ESTD 1948

GAUHATI UNIVERSITY
A training report submitted in partial fulfillment of the requirement for the award of degree of Master of Business Administration (Industry Integrated), Gauhati University on

FINANCE FOR BONANZA PORTFOLIO LTD.

Under Organizational Guidance Of: MR. GAURAV SINGH (Relationship Manager)

Under Institutional Guidance Of: PROF. S. MUKHERJEE (Director)

HARIKISHAN INSTITUTE OF MANAGEMENT STUDIES

Prepared & Submitted By: ASHISH GUPTA -G. U. Registration No. 0036 2010-2012 of

ON THE JOB TRANING ON COMPETITIVE ANALYSIS PROMOTION & FUTURE OF ONLINE TRADING IN BONANZA

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF MASTER OF BUSINESS ADMINISTRATION

UNDER PROF. S. MUKHERJEE Director HIMS (New Delhi)

Under Organizational Guidance Of: MR. GAURAV SINGH (Relationship Manager)

Under Institutional Guidance Of: PROF. S. MUKHERJEE (Director)

SUBMITTED BY ASHISH GUPTA MBA 2009-11, GAUHATI UNIVERSITY (APPROVED BY UGC)

DECLARATION
I do hereby declare that this piece of project report entitled Competitive Analysis Promotion & Future Of Online Trading In Bonanza for partial fulfillment of the requirements for the award of the diploma of MASTER OF BUSINESS ADMINISTRATION is a record of original work done by me under the supervision MR. Gaurav Singh and guidance of PROF. S. MUKHERJEE, Harikishan Institute of Management Studies, New Delhi. This project work is my own and has neither been submitted nor published elsewhere.

SUBMITTED BY:ASHISH GUPTA

ACKNOWLEDGEMENT
Firstly, I would like to thank Mr. Gaurav Singh (Relationship Manager) and a sincere thanks to all other staff members of Bonanza portfolio Ltd. who have helped me directly or indirectly in my difficulties. I wish to express my deepest and most sincere thanks to my Faculty Guide, Prof. S. Mukherjee for their invaluable guidance & support throughout the completion of my project. Last but not least, I am thankful to all my family for cooperating with me at every stage of the project. They acted as a continuous source of inspiration and motivated me throughout the duration of the project helping me a lot in completing this project.

ASHISH GUPTA

TABLE OF CONTENTS
SERIAL NO. 1 2 3 TOPIC EXECUTIVE SUMMARY INTRODUCTION MY ROLE & RESPONSIBILITY COMPANY PROFILE y About Bonanza y bonanza Corporate structure y Corporate members y Services Provided by Bonanza y Products & Required Documents y Branches all over India CAPITAL MARKET IN INDIA y Primary & secondary market y Depositary and depositary participants y Trading and settlement y Online share trading y Dematerialisation of share y Function of stock market INDIAN STOCK MARKET y About NSE y About BSE y SWOT Analysis y Hurdles of Online Share trading

COMPETITIVE ANALYSIS y 5paisa.com y KotakStreet.com y IndiaBulls.com y ICICIDirect.com y HDFCsec.com RESEARCH METHODOLOGY y Sampling Plan y Methodology for Customer Acquisition ANALYSIS & FINDINGS y Analysis of Questionnaire y Findings CONCLUSION & RECOMMENDATION y Conclusion y Learning y Limitation y Recommendation ANNEXURE BIBLIOGRAPHY

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EXECUTIVE SUMMARY
This research is based on the Comparative analysis of Bonanza with other broking houses and the study of Future of Online Share Trading in India. Its totally based on realistic approach towards the online share-trading scenario in India. In the first phase I covered some other stock broking companies as compared to Bonanza. I examined thoroughly areas such as number of players, technology they are offering their customer base their products and offerings and how they market their products etc. In between to acquire new customers for Bonanza was also an integral part of the job. In this process I spoke to different potential customers about the organization and its products in order to increase the popularity of Bonanza. I took Delhi as a sample. I did follow market research procedure to get an idea about the future of Online Share Trading. I was assigned with the task of comparing different online broking companies and predicting the future of online share trading in India. I have undertaken this project with clearly defined objectives, which are:  Gathering data about the leading online broking houses and compare the main points and find the strengths of Bonanza compared to them.  Conducting Market Research in various parts of the city in order to get statistical data for commenting on the future of online share trading in India.  Customer Acquisition through sales of Trading / De-mat Accounts in order to get a deep insight as to how the Organization actually performs these functions. During the study I found that Online Share Trading of Bonanza is lacking in some areas. Still if we talk about Indian customers there are many who are still not aware about Internet, they still prefer the traditional method of Share Trading because they think Internet fraud could be there. But many of the young traders or aware traders prefer Online Share Trading from Bonanza because they want that work should be speedy and return should be high. Sometime people get irritated in filling the form because its a long procedure, due to these problems Indian Customer hesitate to open D-Mat account but I have suggested few points which can make Bonanza a global brand in the world and faith of customers will also increase. In the crux of whole project, at Bonanza we consider our customer as a valuable asset of the company so they take care of their customers and provide good services in comparison of the other competitors existing in the market.

RELIVANCE OF THE PROBLEM

I was assigned with the task of comparing different online broking companies and predicting the future of online share trading in India as a part of the summer training curriculum. The entire project was divided into three parts:

 Gathering data about the leading online broking houses and compare the main points and find the strengths of Bonanza compared to them.  Conducting Market Research in various parts of the city in order to get statistical data for commenting on the future of online share trading in India.  Customer Acquisition through sales of Trading / De-mat Accounts in order to get a deep insight as to how the Organization actually performs these functions.

INTRODUCTION
In todays scenario Online Share Trading in Stock market is gaining popularity. Till now most of the customers were working with offline but in metro cities Online Share Trading is preferred because no one has much time to go to market and work with offline.

So online share trading comes in picture. In Online Share Trading investors invest their money in stock market through the Internet. They do not want to go to a broker. Today companies provided all information on a company website or make their own software. Investors buy or sell their securities in a few seconds by clicking a mouse.

Online Share Trading is beneficiary for customer as well as company because in online customers have not take much pain for investing money in a market. All process is done automatically in a few seconds. Companies provided research reports, monthly magazine etc through Internet. Investors get this information online. These reports help investors for investment in securities. Online Share Trading is very less time consuming and inexpensive. So Online share Trading is much better than offline share trading. Online Share Trading is safer and faster alternative to the offline Share Trading as it offers freedom from delays, thefts and paperwork. So Online Share Trading is quick, convenient and efficient.

About Bonanza:
Bonanza is India's leading retail financial services company. They have over 1611 share shops across 515 cities in India. While their size and strong balance sheet allow them to provide customers with varied products and services at very attractive prices, their over 1000 Client Relationship Managers are dedicated to serving customers unique needs. Bonanza is lead by a highly regarded management team that has invested crores of rupees into a world class Infrastructure that provides clients with real-time service & 24/7 accesses to all information and products. Their

flagship Bonanza Professional Network offers real-time prices, detailed data and news, intelligent analytics, and electronic trading capabilities, right at your finger-tips. This powerful technology complemented by their knowledgeable and customer focused Relationship Managers is creating a world of smart investors. Bonanza offers a full range of financial services and products ranging from Equities to Derivatives enhance your wealth and hence, achieve your financial goals. Bonanza' Client Relationship Managers are available to the customers to help with their financial planning and investment needs. To provide the highest possible quality of service, Bonanza provides full access to all our products and services through multi-channels.

Services provided by the BONANZA

y Equities & Derivatives

Comprehensive services for independent investors, active traders & Non-Resident Indians.

Bonanza equity analysis

Premium research on companies updated daily.

401+

y Depository Services

Value added services for seamless delivery

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MY ROLE & RESPONSIBILITY

My role was to get an idea about the future of Online Share Trading. I was assigned with the task of comparing different online broking companies and predicting the future of online share trading in India. I have undertaken this project with clearly defined objectives, which are:  Gathering data about the leading online broking houses and compare the main points and find the strengths of Bonanza compared to them.  Conducting Market Research in various parts of the city in order to get statistical data for commenting on the future of online share trading in India.  Customer Acquisition through sales of Trading / De-mat Accounts in order to get a deep insight as to how the Organization actually performs these functions.

COMPANY PROFILE
Bonanza, Indias leading stockbroker is the retail arm of BONANZA, an organization with over eight decades of stock market experience. With more than 1611 share shops in over 515 cities, and a presence on Internet through www.Bonanzaonline.com. Indias premier online trading destination, we reach out to customers like no one else. Bonanza offers you trade execution facilities on the BSE and the NSE, for cash as well as derivatives, depository services and most importantly, investment advice tempered by 80 years of research and broking experience. To ensure that your trading experience with Bonanza is fast, secure and hassle free, we offer a suite of products and services, providing you with a multi-channel access to the stock markets. About BONANZA group BONANZA group also comprises institutional broking and corporate Finance. While the institutional broking division caters to the largest domestic and foreign institutional investors, telecom and media. BONANZA holds a sizeable portion of the market in each of these segments.

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As the forerunner of investment research in the Indian market, we provide the best research coverage amongst broking houses in India. Our research team is rated as one of the best in the country. Voted four times as the Top Domestic Brokerage House by Asia-money Survey. BONANZA is consistently ranked amongst the top domestic brokerage houses in India.

BONANZA SERVICES
Equities and Derivatives
Our Retail Equity Business caters to the needs of individual Indian and Non-Resident Indian (NRI) investors. Bonanza offers broker assisted trade execution, automated online investing and access to all IPO's. Through various types of brokerage accounts, Bonanza offers the purchase and sale of securities, which includes Equity, Derivatives and Commodities Instruments listed on National Stock Exchange of India Ltd (NSEIL), The Stock Exchange, Mumbai (BSE) and NCDEX. Bonanza Classic account - Comprehensive services including research and investing guidance for independent investors.

Bonanza equity analysis

Building and maintaining your ideal portfolio demands objective, dependable information. Bonanza Equity Analysis helps satisfy that need by rating stocks based on carefully selected, fact-based measures. And because we're not focused on investment banking, we don't have the same conflicts of interest as traditional brokerage firms. This objectivity is only one important difference in our ratings

Depository Services
Bonanza is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. Bonanza performs clearing services for all securities transactions through its accounts. We offer depository services to create a seamless transaction platform execute trades through Bonanza Securities and settle these transactions through the Bonanza Depository Services. Bonanza Depository Services is part of our value added services for our clients that create multiple interfaces with the client and provide for a solution that takes care of all your needs

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PRODUCTS AND REQUIRED DOCUMENTS

CLASSIC ACCOUNT
This account allows the client to trade through our website and is suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who do not trade too frequently. Features:  Online trading account for investing in Equity and Derivatives  Integration of On-line trading , Saving Bank and Demat Account .  Instant cash transfer facility against purchase & sale of shares.  Competitive transaction charges.  Instant order and trade confirmation by E-mail.  Streaming Quotes.(Cash & Derivatives)  Personalized market watch.  Single screen interface for Cash and derivatives and more.  Provision to enter price trigger and view the same online in market watch.

Features:  Instant order Execution and Confirmation.  Single screen trading terminal. (NSE AND BSE BOTH)  Real-time streaming quotes, tic-by-tic charts.  Market summary (Cost traded scrip, highest value etc.)  Hot keys similar to brokers terminal.  Alerts and reminders.

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

DIAL-N-TRADE
Along with enabling access for your trade online, the Online And offline ACCOUNT also gives you our Dial-n trade services. With this service, all you have to do is dial our dedicated phone lines 1-800-22-7050.

Depository Charges
Account Opening Charges Annual Maintenance Charges Rs. NIL Rs. NIL first year Rs. 400/= p.a. from second year onward

Product details are mentioned below:  Online and Offline Trading

Online Trading: (a) CLASSIC ACCOUNT: A/C Opening charges: Rs. 450/=(life time charges) DEMAT A/C free for first year and Rs.400 from 2nd year onward. (Maintenance charges) Trading through website Live terminal. No brokerage commitment required. NSE and BSE online. Both Cash & F&O.

Monthly Recurring Fee: Brokerage : 0.03% Plus Taxes for Each leg of Intra-day trade 0.30 % Plus Taxes for trades resulting in delivery

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EXPOSURE: 2 to 3 Times on delivery basis (ON MARGIN MONEY) : 6.5 to 7 Times on Intraday basis (ON MARGIN MONEY) Online IPO's available Tie up with Twelve banks i.e. HDFC, OBC, IDBI, UBI, CITI ,ICICI,BANK OF INDIA,YES BANK, UTI bank for online money transfer.

DOCUMENTS:
Photo ID Proof y y y y Passport Pan Card(Mandatory) Driving Licence Voter's ID Residence Proof y y y y y y y y y y Passport(valid) Voter's ID Driving Licence (valid) Bank Statement (latest) Telephone Bill (latest) Electricity Bill (latest) Ration Card Flat Maintenance Bill (latest) Insurance Policy (latest) Leave-Licence/Purchase Agreement(latest)

y 2 Photographs y 1 Cheque of Rs.450/=In Favour of Bonanza Portfolio Ltd. y Photo copy Pan card is must(self attested)

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CAPITAL MARKET IN INDIA

Capital market facilitates the free trading (buy and sell) in all securities. it has two mutually supporting and invisible segments, these are 1. Primary market 2. Secondary market

PRIMARY MARKET
In the primary market companies issue new securities to raise funds. hence it also referred as new issue market. in primary market companies interact with investors directly. Primary capital market is responsible for the sale of new securities. New or listed companies may make the public issues of shares. The initial public offering (IPO) are the public issues of securities by new companies for the first time. In the IPOs or public offerings by the establish companies, securities are sold to the public-all individuals and institutional investors. Equity and debt are the two basic instruments of raising capital from the primary markets. Companies in practice offer a number of variations of equity and debt securities. they include: Ordinary shares Preference shares Debentures & bonds Convertible debentures Securities with options to buy or sell i.e. Derivative securities Borrowings from financial institutions.

SECONDARY MARKET
The secondary market deals with the second hand securities i.e. securities that have already been issued by companies that are listed in stock exchange. Secondary market is also called the Stock market or Stock exchange.

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The secondary market, based on all available information, determines the price and risk of the issued securities. It provides useful signals to both listed companies and investors to act in the primary markets. A stock exchange provides the following useful economic functions: Help determining fair prices based on demand and supply forces and all available information. Provide easy marketability and liquidity for investors. Facilitate in capital allocations in primary markets through price signaling. Enables investors to adjusting portfolios of securities.

India has one of the oldest stock markets in asia,viz., the Bombay stock exchange(BSE).BSE was established in 1875.later on, many more stock exchange were established in other Indian cities like Ahmedabad, kolkata, madras, kanpur etc.The number has now increased up to 25. However in terms of business activities, the two most prominent all India stock exchanges are the Bombay Stock Exchange(BSE) and National Stock Exchange(NSE).NSE was set up in June 1994.NSE started the screen-based trading in India which has been now adopted by BSE and other stock exchanges as well.

DEPOSITORY AND DIPOSITORY PARTICIPANTS

A depository holds shares in dematerialized (DEMAT) form and maintains ownership. All transactions take place through computers without paper work. A depository is an organisation where the securities of a shareholder are held in the electronic form at the request of the shareholder through the medium of depository participant. A depository can be compared to a bank. If an investor wants to utilise the services offered by a depository, the investor has to open an account with the depository through depository participant. This is very similar to the opening of an account with any of the branches of a bank in order to utilise the services of that bank.

In India there are two depositories-NSDL and CDSL and they compete with each other.

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Depository Participant (DP) is an agent of the depository, who is the interacting medium between the depository and the investor. A DP is responsible for maintaining your securities account and handling the securities account in accordance with your written instructions.

DIPOSITORY

NSDL

CDSL

DPs (BONANZA)

Every depository participant is registered through either of depositories i.e. NSDL or CDSL.BONANZA ltd is registered through NSDL as well as CDSL.

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OPERATIONS OF NSDL
NSDL has been established with a view to provide holding of securities in the electronic form and settlement of trades done for these electronic holdings. As required by the Act, NSDL is responsible to every investor who holds electronic balances with the depository. The depository participant acts an agent of NSDL for providing its services to the investors. NSDL has designed the software for the operating systems in such a way that the software systems at the depository and the depository participant office are connected. Thus, a highly integrated set up for maintenance of investor accounts through the depository participants has been developed and implemented. NSDL has access to all the accounts of individual investors maintained by the depository participants to ensure adequate control. The operating system of NSDL also maintains continuous electronic connectivity with the registrar and transfer agents of the companies whose securities can be dematerialised in NSDL. This is done in order to perform a daily reconciliation of all the account balances held with NSDL When a company signs an agreement with NSDL for offering its investors an option of dematerialised mode of holding, physical as well as depository mode of securities co-exist and are traded on the stock exchanges separately as two distinct securities.

OPERATIONS OF CDSL
Central Depository Services (India) Limited (CDSL), the second depository in India, is set up to meet the objectives of the Depositories Act, 1996. CDSL secured its certificate for commencement of business on February 8, 1999 from SEBI. The depository system offers an efficient transfer mechanism by interfacing with the stock market and related clearing operations. Alankit Assignments Ltd., as a depository participant of CDSL, offers services at competitive rates to investors, brokers & issuers of securities through this depository as well. Objectives The main objectives of CDSL are:
y y

To accelerate scripless trading To make a major thrust in the individual investors' participation in the depository system To create a competitive environment and be responsive to users' interest and concerns.

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TRADING AND SETTLEMENT

Investors can carry out their operations (buying & selling) of securities through brokers and sub-brokers. Buying and selling of shares is an agreement between the brokers and sub-brokers and the client (investors) once the client has filled in the client registration. The broker charges a fee (Brokerage), which is between 0.50% and 1% of the value of transaction.

A broker is an enrolled member of a stock exchange who is authorized to the stock exchange trade. Sub-brokers are affiliated to the members (brokers) of the stock exchange and registered with SEBI as sub-brokers.

ON-LINE SHARE TRADING

The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide these NSE introduced a nationwide online fully automated screen-based trading system where a member can punch into the computer quantities of securities and the price 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. The premier stock exchanges of the country, BSE and NSE, have both moved to electronic trading from the traditional outcry system. Tata Consultancy Services has helped both the exchanges make the change.

TECHNOLOGY AT BSE AND NSE

NSE Tata Consultancy Services is providing a total turnkey solution for the money market and capital market's floorless trading system.

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The aim was to enable NSE to provide nation-wide electronic trading with highest transparency in the market place. Using the client-server architecture, faulttolerant computing and in-memory database gives NSE high visibility and impact. Tata Consultancy Services also developed the local and nationwide clearing and settlement system to run in Oracle RDBMS environment. For the year 2001-2002 the National Securities Clearing and Settlement system (NSCS) processed settlements for over 172 million trades with a turnover of around Rs 5,08,121 crore. Tata Consultancy Services also developed the trading, clearing and settlement system for NSE's futures and options segment. In the year 2001-2002, nearly 4.2 million contracts were traded on NSE F&O system with a notional turnover of Rs 1,01,925 crore.

BSE BOLT i.e., BSE's online trading system, the screen-based trading system replaced the manual out-cry method of trading in the ring and went live on March 1995. This enabled BSE to provide floorless and fully automated screen-based trading facilities in capital market (CM) instruments with equal access to investors all over the country. Currently, BSE with around 685 members, has seen an average daily turnover of Rs 1,162 crore in July 2002.

For further expansion of its activities, BSE decided to provide web-based trading facility to the members as it was felt that Internet trading would fundamentally change the way exchange and brokers interact with their customers. So a system developed that is (BSE WebX) with the objective of enabling the exchange to service its members and the customers of the members in an efficient and costeffective manner using the Internet.

DEMATERIALISATION OF SHARES
Dematerialisation is a process by which the physical certificates of an investor are taken back by the Company and equivalent number of securities are credited in the electronic holdings of that investor. This is done at the request of the investor. An investor will have to first open an account with a depository participant and then request for the dematerialisation of his certificates through the depository participant so that the dematerialised holdings can be credited into that account. Dematerialisation of shares in India was introduced in 1998.Now almost 100 % trades are settled in demat form. The growth of dematerialization in India has been the fastest in emerging capital market and most developed markets.

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Features of dematerialization: Fall in settlement and other charges. No stamp duty Breadth and depth of investment culture has further got extended to interior areas of the country faster. Explicit transaction cost has been falling. Increased growth in turnover.

STOCK AND STOCK MARKET

WHAT IS STOCK
A stock, also referred to as a share, is commonly a share of ownership in a corporation. Stock is the ownership of a corporation represented by shares that are a claim on the corporations earnings and assets. There are many kinds of stocks, the most widely known being COMMON STOCK, which usually entitles a stockholder to vote in the election of directors and other corporate matters. Imagine that you own a business. If you were to divide that business up into small pieces and sell those pieces, you would essentially have issued stock. The money you raise from selling those "pieces" of your business can be used to build new plants and facilities, pay down debt, or acquire another company. A smart owner will keep at least 51% of the stock, which will allow them to retain control of the day to day activities. Any person or institution that owns over a majority of the stock is called the "controlling shareholder". Essentially, this person can do anything they want - right down to firing the CEO.

WHAT IS STOCK MARKET

Stock market is known as the cradle of capitalism. It is a place where companies come to raise their share capital and investors go to invest their surplus funds. Stock Market is a place where financial instruments like shares, debentures, commercial papers, bonds etc are bought and sold. Stock markets are popularly known as stock exchanges. There are many popular stock markets in the world. NASDQ, Tokyo Stock Exchange, London Stock Exchange are the most popular of the lot. There are many participants in a stock market. Investors, Speculators, Arbitrators, Traders are different type of participants of a Stock Market. Brokers are intermediaries who bring together various participants in a Stock Market.

FUNCTION OF STOCK MARKET

A stock market (also known as a stock exchange) has two main functions.

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I. The first function is to provide companies with a way of issuing shares to people who want to invest in the company. II. The second function of the stock market, related to the first, is to provide a venue for the buying and selling of shares. Most important function of the stock market is to facilitate trading of financial instruments. Brokers submit a quote at the stock market on behalf of their clients. Quotes are specific to the scrip. The quote of the buyer is matched to the quote of the seller and the transaction takes place. All transactions entered in a stock market are guaranteed by the Stock Exchange. That means if the buyer or seller fails to meet his obligation, the stock exchange steps in and meets the commitment of the participant. This instills a lot of confidence and credibility about the sanctity of the transaction amongst the investing public. That is the reason why a stock exchange is preferred by investing public to a gray market in shares even though the latter has much lower transaction cost. All the participants in the stock market have the same objective i.e. to make a profit. Investors invest in the stock market with the hope that market value of their investment will go up and they will be able to make higher returns than in bank deposits. Arbitrages buy in one market and sell in another market with an objective of making a profit

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INDIAN STOCK MARKET

Indian Stock Market Overview

The Bombay stock exchanges (BSE) and the National Stock Exchange of India Ltd (NSE) are the two primary exchange in India. In addition, there are 28 Regional Stock Exchanges However, the BSE and NSE have established themselves as the two leading exchanges and account for about 80% of the equity volume traded in India. The average daily turnover at the exchanges has increased from Rs. 851 crore in 1997-98 to Rs. 1,284 crore in 1998-99 and further to Re. 2273 crore in 1999-2000 (April- August 1999). NSE has around 1500 shares listed with a total market capitalization of around Rs. 921500 crore (Rs. 9215 Bln). The BSE has over 6000 stocks listed and has a market capitalization of around Rs. 968000 crore (9680 Bln). Most key stocks are traded on both the exchanges and hence the investor could buy them on either exchange. Both exchanges have a different settlement cycle, which allows investors to shift their positions on the

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bourse. The primary index of BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE 50 index (Nifty), which consists of fifty stocks. The BSE Sensex is the older and more widely followed index. Both these indices are calculated on the basis of market capitalization and contain the heavily traded shares from key sectors. The markets are closed on Saturdays and Sundays. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE Online Trading) and NEAT (National Exchange Automated Trading) System. It facilitates more efficient processing, automatic order matching, faster execution of trades and transparency. The Scripts traded on the BSE have been classified into A, B1, B2, C, F and Z groups. The A group shares represent those, which are in the carry forward system (Badla). The F group represents the debt market (fixed income securities) segment. The Z group scripts are the blacklisted companies. The C group covers the odd lot securities in A, B1& B2 groups and Rights renunciations. The key regulator governing Stock Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd.

ABOUT NSE
The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the commendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.

ABOUT BSE
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act, 1956.

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The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redressal of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programs and making available to them necessary informative inputs. A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration of the Exchange and the Chief Operating Officer and other Head of Departments assist him. The Exchange has inserted new Rule No.126 A in its Rules, Bye-laws & Regulations pertaining to constitution of the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting of three elected directors, three SEBI nominees or public representatives, Executive Director & CEO and Chief Operating Officer has been constituted. The Committee considers judicial & quasi matters in which the Governing Board has powers as an Appellate Authority, matters regarding annulment of transactions, admission, continuance and suspension of member-brokers, declaration of a member-broker as defaulter, norms, procedures and other matters relating to arbitration, fees, deposits, margins and other monies payable by the member brokers to the Exchange,etc.

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SWOT ANALYSIS OF ONLINE SHARE TRADING

Strengths
The `do-it-yourself' framework of online share trading offers retail investors the three benefits of transparency, access and efficiency. Paperwork diminishes significantly, and no more painful trips to your broker to check if everything's in order. Online trading has made it possible to universalize access to retail investors. This was earlier very difficult, as the cost of servicing often-outweighed transaction volumes. Online brokerage ranges between 0.05-0.20 percent of the value of transactions for non-delivery-based trades, and between 0.25-0.95 percent for delivery-based trades. Once major investments in online infrastructure are over and done with - and with the economies of scale coming into play - it is expected that brokerage rates would head further downwards. Access to online trading and latest financial happenings, apart from quotes and unbiased investment analyses, all consolidate into a value-added product mix in tandem with evolving markets that are freer and fairer. The Net result: An inquisitive, informed and demanding investor. Today's investor is more involved in managing his or her assets and analyzing a vast array of investment options. Technology and today's enabled investor have, in turn, driven competition, resulting in reduced costs of trading, transparency in dealings, and pricing info that is accurate and real-time. More and more investors now want to know how their trades are executed, and whether they have received the best possible price. Critical components of execution quality include the prices at which orders were executed as well as the speed of execution. The quality of execution, in turn, hinges on efficient order routing. We owe this to our investor fraternity.

Threats
On to some threat perception - Domestic funds, foreign institutional investors and operators comprise the three main market constituents. And all three include term investors as well as opportunists in their pecking order. Some, for instance, hitch their fate with what the FIIs are up to. All this spells spurting volumes. But nobody gives a damn about the resultant volatility. And some, not all, offer free investment advice over the Net to lure rookie investors with misleading information. Prices of scripts can also be influenced to the advantage of vested interests, courtesy the Net. Unlike in the US, stockbrokers out here willingly (or under the force of circumstance) assume the role of `advisors', sans the neutral, non-vested stance.

Weaknesses
Every thing in the world has a flip side to it - Transaction velocity is crucial. And more often than not, connections are lousy. There's also a degree of investor skepticism about online payment and settlement mechanisms in spite of all the encryption and fire walling brought into play. Time and technology will soon assuage these concerns, which hark back to the `physical' days.

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The three main technology obstacles which have prevented Internet broking from taking off are: y y y Lack of Internet penetration Bandwidth infrastructure Poor quality of ISP infrastructure.

Opportunities
You have some money to dabble with. Trading shares on BSE/NSE has always been your dream. When will you ever find the time? And besides, the hassle of finding a broker is not easy. This is your main opportunity. Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them, brokers have taken their trading rooms to the Internet. Known as online brokers, they allow you to buy and sell shares via Internet. There are 2 types of online trading service: discount brokers and full service online broker. Discount online brokers allow you to trade via Internet at reduced rates. Some provide quality research, other dont. Full service online brokerage is linked to existing brokerages. These brokers allow their clients to place online orders with the option of talking/ chatting to brokers if advice is needed. Brokerage rates here are higher. 5Paisa.com, ICICIDirect.com, IndiaBulls.com, Bonanza.com, Geojit securities.com, HDFCsec.com, Tatatdw.com, Kotakstreet.com are some of the online broking sites in India. And daily trading turnover is estimated in the vicinity of 0.75 per cent of the combined BSE and NSE daily turnover of about RS 11,000 crore!!! The point is, there's tremendous scope for growth. Especially when you consider the US, where trading over the Net accounts for about 55 per cent of the total volumes. And, I believe, in some Asian markets the figures as high as 70 per cent

Hurdles for Online Share Trading

1. Internet fraud
In India, we see this kind of frauds happening in different way due to nature of our society. Here when you talk to broker's staff while buying or selling, he will usually advise you to buy share which he has bought and plans to dump when price goes up. We have seen enough of PUMP and DUMP even without help of internet in cases of Harshad Mehta boom of 1992 and Ketan Parekh boom of 2000 (he even had cult following with Index of 10 shares called K-10).

28

Today lot of investors depending on TV channel for recommendation about stocks to sell, or buy or hold. Channels like CNBS offer array of experts from economist to brokers to analyst. Most of these people have vested interest in stocks they recommend and promote. One of the most common forms of securities fraud on the Internet involves an imposter who attempts to manipulate the price of a stock by disseminating phony press releases or information, or creating phony websites. A recent example of this scheme is the hoax perpetrated against US based, Pair Gain Technologies.

2. Volatility of Indias Stock Markets

Recent market developments have once more focused attention on the volatility that has come to characterise Indias stock markets. Movements in the Sensex during the two years have clearly been driven by the behaviour of foreign institutional investors (FIIs), who were responsible for net equity purchases of as much as $6.6 and $8.5 billion respectively in 2003 and 2004. These figures compare with a peak level of net purchases of $3.1 billion as far back as 1996 and net investments by FIIs of just $753 million in 2002. In sum, the sudden FII interest in Indian markets in the last two years account for the two bouts of medium-term buoyancy that the Sensex recently displayed.

Given the presence of foreign institutional investors in Sensex companies and their active trading behaviour, their role in determining share price movements must be considerable. Indian stock markets are known to be narrow and shallow in the sense that there are few companies whose shares are actively traded. Thus, although there are more than 4700 companies listed on the stock exchange, the BSE Sensex incorporates just 30 companies, trading in whose shares is seen as indicative of market activity. This shallowness would also mean that the effects of FII activity would be exaggerated by the influence their behaviour has on other retail investors, who, in herd-like fashion tend to follow the FIIs when making their investment decisions.

29

COMPETITIVE ANALYSIS
The Major competitors are:
5paisa.com KotakSecurities.com India bulls ICICIDirect.com HDFCsecurities

5paisa
Company Background
Indiainfoline was founded in 1995 and was positioned as a research firm. In 2000 ebroking was started under the brand name of 5 paisa.com. Apart from offering online trading in stock market the company offers Mutual funds online. It also acts as a distributor of various financial services i.e. GOI securities, Company Fixed Deposits, Insurance. Limited ground network, present in 20 Cities

Online Account Types:   Investor Terminal Trader Terminal : Investors / Students : Day Traders / HNIs

30

PRICING FOR RETAIL CLIENTS Investor Terminal

y y y y Account Opening Demat 1st Yr Initial Margin Min Margin Retainable : : : : Rs 500 Rs 250 Rs 2500(Compulsory) Rs 1000

Brokerage : -Trading 0.05% each side + ST -Delivery 0.50% each side + ST

PRICING FOR HNI CLIENTS Trader Terminal

Rs 500 Rs 250 Rs 5000(Compulsory) Rs 1000

y y y y

Account Opening Demat 1st Yr Initial Margin Min Margin Retainable

: : : :

Brokerage : Trading 0.05% each side + ST Delivery 0.50% each side + ST (Negotiable to 0.05% each side & 0.25%)

Account Access Charges - Monthly Rs 800, adjustable against Brokerage - Yearly Rs 8000, adjustable against brokerage

31

Deal Clinchers v/s 5 Paisa

Company Background
Not having a very positive image, relatively new in the broking arena, limited network

Downtime Recent past 5 paisa Trader Terminal (T.T) is experiencing high frequency downtime between 3 3:30 p.m due to server load ( as their T.T is feature heavy compared to Speetrade charting)

Manual Accounting The 5 paisa accounting system is manual; online fund transfer through bank is not credited instantly. Limit is provided EOD for shares sold from DP, or call Similarly limit released for shares sold under BTST is manual Delay in receiving pay-out of clear funds from trading to Bank Account

Min Account Balance

Concept of Min Rs 1,000 to be maintained in form of cash / securities to keep account active. This can be withdrawn only on closure of account.

KOTAK SECURITIES
Company Background:
Kotak Securities is the sister concern of Kotak Mahindra bank. Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman Sachs. Online Account Types KEAT desktop version, Sms charge Rs 100, KEAT premium at RS 500 pm, Min margin Rs 20000

Kotak Gateway Account

Kotak Value Account

32

KEAT desktop version, Sms charge Rs 75, KEAT premium at Rs 500 pm, Min margin Rs 5 lakhs y Kotak Privilege Circle Account : KEAT premium free, Sms free, Min margin Rs 10 lakhs

PRICING OF KOTAK y Account Opening : Rs 550 with kotak savings account, Rs 750 with margin of Rs 50000, otherwise Rs 1200. : Rs 30 pm

y y y

Demat

Min Margin Retainable : Rs 1000 Brokerage Slab Wise : Higher the volume, lower the brokerage. Even older customers (on 0.25% & 0.40%) have been moved to the slab wise structure wef 1/4/2004.

Slab Structure of Kotak

Delivery volume pm        < 1 lakh 1 lakh 5 lakhs 5 lakhs 10 lakhs 10 lakhs 20 lakhs 20 lakhs 60 lakhs 60 lakh 2 Cr > 2 Cr

Brokerage 0.59% 0.55% 0.45% 0.36% 0.27% 0.23% 0.18% Gateway Acc Gateway Acc Gateway Acc Value Acc. Value Acc. Value Acc. Privilege Circle

Delivery volume pm     <25 lakhs 25 lakhs 2 Cr 2 Cr 5 Cr > 5 Cr

Brokerage Square off 0.06% both sides 0.05% both sides 0.04% both sides 0.03% both sides Gateway acc Value acc. Value acc. Privilege acc.

33

Derivative Brokerage Slab

Delivery volume pm      < 2 Cr 2 5.5 Cr 5.5 Cr 10 Cr 10 Cr 25 Cr > 25 Cr

Daily Sq. up 0.07% both sides 0.045% both sides 0.036% both sides 0.027% both sides 0.023% both sides

Settlement 0.09% both sides 0.073% both sides 0.046% both sides 0.046% both sides 0.032% both sides

Deal Clinchers v/s Kotakstreet

Rigid Account Opening Terms No Flexibility of A/c opening charges (Rs 550) + Compulsory margin Rs5000/-

No Customisation of commercial Terms No Flexibility in Leverage Dependent on Type of Account ( 4 to 6 times No flexibility in Brokerage, driven by slab structure only)

Many Other Charges Rs 30 p.m towards DP AMC charges DP incoming charges extra, 0.02% Rs 1,000 as retainable Margin to keep account active Rs 25 per call after 20 calls for the month

Restricted Access to Terminal Like product KEAT Desktop restricted distribution on payment of Rs 500, Non refundable

34

INDIABULLS

Company Background
IndiaBulls is a retail financial services company present in 70 locations covering 62 cities. It offers a full range of financial services and Products ranging from Equities to Insurance. 450 + Relationship Managers who act as personal financial advisors

Online Account Type Signature Account : Plain Vanilla Account with focus on Equity Analysis. The equity analysis is a paid service even for A/c holders. Power Indiabulls: Account with sophisticated trading tools, low commissions and priority access to R.M

Pricing of IB Accounts
Signature Account

Account Opening Demat Initial Margin Brokerage

: : : :

Rs 250 Rs 200 if POA is signed, No AMC for this DP NIL Negotiable

Power IndiaBulls
Account Opening Demat Initial Margin Brokerage : : : : Rs 750 Rs 200 if POA is signed, No AMC for this DP NIL Negotiable

35

PAID Research

SCHEME

FACILITY

   

WebBased-1-Month-500 WebBased-1-Year-6000 PrintReport-1-Month-750

: : :

View & Print on website View & Print on website View & Print on website + 10 Reports Delivered View & Print on website + 10 Reports Delivered

PrintReport-1-Year-9000

Deal Clinchers v/s IndiaBulls

POA for Clients DMAT All shares held by client trading with IB are moved to IB Pool Account and the same is shown as a reflection in client DP account. Charges are levied to move shares from IB pool Account to client DP account Paid Research Services Access to an research even for an IB trading account holder is charged a min of Rs 500 a month Margin Funding hoax The interest on funding starts on leveraged delivery trades from T+1 day itself @21% p.a, on a daily basis

The role of Relationship Manager Each RM is looked upon as a revenue generator and he gets a % on business generated from client. This can lead to over leveraged (Interest) & high frequency (Brokerage) trading, which may not be in the best interest of the client.

36

ICICI Direct
Company Background
ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is an Affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited.

Account Types ICICI Direct e-invest Account : Plain Vanilla Account with focus on 3 in 1 advantages. Differentiated in services within the account 1.Cash on spot 2.Margin Plus Premium Trading interface of ICICIDirect Link is given to DBC partners and HNIs

Account Opening : Rs 750

Schemes : For short periods Rs 750 is refundable against brokerage generated in a qtr. These schemes are introduced 3-4 times a year.

Demat: NIL, 1st year charges included in Account Opening Plus a facility to open additional 4 DPs without 1st yr AMC

Initial Margin : Nil

Brokerage All brokerage is inclusive of stamp duty and exclusive of other taxes.

37

Delivery Vol per qtr

Brokerage *

Square Vol off p m

Brokerage **

      

< 10 lakhs 10 lakhs - 25 lakhs 25 lakhs -50 lakhs 50 lakhs 1 Cr 1 Cr 2 Cr 2 Cr 5 Cr > 5 Cr

: : : : : : :

0.75% 0.70% 0.55% 0.45% 0.35% 0.30% 0.25%

Deal Clinchers v/s ICICIDirect

Poor online Interface Slow website interface with no real-time quotes creates a dissatisfaction among high frequency traders Margin trading restriction The margin trading system is available up to 2:45 p.m, with outstanding net positions under margin segment automatically squared off at any time between 2:45 3:30 p.m. Thus no control of square off price. Morning Trades Issue Being one of the websites with largest no of after hour orders which are pushed 1st thing in the morning, creates a choking of orders to the exchange, causes delay of confirmations for new order placed during the early morning trades Restriction of BTST The sale of shares purchased is restricted to T+1 day and is not permitted on T+2 Day. No leverage for Delivery trades Delivery is restricted to the total money allocated into the trading account. No flexibility on leverage on Intra-day trades The leverage of 4 times is available for intra- day trades. Restriction of Bank Account

38

The choice of bank is restricted to ICICI Bank. Higher Brokerage rates with slabs The delivery brokerage is pegged at 0.75% and trading at 0.10% each side, this makes is very unviable for customers dealing in large volumes. Although progressively the delivery and trading brokerage reduce as volumes go up.

HDFC SECURITIES
Company Background
The HDFC BANK, HDFC and ChaseCapital Capital Partners and their associates promote HDFC SECURITIES LTD. Pioneers in setting up Dial-a-share services with the largest team of Tele-brokers Online Account Type: HDFC Online Trading A/c : Plain Vanilla Account with focus on 3 in 1 advantage

Pricing of HDFC Account    Account Opening Demat Initial Margin : : : Rs 750 NIL, 1st year charges included in Account Opening Rs 5000/- for non HDFC Bank customers (AQB)

Brokerage:

Trading 0.05%* each side + ST Delivery 0.50%** each side + ST * Rs 25 Min Brokerage per transaction ** Rs 8 Min Brokerage per transaction

39

Deal Clinchers v/s HDFC Securities

Poor online Interface Apart from having no product to cater to Day-Traders, the hdfcsec.com website is plagued with downtime. The same is currently being revamped.

Lack of focus on Broking The core business of HDFC is Housing Finance and that of HDFC Bank Banking.Broking as a business is a small part of the portfolio of financial services and hence the commitment to resources is limited. No Leverage No leverage is available to clients even for Intra-Day trades, effectively all clients are on cash and carry system.

40

RESEARCH METHODOLOGY
Research Methodology is the way to systematically solve the Research Problem is done scientifically. In it we study the various steps that are generally adopted by researcher in studying his logic behind them. It was quite hard to collect primary data by meeting each individual and interview him/her so I have collected primary data with the help of questionnaire. Secondary data was also available to get information about the study. All the executives and official person were quite helpful and provided full support.

Data was collected in the following manner:  Interacting with some of the customers of Bonanza  By questionnaire seeking information  Interacting with the employees of Bonanza

Primary Data  Questionnaire seeking information  Interaction with the employees of Bonanza and with the customer of Bonanza

Secondary Data There are following things that have been the source of secondary data:     Journal Magazines Manual of Bonanza Welcome kit of Bonanza

41

SAMPLING PLAN
Methodology for Market Research
I divided the entire city into zones and drew out samples out of each zone. The size of samples drawn from each zone depended on the prospective ness of the particular area. For e.g., if a particular research area consisted of Offices then the sample size would obviously be higher than an area like Shopping mall or PVR. This is because Office employees constitute the service sectors that are the active investors of today. Also, the office areas consist of people from the business class who have always been in the hunt for quick money, not to forget that smart and timely investment in the share market can yield to enormous returns. After dividing the city into zones, the Target audience was probed using Interviews and questionnaires. These were later analyzed to draw out conclusive results.

The Research Area Comprised of the following places: Zone East West North South Areas Covered Karkarduma Punjabi Bagh Delhi University Vasant Kunj Sample Size 14 24 6 25

Methodology for Customer Acquisition

The leads for customer acquisition primarily came from the questionnaires filled up by prospective customers. Apart from these customers were also pitched through personal references and contacts. Moreover the organization takes every possible effort in order to spread mass awareness. As a result of this publicity campaign, influenced prospective customers approach the organization. There are various ways to make people aware about the organization as such Marketing Research, Canopy, Personal References, Pop-up windows having collaboration with various portals e.g. Rediffmail.com etc. Person with adequate interest leaves his contact information. Later on these leads are contacted personally for further development. The organization has efficient sales stuff that excels in this job. Part time trainees are also appointed for the same. This work force been perfectly supervised by the Managers. Thus all these factors sum up into a result oriented work force. These leads were the contacted through tele-calling and after developing a relationship, they were pitched in at the addresses provided by them. After giving them a presentation about the product and its advantages over its competitors, they were promised of a Demo by company sales force in case a sale had resulted. Also references were collected from such people and the same methodology was repeated. For each and every customer personal quarries have been entertained after the sale is done.

42

ANALYSIS & FINDINGS

ANALYSIS OF QUESTIONNAIRE
 In which of these Financial Instruments do you invest into?

Instrument Shares Mutual Funds Bonds Others Total

Frequency 70 19 6 9 104

Percent 67.3 18.3 5.8 8.7 100.0

TT
8.70 Others

TI T

5.80 Bonds

18.30 Mutual Funds 67.30 Share

Findings: This question was meant to closely study the pulse and investment pattern in the stock market. It is clearly evident that 67.3 of the respondents prefer to invest in the share market to other Financial Instrument.

43

 Which type of trading do you prefer?

Type of trading Online Offline Not Applicable Total

Frequency 77 16 11 104

Percent 74.0 15.4 10.6 100.0

TRADING PEOPLE PREFER

10.6% Not Applicable 15.4% Offline 74% Online

Findings: The result shows that Online Trading has taken the drivers seat over the conventional trading ever since Internet triggered a revolution across the globe. 74% of the respondents prefer online trading.  If you prefer Online Trading then the reason for it? Reasons Privacy User Friendly and time saving Convenient All the above Total Missing System Frequency 20 27 20 21 88 16 Percent 19.2 26.0 19.2 20.2 84.6 15.4

44

Total

104

100.0

I T
15.4 issing ystem

I
19.2 Convenient

20.2 ll the above 19.2 Privacy

26 ser riendly and time saving

indings: The preferred choice of online trading itself is a proven fact that 26 of the respondents find it user friendly, time saving and convenient. Hence it does not come as a surprise as 20 of the respondents preferred all the options.

 What factors motivated you to invest in securities?

Factors New IPO's Entry of FII's More returns in less time Others Total

Frequency 25 9 63 7 104

Percent 24.0 8.7 60.6 6.7 100.0

45

FACTORS OF INVESTMENT IN SECURITIES

6.7% Others 24% New IPO's

60.6% More return in less time

8.70% Entry of FII's

Findings: This question was meant to understand why more and more investors have started creeping in the share market as never before. About 60% of the respondents believe that there is a possibility in multiplying there money within a short period of time and about 24% of the respondents is driven by the IPOs issued by potential companies.

 Does Online Trading motivate you to deal in securities? Respondents Yes No Total Frequency 84 20 104 Percent 80.8 19.2 100.0

RESPONDENTS DEAL IN SECURITIES

19.2 No

0.00% 0.00% 0.00% 0

80.8 Yes

46

Findings: It is clear and transparent that Online Trading has become more convenient way to deal in securities as majority (as much as 81%) of the sample population voted for it.

 Have you heard about BONANZA?

Respondents Yes No Total

Frequency 85 19 104

Percent 82.74 18.26 100.0

POP

ARIT

OF HAR

HAN

18 No

82 Yes

Findings: Out of the total sample size surveyed, BONANZA has its slice of share, as it is familiar and popular among 82 of the total sample population. Hence Bonanza is a well heard off name among the investors.

47

 Which brokerage firm do you prefer for online trading?

Brokerage Firms ICICI Direct Bonanza Indiabulls Kotak Securities 5 Paisa HDFC Securities Total

Frequency 14 27 23 21 18 1 104

Percent 13.5 26.0 22.1 20.2 17.3 1.0 100.0

FF M

TI IT
1 HDFC

F MP TIT

17.3 5 Paisa

22.1 Indiabulls

Findings: This question was framed to understand the effectiveness of Bonanza among its competitors. The push and pull factor worked out well for Bonanza as it grabbed 26 of the market share out of the total people surveyed. But the survey also reveals an interesting point that there is not much variation among the players in terms of investors consideration for a brokerage firm.

20.2 Kotak Securities

13.5 ICICI Direct

26 Sharekhan

48

 What differentiates your share trading company from others?

Frequency Brokerage Research Report Dial up Trade facility Exposure Account opening charges Others Total 32 51 8 3 7 3 104

Percent 30.8 49.0 7.7 2.9 6.7 2.9 100.0

60

50

40

y c n e u q 30 e r F
20 31% 10

49%

0 B ro k e ra g e R e s e a rc h R e p o rt

8
D ia l u p Tra d e fa c ility

6% 3% A c c o u n t o p e n in g c h a rg e s E xp o s u re

3
O th e rs

Findings: This question was framed to read the mind of an investor. The survey reveals that investors have become more analytical and rationale over the period of time as they have compelled themselves to take decisions on the basis of pre and post market research reports offered to them at regular intervals. Also to some extent investors look in for the brokerages charged by the trading firm while other options were hardly considered as pre requisites for online trading.

49

 How often do you trade?

Duration Daily Weekly Monthly Yearly Total

Frequency 53 31 7 13 104

Percent 51.0 29.8 6.7 12.5 100.0

D
7 Monthly

TI
12 Yearly

FT

51 Daily

30 Weekly

Findings: This shows that how stock market has swept the nation as a whole. Most of the investors prefer daily and weekly trading to keep a watch on the volatility of the stock market so as to take decisions accordingly.

50

 In which category does your income fall? (Per month in Rs.)

Rs. Per Month 0-15000 15000-35000 35000-60000 Total

Frequency 26 61 17 104

Percent 25.0 58.7 16.3 100.0

T R

I P

M T

FT

25 0 - 15000

59 15000 - 35000

Findings: People from different categories of income group have taken their chance to invest in the booming stock market. The upper middle and middle class (income category ranging from 15000 35000) people have taken the primary seat as far as the number of people involved in trading is concerned.  What percentage of your earning do you invest in share trading? Frequency Up to 10% Up to 25% Up to 50% Above 50% Total 40 35 15 14 104 Percent 38.46 33.65 14.42 13.46 100.0

16 35000 60000

51

INVEST ENT OF EARNING IN S HARE ARKET

0 0 0

5 t 5

t 25

Findings: About 70% of the respondents feel that not more than 25% of their earning will be pushed into the market that clearly signifies that how volatility in the stock market can influence the investors.  Rank the attribute customer service of a share trading company? Frequency Most Important Important Neutral Less Important Not Important at all Total 27 24 22 18 13 104 Percent 26.0 23.1 21.2 17.3 12.5 100.0

CUSTOM SERVICE IS IM ORTANT ACTOR

13% Not 0 Important 17% Less Important 26% Most Important

21% Neutral

23% Important

  
t

  

   
e5

 

52

Findings: Investors feel that they should be provided with the best of the services in order to associate themselves with a brokerage company over a long period of time. Hence more than half of the respondents preferred it to be an important parameter of a brokerage firm.

 Rank the attribute proper guidance of a share trading company?

Frequency Most Important Important Neutral Less Important Not Important at all Total 14 41 24 21 4 104

Percent 13.5 39.4 23.1 20.2 3.8 100.0

PROPER GUIDANCE IS AN IMPORTANT FACTOR

20% Less Important 4% Not Important 13% Most Important

23% Neutral

40% Important

Findings: More than 50% of the sample population felt that they require proper guidance from the brokerage company in order to execute their operation effectively.

53

 Rank the attribute regular updates of a share trading company?

Frequency Most Important Important Neutral Less Important Not Important at all Total 20 14 17 35 18 104

Percent 19.2 13.5 16.3 33.7 17.3 100.0

REGULAR CLAUSE IS AN IMPORTANT FACTOR

17 Not Important 19 Most Important 14 Important 16 Neutral

34 Less Important

Findings: Surprisingly about 35 respondents out of the 104 surveyed thought that the regular updates provided by the company were not that important. Only 34 of the respondents felt that the importance of regular market updates.  Rank the attributes trustworthiness of a share trading company? Frequency Most Important Important Neutral Less Important Not Important at all Total 10 7 28 25 34 104 Percent 9.6 6.7 26.9 24.0 32.7 100

54

TRUSTWORTHINESS IS THE IMPORTANT FACTOR

33% Not Important

10% Most Important

6% Important

24% Less Important Findings:

27% Neutral

A mere 20% of the respondents consider the significance of the trustworthiness of the brokerage company with whom they have been associated.  Rank the attribute brokerage charge of a share trading company? Frequency Most Important Important Neutral Less Important Not Important at all Total 36 15 13 5 35 104 Percent 34.6 14.4 12.5 4.8 33.7 100.0

BROKERAGE CHARGE IS THE IM ORTANT ACTOR

34 Not Important 5 Less Important

0 0

35 Most Important

14 12 Important Neutral

55

Findings: The brokerage charges imposed on the investors makes a significant impact on 50% of the respondents whereas another 35% felt that this is of no significance at all.

 Rank the company BONANZA according to the quality of service?

Frequency Excellent Very Good Good Average Below Average Total 31 24 29 17 3 104

Percent 29.8 23.1 27.9 16.3 2.9 100.0

UALIT ERVICE OF A ARE AN

30 Excellent

16 Average

28 Good

23 Very good

Findings: More than half of the sample population was satisfied with the kind of service that Bonanza offers its customers.

3 Below average

56

 Rank the company ICICI Direct according to the quality of service?

Frequency Excellent Very Good Good Average Below Average Total 23 41 22 7 11 104

Percent 22.1 39.4 21.2 6.7 10.6 100.0

UALIT SERVICE OF ICICI IRECT

7 Average 11 Below Average 22 Excellent

21 Good 39 Very Good

Findings: Even ICICI direct had its share of slice; more than 80 with its offering. of the respondents is satisfied

 Rank the company INDIABULLS according to the quality of service Frequency Excellent Very Good Good Average Below Average Total 40 21 26 12 5 104 Percent 38.5 20.2 25.0 11.5 4.8 100.0

57

QUALITY SERVICE OF INDIABULLS

12 verage 5 elo verage 38 xcellent

25 ood 20 Very good

Findings: ven Indiabulls joined the ratrace as a handsome 75 Members opted for Indiabulls in this regard.  Rank the company KOTAK SECURITIES according to the quality of service? Frequency Excellent Very Good Good Average Below Average Total 7 13 24 52 8 104 Percent 6.7 12.5 23.1 50.0 7.7 100.0

58

QUALITY SERVICE F TA SECURITIES

0

Findings: Kotak Securities was viewed as a low quality service provider as mere 20 person voted in favour of this company as far as service offering was concerned.  Rank the company OTHERS according to the quality of service? Frequency Excellent Very Good Good Average Below Average Total
T SER ES OF OTHER O P ES
3% Excellent 5% Very good 6% Good 15% Average

Percent 3 5 6 16 74 104 2.9 4.8 5.8 15.4 71.2 100.0

71% Below average

Findings: This result was very much predicted as other brokerage firms like 5 Paisa is still viewed as low quality service providers as a bulk of them (about 75) were not in their favour.

59

FINDINGS
 People with an eye for investment prefer to invest in shares.  This is mainly due to the fact that shares provide high returns in less time.  People investing in shares prefer online trading because of convenience and time saving.  People who recently started trading were mainly motivated by online share trading concept.  Bonanza is a known entity in the online business.  In online share trading brokerage and research reports are the major criteria for selecting a broking company.  50% of the people are satisfied with Bonanza.

60

CONCLUSION & RECOMMENDATION

Indian economy has been globalize and the capital market has been linked to the international financial market. Foreign individuals and institutional investors are now encouraged to participate into it. So, there is a need for raising the Indian Capital market in to the international standards in terms of efficiency and transparency. One such measure is the passing out of the Depository Act during the year 1996. Dematerialization of securities and under this system is one of the major steps aimed at improving and modernizing the capital market and enhancing the levels of investors protection measures which aims at eliminating the bad deliveries and forgery of shares and expediting the transfer of shares. Thus online share trading is gaining its popularity. Though it still has to go a long way but it has established its foothold in the metropolitan cities like Delhi, Mumbai etc. The dematerializing of shares coupled with the huge growth of Internet has been the fuel for the online trading which is now a considerable part of the total trading. It can therefore be said that online share trading is here to stay and will only grow to bigger proportions and will penetrate deeper into the economy. So online trading would become the order of the day, taking over the traditional norms in the years to come.

LIMITATIONS
       Usual sampling errors may exist. The universe selected was Delhi region. So the result cannot be generalized. Some of the customers may be uninterested and may not have replied correctly. Respondent may also be biased due to several reasons. Sample size was small which may affect the reliability of the result. Internet fraud Still many of Indian customer do not know to use Internet

61

RECOMMENDATION
 Company should invest more in its marketing strategies by giving ads in newspapers, magazines, TV commercials etc.  The Account opening time taken is about 7 working days. Improving logistics should reduce this.  The account opening charges should also be reduced to attract customers.  Customer care is not its best at Bonanza. Prompt customer handling should improve this.  Some of the customers do not get the service promised to them. There should be a check on the promises made.  Form should be simplified.

62

QUESTIONNAIRE
Q1. In which of these Financial Instruments do you invest into? (i) Shares (ii) Mutual Funds (iii) Bonds (iv) Others

Q2. Which type of trading you prefer? (i) Online (ii) Offline (iii) Not Applicable

Q3. If you prefer Online Trading then the reasons for it? (i) Privacy (iii) Convenience (ii) User friendly & Time Saving (iv) All The Above

Q4. What factors motivates you to invest in securities? (i) New IPO's (iii) More returns in less time (ii) Entry of FII's (iv) Others

Q5. Does online trading system motivate you to deal in securities? (i) Yes Q6. Have you heard about Bonanza? (i) Yes (ii) No (ii) No

Q7. Which Brokerage Firm do you prefer for Online Trading? (i) ICICI Direct (ii) Bonanza (iv) Kotak Securities (v) 5paisa (iii) Indiabulls (vi) Any other__________

Q8. What differentiates your Share Trading Company from others? (i)Brokerage (iv)Magazine (vii) Other (ii) Research Report (iii) Dial up trade facility (v) Exposure (vi) Account opening charges

Q9. How often do you trade? (i) Daily (ii) Weekly (iii) Monthly (iv) Yearly

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Q10. In which category does your income fall? (Per month in Rs) i) 0-15000 ii) 15000 35000 iii) 35000 60000 iv) Above 60000 Q11. What percentage of your earnings do you invest in share trading? (i)Up to 10% (ii) Up to 25% (iii) Up to 50% (iv) Above 50% Q12. According to your preference rank the attributes of a share trading company. (1=Most Important, 5= Not Important at all) 1. Customer Service ____ 2. Proper Guidance ____ 3. Regular Updates ____ 4. Trustworthiness____ 5. Brokerage Charges_____ Q13. Rank these share trading companies according to the quality of service they provide. (1=Excellent, 5= Very poor)

1. 4.

2. 5.

3.

a) b) c) d) e)

Bonanza ICICI Direct India Bulls Kotak Securities Others (Please Specify)

Q14. What additional features do you wish to have in Online Share Trading?

Personal Information

Name: Age: Sex: Phone No: Occupation Male Female

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BIBLIOGRAPHY

y Securities Market (Basic) Module: --NCFM y Economic Times. y Training Kit Provided by the Bonanza.

Websites:
www.nseindia.com www.bseindia.com www.hdfcsec.com www.indiainfoline.com www.icicidirect.com www.kotaksecurities.com www.indiabulls.com www.Bonanzaonline.com

Books Refered :
 Marketing Research By G.C Beri  Marketing Management By Philip Kotler  Welcomekit (Manual) of Bonanza

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