ASUMMER INTERSHIP PROJECT REPORT ON “THE FUTURE OF ONLINE TRADING” AT MOTILAL OSWAL SECURITIES LTD. SUBMITTED IN PARTIAL FULFILMENT FOR THE REQUIREMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION TO MAHARSHI DAYANAND UNIVERSITY ROHTAK SUBMITTED BY: Sachin Yadav Roll No-2843 MBA (3rd sem.) AMITY BUSINESS SCHOOL MANESAR, GURGAON DECLARATION I, Sachin Yadav, Roll No.2843, Class-MBA (3rd Semester) of Amity Business School, Manesar, hereby declare that the Project titled, “THE FUTURE OF ONLINE TRADING” is original to the best of my knowledge and has not been published elsewhere. A seminar presentation of the Training Report was made on …….. And the suggestions by the faculty were duly incorporated. Presentation In charge (Faculty) Signature of the Candidate Countersigned Director of the Institute ACKNOWLEDGEMENT As I sum up my study, I appreciatively bring to mind the contribution of all those people without whose support and help, this study would have ever taken its present form. I thank Mr. Vikram Singh(Faculty Guide), Mr. Pravin Sharma for supported me & Col. Anil Gulati(CRC) of Amity Business School, Manesar - for giving me the opportunity to do my internship at Motilal Oswal Securities Ltd. First of all I would like to thank the Management of Motilal Oswal Securities Ltd. for giving us the opportunity to do two-month project training in their esteemed organization. I am highly obliged to Mr. Bhupender Yadav(Unit Manager) for granting me to undertake my training at Ahmedabad Branch. My express thanks to all Sales Managers under whose able guidance and direction, I am able to give shape to my training. Their constant review and excellent suggestions throughout the project are highly commendable. My heartfelt thanks go to all executives who helped us to gain knowledge about the actual working and the processes involved in various departments TABLE OF CONTENTS Declaration Acknowledgement Certificate Chapter I • Introduction • Significance of the study • Conceptualization • Focus of the study • Objectives of the study • Limitations of the study Chapter II • Industry Profile • Company Profile Chapter III Review of Existing Literature • Research Methodology Chapter IV • Analysis and Interpretation Chapter V • Findings • Recommendations • Conclusions Bibliography Annexure . although during my research project I’ve seen that most of the respondents feel online trading. Online trading was initiated by NSE in India and soon after the other exchanges also followed it. On the other hand non banking trading companies are Motilal Oswal Sec Ltd. Due to the rising education awareness and use of interest there is a huge potential for online trading in future and companies must come up with innovative offerings to capture the untapped market. . UTI securities etc. There was a major in yr. 2000 when lots of online trading companies came with a bang but only few were survived because of lack of computer knowledge and low internet penetration. Reliance Money etc. protection through Freudian brokers etc. Today online trading contributes are about 14-16%.com. ICICI direct. Today the online trading companies having cut-throat competition in our offering whose brokerage discounts lower margin money and zero balance accounts. There are two types of online trading companies one is the banking online trading companies and the other is non-banking trading. a secure way of investing in stock marker still a few of them feel it unsafe and a bit complicated but they posses information about online trading. A few examples of banking online trading companies are HDFC securities.CHAPTER I INTRODUCTION As per the title suggest the project report has been prepared regarding the future of online trading in India. A study was undertaken to determine the growth of various online trading companies in India in terms of trade done by them through online and services provided by them.com. It is continuously growing and ha a huge market potential. Angel Broking. Sharekhan. Major findings indicates that out of a survey of 100 respondents it was seen that 40 investors prefer online trading because of few major factors such as time saving convenience. London Stock Exchange is the most popular of the lot. There are many popular stock markets in the world. or (equity market). NASDQ. The companies which survived are getting the handsome returns also attracting the foreign Investment Companies. these are securities listed on a stock exchange as well as those only traded privately. The size of the world stock market is estimated at about $51 trillion. bonds etc are bought and sold.SIGNIFICANCE OF THE STUDY: Since the year 2000 a big boom has been witnessed in the Indian Stock Market when the marker showed the coming up of Online Trading System. ONLINE SHARE TRADING OR INTERNET TRADING: On line trading is a service offered on the internet for purchase and sale of share. Stock Market is a place where financial instruments like shares. you place order on your stock broker either verbally (personally or telephonically) or in a return form (Fax)but In on Line Trading. The study then goes to evaluate and analyze the findings so as to present a clear picture of the trends in the online trading sector CONCEPTUALIZATION: Market In economics. Many online stock trading companies came but initially due to lack of online trading some companies vanished and some survived. the term market means the aggregate of possible buyers and sellers of a thing and the transactions between them. Tokyo Stock Exchange. Online Trading MEANING On line trading involves investment activity which takes place over the internet and it does not require physical inclusion of broker. Nowadays this sector is facing cut-throat competition and also provides huge growth prospects. typically. is a private or public market for the trading of company stock and derivatives of company stock at an agreed price. commercial papers.g. A stock market. debentures. In the real world. Stock markets are popularly known as stock exchanges. . Stock market It is a place where companies come to raise their share capital and investors go to invest their surplus funds. a stock exchange or commodity exchange. you will access a stock broker’ sample size website through your internet enabled PC and place orders through the broker’s internet – based trading engine .. The term “market” is sometimes used for financial securities.These orders are routed to the stock Exchange either out manual intervention and executed there on in a matter of a few second . e. So my study entitled a “THE FUTURE OFONLINE TRADING” has been designed with the definite focus that why the on line trading is going more and more accepted by customers and what are the features and advantages which makes on line trading useful for customers. To study the awareness of clients towards online trading. . but here he has to open demat account with any broking company .. It also focuses the services of different companies and comparison b/w them which help the customer to choose the best company for their trading. the study focused on the customer perception towards on line trading whether they are satisfied or not. OBJECTIVES OF THE STUDY To determine the growth and development of online trading in India. people are looking for the options which give them high monetary rewards. Focus of the study As we all accept that 21st centaury is going to be India centaury. So. This study gives knowledge about on line trading and also about the many different brokerage company which helps the customer to choose instrument and source. To know – Appropriate Education level & Time for online trading LIMITATIONS OF THE STUDY .In nutshell And here I want to discuss the main benefits what the customers should get by online trading as in earlier days if a customer wants to purchase share of any company there is much more paper work in purchasing and customer can’t purchase share in short period of time by these online services customer can purchase shares in a fast manner like earlier he has to purchase at least 100shares of each company but when these online services came into account there is no obligation on the customer that he has to purchase 100 shares here he can purchase 1 share also and sell also within seconds in market through online trading. To understand the customer perception of online trading. To understand the presence of major online traders in the Indian market and looking about the features provided by them. Accordingly they look for various options but what is the right way and from where they can get more and more benefit is very necessary to know. • Lack of awareness of Stock market • Some respondents are unwilling to talk • Misleading concepts • Due to non response CHAPTER II INDUSTRY PROFILE . 000. on whose building steps share brokers used to gather to seek stock tips and share news.000 at par to Rs 120. Calcutta (1908). most of the brokers met their payment commitments. Consequently. Following the establishment of the first stock exchange in Mumbai. who served as the Governor of Bombay at that time. Reports on stock markets around that time indicate that an ordinary broker in 1864 earned about Rs 200 per day. thus forcing them to find a place of their own. 20 insurance companies and 62 joint stock companies. (I) Scalability and robustness of the trading system: The fundamental difference between the Internet as a transaction medium and the conventional closed user group network is that the Net is a universal platform providing concurrent access to infinite users at any given point in time. at different points of time. Uttar Pradesh and Nagpur (1940) and Hyderabad (1944). The stock markets gained from surge and boom in several industries such as jute (1870s). other stock exchanges came into being in major cities in India. Madras (1937). In Jul 1865. A share of Colaba Land Company during the boom period of the 1860s rose from Rs 10. coal (1904 and 1908) etc.000 to Rs 54. tea (1880s and 1890s). The boom period came to an abrupt end in 1865. Historical records show that as early as 1864. from day break till 9 am and from 7 pm to early hours of next morning at Bazargate. there were about 1. between 9 am to 7 pm at the junction of Meadows Street and Rampart Row. what was then used to be called the share mania ended with burst of the stock market bubble. (ii) Bandwidth optimization: . was a major financial centre having housed 31 banks. This trend was akin to the rapid growth of securities markets in Europe and the North America in the background of expansion of railroads and exploration of natural resources and land development. Share prices rose sharply even at that time. “Never had I witnessed in any place a run so widely distributed nor such distress followed so quickly on the heels of such prosperity” thus wrote Richard Temple. disallowed them to gather there. it becomes imperative for any Net-based application to have a proven capability for scalability and robustness which ensures the ability to handle and process requests from multiple users at any given point in time.000 brokers with the stock markets functioning from three places in Mumbai. namely Ahmedabad (1894).000 and that of Backbay Shares went up from Rs 2. which later turned into the Dalal Street. The roots of a stock market in India began in the 1860s during the American Civil War that led to a sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock companies that issued securities to raise finance. Success Factors for e-broking: There are three key success factors for e-broking. at that time. In the aftermath of the crash. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry. Bombay. An interesting aspect is that despite the collapse of the stock market. banks. a huge sum in those days.HISTORICAL EVOLUTION Early Years The equity brokerage industry in India is one of the oldest in the Asia region. A unique feature of the stock market development in India was that that it was entirely driven by local enterprise. unlike the banks which during the pre-independence period were owned and run by the British. the application software should demonstrate intelligence in optimizing the available bandwidth by deploying advanced technologies such as streaming. This will not only ensure lower trading costs in terms of offering cross services but will also help in maximizing Rolls. Kantilal Ishwarlal Securities Pvt. depositories. Therefore the challenge for the technology providers is to develop and deploy advanced e-trading tools and applications using electronic straight through processing technologies. ICICI Web Trade Ltd. etc.com): ICICIdirect. (ICICIdirect. (iii) Integration with third party systems: On the Net.com provides the 3-in-1 to the users which ties in their saving bank account and their Demat account to their brokerage account electronically. with information feeds available from multiple points. (sharekhan. The service providers will have to go beyond the stage of mere order execution and emerge as "informediaries" rather than "intermediaries". information feeds. Future Of Internet Trading: International marketplaces are already witnessing re-alignments and changes with the emergence of electronic communication networks (ECNs) such as INSTINET and ISLAND. for efficiency in trade completion and reducing duplication of client information. PLAYERS OF THE INDUSTRY S.com): Sharekhan. A research and analysis team is constantly working to track performance and trends.com was the first entrant into e-broking. and offers you depository services and trade execution facilities for equities. it is imperative to have both – A robust business model and Comprehensive technology strategy. which are already contributing substantial business volumes to mainline exchanges such as NASDAQ and the NYSE. Concurrently. With Net trading in securities and rapid consolidation between multiple stock exchanges. India’s leading stock broker is the retail arm of SSKI. Total solutions would essentially mean offering interfaces with banks. the international securities marketplace is fast becoming a "global village" through the creation of a universal virtual equity market. S. it is both prudent and essential for a broker/intermediary to offer total solution to the clients at a single point. ICICdirect. Challenges In Internet Trading: For Internet trading to succeed.In the Indian context where availability of a sufficient bandwidth is limited. A true Internet trading system should deliver cost effective transaction fulfillment at a single point. derivatives and commodities backed with investment advice tempered by decades of broking experience. . exchanges worldwide are looking at striking strategic alliances such as the Global Equity Market (GEM). Some of the challenges are discussed: Transaction fulfillment--In the Net-based economy. it is prudent to deploy applications that are built on open architecture methodology for interfacing with third party systems in the new Net age. Ltd. Indiabulls is lead by a highly regarded management team that has invested crores of rupees into a world class Infrastructure that provides real-time service & 24/7 access to all information and products. Reliance Capital MF.. UK. Principal MF.6 %. (MOSt): One of the top-3 stock-broking houses in India.com): Kotak Securities Ltd. The company offers a slew of products such as stock and derivatives broking. Kotak Mahindra MF. margin or spot segments. Its institutional investors include Intel Capital. has been the largest in IPO distribution . . Focus on customer-first-attitude. IL&FS MF. India Info line was founded by a group of professionals in 1995.ICICIdirect. one of the leading technology companies in the world promoted by the UK government. Alliance Capital MF. Sundaram MF. Kotak Securities Ltd. India’s leading and most popular finance and investment portal.000 investors through . Franklin Templeton India MF. member of National Stock Exchange and The Stock Exchange.com: 5paisa is the trade name of India Infoline Securities Private Limited (5paisa). JM MF. An investor can also invest in 14 Mutual Funds (Prudential ICICI MF. 5Paisa. Birla Sun Life MF. commodities broking and mutual funds. with a dominant position in both institutional and retail broking.It was ranked number One in 2003-04 as Book Running Lead Managers in public equity offerings by PRIME Database. ethical and transparent business practices. India Bulls: Indiabulls is India's leading retail financial services company with 77 locations spread across 64 cities. It has also won the Best Equity House Award from Finance Asia April 2004. ICICI. Kotak Securities Limited (kotakstreet. MOSt was founded in 1987 as a small sub-broking unit. MOSt is amongst the best-capitalized firms in the broking industry in terms of net worth. Mumbai. The institutional business unit has relationships with several leading foreign institutional investors (FIIs) in the US. research-based value investing and implementation of cutting-edge technology have enabled it to blossom into a thousand-member team.one of the world’s leading investment banks and brokerage firms) is India’s leading stock broking house with a market share of 5 . Motilal Oswal Securities Ltd. a strategic joint venture between Kotak Mahindra Bank and Goldman Sachs (holding 25% .com has the option of trading in shares in cash. with just two people running the show. In a recent media report MOSt was rated as one of the top-10 brokers in terms of business transacted for FIIs. our over 750 Client Relationship Managers are dedicated to serving your unique needs. TATA MF and DSP MERRILL LYNCH MF) through their trading account. Hong Kong and Singapore. Standard Chartered MF. The retail business unit provides equity investment solutions to more than 50. Its size and strong balance sheet allows providing varied products and services at very attractive prices. HDFC MF. 5paisa has emerged as one of leading players in e-broking space in India. TDA and Reeshanar. respect for professionalism. 5paisa is a wholly owned subsidiary of India Infoline Ltd. while in 2000 and 2002 it has been rated as the Best Domestic Equity Research House and Second best amongst Indian Brokerage firms respectively. they will also start offering the following online trading services on the BSE and UTI SECURITIES LTD.motilaloswal. The services comprise online buying and selling of equity shares on the National Stock Exchange (NSE).Mega Funds . HDFC Securities Ltd (HDFCsec): HDFCsec is a brand brought to you by HDFC Securities Ltd. The company has also invested in the joint-venture company with Standard Chartered Bank viz. (IDBI Capital). Depository Services. a wholly owned subsidiary of Industrial Development Bank of India (IDBI). . 1994 by Unit Trust of India as a 100% subsidiary and on the repealing of the UTI Act. E-Broking Services. offering a complete suite of products and services to individual. The services include fixed income trading. debt and equity derivatives. equities brokerage.htm" µInvestment Advisory Services§. depository services.: (UTISEL) UTI Securities Ltd was incorporated on June 24. institutional and corporate clients. MOSt provides Advice-Based Broking. IDBI Capital is a leading Indian securities firm offering a complete suite of products and services to individual. portfolio management and distribution of financial products. IDBI Capital Market Services Ltd. Commodities Trading. private placements. Its Value PMS Scheme gave a 160% post-tax return for the year ended March 2004. is a leading Indian securities firm. Portfolio Management Services (PMS).270 outlets spanning 150 cities and 22 states.com/eag. Standard Chartered UTI Securities (P) Ltd IDBI Capital Market Services Ltd. The Company has presence in major cities with 20 branches and 50 franchisees to service a wide range of clients. In a few months. In Asia Money Brokers Poll 2003 MOSt has been rated as the Best Domestic Research House. UTI Securities has been working as an independent professional entity for providing financial intermediary and advisory services to its corporate and retail clientele. institutional and corporate clients. the capital is now held by the Administrator of the Specified Undertaking of Unit Trust of India (ASUUTI). which has been promoted by the HDFC Bank & HDFC with the objective of providing the diverse customer base of the HDFC Group and other investors a capability to transact in the Stock Exchanges & other financial market transactions. and IPO and Mutual Fund HYPERLINK "http://www. research. Buying and selling of select corporate debt and government securities on the NSE would be introduced in a subsequent phase. Ltd. Refco Refco Group Group Ltd. Ltd.IDBI IDBI Services Capital Ltd. UTI Securities UTI Securities Ltd. Refco Refco Group Group Ltd. IDBI Services Capital Ltd. Mkt. Services Services Ltd.ANALYSIS OF STOCK BROKING INDUSTRY Industry Analysis using Porter’s 5 forces Model SHAPE \* MERGEFORMAT µ § POTENTIAL POTENTIAL POTENTIAL ENTERANT ENTERANT POTENTIAL ENTERANT ENTERANT Investmart Investmart Investmart Investmart Various Various Banks Banks Various Various Banks Banks Geojit Geojit Geojit Geojit Cipher Cipher Cipher Cipher UTI Securities Ltd. Mkt.com HNI’s HNI’s NSE NSE 5paisa. Ltd. Mkt.com 5paisa. Ltd.com 5paisa. BUYERS BUYERS BUYERS BUYERS SUPPLIERS SUPPLIERS SUPPLIERS SUPPLIERS Small COMPETITORS Small Investors Investors Small Small Investors Investors Web COMPETITORS COMPETITORS Web maintainers maintainers Web Web maintainers maintainers COMPETITORS Franchise/Business Franchise/Business Franchise/Business Franchise/Business NSCL NSCL NSCL NSCL Partners Partners ICICI ICICI Partners Partners CSDL CSDL ICICI Web Web Trade Trade Ltd Ltd ICICI Web Web Trade Trade Ltd Ltd CSDL CSDL HNI’s HNI’s 5paisa. UTI Securities Ltd. IDBI Capital Capital Mkt.com NSE NSE MF Companies MF Companies Kotak Kotak MF Companies MF Companies BSE BSE Kotak Securities Securities Ltd Ltd Kotak Securities Securities Ltd Ltd BSE BSE HUF HUF India India HUF HUF MCX MCX India Bulls Bulls India Bulls Bulls MCX MCX Institutional Investors Institutional Motilal Oswal Securities Motilal Ltd Oswal Securities Ltd Institutional Investors Institutional Investors Investors NCDEX NCDEX MotilalLtd Oswal Securities Ltd NCDEX NCDEX Motilal Oswal Securities HDFC HDFC HDFC Securities Securities Ltd Ltd HDFC Securities Securities Ltd Ltd Marwadi Marwadi Marwadi Finance Finance Ltd Ltd Marwadi Finance Finance Ltd Ltd SUBSTITUTES SUBSTITUTES SUBSTITUTES SUBSTITUTES M M Mutual utual Funds Funds Mutual utual Funds Funds Insurance Insurance Insurance Insurance Bank Bank Bank FD FD Bank FD FD . 40 0.06 0.20 0. OBC. = Not Available) Parameters A/c Opening Fee Brokerage Interface Trading A/c Demat Delivery Square Off Banks Associated with Sharekhan 750 NIL 0. UTI & ICICI Bank 500 500 700 NIL N.75 750 800 0.18 250 NIL ICICI Bank 0. One other best point of Sharekhan is –if a person is having a online/offline trading account as well as Demat account with Sharekhan.A. Citibank.Charges provided by the different companies for Online Accounts: (N.A. Axis Bank.A. UTI.50 0. Kotak Bank & Citibank HDFC & Other 4 Banks If we check the above table.50 0. OBC. . which are charged when the shares are sold from the Demat account.05 N.50 0.05 0. they won’t be charged any kind of Demat transfer charges.10 0.59 0. HDFC. NIL 0.10 HDFC. IDBI & Citibank ICICI Direct 750 NIL Indiabulls 5 paisa Motilal Oswal Securities Ltd Kotak Street HDFC Securities 0. we can come to know that the rates of Sharekhan is quite competitive than other brokerage houses.15 SBI. SUPPLIERS NSDL & CSDL are the regulatory bodies for Depository Participants like SSKI. SHCIL. would be less. business partners. 2. ICICIdirect. NSE & BSE are under the purview of SEBI. While the bargaining power is moderate in case of HNI (High New Worth Investors)/ MNI’s (Medium Net Worth Investors) and business partners. they cannot go for forward integration. BUYERS There are various types of investors who trade through stock broking houses like SSKI. MCX & NCDEX are stock exchanges which trade in commodities and derivatives. Also these regulatory bodies have got an upper hand as the bargaining power stock broking houses like SSKI.com. have low bargaining power. etc. 3. So here we can say that bargaining power of stock broking houses is high in case of small investors & HUF. But here there is one advantage that NSE/BSE have i. which includes investors like small investors. etc. that’s why stock broking houses like SSKI. Here the bargaining power of stock broking houses depends on how big the investor is. institutional investors and mutual fund companies. medium net worth investors.e. ENTRY BARRIERS . Here again stock broking houses have to follow rules and regulation of the same. Network: . Experience curve: .The “Reach” to the customer is the key factor in the industry.g. Motilal Oswal. The network of the companies like Motilal Oswal. regulators constraints could be an entry barrier.” 4.Capital is necessary not only for fixed facilities but also for customer’s credit and absorbing start up losses. Regulatory Constraints: . Marwadi). etc. It will take time for a new entrant to establish such a huge network (e. COMPETITORS .”Network can come up as most difficult entry barrier to overcome. which say that. and ICICI is very efficient and spreaded all over India. For a stock broking houses to plunge into the stock broking industry.Obtaining a license is a tedious job for a stock broking house. this is very difficult for new companies to imitate. Thus. technology could be one of the entry barriers. Stock broking requires huge capital to make their products user friendly. NSDL. Technology: . fundamental as well as technical script analysis. It should comply with the regulation of the governing bodies like SEBI. one needs huge capital for technology up gradation and skilled manpower. it needs to have some kind of financial background and expertise.Technology for stock broking houses is life saving device. which in turn requires capital to employ skilled manpower. Also the most important thing which helps already established firms is-“TRUST” which people would be having on firms like SSKI . Thus. etc. Huge capital: .The core competency in this industry is the services which are provided to the end-users and the research based activities which includes “TIPS”. To start a stock broking house. Sharekhan. The instruments like Bank FD. SUBSTITUTES Here substitutes are such instruments which can be used instead of investing in shares. The local players provide facility for off-line trading while the national players like ICICIdirect. Bank Of Baroda. 5. E. HDFC Security provide online trading services. Motilal Oswal. mutual funds are the substitutes.com. The companies and banks which are having these instruments can plunge into this industry. Jeojit and Cipher which are coming in near future to Rajkot City. If the use of this instruments increase this may be disadvantage for the stock broking houses. There are also other big names like Indiabulls. insurance. INDIAN SCENARIO . 5paisa and Marwadi encircles the company form both the sides by providing online and off-line trading with competitive services.g. POTENTIAL ENTRANTS The potential entrants in like Investmart. 6.com and Kotakstreet. Nationalized banks are also thinking to enter in this field by tying up with broking houses. The company is facing the competition from local as well as national level players. and note that it was only ~55% in 2004: Source: Worldbank Raw data can be found at the Reserve Bank of India site: GDP. determining what percentage level is accurate in showing undervaluation and . BSE Market cap. however. we reach a total of $992 billion. a result of greater than 100% is said to show that the market is overvalued. GDP for India The journey towards the $1-trillion mark is nothing less than spectacular. Typically.S. 100%).e. considering that the market cap was just about $150 billion in 2004. the total bank deposits in 2004 was $500 billion and has crawled to about $650-700 billion in the same period.Stock market capitalization VS. the market cap to GDP ratio for India is near 1 (i. To put in context. By including the capitalisation of Indian entities listed on London’s Alternative Investment Market. which is near the historical average for the U. is said to show undervaluation. the global firms acquired by the listed Indian companies in the last two months and others that are often considered a part of the Indian universe. But notice how it compares to the historical average. In recent years. Thus. market. NSE Market cap Investopedia explains Stock Market Capitalization To GDP Ratio The result of this calculation is the percentage of GDP that represents stock market value. while a value of around 50%. as opposed to sales or total asset figures.S. However.dnb.in/EquityBroking/Indian%20Scenario.overvaluation has been hotly debated. a sign of an overvalued market. Capital market reforms are a major constituent of the overall economic reforms in India. this ratio may have some predictive value in signaling peaks in the market. Stock Market Capitalization To GDP Ratio Stock Market Capitalization To GDP Ratio Calculated as: http://www.asp India Broking……. The investment community uses this figure to determining a company's size. which was still overvalued but the market went on to produce alltime highs over the next few years Market Capitalization What Does Market Capitalization Mean? The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. market falling sharply after the dotcom bubble burst. the ratio was around 130%. according to statistics at the World Bank the market cap to GDP ratio for the U. Frequently referred to as "market cap". A series of measures announced in Union Budgets beginning FY92 laid the road map for the growth and resurgence of securities markets in India.co. was 153%.S. With the U. In 2000. in 2003. These included • improving the investment climate by allowing foreign institutional investors to invest in equity and debt markets . a choice of tax options in the form of choosing either long term gains tax or short term tax which ever they prefer and Regulation A new phase of securities market regulation in India began with the setting up of Securities and Exchange Board of India in 1992. Major reforms that were brought in the Indian securities markets since 1992 are summarized below: • • • • • • • • • • • • • • • • • • • • • • • • • Nation wide network of trading terminals Electronic Trading and abolition of Open Outcry systems Dematerialisation of Shares Foreign Participation in Domestic Brokerage Business Foreign Institutional Investment in Indian stocks Venture capital Book Building Process for IPOs Investor protection guidelines Dual Fungibility of ADRs/GDRs Delisting Guidelines Corporate Governance and Disclosure Standards Introduction of Equity Derivatives Exchange Traded Market for Corporate Bonds Central Listing Authority Mutual Funds in the private sector Mutual Fund Investments Abroad> Demutualization and Corporatisation of Stock Exchanges Margin Trading Exchange Traded Funds Anti-Money Laundering Guidelines Electronic Data Information Filing and Retrieval (EDIFAR) Integrated market surveillance Rating of IPOs Securities Appellate Tribunal Unique Client Identification Markets . the Board has brought in several changes in the way securities markets are organized and conducted in India.• • • • • • expanding the product range offered by the stock exchanges strengthening the role and scope of capital markets regulation revival of commodities futures markets allowing Indian companies to issues ADRs and GDRs in international exchanges and enable them to raise resources through Euro Commercial Borrowings divestment of government ownership in state owned companies and financial institutions tax reforms in the form of introduction of transaction tax that streamlined the tax mobilisation from securities markets operations and also facilitated investors. Over the period. Market Structure Indian securities market is fairly large as compared to several other emerging markets. . In FY01. Pune Stock Exchange Rs 61.213 in the year FY01 but gradually declined thereafter when the regional stock exchanges began to lose business in the light of wide ranging market structure reforms introduced since then.711 in 1994-95 to 9. For instance in FY01.32 bn turnover at the Bombay Stock Exchange. A few aspects of the major developments in the India’s stock markets are described below. India’s two leading indices. though the entire liquidity is shared between the country’s two national level exchanges namely. the National Stock Exchange of India and the Bombay Stock Exchange Ltd. Both primary and secondary market activity experienced sharp surge. the most popular BSE Sensex. Indian stock markets too witnessed rapid growth. Much progress was made in further strengthening and streamlining risk management.000. Ludhiana Stock Exchange Rs 97.11 bn of the turnover at the National Stock Exchange and Rs 10.395. Uttar Pradesh Stock Exchange.71 bn. the liquidity in these exchanges flowed to the national level system consisting of NSE and BSE. The number of brokers in all the exchanges together peaked to 10.71 bn as against Rs 13. several regional stock exchanges were generating business owing to the availability of deferral products. The regional stock exchanges are in pursuit of business models that make them viable.32 bn. There are 22 stock exchanges in the country. such Badla and different settlement calendars prevailing at that time in these exchanges. the Delhi Stock Exchange registered cash market turnover of Rs 838. With the abolition of the deferral products and introduction of uniform T+2 settlement cycle. Rs 247.47 bn. market regulation and supervision.In tune with the global stock markets that began to recover from the second half of 2003. The number of brokers in various stock exchanges rose from 6. when the markets were in upswing.335 in FY06. 1. and the one most used by the markets the National Stock Exchanges’ S&P CNX Nifty rose to record levels. With the rapid growth of securities trading and deepening of the stock markets.Indian Stock Markets: Growth of Market Structure (In Number) Source: Securities and Exchange Board of India Sub-brokers are an important constituent of Indian stock markets.957 in FY01 to 23.479 in FY06. the number of sub-brokers nearly doubled in the last ten years from 9. Sub-brokers work under brokers with specified limits for trading and risk management. . Sub -brokers are term as useful part in the value chain since they provide active interface with a large number of investors across the country and also extend the reach and access of the services of the brokerage firms. 2.Exchange-wise Brokers and Sub-Brokers in Indian Stock Exchanges 2005-06 Source: Securities and Exchange Board of India In the national level stock exchanges. In view of the need for consistent and comparative data on a wide range of aspects. Major aspects of business A brief description of the major aspects of market developments in India with particular reference to NSE and BSE are summarized below. information published in official publications that is available latest for the FY06 are used in the following write up. a large portion of the brokers are corporatised though enough incentive does not appear to exist for similar trends to appear in the regional stock exchanges. i) Market Capitalisation . Market capitalisation of stocks in India rose from Rs 67.50 bn in 1980 to Rs 705.21 bn in 1990 to Rs 11,926.30 bn in 2000. BSE market capitalisation as of mid-2007 is about Rs 40,000 bn, which in the background of the appreciating rupee, takes it to among the small group of exchanges with a trillion dollar market cap. Market capitalisation as percent of gross domestic product which was about 25% in the early 2000s, now equals it. Several leading emerging economies have market capitalization as a multiple of GDP, and in the manner in which stock prices are appreciating in India, the prospects for Indian market capitalisation rising further look good. Information for the tables in this chapter is sourced from the handbook published by the Securities and Exchange Board of India and the websites of the Bombay Stock Exchange Ltd, and the National Stock Exchange of India Ltd. Market capitalisation in India Source: Handbook of Statistics SEBI ii) Trading Volumes Secondary market operations gained greater momentum in the last decade. In the last ten years, the value of trading in both NSE and BSE rose six times making the Indian stock markets the leading market in the Asian region, and is also remarkable as compared to the growth in the world equity markets. During the period FY96 and FY06, value of share trading at the National Stock Exchange rose from Rs 657.42 bn to Rs 15,168.39 bn and at BSE from Rs 500.64 bn to Rs 8,160.74 bn. An important end in the volumes is the trading of a large number of small and midcap stocks as could be evidenced from the sharp rise in the number of scrips traded at BSE, in which a major chunk of these companies are listed. Share of Mumbai in NSE’s trading volumes rose from 40% in FY02 to 52% in FY06. Cities, from which NSE generates sizeable business in addition to Mumbai, include Delhi from where it gets 13% of business, Ahmedabad, 3%; Chennai, 2.77%; Kolkata 11% and others 8.1%. After Mumbai, from which BSE gets 75% of business, other important centres contributing to its business include Ahmedabad 2.9%; Kolkata 1.4%. Equity investing is spreading to a number of cities and towns in India. Exchanges with national presence and infrastructure are gaining from this development which is expected to continue further in the future. A major development in Indian equity markets is the dematerialization of shares which led to speedy securities settlement. Delays and bad deliveries also reduced after dematerialization. Progress made in Indian markets in dematerialization was noticed in the international markets as an important achievement and landmark. By FY06, more than 6,000 companies signed agreements for dematerialization with NSDL and 5,500 companies with CDSL. The number of shares that were dematerialized moved from 37.21 bn. in FY01 to 174.72 bn. in FY06 in NSDL and from 1.92 bn. to 27.22 bn. shares in CDSL during this period. Shares dematerialized forms a major chunk of the market capitalization. Key features of business Source: SEBI for turnover and CMIE for other indicators. $ BSE Sensex: SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. Base Value: 1978-79=100. NSE Nifty: S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy; Base Value: November 1995=1000 Domestic and Foreign Flows Source: Handbook of Statistics SEBI 3. 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 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 iii) Greater reliance on research Client advising in India has graduated from personal insights. which might lead to creating of greater interest in investing in brokerage firms by entities in India and abroad. v) Online broking Several brokers are extending benefits of online trading through creation of separate windows. broking industry is giving greater emphasis on regulatory compliance and observance of market principles and codes of conduct. . market tips to becoming extensively research oriented and governed by fundamentals and technical factors. A wide range of incentives are being created and offered by online brokerage firms to attract larger number of clients. With the nature of markets and products becoming more complex. Many brokerage firms are investing time. 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. Emergence of online broking enabled reduction in transaction costs and costs of trading. Keen competition has emerged in online broking services. it becomes imperative for the broking firms to keep their staff continuously updated with latest development in practices and procedures. money and resources to create efficient and effective compliance and reporting systems that will help them in avoiding costly mistakes and possible market abuses. 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. Moreover. paving the way for stronger brokerage entities and possible scope for consolidation in the future. Some others have dedicated online broking portals. vi) 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. 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. thus making research important brand equity for the brokerage firms. Foreign firms picked up stake in some of the leading brokerage firms. vi) Compliance oriented With stringent regulatory norms in operation. The research and advice are made online giving ready and real time access to market research for investors and clients. Vast progress has been made in developing company research and refining methods in technical and fundamental analysis. vii) 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. Keeping abreast with developments in international markets as also familiarization with global standards in broking operations and assimilating major practices and procedures will become relevant for the domestic brokerage firms. ii) Capital Adequacy Capital adequacy has emerged as an important determinant that governs the scope of business in the financial sector. Given the growing importance of technology in operations and increasing emphasis on regulatory compliance. Current requirements stipulation capital adequacy in regard to trading exposure. new market segments will come into force. changes could be rapid and so as the challenges that emerge from time to time. For instance. Numerous small firms operate in this space. brokerage firms had newer opportunities in the form of commodities futures. but in future more tighter norms of capital adequacy might come into force as a part of the prudential norms in the financial sector 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. i) Fragmentation Indian brokerage industry is highly fragmented. distribution of insurance products.4. if they are well prepared. A brief description on some of the prospects and challenges of the brokerage firms are discussed below. wealth . v) Product Dynamics As domestic finance matures and greater flow of cross border flows continue. 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. smaller firms might find it constrained to make right type of investments that will help in business growth and promotion of investor interests. as also opportunities for investing abroad. Emerging challenges and outlook for the brokerage industry Brokerage firms in India made much progress in pursuing growth and building professionalism in operations. 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. in the last three to four years. which could benefit the domestic brokerage firms. Given the nature of the brokerage industry being very dynamic. 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. . Domestic broking firms should always give due focus to emerging trends in competition and prepare accordingly. vii) Investor Protection Issues of investor interest and protection will assume centre stage. and as the market momentum continues. broking firms will have an opportunity to introduce a wider number of products. The nature of penalties and punitive damages would become more severe. expertise and market experience will bring dramatic changes in the brokerage industry space which the local firms should be able to absorb and compete. vi) Competition from foreign firms Surging markets and growing opportunities will attract a number of international firms that will increase the pace of competition. mutual funds etc.management. Global firms with higher levels of capital. research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an almost 2000 member team. Today we are a well diversified financial services firm offering a range of financial products and services such as: Wealth Management Broking & Distribution Commodity Broking Portfolio Management Services Institutional Equities Private Equity Investment Banking Services and Principal Strategies We have a diversified client base that includes retail customers (including High Net worth Individuals). had a network spread over 555 cities and towns comprising 1. We are headquartered in Mumbai and as of June 30th. we had 5. The company got listed on BSE and NSE on September 9. foreign institutional investors.825 per share (face value Rs. 2007. The issue which was priced at Rs. was founded in 1987 as a small sub-broking unit. As at June 30th. financial institutions and corporate clients. mutual funds. ethical and transparent business practices.18 times in turbulent market conditions. . 2009. respect for professionalism. 2009.48% of its equity with two leading private equity investors based out of the US – New Vernon Private Equity Limited and Bessemer Venture Partners. the Company placed 9.57. with just two people running the show.5 per share) got a overwhelming response and was subscribed 27.373 registered customers.308 Business Locations operated by our Business Partners and us. The issue gave a return of 21% on the date of listing.COMPANY PROFILE Overview Motilal Oswal Securities Ltd. In 2006. Focus on customer-first-attitude. aspx?ReportID=0C2B2131-A6CA-444E-A7A3C641AFEFB554 Rs. the company showed a strong top line growth of 91% to Rs. family and business wealth creation and management needs.7 bn as compared to Rs.68 bn.19 bn.08 701 270 156 Growth (YoY) 91% 97% 100% Credit rating agency Crisil has assigned the highest rating of P1+ to the Company’s short-term debt program. the internet and mobile channels. . last year. associates and business partners Research based value investing Cutting edge technology to ensure world-class customer service Wealth Management Financial planning for individual.As of end of financial year 2008. asset management and fund based activities have contributed to this growth. Business Partner locations. MOSt Principles Customer interest is paramount Ethical and transparent business practices Respect for professionals. 2008 was Rs. For year ended March 2008.com/Content. New businesses like investment banking.motilaloswal. http://www.7 bn and market capitalization as of March 31. Crores Total Revenues EBIDTA PAT FY 2007.3. We also have strategic tie-ups with State Bank of India and IDBI Bank to offer our online trading platform to its customers. These are provided to customers through our Wealth Management service called ‘Purple’ Broking & Distribution services Equity (cash and derivatives) Commodity Broking Portfolio Management Services Distribution of financial products Financing Depository Services IPO distribution We offer these services through our branches. the group networth was Rs. open offers/delistings and syndication of debt and equity. Our knowledge of the markets together with our understanding of our customers and their risk profiles has helped us design a range of portfolio offerings for our clients. MOIAPL has closed 23 transactions in 2007-08 worth US$ 1. mutual funds. the Assets Under Management of our various portfolio schemes stood at Rs. 2009.8 billion and had 18 mandates in hand as at March 31. .8 bn. and FIIs. We service these clients through dedicated sales teams across different time zones. share buybacks. we were empanelled with over 300 institutional clients including 200 FIIs. Business Partner locations.2008. Bulls Eye Strategy. insurance companies. As at June 30th. Trillion Dollar Opportunity Strategy and Focused Strategy Series I. our clients also get access to our exclusive Customized Trading Advice on both the trading platforms. divestitures. Besides access to the best of research in the form of Daily Fundamentals & Technical Reports on highly traded commodities. restructurings and spin-offs through Motilal Oswal Investment Advisors Private Ltd. These clients include companies. financial institutions. As of June 30th. the internet and mobile channels Portfolio Management Services Motilal Oswal Portfolio Management Services offer a range of investments solutions through discretionary services. These include the Value Strategy. We at Motilal Oswal have helped create wealth for our customers through our Portfolio Management Services. rights issues. Institutional Equities We offer equity broking services in the cash and derivative segments to institutional clients in India and overseas. private placements (including qualified institutional placements). banks.6. Investment Banking We offer financial advisory services relating to mergers and acquisitions (domestic and cross-border). 2009. we provide commodity trading facilities and related products and services on MCX and NCDEX. We offer these services through our branches.Commodity Broking Through Motilal Oswal Commodities Broker (P) Ltd our fully owned subsidiary. (MOIAPL) We also offer capital raising and other investment banking services such as the management of public offerings. Motilal Oswal group has applied to the regulatory bodies for a license to operate as a Domestic Asset Management Company (Mutual Fund) and we expect to begin operations soon. Focus on Research Research is the solid foundation on which Motilal Oswal Securities advice is based. . Motilal Oswal's research reports have received wide coverage in the media (over a 1000 mentions last year). Principal Strategies Group For effective management of treasury operations and to capitalize on market opportunities. with investments typically in the range of US$3 mn to US$7 mn MOPEAPL has recently launched an INR 750 crores domestic Real Estate Private Equity Fund called “India Realty Excellence Fund” sponsored by Motilal Oswal Financial Services Ltd. our private equity subsidiary. Motilal Oswal Private Equity Advisors Private Ltd (MOPEAPL) was appointed as the investment manager and advisor to a private equity fund. which was launched with a target of raising US$100 mn. The fund is aimed at providing growth capital to small and medium enterprises in India. Almost 10% of revenue is invested on equity research and we hire and train the best resources to become advisors. the Group has set up a 30 member team which would be responsible for effective deployment of funds into different trading and arbitrage strategies. India Business Excellence Fund. Our consistent efforts towards quality equity research has reflected in an increase in the ratings and rankings across various categories in the AsiaMoney Brokers Poll over the years Our unique Wealth Creation Study. Raamdeo Agrawal. Managing Director. is now in its 13th year. authored by Mr. From a fundamental. At present we have 24 Research Analysts researching over 27 sectors and 16 commodities. Investors keenly await this annual study for the wealth of information it has on the companies that created wealth during the preceding five years.Private Equity In 2006. technical and derivatives research perspective. Motilal Oswal and Mr.History & Milestones The story of Motilal Oswal Securities Ltd (MOSt) goes back many years.000 sq ft in Malad. Raamdeo Agrawal met each other as students in a Mumbai suburban hostel in the early eighties. 2009 Motilal Oswal Securities Ltd.Chairman and Managing Director has been appointed as a member of the Managing Committee of Indian Merchant Chambers. 2006 Motilal Oswal Financial Services Ltd ties-up with State Bank of India to offer online trading. gets listed on the BSE & NSE Mr. 25% higher than the initial target of USD 100 million 2007 The Strategic partnership between MOSL and SBI . Mumbai Motilal Oswal's India Business Excellence Fund raised USD 125 million.e. to provide reliable & honest investment advice to investors'. spread over 26. Both the young chartered accountants hailing from a rural & an unpretentious background had a common dream viz 'to build a professional organization with strong value systems. enters 'Limca Book of Records' for creating India's largest dealing room in Mumbai MOSL was 'Rated No.Purple Motilal Oswal Financial Services ltd. when Mr. Motilal Oswal .EZtrade . Thus was born their first enterprise called "Prudential Portfolio Services" in 1987.CNBC TV 18 IT User Award . In less than a year it has managed to sign up more than 10. Avaya Global ranked MOSL as the second best company in the Financial Sector for customer responsiveness. Asia money Brokers poll 2006 rates Motilal Oswal Securities – Most Independent .000 customers Starts Knowledge First campaign Introduces a separate brand for Private Client Group .1 – Best recommendations Mid & Small Caps' and won awards in 3 out of 4 categories at the Starmine India Broker Rankings 2009 from Thomson Reuters 2008 MOSL awarded the prestigous Nasscom . Motilal Oswal Financial Services Ltd was declared as the Best Research House for Indian Stocks in 2006 as per AQ Research.reaches an important milestone i.2008 MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World Magazine 2008 for the second consecutive year MOSL creates one of India's largest Equity Dealing & Advisory rooms. 000 Depository accounts. 50 lakh category.Local Brokerage Investment Banking business advises Aban in their majority controlling stake of invest ASA – one of the largest investment banking deals of 2006.. About 200 Business locations in 124 cities servicing over 15.2nd Best among Indian Brokerage firms. Uniquely structured performance related fees. 5 lakh to Rs. Starts offering Derivatives products and advisory services on both BSE as well as NSE.Research.A momentum based PMS launched.MOSt Independent Research Brokerage. 2001 Legendary marketing guru Shunu Sen’s services taken to revitalize retail marketing strategy and branding efforts.000 Retail and Institutional Investors. Bulls Eye PMS .000 customers. Retail network completes coverage of 75 cities in India. Best in Sales and Service.50. Head of Equity Research & Institutional sales. Value PMS delivers a whopping 160% post tax returns for the period ended April 2004. inducted in the Board of Directors.Best Local Brokerage. MOSt Portfolio Management Services launched with Mr. Navin Agarwal. Issues about 13% of companies’ equity to employees as ESOPs. Deepest distribution in the stock broking segment with about 700 Business locations in 296 cities and about 1. 2003 Enters the mutual fund and IPO distribution business. Received the Asia Money Award . Acquires Capital Deal Stock and Share Brokers.Value Hedging for derivatives and Discover Value for the Rs. Crossed 15. Raamdeo Agrawal as the Portfolio Manager. . 2004 Presence expanded to 375 Business locations in 190 cities. 2002 Mr. (a proprietary concern based in Karnataka). 2005 Asiamoney Brokers Poll 2005 rates Motilal Oswal Securities . Start of the Solid Research Solid Advice campaign. Launches two new Portfolio Management Schemes . Three more memberships taken . Since then nearly 20% of revenue is allocated to research. Mumbai. 1995 ”Motilal Oswal” gets incorporated as Motilal Oswal Securities Ltd. He still continues to attend it every year. First of its kind study initiated to identify biggest and fastest wealth creating companies in Indian Stock markets. First broking house in India to go on the web. ”Motilal Oswal” is formed through acquisition of membership on The Bombay Stock Exchange (BSE). 1990 After just three years in the business. Raamdeo Agrawal starts attending legendary billionaire investor Warren Buffett’sAnnual General Meetings of Berkshire Hathway Inc. 1998 Mr. www. “Wealth Creation” Campaign started. The Wealth Creation Study started in 1996 culminates into Wealth Creation Seminarand Awards function in 1998. 1994 MOSt acquires NSE Membership and plans for major expansion of its retail network. Raamdeo Agrawal receive Rashtriya Samman Patra from Central Board of Direct Taxes for being amongst the top 50 tax payers in India fromFY94-FY98. First Domestic Stock broking house to have such a strong Research focus.com launched. Motilal Oswal and Mr. 1999 Mr.MotilalOswal. ft office in South Mumbai with bigger and better quality infrastructure than the corporate office. Both Mr. 1996 Wealth Creation Study started.2000 Received the Asia Money award for the Best Domestic Equity house. Inquire (Indian Equity Research) is formally created at a 2500 sq. First Stock Broking house to brand its services as a research and advice based broker. Motilal Oswal joins the Governing Board of The Stock Exchange. Motilal Oswal and Mr. The venture stands out from the rest due to their approach of Research-based broking even when sub-brokers. .1987 Mr. Raamdeo Agrawal lay the foundation of a great partnership by starting a sub-broking firm. Motilal Oswal Financial Services Limited is the holding company of the following five subsidiaries: . Major Services Equities Derivatives E-Broking IPO Portfolio Management Mutual funds Commodities Depository Services . news flow and events where risk reward ratio is favorable. Minimum requirements and fees structure : Portfolio size should be 25 lakhs plus and fees structure varies from case to case. Trading 0. Equity Research is an inherent strength of MOSt. Investments & Trading : MOSt Equity Advisor are experts in providing value based investment solutions as well as advising you in positional trading. We believe in picking investment opportunities where the underlying value is higher than the market price. EAG Process Client Profiling : MOSt Equity Advisor determines each EAG client's profile before deciding the ideal asset allocation. The Equity Advisor keep a close watch on the performance of each stock in your portfolio and suggest changes as and when there is a significant trend reversal or deterioration in a company's performance. Profiling takes into consideration issues like your attitude towards risk. life stage. investment horizon.50%. Most Equity Advisor proactively helps you take informed equity investment decisions and build a healthy portfolio. Derivatives 0.10 %. who act as your Equity Advisor. derivatives and other leverage products to help you reach your investment goal. . Portfolio Tracking Software : Your equity portfolio is continuously monitored using Portfolio Tracking Software. Integrated Approach : We use integrated approach in our investment strategy using a combination of cash.10%. Most EAG team has highly trained equity professionals. who act as your Equity Advisor. Benefits MOSt EAG team has highly trained equity professionals. MOSt Equity Advisor proactively helps you take informed equity investment decisions and build a healthy portfolio. as per your profile.Equities Most Equity Advisory Group In keeping with its tradition of personalized service. Normal Fees : Delivery base 0. Motilal Oswal Securities Limited set up MOSt EAG to provide customized and integrated equity solutions to High Net worth Investors like you.. and return expectation and investment objectives. Our trading ideas are based on technical. If you have a good risk appetite & are willing to take riskier bets for reciprocating returns. which derive their values from equity as their underlying. Normal Fees : Derivatives 0. Minimum requirements and fees structure : Margins as per NSE requirement and fees structure varies from case to case. we will suggest aggressive strategies like buying naked futures. Trading : The MOSt Equity Advisor is an expert in swift & timely execution of trading ideas at the same time monitoring those ideas as per your profile. we can suggest certain portfolio hedging strategies to ease your worries. Integrated Approach : We use integrated approach in our trading strategy using a combination of futures and/or calls and/ or puts to help you optimally capitalize your view reach your trading goal. Clients can be assisted in protecting the downside risk to their portfolio using appropriate combination of options. if you are risk averse and would like to protect your self moderating some of your incremental gains but finding it difficult to digest the bouts of volatility in the markets. Our advisory is skilled to help you in maximizing your gains from your existing corpus using numerous strategies based on the direction and intensity of the views. EAG Process (Derivatives): Client Profiling : MOSt Equity Advisor determines each EAG client's profile before deciding the set of derivative strategies that will ideally suit you. E-Broking . equipped with all the required skills and understanding of Equity Derivatives. will act as your advisors in futures & options segment as well to help you take informed trading decisions.Derivatives MOSL F&O : Futures & options are derivatives. Portfolio Tracking Software : Your F&O position will be continuously monitored using Portfolio Tracking Software. On the other hand. given the risk appetite clients can extrapolate their gains with the timely assistance of our advisory. Hence our Equity Advisory Group (EAG). which provides equity and derivative trades execution through off line and on line channels for the customers. Derivatives give an ability to leverage.10%. Our Company is a member of the National Stock Exchange. Why F&O : Derivatives instruments are primarily hedging tools. derivative dairy. Get access to various online reports like margin report. Access to latest research reports. net position report with mark to market profit/loss and realized profit. You can add NSE-Cash. along with top gainers / losers. Instant order/trade confirmation gives you similar trading experience as exchange based software without the burden of overhead and maintenance cost A refreshing experience of getting outstanding research based advise equity and derivatives on the same screen. SENSEX. Online transfer of funds through multiple banks. without going through the hassles of giving transfer instruction. Live quotes of NSE–Cash/Derivative.Key benefits of trading online with mybroker Single screen order/trade entry. Commodity. Demat A/c details. BSE Cash. writing cheques. View top 20 shares by value or volume traded. pivot points. turnover report. Create multiple market watches. daily market dairy. trades executed. Industrial. default market watch – NIFTY. Derivative & BSE script on the same market watch. . But regardless of this. In a book building public issue the bids are received at different price levels and the demand for the issue is built up over a period of time. Depending upon the bids received at different price levels the issue price is ascertained. Equity as an asset class also requires constant monitoring may not be possible for you to give the necessary time. equities etc… It is a proven fact that Equities as an asset class typically tend to outperform all other asset classes over the long run. given your other commitments. Motilal Oswal Securities Ltd brings with more than 2 decades of experience & expertise in equity research and stock broking. with asset under management worth Rs. income funds. Portfolio Characteristics Value based stock selection Investment Approach : “Buy & Hold” Investments with Long term perspective Aim to Maximize post tax return due to Low Churn Focused portfolio construction Capital preservation consciousness* . every investor seeks to maximize his returns on investments without capital erosion. In a fixed price issue the issue price is pre ascertained by the issuer. Portfolio Management In today's complex financial environment. Investing in equities. investors have unique needs which are derived from their risk appetite and financial goals. 590 Crores. bonds.IPO Background Book Building and Fixed Price Issue are the two types of Initial Public Offerings (IPOs) through which a corporate can raise money in the capital market. time and a right mind-set. While there are many investment avenues such as fixed deposits. require knowledge. We are one of the leading portfolio service providers. The relationship managers. Constant Portfolio Tracking We understand the dynamics of equity as an asset class. The fund manager strongly believes that “Money is made by Sitting” Investments are identified by a Bottom up Approach. Investments with a Long-term investment View. The aim is to identify potential long-term wealth creators by focusing on individual companies and their management bandwidth. Margin of Safety Benefits of Portfolio Management Service: Professional Management The service offers professional management of your equity investments with an aim to deliver consistent return with an eye on risk. web access will enable you to track all information relating to your investment on daily basis. We have a very robust portfolio management software that enables the entire construction. Investment Philosophy Identify and purchase a piece of great business at a fraction of its true value. Risk Control Well defined investment philosophy & strategy acts as a guiding principle in defining the investment universe. monitoring and the risk management processes. Convenience Our Portfolio Management Service relieves you from all the administrative hassles of your investments. . That’s not all. the one point contact will bestow personalized service and ensure that you receive periodic updates. and account performance reports. Transparency You will get account statements and performance reports on a monthly basis. so we track your investments continuously to maximize the returns. The following portfolio reports are accessible online : Performance Statements Portfolio Holding Reports Transactions Statements Capital Gain / Loss Statements Dedicated Relationship Manager Your Relationship manager will help you carefully understand your financial goals and advise you the right product mix. We provide periodic reports on the performance and other aspects of your investments. Monthly review of portfolios. fully backed with solid research. . we offer two distinct modes of investment to suit your specific needs. The client may choose to apply online for Mutual Funds or call up one of our relationship managers to help you place orders in Mutual Fund schemes. Investments can seem complicated and mystical. RBI Bonds. NSC. Dedicated Mutual fund advisors to understand your needs and help you build a tailor made portfolio.Mutual Funds Mutual funds… realize your financial goal through MOSt MUTUAL. we understand the importance of financial goals of our privileged clients and provide you comprehensive solutions to all your financial needs. Services Offered At Motilal Oswal. Knowledge sharing through educational seminars and workshops. we serve your needs better and help you make informed investment decisions. Through our tailor made portfolios. Since all the traditional investment avenues like bank deposits. KVP etc are becoming unattractive with the interest rate falling continuously. one needs to look for other investments alternatives. At Motilal Oswal Securities Ltd. Mentioned below is a brief description of the services that we offer to our clients : Need based advisory. Monthly Fact-sheet covering our analysis of various funds. The trust they have in Motilal Oswal is reflected by their cumulative holding in MODES worth over Rs. 10 lakh receive special SMS service.Local Brokerage" by Asia Money Brokers Poll 2006. which specialized in the production of commodities. 3400 crores. You receive regular account reports and an efficient service at all times. Over the years commodities markets have been experiencing tremendous progress. The very reason for this lies in the fact that commodities represent the fundamental elements of utility for human beings. . With the government's initiative for agricultural liberalization. They get recommendations on their holdings based on Motilal Oswal Research rated the "Most Independent Research . Today MODES is available at all business locations of Motilal Oswal. The non-trading clients can also avail of MODES. Earlier investors invested in those companies.Commodities Ever since the dawn of civilization commodities trading have become an integral part in the lives of mankind. which is evident from the fact that the trade in this segment is standing as the boon for the global economy today. Clients having holdings over Rs. commodities' trading in India has gained increased momentum in activities. In terms of number of accounts MODES is the second biggest Depository Participant in CDSL with over 150. This accounted for the indirect investments in commodity assets.000 accounts. Depository Services In the times of T+2 having a demat account linked to your trading account becomes really convenient. The promising nature of these markets has made them an attractive investment avenue for investors. Commodity markets have a huge potential in the Indian context particularly because of the agri-based economy. Some of them are: 2009 Rated ‘Best Overall Country Research’ for a Local Brokerage in the 2007 AsiaMoney Brokers poll Rated India’s top broking house in terms of total number of trading terminals by the Dun & Bradstreet survey Rated ‘Outstanding Commodity Broking House-2007’ by Globoil India Ranked second best for Customer Responsiveness in the Financial Sector at the Avaya GlobalConnect Customer Responsiveness awards. Mumbai Motilal Oswal's India Business Excellence Fund raised USD 125 million.Awards and Accolades Motilal Oswal Financial Services has received many accolades in the year gone by.CNBC TV 18 IT User Award .Local Brokerage 2007 Motilal Oswal Commodities Broker Pvt Ltd (MOCBPL) bagged Globoil India's prestigious 'Outstanding Commodity Broking House . MOSL was 'Rated No.Local Brokerage among Hedge Funds' by Asia Money Brokers-Poll 2006” CHAPTER III .2007' Award Motilal Oswal Financial Services Ltd. spread over 26.000 sq ft in Malad.2008 MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World Magazine 2008 for the second consecutive year MOSL creates one of India's largest Equity Dealing & Advisory rooms. . featured as a case study in Harvard Business School Motilal Oswal Securities Ltd ranked as the 'Most Independent Research . 25% higher than the initial target of USD 100 million Asia Money Brokers poll 2007 rates Motilal Oswal Securities Ltd.1 – Best recommendations Mid & Small Caps' and won awards in 3 out of 4 categories at the Starmine India Broker Rankings 2009 from Thomson Reuters 2008 MOSL awarded the prestigious Nasscom .Best Overall Country Research . a rough draft was prepared a pilot study was done to check the accuracy of the Questionnaire and certain changes were done to prepare the final questionnaire to make it more judgmental. Sampling Area Ahmedabad city. Exploratory and Descriptive Research The Research is primarily both exploratory and descriptive in nature. RESEARCH DESIGN Non-Probability The non-probability respondents have been researched by selecting the persons who does the stock trading. The source of information will collect from primary and secondary. . Sampling Technique Initially.RESEARCH METHODOLOGY . A well structured questionnaire was prepared for the primary research and personal interviews will be conducted to collect the responses of the target population. Thos persons who do not trade in stocks will not been interviewed. Sample Size The sample size was restricted to only 100 respondents. CHAPTER IV RESEARSH ANALYSIS & INTERPRETATION 1) Do you own a computer? Yes 80 No 20 INTERPRETATION Out of 100 people surveyed found that 20 people do not have computer while 80 people having computer. . 2) Do you have an Internet connection? Yes 60 No 20 INTERPRETATION: 80% people having Internet Connection while 20% people do not have Internet Connection. . 40 people Trade Online out of 60 people. .3) Do you trade Online? Yes 40 No 20 INTERPRETATION: In the present scenario. 4) Through which Technology do you trade Online? Web Based Technology 28 Software Base 12 INTERPRETATION: From the survey of 40 (on line) people. . found that 28 people preferred Web Based technology while remaining 12 are using Software based technology. 5) Do you think online trading is easy and fast way of trading? No 2 Yes 38 Yes No INTERPRETATION: Survey of 40 people 38 people perceived that Online Trading easy and fast way trading. . Ltd and which is preferred by 7 people.] 6) Which of the following companies do you preferred to Online Trading? Motilal Oswal Sec. 11 people preferred ICICI Direct while 8 people preferred Sharekhan follow by Motilal Oswal Sec. . Ltd 5 7 ICICI Direct 11 Sharekhan 8 Indiabulls Kotak Securities 5 Religare 3 Any Other 1 INTERPRETATION: Among the 40 people of online trader. ) How would you rate the internet and telecommunication Services? Excellent 7 Good 20 Average 10 Poor 3 INTERPRETATION: Among the 40 people of online trader found that 7 people rated Excellent Internet while 20 people rated Average service of Internet.7. . 9) What factors do you consider when you trade online? Strongly Agree 1 Agree 2 Neither Agree Disagree Nor Disagree 3 4 Strongly Disagree 5 Strongly Agree Agree Neither A Nor D Disagree Strongly disagree Total Time Saving Convenient 12 20 7 1 0 40 15 22 2 1 0 40 Instant Transfer Security 19 15 16 16 5 7 0 2 0 0 40 40 . 10.) Do you think that online trading has helped in growth and development of online stock market? Yes 40 No 0 INTERPRETATION: 40 Respondent believe that online trading will help for growth and development of stock market. . .10)Do you think introduction of online trading has helped in attracting the new investors thus increasing the trading volumes of Stock Market? Strongly Agree Agree 15 18 Neither Agree Nor Disagree 7 INTERPRETATION: 15 respondents are strongly Agree that online trading has helped in attracting the new investors to increase volume of stock market while 18 respondents are agree. 11)Do you feel that the trading volume will increase in near future because of online trading? Yes 35 No 5 INTERPRETATION: Out of 40 respondents. 35 are believed that online trading accelerates to increase trading volume in near future. . . 38 are believed that M-Trading increase trade volume and 2 respondent are not sure.12) Now Technology is Diversified. Do you think M-Trading (Mobile Trading) will prove to be a new concept? Yes 38 No 2 INTERPRETATION: Out of 40 samples. People are moving towards online trading from offline. because of its rapid growth & development and huge acceptance. 3. who are doing offline trades and make them aware about the ease and benefits of online trade. 2. . 3. Company should more focus on the promotion of its online offering. Online trading should provide online a/c. Company has to provide online trading software at the minimum or free charges. and trained them if required. 5. 4. to every customer with trading & DMAT account. RECOMMENDATIONS 1. Still there are many people who have not computer or internet connection or they do not trade online. The future of online trading is very bright. 2. 6. 4. Online trading in near future become so popular that everyone should start trade online by PC’s or may be through mobiles. 5. Company has to facilitate its online services with solid research and advices which help the investors to do the various investments.CHAPETR V FINDINGS 1. More investors are consider online trading as a better. but because of lack of knowledge about using it they still stuck to the offline. Online trading option help companies for more clients’ acquisition. Company should find out its existing customer. Also there is an intense competition among the companies and the companies come up with new and new promotion schemes such as discounted and negotiable brokerages.CONCLUSION The online trading is growing with a rapid pace with the rising level of education among the customers. . Although some people feel that online trading is not secure but the people doing the trading online is happy about the increasing security concerns among the companies. Also people trade very less in the bearish market and the company’s profits against brokerage fees soars downwards. Zero balance accounts. This is due to the fact that at these times people do not prefer to open the DMAT and Trading accounts. The mantra for success I the current situation will be educating the customers about the benefits of online trading and the amount of ROI that can be generated through it. waiving a/c opening fees and AMC etc. It is also a found fact that during the bearish market the ratio of online trading becomes very less. The other factors being that the India Investor nowadays wants to deal himself in trading rather than depending upon other middlemen. As the internet penetration is growing in Indian this business holds a huge potential for growth. The total trading volume of brokerage companies has increased from USS1239.1 billion in 2004 to USS1492.1 billion in 2005. The year 2008 has not been so good for the stock market and the Sensex and Nifty has been dipping and affecting the business negatively for these companies.7 billion by 2015. So the companies have to reduce their account opening fees to attract more and more customers. They also consider the factors like time saving in doing the online transaction. convenience etc. and is expected to reach USS6535. google.co.com www.com www.bseindia.nseindia.com www.in .sebi.Bibliography Marketing management by Philip Kotler Times of India The Economic Times The Financial Express www.sharekhan.com www.kotakstreet.com www.motilaloswal.com www.icicidirect.com www.