Project Report

On

“Comparative Analysis of Stock Brokers”

(Submitted in partial fulfillment for BBA, C.C.S University, Meerut)

Institute of Management Studies, Noida

Submitted To: - Submitted By:-

Zubair Ahmed Kunal Khandelwal

Roll No-169199153

Annexure-II

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 DECLARATION

I hereby declare that the project entitled “Comparative Analysis of Stock

Brokers” submitted for the BBA Degree is my original work and the project has
not formed the basis for the award of any degree, associate ship, fellowship or any
other similar titles.

Signature of the Student:

Place:
Date:

2
 CERTIFICATE

This is to certify that the project entitled “Comparative Analysis of Stock

Brokers” is the original work carried out by Kunal Khandelwal student of
BBA C.C.S. University, Meerut, during the year 2019, in partial fulfillment of
the requirements for the award of the Degree of BBA and that the project has not
formed the basis for the award previously of any degree, diploma, associate ship,
fellowship or any other similar title.

Signature of the Guide:

Place:
Date:

3
 Table of contents

CHAPTER NO. TITLE PAGE NO.

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 ACKNOWLEDGEMENT

Preservation, inspiration and motivation have always played a key role in the success of any
venture. In the present world of competition and success, training is like a bridge between
theoretical and practical working; willingly I prepared this particular Project. First of all I
would like to thank the supreme power, the almighty god, who is the one who has always
guided me to work on the right path of my life. I would like to thank Mr. Gurpreet Singh
Kohli for granting me permission to undertake the training in their esteemed organization. 8 I
express my sincere thanks to Mr. Harpreet Singh (Head of department), Mr. Harpal Singh
Saini (Co-ordinator) & others faculty members of M.B.A. department, for the valuable
suggestion and making this project a real successful. I also thanks to Mr. Atul Gauri (Team
Leader), Mr. Dharmender Kumar (software guide) for their time-to-time guidance and
support in completing the project. I also thank the other staff of SHAREKHAN who devoted
their valuable time by helping me to complete my project. Last but not least, my sincere
thanks to my parents and friends who directly or indirectly helped me to bring this project
into the final shape.

Kunal Khandelwal

DATE:-

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 PREFACE

“A good broker system must be able to cope with an extremely complex and dynamic
environment.”

The microstructure of the stock market in which brokers work is highly dynamic and volatile.
Many stocks are available to be bought and sold, each exhibiting its own patterns and
characteristics that are highly unpredictable. With so many options and considerations that
need to be taken into account, it is an extremely arduous task for a broker to investigate
aspects of the stock market and consistently provide effective advice to their clients. 6 Thus,
brokers perform their day-to-day tasks with the aid of a broker system. Such a system should
provide tools for interacting with exchanges and performing analysis. As a consequence,
these broker systems are quite large and complicated by themselves.

This research aims is to analysis Stock broker on the basis of their services, products,
growth, and their subsidiaries. Because Stockbrokers are one of the main participants in stock
exchanges worldwide, they often act as an agent for their clients, making trades on their
behalf. They also act as advisors, providing suggestions to their clients on what stocks to buy
and sell.

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 Executive Summary

There is growing competition between brokerage firms in post reform India. For investor it is
always difficult to decide which brokerage firm to choose.

Research was carried out to find which brokerage house people prefer and to figure out what
people prefer while investing in stock market. This study suggest that people are reluctant
while investing in stock and commodity market due to lack of knowledge Main purpose of
investment is returns and liquidity, commodity market is less preferred by investors due to
lack of awareness. The major findings of this study are that people are interested to invest in
stock market but they lack knowledge.

Through this report we were also able to understand, what are our Company’s (Sharekhan
Ltd.) positive and strong points, on the basis of which we come to know what can be the basis
of pitching to a potential client. We also gave suggestions to the company, what improvement
can be done to our product.

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 INTRODUCTION

In most industrialized countries, a substantial part of financial wealth is not managed directly
by savers, but through a financial intermediary, which implies the existence of an agency
contract between the investor (the principal) and a broker or portfolio manager (the agent).
Therefore, delegated brokerage management is arguably one of the most important agency
relationships intervening in the economy, with a possible impact on financial market and
economic developments at a macro level.
In most of the metros, people like to put their money in stock options instead of dumping it in
the bank-lockers. Now, this trend pick pace in small but fast developing cities like Chandigarh,
Gurgaon, Jaipur etc. My research is based on the residents of Chandigarh and its nearby areas.
As the per-capita-income of the city is on the higher side, so it is quite obvious that they want
to invest their money in profitable ventures. On the other hand, a number of brokerage houses
make sure the hassle free investment in stocks. Asset management firms allow 12 investors to
estimate both the expected risks and returns, as measured statistically.
There are mainly two types of Portfolio management strategies:-
1. Passive Portfolio Strategy
2. Active Portfolio Strategy

1. Passive Portfolio Strategy: A strategy that involves minimal expectation input, and instead
relies on diversification to match the performance of some market index. A passive strategy
assumes that the marketplace will reflect all available information in the price paid for
securities.
2. Active Portfolio Strategy: A strategy that uses available information and forecasting
techniques to seek a better performance than a portfolio that is simply diversified broadly.

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 BACKGROUND OF STOCK EXCHANGE IN INDIA

The emergence of stock market can be traced back to 1830. In Bombay, business passed in the
shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank,
the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta,
Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well
as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when the
Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also
quoted the prices of business ventures like the Bengal bonded warehouse, the Docking
Company and the storm tug company.
Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during
the share mania of 1860-65, the number of brokers increased considerably. By 1860, the
number of brokers was about 60 and during the exciting period of the American Civil war, their
number increased to about 200 to 250. The end of American Civil war brought disillusionment
and many failures and the brokers decreased in number and prosperity. It was in those
troublesome times between 1868 and 1875 that brokers organized an informal association and
finally as recited in the Indenture constituting the “Articles of Association of the Exchange”.
On or about 9th day of July,1875, a few native brokers doing brokerage business in shares and
stocks resolved upon forming in Bombay an association for protecting the character, status and
interest of native share and stock brokers and providing a hall or building for the use of the
members of such association.
As a meeting held in the broker’ Hall on the 5th day of February, 1887, it was resolved to
execute a formal deal 15 of association and to constitute the first managing committee and to
appoint the first trustees. Accordingly, the Articles of Association of the Exchange and the
Stock Exchange was formally established in Bombay on 3rd day of December, 1887. The
Association is now known as “The Stock Exchange”.
The entrance fee for new member was Re.1 and there were 318 members on the list, when the
exchange was constituted. The numbers of members increased to 333 in 1896, 362 in 1916and
478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in 1916
and Rs. 48,000 in 1920. At present there are 23 recognized stock exchanges with about 6000
stock brokers. Organization structure of stock exchange varies.
14 stock exchanges are organized as public limited companies, 6 as companies limited by
guarantee and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock
exchanges have been permanent recognition. Others have to seek recognition on annual basis.

These exchange do not work of its own, rather, these are run by some persons and with the help
of some persons and institution. All these are down as functionaries on stock exchange. These
are:-

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1. Stockbrokers
2. Sub-broker
3. Market makers
4. Portfolio consultants etc.

1.) Stockbrokers:-

Stock brokers are the members of stock exchanges. These are the persons who buy, sell
or deal in securities. A certificate of registration from SEBI is mandatory to act as a broker.
SEBI can impose certain 17 conditions while granting the certificate of registrations. It is
obligatory for the person to abide by the rules, regulations and the buy-law. Stock brokers
are commission broker, floor broker, arbitrageur etc.

Total no. of registered brokers as on Total no. of sub-brokers as on

31.03.2018 31.03.2018

15000 48000

2.) Sub-broker:-

A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He

assists the investors in buying, selling or dealing in securities through stockbroker. The
broker and sub-broker should enter into an agreement in which obligations of both should
be specified. Sub-broker must be registered SEBI for a dealing in securities. For getting
registered with SEBI, he must fulfill certain rules and regulation.

3.) Market Makers:-

Market maker is a designated specialist in the specified securities. They make both bid
and offer at the same time. A market maker has to abide by bye-laws, rules regulations of
the concerned stock exchange. He is exempt from the margin requirements. As per the
listing requirements, a company where the paid-up capital is Rs. 3 crore but not more than
Rs. 5 crore and having a commercial operation for less than 2 years should appoint a market
maker at the time of issue of securities.

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4.) Portfolio consultants:-

A combination of securities such as stocks, bonds and money market instruments is

collectively called as portfolio. Whereas the portfolio consultants are the persons, firms or
companies who advise, direct or undertake the management or administration of securities
or funds on behalf of their clients.

Partial fulfillment for degree of M.B.A. programmed, we received the opportunity from
Sharekhan Ltd. for our summer training project report. It is basically a stock brokering
company which deals in security and derivative market, Commodity market, mutual funds
and Insurance etc.

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 INTRODUCTION OF THE COMPANY

Sharekhan is one of the leading retail brokerage of Citi Venture which is running successfully
since 1922 in the country. Earlier it was the retail broking arm of the Mumbai-based SSKI
Group, which has over eight decades of experience in the stock broking business. Sharekhan
offers its customers a wide range of equity related services including trade execution on BSE,
NSE, Derivatives, depository services, online trading, investment advice etc.

Earlier with a legacy of more than 80 years in the stock markets, the SSKI group ventured
into institutional broking and corporate finance 18 years ago. SSKI is one of the leading
players in institutional broking and corporate finance activities. SSKI holds a sizeable portion
of the market in each of these segments. SSKI’s institutional broking arm accounts for 7% of
the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional
portfolio investment in the country. It has 60 institutional clients spread over India, Far East,
UK and US. Foreign Institutional Investors generate about 21 65% of the organization’s
revenue, with a daily turnover of over US$ 2 million.

The content-rich and research oriented portal has stood out among its contemporaries because
of its steadfast dedication to offering customers best-of-breed technology and superior market
information. The objective has been to let customers make informed decisions and to simplify
the process of investing in stocks.

WORK STRUCTURE OF SHAREKHAN

Sharekhan has always believed in investing in technology to build its business. The company
has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle,
Microsoft, Cambridge Technologies, Nexgenix, Vignette, VeriSign Financial Technologies
India Ltd, Spider Software Pvt. Ltd. to build its trading engine and content. The Citi Venture
holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors.

On April 17, 2002 Sharekhan launched Speed Trade and Trade Tiger, are net-based
executable application that emulates the broker terminals along with host of other 22
information relevant to the Day Traders. This was for the first time that a net-based trading
station of this caliber was offered to the traders. In the last six months SpeedTrade has
become a de facto standard for the Day Trading community over the net.

Sharekhan’s ground network includes over 700+ Share shops in 130+ cities in India.

The firm’s online trading and investment site - www.sharekhan.com - was launched on Feb 8,
2000. The site gives access to superior content and transaction facility to retail customers
across the country. Known for its jargon-free, investor friendly language and high quality
research, the site has a registered base of over 3 Lacs customers. The number of trading
members currently stands at over 7 Lacs. While online trading currently accounts for just
over 5 per cent of the daily trading in stocks in India, Sharekhan alone accounts for 27 per
cent of the volumes traded online.

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The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’ to its
credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 5 billion
in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav,
Essar, Hutchison, Planetasia, and Shopper’s Stop. 23 Finally, Sharekhan shifted hands and
Citi venture get holds on it.

PRODUCTS OFFERED BY SHAREKHAN:-

1. Equity Trading Platform (Online/Offline).

2. Commodities Trading Platform (Online/Offline).

3. Portfolio Management Service.

4. Mutual Fund Advisory and Distribution.

5. Insurance Distribution.

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 REASONS TO CHOOSE SHAREKHAN LIMITED

1. Experience:-
SSKI has more than eight decades of trust and credibility in the Indian stock market. In the
Asia Money broker's poll held recently, SSKI won the 'India's best broking house for 2004'
award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has
been 24 providing institutional-level research and broking services to individual investors.

2. Technology:-
With their online trading account one can buy and sell shares in an instant from any PC with
an internet connection. Customers get access to the powerful online trading tools that will
help them to take complete control over their investment in shares.

3. Accessibility:-
Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for
investors. These services are accessible through many centers across the country (Over 650
locations in 150 cities), over the Internet (through the website www.sharekhan.com) as well
as over the Voice Tool.

4. Knowledge:-
In a business where the right information at the right time can translate into direct profits,
investors get access to a wide range of information on the content-rich portal,
www.sharekhan.com. Investors will also get a useful set 25 of knowledge-based tools that
will empower them to take informed decisions.

5. Convenience:-
One can call Sharekhan’s Dial-N-Trade number to get investment advice and execute his/her
transactions. They have a dedicated call-center to provide this service via a Toll Free Number
1800-22-7500 & 39707500 from anywhere in India.

6. Customer Service:-
Its customer service team assist their customer for any help that they need relating to
transactions, billing, demat and other queries. Their customer service can be contacted via a
toll-free number, email or live chat on www.sharekhan.com.

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 7. Investment Advice:-
Sharekhan has dedicated research teams of more than 30 people for fundamental and
technical research. Their analysts constantly track the pulse of the market and provide timely
investment advice to customer in the form of daily research emails, online chat, printed
reports etc.

8. Benefits:-
• Free Depository A/c
• Instant Cash Transfer
• Multiple Bank Option.
• Secure Order by Voice Tool Dial-n-Trade.
• Automated Portfolio to keep track of the value of your actual purchases.
• 24x7 Voice Tool access to your trading account.
• Personalized Price and Account Alerts delivered instantly to your Mobile Phone & E-mail
address.
• Live Chat facility with Relationship Manager on Yahoo Messenger
• Special Personal Inbox for order and trade confirmations.
• On-line Customer Service via Web Chat.
• Enjoy Automated Portfolio.
• Buy or sell even single share
• Anytime Ordering

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Sharekhan offers the following products:-

CLASSIC ACCOUNT

This is a User Friendly Product which allows the client to trade through website
www.sharekhan.com and is suitable for the retail investors who is risk-averse and hence
prefers to invest in stocks or who do not trade too frequently.

Features:-

• Online trading account for investing in Equity and Derivatives via www.sharekhan.com

• Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.

• Integration of On-line trading, Saving Bank and Demat Account.

• Instant cash transfer facility against purchase & sale of shares.

• Competitive transaction charges.

• Instant order and trade confirmation by E-mail.

• Streaming Quotes (Cash & Derivatives).

• Personalized market watch.

• Single screen interface for Cash and derivatives and more.

• Provision to enter price trigger and view the same online in market watch.

SPEEDTRADE
SPEEDTRADE is an internet-based software application that enables you to buy and sell in
an instant. It is ideal for active traders and jobbers who transact frequently during day’s
session to capitalize on intra-day price movement.

Features:-

• Instant order Execution and Confirmation.

• Single screen trading terminal for NSE Cash, NSE F&O & BSE.

• Technical Studies.

• Multiple Charting.

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• Real-time streaming quotes, tic-by-tic charts.

• Market summary (Cost traded scrip, highest clue etc.)

• Hot keys similar to broker’s terminal.

• Alerts and reminders.

• Back-up facility to place trades on Direct Phone lines.

• Live market debts.

DIAL-N-TRADE

Along with enabling access for trade online, the CLASSIC and SPEEDTRADE ACCOUNT
also gives Dial-n-trade services. With this service, one can dial sharekhan’s dedicated phone
lines 1-800-22-7500, 3970-7500. Beside this, Relationship Managers are always available on
Office Phone and Mobile to resolve customer queries.

ShareMobile

Sharekhan had introduced ShareMobile, A mobile based software where one can watch Stock
Prices, Intra Day Charts, Research & Advice and Trading Calls live on the Mobile.

(As per SEBI regulations, buying-selling shares through a mobile phone are not yet
permitted.)

PREPAID ACCOUNT

Customers pay Advance Brokerage on trading Account and enjoy uninterrupted trading in
their Account. Beside this, great discount are also available (up to 50%) on brokerage.

Prepaid Classic Account: - Rs. 2000

Prepaid Speed trade Account: - Rs. 6000

IPO ON-LINE
Customers can apply to all the forthcoming IPOs online. This is quite hassle-free, paperless
and time saving. Simply allocate fund to IPO Account, Apply for the IPO and Sit Back &
Relax.

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 Mutual Fund Online
Investors can apply to Mutual Funds of Reliance, Franklin Templeton Investments, ICICI
Prudential, SBI, 31 Birla, Sundaram, HDFC, DSP Merrill Lynch, PRINCIPAL and TATA
with Sharekhan.

Zero Balance ICICI Saving Account

Sharekhan had tied-up with ICICI bank for Zero Balance Account for Sharekhan’s Clients.
Now their customers can have a Zero Balance Saving Account with ICICI Bank after your
demat Account creation with Sharekhan.

CHARGE STRUCTURE

Fee Structure for General Individuals:-

Charge Classic Account Speed Trade Account

Rs. NIL
Account Opening Rs. NIL

Monthly Commitment Rs. NIL Rs. NIL

Intra-day – 0.05 % Intra-day – 0.05 %

Brokerage
Delivery - 0.50 % Delivery - 0.50 %
*Taxes as per govt.

Depository Charges

Account Opening Charges Rs. NIL

Annual Maintenance Charges Rs. NIL first year.

Rs. 300/= p.a. from second calendar year

onward

EXPOSURE: 4 TO 6.7 times (on margin money)

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