PROJECT ONOPPORTUNITIES AND IMPEDIMENTS OFINDIAN STOCK MARKET

POST GRADUATE PROGRAMME IN MANAGEMENT 2011-2013

PROJECT GUIDE:
MRS. RANJANA SINGH

SUBMITTED BY:
MEGHA KHATOR ENROLLMENT NO.-010110070 BATCH-10
1

ACKNOWLEDGEMENT
My deep sense of gratitude to MAX PLAN WEALTH SECURITIES LTD. for their guidance and supervision as well as for providing necessary information regarding the project and their support me in completing the project. I am highly indebted to my college GLOBSYN BUSINESS SCHOOL, whohas provided me the opportunity of doing SIP in the above-mentioned organization. I take this opportunity to express my deepest thanks to my project guide Mrs. Ranjana Singh who helped me at various stages in my project. She helped me with data and information required to complete my project successfully. I acknowledge my thanks and appreciation to my college mentor Prof. Krishnendu Ghosh, for guiding and correcting various documents of mine with attention and care. I am also thankful to my parents and friends who helped me willingly at every moment in completing the project.

Thanking you MEGHA KHATOR BATCH-10 ENROLLMENT NO.-010110070

APPROVAL OF THE GUIDE

This is to certify that the contents of this report entitled Opportunity and Impediments of Indian Stock Market submitted by MeghaKhator student of Globsyn Business School is the original analysis and findings carried out by her under my guidance and supervision. This report has not been submitted partly or fully to any other institute for award of any degree or diploma.

_______________________ Project Guide MRS. Ranjana SinghProf. KrishnenduGhosh Assistant Vice President(DP) Max Planwealth Securities Ltd.Globsyn Business School

_____________________ Project Mentor Assistant Professor

DECLARATION OF THE INTERN

This project entitled study on Opportunities and Impediments of Indian Stock Market is submitted in partial fulfillment of the requirement for the award of degree of PGPM from Globsyn Business School, Kolkata. This research work and the survey work is done by Megha Khator only for this organization and the questionnaire, survey work and project work will not be submitted for any other degree. The assistance and help during the execution of the project has been fully acknowledged.

MEGHA KHATOR ENROLLMENT NO.-010110070 BATCH-10

TABLE OF CONTENTS

SERIAL NO.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. Company Profile Introduction Types of Stock Market

CONTENT

PAGE NO.
8-9 10 11-13 14-15 16-18 19 20-21 22 23 24 25-26 27 28 29 30-31 32 33-37 38 39 40

Indian Financial Market Structure Exchanges Depositories Forward Market Commission Types of Trade Advantages and Disadvantages of Intraday Trading Advantages and Disadvantages of Delivery Trading Derivative Market Settlement Cycle SWOT Analysis of MPSL Research Methodology Summary of the Report Observation Analysis and Findings Limitations Recommendations and Suggestions Opportunities and Impediments Conclusion Bibliography Appendix Annexure

41
42 43 44-45

LIST OF FIGURES
SERIAL NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.
FIGURE 1 FIGURE 2 FIGURE 3 FIGURE 4 FIGURE 5 FIGURE 6 FIGURE 7 FIGURE 8 FIGURE 9 FIGURE 10 FIGURE 11 FIGURE 12 FIGURE 13 FIGURE 14 FIGURE 15 FIGURE 16 FIGURE 17 FIGURE 18

FIGURE NO.

PAGE NO.
11 13

14
22 23 23 24 24 33 33 34 34 35 35 36 36 37 37

LIST OF TABLE
SERIAL NO. 1. TABLE 1 TABLE NO. PAGE NO. 27

ABSTRACT
One of the most important policy decisions taken was the financial liberalization of equity markets across the world. Equity market liberalization gives foreign investors the opportunity to invest in domestic equity markets and domestic investors the right to transact in foreign equity market. The main purpose is to investigate the issue of stock market integration in India in the light of financial liberalization. The increasing trend of financial market should obviously have impact on domestic stock market. The relaxation from all types of economic barriers and improvement in information technologies are, among others, expected to induce stronger stock market. As well developed stock market will significantly contribute to stock market. Forewords: Types of stock market, Indian financial market structure, exchanges, depositories, forward market commission, types of trade, derivative market.

1.COMPANY PROFILE
Max Plan wealth Securities Ltd is a Stock Broking Company, a member of National Stock Exchange and Bombay Stock Exchange, amidst client centric philosophy with a vision of long term value addition and in line with our presence across the nation. At MPSL, we understand that not all investors are the same and that there is a 'world of investors' and a 'world of investments'. What is right for one is not necessarily right for the other. At MPSL, you choose the type of services and the products that best suits your individual style and investment goals. No matter where you are on your personal investment journey an experienced investor or a beginner to the financial market, we can provide you with the tools, information and support to make your investment goals possible.

Vision and Mission

Vision To emerge as the most preferred financial powerhouse by providing excellent personalized services and a range of customized products, applying best business practices with global standards of technology, expertise, knowledge, solutions and serving through a global network. Mission To be recognized and respected as the preferred choice of investors and clients for entire gamut of financial services by helping them realizing their dreams of planning, creating and preserving wealth; as preferred destination of employees for their career development by providing them a conducive environment of professional growth and knowledge enhancement; and as valuable business venture for shareholders and partners by ensuring optimum returns on their investment.

What MPSL offer

Broking - Equity, Derivatives, Currencies, Internet Trading, Tele Trade, Mobile Trade, Research and Advisory , Mutual Fund , IPO , Fixed Deposit , Bonds , Life Insurance , General Insurance

Business development support

Full support from HO level to all our business partners Brand promotion activities in print and media Periodic seminars and client meets Unique schemes of pre-paid products- choose your own brokerage plan which suits you Regular flow of research report from our Research Team Separate advisory desk Periodic contests & special promotional schemes for different products Dedicated team at regional and HO level for franchisee network

MPSL advantage to BUSINESS ASSOCIATES

All segments through single trading platform Fully automated online back office, risk management system Wide product range Research calls and flash news on a real time basis Attractive revenue sharing model 24/7 online client service Centralized business development and marketing support Extensive support for expansion plan Low cost of activation and operation

Source: www.maxplanwealth.com

2.INTRODUCTION ABOUT STOCK MARKET

A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price. These stocksare listed on exchanges like National Stock Exchange and Bombay Stock Exchange from where people can buy and sell their share. There are certain types of people who feel that investing in stock market is a form of gambling; they are certain that if we invest then we will end up losing our entire money Often friends or family members who had unfortunately experienced such situations drive this fear. In fact, there are certain types of people who know that they will invest in the stock market on long run basis and will take their money with good rate of return. Some investors feel like taking help from financial advisor before investing their money. They buy only those share which there advisor ask them to buy. These types of investors are fully dependent on the financial advisor, they themselves does not have much knowledge about the market. Mainly there are two types of stock market that are primary stock market and secondary stock market. These types of market are discussed further in the report.

10

3.TYPES OF STOCK MARKET

Primary Market Secondary Market

Auction Market

Dealers Market

FIGURE-1, Types of stock market

Primary Market
The primary market is that part of stock market that deals with the issuances of new securities in the form of shares or stocks. Any private or public sector institutions and government companies can obtain funding through the stock issue is called IPO (Initial Public Offering). IPO is issued with the help of broking firms. The process of selling new issues to investor is called underwriting of shares. The broking firms earn a commission, which is built into the price of the security offering. Primary market creates long-term instruments through which corporate entities or organization can borrow capital. Features of primary market are as follows The primary market is the market where the securities are sold for the first time. Therefore, it is called the Initial Public Offering. In a primary issue, the company issues the securities directly to the investors. The company receives money from the investors, and they can use this fund to increase their business. The primary market performs the crucial function of facilitating capital formation in the economy. The shares sold to the investors can be hold by them as a purpose of long-term investment. 11

Secondary market
In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be liquid (originally, the only way to create this liquidity was for investors and speculators to meet at a fixed place regularly; this is how stock exchanges originated). As a rule, the greater the number of investors that participate in a given marketplace, and the greater the centralization of that marketplace, the more liquid the market. For example, if you go to buy Microsoft stock, you are dealing only with another investor who owns shares in Microsoft. Microsoft (the company) is in no way involved with the transaction. Fundamentally, secondary markets mesh the investor's preference for liquidity (i.e., the investor's desire not to tie up his or her money for a long period, in case the investor needs it to deal with unforeseen circumstances) with the capital user's preference to be able to use the capital for an extended period. The secondary stock market can be further broken down into two specialized categories: auction market and dealer market.

Auction Market
In the auction market, all individuals and institutions wishing to trade securities will congregate into one area and announce the prices at which they are willing to buy and sell (bid and ask offers). The idea is that an efficient market should prevail by bringing together all parties and having them publicly declares their prices. Thus, theoretically, the best price of a good need not be searched for because the convergence of buyers and sellers will cause mutually agreeable prices to emerge.

Dealers Market
A dealer market does not require parties to converge. Individuals or institutions will specialize in specific securities or commodities, then buy, and sell according to the demand of the stock market. The rationale behind a dealer market is convenience: investors are not required to wait for other participants before a transaction can occur. Thus, many over-the-counter markets are classified as dealer markets since the demand and supply for particular stocks is not always enough to meet the requirements of different investors, allowing the specialist to intervene by buying and selling out of personal inventories

12

Primary Market V/S Secondary Market

Primary Market
Company

Secondary Market
Listed shares

Issuance of shares

BSE and NSE

All class of investors

All class of investors

FIGURE-2, Comparison between primary market and secondary market

13

4.INDIAN FINANCIAL MARKET STRUCTURE

SEBI FMC

Exchanges

Depositories

Commodities Exchange

NSE

BSE

CDSL

NSDL

MCX

NCDEX

FIGURE-3, Market structure

SEBI:
The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was formed on 12th April,1992 by the jurisdiction of Government of India. Its headquarter is located at Mumbai, Maharashtra with the employee strength of 525(as in 2009). Source: http://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_India

Purpose and Role of SEBI:

To the issuers SEBI aims to provide a market place in which they can confidently look forward, to raise finances. Companies can raise money in a very easy and efficient way. . To the investors it provides protection of their rights and interest through accurate and authentic information and disclosure of information on continuous basis. To the intermediaries it offers a competitive, professionalized and expanding market with adequate and efficient infrastructure to render better services to their investors, issuers and clients. 14

Objectives:
To regulate stock exchanges and the securities to promote their orderly functioning To guide, educate and protect the rights and interests of individual investors. To prevent trading malpractices and achieve a balance between self-regulation by the securities and its statutory regulation. To regulate and develop a code of conduct and fair practices by brokers, merchant bankers with a view to make them competitive and professional.

FUNCTIONS OF SEBI: REGULATORY FUNCTIONS:

SEBI does registration of brokers and sub brokers and other players in the market. SEBI restricts prohibition of fraudulent and unfair trade practices. SEBI charges penalties for controlling insider trading and takeover bids.

DEVELOPMENTAL FUNCTIONS:
It provides education to its brokers. It also conducts training of brokers and sub-brokers. SEBI encourages fair practices and imposes penalties on unfair means. SEBI conducts research publishes information useful to all market participants on its website.

15

5. EXCHANGES:
There are mainly two types of exchanges in India, i.e., NSE and BSE

About NSE
The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualization of stock exchange governance, screen based trading, compression of settlement cycles, dematerialization and electronic transfer of securities, securities lending and borrowing, professionalization of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.

Purpose
Committed to improve the financial well-being of people.

Vision
To continue to be a leader, establish global presence; facilitate the financial well-being of people.

Values
NSE is committed to the following core values: Integrity Customer focused culture Trust, respect and care for the individual Passion for excellence Teamwork 16

Our Logo

The logo of the NSE symbolizes a single nationwide securities trading facility ensuring equal and fair access to investors, trading members and issuers all over the country. The initials of the Exchange viz., N, S and E have been etched on the logo and are distinctly visible. The logo symbolizes use of state of the art information technology and satellite connectivity to bring about the change within the securities industry. The logo symbolizes vibrancy and unleashing of creative energy to constantly bring about change through innovation.

Our Products Equities:

Equities Indices Mutual Funds Exchange Traded Funds Initial Public Offerings Security Lending and Borrowing Scheme

Derivatives
Equity Derivatives Currency Derivatives Interest Rate Futures

Debt
Retail Debt Market Wholesale Debt Market Corporate Bonds

17

About BSE
BSE Limited is the oldest stock exchange in Asia what is now popularly known as the BSE was established as "The Native Share & Stock Brokers' Association" in 1875. Over the past 135 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient capital raising platform. Today, BSE is the world's number 1 exchange in the world in terms of the number of listed companies (over 4900). It is the world's 5th most active in terms of number of transactions handled through its electronic trading system. And it is in the top ten of global exchanges in terms of the market capitalization of its listed companies (as of December 31, 2009). The companies listed on BSE command a total market capitalization of USD Trillion 1.28 as of Feb, 2010.

BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certifications. It is also the first Exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-Line trading System (BOLT). Presently, we are ISO 27001:2005 certified, which is a ISO version of BS 7799 for Information Security. The BSE Index, SENSEX, is India's first and most popular Stock Market benchmark index. Exchange traded funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. Futures and options on the index are also traded at BSE.

Vision
Emerge as the premier Indian stock exchange by establishing global benchmarks.

18

6. DEPOSITORIES
Depository is an institution or a kind of organization which holds securities with it, in which trading is done among shares, debentures, mutual funds, derivatives, F&O and commodities. The intermediaries perform their actions in variety of securities at Depository on the behalf of their clients. These intermediaries are known as Depositories Participants. Fundamentally, there are two sorts of depositories in India. One is the National Securities Depository Limited (NSDL) and the other is the Central Depository Service (India) Limited(CDSL). Every Depository Participant(DP) needs to be registered under this Depository before it begins its operation or trade in the market.

NSDL
National Depository of India(NSDL)- NSDL, the first largest depository in India, established in August 1996 and promoted by institutions of national stature responsible for economic development of the country. It has established a national infrastructure of international standards that handles most of the securities held and settled in dematerialized form in the Indian Capital Market. NSDL is promoted by Industrial Development Bank of India Limited- the largest development bank of India, Unit Trust of India- the largest mutual fund in India and National Stock Exchange of India Limited.(NSE) the largest Stock Exchange In India.

CDSL
Central Depository Services Limited (CDSL) -is the second Indian central securities depository based in Mumbai. It was founded in the year 1999. Its main function is the holding securities either in certificated or uncertificated (dematerialized) form, to enable book entry transfer of securities.
Bombay Stock Exchange Limited (BSE) promoted CDSLjointly

with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Union Bank of India and Centurion Bank.

19

7. FORWARD MARKET COMMISSION

FORWARD MARKET COMMISSION - FMC is the chief regulator of forwards and futures market in India.The headquarter is located in Mumbai, Maharashtra. The parent agency of FMC is Ministry of Consumer Affairs, Food and Public Distribution. The commission allows commodity trading n twenty two exchanges.

Commodity Market
The commodity markets are emerging trend growing at a great pace in India after the stock markets. These commodity markets are especially made to meet the increasing needs of people and to supply them with everything under one roof. The main advantage of commodity market is that they provide every item that is a part of our daily requirements and is often needed. For instance, these commodity markets have cements, chemicals, food items like grains, cereals, fruits, etc. and other items like bullion, jute, iron, steel, etc. these items are available and traded in these markets in India on daily basis and are easily accessible.

The purchase and sale of these commodities is enabled by national exchanges present in India which are as follows-

1. Multi-Commodity Exchange of India Ltd. (MCX) 2. National Commodities and Derivatives Exchange Ltd. (NCDEX)

Multi Commodity Exchange (MCX) - MCX is a state of the art electronic commodity
future exchange. The Demutualized Exchange has permanent recognition from the Government of India to facilitate online trading and clearing and settlement operations for commodity futures across the country. It was the first exchange in India to initiate the evening session to synchronize with the trading hours of global exchanges in London, New York and other major international markets. It has started operations in November 2003, and as on March 31, 2012 MCX has the market share of 86% of the Indian commodity future market. MCX offers more than 40 commodities across various segments such as bullion, ferrous and non-ferrous metals, energy, and a number of agri-commodities on its platform. The exchange introduces standardized commodity future contracts on its platform. The exchange is the world 20

largest exchange in Silver and Gold, second largest in Natural Gas and third largest in Crude oil with respect to the number of future contract traded.

National Commodity and Derivatives Exchange Limited (NCDEX) - NCDEX is a

public limited company incorporated on April23, 2003 under the companies Act, 1956. It obtained its Certificate for Commencement of Business on May 9, 2003. It commenced its operation on December 15, 2003.the headquarter is located in Mumbai and offers facility to its members from the centers located throughout India. NCDEX is a professionally managed on line multi commodity exchange. The shareholders of NCDEX comprises of large national level institutions, large public sector banks and companies. It is the only commodity exchange in the country promoted by national level institutions. The unique percentage enables it to offer a bouquet of benefits, which are currently in short supply in the commodity market. The institutional promoters and shareholders of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nationwide reach, technology and risk management skills.

21

8. TYPES OF TRADE
In Cash Market In Derivative Market

Intraday

Delivery

Future

Option

FIGURE-4, Types of trade

Call

Put

CASH MARKET
Intraday Trading-Intraday Trading, also known as Day Trading, is the system where you take
a position on a stock and release that position before the end of that days trading session. Thereby making a profit or loss for yourself in that buy-sell or sell-buy activities, all in one day. Day trading can be a great way to make money all on your own. Its also a great way to lose all your money in one day if market falls down.

Delivery Trading- Delivery Trading is the system where you take a position on a stock and get
it transfer in your DEMAT account within trading plus two working days (T+2). The wholestockwill be transferred in your account after paying the full amount of the stocks to your broker.

22

9. ADVANTAGES AND DISADVANTAGES OF INTRADAY TRADINGIn day trading you can buy stocks without paying for the full price of the stocks. The market maker allow you pay only a part of the price to hold the shares. So, you can gain more by investing less.

In day trading you can always short sell the stocks. This is one benefit that can give you profit even when the price of the stock is sure to fall.

Advantages of intraday trading

The brokerage of intraday trading is always lower than the delivery trading.

In day trading you are getting the profit on the very day. So, your investment is for few hours only. Therefore, even if the stock prices rises a little your profit percentage is significant.

Figure-5. Advantages of intraday trading

Disadvantages of intraday trading

Time frame is the biggest disadvantage of intraday trading.You have to sell the stocks within a day. So, if the stock loses price you are sure to lose money.

Figure-6. Disadvantages of intraday trading

23

10. ADVANTAGES AND DISADVANTAGES OF DELIVERY TRADING

You can always hold a stock till it reaches the expected price

Advantages You can also benefit from split shares and bonus stocks that company announces.

The long term investment can always get you dividend

Figure-7. Advantages of delivery trading

In delivery trading you pay higher brokerage

Disadvantages

Your investment is always susceptible to market crashes, business cycle and other factors

For long term investment analysis of stock and its report is very important

Figure-8. Disadvantages of delivery trading 24

11. DERIVATIVE MARKET

Future Trading
One future contract is group of stocks (onelot) which has to be brought with certain expiry period and need to square off your position within that expiry period. It gets expires on the last Thursday of every month. The future contract can be bought for one month, for two month and maximum for three months expiry period. The lot size for future contract is decided by SEBI and it differs from stock to stock.

ADVANTAGES
In future trading client gets margin to buy their stock,i.e, they only have to pay only 1020% of the total amount of the share. It also gives you the facility of short selling your future stocks.

DISADVANTAGES
Limitations on holding-if you buy or sell a future contract then you have a limitation of period to square off your position before expiry date. Level of risk-Due to margin facility in future trading you may earn huge profit by investing fewer amounts but at the contrary you may also suffer huge lose. Limitations on stocks-yon are allowed doing future trading only on limited stocks, which are listed under Nifty.

Option Trading
An option is a derivative contract between a buyer and a seller, where one party (say FirstParty) gives to the other (say Second Party) the right, but not the obligation, to buy from (orSell to) the First Party the underlying asset on or before a specific day at an agreed-upon price.In return for granting the option, the party granting the option collects a payment from the other party. This payment collected is called the premium or price of the option. The right to buy or sell is held by the option buyer (also called the option holder); the party granting the right is the option seller or option writer. Unlike forwards and futures contracts, options require a cash payment (called the premium) upfront from the option buyer to the option seller. This payment is called option premium or option price. Options can be traded either on the stock exchange or in over the counter (OTC) markets. Options traded on the exchanges are backed by the Clearing Corporation thereby minimizing the risk arising due to default by the 25

counter parties involved. Options traded in the OTC market however are notbacked by the
Clearing Corporation.

There are two types of optionscall options and put optionswhich are explained below.

Call option
A call option is an option granting the right to the buyer of the option to buy the underlying asset on a specific day at an agreed upon price, but not the obligation to do so. It is the seller who grants this right to the buyer of the option. It may be noted that the person who has the right to buy the underlying asset is known as the buyer of the call option. The price at which the buyer has the right to buy the asset is agreed upon at the time of entering the contract. This price is known as the strike price of the contract (call option strike price in this case). Since the buyer of the call option has the right (but no obligation) to buy the underlying asset, he will exercise his right to buy the underlying asset if and only if the price of the underlying asset in the market is more than the strike price on or before the expiry date of the contract. The buyer of the call option does not have an obligation to buy if he does not want to.

Put option
A put option is a contract granting the right to the buyer of the option to sell the underlying asset on or before a specific day at an agreed upon price, but not the obligation to do so. It is the seller who grants this right to the buyer of the option. The person who has the right to sell the underlying asset is known as the buyer of the put option. The price at which the buyer has the right to sell the asset is agreed upon at the time of entering the contract. This price is known as the strike price of the contract (put option strike price in this case). Since the buyer of the put option has the right (but not the obligation) to sell the underlying asset, he will exercise his right to sell the underlying asset if and only if the price of the underlying asset in the market is less than the strike price on or before the expiry date of the contract. The buyer of the put option does not have the obligation to sell if he does not want to.

26

12. SETTLEMENT CYCLE

Trading Clearing Settlement

Activity Rolling Settlement Trading Custodial Confirmation Delivery Generation Securities and funds pay in Securities and funds pay out Valuation of shortages based on closing prices

Day T T+1 working days T+1 working days T+2 working days T+2 working days at T+1 closing prices T+3 working days T+4 working days T+5 working days T+6 working days T+8 working days T+9 working days

Post Settlement

Auction Bad Delivery Reporting Auction Settlement Rectified bad delivery pay in and pay out Re-bad delivery reporting and pick up Close out of re-bad delivery and funds pay in and pay out TABLE-1, Settlement Cycle

27

13.SWOT ANALYSIS OF MPSL

STRENGTH
MPSL have moved to the rural areas of West Bengal where they can find more potential customers. MPSL have strong research team who assists the clients with market positions. MPSL have diversified product to meet the customers need. MPSL has pan-India presence

WEAKNESSES
There is a lackof advertisement andpromotionalactivities. There is no awareness in the market about MPSL.

OPPURTUNITIES
To set up branches in big cities To follow a strategy of maintaining a good customer relation so that it create good opportunity for the company to capture the market To create goodwill with the help of customer relation Target people who are rich, so that they can give us a good portfolio.

THREATS
There is a stiff competition in the market MPSL should not increase its brokerage and other charges Government and RBI policies triggers the market Increased competition of private firms

28

14.RESEARCH METHODOLOGY
RESEARCH OBJECTIVES
Primary Objective To analyze the awareness of MPSL. To study the financial behavior of the Investors. To find out the overall perception about the operation of stock market. To explore the mostly preferred area of investment.

DATA SOURCE
PRIMARY DATA The data is collected directly from the person in sample population. In this project research the collection of data is directly interviewing Investor. In the collection of the primary data, I have used survey method and use the questionnaire methods.

SURVEY METHOD
I have used survey method for the collection of the necessary data. Different types of the survey are given below, Personal interview. Telephonic interview. Mail questionnaires.

SAMPLING FRAME
Sampling size: 120 Research area: Kolkata

Types of Sampling: Random sampling Stratified sampling

29

15.SUMMARY OF THE REPORT

PARTICULARS Demographic Population - Male - Female Age Group - 20 to 30 - 31 to 40 - 41 to 50 - 51 and above Occupation - Businessman - Homemaker - Retired -Salaried person Income/year -Below 1lakh - Above 1 lakh - 3 lakh - Above 3 lakh 5 lakh - Above 5 lakh 10 lakh - Above 10 lakh Type of Investment - Bank - Equity - Mutual Fund - Post Office - Commodities - Currency - Bonds - Insurance - Derivatives

NUMBER OF RESPONDENT 83 37 15 44 37 24 45 21 5 49 21 12 46 34 7 56 67 20 9 15 12 3 10 11

PERCENTAGE OF RESPONDENT 69% 31% 12.5% 36.67% 30.83% 20% 37.5% 17.5% 4.17% 40.83% 17.5% 10% 38.34% 28.33% 5.83% 27.58% 33% 9.85% 4.44% 7.38% 5.92% 1.48% 4.93% 5.42%

30

PARTICULARS Parameters for investing - Brokers Advice - Personal Views - Market Trend - Technical Analyst Report Facility availed by investors - Online Trading - Offline Trading - Mobile Trading Facility that attract investors - Service - Brand Name - Brokerage Awareness of MPSL - Yes - No

NUMBER OF RESPONDENT 44 49 23 18=134 40 59 10=109 49 22 35=106 26 94

PERCENTAGE OF RESPONDENT 32.84% 36.57% 17.16% 13.43% 36.70% 54.13% 9.17% 46.23% 20.75% 33.02% 21.67% 78.33%

31

16. OBSERVATION
Out of 120 demographic population 83 of them are male which is 69% of the population and 37 of them are female which is 31% of the population. In my survey out of the 120 sample size, I found that maximum number of investor belong to age group 31-40years which constitute 44 out of 120 with a percentage of 36.67% and the least number of investor is between age group of 20-30 years which constitute 15 out of 120 with a percentage of 12.5%. Out of 120 respondents, I found that the maximum number of investors is salaried person which is 40.83%, then comes the businessman who constitute to 37.5% of the population and least number of investor are the retired person who constitute only 4.17%. Out of 120 respondents, I found that the maximum number of investor belong to above 3 lakh - 5 lakh which is 38.34% and the least investor belong to the income of above 10 lakh which is 5.83%. In type of investment I had multiple options for the investor to choose so the total number of responses that I received while survey was 203, so the percentage calculation has done on 203. Here I found that maximum number of people want to invest in bank as they want fixed amount of return and their money is also secured. The number of responses that I received while survey is 134, this is due to multiple choice question. Here I found that maximum number of people invests based on their personal views and the least number of people depend on technical analyst report. The number of responses that I received while survey is 109 which is less than my sample size because the investors who invest in bank or post office does not require trading platform. Here I found that maximum number of people prefer offline trading which is 54.13% The number of responses that I received while survey is 106 which is less than my sample size because the investors who invest in post office does not require brand name and brokerage service for their investment. Here I found that maximum number of people prefer that they should get better service. Out of 120 respondents I found that awareness level of MPSL is very low, it is only 21.67%

32

17.ANALYSIS AND FINDINGS

Comparison between male and female

31%

69%

Female Male

FIGURE-9 Here, we find that the percentage of male investor is more than twice the percentage of female investor.

Investor categorized by age group

Number of Investor

50 40 30 20 10 0 20-30 31-40 41-50 51 and above

Age Group FIGURE-10 Here, we find that people between age group of 31-40years invest the most.

33

 Investor categorized by Occupation

Number of Investor

50 40 30 20 10 0 Businessman Homemaker Retired Salaried person

Occupation FIGURE-11

Here we find that maximum numbers of investors are salaried people and they like to invest in stock market because of its high rate of return whereas as compared to salaried person there are less number of investor who owns their business.

Investor categorized by income

50 40 Number of Investor 30 20 10 0 Below 1 Lakh 1 Lakh - 3 Lakh 3 Lakh - 5 Lakh Income/year 5 Lakh - 10 Lakh 10 Lakh and Above

FIGURE-12 Here we find that people having income range between 3lakh-5lakh invest the most. 34

 Depending on the range of income in which type of investment people invest the most
Number of Investor
30 25 20 15 10 5 0

Below 1 Lakh 1 Lakh - 3 Lakh 3 Lakh - 5 Lakh 5 Lakh - 10 Lakh

10 Lakh and Above

Type of Investment FIGURE-13 Here we find that people with income group of 3lakh-5lakh invest the most in equities in a hope of getting higher return during bull market.

In which broking house people invest the most

Number of Investor 25 20 15 10 5 0

Broking House

FIGURE-14 From our survey we found that maximum number of people invest in share khan 35

 Parameters based on which people invest

50 Number of Investor 40 30 20 10 0 Broker Advice Personal Views Market Trend Technical AnalystRreport

Parameters

FIGURE-15 Here we see most of the investors invest in stock market depending on their own view. Types of trading that a investor would opt for

60 50 40 30 20 10 0 Online Trading Offline Trading Types of Trading Mobile Trading

Number of Investors

FIGURE-16 Here maximum number of investor would prefer offline trading

36

 Factors that influence investors view while choosing any firm for share trading

50

Number of Investor

40 30 20 10 0 Service Brand Name Brokerage

Factor that Attract Investors FIGURE-17 Here we see that service provided by the company affects a person choice most.

How many people know about MPSL?

26, 22%

Yes 94, 78% No

FIGURE-18 Here we can find out that majority of the people does not know about MPSL. The percentage of known people is very less. 37

18.LIMITATIONS
The limitation of my research and finding are as follows The survey area was restricted only to Kolkata. People were bias to some of the questions while responding. Sample size is very small which is not enough to study the awareness of the consumers. It takes much time to fill up the questionnaire by going to the individuals place. Time constraint was the major limitation of the survey.

38

19.RECOMMENDATIONS AND SUGGESTIONS

Advertisement on television, newspaper and through andthrough distribution of leaflet would be the main source of attraction so the company must advertise its products heavily. There should be provision of complain suggestion boxes at every branch. The company should increase their number of branches in metro cities. They should also open branches in small cities and town, especially in Durgapur as there are many potential customers. Company website should have details about each and every the product, equities, commodities, currency, etc. Company should organize some promotional activities so that awareness for the firm will increase in the market.

39

20.OPPORTUNITIES AND IMPEDIMENTS OF INDIAN STOCK MARKET

Opportunity
Equity market aimed at strengthening institutions. A stock exchange tries to encourage good market practices, effective payment and good settlement mechanism. There is an increased demand for stock market instruments at both retail and institutional level for equities, commodities and currency. There is rapid technological advancement, including in the internet, e-trading and new software for traders. There are many potential customers in rural areas, so there should be awareness programme organized for those investors.

Impediments
In stock market new equity is governed by several complex rules, regulations and restrictions. The stock trading in secondary market sometimes lacks transparency. There is limit on the level of ownership and associated rights. Due to high volatility investors feel that their money is not secured. Stock market is very unpredictable so people fear of losing their money while investing in stock market.

40

21.CONCLUSION
Its good to have a general understanding of the structure of the stock market. If investor understand how shares of a company are brought to market and traded on various exchanges, then it will be helpful for the investors to earn money. Imagine if organized secondary markets did not existinvestors have to personally track down other investors to engage in buying/selling stock. The most vital problem spotted is of ignorance. Investors should be made aware ofthe benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Financial Advisors are the most preferred channel for the investment in stock market. Theycan change investors mind from one investment option to others. Many of investorsdirectly invest their money through brokers because they dont have knowledge about stock market but they want to earn money from this market.

41

22.BIBLIOGRAPHY

http://www.bseindia.com/about/introbse.asp http://www.bseindia.com/about/vision.asp http://www.cdslindia.com/abt_cdsl/introduction.htm http://www.maxplanwealth.com/AboutUs# http://www.mcxindia.com/aboutus/aboutus.htm https://nsdl.co.in/index.php# http://www.nseindia.com/global/content/about_us/about_us.htm http://www.sebi.gov.in/sebiweb/stpages/about_sebi.jsp http://en.wikipedia.org/wiki/BSE_SENSEX http://en.wikipedia.org/wiki/Primary_market http://en.wikipedia.org/wiki/Secondary_market http://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indi http://en.wikipedia.org/wiki/Stock_market http://en.wikipedia.org/wiki/S%26P_CNX_Nifty

42

23.APPENDIX

ALPHABET A B C Auction Market BSE Call Option CDSL Commodity Market D Dealer Market Delivery Trading Depository F I M N Future Trading Intraday Trading MCX NCDEX NSDL NSE O P Option Trading Primary Market Put Option S SEBI Secondary Market Settlement Cycle

WORD

PAGE NO. 12 18 26 19 20 12 22 19 25 22 20 21 19 16 25 11 26 14 12 27

43

24. ANNEXURE
QUESTIONNAIRE
I hereby declare that the questionnaire which is solely prepared by me for the project title Opportunities and Impediments of Indian Stock Market will be kept confidential throughout. This questionnaire is prepared to know the financial behavior of the investors investing in different segments of Indian Stock Market.

Name:

Contact No.:

Gender:

Female

Male

Age:

20-30

31-40

41-50

51 and above

Occupation: Businessman Retired personOthers

Homemaker

Salaried Person

Income/year: Below 1lakh 5lakh-10lakh

1lakh-3lakh

3lakh-5lakh Above 10lakh

Type of Investments: Bank Post OfficeInsurance Mutual Fund Equity er CommoditiesCurrencyDerivatives iv at iv Broking House: e Max Plan Wealth Securities er Kotak s ICICI Securities HDFC Securities er iv MotilalOswal Securities iv o atIndia Bulls at b iv iv al e e s s

Bonds

Religare er er SMC Global iv iv Others at at er 44 S iv iv iv S M e e at M s sC iv C G e

S S S S

IIFL er iv at iv e s Share khan S S M C G lo

S

er iv at iv e s

Based on what parameters do you invest? Market trend Technical Analyst Report Personal Views S S On Brokers advice S S S M M M S C C C M Which facility would G you C like to avail for trading? Offline Trading/ lo Tele Trading Online Trading G Mobile Trading G G b lo l l G G al b o o lo lo al b b b b Which facility of a broking firm affects you the most? al al a a Service of the company Brand Name Brokerage l l G G lo lo b b Have you heard about Max Plan Wealth Securities Ltd? al al Yes No
S

S S

S S

G lo b al G lo b al

G lo b If yes, then please specify: al

G lo b al

45