PRJCT IDBI Fin System & Invst Pattern

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00000000000000000No study can be completed without research. And Research
Methodology gives student the necessary training in gathering information and
arranging it. Participation in the fieldwork when required and techniques for the
collection of data appropriate to particular problem in the use of statistic
Questionnaires and controlled experimentation and in recording evidence, sorting out
it and interpreting it. Research methodology is the process in which various steps are
generally followed by the researcher.
• Scope of the study

An attempt was also made to get information about the present Financial Services
availed by the People, and investor’s preference on various investment instruments
available in India. The project was aimed at understanding the various financial
products and services offered by IDBI Capital to the individuals and institutional
investors.
-investment instruments available
-investors’ behaviour and preference towards investment instruments in
Ahmedabad
• Objectives of the Project
The main objective of the project was to know the investment preference given
to the various investment instruments by investors in India. By this we can know
where people mostly invest their savings and their awareness about various
investment instruments available in the market. So that the financial services
provider can know where the opportunity lies and what products and services to be
offered to particular investor. These objectives are as following.
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To study the various financial investment instruments
To find out the preferences of investors for the investment tools
To study investment advisory service and the sources of information preferred by people
To study investment and tax planning by people
• Data Collection Sources
The primary data for the study was collected by the way of the questionnaire survey in the city of
Ahmedabad.
Secondary data was collected from various Internet web site and Business magazines.
• Research Design
This research is the descriptive research because the research is base on the survey conducted by us using
the questionnaire as research tool.
Sampling Size
Sampling area:
Sample Unit:
Sample Frame:
Sampling Method
200 samples were selected for the questionnaire survey.
Ahmedabad
Any individual in Ahmedabad city who does investment planning
All individuals from Ahmedabad city doing investment planning

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Non Probability Convenience units were selected from the population.
• Assumption
1The selected samples represent the whole population.

2We have assumed that people who were selected for survey would give the true and fair view on
the questionnaire
• Limitations
1The survey was conducted only in the Ahmedabad.

2Selected samples were convenient sampling so there may be difference in views of people from
whole population.

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IDBI Capital Market Services Ltd., (IDBI Capital) is a wholly owned subsidiary of IDBI Bank Ltd and
is a leading Investment Banking & Securities Company.
IDBI Capital offers a full suite of products and services to Corporates, Institutional and Individual
clients. The range of services include:
Investment Banking
Capital Market Products
Private Equity
Corporate Advisory Services
Mergers & Acquisitions
Project Appraisals & Debt Syndication
Stock Broking -Institutional & Retail
Distribution of Financial Products
Debt Placement and Underwriting
Fund Management (Managing Clients' Assets-Pension/PF Fund Managers)
Research Group
IDBI Capital is highly regarded for safety and trust and enjoys a credit rating of “AAA” by CARE for
its medium-term borrowings and P1+ by ICRA for its short-term borrowings.
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IDBI Capital as an institutional player provides the entire gamut of Capital

Market services encompassing:
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1Public Offerings
2Qualified Institutional Placements
3Buyback
4Takeover
5Preferential Allotments
6External Commercial Borrowings, FCCBs, etc.
The above activities entails liasioning with institutional investors such as treasury departments of
Domestic Institutions, Banks and corporates, fund managers of mutual funds, private equity firms,
FIIs, HNIs.
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IDBI Capital represent Government organizations, Public Sector Enterprises and Indian
Corporates covering sectors such as Steel and other metals, Mines, Minerals, Chemicals,
Healthcare, Hospitality, Financial Services and other Core Sectors.
IDBI Capital have a combination of professionals with varied background who shares our
values of truthfulness, objectivity, innovation and analytical accuracy. The professional
qualification of our team provide a rock solid foundation for giving consulting services and
our depth of experience ranges from young management graduates from premier business
schools to experienced finance professional and qualified chartered accountants as well.
IDBI Capital provides Financial Advisory & Project Advisory services.
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Institutions and Corporates have surplus funds to manage on daily basis as well as
investible surplus for a defined period. The risk differs for Institution and Corporates
subject to their preferences. The reward by way of return is always in proportion to the risk
taken. IDBI Capital
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define, advise and manage the same by blending caution with aggression in the desired proportion
to teach client. The range of services include from Equity Broking with customised research,
advisory and distribution services for investment in Mutual Funds, Debt/Bonds, Equity IPOs to
placement of Equities etc.
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In addition to offering corporate, institutional clients, IDBI Capital also offers a gamut of financial
products and services that cater to a varied cross section of investors. IDBI Capital also offers to
financial planners, retail intermediaries and consumers to deliver lasting, innovative solutions.
Looking at the opportunities in our market and the growth of our country, we believe it is high time
investors are educated about the nuances of investments. The knowledge and awareness gained
will empower investors and help them create wealth. We firmly believe brokers, media and
regulators have a pivotal role in assisting the individuals to become wealthy. We will go extra mile
to empower the investors in managing their wealth to ensure a more rewarding future.
IDBI Capital aims to provide a single-point source for retail investors in their requirements for
trading and investment products. IDBI Capital has 34 branches all over the country in all major
cities of every state.
• Online Investing
Online investing provides investors with a convenient method to take part in today’s financial
markets. With our commitment to enhancing investor education and awareness as a foundation
stone, we have created an online investing website www.idbipaisabuilder.in for trading and
depository services. This platform enables easy and informed investing in Equity shares, Futures &
Options (F&O), IPO’s and Mutual Funds, for the retail investors with a wealth of information, news,
analysis and tools
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sourced from the best in the industry. It also brings a large database of information about
companies which will assist them in making an informed investment decision.
IDBI Capital strive to empower you with information that helps you make informed decisions and
bank upon the right opportunity. We bring you lots of useful information by way of our varied
market research reports on equity, derivatives, and mutual funds
IDBI Capital offer an integrated three-in-one account linking savings account, trading account and
the demat account. Now investing in Equity, Mutual funds and IPO’s is just a click away
• IPO Distribution
Investment Banking Activities
IDBI Capital have in the last financial year successfully lead managed public/rights issues
mobilizing more than Rs.900 crores. Some of the notable examples were the Central Bank of India
‘s IPO and Varun Industries Ltd fixed price issue. The responses to our issues have been
heartening.
Initial Public Offerings (IPO)
IDBI Capital are reaching out to the investors thru
10,000 sub-brokers/agents spread across the country.

Our 40 thousands online investors.
and our own 25 branches.
IDBI Capital market and distribute IPOs of all lead investment bankers, including our owned lead
managed issues. In IPO distribution, the marketing effort is the key, which enables us to carry out
the vigorous exercise of

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Putting the banners of the IPO on our portal and all across our branches.
Sending the emails to all our investors about the impending IPOs and the product note.
Sending SMS to all of them.
Making available the IPO application forms, in all our branches.
All our branches are in marketing & distribution of IPO application forms, where IDBI Capital accept
and bid the application forms to the exchange.
• Mutual Fund Distribution
Several factors need to be taken into account when choosing an instrument for investment –
among these being safety, liquidity & return related to the risk undertaken. Coming to the choice of
instruments, IDBI Capital have equity, debt, money market, commodity based or even global
equities. Mutual funds provide all this and more. Mutual funds offer an investment portfolio which
can be either diversified in nature or specific in category with risk skewed towards debt to equity in
varying proportions, all in one under one umbrella. Mutual Funds cater to the specific requirement
of the Investor be it Institutional or Individual.
IDBI Capital Market Services Ltd. is into Mutual Fund Distribution, Advisory and Fund
Management. IDBI Capital address the needs of any type of investor from corporate, banks,
trusts, firms, and societies to NRIs, HNIs and individual retail clients .
IDBI Capital have been recognized as among the best financial advisers in the country, and have
been conferred with the CNBC TV 18 Financial Advisor Awards as the Best Performing National
Financial Advisor – Institutional segment in India for the past two consecutive years.
As a distributor registered with almost all the SEBI Registered Mutual Funds in India, IDBI Capital
have also started offering Mutual funds to our retail customers, both off-line and on-line.

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IDBI Capital distributes and advice on the schemes of all the Mutual Fund Houses registered with
SEBI.
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Every modern economy is based on a sound financial system which helps in
production, capital and economic growth by encouraging saving habits,
mobilizing savings from households and other segments and allocating savings
into productive usage such as trade, commerce and manufacturing etc.
The financial markets in India at the time of independence I 1947 was semi
organized and presented a restricted narrow structure. It was marked by the
absence of issuing institutions and non-participation of intermediary financial
institutions. The large industries were held by only government as PSUs and
the securities market was under developed.
The development of the financial system in India began with the inception of
planning in the country. The government evolved the financial system in such a
way that there was social and economic justice with consideration of political
requirement of the country.
The evolution of the financial system in India was in the fulfilment of the socio-
economic and political objectives. Since there was no strong financial
institutional mechanism in the country, chaotic conditions prevailed. The year
1948 was significant for beginning the process of transfer by nationalizing the
Reserve Bank of India, and bringing it under government control. A further
development took place in 1969 when fourteen commercial banks were
nationalized. Ten banks were nationalized latter in 1980. After the commercial
banks, the General Insurance Companies were recognized under the name of
General Insurance Corporation.
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Besides the process of the transfer, government also started new financial institution under its own
control. The unit trust of India was started in 1964 under the public sector to form an important
intermediary by collecting the savings of the people and inter linking with the user of the funds. It
was important link between sources and user of the funds. The other significant forms are the
Provident and Pension funds.
Efficient transfer of resources from those having idle resources to others who have a pressing need
for them is achieved through financial market. Financial markets provides channel for allocation of
savings to investments. These provide a variety of assets to savers as well as various forms in
which the investors can raise funds and there by decoupled the acts of savings and investment.
The savers and investors are constrained not by their individual abilities, but by the economy’s
ability and save respectively. The financial markets, thus, contributes to economic development to
the extent that the latter depends on the rates of saving and investment.
Over the last few years, SEBI has announced several far-reaching reforms to promote the capital
market and protect investor interests. Reforms in the secondary market have focused on three
main areas: structure and functioning of stock exchanges, automation of trading and post trade
systems, and the introduction of surveillance and monitoring systems. Computerized online trading
of securities, and setting up of clearing houses or settlement guarantee funds were made
compulsory for stock exchanges. Stock exchanges were permitted to expand their trading to
locations outside their jurisdiction through computer terminals. Thus, major stock exchanges in
India have started locating computer terminals in far-flung areas, while smaller regional exchanges
are planning to consolidate by using centralized trading under a federated structure. Online trading
systems have been introduced in almost all stock exchanges. Trading is much more transparent
and quicker than in the past. Until the early 1990s, the trading and settlement infrastructure of the
Indian capital market was poor. Trading on all stock exchanges was

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through open outcry, settlement systems were paper-based, and market intermediaries were
largely unregulated. The regulatory structure was fragmented and there was neither
comprehensive registration nor an apex body of regulation of the securities market. Stock
exchanges were run as “brokers clubs” as their management was largely composed of brokers.
There was no prohibition on insider trading, or fraudulent and unfair trade practices. Since 1992,
there has been intensified market reform, resulting in a big improvement in securities trading,
especially in the secondary market for equity.
The financial markets have two major components, the money market and capital market.
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The money refers to the market where borrowers and lenders exchanges
short–term funds to solve their liquidity needs. Money market instruments are
generally financial claims that have low default risk, maturities under one year
and high marketability.
As the Reserve Bank of India observes, “as in most developed countries, the
money market in India comprises two sectors which may broadly be termed as
the organized and Unorganized markets, with substantially higher rate of
interest in the unorganized sector.
The organized marker comprises in the first place the Reserve Bank which is
“the key constituent of the money market being the residual sources of supply
of funds and it is this which invests the Bank’s operation with great
significance, “and occupies “a strategic position in the money market.”
Then there are the financial intermediaries such as call loan brokers and
general finance and stock broker. “The core of the Indian money market is the
inter-bank call money market.” Although the magnitude of funds dealt in this
market is not large in relation to the deposit resources of banks.
The money market structure in India, loosely knit as it is, is not entirely
uncoordinated. The indigenous banker enjoys rediscount facilities from the
commercial bank which in turn have access to the Reserve Bank.
The money market structure has undergone a change over the year,
particularly under the economic reforms. Unlikely in developed economies
where money market are promoted by financial intermediary out of efficiency
considerations, in India, as in many other developing countries, the evolution
of the money market and its structure has been integrated into the overall
deregulation process of the financial sector.
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The money market instrument in India mainly comprises: (i) call money,
(ii) certificates of deposits, (iii)treasury bills, (iv) other short-term government securities
transaction, such as, repos, (v) bankers’ acceptance bills, (vi) commercial paper, and (vii) inter-
corporate funds.
1. • Call Money Market Call and notice money are money dealt for one to 14 days. The
period of term money ranges from 14 days to 90 days. This market is of vital
2. importance to bank and financial institution because of the avenue it provides for
investing surpluses funds and meeting the deficit. The Interbank lending is the major
component of this market.
Term Money market The term money market instrument in India is still not developed. Selected
financial institutions (IDBI, ICICI, SIDBI, EXIM Bank, NABARD, IDFC) are permitted to borrow from
the money market for 3-6 months maturity, within stipulated limits for each institution.
Commercial Papers The commercial papers are unsecured promissory notes of short term
maturity of highly rated companies, issued to meet working capital
requirement. The CP is subject to credit rating by any of the recognized credit agencies in India. As
the CPs are tradable in the secondary market, including National Stock Exchange, they are
regarded liquid.
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• Certificates of Deposits Certificates of the Deposits (CD), introduced in June 1989, are
essentially securitized short-term time deposits issued by banks during periods of tight liquidity, at
relatively high interest rates. But the transaction cost of CDs is often lower as compared with that
of retail deposits. When credit picks up, placing pressure on banks ‘ liquidity, banks try to meet
their liquidity gap by issuing CDs, often at a premium. The required amounts are mobilized in
larger amount through CD, often for short periods in order to avoid interest liability overhang in the
subscribers find it profitable to hold CDs till maturity. As a result, the secondary market for CDs has
been slow to develop.
• Commercial Bill Market

Commercial Bills are important instruments used to facilitate credit sales. Commercial bills can be
discounted with banks and the bank, when they are in need of funds, may rediscount them in the
money market. The
commercial bill market in India is very restricted.
1. • Money market mutual funds (MMMF) In April 1992, scheduled commercial banks
and public limited companies were allowed to set up MMMS, subject to certain terms and
conditions. The prescribed restrictions were relaxed subsequently between November
1995 and July 1996 in order to import more flexibility and depth to the
2. market. MMMFs are allowed to invest in rate corporate bonds and debentures with a
residual maturity of the one year.
Treasury Bills Treasury bills are promissory notes issued by the central Government to raise
short term funds to bridge shirt term mismatch between receipt and expenditures. The RBI which
issues the TBs on behalf of the Government does not purchase them before maturity but investors
can sell them in the secondary market through DFHI or get it rediscounted.

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• Financial Markets
Further the financial markets have been classified as cash market, derivatives market, debt market
and commodities market. Cash market, also known as spot market, is the most sought after
amongst investors. Majority of the sample broking firms are dealing in the cash market, followed
by derivative and commodities. 27% firms are dealing only in the cash market, whereas 35% are
into cash and derivatives. Almost 20% firms trade in cash, derivatives and commodities market.
Firms that are into cash, derivatives and debt are 7%. On the other hand, firms into cash and
commodities are 3%, cash & debt market and commodities alone are 2%. 4% firms trade in all the
markets.
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In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both
exchanges. In the equity derivative market, 48% of the sampled broking houses are
members of NSE and 7% trade at BSE, while 45% of the sample operates in both stock
exchanges. Around 43% of the broking houses operating in the debt market, trade at both
exchanges with 31% and 26% firms uniquely at NSE and BSE respectively.
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1. • Primary Markets The capital market consists of primary and secondary segments.
The primary market deals with the issue of new instruments by the corporate sector such
as equity shares, preference shares and debentures. The public sector consisting of
central and state governments, various Public Sector industrial Units (PSUs), statutory
and other authorities such as state electricity boards and port trusts also issue bonds.
The primary market in which public issue of securities is made through a prospectus is a
retail market and there is no physical location. Direct mailing,
2. advertisements and brokers reach the investors. Screen based trading eliminates the
need for trading floor.
Secondary Markets The secondary market or stock exchange where existing securities are
traded is an auction area. It may have a physical location like a stock exchange or a trading floor.
Since 1995, trading in securities is screen based. Screen based trading eliminates need for a
trading floor. At the same time, since the last year internet-based trading has also made an
appearance in India.
The secondary market consist of 23 stock exchanges including the National

Stock Exchange and the Over-the -counter Exchange of India (OTCEI) and
Inter Connected Sock Exchange of India Ltd. The secondary market provides
a trading place for the securities already issued to be bought and sold. It also
provides liquidity to the initial buyers in the primary market to re-offer the
securities to any interested buyer at any price, if mutually accepted. An
active secondary market actually promotes the growth of the primary market
and capital formation because investors in the primary market are assured of
a continuous market and
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they can liquidate their investments in the stock exchange. We will see these primary and
secondary markets in Next Chapter in detail.
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It is important to ensure a smooth working of this market, as it is the arena where the
players in the economic growth of a country interact. Various laws have been passed from
time to lime to meet this objective. The financial market in India was highly segmented
until the initiation of reforms in 1992-93 on account of a variety of regulations and
administered prices including barriers to entry. The reform process was initiated with the
establishment of Securities and Exchange Board of India (SEBI).
The legislative framework before SBBI came into being consisted of three major Acts
governing the capital markets.
(1) The Capital Issues Control Act 1947, which restricted access to the securities market
and controlled the pricing of issues.
(2) The Companies Act, 1956, which sets out the code of conduct for the corporate sector
in relation to issue, allotment and transfer of securities, and disclosures to be made in
public issues.
(3) The Securities Contracts (Regulation), Act 1956, which regulates transaction in
securities through control over stock exchanges. In addition, a number of other Acts, e.g.,
the Public Debt Act, 1942, the Income Tax Act, 1961, the Banking Regulation Act, 1949,
have substantial bearing on the working of the securities market.

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There are several institutions, which facilitate the smooth functioning of the
capital market. A brief description of important capital market intermediaries is
given in the next few paragraphs.
• Merchant Bankers As per the SEBI (Merchant Bankers) Rules, 1992,

merchant banker means "any person who is engaged in the business of issue
management either by making arrangements regarding selling, buying or subscribing
to securities or acting as manager, consultant, adviser or rendering
corporate advisory service in relation to such issue management". A merchant
banker undertakes the following activities:
Managing of public issue of securities

Underwriting connected with the aforesaid public issue management business
Private placement of securities
Corporate advisory services related to securities market, e.g., takeovers, acquisitions,
disinvestments
Syndication of rupee term loans
Advisory services for projects
Stock broking
International financial advisory services
Managing or advising or international offerings of debt or equity i.e. GDR, ADR
bonds and other instruments
Primary or satellite dealership of government securities
• R&T Agents – Register to issue R & T agents are governed by SEBI. R & T
agents are intermediaries who provide services to shareholders on behalf of issuers.
Issuers may engage
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share transfer agents for maintaining Registrar of Members (ROM), managing corporate benefits
like distribution of dividends, interest on debentures, bonus shares, right forms, etc. besides the
share transfer work. Registrars who extend services for management of public issue are known as
RTI (Registrar To Issue). As per SEBI regulations, registrars who give both RTI services are called
as Category I registrars who give only one of the above services, i.e. registrar to issue services or
only share transfer services are known as Category II registrars.
R & T. agents extend the depository connectivity services in the depository environment.
• Stockbrokers Stockbrokers are regulated by SEBI (both stock brokers and sub brokers)
Regulations, 1992. The stockbroker is a member of the stock exchange. Stockbrokers are the
intermediaries who are allowed to trade in securities on the exchange of which they are members.
They buy and sell on their own behalf of their clients. Traditionally in India, individuals owned firms
providing brokerage services or they were partnership firms with unlimited liabilities. There were,
therefore, constraints on the amount of funds they could raise. With increasing volumes in trading
as well as in the number of small investors, lack of adequate capitalization of these firms exposed
investors to the risks of these firms going bust. In order to reduce risk, SEBI is encouraging
corporatisation of these firms besides
stipulating "Capital adequacy norms". Stockbrokers participate both in trading and clearing of
trades.
Stockbrokers expand their business by engaging sub brokers. Sub brokers means "any person not
being the members of stock brokers who acts on behalf of stock brokers as an agent or otherwise
for assisting the investors in buying, selling or dealing in securities through such stockbrokers". Any
person can act as a stock brokers or sub brokers after registering with SEBI.

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• Custodians Custodians of securities mean "any person who carries on or process to carry on
the business of providing custodian sendees". Custodian sendees
in relations to securities mean safekeeping of securities of a client and providing sendees incidental
thereto, and includes:
Maintaining accounts of securities of a client.

Collecting the benefits of rights accruing to the client in respect of securities.
Keeping the client informed of the actions taken or to be taken by the issue of securities.
Maintaining and reconciling records of the senders referred to in subclass 1 and 2. Custodians of
securities are generally appointed by institutional
investors, mutual funds, banks etc, for physical custody of securities settlements seines,
monitoring and collections of corporate benefits etc. As per the SEBI regulation, MFs and FIIs have
to necessarily appoint custodians for the above-mentioned services. SHCIL, Citibank, Deutsche
Bank, Standard Chartered Bank, HSBC Bank, IT Corporate Sonics, HDFC Bank are among the few
registered custodians in the country. Among the several obligation of a custodial, segregation of
activities is critical. Segregation of activities mean where a custodian of securities is carrying on
any activity besides that of acting as custodian of securities. The activities relating to his business
as custodian of securities shall be separate and segregated from all other activities its officers and
employees engaged in providing custodial services shall not be engaged in any other activity
carries on by him.
• Mutual funds Mutual funds are financial intermediaries, which collect the savings of
small investors and invest them in a diversified portfolio of securities to minimize risk and
maximize returns for their participants. Mutual funds

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have given a major fillip to the capital market-both primary as well as secondary. The units of
mutual funds, in turn, are also tradable securities. Their price is determined by their Net Asset
Value (NAV), which is declared periodically. The operations of the private mutual funds are
regulated by the SEBI with regard to their registration, operation, administration and issue as well
as trading. More information on MFs is given in the chapter no. 5
• Other Intermediaries
Under the regulatory framework administered by SEBI, there are several other intermediaries as
listed below:
1) Credit rating agencies 2) Portfolio managers 3) Under-writers 4) Debenture trustees 5) Foreign

Institutional Investors 6) Venture Capital funds 7) Collective investment schemes.
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The equity brokerage industry in India is one of the oldest in the Asia region.
India had an active stock market for about 150 years that played a significant
role in developing risk markets as also promoting enterprise and supporting the
growth of industry.
The roots of a stock market in India began in the 1860s during the American
Civil War that led to a sudden surge in the demand for cotton from India
resulting in setting up of a number of joint stock companies that issued
securities to raise finance. This trend was akin to the rapid growth of securities
markets in Europe and the North America in the background of expansion of
railroads and exploration of natural resources and land development.
Historical records show that as early as 1864, there were about 1,000 brokers
with the stock markets functioning from three places in Mumbai; between 9 am
to 7 pm at the junction of Meadows Street and Rampart Row, from day break
till 9 am and from 7 pm to early hours of next morning at Bazargate.
Share prices rose sharply even at that time. A share of Colaba Land Company
during the boom period of the 1860s rose from Rs 10,000 at par to Rs 120,000
and that of Backbay Shares went up from Rs 2,000 to Rs 54,000. Bombay, at
that time, was a major financial centre having housed 31 banks, 20 insurance
companies and 62 joint stock companies.
Reports on stock markets around that time indicate that an ordinary broker
in 1864 earned about Rs 200 per day, a huge sum in those days. The boom
period came to an abrupt end in 1865. In Jul 1865, what was then used to be
called the share mania ended with burst of the stock
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market bubble. “Never I witnessed in any place a run so widely distributed nor such distress
followed so quickly on the heels of such prosperity” thus wrote Richard Temple, who served as the
Governor of Bombay at that time. An interesting aspect is that despite the collapse of the stock
market, most of the brokers met their payment commitments.
In the aftermath of the crash, banks, on whose building steps share brokers used to gather to seek
stock tips and share news, disallowed them to gather there, thus forcing them to find a place of
their own, which later turned into the Dalal Street. A group of about 300 brokers formed the stock
exchange in Jul 1875, which led to the formation of a trust in 1887 known as the “Native Share and
Stock Brokers Association”.
A unique feature of the stock market development in India was that that it was entirely driven by
local enterprise, unlike the banks which during the pre-independence period were owned and run
by the British. Following the establishment of the first stock exchange in Mumbai, other stock
exchanges came into being in major cities in India, namely Ahmedabad (1894), Calcutta (1908),
Madras (1937), Uttar Pradesh and Nagpur (1940) and Hyderabad (1944). The stock markets
gained from surge and boom in several industries such as jute (1870s), tea (1880s and 1890s),
coal (1904 and 1908) etc, at different points of time.
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A new phase in the Indian stock markets began in the 1970s, with the introduction of
Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the
multinational companies, which created a surge in retail investing. The early 1980s
witnessed another surge in stock markets when major companies such as Reliance
accessed equity markets for resource mobilisation that evinced huge interest from retail
investors.
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A new set of economic and financial sector reforms that began in the early 1990s gave further
impetus to the growth of the stock markets in India. As a part of the reform process, it became
imperative to strengthen the role of the capital markets that could play an important role in
efficient mobilisation and allocation of financial resources to the real economy. Towards this end,
several measures were taken to streamline the processes and systems including setting up an
efficient market infrastructure to enable Indian finance to grow further and mature. The importance
of an efficient micro market infrastructure came into focus following the incidence of market abuses
in securities and banking markets in 1991 and 2001 that led to extensive investigations by two
respective Joint Parliamentary Committees.
The Securities and Exchange Board of India (SEBI), which was set up in 1988 as an administrative
arrangement, was given statutory powers with the enactment of the SEBI Act, 1992. The broad
objectives of the SEBI include
to protect the interests of the investors in securities

to promote the development of securities markets and to regulate the securities markets
The scope and functioning of the SEBI has greatly expanded with the rapid growth of securities
markets in India in the last fifteen years.
Following the recommendations of the High Powered Study Group on Establishment of New Stock
Exchanges, the National Stock Exchange of India (NSE) was promoted by financial institutions with
an aim to provide access to investors all over the country. NSE was incorporated in Nov 1992 as a
tax paying company, the first of such stock exchanges in India, since stock exchanges earlier were
trusts, being run on no-profit basis. NSE was recognized as a stock exchange under the Securities
Contracts (Regulations) Act 1956 in Apr 1993. It commenced operations in wholesale debt segment
in Jun 1994 and capital market segment (equities) in Nov 1994. The setting up of the National
Stock Exchange

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brought to Indian capital markets several innovations and modern practices and procedures such
as nationwide trading network, electronic trading, greater transparency in price discovery and
process driven operations that had significant bearing on further growth of the stock markets in
India.
Faster and efficient securities settlement system is an important ingredient of a successful stock
market. To speed the securities settlement process, The Depositories Act 1996 was passed that
allowed for dematerialization (and dematerialization) of securities in depositories and the transfer
of securities through electronic book entry. The National Securities Depository Limited (NSDL) set
up by leading financial institutions, commenced operations in Oct 1996. Regulations governing
selection of various types of market intermediaries as depository participations were made.
Subsequently, Central Depository Services (India) Limited promoted by Bombay Stock Exchange
and other financial institutions came into being.
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The last decade has been exceptionally good for the stock markets in India. In the back of
wide ranging reforms in regulation and market practice as also 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 percent of the latter in the
early 2000s. Investor base continued to grow from domestic and international markets.
The value of share trading witnessed a sharp jump too. Foreign institutional investment in
Indian stock markets showed continuous rise reaching about USD10 bn in each of these
years between FY04 to FY06. Stock markets became intensely technology and process
driven, giving little scope for manual intervention
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that has been the source of market abuse in the past. Electronic trading, digital certification,
straight through processing, electronic contract notes, online broking have emerged as major
trends in technology. Risk management became robust reducing the recurrence of payment
defaults. Product expansion took place in a speedy manner. Indian equity markets now offer, in
addition to trading in equities, opportunities in trading of derivatives in futures and options in index
and stocks. ETFs are showing gradual growth.
Within five years of introduction of derivatives, Indian stock markets now are ranked first in stock
futures and fourth in index futures. Indian stock markets are transaction intensive and thus rank
among the top five markets in this regard. Stock exchange reforms brought in professional
management separating conflicts of interest between brokers as owners of the exchanges and
traders/dealers. The demutualisation and corporatisation of all stock exchanges is nearing
completion and the boards of the stock exchanges now have majority of independent directors.
Foreign institutions took stake in India’s two leading domestic stock exchanges. While NYSE Group
led consortium took stake in the National Stock Exchange, Deutsche Borse and Singapore Stock
Exchange bought equity in the Bombay Stock Exchange Ltd.
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The Indian broking industry is one of the oldest trading industries that has been around
even before the establishment of the BSE in 1875. Despite passing through a number of
changes in the post liberalisation period, the industry has found its way towards
sustainable growth. With the purpose of gaining a deeper understanding about the role of
the Indian stock broking industry in the country’s economy, we present in this section
some of the industry insights gleaned from analysis of data received through primary
research.
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00000000000000000000000
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For the broking industry, we started with an initial database of over 1,800 broking firms that were
contacted, from which 464 responses were received. The list was further short listed based on the
number of terminals and the top 210 were selected for profiling. 394 responses, that provided
more than 85% of the information sought have been included for this analysis presented here as
insights. All the data for the study was collected through responses received directly from the
broking firms. The insights have been arrived at through an analysis on various parameters,
pertinent to the equity broking industry, such as region, terminal, market, branches, sub brokers,
products and growth areas.
Some key characteristics of the sample 394 firms are:
On the basis of geographical concentration, the West region has the maximum representation of
52%. Around 24% firms are located in the North, 13% in the South and 10% in the East
3% firms started broking operations before 1950, 65% between 1950-1995 and 32% post 1995
On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7% in
Kolkata, 4% in Chennai and 29% are from other cities
From this study, we find that almost 36% firms trade in cash and derivatives and 27% are into
cash markets alone. Around 20% trade in cash, derivatives and commodities
In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both
exchanges. In the derivative segment, 48% trade at NSE, 7% at BSE and 45% at both, whereas in
the debt market, 31% trade at NSE, 26% at BSE and 43% at both exchanges
Majority of branches are located in the North, i.e. around 40%. West has 31%, 24% are located in
South and 5% in East
In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in North and 4%
in East
Trading, IPOs and Mututal Funds are the top three products offered with 90% firms offering
trading, 67% IPOs and 53% firms offering mutual fund transactions
In terms of various areas of growth, 84% firms have expressed interest in expanding their
institutional clients, 66% firms intend to increase FII clients and 43% are interested in setting up
JV in India and abroad

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In terms of IT penetration, 62% firms have provided their website and around 94% firms have
email facility.
• Terminals
Almost 52% of the terminals in the sample are based in the Western region of India, followed by
25% in the North, 13% in the South and 10% in the East. Mumbai has got the maximum
representation from the West, Chennai from the South, New Delhi from the North and Kolkata from
the East.
Mumbai also has got the maximum representation in having the highest number of terminals. 40%
terminals are located in Mumbai while 12% are from Delhi, 8% from Ahmedabad, 7% from
Kolkata, 4% from Chennai and 29% are from other cities in India.
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• Branches & Sub-Brokers
The maximum concentration of branches is in the North, with as many as 40% of all branches
located there, followed by the Western region, with 31% branches. Around 24% branches are
located in the South and East constitutes for 5% of the total branches of the total sample.
In case of sub-brokers, almost 55% of them are based in the South. West and North follow, with
30% and 11% sub-brokers respectively, whereas East has around 4% of total sub-brokers.
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With the Internet becoming ubiquitous, many institutions have set-up securities trading
agencies that provide online trading facilities to their clients from their homes. This has
been possible since all the players in the securities market, viz., stockbrokers, stock
exchanges, clearing corporations, depositories, DPs. clearing banks, etc., are linked
electronically. Thus, information flows amongst them on a real time basis. The trading
platform, which was converted from the trading hall to the computer terminals at (he
brokers premises, is now shifting to the homes of investors. The investor knows exactly
when and at what rate his order
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was processed. It also creates an end-to-end audit trail that makes market manipulation difficult.
The availability of securities in Demat form has given a further fillip to this process.
Internet trading helps security-trading houses to expand their market far and wide across the
country and outside the country. This facility is likely to bring about sustained changes in the
trading practices.
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(I) Corporate memberships
There is a growing surge of corporate memberships (92% in NSE and 75% in BSE), and the scope
of functioning of the brokerage firms has transformed from that of being a family run business to
that of professional organized function that lays greater emphasis on observance of market
principles and best practices. With proliferation of new markets and products, corporate nature of
the memberships is enabling broking firms to expand the realm of their operations into other
exchanges as also other product offerings. Memberships range from cash market to derivatives to
commodities and a few broking firms are making forays into obtaining memberships in exchanges
outside the country subject to their availability and eligibility.
(ii) Wider product offerings
The product offerings of brokerage firms today go much beyond the traditional trading of equities.
A typical brokerage firm today offers trading in equities and derivatives, most probably
commodities futures, exchange traded funds, distributes mutual funds and insurance and also
offers personal loans for housing, consumptions and other related loans, offers portfolio
management services, and some even go to the extent of creating niche services such as a
brokerage firm offering art advisory services. In the background of growing opportunities for
Investors to

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invest in India as also abroad, the range of products and services will widen further. In the offing
will be interesting opportunities that might arise in the exchange enabled corporate bond trading,
soon after its commencement and futures trading that might be introduced in the near future in the
areas of interest rates and Indian currency.
(iii) Greater reliance on research
Client advising in India has graduated from personal insights, market tips to becoming extensively
research oriented and governed by fundamentals and technical factors. Vast progress has been
made in developing company research and refining methods in technical and fundamental analysis.
The research and advice are made online giving ready and real time access to market research for
investors and clients, thus making research important brand equity for the brokerage firms.
(iv)Accessing equity capital markets
Access to reliable financial resources has been one of the major constraints faced by the equity
brokerage industry in India since long. Since the banking system is not fully integrated with the
securities markets, brokerage firms face limitations in raising financial resources for business and
expansion. With buoyancy of the stock markets and the rising prospects of several well organized
broking firms, important opportunity to access capital markets for resource mobilization has
become available. The recent past witnessed several leading brokerage firms accessing capital
markets for financial resources with success.
(v) Foreign collaborations and joint ventures
The way the brokerage industry is run and the manner in which several of them pursued growth
and development attracted foreign financial institutions and investment banks to buy stakes in
domestic brokerage firms, paving the way for stronger brokerage entities and possible scope for
consolidation in the future. Foreign firms picked up stake in some of
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the leading brokerage firms, which might lead to creating of greater interest in investing in
brokerage firms by entities in India and abroad.
(vi)Specialized services/niche broking
While supermarkets approach are adopted in general by broking firms, there are some which are
creating niche services that attract a particular client group such as day traders, arbitrage trading,
investing in small cap stocks etc, and providing complete range of research and other support to
back up this function.
(vii) Online broking
Several brokers are extending benefits of online trading through creation of separate windows.
Some others have dedicated online broking portals. Emergence of online broking enabled reduction
in transaction costs and costs of trading. Keen competition has emerged in online broking services,
with some of these offering trading services at the cost of a few basis points or costs which are
fixed in nature irrespective of the volume of trading conducted. A wide range of incentives are
being created and offered by online brokerage firms to attract larger number of clients.
(viii) Compliance oriented
With stringent regulatory norms in operation, broking industry is giving greater emphasis on
regulatory compliance and observance of market principles and codes of conduct. Many brokerage
firms are investing time, money and resources to create efficient and effective compliance and
reporting systems that will help them in avoiding costly mistakes and possible market abuses.
Brokerage firms now have a compliance officer who is responsible for all compliance related aspects
and for interacting with clients and other stake holders on aspects of regulation and compliance.
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(ix) Focus on training and skill sets
Brokerage firms are giving importance and significance to aspects such as training on skill sets that
could prove to be beneficial in the long run. With the nature of markets and products becoming
more complex, it becomes imperative for the broking firms to keep their staff continuously updated
with latest development in practices and procedures. Moreover, it is mandated for certain types of
dealers/brokers to seek specific certification and examinations that will make them eligible to carry
business or trade. Greater emphasis on aspects such as research and analysis is giving scope for
in-depth training and skills sets on topics such as trading programs, valuations, economic and
financial forecasting and company research.
(x) From owners to traders
A fundamental change that has taken place in the equity brokerage industry, which is a global
trend as well, is the transformation of broking from owners of the stock exchange to traders of the
stock market. Demutualization and corporatisation of stock exchanges bifurcated the ownership
and trading rights with brokers vested only with the later and ownership being widely distributed.
Demutualization is providing balanced welfare gains to both the stock exchanges and the members
with the former being able to run as corporations and the latter being able to avoid conflict of
interests that sometimes came as a major deterrent for the long term growth of the industry.
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Brokerage firms in India made much progress in pursuing growth and building
professionalism in operations. Given the nature of the brokerage industry being very
dynamic, changes could be rapid and so as the challenges that emerge from time to time.
A brief description on some of the prospects and challenges of the brokerage firms are
discussed below.
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00000000000000000000000
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(i) Fragmentation
Indian brokerage industry is highly fragmented. Numerous small firms operate in this space. Given
the growing importance of technology in operations and increasing emphasis on regulatory
compliance, smaller firms might find it constrained to make right type of investments that will help
in business growth and promotion of investor interests.
(ii) Capital Adequacy
Capital adequacy has emerged as an important determinant that governs the scope of business in
the financial sector. Current requirements stipulation capital adequacy in regard to trading
exposure, but in future more tighter norms of capital adequacy might come into force as a part of
the prudential norms in the financial sector. In this background, it becomes imperative for the
brokerage firms to focus on raising capital resources that will enable to give continuous thrust and
focus on business growth.
(iii) Global Opportunities
Broking in the future will increasingly become international in character with the stock markets
being open for domestic and international investors including institutions and individuals, as also
opportunities for investing abroad. Keeping abreast with developments in international markets as
also familiarisation with global standards in broking operations and assimilating major practices and
procedures will become relevant for the domestic brokerage firms.
(iv) Opportunities from regional finance
Regional economic integration such as that under the European Union and the ASEAN have greatly
benefited businesses in the individual countries with cross border opportunities that helped to
expand the scope and significance of the business. Initial measures to promote South Asian
economic integration is being made by governments in the region first at

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the political level to be followed up in regard to financial markets. South Asian economic integration
will provide greater opportunities for broking firms in India to pursue cross border business. In view
of several of common features prevailing in the markets, it would be easier to make progress in
this regard.
(v) Product Dynamics
As domestic finance matures and greater flow of cross border flows continues, new market
segments will come into force, which could benefit the domestic brokerage firms, if they are well
prepared. For instance, in the last three to four years, brokerage firms had newer opportunities in
the form of commodities futures, distribution of insurance products, wealth management, mutual
funds etc, and as the market momentum continues, broking firms will have an opportunity to
introduce a wider number of products.
(vi) Competition from foreign firms
Surging markets and growing opportunities will attract a number of international firms that will
increase the pace of competition. Global firms with higher levels of capital, expertise and market
experience will bring dramatic changes in the brokerage industry space which the local firms should
be able to absorb and compete. Domestic broking firms should always give due focus to emerging
trends in competition and prepare accordingly.
(vii) Investor Protection
Issues of investor interest and protection will assume centre stage. Firms found not having suitable
infrastructure and processes to ensure investor safety and protection will encounter constraints
from regulation as also class action suits that investors might bring against erring firms. The nature
of penalties and punitive damages would become more severe. It
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is important for brokerage firms to establish strong and streamlined systems and procedures for
ensuring investor safety and protection.
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Primary market provides opportunity to issuers of securities, Government as well as corporate, to

raise resources to me et their requirements of investment and/or discharge some obligation. The
issuers create and issue fresh securities in exchange of funds through public issues and/or as
private placement. They may issue the securities at face value, or at a discount/premium and these
securities may take a variety of forms such as equity, debt or some hybrid instrument. They may
issue the securities in domestic market and/or international market through ADR/GDR/ECB route.
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00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
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The market design for primary market is provided in the provision

of the Companies Act, 1956, which deals with issues, listing and
allotment of securities. In addition, DIP guidelines of SEBI prescribe a
series of disclosures norms to be complied by issuer, promoter,
management, project, risk factors and eligibility norms for accessing the
market. In this section, the market design as provided in securities laws
has been discussed.
• DIP Guidelines, 2000
The issues of capital to public by Indian companies are governed by the

Disclosure and Investor Protection (DIP) Guidelines of SEBI, 2000. The
guidelines provide norms relating to eligibility for companies issuing
securities, pricing of issues, listing requirements, disclosure norms, lock in
period for promoters’ contribution, contents of offer documents, pre-and post
issue obligations, etc. The guidelines apply to all public issues, offers for sale
and rights issues by listed and unlisted companies.
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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00000000000000000000000
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000000000000000000000000000000000000000000011637072740000015000000033646
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595a00000218000000146758595a0000022c000000146258595a0000024000000014646d6
e640000025400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
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• Eligibility Norms
Any company issuing securities through the offer document has to satisfy the following conditions:
A company making a public issue of securities has to file a draft prospectus with SEBI, through an
eligible merchant banker, at least 30 days prior to the filing of prospectus with the Registrar of
Companies (RoCs). The filing of offer document is mandatory for a listed company issuing security
through a rights issue where the aggregate value of securities, including premium, if any, exceeds
Rs.50 lakh. A company 40 cannot make a public issue unless it has made an application for listing
of those securities with stock exchange(s). The company must also have entered into an
agreement with the depository for dematerialisation of its securities and also the company should
have given an option to subscribers/shareholders/investors to receive the security certificates or
securities in dematerialized form with the depository. A company cannot make an issue if the
company has been prohibited from accessing the capital market under any order or discretion
passed by SEBI.
An unlisted company can make an Initial Public Offering (IPO) of equity shares or any other
security which may be converted into or exchanged with equity shares at a later date, only if it
meets all the following conditions:
(a) The company has net tangible assets of at least Rs.3 crore in each of the preceding 3 full years
(12 months each),of which not more than 50 % is held in monetary assets, provided that if more
than 50 % of the net tangible assets are held in monetary assets, the company has made firm
commitments to deploy such excess monetary assets in its business/project.
(b) The company has a track record of distributable profits in terms of section 205 of the
Companies Act, 1956, for at least three (3) out of immediately preceding five (5) years. Provided
further, that extraordinary

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items shall not be considered for calculating distributable profits in terms of section 205 of
Companies Act,1956/
(c) The company has a net worth of at least Rs.1 crore in each of the preceding 3 full years (of 12
months each).
(d) In case the company has changed its name within the last one year, at least 50% of the
revenue for the preceding 1 full year is earned by the company from the activity suggested by the
new name.
(e) The aggregate of the proposed issue and all previous issues made in the same financial year in
terms of the size(i.e offer through offer document+firm allotment promoters’ contribution through
the offer document),does not exceed five (5) times its pre-issue net worth as per the audited
balance sheet of the last financial year.
A listed company shall be eligible to make a public issue of equity shares or any other security
which may be converted into or exchanged with equity shares at a later date; provided that the
aggregate of the proposed issue and all previous issues made in the same financial year in terms of
size (i.e offer through offer document+firm allotment+promoters contribution through the offer
document) issue size does not exceed 5 times its pre issue net worth as per the audited balance
sheet of the last financial year. Further, if there is a change in the name of the issuer company
within the last 1 year (reckoned fro m the date of filing of the offer document), the revenue
accounted for by the activity suggested by the new name is not less than 50 % of its total revenue
in the preceding 1 full year period.
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The companies eligible to make public issue can freely price their equity shares or any
security convertible into equity at a later date in cases of public/rights issues by listed
companies and public issue by unlisted
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8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
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companies. In addition, eligible infrastructure companies can freely price their equity shares
subject to compliance of disclosure norms as specified by SEBI from time to time. The public and
private sector banks can also freely price their shares subject to approval by RBI. A company may
issue shares to applicants in the firm allotment category at higher price than the price at which
securities are offered to public. A listed company making a composite issue of capital may issue
securities at differential prices in its public and rights issue. Further, an eligible company is free to
make public/rights issue in any denomination determined by it in accordance with the Companies
Act, 1956 and SEBI norms.
• Contribution of Promoters and lock-in
The promoters’ contribution in case of public issues by unlisted companies and promoters’
shareholding in case of ‘offers for sale’ should not be less than 20% of the post issue capital. In
case of public issues by listed companies, promoters should contribute to the extent of 20% of the
proposed issue or should ensure post-issue holding to the extent of 20% of the post-issue capital.
For composite issues, the promoters’ contribution should either be 20% of the proposed public
issue or 20% of the post-issue capital. The promoters should bring in the full amount of the
promoters contribution including premium at least one day prior to the issue opening date (which
shall be kept in an escrow account with a Scheduled Commercial Bank and the said
contribution/amount should be released by the company along with the public issue proceeds).
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The SEBI (Issue of Sweat Equity) Regulations, 2002 have been framed and the main
provisions laid down therein for issue of sweat equity are (a) under the new guidelines, the
Sweat Equity shares can be issued by a company to its employees and directors as well as
promoters, (b) the
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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00000000000000000000000
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000000000000000000000000000000000000000000011637072740000015000000033646
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e640000025400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
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pricing of the sweat equity shares should be as per the formula prescribed for that of preferential
43 allotment, (c) the sweat equity shares should be locked in for a period of 3 years from the date
of Allotment. In case of a subsequent public issue being made, lock in shall be as per the SEBI
(DIP) Guidelines, 2000.
• On-line Initial Public Offers (IPO)
A company proposing to issue capital to public through on-line system of the stock exchange has to
comply with Section 55 to 68A of the Companies Act, 1956 and SEBI (DIP) Guidelines, 2000. The
company is required to enter into an agreement with the stock exchange(s) which have the
requisite system for on-line offer of securities. The agreement should cover rights, duties,
responsibilities and obligations of the company and the stock exchanges interse, with provision for
a dispute resolution mechanism between the company and the stock exchange. The issuer
company appoints a Registrar to the Issue having electronic connectivity with the stock exchanges.
The issuer company can apply for listing of its securities at any exchange through which it offers its
securities to public through on-line system, apart from the requirement of listing on the regional
stock exchange. The stock exchange appoints brokers for the purpose of accepting applications and
placing orders with the company. The lead manager would co-ordinate all the activities amongst
various intermediaries connected in the system. In addition to the above, the DIP guidelines also
provide details of the contents of the offer document and advertisement, other requirements for
issues of securities, like those under Rule 19(2) (b) of SC(R) Rules, 1957. The guidelines also lay
down detailed norms for issue of debt instruments, issue of capital by designated financial
institutions and preferential/bonus issues.
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00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
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00000000000000000000000
• Demat Issues As per SEBI mandate, all new IPOs are compulsorily traded in dematerialized
form. The admission to a depository for dematerialisation of securities is a prerequisite for making
a public or rights issue or an offer for sale. The investors would however, have the option of either
subscribing to securities in physical form or dematerialised form. The Companies Act, 1956 requires
that every public listed company making IPO of any security for Rs.10 crore or more shall issue the
same only in dematerialised form.
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00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
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Three distinct categories of collective investment vehicles (CIVs) namely, Mutual Funds,
venture capital funds and collective investment schemes, mobilize resources from market
for investment purposes.
• Mutual Funds
‘Put your money in trust, not trust in money’ entices the small investors, who generally lack
expertise to invest on their own in the securities market and prefer some kind of collective
investment vehicles, which can pool their marginal resources, invest in securities and distribute the
returns there from among them on co-operative principles. The investors benefit in terms of
reduced risk, and higher returns arising from professional expertise of fund managers employed by
such investment vehicle. This was the original appeal of mutual funds (MFs) which offer a path to
stock market far simpler and safer than the traditional call-abroker-and-buy-securities route. This
caught the fancy of small investors leading to proliferation of MFs. In developed financial markets,
MFs have overtaken bank deposits and total assets of insurance funds. In the USA, the number of
MFs far exceeds the number of listed securities.
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0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
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00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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MFs, thus, operate as CIV that pools resources by issuing units to investors and collectively invests
those resources in a diversified portfolio comprising of stocks, bonds or money market instruments
in accordance with objectives disclosed in the offer document issued for the purpose of pooling
resources. The profits or losses are shared by investors in proportion to their investments. The
process gathered momentum in view of regulatory protection, fiscal concession and change in
preference of investors. The first ever MF in India, the Unit Trust of India (UTI) was set up in 1964.
This was followed by entry of MFs promoted by public sector banks and insurance companies in
1987. The industry was opened up to private sector in 1993 providing Indian investors a broader
choice. Starting with an asset base of Rs. 25 crore in 1964, the industry has grown exponentially to
Rs. 5,05,152 crore with a total number of 40 MFs at the end of March 2008. We will discuss more
about MFs in chapter no. 6.
• Venture Capital Funds
‘Venture capital fund’ means a fund established in the form of a trust or a company including a
body corporate and registered under these regulations which has a dedicated pool of capital raised
in a manner specified in the regulations, and invests in accordance with the regulations. `Venture
capital undertaking’ means a domestic company whose shares are not listed on a recognised stock
exchange in India and which is engaged in the business for providing services, production or
manufacture of article or things or does not include such activities or sectors which are specified in
the negative list by the Board with the approval of the Central Government by notification in the
Official Gazette in this behalf. SEBI is the single-point nodal agency for registration and regulation
of both domestic and overseas VCFs. No approval of VCFs by tax authorities is required. VCFs enjoy
a complete pass-through status. There is no tax on distributed or undistributed income of such
funds. The income distributed

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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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00000000000000000000000
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000000000000000000000000000000000000000000011637072740000015000000033646
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by the funds is only taxed in the hands of investors at the rates applicable to the nature of income.
This liberalisation is expected to give a strong boost to NRIs in Silicon Valley and elsewhere to
invest some of their capital, knowledge and enterprise in ventures in their motherland.
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0000000000000000001163707274000001500000003364657363000001840000006c77747074000
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00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
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Secondary market is the place for sale and purchase of existing securities. It enables an
investor to adjust his holdings of securities in response to changes in his assessment about
risk and return. It also enables him to sell securities for cash to meet his liquidity needs. It
essentially comprises of the stock exchanges which provide platform for trading of
securities and a host of intermediaries who assist in trading of securities and clearing and
settlement of trades. The securities are traded, cleared and settled as per prescribed
regulatory framework under the supervision of the Exchanges and SEBI.
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000000000000000000000000000000000000000000011637072740000015000000033646
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595a00000218000000146758595a0000022c000000146258595a0000024000000014646d6
e640000025400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
0000043c0000080c7465787400000000436f7079726967687420286329203139393820486
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• Stock Exchanges The stock exchanges are the exclusive centres for trading of securities.
Listing of companies on a Stock Exchange is mandatory to provide an opportunity to investors to
invest in the securities of local companies. The trading volumes on exchanges have been
witnessing phenomenal growth for last few years. Since the advent of screen based trading system
in 1994-95, it has been growing by leaps and bounds and reported a total turnover of Rs.51,30,816
crore during 2007-08. The growth of turnover has, however, not been uniform across exchanges as
may be seen from Table 3.1. The increase in turnover took place mostly at big
exchanges(NSE and BSE) and it was partly at the cost of small exchanges that failed to keep pace
with the changes. The business moved away from
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00000000000000000000000
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000000000000000000000000000000000000000000011637072740000015000000033646
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small exchanges to big exchanges, which adopted technologically superior trading and settlement
systems. The huge liquidity and order depth of big exchanges further diverted liquidity of other
stock exchanges. The 19 small exchanges put together reported less than 0.02% of total turnover
during 2007-08, while 2 big exchanges accounted for over 99.98 % of turnover. For most of the
exchanges, the raison d’être for their existence,
i.e. turnover, has disappeared. NSE and BSE are the major exchanges having nationwide
operations. NSE operated through 2,956 VSATs in 245 cities at the end of March 2008.
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
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0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
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5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
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• Trading mechanism
The trading on stock exchanges in India used to take place through open outcry without use of
information technology for immediate matching or recording of trades. This was time consuming
and inefficient. This imposed limits on trading volumes and efficiency. In order to provide
efficiency, liquidity and transparency, NSE introduced a nation-wide online fully automated screen
based trading system (SBTS) where a member can punch into the computer quantities of securities
and the prices at which he likes to transact and the transaction is executed as soon as it finds a
matching sale or buy order from a counter party.
SBTS electronically matches orders on a strict price/time priority and hence cuts down on
time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It
allows faster incorporation of price sensitive information into prevailing prices, thus increasing the
informational efficiency of markets. It enables market participants, irrespective of their
geographical locations, to trade with one another simultaneously, improving the depth and liquidity
of the market. It provides full anonymity by accepting orders, big or small, from members without
revealing their identity, thus providing equal access to everybody. It also provides a perfect audit
trail, which helps to resolve disputes by
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00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
00000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031000061
6373704d5346540000000049454320735247420000000000000000000000000000f6d6000
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000000000000000000000000000000000000000000011637072740000015000000033646
57363000001840000006c77747074000001f000000014626b707400000204000000147258
595a00000218000000146758595a0000022c000000146258595a0000024000000014646d6
e640000025400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
0000043c0000080c7465787400000000436f7079726967687420286329203139393820486
5776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
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logging in the trade execution process in entirety. This diverted liquidity from other exchanges and
in the very first year of its operation, NSE became the leading stock exchange in the country,
impacting the fortunes of other exchanges and forcing them to adopt SBTS also. Today India can
boast that almost 100% trading takes place through electronic order matching.
Technology was used to carry the trading platform from the trading hall of stock exchanges to the
premises of brokers. NSE carried the trading platform further to the PCs at the residence of
investors through the Internet and to handheld devices through Wireless Application Protocol
(WAP) for convenience of mobile investors. This made a huge difference in terms of equal access to
investors in a geographically vast country like India. The trading network is depicted in Figure
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c9cad2d3d4d5d6d7d8d9dae1e2e3e4e5e6e7e8e9eaf1f2f3f4f5f6f7f8f9faffc4001f0100030101010101
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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00000000000000000000000
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The purpose of Index Trading is to provide NEAT users with a facility of buying and selling of
Indices, in terms of securities that comprises the Index. Currently, the facility is only for NIFTY
securities. The users have to specify the amount, and other inputs which are sent to the host, and
the host generates the orders. The Index Trading provides users with the choice of gaining with the
rise/decline in Index values either by buying or selling them. The buying and selling of Indices are
simulated by entering orders in securities in proportion to the composition of the chosen index.
Quantity of shares of a particular security of NIFTY is calculated as under:
No. of Shares of a security in index = Current Market Capitalization of the Index Amount
* Issued Capital for the security Where, Current Market Capitalisation of the Index =
Summation [Last Traded Price (Previous close if not traded) * No. of Issued Shares]
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0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
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Traditionally, indices have been used as benchmarks to monitor

markets and judge performance. Modern indices were first proposed by
two 19th century mathematicians: Etienne Laspeyres and Hermann
Paasche. The grandfather of all equity indices is the Dow Jones
Industrial Average which was first published in 1896; since then
indices have come a long way -not only in their sophistication -but also
in the variety. There are three main types of indices, namely price
index, quantity index an value index. The price index is most widely
used. It measures changes in the levels of prices of products in the
financial, commodities or any other markets from one period to
another. The indices in financial markets measure changes in prices of
securities like equities, debentures, government securities, etc. The
most popular index in financial market is the stock (equity) index
which uses a set of stocks that are representative
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0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
00000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031000061
6373704d5346540000000049454320735247420000000000000000000000000000f6d6000
100000000d32d48502020000000000000000000000000000000000000000000000000000
000000000000000000000000000000000000000000011637072740000015000000033646
57363000001840000006c77747074000001f000000014626b707400000204000000147258
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e640000025400000070646d6464000002c400000088767565640000034c00000086766965
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of the whole market, or a specified sector, to measure the change in overall behavior of the
markets or sector over a period of time.
• Understanding the index number
An index is a summary measure that indicates changes in value(s) of a variable or a set of

variables over a time or space. It is usually computed by finding the ratio of current values(s) to a
reference (base) value(s) and multiplying the resulting number by 100 or 1000. For instance, a
stock market index is a number that indicates the relative level of prices or value of securities in a
market on a particular day compared with a base-day price or value figure, which is usually 100 or
1000.
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323232323232323232323232323232323232323232323232323232323232323232323232ffc00011
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010101010000000000000102030405060708090a0bffc400b5110002010204040304070504040001
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00000000000000000000000
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000000000000000000000000000000000000000000011637072740000015000000033646
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A person holding assets (securities/funds), 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 finds out the right 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. The
trades are cleared to determine the obligations of counterparties to deliver securities/funds as per
settlement schedule. Buyer/seller delivers funds/securities and receives securities/ funds and
acquires ownership over them. A securities transaction cycle is presented in Figure
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0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
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00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
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5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
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00000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031000061
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000000000000000000000000000000000000000000011637072740000015000000033646
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000000000000000000000000000000000000000000011637072740000015000000033646
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The changes in the regulatory framework of the capital market and fiscal
policies have also resulted in newer kinds of financial instruments (securities)
being introduced in the market. Also, a lot of financial innovation by companies
who are now permitted to undertake treasury operations has resulted in newer
kinds of instruments -all of which can be traded -being introduces. The
variations in all these instruments depend on the tenure, the nature of
security, the collateral security, the interest rate, the trading features, tax
breaks and purpose of issue.
The following investment instruments are available in the market. The feature
and the purpose of the each type of investment tools are different in terms of
interest rate, maturity period, security if the invested principal amount etc.
Equity Shares
Bank and other FDs
Mutual Funds
Government securities
PPF Public Provident Fund
Life Insurance
Gold, Real estate, post office deposits
The instrument used by corporate sector to raise funds are selected on the
basis of (i) investor preference for a given instrument and (ii) the regulatory
framework, where under the company has to issue the security. Investors’
preference very with their attitude towards risk, and their investment goals and
investment horizons. The tax liability of the investor too affects the choice of
investment media. The firm on the other hand, is affected by the debt-equity
ratio permissible. The tax liability of the company, the purpose for which funds
are required, debt servicing
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influence the choice if the instrument. The corporate sector and financial instrument have been
issuing new instrument to attract investors as mentioned above in the beginning of this chapter.
However the rang of the instrument used is still narrow. The debentures and equity share are the
most popular instruments in the current scenario to raise funds from the market. The attraction for
the instrument for both corporate sector and investors lies in (a) the investor gets reasonable
return during initial years, and (b) the issue the low cost (post – tax) capital, there by entailing a
lesser strain on liquidity.
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Equity shares, commonly referred to as ordinary shares also represent the form of fraction
ownership in which a shareholder, as a fraction owner, undertakes the maximum
entrepreneurial risk associated with business venture. The holders of such shares are
member of the company and have voting rights. A company may issue share with
differential right as to voting, payment of dividend etc.
• Important characteristics of the equity share are as the following.

1Equity share, other than non voting power, have voting rights at all general meeting of
the company.
2Equity share have right to share the profit of the company in the form of dividend and
bonus shares.
3When the company is wound up, payment towards the equity share capital will be made
to the respective shareholders only after payment of the claims of all the creditors and
preference share capital.
The equity shares can be purchased from Primary Market when the company issues the
share in the market as Initial Public Offer (IPO). The primary market also includes issues of
the right and the sweat shares and
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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00000000000000000000000
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bonus shares. When the company offers the shares other than their existing share holders it is
called Follow up Public Offer (FPO-second time issue of share in the market).
Equity shares are easily tradable in the secondary market and it is highly liquid asset. Stock
Exchanges are the well known inter mediatory to sell or buy equity share from secondary market.
It makes easy to invest in the share and provide better plate form for the trade in shares.
Investment in the shares gives high return as the capital gain as well as dividend income. Every
day fluctuation in the prices of the shares in the share market gives good opportunity to the
investors to gain good profit. But with high return, it involves high risk also because its prices are
purely depended on the market and it is very much affected by speculators.
The risks involved with the investment in shares are as following which can also be said demerits
of such investment.
The risk/return trade-off
This is one of the basic principles in investing: Taking reasonable risks could result in higher long-
term rates of returns. Equity shares promise higher rates of return over the long term. On the
other hand, debt instruments offer more stable but lower returns.
Market/economy risks
These risks are not unique to any company and affect all stocks. They stem from factors related to
the economy such as money supply, the level of government borrowing, the industrial policy,
global economic conditions, etc. These are also known as non-diversifiable risks, since investors
cannot avoid these risks, however diversified their portfolios may be.
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00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
Industry risk
This is the risk that applies to a specific industry and therefore, to stocks of companies belonging to
that industry. A large scale shift in demand, a rise in input prices and regulatory changes are
factors that augment such a risk.
Management risk
It is defined as the inability of the management to take decisions in the larger good of the company
and its minority shareholders. Decisions that benefit only the company's directors and its
promoters would classify as a management risk. Further, even a shareholder-friendly management
can be a risk if it is unable to manage a company's growth in both good and bad times alike, and
lacks the necessary dynamism to lead the company.
Business risk
Business risks mainly arise from the fact that a company's earnings before interest and taxes
(EBIT) can vary, depending on various factors. Demand is the first among these factors. If the
demand for the company's product is not stable or predictable, its revenue won't be stable or
predictable either.
Financial risk
Financial risks arise when debt represents a high proportion of the company's capital structure
(which comprises net worth and debt). A calling back of debt by the creditors or the company’s
inability to secure adequate funds in future could result in a collapse in the operations of the firm
whose stock you have invested in.
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00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
• Taxation
Securities Transaction Tax (STT) is levied on the value of certain transactions. These
transactions include the purchase and sale of equity shares, purchase and sale of units of an equity
oriented fund, sale of a unit of an equity oriented fund to the mutual fund and sale of a derivative.
The rates applicable on different transactions differ depending on the type of security that is traded
and whether the transaction is delivery based or not. Further, in some cases the seller is required
to pay the tax and in other cases the buyer has to pay (see table below).
Transaction in recognized stock exchanges in India

units of Sale of equity shares Sale of equity Sale of
equity and units of equity shares and units derivatives
oriented oriented mutual fund of equity
mutual fund (delivery based) oriented mutual
(delivery fund (non-
based) delivery based)
Rate of STT 0.125% 0.125% 0.025% 0. Purchase of
from June 1, equity shares
2006 and 017%
Tax treatment NA Exempt from tax Income is Income is
of long - term under section 10(38) generally treated generally
capital gains in [long- - term capital as business treated as
the hands of the losses, if any, shall income business
seller be ignored] income
Tax treatment NA Taxable at the rate Income is Income is

of short-term of 10% (+surcharge generally treated generally
capital gains in +education cess) as business treated as
the hands of the under Section 111A income business
seller income
Tax treatment NA If income is shown One can claim One can claim
of business as business income, tax rebate under tax rebate
income in the one can claim tax Section 88E under Section
hands of the rebate under Section 88E
seller 88E

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6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
00000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031000061
6373704d5346540000000049454320735247420000000000000000000000000000f6d6000
100000000d32d48502020000000000000000000000000000000000000000000000000000
000000000000000000000000000000000000000000011637072740000015000000033646
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77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
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These are by far one of the core fixed income opportunities available for the retail investor. The
recent hike in interest rates on FDs have made these investments more attractive.
• Investment term
Bank deposits can be placed for flexible time periods. The minimum and maximum tenure of these
deposits varies from bank to bank. Generally, the minimum term of such deposits is 7 days and
maximum is 10 years
• Returns
Normally, interest rates on deposits differ from bank to bank and are dependent upon the
investment tenure of the deposit. A longer tenure deposit attracts a higher rate of interest to
compensate the deposit holder for the interest rate risks arising on such deposits. Bank deposits
are mainly of two types – non-cumulative and cumulative deposits. Under the former, interest
accumulated on the deposit is paid out to the deposit holder after specified intervals whereas in the
case of the latter, interest accrued on the deposit is re-invested in the deposit at the pre-
determined rate of interest. The interest is then made available to the deposit holder at the end of
the term.
• Risk
Since these deposits are provided by banks, they entail a minimum level of risk. Moreover, these
deposits are insured with the Deposit Insurance and Credit Guarantee Corporation (DICGC) for Rs
1 lakh per deposit which further enhances the safety of these instruments.

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000000000000000000000000000000000000000000011637072740000015000000033646
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000000000000000000000000000000000000000000011637072740000015000000033646
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77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
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5776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
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• Tax implications
For interest income exceeding Rs 10000 in a year on deposits, banks deduct tax at source (TDS) at
10.2 per cent (10 per cent tax plus 2 per cent surcharge). Further investments in these deposits,
offer a tax rebate under section 80 C of the Income Tax Act up to a maximum of Rs 1 lakh.
However, for claiming the tax benefit, you need to fulfill two conditions – the deposit is to be kept
with a scheduled bank and the term of this deposit should be greater than or equal to 5 years.
Section 80C allows you to avail of a deduction from taxable income to the extent of your
investment in certain specified avenues, up to a maximum consolidated limit of Rs 1 lakh.
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To benefit from investing in the stock or the debt market, you must have a basic
understanding of how these function and a good overview of what is on offer. Beyond that,
it requires continuous tracking of various stocks and/or debt market products, in order to
stay abreast with the trends in these markets. For example, if you buy shares of ten
companies, it means that you will have to keep a close tab on these ten companies in
terms of their performance, financial results, future plans and so on. In the case of debt, to
invest gainfully, you must be aware of trends in inflation and interest rates, amongst other
factors, not only in the domestic market but in international markets as well.
This may sound like a daunting task as it could take up a lot of your time and effort. It
would also require access to a considerable amount of information, in addition to having
suitable skills and expertise. The simple alternative would be to invest in debt and equity
through mutual funds.
A mutual fund is a vehicle through which an investor can indirectly invest in equities or the
debt instruments. It holds the contributions of a large
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00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
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000000000000000000000000000000000000000000011637072740000015000000033646
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number of investors and the common pool of funds so collected is invested by professional
managers in equities and/or debt instruments in accordance with the predefined objectives of the
mutual fund. Since the ownership of the corpus is joint, i.e., the fund belongs to all investors, and
its investment purpose is “mutual”, i.e., common for all investors, it is called a mutual fund.
In proportion to their contributions, investors receive units of the mutual fund. At the outset, the
units issued have a face value of Rs 10 each. Later, as the corpus is invested and the value of the
investments change the value of each unit changes proportionately. The value of each unit is also
impacted when management fees and other expenses are deducted from the overall pool of funds.
The value of each unit is called the Net Asset Value or NAV of the scheme. It changes on a daily
basis. As per the definition, the net assets mean the current market price of all securities held plus
cash and any accrued income, minus liabilities.
NAV = (Market value of the fund's investments + Current assets + Accrued income) -Current
Liabilities -Accrued Expenses / (Total Number of units outstanding)
Investors who wish to purchase or sell units of a mutual fund after the scheme is fully functional
must do so at a price that is linked to the NAV.
• RISK
The risk involved in the equity is more or less involved in the most of the schemes of the mutual
fund. NAV is purely depended on the stock market and value of securities in which the fund is
invested by Asset Management Company (AMC). But as compare to the direct investment in the
equity
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00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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risk in the mutual fund is lower because the investment is diversified in different scripts.
• TAX BENEFITS AND IMPLICATIONS OF INVESTING IN MUTUAL FUNDS
The dividend distributed by both debt funds and equity funds is tax-free in your hands. In case of
equity funds, no dividend distribution tax is payable by the mutual fund. However, in the case of
debt funds, the mutual fund has to pay a Dividend Distribution Tax (DDT) of 14.025 per cent (12.5
per cent tax + 2 per cent education cess + 10 per cent surcharge) on the amount of dividend
distributed to individuals.
In the case of short term capital gains (profits that accrue from the sale of units within one year
from the date of purchase) earned on the sale of equity mutual funds, tax is applicable at the rate
of 15% per cent, if your net taxable income is above 10 lakh per annum or 10.2 per cent if your
net taxable income is below Rs 10 lakh per annum. Short term capital gains on debt mutual funds
attract tax at the personal income tax rate applicable to you.
Long term capital gains (profits that accrue from the sale of units after one year from the date of
purchase) earned on the sale of equity mutual funds are tax free in your hands. In case of debt
funds, long term capital gains computed without indexation (indexation involves increasing the cost
of your investment to account for inflation based on the cost inflation index table published by the
government), the tax payable on long term capital gains from debt funds is 22.44 per cent if your
income is above Rs 10 lakh per annum or 20.4 per cent if your income is below Rs 10 lakh per
annum. You can choose to calculate your long term capital gains with or without indexation,
depending on which one results in lower tax payable.
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• Expenses
The Asset Management Company charges an annual fee, or expense ratio that covers
administrative expenses, advertising expenses, custodian fees, etc. An expense ratio of 1.80 per
cent means the AMC has charged Rs 1.80 for every Rs. 100 in assets under management.
In Mutual fund investment, AMC can charge 2.25% of the total investment as the entry load on the
investor and the amount is deducted from the investment amount.
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RBI Relief Bonds are issued by the Reserve Bank of India and are a popular tax-saving
tool. These bonds are currently available under two options – an 8 per cent bond which is
taxable and a 6.5 per cent tax-free bond. A number of banks such as the UTI, SBI etc.
undertake the distribution of such bonds on behalf of the RBI.
• Investment tenure
Maturity period of the 8 per cent RBI Bond is 6 years and for the 6.5 per cent RBI Bond is 5 years
• Returns
As the name suggests, the 8 per cent RBI Bonds carry an 8 per cent per annum rate of interest and
the 6.5 percent bonds provide a 6.5 per cent annual interest rate. Interest on such bonds is
compounded half-yearly.
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
• Risk
RBI is the central governing bank of our country and therefore these bonds carry zero risk since
they are issued by the government.
• Liquidity
These are highly illiquid. The 8 per cent bonds cannot be encashed prior to their maturity.
However, the 6.5 percent tax-free savings bond can be redeemed after a minimum lock-in period
of 3 years from the date of issue. Also, these are non-tradable securities and therefore cannot be
sold on the debt market.
• Tax implications
For the 6.5 per cent bond, interest received is completely exempt from income tax. But, for the 8
percent RBI relief bond, interest is taxable according to the personal income tax rate applicable to
you.
• Small saving schemes
The Post Office Savings Schemes (POSS) are a popular savings destination as they offer
guaranteed returns and are risk-free as they are backed by the government. Few SSS are given in
the table on page no
64.
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00000000000000000000000000000000000000000000000000000000000000000000000000000000000
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0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
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00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
A look at the popular Small Savings Schemes

Name of the Scheme Tenure Rate of Liquidity Tax applicable
Return
per
annum
National Saving 6 years 8.16% Low Benefits of Section
Certificates 80 C applicable.
Kisan Vikas Patras 8 years 8.40% Low Returns added to
7 your income and
months taxed accordingly.
Post Office Time 1 Year 2 6.25% to Low Returns added to
Deposit years, 3 7.5% your income and
years or dependin taxed accordingly.
5 years g on the
duration
of the
deposit
Post Office 5 Year 7.45% Low Returns added to
Recurring Deposit your income and
taxed accordingly.
Post Office Monthly 6 Year 8% Low Returns added to
Income Plan your income and
taxed accordingly.
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Popularly known as PPF, is a savings cum tax saving instrument. It

also serves as a retirement planning tool for many of those who do not
have any structured pension plan covering them. The balances in PPF
account cannot be attached by any authority normally.
• How to Open Account
Public Provident Fund account can be opened at designated post offices

throughout the country and at designated branches of Public Sector Banks
throughout the country.
Who can Open Account

Tabs on Investment
The account can be opened by an individual in his own name, on behalf of a

minor of whom he is a guardian.
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000000000000000000000000000000000000000000011637072740000015000000033646
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Minimum deposit required in a PPF account is Rs. 500 in a financial year. Maximum deposit limit is
Rs. 70,000 in a financial year. Maximum number of deposits is twelve in a financial year.
Maturity
The maturity period of the account is 15 years.
Rate of interest is 8% compounded annually.
One deposit with a minimum amount of Rs.500/-is mandatory in each financial year.
The amount of deposit can be varied to suit the convenience of the account holders.
The account holder can retain the account after maturity for any period without making any further
deposits. In this case the account will continue to earn interest at normal rate as admissible till the
account is closed.
The account holder also has an option to extend the PPF account for any period in a block of 5
years at each time, after the maturity period of 15 years.
Lapse in Deposits
If deposits are not made in a PPF account in any financial year, the account will be treated as
discontinued. The discontinued account can be activated by payment of the minimum deposit of
Rs.500/-with default fee of Rs.50/-for each defaulted year.
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
Premature Closure or Withdrawal

Premature closure of a PPF Account is not permissible except in case of death. Nominee/legal heir
of PPF Account holder cannot continue the account after the death.
Premature withdrawal is permissible in the 7th year of the account subject, to a limit of 50% of the
amount at credit preceding three year balance. Thereafter one withdrawal in every year is
permissible.
Tax Benefits
Deposits in PPF are eligible for rebate under section 80-C of Income Tax Act.
The interest on deposits is totally tax free.
Deposits are exempt from wealth tax.
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Life is a roller coaster ride and is full of twists and turns. You cannot take anything for
granted in life. Insurance policies are a safeguard against the uncertainties of life.
Insurance is system by which the losses suffered by a few are spread over many, exposed
to similar risks. Insurance is a protection against financial loss arising on the happening of
an unexpected event. Insurance policy helps in not only mitigating risks but also provides a
financial cushion against adverse financial burdens suffered.
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
• What Is Insurance?
Insurance is a contract between two parties, the insurer or the insurance company, and the
insured, the person seeking the cover. Within this contract, the insurer agrees to pay the insurer
for financial losses arising out of any unforeseen events or risk in return for a regular payment of
premium. Thus, these insurance plans are also called as a Risk Cover Plans, which means to
financially compensate for losses that occur uncertainly through accident, illness, theft, natural
disaster. As you can not fight against these man-made and natural calamities, so at least be
prepared for them and their aftermath by taking insurance policies.
• Insurance -Kind of Investment
Insurance is an attractive option for investment but most people are not aware of its advantages as
an investment option. Remember that first and foremost, insurance is about risk cover and
protection. By buying life insurance, you buy peace of mind. Insurance also serves as an excellent
tax saving mechanism. The Government of India has offered tax incentives to life insurance
products in order to facilitate the flow of funds into productive assets.
• Types of Insurance
Insurance policies cover the risk of life as well as other assets and valuables, such as, home,
automobiles, jewelry et al. On the basis of the risk they cover, insurance policies can be classified
into two categories: Life Insurance and General Insurance. As the term suggests, Life Insurance
covers the risk involved in a person's life, while General Insurance provides financial protection
against unforeseen events, like accident, flood, earthquake, disease, etc.
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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00000000000000000000000
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000000000000000000000000000000000000000000011637072740000015000000033646
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vTax Benefits
The premium paid toward the insurance is deductable from the taxable income of the investor
under section 80C of the Income tax act 1961. The amount receive at the time of end of the period
of the insurance policy is also tax exempted.
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An old saying preaches, “Gold shines when everything else falls apart”. True, the glitter of
the yellow metal makes it an attractive and popular choice as an investment option.
Throughout the world, gold is considered as a ‘must-have’ in your investment portfolio.

Experts recommend an exposure of anything between 5 to 15 per cent of your total assets
in gold. The following factors justify the reasons behind this:
• Store of Value
The preference for gold stems from the fact that it is virtually indestructible and over the long
term, gold generally gains in value. It is a veritable hedge against inflation too. While the value of
most the financial investments depreciate due to inflation, the price of gold keeps up with inflation
in the long run.
• For Diversification
Gold, as an asset is negatively correlated with other asset classes. Therefore, its price generally
moves in the opposite direction from other
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00000000000000000000000
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asset classes such as stocks, bonds, etc. Hence, allocating a certain percentage of your total wealth
towards gold can greatly reduce your portfolio volatility or risk. The more negative the correlation
between this asset and your other investments, the lower will be the overall level of volatility in
your investment portfolio.
• Liquidity
Gold is one of the most liquid assets since it is a universally accepted store of value and hence, you
can convert your gold holdings into cash as and when you require to. Gold is transacted 24-hours a
day in markets around the world.
• DIFFERENT WAYS OF INVESTING IN GOLD
Investments in gold can be made either directly through the purchase of physical gold (in the form
of jewellery, bars, coins, etc.) or indirectly through trading in gold futures and gold Exchange
Traded Funds (ETFs). The gold can be stored in the form of the jewellery, coins, and now form the
commodity exchanges the gold can be purchased as the derivatives.
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The other sources of the investment includes the real estate and the investment in the own
business.
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65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
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000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
As the study was conducted on Indian financial markets and investment pattern of the people, we
carried out a Questionnaire survey to know the investment pattern of people in different
investment instrument and other expected financial services and returns on the investment.
We had asked following questions in the questionnaire and the following results were found from
the survey conducted by us.
(1)Awareness about investment Instruments
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7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
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First we asked to the people that how many investment instruments are
known to them form the mentioned investment instruments like Bank
FD, equity shares, Mutual funds, Insurance etc. As shown in the graph,
most no. of people, 85% know about Life Insurance and most of them
like to invest in LIC’s polices. Second Most known investment is in the
Bank Fixed Deposits, 75% of people have good information about the
fixed deposits schemes available with different banks. After that Equity,
PPF and Mutual Funds have got 65%, 43.5% and 40% opinion
respectively.
Other than these investment instruments some people also know

about Bonds, Gold, etc. other investment instrument those are 40% of
People.

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000000000000000000000000000000000000000000011637072740000015000000033646
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595a00000218000000146758595a0000022c000000146258595a0000024000000014646d6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(2) Preference for investment
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
Here, from the survey results we can say that people like to invest first in the secured
investment. 26% of the people have given first preference to invest in Bank FDs, because
it gives secured and fixed return and the investment principal is also secured. Second most
preferable investment instrument is Life Insurance, it also secured investment and people
who want to invest for long term, like to invest in Life Insurance. 18% people have given
first rank to Life Insurance while 35.5% and 25% people have given second and third rank
respectively.
People who can take risk of investment and want higher return on their invested amount,
they prefer to invest in Equity as the best investment option for them. 12.5% have given
first and 13% people have given second rank to the equity. But comparatively to Bank FD
and Life Insurance it is less preferable, because of the risk involved in it.
Very few people like to invest in MFs because of less awareness and knowledge about it.
Only 0.5% people have given 1st rank and 6% and 21.5% have given 2 and 3 rank
nd rd
respectively. 23.5% people have given

696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
1st
rank to other investment it includes investment in own Business and Gold.
(3)Selection criteria for investment advisory service
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
People who take financial advisory services, 43.5% people give preference to good advice
about the investment tools and 28.5% people wants different products from financial
service providers, and 27.5% wants regular updates from them. 20% people desire good
technology like online services and online trading and fund transfer facilities.
(4) Preference for investment advisory service
Here we cn see that only 35% people take advisory servece for their investment plannig and they
regularly make investments. Othes people who make less frequent investment in FDs or Life
Indurance genrraly do not take regural advisory service.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
(5) Source of information
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
People who make regular investmnet in euity and MFs they generaly get infoermation from
the news paper and brokers and have given opinion 40% and 335.% respectively. T.V. is
also a good source of information and 32.5% opinion vots are with it. Internet is good
source for information but because of less awareness and knowledge of it, less people, only
17% like to collect information about financial products from internet. Very few people
have their profesional financial advisor or financial planner.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
(6) Investment Preriod
In the answer of this question we got mixed opinion. 41% people say that they prefer to invest for
long terb ie. 5 years and more. These people generaly invest in Insurance and ling term
Government security. 32% people say thet they woukd like to invest for mediam term. They invest
in FDs. 27% people like to invest for short term, less than one year. They generaly invest in Equity
and other marketable securitis. The asme is shown in the following graph.
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
(7)Investment frequency
The question was asked to know how often people invest in a year. Following results were found.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
Most People 38% invet on the monthy basis, this is because most of them invest in Insurance or
the post office or bank recring account. Then second preference, 35%, is given to invest on yearly
basis. These people invest in FDs and other medium or log term investments. Less people like to
invest quarterly. They are 22.5% of the total. Investment frequency is depended on the type of
investment instrument.
(8) Expected return
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
33.5% people are satisfied if they get 10%-15% return on their investmnen. These people
generaly invest in FDs and Insurance and expect only safe and steady return. 28% people want
15%-25% and more return on their investment. Only 10% people would be satisfied if they get
6%-9% return.
(9)Expectation for regular income from investment
Period: Monthly, Quarterly or Yearly.
66.6% people like to invest in a way that they get regular return in cash from their investment.
And 33.4% people will invest in a way that they get wholesome amount at the time of maturity.
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
From those who want regular return, 40% people like to get it on yearly basis and 38.7%
and 21.3% people want it on monthly and quarterly basis respectively.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
(10)How do people plan their tax liabilities?
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
For tax Planning people most of the people, 85%, invest in Insurance to gate the benefit of
the deduction. Then they invest in PPF and MFs about 22% and 25.5% respectively. Other
35% people also like to invest in equity because long term capital gain and dividend is
exempted from taxable income.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
We had conducted the study on Indian financial markets to know and
understand the investment pattern of the investors and their preferences about
available investment instruments. From our study we tried to find out
opportunity available in financial market for investors as well as the financial
services and products providers.
Here we came to know that Indian capital market is the one of the fastest
growing market in India. Over the last two decades, Indian capital market has
been growing very fast and still it has lots of scope for development.
Though The Bombay Stock Exchange is the oldest stock exchange in Asia, the
Indian security market is still under developed. Formerly the transactions of
the stock exchange were paper based and tool long time for it. Now trading is
Screen based electronic trading and it has helped stock exchanges for
development.
The capital market is divided into two parts, primary market and the secondary
market. After independence Indian government focused more on the public
sector units and privet investment was restricted, because of that policy
investors had fewer alternatives for investments in primary markets and they
were more investing only in government securities. After the policy of
privatisation and active role of privet players in business and commerce the
security market rapidly developed. Inter mediators like Mutual funds came into
the picture. Today Mutual funds are doing well in the market but it has large
scope for development.
Now if we talk about the brokers and broking industry, in present years they
are able to attract retail investors to invest in shares, mutual funds, insurance
etc. Because of the active role of brokers, more investment alternatives are
available for investors. IDBI capital is also one of the well known players in
retail broking and distribution business. Today IDBI offers IPOs, FDs, MFs, etc
investment instruments to their customers.

00000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031000061
6373704d5346540000000049454320735247420000000000000000000000000000f6d6000
100000000d32d48502020000000000000000000000000000000000000000000000000000
000000000000000000000000000000000000000000011637072740000015000000033646
57363000001840000006c77747074000001f000000014626b707400000204000000147258
595a00000218000000146758595a0000022c000000146258595a0000024000000014646d6
e640000025400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
0000043c0000080c7465787400000000436f7079726967687420286329203139393820486
5776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e310000000000000000000000127352474220494543
36313936362d322e31000000000000000000000000000000000000000000000000000000
00000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031000061
6373704d5346540000000049454320735247420000000000000000000000000000f6d6000
100000000d32d48502020000000000000000000000000000000000000000000000000000
000000000000000000000000000000000000000000011637072740000015000000033646
57363000001840000006c77747074000001f000000014626b707400000204000000147258
595a00000218000000146758595a0000022c000000146258595a0000024000000014646d6
e640000025400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
0000043c0000080c7465787400000000436f7079726967687420286329203139393820486
5776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e310000000000000000000000127352474220494543
36313936362d322e31000000000000000000000000000000000000000000000000000000
Further we found that the financial instruments available in the market involve different degree of
risk and returns. Investment like Government Securities, Bank FDs and Life Insurance are the safe
investment for people who do not want to take risk and it would give fixed return to them. While
Equity and Mutual Funds include the risk and the return on these investments are depended on the
market conditions.
From our study we found that most of the people give first preference to the safe investments
which do not include the market risk and the amount invested is 100% safe. These people give first
preference to Bank FD and Insurance because the investment is guaranteed by government or RBI.
Very few people take active part for investment in Equity and MFs. This is because the risk involved
in it and the awareness of the people about these investment instruments.
From the statistical analysis based on the ranks given by people to different investment
instruments as their preference we found that the people gives the first preference to Bank Fixed
Deposits for investment. Life Insurance is the second best alternative for investment for people.
Then people like to invest in gold real estate and own business also. Then Equity, PPF, Other FDs
and MFs come respectively as the investment instruments.
Other privet company’s FDs and Mutual Fund are less preferable investment alternatives though
they give comparatively more returns. Privet Company’s FD generally has higher interest rate then
Bank FDs, but because of the lack of knowledge of these products and information people do not
invest in it.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
From our study we found that there is lots of scope of development in capital market and people is
not aware about the all the products available in the Capital market. IDBI capital needs to focus on
finding out the need of people and according to their requirement they should offer product that
satisfy their need.
Very few people takes advise on investment planning from the financial advisor, so IDBI capital
should capture these opportunity to convey people and give them advise that help people to create
best portfolio of their investments.
Most of the people give preference to invest in Bank FDs, so there is the opportunity for IDBI
capital that they are already in the business of distribution of Fixed Deposit schemes of some
companies like TATA Motors and HDFC. So IDBI capital need to find people who want to invest in
Fixed deposits and want to invest for long term they can convey these people because the rate of
interest on these FD are higher than bank FD as TATA motors offered 11.25% interest in 3 years
FD.
Now there are fewer people who invest in equity share these is because it involves risk and they do
not know how to choose the share for investment. People who invest in equity shares, generally
the invest for short or medium period of time. IDBI Capital should suggest the following scrips to
people who want to start investment in equity, these scrips are best performing share in last three
years according to the percentage of return.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 Open Close Change % Returns
Jindal Steel 276.83 2473.55 2196.72 793.53
Larsen & Toubro 514.10 1496.10 982.00 191.01
Reliance Infra. 443.35 1262.25 818.90 184.71
Axis Bank 270.80 755.50 484.70 178.99
Tata Power Co. 434.70 1164.35 729.65 167.85
St Bk of India 710.19 1724.35 1014.16 142.80
Bharti Airtel 361.80 805.60 443.80 122.66
Reliance Inds. 933.15 2039.60 1106.45 118.57
HDFC 1052.10 2294.70 1242.60 118.11
BHEL 965.15 2090.50 1125.35 116.60
SAIL 70.35 152.35 82.00 116.56
HDFC Bank 736.20 1555.60 819.40 111.30
Reliance Capital 453.05 919.00 465.95 102.85
Hero Honda Motor 742.75 1460.75 718.00 96.67
Punjab Natl Bank 330.90 641.75 310.85 93.94
GAIL (India) 155.73 287.50 131.77 84.61
Sun Pharma.Inds. 717.50 1313.55 596.05 83.07
NTPC 112.55 198.10 85.55 76.01
ABB 428.01 741.75 313.74 73.30
Cairn India 137.50 234.05 96.55 70.22
(Source: www.paisabuilder.com/)
When we talk about the Mutual funds, very few people have information and knowledge of it.
Mutual Funds are the last preference for people to invest in. People who has invested in mutual
funds even they do not know the concept of MFs. People who want to invest for medium to long
term they can invest in MFs. So IDBI capital first need to aware people about MFs and then they
can attract people for investment in it.

696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000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 of the best performing mutual funds are from infrastructure, banking funds, real estate funds
etc. IDBI Capital should suggest people to invest people in these sectors fund that would give good
return to people. Following are some of the best performing Mutual Fund schemes.
484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346
540000000049454320735247420000000000000000000000000000f6d6000100000000d32d48502
0200000000000000000000000000000000000000000000000000000000000000000000000000000
0000000000000000001163707274000001500000003364657363000001840000006c77747074000
001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000
000146258595a0000024000000014646d6e640000025400000070646d6464000002c40000008876
7565640000034c0000008676696577000003d4000000246c756d69000003f8000000146d65617300
00040c0000002474656368000004300000000c725452430000043c0000080c675452430000043c00
00080c625452430000043c0000080c7465787400000000436f707972696768742028632920313939
38204865776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e3100000000000000000000001273524742204945433631393
6362d322e31000000000000000000000000000000000000000000000000000000
(Source: www.moneycntrol.com)
People who want to invest every month; Systematic Investment Planning (SIP) is the best
alternative for them. People who want regular return from the investment; systematic withdrawal
plan is good available alternative for them.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
So in this way IDBI Capital can offer the products to their existing and potential customers
according to their risk taking ability, investment period and return needed. IDBI capital can help
their customers to invest in the best possible investment instruments according to their need.
696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000
00049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000000000000000000000000000000000000000000000
0001163707274000001500000003364657363000001840000006c77747074000001f000000014626b70
7400000204000000147258595a00000218000000146758595a0000022c000000146258595a000002400
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c000000867669
6577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563680000043
00000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74
65787400000000436f70797269676874202863292031393938204865776c6574742d5061636b6172642
0436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000
000000000000000012735247422049454336313936362d322e310000000000000000000000000000000
00000000000000000000000
BSE India. BSE Certification on Securit Markets. Retrieved 06 14, 2009, from BSE India:
bseindia.com
Capital Market Module. Retrieved 06 14, 2009, from NSE India: www.nseindia.com
Chandra, P. (2008). Financial Management. New Delhi: Tata McGraw Hill .
Cherunilam, F. (2007). Business Envionment. New Delhi: Himalaya Publising House.
Finance & Investment Guide. Retrieved 06 16, 2009, from I love India:
http://www.iloveindia.com/finance/index.html
ICSI. (2008). Capital Market Insruments. In ICSI, Security Lows and Compliances (pp. 117-154).
New Delhi: Instiute of Companysecretories of India.
IDBI Capital. Retal Broking & Distribution. Retrieved 06 20, 2009, from IDBI Capital:
http://www.idbicapital.com/retail_broking_distribution.asp
Matai, S. Investment. Retrieved 06 20, 2009, from MoneyContro.com:

http://www.moneycontrol.com/mccode/news/article/news_article.php?aut ono=179491
Money Control.com. Retrieved 06 19, 2009, from www.moneycontrol.com:

www.moneycontrol.com/mccode/news/article/newsarticle.php?autono=17 9491
Singh, P. (1999). Investment Menagemet. New Delhi: Himalaya Publising House.
Zonkerala Articles. Investment options in India. Retrieved 06 16, 2009, from Zon Kerala Articles:
http://www.zonkerala.com/articles/investmentoptions-india.htm
PDF created with pdfFactory Pro trial version www.pdffactory.com PDF created with pdfFactory Pro trial
version www.pdffactory.com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 A Questionnaire
This questionnaire is to study customers’ preference about investment pattern
Please fill the following questionnaire fully, because it will help us to know need of
investors. (1) Your awareness about investment products. PPF Bank FD Others
FD (Privet Cos) Equities MFs Insurance Others (2) Your preference for
investment (Give rank) PPF Bank FD Others FD (Privet Cos) Equities MFs
Insurance Others (3) Your preference for Financial advisory services (Give rank)
Advice Technology Products Regular Updates (4) Do you take investment
advisory services?
-83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ffd8ffe000104a46494600010201012c012c0000ffe20c584943435f50524f46494c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 No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(5) From where you take information?
T.V
ffd8ffe000104a46494600010201012c01
2c0000ffe20c584943435f50524f46494c45
00010100000c484c696e6f021000006d6e
74725247422058595a2007ce0002000900
0600310000616373704d5346540000000
049454320735247420000000000000000
000000000000f6d6000100000000d32d48
502020000000000000000000000000000
000000000000000000000000000000000
000000000000000000000000000000000
011637072740000015000000033646573
63000001840000006c77747074000001f0
00000014626b707400000204000000147
258595a00000218000000146758595a00
00022c000000146258595a000002400000
0014646d6e640000025400000070646d6
464000002c40000008876756564000003
4c0000008676696577000003d40000002
46c756d69000003f8000000146d6561730
000040c00000024746563680000043000
00000c725452430000043c0000080c6754
52430000043c0000080c62545243000004
3c0000080c7465787400000000436f7079
726967687420286329203139393820486
5776c6574742d5061636b61726420436f6
d70616e79000064657363000000000000
0012735247422049454336313936362d3
22e310000000000000000000000127352
47422049454336313936362d322e31000
000000000000000000000000000000000
000000000000000000 News paper
ffd8ffe000104a46494600010201012c
012c0000ffe20c584943435f50524f464
94c4500010100000c484c696e6f02100
0006d6e74725247422058595a2007ce
00020009000600310000616373704d5
3465400000000494543207352474200
00000000000000000000000000f6d60
00100000000d32d4850202000000000
0000000000000000000000000000000
0000000000000000000000000000000
0000000000000000000000001163707
2740000015000000033646573630000
01840000006c77747074000001f0000
00014626b7074000002040000001472
58595a00000218000000146758595a0
000022c000000146258595a00000240
00000014646d6e64000002540000007
0646d6464000002c400000088767565
640000034c000000867669657700000
3d4000000246c756d69000003f80000
00146d6561730000040c00000024746
56368000004300000000c7254524300
00043c0000080c675452430000043c0
000080c625452430000043c0000080c
7465787400000000436f70797269676
874202863292031393938204865776c
6574742d5061636b61726420436f6d7
0616e79000064657363000000000000
0012735247422049454336313936362
d322e31000000000000000000000012
735247422049454336313936362d322
e310000000000000000000000000000
00000000000000000000000000
Internet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 advisor
ffd8ffe000104a46494600010201012c012c0000ffe20c584943435f
50524f46494c4500010100000c484c696e6f021000006d6e747252
47422058595a2007ce00020009000600310000616373704d53465
40000000049454320735247420000000000000000000000000000
f6d6000100000000d32d485020200000000000000000000000000
00000000000000000000000000000000000000000000000000000
00000000000000001163707274000001500000003364657363000
001840000006c77747074000001f000000014626b707400000204
000000147258595a00000218000000146758595a0000022c00000
0146258595a0000024000000014646d6e64000002540000007064
6d6464000002c400000088767565640000034c000000867669657
7000003d4000000246c756d69000003f8000000146d65617300000
40c0000002474656368000004300000000c725452430000043c00
00080c675452430000043c0000080c625452430000043c0000080c
7465787400000000436f707972696768742028632920313939382
04865776c6574742d5061636b61726420436f6d70616e790000646
573630000000000000012735247422049454336313936362d322e
31000000000000000000000012735247422049454336313936362
d322e310000000000000000000000000000000000000000000000
00000000 Broker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(6) For how much period do you invest?
Short term
ffd8ffe000104a46494600010201012c012c000
0ffe20c584943435f50524f46494c45000101000
00c484c696e6f021000006d6e7472524742205
8595a2007ce000200090006003100006163737
04d53465400000000494543207352474200000
00000000000000000000000f6d600010000000
0d32d485020200000000000000000000000000
00000000000000000000000000000000000000
00000000000000000000000000000001163707
27400000150000000336465736300000184000
0006c77747074000001f000000014626b70740
0000204000000147258595a000002180000001
46758595a0000022c000000146258595a00000
24000000014646d6e640000025400000070646
d6464000002c400000088767565640000034c0
000008676696577000003d4000000246c756d6
9000003f8000000146d6561730000040c00000
02474656368000004300000000c72545243000
0043c0000080c675452430000043c0000080c6
25452430000043c0000080c746578740000000
0436f707972696768742028632920313939382
04865776c6574742d5061636b61726420436f6
d70616e7900006465736300000000000000127
35247422049454336313936362d322e3100000
00000000000000000127352474220494543363
13936362d322e3100000000000000000000000
0000000000000000000000000000000 medium
term
ffd8ffe000104a46494600010201012c012c
0000ffe20c584943435f50524f46494c45000
10100000c484c696e6f021000006d6e74725
247422058595a2007ce0002000900060031
0000616373704d534654000000004945432
07352474200000000000000000000000000
00f6d6000100000000d32d48502020000000
00000000000000000000000000000000000
00000000000000000000000000000000000
00000000000000000011637072740000015
00000003364657363000001840000006c77
747074000001f000000014626b7074000002
04000000147258595a00000218000000146
758595a0000022c000000146258595a0000
024000000014646d6e64000002540000007
0646d6464000002c4000000887675656400
00034c0000008676696577000003d400000
0246c756d69000003f8000000146d6561730
000040c0000002474656368000004300000
000c725452430000043c0000080c67545243
0000043c0000080c625452430000043c0000
080c7465787400000000436f707972696768
74202863292031393938204865776c65747
42d5061636b61726420436f6d70616e79000
06465736300000000000000127352474220
49454336313936362d322e3100000000000
00000000000127352474220494543363139
36362d322e3100000000000000000000000
0000000000000000000000000000000 Long
term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(7) Investment Frequency:
Once in a year
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100000000d32d48502020000000000000000000000000000000000000000000000000000
000000000000000000000000000000000000000000011637072740000015000000033646
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595a00000218000000146758595a0000022c000000146258595a0000024000000014646d6
e640000025400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636
8000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
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5776c6574742d5061636b61726420436f6d70616e79000064657363000000000000001273
5247422049454336313936362d322e310000000000000000000000127352474220494543
36313936362d322e31000000000000000000000000000000000000000000000000000000
Quarterly
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000ffe20c584943435f50524f46494c4500010
100000c484c696e6f021000006d6e74725247
422058595a2007ce00020009000600310000
616373704d53465400000000494543207352
47420000000000000000000000000000f6d60
00100000000d32d485020200000000000000
000000000000000000000000000000000000
000000000000000000000000000000000000
000000000116370727400000150000000336
4657363000001840000006c7774707400000
1f000000014626b7074000002040000001472
58595a00000218000000146758595a000002
2c000000146258595a000002400000001464
6d6e640000025400000070646d6464000002
c400000088767565640000034c00000086766
96577000003d4000000246c756d69000003f8
000000146d6561730000040c000000247465
6368000004300000000c725452430000043c0
000080c675452430000043c0000080c625452
430000043c0000080c7465787400000000436
f707972696768742028632920313939382048
65776c6574742d5061636b61726420436f6d7
0616e7900006465736300000000000000127
35247422049454336313936362d322e31000
000000000000000000012735247422049454
336313936362d322e3100000000000000000
000000000000000000000000000000000000
0 Monthly
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6373704d5346540000000049454320735247420000000000000000000000000000f6d6000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(8) How much return you want on your investment?
06% -09%
10% -15%
16% -25%
25% and more
(9) Do you want regular income on your investment
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6373704d5346540000000049454320735247420000000000000000000000000000f6d6000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ffd8ffe000104a46494600010201012c012c000
0ffe20c584943435f50524f46494c45000101000
00c484c696e6f021000006d6e74725247422058
595a2007ce0002000900060031000061637370
4d534654000000004945432073524742000000
0000000000000000000000f6d6000100000000
d32d4850202000000000000000000000000000
00000000000000000000000000000000000000
00000000000000000000000000000011637072
74000001500000003364657363000001840000
006c77747074000001f000000014626b7074000
00204000000147258595a00000218000000146
758595a0000022c000000146258595a0000024
000000014646d6e640000025400000070646d6
464000002c400000088767565640000034c000
0008676696577000003d4000000246c756d690
00003f8000000146d6561730000040c00000024
74656368000004300000000c72545243000004
3c0000080c675452430000043c0000080c62545
2430000043c0000080c7465787400000000436f
70797269676874202863292031393938204865
776c6574742d5061636b61726420436f6d70616
e7900006465736300000000000000127352474
22049454336313936362d322e3100000000000
00000000000127352474220494543363139363
62d322e3100000000000000000000000000000
0000000000000000000000000 No
ffd8ffe000104a46494600010201012c012c0000ffe20c5
84943435f50524f46494c4500010100000c484c696e6f0
21000006d6e74725247422058595a2007ce0002000900
0600310000616373704d5346540000000049454320735
247420000000000000000000000000000f6d600010000
0000d32d4850202000000000000000000000000000000
000000000000000000000000000000000000000000000
000000000000000000001163707274000001500000003
364657363000001840000006c77747074000001f00000
0014626b707400000204000000147258595a000002180
00000146758595a0000022c000000146258595a000002
4000000014646d6e640000025400000070646d6464000
002c400000088767565640000034c0000008676696577
000003d4000000246c756d69000003f8000000146d656
1730000040c0000002474656368000004300000000c72
5452430000043c0000080c675452430000043c0000080
c625452430000043c0000080c7465787400000000436f7
0797269676874202863292031393938204865776c6574
742d5061636b61726420436f6d70616e7900006465736
30000000000000012735247422049454336313936362d
322e31000000000000000000000012735247422049454
336313936362d322e3100000000000000000000000000
0000000000000000000000000000 (lump sum)
If yes: Monthly
ffd8ffe000104a46494600010201012c012c000
0ffe20c584943435f50524f46494c45000101000
00c484c696e6f021000006d6e74725247422058
595a2007ce0002000900060031000061637370
4d534654000000004945432073524742000000
0000000000000000000000f6d6000100000000
d32d4850202000000000000000000000000000
00000000000000000000000000000000000000
00000000000000000000000000000011637072
74000001500000003364657363000001840000
006c77747074000001f000000014626b7074000
00204000000147258595a00000218000000146
758595a0000022c000000146258595a0000024
000000014646d6e640000025400000070646d6
464000002c400000088767565640000034c000
0008676696577000003d4000000246c756d690
00003f8000000146d6561730000040c00000024
74656368000004300000000c72545243000004
3c0000080c675452430000043c0000080c62545
2430000043c0000080c7465787400000000436f
70797269676874202863292031393938204865
776c6574742d5061636b61726420436f6d70616
e7900006465736300000000000000127352474
22049454336313936362d322e3100000000000
00000000000127352474220494543363139363
62d322e3100000000000000000000000000000
0000000000000000000000000 Quarterly
ffd8ffe000104a46494600010201012c012c0
000ffe20c584943435f50524f46494c4500010
100000c484c696e6f021000006d6e74725247
422058595a2007ce00020009000600310000
616373704d53465400000000494543207352
47420000000000000000000000000000f6d6
000100000000d32d48502020000000000000
000000000000000000000000000000000000
000000000000000000000000000000000000
000000000011637072740000015000000033
64657363000001840000006c777470740000
01f000000014626b70740000020400000014
7258595a00000218000000146758595a0000
022c000000146258595a0000024000000014
646d6e640000025400000070646d64640000
02c400000088767565640000034c00000086
76696577000003d4000000246c756d690000
03f8000000146d6561730000040c00000024
74656368000004300000000c725452430000
043c0000080c675452430000043c0000080c
625452430000043c0000080c746578740000
0000436f7079726967687420286329203139
3938204865776c6574742d5061636b617264
20436f6d70616e7900006465736300000000
00000012735247422049454336313936362d
322e31000000000000000000000012735247
422049454336313936362d322e3100000000
000000000000000000000000000000000000
0000000000 Yearly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(10) How do you plan your tax liabilities? By investing in
PPF
Bank FD
MFs
Insurance
Others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 :
Address :
Occupation : Contact No.: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PRJCT IDBI Fin System & Invst Pattern

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PRJCT IDBI Fin System & Invst Pattern

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Авторское право:

Доступные форматы

ffd8ffe000104a46494600010201012c012c0000ffe20c584943435f50524f464

• Scope of the study

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200 samples were selected for the questionnaire survey.

Any individual in Ahmedabad city who does investment planning

All individuals from Ahmedabad city doing investment planning

1The selected samples represent the whole population.

1The survey was conducted only in the Ahmedabad.

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IDBI Capital as an institutional player provides the entire gamut of Capital

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IDBI Capital provides Financial Advisory & Project Advisory services.

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Investment Banking Activities

Initial Public Offerings (IPO)

IDBI Capital are reaching out to the investors thru

10,000 sub-brokers/agents spread across the country.

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• Mutual Fund Distribution

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• Commercial Bill Market

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The secondary market consist of 23 stock exchanges including the National

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• Merchant Bankers As per the SEBI (Merchant Bankers) Rules, 1992,

Managing of public issue of securities

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Maintaining accounts of securities of a client.

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1) Credit rating agencies 2) Portfolio managers 3) Under-writers 4) Debenture trustees 5) Foreign

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to protect the interests of the investors in securities

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Some key characteristics of the sample 394 firms are:

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(I) Corporate memberships

(ii) Wider product offerings

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(iii) Greater reliance on research

(iv)Accessing equity capital markets

(v) Foreign collaborations and joint ventures

(vi)Specialized services/niche broking

(vii) Online broking

(viii) Compliance oriented

(x) From owners to traders

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(ii) Capital Adequacy

(iii) Global Opportunities

(iv) Opportunities from regional finance

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(v) Product Dynamics

(vi) Competition from foreign firms

(vii) Investor Protection