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Investors perception towards stock market with special reference to KARVY stock

broking Ltd.
Abstract:
The main aim of this study is to identify the investors perception towards stock market. The
size of the sample is 50 and the survey is done in Moradabad city only. The focus of the study
is to know the selection of the stocks and company, risk bare by investors, return perception
through stock market and to know the purpose to invest in stock market are. Various
statistical tools were used with help of MS-excel to describe the factors. Suggestion given in
the end will help the brokers and investors to play a safe game in the stock market.
Key words: Investors, stock, stock market & brokers.

Author: Rajat Panwan (TMG1402092)

Guide Name: Dr. P. K. Yadav

MBA 4th sem., TMIMT, TMU.

Designation: Faculty, Dept. of

9027439960

Management studies, TMIMT,

rajatpawan@gmail.com

TMU, Moradabad.

Introduction:
Capital market could be define as market which deals in medium and long term funds. It is
the borrowing, borrowed by company for medium and long term funds and provide facilities
for marketing and trading of securities. Supply and demand of the stocks in stock market is
affected by various factors. Investment decisions are quite complex as there are many factors
to be consider to select stock to invest in or trade into these factors act as core drivers for
investment decisions. Most of the investors fear of investing their money in stock market
because its the most volatile market, and unable to predict the future. Even after identifying
the blue-chip Company and securities, the trading practice are also complicated, making it a
difficult task for investors to trade in exchange and follow up on post trading formalities. So
it is very important to the investors and brokers who are new to market, the investment
decisions are influenced by few factors like share price, dividend announcement, growth
trend, companys reputation, current economic conditions and other advices given by
professionals.
Review of Literature:
Meenu Verma(2008) The author has observed that demographic profile and investor
personality can be the two determinants for making perception about the investor psychology.
The study revealed that real estate, followed by mutual funds are the most preferred choices
for investment among the investors. It was noted males prefer real estate, PPF and equity
shares as attractive avenues for investment, females prefer bank FD, insurance and bullions.
Abhijeet Chandra (2009) In this literature, the author has analyzed the impact of
competence of individual investors on their trading behavior in the stock market. Individual
investors take trading decisions based on their self-perceived competence that is influenced
by several factors. The study examined the factors that determine the competence level of
individual investors. Age, education, and income were found to be the most influencing
factors of the individual investors' competence in the stock market activities and trading
behavior.
Bodla, (2009) The author in his study observes that the individuals may be equal in all
aspects, but their financial planning needs are very different. It was studied that the modern
investor is a mature and adequately groomed person. The individual investors prefer less
risky investments. Blind investments are scarce, as a majority of investors are found to be
using some source and reference groups for taking decisions. Brokers who are in direct touch

with investors play a vital role in keeping the capital market lively by providing various
services to investors.
Objective:
To analyze investors perception towards the Indian stock market.
To know the preferred sector to invest in stock market.
Research Methodology:
Type

of

Research

Conclusive Research Design

Design
Source of Data

A Primary Data(survey method)

Research Equipment

Questionnaire

Sampling Technique

Non-Probability
Sampling Method.)

Sample Size

80 Samples

Area of Research

Moradabad

Technique

(Convenience

Analysis:
1. What percentage of income do you save?

11%

35%
Less than 10%

10%

21-30% 44%More than 30%

11-20%

2. What percentage of savings would you invest in stock market?

30%
0-10%

11-30%

6%
23%
31-50%

Above 50%

41%

3. For what purpose investment are made by you in stock market?

Saving

23%
Liquidity

16%
Capital appreciation
15%

46%
dividend

4. Time frame of investment preferred by you for making investment.

Short term (0-6 Months)

25%

36% term (6-12 Months)


Medium

39%
Long term (More than 1 year)

5. Maximum risk you are ready to take on your invested capital.

20%

0-10%

10-25%
48%

33%
Above 25%

6. Your general perception about the stock market on basis of return.

9%
31%
Very Poor

Poor

Average

12%

Good
26%

Very Poor

22%

7. Your general perception about the stock market on basis of Risk factor.
9%

19%

Very Poor

26%
Poor

15%

Average

Good
31%

Very Good

8. Your general perception about the stock market on basis of Savings point of view.

20%

Very Poor

26%
Poor

8%

13%

Average 34%
Good

Very Good

9. Before investing in stock market whose advice do you seek?


5%
Brokers

10%

26%
TV channels, Newspapers or Internet

Self- Analysis

38%

Colleague & Friends

21%
Financial consultant

10. Sector preferred for making investment.

Automobile

8%

Oil & gas10%

11%

13%

FMCG

10%
Cement

Banking

IT

Steel

6%
13%

9%
8%

Construction

Retail
14%

Infrastructure

11. Do you face difficulties while investing in stock market?

41%
Yes

12. If yes, what are the difficulties faced by you.

59%
No

22%
False information / rumors

High
24%brokerage

12%

Lack of funds
18%

Being
cheated by the brokers
24%

Lack of knowledge about the market

Findings:
Most of investor are from the age group of 36-40 because this age group want
to earn more so that they can fulfill the requirements of their family.
Most of investors save 11-20% part of their income because there is inflation
in the market it is difficult to survive in lower income.
Most of the investor invest their saving from 31 to 50% in stock market
because everyone want to play a safe game.
Most of the investor invest their money for capital appreciation and the least
for liquidity of their saving because they can invest in other assets for
liquidity.
Most of the investor prefer time period from 6 months to 1 year because they
evaluate their share value appreciation on the annual basis and change their
investment.
Most of investor dont want to bear risk they only prefer to bear risk from 10
to 25% on their investment.
Most of investor think that stock market gives the average return on their
investment because in stock fluctuate more quickly.
Most of the investor think there is average risk in investing in the stock market
because market gives return as well as loss on investment and fluctuates more
quickly.
Stock market can give return as well as investor have to bear loss on their
investment so they think that it has the average on the basis of saving.
Most of the investor invest on the advice of TV channels, Newspapers or
Internet because in recent years
Most of the investors, invest in oil & gas type of companies because these are
in conventional type of business and give good returns.

Most of investors, invest in stock market face several difficulties while


investing in stocks. Such as wrong information, high brokerage, lack of fund,
fraud by broker etc.
Most of the investors, faced false information and high brokerage like
difficulties.

Conclusion:
Running a successful stock brokerage firm requires complete understanding of the

peculiarities of the Indian Stock Market and also the psyche of the small investors
Brand plays important role for the investment. People invest in those Companies

where they have faith or they are well known with them.
Many difficulties are faced by investor while investing in Stock Market such as false
information / rumors, high brokerage, lack of funds, being cheated by the brokers,
lack of knowledge about the market etc.

Limitations:
This research reflects on individual customer in Moradabad only. So findings and
suggestions given on the basis of this research cannot be extrapolated to the entire

population.
Sample size is 100 which is very small that is not enough to study the awareness of

consumers of the country.


Time and money are critical factors limiting this study.

Suggestions:
There should be latest and easy availability of information to the public. Investors

should be educated about the market trends, price movements etc.


Before making any investment Financial Advisors should first enquire about the risk

tolerance of the investors/customers.


Make greater efforts with younger investors who show some interest in investing
should pay off.

Bibliography:

Kothari, C.R., Research Methodology, New Age Publications.

www.nseindia.com
www.investopedia.com

http://www.ijmra.us
Meenu Verma (2008), Wealth Management and Behavioral Finance: The Effect of
Demographics and Personality on Investment Choice among Indian Investors, The

Journal of Behavioural Finance, accessed on May 2011.


Abhijeet Chandra (2009), Individual Investors' Trading Behavior and the
Competence Effect The ICFAI University Journal of Behavioral Finance, Vol. 6, No.
1, pp. 56-70, March 2009