A

Project Study Report

On

Training Undertaken at

“ANAND RATHI”

Titled

“FINANCIAL SERVICES PROVIDED BY ANAND RATHI”

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By Submitted to

Sourabh Golechchha Mrs. Meenakshi nagar

MBA (II Yr) (Lecturer)

-

(2009-2011)

Training is the essence for the practical orientation of the professional studies

undertaken and without practical training one can not understand the real basics

and theoretical applications in practice and everything just goes in vain. A

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Trainee come to face live problems in the industries and the field the institute

where one person pursues his studies cannot provide him that practical

knowledge on all aspects of learning often the studies of a subject is said to be

incomplete until the student has been expose to his practical.

In the equity market, ANAND RATHI SECURITIES is a growing name with the

rising users in its arm and I would be honored to say that it is going to push up

the growth of securities and equity market in the coming years to come as well as

financially viable for the upcoming market segment. Our performance area was

SALES AND MARKETING.

Under ANAND RATHI SECURITIES I made a deep understanding of share

market, opening of Demat accounts and growth opportunities in the sector since

people are getting aware and investing in the share and securities market which

we say equity market. With the feedback that we gathered from customers we

tried to provide fruitful information that would be important for the organization.

ACKNOWLEDGEMENT

The Project would not be completed without the mention of those who have

spared their valuable time and shared their rich experience in making this

project this success.

Research is the search of knowledge and searching knowledge is very

tedious job. Hence it is my responsibility to pay my thanks regard s that

has directly or indirectly helped out to solve the objectives.

First of all, I express my deep sense of gratitude and deep beholden to Mrs.

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AARTI AGIWAL, Marketing Manager, Anand Rathi Securities Ltd. for

giving me the permission to undertake my project training in the company

and their valuable guidance and motivation in completing the assignment.

I am equally thankful to our , GECJ and to all those who have directly or

indirectly helped me in completing this project a reality

SOURABH GOLECHCHHA

MBA – II year

EXECUTIVE SUMMARY

In my summer internship I did project in marketing and finance stream

with ANAND RATHI at its office in jaipur (Rajasthan). Working with ANAND

RATHI as a summer trainee has been a real learning experience. My tenure at

ANAND RATHI was of 45 days. (From 16 june to 1 august, 2010).

During my internship, I worked on financial services project in the

organization. In my project I analysed the which type of services

company provide to its customer to achive the objective of the project.

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I started the project from understanding project, defining its objective and divide it

into steps to achieve defined objective. These steps became helpful to me in

timely completion and acquiring information at required time.

An insight view of the project will encompass – what it is all about,what it aims to

achieve, what is its purpose and scope, the various methods used for collecting

data and their sources, including literature survey done further specifying the

limitations of our study and in the last, drawing inferences from the learning so

far.

Under ANAND RATHI SECURITIES I made a deep understanding of share

market, opening of Demat accounts and growth opportunities in the sector since

people are getting aware and investing in the share and securities market which

we say equity market. With the feedback that we gathered from customers we

tried to provide fruitful information that would be important for the organization.

CONTENT

1. Introduction to the Industry

2. Introduction to the Organization

3. Research Methodology

3.1 Title of the Study

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3.2 Duration of the project

3.3 Objective of the Study

3.4 Type of Research

3.5 Sample size and Method of Selecting Sample

3.6 Scope of the study

3.7 Limitations of the study

4. Facts and Findings

5. Analysis and Interpretation

6. SWOT

7. Conclusion

8. Recommendation and Suggestions

9. Appendix

10.Bibliography

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1.1 WHAT IS FINANCIAL SERVICE INDUSTRY

There is a potential source of confusion regarding careers in finance. On the

one hand there is a function called finance that is a common to all business

enterprises, in every industry. On the other hand, there is a financial service

industry. Our focus will be on the later definition. To add yet more potential

confusion, the finance functions but one of many possible career paths within

the financial service industry.

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1.2 THE FINANCE FUNCTION

The finance function encompasses a variety of jobs categories. Degrees and / or

professional certification in accounting are necessary in only a minority of cases,

for the most part, fall into these three broad categories:

Corporate controller staff

Internal audit staff

Corporate treasury staff

1.3 THE FINANCIAL SERVICE INDUSTRY

The financial services industry includes firms that are engaged in activities such

as investing, lending, insurance, securities trading and securities issuance. This

is not an exhaustive list, but these is companies can be characterized as being in

one or more of the following line of business:

Banking

Insurance

Securities Brokerage

Investment Banking

Securities Trading

Investment management (or money management)

Securities Analysis

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2.1 ABOUT ANAND RATHI

AnandRathi (AR) is a leading full service securities firm providing the

entire gamut of financial services. The firm, founded in 1994 by Mr.

AnandRathi, today has a pan India presence as well as an international

presence through offices in Dubai and Bangkok. AR provides a breadth

of financial and advisory services including wealth management,

investment banking, corporate advisory, brokerage & distribution of

equities, commodities, mutual funds and insurance, structured products -

all of which are supported by powerful research teams. The firm's

philosophy is entirely client centric, with a clear focus on providing long

term value addition to clients, while maintaining the highest standards of

excellence, ethics and professionalism. The entire firm activities are

divided across distinct client groups: Individuals, Private Clients,

Corporates and Institutions and was recently ranked by Asia Money

2006 poll amongst South Asia's top 5 wealth managers for the ultra-rich.

In year 2007 Citigroup Venture Capital International joined the group as

a financial partner.

2.1.2 AR CORE STRENGTHS

Breadth of Services: In line with its client-centric philosophy, the firm

offers to its clients the entire spectrum of financial services ranging from

brokerage services in equities and commodities, distribution of mutual

funds, IPOs and insurance products, real estate, investment banking,

merger and acquisitions, corporate finance and corporate advisory.

Clients deal with a relationship manager who leverages and brings

together the product specialists from across the firm to create an

optimum solution to the client needs.

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2.1.3 MANAGEMENT TEAM

AR brings together a highly professional core management team that

comprises of individuals with extensive business as well as industry

experience.

In-Depth Research: Our research expertise is at the core of the value

proposition that we offer to our clients. Research teams across the firm

continuously track various markets and products. The aim is however

common - to go far deeper than others, to deliver incisive insights and

ideas and be accountable for results.

Management Team:

Our senior Management comprises a diverse talent pool that brings

together rich experience from across industry as well as financial

services.

1. Mr. Anand Rathi - Group Chairman, Chartered Accountant, Past

President, BSE; Held several Senior Management positions with one

of India's largest industrial groups

2. Mr. Pradeep Gupta - Vice Chairman; Plus 17 years of experience in

Financial Services

3. Mr. Amit Rathi - Managing Director; Chartered Accountant & MBA;

Plus 11 years of experience in Financial Service

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2.1.4 MILESTONES

1994: Started activities in consulting & Institutional equity sales with 15 staff.

1995: Set up a research desk and empanelled with major institutional investors

1997: Introduced investment banking businesses; Retail brokerage services

launched

1999: Lead managed first IPO and executed first M & A deal

2001: Initiated Wealth Management Services

2002: Retail business expansion recommences with ownership model

2003: Wealth Management assets cross Rs1500 crores; Insurance broking

launched; Launch of Wealth Management services in Dubai; Retail Branch

network exceeds 50

2004: Commodities brokerage and real estate services introduced; Wealth

Management assets cross Rs3000crores; Institutional equities business

relaunched and senior research team put in place; Retail Branch network

expands across 100 locations within India

2005: Real Estate Private Equity Fund Launched; Retail Branch network

expands across 200 locations within India

2006: AR Middle East, WOS acquires membership of Dubai Gold & Commodity

Exchange (DGCX); Ranked amongst South Asia's top 5 wealth managers for the

ultra-rich by Asia Money 2006 poll; Ranked 6th in FY2006 for All India Broker

Performance in equity distribution in the High Networth Individuals (HNI)

Category; Ranked 9th in the Retail Category having more than 5% market share;

Completes its presence in all States across the country with offices at 300+

locations within India

2009: Citigroup Venture Capital International picks up 19.9% equity stake; Retail

customer base crosses 100 thousand; Establishes presence in over 350 locations

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2.2 PRIVATE WEALTH MANAGMENT

2.2.1 Introduction

Affluent individuals need sophisticated advice and strategic guidance to

capitalize on opportunities to preserve, grow and transfer their wealth. In

addition, a desire exists within wealthy families to simplify the

management of multigenerational needs and lessen the profound

emotional impact of wealth on family members. AR offers the most

extensive platform of customized servicing, individual strategies and

products to help meet the requirements of the affluent private investor.

We provide comprehensive, integrated investment strategies to address

your wealth management needs. Working closely with specialists across

firm PWM offers an array of products & services, which includes AR's

highly-rated research.

2.2.2 Philosophy

We at AnandRathi try and understand your financial needs; to offer you

personal advice and expert analysis that you need to make your assets

go the Xtra mile. Our ability to think far ahead and formulate a long-term

strategy, coupled with long hours of practice and research are the key

drivers, which make your wealth work harder for you.

We believe that the key to build wealth lies in allocating assets across

various markets, financial instruments and industry sectors. Keeping this

in mind we leverage our expertise in scientific asset allocation, to help

you maximize returns and minimize risks.

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2.2.3 Process

We realize the need to simplify the complexities of the investment

strategies and we achieve this by offering highly customized wealth

management product - LaXmi TM (let your Assets go the Xtra Mile TM).

Our Personalized Relationship Managers along with the expert team of

analysts and advisors will assist you in analyzing all your investment

needs and advice you on specialized solutions created exclusively for

you. We have a dedicated research team who constantly screens the

market for investment prospects. The team provides support in fine-

tuning the investment strategy & suggests how to capitalize on these

opportunities.

2.2.4 Research

Our research expertise is at the core of the value proposition that we

offer to our clients. Research teams across the firm continuously track

various markets and products. The aim is however common - to go far

deeper than others, to deliver incisive insights and ideas and be

accountable for results. AR research processes incorporate quantitative

areas well as qualitative analyses. This multi-pronged approach helps us

to provide superior risk- adjusted returns for our clients. AR analysts

provide objective and decisive research that is designed to enable clients

to make informed investment decisions. The team covers entire

spectrum of financial markets from equities, fixed income, and

commodities to currencies. They also cover the global markets, to give

clients an unparalleled macro-view of the investment opportunities

across the globe.

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2.3.1 BROKERAGE & DISTRIBUTION SERVICES

1 Equity & Derivatives Brokerage: AnandRathi provides end-to-end

equity solutions to institutional and individual investors. Consistent

delivery of high quality advice on individual stocks, sector trends and

investment strategy has established us a competent and reliable

research unit across the country. Clients can trade through us online on

BSE and NSE for both equities and derivatives. They are supported by

dedicated sales & trading teams in our trading desks across the country.

Research and investment ideas can be accessed by clients either

through their designated dealers, email, web or SMS.

2. Mutual Funds: AR is one of India's top mutual fund distribution

houses. Our success lies in our philosophy of providing consistently

superior, independent and unbiased advice to our clients backed by in-

depth research. We firmly believe in the importance of selecting

appropriate asset allocations based on the client's risk profile. We have a

dedicated mutual fund research cell for mutual funds that consistently

churns out superior investment ideas, picking best performing funds

across asset classes and providing insights into performances of select

funds.

3. Depository Services: AR Depository Services provides you with a

secure and convenient way for holding your securities on both CDSL and

NSDL. Our depository services include settlement, clearing and custody

of securities, registration of shares and dematerialization. We offer you

daily updated internet access to your holding statement and transaction

summary

.

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4. Commodities: Commodities broking - a whole new opportunity to

hedge business risk and an attractive investment opportunity to deliver

superior returns for investors. Our commodities broking services include

online futures trading through NCDEX and MCX and depository services

through CDSL. Commodities broking is supported by a dedicated

research cell that provides both technical as well as fundamental

research. Our research covers a broad range of traded commodities

including precious and base metals, Oils and Oilseeds, agri-commodities

such as wheat, chana, guar, guar gum and spices such as sugar, jeera

and cotton. In addition to transaction execution, we provide our clients

customized advice on hedging strategies, investment ideas and arbitrage

opportunities.

5. Insurance Broking: As an insurance broker, we provide to our clients

comprehensive risk management techniques, both within the business

as well as on the personal front. Risk management includes

identification, measurement and assessment of the risk and handling of

the risk, of which insurance is an integral part. The firm deals with both

life insurance and general insurance products across all insurance

companies. Our guiding philosophy is to manage the clients' entire risk

set by providing the optimal level of cover the least possible cost. The

entire sales process and product selection is research oriented and

customized to the client's needs. We lay strong emphasis on timely claim

settlement and post sales services.

Our services:

Risk Management

Due diligence and research on policies available

Recommendation on a comprehensive insurance cover based on

clients needs

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Maintain proper records of client policies

Assist client in paying premiums

Continuous monitoring of client account

Assist client in claim negotiation and settlement

6. IPO: We are a leading primary market distributor across the country.

Our strong performance in IPOs has been a result of our vast experience

in the Primary Market, a wide network of branches across India, strong

distribution capabilities and a dedicated research team. We have been

consistently ranked among the top 10 distributors of IPOs on all major

offerings. Our IPO research team provides clients with indepth overviews

of forthcoming IPOs as well as investment recommendations. Online

fillng of forms is also available.

TO NRIS

Introduction

AR is the perfect gateway to the wealth of investment opportunities in

India for Non-Resident Indians. With our dedicated NRI desk in India and

Relationship Managers in your own country, you get the best of both

worlds - real understanding of your investment needs as well on-the-

ground expertise.

Why choose AR?

Superior understanding of the Indian economy & markets

Ability to structure and manage your tax and regulatory compliances

Dedicated relationship team

Unparalleled product range - Indian and Global

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2.3.2 INSTITUTIONAL SERVICES

Institutional Equities: The Institutional sales and trading team provides

cutting edge market information and investment advice to clients,

coupled with excellent execution capabilities. A highly experienced and

reputed team of equity analysts supports the sales team. There is an

extensive focus on research on companies, sectors and macro-

economy. The institutional equity team tracks nearly 250 large and mid-

sized companies to give clients an unparalleled breadth of ideas. We

also provide Investment Advisory Services for institutional clients in India

and overseas for investment in the Indian equity markets.

Research: Our research expertise is at the core of the value proposition

that we offer to our clients. Research teams across the firm continuously

track various markets and products. The aim is however common - to go

far deeper than others, to deliver incisive insights and ideas and be

accountable for results. AR research processes incorporate quantitative

areas well as qualitative analyses. This multi-pronged approach helps us

to provide superior risk- adjusted returns for our clients. AR analysts

provide objective and decisive research that is designed to enable clients

to make informed investment decisions. The team covers entire

spectrum of financial markets from equities, fixed income, and

commodities to currencies. They also cover the global markets, to give

clients an unparalleled macro-view of the investment opportunities

across the globe.

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2.3.2 MANAGED INVESTMENT SERVICES

1. Portfolio Management Services (PMS): AR Portfolio Management

Service is a discretionary investment service created to meet the

demand for more targeted investment styles and opportunities. It offers a

range of specialized investment strategies designed to capture

opportunities across the market spectrum. The range of products varies

from the highly defensive, capital-protected to the most aggressive

strategies in the equities and derivatives markets. Our investment

process ensures that your strategy and portfolio are built on solid

foundations. Together you and your relationship manager select the

strategy in line with your individual goals. AR investment specialists then

construct and manage your portfolio in accordance with the chosen

investment strategy.

2. Real Estate Opportunities Fund: AR Real Estate Opportunities Fund

is a private equity fund for high net-worth individuals, corporates and

institutions, to invest in equity-linked instruments in the Indian real estate

and infrastructure sectors. As part of the structural reforms to further

boost India's economic growth, the government has recognized the need

for institutional finance in the real estate sector. In early 2005, the

government has relaxed the FDI guidelines in real estate and also

allowed the setting up of real estate investment funds under SEBI

guidelines. These developments are expected to provide much needed

capital to provide for the increasing demand for quality real estate in

major urban centers across the country. To capture this opportunity, AR

has brought together a team of specialists and advisors to guide the

fund's investments who bring together expertise in the areas of real

estate consulting, development, legal and financial structuring.

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2.3.4 INSTITUTIONAL WEALTH MANAGEMNET

Introduction

Corporate and Institutional treasuries need ever more sophisticated

advice that is backed by serious and credible research. AR IWM

provides its institutional clients integrated wealth management solutions

across global markets, which are backed by proprietary global economic

& investment research.

We understand that your needs could range from finding short-term

surplus management strategies to higher yielding and long term

investments. The IWM team brings together the highly-rated AR

research across fixed income, currencies and equities markets to provide

investment solutions that meet your complex needs - from simple

money-market mutual funds to complex arbitrage strategies in the

equities or commodities markets.

Products

Equity & Derivatives

Mutual Funds

Depository Services

Commodities

Insurance

IPOs

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Client List

ACC

Bayer

Tata Iron & steel

Century Textiles

Clariant

CRISIL

Crompton Greaves

Dabur

Datamatics

GE Shipping

Godrej

Goodlass Nerolac

Grasim

Gujarat Ambuja Cements

Gujarat Pipavav Port

Heinz India

Hindalco

Hindustan Lever

H&R Johnson

IDFC

Indian Rayon

Jindal Group

Larsen & Toubro

Mastek

Mahindra & Mahindra

Raymonds

Sterlite Group

Syngen

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Research: Our research expertise is at the core of the value proposition that we

offer to our clients. Research teams across the firm continuously track various

markets and products. The aim is however common - to go far deeper than

others, to deliver incisive insights and ideas and be accountable for results. AR

research processes incorporate quantitative areas well as qualitative analyses.

This multi-pronged approach helps us to provide superior risk- adjusted returns

for our clients. AR analysts provide objective and decisive research that is

designed to enable clients to make informed investment decisions. The team

covers entire spectrum of financial markets from equities, fixed income, and

commodities to currencies. They also cover the global markets, to give clients an

unparalleled macro-view of the investment opportunities across the globe.

2.3.5 CORPORATE ADVISORY SERVICES:

Introduction: AnandRathi Advisors assists companies in realizing tangible

improvements in various facets of their businesses by providing a range of

corporate advisory services that includes the entire gamut from financial,

organizational and operational restructuring, to profit improvement and

business turnaround strategies. Highly qualified and thoroughly professional,

our specialists, experts and associates assist you in conceptualising

problems and devising effective solutions, whatever be your need.

Successful assignments undertaken for leading organisations in India as well

as overseas bear ample testimony to our wide-ranging capabilities, utilising

our unparalleled business know-how to give you the competitive edge. We

have successfully handled various assignments under industry segments like

refinery, cement, mining, power, paper, metals, airlines and optic fibre.

Services

1. Performance Improvement and Cost Reduction

2. Business Strategy and Re-engineering

3. Financial, Business & Organizational restructuring

4. Business Turn-around Strategies

5. Management Systems: MIS, Review & Control Mechanism

2.4 INVESTMENT BANKING AND CORPORATE FINANCE

2.4.1 Investment Banking: AR Investment Banking provides

comprehensive services to clients including raising money in the equity

capital markets to identifying strategic alliances, mergers and acquisition

opportunities and debt financing & restructuring advisory.

2.4.2 Corporate Finance: The AR Corporate Finance team helps clients

manage their debt-financing needs by profiling business and cash-flow

risks, defining the alternative sources of funding, building in multiple

variables such as currencies, fixed-floating, tenure, collateral etc. in a

comprehensive manner and finally negotiating with the prospective

lenders / buyers. The team has also built an impressive track-record in

debt restructuring based on its superior understanding of business needs

and relationships with key lenders. The Corporate Finance team has

handled assignments in businesses like paper, hospitality, telecom,

textiles and sugar.

Services

Investment Banking :

Merchant Banking

A highly experienced equity capital markets team, a pan-India

distribution presence and a high level of quality and integrity in executing

client's transactions has enabled us to provide tangible value to our

clients' businesses.

We bring quality independent advice and excellent execution capabilities

to create landmark transactions for clients. Our track record of

successfully lead managed IPOs includes Tips Industries, Emami, HCL

Infosystems and Provogue.

M&A, Private Equity

Our Mergers & Acquisition team works with clients in creating lasting

stakeholder value through advice on mergers, acquisitions, divestitures

and private equity financing.The team leverages on the firm's superior

understanding of businesses and tax and regulatory environments as

well as a deep network of relationships across the professional and

corporate world. We have worked extensively with clients in industries

like cement, sugar, chemicals, power and textiles for mergers and

acquisition deals, valuation and business restructuring.

Corporate Finance :

Raising Cost-effective debt resources in Rupee and Foreign

Currency for Projects, Working Capital and Specific needs.

Financial Restructuring, CDR, OTS, Interest Cost Reduction, Long-

term Corporate Loans for Working Capital Margins.

Financial products and services in hedging of interest and currency

risks.

Distribution Capabilities

1. Strong pan- India distribution network, with presence at over 130

locations across India.

2. Leading distributor of equity related products including IPOs & mutual

fund

3. Have been consistently amongst the top 8 brokers, inspite of not

being a lead manager.

4. 50000 plus captive Institutional clients and HNIs

5. Strong after market support

2.5 ANAND RATHI – HISTORY FILE

1994: Started activities in consulting and Institutional equity sales with

staff of 15

1995: Set up a research desk and empanelled with major institutional

investors

1997: Introduced investment banking businesses

Retail brokerage services launched

1999: Lead managed first IPO and executed first M & A deal

2001: Initiated Wealth Management Services

2002: Retail business expansion recommences with ownership model

2003: Wealth Management assets cross Rs1500 crores

Insurance broking launched

Launch of Wealth Management services in Dubai

Retail Branch network exceeds 50

2004: Commodities brokerage and real estate services introduced

Wealth Management assets cross Rs3000crores

Institutional equities business relaunched and senior research team put

in place

Retail Branch network expands across 100 locations within India

2005: Real Estate Private Equity Fund Launched

Retail Branch network expands across 200 locations within India

2006: AR Middle East, WOS acquires membership of Dubai Gold &

Commodity Exchange (DGCX) Ranked amongst South Asia's top 5

wealth managers for the ultra-rich by Asia Money 2006 poll Ranked 6th

in FY2006 for All India Broker Performance in equity distribution in the

High Net worth Individuals (HNI) Category Ranked 9th in the Retail

Category having more than 5% market share

Completes its presence in all States across the country with offices at

300+ locations within India

2009: Citigroup Venture Capital International picks up 19.9% equity

stake

Retail customer base crosses 100 thousand

Establishes presence in over 350 locations

When any corporate event such as rights or bonus or dividend is

announced for a particular security, the Depositories will give all the

details of the clients having electronic holdings of that security as of

record date / book closure to the Registrars and Transfer Agents of the

Company who will then calculate the corporate benefits due to all the

share holders. The disbursement of cash benefits such as dividend /

interest will be done by the Company whereas the distribution of

securities / entitlements will be done by the Depositories based on the

information provided by the Registrars and Transfer Agents of the

Company. Thus, bonus / rights shares, if any, will be credited to your

account electronically.

Well, in case of those corporate events where you can exercise your

option such as rights issue or optional conversion of debentures to

shares, you do have a choice of either physical or electronic mode of

holdings. However, corporate entitlements such as bonus will be made in

the same form as of your original holdings.

You can approach your DP who in turn will contact the Registrars and

Transfer Agents of the Company for clarifications regarding allotment of

securities. In case of discrepancies in cash benefits you will have to

contact the Registrars and Transfer Agents of the Company.

2.6.1 Equity

Equity is a share in the ownership of a company. It represents a claim on the

company's assets and earnings. As you acquire more stock, your ownership

stake in the company increases. The terms share, equity and stock mean the

same thing and can be used interchangeably.

Holding a company''s stock means that you are one of the many owners

(shareholders) of a company, and, as such, you have a claim (to the extent

of your holding) to everything the company owns. Yes, this means that

technically, you own a portion of every piece of furniture; every trademark;

every contract, etc. of the company. As an owner, you are entitled to your

share of the company's earnings as well as any voting rights attached to the

stock Another extremely important feature of equity is its limited liability,

which means that, as a part-owner of the company, you are not personally

liable if the company is not able to pay its debts.

In case of other entities such as partnerships, if the partnership goes

bankrupt, the partners are personally liable towards the creditors/lenders and

they may have to sell off their personal assets like their house, car, furniture,

etc., to make good the loss. In case of holding equity shares, the maximum

value you can lose is the value of your investment. Even if a company of

which you are a shareholder goes bankrupt, you can never lose your

personal assets.

2.6.1.1 Characteristics of equity

1. Equity is unsecured and a high risk-return investment: When you

invest your money in a debt investment such as a bank deposit,

bonds, etc., you are promised a fixed amount of interest on your

investment and return of capital. This isn't the case with an equity

investment. By becoming an owner, you bear the risk of the company

not being successful. However, the rewards for bearing this risk are

high. Equity shareholders are entitled to a share in the profits of the

company’s business as well as any appreciation in the perceived

value of the shares. The risks and rewards of investing in equity are

clearly apparent from the Bombay Stock Exchange Sensitive Index

(BSE Sensex), which is a popular stock market index.

2. Equity remains in perpetual existence: The perpetual existence of

a company implies that the death, disability, retirement or termination

of a shareholder, director or officer, will not affect the existence of the

company. For an equity shareholder, this is convenient since he does

not need to renew/renegotiate the terms of his investment (like in the

case of a fixed tenure debt investment). He also has the option to sell

his equity holding through the stock exchange if he no longer wants to

remain invested in the company.

3. Limited liability: Another extremely important feature of equity is its

limited liability, which means that, as a part-owner of the company,

you are not personally liable if the company is not able to pay its

debts. In case of other entities such as partnerships, if the partnership

goes bankrupt the partners are personally liable towards the

creditors/lenders and they may have to sell off their personal assets

like their house, car, furniture, etc., to make good the loss

4. Income from equity investing

Capital appreciation: Equity shares of companies are listed and traded on a

stock exchange (the Bombay Stock Exchange or the National Stock

Exchange). The market prices of these shares are continuously moving up or

down depending on the interest in the company’s stock, it’s business

potential, etc. As an equity shareholder, you can profit/lose from the market

price rise/fall.

Bonus shares: When you purchase shares of a company, you become a

shareholder of the company. When the company is doing well, it may declare

a ‘bonus issue’. This means that the company will issue fresh equity shares

to its existing shareholders, for free. As a shareholder, you will be entitled to

receive bonus shares in proportion to your holding in the company. When

you sell your bonus shares in the stock market, the market price at which you

sell your bonus, minus brokerage charges and necessary taxes (Service Tax,

Securities Transaction Tax, etc.), will be your profit i.e. capital appreciation.

In this case, there will be no cost of purchase since you have received the

bonus for free.

Rights shares: Another way a company offers benefits to its shareholders is

by offering ‘rights shares’. This means that the company will offer fresh equity

shares to its existing shareholders at a price, which is lower than the current

market price of the share.

Dividend income: Companies report their profits earned on a quarterly

basis. Based on the quantum of profits, companies declare dividends to

distribute a portion of these profits to their shareholders. Dividends are

declared as a percentage of the share’s face value. As a shareholder, you

will be entitled to dividend to the extent of your share holding.

5. Stock Selection Guidelines

1. Know the business: Warren Buffett, one of the world’s most successful

investors, follows the philosophy of buying stocks of only those businesses

that he understands. Select companies in businesses that you already have

an idea of and find interesting. One of the businesses that could be of

interest to you would be the one, which you are affiliated to because of your

employment. For instance, if you are working in a pharma company, you may

understand this business well.

2. Assess the past performance: All companies present details of their

financial performance in their Annual Reports. In case of a company having

its Initial Public Offering – IPO (when a company offers its shares to the

public for the first time, it is called Initial Public Offering), it is required to

publish its past performance in its IPO offer document. There are also a vast

number of research reports published by research and brokerage houses,

and company analysis done by the media, which is worth reading, to assess

a company’s past performance and future potential. ‘Ratio Analysis’ is widely

used to assess a company’s past performance.

3. Know the promoters: The promoters and management team of a

company are the key people who drive its business. Their integrity dictates

whether the business benefits or they benefit personally. Also, their

experience and business competence is crucial for business growth.

Evaluate the company’s promoters and management on the basis of four Cs:

Competence, Credibility, Corporate governance and Concern for

shareholders.

4. Assess the future prospects of the company: Although a company may

have performed well in the past, it is not necessary that it will continue

performing well in the future. All companies go through business cycles of

ups and downs. It is important that you form a view on the future trends of

the business the company is a player in.

5. Assess the stock price: As mentioned earlier, the share price of all

companies continuously fluctuate on the stock markets with investors buying

and selling the shares. The price at which an investor is willing to buy or sell

a share of a company is the perceived value of the share of the company

taking into consideration the company’s present business and future

business growth. In addition to this, investor sentiment plays a large role in

pricing of stocks. To help you assess this, you could use a popular stock

market ratio called the Price/Earning ratio (P/E ratio) & is based on the

following formula: P/E ratio = Market price of the share; Earning per share

(EPS); *EPS = Profit After Tax (PAT) The P/E ratio helps judge by how many

times the company’s share is traded based on its earnings. In this case, the

company’s stock is available at a multiple of 15 times its earnings. The higher

the P/E ratio, the higher is the stock’s valuation. Usually market prices of

well-established companies with a good past track record and reputed

promoters command a high P/E ratio.

2.6.2 Equity Investing Strategies

There are various methods and strategies one can adopt while investing in

equity. Some of the popular ones are enumerated below

1. Value investing: Value investing means investing in companies that are

believed to be currently undervalued but whose worth will be recognized by

the market eventually. These companies’ intrinsic or fundamental values are

higher than their market values. This strategy implies investing in such

rcompanies before the markets recognize their true values and push up their

share prices accordingly.

2. Investing in dividend yield stocks: Dividend yield is a ratio, which

divides the dividend paid out by a company with the current market price. For

instance, if a company pays out Rs 5 per share as dividend and its current

market price is Rs 55, its dividend yield is about 9 per cent (Rs 5 / Rs 55 x

100). Companies, which offer high dividend yields, are usually ‘value’

companies, which ‘value investors’ look for.

3. Diversification: Diversification means spreading your money over a

number of investments. In other words, you don’t concentrate your money

over just one or two, or only over a few investments. For instance, if you

have an investible surplus of Rs 1 lakh, you can diversify into two ways.

Firstly, don’t invest the entire Rs 1 lakh in just one asset class.

Diversification benefit and pitfall. Diversification is a well-established risk

management investment strategy. It helps spread your risks over investment

options offering different risk-return levels. Diversification especially help

when one invests in investment options with complementary risk-return

profiles.

However, by investing in both, debt and equity, a portion of your portfolio,

which is invested in debt, will offer profits during this time to reduce the

losses on your equity investments, resulting in either an overall lower loss, or

even a marginal gain depending on the level of investment in debt. The

reverse will hold true if the equity markets are moving upwards and the debt

markets are stagnant. However, diversification also results in lower profits.

Diversification methods: Diversification can be done across different asset

classes (equity, debt, mutual funds, gold, property, etc.) as well as across

different investment options (say, in case of equity – investment in

companies with different market capitalisations, in different sectors, etc.). The

amount of investment made in each asset class and investment option will

depend on your investment risk profile and expected investment returns.

4. Growth investing: Growth investing means investing in companies,

whose turnover and profits are expected to grow significantly, which will

result in appreciation in their share prices. These companies are in a phase

of rapid growth and expansion of their businesses.

5. Rupee cost averaging / value averaging

To buy ‘low’ and sell ‘high’ is very difficult to do, especially in volatile markets

(where prices rise and fall significantly over very short periods of time). One

investment strategy that helps overcome this volatility and take advantage of

it by averaging out cost of investment, is ‘Rupee cost averaging’ (RCA) or

‘Value averaging’.

Procedure Of Investing In Equity: In the past, investing in equity involved a

high cost (high brokerage charges of about 2 per cent of the transaction

value) and a number of hassles (shares were traded in the physical form,

which involved a lot of paperwork and often resulted in bad deliveries due to

signature mis-matches, forgery, etc.). Today, the entire scenario of equity

investing has changed for the better. Shares are now traded in the electronic

(dematerialized) form and costs of investing have reduced dramatically. All

this will be done without the investor having to make efforts at every stage for

the necessary action

3-step process of investing in equity:

Step 1: Open the necessary accounts

Before you start investing in equity, you need to open the following accounts:

Broking account: This is an account you open with a broker. You will need

to fill in an application form, which will require you to submit details such as

your full name, address, Permanent Account Number (PAN), etc. Once your

application has been processed, you will receive a broking account number.

Demat account: This is the account, which will hold shares purchased by

you, in electronic form. This works like a bank account. In case of a bank

account, you deposit and withdraw your money and receive a bank

statement periodically, which shows you how much money is remaining in

your account. Similarly, in case of a demat account, shares purchased by

you are deposited into your account and shares sold by you are withdrawn

from your account, and you receive a statement periodically, showing the

shares remaining in your account. A demat account can be opened with a

depository participant. It is preferable to have your demat account maintained

with your broker or an entity affiliated to your broker.

This ensures prompt transfers to and from your demat account of shares

purchased and sold by you without any effort required to be made by you

(you simply need to issue necessary one-time instructions to your broker).

Bank account: You can use an existing bank account for your equity

investments.

Step 2 : Decide your mode of transacting – in cash or with margins

You have two options of investing in equity:

1. By making purchases in cash and taking delivery of the shares or

2. By undertaking margin trading (you pay only a portion of the cost for

purchases and your broker funds the balance) and squaring off your

positions (you don’t take delivery of the shares. You simply book your profit

or loss).

If you decide to undertake cash purchases, you need to have sufficient funds

in your bank account to make the purchases. If you decide to undertake

margin trading, you need to pay the broker the margin amount and start your

trading.

Step 3: Deciding on which mediums to use for transacting

There are a number of mediums you can use to transact in equity. These

are:

Visits to the broker’s office/branches: You can simply visit your broker’s

office or closest branch and undertake your transaction by interacting with a

counter representative.

Via telephone: This is the traditional way of transacting. You simply call your

broker and place your order. This facility is available in the form of call

centres.

The Internet: Register yourself with your broker’s internet portal and use the

equity-trading platform available to conduct your trades.

Kiosks: Kiosks are like booths or cabins placed at prominent locations

across the city. Simply enter a kiosk and execute your trade. A kiosk is used

for trading through the internet. The only difference is that instead of using

your home computer, you can use the kiosk located outside your home.

2.6.2 DERIVATIVES

Derivatives, as the name suggests, are financial instruments that derive their

value from an underlying security or asset. The underlying could be equity

shares or an index, a commodity, a currency or the exchange rate, bonds,

etc. Sounds complicated? In a way, it is. But once you are clear about how a

derivative product derives its value from an underlying asset and yet has a

price and an identity of its own, it will become just another financial product to

you. Then again, derivative products have more variants than any other

financial products since they have been created to meet a variety of niche

needs. There are various derivative products, which derive their value from

equity shares or an index, a commodity, a currency or the exchange rate,

bonds, etc. These derivative products vary according to their structure and

terms and conditions. The most popular derivative products are Forwards,

Futures, Options, Warrants and Swaps. Some of these are short term in

nature while others are long term. For example stock and index options that

can be traded on stock exchanges are short term in nature, while options like

warrants and rights have a longer term.

Derivative products have been around for a long, long time. In fact, as early

as the 1650s, dealings resembling present day derivative market

transactions were seen in rice markets in Osaka, Japan. The first leap

towards an organized derivatives market came in 1848, when the Chicago

Board of Trade (CBOT), the largest derivative exchange in the world, was

established.

Today, equity and commodity derivative markets are rapidly gaining in size in

India. In terms of popularity too, these markets are catching on like a forest

fire. So, what are these markets all about? What are the products that they

trade in? Why do people feel the need to trade in such products and what

sort of traders benefit from such trades? Do these markets hold scope for

retail investors too? And if so, how exactly can you go about trading in them?

2.6.1.1 Derivative markets in India

Globally, the last four decades have seen phenomenal growth in derivative

markets. In the process, many new products have been developed and this

has also led to a sharp rise in volumes over the years. Today, derivative

markets have become an integral feature of financial markets in developed

countries and this phenomenon is gaining momentum in developing

countries, too.

Since the introduction of futures and options in the Indian equity markets, the

turnover in this segment has increased manifold. For instance, in the case of

the National Stock Exchange (NSE), the average daily turnover in the futures

and options segment stood at Rs 410 crore for the financial year 2001-02. By

fiscal 2004-05, it increased 24 times over to more than Rs 10,000 crore!

Since the introduction of futures and options in the Indian equity markets, the

turnover in this segment has increased manifold. For instance, in the case of

the National Stock Exchange (NSE), the average daily turnover in the futures

and options segment stood at Rs 410 crore for the financial year 2001-02. By

fiscal 2004-05, it increased 24 times over to more than Rs 10,000 crore!.

3. RESEARCH METHODOLOGY

3.1 Research: - is a process of collecting, analyzing, interpreting and

summarizing in a significant manner for the purpose of framing out

necessary conclusion and findings of data perceived and formulated for

deriving out the meaningful information. To carry our research necessary

telephonic calls needed to be done, suitable appointments were to be

fixed and therefore market survey is to be followed.

3.2 Process: Methodology or process involving in the Research followed

during the course of summer training is as follows: -

a) Collection of data: - This is an important aspect in formulating the

objective of research process where the data is collected via two

process: - i) Primary Sources and ii) Secondary sources

i) Primary sources: - Where the data is collected primarily by

interviewing and personal observation and is original in nature

and accurate to the considerable extent.\

ii) Secondary sources: -Where the data is obtained from some

published and printed sources such as newspaper, magazines,

websites and so on.

b) Analyzing of collected data: - The data collected through market survey

and published sources is then processed to obtained necessary

inferences and findings for the purpose of achieving the objective as well

as to derive necessary conclusion. A considerable skill and knowledge is

involved in analyzing the data for the purpose of interpreting thereof.

c) Interpreting of data: - it is the significant step where the data collected

and analyzed is interpreted in the forms of graphs and figures is depicted

in the report called Project report.

d) Summarizing of data: - Thereby necessary summary is prepared which

is essential in the project report of the summer training being done under

an organization.

3.3 Helpful Arms of Research Methodology: -

3.3.1 Questionnaire: - Questionnaire is a set or group of questions

being framed for the purpose of obtaining market perspective about a

particular aspect or topic. There are two types questionnaire bing carried

necessary for the market survey of the summer training being

undertaken and put for the by the trainee to the sample people taken as

a base for entire population:

a) Open ended Questionnaire: - where the people (also called

respondents) are required freedom to present their views and

suggestions for the benefits and success of the organization.

b) Close ended questionnaire: - where the respondents is limited to the

choice of answer being delivered by the interviewer itself so that quick

and fast means of responses be derived out without wasting much time.

Here close ended questionnaire being followed by me during the course

of the summer training market survey.

3.3.2 Sampling: - Sampling is a process of obtaining a number of

individuals taken a base for the entire population since entire population

can not be asked about the necessary objective upon which a

questionnaire is put forth needed for the responses to be derived for the

purpose of generation of facts and customer view point regarding their

perception of particular product or services.

There are two type of sampling – i) Random Sampling and ii) Systematic

sampling.

i) Random sampling: - Random sampling is a process of selecting the

sample size randomly and no choice or preference to be made about

the selection of respondents for the market survey and questionnaire

to be put forth against him. Here, Random sampling being adopted by

me.

ii) Systematic sampling: - it is a sampling where the limited number of

selected respondents is figured out based on some criteria so that

only those respondents can be asked for the purpose of filing

questionnaire.

3.4 Sample Size: - 75 respondents

.

5.FINDINGS AND ANALYSIS

1 HEARD ABOUT ANAND RATHI SECURITIES LTD

Responses in favor of Yes were 24 [34%] and the respondents who hadn’t

heard of it were 46 [66%] as inferred from the survey.

34%

66%

Yes

No

2. AWARENESS WITH THE SERVICES OF THE COMPANY

Awareness in respect to the services of the company from the responses

who know the name of the company were 10 and who didn’t knew of the

services of the company were 14 out of the total 24 respondents.

42%

58%

Yes

No

3. EVER DEALT WITH ANAND RATHI

From the 10 responses that are aware with the services of the company, 3

have dealt with the company and rest 7 hadn’t but keen to deal with it.

30%

70%

Yes

No

4 TYPE OF FINANCIAL SERVICES YOU PREFERRED MOST?

Following is the distribution of the services respondents preferred most:

Equity & Derivatives [28], Mutual Funds [10], Depository Services [5],

Commodities [4], Insurance [7] and IPO [6]

46%

8%

7%

12%

10%

17%

Equity &Derivatives

Mutual Funds

DepositoryServices

Commodities

Insurance

IPOs

5 LIKE TO GET ASSOCIATED WITH FINANCIAL SERVICES:

Yes were 33 [47%]

No were 37 [53%] out of the total 70 responses surveyed.

47%53%

Yes

No

6 LIKE TO BE INFORMED WITH THE SERVICES OF ANAND RATHI

SECURITIES LTD. EXTENSIVELY?

Yes were 45 [75%]

No were 15 [25%] out of the total 70 responses that were surveyed.

75%

25%

Yes

No

Q.7 OPENED DEMAT ACCOUNTS & DEALING WITH MARKET SECURITIES?

a) Yes 59% [41]

b) No 41% [29] out of the total 70 responses surveyed.

59%

41% Yes

No

Q.8 WISH TO OPEN DE-MAT ACCOUNTS WITH ANAND RATHI SECURITIES

Near about 7 positive agreed and wished to open de-mat accounts with

Anand Rathi Securities which takes care of your all-financial services to

the maximum satisfaction. Rest said ‘No’.

10%

90%

Yes

No

Q.9 PRIVATE PLAYERS IN FINANCE SECTORS HAVE GIVEN A

SIGNIFICANT CONTRIBUTION

94% of the respondents believed that private players like MNCs, FIIs etc

in finance sectors have given a significant contribution boom to the entire

sector by considerable margin over the last decade

94%

6%

Yes

No

Q.10 PREFERRED OPPORTUNITY BESIDES EQUITY MARKET

Following is the distribution show the preferable investment opportunity of

respondents besides Equity Market: In Mutual Fund [27], In Insurance

[17], In Bank (FD/SB/CA) [16] and In PPF/NSC/RDs [10]

39%

23%

14%

24%

In Mutual Fund

In Insurance

In Bank(FD/SB/CA)

In PPF/NSC/RDs

5. SWOT ANALYSIS

5.1 STRENGTHS

1. The Company has a good reputation with the bulk of financial services

under its arm to offer to the customers at large.

2. The firm offers to its clients the entire spectrum of financial services

ranging from brokerage services in equities and commodities,

distribution of mutual funds, IPOs and insurance products, real estate,

investment banking, merger and acquisitions, corporate finance and

corporate advisory.

3. The management of the company is consisting of highly trained and

skilled professionals

5.2 WEAKNESSES

1. Since the company is reaping the benefits of its high level

performance still due to the low network there is a low customer base

being foreseen as compare to other competing companies in Indian

stock and security market.

5.3 OPPORTUNITIES

1. Immense opportunities in Indian Stock market since very few investors

have turned up as compared to the past years.

2. Still few competitors fighting for the vast securities market.

3. Increasing knowledge of DEMAT inspiring hesitant investors to deal

with Indian stock market without any issue of being loss of their

money.

5.4 THREAT

1. Since there is a wide speculation involved in securities and stock

market, people prefer to invest in mutual fund, insurance and in banks for

their safety of money.

2. Competitors are rising and making their tremendously and many other

FIIs and MNCs are planning to come in to field of securities and

investment since rising finance sector is attracting them a lot.

6. CONCLUSION

At the conclusion of the summer training project in ANAND RATHI Securities

Ltd., I would like to conclude my opinion that there is a vast untapped potential

for a emerging and rising company like ANAND RATHI to grow in business of

securities with other supporting financial services being provided by the

company.

Since a highly enriched corporate environment is being provided in the company

I gained a tremendous knowledge and experience in respect to learning the

concept of Dematerlisation and its significance to the shareholders and every

new prospects applying for the existing shares and/or any new public offer (NPO)

without any hesitation and with all legal procedures so that the amount invested

could be remain secure and safe legally.

Thereby I came to realize the growth of the financial sector as it is reaping

success since the major rising sector being notified as per my knowledge is

finance since company are establishing their business entities in securities,

mutual fund, insurance and many others.

The experience of summer training was indeed a worth in utilizing my

professional approaches under the prestigious like company ANAND RATHI

Securities Ltd.

7. RECOMMENDATIONS & SUGGESTION

1. This is recommended that there should be an aggressive

promotional measures need to be adopted for capturing the

market nation wide.

2. Further, it is suggested that knowledge base campaign be

organized near various corporate offices so that young

professionals may be educated the benefit of investing via

ANAND RATHI Securities and the future benefits which may be

conducive for strengthen their financial position.

3. The Company should locate more offices in the time to come so

that the customers living at different areas and not reachable to

the main areas would be able to access through sub offices or

centers.

4. Since investors are sometimes find them selves in the position to

Demat their account, ANAND RATHI should pave measures for

such investors to ease them in dealing and opening DEMAT

account at their comfort charging reasonable brokerage and

commission.

8. QUESTIONNAIRE

Name: - …………………………………………………

Location: - ………………………………………………………

Contact No.: ……………………………………

Q.1 Do you know about ANAND RATHI SECURITIES LTD?

a) Yes

b) No

Q.2 If yes, are you aware with the services of it?

a) Yes

b) No

Q.3 If yes, have you ever dealt with it?

a) Yes

b) No

Q.4 What type of financial services you preferred most?

a) Equity & Derivatives

b) Mutual Funds

c) Depository Services

d) Commodities

e) Insurance

f) IPOs

Q.5 If No, Would you to get associated with it?

a) Yes

b) No

Q.6 Would you like to be informed with the services of ANAND RATHI

SECURITIES LTD. extensively?

a) Yes

b) No

Q.7 Have you opened your De-Mat account in dealing with market securities?

c) Yes

d) No

Q.8 Do you wish to open De-Mat accounts with ANAND RATHI Securities which

takes care of your all-financial services to the maximum satisfaction?

a) Yes

b) No

Q.9 Do you agree that private players in finance sectors have given a significant

boom to the entire sector by considerable margin over the last decade?

a) Yes

b) No

Q.10 Where you preferably invest your money besides Equity Market

a) In Mutual Fund

b) In Insurance

c) In Bank (FD/SB/CA)

d) In PPF/NSC/RDs

Suggestions for ANAND RATHI Securities Ltd.: -

1.………………………………………………………………………………

2.…………………………………………………………………………….

3……………………………………………………………………………….

4. ……………………………………………………………………………

9. BIBLIOGRAPHY

Following sources have been referred for the completion of the Summer Training

Project Report successfully.

1. BOOKS & MAGZINES: -

a) Business world

b) Business today

c) Journal of finance

d) Business today

e) Dalal street

f) Money today

2. NEWSPAPER: -

a) Economic times

b) Business line

c) Business standard

3. WEBSITES: -

a) www.anandrathi.com

b) www.sebi.gov.in

c) www.thehindubusinessonline.com

d) www.capitalmarket.com

e) www.theeconomicstimes.com