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Executive Summary

This project represents information regarding various investment options available in the market

and awareness of Sharekhan as a financial service provider. The main objective of the project is

to “Study what is risk and return combination and whether the general public is aware of the

various investment options available and the risk and return associated with them”.

Other objectives include:

 To conduct a survey for the company to find about the awareness of various investment

options.

 To find out the awareness among working professional’s about the awareness of Sharekhan

as a Financial Service provider..

 To understand the trend of investment among the working professionals.

 To learn the behavior of consumers in respect of the various investment opportunities

available.

This research work will also help in future in understanding the behavior of customer

(especially the professional’s with handsome salary) toward investment. For execution of the

project, methodology adopted is the collection of data through questionnaire, processing and

analyzing the data. The people who were selected for this research are professionals having

good salary.

The area of the project work is Mumbai city. Sharekhan are the one of the personalized

service providers offering a range of investment services depending on the customer needs and

wants. As far as the brand awareness is considered the Karvy tops the list so, the companies have
to put the extra effort on its awareness, and also the company has to take maximum efforts on

building its marketing strategy.

According to the respondents the quality of the service is very important. So the company

should project itself as a brand in the market that gives end user the best quality of service with

handy operations.

Most of the respondents have their own personal, consultant or company consultants. Sharekhan

have to differentiate their services from other consultant effectively by delivering value added

services to its customers. Organizations have to concentrate on direct marketing activities. The

consultancy should develop its long-term relationship with the customers. The consultancy must

give much more emphasis on creation of customer who make repurchase.The maximum amount

of awareness which has been generated is through newspaper, magazine, internet and word of

mouth. So the company should take care of it as it can be one of the potential media for

advertisements.

The maximum respondents want to invest in tax planning and second preference for the mutual

fund, so the consultancy can decide its strategy accordingly. The consultancy has to consider the

factors for investments of respondents, effectively before making the strategy.

The company should increase the level of interaction between the customer and the Consultancy.

The organization should focus on developing long-term relationship with the customers.

According to the respondents the quality of the service is very important. So the company

should project itself as a brand in the market that gives end user the best quality of service with

handy operations.
CHAPTER-1

INTRODUCTION ABOUT THE ORGANISATION AND


INDUSTRY

1.1 INTRODUCTION ABOUT THE ORGANISATION

1.2 INTRODUCTION ABOUT THE INDUSTRY

INDIAN STOCK MARKET:

Introduction:

The Indian broking industry has been growing from many years as in terms of its size and scope.
Relationship between the investors and brokers develop the capital market and also benefit to the
both parties in terms of investor get good return and secure transactions as well as broker get
good commission as return on transactions. The broker has good knowledge about share market
and companies, he will provide good suggestions to the new investor to get good long return on
their investments. The Indian Stock Exchange has the good reputation in Asia and Worldwide
also in terms of quality and advancement of technology.

History of the World and Indian Brokerage Market:

“In India, it started formally in 1875 with the setting up of Bombay Stock Exchange. Since then,
the profession has come a long way and to have become a $1 billion industry in this country.
Stock Brokers used to be an elite group of BSE members for a long period of time. Becoming a
broker was extremely difficult for many, mainly due to the high capital layout involved. This
changed dramatically in the past couple of decades since NSE was setup in the 1990s and a lot of
trading started moving to the online platforms. Transparency increased and trading costs reduced
which helped the trading public in general. Introduction of Derivatives trading helped in devising
hedging and other trading strategies.”

“During this period, the number of brokers increased exponentially due to relaxation of entry
barriers and the increasing market size. However, over the past 5 years this industry has gone
through a major consolidation phase.

There is a decline in the number of stock brokers in India. This decline can be attributed to a
number of reasons. Tightening of regulations can be seen as a major factor, with introduction of
a number of KYC and other compliance norms. SEBI and the government are making every
effort to ensure investor safety. Regulations are important to ensure the stock markets are used in
the right way as a savings and investment avenue, as against a platform for speculation or
gambling.

Another reason is the advent of new discount broking players which have taken the traditional
broking houses by surprise and have put a major pricing pressure on the old school broking
players. Increasing technology costs have also affected all the broking houses as the customers
have started to demand better and swift technology and the whole industry is inching towards
automation of processes; which is important for the growth of financial markets in India.

Also, the revenues from core broking activities have declined significantly, by almost 7 to 8
percent in FY 16. Derivatives volumes have taken a hit as SEBI has increased the minimum lot
size of futures and options contracts to keep small investors at bay from these arguably risky
trading instruments.

Of the 125-crore people in India, only 0.6 Crore people invest or trade in the stock, commodity
or currency markets. In China or the US, this sub-set is more than 10 percent. SEBI, stock
exchanges, brokers and other market intermediaries are burning their midnight oil for investor
education and it has started to yield results. New investors are entering the markets either by way
of direct investments or through the mutual funds route. Other assets like real estate or gold have
not yielded as much returns as the equity markets in the past 5 years and a lot of people are
beginning to understand this. Additionally, the liquidity offered by the stock markets is not
available with most of the other investment avenues. The tightening of the compliance norms by
SEBI has resulted in transparency in the markets and increased public’s faith in the integrity of
the whole industry.

RAPID GROWTH:

The last decade has been exceptionally good for the stock markets in India. With the background of wide
ranging reforms in regulation and market practice and the growing participation of foreign institutional
investment, stock markets in India have showed phenomenal growth in the early 1990s. The stock market
capitalization in mid-2007 is nearly the same size as that of the gross domestic product as compared to
about 25% of the latter in the early 2000’s.

NATIONAL STOCK EXCHANGE (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. (www.nseindia.com)

There are two kinds of players in NSE:

 Trading members
Recognized members of NSE are called trading members who trade on behalf of themselves and
their clients

 Participants
Participants include trading members and large players like banks who take direct settlement
responsibility.

NSE offers trading, clearing and settlement services in equity, equity derivatives, and debt and currency
derivatives segments. It is the first exchange in India to introduce electronic trading facility thus
connecting together the investor base of the entire country. NSE has 2500 VSATs and 3000 leased lines
spread over more than 2000 cities across India.

BOMBAY STOCK EXCHANGE (BSE)


companies trading on BSE hit a new peak of Rs116 trillion on Tuesday, driven by mutual funds that
stocked up on shares in the broader market, even as the benchmark Sensex closed flat.

Strong domestic investor interest fueled mid- and small-cap stocks, along with the front line indices. The
BSE’s market capitalization closed at Rs115.9 trillion on Tuesday, as investors cashed in gains. The BSE
mid-cap and BSE small-cap indices shed 0.56% and 0.63%, respectively.

It is pertinent to note that in this year’s rally, while BSE’s 30-share Sensex rose 6.41%, the BSE mid-cap
and small-cap indices have risen 10.69% and 11.61%, respectively in the same period.

To be sure, the rise in large cap stocks would, in absolute terms, contribute more to the market
capitalization gains, even with lower percentage gains. Domestic institutional investors (DIIs) have been
major investors in Indian equities market of late, investing a net Rs6, 855.93crore in the year so far. Of
this, mutual funds invested a net Rs6287.50crores. In the same period, foreign institutional investors FIIs
have pumped in a mere Rs1, 590.96crore.

BSE is the world’s 11largest stock exchange with an overall market capitalization of more than
$2trillion.more than 5500 companies are publicly listed on BSE….

(www.bseindia.com)

Top 10 Stock Broking Firms in India:

Sl No. Stock Brokers Number of


clients
1 ICICI SECURITIES LTD. 692689
2 HDFC SECURITIES LTD. 507608
3 SHAREKHAN LTD. 434854
4 AXIS SECURITIES LTD. 321301
5 KOTAK SECURITIES LTD. 312217
6 ZERODHA 299217
7 ANGEL BROKING PVT. LTD. 293178
8 MOTILAL OSWAL SECURITIES LTD. 250306
9 KARVY STOCK BROKING LTD. 205365
10 INDIA INFOLINE LTD. 200721

CHAPTER - 2

ORGANISATION PROFILE

2.1 BACK GROUND

2.2 NATURE OF BUSINESS

2.3 VISSION, MISSION, QUALITY POLICY

2.4 WORKFLOW MODEL

2.5 PRODUCT / SERVICE PROFILE


2.6 OWNERSHIP PATTERN

2.7 ACHIEVEMENTS AND AWARDS

2.8 FURURE GROWTH AND PROCEPECTS

2.1 BACKGROUND

Share khan Ltd. (Established in the year of 1922) is founded in February 2000, by Mr.Shripal
Morakhia at Mumbai, India (Headquarters). The parent company of Share khan is BNP Paribas.
Operating in the Financial Industry as a retail broking industry and leveraged on the first wave of
digitalization, it introduced the electronic trading system when dematerialization (Demat) of
securities came into existence in the country.
Now the Share khan has more than 4800 employees all over the country and is present in over
575 cities through 150 branches, more than 2600 business partners. Share khan has 1.6 Million
clients and on an average, executes more than 4 lakh trades per day in India.

The present CEO of the Share khan is Mr.Jaideep Arora.

Share khan is the India’s 3rd largest brokerage firm after the ICICI Direct and HDFC Securities
in the terms of customer’s base. Share khan is good in online trading in India. It offers broad
range of financial products and services to the clients like securities brokerage, loan against
shares, ESOP financing, etc. Share khan provides a user friendly online trading facility.

About Share khan – Always the first

The share khan is started in 2000 and it is a hold by BNP Paribas since November 2016, Share
khan was the first brokers to offer online trading in India.

Guiding India's retail stock investors for 16 years


 Registered with NSE and BSE for capital market, futures and options and currency segments and
CDSL and NSDL for depository services.
 A full-service stock broking firm providing online services right from online account opening to
trading and investments.
 Created India’s best online trading platforms: Website (www.sharekhan.com), Trade Tiger (the
ultimate desktop trading software), Share khan App (available for Android and IOS devices) and
Share khan Mini (a low bandwidth website especially for mobile browsers)
 A strong brick-and-mortar network with over 2600 outlets in 575+ cities
 Research-based financial advice on all asset classes to suit all investing and trading styles
 Dedicated Education and training courses for investors and traders in association with Online
Trading Academy

Share khan was founded by Mumbai-based entrepreneur Shripal Morakhia in 2000. Share khan
pioneered the online retail broking industry and leveraged on the first wave of digitization, when

Dematerialization (demat) of securities came into effect and electronic trading was introduced in
the stock exchange.

PARTNERS IN SUCCESS

In the past 16 years, we have joined hands with some of the smartest professionals and entrepreneurs of
the country to expand our brick-and-mortar network and connect to our customers better. Today we have
more than 2,000 business partners in 525 cities and we think of them as our extended family.

Share khan: Making a difference quietly

In a remote hamlet near village Vadivelampalayam, bright little Nandhini would often dream of
going to school to learn about the bigger world outside. But her father Ganeshamoorthy, an
agricultural labourer, was not able to fulfill her dream because the nearest school was about
12.5km away and there was no direct transport from their place to the school. With a sense of
regret and tearful eyes Nandhini would watch the older children take an overcrowded state
government bus (the only one to the city) to go to school every day.

Not many know that Share khan is the reason why Nandhini and many other children residing within a
radius of about 25km of Isha Vidhya Matriculation School in Sandegoundenpalayam village of
Coimbatore can now look forward to a brighter future. Social responsibility has always been at the core of
Share khan’s business model and the company quietly funded the purchase of three new SML S7 buses
for the school in September this year.

2.2 NATURE OF BUSINESS

2.3 VISION, MISSION, QUALITY POLICY AND VALUES

VISION: To be the best retail brokering brand in the retail business of stock marketing.

Mission:

To educate and empower the individual investor to make better investment decisions through the
quality advice and superior services.

Quality policy:

Excellence is all about the quality of work. We strive for delivery that is 100% error free and yet
at lightning speed. Excellence deals with the quality of work.

2.4 WORK FLOW MODEL


A person holding assets, either to meet his liquidity needs or to reshuffle his holdings in response
to changes in his perception about risk and return of the assets, decides to buy or sell the
securities. He selects a broker and instructs him to place buy/sell order on an exchange. The
order is converted to a trade as soon as it finds a matching sell/buy order. At the end of the trade
cycle, the traders are netted to determine the obligations of the trading members securities/funds
as per settlement cycle. Buyer/seller delivers funds/ securities and receives securities/funds and
acquires ownership of the securities.

2.5 PRODUCT/SERVICE
Share khan provide

 Demat account
 Trading account for cash calculator
 Bank account for fund transfer

PRODUCTS

o Mutual fund schemes.


o Insurance.
o Portfolio management system.
o Shares- online and offline.
o Bonds.
o Fixed deposits.
o Commodities

Major competitors of Share khan:

 Kotak Securities
 India bulls
 ICICI direct.com
 RELIGARE
 MOTILAL OSWAL
 BAJAJ CAPITAL
 RELIANCE MONEY
 HDFC Securities
 India Info line

2.6 OWNERSHIP PATTERN OF SHAREKHAN LTD


CEO

Country
head

Regional
Head

Branch
Head

City Sales
Manager

Dealer

Sales
Executives

SE1 SE2 SE3 SE4

TRAINEE TRAINEE TRAINEE TRAINEE

2.7 ACHIEVMENTS AND AWARDS

A wired companies along with reliance, hill, Infosys, etc ‘ business today”, January 2004, edition
 The best brokerage firm for Overall Service Category for Liquidity Management, India
 The best Working Capital Solution, India for Novateur Electrical & Digital Systems Private Limited
 The best Cash Management Solution, India for Publicis Groupe
 The best financial website award
 A wired companies along with reliance, hill, Infosys, etc ‘ business today’, January 2004, edition
 It was awarded ‘Top domestic brokerage house’, four times by Euro and Asia money
 It was winner of “Best Financial Website’’ awards
 India’s most preferred brokers with in 5 years “ Awaaz customers award 2005’’

OUR DREAMS

We have many dreams. We dream of becoming India's leading digital savings and investment partner.

10 principles to guide our vision 2020

2.8 FUTURE GROWTH AND PROSPECTS:


 To grow as distribution networks India.
 To support Leverage research and advisory
 To bring Investor awareness and education.
 To Increase distribution of mutual fund and insurance products
 To focus on wealth solutions and new product offering. To have a judicious use of capital
that ensures high Return on Equity and low leverage.
 To have a Flexible cost structure that maintains profitability across market cycles.
 To Build Stronger Institutional relationship through wider and quality research.
 To Increase research support.
 Building Principal Strategies Group to maximize returns using risk free arbitrage
strategies
CHAPTER – 3
Mckensy’s 7s framework and porter’ s five force model 0f
sharekhan
 Structure : share khan is flexible in terms of making temporary structural changes to
cope up with specific strategic tasks without any hassles. If need arises the top
management can assign the role to any of its employees which it considers capable and
skillful.

 Strategy : share khan believes not only in developing the strategies but also in its
successful execution.

 System : this constitutes of all the training and development systems, estimating budgets
and the accounting system of share khan.
 Style : style refers to all the symbolic actions undertaken by top managers of share khan
and its influence on the subordinates.

 Staff : share khan values its employees as its assets and therefore carefully trains and
motivates them by giving them incentives at regular intervals. Talented employees are
assigned as mentors and given real responsibility and moved into higher positions.

 Skills : the term skills refer to those activities organizations do best and for which they
are known. Share khan is known for its timely advice, which it caters to its customers and
its boasts of 70%-90% strike rates in booking recommendations.

 Goals : this refers to guiding concepts, values and aspirants that unite an organization in
some common purpose. It provides the customers the best service as it believes in
customer satisfaction and retention.

 Porter’s five force model of with special reference to


organization under study
 suppliers :
national securities depository limited (NSDL) & central depository services limited
(CSDL) are the regulatory bodies for depository participants like SSKI, SHCIL, ICICI
direct. Com, etc, also these regulatory bodies have got an upper hand as the bargaining
power stock broking houses like SSKI, etc, would be less.

NSE & BSE are playgrounds where common inventors investors trade through stock
broking houses, for which they have to take permission from NSE/BSE.

NSE/BSE are under the purview of SEBI, that’s why stock broking houses like SSKI,
have low bargaining power. But here NSE/BSE have one advantage, they cannot go for
forward integration.

MCX & NCDEX are stock exchanges, which trade in commodities ad derivatives. Here
again stock broking houses have to flow rules ad regulation of the same.

 Buyers :
There are various types of investors who trade through stock broking houses like SSKI,
which includes investors like small investors like small investors, medium net worth
investors, business partners, institutional investors and mutual fund companies.
Here the bargaining power of stock broking houses depends on how big the investor is.
So here we can say that bargaining power of stock broking houses is high in case of small
investors & HUF

While the bargaining power is moderate in case of HNI (high new worth investors)
MNI’s ( medium net worth investors) and business partners.

But in case of mutual fund companies and institutional investors bargaining power is less.
There are competitive buzz in stock broking industry; competitors are offer in low
brokerage and best services with added future. So the buyer can easily switch over to
competitors product.

 Competitors :
the company is facing the competition from local as well as national level players. The
local players provide facility for off-line trading while the national players like
ICICIdirect.com and kotakstreet.com, HDFC security provide online trading services.

There are also other big names like indiabulls, motilal oswal, 5paisa and marwadi, which
encircle the company from both the sides by providing online and off-line trading with
competitive services.

 Potential entrants :

The potential entrants like investment, jeojit and cipher, which are coming in near future
to Rajkot city.

Nationalized banks are also planning to enter this field by typing up with broking houses,
e.g. bank of baroda.
 Substitues :

Here substitutes are such instruments, which can be used instead of investing in shares.

The instruments like bank FD, insurance, mutual funds are the substitutes.
If the use of this instruments increase this may be disadvantageous for the stock broking
houses.

The companies and banks, which are having these instruments, can plunge into this
industry.

 Entry barriers :

Huge capital : capital is necessary not only for fixed facilities but also for customer’s
credit and absorbing start up losses. To start a stock broking house, one needs huge
capital for technology up graduation and skilled manpower.

Technology : technology for stock broking houses is life saving device. Stock broking
requires huge capital to make their products user friendly, which in turn requires capital
to employ skilled manpower. Thus, technology could be one of the entry barriers.

Regulatory constraints :
Obtaining a license is tedious job for a stock broking houses. It should comply with the
regulation of the governing bodies like SBI,NSDL,etc. for a stock broking houses to
plunge into the stock broking industry, it needs to have some kind of financial
background and expertise. Thus, regulators constraints could be an entry barrier.

Experience curve :
The core competency in his industry is the services, which are provided to the end- users
and the research, based activities Which includes “TIPS’’ fundamental as well as
technical script analysis. Also the most important thing which helps the already
established firms is –“TRUST’’ which people would be having on firms like SSKI,
motilal oswal, etc.which is very difficult for new companies to imitate.

Network :

the “reach’’to the customer is the key factor in the industry. The network of the
companies like motilal oswal, sharekhan and ICICI is very efficient and spread al over
india. It will take time for a new entrant to establish such a huge network ( e.g. marwadi),
which says. “network can come up as the most difficult entry barriers to over come.’’

Expected retaliation :

Whenever a new player comes in the industry, the old companies have an option to
reduce the prices of their product. This kind o practice is called expected retaliation,
which is also possible in the industry in terms of less brokerage rates and reduced account
opening charges. E.g. before the entry of so many new companies, sharekhan was having
two types of accounts viz. speed trade and speed trade plus, which were cost 1000 &
1500 account opening charges respectively . but due to competition, they have come up
wiyh only one account I e. speed trade plus with the account charges of Rs 1000.
CHAPTER-4

SWOT ANALYSIS OF SHAREKHAN:


STRENGTHS:
 Number one registrar and transfer agent and dealer of investment products in India.
 Good co-operation between employees.

WEAKNESS:
 High employee turnover lack of awareness among customers because of non-aggressive
promotional strategies (print media, newspapers, etc.).

OPPORTUNITIES:
 Marketing at rural and semi-urban areas.
 As interest on fixed deposits with post office and banks are all time low, more and more
small investors are entering into stock market.

THREATS:

 Lack of sufficient branch-offices for speedy delivery of services.


 Increasing number of competitors.
 Share khan’s acceptance by new clients.
CHAPTER – 5

ANALYSIS OF FINANCIAL STATEMENTS

CHAPTER – 6
LEARNING EXPERIE