Digital Transformation in the PLM domain - distrib.pdf
My summer project
1. SUMMER TRAINING PROJECT REPORT
ON
“COMPARISON BETWEEN RELIGARE AND STOCK TRADING SERVICE”
Submitted in partial fulfilment of the requirements
for the degree of
Master of Business Administration
Submitted to
Department Of Management Studies
Submitted By
SUSHANT TRIPATHI
Roll No. 09/MBA/006
JSS ACADEMY OF TECHNICAL EDUCATION
NOIDA – 201307
U.P.Technical University, Lucknow
(2009-2011)
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3. JSS MAHAVIDYAPEETHA
JSS ACADEMY OF TECHNICAL EDUCATION, NOIDA
DEPARTMENT OF MANAGEMENT STUDIES
CERTIFICATE
This is to certify that “Sushant Triapthi” has successfully completed the Summer Project
titled “Comparison Between Religare & Other Stock Trading Services” from “Religare
Securities Ltd, NOIDA Sec-18” as the partial fulfillment of the requirement for the award of
degree of Masters of Business Administration (M.B.A.) by U.P. Technical University
Lucknow during batch 2009-11.
Dr. S.K.Banerjee
Head, Department of Management Studies,
JSSATE, Noida
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4. DECLARATION
It gives me immense pleasure that I got an opportunity to work with Religare Securities Ltd.
and also to undertake such a wonderful project. The professionalism and the great work
environment has helped me in shape-up my personality and enhance my knowledge. It was an
educating and enriching experience for me.
Now that I have completed my project work, thus, it is but natural to thank all those who
made this project an outstanding experience.
First and foremost, I extend my sincere gratitude to my project guide Mr.Baljeet Singh (Sr
RM) RSL, Noida for his invaluable suggestions and the time he has devoted for successful
execution of this project work. I thank him for giving me insights, required inputs and proper
direction throughout the project.
PLACE: NOIDA
Sushant Tripathi
Date : mm/dd/yyyy (Research Student)
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5. This project aims at understanding the workings of an organization, its external and internal
processes, the product and services it offers to its customers. Religare Securities Limited has
provided an in depth knowledge about how an organization functions, the challenges it faces
and its earnest endeavour to overcome them in its objective of becoming the no.1 service
provider in its product line.
I thank Mr. VIPUL GUPTA (Branch Manager) for selecting me as a management trainee in
his organization. I would especially like to thank Mr. BALIJEET SINGH (Senior
Relationship manager) for his guidance and motivation in helping me to understand the
working of the organization and the challenges ahead in the organization and the corporate
world as a whole. My regards also extends to Mr. KAPIL GUPTA (RM), for providing an
insight in the organization and their help and support and clearing my doubts and problems.
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6. TABLE OF CONTENT
CHAPTER-I
EXECUTIVE SUMMARY 10
CHAPTER-II
INTRODUCTION OF PROJECT
2.1 INTRODUCTION 12
2.2 STATEMENT OF PROBLEM 14
2.3 OBJECTIVE 15
2.4 PROBLEM DEFINETION 16
2.5 WHY INVESTOR CHOOSE RELIGARE 17
2.6 INVESTOR EXPECTATAIONS 18
CHAPTER-III
PROFILE OF THE ORGANIZATION
3.1 INTRODUCTION 21
3.2 FINANCIAL SERVICE INDUSTRY 22
3.3 INDIAN FINANCIAL SECTOR 24
3.4 RECENT ADVANCEMENT IN THE INDUSTRY 26
3.5 RANBAXY GROUP 28
3.6 RELIGARE: THE COMPANY 30
3.7 COMPANY STRUCTURE 34
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7. 3.8 COMPETITORS OF RELIGARE 35
3.9 THE RELIGARE AGE 37
3.10 THE REACH OF RELIGARE 38
3.11 DEVISION OF RELIGARE 39
3.12 COMPETITIVE ADVANTAGE 48
CHAPTER-IV
RESEARCH DESIGN AND METHODOLOGY
4.1 INDRODUCTION TO RESEARCH METHODOLOGY 50
4.2 OBJECTIVE OF RESEARCH 51
4.3 RESEARCH DESIGN 52
4.4 SOURCES OF DATA COLLECTION 53
4.5 LIMITATION OF STUDY 54
CHAPTER-V
DATA REPRESENTATION, ANALYSIS & INTERPRETATION
5.1 DEMATERIALISATION 56
5.2 OPENING OF DEMAT ACCOUNT 57
5.3 COMPARISON TABLE OF BROKERAGE CHARGES IN INDIA 67
5.4 TOP 10 BROKING FIRM IN INDIA 69
5.5 BROKERS’ BROKERAGE RATE REMARK 72
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10. This project provides an insight into the financial service industry of which insurance, stocks
and mutual funds form an integral part. The project focuses on the dematerialization and stock
trading services provided by Religare.
The project also includes the services industry in which Religare plays an important role. The
organization structure, history of the company, ownership patterns, divisions and branches
and different departments in the organization are also mentioned.
The project provides an overall view on the financial standing of the company, products
offered and services provided the competitors in the industry and the competitive edge of
Religare to have a distinctive position in the industry.
Lastly the project involves an analysis and comparative study of the product of Religare with
two of its competitors and recommendations to provide a horizon of improvement and
growth.
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12. PROJECT
INTRODUCTION
The stock broking industry is a service-oriented industry where brokers act as agents for
investors when a security is bought or sold and are compensated with a commission.
Investors would not hesitate to switch to alternative brokerage houses if they do not obtain
satisfaction. Providing quality service and hence customer satisfaction should thus be
recognised as a key strategy and a crucial element of long-run success and profitability for
stock broking businesses.
Little has been done towards understanding the expectations investors hold from their
stockbrokers. Since expectations serve as benchmark to gauge the service level of brokers,
the delivery of services that exceed customer expectations is one strategy that can give firms a
competitive advantage. Therefore, it would seem beneficial for stockbrokerage firms, in a
dynamic economic environment like India, to provide service at a good scale of quality.
In addition, stockbrokers have much to gain in understanding investors‟ expectations of them,
as this would help the stockbrokers to serve their customers better and foster long-lasting
relationship with their customers. This study therefore aims to provide a platform for
understanding whta the customer needs and what is being provided to bridge the gap between
customer expectation and the actual service rendered. This information would be useful for
those who would like to control and improve the performance of their service.
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13. The project would focus mainly on RELIGARE understanding of the requirements of the
customer and its endeavour to provide what the customer expects and hence showing that it is
the market leader in the stock broking industry.
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14. STATEMENT OF PROBLEM
To provide RELIGARE with meaningful recommendation (if any) to initiate a change in their
products (Demat and trading) after questioning prospective investors regarding the fulfilment
of their expectation.
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15. OBJECTIVE
To understand and analyse the expectations of customers of RELIGARE in today market
scenario and RELIGARE‟s efforts to provide the best services at the most competitive prices
and provide recommendations of any deviation from that purpose.
Stating the objective of the study.
Mapping out a questionnaire to understand the expectations of customers.
Identifying problems being faced by customers
Analysing RELIGARE‟s product in meeting these expectations.
Finding deviations if any.
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16. PROBLEM DEFINITION
Understanding expectation of investors.
Analysing the problems being faced by investors.
Understanding RELIGARE‟s product to meet these problems.
Mapping a questionnaire to analyse investors‟ satisfaction of RELIGARE product.
Contemplating the information.
Providing meaningful analysis of the problem.
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17. Why investors choose Religare??
It is a Ranbaxy promoter group company.
Diverse portfolio and a lot of products under one roof.
Has one of the best brokerage plans.
Attractive brand.
Relationship managers attached to customers.
Equity research team (one of the best in the market).
Controlled and low cost service structure.
Large volume processing structure.
Expertise in coordinating multi-location responses.
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18. INVESTORS EXPECTATIONS
Providing basic knowledge to investors so as to help them in understanding the stock market
and making proper decisions in stocks
Providing an averagely priced product so as to appeal to the investors and have a penetration
effect in the market.
Timely input (tips, entry and exist) to be provided to prospective clients so that they can
maximize their wealth by making smart decisions.
Updated info about client accounts on amounts outstanding, payment, withdrawals,
shortages etc if any.
Ancillary services like providing payout facilities, direct transfers, timely payments and
receipts, confirmations about order receiptance and delivery of stocks, cheques,
dematerialised shares etc.
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19. Infrastructure facilities like proper sitting arrangements, water and other refreshments, clean
facility and a clean working environment.
Cordial relation with clients should be maintained so as to promote goodwill and business of
the broker.
Proper availability of RM‟s to attend to clients requests so as to minimize delays in order
reacceptance and minimizing customer dissatisfaction.
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20. CHAPTER – III
PROFILE OF THE
ORGANIZATION
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21. INTRODUCTION
The stock broking industry is a service-oriented industry where brokers act as agents for
investors when a security is bought or sold and are compensated with a commission.
Investors would not hesitate to switch to alternative brokerage houses if they do not obtain
satisfaction. Providing quality service and hence customer satisfaction should thus be
recognised as a key strategy and a crucial element of long-run success and profitability for
stock broking businesses.
Little has been done towards understanding the expectations investors hold from their
stockbrokers. Since expectations serve as benchmark to gauge the service level of brokers,
the delivery of services that exceed customer expectations is one strategy that can give firms a
competitive advantage. Therefore, it would seem beneficial for stockbrokerage firms, in a
dynamic economic environment like India, to provide service at a good scale of quality.
In addition, stockbrokers have much to gain in understanding investors‟ expectations of them,
as this would help the stockbrokers to serve their customers better and foster long-lasting
relationship with their customers. This study therefore aims to provide a platform for
understanding whta the customer needs and what is being provided to bridge the gap between
customer expectation and the actual service rendered. This information would be useful for
those who would like to control and improve the performance of their service.
The project would focus mainly on RELIGARE understanding of the requirements of the
customer and its endeavour to provide what the customer expects and hence showing that it is
the market leader in the stock broking industry.
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22. Financial Services Industry
The financial services industry broadly known as the money market has been in existence
since the late 1990s.The finance industry encompasses a broad range of organizations that
deal with the management of money. Among these are:-
Banks
Credit financers
Insurance companies
Consumer finance companies
Stock brokers
Investment funds
Government sponsored enterprises
Other financial services
Intermediation or advisory services - These services involve stock brokers (private client
services) and discount brokers. Stock brokers assist investors in buying or selling shares.
Primarily internet-based companies are often referred to as discount brokerage. Full service
and private client firms primarily assist execute trades and execute trades for clients with
large amounts of capital to invest, such as large companies, wealthy individuals, and
investment management funds.
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23. Venture capital - Venture capital is a type of private equity capital typically provided by
professional, outside investors to new, high-potential-growth companies in the interest of
taking the company to an IPO or trade sale of the business.
Conglomerates - A financial services conglomerate is a financial services firm that is active
in more than one sector of the financial services market e.g. life insurance, general insurance,
health insurance, asset management. A key rationale for the existence of such businesses is
the existence of diversification benefits that are present when different types of businesses are
aggregated i.e. bad things don't always happen at the same time.
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24. THE INDIAN FINANCIAL SECTOR
The Indian financial services industry has experienced significant growth in the last few
years. There has been a considerable broadening and deepening of the Indian financial
markets due to various financial market reforms undertaken by the Indian regulators, the
introduction of innovative financial instruments in the recent years and the management and
brokerage have been liberalized to allow private sector involvement, which has contributed to
the development and modernization of the financial services sector. This is particularly
evident in the non-banking financial services sector, such as brokerage, resident mortgage and
insurance services. Where new products and expanding delivery channels have helped these
sectors to achieve high growth rates recently. Financial services accounted for approximately
14%of the total GDP.
Derivatives Trading, Demutualization and Depositories Act
to assist market participants in managing risks better than through hedging and arbitrage, the
Securities Contracts(Regulation) Act,1956 was amended to lift the ban on options in securities
and was further amended to include derivatives so that the entire regulatory could apply to
derivative trading also. Derivative trading commenced in June 2000 in NSE and BSE.
The government proposed in March 2001 to corporatize the stock exchanges and thereby
segregate ownership, management and trading membership. A tax incentive to facilitate
corporatization and demutualization process. The NSE has adopted a demutualised
governance structure where ownership, management and trading are separates to help reduce
conflicts of interest.
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25. The settlement system on stock exchanges gave rise to settlement risk due to lapse of time
before trades were settled. A significant proportion of transactions ended up as bad deliveries
due to non-compliance with paperwork. To obviate this problem, the Depositories Act 1996
was passed. All actively traded scripts are now held, traded and settled in uncertificated form.
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26. Recent advancements in the industry
With market sentiment turning positive due to the formation of a stable newly elected
government, the ripple effect is likely to felt across all the financial services in India.
Financial services and real estate sector rose by 9.5 per cent in the first quarter of 2009-10.
Slashing interest rates, lowering factory levies and more than doubling the limit on foreign
investment in corporate bonds has led to rapid growth in the financial sector.
April-May 2009 saw increased inflow in to equity with investors steadily turning positive on
equity with net investment of mutual funds in debt almost getting tripled.
India‟s market capitalization (m-cap) has touched US$ 1.04 trillion making it the ninth
largest in the world.
The Indian stock market has currently responded to the optimism of reforms by the new
stable government and its continuity in policies.
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27. Falling commodity price will ease input cost of the industries. Government policies to boost
the economy.
Inflation at record lows with lower crude price. As interest rate in developed economy is
record low, India could attract investment.
Reducing interest rates provide fuel to the recession economy making the financial system
more secure.
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28. RANBAXY GROUP
RELIGARE SECURITIES LIMITED
Company history:-
Religare Securities limited……
Incorporated in 1984, promoted by Ranbaxy group, Religare Enterprises (REL) is the
holding company of 11 business subsidiaries.
Each of its subsidiaries is engaged in a wide spectrum of financial products and services
targeted at retail, high-net worth individuals, corporate and institutional clients.
The services offered by the group include :
Share broking,
Financing loans against shares,
IPO financing,
Distribution of mutual funds,
Insurance broking,
Commodity broking,
Wealth management advisory business,
Private equity,
Merchant banking and
Trading in arts and artifacts among others.
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29. More than 90% of revenue drivers for the company are its retail equity broking arm
Religare Securities and Religare Finvest, which finances loans against shares.
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30. RELIGARE:THE COMPANY
Religare Enterprises Limited (REL), is one of the leading integrated financial services
groups of India.
The company offers a diverse bouquet of services ranging from equities, commodities,
insurance broking to wealth management, portfolio management services, personal financial
services, investment banking and institutional broking services.
The services are broadly clubbed across three key business verticals- Retail, Wealth
management and the Institutional spectrum.
Religare Enterprises Limited is the holding company for all its businesses, structured and
being operated through various subsidiaries.
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31. NAME OF THE ORGANIZATION:
RELIGARE SECURITIES LTD.
Registered Office Address:-
NOIDA: 101, Ocean Plaza, Sector-18
NOIDA -
India.
Phone: +91-120-4679623
Fax: +91-120-
Corporate Office Address: -
Noida: A-3, 4, 5, Sector-125
Uttar Pradesh - 201 301,
India.
Phone: +91-0120-339-1000
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32. For us, each leaf of the clover has a special meaning. It is a symbol of hope,
trust, care, good fortune. For the world, it is the symbol of Religare.
The first leaf of the clover represents Hope. The aspirations to succeed. The
dream of becoming. Of new possibilities. It is the beginning of every step and
the foundation on which a person reaches for the stars.
The second leaf of the clover represents Trust. The ability to place one‟s own
faith in another. To have a relationship as partners in a team. To accomplish a
given goal with the balance that brings satisfaction to all, not in the binding,
but in the bond that is built.
The third leaf of the clover represents Care. The secret ingredient that is the
cement in every relationship. The truth of feeling that underlines sincerity and
the triumph of diligence in every aspect. From it springs true warmth of service
and the ability to adapt to evolving environments with consideration to all.
The fourth and final leaf of the clover represents Good Fortune. Signifying that
rare ability to meld opportunity and planning with circumstance to generate
those often looked for remunerative moments of success.
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33. Hope, Trust. Care. Good Fortune. All elements perfectly combine in the emblematic and rare, four-leaf
clover to visually symbolize the values that
bind together and form the core of the Religare vision.
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34. COMPANY STRUCTURE:
Our organization is led by individual who are professional and leaders in every sense of the world.
Experts in their respective domain, esteem members of its Board of Directors are:
Name Designation
Mr. Malvinder Mohan Singh Non Executive Chairman
Mr. Sunil Godhwani CEO & Managing Director
Mr. Shivinder Mohan Singh Non Executive Director
Mr. Harpal Singh Non Executive Director
Mr. Deepak Ramchand Sabnani Independent Director
Mr. Padam Bahl Independent Director
Mr. J. W. Balani Independent Director
Ms. Sunita Naidoo Independent Director
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35. COMPETITORS OF RELIGARE
ICICI DIRECT
INDIA INFOLOINE SECURITY PVT. LTD.
HDFC SECURITIES
INDIA BULLS
KOTAK SECURITIES
RELIANCE MONEY
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36. SHARE KHAN SECURITIES
MOTILAL OSWAL
ANAND RATHI SECURITIES
HEM SECURITIES
ANGEL BROKING
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37. The Religare Edge:
Position is not squared off without margin calls.
Cash transfer facility against sale & purchase of shares.
Judgmental call tips given even in the processing time.
Facility to place after market orders.
Efficient and prompt customer service.
Efficient research and analytical team.
SMS alert and email notification.
Short margin calls in the morning.
Transfer funds with most banks.
We offer discount on brokerage.
Attractive margin funding facility.
Flat prescribed NSDL charges.
ECS of dividend in margin.
Excellent market tips.
No inactivity fee.
IPO investments.
4 times exposure on delivery and intraday.
We offer mapping with other demat absolutely free of cost.
No minimum balance maintenance on R-ally.
Brokerage is negotiable.
Company offers demat 3 in 1 online banking with HDFC Bank, ICICI Bank, PNB and
AXIS Bank.
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38. REACH OF RELIGARE
Religare Enterprises Ltd is a Ranbaxy promoter group company
6 Regional offices
25 Zonal Offices
Presence through more than 1200 locations-Pan India
Present across more than 375 Cities & Towns
Total group employees 6,500 plus
Client Interfaces through the Retail, Wealth and Institutional spectrums
Among the largest Retail brokerage branch network, going beyond Tier-I and Tier-II cities in
India
Overseas presence with a representative office in London, with aggressive plans of
straddling other parts of the globe in this financial year
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39. DIVISION OF RELIGARE
Religare Securities Limited (RSL)
Registered with SEBI as an approved stockbroker with membership of NSE and BSE
Registered for portfolio management
Registered as Depository Participant
Registered as merchant banker
Religare Finvest Limited(RFL)
Registered with RBI as a non-banking finance company and presently engaged in providing
credit, distribution of mutual funds and IPO financing.
Registered with SEBI as a Depository Participant of Central Depository Services Limited.
Religare Commodities Limited
Registered with Forwarding Market Commission as a commodity broker.
Member of National Commodities and derivative Exchange Limited, Multi Commodity
Exchange Of India Limited and National Multi Commodity Exchange Of India Limited.
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40. Religare Insurance Broking Services Limited
Registered with Insurance Regulatory Development Authority as a composite broker which
enables us to distribute products and services of life insurance companies, non life insurance
companies and re-insurance businesses.
Religare Venture Capital Private Limited
RVCL was recently incorporated to commence the business of private equity and investment
manager business and is yet to commence business.
Religare Wealth Management Services Ltd
RWMSL is newly incorporated company in which the wealth management advisory business
is conducted with a joint venture with Macquarie providing wealth management services to
high net worth clients in India.
Religare Finance Ltd
RFINL was recently incorporated to start the business of personal loans and other consumer
lending businesses.
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41. Religare Capital Market Ltd
RCML was recently incorporated to do the merchant banking business which is presently
under RSL, with the view to segregate the merchant banking operations from broking
business.
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42. EQUITY BROKING
Over 200,000 Retail Equity clients, with growth rates of over 200%
Market share as on 31st March, 07, was 2.70%
Pan India footprint, one of the largest in the category
International presence
Strong equity research credentials
Team of 10 research analysts
Over 90 man years of research experience for equity retail
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43. COMMODITY TRADING
Started operations in 2004
Member of MCX, NCDEX and NMCE
Presence through more than 460 locations all over India, in addition to over 40 Mandi
(Rural) locations, one of the largest in the category
20,000 plus clients, with growth rates of over 400%
As of 31st March 2007, market share, ranged between 3% - 4%
Over 40% growth in turnover YOY
Strong, credible research and analytics with a dedicated team of 12 professionals
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44. ONLINE INVESTMENT
Official Launch of E-trading in August 2006
Aggressive growth over the last few months
Market share as of 31st March, 07 was around 4.76%*
Recently launched a revamped, unique 360 degree customer centric online trading portal
www.religareonline.com
Launch of “Trade Rewards” unique reward points system, a first in the category
Host of other revolutionary features- 0% brokerage, Interest on cash margin etc.
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45. PERSONAL CREDIT
Personal Loans - Key Facts
Official Launch of Personal Loans in August 2006
Total number clients as on 31st March 2007, were more than 840
Loans against Shares - Key Facts
Current Book Size Rs 650 cr.
Presence through all Religare locations in India.
Total number of clients as of 31st March 2007 was over 1600.
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46. PERSONAL FINANCIAL SERVICES
This group caters to the financial needs of individuals by advising them on various financial
plans
Financial planning for retail investment is not widespread in India
PFS was started to target the rapidly expanding middle net worth individuals (MNI‟s) in
India
Rapid rollout of offerings, such as mutual funds, life and general insurance, fixed income,
small savings instruments, capital bonds and equity IPOs
Expert group of Religare‟s PFS advisors provide high quality customized solutions
Dedicated Team of more than 200 advisors.
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47. PROVIDING FINACIAL SOLUTIONS TO EVERYONE
COMPETITORS
RELIGARE SECURITIES LTD operates in a tough and competitive environment, being
faced by strategic problems like client turnover, stock market fluctuations, external forces can
affect the working of the organization if it doesn‟t not change with the changing environment.
Religare currently faces competition from various other brokers namely:-
Kotak securities ltd.
ICICI securities.
Share khan securities
Edelweiss securities
Motilal Oswal
Angel Broking
With every commercial bank providing depository services ,Religare makes a nitch for itself
by having a competitive advantage in the following area:-
Personalized services
Variable brokerage(Price differentiation)
Lowest charges for its quality products
Conglomerate-Providing various services under one roof.
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48. COMPETITIVE ADVANTAGE
Flexi brokerage and exposure.
Call centre support provided for trading, back office and IT support.
Fully automated processes.
Feature rich software.
Interest on cash margin deposited with Religare.
Target group- Mass market.
USP
Interest on cash margin deposited.
Better quality product at competitive brokerage.
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50. INTRODUCTION TO RESEARCH METHODOLOGY:
Research Methodology comprises defining and redefining the problem, formulating hypothesis or
suggesting solution, collecting, organizing and evaluating the data, making deduction and reaching to
conclusions.
Research Methodology is a way to solve research in study and solving research problems along with
logic behind them. Thus while talking about research methodologies we are not only talking of
research methods but also consider the logic behind the methods.
During my project, I collected data through various sources of primary & secondary data.
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51. OBJECTIVES OF RESEARCH :
To understand and analyse the expectations of customers of RELIGARE in today market
scenario and RELIGARE‟s efforts to provide the best services at the most competitive prices
and provide recommendations of any deviation from that purpose.
Stating the objective of the study.
Mapping out a questionnaire to understand the expectations of customers.
Identifying problems being faced by customers
Analysing RELIGARE‟s product in meeting these expectations.
Finding deviations if any.
Providing recommendations and steps to be taken to counters these problems.
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52. RESEARCH DESIGN:
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. A sampling design is to be selected.
Good research design ensures that the information obtained is relevant to the research question
and that it was collected by objectives. Since research design is simply the framework of plan for a
study, it is used as a guide in collecting and analyzing the data. It is a blueprint that is followed in
completing the research study.
My approach to research is descriptive as well as Explorative. The major objective of the
descriptive research is to describe something – usually market features or functions. Exploratory
research is concerned with the identifying the new insights of investment psychology. Why investor
don‟t want to invest in share market.
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53. SOURCES OF DATA COLLECTION:
In this research, I have used two types of data.
Primary Data.
Secondary Data.
Sources of Primary Data includes:-
Telephonic Interview
Personal Interview during cold calling
Company prospectus & literature
Questionnaire
Sources of Secondary Data includes:-
Books related to Financial Management
Internet
Newspaper
Company Database
References given by Relationship Manager
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54. LIMITATIONS OF STUDY:
The study was conducted in NOIDA only, which restricted the scope of the study.
The data provided by the investor and the agents can‟t be assumed as 100% correct.
Sample size was just 890 which might give different picture than the reality.
Sampling was judgment based & simple random so chance of occurrence of error is more.
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55. CHAPTER - V
DATA REPRESENTATION,
ANALYSIS &
INTERPRETATION
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56. DEMATERIALISATION
Dematerialization is the process of converting physical shares (share certificates) into an electronic
form. Shares once converted into dematerialised form are held in a Demat account.
An investor intending to dematerialise its securities needs to have an account with a DP. The
client has to deface and surrender the certificates registered in its name to the DP. After intimating
NSDL electronically, the DP sends the securities to the concerned Issuer. NSDL in turn informs the
Issuer electronically, using NSDL Depository system, about the request for dematerialisation. If the
Issuer finds the certificates in order, it registers NSDL as the holder of the securities (the investor will
be the beneficial owner) and communicates to NSDL the confirmation of request electronically. On
receiving such confirmation, NSDL credits the securities in the depository account of the Investor with
the DP.
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57. OPENING A DEMAT ACCOUNT
Getting started
Choose a DP
Fill up an account opening form provided by DP, and sign an agreement with DP in a standard
format prescribed by the depository.
DP provides the investor with a copy of the agreement and schedule of charges for his future
reference.
DP opens the account and provides the investor with a unique account number, also known as
Beneficiary Owner Identification Number (BO ID).
Documents to be attached
Passport size photographs
Proof of residence (POR) - Any one of Photo Ration Card with DOB / Photo Driving License
with DOB / Passport copy / Electricity bill / Telephone bill
Proof of identity (POI) - Any one of Passport copy / Photo Driving License with DOB /
Voters ID Card / PAN Card / Photo Ration Card with DOB
PAN card
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58. THINGS INVESTORS SHOULD KNOW ABOUT ACCOUNT OPENING AND
DEMATERIALISATION
It is mandatory for an investor to provide his bank account details at the time of opening a demat
account. This is done to safeguard investor's own interests. There are two major reasons for this:
The interest and dividend warrants can't be en-cashed by any unauthorized person, as the bank
account number is mentioned on it.
It is convenient and time saving, as dividends and interests given by the companies can be
directly credited to the investor's bank account (through ECS facility, wherever available).
CHANGE IN BANK ACCOUNT DETAILS
It is possible for an investor to make changes to the details of his bank account. The investor must
inform any change in his bank account details to his DP. This enables him to receive the cash
corporate benefits (such as dividends, interests) directly into his account in time and discourages
any unauthorized use by any second party.
CHANGE IN THE ADDRESS OF INVESTOR AS PROVIDED TO THE DP
Any change in your address should be immediately informed to DP. This enables DP to make
necessary changes in the records and informing the concerned companies about the same.
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59. OPENING MULTIPLE ACCOUNTS
An investor is allowed to open more than one account with existing DP or with different DPs.
MINIMUM BALANCE OF SECURITIES REQUIRED IN DEMAT ACCOUNT
There is no stipulated minimum balance of securities to be kept in a demat account.
MAXIMUM NUMBER OF HOLDERS IN A DEMAT ACCOUNT
A maximum of three persons are allowed to open a joint demat account in their
names.
ACCOUNT OPENING AND OWNERSHIP PATTERN OF SECURITIES
One must make sure to open a demat account in the same ownership pattern in which the physical
securities are held. For example: If you have two share certificates, one in your individual name (say
'X') and the other held jointly with some other individual (say 'XY'), then in such a case you will have
to open two different accounts in respective ownership patterns (one in your name i.e. 'X' and the other
account in the name of 'XY').
HOLDING A JOINT ACCOUNT ON "EITHER OR SURVIVOR" BASIS LIKE A BANK
ACCOUNT
No investor can open a demat account on "E or S" basis like a bank account.
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60. ALLOWING SOMEBODY ELSE TO OPERATE YOUR DEMAT ACCOUNT
It is possible for an account holder (Beneficiary Owner) to authorize some other person to operate the
demat account on his behalf by executing a power of attorney. After submitting the power of attorney
to the DP, that person can operate the account on behalf of the beneficiary owner (BO)..
ADDITION/DELETION OF THE NAMES OF THE ACCOUNT HOLDERS AFTER
OPENING THE ACCOUNT
It is not possible to make changes in the names of the account holders of a BO account. A new account
has to be opened in a desired holding/ownership pattern
CLOSING A DEMAT ACCOUNT AND TRANSFER OF SECURITIES TO ANOTHER
ACCOUNT WITH SAME OR DIFFERENT DP
An investor, if he wants, can also close his demat account with one DP and transfer all the securities to
another account with existing or a different DP. As per a SEBI circular issued on November 09, 2005,
there are no charges for account closure or transfer of securities by an investor from one DP to
another.
FREEZING/LOCKING A DEMAT ACCOUNT
The account holder can freeze his demat account for a desired time period. A frozen account prevents
securities to be transferred out of (Debit) and transferred into (Credit) the account.
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61. DEMATERIALISED SHARES DO NOT HAVE ANY DISTINCTIVE NUMBER
Dematerialised securities are fungible assets. Therefore they are interchangeable and identical.
REMATERIALISATION
The process of getting the securities in an electronic form, converted back into the physical form is
known as Dematerialization. An investor can rematerialize his shares by filling in a Remat Request
Form (RRF).
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62. BENEFITS OF DEMAT ACCOUNT
Safe and convenient way of holding securities (equity and debt instruments both).
Transactions involving physical securities are costlier than those involving dematerialised
securities (just like the transactions through a bank teller are costlier than ATM transactions).
Therefore, charges applicable to an investor are lesser for each transaction.
Securities can be transferred at an instruction immediately.
Increased liquidity, as securities can be sold at any time during the trading hours (between 9:55
AM to 3:30 PM on all working days), and payment can be received in a very short period of time.
No stamp duty charges.
Risks like forgery, thefts, bad delivery, delays in transfer etc, associated with physical certificates,
are eliminated.
Pledging of securities in a short period of time.
Reduced paper work and transaction cost.
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63. Odd-lot shares can also be traded (can be even 1 share).
Nomination facility available.
Any change in address or bank account details can be electronically intimated to all companies in
which investor holds any securities, without having to inform each of them separately.
Securities are transferred by the DP itself, so no need to correspond with the companies.
Shares arising out of bonus, split, consolidation, merger etc. are automatically credited into the
Demat account of the investor.
Shares allotted in public issues are directly credited into Demat account of the applicants in quick
time.
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64. BANK ACCOUNT VS DEMAT ACCOUNT
S. Basis Of Bank Account Demat Account
No. Differentiation
1. Form of Funds Securities
Holdings/Deposi
ts
2. Used for Safekeeping of money Safekeeping of shares
3. Facilitates Transfer of money Transfer of shares (without actually
(without actually handling shares)
handling money)
4. Where to open A bank of choice A DP of choice (can be a bank)
5. Requirement of Not Mandatory Mandatory (effective from April 01,
PAN Number 2006)
6. Interest accrual Interest income is subject No interest accruals on securities held
on holdings to the applicable rate of in Demat account
interest
7. Minimum AQB* maintenance is No such requirement
balance specified for certain bank
requirement accounts
8. Either or Available Not available
Survivor facility
*AQB - Average Quarterly Balance
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65. SIMILARITES BETWEEN BANK'S A/c AND DEMAT A/c
S. No. BASIS OF SIMILARITY PARTICULARS
1. Security and Both are very safe and convenient means of holding
Convenience deposits/securities
2. Number of accounts No legal barrier on the number of bank or Demat accounts
that can be opened
3. Transfer of deposits Funds/securities are transferred only at the instruction of
(funds or securities) the account holder
4. Physical transfer of Physical transfer of money/securities is not involved
money/securities
5. Nomination Facility Available
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66. Comparison Table of Brokerage Charges in India
Here you will find a table comparing intraday brokerage charges and delivery brokerage charges
charged by different online brokers in India: Sharekhan, ICICIdirect, Motilal Oswal, Religare,
SBICAP Securities, Angel Broking, 5paisa, Indiabulls, UTI Securities, HDFC Securities,
Indiainfoline, Reliance Money. I constantly try to update this table and try to keep it up to date, so if
you have any more information, please leave a comment. It is also important that you read the remarks
below the table to get a complete picture.
Brokerage for Brokerage for Intraday
Online Broker MMC*
Delivery trading
SBICAP Securities
0.50% 0.10% NIL
brokerage charges
Sharekhan
0.03% - 0.50% 0.03% - 0.10% NIL
brokerage charges
Motilal Oswal
0.30% - 0.50% 0.03% - 0.15%
brokerage charges
5 paisa
0.25% - 0.85% 0.07%
brokerage charges
Angel Broking
0.50% 0.02% - 0.03%
brokerage charges
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67. ICICI direct
0.75% 0.15%
brokerage charges
Indiabulls
0.25% - 0.50% 0.05% - 0.10%
brokerage charges
HDFC Securities
0.50% 0.15%
brokerage charges
UTI Securities
0.80% 0.15%
brokerage charges
Religare
0.20% - 0.30% 0.02% - 0.03%
brokerage charges
Reliance Money
0.01% 0.01% card system
brokerage charges
Geogit
0.30% 0.03%
brokerage charges
Indiainfoline
0.50% 0.10% -
brokerage charges
MMC=Minimum monthly commitment.
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68. Brokerage is usually negotiable: Several of you trying to choose an online broker and open an online
trading account must have been frustrated trying to search for the exact brokerage charges charged by
various online brokers. But the fact is the brokerage charged by the same broker varies and in several
cases is negotiable. For example if you go and tell a brokerage house that you are going to deposit 2
lakh rupees and try to convince them you are going to trade heavily, they might consider reducing
your brokerage. That is why in the above table you will find only a range for the brokerage charges in
some cases. But that should be enough to get an idea.
Effective brokerage with taxes is more: In addition to the above brokerage charges you will have to
pay STT (Securities Transaction Tax) at the rate or 0.02% of the total transaction amount. You will
also be charged 12.5% Service Tax on the brokerage amount (and not on the transaction amount). For
example, if your brokerage is 0.50% for delivery and you do a delivery transaction of Rs.100/- then
the total brokerage you pay is
0.50 (brokerage) + 0.02 (stt) + 0.063 (service tax) = 0.58 .
Thus your effective brokerage (including all taxes) will be 0.58%. Similarly for brokerage on intraday
transactions.
One may also like to compare brokerages charged by the online brokers mentioned above for trading
in futures and options. I have traded options on SBICAP securities and have been charged Rs.100/-
flat brokerage fee for every options trade. I will probably find out and also add a comparison table for
brokerage charges for trading derivatives (futures and options) later, if i see enough people google
searching for the same. For futures, some online brokers charge different brokerage for different legs
of the trade, i.e. different for buy and sell trade.
Except SBICAP Securities, I do not have any other trading account. So my information is gathered
from indirect sources. In case there are any inacurracies please let me know by posting a comment.
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69. TOP TEN BROKING FIRM IN INDIA
Many times new investor or trader gets confusion for open a D Mat and trading Account in
Broking house. Many of Broking House promises to you for better service but clients get
problem due to trading session in theirs Broker house firm.
Here we are giving list of India‟s top 10 Broking House on base of survey of investor and
trader of many cities. In their views following Broking Houses gives best and reliable services
1. ICICI direct.com
2. India Infoline
3. Kotak Securities Ltd.
4. Share Khan
5. Indiabulls
6. Motilal Oswal
7. Bajaj Capital
8. SMC
9. Angel Broking
10. Reliance Money
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70. Contact the brokers in your nouns and find the below details:
1. Account Opening charges
2. Annual Maintenance Charges
3. Buy and Sell commissions
4. Any additional Commissions
5. Online Trading Facility at past its sell-by date times
6. Customer Service Clarity
7. Availability of information (free research reports or timely information on company moves
and actions)
8. Number of banks approved to association account to the trading a/c
Visit the maximum brokers and own a database of this. You required to call them to ask these
questions to get answer. By calling them you will return with idea in the order of the customer
service clarity too...
Once you have collected the background, analyze and compare that. You will get exact details
something like to who are the best and with whom you want to start on an account.
This will not one and only help you to identify the show of multiple brokers but in any time
you can compare your present trading account's acting out with any other brokerage company
because you hold that data too beside you..
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71. Posts Tagged „Brokerage Structure of Religare‟
An Overview on the Brokerage Charges for Online Stock Trading in India
September 22nd, 2009 admin
On the Financial Awareness Portal, I have posted two articles on the subject of brokerage
charges comparison. You may like to refer these articles “An Overview on the Brokerage
Structure of Reliance Money” and “Comparison of Brokerage Charges in India”
In continuation with the above two articles, this is the third article in which I have tried to
provide the details of brokerage structure of five brokerage houses in India. Please check out
the following tables to get an idea about the brokerage structure of different brokers in India
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72. Broker Brokerage Rate Remarks
Delivery Trades Intra-Day
HDFC Securities
0.5% Fixed brokerage rates regardless of the turnover
Brokerage charged on both legs
0.05%
Fixed brokerage rates regardless of the turnover
Brokerage charged on both legs
Minimum brokerage of Rs.25 per trade subject to the SEBI limit of 2.5% of total traded value
Occasionally introduces brokerage rebate schemes but turnover slabs are very high for being
eligible for the rebate and as such the schemes are generally not beneficial to ordinary
investors
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73. ICICI Direct
0.25% to 0.75%
Variable brokerage in seven slabs of turnover in the steps of 0.05 each
Charged on both the legs
0.25% to 0.75%
Variable brokerage in seven slabs of turnover
Charged only on the first leg and hence effective rate of 0.375%
Margin trades @0.05%
For most of the retail investors, higher rates will be applicable, as the turnover for lower rates
may not be achieved by them
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74. Kotak Securities
0.18%, 0.23%, 0.27%, 0.36%, 0.45%, 0.55%, 0.59%
Variable brokerage in seven slabs of turnover
Charged on both the legs
0.03%, 0.04%, 0.05%, 0.06%
Variable brokerage in four slabs of turnover
Charged on both the legs
For most of the retail investors, higher rates will be applicable, as the turnover for lower rates
may not be achieved by them
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75. Religare
0.30% to 0.50%
Variable brokerage in three slabs of turnover in the steps of 0.1 each
Charged on both the legs
0.03% to 0.05%
Variable brokerage in three slabs of turnover in the steps of 0.01 each
Charged on both the legs
The details are applicable for Classic Account in which the traders do not have to pay any
subscription charges or fixed fees
In other accounts such as Classic Plus Account, Freedom Account, Trump Account, the
traders have to pay certain minimum fixed fees every month, six months or year. Traders will
be reimbursed brokerage maximum up to the subscription amount or will be provided certain
free turnover depending upon the type of account
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76. Asit C Mehta Investmentz.com
0.55% Fixed brokerage rates regardless of the turnover
Brokerage charged on both legs
For advanced brokerage plans, lower rates are available for higher turnovers
0.05% Fixed brokerage rates regardless of the turnover
Brokerage charged on both legs
For advanced brokerage plans, lower rates are available for higher turnovers
Minimum brokerage of 3 paisa per share
Various advance brokerage plans in which the traders will be reimbursed brokerage maximum
up to the amount of advance brokerage paid by them
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77. Name of the Broker Brokerage Rate Remarks
Futures Options
HDFC Securities
0.05% 0.025% in case of intra-day square off
Fixed brokerage rates regardless of the turnover
Brokerage charged on both legs
1% of the premium amount or Rs.100 per lot, whichever is higher
Fixed brokerage rates regardless of the turnover
Brokerage charged on both legs
Minimum brokerage of Rs.25 per trade subject to the SEBI limit of 2.5% of total traded value
Occasionally introduces brokerage rebate schemes but turnover slabs are very high for being
eligible for the rebate and as such the schemes are generally not beneficial to ordinary
investors
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78. ICICI Direct
0.03% to 0.05%
Variable brokerage in four slabs in the steps of 0.005 each
Charged on both the legs
In case of intra-day square off, second leg is charged at Rs.15 per lot
Rs.65 to Rs.95 per lot
Variable brokerage in five slabs of premium turnover in the steps of Rs.5 each
Charged on both the legs
In case of intra-day square off, second leg is charged at Rs.15 per lot
For most of the retail investors, higher rates will be applicable, as the applicable turnover for
lower rates may not be achieved by them
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79. Kotak Securities
0.023%, 0.027%, 0.036%, 0.045%, 0.07% for intra-day square off
0.032%, 0.046%, 0.046%, 0.073%, 0.09% for carry forward positions
Variable brokerage in five slabs of turnover
Charged on both the legs
1.15%, 1.35%, 1.8%, 2.25%, 2.5% for intra-day square off
1.6%, 2.3%,2.3%, 2.5%, 2.5% for carry forward positions
Variable brokerage in five slabs of premium turnover
Minimum per lot Rs.70, Rs.80 and Rs.100 for intra-day square off
Minimum Rs. 100 per lot in case of carry forward
Charged on both the legs
For most of the retail investors, higher rates will be applicable, as the applicable turnover for
lower rates may not be achieved by them
Depending upon the turnover, the accounts are given different names such as „Gateway
Account‟, „Privilege Account‟ etc
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80. Religare
0.03% to 0.05%
Variable brokerage in three slabs of turnover in the steps of 0.01 each
Charged on both the legs
1% of the premium amount
or Rs.75 per lot, whichever is higher
The details are applicable for Classic Account in which the traders do not have to pay any
subscription charges or fixed fees
In other accounts such as Classic Plus Account, Freedom Account, Trump Account, the
traders have to pay certain minimum fixed fees every month, six months or year. Traders will
be reimbursed brokerage maximum up to the subscription amount or will be provided certain
free turnover depending upon the type of account
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81. Asit C Mehta
Investmentz.com 0.05%
Fixed brokerage rates regardless of the turnover
Brokerage charged on both legs
For advanced brokerage plans, lower rates are available for higher turnovers
Rs.100 per lot
For advanced brokerage plans, lower rates are available for higher turnovers
Minimum brokerage of 3 paisa per share
Various advance brokerage plans in which the traders will be reimbursed brokerage maximum
up to the amount of advance brokerage paid by them
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83. RECOMMENDATIONS AND CONCLUSION
Though Religare is the best trading broker in the region, its services still require some changes so as to
bring customer satisfaction levels up. As already known Religare‟s working is adversely affected by
the trends in the market and in these times providing the customer with all the requirements is a very
difficult task, but still every personnel at Religare tries to provide the utmost level of satisfaction to its
clients.
The changes that would help Religare to grow and sustain in my view are as follows:-
The price of the product of Religare is the least in the market but to induce prospective customers it
needs to tell the investors that even if other brokers have their prices less than Religare ,the other
brokers either charge higher brokerage or do not provide pool facility and therefore Religare‟s product
has been priced after examining various other pricing options in the interest of the investors.
Religare should provide basic information on its product and the services offered by it. It should
make every attempt to make the consumer aware of the various facilities it provides so that the
customer can avail them. For example lot of respondents lacked information about the interest rate
being charged on margin lending , information regarding T+2 and T+5 and how to access CRN portals
and tips on stocks should be provided to customers who are using their own Odin facility etc.
The refreshment issue can be resolved by:
By providing refreshments at a later time, in the middle of the trading period.
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84. The water and other facilities can be moved inside the trading room so that the client doesn‟t have to
wait for someone to bring it to him and get it himself.
An alternative source of refreshment supply be sought so as to meet the budget of the enterprise.
Misuse and mismanagement should be checked.
Customer complaints regarding Odin diet, confirmation calling, and transactional report for income
tax purposes should be provided to the customer as per requirement. Furthermore the transactional
report should be bifurcated between long term and short term capital gain for the ease of the clients.
The Odin diet software is the most advanced and user friendly software that Religare provides for its
clients. The customer should be made aware of the many function that the Odin can provide to it‟s the
clients.
An RM assessment is required after every month so as to assess their performance and ask them
about the steps they have taken to retain their original customers and to induce the dormant customers
to invest and also to assess if the client is satisfied with the working of their respective RMs.
The enterprise should try to bring in the notion of „customer orientation‟ i.e give the customer what
they require, only then can it grow and reach the highest level of customer satisfaction.
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85. Religare is the best service provider for depository and its stock trading services and has over all been
the industry leader and carved out a name for itself in the stock broking industry and with its
endeavour to retain that position certain changes in its daily working would add to its competitive
advantage.
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89. APPENDIX
QUESTIONNARE
1. Name :
2. Mob No : email:
3. Company :
4. Income
A) Below 2 lakh B) 2lakh to 5 lakh
C) 5lakh to 10 lakh D) More than 10 lakh
5. Do you invest in share market ?
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90. A) Yes B) No
[A] If “yes”
1. How much you invest?
2. Which is your broking firm?
3. In which market you invest more frequently?
A) Equity market B) Commodity market
C) Mutual funds D) Gold
E) Other : ........................
4. Are you satisfied with the service?
A) Yes B) No
Comment :
[B] If “no”
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91. 1.Do you have “Demat Account”?
A) Yes B) No
2. Any specific reason for not investing in stock market
Comment :-
3. Would you like to invest in share market?
1. Have you heard about “Religare”?
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