reliance - money - stock market trends1

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SUMMERINTERSHIP

PROJECT

FUTURE OF METALS AS

COMMODITY IN INDIA

Project Report Submitted Towards Partial Fulfillment of

Master of Business Administration Degree

(Affiliated to MTU and Approved by AICTE)

2013-2014

SUBMITTED TO: - SUBMITTED BY:-Mrs. Kavita Indrapurkar VARUN KUMAR RAVI

1271270097

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PREFACE

The successful completion of this project was a unique

experience for me because by visiting many place andinteracting various person, I achieved a better knowledgeabout commodity metal market. The experience which Igained by doing this project was essential at this turning

point of my carrier. This project is being submitted whichcontent detailed analysis of the research under taken by me.

The research provides an opportunity to the students to

devote his skills knowledge and competencies requiredduring the technical session.

The research on the topic FUTURE OF METALS ASCOMMODITY IN INDIA

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ACKNOWLEDGEMENT

For any successful work, it owes its thanks to many

Hardwork, knowledge, dedication, and positive attitude all are

necessary to do any task successfully but one ingredient which is

also very important than others and at a time more important than

others in co-operation and guidance of experts and experienced

person.

I am very grateful to Prof. Kavita Indrapurkar who was myguide during the development of this project and it was her

guidance and assistance which help me in completing my project

and I am thankful for her support and friendly guidance.

I would also like to express my heartful regards to my parents, my

friends and company mentor (Mr. Ashok kumar, Area Co-

ordinator, Reliance LEAP) & staff of Reliance Securities and

others who directly or indirectly help me a lot for the successful

completion of my project report.

So now where my training has been completed and my heart is

full of gratification, so I cannot forgot to thanks the Almighty

God. His blessings help me everywhere in my life. Thanks

God

(Varun Kumar Ravi)

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DECLARATION

I Varun Kumar Ravi student of IIMT Group of Colleges Batch(2012-14)

declare that every part of the Project ReportFuture of Metals As

Commodity in India I have submitted is my original work I was in regular

contact with the nominated faculty guide and contacted Prof. Kavita

Indrapurkar severaltimes for discussing the project.

Date of project submission:______________

(Varun Kumar Ravi)

Facultys Comments :_______________________________________________________________________

_______________________________________________________________________

__________________________________________________________________________________

(Prof. Kavita Indrapurkar)

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TABLE OF CONTENTS

CONTENT PAGE NO.

INTRODUCTION 6

COMPANY PROFILE 12

ORGANISATION STRUCTURE

VISION & MISSION OF THE ORGANIZATION

OBJECTIVE OF STUDY 29

RESEARCH METHODOLOGY 31

DATA ANALYSIS AND INTERPRETATION 37

CONCLUSION 80

LIMITATIONS OF STUDY 82

RECOMMENDATION 84

BIBLIOGRAPHY 86

ANNEXURE 88

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INTRODUCTION TO

COMMODITY

Any product that can be used for commerce or an article of commercewhich is traded on an authorized commodity exchange is known ascommodity. The article should be movable of value, something which is

bought or sold and which is produced or used as the subject or barter orsale. In short commodity includes all kinds of goods. Indian ForwardContracts (Regulation) Act (FCRA), 1952 defines goods as every kindof movable property other than actionable claims, money and securities.In current situation, all goods and products of agricultural (including

plantation), mineral and fossil origin are allowed for commodity tradingrecognized under the FCRA. The national commodity exchanges,recognized by the Central Government, permits commodities which include

precious (gold and silver) and non-ferrous metals, cereals and pulses,ginned and un-ginned cotton, oilseeds, oils and oilcakes, raw jute and jutegoods, sugar and gur, potatoes and onions, coffee and tea, rubber and spicesetc.

COMMODITY EXCHANGE

A commodity exchange is an association or a company or any other bodycorporate organizing futures trading in commodities for which license has

been granted by regulating authority.

COMMODITY MARKET

Commodity market refers to physical or virtual transactions of buying andselling involving raw or primary commodities. A soft commodity generallyrefers to commodities harvested as productslike coffee, cocoa, sugar, corn, wheat, soybean, and fruit traded inthe commodity market. Hard commodities usually refer to commodities thatare extracted such as (gold, rubber, oil). While commodities may be

grouped for regulation purposes etc., in large classes such as energy,agricultural including livestock, precious metals, industrial metals, other

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http://en.wikipedia.org/wiki/Soft_commodityhttp://en.wikipedia.org/wiki/Coffeehttp://en.wikipedia.org/wiki/Cocoa_beanhttp://en.wikipedia.org/wiki/Sugarhttp://en.wikipedia.org/wiki/Maizehttp://en.wikipedia.org/wiki/Wheathttp://en.wikipedia.org/wiki/Soybeanhttp://en.wikipedia.org/wiki/Fruithttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Goldhttp://en.wikipedia.org/wiki/Rubberhttp://en.wikipedia.org/wiki/Oilhttp://en.wikipedia.org/wiki/Soft_commodityhttp://en.wikipedia.org/wiki/Coffeehttp://en.wikipedia.org/wiki/Cocoa_beanhttp://en.wikipedia.org/wiki/Sugarhttp://en.wikipedia.org/wiki/Maizehttp://en.wikipedia.org/wiki/Wheathttp://en.wikipedia.org/wiki/Soybeanhttp://en.wikipedia.org/wiki/Fruithttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Goldhttp://en.wikipedia.org/wiki/Rubberhttp://en.wikipedia.org/wiki/Oil


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commodity markets, these are broken down into about a hundred primarycommodities (soybean oil, recycled steel). Investors access about 50 majorcommodity markets worldwide uses growing numbers of exchanges withvirtual transactions increasingly replacing physical trades.

COMMODITY METAL MARKET

Bullion

Bullion traditionally stands forgold bars, silverbars, otherpreciousmetals bars oringots. The word bullion reportedly originates from Claudede Bullion (13 October 1569 22 December 1640), who was a Frencharistocrat and politician who served as a Minister of Finance under LouisXIII from 1632 to 1640. An alternate theory suggests that it comes from theold French word bouillon, which meant "boiling" and was the term for amint or melting house.

In recent years, the term bullion has also been used to describe ingots orbars ofbase metals such as copper, nickel, oraluminum.

Bullion refers to precious metals in bulk form which are regularly tradedon commodity markets. The value of bullion is typically determined by thevalue of its precious metals content, which is defined by its purityand mass.

The specifications of bullion are often regulated by market bodies orlegislation. In the European Union, the minimum purity for gold bullion,which is treated as investment gold with regards to taxation, is 99.5% forgold bullion bars and 90% forbullion coins.

METALSA)

Gold

Introduction

Gold has long been considered one of the most precious metals, and its value hasbeen used as the standard for many currencies as civilisations and empires have risenand declined. Due to its rarity and durability gold has historically been used as amethod of payment because of its unique properties.

Recent years have seen gold return to grace: against a backdrop of declining equitymarkets, geopolitical tension, and inflationary fears, the dollar price of gold hassoared and with it we have witnessed renewed interest in the yellow metal as aninvestment. Gold, traditionally seen as a safe haven against uncertainty, has proved

very attractive to investors.

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http://en.wikipedia.org/wiki/Soybean_oilhttp://en.wikipedia.org/wiki/Ferrous_metal_recyclinghttp://en.wikipedia.org/wiki/Gold_barhttp://en.wikipedia.org/wiki/Silverhttp://en.wikipedia.org/wiki/Precious_metalshttp://en.wikipedia.org/wiki/Precious_metalshttp://en.wikipedia.org/wiki/Ingothttp://en.wikipedia.org/wiki/French_languagehttp://en.wikipedia.org/wiki/Ingotshttp://en.wikipedia.org/wiki/Base_metalshttp://en.wikipedia.org/wiki/Copperhttp://en.wikipedia.org/wiki/Nickelhttp://en.wikipedia.org/wiki/Aluminumhttp://en.wikipedia.org/wiki/Commodity_marketshttp://en.wikipedia.org/wiki/Masshttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Bullion_coinshttp://en.wikipedia.org/wiki/Soybean_oilhttp://en.wikipedia.org/wiki/Ferrous_metal_recyclinghttp://en.wikipedia.org/wiki/Gold_barhttp://en.wikipedia.org/wiki/Silverhttp://en.wikipedia.org/wiki/Precious_metalshttp://en.wikipedia.org/wiki/Precious_metalshttp://en.wikipedia.org/wiki/Ingothttp://en.wikipedia.org/wiki/French_languagehttp://en.wikipedia.org/wiki/Ingotshttp://en.wikipedia.org/wiki/Base_metalshttp://en.wikipedia.org/wiki/Copperhttp://en.wikipedia.org/wiki/Nickelhttp://en.wikipedia.org/wiki/Aluminumhttp://en.wikipedia.org/wiki/Commodity_marketshttp://en.wikipedia.org/wiki/Masshttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Bullion_coins


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Gold has been highly valued for thousands of years and is as popular now as it hasever been; as jewellery, as a financial asset and as an industrial product. However, thesocial value that the gold industry adds to societies around the world, especially in

poorer countries, is less understood.

Gold mining is vital to the fragile economies of many developing countries,which account for over 70% of global gold production. In addition to generatingexport revenue in these countries, gold production provides royalty and tax income totheir governments, technology transfer, worker training and the creation of a skilledworkforce.

Gold mining can also bring substantial improvements in physical, social, legal andfinancial infrastructure. In many of these countries, gold mining is a foundationindustry that often provides the critical mass for the development of electricity,water, road and rail transport in a region, factors that are the essential foundations ofan economy. This

characteristic of the industry is particularly important in Africa where lack ofinfrastructure has been identified as one of the major hindrances to economicdevelopment.

The majority of the jewellery purchased in the Middle East and Asia is used as ameans of saving in addition to its function as an adornment. The use of jewellery assavings is often important in rural areas where access to a reliable and appropriate

banking system is difficult or impossible. Gold also offers protection against a weakcurrency or high domestic inflation levels, which are prevalent and presistant

problems in the developing world.

Investment in gold - why?

The real value of gold is not that it provides a quick, speculative fix, but that itcan provide a sure and steady means of protecting wealth and enhance the consistencyof returns.

With gold's role as a portfolio diversifier, a hedge against inflation and exposure to thedollar, there are several compelling arguments for investing a portion of one's

portfolio in the yellow metal.

1.Portfolio Diverfication

Most investment portfolios are invested primarily in traditional financial assets suchas stocks and bonds. The reason for holding diverse investments is to protect the

portfolio against fluctuations in the value of any single asset class. Portfolios thatcontain gold are generally more robust and better able to cope with marketuncertainties than those that don't.

Adding gold to a portfolio introduces an entirely different class of asset. Gold isunusual because it is both a commodity and a monetary asset and is an

effective diversifier because its performance tends to move independently of otherinvestments.

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2. Dollar Hedge:

Gold is often cited as being an effective hedge against fluctuations in the US dollar,the world's main trading currency. If the dollar appreciates, the dollar gold price fallsand similarly a fall in the dollar relative to the other main currencies produces a

rise in the gold price.

Like all physical commodities, gold is an asset that bears no credit risk. Holdingassets in the yellow metal involves no counterparty and is no one's liability. Inaddition to that, the physical properties of the metal make it an excellent alternative tomoney.

3. Durable:

Gold is durable. Unlike many of the other commodities examined, other thingsremaining equal (i.e. assuming no changes in price), there is no depreciation in the

value of gold, other than any storage costs that might apply. Gold is fungible. It is, atleast in theory, infinitely divisible with virtually no losses (other than any operationalcosts the process might incur).

Furthermore, gold has a high value to volume ratio, which makes it easilytransferable, with low transport and storage costs. Moreover, gold is one of thedeepest commodity markets with the highest levels of liquidity, second only to oil.

4. Inflation

The purchasing power of gold has not bread. Today, an ounce of gold still buys350 loaves. The value of gold therefore, in terms of real goods and services that itcan buy, has remained remarkably stable.In contrast, the purchasing power of many currencies has generally declined. There is agrowing body of research to bolster gold's reputation as a protector of wealth againstthe ravages of inflation. Market cycles come and go, but gold has maintained its longterm value.

5. Safe Havon

In volatile and uncertain times, we often witness a flight to quality', as investors seek

to protect their capital by moving it into assets considered to be safer stores of value.

Gold is among only a handful of financial assets that is not matched by a liability. Itcan provide insurance against extreme movements on the value of traditional assetclasses that can happen in unsettled times.

6. Liquidity

Gold's liquidity is one of its critical investment attributes. Gold can be traded aroundthe clock in larger size, at narrower spreads and more rapidly than many competingdiversifiers or mainstream investments.

B) Silver

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Introduction

Silver is a white colored shiny element that is highly ductile and malleable and is usedin making jewelry, coins and tableware. It is also used in chemical experimentsas it provides a high electrical and thermal conductivity. It is found in the metallic

state and also in a large amount of minerals mainly in argentite. That is why it iscalled argentum in Latin

Silver is a metal that is associated with metals like gold, lead, zinc and copper, thoughits unusual properties makes it very different from them. It is used in making variouskinds of jewelry, as it is considered as a precious metal second to gold but itscontribution in the various industrial sectors as a raw material makes it unmatchable.

No other metal can replace silver as it has an endless number of uses.

Silver is produced throughout the world but an interesting fact remains that the primary

source of silver is not the silver mines but the other sources of silver. Silvermines produce a small amount of silver that is 25% of the worlds total productionand the rest of it is derived as a by-product from gold mines (15%), copper mines(24%), lead and diminished since Biblical times. According to the Old Testament,during the reign of King Nebuchadnezzar, an ounce of gold bought 350 loaves of zincmines (34%) and other sources. The total production of silver in the world figures to bearound 615 million ounces and Mexico is the leading silver producing country. Thetotal demand of silver in the world amounts to be around 29 thousand tons. About 95%of this demand is contributed largely by three industrial sectors namely

photography, jewelry and silverware sectors. The idea of silver as a holding asset andas a source of coinage is losing popularity to the idea of silver as an industrial

commodity. The demand of silver in 2002 from these sectors was: -

Photography sector 342 millionounces Jewelry sector 205 millionounces Silverware sector 259million ounces

The countries that are the major consumers of silver are: - United states, Canada,Mexico, United Kingdom, France, Germany, Italy, Japan and India

Production of silver in India

India hardly produces any silver and is basically a silver importing country. It holdsthe 20th place in the list of silver producing countries and the total production of silverin India in 2004 was around 2.1 million ounces. The three major silver producing statesin India are: - Rajasthan, Gujarat, Jharkhand.

Rajasthan is the leading silver producing state in India with a production of around 32thousand tons. Gujarat follows on the second place with a production of around 20thousand tons.

Indian Silver Market:

As mentioned above, India is primarily a silver importing country, as the production of

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India is not sufficient to satisfy the ever-growing domestic demand. The production ofsilver in India stands out at the figure of around 2.1 million ounces placing it at the20th position in the list of major silver producing countries. The import of silverin India hovers over 110 million ounces that shows the huge size of Indian domesticdemand. However, this import level fell sharply as a result of the decline in demand

due to rise in silver prices and inconsistent monsoon on which the income of the ruralsector depends. India stands third after United States and Japan among the leadingconsumers of silver in the world.

Major trading centers of Silver:

LondonZurich

New York(COMEX)Chicago (CBOT)

Hong KongTokyo Commodity Exchange (TOCOM)

In India, silver is traded at the following places 1) Delhi 2) Indore 3) Rajasthan4) Madhya Pradesh 5) Mathura (Uttar Pradesh) 6) Rajkot (Gujarat). Also, silver istraded in the Indian commodity exchanges like National Commodity & DerivativesExchange ltd, Multi Commodity Exchange of India ltd. and National Multi

Commodity Exchange of India ltd.

Following diagram gives a fair idea about working of the Commodity market.

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RELIANCE MONEY IS A GROUP COMPANY OF RELIANCE

CAPITAL; ONE OF INDIA'S LEADING AND FASTEST GROWING

PRIVATE SECTOR FINANCIAL SERVICES COMPANIES,

RANKING AMONG THE TOP 3 PRIVATE SECTOR FINANCIAL

SERVICES AND BANKING COMPANIES, IN TERMS OF NET

WORTH. RELIANCE CAPITAL IS A PART OF THE RELIANCE

ANIL DHIRUBHAI AMBANI GROUP.

RELIANCE MONEY IS A COMPREHENSIVE ELECTRONIC

TRANSACTION PLATFORM OFFERING A WIDE RANGE OF

ASSET CLASSES. ITS ENDEAVOR IS TO CHANGE THE WAY

INDIA TRANSACTS IN FINANCIAL MARKETS AND AVAILS

FINANCIAL SERVICES. RELIANCE MONEY IS A SINGLE

WINDOW, ENABLING YOU TO ACCESS, AMONGST OTHERS IN

EQUITIES, EQUITY & COMMODITIES DERIVATIVES, MUTUAL

FUNDS, IPOS, LIFE & GENERAL INSURANCE PRODUCTS,

OFFSHORE INVESTMENTS, MONEY TRANSFER, MONEYCHANGING AND CREDIT CARDS.

RCL is registered as a depository participant with National Securities Depository

Ltd (NSDL) and Central Depository Services Ltd (CDSL) under the Securities

and Exchange Board of India (Depositories and Participants) Regulations, 1996.

RCL has sponsored the Reliance Mutual Fund within the framework of the

Securities and Exchange Board of India (Mutual Fund) Regulations, 1996.RCL

primarily focuses on funding projects in the infrastructure sector and supports the

growth of its subsidiary companies, Reliance Capital Asset Management Limited,

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Reliance Capital Trustee Co. Limited, Reliance General Insurance Company

Limited and Reliance Life Insurance Company Limited. As of March 31, 2005,

the companys investment in infrastructure projects stood at Rs. 1071 Crores. The

investment portfolio of RCL is structured in a way that realizes the highest post-

tax return on its investments.

Shri Amitabhabh Jhunjhunwala, 51, is a Fellow Chartered Accountant. He has

vast experience in the areas of financial services and capital markets. Shri

Jhunjhunwala was appointed to the Board on March 7, 2003 and was appointed

Vice Chairman on March 20, 2006. He is a Director on the Board of Harmony Art

Foundation and Reliance Anil Dhirubhai Ambani Group Pvt. Ltd.

Shri Rajendra P. Chitalale, 46, an eminent Chartered Accountant, is the Managing

Partner of M/s M. P. Chitale & Associates. He is a Director on boards of the

National Securities Clearing Corporation Limited, Asset Reconstruction Company

(India) Ltd, Hinduja TMT Limited, HTMT Global Solutions Ltd, Ambuja Cement

Limited, SME Rating Agency of India Limited, Ishan Real Estate PLC and

Reliance General Insurance Company Ltd. He is also a member of the advisory

board of the Insurance and Regulatory Authority of India (IRDA). He has also

served on the boards of Life Insurance Corporation of India, Unit Trust of India,

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SBI Capital Markets Ltd., National Stock Exchange of India Ltd. and Small

Industries Development Bank of India.

Shri C.P. Jain, 61, is the former Chairman and Managing Director of NTPC Ltd.

(National Thermal Power Corporation). Shri Jain has an illustrious career

spanning over four decades of contribution in the fields of financial management,

general management, strategic management and business leadership. He is a

fellow member of the Institute of Chartered Accountants of India with an

advanced diploma in Management and is a law graduate. Shri C. P. Jain joined the

Board of NTPC in 1993 as Director (Finance), was elevated as Chairman &

Managing Director in September 2000 and superannuated in March 2006. He is

Chairman of the Global Studies Committee of World Energy Council (WEC),

world's largest energy NGO with nearly hundred member-nations. He has been on

several important committees of the Government of India, latest being the 'Adhoc

Group of Experts on Empowerment of CPSEs'. He was Chairman of Standing

Conference of Public Enterprises (SCOPE) between April 2003 and March 2005.

He is a Director on the Board of IL & FS Infrastructure Development Corporation

and, is also a member of the Audit Advisory Board of the Comptroller and Audit

General of India.

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Anil Ambani - Reliance Capital,Success Story

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Born: June 4, 1959-Mumbai,India

Age: 48

Country Of Citizenship: India

Residence: Mumbai, India

Occupation: Chairman, Anil Dhirubhai Ambani Group

Net worth: US$45 billion

Fortune: NA

Source: Diversified

Industry: Diversified

Marital Status: married, 2 children

Spouse: Tina Munim

Education:University of Bombay, Bachelor of Arts / Science

University of Pennsylvania Wharton School, Master of Business Administration

------------------------------------------------------------------------------------------------

Ambani is chairman of Reliance Capital, Reliance Communications and Chairman &

Managing Director, Reliance Energy, and was formerly Vice Chairman and Managing

Director of Reliance Industries Limited. His personal stake in Reliance Communications is

66%. Reliance group is India's largest business house, founded by Anil's late father Dhirubhai

Ambani (1938-2002). His mother is Kokilaben Ambani. He is married to Tina

Ambani(Munim) who was a well known Indian Actress in early 80's, and with whom he has

two sons: Jai Anmol and Jai Anshul.

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The total investors' wealth in the four Anil Ambani Group firms -- Reliance Communications

(RCOM), Reliance Capital (RCL), Reliance Energy (REL) and Reliance Natural Resources

Ltd (RNRL) has reached 1,42,384 crore rupees, while total promoter holding is estimated at

about Rs 87,000 crore. Anil's wealth comes mostly from his over 65 per cent stake in RCOM,

which has a market cap of about Rs 1,03,000 crore. He also has over 50 per cent in RCL

(market cap of Rs 24,000 crore), 35 per cent in REL (market cap of Rs 12,700 crore) and

close to 54 per cent in RNRL, which has a market cap of about Rs 2,600 crore.

As of 6th October 2007, his net worth was calculated at $45 billion. Ambani holds a Bachelor

of Science degree from the University of Mumbai and an MBA degree from The Wharton

School at the University of Pennsylvania. Currently, he serves as a member of the WhartonBoard of Overseers.

Ambani joined Reliance in 1983 as Co-Chief Executive Officer and is credited with having

pioneered many financial innovations in the Indian capital markets. For example, he led

India's first forays into overseas capital markets with international public offerings of global

depositary receipts, convertibles and bonds. He directed Reliance in its efforts to raise, since

1991, around US$2 billion from overseas financial markets; with a 100-year Yankee bondissue in January 1997 being the high point. After which people regarded him as a Financial

Wizard. He has steered the Reliance Group to its current status as India's leading textiles,

petroleum, petrochemicals, power, and telecom company.

Anil was the member of Uttar Pradesh Development Council (This council has now been

scrapped) He is also the Chairman of Board of Governors of DA-IICT, Gandhinagar and a

member of the Board of Governors of the Indian Institute of Technology, Kanpur. He is

member of the Board of Governors, Indian Institute of Management, Ahmedabad. He is also

a member of the Central Advisory Committee, Central Electricity Regulatory Commission. In

June 2004, Anil was elected as an Independent Member of the Rajya Sabha - Upper House,

Parliament of India with the support of the Samajwadi Party. In March 2006, he resigned.

Recently after his brother Mukesh Ambani he also has his name in the books of Trillionaires.

Anil has been linked with several starlets in his long career including his current wife of more

than 15 years. Recently, Anil was linked to Miss Universe Sushmita Sen. His biggest prize

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from the filmdom though is considered to be his friendship with Megastar Amitabh Bachchan

. His another achievement is considered to be the takeover of Adlabs, the movie production to

distribution to multiplex company that owns Mumbai's only dome theatre.

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:

WHARTON BOARD OF OVERSEERS, THE WHARTON SCHOOL, USA

CENTRAL ADVISORY COMMITTEE, CENTRAL ELECTRICITY REGULATORY

COMMISSION BOARD OF GOVERNORS, INDIAN INSTITUTE OF

MANAGEMENT, AHMEDABAD BOARD OF GOVERNORS INDIAN INSTITUTE

OF TECHNOLOGY, KANPUR IN JUNE 2004, HE WAS ELECTED FOR A SIX-

YEAR TERM AS AN INDEPENDENT MEMBER OF THE RAJYA SABHA, UPPER

HOUSE OF INDIAS PARLIAMENT A POSITION HE CHOSE TO RESIGN

VOLUNTARILY ON MARCH 25, 2006.

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CONFERRED THE IN THE PLATTS GLOBAL ENERGY

AWARDS RATED AS ONE OF INDIAS MOST ADMIRED CEOS FOR THE

SIXTH CONSECUTIVE YEAR IN THE BUSINESS BARONS TNS MODE

OPINION POLL, 2004 CONFERRED THE ENTREPRENEUR OF THE DECADE

AWARD BY THE BOMBAY MANAGEMENT ASSOCIATION, OCTOBER 2002

AWARDED THE FIRST WHARTON INDIAN ALUMNI AWARD BY THE

WHARTON INDIA ECONOMIC FORUM (WIEF) IN RECOGNITION OF HIS

CONTRIBUTION TO THE ESTABLISHMENT OF RELIANCE AS A GLOBAL

LEADER IN MANY OF ITS BUSINESS AREAS, DECEMBER 2001 SELECTED BY

ASIAWEEK MAGAZINE FOR ITS LIST OF LEADERS OF THE MILLENNIUM IN

BUSINESS AND FINANCE AND WAS INTRODUCED AS THE ONLY NEW

HERO IN BUSINESS AND FINANCE FROM INDIA, JUNE 1999

The convenience of handling all your key Simplyfy through this Simply open a

Reliance Money account and enjoy the convenience ofhandling all your key

financial transactions through this single window.

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SINGLE - WINDOW ACCESS

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DERIVATIVES, OFFSHORE INVESTMENTS, MUTUAL FUNDS, IPOS, LIFE

INSURANCE, GENERAL INSURANCE, MONEY TRANSFER,

MONEY CHANGING AND CREDIT CARDS, AMONGST OTHERS.

COST-EFFECTIVE

AN INTRODUCTORY OFFER, PAY A FLAT FEE OF JUST RS 500/-* AND TRANSACT

FOR 1 YEAR OR A SPECIFIED TRANSACTION VALUE, WHICHEVER IS EARLIER.

CONVENIENT & SAFE

YOU CAN ACCESS RELIANCE MONEY'S SERVICES THROUGH THE INTERNET,

TRANSACTION KIOSKS, THE PHONE (CALL & TRANSACT), OUR ALL - INDIA

NETWORK OF ASSOCIATES

YOURE A/C IS SAFEGUARDED WITH A UNIQUE SECURITY NUMBER

THAT ACT AS A DYNAMIC PASSWORD AND CHANGE S EVERY 32

SECONDS

A SINGLE WINDOW FOR BANKING,TRADING AND DEMAT ACCOUT

AND AND TRANSFER FUNDS ACROSS ACCOUNTS SEAMLESSLY.

Value-Added services:

CEOs' / Expert views on the economy and financial markets

Risk Analyser for analysis of your risk profile

Asset Allocators to build an appropriate investment portfolio

Conditions Apply

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Reliance Money Demat Account Charges:

Fee HeadDP

Charges

Annual Services Charges - For Individuals / HUFs / Trust Rs. 50/-

Annual Services Charges - For NRIs / Foreign Nationals, Corporates /

Others

Rs. 1000/-

Transaction Charges - SELL (Market & Off Market)

For instructions given in physical form.Rs. 25/-

Transaction Charges - SELL (Market & Off Market)

For instructions received through Internet/ online trading through

Reliance Securities Ltd.

Rs. 12/-

Cost-effectiveYou pay comparatively lower transaction fees.

As an introductory offer, we invite you to pay a flat fee of just Rs.500/-* and transact throughReliance Money.

This fee is valid for two months or a specified transaction value. See the table for details.

Illustrative table showing fee structure & validity limits.

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follow 3 simple stepsLog onwww.reliancemoney.comGo to the IPO sectionSelect your IPO and apply online

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RELIANCE MUTUAL FUND, A PART OF THE RELIANCE - ANIL DHIRUBHAI

AMBANI GROUP (R- ADAG) IS ONE OF THE FASTEST GROWING MUTUAL

FUNDS IN THE COUNTRY.

RELIANCE MUTUAL FUND OFFERS INVESTORS A WELL ROUNDED

PORTFOLIO OF PRODUCTS TO MEET VARYING INVESTOR

REQUIREMENTS. RELIANCE MUTUAL FUND (RMF) IS ONE OF INDIAS

LEADING MUTUAL FUNDS, WITH ASSETS UNDER MANAGEMENT (AUM) OF

RS. 59,857 CRORE (AUM AS ON 30TH JUNE 2007) AND AN INVESTOR BASE

OF OVER 3.4 MILLION.

RELIANCE MUTUAL FUND CONSTANTLY ENDEAVOURS TO LAUNCH

INNOVATIVE PRODUCTS AND CUSTOMER SERVICE INITIATIVES TO

INCREASE VALUE TO INVESTORS.

RELIANCE MUTUAL FUND SCHEMES ARE MANAGED BY RELIANCE CAPITAL

ASSET MANAGEMENT LTD., A WHOLLY OWNED SUBSIDIARY OF RELIANCE

CAPITAL LTD.

RELIANCE CAPITAL IS ONE OF INDIA'S LEADING AND FASTEST GROWING

PRIVATE SECTOR FINANCIAL SERVICES COMPANIES, AND RANKS AMONG

THE TOP 3 PRIVATE SECTOR FINANCIAL SERVICES AND BANKING

COMPANIES, IN TERMS OF NET WORTH.

RELIANCE CAPITAL HAS INTERESTS IN ASSET MANAGEMENT AND

MUTUAL FUNDS, LIFE AND GENERAL INSURANCE, PRIVATE EQUITY AND

PROPRIETARY INVESTMENTS, STOCK BROKING AND OTHER FINANCIAL

SERVICES.

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Reliance Life Insurance is an associate company of Reliance

Capital Ltd., which alongwith its associates has acquired

100% shares in AMP Sanmar Life Insurance Co Ltd.

Reliance Life Insurance has a pan presence and a range of

products catering to individual as well as corporate needs

A total of 16 products covering savings, protection &

investment requirements

Reliance Life Insurance would strive hard to achieve the

following goals:-

Emerge as transnational Life Insurer of global scale and

standard

Achieve impeccable reputation and credentials through best

business practices

Vision : Empowering everyone live their dreams

Mission : Create unmatched value for everyone through

dependable, effective, transparent and profitable life insurance

and pension plans

Guiding Principles

- Customer Care and Satisfaction

- Corporate Governance

- Creativity and Innovation

- Competitiveness

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Life Insurance

About Reliance General Insurance

Reliance General Insurance, a Subsidiary of Reliance Capital, is one of the first non-life

companies to get the license from the IRDA. RGICL offers an exhaustive range of insurance

products that covers most risks including Property, Marine, Casualty and Liability.

It is a system by which the losses suffered by a few are spread overmany, exposed to similar risks. Insurance is a protection against

financial loss arising on the happening of an unexpected event.

It is a hedge against the occurrence of unforeseen incidents.

Insurance products help you in not only mitigating risks but also

helps you by providing a financial cushion against adverse financial

burdens suffered.

Accidents... illness... fire... financial securities are the things you'd

29

Life insurance helps Provide financial assurance & security for your

dependents & loved ones. It is an important part of the financial

planning bouquet for all individuals & families. Life insurance

products offer comprehensive financial solutions which besides

offering financial security also provide opportunity for saving,investment & tax planning.


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like to worry about any time. General Insurance provides you the

much-needed protection against such unforeseen events. Unlike Life

Insurance, General Insurance is not meant to offer returns but is a

protection against contingencies. Under certain Acts of Parliament,some types of insurance like Motor Insurance and Public Liability

Insurance have been made compulsory.

Vision

To be an insurer of World Standards and the most preferred choice for clientele at the

domestic and global level.

Mission

Our Mission is to keep the customer satisfaction as focal point of all our operations,

adopt the best international practices in underwriting, claims and customer service, be

the most innovative in product development, establish presence all over India, ensure

sustained value addition to all stake holders and to uphold Corporate Value &

Corporate Governance.

Objectives

Make affordable insurance accessible to all Keep customer as focal point for all operations

Protect policy holders interests Adopt best international practices in

claims, underwriting and policy servicing Be the most innovative in

product development Establish Pan India presence

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Value propositions

Risk Evaluation: Provide expertise in risk evaluation and risk

mitigation leading to the most appropriate risk transfer solution.

Post sales services: Differentiate on service parameters by

ensuring prompt and correct documentation& fair, transparent,

speedy claims settlement.

New products: Introduce innovative products suited to specific

market segments

Training: Extensive training to the employees involved in

underwriting and claims to ensure availability of a varied

experienced and competent team to cater to the customer needs.

Technology: Use IT as a means to provide for a far superior

customer experience in terms of access, speed and simplicity

Reinsurance backing: Apart from using capacity of the national

reinsurer, establish relationships with the best reinsurers across the

world.

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OBJECTIVE OF THE PROJECT

As far as the objective of the project is concerned I have divided my whole project

into two phases which are as follows-:

PHASES PROJECT

Phase-1 Analysis of investment pattern of anindividual.

Phase-2 Study the recent trends in the commodity metal market

PHASE-1

To know about the investment pattern of the individual.

To know about the satisfaction of individual on financial products.

To know about various aspects regarding investments like whether people

Preferspeculative market or they prefer secure market.

PHASE-2

The main objective was to identify major players in the market.

Analyzing the recent happenings in the metal market.

Analyzing how market behaves from time to time.

To analyze the role of SEBI as market regulator

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RESEARCH METHODOLOGY

This section indicates what is to be researched and

also shows which method is to be adopted for the research methodology.

Problem Statement

To study the future of metal as commodity in India

Introduction to Research:-

The following methodology will be used to state and justify the reason for using

the different methods selected for the research of the project. In order to achieve

the aims and objective of the study, it is very important that researcher should

use sound research tools and techniques and know how best to analyze the

results. Here, the combination of research methods has been utilized in gaining

an insight to a complex and changing area.

As in the research, the theory is already available about the metals in the

commodity market by taking into consideration their price, future value and

scope in income generation. Hence, the researcher has to find out the behavior

of consumer in context of purchase decision regarding to the metals rather than

in shares and debentures by comparing the prospect market of the available

competitors.

Re s earch De s ign : -

This section carries out the topics such as research sector, research population

and instruments used for the research.

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Research Sector

Researcher is going to carry out the research on the prospects of the metals in

stock market because the research is aimed at the future scope of metals in

commodity markets.

Research Population

Research population comprises of each and every person come under the terms

consumer and customer. They may be working persons, housewives, students

and impulsive buyers.

Research Instruments

Research instruments used to find out the solution of the research problem are:

1. Questionnaire

Sampling Techniques

Random sampling method is used so each population can get equal and fair

chance of being selected.

Sample Size

Sample size taken for the study is 150.

Source of Data

As the project title itself describes the future aimed problem as the research isconducted problem related to future of metals. Here in the survey primary data

is collected with the help ofquestionnaire method to get the main theme of the

project.

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Method of Analysis

The raw data is not fruitful if it is not analyzed properly. There are various tools

available in the statistical field. Some statistical tools used for analyzing the

data are as follows:

Tabulation method

Graphical method

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CLASSIFICATION OF INVESTMENT

AS AN INVESTOR YOU HAD A WIDE ARRAY OF INVESTMENT

AVENUES AVAILABLE TO YOU. THESE MAY BE CLASSIFIED AS BELOW:

-

INVESTMENT AVENUES

NON-MARKETABLE EQUITY SHARE

FINANCIAL ASSETS

BONDS MONEY MARKET

INSTRUMENT

MUTAL FUNDS LIFE INSURENCE

SCHEMES POLICIES

REAL ASSETS PRECIOUS OBJECT

METAL MARKET

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RESPONDENTS AWARENESS IN METALS COMMODITY

MARKET :-

AWARENESS NUMBER OF RESPONDENTS

YES 80

NO 20

42

YES

81%

NO

19%

RESPONDENT'S AWARENESS OF METALS

COMMODITY MARKET


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ANALYSIS OF TABLE

From the above table we can analyze that most of thepeople we surveyed are aware of the securities market

Above table shows that out of 150 people surveyedaround 81% were aware of the METALS market &remaining 19% were still to know what METALSmarket is all about .

The information shows the peoples growing concerntowards their money which is infact the result ofgrowing investments in the METALS market and otherinvestment areas.

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ANALYSIS OF TABLE

o Investment in laymans language is just addition of units of profit

into the capital.

The purpose of investment can be to save for the future or to

get tax

exemptions or to get higher returns like in stock market .

o If we analyze the above table 41% people have opted for higher

returns. 38% people have opted for future benefits & 20% have

opted for tax exemptions.

o Therefore we can conclude from the above table that the purpose of

investment is the mixed bunch of all the things . people want invest

to save their tax , they want to invest for the future benefits or gains

arising out of the investments .

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MARKET THAT GIVES HIGHEST RETURNS:-

MARKET NUMBER OF RESPONDENTS

MUTUAL FUNDS 60

SHARE MARKET 40

REAL ESTATE 94

ANY OTHER 13

46

60

40

94

13

0 20 40 60 80 100

MUTUAL

FUNDS

SHARE

MARKET

REAL ESTATE

OTHERS

MARKET OF HIGH RETURNS

NUMBER OF

RESPONDENTS


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ANALYSIS OF TABLE

The stock market or the securities market in India witnessed several changessince the year 2005 and 2008 which further refined the market scenario &

broadened investment choices for the investors .

But in comparison to securities market , the real estate market had alreadyseen a booming period & is still one of the most preferred area of investmentfor the people in general .

Apart from these two there are some more options available for theinvestments like mutual funds , insurance etc .

From the above table we can conclude that out of 150 people around 45%

want to invest in real estate market, 28% want to invest in mutual funds &around 20% in securities market & the rest in others .

The reason for the less no. of investments in securities market is the amountof risk involved in this market .

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RESPONDENTS PREFERRED AREA OF INVESTMENT:-

AREA OF INVESTMENT NUMBER OF RESPONDENTS

POST OFFICE 24

FIXED DEPOSITS 11

MUTUAL FUNDS 54

INSURANCE 44

EQUITY 60

BONDS 14

48

POST OFFICE

12%

FIXED DEPOSIT

5%

MUTUAL FUNDS

26%

INSURANCE

21%

EQUITY

29%

BONDS

7%

AREA OF INVESTMENT


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ANALYSIS OF TABLE

Well it is true to say that the market scenario has been changed, people are nowmore interested towards speculative market as it gives more returns but at thesame time with more risk involved .

If we talk about the FIIs investment in India , its being increased & withpositive signs in the market

Last year there was an all time high investment made by the FIIs in equities &

mutual funds .

Also if we analyze the above table we will find that out of 150 respondents 29%are interested in equity ,26% in mutual funds ,12 in post office, 21 in insurance& 5% & 7% in fixed deposits & bonds respectively which clearly states that

people in general normally want to invest in securities , mutual funds &insurance . with these above being the gray areas , we can conclude that goneare the days when people used to invest in Fixed deposits ,Post office & others .

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RESPONDENTS PROFESSION:-

PROFESSION NUMBER OF RESPONDENTS

SELF EMPLOYED

49SALARIED GOVERNMENT

30

SALARIED PRIVATE128

50

32

20

85

0

10

20

30

40

50

60

70

80

90

SELFEMPLOYED

SALARIED

GOVERNMENT

SALARIEDPRIVATE

RESPONDENT'S PROFESSION

NUMBER OF

RESPONDENTS


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ANALYSIS OF TABLE

If we talk right from back there was always less percentage of self employedpeople as compared to people who were working . Earlier people used to gofor government jobs but now the percentage has dramatically changed.

Now people are focusing towards employment in private sectors which inturns gives fruitful opportunities in order to reach heights in their profession.

Due to this good working atmosphere, the lifestyle of people has changed.

People are earning more, spending more & therefore scope for investmentshave also increased, as big private companies and MNCs are paying farabove the government agencies.

If we look towards the above table 62% respondents are working

in the private sector ,14% in government sector & 24% people

They are self employed.

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INCOME GROUP OF RESPONDENTS :-

INCOME GROUP NUMBER OF RESPONDENTS

1 5 LACS 82

6 8 LACS 44

9 12 LACS 14

12 LACS & ABOVE 10

52

54

30

97

0

10

20

30

40

50

60

1 - 5 LACS 6 - 8 LACS 9 - 12 LACS 12 LACS &

ABOVE

INCOME GROUP OF RESPONDENTS

NUMBER OF

RESPONDENTS


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ANALYSIS OF TABLE

With India being the most preferred destination for companies &recruiters, the pay package in India has seen a great rise in the recent past.

The MNCs pay a very good amount of salary to their employees & thestandard of living has also increased with the increase in economy aswhole, Thats why people are more focused towards the investments .

If we look at the above table 80% of the people earn between 1-5lacs perannum, 44% of them earn between 6-8lacs , 14% between 9-12lacs & there

are 10% people who even earn more 12lacs per annum.

People above 12lacs of earning are mostly self employed people who havetheir own business & they focus more on future benefits & return oninvestments rather than tax savings & other purposes. Their attitudetowards investment is different as compared to salaried people. In a way

they are more aggressive than the salaried class.

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PERCENTAGE OF SALARY INVESTED:-

% OF EARNINGS NUMBER OFRESPONDENTS

10% OF EARNINGS 30

20% OF EARNINGS 40

25% OF EARNINGS 97

30% OF EARNINGS 4O

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ANALYSIS OF TABLE

When we think of making investment in any field, first thing that strikes in

our mind is what part of our earnings we are ready to invest in the decidedsector.

We invest according to the current position of the sector. Above table clearlyshows that 19% people invest 30% of their earnings , 14% people invest 10%of their earnings , 19% invest 20% of their earning and 48% people invest25% of their earnings which is the maximum percentage.

All these figures depend upon the interest level of the investor.

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RISK AND RETURN

TYPE OF INVESTMENTS NUMBER OF RESPODENTS

HIGH RISK HIGH RETURN 27

LOW RISK HIGH RETURN 123

56

0

20

40

60

80

100

120

140

HIGH RISK HIGH

RETURN

LOW RISK HIGH

RETURN

27

123

TYPE OF INVESTMENT

NUMBER OF

RESPONDENTS


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ANALYSIS OF TABLE

The stock market or securities market involves lot of risk . when people invest asinvestor in this market they carry a lot of risk of their money to be lost . That iswhy this market is also called speculative market.

Therefore an investor should be aware of this market and should have properknowledge so that the decision to invest in the market yields him good results.

There is a popular saying that HIGHER THE RISK, HIGHER THE

RETURN .

In the above table 20.28% people have opted for High risk high return category &79.71% have opted for low risk low return category which shows that majority ofthe people dont want to take risks with their money involved.

They want to be on the safer side and would choose the option which willminimize their risks and maximize their returns.

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HOW RESPONDENTS TAKE DECISIONS TO INVEST?

DECISION TO INVEST NUMBER OF RESPONDENTS

SELF DECISION 66

FAMILY MEMBERS 46

FRIENDS 10

FINANCIAL PLANNER 28

TOTAL 150

58

66

46

10

28

010

203040506070

SELF

DECISIONFAMILY

MEMBERSFRIENDS

FINANCIAL PLANNER

RESPONDENT'S INVESTMENT

DECISION

NUMBER OF

RESPONDENTS


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ANALYSIS OF TABLE

To make the investment one should be aware of the market, variousinstruments in the market and should have proper knowledge, so that thedecision to invest in the market will give him good returns as well as security.

The decision made by the respondents should be sound backed by goodknowledge and awareness of the current market scenario.

If we look towards the table 65% of the people take self decisions, 22% of thepeople take investment decisions after consulting their families.

These type of respondents are mainly from joint families who make theirdecisions considering all the members of the family.4% of the people consulttheir friends and there are only 8% people who are dependent on financial

planners or wealth managers to manage their portfolio, as the new entry ofwealth manager companies leaves the choice to respondents to make the bestuse of it but hardly anyone knows about these wealth management companiesthat is why the %age is less.

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DURATION OF INVESTMENT:-

DURATION NO.OF RESPONDENT2 YEAR 40

5YEAR 70

6YEAR 30

8YEAR 10

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ANALYSIS OF TABLE

The investment duration made by the respondents should be sound backed by

good knowledge and awareness of the current market scenario.

These type of respondents are mainly from 2year in 26%, 5 year in46%,6yearin 20% and last one 8year in 8%.then the no. of investor in chosen by 5year

plan.

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Which metal commodity is most preferable by you:-

COMMODITY NO.OF RESPONDENTGOLD 80

SILVER 40

DIMOND 10

OTHER 20

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ANALYSIS OF TABLE

When we think of making commodity in any field, first thing that strikes in

our mind is what part of our earnings we are ready to invest in the decidedsector.

We invest according to the current position of the sector. Above table clearlyshows that 53% people commodity 26% of their commodity, 8% peopleinvest 13% of their commodity,53% commodity in gold ,26% of theircommodity in silver which is the maximum percentage.

All these figures depend upon the investment level of the investor.

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IS THE METAL MARKET HAVE ANY OPPORTUNE

IN FUTURE:-

OPPORTUNE NO. OF RESPONDENT

GROWTH 110

DECLINE 30

NO IDEA 10

ANALYSIS OF TABLE

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When we think of making commodity metal market , first thing that strikes inour mind is what part of our profitable .

We invest according to the current position of the sector. Above table clearlyshows that 70% groth stage commodity 20% decline stage commodity,10% noidea

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Which metal is profitable in future:-

COMMODITY NO.OF RESPONDENT

GOLD 75

SILVER 45

DIMOND 10

OTHER 20

Analysis of table

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When we think of making commodity in any field, first thing that strikes inour mind is what part of our profitable we are ready to invest in the decided

sector.

We invest according to the current position of the sector. Above table clearlyshows that 50% people commodity 30% of their commodity, 7% people incommodity13% of their commodity,50% commodity in gold ,13% of theircommodity in gold which is the maximum percentage.

Frequency:-

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FREQUENCY NO.OF RESPONDENT

DAILY 30

OCCASAN 120

Analysis of table

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From the above table we can analyze that most of thepeople we surveyed are occasanely purchase of themetals

They some of the people metals purchase in daily

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THE RECENT TRENDS IN THE STOCK MARKET

THE BACKGROUND

Stock Market

Stock Market is a market where the trading of company stock, both listed

securities and unlisted takes place. It is different from stock exchange because it

includes all the national stock exchanges of the country. For example, we use the term,

"the stock market was up today" or "the stock market bubble."

Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)

Regional Stock Exchanges

o Ahmedabad Stock Exchange

o Bangalore Stock Exchangeo Bhubaneshwar Stock Exchange

o Calcutta Stock Exchange

o Cochin Stock Exchange

o Coimbatore Stock Exchange

o Delhi Stock Exchange

o Guwahati Stock Exchange

o Hyderabad Stock Exchange

o Jaipur Stock Exchange

o Ludhiana Stock Exchange

o Madhya Pradesh Stock Exchange

o Madras Stock Exchange

o Magadh Stock Exchange

o Mangalore Stock Exchange

o Meerut Stock Exchange

o OTC Exchange Of India

o Pune Stock Exchange

o Saurashtra Kutch Stock Exchange

o Uttar Pradesh Stock Exchange

o Vadodara Stock Exchange

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History of Indian Stock Market

Indian stock market marks to be one of the oldest stock market in

Asia. It dates back to the close of 18th century when the East India

Company used to transact loan securities. In the 1830s, trading on

corporate stocks and shares in Bank and Cotton presses took place

in Bombay. Though the trading was broad but the brokers were

hardly half dozen during 1840 and 1850.In 1860, the exchange

flourished with 60 brokers. In fact the 'Share Mania' in India began

when the American Civil War broke and the cotton supply from the

US to Europe stopped. Further the brokers increased to 250. At the

end of the war in 1874, the market found a place in a street (now

called Dalal Street). In 1887, "Native Share and Stock Brokers'

Association" was established. In 1895, the exchange acquired a

premise in the street which was inaugurated in 1899.

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Stock Trading

Screen Based Trading

The 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, NSE

introduced a nationwide, on-line, fully automated screen based

trading system (SBTS) where a member can punch into the computer

the quantities of a security and the price at which he would like to

transact, and the transaction is executed as soon as a matching sale

or buy order from a counter party is found.

NEAT

NSE is the first exchange in the world to use satellite communication

technology for trading. Its trading system, called National Exchange

for Automated Trading (NEAT), is a state of-the-art client server

based application. At the server end all trading information is stored

in an in memory database to achieve minimum response time and

maximum system availability for users. It has uptime record of

99.7%. For all trades entered into NEAT system, there is uniform

response time of less than one second.

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Placing orders with the broker

You may go to the brokers office or place an order on the

phone/internet or as defined in theModel Agreement, which every

client needs to enter into with his or her broker.

Products in the Secondary Markets

Following are the main financial products/instruments dealt in the

Secondary market which may be divided broadly into Shares and

Bonds:

Shares

Equity Shares: An equity share, commonly referred to as ordinary

share, represents the form of fractional ownership in a business

venture.

Rights Issue/ Rights Shares: The issue of new securities to

existing shareholders at a ratio to those already held, at a price. For

e.g. a 2:3 rights issue at Rs. 125, would entitle a shareholder to

receive 2 shares for every 3 shares held at a price of Rs. 125 per

share.

Bonus Shares: Shares issued by the companies to their

shareholders free of cost based on the number of shares the

shareholder owns.

Preference shares

Owners of these kind of shares are entitled to a fixed dividend or

dividend calculated at a fixed rate to be paid regularly before

dividend can be paid in respect of equity share. They also enjoy

priority over the equity shareholders in payment of surplus. But in the

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event of liquidation, their claims rank below the claims of the

companys creditors, bondholders/debenture holders.

Cumulative Preference Shares

A type of preference shares on which dividend accumulates if

remained unpaid. All arrears of preference dividend have to be paid

out before paying dividend on equity shares.

Cumulative Convertible Preference Shares

A type of preference shares where the dividend payable on the same

accumulates, if not paid. After a specified date, these shares will be

converted into equity capital of the company.

Bond

Bond is a negotiable certificate evidencing indebtedness. It is

normally unsecured. A debt security is generally issued by a

company, municipality or government agency. A bond investor lends

money to the issuer and in exchange, the issuer promises to repay

the loan amount on a specified maturity date. The issuer usually pays

the bond holder periodic interest payments over the life of the loan.

The various types of Bonds are as follows:

Zero Coupon Bond

Bond issued at a discount and repaid at a face value. No periodic

interest is paid. The difference between the issue price and

redemption price represents the return to the holder. The buyer of

these bonds receives only one payment, at the maturity of the bond.

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Convertible Bond

A bond giving the investor the option to convert the bond into equity

at a fixed conversion price.

Treasury Bills:

Short-term (up to one year) bearer discount security issued by

government as a means of financing their cash requirements.

Equity Investment

When you buy a share of a company you become a shareholder in

that company. Shares are also known as Equities. Equities have the

potential to increase in value over time. It also provides your portfolio

with the growth necessary to reach your long term investment goals.

Research studies have proved that the equities have

outperformed most other forms of investments in the long term.

Growth Stocks

In the investment world we come across terms such as Growth

stocks, Value stocks etc. Companies whose potential for growth in

sales and earnings are excellent, are growing faster than other

companies in the market or other stocks in the same industry are

called the Growth Stocks. These companies usually pay little or no

dividends and instead prefer to reinvest their profits in their business

for further expansions.

Portfolio

A Portfolio is a combination of different investment assets mixed and

matched for the purpose of achieving an investor's goal(s). Items

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that are considered a part of your portfolio can include any asset you

own-from shares, debentures, bonds, mutual fund units to items

such as gold, art and even real estate etc. However, for most

investors a portfolio has come to signify an investment in financial

instruments like shares, debentures, fixed deposits, mutual fund

units.

DERIVATIVES

Forwards

A forward contract is a customized contract between two entities,

where settlement takes place on a specific date in the future at

todays pre-agreed price.

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. Futures

contracts are special types of forward contracts in the sense that the

former are standardized exchange-traded contracts, such as futures

of the Nifty index.

Options

An Option is a contract which gives the right, but not an obligation,

to buy or sell the underlying at a stated date and at a stated price.

While a buyer of an option pays the premium and buys the right to

exercise his option, the writer of an option is the one who receives

the option premium and therefore obliged to sell/buy the asset if the

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buyer exercises it on him. Options are of two types - Calls and Puts

options:

CallsGives the buyer the right but not the obligation to buy a given

quantity of the underlying asset, at a given price on or before a given

future date.

Puts

Gives the buyer the right, but not the obligation to sell a given

quantity of underlying asset at a given price on or before a given

future date.

Presently, at NSE futures and options are traded on the Nifty,

CNX IT, BANK Nifty and 116 single stocks

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THE IPO SCAM

The Securities and Exchange Board of India (SEBI), the capital market Watchdog,

cracked down on some of the top brokerage firms and banks for their allegedinvolvement in an initial public offering (IPO) scam. SEBI conducted investigationsin respect of all the IPOs from January 2003 to December 2005. The findings ofinvestigations, prima facie, revealed violations of serious nature by several keyoperators, their financiers, concerned depository participants and the depositories. Inits order, SEBI has barred brokerage firms like Karvy Stock broking IndiaBullsRELIANCE MONEY etc. from the market. It has also directed HDFC Bank andIDBI Bank not to open new demat accounts for share transactions.

SEBI's Order fallout:

24 entities banned from primary and secondary market, including Indiabulls, KarvySecurities Reliance Money etc.

Quasi-judicial proceedings against Karvy DP and Pratik DP, banned from themarket

12 DPs cant open fresh D-mat accounts, including HDFC Bank, IDBI Bank,Central Bank,ING Vysya Bank, IL&FS and Motilal Oswal; 15 more under scrutiny, includingICICI Bank,Citibank,Stanchart

85 Financiers barred from the market.

SEBI said certain entities had cornered shares reserved for retailapplicants in the name of fictitious entities in the initial public offerings of Yes Bankand Infrastructure Development Finance Company (IDFC).Each of the fictitiousapplication was of small value so as to be eligible for allotment under the retailcategory, it added.After the allotment, these fictitious beneficiaries transferred these shares to their

principals who in turn transferred the shares to their financiers.The financiers in turn sold most of these shares on the first day of listing, therebyrealizing the windfall gain of the price difference between IPO price and the listing

price.

EFFECTS OF THE RECENT BOOM

If we see the overall performance of stock market ,Sensex, from initial(july25,1990) to Feb,2000 ,fluctuate between 1000 to 6000 And July,2005 toJuly, 2007 moves between 7000 to 15500.

The progress of sensex is given in following table

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So we can say stock maret in India is actually in booming period. This isbecause equity MFs pace with market ,raising more FDI and FII,LOWERING inflation ,strongness in value of Rupee, increase in GDP

and PER KAPITA income.

SOME OF THE EXPERT COMMENTS

Investors shouldnt focus on value . Instead they should stick to theirasset location plan . If you are underweight on stocks , you

should go ahead with your investment plan . If you are overexposed toequity, sell off partly.

Sanjiv Shah /EXECUTIVE DIRECTOR, BENCHMARK MF

The rally is mainly because of strong foreign inflows in the last two years. If itcontinue ,there would be re-rating of India . Then we may see more money cominginto the country. As for investor , they should stick to their asset allocation plan andshouldnt get swayed by market movements.

Sanjay sinha / CHIEF INVESTMENT OFFICER, SBI MF

These are exceptional returns, but this is also an exceptional time. You shouldextrapolate these returns to the future. These kind of return cannt be sustainedover along period. MADHU SUDAN KELA RELIENCEHEAD MF

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A REGULATOR

Q-1 who regulates the securities market?

Ans-: The responsibility for regulating the securities market is shared by the

department Of economic affairs (DEA), Department of company affairs (DCA),

Reserve bank of India (RBI), and Securities and exchange board of India (SEBI)

Q-2) Why does securities market need a regulator?

Ans-:The absence of conditions of perfect competition in the securities market

makes the role of a regulator extremely important. The regulator ensures that market

participants behave in a desired manner so that securities market continues to be a major

source of finance for corporate and the government and the interest of the investors are

protected. Moreover it also ensures that all the work being done in the securities market is

being done with trueness and honesty and there should be no malpractices in this market

so that interest of the investors remain positive towards this market.

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ROLE OF SEBI AS A MARKET REGULATOR

The Securities and Exchange Board of India (SEBI) is the regulatory authority

in India established under Section 3 of SEBI Act, 1992. SEBI Act,

1992 provides for establishment of Securities and Exchange Board of

India (SEBI) with statutory powers for-:

(a) Protecting the interests of investors in securities

(b) Promoting the development of the securities market and

(c) Regulating the securities market. Its regulatory jurisdiction extends

(d) Corporates in the issuance of capital and transfer of securities, in

addition to all intermediaries and persons associated with

securities market. SEBI has been obligated to perform the

aforesaid functions by such measures as it thinks fit. In

particular, it has powers for:

Regulating the business in stock exchanges and any othersecurities markets

Registering and regulating the working of stock brokers,subbrokers etc.

Promoting and regulating self-regulatory organizations

Prohibiting fraudulent and unfair trade practices

Calling for information from, undertaking inspection,

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conducting inquiries and audits of the stock exchanges,

intermediaries, selfregulatory organizations, mutual funds

and other persons associated with the securities market.

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CONCLUSION

In span of 60 days, I have learned how market behaves in bullish & bearish

situations. It was a perfect storm. The INDIAN market had been teetering on the knife-

edge for apart from above, during my two months stay at

RELIANCE MONEY I learned various aspects relating to stock market. I got an

opportunity to use my theoretical knowledge which I gained during my MBA course

into practical way of doing things. I learned how online trading is done , how do we buy

and sell stocks and shares and not to forget the core selling of D-MAT A/cs. This

training was very important looking at the future prospects and I feel I have done my

job with sincerity and honesty . In the future also I am willing to take such kind of

projects as these kind of projects help you enhance your knowledge and of course

they make you do things in a practical way.

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LIMITATION OF THE STUDY

The word limitation is itself narrating the whole story. To certain extent I was restricted

not to extend the reach of my study beyond the certified limit which were imposed by

the organization as well as the circumstances. Some are as follows:

The area of research was limited to certain area.

Sample size was limited to 150 only due to which the analysis of datawas

not adequate to reveal its significance.

Library management & functioning were not available.

Not able to implement enough methods of data collection.

Since fixed alternative questions were used it may be possible that

Respondents had an opinion but non of the response category allowed theaccurate expression of that attitude.

Identification of the personals to the customer was quite difficult dueto

proper identity

Due to many vague technical terms it became difficult for customer tounderstand.

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RECCOMENDATION

Proper coordination is important form top to operative level for smooth

functioning.

Recruitment of experienced & knowledgeable personal for the

companyssystematic & profitable working.

Motivating the old & new customer form special offers to invest

heavily in themarket.

Training & development programs should be introduced from time to

time inaccordance to the changing trends in the market & to polish their skills.

Library assistance should be provided to the companies

Customer relationship management program of the company should be

highlighted from time to time & it should be flexible.

Broker should be quick & cautious while taking the orders from

customers.

RELIANCE MONEY should look towards the proper coordination

between all the

branches.

During the period of opening of D-mat account the customer should be

providedwith information broacher related to it.

Verification of each & every document should be done before thepunching of the

form.

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BIBLIOGRAPHY

BOOKS

Pandey I.M.; Financial management; vikas publishing house pvt. Ltd.

Khan M.Y.; Jain P.K.; Management Accounting; Tata McGraw Hill publishing companylimited.

Kothari C.R.; Research Methodology; new age international publishers (p) ltd.

WEBSITES-:

www.google.comwww.reliancemoney.comwww.sharemarketbasics.comwww.indian-stock-market.comwww.nseindia.com

Useful links about Reliance Money1. Reliance Money Website:RelianceMoney.com2. Branch Locator:Reliance Money Branch Locator

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http://www.google.com/http://www.reliancemoney.com/http://www.sharemarketbasics.com/http://www.indian-stock-market.com/http://www.nseindia.com/http://www.google.com/http://www.reliancemoney.com/http://www.sharemarketbasics.com/http://www.indian-stock-market.com/http://www.nseindia.com/


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RESPONDANTS PERSONAL INFORMATION

Name ::____________________________

Address ::____________________________Contact :: ____________________________E-Mail :: ___________________________

Age ::____________________________Profession :: ____________________________

Q-1) Do you have any investment?

Yes ---------- No -------------

Q-2)What is the purpose of your investment?

High return------ Tax Exemption ----- Future benefits ------

Specify Others(if any) --------------------------

Q-3)Which kind of investment you have-

Insurance-------- Real estate------ Share market------------Debenture--------- Commodity--------------Other --------

Q-4) Are you aware as in metals in commodity market :-

Yes ---------- No -------------

Q-5) Is the metal market have any opportune in future:-

Growth ------ Decline------

Q-6)What is the total income of your family?

1-5lcas----- 9-12lacs-------6-8lacs------- 12lacs & above---------

Q-7) If you have a chance, Which metal do you choose:-

Gold------ Silver-----------Dimond----- Other-----------

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Q-8) Duration of Investment :-

2year---- 5year ------ 6year ------ 8year ----------

Q-9) Which Type of investments suits you?

High risk high return-------------- Low risk high return------------------

Q-10)Which metal commodity is most preferable byyou :-Gold------ Silver-----------Dimond----- Other-----------

Q-11)Which metal is profitable in future :-

Gold------ Silver-----------Dimond----- Other----------

Q-12)Volume of Business?

1-5lak--------- 5- 6lak-----------

6-12lak---------- 12lak above -----------

Q-13) Frequency:-

Daily--------- Occasan------------

Q-14) Do you have any D-Mat A/c: -

Yes --------- No-------------------

Q-15) Last one year Gain profit/loss :-

reliance - money - stock market trends1

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