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Functioning of Stock Market in India

Summer project submitted

In

Partial Fulfilment of the Requirements for the Award of Post Graduate Diploma in Management

(Recognized by AICTE, Ministry of HRD, Govt. of India)

By

Kumar BhaskarPG/09/054

Integrated Academy of Management and Technology

GhaziabadMay-June, 2010

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Functioning of Stock Market in India

ByKumar Bhaskar

Under the guidance of

Prof. Vipin AggrawalINMANTEC, Ghaziabad

Integrated Academy of Management and Technology

GhaziabadMay-June, 2010

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Overview of Indian Capital Market

EVOLUTION:

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago.The earliest records of security dealings in India are meagre and obscure. The East IndiaCompany was the dominant institution in those days and business in its loan securities used to betransacted towards the close of the eighteenth century.

By 1830's business on corporate stocks and shares in Bank and Cotton presses took place inBombay. Though the trading list was broader in 1839, there were only half a dozen brokersrecognized by banks and merchants during 1840 and 1850.

The 1850's witnessed a rapid development of commercial enterprise and brokerage businessattracted many men into the field and by 1860 the number of brokers increased into 60.

In 1860-61 the American Civil War broke out and cotton supply from United States of Europewas stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began(for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87).

At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would convenientlyassemble and transact business. In 1887, they formally established in Bombay, the "Native Shareand Stock Brokers' Association" (which is alternatively known as The Stock Exchange "). In1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899.

Thus, the Stock Exchange at Bombay was consolidated.Step by Step---

18thCentury

East India Company was the dominant institution and by end of the century, business in its loan securities gained full momentum

1830's Business on corporate stocks and shares in Bank and Cotton presses started inBombay. Trading list by the end of 1839 got broader

1840's Recognition from banks and merchants to about half a dozen brokers

1850's Rapid development of commercial enterprise saw brokerage business attractingmore people into the business

1860's The number of brokers increased to 60

1860-61 The American Civil War broke out which caused a stoppage of cotton supply

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from United States of America; marking the beginning of the "Share Mania" inIndia

1862-63 The number of brokers increased to about 200 to 250

1865 A disastrous slump began at the end of the American Civil War (as an example,Bank of Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87)

Pre-Independence Scenario - Establishment of Different Stock Exchanges

1874 With the rapidly developing share trading business, brokers used to gather at astreet (now well known as "Dalal Street") for the purpose of transacting business.

1875 "The Native Share and Stock Brokers' Association" (also known as "The BombayStock Exchange") was established in Bombay

1880's Development of cotton mills industry and set up of many others

1894 Establishment of "The Ahmadabad Share and Stock Brokers' Association"

1880 -90's

Sharp increase in share prices of jute industries in 1870's was followed by a boomin tea stocks and coal

1908 "The Calcutta Stock Exchange Association" was formed

1920 Madras witnessed boom and business at "The Madras Stock Exchange" was

transacted with 100 brokers.

1923 When recession followed, number of brokers came down to 3 and the Exchangewas closed down

1934 Establishment of the Lahore Stock Exchange

1936 Merger of the Lahore Stock Exchange with the Punjab Stock Exchange

1937 Re-organization and set up of the Madras Stock Exchange Limited (Pvt.) Limitedled by improvement in stock market activities in South India with establishment

of new textile mills and plantation companies

1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited wasestablished

1944 Establishment of "The Hyderabad Stock Exchange Limited"

1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and4


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Shares Exchange Limited" were established and later on merged into "The DelhiStock Exchange Association Limited"

Post Independence Scenario:The depression witnessed after the Independence led to closure of a lot of exchanges in the

country. Lahore Stock Exchange was closed down after the partition of India, and later onmerged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state till1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956. TheExchanges that were recognized under the Act were:

1. Bombay2. Calcutta3. Madras4. Ahmadabad5. Delhi6. Hyderabad7. Bangalore

8. IndoreMany more stock exchanges were established during 1980's, namely:

Cochin Stock Exchange (1980) Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982) Pune Stock Exchange Limited (1982) Ludhiana Stock Exchange Association Limited (1983) Gauhati Stock Exchange Limited (1984) Kanara Stock Exchange Limited (at Mangalore, 1985) Magadh Stock Exchange Association (at Patna, 1986) Jaipur Stock Exchange Limited (1989) Bhubaneswar Stock Exchange Association Limited (1989) Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989) Vadodara Stock Exchange Limited (at Baroda, 1990) Coimbatore Stock Exchange

Meerut Stock ExchangeAt present, there are twenty one recognized stock exchanges in India which does not include the

Over the Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of IndiaLimited.

The main two Stock Exchanges are:-

1. BOMBAY STOCK EXCHANGE LIMITED (BSE)

2. NATIONAL STOKE EXCHANGE OF INDIA LTD (NSE)

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BOMBAY STOCK EXCHANGE LIMITED (BSE)

INTRODUCTION:

The Bombay Stock Exchange Limited (BSE) is the oldest stock exchange in Asia and has thethird largest number of listed companies in the world, with 4900 listed as of April 2010. It is

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located at Dalal Street , Mumbai , India . On February 2010, the equity market capitalization of thecompanies listed on the BSE was US$ 1.28 trillion , making it the largest stock exchange in South Asia and the 12th largest in the world. [2]

With over 4900 Indian companies listed & over 7700 scripts on the stock exchange, it has asignificant trading volume. The BSE SENSEX (Sens itive ind ex), also called the "BSE 30", is awidely used market index in India and Asia . Though many other exchanges exist, BSE andthe National Stock Exchange of India account for most of the trading in shares in India.

BSE is first exchange in India and second in the world to obtain an ISO 9001:2000 certifications.It is also the first exchange in country and second in world to receive Information SecurityManagement System Standard BS 7799-2-2002 certification for its BSE online trading system(BOLT). Presently BSE is ISO 270001:2005 certified, which is a ISO version of BS7799 for information securities.

LANDMARKS:

Become first national exchange to launch its website in Guajarati and Hindi and now inMarathi.

Purchased Marketplace technologies in 2009 to enhance the in house technologydevelopment capabilities of BSE and allow faster time to time market for new products.

Launched a reporting platform for corporate bonds christened the ICDM or IndianCorporate Debt Market.

Acquired a 15% stake in United stock exchange (USE) to drive the development andgrowth of the currency and interest rate derivative market.

Launched BSE Star MF- Mutual fund trading platform, which enables exchangemember to use its existing infrastructure for transition in MF schemes.

BSE now offers AMFI certification for Mutual Fund Advisors through BSE TrainingInstitute.

Co-location facilities for Algorithm trading

BSE also successfully launched the BSE IPO index and PSU website

Launched BSE SENSEX MOBILE STREAMER

Hours of Operations:

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Session Timing

Beginning of the Day Session 8:00 - 9:00

Trading Session 9:00 - 15:30

Position Transfer Session 15:30 - 15:50

Closing Session 15:50 - 16:05

Option Exercise Session 16:05 - 16:35

Margin Session 16:35 - 16:50

Query Session 16:50 - 17:35

End of Day Session 17:30

History:

The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history to the1850s, when 4 Gujarati and 1 Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of

brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In1956, the BSE became the first stock exchange to be recognized by the Indian Government under

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the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSESensex in 1986, giving the BSE a means to measure overall performance of the exchange. In2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts.The development of Sensex options along with equity derivatives followed in 2001 and 2002,

expanding the BSE's trading platform. Historically an open-cry floor trading exchange, theBombay Stock Exchange switched to an electronic trading system in 1995. It took the exchangeonly fifty days to make this transition.

Time line:

1830's Business on corporate stocks and shares in Bank and Cotton presses started in Bombay.

1860-1865 Cotton price bubble as a result of the American Civil War

1870 - 90's Sharp increase in share prices of jute industries followed by a boom in tea stocks and

coal

1978-79 Base year of Sensex , defined to be 100.

1986 Sensex first compiled using a market Capitalization-Weighted methodology for 30component stocks representing well-established companies across key sectors.

30 October 2006 The Sensex on October 30, 2006 crossed the magical figure of 13,000 andclosed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the Sensex to movefrom 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.

5 December 2006 The Sensex on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36 days for the Sensex to move from 13,000 to the 14,000 mark.

6 July 2007 The Sensex on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the Sensex to move from 14,000 to 15,000 points.

19 September 2007 The Sensex scaled yet another milestone during early morning trade onSeptember 19, 2007. Within minutes after trading began, the Sensex crossed 16,000, rising by450 points from the previous close. The 30-share Bombay Stock Exchange's sensitive index took

53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points.

The Sensex finally ended with a gain of 654 points at 16,323. The NSE Nifty gained 186 pointsto close at 4,732.

26 September 2007 The Sensex scaled yet another height during early morning trade onSeptember 26, 2007. Within minutes after trading began, the Sensex crossed the 17,000-mark.

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Some profit taking towards the end, saw the index slip into red to 16,887 - down 187 points fromthe day's high. The Sensex ended with a gain of 22 points at 16,921.

9 October 2007 The BSE Sensex crossed the 18,000-mark on October 9, 2007. It took just 8days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-dayhigh of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market setseveral new records including the biggest single day gain of 789 points at close, as well as thelargest intra-day gains of 993 points in absolute term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the worries of an impending election.

15 October 2007 The Sensex crossed the 19,000-mark backed by revival of funds-based buyingin blue chip stocks in metal, capital goods and refinery sectors. The index gained the last 1,000

points in just four trading days. The index touched a fresh all-time intra-day high of 19,096, andfinally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 points to close at5,670.

29 October 2007 The Sensex crossed the 20,000 mark on the back of aggressive buying by fundsahead of the US Federal Reserve meeting. The index took only 10 trading days to gain 1,000

points after the index crossed the 19,000-mark on October 15. The major drivers of today's rallywere index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank, HDFC Bank andSBI among others. The 30-share index spurted in the last five minutes of trade to fly-past thecrucial level and scaled a new intra-day peak at 20,024.87 points before ending at its freshclosing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a record high 5,922.50

points before ending at 5,905.90, showing a hefty gain of 203.60 points.

8 January 2008 The sensex peaks. It crossed the 21,000 mark in intra-day trading after 49trading sessions. This was backed by high market confidence of increased FII investment andstrong corporate results for the third quarter. However, it later fell back due to profit booking.

13 June 2008 The sensex closed below 15,200 mark, Indian market suffer with major downfallfrom January 21, 2008

25 June 2008 The sensex touched an intraday low of 13,731 during the early trades, then pulled back and ended up at 14,220 amidst a negative sentiment generated on the Reserve Bank of Indiahiking CRR by 50 bps. FII outflow continued in this week.

2 July 2008 The sensex hit an intraday low of 12,822.70 on July 2, 2008. This is the lowest that ithas ever been in the past year. Six months ago, on January 10, 2008, the market had hit an alltime high of 21206.70. This is a bad time for the Indian markets, although Reliance and Infosys

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continue to lead the way with mostly positive results. Bloomberg lists them as the top two gainersfor the Sensex, closely followed by ICICI Bank and ITC Ltd.

6 October 2008 The sensex closed at 11801.70 hitting the lowest in the past 2 years.

10 October 2008 The Sensex today closed at 10527,800.51 points down from the previous dayhaving seen an intraday fall of as large as 1063 points. Thus, this week turned out to be the week with largest percentage fall in the SenseX

18 May 2009 After the result of 15th Indian general election Sensex gained 2110.79 points fromthe previous close of 12173.42, a record one-day gain. In the opening trade itself the Sensexevinced a 15% gain over the previous close which led to a two-hour suspension in trading. After trading resumed, the Sensex surged again, leading to a full day suspension of trading.

BSE Indices:

For the premier stock exchange that pioneered the securities transaction business in India, over acentury of experience is a proud achievement. A lot has changed since 1875 when 318 persons by

paying a then princely amount of Re. 1, became members of what today is called Bombay Stock Exchange Limited (BSE).

Over the decades, the stock market in the country has passed through good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was nomeasure or scale that could precisely measure the various ups and downs in the Indian stock market. BSE, in 1986, came out with a Stock Index-SENSEX- that subsequently became the

barometer of the Indian stock market.

The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmadabad and Madras. The BSE National Indexwas renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated takinginto consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked versionof BSE-100 index on May 22, 2006.

With a view to provide a better representation of the increasing number of listed companies,larger market capitalization and the new industry sectors, BSE launched on 27th May, 1994 twonew index series viz., the 'BSE-200' and the 'DOLLEX-200'. Since then, BSE has come a longway in attuning itself to the varied needs of investors and market participants. In order to fulfillthe need for still broader, segment-specific and sector-specific indices, BSE has continuously

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1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-floatmethodology (except BSE-PSU index).

BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio andthe Dividend Yield Percentage on day-to-day basis of all its major indices.

The values of all BSE indices are updated on real time basis during market hours and displayedthrough the BOLT system, BSE website and news wire agencies.

All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee whichcomprises eminent independent finance professionals frames the broad policy guidelines for thedevelopment and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-daymaintenance of all indices and conducts research on development of new indices.

BSE 100 Index :As BSE Sensex has only 30 scrips, a need was felt for a more broad-based index, which couldalso reflect the movement of stock prices on a national scale. In 1989, Bombay Stock ExchangeLimited, started compilation and publication of an index series called "BSE National Index". TheBSE National Index is now known as BSE 100 and since April 5, 2004 it is calculated on the

basis of free-float market capitalization methodology.

BSE 200 Index :

BSE 200 Index was constructed and launched on 27th May 1994. The number of companieslisted on the Bombay Stock Exchange registered a phenomenal increase from 992 in the year 1980 to about 3,200 companies by the end of March 1994.

BSE 500 Index :

On August 9, 1999, Bombay Stock Exchange constructed a new index, namely, BSE-500,consisting of 500 scrips in its basket. BSE-500 index represents nearly 93% of the total marketcapitalisation on Bombay Stock Exchange Limited.

BSE Bankex :Banking sector reforms such as fall in interest rates, and enactment of Securitization Bill havegiven a major fillip to Indian banking industry.

BSE PSU Index :12
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BSE - Public Sector Undertaking (PSU) Index is a stock index that tracks the performance of thelisted PSU stocks on the Exchange.

BSE TECk Index :

The BSE-TECk is a stock index constituted of companies in the Information Technology, Mediaand Telecom sectors.

NATIONAL STOKE EXCHANGE OF INDIA LTD (NSE)

The Organization:

The National Stock Exchange of India Limited has genesis in the report of the High PoweredStudy Group on Establishment of New Stock Exchanges. It recommended promotion of a

National Stock Exchange by financial institutions (FIs) to provide access to investors from allacross the country on an equal footing. Based on the recommendations, NSE was promoted byleading Financial Institutions at the behest of the Government of India and was incorporated in

November 1992 as a tax-paying company unlike other stock exchanges in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in13
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April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June1994. The Capital Market (Equities) segment commenced operations in November 1994 andoperations in derivatives segment commenced in June 2000.

The following years witnessed rapid development of Indian capital market with introduction of

internet trading, Exchange traded funds (ETF), stock derivatives and the first volatility index IndiaVIX in April 2008, by NSE.

August 2008 saw introduction of Currency derivatives in India with the launch of CurrencyFutures in USD INR by NSE. Interest Rate Futures was introduced for the first time in India by

NSE on 31st August 2009, exactly after one year of the launch of Currency Futures.

With this, now both the retail and institutional investors can participate in equities, equityderivatives, currency and interest rate derivatives, giving them wide range of products to takecare of their evolving needs.

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Group of NSE ( Associate/Affiliate Companies ):

NSCCL

NCCL NSETECH

IISL

DotEx Intl. Ltd.

NSE.IT

NSE Milestones:

November 1992 Incorporation

April 1993 Recognition as a stock exchange

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May 1993 Formulation of business plan

June 1994 Wholesale Debt Market segment goes live

November 1994 Capital Market (Equities) segmen t goes live

March 1995 Establishment of Investor Grievance Cell

April 1995 Establishment of NSCCL , the first Clearing Corporation

June 1995 Introduction of centralized insurance cover for all trading members

July 1995 Establishment of Investor Protection Fund

October 1995 Became largest stock exchange in the country

April 1996 Commencement of clearing and settlement by NSCCL

April 1996 Launch of S&P CNX Nifty

June 1996 Establishment of Settlement Guarantee Fund

November 1996 Setting up of National Securities Depository Limited , first depository inIndia, co-promoted by NSE

November 1996 Best IT Usage award by Computer Society of India

December 1996 Commencement of trading/settlement in dematerialised securities

December 1996 Dataquest award for Top IT User

December 1996 Launch of CNX Nifty Junior

February 1997 Regional clearing facility goes live

November 1997 Best IT Usage award by Computer Society of India

May 1998 Promotion of joint venture, India Index Services & Products Limited(IISL)

May 1998 Launch of NSE's Web-site: www.nse.co.in

July 1998 Launch of NSE's Certification Programme in Financial Market

August 1998 CYBER CORPORATE OF THE YEAR 1998 award

February 1999 Launch of Automated Lending and Borrowing Mechanism

April 1999 CHIP Web Award by CHIP magazine

October 1999 Setting up of NSE.IT

January 2000 Launch of NSE Research Initiative

February 2000 Commencement of Internet Trading

June 2000 Commencement of Derivatives Trading ( Index Futures )

September 2000 Launch of 'Zero Coupon Yield Curve ' 16
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November 2000 Launch of Broker Plaza by Dotex International, a joint venture between NSE.IT Ltd. and i-flex Solutions Ltd.

December 2000 Commencement of WAP trading

June 2001 Commencement of trading in Index Options

July 2001 Commencement of trading in Options on Individual Securities

November 2001 Commencement of trading in Futures on Individual Securities

December 2001 Launch of NSE VaR for Government Securities

January 2002 Launch of Exchange Traded Funds (ETFs)

May 2002 NSE wins the Wharton-Infosys Business Transformation Award in theOrganization-wide Transformation category

October 2002 Launch of NSE Government Securities Index

January 2003 Commencement of trading in Retail Debt MarketJune 2003 Launch of Interest Rate Futures

August 2003 Launch of Futures & options in CNXIT Index

June 2004 Launch of STP Interoperability

August 2004 Launch of NSEs electronic interface for listed companies

March 2005 India Innovation Award by EMPI Business School, New Delhi

June 2005 Launch of Futures & options in BANK Nifty Index

December 2006 'Derivative Exchange of the Year', by Asia Risk magazine

January 2007 Launch of NSE CNBC TV 18 media centre

March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com

June 2007 NSE launches derivatives on Nifty Junior & CNX 100

October 2007 NSE launches derivatives on Nifty Midcap 50

January 2008 Introduction of Mini Nifty derivative contracts on 1st January 2008

March 2008 Introduction of long term option contracts on S&P CNX Nifty Index

April 2008 Launch of India VIX

April 2008 Launch of Securities Lending & Borrowing Scheme

August 2008 Launch of Currency Derivatives

August 2009 Launch of Interest Rate Futures

November 2009 Launch of Mutual Fund Service System

December 2009 Commencement of settlement of corporate bonds17
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February 2010 Launch of Currency Futures on additional currency pairs

March 2010 NSE- CME Group & NSE - SGX product cross listing agreement

April 2010 Financial Derivative Exchange of the Year Award' by Asian Banker

Some facts & figures:

CAPITAL MARKET (EQUITIES) SEGMENT

1 Settlement Guarantee Fund 31-MAR-2009 Rs.4,843.50 crores

2 Investor Protection Fund 30-APR-2010 Rs.307.02 crores

3 Number of securities available for trading 30-APR-2010 1,872

4 Record number of trades 19-MAY-2009 112603925 Record daily turnover (quantity) 19-MAY-2009 19225.95 lakhs

6 Record daily turnover (value) 19-MAY-2009 Rs.40151.91 crores

7 Record market capitalisation 07-JAN-2008 Rs.67,45,724 crores

8 Record value of S&P CNX Nifty Index 08-JAN-2008 6357.1

9 Record value of CNX Nifty Junior Index 04-JAN-2008 13209.35

CLEARING & SETTLEMENT

1 Record Pay-in/Pay-out (Rolling Settlement):

Funds Pay-in/Pay-out (N2007200) 23-OCT-2007* Rs.4,567.70 crores

Securities Pay-in/Pay-out (Value) (N2009088) 21-MAY-2009* Rs.9,523.33 crores

Securities Pay-in/Pay-out (Quantity) (N2009088) 21-MAY-2009* 4,385.75 lakhs

*Settlement Date

DERIVATIVES (F&O) SEGMENT

1 Settlement Guarantee Fund 31-MAR-2009 Rs.23,655.86 crores


3 Record daily turnover (value) 28-JAN-2010 Rs.166,193.03 crores

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4 Record number of trades 07-JAN-2009 1874697

CURRENCY DERIVATIVES SEGMENT

1 Record daily turnover (value) 20-APR-2010 Rs.21,903.34 crores2 Record number of trades 11-JAN-2010 78935

3 Record number of contracts 20-APR-2010 4884935


WHOLESALE DEBT SEGMENT

1 Number of securities available for trading 30-APR-2010 4,157

2 Record daily turnover (value) 25-AUG-2003 Rs. 13,911.57 crores

Technology:

Across the globe, developments in information, communication and network technologies havecreated paradigm shifts in the securities market operations. Technology has enabled organizations

to build new sources of competitive advantage, bring about innovations in products and services,and to provide for new business opportunities. Stock exchanges all over the world have realizedthe potential of IT and have moved over to electronic trading systems, which are cheaper, havewider reach and provide a better mechanism for trade and post trade execution.

NSE believes that technology will continue to provide the necessary impetus for the organizationto retain its competitive edge and ensure timeliness and satisfaction in customer service. Inrecognition of the fact that technology will continue to redefine the shape of the securities

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industry, NSE stresses on innovation and sustained investment in technology to remain ahead of competition. NSE's IT set-up is the largest by any company in India. It uses satellitecommunication technology to energies participation from around 200 cities spread all over thecountry. In the recent past, capacity enhancement measures were taken up in regard to the tradingsystems so as to effectively meet the requirements of increased users and associated trading

loads. With up gradation of trading hardware, NSE today can handle up to 15 million trades per day in Capital Market segment. In order to capitalize on in-house expertise in technology, NSEset up a separate company, NSE Technology Services Ltd. which is expected to provide a

platform for taking up all IT related assignments of NSE.

NEAT is a state-of-the-art client server based application. At the server end, all tradinginformation is stored in an in-memory database to achieve minimum response time andmaximum system availability for users. The trading server software runs on a fault tolerantSTRATUS main frame computer while the client software runs under Windows on PCs.

The telecommunications network which was using X.25 protocol and is the backbone of the

automated trading system is being upgraded to use the more popular and modern IP Protocol.This is a major project involving use of X.25 and IP in parallel and ensuring smooth transition toIP. Each trading member trades on the NSE with other members through a PC located in thetrading member's office, anywhere in India. The trading members on the various marketsegments such as CM / F&O, WDM are linked to the central computer at the NSE throughdedicated leased lines and VSAT terminals. The Exchange uses powerful RISC -based UNIXservers, procured from HP for the back office processing. The latest software platforms likeORACLE 10g RDBMS, SQL/ORACLE FORMS Front - Ends, etc. have been used for theExchange applications. The Exchange currently manages its data centre operations, system anddatabase administration, design and development of in-house systems and design andimplementation of telecommunication solutions.

NSE is one of the largest interactive VSAT based stock exchanges in the world. Today itsupports more than 2000 VSATs and 3000 leased lines across the country. The NSE- network isthe largest private wide area network in the country and the first extended C- Band VSATnetwork in the world. Currently more than 9000 users are trading on the real time-online NSEapplication. There are over 15 large computer systems which include non-stop fault-tolerantcomputers and high end UNIX servers, operational under one roof to support the NSEapplications. This coupled with the nationwide VSAT network makes NSE the countrys largestInformation Technology user.

In an ongoing effort to improve NSE's infrastructure, a corporate network has beenimplemented, connecting all the offices at Mumbai, Delhi, Calcutta and Chennai. This corporatenetwork enables speedy inter-office communications and data and voice connectivity betweenoffices.

In keeping with the current trend, NSE has gone online on the Internet. Apart from havingmultiple internet links and our own domain for internal browsing and e-mail purposes, we havealso set up our own Web site. Currently, NSE is displaying its live stock quotes on the web site(www.nseindia.com) which are updated online.

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NSE today allows members to provide internet trading facility to their clients through the use of NOW (NSE on web), a shared web infrastructure.

DEPOSITORY OF INDIAN STOCK MARKET

About Depository:

A depository can be compared to a bank. A depository holds securities of investors inelectronic form.

Depositories in India:

1. NATIONAL SECURITIES DEPOSITORY LIMITED

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NATIONAL SECURITIES DEPOSITORY LIMITED [NSDL] is a depository promoted by National Stock Exchange of India Limited, IDBI, UTI, SBI and other financial institutions. NSDL commenced operation in November 1996.

2. CENTRAL DEPOSITORY SERVICE [INDIA] LIMITED

CENTRAL DEPOSITORY SERVICE (INDIA) LIMITED [CDSL] is a depository promoted by The Stock Exchange, Mumbai jointly with SBI, Bank Of India, HDFC Bank and other financial institutions. CDSL commenced its operations in July 15 th 1999.

NSDL: NATIONAL SECURITIES DEPOSITORY LTD.

Although India had a vibrant capital market which is more than a century old, the paper-basedsettlement of trades caused substantial problems like bad delivery and delayed transfer of title tillrecently. The enactment of Depositories Act in August 1996 paved the way for establishment of

NSDL, the first depository in India. This depository promoted by institutions of national statureresponsible for economic development of the country has since established a nationalinfrastructure of international standards that handles most of the securities held and settled indematerialized form in the Indian capital market.

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Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimize risk and reduce costs. At NSDL, we play a quiet but central role in developing products and servicesthat will continue to nurture the growing needs of the financial services industry.

In the depository system, securities are held in depository accounts, which is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simpleaccount transfers. This method does away with all the risks and hassles normally associated with

paperwork. Consequently, the cost of transacting in a depository environment is considerablylower as compared to transacting in certificates.

Promoters & Share holders: NSDL is promoted by Industrial Development Bank of India Limited (IDBI) - the largestdevelopment bank of India, Unit Trust of India (UTI) - the largest mutual fund in India and

National Stock Exchange of India Limited (NSE) - the largest stock exchange in India. Some of the prominent banks in the country have taken a stake in NSDL.

Promoters: Industrial Development Bank of India Limited (Now, IDBI Bank Limited) Unit Trust of India (Now, Administrator of the Specified Undertaking of the Unit Trust of

India) National Stock Exchange of India Limited

Other Shareholders:

State Bank of India Oriental Bank of Commerce Citibank NA Standard Chartered Bank HDFC Bank Limited The Hongkong and Shanghai Banking Corporation Limited Deutsche Bank Dena Bank

Canara Bank Union Bank of India

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Milestones

August 2009 Demat Accounts cross one crore

August 2008 Launch of Central Recordkeeping Agency (for New PensionSystem)

May 2008 NSDL and Japan Securities Depository Center signInformation Sharing and Collaboration Pact

April 2008 NSDL and National Depository Center (Russia) signInformation Sharing and Collaboration Pact

February 2008 NSDL and Euroclear (Belgium) sign Information Sharing andCollaboration Pact

September 2007 Value of securities held in dematerialised form at NSDLcrosses US$ 1 trillion

September 2007 Launch of SMS alert facility for investors

June 2007 NSDL and DTCC (US Depository) sign Information Sharingand Collaboration Pact

January 2007 NSDL and TDCC (Taiwan Depository) sign InformationSharing and Collaboration Pact

November 2006 NSDL completes a decade of depository operations

January 2006 Launch of National Skills Registry by NDML

July 2005 Launch of Tax Information Network - PAN Ledger

January 2005 Launch of online upload of Central Excise challan data

October 2004 Intraday production shifting to Disaster Recovery Site

June 2004 Incorporation of NSDL Database Management Limited(NDML) - wholly owned subsidiary company of NSDL

June 2004 Launch of Online Tax Accounting System (OLTAS)

June 2004 Launch of PAN card services

January 2004 Launch of Tax Information Network (TIN)

January 2004 Launch of IDeAS

November 2003 Introduction of demat of Warehouse Receipts

November 2003 Launch of Market Participants and Investors Database

(MAPIN)October 2003 Demat Accounts cross 6 million

April 2003 Introduction of T+2 Rolling Settlement

December 2002 Demat Accounts cross 5 million

November 2002 Launch of STEADY - An STP initiative by NSDL

April 2002 Introduction of T+3 Rolling Settlement

September 2001 NSDL launches SPEED-e

July 2001 Introduction of T+5 Rolling Settlement and Uniform

Settlement CycleJune 2000 98% settlement in demat form


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Depository System - Business Partners

NSDL carries out its activities through various functionaries called "Business Partners" whoinclude Depository Participants (DPs), Issuing companies and their Registrars and Share Transfer Agents, Clearing corporations/ Clearing Houses of Stock Exchanges. NSDL is electronicallylinked to each of these business partners via a satellite link through Very Small ApertureTerminals (VSATs) or through Leased land lines. The entire integrated system (including theelectronic links and the software at NSDL and each business partner's end) is calledthe "NEST" [National Electronic Settlement & Transfer] system.

Depository Participant (DP) :The investor obtains Depository Services through a DP of NSDL. A DP can be a bank, financialinstitution, a custodian, a broker, or any entity eligible as per SEBI (Depositories andParticipants) Regulations, 1996. The SEBI regulations and NSDL bye laws also lay down thecriteria for any of these categories to become a DP.

Just as one opens a bank account in order to avail of the services of a bank, an investor opens adepository account with a DP in order to avail of depository facilities. Though NSDLcommenced operations with just three DPs, Depository Participant Services are now available inmost of the major cities and towns across the country.

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Issuing Companies/ their Registrar & Transfer Agents :Securities issued by issuers who have entered into an agreement with NSDL can bedematerialised in the NSDL depository. As per this agreement, issuer agrees to verify thecertificates submitted for dematerialisation before they are dematerialised and to maintain

electronic connectivity with NSDL. Electronic connectivity facilitates dematerialisation,rematerialisation, daily reconciliation and corporate actions.

Clearing Corporation / House:The clearing corporations/houses of stock exchanges also have to be electronically linked to thedepository in order to facilitate the settlement of the trades done on the stock exchanges for dematerialised shares. At present, all the major clearing corporations/houses of stock exchangesare electronically connected to NSDL.

The following stock exchanges have linked up with NSDL to facilitate trading and settlement of dematerialised securities:

Madras Stock Exchange Ltd. (MSE) National Stock Exchange of India Ltd. (NSE) Inter-connected Stock Exchange of India Ltd. (ISE) OTC Exchange of India (OTCEI) The Calcutta Stock Exchange Association Ltd. (CSE) The Delhi Stock Exchange Association Ltd. (DSE) The Stock Exchange, Mumbai (BSE) The Stock Exchange, Ahmedabad (ASE)

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Benefits of Depository SystemIn the depository system, the ownership and transfer of securities takes place by means of electronic booentries. At the outset, this system rids the capital market of the dangers related to handling of paper.

NSDL provides numerous direct and indirect benefits like:

Elimination of bad deliveries In the depository environment, once holdings of an investor aredematerialized, the question of bad delivery does not arise i.e. they cannot be held "under objection". In the physical environment, buyer was required to take the risk of transfer and faceuncertainty of the quality of assets purchased. In a depository environment good money certainly

begets good quality of assets. Elimination of all risks associated with physical certificates - Dealing in physical securitie

have associated security risks of theft of stocks, mutilation of certificates, loss of certificatesduring movements through and from the registrars, thus exposing the investor to the cost of obtaining duplicate certificates etc. This problem does not arise in the depository environment.

No stamp duty for transfer of any kind of securities in the depository. This waiver extends toequity shares, debt instruments and units of mutual funds.

Immediate transfer and registration of securities - In the depository environment, once thsecurities are credited to the investors account on pay out, he becomes the legal owner of thesecurities. There is no further need to send it to the company's registrar for registration. Having

purchased securities in the physical environment, the investor has to send it to the company'sregistrar so that the change of ownership can be registered. This process usually takes aroundthree to four months and is rarely completed within the statutory framework of two months thusexposing the investor to opportunity cost of delay in transfer and to risk of loss in transit. Toovercome this, the normally accepted practice is to hold the securities in street names i.e. not toregister the change of ownership. However, if the investors miss a book closure the securities arenot good for delivery and the investor would also stand to lose his corporate entitlements.

Faster settlement cycle - The settlement cycle follow rolling settlement on T+2 basis i.e. thesettlement of trades will be on the 2nd working day from the trade day. This will enable faster turnover of stock and more liquidity with the investor.

Faster disbursement of non cash corporate benefits like rights, bonus, etc. - NSDL profor direct credit of non cash corporate entitlements to an investors account, thereby ensuringfaster disbursement and avoiding risk of loss of certificates in transit.

Reduction in brokerage by many brokers for trading in dematerialized securities Bro provide this benefit to investors as dealing in dematerialized securities reduces their back officecost of handling paper and also eliminates the risk of being the introducing broker.

Reduction in handling of huge volumes of paper Periodic status reports to investors on their holdings and transactions, leading to better contro Elimination of problems related to change of address of investor - In case of change of

address, investors are saved from undergoing the entire change procedure with each company orregistrar. Investors have to only inform their DP with all relevant documents and the requiredchanges are effected in the database of all the companies, where the investor is a registered holdof securities.

Elimination of problems related to transmission of demat shares - In case of dematerialiholdings, the process of transmission is more convenient as the transmission formalities for allsecurities held in a demat account can be completed by submitting documents to the DP whereasin case of physical securities the surviving joint holder(s)/legal heirs/nominee has to correspondindependently with each company in which shares are held.

Elimination of problems related to selling securities on behalf of a minor - A natural guis not required to take court approval for selling demat securities on behalf of a minor.

Ease in portfolio monitoring since statement of account gives a consolidated position of investments in all instruments.

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CDSL: Central Depository Services (India) Limited

A Depository facilitates holding of securities in the electronic form and enables securitiestransactions to be processed by book entry by a Depository Participant (DP), who as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financialinstitutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who isknown as beneficial owner (BO) has to open a demat account through any DP for dematerialization of his holdings and transferring securities.

The balances in the investors account recorded and maintained with CDSL can be obtainedthrough the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and transactions. The depository systemhas effectively eliminated paper-based certificates which were prone to be fake, forged,counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities.

CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading banks suchas State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank,Union Bank of India and Centurion Bank.

CDSL was set up with the objective of providing convenient, dependable and secure depositoryservices at affordable cost to all market participants. Some of the important milestones of CDSLsystem are:

CDSL received the certificate of commencement of business from SEBI in February,1999.

Honorable Union Finance Minister, Shri Yashwant Sinha flagged off the operations of CDSL on July 15, 1999.

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Settlement of trades in the demat mode through BOI Shareholding Limited, theclearing house of BSE, started in July 1999.

All leading stock exchanges like the National Stock Exchange, Calcutta Stock Exchange, Delhi Stock Exchange, The Stock Exchange, Ahmedabad, etc haveestablished connectivity with CDSL.

As at the end of Dec 2007, over 5000 issuers have admitted their securities (equities,

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bonds, debentures, and commercial papers), units of mutual funds, certificate of deposits etc. into the CDSL system.

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CDSL was promoted by BSE in association with Bank of India, Bank of Baroda, State Bank of India and HDFC Bank. BSE has been involved with this venture right from the inceptionand has contributed overwhelmingly to the fruition of the project. The initial capital of thecompany is Rs.104.50 crores. The list of shareholders with effect from 5th April, 2010 is asunder.

Sr.No.

Name of shareholders Value of holding(in Rupees Lacs)

% terms tototal equity

1 Bombay Stock Exchange Limited 4,025.46 38.52

2 Bank of India 1,000.00 9.57

3 Bank of Baroda 1,000.00 9.57

4 State Bank of India 1,000.00 9.57

5 HDFC Bank Limited 1,500.00 14.36

6 Standard Chartered Bank 750.00 7.18

7 Canara Bank 674.46 6.45

8 Union Bank of India 200.00 1.91

9 Bank of Maharashtra 200.00 1.91

10 The Calcutta Stock Exchange AssociationLimited

100.00 0.96

11 Others 0.08 --

TOTAL 10,450.00 100.00


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Dormant Account Monitoring: CDSL has in place a mechanism for monitoring dormantaccounts.Helpdesk:: DPs and investors can obtain clarifications and guidance from CDSL's prompt andcourteous helpline facility

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Wide DP Network:

CDSL has a wide network of DPs, operating from over 6000 sites, across the country, offering

convenience for an investor to select a DP based on his location.On-line DP Services:

The DPs are directly connected to CDSL thereby providing on-line and efficient depository service toinvestors.

Wide Spectrum of Securities Available for Demat:

The equity shares of almost all A, B1 & B2 group companies are available for dematerialization on

CDSL, consisting of Public (listed & unlisted) Limited and Private Limited companies. These securitiesinclude equities, bonds, units of mutual funds, Govt. securities, Commercial papers, Certificate of deposits; etc. Thus, an investor can hold almost all his securities in one account with CDSL. A BO canalso hold warehouse receipts pertaining to commodities, in a demat account. However, a separateaccount should be opened for holding warehouse receipts.

Competitive Fees Structure:

CDSL has kept its tariffs very competitive to provide affordable depository services to investors.

Internet Access:

A DP, which registers itself with CDSL for Internet access, can in turn provide demat accountt holderswith access to their account on the Internet.

Dependability:

On-line Information to Users: CDSL's system is built on centralized database architecture and tusenables DPs to provide on-line depository services with the latest status of the investor's account.

Convenient to DPs: The entire database of investors is stored centrally at CDSL. If there is any system-related issues at DPs end, the investor is not affected, as the entire data is available at CDSL.

Contingency Arrangements:CDSL has made provisions for contingency terminals, which enables a DPto update transactions, in case of any system related problems at the DP's office.

Meeting User's Requirements: Continuous updation of procedures and processes in tune with evolvingmarket practices is another hallmark of CDSL's services.


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Security:

Computer Systems: All data held at CDSL and is automatically mirrored at the Disaster Recoverysite and is also backed up and stored in fireproof cabinets at the main and disaster recovery site.

Unique BO Account Number:: Every BO in CDSL is allotted a unique account number, which

prevents any erroneous entry or transfer of securities. If the transferor's account number is wronglyentered, the transaction will not go through the CDSL system, unless corrected.

Data Security: All data and communications between CDSL and its users is encrypted to ensure itssecurity and integrity.

Claims on DP: If any DP of CDSL goes into liquidation, the creditors of the DP will have no accessto the holdings of the BO.

Insurance Cover: CDSL has an insurance cover in the unlikely event of loss to a BO due to thenegligence of CDSL or its DPs.

Technology:

SoftwareThe software is developed and supported by CMC Ltd., who have also developed the BOLTsystem for BSE and Indian Railway Reservation System. The software is a modified version of the banking software-TC4 developed by a subsidiary of CMC Ltd. (in USA), which is currently

being used by several banks worldwide. The software has been customized to suit therequirement of CDSL.

HardwareThe server infra structure is procured from Hewlett Packard Company. HP 9000 (64 Bit RISC

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architecture) Enterprise server system Model is powered by mission critical HP UNIX operatingsystem. Which is proven for Reliability, Scalability and High Availability These systems arehighly scalable and provide main frame class Reliability and Robustness.This system is connected to one of the most robust and secure storage systems in the world fromEMC, the world leader in products, services, and solutions for information storage and

management. CDSL has invested in an end-to-end fiber architecture storage system, whichcombines sixth-generation Fiber Channel 2Gb connectivity, non-disruptive capacity and performance scalability, multiple 2GHz processors, resulting in faster performance, continuousdata availability and data integrity. The EMC systems also provide the most advanced softwarecapabilities, including full and incremental replication and anytime/any distance mirroring for

business continuity protection.

Database ArchitectureCDSL has gone in for a centralized database system. This centralized architecture providesdistinct advantages to the users. The initial set-up cost for Issuer Companies/their RTAs andDepository Participants is low. Information on investor's holdings is available to the DepositoryParticipant and the Issuer or its RTA immediately.

Disaster Recovery Site (DRS)From the business continuity angle, CDSL has in place, a robust system with multiple back-uplevels including a redundant fail-over cluster and a DRS, which has achieved "disaster-readyconnectivity" status. Consequently, in the event of a disaster at the main site, users connected tothe CDSL connectivity network viz. Depository Participants (DPs), Clearing Corporations andRegistrar & Transfer Agents (RTAs) can electronically connect to the DRS for carrying on day-to-day operations.

DEPOSITORY PARTICIPENT (DP)

In India , a Depository Participant (DP) is described as an agent of the depository. They are theintermediaries between the depository and the investors. The relationship between the DPs andthe depository is governed by an agreement made between the two under the Depositories Act. Ina strictly legal sense, a DP is an entity who is registered as such with SEBI under the provisionsof the SEBI Act. As per the provisions of this Act, a DP can offer depository-related servicesonly after obtaining a certificate of registration from SEBI.

SEBI (D&P) Regulations, 1996 prescribe a minimum net worth of Rs. 50 lakh for stockbrokers,R&T agents and non-banking finance companies (NBFC), for granting them a certificate of

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registration to act as DPs. If a stockbroker seeks to act as a DP in more than one depository, heshould comply with the specified net worth criterion separately for each such depository. Nominimum net worth criterion has been prescribed for other categories of DPs; however,depositories can fix a higher net worth criterion for their DPs.

Basics of Depository participant:

Depository is an institution or a kind of organization which holds securities with it, in whichtrading is done among shares, debentures, mutual funds, derivatives, F&O and commodities. Theintermediatories perform its actions in various kinds of securities at Depository on the behalf of its clients. And this intermediatories are called Depositorys Participants. There are basically twokinds of depositories in India one is National Securities Depository Limited (NSDL) and CentralDepository Service Limited (CDSL). Every Depository Participant (DP) needs to be registered

under this Depository before starting operation or trade in the market.

Benefits of Depository:

Bad delivery eliminated

Immediate transfer of shares

No stamp duty on such transfers

Elimination of risks those are normally associated in dealing with Physical certificates -loss / theft / mutilation due to careless handling / forgery / etc.

Reduced transaction cost

How Depository works:

Depository interacts with its clients / investors through its agents, called Depository

Participants normally known as DPs. For any investor / client, to avail the services provided by the Depository, has to open

Depository account, known as Demat A/c, with any of the DPs.

Demat Account Opening:

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A demat account is opened on the same lines as that of a Bank Account. Prescribed Accountopening forms are available with the DP, needs to be filled in. Standard Agreements are to besigned by the Client and the DP, which details the rights and obligations of both parties. Alongwith the form the client requires to attach Photographs of Account holder, attested copies of proof

of residence and proof of identity needs to be submitted along with the account opening form.

In case of corporate clients, additional attachments required are - true copy of the resolution for Demat a/c opening along with signatories to operate the account and true copy of theMemorandum and Articles of Association is to be attached.

Services Provided by Depository:

Dematerialization (usually known as demat) is converting physical certificates toelectronic form

Rematerialization, known as remat, is reverse of demat, i.e. getting physical certificatesfrom the electronic securities

Transfer of securities, change of beneficial ownership

Settlement of trades done on exchange connected to the Depository

Number of Depository in the Country:

1. National Securities Depository Ltd. - NSDL - Having 95 Cr. Demat A/c as on 31-03-2010 - 300 DPs in India

2. Central Depository Services Ltd. - CDSL - Having 65 laks Demat A/c as on 31-03-2010 - 500 DPs in India

Some Depository participant working in India:

1.India Infoline Ltd.

2. India bulls

3. ICICI direct.com

4. Share Khan

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6. Reliance Money

7. Bajaj Capital

8. Kotak Securities Ltd.

9. Infnity.com

10. Angel Broking

A brief Introduction of India Infoline

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Vision Statement:

To be the most respected company in the financial services space.

India Infoline Group:

The India Infoline group, comprising the holding company, IndiaIinfoline limited and its wholly-

owned subsidiaries, straddle the entire financial services space with offerings ranging from equityresearch, equities and derivatives trading, commodities trading, portfolio management services,mutual funds, life insurance, fixed deposits, GOI bonds and other small savings instruments toloan products and investment banking.IndiaInfoline also owns and manages the websites www.indiainfoline.com andwww.5paisa.com . The company has a network of over 2100 business locations (branches andsub-brokers) spread across more than 450 cities and towns. The group caters to approximately amillion customers.

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India Infoline Group subsidiaries:

India Infoline Media and Research Services Limited

India Infoline Commodities Limited India Infoline Marketing & Services India Infoline Investment Services Limited IIFL (Asia) Pte Limited

History:

India Infoline was founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) asan independent business research and information provider. India Infoline gradually evolved intoa one-stop financial services solutions provider. Its strong management team comprisescompetent and dedicated professionals

India Infoline is a pan-India financial services organization across 1,361 business locations and a presence in 428 cities. Its global footprint extends across geographies with offices in New York,Singapore and Dubai . It is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

India Infoline offer a wide range of services and products comprising broking (retail andinstitutional equities and commodities), wealth management, credit and finance, insurance, assetmanagement and investment banking.

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India Infoline is registered with the BSE and the NSE for securities trading, MCX, NCDEX andDGCX for commodities trading, CDSL and NSDL as depository participants. It is registered as aCategory I merchant banker and are a SEBI registered portfolio manager. It also received the FIIlicense in IIFL Inc. IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to carry out corporate advisory and dealing in securities operations. Two subsidiaries

India Infoline Investment Services and Moneyline Credit Limited are registered with RBIas non-deposit taking non-banking financial services companies. India infoline HousingFinance Ltd , the housing finance arm, is registered with the National Housing Bank.

Milestones:

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1. 1995:

Incorporated as an equity research and consulting firm with a client base that includedleading FIIs, banks, consulting firms and corporate.

2. 1999

Restructured the business model to embrace the internet; launchedarchives.indiainfoline.com mobilized capital from reputed private equity investors.

3. 2000

Commenced the distribution of personal financial products; launched online equity trading;entered life insurance distribution as a corporate agent. Acknowledged by Forbes as Best of the Web and ...must read for investors.

4. 2004

Acquired commodities broking license; launched Portfolio Management Service.

5. 2005

Listed on the Indian stock markets.

6. 2006

Acquired membership of DGCX; launched investment banking services.

7. 2007

Launched a proprietary trading platform; inducted an institutional equities team; formed aSingapore subsidiary; raised over USD 300 mn in the group; launched consumer finance

business under the Moneyline brand.

8. 2008

Launched wealth management services under the IIFL Wealth brand; set up India InfolinePrivate Equity fund; received the Insurance broking license from IRDA; received the venturecapital license; received in principle approval to sponsor a mutual fund; received Best

broker- India award from FinanceAsia; Most Improved Brokerage- India award from Asiamoney.

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9. 2009

Received registration for a housing finance company from the National Housing Bank;received Fastest growing Equity Broking House - Large firms in India by Dun &

Bradstreet.

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Structure:

India Infoline Media and Research Services Limited.

The content services represent a strong support that drives the broking, commodities, mutualfund and portfolio management services businesses. Revenue generation is through the sale of content to financial and media houses, Indian as well as global.

It undertakes equities research which is acknowledged by none other than Forbes as 'Best of theWeb' and 'a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson FirstCall and Internet Securities where India Infoline is amongst the most read Indian brokers.

India Infoline Commodities Limited.

India Infoline Commodities Pvt Limited is engaged in the business of commodities broking.Our experience in securities broking empowered us with the requisite skills and technologies toallow us offer commodities broking as a contra-cyclical alternative to equities broking. We

enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges,and recently acquired membership of DGCX. We have a multi-channel delivery model, makingit among the select few to offer online as well as offline trading facilities.

India Infoline Marketing & Services

India Infoline Marketing and Services Limited is the holding company of India InfolineInsurance Services Limited and India Infoline Insurance Brokers Limited.

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(a) India Infoline Insurance Services Limited is a registered Corporate Agent with the InsuranceRegulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICIPrudential Life Insurance Co Limited, which is India's largest private Life Insurance Company.India Infoline was the first corporate agent to get licensed by IRDA in early 2001.

(b) India Infoline Insurance Brokers Limited is a newly formed subsidiary which will carry outthe business of Insurance broking. We have applied to IRDA for the insurance broking licenceand the clearance for the same is awaited. Post the grant of license, we propose to alsocommence the general insurance distribution business.

India Infoline Investment Services Limited

Consolidated shareholdings of all the subsidiary companies engaged in loans and financingactivities under one subsidiary. Recently, Orient Global, a Singapore-based investmentinstitution invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services.

This will help focused expansion and capital raising in the said subsidiaries for various lending businesses like loans against securities, SME financing, distribution of retail loan products,consumer finance business and housing finance business. India Infoline Investment ServicesPrivate Limited consists of the following step-down subsidiaries.

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

(b) Moneyline Credit Limited (consumer finance)

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

IIFL (Asia) Pte LimitedIIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated in Singaporeto pursue financial sector activities in other Asian markets. Further to obtaining the necessaryregulatory approvals, the company has been initially capitalized at 1 million Singapore dollars.

IIFL Trader Terminal

Trader Terminal is almost a substitute for NSE NEAT terminal and VSAT. In fact, it has manymore powerful features that only a premium trader can appreciate. Target customer segments are

It is for dedicated day traders, who churn their portfolio on minor movements in themarket, sometimes several times a day. Their rapid and high volume trading requires a

powerful interface for lightening fast order execution. High Net worth Individuals with large and active equities portfolio who need to monitor

and action swiftly.

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Large corporate or trusts who have dedicated staff to monitor, analyze and shuffle their portfolios

Trader Terminal features

Trade execution in a fraction of a second! Live streaming quotes. Price watch on any number of scrips. Intraday charts, updated live, tick-by-tick. Live margin, position, marked to market profit & loss report. The Lowest Brokerage on the face of the earth! Set any number of price alerts on any number of scrips. Flexibility to customize screen layout and setting. Facility to customize any number of portfolios & watchlists. Facility to cancel all pending orders at one click. Facility to square off all transactions at one click. Top Gainers, Top Losers, Most Active, updated live. Index information; index chart, index stock information live. Market depth, i.e. Best 5 bids and offers, updated live for all scrips Instant trade confirmation. Online access to both accounts and DP. Live updated Order and Trade Book. Details of pending executed and rejected orders. Online access to Customer Service. 128 - Bit super safe encryption. Facility to place orders on the phone in all major cities. Facility to place after market orders Online fund transfer facility from leading Banks Online intra-day technical calls. Exhaustive database of over 5000 companies Historical charts and technical analysis tools. India Infoline's world - acclaimed news service and research. Lots more Last but not the least, ideas that help you make money!

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IIFL Trader Terminal Interface:

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sip fina 4 infolinel

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