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RESEARCH REPORT

ON

INVESTORS PERCEPTION

ABOUT IPOS HAVING SAFETY NETS

SUBMITTED TO SUBMITTED BY

MR. PRIYANK BADOLA

FACULTY GUIDE

ASB NOIDA

DIVYANSHU KATARIA

AO106406 F-15

BBA

ASB NOIDA

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Acknowledgement

I would like to take this opportunity to thank the following people who

have directly or indirectly contributed towards the completion of this

dissertation and without their help; this in the present form would have

not been possible.

I would also like to thank my industry guide Mr. Abhishek Yadav for his

continous support & cooperation.

And last but not the least I express my heart felt gratitude to my

faculty guide Mr. Priyank Badola for his innovate ideas & continuous

guidance through out the intern ship.

DIVYANSHU KATARIA

BBA

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Certificate:

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INDEX

S.NO TOPIC

1 CHAPTER 1

a) Executive Summary 6-7

b) Objective of Study 8

c) Introduction

1) Company profile

2) Introduction to the topic

10-14

15

2 CHAPTER 2

a) Literature Review 17

3 CHAPTER 3

a) Investment Options Available For

Investors 21-23

4 CHAPTER 4

a) How You Can Invest in Shares in

Primary Market 25-26b) Initial Public Offer & Further Public

Offering 28-31

5 CHAPTER 5

a) Reason For This Research IPO

Failures 33-34

6 CHAPTER 6a) What is safety net 36

b) Safety Nets (how it works??) 37

c) Green Shoe Option 38

7 CHAPTER 7

RESEARCH

a) Research Methodology 40-41

8 CHAPTER 8a) Analysis And Interpretation 43-67

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b) Conclusion & Recommendations 69-73

c) Limitations 74

9 ANNEXURE

a) Sample Questionnaire 76-78

10 BIBLIOGRAPHY 80

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EXECUTIVE SUMMARY

During the past few months, the stock markets have scaled new

heights, surpassing the previously insurmountable barriers. Worseis the fact that corrections in the market have time and again

shaken the confidence of the retail investors. In order to bring

back the investors to the stock markets and regain their

confidence, a lot needs to be done by the issuer companies, their

merchant bankers, lead managers and book runners.

Safety net options are one of the measures taken by them. It is actually

a put option given to the investors, which gives the right but not the

obligation to the investors to sell the stock to issuer at a particular price

before a certain period.

The present research study has been undertaken in order to

deepen the understanding of the investors problems and to find

how safety nets are perceived by the investors?

The study is based on direct interviewing of a sample of 50 investors. A

cross sectional descriptive research was conducted to know the

perception about safety nets among the investors with the help

structured, questionnaire. Those having no voluntary savings for financial

investments or no ability to understand investments, like shares and

bonds, were excluded.

Findings of survey justify that as far as perception about the safety net

is concerned investors are not sound in perceiving it as a tool which shows

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great optimism about the prospects of stock and this is based on facts

like, there are as many as 54% of investors who are unaware of this tool

and additional 10% dont take it as a tool which helps investors.

So these 64% investors, if made aware of the benefits can really prove as

potential investors for companies which are yet to come up with their

IPOs.

OBJECTIVE OF THE STUDY

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The present research study has been undertaken in order to deepen the

understanding of the investors problems and needs and their perception

while investing money. During the last few months many new companies

have entered the market but worrisome part has been the fact that many

of their IPOS are trading below the issue price and this all has time and

again shaken the confidence of the investors. While many companies {such

as DLF} have shelved the plan of IPO, Some others have price

stabilization mechanism such as safety net attached to their IPOS.

So prime motive of this research was to find how safety nets are

perceived by the investors?

Sub objectives:

1. To find out the level of awareness about safety net among the

investors so that this research would make a substantial contribution

to those investors who are unaware about these safety nets.

2. To find out investors confidence level (whether investors feel

that they can make money in the stock market?)

3. To find out the investors preference while investing money.

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COMPANY PROFILE:

Sharekhan is one of the leading retail brokerage of CITI VENTURE

9

Chapter 1

INTRODUCTION


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CAPITAL which was running sucessfully since 1922 in the country. It is

the retail broking arm of the Mumbai-based SSKI Group, which has over

eight decades of experience in the stock broking business. Sharekhan

offers its customers a wide range of equity related services including

trade execution on BSE, NSE, Derivatives, depository services, online

trading, investment advice etc.

The firms online trading and investment site - www.sharekhan.com - was

launched on Feb 8, 2000. The site gives access to superior content and

transaction facility to retail customers across the country. Known for its

jargon-free, investor friendly language and high quality research, the site

has a registered base of over one lakh customers. The number of trading

members currently stands at over 4.5Lacs While online trading currently

accounts for just over 2 per cent of the daily trading in stocks in India,

Sharekhan alone accounts for 22 per cent of the volumes traded online.

The content-rich and research oriented portal has stood out among its

contemporaries because of its steadfast dedication to offering

customers best-of-breed technology and superior market information.

The objective has been to let customers make informed decisionsand to

simplify the process of investing in stocks.

On April 17, 2002 Sharekhan launched Speed Trade, a net-based

executable application that emulates the broker terminals along with host

of other information relevant to the Day Traders. This was for the first

time that a net-based trading station of this caliber was offered to the

traders. In the last six months SpeedTrade has become a standard for

the Day Trading community over the net.

THE NETWORK:

Sharekhans ground network includes over 660 branches in 290 cities in

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India. It has always believed in investing in technology to build its

business. The company has used some of the best-known names in the IT

industry, like Sun Microsystems, Oracle, Microsoft, Cambridge

Technologies, Verisign Financial Technologies India Ltd, Spider Software

Pvt Ltd. to build its trading engine and content.

With a legacy of more than 80 years in the stock markets, the SSKI

group ventured into institutional broking and corporate finance 18 years

ago Presently SSKI is one of the leading players in institutional broking

and corporate finance activities. SSKI holds a sizeable portion of the

market in each of these segments. SSKIs institutional broking arm

accounts for 7% of the market for Foreign Institutional portfolio

investment and 5% of all Domestic Institutional portfolio investment in

the country. It has 60 institutional clients spread over India, Far East,

UK and US. Foreign Institutional Investors generate about 65% of the

organizations revenue, with a daily turnover of over US$ 2 million. The

Corporate Finance section has a list of very prestigious clients and has

many firsts to its credit, in terms of the size of deal, sector tapped etc.

The group has placed over US$ 1 billion in private equity deals. Some of

the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison,

Planetasia, and Shoppers Stop.

PRODUCTS OFFERED BYSHAREKHAN:

1- Equity in online and offline trading.

2- Portfolio Management Services.

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3- Offline Trade in Commodities.

4- Mutual Fund Advisory.

WHY SHAREKHAN ??

ExperienceSSKI has more than eight decades of trust and credibility in the Indian

stock market. In the Asia Money broker's poll held recently, SSKI won

the 'India's best broking house for 2004' award. Ever since it launched

Sharekhan as its retail broking division in February 2000, it has been

providing institutuonal-level research and broking services to individual

invcestors.

TechnologyWith our online trading account you can buy and sell shares in an instant

from any PC with an internet connection. You will get access to our

powerful online trading tools that will help you take complete control over

your investment in shares.

AccessibilitySharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION

servies for investors. These services are accessible through our centres

across the country (Over 588 locations in 148 cities) over the internet

(through the website www.sharekhan.com) as well as over the Voice Tool.

Knowledge

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In a business where the right information at the right time can translate

into direct profits, you get access to a wide range of information on our

content-rich portal, sharekhan. You will also get a useful set of

knowledge-based tools that will empower you to take informed decisions.

ConvenienceYou can call our Dial-N-Trade number to get investment advice and

execute your transactions. We have a dedicated call-centre to provide

this service via a Toll Free Number 1800-22-7500 & 1800-22-7050 from

anywhere in India.

Customer Service

The customer service team will assists for any help that one needs

relating to transactions, billing, demat and other queries. Our customer

service can be contracted via a toll-free number, email or live chat on

www.sharekhan.com.

Sharekhan has dedicated research teams of more than 30 people for

fundamental and technical researchs. The analysts constantly track the

pulse of the market and provide timely investment advice in the form of

daily research emails, online chat, printed reports and SMS on you mobile.

BenefitsFree Depository A/c

Secure Order by Voice Tool Dial-n-Trade.

Automated Portfolio to keep track of the value of your actual purchases.

24x7 Voice Tool acess to your trading account.

Personalised Price and Account Alerts delivered instantly to your Cell

Phone & E-mail address.

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Special Personal Inbox for order and trade confirmations.

On-line Customer Service via Web Chat.

Anytime Ordering.

INTRODUCTION TO THE TOPIC:

Alarm bells always tend to ring loud and clear in primary market circles.

of late, many stocks are logging only a marginal increase in prices

immediately and within days of their IPOs getting listed.

The recent boom in the stock markets has again motivated many

corporates to tap money from the market. During the past few months,

the stock markets have scaled new heights, surpassing the previously

insurmountable barriers. As the same time, it is to be noted that falls

have eroded thousands of crores of investor wealth. For retail investors,

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especially those who earlier flocked to IPOs of smaller cap stocks, this

scenario is unwelcome.

Retail investors form an integral part of the stock markets. The markets

cannot survive without their participation. So the loss of wealth had put

off the retail investors from the market.

In order to bring back the investors to the stock markets and regain

their confidence, the Securities Exchange Board of India (SEBI) has

taken some steps. However, law alone cannot achieve the goal. A lot would

also need to be done by the issuer companies, their merchant bankers,

lead managers and book runners.

Safety net options are one of the measures taken by them.

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16

Chapter 2

LITERATURE

REVIEW


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LITERATURE REVIEW

In an IPO, or initial public offering, a company issues its shares to the

public for the first time but Equity investments are risky. Ups and downsin the stock markets are an integral part of equity investing. The rising

ratio of under-performers need not be a major cause of concern as it is a

part and parcel of a very bullish market.

Still worse is the fact that it has time and again shaken the confidence

of the retail investors. Retail investors form an integral part of the stock

markets. The markets cannot survive without their participation. So the

loss of wealth put off the retail investors.

Following case in newspaper fully justify this fact

S Ramachandra lost heavily in IBP's divestment issue. Allotted 300

shares at Rs 620, Ramachandra decided to cut his losses as price of the

scrip started to plummet.

He sold his shares at Rs 565, making a loss of about nine per cent. His

elder son reacted much slower, and sold his 200 shares at a price of Rs

529, ending up with a loss of over 14 per cent against the allotment price.

He had little option but to sell the shares since he had availed of a bank

loan in order to subscribe to the issue.Banks today lending against shares

charge an interest of about 10-12 per cent.

So this all bring in problem like.

Where does that leave retail investors?

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The recent boom in the stock markets has again motivated many

corporates to tap money from the market. During the past few months,

the stock markets have scaled new heights.

As the secondary market has bounced back, the primary market is

buzzing with activity once again.

As the stock markets turn bullish once again, initial public offerings have

become numerous just as little seeds sprout all over during the rainy

season. Not all of these grow to become giant trees.

Companies with sound business models and good earnings potential would

grow regardless of market conditions while the me-too IPOs which hit

the market, essentially to capitalize on good weather, are bound to perish

When an IPO goes bad, there's never one thing that causes it. it takes

bad timing, , bad luck, and the occasional stupid mistakes so Those that

survive and prosper, are the ones that have found fertile soil, good

sunshine and high resistance levels, which enables them to compete and

spread out.

There has been confusion among the investors where they have to put

their money in, either secondary markets or in primary markets. There

has been a general perception that the secondary markets are too risky

and primary markets are risk averse to some extent. But it was proved

that both seem to be the peers in pushing the investors into the losses.

The markets prove that both are equally bad.

Leading book managers of IPOs are tagging safety net options to

make best use of the motives of such investors and get back scared

retail investors to the market.

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A `safety net' implies a commitment to buy shares from the original

investors during a stipulated period at a price determined at the time of

issue, irrespective of the prevailing market price. But most merchant

bankers do not offer this option for public issues.

In a circular the central bank said these schemes were often offered

without any request from the company. There is also no income for the

banks to correspond with the risk of loss built into these schemes, as the

investor will take recourse to the safety net only when the market value

of the shares falls below the pre-determined price. "Banks/their

subsidiaries have, therefore, been advised that they should refrain from

offering such `Safety Net' facilities by whatever name they are called.

A large number of investors look at IPOs as a vehicle for quick gains, for

which market sentiment does matter .So better for an investor is to

consider Growth visibility and do valuation of the company before

investing.

P roblem is:

If we ever involved in an IPO, have to close eyes, grit teeth, and prepare

to be blindsided?

What investors should do if such securities fall below issue

price?

Safety net can help.

But how many investors are aware of these safety nets and

how they actually perceive it?

So this research was being conducted to find out how many investors are

really aware of these safety nets and how they see these options. So that

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this research could eventually help those, who are unaware about the

benefits of safety net.

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21

Chapter 3

INVESTMENT

OPTIONAVAILABLE FOR

INVESTORS


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VARIOUS INVESTMENT OPTIONS

FOR INVESTORSInvestment options for an investor broadly can be categorized as:

Traditional Investment Safety Convenience Products Risky Products

A. Gold A) Small Saving A) Mutual funds A)shares

B. Real Estate B) Bank Deposits

C. Chit Funds C) Bonds

D) Company deposits

TRADITIONAL PRODUCTS

A) GOLD: Gold has much advantage besides being an investment product.

Gold score high in terms of liquidity, safety but at times falls behind the

benchmark of returns

B) CHIT FUNDS: Chit funds are savings of small groups of people,

which are circulated but as investment options they are ranked poorly in

term of safety, return and liquidity and high default rate.

C) REAL ESTATE: Real estate has much advantage of being an

investment option and is rated high in term of safety.

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SAFETY PRODUCTS

A) SMALL SAVING : INCLUDES:

I. Post office savings:- saving deposits, recurring deposit, time

deposits, monthly income accounts.

II. National savings:- public provident funds, national saving

certificates, small saving backed by govt. assurance offer

convenience, safety, tax advantages and good returns.

B) BANK DEPOSIT:

Banks were the first investment houses to successfully help the

common man to shift his investments. Banks offer safety liquidity,

convenience and decent returns. RBIs policy of interest rate

deregulation further triggered competition among bands and they

are moving from offering traditional services to market friendly

options and services.

C) BONDS:

Bonds are debt instruments issued at fixed price, bearing fixed

interest and having a fixed term of life. Govt. and corporate

sectors are main issuers of bonds. Bonds as investment option

offers a decent returns but carry several risk of default.

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D) COMPANY DEPOSITS:

An investor can also invest his money in a company for a fixed

period of time after the maturity period he receive handsome

prefixed rate of interest. Company deposits are simple but there

market is not well regulated so investors have to be watchful.

CONVENIENCT PRODUCT:

MUTUAL FUNDS:

They are the most convenience products and are usually safe than

stocks. The mutual funds are managed by investment professionals

and other service providers. While ownership of fund is in the

hands of the investors. The pool of fund is invested in portfolio of

marketable investments. The value of portfolio updated everyday.

RISKY PRODUCTS:

STOCKS/ SHARES:

In terms of risk and return stocks deliver more than other investment

option, in stocks there is probability of losing the principal. Investment

in stocks requires great analytical skills and deep pockets to absorb the

risks through systematic diversification. Stocks need constant

attention to update one self with development in companies and market

regulations.

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25

Chapter 4

HOW YOU CANINVEST IN

SHARES IN

PRIMARY

MARKET


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DIFFERENT KINDS OF

ISSUES

Primarily, issues can be classified as a Public, Rights or preferential

issues (also known as private placements). The classification of issues is

as follows.

Rights Issue

Rights Issue (RI) is when a listed company which proposes to issue fresh

securities to its existing shareholders as on a record date. The rights are

normally offered in a particular ratio to the number of securities held

prior to the issue. This route is best suited for companies who would like

to raise capital without diluting stake of its existing shareholders unless

they do not intend to subscribe to their entitlements.

Private placements

A private placement is an issue of shares by a company to a select group

of persons under Companies Act, 1956 which is neither a rights issue nor

a public issue. This is a faster way for a company to raise equity capital.

A private placement of shares or of convertible securities by a listed

company is generally known by name of preferential allotment.

A Qualified Institutions Placement is a private placement of equity

shares or securities convertible in to equity shares by a listed company to

Qualified Institutions Buyers only in terms of provisions of SEBI

guidelines.

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Public issue

Public issues can be classified into Initial Public offerings and furtherpublic offerings. In a public offering, the issuer makes an offer for new

investors to enter its shareholding family.

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28

INITIAL PUBLIC

OFFER &

FURTHER PUBLIC

OFFERING


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[ A ]

INITIAL PUBLIC OFFER

An initial public offering (IPO) is the first sale of a

corporation's commonshares to public investors. The main purpose of an

IPO is to raise capital for the corporation. While IPOs are effective at

raising capital, they also impose heavy regulatory compliance and

reporting requirements. The term only refers to the first public issuance

of a company's shares; any later public issuance of shares is referred toas a Secondary Market Offering

There are several reasons for which a private company may wish to

become a public company.

THE TWO BIGGEST REASONS ARE:

To raise capital

To allow the original investors or entrepreneurs who started the

company to realize profits on their investment and time.

A private company is one in which investment or ownership is limited to

select individuals or organizations. A public company is one in which

anyone can invest and obtain ownership by purchasing shares on a publicly

traded exchange.

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http://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Common_stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Secondary_Market_Offeringhttp://www.wisegeek.com/what-is-an-entrepreneur.htmhttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Common_stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Secondary_Market_Offeringhttp://www.wisegeek.com/what-is-an-entrepreneur.htm


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UNDERTAKING AN IPO

It is a large and exciting event for a new company. A well received IPO

means that the company will have cash to further its development and

growth. It also usually means that the people who started the company

realize some significant profits for their efforts.

An IPO requires a great deal of work, from filing the necessary

paperwork with the regulatory bodies and writing a prospectus for

potential investors to devising and implementing a sales campaign for the

sale of the initial shares.

Since the company also needs to continue to function and complete its

normal activities, a financial firm is usually hired to do this work. This

firm is referred to as the underwriting firm for the IPO

IPOs generally involve one or more investment banks as "underwriters."

The company offering its shares, called the "issuer," enters a contract

with a lead underwriter to sell its shares to the public. The underwriter

then approaches investors with offers to sell these shares. the

underwriters keep a commission based on a percentage of the value of

the shares sold.

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ELIGIBILITY NORMS FOR

MAKING AN IPO

SEBI has laid down eligibility norms for entities planning to enter the

primary market through public issues. An unlisted company needs to

satisfy following criteria to be eligible for making a public issue:

a) Net tangible assets of at least Rs 3 crores for three full years

b) Distributable profits in at least three years

c) Net worth of at least Rs 1 crore in three years

d) If change in name, at least 50 per cent of revenue for

Preceding one year should be from the new activity

e) The issue size should not exceed five times the pre-issue net

Worth.

SEBI also provides alternate routes to the companies not satisfying any

of the above parameters, for accessing the primary market.

The alternative conditions are as follows:

a) Issue shall be made through book-building route, with at least 50 per

cent to be mandatory allotted to the QIBs .

b) The minimum post-issue face value capital shall be Rs 10 crores or

there shall be a compulsory market-making for at least two years.

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[ B ]

FURTHER PUBLIC OFFERING

A Further public offering (FPO) is when an already listed company makes

either a fresh issue of securities to the public or an offer for sale to the

public, through an offer document. An offer for sale in such scenario is

allowed only if it is made to satisfy listing or continuous listing

obligations.

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WHAT HAD HAPPENED DURING MAY- JUNE 2006

33

Chapter 5

REASON FOR

THIS RESEARCH

IPO FAILURES


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REASONS FOR UNDERPRICING

OF I.P.OS:

ASYMMETRIC INFORMATION:

The most basic problem of the I.P.O process is the presence of

both good & bad companies going public coupled with the

asymmetric information between the investors & the firms. The

firms themselves know reasonably well, but the investors do not.

When the information & analysis is costly it is optimal for theinvestors to not learn about the company thoroughly, which is

particularly relevant in India.

FIXING THE OFFER PRICE EARLY:

The firms set an offer price at a certain date & the issue opens at

another date even if the company has an exact idea on the offerday it would be afraid of a drop in the stock price on the issue date

which renders the public issue unattractive as it is the stock prices

fluctuate from day to day.

THE INTEREST RATE FLOAT:

The issuing company controls the application money for a fewmonths & even if the stock invest are widely used but if the

interest rate on the stock invest is low the markets would

compensate the low rate of return to the investors by under

pricing.

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MERCHANT BANKER REWARDING FAVOURED CLIENTS:

The interaction between the merchant banker & the company going

public is one-shot interaction but the merchant banker is in a

repeated game with many of his large clients, especially the large

institutional investors, in this situation merchant banker has an

incentive to under price the issue as a way of favoring his

established clients, which would hurt the interests of the issuing

company.

THE LIQUIDITY PREMIUM:

Investors who apply for public issue loose their liquidity on the

amount paid at the issue date, markets in order to compensate this

pay a liquidity premium which results in under pricing.

BUILDING LOYAL SHAREHOLDERS:

Firms may have an incentive to under price when they expect to

return to the capital market to raise further resources at a later

stage via a rights issue or a public issue which helps the firm leave

the purchasers at an under priced value

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36

Chapter 6

WHAT CAN

HELP IS

SAFETY NET


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SAFETY NETS

Safety Net:

It is actually a put option given to the investors, which gives the right but

not the obligation to the investors to sell the stock to issuer at a

particular price before a certain period.

Any safety net scheme of the shares proposed in any public issue shall be

finalized by an issuer company with the lead merchant banker in advance

and disclosed in the prospectus. Such buy back or safety net

arrangements shall be made available only to all original individual allottee

limited up to a maximum of 1000 shares per allottee and the offer is kept

open for a period of 6 months from the last date of dispatch of

securities.

For exp. IPO hits the market with a final price of Rs 50 with safety net

option attached to it. The subscribers to IPO can sell the shares to

Issuer before 6 month at a price of Rs 50 per share. The investors, thus,

have a put option with a strike price of Rs 50 per share with an expiry of

six months. As it gives the investors the right to sell the shares at any

time before the expiry of six months, Such an option makes the

instrument attractive to investors.

How It Works:

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Suppose the above stock falls to Rs 25 three months hence, an investor

would lose Rs 25 (Rs 50-25) per share on his investment. A safety option,

however, enables the investor to sell the stock to issuer at the strike

price of Rs 50 per share.

Next, suppose the stock moves up to Rs 60, the investor can sell it in the

market and pocket the gains. He is under no compulsion to sell the share

to issuer which is why the safety net is an option.

But there is a difference between the safety net and an option . An

option requires investors to pay an upfront premium to the option writer.

This premium is compensation to the writer for the risk of having to buy

the stock from you at a higher-than-market-price. Safety net does not

require investors to pay such a premium which makes it more attractive.

The idea of safety net is that, should during this period the secondary

market price fall below the offer price, the promoter or the merchant

banker would stand guard and buy the shares from them without demur.

This arrangement is any day vastly superior to the Green shoe

exercise which admittedly has but the trappings of real safety net and,

hence, is superficial in offer of protection to individual investors because

the exercise may come a cropper should the shares bought with the

limited resources at the disposal of the stabilizing agent prove to be

inadequate to lift its price to the desired level.

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GREEN SHOE OPTION

The Securities and Exchange Board of India (SEBI) permit exercise of

the green shoe option by a company making a public issue. A pre-issuecontract is entered into for this purpose with an existing shareholder

often one of the promoters with a sizeable shareholding who would be

prepared to lend his shares to be used for price stabilization to be

carried out by a stabilizing agent on behalf of the company up to a

maximum period of 30 days from the date of allotment of shares.

The company then goes on to make allotment, including over allotment, to

the extent it has exercised the green shoe option, which term

incidentally has its origin in the name of a company that for the first time

exercised such an option in the US. The proceeds of the public issue to

the extent it relates to such over-subscription permitted by the green

shoe option is, however, kept in an escrow account to be used in the price

stabilization exercise.

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40

Chapter 7RESEARCH


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RESEARCH METHODOLOGY

Research methodology stands for the ways and means we adopt for

conducting the research. It gives a fair idea about the steps generally

followed by researcher in pursuing the research right from defining the

problem to the final conclusion and summary. This is how this research is

going to be focused towards those steps

Problem

Stock markets movements are integral part of equity investing. Worse is

the fact that Market has time and again shaken the confidence of the

investors. Safety net does help investors to sustain their faith in IPOS

at least for some time.

But problem is

How many investors are aware of these safety nets and how

they actually perceive it?

Research Design and Tools

A cross sectional descriptive research was conducted to know the

perception about safety nets among the investors with the help

structured, questionnaire. The questions started with an investor profile,

followed by questions that helped to determine the confidence level.

Additional questions allow us to ascertain whether investors feel that

they can make money in the stock market, and also to find out their

perception especially when instruments tends to have some safety

mechanism attached to them.

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Research Approach

The investors problems and needs can be best known from the investors

themselves. So for this research surveys were conducted to fulfill the

purpose , covering a variety of interrelated aspects, such as the

investors past experiences, types of investments held currently, future

investment intentions, the important combination of decisions taken by

the investors while investing.

Sampling technique and size:

Random Sample of 50 investors was drawn from the universe of

potential investors Those having no voluntary savings for financial

investments or no ability to understand investments, like shares and

bonds, were excluded, because they were irrelevant for the purpose of

the present survey. And to ensure near-randomness and cross-sectional

representation, relevant data was collected by primary sources with the

help of questionnaire.

Data Analysis and Interpretation

To make the project understandable to the readers the various data,

information is being edited and tabulated using SPSS and other simple

statistical tools ,which is depicted by diagrams such as charts, graphs ,

pie charts, histograms and percentages so as to make interpretations at aglance. Relevant summary and conclusions is also being drawn from the

available data with the use of SPSS.

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43

Chapter 8

ANALYSIS &

INTERPRETATIONS

CONCLUSION &

RECOMMENDATIONS

LIMITATIONS


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INVESTMENT OBJECTIVE AMONG INVESTORS

What is your Investment Objective?

Frequency Percent

Valid Receivingregularincome

16 32.0

Capitalappreciation

21 42.0

Planning forcommitment

5 10.0

Pay off orreduce debt

1 2.0

Acquiring anAsset

4 8.0

Saving forRetirement

3 6.0

Total 50 100.0

0

5

10

15

20

25

No. of

Respondents

Objectives

INVESTMENT OBJECTIVE

Series1 16 21 5 1 4 3

Regular

income

Capital

Appreci-

Future

Commit-

Pay off

Debt

Acquiring

Asset

Saving for

Retirement

This research shows that both regular income and capital

appreciation are the primary objectives of investors while investing

their money.

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Around 32% i.e. 16 investors out of the sample agree that they look

for regular income in the instruments, they tends to put their money in.

Around 42% i.e. 21 investors out of sample give preference to

capital appreciation. So its good news for primary market that they are

ample number of investors who look for capital gain in long run.

Rest of the sample have other personal motives like future

commitments , paying off or reducing debt, acquiring an asset or saving

for retirement.etc.

Around 10% say they want to save their money for future

commitment, only 2% say they are investing with a motive to pay off

their existing debt, 8% want to acquire some asset in future and rest

6% wants to accumulate their money to utilize it after their retirement.

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INVESTMENT GOAL WHILE INVESTING MONEY

What is your Investment goal?

Frequency Percent

Valid Capital is safeand no need ofincome this time

11 22.0

Steady incomefrom yourInvestments

12 24.0

Both CapitalAppreciationand Regular

Income

21 42.0

Only CapitalAppreciation

6 12.0

Total 50 100.0

0

5

10

15

20

25

no of

respondents

Investment goals

what is your investment goa

Series1

Series1 11 12 21 6

Capital is

safe

Steady

income

Both Appre-

and Income

Only Capital

Appreciation

This research shows that in spite of boom in the stock market

majority of investors wants to put their instrument which not only

provide safety to the principal but also fetch interest on it

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Around 22% investors i.e. 11 out of sample wants their capital safe

as they do not require income this time so safety of principal is the

goal with which they are investing

Around 24% investors wants to have regular income rather than

sticking with investment for long so this is also a major reason for

speculation going on in share market as investors want quick returns

within no time.

Appreciation in Principal + Interest on it seems to be the driving

goal for investors. Around 42% investors look for instruments which

not only provide regular income but also appreciate the principal in long

run. So this is good news for industry like mutual fund to utilize these

potential investors.

Rest 12% wants only capital appreciation in long run so they want to

safe their principal in long run and dont want to put it in risky

instruments just for the sake of quick returns.

INSTRUMENT IN WHICH INVESTMENT IS MADE

You have Investments in which Instrument?

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Frequency Percent

Valid SavingSchemes

12 24.0

Commodity 2 4.0

MutualFunds

14 28.0

Shares 20 40.0Any other 2 4.0Total 50 100.0

Instruments where Investment was made

12

2

14

20

2

Saving Schemes

Commodity

Mutual Funds

Shares

Any other

Instrumen

No of Respondents

Series1

This research shows that regular income and capital appreciation

are the primary objectives while investing money and that is justified

by the fact that 68% of the sample wants to put their money in

instruments like mutual funds and shares. This may be the recent

boom of stock market which makes them put money to these risky

instruments ahead of saving schemes.

Rest 24% wants to put their money in saving schemes. They are the

investors who either dont feel secure in stock market or their

confidence had been shaken due to past corrections and scams in

stock market.

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Rest of the investors tends to put their money in commodities or

other schemes like insurance as investment, but they represent only

8% of population studied.

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FOR HOW LONG THEY WANT TO INVEST THEIR MONEY

What is Your Investment Time Frame?

Frequency PercentValid Less than a

year13 26.0

1 year to 3years

18 36.0

3 years to 5years

9 18.0

More than 5years

10 20.0

Total 50 100.0

Time frame for Investment

13

18

9

10

Less than a

year

1 year to 3

years

3 years to 5

years

More than 5

years

Timeframe

No or Respondents

Series1

This research show that most of people today do believe in investing

for long term but still there are good number of investors who wants

to fetch short term gains out of their investments. Above chart

clearly justify this fact that 26% of sample was investing for short

term i.e. less than a year.

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PERCENTAGE OF INCOME INVESTED

What Percentage of your Annual Income you set aside forInvestments?

Frequency Percent

Valid Less than10%

13 26.0

10% - 20& 18 36.020% - 30% 10 20.0More than30%

9 18.0

Total 50 100.0

0

5

10

15

20

No.of

Respondent

Percentage Incom

Percentage of Income set aside for Investme

Series1 13 18 10 9

Less than

10%10% - 20 20% - 30% >30%

There is no particular trend that how much one invests in. It all

depends upon whether he/she wants to be in accumulation phase or

distribution phase. Still a lot depends upon the risk assessment and

income of the investor. Returns expected and past experience do effect

on how much is being invested.

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HOW MANY INVEST IN STOCK MARKET &

HOW COMFORTABLE ARE THEY

Have you ever invested in Shares / Stocks?

Frequency PercentValid Yes & I was

comfortable withrisk

29 58.0

Yes but I wasuncomfortablewith risk

10 20.0

No but I wouldfeel comfortablewith risk

8 16.0

No as I feeluncomfortablewith risk

3 6.0

Total 50 100.0

29

58

10

20

8

16

36

0

10

20

30

40

50

60

Frequenc

Percent

Frequency 29 10 8 3

Percen t 58 20 16 6

Yes & I wa

comfortable

with risk

Yes but I wa

uncomfortabl

with risk

N o but i w ou

feel

comfortable

N o a s I fe el

uncomfortabl

with risk

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This is good news for stock market that most of the investors feel

comfortable with the risk involved in shares. Around 58% investor in

this research feel comfortable when they invest in shares

16% of investors were such that they never invested in stocks/ shares

but they are comfortable with risk involved in these risky instruments

Rest 20% investors had their investment in stock market but they are

either not confident or not comfortable with risk. This might be due

to correction being seen during May-June 2006.

Only 6% said that they never invested in share market due to the fact

that they are not comfortable with risk.

Overall this research shows that people like risky investment provided

it justify them with suitable returns.

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INVESTMENTS IN INITIAL PUBLIC OFFER

Have you ever invested in Initial Public Offer [IPO] ?

Frequency Percent

Valid Yes 24 48.0

No 26 52.0

Total 50 100.0

2 4

2 6

2 3

2 4

2 5

2 6

N o o f

R e s p o n d

O p t i o

H a v e y o u e v e r In v e s t e d in In it i

S e ri e s 1 2 4 2 6

Y e s N o

Around 48% of sample responds positively when they were being

asked that whether they had invested in IPO ever during their life.

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INVESTORS COMFORT LEVEL IN STOCK MARKET AND

THEIR INVESTMENT IN IPOS

Have you ever invested in Shares / Stocks * Have you ever invested in Initial

Public Offer [ IPO ]?

Have you everinvested in Initial

Public Offer [ IPO ] Total

Yes No

Have youeverinvested inShares /

Stocks

Yes & I wascomfortable withrisk 20 9 29

Yes but I wasuncomfortable withrisk

4 6 10

No but I would feelcomfortable withrisk

0 8 8

No as I feeluncomfortable with

risk

0 3 3

Total 24 26 50

0

3

6

912

15

18

21

No ofrespondent

Yes&Iwas

comfortable

withrisk

YesbutIwas

uncomfortable

withrisk

Nobutiwould

feel

comfortable

withrisk

NoasIfeel

uncomfortable

withrisk

Have you ev er invested in Shares / Stocks

INVESTORS COMFORT LEV EL IN STOCK MARK

THEIR INVESTMENT IN IPO'S

Have you ever invest

in Initial Public Offer [

IPO ] Yes

Have you ever investin Initial Public Offer [

IPO ] No

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This research show that out of 24 investors who invest in IPO 20

investors i.e. 83% were those who are comfortable with the risk involved

in stock/shares and rest 4 i.e.17% were those who do invest in shares but

not comfortable with risk involved. So this shows that this primary

market is basically driven by the confidence level of investors.

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AWARENESS ABOUT IPO FAILURE

Are you aware of IPO failure?

Frequency Percent

Valid Yes 36 72.0

No 14 28.0

Total 50 100.0

0

10

20

30

40

No of

respondent

Option

Awarene ss ab out IPO fail

Series1 36 14

Yes No

This research shows that 72% of the sample studied knows that attimes IPO fails to pick in the market and their prices fall below the

price at which they were issued.

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AWARENESS ABOUT IPO FAILURE AMONG INVESTORS

WHO HAD INVESTED IN IPOS

Have you ever invested in Initial Public Offer [ IPO ] * Are you

aware of IPO failure?

Are you aware ofIPO failure

TotalYes No

Have you everinvested inInitial PublicOffer [ IPO ]

Yes 21 3 24No

15 11 26

Total 36 14 50

Awareness about IPO failure among Respondents

who invested in it

21

3

15

11

0

5

10

15

20

25

Options

Noo

frespondents

Yes I have invested in IPO'S No, I never Invested in IPO's

Yes I have invested in IPO'S 21 3

No, I never Invested in IPO's 15 11

Yes No

Are you aware of IPO failure

Out of total of 36 who were aware of IPO failures, 56% i.e. 21

were those who had invested in IPO in the past .rest 44% constitute

those who never invested in IPO but they know about failure.

Out of total of 24 who had invested in IPO 3 are such that they

were unaware about the IPO failures , this may be due to fact that they

might have invested through some brokers and were unaware about

what was happening to there investment in short run.

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So out of total 14 who were unaware about IPO failure 11 i.e.

around 79 % were those who never invest in IPO at all.

So from here this can be concluded that there is good amount of

awareness regarding the IPO failure among investors who had their

investments in IPOs

AWARENESS ABOUT SAFETY NETS

Are you aware about Safety Net Options attached with IPO's?

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Frequency Percent

Valid Yes23 46.0

No

27 54.0Total

50 100.0

21

22

23

24

25

26

27

No.of

Respondents

Options

Awareness about Safety Net Options

Series1

Series1 23 27

Yes No

Out of total 50 respondents 46% i.e.23 respondents were aware of

safety net options attached with IPOs .So there is still 54% investors

which are unaware about these price stabilization mechanisms.

AWARENESS ABOUT SAFETY NETS AMONG

INVESTORS WHO HAD INVESTED IN IPOs

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Have you ever invested in Initial Public Offer [ IPO ] * Are you aware about

Safety Net Options attached with IPO'S?

Are you aware aboutSafety Net Options

attached with IPO'S

TotalYes No

Have you everinvested inInitial PublicOffer [ IPO ]

Yes 18 6 24No

5 21 26

Total 23 27 50

Have you ever invested in Initial Public Offer [ IPO ]

NoYesCount

30

20

10

0

Aware of Safety Nets

Yes

No

Out of total 24 who had invested in IPO in the past 18 i.e.75% of

them were aware of the safety net options. so there is fair amount of

awareness among people who invest in IPOs about these safety nets.

Rest 25% were unaware about these options in spite of the fact that

they had invested in IPOs in the past

Out of rest 26 [who never invest in IPO] 5 i.e19% were aware of

safety net while majority of them were not aware of these options.

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INVESTORS AWARENESS ABOUT SAFETY NETS & THEIR

INVESTMENT IN IPOs WITH SAFETY NETS

Are you aware about Safety Net Options attached with IPO'S *Have you ever Invested with Safety Net Options?

Have you ever Investedwith Safety Net

Options

TotalYes No

Are you awareabout SafetyNet Optionsattached with

IPO'S

Yes 10 13 23

No

0 27 27

Total 10 40 50

10

013

27

0

5

10

15

20

25

30

35

40

No.of

respondents

Yes No

Have you ever Invested with Safety

Net Options

INVESTORS AWARENESS ABOUT SAFETY NETS AND

THEIR INVESTMENT IN IPO's WITH SAFETY NETS

No,I am unaware

about Safety nets

Yes I am aware

about Safety nets

Out of 23 investors who were aware of safety nets, only 10 found to

have their investments in IPO with safety nets. While majority of them

i.e. 13 or 56% never invest their money with safety nets in spite of

being aware of these options. So this is a good opportunity for

intermediaries to make these investors invest with these options.

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Remaining 27 i.e.54% were not aware of safety nets so they never

invest with it. So this is again an opportunity to make them aware of the

benefits involved and eventually invest in primary market with these

options on.

SAFETY NET ARE SHOWING GOOD OPTIMISM ABOUT THE

PROSPECT OF STOCK

Do you agree Safety Nets are showing great deal of optimism aboutthe prospects of stock?

Frequency Percent

Valid Yes I Agree 15 30.0No I Disagree 3 6.0No Opinion 32 64.0Total 50 100.0

Safety Nets are showinggreat deal of optimismabout the prospects of stock

YesI Agree

30%

NoI Disagree

6%

NoOpinion

64%

This question was put forward to gauge the perception level of investors.

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When being asked that do they agree that safety nets are showing

great deal of optimism about the prospects of stock, majority of

investors i.e.64% were having no opinion on this. So this can be

concluded that majority of them were not clear about the impact safety

nets have on the prices on stock.

Only 30% of Investors agrees that yes it shows a great deal of

optimism about the prospects of the stock while rest 6% were disagree

on this fact.

So as far as perception about the safety net is concerned investors

were not sound in perceiving it as a tool which shows great optimism

about the prospects of stock.

PERCEPTION ABOUT SAFETY NET AMONG INVESTORS

Are you aware about Safety Net Options attached with IPO'S

* Do you agree Safety Nets are showing great deal of optimism aboutthe prospects of stock?

Do you agree Safety Nets areshowing great deal of optimismabout the prospects of stock Total

Yes IAgree

No IDisagree

NoOpinion

Are youawareabout

SafetyNetOptionsattached withIPO'S

Yes

15 2 6 23

No 0 1 26 27

Total 15 3 32 50

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Perception About Safety nets among

Investors who are Aware or Unaware

about these options

15

2

6

0

1

26

0 10 20 30 40

Yes I

Agree

No I

Disagree

No

Opinion

SafetyNetsareshowinggreat

ofOptimisma

boutthe

prospe

stock

No of RespondentsYes, I know about Safety nets No, I am unaware about Safety Nets

No, I am unaware

about Safety Nets

0 1 26

Yes, I know about

Safety nets

15 2 6

Yes I Agree No I Disagree No Opinion

Above graph show that out of total sample of 50 investors only 15

i.e.30% agree on the fact that safety nets shows great optimism about

prospect of stock. While 32 investors i.e. around 64% of the sample

studied were not having any opinion regarding this .this is due to fact

that the majority of investors i.e. 26 were actually not aware of safety

nets. So they are bound to have no opinion about that.

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0

5

10

15

No of

respondents

Safety nets are showing great deal of

Optimism about the Prospect of stock

Perception about safety net among Investors

who are aware of safety nets

Series1 15 2 6

Yes I Agree No,I disagree No Opinion

When same question was put forward to those 23 investors who

were aware of safety nets, 15 i.e. 65% of them agree that yes it

show great optimism about the prospect of the stock while 6

i.e.26% were found to have no opinion and rest 9% do not agree on

this fact.

So this can be concluded that majority of investors who are aware

of safety nets perceive it as a good tool. But still there are as many

as 35% investors who were still not sure how this price

stabilization mechanism actually operates to show optimism about

the future prices of the stocks.

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SAFETY NET HELPS INVESTORS WHEN THERE IN

DOWNFALL IN PRICES

Do you think that Safety Net really help investors when there isdownfall in prices?

Frequency Percent

Valid Yes it helpsinvestors

18 36.0

No it's just amechanism

5 10.0

Not aware ofsafety net

27 54.0

Total50 100.0

Safety Nets really hepls Investors when there is

downfall in Prices

18

5

27

Yes it helps investors

No it's just a mechanism

Sorry I am unaware about

safey net

No of respondents

Series1

When this question was put forward that do you think safety net

helps investors when market price of stock fall below the price for

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which it was issued with in 6 months or it is just a mechanism which

companies used to get more and more subscriptions. 27 investors were

not unaware of safety nets so their opinion was not considered for this

research as it might mislead the purpose of study.

Out of 23 who were aware of safety net 18 i.e.78% investors

agree on the fact that Yes, safety net helps when price of stock fall

below the price for what it was issued and investors can utilize the put

option being provided and return the shares back to the merchant

banker .while rest 22% i.e. 5 investors perceive it just as a mechanism

used by companies to get more and more subscriptions and in their

opinion merchant bankers hardly take the shares back in case price fall

below for what it was issued within 6 months.

So this can be concluded that majority of investors who are aware

of safety net perceive this instrument in a positive sense but still there

are as many as 54% of investors who are unaware of this tool and

additional 10% dont take it as a tool which helps investors. So these

64% investors, if made aware of the benefits can really prove as

potential investors for companies which are yet to come up with their

IPOs.

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69

CONCLUSION

RECOMMENDATION

S

LIMITATIONS


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CONCLUSION

Various conclusions can be drawn from the study:

One of the motives of this research was to find out investors

preference while investing money and from this research it is found

that appreciation in Principal + Interest on it seems to be the driving

goal for investors. Around 42% investors look for instruments which not

only provide regular income but also appreciate the principal in long run.So this is good news for this industry of investment to utilize these

potential investors by providing such options with instruments which not

only provide some sort of safety to the principal but also fetch regular

return on it and maximum the return at lowest possible risk.

Regular income and capital appreciation are the primary objectiveswhile investing money and that is justified by the fact that 68% of the

sample had their investments in instruments like mutual funds and

shares. This may be the recent boom of stock market which makes them

put money to these risky instruments ahead of saving schemes. Another

good thing is that investors tends to put their money for long term,

around 74% investors tends to keep their investments for more than a

year. So this research shows that people dont mind keeping their

investments for long term and that too in risky instruments provided it

justify them with suitable returns.

Another motive of this research was to find out the confidence

level of investors or it can be said that how comfortable they feel to

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put their money in an instrument like stock/share where there is risk of

both principal + interest? There is good news for stock market that

most of the investors feel comfortable with the risk involved in shares.

Around 58% investor in this research feel comfortable when they invest

in shares 16% of investors were such that they never invested in

stocks/ shares but they are comfortable with risk involved in these

risky instruments

Another motive of research was to find out the level of

awareness among investors so that this research would make a

substantial contribution to those investors who are unaware about these

safety nets. This research show that still 54% investors which are

unaware about these price stabilization mechanisms. So as far as level

of awareness is concerned it is still not satisfactory. This low level is

due to the facts like:

1. Out of the sample of 50 investors only 39 i.e. 78% investors

had their investments in stock / shares in their life.

2. Out of those 39 only 24 had their investment in IPOs.

3. 14 investors that represent 28 % of the sample were not

aware of IPO failure, where IPO fails to pick in the market and their

prices fall below the price at which they were issued.

Prime motive of this research was to find how safety nets areperceived by the investors. So when being asked that do they agree

that safety nets are showing great deal of optimism about the

prospects of stock, majority of investors i.e.64% were having no

opinion on this. So this can be concluded that majority of them were

not clear about the impact safety nets have on the prices on stock.

Only 30% of Investors agree that yes it shows a great deal of optimism

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about the prospects of the stock while rest 6% were disagree on this

fact.

So as far as perception about the safety net is concerned

investors were not sound in perceiving it as a tool which shows

great optimism about the prospects of stock.

Another fact which justify above result is that Out of 23 who

were aware of safety net 22% investors perceive it just as a

mechanism used by companies to get more and more subscriptions and in

their opinion merchant bankers hardly take the shares back in case

price fall below for what it was issued within 6 months.

So over all this study can be concluded by the facts that still there are as many as

54% of investors who are unaware of this tool and additional 10% dont take it as

a tool which helps investors. So these 64% investors, if made aware of the benefits

can really prove as potential investors for companies which are yet to come up

with their IPOs.

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RECOMMENDATIONS

The Indian primary stock market has witnessed impressive progress in

the last decade. However, unless the retail investors are educated enough

to understand the instruments and the facilities attached most of them

would be unable to benefit from the markets progress and would

eventually end up losing the bulk of the money invested due to their own

lack of understanding. This was exactly found in this research that

primary market is abound with people who are looking for easy preys, i.e.

ignorant investors. Even the safety mechanisms such as safety nets which

eventually help them are not perceived in true sense.

1. Launch Investor Awareness Program. How well one manages own

investments will depends upon the factor that how much he/she is

equipped with knowledge to undertake this task. The affluent people

can hire portfolio management services but the ordinary people will

find these too costly. So awareness programs can help such investors

to made their investments on safer side and have maximum returns at

lowest possible risk.

2. A more systematic approach to investor educationis needed. Which

should give more thought to both the content and the delivery mechanism

it should make them aware about the practical implication of the

instruments / options such as Safety nets rather than imbibing

theoretical knowledge into their brains. This systematic approach is

needed because even investors who were aware of safety nets were

found to have no opinion about the impact; it has on the prospect of

the stock in future.

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3. Town Meetings in cities throughout the country should be held to

help the people learn how to save and invest wisely and achieve

financial security. Companies coming with IPOs should also publish free

brochures and other educational materials on these safety mechanisms

and launch special promotional schemes to make investors aware about

these options. Such perspective will guard the investors against being

over-optimistic and will help them in evolving a sound and safe long-term

investment strategy.

4. Patience is the key to success in primary market. Generally

investors increasingly try to make a quick buck and put their money in a

company without checking its fundamentals. . Many companies tend to be

shady with no projects and business plans. Better is to make investment

in IPO only a small part of portfolio so that one can afford to lose. And

stop dreaming that buying shares in a hot IPO at the offering price and

then "flip" the shares on first few months for an easy profit. Instead,

determine which new companies may actually have a future, then invest in

the holding only if it's a good company with good earnings potential.

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LIMITATIONS

Sample size was only 50. This was due to the fact that Those having

no voluntary savings for financial investments or no ability to

understand investments, like shares and bonds, were excluded

Due to incomplete response of some of the investors, some

adjustments are being made in order to make it viable.

This survey was being conducted in the period when market was on a

higher side so this psychological effect on the mindset of the

respondents assumed to have an effect on their responses. Specially

when asked, whether they are comfortable with their past

investments in stock/shares or not?

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QUESTIONNAIRE

This study is for academic purpose so no personal information will besupplied to any person or organization. The main objective of this study is

to know the preferences while investing money and their perception and

awareness about safety nets when it comes to primary market.

Personal Details:-

Age:

Sex:

Q1: -What are your investment goals, i.e. why would you want to

Invest today?

Receiving regular income Capital appreciation

Planning for commitment Pay off or reduce debt(CHILD EDUCATION ETC)Acquiring an asset Saving for retirement

Any other ( please specify)

Q2:- Which of following clearly define your investment objective?

You want to ensure capital is safe & you do not need income at this time

You require steady income from your investments

You need both capital appreciation and regular income

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You are only interested in capital appreciation over long term.

Q3:- Do you have existing investment / savings?YesNo

If yes in which of the following instruments:

Saving Schemes Commodity Mutual Funds SharesAny other

Q4:- What is your investment time frame i.e. for how long you setaside your funds?

Less than a year 1 year to 3 years3 years to 5 years More than 5 years

Q5:-What percentage of your annual income do you set aside for

Savings/ investments?

Less than 10% 10% - 20%

20% - 30 % More than 30%

Q6:- Have you ever invested in shares / stocks?

Yes and I was comfortable with the risk

Yes but I was uncomfortable with the risk

No but I would feel comfortable with the risk if I did

No because I feel uncomfortable with risk involved

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.Q7:- Have you ever invested in Initial Public Offer (IPO)?

Yes No

Q8:-Are you aware about IPO failure( when market price fall

below the price for which they are issued) ?

Yes No

Q9:-Are you aware about the Safety net options (such as buy back

by the Issuer or Green shoe option) attached to the initialpublic offers?

Yes No

Q10:- If yes, have you ever invested with Safety net options?

Yes No

Q11:-If yes, do you agree that Safety nets are showing a great

deal

of optimism about the prospects for the stock?

1 .Yes, I Agree

2 No, I Disagree

3. No opinion

Q12:- Do you think that Safety net really help investors whenThere is downfall in prices or it is just a mechanism used by

companies to get more and more subscriptions?

Yes it helps investors

No its just a mechanism

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BIBLIOGRAPHY


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BIBLIOGRAPHY

Web sites:

www.financialexpress.com

www.ecomomictimes.com

www.businesstimes.com

www.rediff.money.com

Links:

http://nseindia.com/content/ipo/ipo_introduction.

Book:

Fundamentals of investments by Gorden J. Alexander, william F.sharpe

81
http://www.financialexpress.com/http://www.ecomomictimes.com/http://www.businesstimes.com/http://nseindia.com/content/ipo/ipo_introductionhttp://www.financialexpress.com/http://www.ecomomictimes.com/http://www.businesstimes.com/http://nseindia.com/content/ipo/ipo_introduction


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