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PROJECT SYNOPSIS ON

DEMAT AND ONLINE TRADING IN

SHAREKHAN

(A Report Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration in JNTU University)

Submitted by

Mr. B.VENKATA CHOWDARY

Enrolment No:09GF1E0006

MBA: Specialization in Finance

Project Guide

Mr. P.RAJ KUMAR , Asst Prof MBA (FINANCE)

MALLA REDDY PG COLLEGE

Maisammaguda, Dhulapally (Post Via), Hakimpet,

Secunderabad ± 500014;



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CONTENTS

Chapter Topic Pg No

C t 1 Int ti n t t concept

Ob jecti es of t e st

Need of t e St dy.

Impor t nce of t e st dy.

Scope of t e St dy

Limit tions of t e St dy

Company Prof ile

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4

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6

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PR OJEC SYNOPSIS ON

DEM AND ONLINE TR ADING IN

SHAR EKHAN

INT ODUCTION TO T E STUDY

Stock exchange is an organi ed market place where secur ities are traded. These

secur ities are issued by the government semi-government bodies, public sector

under tak ings and companies for borrowing funds and raising resources. Secur ities are

def ined as any monetary claims (promissory notes or I.O.U) and also include shares,

debentures, bonds and etc., if these secur ities are marketable as in the case of the

government stock, they are transferable by endorsement and alike movable proper ty.

They are tradable on the stock exchange. So are the case shares of companies.

Under the Secur ities Contract R egulation Act of 1956, secur ities¶ trading is regulated

by the Central Government and such trading can take place only in stock exchanges

recogni ed by the government under this Act. As referred to ear lier there are at

present 23 such recogni ed stock exchanges in India. Of these, ma jor stock

exchanges, like Bombay Stock Exchange, National Stock Exchange, Inter-Connected

Stock Exchange, Culcutta, Delhi, Chennai, Hyderabad and Bangalore etc. are

permanently recogni ed while a few are temporar ily recogni ed. The above act has

also laid down that trading in approved contract should be done through registered

members of the exchange. As per the rules made under the above act, trading in

secur ities permitted to be traded would be in the normal trading hours (9.15A.M to

3.30 P.M) on work ing days in the trading r ing, as specif ied for trading purpose.

Contracts approved to be traded are the f ollowing:

Spot delivery deals are for deliver ies of shares on the same day or the next day as the

payment is made. Hand deliver ies deals for deliver ing shares within a per iod of 7 to



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14 days from the date of contract. Delivery through clear ing for deliver ing shares with

in a per iod of two months from the date of the contract, which is now reduce to 15

days.(R educed to 2 days in demat trading)Special Delivery deals for deliver ing of

shares for specif ied longer per iods as may be approved by the governing board of the

stock exchange. Except in those deals meant for delivery on spot basis, all the rest

are to be put through by the registered brokers of a stock exchange.

OB ECTIVES OF T E STUDY

To analyze the changes in trading af ter the exchange shif ted from outcry to

online trading system.

To study the functions of SHAR EKHAN through var ious depar tments.

To understand the online screen based trading system adopted bySHAR EKHAN and about its communication facilities. The appropr iate

conf iguration to set the network, which would link the SHAR EKHAN to

individual / members.

To know about the latest and future development in the stock exchange trading

system.

NEED OF T E STUDY:

Online trading denotes buying and selling secur ities on the Internet through provided

by f inancial brokers like SIM s and banks online trading is the easy way to buy and

sell shares from the comfor t of one¶s home. Finding a company that provides with an

online trading account can be diff icult. There are many companies that will offer

excellent services for online trading, but one needs to f ind out one that meets their

needs and requirements. The present study to review the online trading procedure a

case study of ONLINE TR ADING at SHAR EKHAN , as the exchange has changed

it¶s trading from the outcry mode to online trading on 20th

February 1997, there is

need to assess the performance of the capital market.

Trading f inancial markets is like any other disci pline; the more you study it and

become an exper t in it, the better you get. Too many people want to jump into online

trading and blow their money before they even know what they are doing. They



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perceive forex trading or stock market trading as a quick and easy way to r iches and

f igure they can jump in with minimal preparation.

This is why beginner traders are suscepti ble to the latest forex trading or commodity

trading ³sure-f ire´ system that some guru out there is selling. Af ter all, what could beeasier than fork ing out some cash and buying a trading system ³guaranteed´ to make

you big prof its.

IMPOR T NCE OF T E STUDY:

Online of the trading is no different than off line trading. It requires the same amount

of r isk plus the same amount of sk ill. One needs to be well-disci plined and goal

or iented as these are the main sk ills that separate winners and losers in the trading

wor ld.

Trading especially online trading-requires any one to put limits on what they spend

and their number of transactions. Also research is vital if one wants to uncover

impor tant ti ps to greatly improve the quality of their online trading por tfolio and also

to avoid getting bogged by purchasing shares from companies in the midst of a

lawsuit or poor management.

Online trading can be a good way to make a lot of money or to br ing a small residual

income to supplement regular income. Of course, one needs money to get star ted and

even af ter getting star ted, it will still be a dangerous game loaded with r isks. If one is

determined and goal or iented, then they can succeed at online trading. If one trades

emotionally and fail to be patient and analytical, they are almost guaranteed to fail,

even if they get lucky a couple of times. Trading at different exchanges has never

been without glitches. It has made a lot of billionaires, as well as br inging many r ich

people onto roads.

It used to be much more diff icult in past; one of the most challenging problems was

inability of the stock traders to make up something useful of the information

generated on per second basis from the ongoing trade. This not only slowed down the

trading activity, but also resulted into huge losses. Not all the traders were in a

position to make the r ight decisions at the r ight time. Online trading tools have



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revolutionized the industry; it has made a real difference in the investors earning

ability.

At the beginning when these tools came into existence, many cr itics were concerned

about their ability to make any impact on the way online trade was carr ied out. Themost impor tant challenge to tack le was that these trading tools were fed into and they

didn¶t do any real time processing.

SCOPE OF T E STUDY:

The study is conf ined to the past 2-3 years and the present system of trading

procedure in SHAR EKHAN stock exchange. (Also a comparative study is done for

HDFC secur ities, sharekhan, Icici direct, India bulls, Kotak Street, 5 Paisa.)

Online Trading is an internet based investment activity which eliminates the

association of a broker. Anyone who has a computer, enough money to open an

account and reasonable f inancial history has the ability to invest in the market.

Nowadays there are many online trading companies work ing as por tals for the biggest

stock houses like the National stock exchange and the Bombay Stock Exchange. The

person has to get registered with the online trading por tal and get into an agreement

with the company to trade in different k inds of secur ities by accepting the terms and

conditions. The online trading por tals are connected to the stock exchangesand the

assigned banks.

Such online por tals offer the trader an oppor tunity to check live online stock pr ices

which they can either check through mail or the interface. Also ample amount of

research data is provided which hel ps the user make their own decisions as to whether

to invest in a par ticular stock or not.

The online trading companies allow the users to invest in a number of f inancial products and services like equities, mutual funds, life insurance, loans, share trading,

commodities tradinginstitutional trading, general insurance and f inancial planning.

Due to this invent, the market has become more accessi ble, but that doesn¶t mean that

it should be taken lightly when we trade online, we use the services of an online

broker.



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we use actual money, but instead of talk ing to the broker about which investments to

make, we ourselves decide which stock to buy since we have resource to the online

stock pr ices.

Thus online stock company not only acts as a por tal, but also as a broker and offers

you to maximize your returns in the most eff icient manner.

LIMIT TIONS OF T E STUDY

y The study is conf ined to online trading procedure only.

y Problems of listing are not covered due to limited time and to keep the study

in manageable limits.

y The study conf ined to the past 2-3 years and present system of the trading

procedure in the SHAR EKHAN STOCK EXCHANGE and the study is

conf ined to the coverage of all the related issues in br ief.

y The data is collected from the pr imary and secondary sources and thus is

sub ject to slight var iation than what the study includes in reality.



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COMPANY PROFILE

S AR E AN LIMITED:

Sharekhan is one of the top retail brokerage houses in India with a strong

online trading platform. The company provides equity based products (research,

equities, der ivatives, depository, margin funding, etc.). It has one of the largest

networks in the country with 704 share shops in 280 cities and India¶s premier online

trading por tal www.sharekhan.com. With their research exper tise, customer

commitment and super ior technology, they provide investors with end-to-end

solutions in investments. They provide trade execution services through multi ple

channels - an Internet platform, telephone and retail outlets.

Sharekhan was established by Morakhia family in 1999-2000 and Morakhia

family, continues to remain the largest shareholder. It is the retail brok ing arm of the

Mumbai- based SSKI [SHANTILAL SHEWANTILAL KANTILAL ISWAR NATH

LIMITED] Group. SSKI which is established in 1930 is the parent company of

Sharekhan ltd. With a legacy of more than 80 years in the stock markets, the SSKI

group ventured into institutional brok ing and corporate f inance over a decade ago.

Presently SSKI is one of the leading players in institutional brok ing and corporate

f inance activities. Sharekhan offers its customers a wide range of equity related

services including trade execution on BSE, NSE, and Der ivatives. Depository

services, online trading, Investment advice, Commodities, etc.

Sharekhan Ltd. is a brokerage f irm which is established on 8th February 2000

and now it is having all the r ights of SSKI. The company was awarded the 2005 Most

Preferred Stock Brok ing Brand by Awwaz Consumer Vote. It is f irst brokerage

Company to go online. The Company's online trading and investment site -

www.Sharekhan.com - was also launched on Feb 8, 2000. This site gives access to

super ior content and transaction facility to retail customers across the country. Known

for its jargon-free, investor fr iendly language and high quality research, the content-

r ich and research or iented por tal has stood out among its contemporar ies because of

its steadfast dedication to offer ing customers best-of-breed technology and super ior

market information.



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SHAR EKHAN has one of the best states of ar t web por tal providing fundamental and

statistical information across equity, mutual funds and IPOs. One can surf across

5,500 companies for in-depth information, details about more than 1,500 mutual fund

schemes and IPO data. One can also access other market related details such as board

meetings, result announcements, FII transactions, buying/selling by mutual funds and

much more.

Sharekhan provides 4 in 1 account.

y Demat a/c

y Trading a/c: for cash calculation

y Bank a/c: for fund transfer

y Dial and Trade: for query relating trading

Products:

y Mutual fund schemes

y Insurance

y Por tfolio Management System

y Shares

y Online and off line

y Bonds

y Fixed Deposits

y Commodities

Out of these we have to mostly sell demat accounts and Mutual Funds.

Sharekhan First Step :

The Sharekhan First Step is a brand new program designed especially for

those who are new to investing in shares. All one have to do is open a Sharekhan First

Step account and they guide us through the investing process.

Market Share :

Sharekhan en joyed about 20 per cent market share in Web business (Internet

trading) in stock markets. Three years ago, Web trading showed lot of promise but



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with the market witnessing a downturn, there was not much interest among retail

customers.

Profits:

The share of Web trading constituted 22 per cent of the revenue. As

Sharekhan's daily trading volume was over R s 200 crore, the share of Web trading at

about R s 40 crore a day was substantial and a larger par t of the volume was coming

from day traders.

Features of Trading With Sharekhan:

y Freedom from paperwork

y Instant credit and money transfer

y Trade from any net enabled PC

y Af ter hour orders

y Online orders on the phone

y Timely advice and-research repor ts

y R eal-time Por tfolio track ing

y Information and Pr ice aler ts.

FINANCIAL CAPABILITY:

Tak ing in to consideration all its assets and liabilities company is valued at

around R s. 750-850 crores.

CUSTOMER:

y Business class people (high class)

y High Net wor th Individuals

y Service class people

y Government Employees

y Young Adults (19-30 yrs.)

y Adults (35-50 yrs.)

y HUF (Hindu Undivided Family)

y Women (literate and work ing)



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COMPETITOR S:

y India Bulls

y Anand R athi

y Motilal Oswal

y 5 paisa.com

y SHAR EKHAN

y R eligare

y R eliance Money

y Kotak Secur ities

y Angel Brok ing

y ICICI Direct

ADVANTAGES OF S AR E AN:

1. Online trading is very user fr iendly and one doesn't need any sof tware to

access.

2. They provide good quality of services like daily SMS aler ts, mail aler ts, stock

recommendations etc.

3. Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct,

HDFC Sec, etc., so investor not really needs to open an account with a

par ticular bank as it can establish link with most modern banks.

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