SYNOPSIS

INTRODUCTION OF STOCK MARKET & IPOS

WHAT IS MEANT BY A STOCK EXCHANGE? The Securities Contract (Regulation) Act, 1956 [SCRA] defines Stock Exchange as any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. Stock exchange could be a regional stock exchange whose area of operation/jurisdiction is specified at the time of its recognition or national exchanges, which are permitted to have nationwide trading since inception. NSE was incorporated as a national stock exchange. BRIEF HISTORY OF STOCK EXCHANGES Do you know that the world's foremost marketplace New York Stock Exchange (NYSE), started its trading under a tree (now known as 68 Wall Street) over 200 years ago? Similarly, India's premier stock exchange Bombay Stock Exchange (BSE) can also trace back its origin to as far as 125 years when it started as a voluntary non-profit making association. News on the stock market appears in different media every day. You hear about it any time it reaches a new high or a new low, and you also hear about it daily in statements like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks and stock markets are important. Stocks of public limited companies are bought and sold at a stock exchange. But what really are stock exchanges? Known also as the stock market or bourse, a stock exchange is an organized marketplace for securities (like stocks, bonds, options) featured by the centralization of supply and demand for the transaction of orders by member brokers, for institutional and individual investors. The exchange makes buying and selling easy. For example, you don't have to actually go to a stock exchange, say, BSE - you can contact a broker, who does business with the BSE, and he or she will buy or sell your stock on your behalf. Stock exchanges are the most perfect type of market for securities, whether of govt. and semi-govt. bodies and also for shares and debentures issued by the joint stock companies in the stock market, purchases and sale of shares are made in conditions of free competition. Govt. securities are traded outside the trading ring in the form of over the

counter sale or purchase. The bargains that are stuck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basis laws of demand and supply. The only stock exchanges operating in the 19th century were those of Bombay, set up in 1875 and Ahmadabad set up in 1894. These were organized as voluntary non-profit making association of brokers to regulate and protect their interests before the control on securities, trading became a central subject and the Bombay securities. Under this act, the Bombay stock exchange was recognized in 1927 and Ahmadabad and other centres, but they were not recognized. Soon after they become a central subject, central legislation was proposed and a committee, headed by A.D GORWALA went into the bill of securities contract, which became law in 1956. GROWTH OF STOCK EXCHANGES IN INDIA The stock market activities in India were relatively on a low key during the beginning of the decade of 80s mainly because of the allies regime till 947. Afterwards, the government of India concentrated more on administration and less on development and pursuit of the philosophy of public sector dominating the economy Stock exchanges were placed under the exclusive regulation of the government through proclamation in 1930 of the constitution of India. During the 1950s & 1960s Indian economy was dominated by the public sector, which was considerate as the major vehicle for economic and industrial development. This trend has changed since mid 80s with liberalization of government polices and greater freedom given to private sector. This policy of progressively deregulating the economy led to the emergence of stock markets as a major instrument of finance for industry and trade. India can boast of being one of the oldest stock market in Asia. The Bombay stock exchange (BSE) as founded in 1875, while the London stock exchange was established in 1773.

INTRODUCTION TO IPOS DEFINITION Initial Public Offering : The first sale of stock by a company to the public. Companies offering an IPO are sometimes new, young companies, or sometimes companies which have been around for many years but are finally deciding to go public. IPOs are often risky investments, but often have the potential for significant gains. IPOs are often used as a way for a young company to gain necessary market capital. The term "IPO" slipped into everyday speech during the tech bull market of the late 1990s. Back then, it seemed you couldn't go a day without hearing about a dozen new dot-com millionaires in Silicon Valley cashing in on their latest IPO. The phenomenon spawned the term "siliconaire," which described the dot-com entrepreneurs in their early 20s and 30s who suddenly found themselves living large due to IPOs from their Internet companies. So, what is an IPO anyway? How did everybody get so rich so fast? And, most importantly, is it possible for mere mortals like us to get in on an IPO? All these questions and more will be answered in this tutorial. Before we continue, we suggest you check out our stock basics tutorial as well as brokers and online trading if you don't have a solid understanding of stocks and how they trade. What is an IPO? Selling Stock IPO is an acronym for Initial Public Offering. This is the first sale of stock by a company to the public. A company can raise money by issuing either debt (bonds) or equity. If the company has never issued equity to the public, it's known as an IPO. Companies fall into two broad categories: private and public. A privately held company has fewer shareholders and its owners don't have to disclose much information about the company. Anybody can go out and incorporate a company: just put in some money, file the right legal documents, and follow the reporting rules of your jurisdiction. Most small businesses are privately held. But large companies can be private too. Did you know that IKEA, Domino's Pizza, and Hallmark Cards are all privately held? It usually isn't possible to buy shares in a private company. You can approach the owners about investing, but they're not obligated to sell you anything. Public companies, on the

other hand, have sold at least a portion of themselves to the public and trade on a stock exchange. This is why doing an IPO is also referred to as "going public." Public companies have thousands of shareholders and are subject to strict rules and regulations. They must have a board of directors and they must report financial information every quarter. In the United States, public companies report to the SEC. In other countries, public companies are overseen by governing bodies similar to the SEC. From an investor's standpoint, the most exciting thing about a public company is that the stock is traded in the open market, like any other commodity. If you have the cash, you can invest. The CEO could hate your guts, but there's nothing he or she could do to stop you from buying stock. Why Go Public? Going public raises cash, and usually a lot of it. Being publicly traded also opens many financial doors: Because of the increased scrutiny, public companies can usually get better rates when they issue debt. As long as there is market demand, a public company can always issue more stock. Thus, mergers and acquisitions are easier to do because stock can be issued as part of the deal. Trading in the open markets means liquidity. This makes it possible to implement things like employee stock ownership plans, which help to attract top talent. Being on a major stock exchange carries a considerable amount of prestige. In the past, only private companies with strong fundamentals could qualify for an IPO and it wasn't easy to get listed. The Internet boom changed all this. Firms no longer needed strong financials and a solid history to go public. Instead, IPOs were done by smaller startups seeking to expand their business. There's nothing wrong with wanting to expand, but most of these firms had never made a profit and didn't plan on being profitable any time soon. Founded on venture capital funding, they spent like Texans trying to generate enough excitement to make it to the market before burning through all their cash. In cases like this, companies might be suspected of doing an IPO just to make the founders rich. In VC talk, this is known as an exit strategy, implying that there's no desire to stick around and create value for shareholders. The IPO then becomes the end of the road rather than the beginning. How can this happen? Remember: an IPO is just selling stock. It's all about the sales job. If you can convince people to buy stock in your company, you can raise a lot of money. In our opinion, IPOs like this are extremely risky and should be avoided.

RESEARCH METHODOLOGY
RESEARCH:Research in common refers to a search for knowledge. We can also define research as a scientific and systematic search for pertinent information on a specific topic. D.Slesinger and M.Stephenson define research as the manipulation Of things, concepts or symbols for the purpose of generalizing to extend, Correct or verify knowledge, whether that the practice of an art. Research methodology is a way to systematically solve the research Problem. The steps adopted by the researcher to solve the research problem. 1. Descriptive Research Descriptive research is used to obtain information concerning the current status of the phenomena to describe what exists with respect to variables or conditions in a situation. Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, what, where, when and how. Although the data description is factual, accurate and systematic, the research cannot describe what caused a situation. 2. Analytical Research Analytical research takes descriptive research one stage further by seeking to explain the reasons behind a particular occurrence by discovering causal relationships. Once causal relationships have been discovered, the search then shifts to factors that can be changed (variables) in order to influence the chain of causality.

TYPE OF RESEARCH DESIGN: The research design is pre planned which is designed for analysis. And also the data was collected from structured and well thought out instruments. NATURE OF STUDY: The study was totally a fact-finding study. The main aim of this is to identify and evaluate the IPOs and its effects on stock market.

STUDY AREA: The study has been conducted in Emkay Global Financial Services Pvt. Ltd.., Mahabubnagar. DATA: Datas are the useful information or any forms of document designed in a systematic and standardize manner which are used for some further proceedings. One of the important tools for conducting marketing research is the availability of necessary and useful data. Some time the data are available readily in one form or the other and some time the data are collected afresh.

The sources of Data fall under two categories;

Source of Data

Primary Data

Secondary Data

1) Primary Data: The Primary data are those, which are collected afresh for the first Time, and thus happens to be original in character. With reference to This study, data is collected through Interview method the study also includes obtaining information from Knowledgeable persons. This interview is an informal or unstructured one with competent and articulate individuals, programmers and professionals of the organization. This interviews helps me to analyze the information in effective way. Collected from personal interview, collected under the guidance of Mr. Ramesh Babu, Manager in Emkay Global Financial Services Ltd., Mahabubnagar Branch.

2) Secondary Data: The Secondary data has been collected from 1. Annual reports of organization. 2. Internet 3. Broachers. 4. House magazines of the units. 5. Other reports of the units. 6. Books SAMPLE DESIGN: Sample unit: Sample unit is the organization the project was completed. Time and place: Project completed within a period of 45 days. Emkay Global Financial Services Ltd., Mahabubnagar Branch.

RESEARCH OBJECTIVES
Before embarking on actual research objectives of study, we have to know the main objective of this study is as fallows: The ultimate objective of the study is to determine the IPOs and its effect on Stock Market. This is assessed on the basis of the following criteria: Secondary Objectives: To find out the reasons behind fluctuating the stock market when IPOs issued. To know the objectives how IPOs issued by companies. To know the how investors minds will change. To understands the basic things of IPOs and stock market. To know about the reasons for issuing the IPOs.

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IMPORTANCE OF THE STUDY The prospectus includes very important information like the historical performance of the company in the previous years, the current performance of the company, the amount of shares that they are offering to the public, what they intend to do with the money after the IPO amongst other things. Any prudent investor will take his/her time to go through this information in order to make an informed decision on the amount of shares to take up or even if to participate in the offer. As an investor this are the things to look out for in the prospectus and Stock Markets concepts and how the indices of stock markets will effected by an IPOs. It consists with Companies IPOs performance in the pre-ceding years. This is important for you, to develop performance trends and therefore be able to predict its future performance- all factors held constant. This is mainly done by looking at the fluctuations in stock markets. NEED OF THE STUDY: This study is needed because now days every companies wants to extent their business and they wants to go for public. Every investor also looking towards different IPOs to invest in large amount in beginning to retain the more earnings in future. As a citizen or investor also, if any body wants to know about the economic position of companies as well as countries, every body must be have some basic knowledge about stock market and other related information. This study is needed because; To know the facts of stock market fluctuations during IPOs issues. To understand the IPOs and Stock market basics. To know about the stock market indices. To know about investors mindset during IPOs issues. To know why companies wants to go for public.

This project is needed because; all of the above options are never ended. As a financial student, as a investor, as a citizen and everybody must be having some knowledge to understand the things. So researchers project will cover the all things.

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SCOPE OF THE STUDY: The study with the prime objectives of IPOs and its effect on stock market. What are the main reasons behind stock market fluctuations during IPOs issues? This study advices the investor for future expectations towards market indices.
Researchers project will help full, to further study related to IPOs. Researchers project will help full, to all financial students to gain some

information and knowledge related to IPOs.

Researchers project will help full, to broking companies and other related

consultancies to understand the market situations during IPOs issued.

Researchers project will help full, to Investors to gain the knowledge of Stock

Market and fluctuations during IPOs issued. It will be helpful to take decision towards investments. Researchers project will help full, to every citizen to understand Stock Market fluctuations and IPO details and its effect on Stock Market. Researchers project will help full, every body to Know about the how stock market works.

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LIMITATIONS OF STUDY 1. The study was to be completed in a short time; the time factor put a considerable limit on the scope and the extensiveness of the study. 2. The unsupportive attitude of the respondents while responding to the questions, requiring the qualitative information may have affected the final findings and outcomes. 3. Because of the diversity of nature of respondents as well as due to conduction of the study on very small scale, the findings of the survey could not be generalized. 4. It was tried very harder to include the best of information from published and unpublished sources available on internet, books and magazines but some of the data required for the detailed study was not available free.