Sharekhan%20project%20ashmeet.docx

SUMMER TRAINING REPORT ON INVESTOR’S BEHAVIOUR FOR INVESTING IN EQUITY MARKET IN VARIOUS SECTOR AT SHAREKHAN LTD Project report submitted in the partial fulfillment of the requirement the award for the of Bachelor of Business Administration (BBA)

SUBMITTED BY

Ashmeet Singh ENROLLMENT NO.35290201816 UNDER THE GUIDANCE OF

Mr.Anil Sharma

SRI GURU TEG BAHADUR INSTITUTE OF MANAGEMENT & INFORMATION TECHNOLOGY (AFFILIATED To GGSIP UNIVERSITY, DELHI) (2016-2019)

CHAPTER -1

Introduction To Industry 1.1 Overview of Industry A stock market, equity market or share market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as those only traded privately. Examples of the latter include shares of private companies which are sold to investors through equity crowdfunding platforms. Stock exchanges list shares of common equity as well as other security types, e.g. corporate bonds and convertible bonds. Stocks are categorised in various ways. One way is by the country where the company is domiciled. For example, Nestlé and Novartis are domiciled in Switzerland, so they may be considered as part of the Swiss stock market, although their stock may also be traded on exchanges in other countries, for example, as American depository receipts (ADRs) on U.S. stock markets. As of mid 2017, the size of the world stock market (total market capitalisation) was about US$76.3 trillion.[1] By country, the largest market was the United States (about 34%), followed by Japan (about 6%) and the United Kingdom (about 6%).[2] These numbers increased in 2013.[3] As of 2015, there are a total of 60 stock exchanges in the world with a total market capitalization of $69 trillion. Of these, there are 16 exchanges with a market capitalization of $1 trillion or more, and they account for 87% of global market capitalization. Apart from the Australian Securities Exchange, these 16 exchanges are based in one of three continents: North America, Europe and Asia 2

1.2 Stock Exchange A stock exchange is an exchange (or bourse)[note 1] where stock brokers and traders can buy and sell shares of stock, bonds, and other securities. Many large companies have their stocks listed on a stock exchange. This makes the stock more liquid and thus more attractive to many investors. The exchange may also act as a guarantor of settlement. Other stocks may be traded "over the counter" (OTC), that is, through a dealer. Some large companies will have their stock listed on more than one exchange in different countries, so as to attract international investors.[7] Stock exchanges may also cover other types of securities, such as fixed interest securities (bonds) or (less frequently) derivatives which are more likely to be traded OTC.

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1.3 Major stock exchange in the world

Where, Two major Stock Exchanges from India, which is – 1. Bombay Stock Exchange 2. National Stock Exchange 4

 List of Stock Exchanges In India 1. Bombay Stock Exchange(BSE) 2. National Stock Exchange(NSE) 3. Regional Stock Exchanges (21) There are 21 other regional stock exchanges, which are Ahmedabad»Bangalore» Bhubaneshwar» Calcutta» Cochin»Coimbatore» Delhi» Guwahati» Hyderabad» Jaipur» Ludhiana» Madhya Pradesh» Madras» Magadh» Mangalore» Meerut» OTC Exchange Of India» Pune» Saurashtra Kutch» Uttar Pradesh» Vadodara etc.

1.4 Bombay Stock Exchange The Bombay Stock Exchange Limited is the oldest stock exchange not only in the country, but also in Asia with a rich heritage of over 133 years of existence. In the early days, BSE was established as "The Native Share & Stock Brokers Association." It was established in the year 1875 and became the first stock exchange in the country to be recognised by the government. In 1956, BSE obtained a permanent recognition from the Government of India under the Securities Contracts (Regulation) Act, 1956. Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in handling of transactions through its electronic trading system. The companies listed on BSE command a total market capitalization of USD Trillion 2.3 as of 2018 BSE reaches to over 400 cities and town nation-wide and has around 5,439 listed companies, being traded as on 2018.

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The BSE Index, SENSEX, is India's first and most popular stock market benchmark index. The BSE SENSEX (SENSitive indEX), also called the "BSE 30", is a widely used market index in India and Asia. Sensex is tracked worldwide. It constitutes 30 stocks representing 12 major sectors. The SENSEX is constructed on a 'free-float' methodology, and is sensitive to market movements and market realities. Apart from the SENSEX, BSE offers 23 indices, including 13 sectoral indices. BSE provides an efficient and transparent market for trading in equity, debt instruments and derivatives. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certifications. It is also the first exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT). BSE continues to innovate. In 2006, it became the first national level stock exchange to launch its website in Gujarati and Hindi and now Marathi to reach out to a larger number of investors.

 The BSE On-line trading(BOLT) BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities. BOLT is currently operating in 25,000 Trader Workstations located across over 359 cities in India.

BSE Profile  Address

:- Phiroze Jeejeebhoy Towers, Dalal Street o Mumbai-400001, India

 Telephone

:-91-22-227212334

 Website

:-www.bseindia.com 6

 Trading hours

:-Monday-Friday, 9:00am to 3:30pm

 Securities

:-Stocks, derivatives, debt

 Trading System

:-Electronic

 MD & CEO

:-Mr.Madhu Kannan

History of BSE The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history to the 1850s, when stockbrokers would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts. The development of Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition.

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Indices of BSE 1. Sensex 2. BSE 100(This covers Banking Sector) 3. BSE 200(This covers Capital goods) 4. BSE 500(This covers Consumer goods) 5. BSE mid-cap index 6. BSE small-cap index BSE mid-cap index covers the FMCG sector and BSE small-cap index covers the IT, Metal, Oil & gas, Power industry, PSUs, etc.

BSE disseminates

information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices. The values of all BSE indices are updated every 15 seconds during market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee which comprises eminent independent finance professionals frames the broad policy guidelines for the development and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-day maintenance of all indices and conducts research on development of new indices.

Awards achieve by BSE  The World Council of Corporate Governance has awarded the Golden Peacock Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR).  ICAI award for excellence in financial reporting for the year 2006-07  BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technology. 8

1.5 National Stock Exchange The National Stock Exchange of India Limited (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around US $2.27 trillion(2018) and is expected to become the biggest stock exchange in India in terms of market capitalization by 2018 end. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euro next and Goldman Sachs who have taken a stake in the NSE. As of 2018, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.

Origins

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The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.

Markets Currently, NSE has the following major segments of the capital market:  Equity  Futures and Options  Retail Debt Market  Wholesale Debt Market  Currency futures NSE became the first stock exchange to get approval for Interest rate futures as recommended by SEBI-RBI committee, on 31 August,2009, a futures contract based on 7% 10 Year GOI bond (NOTIONAL) was launched with quarterly maturities.

Hours

10

NSE's normal trading sessions are conducted from 9:00 am India Time to 3:30 pm India Time on all days of the week except Saturdays, Sundays and Official Holidays declared by the Exchange (or by the Government of India) in advance. The exchange in association with BSE (Bombay Stock Exchange Ltd.,) thinking to revise its timings from 9.00 am India Time till 5.00 pm India Time. However, on Dec 17, 2009, after strong protests from brokers, the Exchange decided to postpone the change in trading hours till Jan 04, 2010. NSE new market timing from Jan 04, 2010 is 9:00 am till 3:30 pm India Time.

NSE Group  National Securities Clearing Corporation Ltd. (NSCCL)  National Securities Depository Ltd. (NSDL)  India Index Services & Products Ltd. (IISL)  NSE.ITltd.  DotEx International Limited

History of NSE Capital market reforms in India and the launch of the Securities and Exchange Board of India (SEBI) accelerated the incorporation of the second Indian stock exchange called the National Stock Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest stock exchange in India. Three segments of the NSE trading platform were established one after another. The Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world. 11

In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poor's. In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as 'Best IT Usage Award' by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999).

Indices of NSE NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including:  S&P CNX Nifty(Standard & Poor's CRISIL NSE Index)  CNX Nifty Junior  CNX 100 (= S&P CNX Nifty + CNX Nifty Junior)  S&P CNX 500 (= CNX 100 + 400 major players across 72 industries)  CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)

Mission of NSE NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of:  Establishing a nation-wide trading facility for equities, debt instruments and hybrids,

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

Ensuring equal access to investors all over the country through an appropriate communication network,



Providing a fair, efficient and transparent securities market to investors using electronic trading systems,



Enabling shorter settlement cycles and book entry settlements systems, and



Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities.

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CHAPTER - 2 Company Profile Sharekhan is the largest standalone retail brokerage in the country and the third largest in terms of customer base after ICICI Direct and HDFC Securities.Sharekhan is one of the pioneers of online trading in India.It offers a broad range of financial products and services including securities brokerage, mutual fund distribution, loan against shares, ESOP financing, IPO financing and wealth management Sharekhan was founded by Mumbai-based entrepreneur Shripal Morakhia in 2000.Sharekhan pioneered the online retail broking industry and leveraged on the first wave of digitization, when dematerialization (demat) of securities came into effect and electronic trading was introduced in the stock exchanges.

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Though the www.sharekhan.com, have been providing investors a powerful online trading platform, the latest news, research and other knowledge-based tools and Sharekhan's equity related services include trade execution on BSE, NSE, Derivatives, commodities, depository services, online trading and investment advice. They have talent pool of experienced professionals specially designated to guide you when you need assistance, which is hy investigating with us is bound to be a hassle-free experience for you! In India, Sharekhan has over 4800+ employees, and is present in over 575 cities through 150 branches, more than 2,600 business partners. The company has 1.6 Million clients and on an average, executes more than 4 lakh trades per day.

Sharekhan Ltd

Founded

February 2000

Headquarters

Mumbai, India

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Country of origin CEO Industry Parent Website

India Jaideep Arora Financial Services BNP Paribas Sharekhan.com

Sharekhan Board Of Directors

CEO- Mr.Jaideep Arora

2.1 Sharekhan Mission & Vision  Mission “To educate and empower the retail investor help him/her take better investment decisions.

16

to

 Vision “To educate and empower the retail investor

to

help him/her take better investment decisions.

2.2 Role of Sharekhan  Interface between the stock exchange and the investor.  Assistance to investors in precise allocation of funds.  Building awareness amongst general public about stock market.

2.3 Core Services Of Sharekhan As a Sharekhan customer you can decide the channel through which you want to receive different Services.

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2.4 Other services provided by Sharekhan 18

1. Online Services 2. Offline Services 3.

Depository Services: Demat & Remat Transactions

4. Derivatives Trading (Futures and Options) 5. Commodities Trading 6. IPOs & Mutual Funds Distribution 7. Fundamental Research 8. Technical Research 9. Portfolio Management 10. Free access to investment advice from Sharekhan's Research team 11. Sharekhan

Value

Line

(a

monthly

publication

with

reviews

recommendations, stocks to watch out for etc) 12.Daily research reports and market review (High Noon & Eagle Eye) 13.Pre-market Report (Morning Cuppa) 14.Daily trading calls based on Technical Analysis 15.Cool trading products (Daring Derivatives and Market Strategy) 16.Personalised Advice 17. Live Market Information 18.Internet-based Online Trading: SpeedTrade 1.Online Services o Online BSE and NSE executions (through BOLT & NEAT terminals o Mutual Funds o Commodity Futures o PMS (Portfolio Management Services) o Technical PMS o Demat Services o Share shops

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of

2.Offline Services o Trading with the help of Dealer o Trading without credit o By calling to the Share shops o Credit facility (Only in Delivery-based) o Special website for Offline Clients: www.mysharekhan.com o Physical contract notes

2.5 Types of Demat Account

TYPES OF DEMAT ACCOUNT

Classic Accounts

Online Account

Offline Account

Trade Tiger Account

Dial – N – Trade

The company provided mainly two types of services to their customers for the Demate Accounts. (1) Online Account (2) Offline Account 20

2.5.1. Online Account In the Online account, the company simply provides the terminal to the customers or clients and the clients can do trading himself/herself when he/she wants. The charges of online account is Rs. 750 /-, which is varies from company to company. Online accounts are most popular than the Offline accounts. In the Online A/C, the company provides 3 types of facilities to their clients as per the requirements.  Classic Accounts  Trade Tiger Accounts  Dial – n –Trade

2.5.2 Classic Account

Investing Online is so much easier! In Classic accounts, it is very simple to do trading. Here customer has first to open a Demat account with Sharekhan and after opening an account he can get the login ID and password. With the help of login ID and password, the client can login to the Sharekhan.com and in the classic a/c whatever company’s information the clients wants, he has to type the company’s name or code and he will get all the necessary information about that company and he can buy or sell the that company’s stock or shares. But, here in the classical account the client can access only one scrip at a time.

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Features of Classic Account Classic account enables you to buy and sell shares through our website. You get features like 

Online trading account for investing in Equities and Derivatives via sharekhan.com



Integration of: Online trading + Bank + Demat account



Instant cash transfer facility against purchase & sale of shares



Make IPO bookings



You get Instant order and trade confirmations by e-mail



Streaming Quotes



Personalised Market Scan with your own customized stock ticker!



Single screen interface for cash and derivatives



Your very own Portfolio Tracker

2.5.3 Trade Tiger Account Earlier it was known as Speed Trade and now it is known as Tiger Trade. This account is same as fast trade account. But, difference between these two accounts is that in the Tiger Trade Account the client can access more than 25 scripts at a time and buy and sell the share from wherever they wants. This account also provides the charts and graphs, so that the clients can easily understand about the stock of the company. This is only for big clients and dealer kind of customers. This account is mainly for active traders who trade frequently during the trading session.

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Features of Trade Tiger Account

 A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX, NCDEX, Mutual Funds, IPOs  Multiple Market Watch available on Single Screen  Multiple Charts with Tick by Tick Intraday and End of Day Charting powered with various Studies  Graph Studies include Average, Band- Bollinger, Know Sure Thing, MACD, RSI, etc  Apply studies such as Vertical, Horizontal, Trend, Retracement & Free lines  User can save his own defined screen as well as graph template, that is, saving the layout for future use  User-defined alert settings on an input Stock Price trigger

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 Tools available to gauge market such as Tick Query, Ticker, Market Summary, Action Watch, Option Premium Calculator, Span Calculator  Shortcut key for FAST access to order placements & reports  Online fund transfer activated with 12 Banks

2.5.4 Dial-n-trade

Features of Dial-n-trade:  TWO dedicated numbers for placing your orders with your cell phone or landline. Toll free number: 1-800-22-7050. For people with difficulty in accessing the toll-free number, we also have a Reliance number (Your Local STD Code) 30307600 which is charged at as a local call.  Simple and Secure Interactive Voice Response based system for authentication  No waiting time. Enter your TPIN to be transferred to our telebrokers  You also get the trusted, professional advice of our telebrokers  After hours order placement facility between 9.00 am and 9.30 am (timings to be extended soon)

2. Offline Account This is simple way to do trading. In the offline account, the client can place the order by telephone or through personal visit in the office. The client who is very busy in their jobs or business, they can directly place the order

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by the telephone or the client who are not much busy; they can come to the office of Sharekhan. Sharekhan also provide the Dial-n-trade service to their customers. So that customers can directly place the order by the telephone.

Demat account opening and brokerage charges

 Fee structure for General Individual: Charges

Classic Account

Trade Tiger Account

Account Opening Charges

Rs. 750/-

Rs. 1000/-

Brokerage

Intra-day : 0.10 % Intra-day : 0.10 % Delivery : 0.50 % Delivery : 0.50 %

Annual Maintenance Charges

Rs. NIL first year Rs. 300/= p.a. from second year onwards

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For Intra-day Trades: This is subject to a minimum brokerage of 5 paisa per share. This means that if the share price you trade in is Rs 50/- or less, a minimum brokerage of 5 paisa per share will be charged.

For Delivery Based Trades : This is subject to a minimum brokerage of 10 paisa per share. Minimum brokerage of 10 paisa per share will be applicable when the share price is Rs 20/- or less. 2.6 Share Mobile

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 Sharekhan

launchs

ShareMobile,

an

exclusive live streaming quotes and trading facility for its online trading customers  Next time when you are on move, you need not worry about your favorite stocks price movement. You can carry stock market terminal with you anywhere – anytime.  Have you ever missed an investment or an opportunity to book profit / loss, just because you were on move?  Sharekhan brings your freedom of being Mobile. Yes, it’s so easy with ShareMobile to track your favorite stocks price movement tick-by-tick. How ShareMobile does empower you?  Live tick by tick stock price.  Latest News Headlines  Track your My Trade Portfolio investments  Live Research Fundamental & Trading Calls

Sharekhan Depository Services:  Sharekhan Depository Services offers dematerialization services to individual and corporate investors. 27

 Sharekhan has a team of professionals and the latest technological expertise dedicated exclusively to our Demat department, apart from a national network of franchisee, making the services quick, convenient and efficient.

Trading in Commodity Futures:  It provides with facility to trade in commodities (Bullion: Gold, silver and agricultural commodities) through a wholly owned subsidiary of its Parent SSKI.  Sharekhan is a member of 2 Commodity Exchanges and offers trading facility at both these exchanges: 1. Multi Commodity Exchange Of India (MCX)

2. National Commodity And Derivative Exchange, Mumbai (NCDEX)

Software (Technology) Used In Sharekhan: Sharekhan is using different technology for the running of their daily transactions. Mainly for the trading, the company using three software. 1. ODIN (VSAT Based) 2. Trade Tiger (WEB Based) 3. Classic/Fast Trade (WEB Based)

And also NEAT System Used for making transaction in NSE listed company & same way BOLT System Used for making transaction BSE listed company. 28

And for the client information or customer service, the company using two software. 1. CIS – Client Information System. 2. BOC – Back Office.

Some Information about Sharekhan:

Turnover

Rs. 15 corers daily

Employees Strength

35

Offices

More than 640 outlets in 280 cities

Clients : Demat A/c

5000

Trading A/c

3000

Head office

Mumbai

Working Capital

More than 400 corers  Sharekhan Classic Account

Special Features

 Sharekhan Trade Tiger Account  Dial – n - Trade

Sharekhan provide right investment decision to Investors according to their needs

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2.7 SWOT ANALYSIS of Sharekhan STRENGTHS:  Online Trading Facility  Largest Chain of Retail Share Shops in India  88 years of Experience in securities market  Dedicated and responsive workforce/staff  Value added service for HNI client  Research Center  Membership of NSE & BSE  Trading option like Future & Option and Commodities  Volume based differentiated product. 30

WEAKNESSES:  Less informative website  Does not have slab rate brokerage which is provided by competitors  Problems due to network crash  Unawareness Among Investors

OPPORTUNITY:  Collaboration with international financial institution  To tap the Untapped market  To capture the market lost to its Competitors.  To focus on developing a superior and powerful portal  To spread awareness of its Brand Name.

THREATS:  Follow government laws  Competitors develops  Prolonged depression and high volatility in the market  New Entrants.

2.8 Awards & Achievements of SHAREKHAN:  2001 - Web Award winner of Chip magazines Best Financial Website Award.  2004 - Best Local Brokerage by Advisory Poll of Poll 2004.

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 2005 - Awaaz Consumer Awards Best Broking House by CNBC channel.  Sharekhan is amongst top 3 online Brokers in India.

CHAPTER -3

THEORETICAL ASPECTS ABOUT TOPIC What is Investment? “The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future.” This is called Investment.

Why should one invest? 32

One needs to invest to:  Earn return on your idle resources  Generate a specified sum of money for a specific goal in life  Make a provision for an uncertain future One of the important reasons why one needs to invest wisely is to meet the cost of Inflation. Inflation is the rate at which the cost of living increases. The cost of living is simply what it costs to buy the goods and services you need to live.

Investor  An investor is any party that makes an investment.  An individual who commits money to investment products with the expectation of financial return.  The term has taken on a specific meaning in finance to describe the particular types of people and companies that regularly purchase equity or debt securities for financial gain in exchange for funding an expanding company.

Investor’s Behaviour Generally, Investors Behaviour regarding the any investment is primary concern with to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the hopes of collecting higher-thanaverage profits. While, some people are also believes in “High Risk, High Return” Many investors purchase a particular stock with the intention of making a

big

profit over a short period of time. However, this action is not investing, but a pure gambling. 33

The stock market is characterized by the trade-off between

risk

and return. The higher the risk the investor is willing and able to take, the higher the potential rewards from the investment. Therefore, if a particular investment offers you high returns, it is an indication that it will come with a high risk burden. Some people are also believes in that there is no safe investment that will provide you with high returns over a short period of time. Therefore, you should direct your resources toward long-term investments that are more likely to reward you for the patience with high returns. Investors Behaviour regarding the financial investment is closely related with the “Behavioral Finance” and “Behavioral Economics” are closely related fields making up a separate branch of economic and financial analysis using social, cognitive and emotional factors in understanding the economic decisions of investors for investment, and their effects on market prices, returns and the allocation of resources.

3.1

Information of Equity market and various sector

3.1.1 Equity market “A

market

where

investors

buy

and

sell

securities

providing ownership of a company's shares.” The market in which shares are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market,

it is one of

the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential to realize gains based on its future performance. Equity market, or stock market, is a system through which company shares are traded. The equity market offers investors an opportunity to participate in a 34

company's success through an increase in its stock price.

With enhanced

opportunity, however, the equity market usually carries greater risk than debt markets.

3.1.2 Indian Equity Market The Indian Equity Market is more popularly known as the Indian Stock Market. The Indian equity market has become the third biggest

after

China and Hong Kong in the Asian region. According to the latest report by ADB, it has a market capitalization of nearly $2.29 trillion.



The Indian equity market depends on three factors  Funding into equity from all over the world  Corporate houses performance  Monsoons

The equity market is also affected through trade integration policy. The country has advanced both in foreign institutional investment (FII) and trade integration since 1995. This is a very attractive field for making profit for medium and long term investors, short-term swing and position traders and very intra day traders. The Indian market has 21 stock exchanges. The larger companies are enlisted with BSE and NSE. The smaller and medium companies are listed with OTCEI (Over The counter Exchange of India). The functions of the Equity Market in India are supervised by SEBI (Securities Exchange Board of India). The Indian Equity Market was not well organized or developed before independence. After independence, new issues were supervised. The timing, floatation costs, pricing, interest rates were strictly controlled by the Controller of Capital Issue (CII).

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In the 1950s, there was uncontrollable speculation and the market was known as ‘Satta Bazaar'. Speculators aimed at companies like-Tata Steel, Kohinoor Mills, Century Textiles, Bombay Dyeing and National Rayon. The Securities Contracts (Regulation) Act, 1956 was enacted by the Government of India. Financial institutions and state financial corporation were developed through an established network. Two new stock exchanges, NSE (National Stock Exchange of India) established in 1994 and OTCEI (Over the Counter Exchange of India) established in 1992 gave BSE a nationwide competition. In 1995-96, an amendment was made to the Securities Contracts (Regulation) Act, 1956 for introducing options trading. In April 1995, the National Securities Clearing Corporation (NSCC) and in November 1996, the National Securities Depository Limited (NSDL) were set up for demutualised trading, clearing and settlement.

3.2 Intoduction of various sectors Meaning of sector “There are many companies or scrip that manufacturer the same products and provide services are specified under the particular name that called Industry or Sector.” There are many other different kinds of industries, and often organized into different classes or variety of industrial classifications it’s called Sector. In this report, I have study on these Five Sectors which are:

36

1. 2. 3. 4.

5.

• Oil & Gas Sector • Banking Sector • IT Sector • Infrastructure Sector • Automobile Sector

3.3 List of various sectors

SECTORS Agro Inputs Sector

IT Sector

Agriculture Sector

Insurance Sector

Auto Ancillaries Sector

Infrastructure Sector

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Automobile Sector

Mining Sector

Aviation Sector

Media & Entertainment Sector

Banking Sector

Medical Sector

Cement Sector

Oil & Gas Sector

Chemicals Sector

Paint Sector

Cigarettes Sector

Paper Sector

Construction Sector

Pharmaceutical Sector

Consumer Durables Sector

Petrochemicals

Courier Sector

Power Sector

& Logistic Services

Cycle & Accessories Sector

Real Estate Sector

Engineering Sector

Retail Sector

Financial Institutions Sector

Sugar Sector

Food Products Sector

Service Sector

FMCG Sector

Shipping Sector

Fertilizer Sector

Steel Sector

Garment Sector

Tele communication Sector

Health Care Sector

Textiles Sector

3.3 1. Oil and gas sector

38

The oil & gas industry in recent years has been characterized by rising consumption of oil products, declining crude production & low reserve accretion. India remains one of the least-explored countries in the world, with a well density among the lowest in the world. India is the fourth largest oil consumption zone in Asia, even though on a per capita basis the consumption is a mere 0.1 tonne, the lowest in the region- This makes the prospects of the Indian Oil industry even more exciting. The oil and gas industry has been instrumental in fuelling the rapid growth of the Indian economy. The petroleum and natural gas sector which includes transportation, refining and marketing of petroleum products and gas industry constitutes over 15 per cent of the GDP. Market size India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally.Oil imports rose sharply year on year by 27.89 percent of US$ 9.29 billion in october 2017. The country’s gas production is expected to touch 90 billion cubic meters in 2040 from 21.3 bcm in 2017-18.Gas pipeline infrastructure in the country stood at 16,470 km in september 2017.

3.3.2. Banking sector Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India,

government-

owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the 39

Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India. The banking sector will navigate through all the aspects of the Banking System in India. It will discuss upon the matters with the birth of the banking concept in the country to new players adding their names in the industry in coming few years. The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association (IBA) & top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. With the Indian economy moving on to a high growth trajectory, consumption levels soaring & investment riding high, the Indian banking sector is at a watershed. Further, as Indian companies globalize & people of Indian origin increase their investment in India, several Indian banks are pursuing global strategies. Market size The indian banking system consists of 27 public sector bank,22 private sector bank,44 foreign bank,56 regional rural banks,1589 urban cooperative banks and 93,550 rural cooperative bank, in addition to cooperative credit institutions.Bank credit grew at12.64 percent year on year to Rs.85.511 lakh crore on may11 2018 from Rs75.91 lakh crore on may12,2017.

3.3.3 IT Sector Over the past decade, the Information Technology (IT) industry has become one of the fastest growing industries in India. The key segments that have contributed significantly (96 percent of total) to the industry’s exports include – Software & 40

services (IT services) & IT-enabled services (ITeS) i.e. business services. Over a period of time, India has established itself as a preferred global sourcing base in these segments & they are expected to continue to fuel growth in the future. At present, India is emerging as one of the popular Software outsourcing locations to offer cost effective software solutions. The contribution of India in Software Outsourcing is remarkable. One just can not reject the reality that currently India is described as the most prospering name in software outsourcing. Now there are several grounds for this flourishing popularity of the offshore IT outsourcing services of India. The prime reason for choosing India, as an offshore development partner in software outsourcing business is the availability of enormous pool of educated manpower combined with world-class quality offerings. The Indian information technology (IT) industry has played a key role in putting India on the global map. Thanks to the success of the IT industry, India is now a power to reckon with. According to the National Association of Software and Service Companies (NASSCOM), the apex body for software services in India. India's IT growth in the world is primarily dominated by IT software and services such as Custom Application Development and Maintenance (CADM), System Integration, IT Consulting, Application Management, Software testing, and Web services. Market size Total spending on IT by banking and security firms in india is expected to grow 8.6 percent year on year to US$ 7.8 billion by 2017.India’s personal computer shipment advanced 11.4 percent year on year to 9.56 million units in 2017 on the back of rise in the quantum of large projects. 41

India's domestic market has also become a force to reckon with, as the existing IT infrastructure evolves both in terms of technology and depth of penetration. Investments India IT core competencies and strengths have attracted significant investments from major countries.The computer software and hardware sector in India attracted cumulative FDI inflows US$29.825 billion from april 2000 to december 2017 according to data released by the department of industrial policy and promotion. The Indian information technology sector continues to be one of the sunshine sectors of the Indian economy showing rapid growth and promise. 3.3.4 Infrastructure sector Infrastructure is the basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function. The term typically refers to the technical structures that support a society, such as roads, water supply, sewers, power grids, telecommunications, and so forth.

Market Size FDI received in construction development sector from april 2000 to december 2017 stood at US$24.67 billion, according to the Department of Industrial Policy and Promotion(DIPP).The logistics sector in India is expected to increase at a compound annual growth rate (CAGR) of 10.5 percent from US$ 160 billion in 2017 to US$215 billion by 2020. 42

Investments Some key investments in the sector are listed below: 1. In june 2018 the asian infrastructure investment bank has announced US$200 million investment into the national investment and infrastructure fund. 2. Private equity and venture capital investments in the infrastructure sector reached US$3.3 billion with 25 deals during january- may 2018. 3. Indian infrastructure sector witnessed 91 M&A deals worth US$ 504 billion in 2017. 3.3.5 Automobile Sector Automobile industry is one of the fastest growing industries of the world. With more than 2 million new automobiles rolling out each year, on roads of India, the industry is set to grow further.

Automobile industry made its silent entry in India in the nineteenth century. Since the launch of the first car in 1897, India automobile industry has come a long way. Today India is the largest three wheeler market in the world and is expected to take over China as the second largest automobile market, in the coming years. Some facts on Automobile industry in India: 

India has the fourth largest car market in the world



India has the largest three wheeler market in the world



India is the second largest producer of two wheelers in the world



India ranks fifth in the production of commercial vehicles

43

The growth of the Indian middle class along with the growth of the economy over the past few years has attracted global auto majors to the Indian market. Moreover, India provides trained manpower at competitive costs making India a favoured global manufacturing hub. The attractiveness of the Indian markets on one hand and the stagnation of the auto sector in markets such as Europe, US and Japan on the other have resulted in shifting of new capacities and flow of capital to the Indian automobile industry. Global auto majors such as Japanese auto majors Suzuki, Honda and Korean car giant Hyundai are increasingly banking on their Indian operations to add weight to their businesses, even as numbers stay uncertain in developed markets due to economic recession and slowdown. Market Size Overall domestic automobiles sales increased at 7.01 percent CAGR between FY13-18 with 24.97 million vehicles getting sold in FY18. The auto industry is set to witness major changes in the form of electric vehicles shared mobility,Bharat stage-VI emission and safety norms.Electric cars in India are expected to get free parling for three years along with toll waivers.Sales of electric two wheelers are estimated to have crossed 55,000 vehicles in 201718.Premium motorbike sales in India one million units in FY18.

3.4 List of companies under selected sectors  Oil and Gas sector  Indian Oil Corporation  ONGC (Oil and Natural Gas Corporation India.)  Essar Oil Limited 44

 Gas Authority of India Limited  Oil India Limited  Gujarat Gas  Indian Oil  Aban  Tata Petrodyne  Gas Projects (India) Private Limited  Hindustan Oil Exploration Company Limited  India LPG  Oil Gas India  etc…  Banking Sector  State Bank of India  ICICI Bank  Unit Trust of India (UTI)  HDFC (Housing Development Financial Corporation)  ABN Amro Bank  HSBC  IDBI Bank  Union Bank of India  Central Bank of India  Bank of Baroda  etc…  IT sector  Infosys  TCS Limited 45

 Wipro  Microsoft  L&T Infotech Ltd.  Lenovo  HCL  Mahindra Satyam  etc…  Infrastructure Sector  DLF  Reliance Infrastructure  HCC Infrastructure  Maytas Infra Limited  GMR Infrastructure  IBR Infrastructure  etc…  Automobile Sector  Hero Honda  Ford Motor  Honda Motors  Bajaj Auto  Tata Motors  Maruti Suzuki  TVS Motors  Mihindra Motors  Yamaha Motors  etc…

3.5 Why Customer’s first choice is SHARAKHAN…? 46

1.EXPERIENCE: BNP Paribas has more than eight decades of trust and Credibility in the Indian stock market. In the Asia Money broker’s poll held recently, Sharekhan won the ‘India best broking house for 2004’ award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has been providing institutionallevel research & broking services to investors.

2.TECHNOLOGY: With Sharekhan online trading account you can buy and sell shares in an instant from any PC with an internet connection. You will get access to our powerful online trading tools that will help you take complete control over your investment in shares.

3.KNOWLEDGE: In a business where the right information at the right time can translate into direct profits, you get access to a wide range of information on Sharekhan’s website www.sharekhan.com. You will also get a useful set of Knowledge-based tools that will empower you to take informed decisions.

4.ACCESSIBILITY In addition to Sharekhan online and phone trading services also very useful. Sharekhan also have a ground network of 640 share shops across 280 Cities in India where you can get personalize Services.

5.CONVENIENCE: You can call Sharekhan’s Dial-n-Trade number to get investment advice and execute your transactions. Sharekhan have a dedicated Call Center to provide this service via a toll-free number from anywhere in India.

6.CUSTOMER SERVICE: 47

Sharekhan’s customer service team will assist you for any help that you need relating to transactions, billing, demat and other queries. Sharekhan’s customer service can be contacted via a toll-free number-mail or live chat on Sharekhan.com.

7.INVESTMENT ADVICE: Sharekhan has dedicated research teams for fundamental and technical research. Sharekhan’s analysts constantly track the pulse of the market and provide timely investment advice to you in form of daily research e-mail, online chat, printed reports and SMS on your phone.

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CHAPTER -4 Research Methodology “Research design is the plan structure and strategy if investigation conceived so as obtain answers to research question and to control variance” A research design is the master plan or model for the conduct of formal investigation and survey. It is a specification of methods and procedures for acquiring the information needs for solving the problem. It decides the source of information and methods for gathering the data. A questionnaire and other forms are tested to use the collection of data.

4.1 Objectives of the study  To find out in which investment option people invests most.  To find out how investors are motivates for investing in Equity Market.  To study the general investment criteria of people.  To know the peoples time horizon for investing in Equity Market and to know the rate of return expected by them.  To study the interest of people for further investment in Equity Market.  To assess the customer satisfaction level for investing in equity market.  To classify the different sector on the basis of investors behaviour regarding investing in equity market.  To identify various motivation factor which affect to investor while investing in various selected sectors.

49

4.2 DEFINITION OF RESEARCH DESIGN Research is common parlance refers to a search for knowledge. Once can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is a scientific investigation. The Advance Learner’s Dictionary of Current English lays down the meaning of research as “ a careful investigation or inquiry especially through search for new facts in any branch .

4.3 RESEARCH DESIGN Decisions regarding what, when, how much, by what means concerning an enquiry or a research study constitute a research design. “A research design is the arrangement of conditions for collections and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. “

4.4 TYPES OF RESEARCH DESIGN  Exploratory research design They are termed as formulative research studies. The main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypotheses from an operational point of view.  Descriptive research design 50

It includes survey and fact-finding enquires of different kinds. The major purpose of it is description of the state of affairs as it exists at present.

4.5 SAMPLING Sampling Plan: “Sampling

is

the

process

to

analyze

the

whole

population

by analyzing a part of it.”  The effectiveness of the report depends on the sample size selected from the population. Sampling Unit: Here, target population is decided who are the actual and potential investors, each sample has the chance to be selected on an equal basis & this research has been conducted through surveying the whole of the equity market of Surat city

Sample size: For getting better result of the given problem I have to determine the perfect sample size as on 90% confidence level which is calculated statically by the formula. Sampling Frame: Sampling frame is the actual set of units from which a sample has been drawn. In sampling frame, I have used simple random sampling method for conducting survey. In a simple random sample ('SRS') all units from the sampling frame have an equal chance to be drawn and to occur in the sample. 51

Here, I have used sampling frame as an actual and potential investors from whole of the equity market of Delhi city and also from Sharekhan Securities Pvt. Ltd. Here, each sample has the chance to be selected on an equal basis because I have used simple random sampling method for surveying purpose.

4.6 SOURCES OF DATA  Primary data They are those which are collected afresh and for the first time, and thus happen to be original in character. Apis collect primary data during the course of doing experiments in an experimental research but in case Apis do research of the descriptive type of performs surveys. Here the primary data will be collected by means of preparing a questionnaire and getting it filled by a large sample space.

These questionnaires will help in drawing conclusions about the case.  Field survey  Personal interview (Questionnaire)

 Secondary data It means data that are already available i.e. they refer to the data which have already been collected and analyzed by someone else. When the researcher utilizes secondary data then he has to look into various sources from where he can obtain them. In this case he is certainly not confronted with the problems that are usually associated with the collection of original data. Secondary data may be either published or unpublished data. 52

 Internet  Database

HENCE, FOR MAKING THIS PROJECT, PRIMARY DATA HAS BEEN USED. Data analysis tool  I have used SPSS software (Statistical Package for the Social Sciences) for analysis purpose.  In that I have used Mean, Median, Mode, Frequency Table, and Cross Tabulation, Graphical representation & interpretation with each graphs and charts.  Microsoft Office is used for data typing formatting and analyzing the data.

4.7 Limitations of the study  Respondents might have felt hesitation in providing information related to their age, income etc. So, there can be some data that might questionable because of unwillingness of respondents to give right information.  Sample selected may not represent whole population, as sample size selected is very small in proportion to population due to time and cost constraints.  Even many of the respondents may give bias answer.

53

CHAPTER -5

Data analysis and Interpretation 1. Do you investing in Equity Market? [ ] Yes [ ] No

Particulars

Investing

Percentage

Yes

32

68%

No

18

32%

Total

50

100%

54

Investing In Equity Market ( In Percentage)

Yes

No

Interpretation: According to the above chart we can see that:  68% of investors (32) are investing in Equity Market.  While 36% of investors (18) are not investing in Equity Market. 2. If you want to invest, which investment option will provide the best returns? [ ] Equity Share [ ] IPO [ ] Mutual Funds [ ] Bonds [ ] Fixed Deposits [ ] If any other _________

Investment option

Investors in Percentage

Equity Share

53%

55

IPO

18%

Mutual Funds

8%

Bonds

7%

Fixed Deposits

4%

Other

10%

Investors are investing in various Investment option (Investors in Percentage) 10% 4%

Equity Share IPO

7%

Mutual Funds 8%

53%

Bonds Fixed Deposits Other

18%

Interpretation: According to the previous chart:  According to 53% of investors, Equity market will provide the best returns in compare to other investment option.

56

 18% of investors believe that IPO (Primary Market) will provide the best returns.  8% of investors think that Mutual Funds will provide the best returns.  7% of investors believe that Bonds Market will provide the best returns.  4% of investors trust that Fixed Deposits will provide the best returns.  According to 10% of investors, other investment option will provide the best returns. According to them other investment options are:  Commodity Market  Insurance  Government Securities etc. 3. Which factors motivate you for investing in Equity Market? [ ] Return [ ] Liquidity [ ] Safety [ ] Capital Appreciation [ ] Other _____________

Motivation Factors

Investors Percentage

Return

49%

Liquidity

26%

Safety

7%

Capital Appreciation

17%

Other

1%

57

Motivating factors for Investors to invest in Equity Market (Investors in Percentage) 5% 16% 6%

48%

Return Liquidity Safety Capital Appreciation

25%

Other

Interpretation: According to the Previous Figure:  49% of investors are motivated by Return to invest in Equity market.  26% of investors are motivated by Liquidity to invest in Equity market.  6% of investors are motivated by Safety to invest in Equity market.  16% of investors are motivated by Capital Appreciation to invest in Equity market.  While 5% of investors are motivated by other factors like-Investment, Profit etc. to invest in Equity market.

4.How much percentage of your income you invest in equity market? [ ] Less than 5% [ ] 5%-10% [ ] 10%-15% [ ] 15%-20% 58

[ ] 20%- 25% [ ] More than 25% Percentage of Income

Investors in Percentage

Less than 5%

23%

5%-10%

45%

10%-15%

17%

15%-20%

7%

20%- 25%

5%

More than 25%

3%

Percentage of income investors are investing in Equity Market (Investors in Percentage) 5%

3%

7%

23%

Less than 5% 5%-10%

17%

10%-15% 15%-20% 20%- 25% More than 25% 45%

Interpretation: According to the Previous Figure:  23% of the investors are investing Less than 5% of their income in Equity Market. 59

 45% of the investors are investing 5%-10% of their income in Equity Market.  17% of the investors are investing 10%-15% of their income in Equity Market.  7% of the investors are investing 15%- 20% of their income in Equity Market.  5% of the investors are investing 20%-25% of their income in Equity Market.  While 3% of the investors are investing More than 25% of their income in Equity Market

5.How do you trade in Equity Market? [ ] Intraday [ ] Delivery [ ] Speculation [ ] Arbitragers [ ] Hedging [ ] If any other please specify _____________

Types of Trade

Investors in Percentage

Intraday

13%

Delivery

31%

Speculation

26%

Arbitragers

17%

Hedging

11%

Other

2%

60

Investors are Trade in Equity Market (Investors in Percentage) 11%

2%

13%

Intraday Delivery Speculation

17% Arbitragers 31%

Hedging Other

26%

Interpretation: According to the Previous Figure:  13% of the investors are doing Intraday trading in Equity Market. “Intraday Trading is trading for that one day only. Means any securities are purchase & sell “within the day.”  31% of the investors are investing in Equity Market as a Delivery base Trading. “Delivery based trading is normally considered as a safer approach for trading in shares when compared to day trading. Delivery based trading involves buying shares on a market day and selling them only after receiving the delivery of those shares in demat account.”

61

 26% of the investors are trading in Equity Market as a Speculator. “Speculators are those classes of investors who willingly take higher-thanaverage risk in return for a higher-than-average profit potential in future. Speculators aim primarily at quick profit from a short-term acquisition of assets.”  17% of the investors are Arbitragers in Equity Market. “Arbitrager means who purchases securities in one market for immediate resale in another in the hope of profiting from the price differential”  11% of the investors are trading in Equity Market as Hedgers. “Hedging means reducing or controlling risk. Hedgers wish to eliminate or reduce the price risk to which they are already exposed.”  While 2% of the investors are trade in Equity Market for Other Purpose.

6.What is the time horizon for investing in Equity Market? [ ] Less than 1 Months [ ] 1 to 3 Months [ ] 3 to 6 Months [ ] 6 to 12 Months [ ] More than 12 Months

62

Time Horizon

Investors in Percentage

Less than 1 Months

14%

1 to 3 Months

28%

3 to 6 Months

15%

6 to 12 Months

18%

More than 12 Months

25%

Investors Time Horizon for investing in Equity Market (Investors in Percentage) 28%

30%

25%

25% 18%

20% 15%

15%

14%

10% 5% 0%

Less than 1 Months

1 to 3 Months

3 to 6 Months 6 to 12 Months

Interpretation: According to the Previous Figure: 63

More than 12 Months

 14% of investors invest in Equity market for Less than 1 Months.  28% of investors invest in Equity market for the period of 1 to 3 months.  15% of investor’s time horizon for in Equity market is 3 to 6 Months.  18% of investor’s time horizon for in Equity market is 6 to 12 Months.  25% of investors invest in Equity market for more than 12 Months.

7.What is the rate of return expected by you from Equity Market in a year? [ ] 5% – 10 % [ ] 10% – 15 % [ ] 15% – 20% [ ] 20% – 25% [ ] 25% –30% [ ] 30% and above Rate of Return

Investors in Percentage

5% – 10 %

12%

10% – 15 %

18%

15% – 20%

32%

20% – 25%

26%

25% –30%

8%

30% and above

4%

64

8%

4%

12% Rate of Return 5% – 10 %

18%

10% – 15 % 15% – 20%

26%

20% – 25% 25% –30% 30% and above

32%

Interpretation: According to the above Figure:  12% of investors are expects 5%-10% return from Equity market.  18% of investors are expects 10%-15% return from Equity market.  32% of investors are expects 15%-20% return from Equity market.  26% of investors are expects 20%-25% return from Equity market. Here, above two cases investors are more expects from Equity market.  8% of investors are expects 25%-30% return from Equity market.  While 4% of investors are expects more than 30% return from Equity market.

8.Are you satisfied with the current performance of the Equity Market in terms of expected return? [ ] Fully Satisfied [ ]Satisfied [ ]Neutral 65

[ ] Unsatisfied [ ] Fully Unsatisfied

Rate of Return

No. of Investors

Percentage

Fully satisfied

8

17%

Satisfied

21

42%

Neutral

14

28%

Unsatisfied

5

10%

Fully Unsatisfied 2 Total

3%

50

100%

Investors

fully satisfied Satisfied neutral unsatisfied fully unsatisfied

Interpretation: According to the Previous Figure:  8 investors are Fully Satisfied from current performance of equity market.  21 investors are Satisfied from Equity market. 66

 14 investors are Neutral with current performance of Equity market.  5 investors are Unsatisfied from Equity market.  While 2 investors are Fully Unsatisfied from Equity market.

9. Who advise you to enter in Equity Market? [ ] Friends [ ] Relatives [ ] Advisers [ ] Media [ ] Research Report [ ] Magazines [ ] If any other ___________ Particulars

Investors in Percentage

Friends

28%

Relatives

12%

Advisers

25%

Media

17%

Research Report

10%

Magazines

5%

Other

3%

67

Investor's Referance for enter into Equity Market (Investors in Percentage) 5% 3% 10%

Friends 28%

Relatives Advisers Media

17%

Research Report 12%

Magazines Other

25%

Interpretation: According to the Above Figure:  Friends motivate 28% of the investors to enter into the equity market.  Relatives motivate 12% of the investors to enter into the equity market.  25% of investors enter in Equity market by the Advise of financial advisor.  Media motivate 17% of the investors to enter into the equity market.  Magazines motivate 10% of the investors to enter into the equity market.  5% of investors are motivates by Reading Magazines to enter in Equity market.  While other factors like self-Study, their own View etc. motivate of the investors to enter into the equity market.

68

3%

10.Which Factors do you consider most important while selecting the Sectors? [ ] Market Trend [ ] Profitability [ ] Economic Condition [ ] Industry Condition [ ] Existence of well established Companies under Sectors [ ] Government Policy [ ] If any other please specify _____________

Particulars

Percentage

Market Trend

29%

Profitability

23%

Economic Condition

14%

Industry Condition

16%

Existence

of

well

established

Companies under Sectors

12%

Government Policy

5%

Any Other

1%

69

Factors Consider by Investors while selecting sector (Investors in Percentage) 5% 1%

Market Trend

12% 29%

Profitability Economic Condition Industry Condition

16% Existence of well established Companies under Sectors Government Policy

14%

23%

Any Other

Interpretation: According to the Previous Figure:  29% of the investors have considered Market Trend as a most important factor while selecting the Sector.  23% of the investors have considered Profitability as a most important factor while selecting the Sector.  14% of the investors have considered Economic Condition as a most important factor while selecting the Sector.  16% of the investors have considered Industry Condition as a most important factor while selecting the Sector.  12% of the investors have considered Existence of well established Companies under Sectors as a most important factor while selecting the Sector.  5% of the investors have considered Government Policy as a important factor while selecting the Sector.

70

 While 1% of the investors have considers Other Factor like Global Position of the company and etc. important factor while selecting the Sector. 11. Which Sectors do you prefer the most? Here, I have decided to study only these five sectors. Oil & Gas Sector Banking Sector IT Sector Infrastructure Sector Automobile sector Sectors

Investors

rank

Oil & gas

15

1st

IT Sector

5

2nd

Banking sector

25

3rd

Automobile sector

5

4th

Infrastructure sector

10

5th

71

Investors

oil and gas It sector Banking sector Automobile Infrastructure

Interpretation: On the basis of Previous Figures:  Oil & Gas Sector: Here, over all 15 investors have selected oil & gas sector as a First Rank in comparison with First Rank of all sectors.  IT Sector Here, over all 5 investors have selected IT sector as a 2nd Rank in comparison with 2nd Rank of all sectors.  Banking Sector: Here, over all 25 investors have selected Banking sector as a 3 nd Rank in comparison with 3nd Rank of all sectors.

72

 Automobile Sector: Here, over all 5 investors have selected Automobile sector as a 4 th Rank in comparison with 4th Rank of all sectors.  Infrastructure Sector: Here, over all 10 investors have selected Infrastructure sector as a 5thRank in comparison with 5nd Rank of all sectors.

12. Mention the most important factors for selecting a company of your choice. [ ] Earning Per Share [ ] Dividend [ ] Broker’s advise [ ] Market capitalization [ ] Performance of company [ ] P.E. Ratio [ ] If any other __________

Factors

affect

for Investors

selecting company

Percentage

Earning Per Share

19%

Dividend

17%

Broker’s advise

15%

Market capitalization

7%

Performance of company

16%

P.E. Ratio

24%

Other

2%

73

in

Factors affect to Investors for for selecting company (Investors in Percentage) 2% 19%

Earning Per Share

24% Dividend Broker’s advise 17%

Market capitalization Performance of company

16%

P.E. Ratio 7%

15%

Other

Interpretation: On the basis of above Figures:  19% of the investors have considered Earning Per Share as a most important factor to select a Company under the sector of their Choice.  17% of the investors have considered Dividend as a most important factor to select a Company under the sector of their Choice.  While 15% of the investors are select a company under the sector of their choice on the basis of Broker’s advises.  7% of the investors have considered Market capitalization by the company as a important factor to select a company under the sector.  16% of the investors have considered as a Performance of company most important factor to select a company under the sector of their choice. 74

 24% of the investors have considered Price Earning Ratio as a most important factor select a company under the sector of their choice.  At last 2% of the investors have considered Other Factors like Suggestion from reference group, External advisors, Stakeholders, Growth of Company, Market Trend, Profitability and their own view etc. to select a company under the sector.

CHAPTER -6 Conclusion During my training period I have study on “Investors Behaviour for Investing in Equity Market in Various Sectors” by using Descriptive Research Design as a Questionnaire method where respondents are from whole of the equity market of Delhi city and also from Sharekhan Securities Pvt. Ltd. From the survey I found that major people are investing in equity market only due to Earn High Return and Hedge the Risk by investing their major proportion 75

of income in Equity Market. Here, the most of people are trade in equity market as a speculation and they are invests for one to three months. Generally, the investors who are invest for long period more than year they are surely beneficial in equity market. Majority of people are motivated by their friends & medias advise to enter into equity market. Majority people are expecting something more from the equity market.So, finally some are satisfied and some are not satisfy with equity market. Major investors prefer the Oil & gas sector as a first rank on the basis of Market trend, Profitability, industry condition and economic condition also important factor while selecting the Sector and investors have also considered Price Earning Ratio, Earning per Share and Dividend as a most important factor while selecting a company under these selected sectors.

CHAPTER -7 Suggestions & Recommendations Recommendation to Investors:

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 Prefer investment for long term investment strategy that provides you moderate return with liquidity.  Investors should not invest in only equity market but, also invest in other Safe Securities Like- Fixed Deposits, Government Securities, Bonds, Mutual fund and Insurance etc. which also provides moderate return. For Example: One should prefer o Equity – 50% o Other Safe Securities – 50% So, one can get moderate return with liquidity.  Investors should invest money at lower level price and sale the stock at higher price.  Investors should select company on the basis of PE ratio, EPS, Current Growth of Company and Market capitalization and many more. So, investors can get higher return on their investment.  Always invest extra money in stock market. Do not invest by taking loan from banks or other resources.

Recommendation to Company:

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 From my research, I found that only 68% of investors are investing in equity market, so more focus should on 32% of investors who are not investing in equity market.  Broking firms or companies should promote Equity investment aggressively for long term investment purpose.

 Majority of investors (53%) are investing secondary market (equity market) and very few (18%) investors are investing in Primary Market. So, here broking firm should promote to their client for investing in Primary Market also.  Company should have to concentrate on those people who are not investing in Equity Market because of High risk than convert them in investing other security like-Mutual Fund, Bonds, and Insurance etc. which also provides moderate return.  The Stock Broking firm should also provide better services to the investor to increase the satisfaction level of the investors.

 Company should focus on students also because equity market has risk and the younger generation likes to take risk.  Majority investors are investing in Oil & gas sector and IT sector. So, Company should also suggest to investors for investing other sector which is also profitable. CHAPTER -8

Bibliography 78

@. BOOKS:  Gordon & Natrajan, “Financial Markets And Services” Second

Revised Edition Reprint, Himalaya Publishing House, 2005.  Investment Management – V.A. AVADHANI

@. Websites:  www.sharekhan.com  www.nseinda.com  www.bseindia.com  www.moneycontrol.com  www.investopedia.com  www.wikipedia.com  www.autherstream.com  www.myrisis.com

@. NEWS PAPER:  ECONOMICS TIMES  TIMES OF INDIA

@. OTHER:  Sharekhan’s Broachers  NCFM – Capital Market Dealers Module  Other Magazines for Capitals Markets

CHAPTER-9 79

Annexure Questionnaire on “INVESTORS BEHAVIOUR FOR INVESTING IN EQUITY MARKET IN VARIOUS SECTORS” IN Delhi CITY Student of Sri gure tegh bahadur institute of management and information technology for B.B.A. is conducting a survey on “Investors Behaviour for Investing in Equity Market in Various Sectors” This information is purely for an academic purpose and will be kept completely confidential. You are requested to fill the below QUESTIONNAIRE.

1.Do you investing in Equity Market? [ ] Yes

[ ] No

2.If you want to invest, which investment option will provide the best returns? [ ] Equity Share

[ ] IPO

[ ] Mutual Funds

[ ] Bonds

[ ] Fixed Deposits

[ ] If any other _________

3.Which factors motive you investing in Equity Market? [ ] Return

[ ] Liquidity

[ ] Safety

[ ] Capital Appreciation [ ] If any other please specify _____________

4.How much percentage of your income you invest in Equity Market? 80

[ ] Less than 5%

[ ] 5%-10%

[ ] 15%-20%

[ ] 10%-15%

[ ] 20%- 25%

[ ] More than 25%

5.How do you trade in Equity Market? [ ] Intraday [ ] Hedging

[ ] Delivery

[ ] Speculation [ ] Arbitragers

[ ] If any other please specify _____________

6.What is the time horizon for investing in Equity Market? [ ] Less than 1 Months

[ ] 1 to 3 Months

[ ] 6 to 12 Months

[ ] More than 12 Months

[ ] 3 to 6 Months

7.What is the rate of return expected by you from Equity Market in a year? [ ] 5% – 10 %

[ ] 10% – 15 %

[ ] 15% – 20%

[ ] 20% – 25%

[ ] 25% –30%

[ ] 30% above

8.Are you satisfied with the current performance of the Equity Market in terms of expected return? [ ] Fully Satisfied

[ ] Satisfied

[ ] Unsatisfied

[ ] Fully Unsatisfied

9.Who advise you to enter in Equity Market?

81

[ ] Neutral

[ ] Friends

[ ] Relatives

[ ] Research Report

[ ] Advisers

[ ] Magazines

[ ] Media

[ ] If any other ___________

10.Which Factors do you consider most important while selecting the Sectors? [ ] Market Trend

[ ] Profitability

[ ] Economic Condition

[ ] Industry Condition

[ ] well established Companies under Sectors

[ ] Government Policy

[ ] If any other please specify _____________

11.Which Sector do you prefer the most? (Give 1 to 5 Orders in given boxes) Oil & Gas Sector Banking Sector IT Sector

Infrastructure Sector Automobile Sector If

any

other

please

specify

_____________ 12.Mention the most important factors for selecting a company of your choice. [ ] Earning Per Share

[ ] Dividend

advise [ ] Market capitalization P.E. Ratio

[ ] Broker’s

[ ] Performance of company

[ ]

[ ] If any other _____________

13.If any Suggestion from your side, then please specify. _________________________________________________________ _________________________________________________________ __________

-: Personal Information: Name:

_______________________________________________

 Address: _______________________________________________ 82

_______________________________________________ 

E-mail

ID:

…………………………………..……………………………… 

Contact No.: …………………………………..



Gender



Age:

[ ] Male

[ ] Below 20 Years

[ ] Female

[ ] 21 TO 30 Years

[ ] 31 TO 40

Years [ ] 41 TO 50 Years

[ ] 51 TO 60 Years

[ ] Above 60

Years  Occupation: [ ] Business [ ] Student

[ ] Service

[ ] Employee

[ ] Other please specify _____________

 Income (Yearly): [ ] Less than 100000 Rs. [ ] 100000 to 200000 Rs.

[ ] 200000 to 300000

Rs. [ ] 300000 to 400000 Rs. [ ] 400000 to 500000 Rs. [ ] Above 500000 Rs. !!!!.....Thanking you for providing your valuable Response…..!!!!

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