A

Project Study Report

On

INDIABULLS

Titled

“A COMPARATIVE STUDY OF INDIABULLS WITH

ITS COMPETITORS”

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

SUBMITTED BY: - SUBMITTED TO:- KHUSHBU DADHICH DR. SHEHNAZ MBA IV SEM (PRINCIPAL)

2009-2011

Akashdeep Institute of Management & Technology, Jaipur

DECLARATION

I,Khushbu Dadhich Hereby declare that this project report is the

record of authentic work carried out by me during the period of

15 days and has not been submitted earlier to any University or

institute for the award of degree/diploma etc.

Name of the student: Khushbu Dadhich

Date :

PROJECT GUIDE CERTIFICATE

This is to certify that project report entitled

“A COMPEITIVE STUDY OF INDIABULLS WITH ITS COMPETITORS”

Submitted towards the partial fulfillment of the requirement for the

Degree of

MASTER OF BUSINESS ADMINISTRATION

TO

AKASHDEEP INSTITUTE OF MANAGEMENT & TECHNOLOGY

Affiliated to

RAJASTHAN TECHNICAL UNIVERSITY OF KOTA

Is a record of perfect programme carried out by

ROLL NO. 09MAKXX613

Under my supervision and guidance.

To the best of my knowledge and belief the represented report

Has not been submitted earlier. The work done by him has

found Satisfactory

I wish his great success in his career.

Mr. Dakshit Patel

(Project Guide)

Preface

“A good broker system must be able to cope with an extremely complex and dynamic environment.”

The microstructure of the stock market in which brokers work is highly dynamic and volatile. Many stocks are available to be bought and sold, each exhibiting its own patterns and characteristics that are highly unpredictable. With so many options and considerations that need to be taken into account, it is an extremely arduous task for a broker to investigate aspects of the stock market and consistently provide effective advice to their clients.

Thus, brokers perform their day-to-day tasks with the aid of a broker system. Such a system should provide tools for interacting with exchanges and performing analysis. As a consequence, these broker systems are quite large and complicated by themselves.

This research aims is to analysis Stock broker on the basis of their services, products, growth, and their subsidiaries. Because Stockbrokers are one of the main participants in stock exchanges worldwide, they often act as an agent for their clients, making trades on their behalf. They also act as advisors, providing suggestions to their clients on what stocks to buy and sell.

Acknowledgement

I express my sincere thanks to my project guide, Mr. Dakshit Patel

for guiding me right form the inception till the successful completion of

the project. I sincerely acknowledge her them for extending their

valuable guidance, support for literature, critical reviews of project and

the report and above all the moral support he had provided to me with all

stages of this project.

I would also like to thank the supporting staff of sales and distribution

Department, for their help and cooperation throughout our project.

(Signature)

KHUSHBU DADHICH

EXECUTIVE SUMMARY

The commencement of E-broking and Demat has transformed the capital

market in India. With the help of them today, buying and selling of shares has

become a much faster and even process than trading with the assistance of a

physical broker. It provides for the assimilation of bank, broker, stock exchange and

depository participants. This helps to get rid of the painstaking procedure of investing

in stock exchange. Today, if one wants to invest in stock market, he has to contact a

broker on phone or meet him personally to place order.

A broker generally gives such importance and additional service only to high net

worth customers. But the introduction of Internet trading, even a common or a small

investor gets an opportunity to avail the service at an affordable price which is much

lesser than what is charged by a physical broker over the phone. Online trading has

given customer a real time access to account information, stock quotes elaborated

market research and interactive trading. The prerequisites of Internet trading are a

computer, a modem and a telephone connection, registration with broker, a bank a/c

and depository account.

The basic objective of study is to understand the various concepts of Demat, e-

broking and analyzing the investment pattern of individual, there knowledge about

security market, finding potential customers for Indiabulls, increase the client base of

the company by targeting new clients for Indiabulls, suggesting strategies to

Indiabulls regarding marketing of demat and trading a/c. and study the factors

affecting consumer behavior while taking decision before investing in Equities and

Derivative market. The scope of the study is to analyze the awareness level of

customes and investment pattern of various individuals and examining the peer

group companies proving Demat services - Industry analysis.

The method used in study would be a mix of exploratory and descriptive type that

would provide help to investors and corporate houses related to these industries. The

data collection includes primary as wel as secondary sources like company

brochures, journals, news paper articles, the internet, etc. Also, primary data would

be collected by way of meeting some key people belonging to the concerned

industries. A survey would be conducted so as to acquire the views of the investors

regarding their investment preferences and to extract the factors that the investors

consider in an investment before putting in their money. The various data collected

would be analyzed through way of bar charts, tabular data and pie charts.

The major limitation of the study is the time and resource constraints, it involves

investors chosen at random which may not be the true representative of the

population. Hence cannot be generalized, the data collected pertains to the sample

behavior which may not be consistent with time, lack of awareness among investors

about the products and services, existence of strong competitors, especially Indian

Private Banks in the industry, dominance of nationalized banks in India.

This study will help to know the decisions taken by small investors while investing in

equity primary markets, the importance of investment based on the advice from the

broker, personal analysis of the offer document, confidence pertaining to electronic

trading and using analysts’ recommendations in investment decisions and the extent

to which they consider online trading as reliable.

CONTENTS

Cover Page 1

Certificate from the Company/Organization 2

Preface/Prelude 3

Acknowledgement 4

Executive Summary 5

Contents

1. Introduction to the Industry 9

2. Introduction to the Organization 38

3. Research Methodology 75

3.1 Title of the Study 77

3.2 Duration of the Project 77

3.3 Objective of Study 77

3.4 Type of Research 77

3.5 Sample Size and method of selecting sample 78

3.6 Scope of Study 79

3.7 Limitation of Study 80

4. Facts and Findings 81

5. Analysis and Interpretation 90

6. SWOT 104

7. Conclusion 112

8. Recommendation and Suggestions 114

9. Bibliography 119

10. Appendix 120

INTRODUCTION

OF

INDIAN

RETAIL BROKERAGE INDUSTRY

1

INTRODUCTION OF INDIAN STOCK MARKET

Introduction

Stock markets refer to a market place where investors can buy and sell stocks. The

price at which each buying and selling transaction takes is determined by the market

forces (i.e. demand and supply for a particular stock).

Let us take an example for a better understanding of how market forces determine

stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an

anticipation of an upward movement in its stock price. More and more people would

want to buy this stock (i.e. high demand) and very few people will want to sell this

stock at current market price (i.e. less supply). Therefore, buyers will have to bid a

higher price for this stock to match the ask price from the seller which will increase

the stock price of ABC Co. Ltd. On the contrary, if there are more sellers than buyers

(i.e. high supply and low demand) for the stock of ABC Co. Ltd. in the market, its

price will fall down.

In earlier times, buyers and sellers used to assemble at stock exchanges to make a

transaction but now with the dawn of IT, most of the operations are done

electronically and the stock markets have become almost paperless. Now investors

do not have to gather at the Exchanges, and can trade freely from their home or

office over the phone or through Internet.

History of the Indian Stock Market - The Origin

One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years old history

18th

Century

East India Company was the dominant institution and by end of the

century, busuness in its loan securities gained full momentum.

1830's Business on corporate stocks and shares in Bank and Cotton presses

started in Bombay. Trading list by the end of 1839 got broader

1840's Recognition from banks and merchants to about half a dozen brokers

1850's Rapid development of commercial enterprise saw brokerage business

attracting more people into the business

1860's The number of brokers increased to 60

1860-61 The American Civil War broke out which caused a stoppage of cotton

supply from United States of America; marking the beginning of the

"Share Mania" in India

1862-63 The number of brokers increased to about 200 to 250

1865 A disastrous slump began at the end of the American Civil War (as an

example, Bank of Bombay Share which had touched Rs. 2850 could

only be sold at Rs. 87)

Pre-Independance Scenario - Establishment of Different Stock Exchanges

1874 With the rapidly developing share trading

business, brokers used to gather at a street (now well known

as "Dalal Street") for the purpose of transacting business.

1875 "The Native Share and Stock Brokers' Association" (also known

as "The Bombay Stock Exchange") was established in Bombay

1880's Development of cotton mills industry and set up of many others

1894 Establishment of "The Ahmedabad Share and Stock Brokers'

Association"

1880 -

90's

Sharp increase in share prices of jute industries in 1870's was

followed by a boom in tea stocks and coal

1908 "The Calcutta Stock Exchange Association" was formed

1920 Madras witnessed boom and business at "The Madras Stock

Exchange" was transacted with 100 brokers.

1923 When recession followed, number of brokers came down to 3 and

the Exchange was closed down

1934 Establishment of the Lahore Stock Exchange

1936 Merger of the Lahoe Stock Exchange with the Punjab Stock

Exchange

1937 Re-organisation and set up of the Madras Stock Exchange Limited

(Pvt.) Limited led by improvement in stock market activities in

South India with establishment of new textile mills and plantation

companies

1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock

Exchange Limited was established

1944 Establishment of "The Hyderabad Stock Exchange Limited"

1947 "Delhi Stock and Share Brokers' Association Limited" and "The

Delhi Stocks and Shares Exchange Limited" were established and

later on merged into "The Delhi Stock Exchange Association

Limited"

POST INDEPENDANCE SCENARIO

The depression witnessed after the Independance led to closure of a lot of

exchanges in the country. Lahore Estock Exchange was closed down after the

partition of India, and later on merged with the Delhi Stock Exchange. Bnagalore

Stock Exchange Limited was registered in 1957 and got recognition only by 1963.

Most of the other Exchanges were in a miserable state till 1957 when they applied for

recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that

were recognized under the Act were:

1. Bombay

2. Calcutta

3. Madras

4. Ahmedabad

5. Delhi

6. Hyderabad

7. Bangalore

8. Indore

Many more stock exchanges were established during 1980's, namely:

Cochin Stock Exchange (1980)

Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982)

Pune Stock Exchange Limited (1982)

Ludhiana Stock Exchange Association Limited (1983)

Gauhati Stock Exchange Limited (1984)

Kanara Stock Exchange Limited (at Mangalore, 1985)

Magadh Stock Exchange Association (at Patna, 1986)

Jaipur Stock Exchange Limited (1989)

Bhubaneswar Stock Exchange Association Limited (1989)

Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989)

Vadodara Stock Exchange Limited (at Baroda, 1990)

Coimbatore Stock Exchange

Meerut Stock Exchange

At present, there are twenty one recognized stock exchanges in India which does not

include the Over The Counter Exchange of India Limited (OTCEI) and the National

Stock Exchange of India Limited (NSEIL).

Specified securities(Forward listed)

Non-Specified securities(Cash listed)

Equity share of company that are- Dividend payingGrowth oriented companiesPaid up capital at least Rs. 50 millionMarket capitalization at least Rs. 100 millionHas more than 20,000 share holders

Equity share of companies not covered in specified securities.

Trading Pattern of the Indian Stock Market

Indian Stock Exchanges allow trading of securities of only those public limited companies that are listed on the Exchange(s). They are divided into two categories:

Listed securities of public limited companies

Spot delivery transaction

Include transaction that requires Delivery and delivery within stipulated time period at the time of entering into the contract.

The period shall not be more than 14 days following the date of the contract.

Forward transaction

Transactions in which delivery and payment can be extended by further period of 14 days each.

The overall period should not exceed 90 days from the date of contract.

Transaction permitted only in case of specified share.

Transaction on Indian stock exchange

Types of Transactions

The flowchart below describes the types of transactions that can be carried out on the Indian stock exchanges:

Indian stock exchange allows a member broker to perform following activities:

Act as an agent,

Buy and sell securities for his clients and charge commission for the same,

Act as a trader or dealer as a principal,

Buy and sell securities on his own account and risk.

NATIONAL STOCK EXCHANGE-

In order to lift the Indian stock market trading system on par with the international

standards. On the basis of the recommendations of high powered Pherwani

Committee, the National Stock Exchange was incorporated in 1992 by Industrial

Development Bank of India, Industrial Credit and Investment Corporation of India,

Industrial Finance Corporation of India, all Insurance Corporations, selected

commercial banks and others.

NSE provides exposure to investors in two types of markets, namely:

1. Wholesale debt market 2. Capital market

Wholesale Debt Market - Similar to money market operations, debt market

operations involve institutional investors and corporate bodies entering into

transactions of high value in financial instrumets like treasury bills, government

securities, commercial papers etc.

Trading at NSE

Fully automated screen-based trading mechanism

Strictly follows the principle of an order-driven market

Trading members are linked through a communication network

This network allows them to execute trade from their offices

The prices at which the buyer and seller are willing to transact will appear on

the screen

When the prices match the transaction will be completed

A confirmation slip will be printed at the office of the trading member

Advantages of trading at NSE

Integrated network for trading in stock market of India

Fully automated screen based system that provides higher degree of

transparency

Investors can transact from any part of the country at uniform prices

Greater functional efficiency supported by totally computerized network

TRADING AND SETTLEMENT

The procedure for buying and selling dematerialised securities is similar to the

procedure for buying and selling physical securities. The difference lies in the

process of settlement of shares i.e. delivery (in case of sale) and receipt (in case of

purchase) of securities.

Following procedure is followed for settlement:

In case of purchase:-

The broker will receive the securities in his account on the payout day from

the   clearing corporation of the stock exchange.

The broker will give instruction to its DP to debit his account and credit

investor's account who has bough the shares.

Investor will give 'Receipt Instruction to DP for receiving credit by filling

appropriate     form. However one can also give standing instruction for credit

of securities in his     account, which is convenient way of receiving shares as

that will obviate the need of     giving Receipt Instruction every time.

In case of sale:-

The investor will give delivery instruction to DP to debit his account and credit the

broker’s account with correct ISIN of the number of securities sold by him. Such

instruction should reach the DP’s office at least 24 hours before the pay-in as

other wise DP will accept the instruction only at the investor’s risk. DP will debit

his account and credit the account of the broker through whom shares have been

sold. The broker would then transfer the shares to the clearing corporation of the

exchange where shares have been sold.

HISTORY OF ONLINE TRADING

Indian exchanges and brokering houses have been slow to move their

transactions online. This has been mainly due to Government regulations.

There was initial delay in laying down specifications for creating Closed User

Groups (CUGs). The issue was resolved between the DoT and the Finance

Ministry around 1998 and soon trade portals like India bulls sec.

ltd., ICICIDirect.com, motilaloswal.com, and smartjones.com came into being.

ABOUT ONLINE TRADING

Traditionally stock trading is done through stock brokers, personally or through

telephones. As number of people trading in stock market increase

enormously in last few years, some issues like location constrains, busy

phone lines, miss communication etc start growing in stock broker offices.

Information technology (Stock Market Software) helps stock brokers in solving

these problems with Online Stock Trading.

Online Stock Market Trading is an internet based stock trading facility.

Online trading refers to buying and selling securities via the Internet or other

electronic means such as wireless access, touch-tone telephones, and other new

technologies. Investor can trade shares through a website without any manual

intervention from Stock Broker.

Though the spread of internet has been slow in India, the players are catching

fas t a t leas t in the on l ine t rad ing bus iness . Given the suitability of the

product and rising demand of internet there is no surprise that E-broking is

picking up fast captivated the imagination of the consumer and created a new

breed of investor- the day trader investor who is impulse to buy, own and to

sell and must be matched by swift transaction processes.

Two different type of trading environments available for online equity trading.

1. Installable software based Stock Trading Terminals

This trading environment requires software to be installed on

investor’s computer. This software is provided by the stock broker. These

kind of trading terminals are used by high volume intraday equity traders.

Advantages

Orders directly send to stock exchanges rather than stock

broker. This makes order execution very fast.

It provides almost each and every information which is

required to a trader on a single screen including stock

market charts, live data, alerts, stock market news etc.

Disadvantages

Location constrains - You cannot trade if you are

not on the computer where you have installed

trading terminal software.

It requires high speed internet connection.

These trading terminals are not easily available for low

volume share traders.

2. Web (Internet) based trading application

These kind of trading environment doesn't require any additional software

installation. They are like other internet websites which investor can access

from around the world through normal internet connection.

Advantages of Online Stock Trading (Website based)

Real time stock trading without calling or visiting broker's

office.

Check the trading history; demat account balance and

bank account balance at any time.

Provide online tools like market watch,

graphs and recommendations to do analysis of stocks.

Place offline orders for buying or selling stock.

Set alert to inform you certain activity on the stock through email or sms.

Disadvantages of Online Stock Trading (Website based)

Website performance - sometime the website is too slow or not enough user friendly.

Little long learning curve especially for people who don’t know much about computer and internet.

BENEFITS OF ONLINE TRADING

Internet trading is expected to:

o Increase transparency in the market

o Provide management information system (MIS)

o Introduce flexibility in the system, to handle growing volumes and to

support nationwide expansion plans of market activity.

o Through internet trading three fundamental objectives of

SEBI.

o regulation can be easily achieved. These are:

Investor protection

Creation of fair and efficient market

Reduce risk of systematic risk

o Real time streaming quotes

o Instant trade execution and order confirmation

Benefits from the online trading are so much day by day numbers of clients

prefer online trading and also revenue coming from online trading is

increasing at tremendous speed.

ONLINE TRADING PROCESS

The various transactions involved in online trading can be shown from the point of view of the

Client Broker Stock Exchange

The client places an order via the net by logging onto his

Broker’s site.

The broker accepts and executes the order

And places it with the exchange.

The exchange accepts the order after

Checking the share limit for the day.

The broker makes the payment either

Directly via the clients bank account or indirectly via broker

The exchange receives the money and

Completes the settlement.

The client is intimated about the settlement either

Through demat account or through e-mail.

INTRODUCTION OF INDIAN RETAIL BROKERAGE MARKET

Overview of brokerage firm

A brokerage is a firm that acts as an intermediary between a purchaser and a

seller. More commonly, a brokerage is referred to as a brokerage firm. To

broker a deal is to communicate with both the buyer and seller as to

acceptable price on anything sold or purchased.

A broker, a single person, or the brokerage firm completes any necessary

legal paperwork, obtains the appropriate signatures, and collects money from

the purchaser to give to the seller. Since the buyer and seller are employing

the brokerage to complete the deal, the brokerage may collect a portion of

the money obtained. In some cases, a brokerage receives money from both

parties. In others, the brokerage receives a commission only from the seller.

Brokerage firms are most commonly thought of in relationship to the sale and

purchase of stock shares. Fees are variable, depending on the degree to

which the brokerage is involved in decisions about purchase. Some

stockowners give their brokers power of attorney to make decisions about

when to buy or sell stock and depend upon their brokers for researching new

stock for purchase. This type of brokerage firm usually assesses a fairly large

fee, and regardless of whether the owner loses or earns money, the firm is

paid.

Though the Indian brokerage industry has been consolidating steadily over

the last 10 years, the share of the top 10 brokers has risen to only around

one-fourth of the total industry revenues. In this fragmented market, leading

players like ICICI Direct, Kotak Securities, Indiabulls, Sharekhan, and 5

Paisa, apart from many small players, compete on the basis of low brokerage

fees and customer service.

26

Buoyed by the bullish Indian stock market, foreign banks such as Société

Générale (SocGen), BNP Paribas, Standard Chartered, and Macquarie Bank

(Australia) are eyeing stakes in Indian retail brokerages.

The major growth drivers of the Indian retail brokerage industry are the

increasing appetite for equities among investors as an asset class, the

convenience of online trading, and declining brokerage fees.

The major growth drivers for brokerage revenue and trading volume are:

Continuous fall in brokerage fees

Adoption of technology — screen-based trading, electronic matching,

and paperless securities

Centralized operations, effective risk management, and control on

large interconnected operations spanning multiple locations, which is

enabled by telecom connectivity and low costs

Increasing access to capital and the ability to provide margin finance.

INDUSTRY DEFINITION AND SEGMENTATION

The Indian retail brokerage industry consists of companies that primarily act

as agents for the buying and selling of securities (e.g. stocks, shares, and

similar financial instruments) on a commission or transaction fee basis. It has

two main interdependent segments: Primary market and the Secondary

market.

primary market

The primary market is an intermittent and discrete market where the initially

listed shares are traded first time, changing hands from the listed company to

the investors. It refers to the process through which the companies, the

issuers of stocks, acquire capital by offering their stocks to investors who

supply the capital. In other words primary market is that part of the capital

27

markets that deals with the issuance of new securities. Companies,

governments or public sector institutions can obtain funding through the sale

of a new stock or bond issue. This is typically done through a syndicate of

securities dealers. The process of selling new issues to investors is called

underwriting. In the case of a new stock issue, this sale is called an initial

public offering (IPO). Dealers earn a commission that is built into the price of

the security offering, though it can be found in the prospectus.

secondary market

The secondary market is an on-going market, which is equipped and

organized with a place, facilities and other resources required for trading

securities after their initial offering. It refers to a specific place where

securities transaction among many and unspecified persons is carried out

through intermediation of the securities firms, i.e., a licensed broker, and the

exchanges, a specialized trading organization, in accordance with the rules

and regulations established by the exchanges.

Products dealt in the Secondary Markets

Following are the main financial products/instruments dealt in the Secondary

market which may be divided broadly into Shares  and Bonds: Shares:

Equity Shares: An equity share, commonly referred to as ordinary share,

represents the form of fractional ownership in a business venture.

Rights Issue/ Rights Shares: The issue of new securities to existing

shareholders at a ratio to those already held, at a price. For e.g. a 2:3 rights

issue at Rs. 125, would entitle a shareholder to receive 2 shares for every 3

shares held at a price of Rs. 125 per share.

28

Bonus Shares: Shares issued by the companies to their shareholders free of

cost based on the number of shares the shareholder owns. 

Preference shares: Owners of these kinds of shares are entitled to a fixed

dividend or dividend calculated at a fixed rate to be paid regularly before

dividend can be paid in respect of equity share. They also enjoy priority over

the equity shareholders in payment of surplus. But in the event of

liquidation,their claims rank below the claims of the company’s

creditors, bondholders/debenture holders.

Cumulative Preference Shares:  A type of preference shares on which

dividend accumulates if remained unpaid.  All arrears of preference dividend

have to be paid out before paying dividend on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares

where the dividend payable on the same accumulates, if not paid.  After a

specified date, these shares will be converted into equity capital of the

company.

TYPE OF BROKERAGE FIRM

Full service brokerage firm offers advice on investment strategies,

research and news. Since these firms offer multiple services, their fees

are also higher.

Discount brokerage firm is ideal for someone who is an experienced

trader who makes his or her own decisions. Discount brokerage firms

have lower commission costs than full service brokerage firms.

An introducing brokerage firm is one that specializes in futures

markets and buy or sell orders on commodities exchanges through

established firms that are clearing members of exchanges.

29

Market Size

The Indian retail brokerage market is showing phenomenal growth. The total

trading volume of brokerage companies has increased from US$1239.1

billion in 2004 to US$1492.1 billion in 2005, and is expected to reach

US$6535.7 billion by 2015.

Name of Indian brokerage firm

1. Reliance money

2. 5paisa.com

3. Advani share brokers

4. Agroy

5. Anand rathi securities ltd.

6. Angel trade- part of angel group

7. Arcade share and stock broker

8. Dala and broacha stcok broking pvt. Ltd.

9. Dalmia securities

10.Emkay

11.Ethical investment solution pvt. Ltd.

12.Geojit financial services limited

13. Icici direct

14. IT&LS investsmart

15. Indiabull securities ltd.

16. Indianstockmarket.net

17. Indiara securities

18. Indus invest

19. Investmentor

20. Investment research & information services ltd. (IRIS)

21.Japyee capital services

22.Khandwala securities limited

30

23.KRchoksey

24.LKP

25.Mangal keshav

26.Motilal oswal

27.Mumbaibull.com

28.Networth stock broking ltd.

29.Orient capital market

30.Pratibhuti

31.RBK share brokers

32.Religare securities Ltd.

33.Sivan securities

34.Toss financial services Pvt. Ltd.

35.UTI securities

PRODUCT OFFERED BY BROKERAGE FIRM

In the past couple of years, apart from trading, the firms have started offering

various investment related value added services. The sustained growth of the

economy in the past couple of years has resulted in broking firms offering

many diversified services related to IPOs, mutual funds, company research

etc. However, the core trading activity is still the predominant form of

business, forming 90% of the firms in the india. 67% firms are engaged in

offering IPO related services. The broking industry seems to have capitalised

on the growth of the mutual fund industry, which was pegged at 40% in 2006.

More than 50% of the broking houses deal in mutual fund investment

services. The average growth in assets under management in the last two

years is almost 48%. Company research is another lucrative area where the

broking firms offer their services; more than 33% of the firms are engaged in

providing company research services. Additionally, a host of other value

added services such as fundamental and technical analysis, investment

banking, arbitrage etc are offered by the firms at different levels.

31

MAJOR DEVELOPMENTS IN EQUITY BROKERAGE

INDUSTRY IN INDIA

i) Corporate memberships

There is a growing surge of corporate memberships (92% in NSE and 75%

in BSE), and the scope of functioning of the brokerage firms has transformed

from that of being a family run business to that of professional organised

function that lays greater emphasis on observance of market principles and

best practices. With proliferation of new markets and products, corporate

nature of the memberships is enabling broking firms to expand the realm of

their operations into other exchanges as also other product offerings.

Memberships range from cash market to derivatives to commodities and a

few broking firms are making forays into obtaining memberships in

exchanges outside the country subject to their availability and eligibility.

ii) Wider product offerings

The product offerings of brokerage firms today go much beyond the

traditional trading of equities. A typical brokerage firm today offers trading in

equities and derivatives, most probably commodities futures, exchange

traded funds, distributes mutual funds and insurance and also offers

personal loans for housing, consumptions and other related loans, offers

portfolio management services, and some even go to the extent of creating

niche services such as a brokerage firm offering art advisory services. In the

background of growing opportunities for Investors to invest in India as also

abroad, the range of products and services will widen further. In the offing

will be interesting opportunities that might arise in the exchange enabled

corporate bond trading, soon after its commencement and futures trading

that might be introduced in the near future in the areas of interest rates and

Indian currency.

32

iii) Greater reliance on research

Client advising in India has graduated from personal insights, market tips to

becoming extensively research oriented and governed by fundamentals and

technical factors. Vast progress has been made in developing company

research and refining methods in technical and fundamental analysis. The

research and advice are made online giving ready and real time access to

market research for investors and clients, thus making research important

brand equity for the brokerage firms.

iv) Accessing equity capital markets

Access to reliable financial resources has been one of the major constraints

faced by the equity brokerage industry in India since long. Since the banking

system is not fully integrated with the securities markets, brokerage firms

face limitations in raising financial resources for business and expansion.

With buoyancy of the stock markets and the rising prospects of several well

organized broking firms, important opportunity to access capital markets for

resource mobilization has become available. The recent past witnessed

several leading brokerage firms accessing capital markets for financial

resources with success.

v) Foreign collaborations and joint ventures

The way the brokerage industry is run and the manner in which several of

them pursued growth and development attracted foreign financial institutions

and investment banks to buy stakes in domestic brokerage firms, paving the

way for stronger brokerage entities and possible scope for consolidation in

the future. Foreign firms picked up stake in some of the leading brokerage

firms, which might lead to creating of greater interest in investing in

brokerage firms by entities in India and abroad.

33

vi) Specialised services/niche broking

While supermarkets approach are adopted in general by broking firms, there

are some which are creating niche services that attract a particular client

group such as day traders, arbitrage trading, investing in small cap stocks

etc, and providing complete range of research and other support to back up

this function.

vii) Online broking

Several brokers are extending benefits of online trading through creation of

separate windows. Some others have dedicated online broking portals.

Emergence of online broking enabled reduction in transaction costs and

costs of trading. Keen competition has emerged in online broking services,

with some of these offering trading services at the cost of a few basis points

or costs which are fixed in nature irrespective of the volume of trading

conducted. A wide range of incentives are being created and offered by

online brokerage firms to attract larger number of clients.

viii) Compliance oriented

With stringent regulatory norms in operation, broking industry is giving

greater emphasis on regulatory compliance and observance of market

principles and codes of conduct. Many brokerage firms are investing time,

money and resources to create efficient and effective compliance and

reporting systems that will help them in avoiding costly mistakes and

possible market abuses. Brokerage firms now have a compliance officer who

is responsible for all compliance related aspects and for interacting with

clients and other stake holders on aspects of regulation and compliance.

34

ix) Focus on training and skill sets

Brokerage firms are giving importance and significance to aspects such as

training on skill sets that could prove to be beneficial in the long run. With

the nature of markets and products becoming more complex, it becomes

imperative for the broking firms to keep their staff continuously updated with

latest development in practices and procedures. Moreover, it is mandated

for certain types of dealers/brokers to seek specific certification and

examinations that will make them eligible to carry business or trade. Greater

emphasis on aspects such as research and analysis is giving scope for in-

depth training and skills sets on topics such as trading programs, valuations,

economic and financial forecasting and company research.

x) From owners to traders

A fundamental change that has taken place in the equity brokerage industry,

which is a global trend as well, is the transformation of broking from owners

of the stock exchange to traders of the stock market. Demutualization and

corporatisation of stock exchanges bifurcated the ownership and trading

rights with brokers vested only with the later and ownership being widely

distributed. Demutualization is providing balanced welfare gains to both the

stock exchanges and the members with the former being able to run as

corporations and the latter being able to avoid conflict of interests that

sometimes came as a major deterrent for the long term growth of the

industry.

35

EMERGING CHALLENGES AND OUTLOOK FOR THE

BROKERAGE INDUSTRY

Brokerage firms in India made much progress in pursuing growth and

building professionalism in operations. Given the nature of the brokerage

industry being very dynamic, changes could be rapid and so as the

challenges that emerge from time to time. A brief description on some of the

prospects and challenges of the brokerage firms are discussed below.

i) Fragmentation

Indian brokerage industry is highly fragmented. Numerous small firms

operate in this space. Given the growing importance of technology in

operations and increasing emphasis on regulatory compliance, smaller firms

might find it constrained to make right type of investments that will help in

business growth and promotion of investor interests.

ii) Capital Adequacy

Capital adequacy has emerged as an important determinant that governs

the scope of business in the financial sector. Current requirements

stipulation capital adequacy in regard to trading exposure, but in future more

tighter norms of capital adequacy might come into force as a part of the

prudential norms in the financial sector. In this background, it becomes

imperative for the brokerage firms to focus on raising capital resources that

will enable to give continuous thrust and focus on business growth.

iii) Global Opportunities

Broking in the future will increasingly become international in character with

the stock markets being open for domestic and international investors

including institutions and individuals, as also opportunities for investing

abroad. Keeping abreast with developments in international markets as also

familiarization with global standards in broking operations and assimilating

36

major practices and procedures will become relevant for the domestic

brokerage firms.

iv) Opportunities from regional finance

Regional economic integration such as that under the European Union and

the ASEAN have greatly benefited businesses in the individual countries

with cross border opportunities that helped to expand the scope and

significance of the business. Initial measures to promote South Asian

economic integration is being made by governments in the region first at the

political level to be followed up in regard to financial markets. South Asian

economic integration will provide greater opportunities for broking firms in

India to pursue cross border business. In view of several of common

features prevailing in the markets, it would be easier to make progress in this

regard.

v) Product Dynamics

As domestic finance matures and greater flow of cross border flows

continue, new market segments will come into force, which could benefit the

domestic brokerage firms, if they are well prepared. For instance, in the last

three to four years, brokerage firms had newer opportunities in the form of

commodities futures, distribution of insurance products, wealth

management, mutual funds etc, and as the market momentum continues,

broking firms will have an opportunity to introduce a wider number of

products.

vi) Competition from foreign firms

Surging markets and growing opportunities will attract a number of

international firms that will increase the pace of competition. Global firms

with higher levels of capital, expertise and market experience will bring

dramatic changes in the brokerage industry space which the local firms

should be able to absorb and compete. Domestic broking firms should

always give due focus to emerging trends in competition and prepare

accordingly.

37

vii) Investor Protection

Issues of investor interest and protection will assume centre stage. Firms

found not having suitable infrastructure and processes to ensure investor

safety and protection will encounter constraints from regulation as also class

action suits that investors might bring against erring firms. The nature of

penalties and punitive damages would become more severe. It is important

for brokerage firms to establish strong and streamlined systems and

procedures for ensuring investor safety and protection.

38

INTRODUCTION

OF

ORGANIZATION

2

39

INTRODUCTION TO INDIABULLS

Indiabulls Group is one of the top business houses in the country with

business interests in Real Estate, Infrastructure, Financial Services, Retail,

Multiplex and Power sectors. Indiabulls Group companies are listed in Indian

and overseas financial markets. The Networth of the Group exceeds USD 2

billion. Indiabulls has been conferred the status of a “Business Superbrand”

by The Brand Council, Superbrands India.

Indiabulls Financial Services is an integrated financial services powerhouse

providing Consumer Finance, Housing Finance, Commercial Loans, Life

Insurance, Asset Management and Advisory services. Indiabulls Financial

Services Ltd is amongst 68 companies constituting MSCI - Morgan Stanley

India Index. Indiabulls Financial is also part of CLSA’s model portfolio of 30

Best Companies in Asia. Indiabulls Financial Services signed a joint venture

agreement with Sogecap, the insurance arm of Societé Generale (SocGen)

for its upcoming life insurance venture. Indiabulls Financial Services in

partnership with MMTC Limited, the largest commodity trading company in

India, is setting up India’s 4th Multi-Commodities Exchange.

Indiabulls Real Estate Limited is India’s third largest property company with

development projects spread across residential projects, commercial offices,

hotels, malls, and Special Economic Zones (SEZs) infrastructure

development. Indiabulls Real Estate partnered with Farallon Capital

Management LLC of USA to bring the first FDI into real estate. Indiabulls

Real Estate is transforming 14 million sqft in 16 cities into premium quality,

high-end commercial, residential and retail spaces. Indiabulls Real Estate

has diversified significantly in the following three business verticals within the

real estate space: Real Estate Development, Project Advisory & Facilities

Management: Residential, Commercial (Office and Malls) and SEZ

Development. Power: Thermal and Hydro Power Generation. Retail:

Departmental Stores, Hypermarket Stores, Daily Needs Neighborhood

Stores.

40

Indiabulls Securities Limited is India’s leading capital markets company with

All-India Presence and an extensive client base. Indiabulls Securities

possesses state of the art trading platform, best broking practices and is the

pioneer in trading product innovations. Power Indiabulls, in-house trading

platform, is one of the fastest and most efficient trading platforms in the

country. Indiabulls Securities Limited is the first and only brokerage house to

be assigned the highest rating BQ – 1 by CRISIL.

RECENT GROWTH AND DEVELOPMENTS IN INDIABULLS

One of India’s first trading platforms was set up by Indiabulls Financial

Services Ltd. with the development of an in-house team.

The service offered by Indiabulls was increased to include Equity,

F&O, Wholesale Debt, Mutual fund, IPO Financing/Distribution and

Equity Research.

In this particular year Indiabulls ventured into Distribution and

Commodities Trading business. Indiabulls came out with its initial

public offer (IPO) in September 2004.

Indiabulls started its Consumer Finance business.

Indiabulls entered the Indian Real Estate market and became the first

company to bring FDI in Indian Real Estate.

Indiabulls won bids for landmark properties in Mumbai.

The company acquired over 115 acres of land in Sonepat for

residential home site development. The world renowned investment

banks like Merrill Lynch and Goldman Sachs increased their

shareholding in Indiabulls. It also became a market leader in securities

brokerage industry, with around 31% share in Online Trading. The

world’s largest hedge fund, Farallon Capital and its affiliates committed

Rs. 2000 million for Indiabulls subsidiaries Viz. Indiabulls Credit

Services Ltd. and Indiabulls Housing Finance Ltd. In the same year,

41

the Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture

Ltd. acquired 8.2% stake in Indiabulls Credit Services Ltd.

Indiabulls Financial Services Ltd. was included in the prestigious

Morgan Stanley Capital International Index (MSCI). Indiabulls

Financial Services Ltd. was benefited with the Farallon Capital

agreeing to invest Rs. 6,440 million in it. The company also received

an “in principle approval” from Government of India for development of

multi product SEZ in the state of Maharashtra. Indiabulls Financial

Services Ltd acquired 100% of the equity share capital of Noble

Realtors Pvt Ltd. Noble Realtors is a Company engaged in the

business of construction and development of real estate projects.

Indiabulls Real Estate Business was demerged to become a separate

entity called Indiabulls Real Estate Ltd. The Board of Indiabulls

Financial Services Ltd. Resolved to Amalgamate Indiabulls Credit

Services Ltd and demerge Indiabulls Securities Limited.

PHILOSOPHY

Indiabulls has created a unique organization that is designed for you – the

Smart Investor –. it passionately believe in the Smart Investor who wants to

make his own educated investment choices and demands world class access

to a full range of services and products ranging from Equities to Insurance,

combined with the highest level of integrity, service and professionalism.

Indiabulls is a full service investment firm offering clients access to a

tremendous range of financial services from 135 locations across 95 cities.

We have a strong team of over 1000 Client Relationship Managers focussed

on serving customers unique needs. Our world class infrastructure, built with

tens of crores of investment, provides our clients with real-time service, multi-

channel & 24/7 access to all information and products. As we've expanded

and developed to serve the needs of all kinds of investors, we've been

guided by one underlying philosophy: You come first.

42

We are proud to introduce to you Indiabulls Professional NetworkTM that

offers real-time prices, equity analysis, detailed data and news, intelligent

analytics, and electronic trading capabilities, right at your finger-tips. This

powerful technology is complemented by our knowledgeable and customer

focussed Relationship Managers who are available to help with your financial

planning and investment needs.

ABOUT FOUNDERS

The fast paced growth, diversification and consolidation of the Group has

been possible due to the vision and leadership of the co-founders of

Indiabulls.

Sameer Gehlaut is the Chairman, CEO and Whole Time Director of

Indiabulls. Sameer is an engineer from IIT, Delhi (1995) and has worked

internationally with Halliburton in its international services business in 1995.

He has utilized his experience with the international best practices and

professional work culture at Halliburton to lead Indiabulls successfully.

Rajiv Rattan is the President, CFO and Whole Time Director of Indiabulls.

Rajiv is an engineer from IIT, Delhi (1994) and has rich experience in the oil

industry, having worked extensively across the globe in highly responsible

assignments with Schlumberger. Rajiv has managed remote exploration

projects providing evaluation services for different clients in India as well as

abroad.

Saurabh Mittal is a Director at Indiabulls. Declared the best graduating

student in IIT, Delhi in (1995), Saurabh was also one of the engineers

selected by Schlumberger to work for its international services business in

1995 and gained experience of working in various global locations. He

graduated as a Baker Scholar with an MBA from the Harvard Business

School. He has also developed in-depth understanding of international

financial markets

43

44

Indiabulls Financial Services Ltd.

Board of directors

The Bankers of Indiabulls Financial Services Ltd. are as follows:

ABN-Amro Bank

Andra Bank

Bank of Maharashtra

Canara Bank

Centurion Bank of Punjab Ltd.

Citibank

Punjab National Bank

Dena Bank

LKB Ltd

HDFC Bank Ltd

HSBC Ltd.

Corporation Bank

ICICI Bank Ltd.

IDBI Ltd

Industrial Bank Ltd.

ING Vysya Bank Ltd

Standard Chartered Bank

Karnataka Bank

45

Chairman Sameer Gehlaut

Director Gagan Banga

Director Karan Singh

Director Prem Prakash Mirdha

Director Rajiv Rattan

Director Saurabh K Mittal

Director Shamsher Singh

Director Aishwarya Katoch

State Bank Of India

UTI Bank Ltd.

Yes Bank Ltd.

Syndicate Bank

Union Bank Of India

PERFORMANCE HIGHLIGHTS

The Consolidated Total Revenues of IndiaBulls have increased by 83% to

Rs. 641.5 cr in Q2 FY09 from Rs. 350.5 cr in Q2 FY08. The Consolidated

PAT has increased 21.4% to Rs. 135.7 cr from Rs. 111.8 cr in Q2 FY08. For

Indiabulls Securities(ISL), the fifth biggest retail broker, income stood at

Rs 193.2 cr (80% of total revenues) during H1FY09. It has declined by only

8% from the corresponding period of the last year despite significant

slowdown in trading volumes. ISL gained market share in retail brokerage

during this period. Its 12 lakh customers will help the group expand into other

financial services.

Key Highlights

The debt equity ratio of 2.4 times signifies very low leverage.

Personal Loans portfolio continued to shrink to Rs 274.4 cr

representing 2.5% of their total loan portfolio. Indiabulls have 0% of

Net NPAs and 1.1% of Gross NPAs. The company has provisions of

171.8%. Indiabulls has maintained a capital adequacy ratio of

27.11%. It has raised 1,000 cr in debt for a three-year period in

addition to the Rs 10,000 cr of current bank funding. Disbursements

during Q2 were at Rs 150 cr, which is almost half of the disbursements

during previous quarters

46

Indiabulls, the fifth-largest NBFC by sales , may be able to survive

the financial crisis as it is well capitalized with $250 cr in assets and

$100 cr in cash

Indiabulls plans has put expansion plans on hold, plans to cut about

1,000 of its 20,000 staff by not replacing workers who quit.

Some of its new ventures coming up are commodity exchange and

life insurance business. Indiabulls is waiting for insurance regulator's

approval for its life insurance venture with Societe Generale SA; while

expects trading to begin on its planned commodity exchange by the

end of this fiscal. Indiabulls plans to become a bank when the govt

permits to offer services like cash management, forex and letters of

credit. IB wants to emulate the conservative approach in banking.

Asset under management –

AUM (Rs Cr.)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q2FY08 Q1FY09 Q2FY09

47

Financial Snapshot

INCOME FROM SEGMENT

Q2FY08 Q2FY09 YOY growth (%)

Investing & financing related

activities

336.19 529.17 57%

Broking related activities 143.01 0 -100%

Fee ncome 11.51 3.18 -72%

other 2.59 11.35 4199%

Total income from operation 493.32 643.7 30%

INDIABULLS SECURITIES LTD.

Indiabulls Securities Limited is India’s leading capital markets company with

All-India Presence and an extensive client base. Indiabulls Securities is the

first and only brokerage house in India to be assigned the highest rating BQ –

1 by CRISIL. Indiabulls Securities Ltd is listed on NSE, BSE & Luxembourg

stock exchange.

Products

Indiabulls Securities Limited  (ISL) is the pioneer in Retail Broking Industry

having a pan India presence and providing services to a customer base

exceeding half a million. ISL is in the business of providing securities broking

and advisory services and is a corporate member of capital market,

wholesale debt market and derivative segment of NSE and of the capital

market and derivative segment of BSE. ISL is the first and only brokerage

house to be assigned the highest rating BQ-1 by CRISIL.

The company through various types of brokerage accounts provides product

48

and services related to purchase and sale of securities listed in NSE and

BSE. It also provides depository services, equity research services, mutual

fund, IPO distribution to its clients. The company provides these services

through on-line and off-line distribution channel.

Power Indiabulls

Power Indiabulls(PIB) is an online trading platform which brings you the

power of a broker’s terminal on your desktop. It is an in-house developed

internet enabled trading solution that supports securities and derivatives

trading with NSE and BSE. PIB is designed for the high volume traders that

provide access to multiple market segments through the ease of a single

terminal.

Designed by the technology team of Indiabulls, PIB comes with several

enhanced features, which makes it the best desktop trading application in the

country today. You can create market watches where you can view “live

broadcast” of stocks both in capital as well as F&O segment. Stock prices get

updated automatically every second without any manual intervention. PIB

provides you with extensive real time reports to evaluate the performance of

your portfolio. 

Salient features of Power Indiabulls:

Integrated market watch for securities and derivatives

Live Streaming Quotes

Fast Order Entry

Tic by Tic Live Charts

Technical Analysis

Live News and Alerts

Extensive Reports for Real-time Accounting

Indiabulls Signature Account

49

With Indiabulls Signature account you will always remain on top of your

investments. It provides you the platform to trade in Equity and Derivatives.

With an unmatched service and nationwide presence, the Indiabulls

Signature account comes bundled with a variety of exclusive features.

Ease of trading – With Indiabulls Signature account you have the flexibility

to place your orders either by logging on the website, calling at the branch or

walking in the branch.

Dedicated Service Branch and Relationship Manager: You can get in

touch with your Relationship Manager and Service Branch for all your trading

related requirements.

Power Indiabulls (PIB): You can trade smarter and faster using the Power

Indiabulls application. Access the broad spectrum of sophisticated trading

tools and get an edge in the stock markets.

Online Payment Gateways: Use our online payment gateways facility and

get instant credit in your Trading Account. We currently provide online

gateway payment facility with four major banks – HDFC, ICICI, AXIS and

IDBI.

IPOs – Indiabulls provides you the flexibility to apply in ongoing IPOs through

either online or offline channels. For applying online, you do not need to fill

tedious forms and write cheques. You can apply conveniently in IPOs from

the comfort of your home / office through our Website/PIB. For applying

offline, you can contact your Relationship Manager/ Service Branch.

Portfolio Tracker: You can track your investments online through our

portfolio tracker functionality. You can conveniently track the daily movement,

notional / booked profits and losses in your portfolio.

Equity Analysis Report – A qualified and dedicated team of equity analysts

at Indiabulls publishes various research reports. You can view these reports

to gain insight into the companies of your interest.

50

News Room: The News Room provides real-time news from stock-markets,

corporate sector, economy and other segments that have a bearing on the

market sentiment.

Market Statistics: This functionality facilitates tracking the market trend by

providing you real time data on top gainers, top losers, volume toppers and

most volatile stocks.

Documentary Requirements for Equity Trading Account

Documents Valid as ID Proof:-

i. PAN card –Mandatory*

ii. Voter id card

iii. Passport

iv. Driving License/ Learning License

v. Photo Identity card issued by employer registered under MAPIN

if photo is not clear on Pan card, either of ii, iii, iv, v documents can be

given as additional ID proof.

Documents Valid as Address Proof:-

i. Ration Card

ii. Driving License/ Learning License

iii. Lease and License Agreement/ Rent Agreement

iv. Passport

v. Voter ID card

vi. Insurance Policy

i. Certificate issued by employer registered under MAPIN.

ii. Electricity Bill (not more than 2 month old from bill generation date)

51

iii. Landline Bill (not more than 2 month old from bill generation date)

iv. Bank Passbook

v. Bank Statement original/photocopy with Bank Logo (not more than 3

month old) must be accompanied with a Cheque copy

vi. Bank statement original/photocopy without Bank Logo (not more than

3 month  old) must be attested by bank official stamp and signature

along with original cancelled Cheque copy

Note- i to vii proofs are valid for individuals only, whereas proofs from viii to

xii are acceptable both in the name of Firm & individual.

Documents Valid as Bank Proof :-

i. Personalized Cheque copy(Client signature should be match with kit)

ii. Non personalized Cheque copy (Client signature should be match with

kit)

iii. Bank Statement with Bank Logo (not more than 3 month old)

iv. Bank statement original/photocopy without Bank Logo (not more than

3 month old) attestation by bank official stamp and signature.

v. Bank Passbook

vi. Original Banker verification letter

Documents required for individual account:-

1. Individual recent passport size photograph(s)

2. Individual pan card

3. Address proof in the name of the individual.

4. Bank proof in the name of the individual.

Note:- All the documents must be duly Self-attested in original.

Documents required for Proprietorship Firm Account

1. Recent passport size Photograph of Proprietor.

2. Proprietor Pan card

52

3. Address Proof in the name of the Proprietorship firm and Proprietor.

4. Bank proof in the name of the Proprietorship firm

5. Declaration by Firm – Sole Proprietorship on letter head of the firm as

per Annexure-4.

6. Affix rubber stamp at all places except at the bottom of the declaration

in Annexure-4.

Documents required for HUF Account

1. Recent passport size Photographs of the Karta.

2. Pan card of the HUF & the Karta.

3. Address proof in the name of HUF & the Karta.

4. Bank proof in the name of HUF.

5. Signature of Karta and all the co-parceners(major &/Minor) on the

Declaration given in Annexure-7

6. HUF Stamp to be affixed on all client’s signature.

Documents required for Partnership Firm Account

1. Recent passport size photographs of all authorized partners.

2. PAN card of all the partners & the partnership firm

3. Address proof in the name of all the partners & the partnership firm

4. Bank proof in the name of Partnership firm

5. Notarized Partnership Deed along with the list of partners duly certified

and attested by all the partners.

6. Partnership firm stamp to be affixed with all signatures of partners.

7. Copy of the Latest ITR

8. Authority letter by all the partners in favour of Managing Partners on the

Original letterhead of the partnership firm, along with stamp & signature

as per Annexure-6.

53

Documents required for Corporate Account

1. Photograph(s) of all the authorized signatories.

2. PAN Card Copy of all authorized signatories & Corporate.

3. Address proof of all the authorized signatories & Corporate. Only

following documents can be accepted address proof of Corporate

4. Form 18 with ROC receipt

5. Bank statement

6. Land line telephone bill or Electricity bill must be supported by ITR

copy (Validity date- 2 months from bill date) 

7. Bank proof for the Corporate

8. Board Resolution on the original letter head in specified format given

in Trading kit & duly attested by Director / Chairman other than the

authorized signatory.

9. True copy of MOA and AOA Certified by Authorized signatory.

10.Valid Certificate of Incorporation with ROC seal attested by authorized

signatory

11.Certified true copy of Auditor Report with Balance Sheet for last 2

years

12.Networth certificate by a Chartered Accountant in original with their

stamp.

13.Copy of ITR for last two years.

14.Certified true copy of Annual Reports of Last 2 years

15.Banker’s Verification on Banker’s original letter head certifying the

signatures of the Authorized Signatories (as per the format given the

corporate kit)

16.List of director’s along with name, address and photographs across

signed with company stamp to be provided along with their signatures

on letterhead of the company.

17.List of Authorized Signatories along with their Name, address,

signatures & Photographs across signed with company stamp on the

company’s letterhead

18.Copy of latest shareholding pattern including list of all those holding

more than 5% in the share capital of the company duly certified by the

54

company secretary/whole time director/MD) (copy of the updated

shareholding pattern to be submitted every year)- Required On

Company Letter Head (Original).

19.Form-32 along with ROC receipt in case of change in director.

20.Form-18 along with ROC receipt in case of company address change

Note:- All the documents must be duly attested in original with company

stamp

Depository Services

Indiabulls is a depository participant with the National Securities Depository

Limited and Central Depository Services (India) Limited for trading and

settlement of dematerialised shares. Indiabulls performs clearing services for

all securities transactions through its accounts. We offer depository services

to create a seamless transaction platform – execute trades through Indiabulls

Securities and settle these transactions through the Indiabulls Depository

Services. Indiabulls 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.

NRI Online Trading

Introduction to NRI Online Trading

Non-Resident Indians (NRIs) can also enjoy the  state of the art Online

trading Platforms of Indiabulls to trade in Indian Capital Markets. We, at

Indiabulls, provide NRI clients a fast and secure trading platform which would

perfectly cater to NRI's Trading requirements.  To start trading through

Indiabulls , the following simple steps need to be followed:

1. Opening of Online NRI Trading and NRI Demat account with

Indiabulls: Get in touch with your nearest Indiabulls service branch

55

(Branch Locator) to complete all the Trading and Demat account

opening formalities.

2. Opening of a NRI PIS account with Axis bank: A NRI is required to

open a PIS account (Portfolio Investment Scheme) with a designated

bank in India. Indiabulls Securities Limited has tied up Axis bank to

offer this facility to NRIs to enable them to trade in the Indian Capital

markets. The Indiabulls team would also help and assist you with

opening a PIS account with Axis Bank.

3. Documentation required: The following proofs need to be submitted

along with the Trading and Demat account opening forms:

o Copy of PIS approval letter from Axis Bank

o Copy of passport (copy of the pages containing the Name,

address and photographs)

o Valid & self-attested Proof of Identity and Proof of Address

(Indian and Foreign).

Salient features of NRI Trading Account

Dedicated Service Branch and Relationship Manager: You can get

in touch with your Relationship Manager and Service Branch for all

your trading related requirements.

Online Trading: You can place your orders through our state-of-the-

art Online trading platforms (Power Indiabulls (PIB) & Website)

Power Indiabulls (PIB): You can trade smarter and faster using the

Power Indiabulls application. Access the broad spectrum of

sophisticated trading tools and get an edge in the stock markets.

Portfolio Tracker: You can track your investments online through our

portfolio tracker functionality. You can conveniently track the daily

movement, notional / booked profits and losses in your portfolio.

56

Equity Analysis Report – A qualified and dedicated team of equity

analysts at Indiabulls publishes various research reports. You can

view these reports to gain insight into the companies of your interest.

News Room: The News Room provides real-time news from stock-

markets, corporate sector, economy and other segments that have a

bearing on the market sentiment.

Market Statistics: This functionality facilitates tracking the market

trend by providing you real time data on top gainers, top losers,

volume toppers and most volatile stocks

Electronic Contract Notes on Email: This facility enables you to get

digitally signed  Contract Notes on email within 24 hours of executing

trades in your Trading Account.

Reporting of transactions to RBI: Indiabulls facilitates the reporting

of all transactions done in your account to RBI through the Axis bank.

Orders on Phone: Indiabulls also offers the facility of placing orders

through phone.

IPO Online

For various reasons, we often miss the opportunity of subscribing to an IPO.

It can either be because we could not procure the application form or we did

not have the time to fill up the form and submit it. The most important benefit

of the 'ONLINE IPO facility offered by Indiabulls Securities Ltd. is the

convenience in submission of applications from anywhere breaking the

limitations of time and geography. You don’t need to submit the application in

paper form, or write a cheque or go to submit it anywhere.

Now you have the convenience at your fingertip. You can quickly and

seamlessly apply to the latest public offerings with just a few clicks. Indiabulls

57

Securities Ltd. offers ONLINE IPO facility to its registered trading customers

at absolutely no cost.

Indiabulls Equity Analysis

Indiabulls Equity Analysis complements its equity broking and advisory

services with high quality comprehensive report which can be accessed

online. Research report assess the potential strength and investment risk by

doing in-depth and exhaustive analysis of operational and financial

performance of company, Peer group analysis, present Industry scenario

using advanced and sophisticated forecasting tools and models. These

research reports identify, examine and distill attractive investment

opportunities to help you in building and maintaining your ideal portfolio.

Salient features of Indiabulls Equity Analysis:

Covers report of more than 540 company

Updated on a daily basis

Scorecard on Fundamentals, Valuations and risk

Peer Analysis

Valuation of potential growth

Industry Scenario

Expansion plan

Details of Mergers and Acquisitions

These reports are available to clients without any additional cost. If you are

not a client and wish to view a sample report, please share your details with

us.

Currency Derivatives

Indiabulls offers trading in the Currency Derivatives Segment in National

Stock Exchange (NSE)Currency Derivatives are similar in nature to Stock or

Index Futures contracts. Currency Futures Contracts, with INR:

USD exchange rate as the underlying, are available with a monthly expiry. At

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any given time, Currency Future Contracts are available for trading for the

next 12 months.The Mark-to-Market for Currency Derivatives is settled on a

daily basis in a manner similar to Equity / Index Futures.

Business Highlights

Brokerage & Capital Market related Income was Rs 193.22 crore (79.7% of

total revenues) during the six months ended Sep.08, roughly flat in Q1 and

Q2 of 08-09. This segment was down only 8% from last year first six months

despite significant declines in market activity (trading volumes) as ISL gained

market share in retail brokerage.

Sequential increase in Profits after tax despite market turmoil through strong

cost controls.

During the quarter, the Board of Directors has authorized the Company at its

meeting held on 23rd September, 2008 to subscribe to 24.5% of the paid up

share capital of Indiabulls Life Insurance Company Limited (ILICL), a joint

venture of Indiabulls Financial Services Limited (IBFSL) and Sogecap of

France. IBFSL will continue to own 49.5% and Sogecap will own 26% of the

life insurance business.

During the quarter, the final dividend of Rs. 7.50 per equity share (375% on

the face value of Rs. 2/- per equity share) amounting to Rs.19,007.02 lakhs

(excluding corporate dividend tax) approved at the Annual General Meeting

of the Company held on September 05, 2008 and was paid by the Company

on September 09, 2008 into the Dividend Account.

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Networth of the company as on 30th September 2008 is Rs. 434.2 crores, as

compared to Rs. 359.4 crores on March 31, 2008. Book Value per share as

on 30th September 2008 is Rs. 17.14.

During the quarter, the company has launched its Trading Platform for trading

in the Currency Derivatives Segment on National Stock Exchange.

ISL.s Internet Based Trading System (IBT) was concluded as

being .STRONG. based on an audit conducted by Tata Consultancy Services

for The National Stock Exchange, across the following parameters;

Risk Management

Security Policy & Implementation

Capacity Management

Disaster Recovery and Back-up

Vulnerability test.

This is the highest grading for the audit - the other.s being Medium and

Weak.

CRISIL has assigned a CRISIL BQ . 1 to ISL. This is an opinion on the quality

of operations and service offered by the graded broker. The grading is

expressed on a five point scale BQ-1 to BQ-5, with BQ-1 being the highest.

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THE COMPETITORS OF INDIABULLS SECURITIES LTD.

1. INDIA INFOLINE LTD.

INTRODUCTION:

India Infoline Ltd is listed on both the leading stock exchanges in

India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock

Exchange (NSE). The India Infoline group, comprising the holding company,

India Infoline Ltd and its subsidiaries, straddles the entire financial services

space with offerings ranging from Equity research, Equities and derivatives

trading, Commodities trading, Portfolio Management Services, Mutual Funds,

Life Insurance, Fixed deposits and other small savings instruments to loan

products and Investment banking. India Infoline also owns and manages the

websites, www.indiainfoline.com and www.5paisa.com .

India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities

and Exchange Board of India). It undertakes equities research which is

acknowledged by none other than Forbes as 'Best of the Web' and '…a must

read for investors in Asia'. India Infoline's research is available not just over

the internet but also on international wire services like Bloomberg (Code:

IILL), Thomson First Call and Internet Securities where it is amongst the most

read Indian brokers.

India Infoline Securities Pvt Ltd

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India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd,

which is engaged in the businesses of Equities broking and Portfolio

Management Services. It holds memberships of both the leading stock

exchanges of India viz. the Stock Exchange, Mumbai (BSE) and the National

Stock Exchange (NSE). It offers broking services in the Cash and Derivatives

segments of the NSE as well as the Cash segment of the BSE.

As a SEBI authorized Portfolio Manager, it offers Portfolio Management

Services to clients. These services are offered to clients as different

schemes, which are based on differing investment strategies made to reflect

the varied risk-return preferences of clients.

India Infoline.com is making a great move towards giving the investor in

Indian equities market a choice. A choice of technologically advanced trading

that is with the help of 5paisa.com. 5 paisa also represents the availability of

world class service to investors at the lowest possible rate - 5 paisa for every

trade of Rs100, i.e., a brokerage rate of 0.05%.

2. SHAREKHAN

Sharekhan was created when SSKI Investor Services Pvt. Ltd., a company in

the securities and equities segment decided to harness the power of the

Internet and offer services to its customers through an online stock trading

portal. Sharekhan, one of India's leading brokerage houses, is the retail arm

of SSKI. With over 510 share shops in 170 cities, and India's premier online

trading firm.

Sharekhan is an equities focused organization tracing its lineage to SSKI, a

veteran equities solutions company with over five decades of experience in

Indian stock markets. Sharekhan brings and provides a user-friendly online

trading facility, coupled with a wealth of content that will help you stalk the

right shares. They also have an extensive all-India ground network of

franchisees across the country.

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The company offers its services through a combination of online and offline

channels. The online model comprises a portal, chat facilities, and 'speed

trade' terminals. And the offline model uses a combination of an IVR

infrastructure and a team of customer agents to receive orders over the

telephone. The company claims to have around 150,000 current registered

users nationwide.

The 'speed trade' channel offers the benefit of a terminal at the user end,

which is connected to the company's systems through a TCP/IP link. Unlike a

Web trade request, which travels with the help of HTTP or HTTPS a speed

trade transaction is a direct transfer of information with the trading system, is

live, and on real-time.

Sharekhan Depository Services offers dematerialization services to individual

and corporate investors. They have a team of professionals and the latest

technological expertise dedicated exclusively to the demat department, apart

from a national network of franchisee, making the services quick, convenient

and efficient.

3. MOTILAL OSWAL

Vision:-

To be a well respected and preferred global financial services organization

enabling wealth creation for all our customers

Introduction:

Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking

unit, with just two people running the show. Focus on customer-first-attitude,

ethical and transparent business practices, respect for professionalism,

research-based value investing and implementation of cutting-edge

technology have enabled them to blossom into an almost two thousand-

member team. Motilal Oswal Securities Limited (MOSt) has established itself

as the Best Local Brokerage House in India (Asia Money Brokers’ Poll 2005).

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Their Institutional Equities Division combines the efforts of the Research and

Sales & Trading departments to best serve clients' needs. It believes that it is

their unflinching commitment to providing superior client service that makes

them stand out.

They have a dedicated research team, which is engaged in analyzing the

Indian economy and corporate sectors to identify equity investment ideas.

They staunchly practice the value-investing philosophy and advise investors

to take a long-term view of equity investments. Consistent delivery of high

quality advice on individual stocks, sector trends and investment strategy has

established them as a reliable research unit amongst leading Indian as well

as international investors. Most is known for its equity research ideas. Asia

Money Broker's Polls have consistently rated their research as one of the

best in the industry.

Their sales & trading team, comprising top equity professionals, translates

the research findings into actionable advice for clients, based on their specific

needs. Each of the sales personnel has at least five years’ experience in

equity research. Sophisticated computerized tools are used to understand

client investment profile and objectives, which ensures proactive and timely

service.

4. KARVY

The birth of Karvy was on a modest scale in the year 1982. It began with the

vision and enterprise of a small group of practicing Chartered Accountants

based in Hyderabad, who founded Karvy. They started with consulting and

financial accounting automation, and then carved inroads into the field of

Registry and Share Transfers. Karvy has built a reputation as an integrated

financial services provider, offering a wide spectrum of services for over 20

years.

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In 1982, a group of Hyderabad-based practicing Chartered Accountants

started Karvy Consultants Limited with a capital of Rs.150, 000 offering

auditing and taxation services initially. Later, it forayed into the Registrar and

Share Transfer activities and subsequently into financial services.

A decade of commitment, professional integrity and vision helped Karvy

achieve a leadership position in its field when it handled the largest number

of issues ever handled in the history of the Indian stock market in a year.

Thereafter, Karvy made inroads into a host of capital-market services, -

corporate and retail - which proved to be a sound business strategy.

Today, Karvy has access to millions of Indian shareholders, besides

companies, banks, financial institutions and regulatory agencies. Over the

past one and half decades, Karvy has evolved as a veritable link between

industry, finance and people. In January 1998, Karvy became the first

Depository Participant in Andhra Pradesh. An ISO 9002 company, Karvy's

commitment to quality and retail reach has made it an integrated financial

services company.

Associate Companies of Karvy

Karvy Securities Limited 

Deals in distribution of various investment products, viz., equities, mutual

funds, bonds and debentures, fixed deposits, insurance policies for the

investor. 

Karvy Investor Services Limited 

Deals in Issue management, Investment Banking and Merchant Banking. 

Karvy Stock broking Limited 

Deals in buying and selling equity shares and debentures on the National

Stock Exchange (NSE), the Hyderabad Stock Exchange (HSE) and the Over-

The-Counter Exchange of India (OTCEI).

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5. KOTAK SECURITIES

Introduction

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock

broking and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is

one of India's leading financial institutions, offering complete financial

solutions that encompass every sphere of life. From commercial banking, to

stock broking, to mutual funds, to life insurance, to investment banking, the

group caters to the financial needs of individuals and corporate.

Kotak Securities was set up in 1994. Kotak Securities is a corporate member

of both The Bombay Stock Exchange and the National Stock Exchange of

India Limited.

Its operations include stock broking and distribution of various financial

products - including private and secondary placement of debt and equity and

mutual funds. Currently, Kotak Securities is one of the largest broking houses

in India with wide geographical reach. The company has four main areas of

business:

Institutional Equities,

Retail (equities and other financial products),

Portfolio Management and

Depository Services.

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Kotak Securities Ltd is also a depository participant with National Securities

Depository Limited (NSDL) and Central Depository Services Limited (CDSL),

providing dual benefit services wherein the investors can use the brokerage

services of the company for executing the transactions and the depository

services for settling them.

Kotak Securities has 195 branches servicing more than 2, 20,000 customers

and coverage of 231 Cities. Kotaksecurities.com, the online division of Kotak

Securities Limited offers Internet Broking services and also online IPO and

Mutual Fund Investments.

6. ICICI SECURITIES

Introduction

ICICI Securities, A subsidiary of ICICI Bank, was set up in February 1993 to

provide investment-banking services to investors in India. As on date ICICI

Bank holds 99.9% of the share capital of ICICI Securities.

ICICI Securities Limited is India’s leading full service investment bank with a

dominant position in all segments of its operations –

Corporate Finance

Fixed Income and

Equities.

In order to assist/provide corporate clients and institutional investors with

investment banking services in the United States of America, ICICI Securities

has set up two subsidiaries namely, ICICI Securities Holdings Inc and ICICI

Securities Inc, ICICI Securities Inc, has become the registered broker dealer

with the National Association of Securities Dealers Inc, empowering it to

engage in a variety of securities transactions in the U.S. market.

ICICI Securities Inc. is also registered with the Financial Services Authority,

UK (FSA) and the Monetary Authority of Singapore (MAS) to carry out

Corporate Advisory Services.

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COMPETITIVE ANALYSIS FOR INDIABULLS

The Indian retail brokerage industry consists of companies that primarily act

as agents for the buying and selling of securities (e.g. stocks, shares, and

similar financial instruments) on a commission or transaction fee basis .

It has two main interdependent segments: Primary market and the

Secondary market.

Objective: The main objective is to

Analyze retail brokerage industry taking into account the health of the

capital markets, Derivative Market and the intensity of competition

among the brokerage companies.

Doing Competitive Analysis for Indiabulls.

The major growth drivers for brokerage revenue and trading volume

are:

• Continuous fall in brokerage fees

• Adoption of technology — screen-based trading, electronic matching,

and paperless securities

• Centralized operations, effective risk management, and control on large

interconnected operations spanning multiple locations, which is enabled

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by telecom connectivity and low costs

• Increasing access to capital and the ability to provide margin finance

Parameter Assessment for Doing Competitive analysis

A differentiating aspect is a comparative assessment of the top retail

brokerages on various value indicators, comprising of

Product

Pricing

Service delivery model

Unique selling proposition.

Customers need to analyze the Brokerage Firms Based on these 5

Parameters.

Brokerage & Miscellaneous charges

Quote Software

Execution Platform

Demat Account, and finally

Back office Support.

Brokerage & Miscellaneous charges: This accounts for all the charges that

you incur for your trading/investing. A few examples would be: Demat

Account maintenance, Brokerage, Annual account Fee, Telephone based

trading charges, trading software usage charges, etc. We should understand

what all charges we are bound to incur from our broker.

Quote Software: This is used mainly for technical study and for live quotes.

Many people don’t evaluate quote software. We typically use software that

have stumbled upon and stick with it just because we have eventually grown

comfortable using it. We don’t pay attention to the quality of data (how

accurate it is). Or how fast and often it refreshes. Does it allow us to back test

our strategy? Does it allow customizing technical signals/parameters? Does it

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allow adding new indicators? Does it allow us to see historic data? For, what

period is intra day data available? We might need all this information. We

should be clear on what we need and ensure our quote software provides it

all.

Execution Platform: It’s nothing but a platform that allows us to execute our

trade fast. It should automate trade management and execution, and should

automatically give protection against human errors.

Demat Account: Demat account should only be opened with a well known

and established brokerage firm in the market.

Back office Support: People while trading face lots of problem because of

lack of good back office support. Relationship Managers trading without their

client’s knowledge, funds not being transferred, trades not being executed,

slow execution etc are a few examples.

COMPETITIVE STRENGTH OF INDIABULLS SECURITIES

Indiabulls securities Ltd have a distinct set of competitive advantages that

make it uniquely capable of winning in the marketplace against its

competitors

Diverse Branch Network

Bouquet of financial products and services

Advanced technology team that delivers market leading product

innovation

Strong sales and marketing teams with continuous reinvestment and

training

Strong cross-selling opportunities.

Strong and experienced promoters

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Leading product innovation and marketing strategies

Well capitalized player, with strong banking relationships and credit

ratings

Ability to combine people and technology in unique ways

Strong market presence and increased market share leading to a

virtuous cycle of growth and Profitability.

Core pillars of Business strategy

Increase the number of Client Relationships.

Offer Diversified Financial Products & Services.

Multiple Channels – Enhance Customer Experience and

Opportunities.

Low cost and highly scalable business.

Merits of Indiabulls Securities

Low brokerage charges (Competitive) with 0.10 for Intra-day and 0.50

% for delivery.

Indiabulls securities provide 8 times margin for Intra-day and 4 times

margin for delivery.

Indiabulls is suitable for both Day trading & Long term investment

IndiaBulls has software called Power IndiaBulls. It is a Java based

application, with real-time streaming quotes. It is fast in terms of speed

and execution

Research reports are free of cost to trading members.

They Provide 3 in 1 interface, i.e. Demat Account, Trading account &

bank account all are linked in one interface.

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De-Merits of Indiabulls Securities

You have to open a bank account with the banks mentioned in

Indiabulls site for Credit/ Debit Facility as they don’t have their own

bank. And In ICICI direct , you have a direct debit/credit facility with the

bank

Most customers feel that it is difficult to understand the ledger reports

of Indiabulls securities, so proper customer guidance should be given.

Value Proposition of Indiabulls Securities

ISL provide a very good Trading tools like Power Indiabulls &

Indiabulls market trader.

Power Indiabulls: A desktop Trading application offering clients

sophisticated trading tools accessible at lightning fast speed.

Indiabulls Market Trader: Browser based trading application built for

retail investor.

Indiabulls Equity Analysis: Premium research on 400 plus

companies.

Indiabulls Professional Network: Offers real-time prices, detailed

data and news, intelligent analytics and electronic trading capabilities.

Relationship manager: Indiabulls securities robust technology is

integrated with knowledgeable and customer-focused relationship

managers who are available 24X7 to assist the clients.

In Depth Market Analysis and Research

Their special research cell bring you intensive research reports on how

the stock market is faring, when is the right time to invest, when to

execute your order and more. Depending on what kind of investor you

are, they bring you fundamental or basic research and technical

research.

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MERITS & DE-MERITS OF COMPETITORS

ICICI SECURITIES

ICICI securities: It provides products & services in fixed income, equity &

corporate finance.

Merits of ICICI Securities

ICICI Direct is considered best for long term investment.( Indiabulls is

suitable for both Day trading & Long term investment)

A direct debit/credit facility with the bank.

All facilities available under one umbrella.

BTST (Buy today & sell tomorrow) is available; this facility is available

only in ICICI Direct.

Can apply for IPO online (we can’t do this in Indiabulls).

Can apply for mutual funds online and can also sell them online.

Internet banking demo which gives customers an opportunity to learn.

De-Merits of ICICI Securities

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Brokerage charges are high - intraday 0.25% and 0.75% delivery

compared to other brokerage firms (is considered as highest in the

market).

Day trading is a night mare in ICICI because of Web based terminal,

which is very slow. Orders placed at or around 10.00 hrs may be

queued for a while. So intra-day Margin trading could be annoying now

& then. It's not much of a hassle for cash trading though.

(Indiabulls offers you a trading terminal 'powerIndiabulls', which is

java based software. It is fast in terms of speed and execution).

ICICI Direct brokerages are not negotiable ( Where as Indiabulls

Brokerage Charges are negotiable).

SHAREKHAN

Merits of ShareKhan Securities

Low brokerage charges, intraday 0.1% and 0.5% for delivery.

Live streaming quotes

Customer support is good

No monthly charges

Can trade in both BSE and NSE

De-Merits of ShareKhan Securities

No BTST (buy today sell tomorrow), in ShareKhan you can’t sell a share

today which you bought yesterday.

You have to open a bank account with the banks mentioned in

ShareKhan site.

Streaming quotes requires JVM (Java Virtual Machine); this may be

big headache for customers.

Annual charges are Rs330.

Their trading terminals are certainly not for "investors", only for active

traders. That is because, you have to trade a certain volume every

month, otherwise you end up paying a fine

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INDIA INFOLINE

Merits of India Infoline (5 Paisa.com) Securities

Low brokerage charges, intraday 0.10% and 0.50% for delivery and it is

negotiable.

Minimum brokerage per share will be 1 paisa for trading transactions

and 5 paisa for delivery based transactions.

5 paisa provides 6 times margin for Intraday & 8 time’s margin for

Delivery.

All customers will get Digital Contract Notes. Physical contract notes

could be provided on request which would entail a nominal charge.

De- Merits of India Infoline (5 Paisa.com) Securities

Software License Fee Rs.799/- per month or 7999/- per annum and is

non-refundable.

There is lot of Hidden costs.

Annual Service Charges Rs.250.

Customers who just want to have a depository relationship will be

required to pay Rs.1000/-, for each Demat account, which will be

adjusted against service charges.

The information in their web based terminal is too much compressed in

one screen.

Trader terminal is good, but the interface is too complicated

KOTAK SECURITIES

Merits

Low Brokerage charges with 0.05% for Intra-day & 0.45% for delivery.

Kotak Securities will offer small-time retail investors with invest able

surpluses as low as Rs.5, 000 a chance to invest in capital markets.

Transactions are transparent with effective back office support.

They provide Simple Ledger reports, which customers feel easy to

understand than any other brokerage firms.

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Mutual fund & IPO facility is available online.

Flexibility of products - Once you invest with Kotak Securities, you can

enjoy access to a wide range of products and services to help you

make the most of your investments.

De-Merits

Unethical act: Geojit Securities Ltd has accused kotak securities stock

broking firm of hacking into its account to steal critical business

information and blocking information access.

Some investors have bad experience with accounts opening & they

complain that it takes a long time for opening accounts.

Value Proposition of Kotak Securities

Kotak Securities have a definite policy on brokerage, and they have

different slabs for different clients based on their turnover. You can

always choose your brokerage based on your style and quantum of

trading.

High Quality of software (KEAT)

K.E.A.T is a special software that Koataksecurities.com provides its

customers using which they can view live market rates of scrip’s on

both the NSE and BSE, create a watch list and simultaneously place

orders, view order reports, research companies etc. It is a complete

online trading terminal.

Mobile trading

The facility is exclusively designed to give you instant access to the

stock market through mobile phone.

Phone Trading – Call and Trade

Call & Trade is a service offered by Kotak Securities for its customers,

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which provides customers with a facility to trade over the phone. Kotak

Securities provides you a toll free number that you can call from

anywhere in India.

Kotak Securities offers Variety of account types for different investors

Kotak Auto Invest

Kotak flat

Kotak Gateway

Kotak privilege circle

Kotak High Trader

Kotak free way

RESEARCH

METHODOLOGY

3

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RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research

problem. The logic behind the method used, in context of research, is

explained; so that research results are capable of being evaluated either by

the researcher himself or by others. People undertake research in order to

find things in a systematic way, thereby increasing their knowledge. The

research project involves an explanation of the methods to collect

information, argue why the results are meaningful and explain any limitations

that are associated with them.

Research defined

Research in common parlance refers to a search for knowledge. One can

also define research as a scientific and a systematic search for pertinent

information on specific topic.

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“A careful investigation (or) inquiry especially through search for new facts in

any branch of knowledge ”.

-Oxford advance learner dictionary

Redman and Mory defined research as –“a systematized effort to gain new

knowledge.

Title of the study

“A comperitive study of Indiabulls with its competitors”

Duration of the project

The Duration of the project of the study has 40 days period.

Objective of study

• To make a comparative study of competitors of Indiabulls.

• To study Indiabulls products and services.

• To find out potential investors for Indiabulls and present attitude of

investors regarding share market.

Type of research

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A research design is considered as the framework or plan for a study that

guides as well as helps the data collection and analysis of data. The research

design may be exploratory, descriptive and experimental for the present

study.

Exploratory research studies are also termed as formulative

research studies. The major emphasis in such studies is the discovery

of ideas and insights. The main objective of exploratory research is to

fine-tune the broad problem (here, increasing turnover) into specific.

Descriptive research studies are those studies, which are concerned

with describing the characteristics of a particular individual, or a group.

A sample was taken and statements about the population on the basis

of the samples were made. Descriptive research aims at drawing

inferences and making predictions (here, the number of prospective

Customers who may buy Nestle products).

The descriptive research design is adopted for this project.

Sample size

The study sample constitutes 100 respondents constituting in the

research area.

Method of selecting sample

Most of the data collected by the researcher is primary data through

questionnaire, where the researcher and the respondent operate face – to –

face.

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Research Instrument

The researcher has used a structured questionnaire as a research

instrument tool which consists of open ended questions, multiple choice and

dichotomous questions in order to get data. Thus, Questionnaire is the data

collection instrument used in the study. All the questions in the questionnaire

are organized in such a way that elicit all the relevant information that is

needed for the study

Scope of the study

This study is limited to Jaipur city.

This study emphasizes on the following aspects-

To identify the preferences of different investors in investment

instrument.

This study is helpful to that organisation for conducting further

research.

It is helpful to identify the customers interest level of investment in

share market.

This study is helpful to the organization for identifying the area of

dissatisfaction of their clients.

To identify the competitiveness of organization and its competitors.

This study helps to make a managerial decision to the company

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Limitations of the study

Through the present study aims to achieve the above-mentioned objective in

full earnest and accuracy, it may be hampered due to certain limitations.

Some of the limitations of this study may be summarized as follows:

Questionnaires are not filled properly by the respondents.

Respondents are not interested in filling the questionnaire.

Investors are not interested sharing their investing pattern.

Sample size is limited.

The selection of customers to cover the various strata of the society is

tedious and time consuming.

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The data collected were totally depending on the respondents’ view,

which could be bias in nature.

Getting accurate responses from the respondents due to their inherent

problem is difficult .They may be partial or refuse to cooperate.

Since the study is wide in nature and the matters regarding the study

could not be analyzed and taken for consideration.The sample size is

small; it may not actually represent the whole population.

FACTS

AND

FINDINGS

4

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Number of Branches of Competitors compared with Indiabulls securities

0

100

200

300

400

500

600

700

no

. of

bra

nc

he

s

FINDING AND ANALYSIS

Number of Branches of Competitors compared with Indiabulls securities

Brokerage houses No. of branches

INDIABULLS 640

ICICI DIRECT 441

INDIAINFOLINE 605

SHAREKHAN 583

KARVY 581

MOTILAL OSWAL 80

KOTAK 330

84

Number of Branches of Competitors compared with Indiabulls securities

0

100

200

300

400

500

600

700

no

. of

bra

nc

he

s

Number of Customers of competitors compared with Indiabulls

0

100,000

200,000

300,000

400,000

500,000

600,000

no

. of

co

mp

eti

tors

NUMBER OF CUSTOMERS OF COMPETITORS COMPARED WITH

INDIABULLS

Brokerage houses No. of customer

INDIABULLS 450,000

ICICI DIRECT 210,000

INDIAINFOLINE 500,000

SHAREKHAN 260,000

MOTILAL OSWAL 200,000

KOTAK 400,00

85

Number of Customers of competitors compared with Indiabulls

0

100,000

200,000

300,000

400,000

500,000

600,000

no

. of

co

mp

eti

tors

COMPARISON OF COST- PHYSICAL VS DEMAT OF SHARES

TYPE OF ACCOUNT PHYSICAL DEMAT

Brokerage 0.75-1.25% 0.25-0.75%

Stamp Duty on transfer 0.5% of MV NIL

Postal Actual NIL

Transfer Deeds INR 0.35/TD NIL

Follow Ups Actual NIL

Settlement Changes NIL 0.05% of Transaction

Value

Custody Changes (Vault Cost) 0.02% of Share Value

Bad Delivery Not Quantifiable NIL

Loss/Theft/Mutilation Actual NIL

Non Receipt Of Bonus/right

Shares

Actual NIL

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No bad delivery of shares.

No loss of share certificate in postal transit.

No courier\postal charges incurred in transferring them or changing

your address etc.

No requirement of stamp duty on transfer of shares. (This is 0.5% of

value in case of physical)

Shares are transferred in the name of purchaser within a day of

completion of settlement as against 45-60 days in physical mode.

Much faster payment on sale of shares.

No scope for theft\forgery damage of share certificates.

Minimum handling of paper.

Corporate Offer

Sno. Parameters Competitors offer Indiabulls Offer

1 Facilities Only offline or online or

both

Both offline and

online

2 A/c Opening charges Rs 0 to Rs.750

(initially)

Rs 700(lifetime)

3 Annual Maintenance

charges

Rs 190 to Rs. 500 Nil

4Brokerage-Intraday

0.15% to 0.02% 0.10(negotiable)

5Delivery

0.75% to 0.20% 0.50(negotiable)

6 Min Charges Rs 10 to Rs 25 1 Paisa

7 Margin-Intraday Generally 6 to 10 times 8 times

8 Margin on Delivery Most of the competitors

do not provide

4 times

9 Automised margin lending Do not have Provided

87

facility

10 Equity analysis Do not have Equity Analysis of

400+ companies

updated daily

11 Technical charts Do not provide Provided on trade

terminal

12 Transparency Not so transparent Everything

provided online

Online trading through Power Indiabulls is extremely fast and

convenient.

User can open charts for any number of scrips.

Comparison of different Depository Participants

SNO. Name Of DP Demat

Charges

initial

Account

Maintenance

(AMC)

Charges for

Trading

Account

1 ICICI

DIRECT.COM

Rs. 750 Rs. 500/- PA Nil

2 IL&FS Rs. 270 Rs. 250/- PA Rs. 670

3 UTI SECURITIES Rs. 375 Rs. 240/- PA Nil

4 KOTAK

SECURITIES

Rs. 360 Rs. 30/- Per

Month

Nil

5 SHAREKHAN Nil Rs. 300/- PA Rs. 750

6 INDIABULLS

SECURITIES LTD.

Rs. 200 NIL Rs. 500

7 ANAGRAM Rs. 50 Rs. 300/- PA Rs. 300

(AMC)

8 INDIAINFOLINE Nil Rs. 250/-PA Rs. 425

88

9 ALANKIT

ASSIGNMENT

Rs.400 Rs. 260/-PA Rs. 50

10 MOTILAL OSWAL Nil Nil Rs. 500

11 ANANDRATHI Nil Rs. 330/- PA Rs. 200

12 FORTIS Rs. 350 Rs. 190/- PA Nil

13 HEM SECURITIES Rs. 100 Rs.250/- PA Nil

Demat charges per year taken by the entire depository participants are

almost similar.

Local Brokers’ charges are the lowest among these. Many of them are

free.

Many depository participants are opening accounts in free but they are

charging annual maintenance (AMC).

A very few are not charging account maintenance (AMC) viz.

Indiabulls and Motilal Oswal.

Comparison of brokerage charges by different Depository Participants

SNO. Name Of DP Brokerage

Charges on

Delivery

Brokerage Charges on

Intraday settlement

1 ICICI DIRECT.COM 0.75-0.25% 0.10-0.08%

2 IL&FS 0.75% 0.25%

3 UTI SECURITIES 0.3% 0.08%

4 KOTAK SECURITIES 0.65-0.20% 0.07-0.03%

5 SHAREKHAN 0.35-0.20% 0.08-0.06%

6 INDIABULLS SECURITIES LTD. 0.50-0.20% 0.10-0.03%

89

7 ANAGRAM 0.30-0.25% 0.03%

8 INDIAINFOLINE 0.25-0.20% 0.05-0.04%

9 ALANKIT ASSIGNMENT 0.50-0.30% 0.05-0.03%

10 MOTILAL OSWAL 0 .40-0.30% 0.075%

11 ANANDRATHI 0.30-0.25% 0.08%

12 Religare 0.30-0.20% 0.03-0.02%

13 HEM SECURITIES 0.25-0.10% 0.03%

Brokerage charges of almost all the broking firms are negotiable

according to the potential of the customer. But brokerage charged by

icicidirect.com is not negotiable (according to slab-rate).

In Alankit and Fortis brokerage is negotiable up to any level.

Indiabulls Securities Ltd. is encouraging the investors to trade more by

charging less brokerage as compared to other competitors.

Comparison of margin limits given by different Depository Participants

S.NO. Name Of DP Margin on Delivery Margin on Intraday

settlement

1 ICICI DIRECT.COM Nil 4t – 20t

2 IL&FS Nil Depends on volume

3 UTI SECURITIES 4t 10t

4 KOTAK SECURITIES 4t 6t

5 SHAREKHAN Depends on volume Depends on volume

6 INDIABULLS SECURITIES

LTD.

4t 8t – 15t

90

7 ANAGRAM Nil 5t

8 INDIAINFOLINE 4t 6t – 10t

9 ALANKIT ASSIGNMENT Nil 10t

10 MOTILAL OSWAL Nil 5t

11 ANANDRATHI Negotiable 4t

12 FORTIS 4t – 5t 8t

13 HEM SECURITIES Nil 10t

Hem Securities requires Rs. 25000 as a minimum balance in trading

account. One cannot trade through Hem Securities without having Rs.

25000 minimum.

In UTI Securities it is Rs. 10000 and in Indiainfoline it is Rs. 5000.

And in Indiabulls Securities it is Rs. 500.

Most of the broking firms do not provide margin on delivery, on the

other hand some are allowing their customer to trade up to any limit,

which is very risky.

91

ANALYSIS

AND

INTERPRETATION

5

92

The process by which sense and meaning are made of the data gathered in

qualitative research, and by which the emergent knowledge is applied to

clients' problems. This data often takes the form of records of group

discussions and interviews, but is not limited to this. Through processes of

revisiting and immersion in the data, and through complex activities of

structuring, re-framing or otherwise exploring it, the researcher looks for

patterns and insights relevant to the key research issues and uses these to

address the client's brief.

Q1. OCCUPATION CLASS-

Class No. Of. Respondents

Business class 60

Service class 10

Professionals 30

93

age wise classification

0

5

10

15

20

25

30

35

40

45

Below 35 35-45 46-55 Above55

Age range

% o

f re

sp

on

de

nts

Percentage ofRespondents (%)

occupation wise classification

0

10

20

30

40

50

60

70

Business class Service class Professionals

class

% o

f re

sp

on

de

nts

Percentage ofrespondents (%)

Q2. AGE-WISE DISTRIBUTION

Age No. of Respondents

Below 35 42

35-45 24

46-55 20

Above55 14

94

income wise classification

05

10152025303540

Below10000

Rs.10000to Rs.20000

Rs. 20001to Rs.30000

above Rs.30000

income range

% o

f re

sp

on

de

nts

Percentage ofRespondents (%)

Interpretation -This bar chart depicts the percentage of the respondents

belonging to different age groups like 21 no. (42%) of persons belongs to the

age group of below 35 years. This depicts that the maximum no. of investors

belongs to the age group of below 35 years.

Q3. INCOME RANGE-

Monthly Income No. of Respondents

Below 10000 18

Rs.10000 to Rs. 20000 22

Rs. 20001 to Rs. 30000 26

Above Rs. 30000 34

95

PERCENTAGE OF RESPONDENTS (%)

0

10

20

30

40

0-20%

20-40%

40-60%

Above60%

% of investment

% o

f re

spo

nd

ents

PERCENTAGEOFRESPONDENTS (%)

Interpretation - This bar chart depicts the no. of the respondents belonging

to different income groups like 18% of persons belongs to the income level of

below 10000 rupees per month. Maximum no. of investors are those who lies

in the income group of above 30000.

Q4. HOW MUCH PORTION OF YOUR SAVING DO YOU INVEST/WOULD INVEST IN SHARE MARKET-

% OF INVESTMENT NO. OF RESPONDENTS

0-20% 30

20-40% 32

40-60% 26

Above 60% 12

96

PERCENTAGE OF RESPONDENTS (%)

0

5

10

15

20

25

30

35

40

1 2 3 4

experience in year

% o

f re

sp

od

en

t

PERCENTAGE OFRESPONDENTS (%)

PERCENTAGE OF RESPONDENTS (%)

0

10

20

30

40

0-20%

20-40%

40-60%

Above60%

% of investment

% o

f re

spo

nd

ents

PERCENTAGEOFRESPONDENTS (%)

Interpretation - Majority of the respondents say that they would like to invest in

share market up to 20% to 40% of their savings.

Q5.EXPERIENCE IN SHARE TRADE

EXPERIENCE (IN

YEARS)

NO. OF RESPONDENTS

Less than 2 38

2-3 28

3-4 22

Above 4 12

97

Percentage of Respondents (%)

0

5

10

15

20

25

30

35

% o

f re

sp

on

de

nts

Percentage ofRespondents (%)

Interpretation -This bar chart depicts the no. of the respondents having the

experience of online trading .Like 19 person out of 50 are having the

experience of less than 2 years. This data shows high surge in investment

trend in equity market in recent 2 years.

6. TAKING THE FACTORS LIKE SECURITY, RATE OF RETURNS AND

TIME IN CONSIDERATION WHICH AMONG THE FOLLOWING YOU RATE

AS PER THE BEST OPTION-

Avenues Respondents

bank FD’s 14

small saving schemes 6

bonds 24

equities/derivatives 32

mutual funds 24

98

Percentage of Respondents (%)

0

5

10

15

20

25

30

35

% o

f re

sp

on

de

nts

Percentage ofRespondents (%)

Interpretation - Majority of the respondents rated equities / derivatives as the

best option among the factors like security, rate of returns and time

consideration.

Q7.INVESTOR’S PERCEPTION ABOUT SHARE MARKET

INVESTOR’S VIEWS NO. OF RESPONDENT

100 % risk 15

High risk less return 20

Low risk , high return 21

100 % return 44

100%risk high risk less return

low risk, high return

100%return0

5

10

15

20

25

30

35

40

45

Returns

99

Interpretation -This bar chart depicts the percentage of the respondents

having different opinion about equity market. Like 14% are having the opinion

that in equity market there is high risk and less return. Maximum no. of

persons are having the perception that the equity market gives the 100%

return on investment.

Q8. IF YOUR BASE TO CHOOSE THE SCRIP IS MARKET CALLS/

MARKET TIPS, AND THEN WHAT ARE THE SOURCES YOU TRUST

UPON MOST-

SOURCES NO. OF RESPONDENT

Market tips by securities 8

T.V channels 46

stock brokers 46

100

information sources

05

101520253035404550

Market tips bysecurities

T.V channels stock brokers

sources

% o

f re

sp

on

de

nts

PERCENTAGE (%)

Interpretation - Majority of the respondents say that if their base is to

choose the scrip is market calls/market tips, then the sources they will trust

upon are share brokers, T.V. channels.

Q9. UP TO WHAT PERCENT MARKET TIPS ARE CORRECT

ACCORDING TO YOU -

INVESTORS VIEW NO. OF RESPONDENT

30% or less 68

30%-50% 10

50%-60% 10

More than 60% 12

101

PERCENTAGE (%)

0

10

20

30

40

50

60

70

80

30% orless

30%-50% 50%-60% More than60%

investors view

% o

f re

sp

od

en

t

PERCENTAGE (%)

Interpretation - Majority of the respondents say that 30% or less percent of

market tips are correct according to them.

10. WITH WHICH BROKERAGE HOUSES ARE YOU ENGAGED-

Brokerage house NO. OF RESPONDENT

Indiabulls 25

India info line 20

ICICI direct 20

Karvy 18

Motilal oswal 8

Sharekhan 9

102

Indiabulls India info line ICICI direct Karvy Motilal oswal Sharekhan

0

5

10

15

20

25

Interpretation -22 % of the respondents out of 50 say that they are engaged with

indiabulls sec. ltd., and minimum 2% with karvy.

Q11. WHY YOU HAVE CHOSEN ABOVE BROKING HOUSE -

Criteria No. Of respondent

Low brokerage fess 66

Services 18

Fast query solution 16

103

Percentage (%)

0

10

20

30

40

50

60

70

Low brokeragefess

Services Fast querysolution

Criteria

% o

f re

sp

on

de

nt

Percentage (%)

Interpretation - 66 % of the respondents out of 50 say that they are

engaged with their brokerage houses because of the low brokerage

charges.

Q12. HOW WILL YOU RANKED YOUR BROKERAGE HOUSE –

Investors view No. Of respondent

Excellent 30

Very good 20

Good 26

Satisfactory 24

104

Are you satisfied with services provided by your brokerage houses

0

10

20

30

40

50

60

70

YES NO

How will you ranked your brokerage house

05

101520253035

Excell

ent

Very g

ood

Good

Satisf

actor

y

investors view

% o

f re

sp

on

de

nts

Percentage (%)

Interpretation – 30 % of the respondents out of 50 say that brokerage

house with whom they are engaged are excellent and minimum 20%

investors says that their brokerage house very good.

Q13. ARE YOU SATISFIED WITH SERVICES PROVIDED BY YOUR BROKERAGE HOUSES -

Investors view No. Of respondent

YES 60

NO 40

105

Are you satisfied with services provided by your brokerage houses

0

10

20

30

40

50

60

70

YES NO

Interpretation – 60% of the respondents out of 50 say that they are satisfied with

services provided by their brokerage houses.

6106

SWOT ANALYSIS

OF

ORGANIZATION

INTRODUCTION OF SWOT ANALYSIS

Introduction

 It has always been important for a business to know and understand how it

fits in and interacts with the surrounding environment on both an internal

(office/factory/shop environment) and external view (how your business

operates with the outside world).

107

 Researching your environment will benefit you and/or your management

team by putting you in a position to develop a strategy for both the long and

short term.

 

Analyzing the Business

The most influential way of doing this is to perform a SWOT analysis of the

company. It is a common phrase used to abbreviate Strengths, Weaknesses,

Opportunities and Threats.

Each term is a heading for a separate analysis of the business but they can

be related as seen below:

Strengths provide an insight to your business Opportunities &

Weaknesses in your business can cause immediate Threats

A guideline of how to carry out the analysis is explained in the next section,

but it is important to know that the SWOT analysis is only based upon

information that is known by the assessors (you), and is seen as perhaps the

more basic approach of analyzing a business’ position: but SWOT is still a

powerful tool when looking for immediate benefits.

 

SWOT ANALYSIS OF INDIABULLS

108

STRENGTHS

Integrated technology platform: - Since the launch of their website,

www.indiabulls.com their online trading platform, they have invested in

building a technology platform. They have also developed software

called “power Indiabulls”. Their trader terminal is an application which

allows customers to trade on both the BSE and the NSE, has features

like live intra-day tick by tick charts, historical charts, price alerts and

other features. The features allow them to seamlessly integrate across

delivery channels, online or offline through branches or telephone.

109

Pan India distribution network: - They have 640 branches across

India. These branches help in customer acquisition as well as

customer service. Their distribution network is well spread to capture

the target audience and cater to the needs of their potential

customers.

Relationship manager facility: - This is one of the unique services

that Indiabulls offer’s its customers. Every customer is provided with a

relationship manager, where in the customers can contact these

managers at anytime of the day to get information on the market or get

their queries clarified.

Growth rate: - The Company is growing at a very rapid rate, from 25

branches in the year 2003 it has grown to 650 branches in the

beginning of 2007. Not only has it seen a fast growth rate in the

number of branches but also it has grown in the number of clients and

the employee strength. They have a customer base of more than

450,000 and over 4500 relationship managers. Indiabulls has been

rated as the “Fastest Growing Large Cap Company” in India in a report

by Business Today magazine in April, 2006.

Power Indiabulls has developed into brands: - Indiabulls.com and

power Indiabulls which is their software are well known brands

amongst retail investors across India. In all the cities that they have

expanded into, they have been able to leverage upon brand

awareness and have established a customer base.

Strong sales and marketing teams that deliver market leading

product innovation: - their relationship manager channel offers a

single point contact to all their retail customers. These managers offer

personalized services to their customers and help to build strong and

continuing relationships with them. The marketing associates help the

company in client acquisition at minimal cost and they also help the

company and its subsidiaries in increasing their penetration into

smaller towns and cities.

Strong banking relations and credit ratings: - Indiabulls has

banking relation with some of the major banking institutions in the

110

country such as HDFC Bank, ICICI Bank, Standard Chartered Bank,

etc, for easy mobilization of funds of the customers.

Strong market presence and increased market share: - Their

growing client base and market share have increased their market

presence and brand recognition has enhanced their profitability. Their

brand and profitability allows them to recruit good and efficient

employees, compensate them attractively and provides the flexibility

for them to invest in the business and technology systems these

attributes in turn has a positive effect on the growth of the company.

Diversified business model: -Our Company and our subsidiaries

offer various financial services and products ranging from equity, F &

O and wholesale debt, insurance and IPO distribution, depository

services to cater to the specific needs of the retail and institutional

investors thus providing all these services in a single platform. Thus

Indiabulls is not dependent on any single of its subsidiary for survival

and failure of any one subsidiary will not have an adverse effect on the

company as a whole.

WEAKNESSES

Lack of a banking arm: - Indiabulls does not have a banking arm of

its own which otherwise would have helped the company to a large

extent. Whereas a few of its competitors like HDFC securities, ICICI

securities, Kotak securities, etc have their own banking arms which

make the transactions easier and simpler.

111

Loss of relationship managers leads to loss of clients: - Their

business is dependent on the team of relationship managers who

directly manage client relationships. Any events that harm these

relationships including the loss of their relationship managers may

lead to the loss of client.

OPPORTUNITIES

Changing demographics with higher disposable income: - India is

one of the fastest growing economies in the world. It has a large and

rapidly growing middle class of 300 million people with increasing

levels of discretionary income available for consumption and

investment purposes. The options they have for investments are fixed

deposits, post office deposits etc,. This gives them a limited interest

rate on their investment; where as the stock market provides a good

scope for making good returns. The evolution in India’s demographic

setup with a median age of 24 years and higher consumption

expenditure is expected to have a virtuous cycle effect by improving

the economic growth and per capita income which would result in

higher savings and investments.

Rapid penetration of internet and computers: -Technology is vastly

used in stock market trading. Now, with the use of the computers and

internet the stock market trading has become fast. The traders can

place orders through the internet and execute them. This saves the

time of the investors, who earlier had to make calls to their brokers in

order to trade. These people are willing to use advanced

communication tools, such as computers and telephones, and want to

take charge of their personal investment decisions. The use of

technology is influencing more people to invest in the stock market.

112

Market size and Characteristics: -India is a large and growing

economy with rapidly expanding financial services sector. The sector

has witnessed a transformation over the last decade as a result of the

economic liberalization which started in 1991. India is the world’s 12th

largest economy in dollar terms and the 4th largest in PPP terms. The

projected growth rate of real GDP is greater than 9% per annum with

higher growth in many sectors such as financial services. Indian

financial sector presents a huge retail finance opportunity. As a result

of falling interest rates, bank deposits, other traditional investment

opportunities are losing their attraction. Thus, Indian investors are

getting attracted towards alternate investments such as the equity

markets and are looking for newer financial products.

THREATS

Economic slowdown: - Terrorist attacks and other acts of violence or

war, including those involving India or other countries could adversely

affect national economy or world economy as a whole. Such act may

also result in a loss of business confidence. Travel restrictions as a

result of such incidents may have adverse affect on the ability to

operate effectively. This will result in an economic slowdown

Political instability in the country: - The government of India has

pursued the policy of economic liberalization, including relaxing

restriction on the private sector. With the change in government, there

is no assurance that these liberalization polices will continue in the

future. Any political instability could delay the economic reforms and

could have adverse effect on the market.

Volatile movement in market indices: - The Indian stock market is

very volatile in nature and is capable of shedding or gaining several

points in a single day. Unless and until the market stabilizes the

investors will be very hesitant to invest in the market. Stock market

113

falls will have a cascading effect on the investors and economy of the

country.

Competition: - Indiabulls faces significant competition from

companies seeking to attract client’s financial assets, including

traditional and online brokerage firms, mutual fund companies, etc,

which are having a wide presence and strong brand name. As the

company enters new markets their bound to face additional

competition from those who have longer operating history have grater

retail and brand presence than Indiabulls. If the company is unable to

manage its business it might impede their competitive position and

their profitability.

Substitutes: - Various alternative forms of investment including fixed

deposits with banks and post offices etc act as substitutes to retail

broking products and services. The stock market is very unpredictable

with fluctuations; this may prompt many people to invest in fixed

deposits, posy office deposits, etc in order to avoid risk.

Low product differentiation: - The retail broking services provided by

the various companies are homogeneous with very low product

differentiation. This does not allow the company to freely fix their

prices due to the threat of competition, which in turn reduces their

profit.

7114

CONCLUSION

CONCLUSION

This conclusion relates with not what is written in the report rather, it goes

beyond that, Indiabulls Securities Ltd is a company which is having maximum

number of branches and largest client base but stands second in term of

brokerage generation, this shows that there is further scope for its growth.

Since formation of Indiabulls in year 2000 Indiabulls have adopted strategy of

downsizing twice in year 2002, 2004 and surprisingly it is under process of

115

doing it again in year 2007. This cutting of cost center is not done directly;

employees are given high target of sales and those employees who are

uncomfortable with that leave the organization. Apart from this it has been

found that Indiabulls is having high labor turnover ratio.

The above given situation brings us to the conclusion that Indiabulls is

incurring high salary expenses with high labor turnover, as explained in

accounting a high turnover will always leads to high cost. This finally led us to

believe that Indiabulls can become a better company if it handles the above

mentioned issue efficiently.

There is another problem that exists is, lack of good guidance to clients so

that they can make better decision while making investments. The level of

this problem is not serious & neither customer are aware of it, customer are

given regular updates of stock market on daily basis they are quiet satisfied

with it. Thus customer satisfaction can enhance if, more attention is given to

technical analysis of stock which will help Relation Managers to deliver

calculated information to their customer.

The head office of Indiabulls is in Gurgoa (Haryana), on daily basis it sends

tips to all its branches through mail, which in turn is given to customer, this

transfer of data takes place only ones when market opens and for the rest of

the day Relation Manager has to depend on their own. Thus if this flow of

information is enhance customer as well as Relation Manager will reap more

benefits. Hiring of technical analyst for branch will be too costly so the best

way will be to improve the flow of information.

8116

RECOMMENDATION

AND

SUGGESTION

RECOMMENDATION AND SUGGESTION

These are following problems that were observed while staying in Indiabulls

which also includes recommendations.

1. As per NSDL guideline clients have to change their password every 15 th day.

It becomes very difficult for a client to change and remember a new password

after every 15 days. It increases the work of Relationship Manager also as he

has to tell the clients their new password every time.

117

Recommendation

Since this guideline of changing the password by NSDL is not mandatory to

follow. Other brokerage houses like ICICI DIRECT, HDFC, Share Khan, UTI

etc. are not following this guideline. It is advisable for Indiabulls to reconsider

this rule once again.

It may be good for the company if they modify this guideline in terms of

increasing the time limit from 15 days to 45-60 days.

Another thing that can be done is software could be made in such a way that

the client can directly send request of renewing password to the main server.

The main server will automatically generate new password and send it to

client’s mail ID. For this the client has to make sure that his/her mail Id is

updated regularly.

2. Both Screen Based and Power Indiabulls software do not show purchased

price and current market price of underlying on same screen at a time. To

see original purchased price of underlying, a client has to check from his/her

transaction history. That’s way system does not show percentage gain/loss of

client on screen.

Recommendation

It would be easy for the client to get this advantage on his/her screen.

Consider this recommendation while updating the software

3. Relationship manager is the person who takes care of client’s account. Due to

frequent changes in the Relationship manager a client is in dilemma that to

whom he/she is supposed to contact. In general when the client calls, he/she is

not aware about his/her Relationship manager. This can be due to the high

attrition rate.

Recommendation

Client should be informed through Phone, E-mail by the new Relationship

manager personally. Confirmation should be sent from the H.Q to the client

about his/her new Relationship Manager.

118

4. Margin Product is the facility provided by Indiabulls through which clients

can utilize fund beyond their capacity of cash margin + stock margin on the

basis of predetermined rate of interest. Most of the clients are not aware

about this facility

Recommendation

Explain the clients through a simple example of how margin product works. A

format of the same can be prepared and send through E-mail to every client.

5. It is observed that majority of clients who have done trade in Futures and

Option Market, are in loss. Due to the lack of proper strategies most of the

clients losing their money in this segment.

Recommendation

Prepare some of the presentations in series starting from primary level to

advanced level on Futures and Option Market and send it to every client who

has signed Futures and Option agreement in time to time.

6. Most of the Brokerage Houses are using advertising strategy for promoting

their products. This is in form of print ads, TV commercials, holding seminars,

Web advertising etc. For example Share Khan advertises its product by

placing its advertisement on different other web sites. Some other companies

like An and Rather, Stock Holding Corporation use seminars as a means to

promote their product

Recommendation

It would be an advantage if Indiabulls follows some kind of advertising

strategy. This can be done through,

Print Media.

Banners and Hoardings.

Web advertising (Placing ads into other popular web sites).

119

By conducting seminars. For example, people can be called in the

office at weekends, conducting presentations.

SMS promotional schemes. Etc

7. Indiabulls does not provide IPO subscription facility through its online

software. Many clients are facing this problem as they have to go through

paper work subscription method. Whereas all other competitors are providing

this facility online

Recommendation

Since most of the companies are coming with their IPOs/FPOs, it would be

beneficial for Indiabulls customers if they are provided with this facility online.

Consider this recommendation while updating the online software in future.

SUGGESTIONS

Aggressive Promotions: Indiabulls Securities compared to its competitors

concentrates less on advertising and promotions, especially through

electronic media. Its competitors like Sharekhan, ICICI and Kotak are

advertising aggressively through media. Hence Indiabulls should concentrate

more on advertising through print and electronic media.

120

Tapping Rural Market: The Indian rural investors market are relatively

untapped, with only small and private firms meeting the current demand.

Indiabulls Securities can gain the “First Mover Advantage” over its

competitors, especially in areas were commercial crops are grown and the

standard of living is high. These people do not have much option to invest

other than banks and post offices.

Reduce the initial account opening charges: The charge for opening a

trading and demat account in Indiabulls securities is high compared to its

competitors. This influences the potential investors to open their account with

another company which provides the same at lower prices. Thus it acts as a

mental barrier for potential customers, who tend to overlook all other benefits

offered by Indiabulls. Hence Indiabulls should consider reducing their account

opening charges.

Bring in more product differentiation: Product differentiation here means

that Indiabulls securities should bring in more customized services and more

value proposition for large investors. It can reduce the brokerage charges for

large investors which will encourage them to invest more in the company.

Invest more on R&D: Indiabulls should concentrate on its research and

development since most of its competitors are investing on R&D. This will

help the company to read the market better and will also be in a better

position to understand the needs of the customers. This can be extremely

beneficial for Indiabulls in the long run.

BIBLIOGRAPHY

Books:

• Kotler Philip, Keller Kevin L., Koshy A., Jha Mithileshwar “Marketing

Management” 12e, Pearson Education.

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• Kothari C.R., Research Methodology Method &Techniques, Fourth

Edition, Wishwa Prakashan, New Delhi.

• Ramaswamy & Namakumari : MARKETING MANAGEMENT –MACMILLAN

NEW DELHI.

• Subhash C. Mehta: MARKETING ENVIRONMENT. CONCEPT AND

CASES, TATA MCGRAW HILL, NEW DEHLI.

Website

http://www.indiabulls.com/securities/

http://www.indiainfoline.com

http://www. kotaksecurities.com

http://www. karvy.com

http://www. icicidirect.com

http://www. sharekhan.com

http://www.motilaloswal.com

http://www.dnb.co.in/EquityBroking

https://www.arthamoney.com/Articles/

http:/www.wikipedia.org

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APPENDICES

QUESTIONNAIRE

I am Rohit Jain A student of MBA 4th sem of AIMS Mansarover,Jaipur.I am

conducting this research as part of MBA curriculum.The information provided

by you will kept confidential.

Name : ________________________________________________

8

123

Address: _______________________________________________

_______________________________________________

1. YOUR OCCUPATION CLASS-

(A) Business class (B) Service class (C) Professionals

2.AGE GROUP-

(A) Below 35 (B) 35-45 (C) 46-55 (D) Above 55

3.YOUR INCOME RANGE-

(A) Below 1000 (B) Rs.10000 to Rs. 20000

(C) Rs. 20001 to Rs. 30000 (D) Above Rs. 30000

4. HOW MUCH PORTION OF YOUR SAVING DO YOU INVEST/WOULD INVEST IN SHARE MARKET

(A) 0-20% (B) 20-40% (C) 40-60% (D) Above 60%

5. EXPERIENCE IN SHARE TRADE

(A) Less than 2 (B) 2-3 (C) 3-4 (D) Above 4

6. TAKING THE FACTORS LIKE SECURITY, RATE OF RETURNS AND TIME IN CONSIDERATION WHICH AMONG THE FOLLOWING YOU RATE AS PER THE BEST OPTION-

(A) Bank FD’s (B) Small saving schemes

(C) Bonds (D) Equities/derivatives

(E) Mutual fund

7. INVESTOR’S PERCEPTION ABOUT SHARE MARKET

(A) 100% risk (B) High risk less return

(C) Low risks, high return (D) 100% return

8. IF YOUR BASE TO CHOOSE THE SCRIP IS MARKET CALLS/ MARKET TIPS, AND THEN WHAT ARE THE SOURCES YOU TRUST UPON MOST -

(A) Market tips by securities (B) T.V. Channels

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(C) Stock broker

9. UP TO WHAT PERCENT MARKET TIPS ARE CORRECT ACCORDING

TO YOU –

(A) 30% or less (B) 30%-50% (C) 50%-60 (D) More than 60%

10. WITH WHICH BROKERAGE HOUSES ARE YOU ENGAGED-

(A) Indiabulls (B) India infoline (C) Icici direct (D) Karvy

(E) Motilal oswal (F) Sharekhan

11 WHY YOU HAVE CHOSEN ABOVE BROKING HOUSE –

(A) Low brokerage charges (B) Services

(C) Fast query solution

12. HOW WILL YOU RANKED YOUR BROKERAGE HOUSE -

(A) Excellent (B) Very good (C) Good (D) Satisfactory

13. ARE YOU SATISFIED WITH SERVICES PROVIDED BY YOUR BROKERAGE HOUSES -

(A) Yes (B) No

14. WHAT PROBLEM DO YOU FACE WITH BROKERAGE FIRM-

__________________________________________________

__________________________________________________

Thank you

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126

Sr. no. Q.1 Q.2 Q.3 Q.4 Q.5 Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.131 A A D B A E D C A F A A A2 C A D B B C C A A A A C A3 A A D A A B D C C B A C A4 C A B D B C C B D C C A A5 A D D C A D D B A C C C A6 C A A B A B B C C F A C A7 C C D B B C A C A B A A A8 B D D D B A D C A D B B B9 A A A C A E B B A E A B B

10 C B D A A A B B C B A A A11 A C D A A C D A A F A B B12 A A D C B D D C D C A C A13 A A B D C C B B A F B C A14 A B D B C E D C A C A A A15 C C C B B D D B C A A C A16 A A B C A D D A A D A B B17 A A D B B D B C B D B B B18 C C C D C C D B A B C A A19 A C A A B C A B C A A C A20 C B D A A A D C D D A D B21 A C C A C E D C A D B A A22 B B D A A A C B D F A B B23 A D C B A C D C C B B A A24 C A B D B D C B A E C C A25 A A D C A D D C A C C D B26 A A A D A A B C B A A B B27 A A C A C C C B A D A A A28 C C D B A D D C A B A D B29 A B D C C E C B A B A B B30 A C C C B C D C C A C A A31 C B B B A E D B A D B C A32 A D D C A A D C A B A A A33 C C C B B E A B A C A C A34 B B D B C D A C A A A C A35 A A A A B A A B D D A D B36 C A A C C E B B A B B A A37 C C C B C B D C C F A B B38 A B C C B C C B B A A C A39 A A D C A D D C A B B D B40 C D D B B C D A A E A A A41 C A B A C C B B D C B C A42 A A D B C A C B C C A C A43 B D A A C E A C A E A A A44 C B B B A D D B A F C C A45 A C C B B A D C A A A C A46 B C D B A E B B B D C A A47 A A D B B C A B A A A D A48 C D D A A D D B A A A A A49 B A D B A D C A 0 F B C A50 A C C A C D A B A C A C A51 C A D C D E D C A A A A B52 C D B C A C C B A A A A A

Q.1 Q.2 Q.3 Q.4 Q.5 Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.13A 60 42 18 30 38 14 15 8 68 25 66 30 60B 10 24 22 32 28 6 20 46 10 20 18 20 40C 30 20 26 26 22 24 21 46 10 20 16 26 D 14 34 12 12 32 44 12 18 24 E 24 8 F 9

TOTAL 100 100 100 100 100 100 100 100 100 100 100 100 100

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