shareholders may go without any dividend if no profit is made.

Equity shares are most risk bearing securities because holders of these shares will get

repayment of capital after meeting the claims of preference share holders, debenture

holders and other creditors. The value of these shares in the market fluctuates upward or

downward with the fortunes of the company. Equity share holders enjoy voting right

in case of any decisions in the company.

SHARE MARKET:

Share market is a place where shares are issued or purchased or sold. These shares may be

new issue or existing shares. There are two types of share markets:

(i) Primary Market (ii) Secondary Market

Primary Market:

This is the market where fresh issues of shares are made.

Secondary Market:

In this market existing shares are traded. BSE and NSE are two major secondary markets in

India. Apart these two exchanges there are twenty one exchanges in India.

SHARE MARKET PARTICIPANT:

There are two basic market participants these are:

(i) Investor vs. Speculator

(ii) Institutional vs. Retail Investor

Investor: An investor may be people or company who make investment in securities with

an objective to get return in long term.

Speculator: They involve in buying, holding, selling and short selling of securities. All

above these happen due to fluctuation in the price of securities.

Institutional Investor: An institutional investor is investors such as bank, insurance

company, retirement fund, hedge fund or mutual fund that is financially sophisticated and

makes large investment, often held in very large portfolio management.

 Retail Investor: A retail investor is an individual investor possessing shares of a given

security. Retail investors can be further divided into two categories of share ownership:

1. A Beneficial Shareholder is a retail investor who holds shares of their securities in the

account of a bank or broker, also known as “in Street Name.” The broker is in possession of

the securities on behalf of the underlying shareholder.

2. A Registered Shareholder is a retail investor who holds shares of their securities

directly through the issuer or its transfer agent.

DIFFERENT INVESTMENT OPTIONS IN SHARE MARKET:

 Equity through secondary Market

 Equity through IPOs/Primary Market

 Equity through Derivatives

Equity through secondary market:

It is the investment on already existing equity shares of companies.

Equity through IPOs/Primary market:

When a company raises capital by issuing shares to general investors, the process is called

a public issue of share or a primary market issue. If the company approaching the capital

market with an issue of shares for the first time, the issue is called an Initial public offering.
Equity through derivatives:

Derivatives are a financial instrument which value is derived from underlying assets

(commodities, shares, forex and other assets). Derivative is three types forward contract,

future contract, option.

Forward contracts:

These are used in the foreign exchanges markets to reduce currency risk and in the

commodities market to reduce the price risk.

Future contract:

Derivative contract wherein you agree to buy or sell a specified quantity of the underlying

assets on a specified particular date in the future, at he price agreed upon at the time of

entering into contract. In India equities future market, this price is the spot price (the price of

the underlying assets in the cash market) prevailing on the date of the expiry of contract.

Futures are legally binding and both parties are bound to uphold the agreement.

Option:

This is a contract that gives you the right (but not the obligation or the liability) to buy or

sell a specified quantity of the underlying assets at an agreed price (strike/agreed price) on or

before the before the specified future date (expiration date). To acquire this right, you pay a

price (option premium) to the seller of the option “option writer”. The potential loss for the

option seller is unlimited whiles his upside or profit is limited to the premium that he
receives. On the other hand the maximum loss that the buyer could face is the option

premium that he pays, put his potential profit is unlimited.

DIFFERENT ANALYSIS FOR EQUITY INVESTMENT:

There are different analysis are made by the investor for investment in equity. These are

(i) Fundamental analysis

(ii) Technical analysis

Fundamental analysis:

Fundamental analysis is really a logical and systematic approach to estimating the future

share price. It is based on the premises that share price are determined by a number of

fundamental factors relating to the economy, industry, and company fundamentals.

Fundamental analysis is, in other words a detailed analysis of the fundamental

factors affecting the performance of the company as well its share price.

Generally each share is assumed to be having an economic worth based on its presents and

future earning capacity, this is called intrinsic value or fundamental value. The purpose of

fundamental analysis is to compare intrinsic value of share with the prevailing market price

of the share. The market price of the share is due to the supply and demand of the share in

the market. This helps to the investor to make an investment decision.

The market price of the share is always trying to match with its intrinsic price so that if the

market price of the share is higher than its intrinsic price then the investor should sell the

share because the share price will go down to match with its intrinsic price .if the market
 price of the share is lower than the intrinsic price than the investor should bought the share

because the share price will go up to match up with its intrinsic price.

Thus fundamental analysis provides an analytical framework for rational investment

decision making. This analytical framework is known as EIC framework.

(EIC FRAMEWORK)

The logic behind this three tire analysis is that the share price depends upon not only its

own effort but also on general industry and economic factor. A company belongs to an

industry and an industry belongs to an economy. So the effective industry and economy

affect the share price.

Classification of factors:

(i) Economic wide factor: such as growth rate of the economy, inflation rate, foreign exchange

rate which affect all companies

(ii) Industry wide factors: such as demand supply gap in the industry, the emergence of

substitute product, change in government policy etc these factor affecting those companies

which belongs to an specific industry.

(iii) Company specific factor: such as the age of its plant, the quality of management, brand

image of its products, its labour management relationship, etc. These are the actors which

affect the performance of the company.

Technical analysis:

A technical analyst in technical analysis believes that the share prices are

determined by the demand and supply forces operating in the market. These forces again
 influenced by a number of fundamental factors as well as the emotional factors of the

investors. The combined impact of all these factors is reflected in the share price

movement. The technical analysis includes the past share prices to forecast the future share

price. So that technical analysis is the forecasting technique to determine the future price of

the stock by taking historical price of the stock.

Basic principle of technical analysis:

(i) The market price of the share price is related to supply and demand forces operating in the

market.

(ii) Security prices movement are continuous in a particular direction for some length of time.

(iii) Trends in stock price shows when there is a shift in demand and supply factors.

(iv) The shifts in demand and supply forces can be detected through charts prepared specially to

show market action.

(v) These charts can show the resistance and support level of the stock price.

ROLE OF MARKET TRENDS IN EQUITY INVESTMENT:

Trends refer to the direction of share price movement for a long period of time such as

month and quarter. Trend is divided into two types. These are bullish trend and bearish

trend.

(i) Bullish trend: During a bull market (up word moving market) in the first phase the

price would advanced with the revival of confidence in the future business. The

future prospect of business should be promising .this will promote the investor to

purchase share of companies .during second phase the price would advanced due to

the corporate earnings. In the third phase price advances due to the inflation means
 the demand of share increased. In the bullish trend the share price moves in a up

word direction for a long period of time.

So during the bullish trend the investors are investing their money to gain profit from the up

word movement of share price.

(ii) Bearish trend: bearish trend is the opposite of the bullish trend here prices began to

fall due to the lost of hope on company and investor sell their shares in first phase

and in the second phase the fall in distributing dividend and causes further fall in

share price

So during the bearish trend the investors are selling their security to avoid the loss of

capitals.

Support and resistance level of share price:

Support and resistance level are those price levels at which the down trend and up trend in

share price movements is reversed. Support occurs when price is falling but bounce back or

reverse direction every time it reaches a particular level. When all these low points are

connected through a straight line it forms the support level. Support level is the price level

at which sufficient buying pressure is exerted t defend the fall in price

Resistance occurs when the share price moves up word. The price fall back every time it

reaches a particular price level. A straight line joining this price level forms the resistance

level. Resistance level is the price level at which sufficient selling pressure is exerted to

restrict the share price to move up word.

 COMPETITORS DETAILS

KARVY

KARVY is a premier integrated financial services provider, and ranked among the top five

in the country in all its business segments, services over 16 million individual investors in various

capacities, and provides investor services to over 300 corporate, comprising the who is who of

Corporate India. Karvy has a professional management team and ranks among the best in

technology, operations and research of various industrial segments.

ICICI DIRECT

ICICI Web Trade Limited (IWTL) maintains www.icicidirect.com (herein after referred to

as the "Website") whereas IWTL is an affiliate of ICICI Bank Limited and the Website is owned by

ICICI Bank Limited. IWTL has launched and established an online trading service on the Website.

HDFC SECURITY

HDFC security is the subsidiary of HDFC (Housing Development Financial Corporation).

www.hdfcsec.com would have an exclusive discretion to decide the customers who would be

entitled to its online investing services. www.hdfcsec.com also reserves the right to decide on the

criteria based on which customers would be chosen to participate in these services .The present web
site (www.hdfcsec.com) contains features of services that they offer/propose to offer in due course.

The launch of new services is subject to the clearance of the regulators. i.e. SEBI, NSE and BSE.

INDIABULLS SECURITIES LIMITED

Indiabulls Securities Limited was incorporated as GPF Securities Private Limited on June 9,

1995. The name of the company was changed to Orbis Securities Private Limited on December 15,

1995 to change the profile of the company and subsequently due to the conversion of the company

into a public limited company; the name was further changed to Orbis Securities Limited on

January 5, 2004. The name of the company was again changed to Indiabulls Securities Limited on

February 16, 2004 so as to capitalize on the brand image of the term “Indiabulls” in the company

name. ISL is a corporate member of capital market & derivative segment of The National Stock

Exchange of India Ltd. At present, ISL accounts for approximately 3% of the total daily turnover of

the Exchange with 32,359 client relationships and 70 branches spread across the country as of April

30,2004.
 INTRODUCTION OF TOPIC

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.

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.

Customer satisfaction
Customer satisfaction can be represented as follows.

Customer satisfaction=Performance Features + Behavioural Features + Price.

Performance features address the issues on Conformance to the standards and Variability

and the behavioural aspects of service provider deals with the following components of service

which is a major enabler for the growth of the business as indicated in the research publications.

If customer experience matches customer expectations, leads to customer satisfaction and if

customer experience doesn’t match Customer Expectation, leads to Customer dissatisfaction. On

similar lines if it exceeds expectation leads to Customer Delight.

Purpose – Many researchers have proposed a virtuous chain of effects from improved customer

satisfaction to profits. In particular, satisfaction is thought to improve share-of-spending, which in

turn leads to higher customer revenue and customer profitability. This paper aims to examine these

proposed linkages using data from the institutional securities industry.

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 example

 Functions of SEBI

 It is the duty of SEBI to protect the interest of investors in securities into promotes the

development of, and to regulate the securities market, by such measures as it thinks fit.

 Prohibiting fraudulent and unfair trade practices relating to the securities market

 Prohibiting insider trading in securities.

 Regulating the business in stock exchange(s) and any other securities market(s).

 Registering and regulating the working of stock brokers, sub- brokers, share transfer agents,

bankers to an issue, trustees of trust deeds, registrars to an issue merchant bankers,

underwriters, portfolio managers, investor advisor, and such other intermediaries who may

be associated with the securities market.

 Registering and regulating the working of ventures capital and collective investment

schemes include Mutual funds.

 Promoting and regulating self-regulatory organizations.

 Promoting investor’s education and training of intermediaries of the securities marked.

 Conducting research for the above purpose.

 Regulating substantial acquisition of shares and takeover of companies.

Calling for information and record form, undertaking inspection, conducting inquiries and

audits, stock exchanges, mutual funds and other persons associated with the securities

market intermediaries and self-regulatory organizations in the securities market.

Performing such functions and exercises such powers under the provisions of the Securities

Contract Act, as may be delegated to it by the Central Government.

The Indian broking industry is one of the oldest trading industries that have been around even

before the establishment of the BSE in 1875. Despite passing through number of changes in the

post liberalization period, the industry has found its way onwards sustainable growth. With the

purpose of gaining a deeper understanding about the role of the Indian stock broking industry in

the country’s economy, we present in this section some of the industry insights gleaned from

analysis of data received through primary research.

For the broking industry, we started with an initial database of over 1,800 broking firms that

were contacted, from which 464 responses were received. The list was further short listed based on

the number of terminals and the top 210 were selected for profiling. 394 responses, that provided

more than 85% of the information sought have been included for this analysis presented here as

insights. All the data for the study was collected through responses received directly from the

broking firms. The insights have been arrived at through an analysis on various parameters,

pertinent to the equity broking industry, such as region, terminal, market, branches, sub brokers,

products and growth areas.

Some key characteristics of the sample 394 firms are:

 On the basis of geographical concentration, the West region has the maximum

representation of 52%. Around 24% firms are located in the North, 13% in the South and

10% in the East

 3% firms started broking operations before 1950, 65% between 1950-1995 and 32% post

1995.

 On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7%

in Kolkata, 4% in Chennai and 29% are from other cities

  From this study, we find that almost 36% firms trade in cash and derivatives and 27% are

into cash markets alone. Around 20% trade in cash, derivatives and commodities

 In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both

exchanges. In the derivative segment, 48% trade at NSE, 7% at BSE and 45% at both,

whereas in the debt market, 31% trade at NSE, 26% at BSE and 43% at both exchanges

 Majority of branches are located in the North, i.e. around 40%. West has 31%, 24% are

located in South and 5% in East

 In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in North

and 4% in East

 Trading, IPOs and Mutual Funds are the top three products offered with 90% firms offering

trading, 67% IPOs and 53% firms offering mutual fund transactions

 In terms of various areas of growth, 84% firms have expressed interest in expanding their

institutional clients, 66% firms intend to increase FII clients and 43% are interested in

setting up JV in India and abroad

 In terms of IT penetration, 62% firms have provided their website and around 94% firms

have email facility

A BRIEF HISTORY
 India Infoline was originally incorporated on October 18, 1995 as Probity Research and

Services Private Limited at Mumbai under the Companies Act, 1956 with Registration No. 11

93797. India Infoline commenced operations as an independent provider of information, analysis

and research covering Indian businesses, financial markets and economy, to institutional customers.

India Infoline became a public limited company on April 28, 2000 and the name of the Company

was changed to Probity Research and Services Limited. The name of the Company was changed to

India Infoline.com Limited on May 23, 2000 and later to India Infoline Limited on March 23, 2001.

In 1999, India Infoline.com identified the potential of the Internet to cater to a mass retail

segment and transformed our business model from providing information services to institutional

customers to retail customers. Hence India Infoline launched Internet portal,

www.indiainfoline.com in May 1999 and started providing news and market information,

independent research, interviews with business leaders and other specialized features.

In May 2000, the name of India Infoline was changed to India Infoline.com Limited to

reflect the transformation of our business. Over a period of time, India Infoline.com has emerged as

one of the leading business and financial information services provider in India.

In the year 2000, India Infoline leveraged its position as a provider of financial

information and analysis by diversifying into transactional services, primarily for online trading in
shares and securities and online as well as offline distribution of personal financial products, like

mutual funds and RBI Bonds. These activities were carried on by our wholly owned subsidiaries.

India Infoline broking services was launched under the brand name of 5paisa.com through

our subsidiary, India Infoline Securities Private Limited and www.5paisa.com, the e-broking portal,

was launched for online trading in July 2000. It combined competitive brokerage rates and research,

supported by Internet technology besides investment advice from an experienced team of research

analysts, India Infoline also offer real time stock quotes, market news and price charts with multiple

tools for technical analysis.

Facilities

India Infoline’s main offices are located in approximately 4,000 square feet of office space

located in Mumbai, India. India Infoline Branches collectively occupy an additional 10,000 square

feet of office space located throughout India, As on March 31, 2005, India Infoline has 73 branches

across 36 locations in India.

Terminals

Almost 52% of the terminals in the sample are based in the Western region of India,

followed by 25% in the North, 13% in the South and 10% in the East. Mumbai has got the

maximum representation from the West, Chennai from the South, New Delhi from the North and

Kolkata from the East.

Branches & Sub-Brokers

The maximum concentration of branches is in the North, with as many as 40% of all

branches located there, followed by the Western region, with 31% branches. Around 24% branches

are located in the South and East constitutes for 5% of the total branches of the total sample.

In case of sub-brokers, almost 55% of them are based in the South. West and North follow,

with 30% and 11% sub-brokers respectively, whereas East has around 4% of total sub-brokers.
 PURPOSE OF THE STUDY

The purpose of the study is to know the expectations of those customers who trading in INDIA

INFOLINE LTD and the satisfaction levels of customers with the services provided by the INDIA

INFOLINE LTD.

Here the main purpose of the survey is to know the various factors that are very important in

satisfying the customer’s needs and to know how INDIA INFOLINE LTD is ensuring its customers

satisfaction.

The expectations of customers are vary from one customer to the other customer. It is very difficult

to any business firm to satisfy all the expectations of all customers but there are some common

factors that are essential to fulfill.

 RESEARCH METHODOLOGY

Type of Research – Descriptive Research.

Descriptive research includes surveys and fact – finding enquries of different kinds. The major

purpose of Descriptive research description of the state of affairs as it exists at present .In Social

science & business research we quite often use the term EX POST FACTO RESEARCH for

descriptive research studies.

Sample design

Sampling design – The sampling method adopted for research work was Convenience sampling

method.

Sample size - The sample selected was 200. The data collection method was based on the

following:

Sampling Unit – Shareholders

Sampling area- Meerut

Variables of the Study

Dependent Variable – Overall satisfaction

Independent Variable – Brokerage, Tips, Trade confirmation, Flexibility, Customer support, Speed

of service, Clarity of information, Time taken to respond to telephone enquiries, staff treating as a

valuable customer.

Method of Data collection

The sources of the data for the study were primary data. The questionnaire was prepared and

administered to collect the relevant primary data. The data collection method was based on

Questionnaire and Observation.

Method of analysis of data

Data collected through questionnaires is analyzed using graphs and charts

CHAPTER – III

ANALYSIS &

INTERPRETATION
1. % Clients with different age group:

20-30 31-40 ABOVE 40

117 181 2
Out of the total clients visited, majority i.e., 60% belongs to 31 years to 40 years age group,

followed by 20 years to 30 years age group which comprises of 39% of the clients visited, and the

leftover clients i.e., 1% (the least %) belongs to above 40 years age group.
 2. % Clients with different occupation:

Professional Businessman Retired Student others

220 62 0 4 14

Out of the total clients, majority i.e., 73% are professional. Followed by businessman, which

comprises of 21%. 1% are students, 4% belongs to other category (like housewife, etc), and retired

is 0 i.e., nil.
 3. % Customer connected to India Infoline since:

Less then 6 months 6 months - 1 Year 1-2 year More then 2 year

26 60 187 27

The maximum number of clients i.e., 62% of the total clients are connected to India Infoline since

1-2 years, followed by 20% connected since 6 months to 1 year and the least 9% in more than 2

years as well as less than 6 months.

 4. % Customer gathering information/ awareness about trading from different sources:

TV Newspaper Friend Financial Advisor Others

58 15 43 37 147

Out of the total clients, majority i.e., 49% of clients gather information about trading from the

sources like mail, some web-sites (moneycontrol.com, bloomberg, dnaindia.com),etc. Followed by

19% which gather information from television,15% from friends, 12% from financial advisor, and

the rest 5% from newspaper.

 5. Main objectives of investment in Equities and Mutual funds of % customer:

Risk Return Tax Benefit Capital Appreciation Safety Liquidity Other

0 263 0 18 0 19 0

Maximum customers invest in Equities and Mutual funds for getting a good return, which is

obvious from the chart shown above.Here, we can see that mojority of the clients visited i.e., 88%

invest in equities for good return.6% for liquidity and rest 6% for capital appreciation.
 6. Number of clients giving more weightage to the tips coming from:

Relationship India Infoline TT Advance

manager TV tips Others

66 49 152 33

Out of the total number of clients visited, maximum i.e., 51% give more weightage to the tips

coming from India Infoline TT Advance tips. 22% of the client goes with the tips coming from

Relationship Manager, 16% goes with the tips coming from television, and rest 11% goes with the

tips coming from some other sources.

 7. Customer Satisfaction level on Flexibility

Criteria Response Percentage

Highly Dissatisfied 2 1

Dissatisfied 32 16

Neutral 60 30

Satisfied 104 52

Highly satisfied 2 1

Here, we can see that maximum number of clients i.e., 52% of the clients are satisfied with the

service provided by India Infoline regarding flexibility, while in the otherhand we can see that 16%

of the clients are dissatisfied by the service provided.

 8. Customer Satisfaction level on Customer support

Criteria Response Percentage

Highly Dissatisfied 2 1

Dissatisfied 32 16

Neutral 54 27

Satisfied 106 53

Highly satisfied 6 3

Here, we can see that maximum number of clients i.e., 53% of the clients are satisfied with the

service provided by India Infoline regarding customer support, while in the otherhand we can see

that 16% of the clients are dissatisfied with the service provided.
 9. Customer Satisfaction level on Speed of service

Criteria Response Percentage

Highly Dissatisfied 4 2

Dissatisfied 40 20

Neutral 46 23

Satisfied 102 51

Highly satisfied 8 4

Here, we can see that maximum number of clients i.e., 51% of the clients are satisfied with the

service provided by India Infoline regarding speed of service, while in the otherhand we can see that

20% of the clients are dissatisfied with the service provided.

 10. Customer Satisfaction level on a clarity of information

Criteria Response Percentage

Highly Dissatisfied 6 3

Dissatisfied 42 21

Neutral 64 32

Satisfied 84 42

Highly satisfied 4 2

Here, we can see that maximum number of clients i.e., 125 clients are satisfied with the service

provided by India Infoline regarding clearity of information, while in the othernhand we can see

that 64 clients are dissatisfied with the service provided.

 11. Customer Satisfaction level on time taken to respond to telephone enquiries

Criteria Response Percentage

Highly Dissatisfied 2 1

Dissatisfied 32 16

Neutral 60 30

Satisfied 102 51

Highly satisfied 4 2

Here, we can see that maximum number of clients i.e., 153 clients are satisfied with the service

provided by India Infoline regarding respond to telephone, while in the otherhand only 49 clients

are dissatisfied with the service provided.

 12. Customer Satisfactil on levon staff treating as a valuable customer

Criteria Response Percentage

Highly Dissatisfied 0 0

Dissatisfied 30 15

Neutral 60 30

Satisfied 108 54

Highly satisfied 2 1

Here, we can see that maximum number of clients i.e., 162 clients are satisfied with the service

provided by the staff (as a valuable customer) by India Infoline, while in the otherhand we can see

that 46 clients are dissatisfied with the service provided by the staff people.
 13. Customer Satisfaction level on Trade confirmation

Criteria Response Percentage

Highly Dissatisfied 0 0

Dissatisfied 28 14

Neutral 46 23

Satisfied 122 61

Highly satisfied 4 2

Here, we can see that maximum number of clients i.e., 61% of the clients are satisfied with the

service provided by India Infoline regarding trade confirmation, while in the otherhand we can see

that 14% of the clients are dissatisfied with the service provided.
 14. Customer Satisfaction level

Criteria Response Percentage

Highly Dissatisfied 0 0

Dissatisfied 18 9

Neutral 58 29

Satisfied 124 62

Highly satisfied 0 0

Here, we can see that maximum number of clients i.e., 186 clients are satisfied with the service

provided by India Infoline regarding brokerage charged, while in the otherhand only 26 clients are

dissatisfied with the brokerage charged.

CHAPTER – IV

FINDINGS, LIMITATIOMNS, SUGGESTIONS &

CONCLUSION
 FINDINGS

 There is low positive correlation between brokerage and overall satisfaction.

 There is low positive correlation between tips and overall satisfaction.

 There is a moderate positive correlation between customer support service and overall

satisfaction.

 There is low positive correlation between flexibility and overall satisfaction.

 There is a moderate positive correlation between speed of service and overall satisfaction.

 There is a moderate positive correlation between Clarity of information and overall

satisfaction.
 LIMITATIONS OF THE STUDY

 As the data will be collected through questionnaire, there are chances of biased information

provided by the respondent.

 Heterogeneity among the respondents.

 Inability to respond to the questionnaire due to lack of time.

The study is confined to the existing customers of INDIA INFOLINE LTD only.
 SUGGESTIONS

 The suggestion is the Small investors prefer most economical fee on trading and prefers

negotiations therefore the company should offer services and fee structure keeping in mind

such customers if they add significantly to bottom line.

 Lack of communication and advisories happen when relationship manager moves out of the

organization and this has to be checked so that the customer doesn’t migrate to other

brokerage companies.
 CONCLUSION

 The company should come up with innovative ways of service at their door steps this

may be a costly affair but will surely give positive results in the long run.

 The company should take the initiative of training the advisors about the trading

from time to time which also makes the advisors connected to the company.

 The company should focus on the advertising strategy and also the marketing of the

product.
 BIBLIOGRAPHY

Referred Books:

RESEARCH METHODOLOGY

( C.R.KOTHARI)

Websites:

http://www.indiainfoline.com

http://www.5paisa.com

http://www.moneycontrol.com

http://www.capitaline.com
Appendix:

“A study on Customer satisfaction towards the services provided by India Infoline with

special reference to Meerut zonal office”

QUESTIONAIRE

Name: ……………………………………………………………………………………………..

Gender:

1. Age:

a). Below 20 b). 21- 30 c). 31- 40 d). More then 50

2. Occupation:

a). Businessman b). Student c). Professional d). Retired Person

e). Others (Please Specify)__________

3. Since how long you are connected to India Infoline since:

a).Less than 6 Months b). 6 months – 1 Year

c). 1 – 2 year d). More than 2 year

4. From where you gather information/ awareness about trading from:

a). T.V b). Newspaper c) Friends

d). Financial Advisor e) Others (Please specify) ______

5. What is the main objectives of investment in Equities and Mutual funds are:

a). Risk b). Return c). Tax benefit

d). Capital Appreciation e). Safety f). Liquidity

g). Others (please specify)________

7. Which source you rely upon : (in %)

a). Relationship manager _______ b). T.V ________

c). India Infoline TT Advance tips ________ d) Others (please specify) _______
8.Satisfaction level with India Infoline.

Particulars Highly Dissatisfie Neither Satisfied Highly

Dissatisfied d Satisfied Satisfied

Nor

Dissatisfied

Brokerage

Trade

Confirmation

Flexibility

(Fund

transfer)

5paisa.com

Customer Support

Speed of Service /

Product Delivered

Clarity of

information or

advice provided

Time taken to

respond to
telephone enquiries

Staff treating you

as a valuable

customer

Overall Satisfaction