III

PROFILE OF THE STUDY AREA AND TE SAMPLE

OF INVESTORS

79

PROFILE OF THE STUDY AREA AND TE SAMPLE OF INVESTORS

PART I

This chapter is divided into two major Parts. Part I consists of the socio-

economic profile of Trichirappalli and Part II consists of the personal profile of

the investors of this study.

3.1 Profile of the study area

Tiruchirapalli was originally a Chola citadel and later, during 1st

millennium AD. Then it was occupied by other South Indian dynasties such as

the Pallavas, and Pandyas. The Chola regained control over Tiruchirapalli

during the 10th century. Urayur, which has a known history and tradition of

about 2500 years, was the capital of Early Cholas. Later, after the fall of the

Chola empire, it came under the direct conrol of the Madurai Nayak Dynasty

which paid tribute to the Vijayanagara empire. The Rock Fort temple, the most

famous landmark in Tiruchirapalli, was built by the Nayaks. The Madurai

Nayak rulers changed their capital from Madurai to Tiruchirapalli, and back,

several times.

The city is home to Nagaraja Cholan and it has many historic temples,

monuments, churches and mosques. It was the capital of the early Chola kings.

The oldest human-built dam, Kallanai, was built by Karikala Cholan across the

Kaveri River about 10 miles from Urayur. With regard to the centre of origin of

iron, Sir William Larke, Director of the British Iron and Steel Federation, says -

The centre of origin is variously placed in India, where there are historical

traditions and remains indicating a highly developed iron culture. Hyderabad

and Trichinopoly are considered by many to have been the centres of

production of wootz. This steel was noted for centuries, being carried by

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merchants from India to Damascus and Toledo.. Sir William gives the date of

this origin of the iron age as 1400 to 1500 B.C.E

Trichy was an important town in the days of the Later Cholas and of the

Nayak kings, and during the early days of the British East India Company. The

conquest of Tiruchirapalli by the British East India Company marked a major

even step in the British conquest of India. The well-known Trichinopoly cigars

are chiefly manufactured from Tobacco grown in the district at Dindigul. It was

said that Winston Churchill developed a taste for the mildly aromatic Trichy

cigar that was traded from Fort St George to Whitehall during the 2nd World

War .One famous landmark in Tiruchirapalli is the Rock Fort, a big outcrop of

rock, 83 metres in height. It is the only such outcrop of its kind. Because of it

Trichy is also called as Rock City. On top of it is the Ucchi Pillayar Koil, a

temple dedicated to the Hindu god Vinayaka (Ganesh), from where one can

enjoy a panoramic view of Tiruchirapalli. The temple was also used as a

military fort by the Nayaks for some time.

On the southern face of the rock are several beautifully-carved cave

temples of the Pallava period. On the eastern side is Sri Nandrudayan

Vinayakar Temple, with Ganesha as the main deity. A large-sized Ganesha and

depictions of other rare deities can be seen in this temple, which hosts festivals

every year during the Vinayaka Chathurthi (birthday of Ganesha). Many

Carnatic musicians have given concerts in this famous shrine. Around the rock

temple is a busy commercial area, mainly known for its textiles and Burmese,

Chinese, Japanese goods, known as Chatram. The Main Guard Gate is flooded

on festive occasions such as Deepavali, Ramzan, Bakrid, Christmas, and

Pongal with shoppers.

Trichy is also famous for the number of Christian churches said to have

the greatest number of churches in India. The most famous are Holy

Redeemer's Church (Sagayamatha Kovil), Our Lady of Lourdes Church(built

by Jesuits) near Chatram bus stand, and The Cathedral in Melapudur(built by

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Jesuits), all more than a century and a half old. The most famous college in

Trichy, St. Joseph's College was also built by the Jesuits, and so was

St. Joseph's School, Trichy also is also famous for Arcot Nawab Masjid (one of

the oldest), with its large water storage tank (Ahail)

Geography and climate

The river Kaveri flowing through Trichy, as seen from Rockfort temple.

The topology of Trichy is flat. It lies at an altitude of 78 m above sea level. The

river Kaveri (also called Cauvery) and the river Coleroon (also called

Kollidam) flow through Trichy, the latter forms the northern boundary of the

city. The river Cauvery flows along WNW-SSE direction through the city.

There are a few hills located within the city, the prominent among them

are Golden Rock, Rock Fort, Kajamalai and in Thiruverumbur. There are a few

reserve forests along the river Cauvery, located at the west and the north-west

parts of the city. The southern and the south-western part of the district is

dotted by several hills which are thought to be part of the Western Ghats.

Eastern ghats also pass through the district. The soil here is considered to be

very fertile. As two rivers flow through the city, the northern part of the city is

greener than other areas of the city. Trichy has a moderate and pleasant climate,

with humidity slightly above normal. The city experiences mild winters and

humid summers. The timing of the monsoon in this part of the country has

lately become unpredictable, with the rainy season starting from mid-October

until early-November and the rains then extending until early or mid-January.

Demography

As of 2009, Trichy had a population of 11,39,534. Males constitute

49.97% of the population and females 50.03%. Trichy has an average literacy

rate of 91.45%. Male literacy is 94.17% and female literacy is 88.73%. In

Trichy 9.59% of the population is under 6 years of age. The city's population is

predominantly Hindu (with both Saivaite and Vaishnavaite), and there are

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sizable population of Christians and Muslims. Sikhs and Jains are also present

in smaller numbers as businessmen mainly.

The most widely spoken language is Tamil, though there are also

significantly large numbers of people speaking Telugu, Saurashtrian, Kannada

and Thanjavur Marathi. The standard dialect is the Central Tamil dialect.[5][6]

Madurai Tamil is also widely spoken.

During the pre-independence era, Anglo-Indians, many of whom

worked in the 'South-Indian Railways', started settling in 'Golden Rock-

Township' and 'Crawford' located within the city. Crawford is considered as

one of the expensive areas in the city. The place is predominantly Christian.

3.4 Economy

Trichy is a major engineering hub and energy equipment and fabrication

center of India.

BHEL - Bharat Heavy Electriclas Limited

Bharat Heavy Electriclas Limited (BHEL) is ranked among the leading

Power Plant Manufacturers in the world. At Tiruchirapalli, the High Pressure

Boiler Plant of the Bharat Heavy Electricals Limited (BHEL) was setup in

1963. Now, it is one of the foremost manufacturing facilities within BHEL and

it has 3 major plants namely, High Pressure Boiler Plant, Seamless Steel Tube

Plant and Boiler Auxiliaries Plant. BHEL was set up during the period of

K.Kamaraj, the then Chief Minister of Tamil Nadu and the statue of K.Kamaraj

is there at the entrance of the Colony main Gate.

• A number of small scale industries have also sprung up in Trichy,

mostly around Thuvakudi and Mathur.

• Leather Tanneries are located on the way to Pudukottai. Viralimalai,

considered an industrial sub urban, has the factories.

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• Manachanallur has numerous rice mills supplying polished rice all over

Tamil Nadu and it is well known for the quality of the rise produced

from its land.

• The economy of the city is driven to a certain extent by IT/ITES

companies encouraged by the support from state government. A

dedicated stretch of land has been identified and developed to increase

the state's share in national IT/ITES exports. The government had

begined its work for setting up IT park in the city. The economy of the

city would be increased to a great extend if this park comes into

working. Which would be finished in about one year.

• HCL has a carrier development centre in the city to guide the youth of

the city. More over the city has many reputed MNC's are in the city, and

still many to come.

3.5 Transportation

a) Roadways

Kaveri Bridge on NH 45 connects Trichy and Srirangam. Trichy is well

connected to various parts of Tamil Nadu, by private and public bus services.

There are two Bus Stands at Tiruchirappalli, as explained below:

Chathiram (also called Chinthamani or Main Guard Gate Bus Stand)

The Chathram (Main Guard Gate) bus stand, near Rock Fort temple, runs local

and outstation (City-to-Town) bus services which connect people to nearby

towns and villages such as Thuraiyur, Perambalur, Ariyalur, Cuddalore,

Jeyankondacholapuram, Vriddhachalam, Chidambaram, Neyveli, and many.

Bus services are frequent throughout the day and the night.

The central bus stand runs long distance services to major cities and

states of South India such as Tanjore,Chennai, Madurai, Coimbatore,

Bangalore, Tirunelveli, Nagercoil, Tirupathi, Salem, Erode, Pudukkotai,

Dindigul, Rameswaram, Theni, Tindivanam, Hosur, Vellore,Tiruvannamalai,

Kumbakonam, Mayiladuthurai, Namakkal, also to other states.

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b) National Highways passing through Tiruchirappalli

On the road infrastructure Trichy will have four track highways from the

city branching to destination Chennai, Madurai, Nagappattinam and

Coimbatore.

c) Railways

Trichy is a hub of Southern Railway (India). Southern railway connect

this central part of Tamil Nadu to various parts of India, notably regions in

Kerala, Andhra Pradesh, West Bengal, Maharashtra, Karnataka, Delhi, and

Madhya Pradesh.

Trichy Railway Junction has five branches leading to Madurai,

Rameswaram, Erode, Tanjore and Chennai and currently there are 4 platforms

in operation. Platform no 5, 6, 7 is under gauge conversion which is to be

finished and brought into working soon.

Trichy is one of the busiest railway junctions in India. It has more than

200 train crossings per day in its division. It also has the record of a railway

station to have broadgage next to Chennai. The railway station has been

accredited with international standard, and the development is under process.

The Electrification between Villupuram and Tiruchchirappali has been

completed and service started with electric traction on the chord line. The

double line is also approved for the same section and the work had started.

This division has the press which supplies the printed unreserved ticket for

Tamil Nadu railway stations.

d) Airways

Trichy has an International airport about eight kilometres from the

city, which operates flights to several Indian cities, territories, and

neighbouring countries including Malaysia, Singapore, Sri Lanka and the Gulf

by Air Asia, Indian Airlines, Air India Express, Srilankan Airlines, Mihin

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Lanka,Kingfisher Airlines,Paramount Airways. Trichy airport is the second

largest airport in Tamil Nadu next to Chennai to get international connectivity

to Colombo (Srilanka) in 1981. Nowadays, flights are operated to Gulf

countries such as the United Arab Emirates and Kuwait.

Plans are on to upgrade it to a full fledged international airport in the

next three years.[7] The extended runway (8000 ft) was commissioned and

further expansion to 12500 ft has started. The new terminal building is opened

in 2009. Two aero bridge are opened to use. This is the second airport in Tamil

Nadu to get it next to Chennai. An new Air Traffic Control Centre is also being

planned to be constructed to cope up with growing air traffic in the region.

3.6 Administration

The city is a Municipal Corporation. It also serves as the headquarters of

the district with the same name. The city is headed by a Mayor, under whom

the Deputy Mayor and several councilors elected by people representing work

as administrative wards; as well as a corporation Commissioner of the rank of

IAS to administer the city.

The city has one Member of Parliament representing the Trichy

constituency, Tiruchi (East) and Tiruchi (West) Srirangam, Musiri, Lalkudi and

Thiruverambur assembly constituencies are part of Tiruchirappalli (Lok Sabha

constituency) .

The district is headed by the District Collector of the rank of IAS.

3.7 Stock Exchanges in Tamil Nadu

There are two stock exchanges in Tamil Nadu. They are

1) Madras Stock Exchange Ltd (MSE) is a self regulatory organization

having permanent recognition under the Securities Contracts (Regulations) Act,

1956, and the fist Stock Exchange in the southern part of the country.

Established in the year 1937, the Exchange has a long history of service to the

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nation and pioneered the development of the capital market in this part of the

country by catering to the needs of the industrial entrepreneurs to raise capital

for industrial promotion and providing investment opportunities to the public.

The Exchange is a demutualised corporate entity pursuant to the MSE

(Corporatisation and Demutualisation) Scheme, 2005 approved by the

Securities and Exchange Board of India (SEBI). The stakeholders of the

Exchange include Financial Institution of the Tamil Nadu State Government,

leading corporate houses, high networth individuals and Trading Members of

the Exchange. The Exchange is managed by the Board of Directors,

representing the various stakeholders in the manner as stipulated in the

Demutualisation Scheme.

MSE has a strategic arrangement with the National Stock Exchange

(NSE) which provides for the facility of trading by the members of MSE on

NSE platform and also for trading of MSE listed companies on the NSE.

Empowerment of the investors through education has been the focus of

the Exchange. The Exchange has established an exclusive investment education

centre named as the “MSE Institute of Capital Markets” to cater to the

educational needs of the market participants. This Centre conducts regular and

intensive training programmes, seminars and workshops throughout the State

of Tamil Nadu & Pondicherry. The Exchange continuously holds monthly

Investors’ Meet at its premises in Chennai on the third Saturday of every

month.

The Exchange also provides Depository Services as Depository

Participant of CDSL and NSDL. MSE has set up subsidiary - MSE Financial

Services Ltd., which is a Corporate Broking House, having membership of

BSE and NSE and trading facilities are provided to the investors through the

Members of MSE.

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a) Trading Facilities

The Exchange provides cost effective and efficient trading facilities

through the Members of the Exchange, for which it has the following

arrangements:

b) Trading through the Subsidiary

In terms of the guidelines issued by SEBI, the Exchange has floated a

Subsidiary Company– MSE Financial Services Ltd., which is a corporate

member of both NSE and BSE. The Members of the Stock Exchange are

eligible to trade through the Subsidiary route, by registering themselves as Sub-

brokers of MSEFSL. The contract notes are issued by the Subsidiary and the

funds and securities of clients are directly handled by the Subsidiary, ensuring

highest level of safety and security to the investors.

c) MoU with NSE

The Exchange has entered into an MoU with the National Stock

Exchange Ltd (NSE) and the same is duly approved by SEBI, under which the

members of MSE can access the trading platform of NSE and execute the

trades. Under this arrangement, the members would issue contract notes of

their own, as a member of MSE. The arrangement also provides for trading of

MSE listed shares at NSE, subject to eligibility criteria.

d) MSE - NSE Trading Operation

1) Enablement Application for NSE Trading Existing Members of MSE

New Members

2) MSE contract note

3) MSE KYC Individual

4) MSE KYC Corporate

5) User id application

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6) System Configuration for now terminal

e) Investors Education

The Madras Stock Exchange (MSE) has initiated various steps to

promote education in securities markets and create investor awareness.

MSE strongly believes that investors are the backbone of the securities

market. They not only determine the level of activity in the securities market

but also the level of activity in the economy.

However, many investors may not possess adequate

expertise/knowledge to take informed investment decisions. Some of them may

not be aware of the complete risk-return profile of the different investment

options. Some investors may not be fully aware of the precautions they should

take while dealing with market intermediaries and dealing in different

securities. They may not be familiar with the market mechanism and the

practices as well as their rights and obligations.

Against this MSE launched a comprehensive education campaign aimed

at creating awareness among investors about securities market, under the aegis

of “Investor Awareness Campaign” initiated by SEBI. The motto of the

campaign is “an Educated Investor is a Protected Investor.”

The structural foundation of the campaign is based on workshops that

are being conducted all across the Tamilnadu with the continued and active

participation of market participants, market intermediaries, Investors

Associations etc.

In order to further give an impetus to this initiative, the Exchange has

established the MSE Institute of Capital Markets, as a separate wing

exclusively for Education & Training in the Securities and Financial Markets.

MSE offers Investor Services in the following Centres in Tamilnadu : T.Nagar

Chennai, Mylapore Chennai, Virudhunagar, Karaikudi, and Tirunelveli

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2) Coimbatore Stock Exchange Limited (CSX) is the youngest stock

exchange in India. It was founded by K.G. Balakrishnan in the year 1996. It is

now governed by the Governing Body which consists of the member brokers.

The exchange also has Screen Based Trading (SBT) system which

commenced operations on 9th of October, 1996. The system is equiped to

handle 25,000 traders per day and 400 members. Each member has been given

a computer terminal which is connected in a Local Area Network (LAN).

a) Location

Its trading hall consists of 19000 sq.ft area. The Exchange has

successfully implemented Screen Based Trading (SBT) system and

commenced its operations with effect from 9th October, 1996. The system is

capable of handling 25,000 trades per day. All the members of the Exchange

are connected in a Local Area Network (LAN). The system can be expanded to

handle upto 400 members. The SBT system has been interfaced with the

existing settlement system. The margins are monitored online on the SBT

system. Each member is given a computer terminal, telephone connections

which are accommodated in a cubicle. The communication facilities include

the terminals of Reuters and Knight Ridder constantly updating economic and

capital market related news.

b) Coimbatore Stock Exchange Members

Currently the segregation of Coimbatore Stock Exchange are as follows:

Individual Members 136

Corporate Members 57

Chartered Accountants/ Company Secretaries 40

MBAs 17

Engineers 14

Cost Accountants 10

Post Graduates 20

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PART II

3.2.01 Profile of Investors

The study of investors preferences in capital market investment with

special reference to Trichirappalli District was carried out by a personal

interview of 300 investors with the help of a structured interview schedule. For

the purpose of sample study Tiruchirappalli district was divided into three

geographical regions namely the southern region, the central region, and the

northern region. The southern region consists of the following places like

Manikandam, Ramji Nagar, Enamam Kolathur, Navalpattu, and Manaparai.

The central region consists of the following places in Trichy city like central

bus stand, Puthur, Thillai Nagar, Chathiram bus stand, Srirangam and BHEL.

The northen region consists of places like Tolgate, Samayapuram, Lalgudi,

Jeeyapuram, Musiri, and Thottyam.

A sample of 100 investors were selected from each of the three sample

regions on simple random basis from the list of investors supplied by broker

firms and mutual funds agents. The personal profile of respondents who

participated in the survey are presented in tables below. It is arranged in the

order of age, sex, marital status, educational qualification, occupation income,

and savings. The sample places chosen for the study in Trichirappalli District

is shown below in the Map.

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MAP 3.1

TRICHIRAPPALLI DISTRICT

92

Personal Profile of Respondents

Age wise distribution of respondents is shown in table 3.1 reveals that

29.7 per cent of investors are in the group of 36 to 45 years, 26.7 per cent are in

the group of upto 35 years and 26 per cent are in the group of 46 to 55 years.

Among three regions, the major group of investors in the southern region are

upto 35 years (37 per cent) those in the central region are investors between 36

years and 45 years (37 per cent) and those in the northern region are investors

between 46 and 55 years (36 per cent).

Table 3.1

AGE

Regions Factors

Southern Central Northern All Trichy

37 22 21 80 Up to 35

(37.0) (22.0) (21.0) (26.7) 26 37 26 89

36 – 45 (26.0) (37.0) (26.0) (29.7)

20 22 36 78 46 – 55

(20.0) (22.0) (36.0) (26.0) 17 19 17 53

Above 55 (17.0) (19.0) (17.0) (17.6) 100 100 100 300

Total (100.0) (100.0) (100.0) (100.0)

Note: Figure in parentheses are percentage of the respective totals Source: Interview Schedule

93

The classification of respondents according to sex shown in table 3.2

reveals that 85.3 per cent of them are male members and 14.7per cent are

females. In the southern region, 78 per cent are male members while 89 per

cent each are male members in the central and northern region.

Table 3.2

Sex

Regions

Factors Southern Central Northern

All Trichy

78 89 89 256 Male

(78.0) (89.0) (89.0) (85.3) 22 11 11 44

Female (22.0) (11.0) (11.0) (14.7) 100 100 100 300

Total (100.0) (100.0) (100.0) (100.0)

Note: Figure in parentheses are percentage of the respective totals Source: Interview Schedule

94

Distribution according to marital status shown in table 3.3 shows that 79

per cent investors are married, 16.3 per cent are unmarried and 2.3 per cent

each belong to widow and divorced group.

Table 3.3

Marital Status

Regions Factors

Southern Central Northern All Trichy

70 84 83 237 Married

(70.0) (84.0) (83.0) (79.0) 21 13 15 49

Unmarried (21.0) (13.0) (15.0) (16.3)

5 2 - 7 Widowed

(5.0) (2.0) - (2.3) 4 1 2 7

Divorced (4.0) (1.0) (2.0) (2.3) 100 100 100 300

Total (100.0) (100.0) (100.0) (100.0)

Note: Figure in parentheses are percentage of the respective totals Source: Interview Schedule

95

The distribution of respondents according to educational qualification

shown in table 3.4 reveals that 38 percent are graduates and 26 percent are

post-graduates and above. Professional degree holders constitute 23 percent of

the total number of respondents. Slight regional difference is observed with

regard to qualification of respondents.

Table 3.4

Education Regions Factors Southern Central Northern All Trichy

14 12 13 39 Below Graduation (14.0) (12.0) (13.0) (13.0) 40 51 23 114 Graduation (40.0) (51.0) (23.0) (38.0)

Post-graduation and above

26 (26.0)

14 (14.0)

38 (38.0)

78 (26.0)

Professional Degree

20 (20.0)

23 (23.0)

26 (26.0)

69 (23.0)

100 100 100 300 Total (100.0) (100.0) (100.0) (100.0) Note: Figure in parentheses are percentage of the respective totals

Source: Interview Schedule

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Occupational distribution of the investors given in below Table 3.5

reveals that 45.3 percent of the respondents are employees, 20 percent are

engaged in business or industry and about 14 percent are pensioners. Investors

doing professional practice comes to 12.7 percent. A market difference is noted

in the pattern of respondents managing business or industry in southern and

northern regions.

Table 3.5

Occupation

Regions

Factors Southern Central Northern

All Trichy

41 46 49 136 Employee

(41.0) (46.0) (49.0) (45.3) 11 13 14 38

Professional (11.0) (13.0) (14.0) (12.7)

27 22 11 60 Businessman/industrialist

(27.0) (22.0) (11.0) (20.0) 12 15 14 41

Pensioner (12.0) (15.0) (14.0) (13.7)

9 4 12 25 Others

(9.0) (4.0) (12.0) (8.3) 100 100 100 300

Total (100.0) (100.0) (100.0) (100.0)

Note: Figure in parentheses are percentage of the respective totals Source: Interview Schedule

97

The distribution by income class of investors shown in table 3.6 reveals

that 37.3 percent of them fall in the income group between Rs.100000 and

Rs.200000, 33.3 per cent belong to the income group of Rs.200001 and

Rs.500000 and 14.7 per cent have income between Rs.50001 and Rs.100000.

On regional review it is observed that major part of respondents in each region

is in the income group of Rs.100001 to 200000 and Rs.200001 and 500000.

The average annual income of the whole sample amounted to Rs. 256083 while

it is Rs.227250 in the southern region, Rs.267250 in the central and Rs.273750

in the northern region.

Table 3.6

Annual Income

Regions

Factors Southern Central Northern

All Trichy

2 4 5 11 Up to 50000

(2.0) (4.0) (5.0) (3.7) 23 13 8 44

50001-100000 (23.0) (13.0) (8.0) (14.7)

37 38 37 112 100001-200000

(37.0) (38.0) (37.0) (37.3) 31 31 38 100

200001-500000 (31.0) (31.0) (38.0) (33.3)

7 14 12 33 Above 500000

(7.0) (14.0) (12.0) (11.0) 100 100 100 300

Total (100.0) (100.0) (100.0) (100.0)

Note: Figure in parentheses are percentage of the respective totals Source: Interview Schedule

98

Classification of investors according to their savings shown in Table 3.7

reveals that 33.7 per cent have savings between Rs.50001 to Rs.100000

whereas 30.3 per cent have savings above Rs.100000. Only 11.7 per cent of

respondents have savings less than Rs.25000. In the southern region, 32 per

cent respondents have saving between Rs.25001 to 50000 and 33 per cent have

savings above 100000. While 28 per cent have savings between Rs.500001 to

100000 and 26 per cent have savings between Rs.25001 to 50000. In the

northern region 40 per cent investors have savings between Rs.50001 – 100000

followed by 34 per cent in the savings group of above Rs.100000. Average

annual savings of 300 investors came to Rs.81542 which is Rs.74300 in the

southern region, Rs.82275 in the central region and Rs.88050 in the northern

region.

Table 3.7

Annual Savings

Regions

Factors Southern Central Northern

All Trichy

3 2 4 9 Up to Rs. 1000

(3.0) (2.0) (4.0) (3.0) 8 11 7 26

Rs. 10001-25000 (8.0) (11.0) (7.0) (8.7.0) 32 26 15 73

Rs. 25001-50000 (32.0) (26.0) (15.0) (24.3)

33 28 40 101 Rs. 50001-100000

(33.0) (28.0) (40.0) (33.7) 24 33 34 91

Above Rs. 100000 (24.0) (33.0) (34.0) (30.3) 100 100 100 300

Total (100.0) (100.0) (100.0) (100.0)

Note: Figure in parentheses are percentage of the respective totals Source: Interview Schedule