anand rathi group

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Summer TrainingProject Report

On

PERCEPTION AND BAHAVIOR OF INVESTOR ON CAPITAL

MARKET

Submitted in partial fulfillment of

Bachelor of Business Administration toMaharaja Ganga Singh University, Bikaner.

Under the guidance of Under the supervision ofMr. Ravi Kant Vyas Mr. Santosh Acharya

Faculty, E.C.B Branch Manager,

Anand Rathi Shares

And Stock Brokers ltd.

Submitted ByRenu Mahayach

BBA 3rd YearResearcher

Specialization: Marketing

Engineering College Bikaner

DEPARTMENT OF MANAGEMENT AND TECHNOLOGYBIKANER, RAJASTHAN

2010-2011

(AN AUTONOMOUS INSTITUTE OF GOVT. OF RAJASTHAN)

KARNI INDUSTRIAL AREA, PUGAL ROAD,BIKANER.

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Certificate from Faculty Guide

This is to certify that the summer training report entitled "Perception and Behavior ofInvestor on Capital Market" work carried out by Miss Renu Mahayach in the partialfulfillment of requirement for the award of Bachelor of Business Administration (BBA)second year 2009-10 affiliated to Maharaja Ganga Singh University, Bikaner (Raj.).

To the best of my knowledge & belief this work is not submitted or published elsewherefor any degree or diploma examination.

Best of luck

Mr. Ravi Kant Vyas

(Faculty guide)

Engineering College BikanerBikaner (Raj)

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Preface

Beginning of the system project is entirely creative. This does not come all of a sudden, but

it comes by result of discussion, consultation and contemplation. Problem unsolved herecan never be satisfactory eliminated later. It is therefore a slow process.

Moreover practical training is an important part of management courses. The

theoretical studies are not sufficient to get into the corporate world. Only practical

knowledge can help us to understand the complexities of large scale organizations.

To develop healthy managerial and administration skill in potential managers, it is

necessary that theoretical knowledge must be supplemented with exposure to the real

environment. Actually, it is life for, a management itself is realized.

In my case I confronted myself to Anand Rathi Group. And the exposure that I could not

gained from the books. I found it very interesting and challenging. I did my training at

BIKANER branch office and my topic of project is "Perception and Behavior of

Investor on Capital Market with special reference to Anand Rathi Shares and Stock

Brokers limited.

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ACKNOWLEDGEMENT

Heartfelt thanks to the following people.

A Few typewritten words of thanks can-not really express the sincerity of my

gratitude. But I am still trying to put into words my gratefulness towards all who have

helped & encouraged me in carrying out this project.

I would like to thankMr. Giriraj Kiradoo(HOD:BBA)to give me guidelines

and my worthy thanks to my teacher Mr. Ravi Kant Vyas (faculty member) for their

valuable contribution during the academic session and guidance in preparation of this

project report.

This report conveys my heartiest thanks to Mr. Santosh Acharya Branch Manager of

ANAND RATHI SHARES AND STOCK BROKERS LIMITED. for giving me this

project & helping me in completion of this project. No praise is ample for the never tiring

efforts of my colleagues whose constant support feedback, guidance & practical

suggestions helped me in completing this Project successfully.

TO THE GUIDE

Student owes a debt of gratitude to his esteemed guide, Mr. Ravi Kant Vyas, Lecturer inengineering College Bikaner, for his gifted guidance, encouragement, and unceasinginscription, throughout training and study. Student feels better than them to have him as hisguide. Beside the path finder for him, his qualities of professional competence and way ofworking was constant inspire and encourage him to keep the flam of management studyburning till the generation passes. Students extend his earnest feeling for the interest andaffection that he graciously lavished upon this work.Students shall ever remain grateful and owe his regards for the masterly guidance.

(RenuMahaya

ch)

DECLARATION

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\

I hereby declare that the project "Perception and Behavior of Investor on Capital in ANAND

RATHI SHARES & STOCK LIMITED is original and bonafied work done by me.

The project is being submitted in partial fulfillment requirements for the award degree of

Bachelors of Business Administration, MAHARAJA GANGA SINGH UNIVERSITY.

EXECUTIVE SUMMARY

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Investing in equities in a market like India is speculative and involves risk that may be

greater than other types of investment strategies. Before investing an Investor should be

careful enough about him investment decision to avoid erosion of wealth. As seen in the

recent times the volatility of market is more detrimental to the retail investors as it seems to

be lucrative for speculative gains of short duration of time. Hence an investor has to

evaluate his options carefully for a prudent investment, keeping long-term horizon in mind.

The report has tried to bring out the parameters those are of paramount importance to

general public dealing in an equity trading on day-to-day and delivery base trading. The

working methodology has been discussed i.e. the data collection methods, sampling

methods and the survey questionnaire methods. The questionnaire prepared is designed so

as to cover a wide range of customer touch points

The report gave a view about the investors perception that what they think while making

investments in shares.

A sample of 100 people was selected randomly and survey was done as per the parameters

of the questionnaire. The results of every parameter have been included in this report and

shown graphically (Pie Charts, bar graphs etc.) A complete structure of the research design

has been included.

Apart from above discussed points the brief history of Anand Rathi Group, its business

diversification and a brief introduction about the concept of share trading.

Certificate from the corporation

Certification from the faculty guide

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Preface

Acknowledgement

Declaration

Executive summary

TABLE OF CONTENT

CONTENTS

S.No. Title Page No.

GROUP INTRODUCTION

FINANCIAL MARKET CAPITAL MARKET

PRIMARY MARKET

SECONDARY MARKET

OVERVIEW OF THE INDUSTRY

BOMBAY STOCK EXCHANGE

NATIONAL STOCK EXCHANGE

TRADING MECHANISM

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10

11

11

12

13

15

18

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RESEARCH METHODOLOGY

RESEARCH

TITLE OF RESEARCH

OBJECTIVEOF RESEARCH

SIGNIFICANCE OF RESEARCH

METHODOLOGY

DATA COLLECTION

RESEARCH DESIGN

LIMITATIONS OF THE RESEARCH

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24

24

24

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25

25

26

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COMPANY INTRODUCTION

PROFILE OF THE COMPANY

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28

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EVOLUTION OF ANAND RATHI

MANAGEMENT TEAM

AR VISION

MAIN OBJECTIVES OF THE COMPANY WHY ANAND RATHI GROUP

SERVICE PROFILE OF ANAND RATHI

MAIN CUSTOMERS OF ANAND RATHI

COMPETITION INFORMATION

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30

32

32

34

35

37

38

38

PRODUCTS AND SERVICES

EQUITY

IPO

MUTUAL FUND

LIP & SIP

INSURANCE BROKING

DEPOSITORY SERVICES

COMMODITIES

CURRENCY

PMS

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43

47

47

48

49

50

50

51

51

51

CONCEPTUAL DISCUSSION 53

SWOT ANALYSIS 70

PROCESSING AND DATA ANALYSIS 73

CONCLUSION AND RECOMMENDATIONS 87

ANNEXURE 91

BIBLIOGRAPHY 96

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FINANCIAL MARKET

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In economics, typically, the term marketmeans the aggregate of possible buyers and sellers

of a thing and the transactions between them.

The term "market" is sometimes used for what are more strictly exchanges, organizationsthat facilitate the trade in financial securities, e.g., a stock exchange or commodityexchange. This may be a physical location (like the NYSE) or an electronic system (likeNASDAQ). Much trading of stocks takes place on an exchange; still, corporate actions(merger, spin-off) are outside an exchange, while any two companies or people, forwhatever reason, may agree to sell stock from the one to the other without using anexchange.

Trading of currencies and bonds is largely on a bilateral basis, although some bonds tradeon a stock exchange, and people are building electronic systems for these as well, similar to

stock exchanges.Financial markets can be domestic or they can be international.

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 orcommon 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.

Derivatives markets, which provide instruments for the management of financialrisk.

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Futures markets, which provide standardized forward contracts for trading productsat some future date; see also forward market.

Insurance markets, which facilitate the redistribution of various risks.

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

The capital markets consist of primary markets and secondary markets. Newly formed(issued) securities are bought or sold in primary markets. Secondary markets allowinvestors to sell securities that they hold or buy existing securities

Capital market

A capital market is a market forsecurities (debt orequity), where business enterprises(companies) and governments can raise long-term funds. It is defined as a market in whichmoney is provided for periods longer than a year[1], as the raising of short-term funds takesplace on other markets (e.g., the money market). The capital market includes the stockmarket (equity securities) and the bond market (debt). Financial regulators, such as the

UK's Financial Services Authority (FSA) or the U.S. Securities and Exchange Commission(SEC), oversee the capital markets in their designated jurisdictions to ensure that investorsare protected against fraud, among other duties.

Capital markets may be classified as primary markets and secondary markets. In primarymarkets, new stock or bond issues are sold to investors via a mechanism known asunderwriting. In the secondary markets, existing securities are sold and bought amonginvestors or traders, usually on a securities exchange,over-the-counter, or elsewhere

Primary market

The primary market is that part of the capital markets that deals with the issue of newsecurities. Companies, governments or public sector institutions can obtain funding throughthe sale of a new stock orbond issue. This is typically done through a syndicate ofsecurities dealers. The process of selling new issues to investors is called underwriting. Inthe case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn acommission that is built into the price of the security offering, though it can be found in theprospectus. Primary markets create long term instruments through which corporate entitiesborrow from capital market.

Features of primary markets are:

This is the market for new long term equity capital. The primary market is themarket where the securities are sold for the first time. Therefore it is also called the

new issue market (NIM).

In a primary issue, the securities are issued by the company directly to investors.

The company receives the money and issues new security certificates to theinvestors.

Primary issues are used by companies for the purpose of setting up new business orfor expanding or modernizing the existing business.

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http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/U.S._Securities_and_Exchange_Commissionhttp://en.wikipedia.org/wiki/Primary_markethttp://en.wikipedia.org/wiki/Secondary_markethttp://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Over-the-counter_(finance)http://en.wikipedia.org/wiki/Over-the-counter_(finance)http://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Initial_public_offeringhttp://en.wikipedia.org/wiki/Prospectus_(finance)http://en.wikipedia.org/wiki/Prospectus_(finance)http://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/U.S._Securities_and_Exchange_Commissionhttp://en.wikipedia.org/wiki/Primary_markethttp://en.wikipedia.org/wiki/Secondary_markethttp://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Over-the-counter_(finance)http://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Initial_public_offeringhttp://en.wikipedia.org/wiki/Prospectus_(finance)http://en.wikipedia.org/wiki/Debt


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The primary market performs the crucial function of facilitating capital formationin the economy.

The new issue market does not include certain other sources of new long termexternal finance, such as loans from financial institutions. Borrowers in the newissue market may be raising capital for converting private capital into public

capital; this is known as "going public."

The financial assets sold can only be redeemed by the original holder.

Methods of issuing securities in the primary market are:

Initial public offering;

Rights issue (for existing companies);

Preferential issue.

Secondary market:-

The secondary market, also known as the aftermarket, is the financial marketwhere previously issued securities andfinancial instruments such as stock, bonds,options, and futures are bought and sold.[1]. The term "secondary market" is alsoused to refer to the market for any used goods or assets, or an alternative use for anexisting product or asset where the customer base is the second market (forexample, corn has been traditionally used primarily for food production andfeedstock, but a "second" or "third" market has developed for use in ethanolproduction). Another commonly referred to usage of secondary market term is torefer to loans which are sold by a mortgage bankto investors such as Fannie Mae

and Freddie Mac. With primary issuances of securities or financial instruments, or the primary

market, investors purchase these securities directly from issuers such ascorporations issuing shares in an IPO orprivate placement, or directly from thefederal government in the case oftreasuries. After the initial issuance, investors canpurchase from other investors in the secondary market.

The secondary market for a variety of assets can vary from loans to stocks, fromfragmented to centralized, and from illiquid to very liquid. The major stockexchanges are the most visible example of liquid secondary markets - in this case,for stocks of publicly traded companies. Exchanges such as the New York Stock

Exchange,Nasdaq and the American Stock Exchange provide a centralized, liquidsecondary market for the investors who own stocks that trade on those exchanges.Most bonds and structured products trade over the counter, or by phoning thebond desk of ones broker-dealer. Loans sometimes trade online using a LoanExchange.

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http://en.wikipedia.org/wiki/Rights_issuehttp://en.wikipedia.org/wiki/Financial_marketshttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Financial_instrumentshttp://en.wikipedia.org/wiki/Financial_instrumentshttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bondshttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Futures_contracthttp://www.businessdictionary.com/definition/secondary-market.htmlhttp://www.businessdictionary.com/definition/secondary-market.htmlhttp://en.wikipedia.org/wiki/Used_goodshttp://en.wikipedia.org/wiki/Mortgage_bankhttp://en.wikipedia.org/wiki/Mortgage_bankhttp://en.wikipedia.org/wiki/Investorshttp://en.wikipedia.org/wiki/Fannie_Maehttp://en.wikipedia.org/wiki/Freddie_Machttp://en.wikipedia.org/wiki/Primary_markethttp://en.wikipedia.org/wiki/Primary_markethttp://en.wikipedia.org/wiki/Issuershttp://en.wikipedia.org/wiki/Corporationshttp://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/IPOhttp://en.wikipedia.org/wiki/Private_placementhttp://en.wikipedia.org/wiki/Treasurieshttp://en.wikipedia.org/wiki/Loanshttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/Nasdaqhttp://en.wikipedia.org/wiki/American_Stock_Exchangehttp://en.wikipedia.org/wiki/Rights_issuehttp://en.wikipedia.org/wiki/Financial_marketshttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Financial_instrumentshttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bondshttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Futures_contracthttp://www.businessdictionary.com/definition/secondary-market.htmlhttp://en.wikipedia.org/wiki/Used_goodshttp://en.wikipedia.org/wiki/Mortgage_bankhttp://en.wikipedia.org/wiki/Investorshttp://en.wikipedia.org/wiki/Fannie_Maehttp://en.wikipedia.org/wiki/Freddie_Machttp://en.wikipedia.org/wiki/Primary_markethttp://en.wikipedia.org/wiki/Primary_markethttp://en.wikipedia.org/wiki/Issuershttp://en.wikipedia.org/wiki/Corporationshttp://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/IPOhttp://en.wikipedia.org/wiki/Private_placementhttp://en.wikipedia.org/wiki/Treasurieshttp://en.wikipedia.org/wiki/Loanshttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/Nasdaqhttp://en.wikipedia.org/wiki/American_Stock_Exchange


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OVERVIEW OF THE INDUSTRY

The only stock exchanges operating in the 19th century were those of Bombay set up in

1875 and Ahemadabad set up in 1894. These were organized as voluntary non-profit

making organization of brokers to regulate and protect their interests. Before the control on

securities trading became a central subject under the constitution in 1950, it was a state

subject and the Bombay securities contract (CONTROL) Act of 1952 used to regulate

trading in securities. Under this Act, the Bombay stock exchanges in 1927 and

Ahemadabad in 1937.

During the war boom, a number of stock exchanges were organized in Bombay,

Ahemadabad and other centers, but they were not recognized. Soon after it became a

central subject, central legislation was proposed and a committee headed by A.D. Gorwala

went into the bill for securities regulation. On the basis of committees recommendations

and public discussions the securities contracts (regulations) Act became law in 1956.

DEFINITION OF STOCK EXCHANGE

Stock exchange means anybody or individuals whether incorporated or not, constituted for

the purpose of assisting, regulation or controlling the business of buying, selling or dealing

in securities.

It is an association of member brokers for the purpose of self regulation and protecting the

internet of its members. It can operate only if it is recognized by the Govt. under the

securities contract (regulation) Act, 1956 the recognition is granted under section 3 of Act

by the Central Govt. ministry of finance.

What is an Index?

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To understand the use and functioning of the index derivatives markets, it is necessary to

understand the underlying index. A stock index represents the change in value of a set of

stocks, which constitute the index. A market index is very important for the market players

as it acts as a barometer for market behavior and as an underlying in derivative instruments

such as index futures.

BYELAWS

Beside the above act, the securities contract (regulation) rules were also made in 1975 to

regulate certain matter of trading on Stock Exchange. These are also byelaws of the

exchanges, which are concerned with following subjects.

Opening/Closing of the Stock Exchange, timing of trading, regulation of blank transfer,

regulation of Badla or carryover business, control of statement, and other activities of

stock exchange, fixation of margins, fixation market price or making price, regulation of

intraday (jobbing), regulation of broker trading, brokerage charges, trading rules on

exchanges, attribution and settlement of disputes, settlement and clearing of the trading etc.

REGULATION OF STOCK EXCHANGE

The securities contract (regulation) is the basis of the stock exchange in India. No exchange

can operate legally without the Govt. permission or recognition. Stock exchanges are given

monopoly in certain areas under section 19 of the above Act to ensure that the control and

regulation are facilitated. Recognition can be granted to a stock exchange provided certain

condition are satisfied and the necessary information is supplied to the government.

Recognition can also be withdrawn, if necessary. Where there are no stock exchanges, the

government can license some of the brokers to perform the function of stock exchange in

its absence.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

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SEBI was setup as an autonomous regulatory authority by the Government of India in 1988

to perform the interest of investors in the securities and to promote the development of,

and to regulate the securities market and for matters connected therewith or incidental

thereto. It is empowered by two Acts namely the SEBI act, 1992 and the securities

contract (regulation) Act 1956 to perform the function of protecting investors right and

regulating the capital market. The SEBI Act 1992 was enacted to empower SEBI with

statutory powers for:

Protecting the interests of investors in securities.

Promoting the development of the securities market

Regulating the securities market

Its regulatory jurisdiction extends over corporate in the issuance of capital and

transfer of securities. It has powers to register and regulate all the market all market

intermediaries and also to penalize them in case of violations of the provisions of the ACT,

rules and regulations made there under. SEBI has a full autonomy and authority to regulate

and develop an orderly securities market

BOMBAY STOCK EXCHANGE

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The stock exchange, Mumbai, popularly known as BSE was established in 1875 as The

Native share and stock broker association, as a voluntary non-profit making association. It

has an evolved over the year into its present status as the premiere stock exchange in the

country. It may be noted that the stock exchanges the oldest one in the Asia, even older

than the Tokyo Stock Exchange, which was founded in 1878.

The Exchange, while providing an effective and transparent market for trading in

securities, uphold the interest of the investors and ensure redressed of their grievances,

whether against the companies or its own member brokers. It also strives to educate and

enlighten the investors by making available necessary informative inputs and conducting

investor education programmes.

A governing board comprising of 9 elected directors, 2 SEBI nominees, 7 public

representatives and an executive director is the apex body, which decides the policies and

regulates the affairs of the exchanges.The executive director as the chief executive officer

is responsible for the day today administration of the exchange. The average daily turnover

of the exchange during the year 2006-07 (April-March) was Rs. 6984.19 crores and

average number of daily trades 15.69 lakhs.

BSE INDICES

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In order to enable the market participants analysis etc., to track the various ups and downs

in the Indian stock market, the Exchange has introduced in 1986 an equity stock index

called BSE-SENSEX that subsequently became the barometer of the moments of the share

prices in the Indian Stock market. It is a Market capitalization weighted index of 30

components stocks representing a sample of large, well-established and leading companies.

The base year of Sensex is 1978-79. The Sensex is widely reported in both domestic and

international markets through print as well as electronic media.

Sensex is calculated using a market capitalization weighted method. As per this

methodology, the level of the index reflects the total market value of all 30-component

stocks form different industries related to particular base period. The total market value of

a company is determined by multiplying the price of its stock by the number of sharesoutstanding. Statisticians call an index of a set of combined variables (such as price and

number of shares) a composite Index. An Indexed number is used to represent the results

of this calculation is order to make the value easier to work with the track over a time. It is

much easier to graph a chart based on Indexed values than one based on actual values

world over majority of the well-known Indices are constructed using Market capitalization

weighted method.

In practice, the daily calculation of SENSEX is done dividing the aggregate market value

of the 30 companies in the Index Divisor. This keeps the Index comparable over a period of

time and if the reference point for the entire Index maintenance adjustments. SENSEX is

widely used to describe the mood in the Indian Stock Markets. Base year average is

changed as per the formula new base year average = old base year average* (new market

value/old market value).

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NATIONAL STOCK EXCHANGE

The NSE was incorporated in Now 1992 with an equity capital of Rs. 25 crores. The

international securities consultancy (ISE) of Hong Kong has helped in setting up NSE. ISE

has prepared the detailed business plans and installation of hardware and software systems.

The promotions for NSE were financial institutions, insurance companies, banks an SEBI

capital market ltd., Infrastructure leasing and financial services ltd. and stock holding

corporation ltd.

It has been set up to strengthen the move towards professionalization of the capital market

as well as provide nationwide securities trading facilities to investors.

NSE is not an exchange in the traditional sense where brokers own and manage the

exchange. A two tier administrative set up involving a company board and a governing

abroad of the exchange is envisaged.

NSE is a national market for share PSU bonds, debentures and government securities since

infrastructure and trading facilities are provided.

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NSE-NIFTY

The NSE on April 22, 1996 launched a new equity Index. The NSE-50 is the new index,

which replaces the existing NSE-100 index, is expected to serve as an appropriate Index for

the new segment of futures and options.Nifty means National Index for Fifty Stocks. The

NSE-50 comprises 50 companies that represent 20 board Industry groups with an aggregate

market capitalization of around Rs. 5, 70,000 crores. All companies included in the Indexhave a market capitalization in excess of Rs. 1000 crores each and should have traded for

85% of trading days at an impact cost of less than 1.5%.

The base period for the close of prices on Nov 3, 1995, which makes one year of complete

operation of NSEs capital market segment. The base value of the Index has been set at

1000.

NSE-MIDCAP INDEX

The NSE madcap Index or the Junior Nifty comprises 50 stocks that represents 21 abroad

Industry groups and will provide proper representation of the madcap segment of theIndian capital Market. All stocks in the index should have market capitalization of greater

than Rs. 600 crores and should have traded 85% of the trading days at an impact cost of

less 2.5 %.

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The base period for the index is Nov 4, 1996, which signifies two years for completion of

operations of the capital market segment of the operations. The base value of the Index has

been set at 1000.

Average daily turnover of the present scenario 258212 (Laces) and number of averages

daily trades 2160 (Laces).

THE SENSEX AND NIFTY

In India the most popular indices have been the BSE Sensex and S&P CNX Nifty. The

BSE Sensex has 30 stocks comprising the index which are selected based on market

capitalization, industry representation, trading frequency etc. It represents 30 large well-

established and financially sound companies. The Sensex represents a broad spectrum of

companies in a variety of industries. It represents 14 major industry groups. Then there is a

BSE national index and BSE 200. However, trading in index futures has only commenced

on the BSE Sensex.

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While the BSE Sensex was the first stock market index in the country, Nifty was launched

by the National Stock Exchange in April 1996 taking the base of November 3, 1995. The

Nifty index consists of shares of 50 companies with each having a market capitalization of

more than Rs 500 crore.

FUTURES AND STOCK INDICES

For understanding of stock index futures a thorough knowledge of the composition of

indexes is essential. Choosing the right index is important in choosing the right contract for

speculation or hedging. Since for speculation, the volatility of the index is important

whereas for hedging the choice of index depends upon the relationship between the stocks

being hedged and the characteristics of the index.

Choosing and understanding the right index is important as the movement of stock index

futures is quite similar to that of the underlying stock index. Volatility of the futures

indexes is generally greater than spot stock indexes.

Every time an investor takes a long or short position on a stock; he also has a hidden

exposure to the Nifty or Sensex. As most often stock values fall in tune with the entire

market sentiment and rise when the market as a whole is rising.

Retail investors will find the index derivatives useful due to the high correlation of the

index with their portfolio/stock and low cost associated with using index futures for

hedging.

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TRADING MECHANISM

Earlier trading on stock exchanges in India used to take place through open outcry, without

use of information technology for immediate matching or recording of trades. This was

time consuming and inefficient. This imposed limits on trading volumes and efficiency. In

order to provide efficiency, liquidity and transparency National Stock Exchange introduced

a nationwide on line fully automated screen based trading system where a member can

punch in to the computer quantities of securities and the prices at which he likes to transact

and the transaction is executed as soon as it finds a matching sale or buy order from a

counter party. Screen based trading electronically matches orders on a price/time priority

and hence cuts down on time, cost and risk of error, as well as on fraud resulting in

improved operational efficiency. It enables market participants, irrespective of their

geographical locations to trade with one another and it provides equal access to everybody.

NSE has main computer which is connected through Very Small Aperture Terminal(VSAT) installed at its office. The main computer runs on a default tolerant STRATUS

mainframe computer at the exchange. Brokers have terminals installed at their premises

which are connected through VSATs. An investor informs a broker to place an order on his

behalf.

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RESEARCHMETHODOLOGY

Research

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Research is used to choose the best line of action (in the light of growing competitionand increasing uncertainty). Research in common context refers to a search for knowledge.It can also be defined as a scientific and systematic search for gaining information andknowledge on a specific topic of phenomena. In management research is extensively usedin various areas.

Research is a structured inquiry that utilizes acceptable scientific methodology to solveproblems and create new knowledge that is generally applicable.It contains characteristics like Controlled, Rigorous, Systematic, Valid and verifiable,Empirical, Critical.

Title of ResearchPerception and Behavior of Investor on Capital

Objective of ResearchTo gain practical insight about investor behavior relates to investment and their satisfactionlevel with depository services and broking institutions as like value added services and

individual accounts of Anand Rathi group.To find out the intention of customers in which he/she wants to invest.To give suggestions or recommendations to the organization after analysing the facts andfindings.

Scope of ResearchThe research was pertained to the Bikaner city. The researcher had taken those personswhich are investors or non investor or want to invest in Anand Rathi. The research wasconducted for a period of 45 days from June 2010 to July 2010.The researcher contacted tocustomers according to the systematic random sampling method in different area ofBikaner city fieldwork. The conclusion and interpretation hold good to the situation as ofthen.

Significance of Research

To Corporation: The research has provided the corporation comprehensiveinformation about its customers behavior. The researcher help the corporation toknow about the need and wants of their customers and try to fulfill their genuineexpectations so as to move with the current trend of Buying Market in whichcustomer is the king of the market to prevent the customer from switching over andmake them brand loyal. The study helps the corporations to critically analysisthemselves so as to improve in respective fields.

To Researcher: The researcher not only fulfilled his requirement for the Degree ofBBA but also learnt a lot in the field of customers research.Researcher has got anopportunity of implementing his theoretical knowledge of management curriculumin practical life.

To Others: The research is significant for the others who are interested to know indetails about daily investment behavior of consumers and problem which have to

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face by investors. The research will also able to guide the other research scholarsfor further study.

Research Methods

Methodology used is explained in detail. Data collection, primary or secondary, is done using appropriate technique.

The type of data (evidence, framework, argument) collected and used are evidentlyappropriate & justified.

Contact Method with Personal Interview and Internet Connectivity.

Data collection method used through survey for primary data and internet surfingfor secondary data.

Structured schedule and computer with internet research instrument was used.

Universe type was Anand Rathi customers and their investment interestedconsumer from different-2 sectors.

Data Collection

Primary data: - It is collected for new research for the first time. Personal interview

Close interview

Survey conduction

Group discussion

Secondary Data: - Already existed data is called secondary data. I collected them fromfollowing method.

Internet

Books

Previous research

Pilot Survey

A schedule was prepared consisting of 15-20 questions from investors. The questions wereboth open and close ended. The survey was done in the terminals at Modern Market,Bothra Complex in Bikaner city. Respondents answered most of the questions but certainquestions were unanswered for pilot survey which was shown as the dissatisfaction fromthe investment instruments and other services relates to market and other conditions,certain new questions were also generated, ten respondents were taken from differentterminals.

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RESEARCH DESIGNA research design is a specification of method and procedures or acquiring the informationneeded. It is the overall observational pattern or framework of the projects that stipulateswhat information is to be collected, from which source, by what procedure.

Sampling designSampling technique: Systematic Random Sampling- First hundred customers of AnandRathi Group which receive billing and holding statement during the training period werechosen for the research.Unit Sample: Customers of Anand Rathi Group in Bikaner city.Sample size: 100

LimitationsThough tried to make utmost care, to make research work exhaustive, still the researchercould not rule out the presence of few unintentional and unavoidable flows in research:-1. The research was confined to certain parts of Bikaner and does not necessarily shows a

pattern applicable to all of Country.2. Some respondents were reluctant to divulge personal information as income level,contact and reason for not investment orientation which can affect the validity of allresponses.3. In a rapidly changing industry, analysis on one day or in one statement can change veryquickly. The environmental changes are vital to be considered in order to assimilate thefindings.4. Stipulation due to instrument used for the collection of data.5. This research is based on personal interview so there may be chances of business.6. Majority of the customers accepted this system in order to abide by the regulations as setby SEBI.

7. Frustrations among investors due to market inflation which is major problem in ignoringthe idea of investment by the investors.8. The sample size is limited to 100 numbers of respondents, who represent the population.9. The study is conducted for a period of 3-4 weeks.

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COMPANY

PROFILE

COMPANY PROFILE

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INTRODUCTION TO ANAND RATHI GROUP

Anand Rathi is a leading full service investment bank founded in 1994 offering a widerange of financial services and wealth management solutions to institutions, corporations,

highnet worth individuals and families. The firm has rapidly expanded its footprint to over350 locations across India with international presence in Dubai, Hong Kong & New York.Founded by Mr. Anand Rathi and Mr. Pradeep Gupta, the group today employs over 2,500professionals throughout India and its international offices

AR provides a breadth of financial and advisory services including wealth management,investment banking, corporate advisory, brokerage & distribution of equities, commodities,mutual funds and insurance - all of which are supported by powerful research teams.

The firm's philosophy is entirely client centric, with a clear focus on providing long termvalue addition to clients, while maintaining the highest standards of excellence, ethics and

professionalism. The entire firm activities are divided across distinct client groups:Individuals, Private Clients, Corporate and Institutions.

Company Profile

a. Member of Bombay Stock Exchange and National Stock Exchange(Cash and Derivatives)

b. Depository Participant (Central Depository Services Limited and NSDL)

c. Member of National Commodities Index and Multi Commodities

Exchange

d. Insurance Brokerage (IRDA)

e. Member of Dubai Gold and Commodities Exchange

f. Mutual Funds Distribution (Association of Mutual Funds of India

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EVOLUTION OF ANAND RATHI GROUP

1994:Started activities in consulting and Institutional equity sales with staff of 151995:Set up a research desk and empanelled with major institutional investors1997:Introduced investment banking businessesRetail brokerage services launched1999:Lead managed first IPO and executed first M & A deal2001:Initiated Wealth Management Services

2002:Retail business expansion recommences with ownership model2003:Wealth Management assets cross Rs1500 croresRetail Branch network exceeds 50Insurance broking launchedLaunch of Wealth Management services in Dubai2004:Retail Branch network expands across 100 locations within IndiaCommodities brokerage and real estate services introduced

Wealth Management assets cross Rs3000croresInstitutional equities business re-launched and senior research team put in place2005:Retail Branch network expands across 130 locations within IndiaReal Estate Private Equity Fund Launched2006:AR Middle East, WOS acquires membership of Dubai Gold & Commodity Exchange (DGCX)Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money 2006 poll

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Ranked 6th in FY2006 for All India Broker Performance in equity distribution in the High Networth Individuals (HNI) CategoryRanked 9th in the Retail Category having more than 5% market shareCompletes its presence in all States across the country with offices at 300+ locations within India2007:

Citigroup Venture Capital International picks up 19.9% equity stakeRetail customer base crosses 100 thousandEstablishes presence in over 350 locations

Management Team

AR brings together a highly professional core management team that comprises of individuals withextensive business as well as industry experience.

Our senior Management comprises a diverse talent pool that brings together rich experience from

across industry as well as financial services.

Mr. Anand Rathi - Group ChairmanChartered AccountantPast President, BSEHeld several Senior Management positions with one of India's largestindustrial groupsPrior to establishing his own company, Mr. Rathi headed Indian Rayon &Industries, as Senior President. He has held a series of responsible positionswith the Birla group and was also instrumental in setting up of Birla Global

Finance. In his 40 years of being in the corporate world, Mr. Rathi has heldseveral key positions on various regulatory and professional boards,including, President, Bombay Stock Exchange (BSE), and Member, CentralCouncil of Institute of Chartered Accountants (ICAI). As President of BSE,Mr. Rathi played a key role in the expansion plan of BOLT, the onlinetrading system of the Exchange and setting up of the Trade Guarantee Fund.He was the moving force behind setting up of the Central DepositoryServices (India) Ltd. He is a gold medalist Chartered Accountant.

Mr. Pradeep Gupta - Managing DirectorPlus 15 years of experience in Financial Services

With over twenty years experience in the securities market. Cofounder andkey driver of the Retail and Institutional Equities business of the group

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Mr. Amit Rathi - Managing Director

Chartered Accountant & MBAPlus 11 years of experience in Financial Services A rank holder CharteredAccountant and an MBA from Leonard N. Stern School of Business, NewYork University joined the group in 1998. He was instrumental inestablishing the groups private wealth management and investment bankingbusinesses. Calling him a financial guru, the Times of India group, listedAmit in 2008 amongst the top 51 young Marwari in India (under the age of40).

P G Kakodkar | Director

Former Chairman Bank of India. Director in Financial Technologies (India). Director in Sesa GoaLtd. Director in SBI Funds Management Pvt Ltd & the Multi Commodity Exchange of India Ltdand a M. A. in Economics of State.

Dr. S A Dave | Director

Former Chairman Securities & Exchange Board of India (SEBI) and Deputy Director of the RBI.Former Chairman Unit Trust of India (UTI). Member of General Committees of Government ofIndia & Financial Reforms and Chairman CMIE 1998 till date. And a M. A. (USA) with Ph D inEconomics.

C D Arha | Director

Formerly Secretary in the Union Ministry of Mines. Special Secretary & Additional Secretary in the

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Ministry of Coal. Resident Chief Information Commissioner AP (Right to Information Act).Commissioner Civil Supplies (AP). Chairman & MD, APSEC. With a M .A. (History) and diplomaManagement & Administration of Rural Development.

Ajit Bhushan | Director

Managing Director Citi Venture Capital London Over 17 years experience with Citi. Joined CVCinternational in 2001. Worked on Strategy and business development for Citibank in CEEMEAregion and managed Cash Management Business for Citi in Poland and India. B Tech (IIT Delhi)and an MBA (IIM Ahmadabad).

MAIN OBJECTS OF THE COMPANY

The main objects to be pursued by the Company on its incorporation are:

To hold investments in various step-down subsidiaries for investing, acquiring,

holding, purchasing or procuring equity shares, debentures, bonds, mortgages,

obligations, securities of any kind issued or guaranteed by our Company.

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To provide financial consultancy services; to provide investment advisory services on

the internet or otherwise; provide financial consultancy in the area of personal and

corporate finance; publish books and CD ROMs and any other information related to

the above.

To conduct the business of sale, purchases, distribution and transfer of shares, debts,

instruments and hybrid financial instruments and to perform all related, incidental,

ancillary and allied services.

To conduct depository participant services; to conduct de-materialization and re-

materialization of shares; set up depository participant centers at various regions in

India and to perform all related, incidental, ancillary and allied services.

To receive funds, deposits and investments from the public, Government agencies,

financial institutions and corporate bodies; grant advances and loans; conduct advisory

services related to banking activities, project financing, funding of mergers and

acquisition activities; fund management and activities related to money market

operations.

To carry on the business of portfolio management services, investment advisoryservices; custodial services; asset management services; leasing and hire purchase;

mutual fund services and to act as brokers of real estate and financial instruments.

To carry on the business of financing; provide lease and hire purchase services; to

provide consultancy in the area of lease and hire purchase financing.

To operate mutual funds; receive funds from investors; equity or debt instrument researchactivity instrument in debt and/or equity instruments

WHY ANAND RATHI GROUP

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Quick InformationGet access to information about a company, its background, any relevant newsabout the company in recent times. Let yourself be well versed with information of

whereabouts of the company, owners & people who make a difference to thebusiness and with whom you are most likely to identify the company.

Company DetailsGet to know a company better in terms of key personnel related to its operations andits shareholding pattern. Get an insight as to the thought process behind thecompanys financing plans, the financing pattern followed by the company and thekey personnel who are in control of the business.

Investor InformationAccess information about how often has the company declared Dividends, Bonusissues and how has it been performing as compared to other companies in its peergroup.

Assess how beneficial will be your investment in the company according to itshistory of dividends, bonus and peer group comparison. See which companies areperforming better within the same industry circle and make an informed decision.

Corporate AnnouncementsBe the first to know about any public announcement made by companies. Know thebenefits that accrue to your investments before anyone else does. Read it firsthand& take necessary actions accordingly. Take note of the board meetings held,resolutions made and critical corporate decisions affecting your investment andidentity of the company you have invested in.

Financial StatementsAnalyze the financial wellbeing of a company, profits earned through its operations,cash flows during the year. Access the strength of a company in terms of financingits day to day operations, Fixed assets and its capability to take on future venturessuccessfully.

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Key RatiosEvaluate the worth of your investments through the ratios that resemble theperformance of a company. It is one of the easiest modes of performancecomparison between companies. Compare the differences between standard ratiosand actual ratios of the company that you want to invest into. Check what the

tolerable level of disparity is before its time for you to reconsider your investmentsin the company.

ResultsAccess the latest company results posted on internet about any company of yourchoice. Be in touch with the results affecting your investments.

Research Reports provided by Anand Rathi Group

Equity & FNOGet access to Fundamental,Technical, FNO & Other reports tokeep you updated on everydayperformance of the market.

CommoditiesKeep yourself updated on thecommodity activities in the countryand in abroad as well.

Insurance

View the performance of variousinsurance companies of yourinterest on monthly basis

Mutual Funds

Stay updated with the latest NFOdetails, daily fund tracker and viewWhat's In / Out

Investment Strategy

Stay in touch with the changes inyour economy and foreign tradestatus

Institutional EquitiesView updates about a

company, over a sector and

latest results declared by the

companies

SERVICES PROFILE OFANAND RATHI

WEALTH MANAGEMENT

Centers located at Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Dubai and

Bangkok

Dealings in:

1. EQUITIES

a) Stocks

b) PMS

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c) Derivatives

d) Mutual Funds

2. FIXED INCOME SCHEMES

Bonds

3. COMMODITIES AND PRECIOUS METALS

4. LIFE AND GENERAL INSURANC

5. REAL ESTATE PRIVATE EQUITY FUND

6. CURRENCIES

7. STRUCTURED PRODUCTS AND CAPITAL GUARANTEED NOTES

8. ALTERNATIVE AND NON CORRELATED INVESTMENTS

Value added services byAnand Rathi:

1. COMPREHENSIVE PRODUCT RANGE

2. RISK MANAGEMENTS SKILLS

a) Sophisticated asset allocation and risk modeling processing

b) In depth understanding of risks, opportunities and correlations across Markets

3) PROPERITARY GLOBAL ECONOMIC AND INVESTMENT RESEARCH

Focusing on long term dynamics and trends

4) CLIENT CENTRIC RESEARCH

Only third party products (no unbiased interest and research investment)5) BANKING AND CORPORATE FINANCE6. DEBT ADVISORYa. Rupee and Foreign Currenciesb. Debt Raising and Restructuring / Negotiationsc. Credit Settlement / OTS7. COMPREHENSIVE SERVICES WITH STRONG DISTRIBUTIONCAPABILITY8. DEEP INDUSTRY AND SECTORAL KNOWLEDGE AND RESOURCES9. LOCAL STRENGTHUnderpinned by network of national offices10. TRULY INDEPENDENT ADVICENot tied to any product, market and bank

11. BROKERAGE AND DISTRIBUTION

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MAIN CUSTOMERS OF Anand Rathi

INDUSTRIAL GROUPS BIRLAs Birla Sunlife Insurance, Grasim Industries, Hindalco, Indal, Indian

Rayon, Indo Gulf, Transworks

VENDATAs Balco Industries, Hindustan Zinc Limited, Sterlite Industries,

Vendata

TATAs Tata Investments, Tata Steel, Tata Motors Limited, Videsh Sanchar

Nigam Limited

MULTINATIONALSBayer, Clariant, Godfrey Philips, Goodlass Nerolac,Hindustan Lever Limited, Nestle, Thomas Cook Travels and many moreBANKS

Andhra Bank, Bank of India, Bank of Baroda, Canara Bank, HDFCBank, General and Life Insurance Corp, Punjab National Bank and many moreCORPORATES

ACC Cement, Berger Paints, Boots Piramal, Century Textiles,CRISIL, Crompton Greaves, Dabur, DCM, Emami, GeneralElectrics Shipping, Globus,Godrej, Gujarat Ambuja, ICICIVentures, HCL, Infosys, Indian Tobacco Company,JetAirways, Jindal Steel, Larsen & Tubro, Mahindra & Mahindra,Radico Khaitan, Raymonds, Wipro, Varun Shipping and many more.

COMPETITORS OFAnand Rathi

REMOTE COMPETITORS

INDIAN BANKS

Kotak Bank

Housing Development and Finance Corporation Bank

Industrial Credit and Investment Corporation of India Bank

State Bank of India

Unit Trust of India

Bank of Baroda

Canara Bank

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ING Vysya

INDIAN ASSET MANAGEMENT COMPANIES Cholamandalam

Lotus India

Principal

Optimix

Sahara

FOREIGN BANKS and ASSET MANAGEMENT COMPANIES ABN Amro Bank

Deustche Bank

Hongkong Shanghai Bank Corporation

Franklin Templeton

DSP Merill Lynch

BNP Paribas

Quantum

Taurus

IMMEDIATE COMPETITORS

RELIGARE ENTERPRISES

Religare Enterprises Limited group comprises of Religare Securities Limited, ReligareCommodities Limited and Religare Finvest Limited which deals in equity, commodity andfinancial services business. Religare Securities Limited is one of the leading brokinghouses of India and is dealing into Equity Broking, Depository Services, PortfolioManagement Services, Institutional Equity Brokerage &Research, Investment Banking and

Corporate Finance. Religare is a member of National Commodities Index and MultiCommodities Exchange and provides platform for trading in commodities, which is anonline facility also. Religare Finvest Limited, a Non Banking Finance Company isaggressively making a name in the financial services arena in India. In a fast paced,constantly changing dynamic business environment, Religare Finvest Limited has deliveredthe most competitive products and services. Religare Insurance Broking Limited as acomposite insurance broker deals in both insurance and reinsurance, providing our clientsrisk transfer solutions on life and non-life sides. This service will take benefit of Religares

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vast business empire spread throughout the country, providing their valued clientsinsurance services across India.

KARVY

Karvy is a premier integrated financial services provider, and ranked among the top five inthe country in all its business segments, services over 16 million individual investors invarious capacities, and provides investor services to over 300corporates, comprising thewho is who of Corporate India. Karvy covers the entire spectrum of financial services suchas Stock broking, Depository Participants, Distribution of financial products like mutualfunds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, PersonalFinance Advisory Services, Merchant Banking & Corporate Finance, placement of equity,Initial Public Offers, among others. Karvy has a professional management team and ranksamong the best in technology, operations and research of various industrial segments.

JM MORGAN STANLEY

JM Morgan Stanley is a joint venture between the JM Financial Group, one of Indiasleading financial services groups and Morgan Stanley, one of the worlds pre -eminentfinancial services firms. JM Morgan Stanley offers a diverse range of financial servicesincluding capital raising, mergers and acquisitions, institutional and retail equity sales andtrading, private wealth management and fixed income securities.JM Morgan Stanley has been involved in several landmark investment banking transactionsfor Indian as well as global clients and is one of Indias leading institutional brokeragehouses. JM Morgan Stanley commenced operations in April1999 and currently operatesthrough four companies, all of which are headquartered in Mumbai. JM Morgan Stanleyhas extensive global reach through its offices in eight Indian cities and Morgan Stanleysoperations in 27 countries.

GEOJIT FINANCIAL SERVICES

Mr. C.J. George and Mr. Ranajit Kanjilal founded Geojit as a partnership firm in the year1987. In 1993, Mr. Ranajit Kanjilal retired from the firm and Geojit became a proprietaryconcern of Mr. C .J. George. In 1994, it became a Public Limited Company by the nameGeojit Securities Ltd. The Kerala State Industrial Development Corporation Ltd., in 1995,became a co-promoter of Geojit by acquiring24% stake in the company, the only instancein India of a government entity participating in the equity of a stock broking company.Geojit listed at Bombay Stock Exchange in the year 2000. In 2003, the Company wasrenamed as Geojit Financial Services Ltd. The board of the company consists ofprofessional directors; including a Kerala government nominee with 2/3rd of the board

members being Independent Directors. With effect from July 2005, the company is alsolisted at The National Stock Exchange. Geojit is a charter member of the FinancialPlanning Standards Board of India and is one of the largest DP brokers in the country.

INDIA BULLS

India bulls are Indias leading Financial Services and Real Estate company having over 640branches all over India. India bulls serves the financial needs of more than

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4,50,000 customers with its wide range of financial services and products fromsecurities, derivatives trading, depositary services, research & advisory services,consumer secured & unsecured credit, loan against shares and mortgage & housingfinance. With around 4000 Relationship Managers, India bulls help its clients toSatisfy their customized financial goals. India bulls through its group companies have

entered Indian Real Estate business in 2005. It is currently evaluating several large-scaleprojects worth several hundred million dollars

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Products &services

PRODUCTS AND SERVICES

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Anand Rathi Group works in above shown sectors. Its main products and services are: -

Products

Equities I Bonds I Mutual Funds I Derivatives

Managed Investment Services / PMS

Commodities

FX Trading

Life Insurance

General Insurance

Alternative Assets

- Private Equity Funds

- Structured Products

- Real Estate Opportunities Fund

Special Situation Opportunities

Offshore Structures & Global Investments

Services

Creation of a customized financial strategy

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Diversification of assets based on a formal process of asset allocation

Active tracking, monitoring and review of portfolios

Creation of private trusts

Tax planning

Estate planning

Structuring of family wealth

Equity & Derivatives

Equity

Investing in shares is akin to owning part of a business. A profitable business keepsploughing back profit to earn more profits. Hence unlike in investing in assets likegold and real estate, investing in shares, which represent ownership in productiveasset (business) , hold very high returns potential.

Equity Business caters:

Needs of independent investors.

Active traders

Non-Resident Indian (NRI) investors.

ANAND RATHI OFFERS:

Broker assisted trade execution

Automated online investing

Access to all IPO's.

Cash N Carry

Deliveries on Margin

Selling of Deliveries before settlements

High Intra-day exposures

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Margin Financing

Value Adds:

Stock collateral benefits Digital Contract Notes

Research calls through multiple channels

Phone trade

Personal Investment AdvisoryAnand Rathi offers the purchase and sale of securities, which includes Equity, Derivatives

and Commodities Instruments listed on National Stock Exchange of India Ltd (NSEIL),

The Stock Exchange, Mumbai (BSE) and NCDEX.

TYPES OF ACCOUNTS

Anand Rathi Signature Account - Comprehensive services including research and

investing guidance for independent investors.

Non-Resident Indian (NRI) Investor Services - With an extensive range of

investment products, you will discover an unwavering commitment to helping you

invest in India.

All of this comes to you backed by your Relationship Manager available to you 24x7 .

Is complemented by our knowledgeable and customer focussed Relationship

Managers.

Provides our clients with real-time service & 24/7 access to all information and

products.

Anand Rathi offers a full range of financial services and products ranging from

Equities to Insurance to enhance your wealth and hence, achieve your financial

goals.

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POST REGISTRATION SERVICES:

Deliver and receive cheques and securities

Obtain market information

Place orders

Get access to IPOs via the Book Building route as well as to all the fixed price

issues.

DOCUMENTS REQUIRED FOR TRADING ACCOUNT AND D-MATA/C

2-passport size photograph.

Photocopy of Income Tax Permanent Account Number (PAN) Card - If you do not

have a PAN, then you would be required to give a declaration to that effect and fill

form 60.

IDENTITY PROOF - PHOTOCOPY OF ANY OF THE

FOLLOWING:

Passport

PAN Card

Voter ID

Driving License

Ration Card

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Address Proof - Photocopy of any one of Driving License / Passport/Ration

Card/Voter Card/ Bank Statement.

There are various types of orders that can be placed in equity investment; such orders have

been listed below: Delivery order: Orders where shares are delivered into the client's demat account

for settlement and they cannot be sold on the same day of order placement. Oncecan only sell such shares once their delivery has been received.

Intraday order: Orders where shares are bought and sold on the same trading dayand there is not delivery of shares into the client's demat account for settlement. Forsuch orders, settlement is done on net payment basis where only monetary effectsare given to the client's account.

Market Order: An order placed at current market price of a share in order to getinstant execution of the order. This order is placed when an investor expects the

share price to rise sharply and is thus keen on buying it. Such orders may getexecuted at market price when your order is placed but there can be somedifference in the price at which your order was executed as there could be a pricechange while you place your order.

After Market Order: An order that can be placed to buy or sell a share even whenthe market session is over. Such orders are executed when the next market sessionopens for trading. After Market orders can be placed within a specific time periodwhich varies between different brokers.

Stop Loss Order: An order that allows you to decide the maximum loss that youare ready to bear in intraday trading. As in intraday trading, you enter and exit the

position within the same trading session, Stop Loss order is placed to safe guardagainst potential losses that may occur once your order is executed.Suppose you place a buy order at Rs.125 and it gets executed, in order to minimizethe losses if any adverse price movement takes place; you need to place a reversestop loss order. This order will be a sell order with the same quantity of stock thatyou have received as a result of the buy order. Now you need to specify the price atwhich you think you would like to exit the position which can be Rs. 120 and alsothe price at which your order should enter the market which can be Rs.123. Thisprice (Rs.123) is called trigger price. If you think that the price may fall, from thecurrent market price, then you can put this trigger in stop loss order to make surethat it enters the market only after the trigger price has been reached

IPO

Initial Public Offerings are one of the best rewarding investment options thatprovide an investor the opportunity to get into Primary Market investments, thus bea part of a Company and own a share in it. Subscribing to equity capital of acompany is like owning a stake in the company. Investing early in a good companygives an opportunity to reap the benefits of it in the long run. IPO (primary market)

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investing is rewarding for both short term as well as long term investors.

Offerings of ARGARG is a leading primary market distributor across the country. We

have been consistently ranked among the top 10 distributors of IPOs on all major

offerings.

Our strong performance in IPOs has been a result of our vast experience in thePrimary Market, a wide network of branches across India, strong distributioncapabilities and a dedicated research team.

Our IPO research team provides clients with in-depth overviews of forthcoming IPOsas well as investment recommendations.

MUTUAL FUND

A mutual fund is a pool of money that is invested according to a common investment objective byan asset management company (AMC). The AMC offers to invest the money of hundreds ofinvestors according to a certain objective - to keep money liquid or give a regular income.

Investors buy a scheme if it fits in with their investment goals, like getting a regular income now or

letting the money accumulate over the long term. Investors pay a small fraction of their total fundsto the AMC each year as investment management fees.

ARG provide following offers: -

1. Strong AUM base Anand Rathi Financial Services is one of India's top mutual funddistribution houses having Assets Under Management (AUM) of Rs.4, 000 crores.

2. Wide Branch Network- Anand Rathi Financial Services has over 250 branches spread across

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India.

3. Diversified Product offerings - Anand Rathi Financial Services offers the products of allleading Mutual Fund Houses.

4. Research backed advisory support - Our philosophy is to provide consistently superior,independent and unbiased advice to our clients backed by in-depth research.

5. Superior Service - Our employees are well trained and better equipped to take care of yourinvestments. Our sales staff functions on the motto "the best services for our esteemed clients".

Lumpsum Investment Plans

We offer Lumpsum investment plans as well as systematic investment plans of all MutualFund houses to our customers

Lumpsum Investment:Long term investment horizon - The Lumpsum option is best suited for investors with amedium to long term investment appetite & can withstand the periodic volatility.

2. Value picking - Lumpsum investments are apt for investors who wish to pick up fundsinvesting in specific sectors or stocks.

Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP) - Advantages:1. Volatility of market - Indian markets remain at their volatile best at most times.Timing investments in this market is difficult. SIP helps you tide over lows and ridethe highs of the stock market.

2. Rupee Cost Averaging Advantage - When you invest the same amount in afund at regular intervals over time, you buy more units when the price is lower.Thus, you may reduce your average cost per share over time.

3. Benefits of compounding -Saving a small sum of money regularly makes money work with greater power ofcompounding with significant impact on wealth accumulation.

4. Disciplined & Regular Investing - SIP requires the investor to allocate aspecific amount regularly over a period of time. This develops a habit of regularsavings through market ups and downs, so that your investment behavior is notaffected by short term market moves.

5. Small Amounts of Investments - One can start a SIP with lesser amounts when

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compared with other market linked products. Thus investors need not wait till theyhave accumulated a large capital to begin investing

Insurance BrokingAs an insurance broker, we provide to our clients comprehensive risk management

techniques, both within the business as well as on the personal front. Risk managementincludes identification, measurement and assessment of the risk and handling of the risk, ofwhich insurance is an integral part. The firm deals with both life insurance and generalinsurance products across all insurance companies.Our guiding philosophy is to manage theclients' entire risk set by providing the optimal level of cover at the least possible cost. Theentire sales process and product selection is research oriented and customized to the client'sneeds. We lay strong emphasis on timely claim settlement and post sales services.

ARGs services

:

Risk Management

Due diligence and research on policies available

Recommendation on a comprehensive insurance cover based on clients needs

Maintain proper records of client policies

Assist client in paying premiums

Continuous monitoring of client account

Assist client in claim negotiation and settlement

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Depository Services

AR Depository Services provides you with a secureand convenient way for holding your

securities on both CDSL and NSDL.

Our depository services include settlement, clearing and custody of securities, registration

of shares and dematerialization. We offer you daily updated internet access to your holding

statement and transaction summary. Anand Rathi is a depository participant with the

National Securities Depository Limited and Central Depository Services (India) Limited

for trading and settlement of dematerialized shares. Anand Rathi performs clearing services

for all securities transactions through its accounts. We offer depository services to create a

seamless transaction platform execute trades through Anand Rathi Securities and settle

these transactions through the Anand Rathi Depository Services. Anand Rathi Depository

Services is part of our value added services for our clients that create multiple interfaces

with the client and provide for a solution that takes care of all your needs.

Commodities

Commodities broking

Our commodities broking services include online futures trading through NCDEX and

MCX and depository services through CDSL. Commodities broking is supported by a

dedicated research cell that provides both technical as well as fundamental research. Our

research covers a broad range of traded commodities including precious and base metals,

Oils and Oilseeds, agro-commodities such as wheat, chana, guar, guar gum and spices such

as sugar, jeera and cotton.

In addition to transaction execution, we provide our clients customized advice on hedgingstrategies, investment ideas and arbitrage opportunities.

Currencies

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Anand Rathi is an established market leader in the exchange traded currencies in India, which deliversa consistent unparallel service and advice in the Rupee and other currencies. It offers various solutionsto varied needs of the currency clients across the business segment. We offer complete hedgingsolutions to the end clients and help corporate in planning their remittances and receivables. Thisoffers an all new segment to the trading community; the recently opened Rupee/Dollar is an excelleninstrument for the retail investors with fewer amounts of margin (Low entry barrier), limited volatility,lower transaction costs and high transparency. We at Anand Rathi, thrive to give you the best of adviseand help you trade.

Portfolio Management Services(PMS)

The Advanced Portfolio Tracker through our web site is available only for Registered Account holdersof Anand Rathi Financial Services.The Portfolio Management System is an intuitive and easy to use tool which helps you keep track ofyour investments in Equity and Mutual Funds and also evaluate the performance based on the current

market valuation.It gives you a 360-degree view about how your investments are performing. Its unmatched features,reports and tools will help you in your investment decisions.

Features of Portfolio Tracker

1 Family or Individual Account level access

You could login as head of Family and enjoy multiple viewing options with graphical view of yourportfolio. Viewing options include Asset allocation across family portfolios and family account

wise holdings2 Auto Sudation

Transactions done through Anand Rathi on NSE/BSE are updated automatically at the end of theday in the Portfolio. We also auto update any corporate benefits accruing on your investments togive you a truly Automated experience.

3 Manual Entries allowed

You can add/ edit and delete transactions to correct or build a accurate, single view of investments.

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Option to add details for Rights/ Bonus and IPO Allotment for Equity and SIP/ SWP, etc. for MF.

4 Tracking of Equity & MF Investments

Track your investments in Equities and Mutual funds. We will soon be adding other assets such asFutures & Options, Commodities, Gold, Currency etc.

5 Multiple Viewing Options of HoldingsYou could view investments through multiple lenses, aiding your investment decisions by usingour viewing filter options.

6 Transaction History

Access transaction level information of your investments across date range, with facility to edit /delete records, giving you the controls to your Portfolio Tracker.

7 Gains & Losses reporting

Determine which investments have given what returns, segregated on Realized / Unrealized.Added feature of booked gains & losses bifurcated into Long Term & Short Term make handy

inputs for filing your Tax returns.

8 Content Integration

You can track your investments with the latest prices for BSE (15 min delayed) and NSE (5minute delayed) and ascertain your realized and unrealized gain/ loss from time to time.Additionally get access to in-depth information on your investments with Company Info /Scheme profile along with news options with a click on your holdings.

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CONCEPTUAL

DISCUSSION

CONCEPTUAL DISCUSSION

INTRODUCTION AND CONCEPT OF SHARE TRADING

Trading in shares is old phenomena its regulation had been started when securities contract

act had been formed in 1956. Transfer of resources from those with idle resources to others

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who have a productive need for them is most efficiently achieved through the securities

market. It provides a channel for reallocation of savings to investments.

EQUITY MARKET AND DERIVATIVE MARKET

What is equity?

Financing a company through the sale of stock in a company is known as equity financing.

Alternatively, debt financing (for example issuing Bonds) can be done to avoid giving up

shares of ownership of the company. Unofficial financing known as trade financing usually

provides the major part of a company's working capital (day-to-day operational needs).

Trade financing is provided by vendors and suppliers who sell their products to the

company at short-term, unsecured credit terms, usually 30 days. Equity and debt financing

are usually used for longer-term investment projects such as investments in a new factory

or a new foreign market. Customer provided financing exists when a customer pays for

services before they are delivered, e.g. subscriptions and insurance.

EQUITY MARKET

Public equity markets are those where corporate raise resources through IPOs by getting

listed in the stock exchanges. Public equity markets are subjected to a wide range of

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governance, disclosure, transparency and compliance norms set by the securities exchanges

commissions/government agencies and also the self-regulatory functions set by the

exchanges themselves. Institutional and retail investors mostly use this channel.

The distinct advantages of the public equity capital are:

a. Lower cost of capital for the firm

b. Provide liquidity for current stockholders

c. Shift monitoring costs for private lenders

d. Firm can learn from information contained in the stock price movements.

However, public equity capital has some costs too. These include

a. Disclosure of proprietary information

b. Agency costs of outside equity

c. Costs of reporting/filing with regulators/exchanges

d. Costs of corporate control

e. Under-pricing

A few features generally observed in the respect of the IPO markets include:

Typically, IPO prices are below the level that they reach on the market a few days

or weeks later, when more public information is available (under pricing). However

the extent of under-pricing will narrow with several companies coming up for

listing.

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Each IPO generates beneficial information externalities for other companies that are

about to go public.

Privatized companies tend to list in public equity markets that offering better legal

protection of shareholders.

The decisions to go public are affected by firms ownership structure. When

company has only one owner or when banks holds majority shares, companies are

less likely to prefer public equity.

UNDERSTANDING INDEX FUTURES

A futures contract is an agreement between two parties to buy or sell an asset at a certain

time in the future at a certain price. Index futures are all futures contracts where the

underlying is the stock index (Nifty or Sensex) and helps a trader to take a view on the

market as a whole.

Index futures permits speculation and if a trader anticipates a major rally in the market he

can simply buy a futures contract and hope for a price rise on the futures contract when the

rally occurs. We shall learn in subsequent lessons how one can leverage ones position by

taking position in the futures market.

In India we have index futures contracts based on S&P CNX Nifty and the BSE Sensex and

near 3 months duration contracts are available at all times. Each contract expires on the last

Thursday of the expiry month and simultaneously a new contract is introduced for trading

after expiry of a contract.

EXAMPLE:

Futures contracts in Nifty in July 2007

Contract month Expiry/settlement

July 2007 July 27

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August 2007 August 24

September 2007 September 28

On July 27

Contract month Expiry/settlement

August 2007 August 25

September 2007 September 28

October 2007 October 26

The permitted lot size is 100 or multiples thereof for the Nifty. That is you buy one Nifty

contract the total deal value will be 100*3000 (Nifty value)= Rs 3,00,000.

In the case of BSE Sensex the market lot is 50. That is you buy one Sensex futures the total

value will be 50*4000 (Sensex value)= Rs 2,00,000.

The index futures symbols are represented as follows:

BSE NSE

BSXJUN2007 (June contract) FUTDXNIFTY28-JUN2007

BSXJUL2006 (July contract) FUTDXNIFTY28-JUL2007

BSXAUG2006 (Aug contract) FUTDXNIFTY28-AUG2007

OPTIONS

Stock markets by their very nature are fickle. While fortunes can be made in a jiffy more

often than not the scenario is the reverse. Investing in stocks has two sides to it a)

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Unlimited profit potential from any upside (remember Infosys, HFCL etc) or b) a downside

which could make you a pauper.

Derivative products are structured precisely for this reason -- to curtail the risk exposure of

an investor. Index futures and stock options are instruments that enable you to hedge your

portfolio or open positions in the market. Option contracts allow you to run your profits

while restricting your downside risk.

Apart from risk containment, options can be used for speculation and investors can create a

wide range of potential profit scenarios.

We have seen in the Derivatives School how index futures can be used to protect oneself

from volatility or market risk. Here we will try and understand some basic concepts of

options.

What are options?

An option is a contract, which gives the buyer the right, but not the obligation to buy or sell

shares of the underlying security at a specific price on or before a specific date.

Option, as the word suggests, is a choice given to the investor to either honour the

contract; or if he chooses not to walk away from the contract.

To begin, there are two kinds of options: Call Options and Put Options.

A Call Option is an option to buy a stock at a specific price on or before a certain date. In

this way, Call options are like security deposits. If, for example, you wanted to rent a

certain property, and left a security deposit for it, the money would be used to insure that

you could, in fact, rent that property at the price agreed upon when you returned. If you

never returned, you would give up your security deposit, but you would have no other

liability. Call options usually increase in value as the value of the underlying instrument

rises.

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When you buy a Call option, the price you pay for it, called the option premium, secures

your right to buy that certain stock at a specified price called the strike price. If you decide

not to use the option to buy the stock, and you are not obligated to, your only cost is the

option premium.

Put Options are options to sell a stock at a specific price on or before a certain date. In this

way, Put options are like insurance policies

If you buy a new car, and then buy auto insurance on the car, you pay a premium and are,

hence, protected if the asset is damaged in an accident. If this happens, you can use your

policy to regain the insured value of the car. In this way, the put option gains in value as

the value of the underlying instrument decreases. If all goes well and the insurance is not

needed, the insurance company keeps your premium in return for taking on the risk.

With a Put Option, you can "insure" a stock by fixing a selling price. If something happens

which causes the stock price to fall, and thus, "damages" your asset, you can exercise your

option and sell it at its "insured" price level. If the price of your stock goes up, and there is

no "damage," then you do not need to use the insurance, and, once again, your only cost is

the premium. This is the primary function of listed options, to allow investors ways to

manage risk.

Technically, an option is a contract between two parties. The buyer receives a privilege for

which he pays a premium. The seller accepts an obligation for which he receives a fee.

CALL OPTION

An option is a contract between two parties giving the taker (buyer) the right, but not the

obligation, to buy or sell a parcel of shares at a predetermined price possibly on, or before a

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predetermined date. To acquire this right the taker pays a premium to the writer (seller) of

the contract.

There are two types of options:

Call Options

Put Options

CALL OPTIONS

Call options give the taker the right, but not the obligation, to buy the underlying shares at

a predetermined price, on or before a predetermined date.

ILLUSTRATION 1:

Raj purchases 1 Satyam Computer (SATCOM) AUG 150 Call --Premium 8 This contract

allows Raj to buy 100 shares of SATCOM at Rs 150 per share at any time between the

current date and the end of next August. For this privilege, Raj pays a fee of Rs 800 (Rs

eight a share for 100 shares).

The buyer of a call has purchased the right to buy and for that he pays a premium.

Now let us see how one can profit from buying an option. Sam purchases a December call

option at Rs 40 for a premium of Rs 15. That is he has purchased the right to buy that share

for Rs 40 in December. If the stock rises above Rs 55 (40+15) he will break even and he

will start making a profit. Suppose the stock does not rise and instead falls he will choose

not to exercise the option and forego the premium of Rs 15 and thus limiting

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