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PROJECT REPORT ON A COMPARATIVE STUDY OF BROKERAGE PLANS OF RELIGARE SECURITIES LTD. WITH VARIOUS BROKERAGE FIRMS

BY Rahul Mahajan (08bs0004066) Religare Securities Limited Summer Internship Project (Batch of 2010)


PROJECT TITLE

A COMPARATIVE STUDY OF BROKERAGE PLANS OF RELIGARE SECURITIES LTD. WITH VARIOUS BROKERAGE FIRMS

COMPANY GUIDE Mr. Abhay Sawhney A.S.M. Delhi, Religare

FACULTY GUIDE Prof. Rajneesh Mehra ICFAI Business School Chandigarh

SUBMITTED BY RAHUL MAHAJAN (08BS0004066)


Certificate This is to certify that the project report entitled “A COMPARATIVE STUDY WITH

VARIOUS

OF

BROKERAGE PLANS

OF

RELIGARE SECURITIES LTD.

BROKERAGE FIRMS” at Religare Securities

Limited is a bonafide record of work done by Rahul Mahajan, and submitted in partial fulfillment of the requirements of MBA program of ICFAI Business School, Chandigarh.

Prof. Rajneesh Mehra

Faculty Guide IBS Chandigarh


TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr. Rahul Mahajan, doing MBA at ICFAI Business School, Chandigarh has done a project entitled “A COMPARATIVE STUDY WITH VARIOUS

OF

BROKERAGE PLANS

OF

RELIGARE SECURITIES LTD.

BROKERAGE FIRMS” at Religare Securities Limited, Noida

Branch from February 23, 2009 to May 23, 2009. From Religare Securities LTD.

Mr. Abhay Sawhney Area Sales Manager Delhi (N.C.R.)

Declaration


I hereby declare that this report on “COMPARATIVE STUDY

OF

BROKERAGE

PLANS OF RELIGARE SECURITIES LTD. WITH VARIOUS BROKERAGE FIRMS” has been written and prepared by me during the academic year 2008-2009. This project was done under the able guidance and supervision of Prof. Rajneesh Mehra, Faculty, ICFAI Business School and Mr. Abhay Sawhney, ASM, Religare Securities Ltd., Noida in partial fulfillment of the requirement for the Master of Business Administration Degree course of the ICFAI Business School. I also declare that this project is the result of my own effort and has not been submitted to any other institution for the award of any Degree or Diploma. Place: Noida Rahul Mahajan 08bs0004066


Acknowledgements Sometimes words fall short to show gratitude, the same happened with me during this project. The immense help and support received from Religare Securities limited overwhelmed me during the project. My sincere gratitude to MR.ABHAY

SAWHNEY

(ASM, Religare Securities Ltd.)

and MR.SANDEEP BHATI (SM, Religare Securities Ltd.), for providing me with an opportunity to work with Religare Securities limited. I also thank PROF. RAJNEESH MEHRA, faculty guide, IBS, Chandigarh who has sincerely supported me with the valuable insights into the completion of this project. I am grateful to MS. ESHA AHUJA (TL, Noida, Religare Securities Ltd.) and all of the members of Noida branch, who have helped me in the successful completion of this project, special mention of MR SANDEEP CHATTURVEDI.

Last but not the least; my heartfelt love for my parents, whose constant support and blessings helped me throughout this project.

Table Of Contents


I. Certificate II. To whomsoever it may concern III.Declaration IV.Acknowledgement V. Abstract Chapter 1: Introduction 1.1 1.2 Chapter 2: 2.1

2.2 2.3

Chapter 3: 3.1 3.2 3.3 3.4 3.5 3.6 Chapter 4:

Objectives of the project Increasing internet trading Introduction to brokerage industry Brokerage industries insight Stock market Stock trading Religare Enterprises Ltd. About Religare Pan India expansion Financial services provided by Religare Corporate Structure Area of operations Products and Services Religare Securities Ltd.

4.1 Company overview 4.2 Products offered 4.3 Equity trading

4.4 Types of accounts 4.5 Client coverage 4.6 Online trading


4.7 Incomes 4.8 SWOT analysis

Chapter 5:

The Competitors

5.1 ICICI Direct 5.2 Indiabulls 5.3 Sharekhan Chapter 6: 6.1 6.2 6.3 6.4 6.5

Research Methodology Descriptive research design Sampling Design Sample Size and Area Details of the survey conducted Data Collection Method

Chapter 7:

Analysis and Interpretation

Chapter 8:

Recommendations

Chapter 9:

Annexure

Chapter 10:

References

LIST OF IILUSTRATIONS

1. Increasing Internet trading

Graph 1

2. Percentage of sub brokers present in each region

Graph 2


3. Percentage of branches in each region Graph 3 4. Institutional structure of the Indian stock market

Table 1

5. Pan India presence expanding

Graph 4

6. Geographical distribution

Chart 1

7. Corporate structure of Religare

Fig 1

8. Religare area of operations

Table 2

9. Increased client coverage (Equity client)

Graph 5

10. Increased client coverage (Priority client group)

Graph 6

11. Increased online trading client

Graph 7

12. Increased portfolio management client

Graph 8

13. Increased income from total brokerage

Graph 9

14. Increased income from priority service client

Graph 10

Abstract

This project has been a great learning experience for me and at the same time it gave me enough scope to implement my analytical ability. The project in religare is to figure out the potential brokerage plans, which can undertake the various products and services offered by the religare.


With the advent of the internet, investors can now enter orders directly online, or even trade with other investors via ECN's (electronic communication networks). So, most of the brokerage houses have started providing the facility of online trading to the customers. Today even the banks with the view of expansion and large number of customers has started providing the online trading terminal to the customers. As the competition from big players of online trading like Share khan, Kotak Mahindra, ICICI Direct etc is rising religare intends to built up a loyal customer base , the project is a step towards the same. In this era of competition it’s becoming difficult for the organizations to acquire and retain the customers. Hence, for religare it is of utmost importance to have satisfied existing customers as well as to attract the other customers. With the help of this project Religare Securities Ltd could tap the Customers potential in investment and which would provide them various opportunities of increasing the customer base. “Customer Relationship and Branch Operations” believes that

“They would

not remember what you did but they will always remember what you said”.


CHAPTER ONE

INTRODUCTION Globalization has proved to be a boon for the Indian economy. After globalization there has been a tremendous growth in the Indian economy.

Every sector of the economy has shown an outstanding performance after globalization.


The project was under taken as to study the Indian online trading. Earlier Trading was confined in limited boundaries but now the scenario has been totally different after the entrance of online trading. There is a cut throat competition between the broking houses. Now the brokers are more concerned about their customers to improve their performance. The sector is undergoing fundamental changes that have diluted its traditional role of protecting small deposits against capital and income risk and facilitating the conversion of Savings into investment.

Also there have been a drastic increase in the volume of share traded on stock exchange and with that the online trading has shown Bull Run.

Increasing Internet trading volume Online trading is the service offered on the internet for purchase and sales of shares. In the real world you place orders on your stock broker either verbally or in a written form. In online trading you will access a stock broker’s website through your internet enabled PC and place orders through the brokers internet based trading engine. These orders are routed to the stock exchange without manual intervention and executed their own in the matter of a few seconds. From the past two years the volume of the internet trading has increased largely.


(Graph 1)


CHAPTER TWO

Introduction to brokerage industry Post major reforms initiative in early 2000s brokerage industry in India is experiencing rapid growth and diversity. At present apart of brokerage business industry is also offering wide range of financial services. These developments have resulted in huge spurt in business and also growing market share of the large sized brokerage houses has led to surge in enterprise value. In the year 2007 IPOs of large firms (Motilal Oswal, Religare, and Edelweiss) received huge response (Indian catalog, 2001). At the same time global and private equity firms have taken


stake in brokerage firms. In India there are about 45 equity brokerage houses that are at present listed in the stock exchanges.

Industry Insight Majority of the broking firms entered the business post 1990. A majority of members have memberships in more than one stock exchange and across equities, equity derivatives and commodities futures in domestic and International stock exchange. On the back of growing equity culture broking activity is spreading in Tier II and Tier III cities in India. Deepening financial system and economic growth has provided growth and expansion opportunities to broking firms. Access to public equity markets and growing international investor’s interest has enabled them to raise resources. Although there are more than 9000 brokers registered with SEBI 80% of the turnover in NSE and BSE is accounted by about 100 brokers.

One of the oldest trading industries that have been around even before the establishment of BSE is the Indian Broking Industry. Post liberalization there have been number of changes, despite this the stock broking industry was at its pace and retained its sustainable growth. To study the trend in the stock broking industry, if we take the database of over 394 broking firms. All the data for the study was collected through responses received directly from the broking firms. The insights have been arrived at through


an analysis on various parameters, pertinent to the equity broking industry, such as region, terminal, market, branches, sub brokers, products and growth areas. Some key characteristics of the sample 394 firms are: On the basis of geographical concentration, the West region has the maximum representation of 52%. Around 24% firms are located in the North, 13% in the South and 10% in the East 3% firms started broking operations before 1950, 65% between 19501995 and 32% post 1995 On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7% in Kolkata, 4% in Chennai and 29% are from other cities In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both exchanges. In the derivative segment, 48% trade at NSE, 7% at BSE and 45% at both, whereas in the debt market, 31% trade at NSE, 26% at BSE and 43% at both exchanges

Majority of branches are located in the North, i.e. around 40%. West has 31%, 24% are located in South and 5% in East In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in North and 4% in East In terms of various areas of growth, 84% firms have expressed interest in expanding their institutional clients, 66% firms intend to increase FII clients and 43% are interested in setting up JV in India and abroad In terms of IT penetration, 62% firms have provided their website and around 94% firms have email facility


(Graph 2)

Branches & Sub-Brokers The maximum concentration of branches is in the North, with as many as 40% of all branches located there, followed by the Western region, with 31% branches. Around 24% branches are located in the South and East constitutes for 5% of the total branches of the total sample. In case of sub-brokers, almost 55% of them are based in the South. West and North follow, with 30% and 11% sub-brokers respectively, whereas East has around 4% of total sub-brokers.


(Graph 3)

Where one firm looses out to other Lack of well established branches put smaller brokers at a disadvantage when compared to larger Brick and Mortar players who have presence in every corner of the country. Bulk of client base is made up of retail investors. Institutional and other high value high volume investors prefer to trade with so called blue chip brokers. Retail investors are “easy come easy go� accompanied with inconsistent trading habits. In Bull Run they gain confidence to invest but in correction phase they lose confidence easily.


High competition among Stock brokers has put significant pressure on the prices. Market consolidation and merger are expected to keep the broking industry viable in the long run. Demanding customers asks for 24/7/365 access to information and transaction capability. Providing it with minimum overheads is very challenging especially for newer firms who are yet to realize margin of scale. Foreign banks for a slice of equity business pie In the recent period, global and domestic private equity firms have taken stake in brokerage firms such as Anand Rathi (Citigroup), Edelweiss (Lehman Brothers), Geojit (BNP Paribas), SMC (Millennium India), Motilal Oswal (New Vernon), Network Broking (Amas Bank of Hindujas) and India Infoline (Orient Global) etc.

Stock Exchange - Business Trends

INDIAN STOCK MARKETS AND EXCHANGES

There are 23 recognized stock exchanges in India, including the Over the Counter Exchange of India (OTCEI) for small and new companies and the National Stock Exchange (NSE) which was set up as a model exchange to provide nation-wide services to investors. BOMBAY STOCK EXCHANGE (BSE) Bombay stock exchange is the oldest stock exchange of India For the premier Stock Exchange that pioneered the stock broking activity in India, 128 years of experience seems to be a proud milestone. A lot has changed since 1875 when 318 persons became members of what today is called "The Stock Exchange, Mumbai" by paying a princely amount of Re1.


Since then, the country's capital markets have passed through both good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was no scale to measure the ups and downs in the Indian stock market. The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market. SENSEX SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media.

The index is calculated on the “Free-float Market Capitalization� methodology. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally. All major index providers like NIKKEI, NASDAQ and DOW JONES use the free float methodology. The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. The SENSEX captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through SENSEX.

NATIONAL STOCK EXCHANGE (NSE)


The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FI’s) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE 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 unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.

When India’s National Stock Exchange (NSE) was started in 1994, few believed it would survive. How could a stock exchange run by a team of untested professionals headed by a former development banker succeed against existing stock exchanges run by third generation, savvy stockbrokers? Critics even went to the extent of warning that NSE’s sophisticated systems would be a misfit in an Indian capital market dominated by physical deliveries, arbitrary speculative trade, and lengthy trade settlements. Today, with number of trades touching 2.5 million a day and turnover touching turnover touching Rs 100 billion in value terms, NSE towers over all the other stock exchanges in the country. In a ten-year period (NSE completed a decade on June 30, 2004) the National Stock Exchange has tilted the market system in favour of investors and away from a significant bias in favour of intermediaries. For a mass of investors across the


country, the NSE is now the focal point for trading in stocks, and futures and options. The Stock Exchange, (NSE) came out with a stock index that subsequently became another barometer of the Indian stock market known as NIFTY. Nifty been the focal point of investors, as it provides trading the shares as well as index in futures and options. Before Nifty came into existence trading of index concept was not present it was introduced by Nifty and is present in it only, till date.

CASH MARKET AND DERIVATIVES

National stock exchange gives the investors different option where an investor can deal the equities into different market situations like cash market and derivatives. Cash market is simply the equity market where investors have to pay the security amount which is done in BSE also but in NSE investors has the choice of dealing in derivatives. Derivatives are the future market where investors have the option of dealing in the price list of futures for which there a separate index is present known as NIFTY FUTURE. In Derivatives there are two choices available for an investor FUTURES AND OPTIONS FUTURE – In future market shares are deal in lots these lots could be of different numbers like 100, 200, 500 etc. Investors while taking over these lots and coming under the contract takes the position of the shares by paying the 1/3rd amount of the total holdings. (could be understood by a formula). Holdings of investors = (shares lot * price of the lot) / 3.


This formula explains that as investor is interested in taking 2 lots of reliance of 100 shares of Rs. 900 , the investor has to pay:(2*100*900) / 3 = 60000/ Which shows the investor is taking the position of Rs. 180000/- in just Rs. 60000/in future market which the area of attraction of this particular market. These holdings are taken for 1 month, 2 months and three months according to the investor’s preference. The beauty of this contract is that the remaining 2/3rd money of the holdings is paid by the broking house the investors dealing with. Investor coming into this contract should know that by the time of contract he is in like of 1 or 2 months investor should clear its position before the last Thursday of the expiry month.

OPTIONS – Option is a contract where the investor has two options to deal with CALL and PUT. The concept of call and put is opposite to each other call is the contract where the investors believe that the market is going to be BULLISH in near future and put option is taken when he thinks that the market is going to be BEARISH in the future. In the call option investors is benefited if market drives up in future and in put will be benefited if it slips down.

Funds mobilized in primary market rose to Rs 1, 74,143 cr through 558 issues in 2007-08 against Rs 55,654 cr through 451 issues in 2006-07. Out of this Rs 87,029 cr were raised through 124 public and right issues against Rs 33,508 cr through 124 issues in 2006-07. Total of Rs 42,595 cr was raised through 85 IPOs in 2007- 08 against Rs 28,504 cr raised through 77 IPOs in 2006-07.


Net resource mobilization by mutual funds grew to Rs 1,53,801 cr in 2007-08 with a 63% rise from Rs 93,984 cr in 2006-07. Cumulative Assets under management rose to Rs 5,05,152 in March 2008 from Rs 3,26,292 in March2007.

Institutional Structure of the Indian Stock Market Market Intermediaries

Number of Intermediaries as on March 31,2008

Stock exchanges (cash Market)

19

Stock Exchanges (Derivative Market)

2

Brokers (Cash Segment)

9487

Corporate Brokers (Cash Segment)

4183

Sub Brokers (Cash Segment)

44073

Brokers (Derivatives)

1442

FII

1319

Custodians

15

Depositories

2

Merchant Bankers

155

Bankers to an Issue

50

Underwriters

35

Mutual Funds

40


(Table 1)

Stock Trading

Traditionally stock trading is done through stock brokers, personally or through telephones. As number of people trading in stock market increase enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc start growing in stock broker offices. Information technology (Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading. Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker. In this case these Online Stock Trading companies are stock broker for the investor. They are registered with one or more Stock Exchanges. Mostly Online Trading Websites in India trades in BSE and NSE. There are two different type of trading environments available for online equity trading. Installable software based Stock Trading Terminals

These trading environment requires software to be installed on investors computer. This software is provided by the stock broker. This software’s require high speed internet connection. These kind of trading terminals are used by high volume intraday equity traders. Advantages: ➢ ➢

Orders directly send to stock exchanges rather than stock broker. This makes order execution very fast. It provide almost each and every information which is required to a trader on a single screen including stock market charts, live data, alerts, stock market news etc.


Disadvantages:

Location constrains - You cannot trade if you are not on the computer where you have installed trading terminal software. ➢ It requires high speed internet connection. ➢ These trading terminals are not easily available for low volume share traders. ➢

Web (Internet) based trading application

These kind of trading environment doesn't require any additional software installation. They are like other internet websites which investor can access from around the world through normal internet connection.Below are few advantages and disadvantages of Online Stock Market Trading:Advantages of Online Stock Trading (Website based):

➢ Real time stock trading without calling or visiting broker's office. ➢ Display real time market watch, historical data’s, graphs etc. ➢ Investment in IPOs, Mutual Funds and Bonds. ➢ Check the trading history; demat account balance and bank account balance at any time. ➢ Provide online tools like market watch, graphs and recommendations to do analysis of stocks. ➢ Place offline orders for buying or selling stocks. ➢ Set alert to inform you certain activity on the stock through email or sms. ➢ Customer service through Email or Chat. Disadvantages of Online Stock Trading (Website based):

➢ Website performance - sometime the website is too slow or not enough user friendly. ➢ Little long learning curve especially for people who don’t know much about computer and internet.


CHAPTER THREE

Religare Enterprises Ltd. Religare Enterprises ltd (REL), incorporated in 1984 and promoted by RANBAXY group, is the holding company of 11 subsidiaries. It is among the leading integrated financial services group in the country today. Religare is a diversified financial services group of India offering a multitude of investment options. 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 services, private equity, merchant banking and trading in arts and articrafts. The major revenue drivers for the company are its retail equity broking arm Religare Securities and Religare Finvest, which finances loans against shares. The diverse bouquet of financial services which Religare offers can be broadly clubbed across three key verticals - Retail, Institutional and Wealth spectrums. The services extend from asset management, Life Insurance, wealth management to equity broking, commodity broking, investment banking, lending services, private equity and venture capital. Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund. With a view to expand, diversify and introduce offerings benchmarked against global best practices, Religare operates in the life insurance space under 'AEGON Religare Life Insurance Company Limited' and wealth management under the brand name 'Religare Macquarie Private Wealth'.(www.religare.in) Religare has a pan India presence, 1837* locations across 498* cities and towns. It also currently operates from nine international locations following its acquisition of London's brokerage & investment firm, Hichens, Harrison & Co. plc. (Now Religare Hichens, Harrison Plc).


(Graph 4)

Religare (“company�) is an integrated financial services institution offering a wide range of financial products and services to retail investors, high net worth individuals and corporate and institutional clients including equity and commodity broking, online trading, wealth advisory services, investment banking and insurance broking. Religare has grown rapidly from what was largely an equity trading company into a diversified financial services company operating through its 11 subsidiaries. As on June 30, 2008, Religare has operations at 1,575 locations across 465 cities and towns and a large management team leading group of over 9,500 employess.


Recently acquired Hichens, Harrison & Co. (“Hichens”), one of the oldest broking firm in London, for a sum of GBP 55.5 million. ➢ Acquisition to boost the institutional and investment banking operations of Religare and extend its geographical reach to London, South Africa, Argentina, Brazil, Dubai, Qatar, Singapore, Malaysia and Indonesia.

(Chart 1)


Diversified Integrated Financial Services Platform Recently growth and established business testimony of Religare’s commitment towards becoming the investment gateway of India. Diversified product portfolio with individually focused management teams to create optimum balance and result.


CORPORATE STRUCTURE OF RELIGARE RELIGARE FINVEST LTD

RELIGARE SECURITIE S LTD RELIGARE INSURANCE RELIGARE BROKING FINANCE LTD LTD

RELIGARE COMMODITIE S LTD

RELIGARE ENTERPRISE S LIMITED

RELIGARE WEALTH MANAGEMEN T SERVICES

RELIGARE VENTURE CAPITAL LTD

RELIGARE CAPITAL MARKET LTD Fig 1

Religare Areas of Operation

RELIGARE REALTY LTD


(Table 2)

Products & Services


Promoter Groups

Fortis Healthcare Limited

Super Religare Laboratories Limited

Religare Wellness Limited (Formerly Fortis Healthworld)

Religare Technova Limited (formerly Fortis Financial Services Limited)

Religare expansion as on Q1 FY09 Employee strength increased to over 9,500 Pan India presence expanded to 1,575 location in 465 cities across India Continued focus on expanding network, investment in multiple business & human resource in new venture of RFL and RIBL


Quarterly Total Revenue recorded at Rs. 2,887.49 mn, EBIDTA at Rs. 1,184.17 mn and Profit after tax at Rs. 36.68 mn

CHAPTER FOUR


RELIGARE SECURITIES LTD

Company Overview Religare Securities Ltd. (“RSL”) is the wholly owned subsidiary of REL and a securities firm in India. Major activities and offerings of the company include equity broking both offline and online, depository participant services, portfolio management services and institutional brokerage. Member of the NSE, BSE, depository participant with NSDL and CDSL, and SEBI approved portfolio manager. Businesses under Religare Securities Ltd. include: ➢ Retail Equity Broking ➢ Priority Client Equity Services ➢ Online Investment Portal ➢ Institutional Equity Broking (To be shifted to RCML) ➢ Portfolio Management Services ➢ Depository Services Empanelment with 81 institutions including 20 mutual funds, 10 insurance companies, 35 banks and 11 FIIs. Has strong


institutional research team covers over 185 companies in 16 sectors Aggressive ramp up of equity trading client accounts with market share increasing to 3.8% in June 2008 from 2.7% in FY07 and online trading market share increased to 8.7% in June 2008 from 7.2% in October, 2007

Received in principal approval from SEBI to act as a sponsor of Asset Management joint venture with Aegon Received P1 Credit Rating from CRISIL for its short term debt issuance program for a sum of Rs. 7,000 million Religare Securities Limited (RSL) is a leading equity and securities

firm in India. The company currently handles sizeable volumes traded on NSE and in the realm of online trading and investments it currently holds a reasonable share of the market. The major activities and offerings of the company today are Equity broking, Depository Participant Services, Portfolio Management Services, Institutional Brokerage & Research, Investment Banking and Corporate Finance. RSL is a member of the National Stock Exchange of India, Bombay Stock Exchange of India, Depository Participant with National Securities Depository Limited and Central Depository Services (I) Limited, and SEBI approved Portfolio Manager. Religare has been constantly innovating in terms of product and services and to offer such incisive services to specific user segments it has also started the NRI, FII, HNI and Corporate Servicing groups. These groups take all the portfolio investment decisions depending upon a client’s risk / return parameter. Religare has a very credible Research and Analysis division,


which not only caters to the need of our Institutional clientele, but also gives their valuable inputs to investment dealers. Religare is also providing in-house Depository services to its clientele and is one of the leading depository service providers in the country.

Product offered by Religare Securities


OFFERINGS EQUITY OF RELIGARE SECURITY INTERNATI AND ONAL DERIVAT PM ADVISORY IVES S INVEST. BANKIN G


Equity and Trading Race and Rally are the two products offered by Religare Securities ltd which come under equity and derivatives.

Race Rall y

While Rally deals with offline facilities, Race provides for complete online package and facility. There is difference between both offline and online modes of trading. The difference lies on account of its schemes, platforms and facilities provided. Initially the clients used to go for offline modes of trading, but now with increasing use of internet online mode has become the preference.


Type of Account  R-ACE (Basic)

It's the basic online trading account provided by Religare. Investor can trade and access their account information online and over the phone as well. This account comes with a browser based online trading platform and no additional software installation needed. This account also provides Lifetime free DP account with no annual maintenance charges. R-ACE Lite (Advanced)

It's the advanced account option for the investor with Religare. This trading account provides the entire feature of R-ACE (Basic) account. In addition it also provides real-time streaming stock quotes and alerts. This trading platform is also browser based and no software installation is needed. R-ACE Pro (Professional)

As the name indicates this account is for high volume traders. Along with the features from above 2 accounts, this account also comes with a Trading Terminal, software which needs to install on your computer. This terminal directly connects the investor to stock market and having all industry standard Treading terminal features including technical charting (intra-day and EOD), multiple watch list, advanced hot-key functions for faster trading, derivative chains, futures & options calculator. As in basic and advance account, trading is available online through internet and offline though phone.


Brokerage and Account opening fees: Religare offers three kinds of accounts as above. Below are detail about fees and activation charges for each account: 1. R-ACE

Account activation charges Rs.299/-.

2. R-ACE Lite

Account activation charges Rs.499/-..

3. R-ACE Pro

Account activation charges Rs.999/-.

4. All the account comes with free annual maintenance charge. 5. All account comes with free DP account. 6. Brokerage at Religare

On the basis of volume and frequency of trading, Religare provide different options for brokerages. On the broader way they divided into three categories: ○

Classic Account

Freedom Account

Trump Account

Intraday brokerage varies from 0.3% to 0.5%. Delivery brokerage varies from 0.30% to 0.50%.. In this payment scheme, investor has to pay a fix amount in advance for Annual Subscription (Rs 4000). This one time payment enable account holder to trade for Rs. 3,00,000 intraday & derivative trading and Rs. 40,000 of delivery based trading for zero brokerage.

Trump account has two payment options 1. Trump Plus has annual subscription fees of Rs 2,500,


Brokerage on Delivery Trades of 0.25% and Brokerage on Intraday Trades & F&O Trades of 0.025%. 2. Trump Super has annual subscription fees of Rs. 15,000, Brokerage on Delivery Trades of 0.15% and Brokerage on Intraday Trades & F&O Trades of 0.015%. Advantages of Religare • Religare gives interest on unutilized cash when investor is waiting to make next trade or online investment. • Religare Allow their investor to trade without having to worry about cash margin. Investor can get exposure (on cash segment) as high as 20 times for intraday trades. • They provide intraday reports and historical charting. • Lifetime free DP account. • Varity of fee structure to fulfill need of different type of investors.


Equity Broking and Online Trading Equity client base of over 4.6 lacs, recorded an increase of more than 11% in last quarter Total Equity brokerage of Rs. 749 mn for Q1 FY 09 Equity market share increased from 3.46% to 3.84% in last quarter Online client base of over 78,500 clients, recorded an increase of 20% in last quarter Online brokerage for the quarter accounted for Rs. 32 mn

Increased Client Coverage

(Graphs-5 & 6)


Increased Online Trading and Portfolio Management Client

(Graphs-7 & 6)

Increased Income from Various Business Lines


(Graphs-8 & 9)

SWOT ANALYSIS

STRENGTHS Strong corporate relationship with its promoter RANBAXY ➢ Collaborations with highly reputed international companies AEGON and MACQUERIE. ➢ Provides transparency to clients ➢ Highly qualified research team ➢ Strong network throughout India, strong presence in WEST, NORTH and SOUTH ➢

WEEKNESS ➢ No satisfactory Brand awareness and no Brand recall value ➢ In case of intraday the order is automatically squared off at 3.10 pm ➢ Problem in linking Religare demat account with the five banks HDFC, CITIBANK, AXIS, ICICI, INDUS Bank.


OPPURTUNITIES ➢ Even the strong players in the market holds 6% of market share, so there is a good potential for growth ➢ The growing interest of people in the stock market ➢ Indian stock market story going strong

THREATS ➢

Competition from major players like ICICI DIRECT, SHAREKHAN, INDIA BULLS, KOTAK etc. The downfall in the stock market

CHAPTER FIVE


The Competetor

The existing major players in the stock broking industry besides Religare Securities ltd. are: 1. ICICIDirect 2. India Bulls 3. Share Khan 4. India Infoline 5. Kotak 6. Reliance money


ICICIDIRECT ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs, Mutual Funds and Bonds. Trading is available in BSE and NSE.

Trade In: BSE and NSE Type of Account ICICIDirect offers 3 different online trading platforms to its customers:

1. Share Trading Account

Share Trading Account by ICICIDirect is primarily for buying and selling stocks in NSE and BSE. This account allows Cash Trading,


Margin Trading, Margin PLUS Trading, Spot Trading, Buy Today Sell Tomorrow and Call and Trade on phone. ICICIDirect.com website is the primary trading platform for this trading account. They also provide installable application terminal based application for high volume trader.

2. Wise Investment Account

Along with stock trading and IPO investing in BSE and NSE, Wise Investment account also provide options to invest in Mutual Funds and Bonds online. Online Mutual funds investment allows investor to invest on-line in around 19 Mutual Fund companies. ICICI Direct offers various options while investing in Mutual Funds like Purchase Mutual Fund, Redemption and switch between different schemes, Systematic Investment plans, Systematic withdrawal plan and transferring existing Mutual Funds in to electronic mode. This account also provides facility to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICIDirect.com website is the primary tool to invest in Mutual Funds, IPOs, Bonds and stock trading. Active Trader Account

Active Trader account gives more personalized investment options to the investors. It allows investor to use online and offline stock trading. It also provides with independent market expertise and support through a dedicated Relationship Manager from ICICI. Active Trader also provides commodity trading. Brokerage and fees 1.

Account opening fees : Rs 750/- (One time non-refundable)

2.

Brokerage: ICICIDirect.com brokerages varies on volume of

trade and inclusive of demat transaction charges, service taxes and


courier charges for contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.85% on delivery based trades.

Advantages of ICICIDirect

1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very well integrated. This feature makes ICICI the most interesting player in online trading facility. There is absolutely no manual interfere require. This is truly online trading environment. 2. Unlike most of the online trading companies in India which require transferring money to the broker's pool or towards deposits, at ICICIDirect you can manage your own demat and bank accounts through ICICIdirect.com. Money from selling stock is available in ICICI bank account as soon as the ICICIDirect receive it. 3. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one website. General Insurance is also available from ICICI Lombard. 4. Trading is available in both BSE and NSE. Disadvantages of ICICIDirect

1. Getting access to ICICIDirect.com website during market session can be frustrating. 2. ICICIDirect brokerage is high and not negotiable. 3. Not all stocks are available under Margin Plus.


INDIABULLS Indiabulls is India's leading Financial Services and Real Estate Company having presence over 414 locations in more than 124 cities. Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay Stock Exchange, Luxembourg Stock Exchange and London Stock Exchange. Type of Account

Indiabulls Equity Trading Account Indiabulls Equity Trading Account is standard Online trading account from India bulls and along with online trading it also provides priority telephone access that gives you direct access to your Relationship Manager and full access to 'Indiabulls Equity Analysis'. Application Trading Terminal (Need Installation)

Power Indiabulls Power Indiabulls trading terminal is the most advanced new generation trading platform with great speed. This trading terminal is built in JAVA. Power Indiabulls is extremely reach in features including Live Streaming Quotes, Fast Order Entry and execution, Tic by Tic Live Charts, Technical Analysis, Live News and Alerts, Extensive Reports for Real-time Accounting.

Brokerage and fees : 1.

Account opening fees : Rs 1200/- (One time non-refundable) as below:


250/- Equity Trading Account opening charge 200/- Demat Account opening charge 750/- Software changes Advantages of Indiabulls Equity Trading Account

Brokerage is less compare to other online trading companies. Provide trading terminal 'power bulls', a java based software. It's very fast in terms of speed and execution.

SHAREKHAN

Sharekhan is online stock trading company of SSKI Group, provider of India-based investment banking and corporate finance service. ShareKhan is one of the largest stock broking houses in the country. S.S. Kantilal Ishwarlal Securities Limited (SSKI) has been among India’s leading broking houses for more than a century.


Sharekhan's equity related services include trade execution on BSE, NSE, Derivatives, commodities, depository services, online trading and investment advice. Trading is available in BSE and NSE. Along with Sharekhan.com website, ShareKhan has around 510 offices (share shops) in 170 cities around the country. Share khan has one of the best state of art web portal providing fundamental and statistical information across equity, mutual funds and IPOs. You can surf across 5,500 companies for in-depth information, details about more than 1,500 mutual fund schemes and IPO data. You can also access other market related details such as board meetings, result announcements, FII transactions, buying/selling by mutual funds and much more. Trade In: BSE and NSE

Type of Account 1.ShareKhan Classic account

Allow investor to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer. a. Online trading account for investing in Equities and Derivatives b. Free trading through Phone (Dial-n-Trade) I. Two dedicated numbers for placing your orders with your cell phone or landline.


c. d. e. f. g.

II. Automatic funds transfer with phone banking (for Citibank and HDFC bank customers) III.Simple and Secure Interactive Voice Response based system for authentication IV.get the trusted, professional advice of our telebrokers V. After hours order placement facility between 8.00 am and 9.30 am Integration of: Online trading + Bank + Demat account Instant cash transfer facility against purchase & sale of shares IPO investments Instant order and trade confirmations by e-mail Single screen interface for cash and derivatives

2. ShareKhan SpeedTrade account

This accounts for active traders who trade frequently during the day's trading session. Following are few popular features of SpeedTrade account. a. Single screen interface for cash and derivatives b. Real-time streaming quotes with Instant order Execution & Confirmation c. Hot keys similar to a traditional broker terminal d. Alerts and reminders e. Back-up facility to place trades on Direct Phone lines Brokerage:

Some stock trading companies charge direct percentage while others charge a fixed amount per Rs 100. Sharekhan charges 0.5% for inter day shares and 0.1% for intra day or you could say Sharekhan charges 50 paise per Rs 100.


Advantages of Sharekhan:

Online trading is very user friendly and one doesn't need any software to access. B. They provides good quality of services like daily SMS alerts, mail alerts, stock recommendations etc. C. Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC Sec, etc., so investor not really needs to open an account with a particular bank as it can establish link with most modern banks. A.

Disadvantages of ShareKhan

A. They charge minimum brokerage of 10 paisa per stock would not let you trade stocks below 20 rs. (If you trade, you will loose majority of your money in brokerage). B. Lots of hidden rules and charges. C. They do not provide facility to book limit order trades during afterhours. D. Classic account holders cannot trade commodities.\ E. Cannot purchase mutual funds online.


CHAPTER SIX


RESEARCH METHODOLOGY

DESCRIPTIVE RESEARCH DESIGN The research design adopted in this study is DESCRIPTIVE RESEARCH DESIGN. A descriptive research design is the one which is description of the state of affairs as it exists at present. It includes survey and fact finding enquiries of different kinds. The researcher has no control over the variables. The researcher used this research design to find out the respondents attitude and opinion about ULIP policies offered.

SAMPLING DESIGN A sample design is a definite plan for obtaining a sample from a given population. It refers to the techniques or procedures the researcher would adopt in selecting items for the sample.

CONVENIENCE SAMPLING The researcher adopted convenience sampling. It is the non probability sampling is that sampling procedures does not any basis for estimating the probability that each item in the population has of included in the sample. The researcher selects the people according to their convenient.


SAMPLE SIZE A sample of 50 people was taken for the survey. The required data collected through questionnaire.

SAMPLE DESIGN

DETAILS OF THE SURVEY CONDUCTED

Sample Size

50 20-30 years 30-40 years

Target Population 40-50 years above 50 years

Location

Noida, Greater Noida, Laxmi nagar,Nehru Place.

Type of questionnaire

Structured

No. of Questions involved

12


DATA COLLECTION The information required for our project was collect mainly from the primary sources and even from secondary sources. The primary source consists of the data analyzed from questionnaire and interaction with the user at that time only. And internet is used as secondary source.

DATA COLLECTION METHOD Data is collected through questionnaire schedule method. It means the investigators are trained to collect the information required for an enquiry through schedule. The trained investigators meet the people concerned and fill up the schedules with the information supplied by them.

Limitations: • Time limitation • Research has been done only in Delhi. • Companies did not disclose their secrets data and strategies. • Possibility of Error in data collection. • Possibility of Error in analysis of data due to small sample size.


CHAPTER SEVEN


ANALYSIS AND INTERPRETATION 1. How much income are you able to save or invest?

a. 0 - 10%

b. 10 - 20%

c. 20 – 30%

d. 30 – 40%

e. others

others, 3 30-40% , 9

0-10% , 8 0-10% 10-20% 20-30% 30-40%

20-30% , 11

10-20% , 19

others

ANALYSIS: Among the 50 questionnaires filled, it was clear that among them maximum people invest in the category of 10-20%. Thus Religare has the opportunity to capture this segment. But people are not aware of the services so here Religare has to work in this area.


2. You invest in which of the following financial instruments? (a) Securities (b) Mutual fund (c) Commodities (d) Insurance (e) Other Instruments

ANALYSIS: The above observation speaks about the financial instruments in which the people invest; most of the people invest in the securities through share market and then invest in the insurance. Thus more focus should be made on securities so that company has the maximum investment. This would ultimately increase the profits.

3. Do you invest/interested in stock market?

(a) YES (b) NO


no 42% yes no yes 58%

ANALYSIS: It can be seen that among the whole population around 58% people either invest in stock market or they are actually interested, but don’t have a good knowledge about it. So these people can actually become Religare’s target market but religare has to provide them the better services and brokerage plans and also, providing them the initial platform of online trading.

4. Do you have a demat account?

(a) YES (b) NO


no, 18 yes no yes, 32

ANALYSIS: Among 50 respondents 32 actually have a demat account and are aware of the dealings in stock trading. The rest 18 are still in the other category. So strategies should be made to convert these people in to our potential customers.

5. If yes, which type of demat account do you have? (a) Online (b) Offline


online, 11 online offline offline, 21

ANALYSIS: Among 50 respondents 32 had a demat account. Of these 32, 21 have their demat account offline and rest 11 have their demat accounts online. As online broking is still at a premature stage in India. Thus more and more awareness should be made about the online broking services.

6. In which company you have your demat account? (a) India Infoline (b) India Bulls

(c) Kotak

(d) Religare

(f) Share khan

(e) ICICI direct


(g) Others

ANALYSIS: Among these 32 people most of them have their demat account with ShareKhan and Indiabulls. Thus these two are Religare’s biggest competitors. Also ICICIDirect gives a good competition to Religare. These brands have a good brand recall as compared to Religare.

Do you trade in Futures and Options? (a) Yes 1.

(b) No


ANALYSIS: It can be seen that among the population who invest in stock market, around 37% people either trade in future or they trade in option. So these people can actually become Religare’s target market as they generate heavy brokerage for the company. Religare has to provide them the better services and brokerage plans and also, providing them the initial platform of online trading.

8. How often you trade in the stock market (a) Everyday

(b) 2-3 Days a week

(c) 12-18 days a month

(d) 2-3 days a month

ANALYSIS: The above observation speaks about the; most of the people do trading every day. Thus more focus should be made on the traders which are every day traders. The company should also focus on the others also because they are the traders for the long term investment and also, provide heavy brokerage to the company.


9. Do you pay AMC (Annual Maintenance Charge)? (a) Yes (b) No

ANALYSIS: A good percentage of people give the annual maintenance charge to the company. Religare can have the advantage of attracting their customers as they don’t charge the AMC on its brokerage plans and which will work to generate sales.


10. How much Brokerage do you pay on Intraday? (a) (0.01 – 0.02) % (c) (0.03 – 0.04) %

(b) (0.02 – 0.03) % (d) (0.04 – 0.05) %

(e) 0.05 % or more

ANALYSIS: It can be seen that the companies are charging brokerage according to their own means. So, the companies are creating biasness between the customers. Even if the customers portfolio is the same then also the brokerage may vary from the person to person. So, religare has the best feature of providing less brokerage and according to the customers wants.

11. How much Brokerage do you pay on Delivery? (a) (0.1 – 0.2) % (c) (0.3 – 0.4) % (e) 0.5 % or more

ANALYSIS:

(b) (0.2 – 0.3) % (d) (0.4 – 0.5) %


Here also you can see that the long term investors have to give brokerage according to what the company wants. So, here also the biasness is created in the mind of the customers. So, Religare got a great opportunity to attract the customers by giving the brokerage plans according to what the customer want.

12. Are they getting the good services? (a) Yes (b) No

ANALYSIS: It can be seen from the observations that there are customers who are not satisfied by the services given by the brokerage companies can be converted by providing better services to them. Sometimes even if the customers have the same or more investment then also, he is getting fewer services than the other one. So, Religare can convert them by providing better services to them.


CHAPTER EIGHT

RECOMMENDATIONS On the basis of these findings and analysis, It has can be surely said that in stock broking industry, differentiation can become the key to higher revenues. Better


service, straight through processing(STP), immediate execution, portfolio services, investment advisors and telephone call centers or branch investment offices are needed to retain customers and to increase the revenue base. As more number of people will get comfortable with internet/technology, broking (especially online broking) will have a completely new meaning with more fringes coming into the picture and more firms will offer umbrella services to their clients. Thus more of strategies should be undertaken ➢ Providing better plans and schemes than our competitors like Sharekhan, Indiabulls, and ICICI direct are providing in terms of brokerage and subscription. ➢ Formulation of more corporate schemes for employees of organizations falling under Religare’s corporate category. ➢ Drafting a website which is both professional and user friendly ➢ Associating Religare with Ranbaxy to make it a power brand. ➢ Taking Religare from the brand recognition stage to brand insistence stage. ➢ Religare should make its brokerage structure more flexible to give a good competition to the investors ➢ Some more collaboration with international firms and increasing its outlets not only in India but also outside the world ➢ Also, to attract the NRIs so, that to increase its share in the stock exchanges as they provide the largest share in terms of the investment.


CHAPTER NINE

Annexure

QUESTIONNAIRE

NAME: GENDER:

AGE:

OCCUPATION:

ANNUAL INCOME:


1. How much income are you able to save or invest? (a) 0 - 10%

(b) 10 - 20%

(c) 20 – 30%

(d) 30 – 40%

(e) Others

2. You invest in which of the following financial instruments? (a) Securities

(b) Mutual fund

(c) Commodities

(d) Insurance

(e) Other Instruments

3. Do you invest/interested in stock market?

(a) YES

(b) NO

4. Do you have a demat account?

(a) YES

(b) NO

5. If yes, which type of demat account do you have? (a) Online

(b) Offline


6. In which company you have your demat account? (a) India Infoline (b) India Bulls

(c) Kotak

(d) Religare

(f) Share khan

(e) ICICI direct

(g) Others

1. Do you trade in Futures and Options? (a) YES (b) NO

8. How often you trade in the stock market (a) Everyday

(b) 2-3 Days a week

(c) 12-18 days a month

(d) 2-3 days a month

9. Do you pay AMC (Annual Maintenance Charge)? (a) Yes

(b) No

10. How much Brokerage do you pay on Intraday? (a) (0.01 – 0.02) %

(b) (0.02 – 0.03) %

(c) (0.03 – 0.04) %

(d) (0.04 – 0.05) %

(e) 0.05 % or more


11. How much Brokerage do you pay on Delivery? (a) (0.1 – 0.2) % (c) (0.3 – 0.4) %

(b) (0.2 – 0.3) % (d) (0.4 – 0.5) %

(e) 0.5 % or more

12. Are they getting the good services? (a) Yes

(b) No

CHAPTER TEN


REFERENCES http://www.religareonline.com http://religaresecurities.com/trade.asp http://www.hinduonnet.com/businessline/iw/2000/09/03/stories/0703g051.htm http://www.traderji.com/ http://www.ShareKhan.com http://www.indiabulls.com http://www.icicidirect.com http://www.chittorgarh.com/newportal/online-stock-brokers-list.asp www.financialtimes.net http://www.religare.in/ http://www.milestonereligare.com/

Newspaper


• The Economic Times



PROJECT REPORT ON A COMPARATIVE STUDY OF BROKERAGE PLANS OF RELIGARE SECURITIES LTD. WITH VARIOUS