A Study On Investors Perception Towards Investment In Stock Market.docx

PROJECT REPORT ON STUDY ON INVESTORS PERCEPTION TOWARDS INVESTMENT IN STOCK MARKET

SUBMITTED BY JANICE VAZ

TYBAF SEMESTER – VI 2018-19

UNDER THE GUIDANCE OF PROF. Dr. Swagatika Nanda

SUBMITTED TO UNIVERSITY OF MUMBAI

VIDYALANKAR SCHOOL OF INFORMATION TECHNOLOGY (AFFILIATED TO UNIVERSITY OF MUMBAI) VIDYALANKAR MARG, WADALA (E), MUMBAI 400037

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ACKNOWLEDGEMENT

I hereby acknowledge all those who directly or indirectly helped me in drafting of this project report. It would not have been possible for me to complete the task without their help and guidance. First of all I would like to thank The Principal Dr. Rohini Kelkar, The Vice Principal Prof. Vijay Gawde, and our Project In charge Prof.Dr Swagatika Nanda who gave me the opportunity to do this project work. They also conveyed the important instructions from the university time to time. Secondly, I am very much obliged of Prof.Dr Swagatika Nanda for giving guidance for completing the project. Last but not the least; I am thankful to the University of Mumbai for offering the project in the syllabus. I must mention my hearty gratitude towards my family, other faculties and friends who supported me to go ahead with the project.

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A STUDY ON INVESTORS PERCEPTION TOWARDS INVESTMENT IN STOCK MARKET

Content Page Sr. No

Page Title

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Cover Page

2

Certificate by College

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Acknowledgement

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Declaration of Completion of Project by Student

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Executive Summary

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Index

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List of Tables/Figures

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Page No.

Chapter 1: Introduction 1.1 INTRODUCTION

For the development of any country capital markets plays a critical and significant role. The developed capital markets provide various benefits like high economic growth, high employment, infrastructural development and developed financial sectors. Developed markets not only benefits a country but also offers ample opportunities to retail investors for wealth generation and maximization. The total market cap of all the Indian companies is nearly 65%of the GDP today as compared to the US at nearly 90% as reflected in a study titled Deepening of capital markets by the Boston Consulting Group and Confederation of Indian Industry in December 2012. In India the household savings rate is increasing and almost fifty percent of the savings are in physical assets like gold, real estate and the rest fifty percent is in financial assets. In India the private equity has grown substantially. The value of private equity investments in the country grew more than 20 times in less than a decade. The performance of Market has registered a significant upward trend in recent times. Retail investors who are investing in small stocks to make a quick gain, are changing their approach and now placing their money in quality stocks. According to (Mascarenhas, 2015) companies such as SBI, ICICI Bank, Axis Bank, ITC, ONGC, Infosys, Asian Paints and Tata Power, have seen a sharp rise in the number of individual retail investors— between 50,000 and 3.5 lakh — at the end of March 2015 compared with the previous year.

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The NSE has specified that it has seen retail investor participation increase dramatically in the last one year, with Maharashtra recording the highest rate of increase. On the NSE platform, Maharashtra had the most number of people trading in the last one year (up 38 per cent) while Gujarat witnessed the highest jump in value terms, by more than 50 per cent. Maharashtra, Goa and Gujarat together witnessed 32 per cent spurt in the number of people actively trading in the last one year. India has around 2.5 crore registered clients across exchanges, according to the NSE statement. With rising trend of popularity of stock market in general as a place where one can earn good returns in less time has given a push to a common man to be a part of this market. In academics term an Individual who commits money to any source of investment with the expectation of financial return is being recognized as an Investor. The prime concern of an Individual Investor is usually to have more profit with minimum risk. As oppose to this a speculator is always willing to expect a higher level of risk in the hopes of collecting higher than average profits. An individual with the various levels of needs and level of risks being taken is being classified in different categories of Investors. Some categories of Investors are mutually exclusive and some are not. The classification which not mutually exclusive mainly includes gambling , Angel Investors , some equity Investors, Investment Trust, Mutual Funds, Hedge Funds, Sovereign Wealth Fund. With the growing pace of Investment alternatives availability in the market the awareness and knowledge level of the Investors have also increased many folds. An Individual usually willing to relocate their surplus amount of funds with the Government Securities, Banks, and LICs as they were being recognized as safe mode of keeping the savings and also to earn a decent return on the deployed funds. Gradually the scenario has taken a shift which leads to the introduction of market linked securities with moderate component of risk and other investment opportunities with flexible level approach. This gave an opportunity to an individual investor to diverse his/her portfolio to earn a higher rate of return with calculated amount of risk. Gradually the shift is being observed in the nature of Investor towards their investment pattern. During the 1980’s the noise of Stock

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Market operations had become prominent among the society. With a bit hesitation individuals started shelling out the small segment of their earning into the share purchasing with a feel of having fast and maximum return in a short span of time. Over a period it is being realized that the Stock Market has made its footage as an identity of Market which gives maximum return but with rich component of risk in a short span of time.

1.2 NEED FOR THE STUDY

In India, when a person is asked about investment the sole answer that one gets is either fixed deposit or gold. According to various surveys only 2.5% of the total population of 1.3 billion which means only people in the metro cities are aware of investment apart from the traditional fixed deposit or gold. Following study is carried out to know the extent and awareness among people related to various investment alternatives and also their perception towards stock market investment. This study will help us to know about how aware an individual is about the various investment avenues available in India and also about the various factors that affect an individual while investment of their wealth. The importance and relevance of this study is that it will give us an idea of how individual invest and save their money so that they can fetch good returns. This study will provide us information on what factors drive an individual while investing. This study would also focus on individual who have started working for the past 1-2 years and to know what is their perception towards investment inn stock market and level of awareness.

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1.3 SUPPORTING LITERATURE

Smita Mazumdar (2014) Individuals invest rationally with intention of maximizing utility for given level of risk. This study examines the relationship between investment behaviour and level of knowledge. Financial knowledge leads to investing in different investment avenues such as equity, gold, real estate, fixed deposits etc. study examines the aggressive investors, averse investors and moderate risk taker with the help of financial knowledge.

N. Geetha, M. Ramesh (2015) This study Examines the factors responsible for investment behaviour of people and different investment options available. Equity are high risk and high return investment with liquidity, debts are low risk and fixed return instruments, Mutual funds and bonds are low risk with normal returns instruments, Company deposits and bank deposits has low risk and low returns, post office savings , PPF and insurance policies are no risk investment with low returns, Real estate and Gold has no returns on investment but has capital appreciation.

Rajeshwari Jain (2014) Investment is the consumption and saving opportunity in future expressed in monetary terms. Two classes of investments like Fixed income statements i.e. Preference shares , Bonds, fixed deposits and Variable income investment i.e. equality capital, proprietary ownership. Data shows that

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respondents between the age group of 26 years to 35 years are involve in investment activities.

Santi Swarup K,(2015) had indicated that the investors gave importance to their own analysis as compared to brokers’ advice. They also considered market price as a better indicator than analyst’s recommendations. The study also identified factors that were affecting primary market situation in India. Issue price, information availability, market price after listing and liquidity had emerged as importance factors in the study. The study suggested that investors need to be assured of some return and the level of risk associated with investment in the market was very high. They have bad experience in terms of lower market price after listing and high issue price. A number of measures in terms of regulatory price level and market oriented reforms were suggested to improve the investor confidence in equity primary markets. However, this study did not highlight the measures for improving investors’ confidence in the secondary market.

E. Bennet et al (2015) found the average value of the five factors namely, return on equity, quality of management, return on investment, price to earnings ratio and various ratio of the company had influenced the decision makers. Further other five factors such as recommendation by analysts, broker and research report, recommended by friend, family and peer, geographical location of the company and social responsibility were given the lowest priority or which had low influence on the stock selection decision by the retail investors.

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1.4 OBJECTIVE AND HYPOTHESIS

1. To understand the investors preference towards investment. 2. To identify the factors influencing investor while investing in stock market. 3. To know level of awareness of the various investment avenues available in India.

HYPOTHESIS The following null hypotheses were framed and they were tested with the help of statistical tools mentioned at the end of this chapter.  There is no association between gender of the investor and their preference of investment.  There is no association between the occupation of the investor and the percentage of investment.  There is no association between the age of the investor and their preference of investment.

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METHODOLOGY

Research Design: The research was exploratory in nature and survey method was used to conduct the study.

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Sample Size: For the purpose of the study a sample size of 80 respondents were covered in the study. Methods of data collection: The research is based on primary data. A wellstructured questionnaire was used for collecting primary data. For the study both primary and secondary data has been used. Tools used: Statistical tools, MS excel, Google form.

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1.6

PROJECT OUTLINE

This project is undertaken to know what investment avenues investors are aware of and invest in. It gives an idea on how investors perceive investment in stock market. This study even shows the various factors that are considered by individuals while investing in stock market is concerned.

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Chapter 2: Theoretical Development

INTRODUCTION TO INVESTMENT The word "investment" can be defined in many ways according to different theories and principles. It is a term that can be used in a number of contexts. However, the different meanings of "investment" are more alike than dissimilar.

Generally, investment is the application of money for earning more money. Investment also means savings or savings made through delayed consumption. According to economics, investment is the utilization of resources in order to increase income or production output in the future.

An amount deposited into a bank or machinery that is purchased in anticipation of earning income in the long run are both examples of investments. Although there is a general broad definition to the term investment, it carries slightly different meanings to different industrial sectors.

According to economists,

investment refers to any physical or tangible asset, for example, a building or machinery and equipment.

On the other hand, finance professionals define an investment as money utilized for buying financial assets, for example stocks, bonds, bullion, real properties, and precious items.

According to finance, the practice of investment refers to the buying of a financial product or any valued item with an anticipation that positive returns will be received in the future. The most important feature of financial investments is that they carry high market liquidity. The method used for evaluating the value of a financial investment is known as valuation.

According to business theories, investment is that activity in which a manufacturer buys a physical asset, for example, stock or production equipment, in expectation that this will help the business to prosper in the long run. CHARATERISTICS OF INVESTMENT 13

The characteristics of investment can be understood in terms of as - return, - risk, - safety, - liquidity etc.

Return: All investments are characterized by the expectation of a return. In fact, investments are made with the primary objective of deriving a return. The return may be received in the form of yield plus capital appreciation. The difference between the sale price & the purchase price is capital appreciation. The dividend or interest received from the investment is the yield. Different types of investments promise different rates of return. The return from an investment depends upon the nature of investment, the maturity period & a host of other factors. Risk: Risk is inherent in any investment. The risk may relate to loss of capital, delay in repayment of capital, non payment of interest, or variability of returns. While some investments like government securities & bank deposits are almost risk less, others are more risky. The risk of an investment depends on the following factors. 

The longer the maturity period, the longer is the risk.



The lower the credit worthiness of the borrower, the higher is the risk.

The risk varies with the nature of investment. Investments in ownership securities like equity shares carry higher risk compared to investments in debt instrument like debentures & bonds. Safety: The safety of an investment implies the certainty of return of capital without loss of money or time. Safety is another features which an investors desire for his investments. Every investor expects to get back his capital on maturity without loss & without delay.

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Liquidity: An investment, which is easily saleable, or marketable without loss of money & without loss of time is said to possess liquidity. Some investments like company deposits, bank deposits, P.O. deposits, NSC, NSS etc. are not marketable. Some investment instrument like preference shares & debentures are marketable, but there are no buyers in many cases & hence their liquidity is negligible. Equity shares of companies listed on stock exchanges are easily marketable through the stock exchanges. An investor generally prefers liquidity for his investment, safety of his funds, a good return with minimum risk or minimization of risk & maximization of return.

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INVESTMENT OPTIONS FOR INVESTORS

Investment Avenues is in which an investor can place his surplus funds with the objectives of having certain gains in the future. This organization may be well organized like a bank, financial institution, mutual funds and company or in an unorganized manner like chit fund organization, Nidhis (a type of non-banking finance company) or curry (a type of non-banking finance company in southern India). Different investment avenues have different features; few offer a fixed return and certain others offer stock market based returns and yet certain others offer a mix of these two. Few of these have an element of safety and yet others do not have any kind of safety. In certain cases these are in negotiable form and in other cases these are non-negotiable. Investment avenues of a country are subject to different rules and regulations of either the government or some apex body like Reserve Bank of India, NABARD, SEBI or Companies Act. Following are the features of investment avenues.  A place where one can invest his surplus  Fixed or floating return  Security vs. Non-security form  Investment accepting organization might have an obligation or not  Negotiable vs. Non-negotiable  Risk is the inherent part of every avenue  May be in an organized form or unorganized form  Regulation  Market oriented vs. others

Investment avenues can be broadly divided into following types.  Security form  Non-security form  Traditional form  Other emerging avenues

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SECURITY FORMS These are the instruments or securities through which a company or issuing authority like government raises finance. Majority of these are in negotiable form, i.e. these are sellable in the market by the holder of the securities. Companies/Government issues these in capital market or money market to raise funds directly from the providers of the funds. Some of these have maturity for a very long period and others have for either medium term or short term. Security form can further be divided into money market securities and capital market securities.

MONEY MARKET SECURITIES It is the market in which liquid funds as well highly liquid securities are traded in for a very shorter duration. The main participants in this market are banks and financial institutions. The banks deal in this market to fulfill their CRR (Cash Reserve Ratio) and SLR (Statutory Liquidity Ratio) requirements. However, few corporate houses, insurance companies, mutual funds, provident funds trusts and non-banking finance companies also play an active role in this market. This market provides liquidity support to banking system. At the same time, the central bank of the country – Reserve bank of India- uses this market to exercise monetary control in the economy and credit control in the country.

Money market can be divided into two parts, call money market and government securities/gilt-edged securities market. Call money market in which surplus cash of banks and corporate houses is traded in for a very short maturity period, generally not exceeding one fortnight. The main transactions are carried on by banks to fulfill their liquidity, as well as CRR requirements. The main participants in market are banks, financial institution, mutual funds, corporate houses and other organizations as allowed by Reserve bank of India from time to time. Banks are allowed to play the role of both the seller as well as the buyer of funds. A seller of funds is the one who provides it to another party and the party receiving it is identified as the buyer of the funds. For making funds available, the seller charges interest, which is decided mutually.

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The charges in a call money market are influenced by the demand and supply of money available in this market. Call rates fluctuate very frequently due to the volatile nature of this market. The provider of funds can call back his money at a short notice; which is why it is called call money market. The market for government securities is known as gilt-edged securities market. Government securities are either issued by the central government or state government or any of the agencies of these governments. The government guarantees payment of interest and repayment of the principal amount in gilt-edged securities. Developed banks and financial institutions trade in this market to fulfill their SLR (Statutory Liquidity Ratio) requirement. The feature of safety and liquidity in these securities is as safe as good as that of gold; hence, these are called as giltedged securities. Following are the main instruments in this market.

TREASURY BILLS Treasury bills are very useful instruments to deploy short term surplus depending upon the availability and requirement. Even funds which are kept in current accounts can be deployed in treasury bills to maximize returns. These treasury bills have a maturity period not exceeding 364 days. These bills do not carry any interest rate; instead these are issued at a discount to face value, and redeemed at par on the maturity. Treasury bills have a unique maturity period of 91 days, 182 days, and 364 days. Recently RBI issued treasure bills for a maturity of 14 days and 28 days too. Banks do not pay any interest on fixed deposits of less than 15 days, or balances maintained in current accounts, whereas treasury bills can be purchased for any number of days depending on the requirements. This helps in deployment of idle funds for very short periods as well. Further, since every week there is a treasury bills auction, investor can purchase treasury bills of different maturities as per requirements so as to match with the respective outflow of funds. Treasury bills are of two types, regular treasure bills issued to the general public, including banks, financial institutions and corporate houses through a notification by RBI. Ad-hoc treasure bills are issued in the favour of RBI, and these bills never issued or sold subsequently to anyone in the secondary market. Nowadays RBI issues only regular treasure bills; ad-hoc

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treasure bills are not issued. At times when the liquidity in the economy is tight, the returns on treasury bills are much higher as compared to bank deposits even for longer term. Another important advantages of treasury bills over bank deposit are that the surplus cash can be invested depending upon the staggered requirements. Advantage of treasury bills includes; no tax deducted at source, zero default risk being sovereign paper, highly liquid money market instrument, better return especially in the short term, transparency, simplified settlement, high degree of tradability and active secondary market facilitate meeting unplanned fund requirements. Limitations of treasury bills includes restrictions and penalties associated with redeeming treasure bonds too early, depending on the type of bond the rate of return may not exceed the average annual inflation rate of 3 percent thus mitigating the interest gains.

CERTIFICATE OF DEPOSITS Certificate of deposits are offered to investors by banks just like normal deposits. But the difference is certificate of deposits are short term wholesale deposits and they are tradable. An investor holding the certificate of deposit can sell it to another investor. Because of liquidity interest rates on certificate of deposits are normally less than that on „sight‟ deposits, investor can compare certificate of deposits with treasury bills as they are short term, tradable, discounted bonds. But the difference is treasure bills are issued by government and certificates of deposits are issued by banks, financial institutions etc. The lender of a certificate of deposits could be another bank, corporate or financial institution. Certificates of deposits are rated by approved rating agencies (e.g. CARE, ICRA, CRISIL, and FITCH) which considerably enhance their tradability in the secondary market, depending upon demand.

The term of certificate of deposit is fixed and it is usually 3 months, 6 months, 1 year or 5 years. In India certificate of deposits are introduced in July 1989. Maturity period is minimum 7 days and maximum 12 months for certificate of deposits issued by banks. For certificate of deposits issued by financial 19

institutions, maturity is minimum 1 year and maximum 3 years. Minimum amount to invest in a certificate of deposit is Rs. 100000 and in the multiples of Rs. 100000 thereafter. Loan against collateral of certificate of deposit is not permitted but it is possible in „sight fixed deposits. Premature withdrawal is not allowed but can be sold to other investors. Interest rate can be fixed or floating and they are issued at a discount to face value like zero coupon bonds. Advantages of certificate of deposits  Since one can know the returns from inception, the certificates of deposits are

considered much safe.  One can earn more as compared to depositing money in savings account.  The central insurance corporation guarantees the investments in the certificate

of deposit. Disadvantages of Certificate of deposits  As compared to other investments the return is less. 4  Money is tied along with the long maturity period of the certificate of deposit.  Huge penalties are paid if one gets out of it before maturity.

COMMERCIAL PAPER Commercial paper is short-term loan that is issued by a corporation for financing accounts

receivable

and

inventories.

Commercial

papers

have

higher

denominations as compared to the treasury bills and the certificate of deposit. The maturity period of commercial papers is minimum 15 days to maximum of one year. Commercial papers do not carry any interest rate; instead these are issued at a discount to face value and redeemed at par on maturity. The difference between issue price and maturity value is the interest compensation for the buyer of commercial papers. These are negotiable in nature – these can easily and freely be transferred from one party to another party. They are very safe since the financial situation of the corporation can be anticipated over a few months.

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Commercial paper is a money market security sold by banks and corporations. Commercial paper is a low-cost alternative to bank loans. It is a very safe investment and can be used for inventory purchases or working capital. Use of commercial paper can efficiently raise large amounts of funds quickly and without expensive registration by selling paper, either directly or through independent dealers, to a large and varied pool of institutional buyers. Competitive, marketdetermined yields in notes, whose maturity and amounts can be tailored to specific needs, can be earned by investing in commercial paper. The essential quality of this type of investment is short-term maturity typically three to six months, an automatic or self-liquidating nature, and non-speculativeness in origin and purpose of use. The two main methods of issuing commercial paper are selling them directly to an investor, or selling them to a dealer who then sells them in the market. Commercial paper is issued by large creditworthy borrowers, which means it's typically less risky than some other investments. Also, the rating provided by credit rating agencies gives an indication to investors about how risky the investment is, which helps them better gauge the investment. As a tradeoff for the relative safety of this investment, it yields a lower rate than riskier investments, such as stocks. Another advantage is that commercial paper issuers usually can't buy back the paper before its due date without a penalty. This means they can't buy back the paper before its maturity without compensating the investor for the early purchase. Investors can thus count on a steady yield from commercial paper, unlike in the case of certain bonds that investors can retire before their maturity. These funds also charge management fees and expenses, for giving the convenience of investing in market-rate, short-term, fixed-income securities. Therefore, investor could obtain slightly higher yields on their money if they invest in commercial paper directly. However this is not a very liquid investment and there is no active secondary market, this makes it difficult for the investor to sell off the commercial paper before its scheduled maturity date.

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DATED SECURITIES OF GOVERNEMT Government securities are issued by the government for raising a public loan or as notified in the official gazette. They consist of government promissory notes, bearer bonds, stocks or bonds held in bond ledger account etc. They may be in the form of treasury bills or dated government securities. Government securities are mostly interest bearing dated securities issued by RBI on behalf of the government of India. Government of India uses these funds to meet its expenditure commitments. These securities are generally fixed maturity and fixed coupon securities carrying semi - annual coupon. Since the date of maturity is specified in the securities, these are known as dated government securities.

The dated government securities market in India has two segments; primary market consists of the issuers of the securities, viz., central and state government and buyers include commercial banks, primary dealers, financial institutions, insurance companies & co-operative banks. RBI also has a scheme of non-competitive bidding for small investors. Secondary market includes commercial banks, financial institutions, insurance companies, provident funds, trusts, mutual funds, primary dealers and reserve bank of India. Even corporate and individuals can invest in government securities. The eligibility criteria are specified in the relative government notification. Following are the main features of government securities. i.

Issued at face value.

ii.

No default risk as the securities carry sovereign guarantee.

iii.

Ample liquidity as the investor can sell the security in the secondary market.

iv.

Interest payment on a half yearly basis on face value.

v.

No tax deducted at source.

vi.

Can be held in dematerialized form

vii.

Rate of interest and tenure of the security is fixed at the time of issuance and is not subject to change.

viii.

Redeemed at face value on maturity

ix.

Maturity ranges from of 2-30 years. 22

Auctions for government securities are normally multiple-price auctions either yield based or price based. In yield based type of auction, RBI announces the issue size or notified amount and the tenure of the paper to be auctioned. The bidders submit bids in term of the yield at which they are ready to buy the security. If the bid is more than the cut-off yield then its rejected otherwise it is accepted where in price based type of auction RBI announces the issue size or notified amount and the tenure of the paper to be auctioned, as well as the coupon rate.

The bidders submit bids in terms of the price. This method of auction is normally used in case of reissue of existing government Bids at price lower than the cut off price are rejected and bids higher than the cut off price are accepted. Price based auction leads to a better price discovery then the yield based auction. Government securities, state development loans & treasury bills are regularly sold by RBI through periodic public auctions. It gives investors an opportunity to buy government securities/treasure bills at primary market auctions of RBI through its invest scheme. Investors may also invest in high yielding government securities through buy and sell facility for selected liquid scripts in the secondary markets.

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CAPITAL MARKET SECURITIES The capital market is a market for financial assets which have a long or indefinite maturity. Unlike money market instruments the capital market instruments become mature for the period above one year. It is an institutional arrangement to borrow and lend money for a longer period of time. It consists of financial institutions like IDBI, ICICI, UTI, LIC, etc. These institutions play the role of lenders in the capital market. Business units and corporate are the borrowers in the capital market. Capital market involves various instruments which can be used for financial transactions. Capital market provides long term debt and equity finance for the government and the corporate sector. Capital market can be classified into primary and secondary markets. The primary market is a market for new shares, where as in the secondary market the existing securities are traded. Capital market institutions provide rupee loans, foreign exchange loans, consultancy services and underwriting. Capital market securities issued by the companies in the primary market to raise the finance. Issue of the securities is completely regulated by the provisions of SEBI. A company can issue the following securities in this market.  Equity shares  Preference shares  Debentures

EQUITY SHARES Equity is the term commonly used to describe the ordinary share capital of a business. Ordinary shares in the equity capital of a business entitle the holders to all distributed profits after the holders of debentures and preference shares have been paid. Ordinary shares are issued to the owners of a company. The ordinary shares of Indian companies typically have a nominal or 'face' value between rupees 10 to 100. However, it is important to understand that the market value of a company's shares has little relationship to their nominal or face value. The market value of a company's shares is determined by the price another investor is prepared to pay for them. In case of publicly quoted companies, this is reflected in the market value of the ordinary shares traded on the stock 24

exchange. In case of privately owned companies, where there is unlikely to be much trading in shares, market value is often determined when the business is sold or when a minority shareholding is valued for taxation purposes.

"Deferred ordinary shares" are a form of ordinary shares, which are entitled to a dividend only after a certain date or only if profits rise above a certain amount. Voting rights might also differ from those attached to other ordinary shares. An equity holder become the owner of the company and enjoys voting rights also. Besides capital appreciation, he is entitled to get dividend also. Equity shares are listed on stock market and can easily converted into cash whenever required. But equity investments are the most risky form of investment where there are chances of going money into 100 percent loss. Besides, investors will get his money back when all the parties have been paid their dues to company at the time of liquidation.

PREFERENCE SHARES A preference shares means shares which carries preferential rights in respect of dividend at fixed amount or at fixed rate before the holders of the equity shares have been paid. It also carries preferential right in regard to payment of capital on winding up or otherwise. It means the amount paid on preference share must be paid back to preference shareholders before anything in paid to the equity shareholders. In other words, preference share capital has priority both in repayment of dividend as well as capital. Following are the main types of preference shares. 

Non – Cumulative Preference Shares or simple preference shares gives right to fixed percentage dividend of profit of each year. In case no dividend thereon is declared in any year because of absence of profit, the holders of preference shares get nothing nor can they claim unpaid dividend in the subsequent year or years in respect of that year.



Cumulative preference shares however give the right to the preference shareholders to demand the unpaid dividend in any year during the subsequent year or years when the profits are available for distribution. In 25

this case dividends which are not paid in any year are accumulated and are paid out when the profits are available. 

Redeemable Preference Shares are preference shares which have to be repaid by the company after the term for which the preference shares have been issued.



Irredeemable preference shares means preference shares need not to repay by the company except on winding up of the company. However, under the Indian companies act, a company cannot issue irredeemable preference shares. In fact, a company limited by shares cannot issue preference shares which are redeemable after or more than 10 years from the date of issue. In other words the maximum tenure of preference shares is 10 years. If a company is unable to redeem any preference shares within the specified period, it may, with consent of the company law board, issue further redeemable preference shares equal to redeem the old preference shares including dividend thereon. A company can issue the preference shares which from the very beginning are redeemable on a fixed date or after certain period of time not exceeding 10 years.



Participating Preference Shares are entitled to a preferential dividend at a fixed rate with the right to participate further in the profits either along with or after payment of certain rate of dividend on equity shares. A nonparticipating share is one which does not such right to participate in the profits of the company after the dividend and capital has been paid to the preference shareholders.



Convertible Preference Shares are the one which have a provision of conversion into the equity shares of the issuing company; the conversion takes place on pre-specified date. The terms and conditions of conversion are specified at the time of issue of these shares. Holders of these have the benefit of preference shares till the date of conversion, thereafter these have the benefits of equity shares, due to this dual nature these are called hybrid securities.



Non-convertible preference shares are those in which a provision of conversion into the equity shares of the issuing company is not provided, 26

these might be redeemable or irredeemable, redemption, if any, take place according to the terms and conditions of the issue of these preference shares. For the investor, preference shares are less attractive than loan stock because they cannot be secured on the company's assets, the dividend yield traditionally offered on preference dividends has been too low to provide an attractive investment compared with the interest yields on loan stock in view of the additional risk involved. 2.

DEBENTURES AND BONDS Debentures and bonds are similar except for one difference that bonds are more secure than debentures. In case of both, investors are paid a guaranteed interest that does not change in value irrespective of the fortunes of the company. However, bonds are more secure than debentures, but carry a lower interest rate. The company provides collateral for the loan. Moreover, in case of liquidation, bond holders will be paid off before debenture holders. In India, the terms „corporate bonds‟ and „debentures‟ are interchangeably used. Though different countries have different interpretations of both the terms „corporate bonds‟ and „debentures‟, our companies act (section 2(12)) identifies both as same. Investor may find a corporate bond similar to a fixed deposit in a bank or a post office scheme or any such fixed‐return instrument. However, every type of investment is different in its own way and has its own features, advantages and disadvantages.

In India, both public and private companies can issue corporate bonds. A company incorporated in India, but part of a multinational group, can also issue corporate bonds. However, a company incorporated outside India cannot issue corporate bonds in India. A statutory corporation like LIC can also issue corporate bonds. For investors those who are looking for an investment that generates fixed income periodically, corporate bonds may be an ideal investment. It normally offers a higher rate of interest as compared to fixed deposits or postal savings or similar investments. Listed bonds can also sell in the secondary market before its maturity. While a bond is usually not designed for capital appreciation; a listed

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bond may also earn capital appreciation i.e. investor can sell bond at a price higher than cost price in the market.

A corporate bond may offer a fixed or floating rate of interest and accordingly investor may earn a fixed or varying amount of interest periodically. A fixed rate bond will pay fixed amount periodically as per the interest rate set out when the bonds were issued. This interest is determined as a percent of the face value of the bond. Such fixed interest payments are sometimes also called coupon payments. A floating rate bond has its interest rate pegged to a benchmark rate i.e. (Benchmark rate) +/‐ (some percent). The benchmark rate may be government bond/MIBOR. As the benchmark rate changes, the interest rate on the bond will vary accordingly. Hence, a floating rate bond is considered to be relatively risky since return is dependent on the movement of the benchmark rate. If investor wish to receive fixed amount periodically, a fixed rate bond is advisable. However, a fixed interest rate bond may earn less than a floating rate bond due to lesser risk involved. If investor plans to invest in a floating rate bond, return will depend on the movement of benchmark rate which may move in either direction substantially.

An investor in corporate bonds receives his interest payments periodically. The interest may be received yearly or half yearly or quarterly or even monthly depending upon the period set at the time of issue. The interest payment dates are usually specified in the prospectus. On the maturity date, the issuer pays back the investor face value of the bonds held by him along with the interest accrued on the same.

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FIXED DEPOSITS RECEIPTS (FDR) Banks offer a low interest on the deposited money in savings bank account and current account, but these accounts offer the convenience of making partial withdrawal anytime at demand. In contrary to this FDR is a deposit scheme which offers a higher interest rate with the condition to maintain the deposit for a fixed time period. It is not like an account wherein any time any amount can be added instead a fixed amount is deposited by mentioning the time period till which no withdrawal is allowed. If the deposit continues till the specified maturity period then interest for the full period along with the principal amount is paid. These also offer the convenience of premature withdrawal, in such case interest is paid at a low rate and few banks charge a panel interest also.

FDR can be pledged with the issuing bank to obtain a loan against the FDR or it can be pledged to open a cash credit account. In case a loan is taken against the FDR then bank gives the interest on the amount of FDR and charges the interest on the loan amount. Fixed deposit is a financial instrument for investors to deposit money for a fixed duration ranging from 15 days to 10 years. Therefore, the depositors are supposed to continue such FDR for the duration of time for which the depositor decides to keep the money with the bank. However, in case of need, the depositor can ask for closing the fixed deposit in advance by paying a penalty. Soon some banks have even introduced variable interest fixed deposits. The rate of interest in such deposits will keep on varying with the prevalent market rates i.e. it will go up if market interest rate goes and it will come down if the market rates fall.

POST OFFICE DEPOSITS/ POST OFFICE SAVINGS CERTIFICATE National savings certificate popularly known as NSC, is a time-tested tax saving instrument that combines adequate returns with high safety. NSCs are an instrument for facilitating long-term savings. A large chunk of middle class families use NSCs for saving on their tax, getting double benefits. They not only save tax on their hardearned income but also make an investment which assures good and safe returns. 29

National savings certificate (NSC) is a fixed interest, long term instrument for investment. NSCs are issued by the department of post, government of India. Since they are backed by the government of India, NSCs are a practically risk free avenue of investment. They can be bought from authorized post offices. They offer a fix rate of return per annum. This interest is calculated every six months, and is merged with the principal. That is, the interest is reinvested, and is paid along with the principal at the time of maturity. NSCs qualify for investment under Section 80C of the income tax act. Even the interest earned every year qualifies under Sec 80C.

National savings certificates are available in the denominations of Rs. 100, Rs 500, Rs. 1000, Rs. 5000 & Rs. 10000 throughout the year. There is no maximum limit on the purchase of the certificates. So it is investor to decide how much amount to invest in the NSCs. This is of course a huge benefit for investor as he can decide as much as budget allows. There are various investment schemes available in post offices, like KVP (KisanVikas Patra), Post Office Monthly Income Scheme (MIS), Post Office Time Deposits (TD), Post Office Recurring Deposits (RD), National Savings Certificates (NSC) and National Saving Schemes (NSS) etc. All these schemes are completely risk-free and do not need to have large sum of money to start investing in these schemes. Some schemes offer tax-saving benefits and some gives tax-free returns. So investors need to find out scheme as per requirements.

PUBLIC PROVIDENT FUND (PPF) PPF is a 30 year old constitutional plan of the central government happening with the objective of providing old age profits security to the unorganized division workers and self-employed persons. Any individual salaried or non-salaried can open a PPF account. Investor may also pledge on behalf of a minor, HUF, AOP and BOI. Even NRIs can open PPF account. A person can contain only one PPF account. Also two adults cannot open a combined PPF account. The collective annual payment by an individual on account of himself his minor child and

30

HUF/AOP/BOI cannot exceed Rs.70000 or else the excess amount will be returned without any interest.

The yearly contribution to PPF account ranges minimum Rs.500 to a maximum of Rs.70000 payable in multiple of Rs.500 either in lump sum or in convenient installments, not exceeding 12 in a year. The account will happen to obsolete if the required minimum of Rs.500 is not deposited in any year. The account can be regularized by depositing for each year of default, arrears of Rs.500 along with penalty of Rs.100.

A PPF account can be opened at any branch of State Bank of India or its subsidiaries or in few national banks or in post offices. On opening of account a pass book will be issued wherein all amounts of deposits, withdrawals, loans and repayment together with interest due shall be entered. The account can also be transferred to any bank or post office in India. Deposits in the account earn interest at the rate notify by the central government from time to time. Interest is designed on the lowest balance among the fifth day and last day of the calendar month and is attributed to the account on 31st March every year. So to derive the maximum, the deposits should be made between 1st and 5th day of the month.

MUTUAL FUNDS A Mutual fund is an investment tool that allows small investors to access a welldiversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. A mutual funds is a professionally managed firm of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. In a mutual funds, the fund manager, who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income. The investment proceeds are then passed to the individual investors. The value of a share of the mutual funds, known as the net asset value

31

per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding.

Factors Affecting Investment Decisions 1. Framework of Investments in India: The Indian investment scene has many schemes to offer to an individual. On an analysis of these schemes, it appears that the investor has a wide choice. A vast range of investments are in the Government sector. These are mostly risk free but low return yielding. Several incentives are attached to it. The private sector investments consist of equity and preference shares, debentures and public deposits with companies. These have the feature of high risk. Ultimately, the investor must make his investment decisions. The predominance of Government securities serves the purpose of bringing about confidence to the individual investor, but before an investor can make a choice, he must realize the controlled nature of investments. In most investments, the return on investments is controlled by the Government and not according to the free play of demand and supply of investments. 2. Inflation: The Indian investor is faced with a high rate of inflation. Price rise has been very high since January 2008. The prices of all essential commodities rose. The prices of milk and milk products, spices and edible oils increased. Petrol prices increased. Under these conditions, the investor has to consider the investment opportunities in the economy. It is to be expected that the rise in prices will reduce the ability of an average investor to make investments and he will save not out of willingness

32

to save, but will make forced savings in those outlets which will give him maximum benefit out of his limited resources. 3. Taxation: The Indian investor is to a great extent affected by the taxation policy of the Government. He would plan his investments in a manner so that he would have to pay a minimum direct tax. His investments would be directed to those schemes which would give him tax relief. For example, Life Insurance premium, provident fund, units and National Savings Certificates enable the investor to save from the tax point of view. The taxation system in the country is such that it takes away whatever surplus an individual has unless he saves in the investment schemes which give him tax relief. Thus, the Indian investor is forced to invest in those outlets which give him tax relief. Currently up to Rs. 1,00,000 in specified investments can get tax relief for an investor. 4. Stock Market Conditions: The stock market is the nerve centre of investments in a country. The Indian investor has seen the stock exchange undergoing several changes in 2007. Due to government policies, there was a positive climate and an individual investor’s mood and sentiment was for investing in corporate securities, from 2005-2997. In January 2008, the stock market crashed, and the market kept moving low up to April. Although prices of both new companies and blue chip companies crashed, the Indian investor is thus faced with a sluggish state of stock market at the present juncture and it is in this context this behaviour and attitude towards investments must be judged.

33

5. Manipulation of Share Prices: Another factor which affects the Indian investor is the helpless and inadequate nature in which he deals with the investment climate in the country. An investor who has power either through position, status or money has great control over the investment outlets in the country. It is the ordinary middle class investor who suffers a great deal because he is unprotected in the Indian environment. Despite SEBI regulations, crashes and scams continue in the stock market in India.

What care should one take while investing? Before making any investment, one must ensure to: 1. Obtain written documents explaining the investment 2. Read and understand such documents 3. Verify the legitimacy of the investment 4. Find out the costs and benefits associated with the investment 5. Assess the risk-return profile of the investment 6. Know the liquidity and safety aspects of the investment

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7. Ascertain if it is appropriate for your specific goals 8. Compare these details with other investment opportunities available 9. Examine if it fits in with other investments you are considering or you have already made 10. Deal only through an authorised intermediary 11. Seek all clarifications about the intermediary and the investment 12. Explore the options available to you if something were to go wrong, and then, if satisfi ed, make the investment. These are called the Twelve Important Steps to Investing.

35

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CHAPTER 3: Literature Review

The research dimension of the related literature and the relevant information begins from an explanatory perspective, approaching towards specific studies which are related to judging the imitations and informational gaps in data from the secondary sources. This analysis may reveal conclusions from past studies to realise the reliability of the secondary sources and their creditability. This in turn enables one to rely on a comprehensive review for the study. A few studies had been made which were indirectly helpful to this investigation. Reviews of such studies are presented below:

Abhijeet Chandra (2015). In this literature, the author has analyzed the impact of competence of individual investors on their trading behavior in the stock market. Individual investors take trading decisions based on their self-perceived competence that is influenced by several factors. The study examined the factors that determine the competence level of individual investors. Age, education, and income were found to be the most influencing factors of the individual investors' competence in the stock market activities and trading behavior. The results of the study reveal that a person invests as per his/her own judgments once he/she perceives himself/herself more knowledgeable about investing. It finds that investors having high, high to moderate income and professional qualification are supposed to be more confident about their competence when it comes to trading in stock markets. Thus, it can be said that competence effect rules the trading behavior of individual investors.

Kaushal Bhatt (2015) Utilization of resources in order to increase income or production output in future is kwon as investment. Data analyses states that Graduates are more intended to save money and they are aware about various investment avenues. Business man tend to invest more as compared to salaried man. Respondent want more safety and securities to their money.

37

Ravi Vyas (2015) This study finds the form of investments preferred by investors. Mutual fund investment is a secured investment with good returns on investments. Data analyses shows that maximum respondent invest in Gold followed by bank deposits and Insurance schemes. Mutual fund investments are very limited. For Safety, Liquidity, Reliability, Tax benefits and high returns Mutual fund has average score among investors.

Priyanka Jain (2015) The study analyses the various investment avenues available for the investors. It state Equity shares has low return but high capital appreciation, risk liquidity, Marketability, tax benefit, Debentures has high return but low risk liquidity and marketability. Bank deposits have moderate returns but low capital appreciation and risk liquidity. Nayak (2015) seeks to examine the nature of investor’s grievances and also to evaluate the role of grievance redressal agencies. Using convenient random sampling technique he collects primary data on the investor’s demographic profile, knowledge about various grievances, awareness about the functions of various grievances redressal agencies, loading of complain and their satisfaction level in Valsad district of Gujarat State. By using chi square analysis he shows that there is significant difference between the various demographic variables and investor’s knowledge of grievances, awareness of functions of redressal agencies, loading of complain and their satisfaction level. Varadharajan and Vikkraman (2014) focus on identifying the investors’ perceptions towards investment decision in equity market. Using ANOVA on a sample size of 50 investors in Coimbatore they study their attitude towards selection of stock, company, risk, equity portfolio, financial affairs and their expected return. They find that there exists an independency between the demographics, majority of the factors and the returns obtained.

38

Kadariya (2014) analyzes the market reactions to tangible information and intangible

information

in

Nepalese

stock

market

to

examine

the

investors’opinions in Nepalese stock market issues. After analysis of a sample of 185 stock investors he finds that the capital structure and average pricing method is one factor that influence the investment decisions, the next is political and media coverage, the third factor is belief on luck and the financial education, and finally the forth component for stock market movement is trend analysis. Thus, he concludes that both the tangible and intangible information are essential to succeed in Nepalese capital market.

Chaudhary (2014) examines the meaning and importance of behavioural finance and its application in investment decisions. He has also discussed some trading approaches for investors in stocks and bonds to assist them in manifesting and controlling their psychological roadblocks.

Gaurav Chhabra, Ankesh Mundra (2014)The study state various invest options available with the investors. In earlier time because of non availability of banking system investors use to keep hard cash, gold and silver ornament , precious stones etc as savings. Now investment are made through bank, insurance policies, mutual funds , pension funds, collective investment schemes, investment clubs.

T. N. Murty, P. V. S. H Sastry (2014) Investors choice with the objective of return optimization is investment in the stock market instruments or securities. Stock market securities are affected by various internal and external factors. Study examines the perception of small investment investors towards returns on investment.

A. N. Paunikar (2014) Equity Linked Saving Schemes are similar to equity diversification schemes with tax saving benefit under section 80C. The study aims at understanding scheme- wise benefits under Equity Linked Saving Schemes for tax saving. Data analysis shows that Equity Linked Saving Schemes has better returns on investments.

39

Avinsah N (2014) The study analyses the investment behaviour by examining various invest avenues. Data analyses reveals that Most of the respondents have selected bank deposit as their first option for investment followed by real estate. Below 30 years respondents invest more in real estate whereas above 60 years preferred LIC policies. Full time salaried people are more aware about different investment avenues. Nidhi Walia and Ravi Kiran (2014) studied that to satisfy the needs of investors‟ mutual funds are designing more lucrative and innovative tools considering the appetite for risk taking of individual investors. A successful investor is one who strives to achieve not less than rate of return consistent with risk assumed. They also argued as per observation by survey responses of the individual investor‟s fact is clear that overall among other investment avenues capital market instruments are at the priority of investors but level of preference varies with different category/ level of income, and an association exists between income status of investors and their preference for capital market instrument with return as objective.

Ashok Kumar (2014), suggested that majority of investors preferred to invest in Fixed deposit with banks followed by gold, units of UTI, fixed deposit of nongovernment companies, mutual funds, equity shares and debenture for safety and liquidity. The above literature shows the important contribution on investors perception towards’ various investment avenues. It is also evident from the above literature that majority of the investors prefer fist safety and security for the investment and secondly they interested to get maximum benefits for their investments. In light of above literature, the present study attempts to identify the problems on the perception of investors towards investment avenues in Vellore city, Tamil Nadu.

Vinayakam and Charumathi (2014) in their study observed that equity cult had spread to different parts of the country and millions of Indian investors invested their savings in the booming stock markets. What was once considered as the exclusive game of the rich and privileged class is now becoming a matter of day interest for millions of middle and low income groups of investing public in India. 40

In spite of such widespread interest of Indian investors in shares, investment knowledge is very much lacking in them. This is evident from the fact that most of them usually get attracted towards the stock exchanges like moths to a candle in periods of boom and rising prices in a bid to become rich quickly. When the boom bursts and a depression sets in, most of such new entrants prove a menace to themselves and to the general public ultimately.

Elke U. Weber Richard A. Milliman (2014), had stated that commuters changed their preferences for trains with risky arrival times when the alternative involved gains with changes in the perception of the riskiness of the choice of alternatives. This had left the perceived risk attitudes of majority of commuters unchanged. Similarly, they had investigated changes in risk perception, information acquisition and stock selection as a function of outcome viz., returns. Investors’ stock selection and their perception of the risk of the same stock were different in series of decisions in which they lost money than in series in which they made money.

Santi Swarup (2014) had indicated that the investors gave importance to their own analysis as compared to brokers’ advice. They also considered market price as a better indicator than analyst’s recommendations. The study also identified factors that were affecting primary market situation in India. Issue price, information availability, market price after listing and liquidity had emerged as importance factors in the study. The study suggested that investors need to be assured of some return and the level of risk associated with investment in the market was very high. They have bad experience in terms of lower market price after listing and high issue price. A number of measures in terms of regulatory price level and market oriented reforms were suggested to improve the investor confidence in equity primary markets. However, this study did not highlight the measures for improving investors’ confidence in the secondary market.

Manoj Kumar Dashl (2014) Factors Influencing Investment Decision of Generations in India: An Econometric Study This study aims to gain knowledge about key factors that influence investment behavior and ways these factors 41

impact investment risk tolerance and decision making process among men and women and among different age groups. The individuals may be equal in all aspects, may even be living next door, but their financial planning needs are very different. It is by using different age groups along with Gender that synergism between investors can be generated. In this context, demographics alone no longer suffice as the basis of segmentation of individual investors. Hence keeping this in mind, the present study is an attempt to find out Factors which affects individual investment decision and Differences in the perception of Investors in the decision of investing on basis of Age and on the basis of Gender. The study concludes that investors’ age and gender predominantly decides the risk taking capacity of investors.

James E. Corter (2014) had concluded that risk tolerance and uncertainty tolerance can be distinguished not only theoretically but empirically and that both types of attitudes affected investing behaviour. While higher levels of risk tolerance led to riskier portfolios and thus to higher exposure to losses, it seemed that investors’ emotional reactions to losses were not mitigated by higher level of risk tolerance. It suggested that a high level of risk tolerance insulated a client from neither the actual nor the emotional consequence of market losses.

Sohan Patidar (2014), found that as per the age-wise classification, the investors in the age group of below 35 years were actively participating in the speculation trade and the age group of above 55 hesitated to take risks. Professional people were not interested in the share market and investors falling under the income group below Rs 20, 000 showed more interest in investing their earnings in the share market.

Manjunatha T and Gopi K.(2014), found that every investor had his own investment objectives, risk acceptance level, inflows and outflows of money and other constraints. Their study showed that the decision of retail investors in primary market were influenced by issue price, information availability, broker

42

advice, recommendations of the analysts, secondary market situation, disclosure by market participation and other factor. The study suggested that wealth maximisation criteria was important to retail investors while investing in the primary market, the recommendation of brokerage house analysts, issue price, IPOs grading, promoters’ reputations and other factors go largely were considered in the primary market.

Bandgar P.K75, (2014), in his study entitled, “A Study of Middleclass Investor’s Preferences for Financial Instruments in Greater Bombay”, studied the existing pattern of financial instruments in India and the performance of middle class investors, their behavior and problems. Questionnaire was administered to collect data. Average, skewness, chi-square test and Fisher Irving test were used to analyze the data. The study revealed that only 16% of the investors were facing difficulties in buying and selling securities. Middle-class investors were highly educated but they were lacking skill and knowledge to invest. Female investors preferred to invest in risky securities as compared to male investors. The study also revealed that there was a moderate and continuing shift from bank deposits to shares and debentures, and a massive shift towards traditional financial instruments namely, life insurance policies and government securities. Kannadasan (2014) in his “ Risk appetite and Attitudes of Retail Investors with Special reference to Capital Market” analyzed the behavioral pattern of the Retail Investors, based on various dependent variables viz., Gender, age, marital status, 71 educational level, income level, awareness, preference and risk bearing capacity. The following are the major findings of the study : a. Only 25 per cent of the sample respondents were aware of all the investment avenues available in the capital market. However, all of them are aware of at least one avenue. b. 90 per cent of the retail investors are not aware of the measures taken by the Government to protect the interest of the investors. c. 79 per cent of the retail investors are interested to invest in Shares and Debentures as well.

43

d. The risk bearing capacity of the retail investors was not influenced by their age. The retail investors’ age is not a criterion to decide their investment behavior and investment option. e. The investment strategy of the investors is influenced by their income level. The retail investors’ income level is playing a predominant role to decide their investment behavior and investment strategy as well. f. The major attributes of risk in investment are dividend, redemption period and Value appreciation. Value appreciation is an important factor among the three.

Security Exchange Board of India (SEBI) along with National Council of Applied Economic Research (NCAER), conducted a comprehensive survey of the Indian investor households entitled, “Survey of Indian Investors”, in order to study the impact of the growth of the securities market on the households and to analyze the quality of its growth. 25,000 investors were drawn from places all over India and the data was collected by administering questionnaire and through personal interviews. The survey was carried out with the major objective of drawing a profile of the households and investors and to describe the demographics, economic, financial and equity ownership characteristics. The study also focused to understand the investor’s investment preference for equity as well as other savings instruments, their perception about market risk, their expectations, nature of their grievances, and difficulties, to estimate the number of household which had refrained from investing in the equity market and the reasons for their reluctance. The survey 72 revealed that age, education, occupation and income were found to influence the attitude of an investor towards investment. The urban investor households had higher proportion of investment in equity shares, debenture and mutual funds as compared to the rural households. Income levels and investment of the households in capital market were found to be associated. Majority of the equity investors had long term motive of investment. Investors revealed that they had a number of broker related problems than the issuer related problems.

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Panda K, Tapan N.P and Tripathi, (2014), in their study entitled, “Recent Trends in Marketing of Public Issues: An Empirical Study of Investors Perception”, attempted to identify the investors’ awareness and attitude towards public issues. One hundred and twenty five investors covering the salaried and business class, from the city of Bhuvaneshwar were selected at random. The data was collected by administering a questionnaire and was analysed using simple percentage and weighted average analysis. The study revealed that majority of the investors relied on newspapers as the source of information. Financial journals and business magazines were ranked next to newspapers. A large number of investors were of the opinion that they were not in a position to get the required information from the company in time. A sizable number of investors were found to face problems while selling securities. ‘Safety and Regular Return’ stood first and second with regard to the factors associated with investment activities. Equity shares were preferred for their higher rate of return by the investors.

Muraleedhran (2014) “Pattern of Household Income, Savings and Investment” analyzed the pattern of investment preference among the different income groups in physical and financial assets. The relevant findings of the study are as follows: a. The composition of savings reveals that savings in financial asset (63.47%) is higher than savings in physical assets. b. Among the savings in financial assets savings in chit funds is the highest (44.58%). c. In physical assets, consumer durables are the highest (28.33%). d. For around 23.62% of the households, the saving motive is the educational and marriage purposes of their children. e. The average propensity to save shows that the level of savings is related to the level of income. Selvam M (2014), in their study entitled, “Equity Culture in Indian Capital Market’, examined the need for promoting equity culture, which deserves special attention for the development of economic growth. The study discussed in detail the current trend of equity culture, its implications and its revival and remedial 45

measures. The study suggested intervention by government, SEBI and RBI and evaluation of suitable credit policy for projects in order to assure safety and assured returns to the investors, in order to restore investor confidence. Jasim Y Al-Ajmi (2014) in “Risk tolerance of Individual Investors in an Emerging Market” explores the relationship between risk tolerance and the demographic characteristics of the investors. The study was conducted to investigate the effect of gender, education, age and wealth of the investors on their risk tolerance level. Major findings of the study are as follows : a. Men are less risk averse than women. b. Less educated investors are less likely to take risk. c. The effect of age on risk tolerance is complex. d. Wealthy investors are more risk tolerant than the less-wealthy investors.

Hon (2012) investigates the behaviour of small investors in Hong Kong’s derivatives markets. The study period covers the global economic crisis of 20112012, and he focuses on small investors’ behaviour during and after the crisis. He attempts to identify and analyse the key factors that capture small investor’s behaviour in derivatives markets in Hong Kong. He collects data 524 respondents through a questionnaire survey. Exploratory factor analysis rotated principal component loadings, scree test, KMO and Bartlett’s test, and a reliability test show that the behaviour of small investors in derivatives markets in Hong Kong consistently indicates the ascending order of importance of return performance, reference group, and personal background

Verma.P. (2012) found that awareness of various equity oriented securities among Indian investors is increasing due to various investor education programmes conducted by Securities and Exchange Board of India (SEBI) and Association of Mutual Funds in India (AMFI). He stated that, due to the increased awareness about equity oriented securities, the number of new investors is growing at a healthy rate in India. He further stated that, increased awareness is also motivating the equity investors to acquire knowledge on various investment strategies and risk minimisation techniques.

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Heena Kothari (2012) The study analyses the investment behaviour towards investment avenues in Indore city. The study is consisting of private and public banking employees as they have regular income, retirement benefits, safety and security of income. Analyses of data states that Younger people invest more than Middle age people

Szyska Adam (2008) analysed how investors’ psychology changes the vision of financial markets and discussed the consequences of the new view of finance by capital market practitioners-investors, corporate policy makers and concluded with some thoughts on the future development of the capital market theory.

Hvidkjaer S (2008) analysed the relationship between retail investor trading behaviour and the cross section of future stock returns. The result suggests that stocks favoured by retail investors subsequently experience prolonged underperformance relative to stock out of favour with them. This results link the systematic component of retail investor behaviour to future returns, i.e., informed investors might begin selling stocks that they believe to be overvalued. The overvaluation that these investors perceived could be driven by changes in firms fundamental values.

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CHAPTER 4 RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. The Research Methodology includes the various methods and techniques for conducting a research. Research is an art of scientific investigation. In other word research is a scientific and systematic search for pertinent information on a specific topic. The logic behind taking research methodology into consideration is that one can have knowledge about the method and procedure adopted for achievement of objective of the project.

RESEARCH DESIGN: Research design is the conceptual structure within which research is conducted. It constitutes the blueprint for collection, measurement and analysis of data was a descriptive research. Descriptive research involves collecting numerical through self-reports collected, through questionnaires or interviews (person or phone), or through observation. For present study, the research was descriptive and conclusion oriented.

SAMPLING DESIGN: Universe - The Universe is most commonly defined as everything that physically exists: the entirety of space and time, all forms of matter, energy and momentum, and the physical laws and constants that govern them. All those persons who make investment. 

Theoretical Universe: It included investors make investment in all over world.



Accessible Universe: It included investors make investment in Indian Stock Market.

Sampling unit - The target population must be defined that has to be sampled. The sampling unit of research included students and professionals residing in Mumbai city

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Sample size – This refers to number of respondents to be selected from the universe to constitute a sample. The sample size of 100 Investors was taken.

Sampling Technique – Convenience Sampling was used to select the sample. Convenient sampling is a non probability sampling technique that attempts to obtain a sample of convenient elements . In this project, Questionnaire Method was used for the collecting the data. With the help of this method of collecting data, a sample survey was conducted.

DATA COLLECTION AND ANALYSIS: Data Collection - Information has been collected from both Primary and Secondary Data. 

Secondary sources- Secondary data are those which have already been collected by someone else and which already had been passed through the statistical process. The secondary data was collected through web sites, books and magazines.



Primary sources- Primary data are those which are fresh and are collected for the first time, and thus happen to be original in character. The primary data was collected through direct personal interviews (open ended and close ended questionnaires)

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CHAPTER 5 ANALYSIS

Table 1: To know about the age of the respondents Age

No. of respondents

Less than 20 years

5

20-40 years

31

Greater than 40 years

64

Analysis & Interpretation: As observed in Table 1, majority of the respondents constituting 64 per cent of the total sample belong to the age group above 40 years, while 31 per cent of the sample are aged between 20-40 years and the remaining 5 per cent individual are below 20 years. This indicates that majority of the sample belong to the working class and thus would involve in invesment.

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Table 2: To know about the gender of the respondents Gender

No. of respondents

Male

58

Female

42

Analysis & Interpretation: According to Table 2 with respect to gender distribution of respondents, it is observed that, majority of the respondents constiututing 58 per cent of the sample were males while the remaining 42 per cent of the respondents were females.

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Table 3: To know about the qualifications of the respondents. Occupation

No. of respondents

Matric

7

Under Graduate

11

Diploma

13

Graduate

44

Post Graduate

25

Analysis & Interpretation: According to Table 3 with respect to occupation of respondents, major individual are graduate which equal to 44 per cent, post graduate is the 2nd highest response with 25 per cent while diploma and under graduate are 13 and 11 per cent respectively. The least of all is matric that total to 7 per cent.

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Table 4: To know about the occupation of the respondents. Occupation

No. of respondents

Service

42

Profession

23

Business

17

Student

11

Others

7

Analysis & Interpretation: According to Table 4, the respondents are majorly into service constituting 42 percent, whereas individuals with profession and business as occupation equated to 23 and 17 per cent respectively. 11 per cent of the respondents were students and the remaining 7 per cent consisted of 1 spoken english trainer,1 Tutor, 2 home makers, 1 e-commerce sales executive, 1 unemployed and 1 retired.

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Table 5: To know about the income (per month) of the respondents. Income (Per Month)

No. of respondents

Less than 20000

16

20000-40000

29

Greater than 40000

55

Analysis & Interpretation: According to Table 5, majority of the respondents had income above 40000 that consituted 55 per cent of the responses whereas 29 per cent responses were between the range of 20000-40000 and the rest which can be assumed as students and home makers who accounted to 18 per cent of the responses.

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Table 6: To know about whether respondents invest in stock market Investment Decision

No. of respondents

Yes

66

No

34

Analysis & Interpretation: According to Table 6, 66 per cent of the individuals invest in stock market while the other 34 per cent do not invest in stock market.

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Table 7: Type of investment options respondents are aware of. Types of investment instruments Shares

No. of respondents

Mutual Funds

88

Debentures

42

Bonds

52

Derivatives

25

Others

19

82

Analysis & Interpretation: This question had a checkbox answer where respondents were allowed to select as many investment alternatives they were aware of. According to the Table 7, 88 per cent and 82 per cent of the respondents are aware of mutual funds and shares as an investment alternative while 42 and 52 percent individuals are aware of debentures and bonds respectively while derivatives constituted to 25 per cent of the responses. The option others which included investments in Fixed deposits, Public provident funds, National pension scheme, Gold constituted to 19 per cent.

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Table 8: To know the type of investment option the respondents are investing. Investment alternatives

No. of respondents

Shares

61

Mutual Funds

79

Debentures

12

Bonds

14

Derivatives

7

Others

25

Analysis & Interpretation: This question had a checkbox answer where respondents were allowed to select as many investment alternatives they invest in. According to Table 8, 79 per cent invest in mutual funds while 61 per cent invest in shares while 12 per cent invest in debentures, 14 per cent invest in bonds and only 7 per cent invest in derivatives. Also 25 per cent invest in Fixed deposits, Public provident funds, National pension scheme, Gold. Thus, it can be stated that maximum people invest in Mutual Funds whereas shares are having 2nd importance.

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Table 9: To know the rates at which the investment grow. Investment Growth Rate

No. of respondents

Steadily

15

At an average rate

79

At fast rate

6

Analysis & Interpretation: According to Table 9, 79 per cent of respondents have return at an average rate while 15 per cent and 6 per cent indiviual conclude that their investment grow at steady and fast rate respectively

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Table 10: To know about the frequency of the investment. Frequency of Investment

No. of respondents

Daily

2

Weekly

2

Monthly

69

Yearly

27

Analysis & Interpretation: From the above Table 10 & chart it was found that 69 respondents invest monthly, 29 invest yearly and there were 2 respondents who invest daily and 2 respondents who invest yearly. Thus, it can be stated that majority of the investors invest monthly.

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Table 11: To know about the percentage of income the respondents invest monthly. Monthly Income Invested

No. of respondents.

Upto 10%

31

10-15%

34

15-20%

22

Above 20%

10

No investment

3

Analysis & Interpretation: From the above Table 11 & chart, it was found that 34 respondents invest 1015% of their monthly income, 31 respondents invest 10% of their annual income, 22 respondents invest up to 15-20% of their income, 10 respondents invest up above 20% of their income in different investment avenues while 3 respondents do not make any monthly investment. Thus, it can be concluded that majority of investors invest 10% to 20% of their monthly income.

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Table 12: To know about the respondent’s influence on investment decision. Sources

No. of respondents

Self

75

Friends & Relatives

41

Service providers & consultants Newspapers & Advertisments

30 27

Agents

33

Workshop & Seminars

9

Tax Rebate`

1

None

1

Analysis & Interpretation: This question had a checkbox answer where respondents were allowed to select as many factors that infuence their decision of investment. From the above Table 12 & chart, it was found that multiple aspects for investing influenced respondents.75% respondents take investment decision on the basis of their personal evaluation where as 41% respondents invest because of influence of friends & relatives, the agent influences 33% respondents, the consultants influences 30% respondents and the advertisement influences 27% respondents.It can be stated that majority of the persons are influenced by their own while opting for investments.

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Table 13: To know about the factors that are considered while investing. Investment Factors

No. of respondents

Return on investment

77

Tax benefits

57

Capital appreciation Maturity period

52 31

Risk

42

Safety of principal

45

Liquidity

39

Analysis & Interpretation: This question had a checkbox answer where respondents were allowed to select as many factors while investing. From the survey it was found that the maximum respondents considered return on investment was most important factor, 57% and 52% respondents considered tax benefits and capital appreciation as an important factor respectively and 42% respondents considered risk as an important factor while 45% and 39% considered safety of principal and liquidity as an important factor respectively. It can be stated that majority of investors were consider return as an important factor while investing

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Table 14: To know about the respondents action in case of stock market drop. Preference in case of losses

No. of respondents

Cut losses & transfer funds into secure investment Wait to see if investment improves

12

Invest more funds

20

Withdraw funds & stop investing

6

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Analysis & Interpretation: From the survey it was found that maximum respondents would wait to see if their investment improves and start generating funds, 20% respondents would invest more funds, 12% respondents would transfer funds into secure investment and 12% respondents would stop investing. It can be stated that majority of investors would like to wait to see whether investment improves or they can invest more funds.

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Table 15: To know whether the respondent finds capital market risky. Decision

No. of respondents

Yes

88

No

12

Analysis & Interpretation: From the survey majority of the respondents i.e 88 per cent feel that capital market is risky wheras 12 per cent agree that capital market is not risky.

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CHAPTER 6: FINDINGS & CONCLUSIONS

Following findings were generated from the study:

Most investors are above the age of 40



Most 58% of respondents are males.



44% of respondents are graduates while 25% are post graduates.



Majority 42% are into service whereas 23% are professionals.



Most of the respondents have income above 40000 monthly.



Maximum investors are aware of all the investment options.



Investors do not invest in a single avenue. They prefer different avenues and maximum investors prefer to invest in shares, mutual funds & bonds.



Maximum investors feel their investment grow at an average rate.



The investment decision of investors is influenced majorly by their own decision and through friends & relatives.



Different factors considered by investors while investing are return on investment, tax benefits, capital appreciation and the most prominent factor is the return on any investment avenue.



The most important factor is Return which influenced the decision regarding investment.



Majority of investors invest 10-20% of their monthly income.



Maximum investors invest on monthly basis.



The investors find that capital market is risky for investment.

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RECOMMENDATIONS Following were the recommendations of the study: 1. The various investment tools which were mostly preferred by the investors were shares, mutual funds etc. So there should be various other means to create awareness regarding the potential of other instruments and the tools which can be more beneficial to the investors. 2. The investors consider various factors while making investment like risk, return, liquidity etc. There should be rational thinking so that the investor is able to know that at what point of time they need capital appreciation instead of reducing the risk and when they need return instead of liquidity. 3. The preferred time span of investment by the investors depends upon the need of the investor that whether they wants to have early and high returns or wants to have stable returns, most probably the long time span is suitable because the returns are high and safety is also there. 4. The satisfaction levels of various investors are different due to different investment alternatives they opt for. If they will be aware of each type of alternatives and the worth of the alternatives then investing as per that there satisfaction level will also be high. 5. Investors should have the complete knowledge of stock market.

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REFERENCES 

Introduction on Indian Stock Market http://www.banknetindia.com/ last accessed on November 5, 2009.



Introduction

on

Online

Investors

&

Traders

available

at

http://www.traderji.com/ last accessed on November 17, 2009 

Introduction

on

Types

of

investment

available

at

http://finance.mapsofworld.com/investment/types/ last accessed on November 17, 2009.

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ANNEXURE/APPENDIX

QUESTIONNAIRE

Dear Respondents, This survey is aimed to know the perception of people towards investment in stock market in form of investment and to find the level of awareness of stock market among Student/Professional/Retired in Mumbai city.

PERSONAL PROFILE 1. Age  Less than 20 years  20-40 years  Above 40 years

2. Gender  Male  Female

3. Qualification  Matric  Graduate  Post Graduate  Diploma

4. Occupation  Service  Profession  Business  Student  Other:

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5. Income (Per month)  Less than 20000  20000-40000  Greater than 40000

INVESTMENT QUESTIONS

6. Do you invest in stock market?  Yes  No

7. What investment alternatives are you aware of?*  Shares  Mutual Funds  Debentures  Bonds  Derivatives  Others:

8. What type of investment options are you investing in?*  Shares  Mutual Funds  Debentures  Bonds  Derivatives  Others:

9. What are the rates at which the investments grow?  Steadily  At an average rate  At a fast rate

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10. Frequency of investment?  Daily  Weekly  Monthly  Yearly

11. What is the percentage of income you invest monthly?  Upto 10%  10-15%  15-20%  Above 20%  No investment

12. What influences your investment decision?*  Self  Friends & Relatives  Service providers & consultants  Agents  Workshop & seminars  Others:

13. What are the factors considered while investing?*  Return on investment  Tax benefits  Capital appreciation  Maturity period  Risk  Safety of principal  Liquidity  Others:

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14. What is your action if there is a drop in stock market?  Cut your losses & transfer into safe investment  Wait to see if investment improves  Invest more funds  Withdraw funds & stop investing

15. According to you is capital market risky?  Yes  No

*Questions with check-box answer. Conclusion It can be concluded that the investors preferential choices on investment avenues are same across their gender and the decision making process on various investment avenues are same on the investment aspects like gold. The preferential choices across the age group of the investors is same towards the avenues like Real estate and Insurance sectors and they differ in the aspects like stock markets, gold, bank savings and post office savings. The present study further concludes that the perception of order of investments among the investors is different towards post office savings among the various income group levels of the investors. Finally, the study concludes that investments by the investors towards various investment avenues were done with the expectation of capital appreciation and earnings comprising both short term and long term periods.

Suggestions Based on the findings of the study it is proposed to suggest that investment of surplus amount can be invested in the safety investment avenues like insurance sector, bank savings and post office savings schemes and more over the retired investors and self-employed investors should be cautious on investing in risky avenues like stock markets, gold and real estate as their markets are highly volatile in nature. In the present days investment market, the avenues like gold market and share market are highly uncertain and unpredictable. Hence due caution and care is to be taken during the decision making process by the investors in their investments towards various investment avenues ) Majority of the investing respondents were found to be in the age group of 20 to 40 years. Hence it is suggested that investment schemes tailored to the senior citizens need to be developed. 2) It was found from the study that urban people were more aware of the different 71

investment schemes than the rural. As more than 80 percent of the Indian society resides in rural areas, it is strongly suggested that necessary steps should be taken to increase awareness among rural population about the existing investment schemes. 3) The perception of most investors on the safety and liquidity of different investment avenues is unfavourable. Hence there is need to create the environment to instil confidence on investing public with regard to the liquidity and safety of their investment schemes. 4) More than 20 per cent of respondents are not satisfied with after sale services of stock broking firms. Therefore, efforts to improve the after sale services by the managers and staff of stock broking firms, so as to satisfy the needs of customers. 5) It was observed that large number of investor complaints and grievances regarding the managers and staff of stock broking firms are not properly resolved. Therefore, it is recommended that stock broking firms should be careful enough in resolving the grievance of the investors. 6) As there is change in the income levels of the investors most of the investors are interested to divert their savings to profitable investment opportunities. However, prior to that there is a dire need to initiate steps to inculcate a habit of savings among the growing middle class families. The savings are to be pooled and canalized into productive investment, there by returns to investors may enhance. It may further accelerate investment in corporate securities in future on a large scale. 7) Construction of an efficient portfolio is always advisable to maximize the return and minimize the risk. It is disheartening to note that the investors in East Godavari and West Godavari are very little aware of investment in company securities. Hence, investors should be educated about the benefits of investment in diversified industries and companies. If one company fails is in crisis, investment in other companies would be safe. Diversification of funds among different industries is a must because, if one industry fails or experiences a down trend in share value, investment in other industries would be safe. So investors are to be explained about the advantages of diversifying funds across industries and over different companies in the same industry. 7. Conclusion There are considerable number of studies on Indian Stock markets and its related activities. However, most of these studies concentrated either on overall development, growth, development and performance of Capital market in India or on the recent trends of change after liberalization. Most of the studies reviewed above have mainly covered the aspects at macro level, like the ownership patterns in the capital market, occupation-wise break up of paid up value of share holdings of individuals, ownership pattern of shares/debentures, geographical distribution of share ownership in India. Though there are some specific studies on the investment pattern of individual, they mainly focused their attention on individual investors’ problems and need for their protection. There are no specific studies exclusively on investment culture focusing on investors’ awareness, his

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evaluation process of investment, his investment pattern, risk perception and risk preference. It is needless to emphasize that the behaviour of the small and household is a very crucial area in the formulation of policies and procedures for the orderly growth and development of securities markets in any nation. There are only a few studies covering the issue of investor perception and behaviour at micro/regional level. Especially in the context of decline in the participation of small and household investors in the primary market operations, withdrawal of investors from the capital market, diversion of household savings into safer investment avenues like bank deposits, real estate and unproductive assets like gold and silver, it becomes all the more important to study and analyse the investor awareness, perceptions and preferences of various investment avenues available to them in the securities markets. This may help the policy makers in evolving the suitable strategies to get small and household investors once again in large numbers into the capital market operations. Hence, the present investigation is an attempt in that direction. The issues investigated in the present study include awareness of investment avenues, investment pattern, the most preferred objectives of investors, and investment evaluation. Moreover, this study is mainly undertaken in Coastal Andhra, a very prominent region of Andhra Pradesh, with the hope that the observations and conclusions of the study are of immense use. FINDINGS Some of the findings of the study are: • Major portion of the respondents are aware of the share broking agencies. • 40% of the respondents are not familiar with the derivative trading, ie they are not at all aware of the futures and option schemes in security trading. • A good sum of respondents are not at all aware of the day trading activities and about the guidelines, rules and regulations laid down by SEBI, but a satisfactory portion of the respondents are aware of the activities of stock exchange and its role played in the economic development of the nation. • Though most of the respondents know about stock exchanges, its activities, role of share broking agencies, yet many of them are very much afraid to get into share investment for fear of risk. • A large group of respondents invested their savings in equity shares when compared to people invested in preference shares as because of the fear in return and most of the respondents buy or sell securities instantly when they feel that the market tends to move in an unfavourable position. • Age and investment are very much correlated as because, people of the age group of 31- 40 are more prone to invest in shares than people of other ages and not only that that gender of the respondents is dependent with the preference in investing in Shares. Here mostly male respondents invest in shares. • The income level of the respondents and Gender of respondents have some correlation with the investment in securities, ie more the income more the tendency to invest in securities and males are

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predominant in investing funds in secuirities. • Occupation and investment in securities are independent. Share investment is done by all the sections more or less equally. Only the investment by farmers is comparatively less and the level of education and the investment in securities are dependent. • It is found that age and the attitude of taking risk are very much dependent.ie, about 70% of the investors comes under the category of below 40 yrs of age. • Educational qualification has a strong bearing upon the attitude of investors to face risk, specially with regard to investment in securities. Here about 70% of the investors are of the categories belonging to post graduates and graduates. • The attitude of investors in taking risk has greater influence upon the decision taken regarding the type of investment. • Lack of awareness on share broking agencies, derivative trading, day trading activities, SEBI guidelines and regulations are a major reason behind the fear of investors in taking risk as well as the stand taken by them when the market shows a slight unfavourable trend. • The primary investment objective of most of the respondents is capital appreciation. • Most of the respondents commented that Lack of awareness and fear of risk as the major problems they face while investing in shares. • Complicated procedures, fluctuation in prices, and fear of getting returns are also been pointed by the respondents as problems faced while investment. • A minute portion of the respondents resort to the practice of derivative trading such as through option, futures and some use speculative trading, while a satisfactory share of people sometimes avail day trading facility to transact on their investments. CONCLUSION It is no doubt that an individual’s financial security depends strongly on how far he has saved. Therefore savings form an undisputed aspect in the financial planning of one’s life. Our economy is offering enormous investment avenues, such as investment in various Banks, Financial Enterprises, Insurance companies, real estates, stock market, gold etc. Selection of suitable investment project depends on one’s ability to track out the best one which suits him most. India’s development widely depends upon the development of rural sector. Majority of the Indian population resides and employs in rural sector. Our policy makers and financial system clearly demands for a vital need of flow of savings from rural sector to corporate sector. From the present study on the perception of investors on share investment, it can be concluded though the ruralites of Alappuzha have transformed their mind set towards security investment substantially when compared to older times, still many of them approach it with fear and uncertainty. The reasons they cite for this fear, uncertainty and inapproachability are varied ignoring the fact that the share investment is one of the most promising and challenging avenue of investment which they can look upon for investing their savings. The major reason for resistance from rural population is due to factors such as lack of knowledge about share investments, share broking

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agencies, derivative trading, and above all guidelines and regulations issued by SEBI, fear of risk, Complicated procedures, volatile nature of our capital market etc . All these factors tempt people to make aloof from security investment, especially in share investment. It is to be understood that this is not restricted to a single district, but to other rural areas of our country which face the same problem among the rural masses. Through proper education, frequent awareness programmes, inspiration, proper guidance can do a lot in the transformation of the present attitude of these investors towards share investment to a more positive outlook.

REFERENCES: WEB: 1. http://www.investing.com/rates-bonds/india-10-year-bond-yieldadvanced-chart 2. http://economictimes.indiatimes.com/markets/stocks/stock-quotes 3. https://in.finance.yahoo.com/q/hp?s=TECHM.NS&a=02&b=31&c=2010&d=02&e=31&f =2014&g=d 4. Stern Stewart and Company, "Why EVA works", http://eva.com/ 5. www.investopedia.com/terms/c/cva.asp 6. www.valuebasedmanagement.net/methods_cva.html 7. www.ripublication.com/gjfmspl/gjfmv6n2_16.pdf 8. www.iosrjournals.org/iosr-jef/papers/icsc/volume-1/8.pdf 9. http://www.acmeintellects.org/images/AIIJRMSST/Jan2015/10-1-15.pdf 10. https://www.ici.org/pdf/rpt_risk.pdf.

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