INDEX

Particular Page No.

1. Introduction of the CRM 5
2. Objective of the CRM 16
3. Research Methodology 19
4. Literature Review 24

 Training 42
 Importance & Needs of Training 42
 Types of Training
 Methods of Training 43
 Recommendation & Conclusion 46
 Training Adopted by us at Angel 47
 Training Under Different 48
Departments
 Problems Faced at the Time of 50
Training
 Suggestions to Improve 51

5. Industry Analysis

 Industry Analysis at Indian Level 51

 Past Performance 62
 SWOT Analysis 69
 Major Players in the Industry 76
 Products & Services 80

6. Data Analysis 87
7. Limitations 94
8. Findings 95
9. Suggestions 97

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 10.Bibliography 98

Preface

The Summer program offered by the IBMR College, is an

enlightening course for those who are wishing to master their
Business administration skills, with their knowledge. This is an
unique course which is the collaboration of MBA. It not only
developes your management talent but also develop your technical
skill. It imparts the necessary theoretical knowledge about the field
but also provides an opportunity to practically experience the
application of the business administration fundamentals in the
corporate as well as the non-corporate sector.
I was unaware about the role of exchanges and depositories in
the secondary market. Here I really got practical knowledge about the
role of SEBI, NSE, and BSE etc. in the secondary market. Now I am
aware about the buying and selling system in the secondary market
through broking firm or sub-broker. I am very much thankful to Mr.
Jicky Thomas, Branch & Product Head, main branch Mahalaya
complex C. G. Road, Ahmedabad.

I therefore have pleasure to present my training report, which, I

hope as per the curriculum requirements.

2
Introduction to CRM

Before we begin to examine the conceptual foundations of CRM,

it will be useful to define, what is CRM? A narrow perspective of
customer relationship management is database marketing
emphasizing the promotional aspects of marketing linked to database
efforts. Another narrow, yet relevant, viewpoint is to consider CRM
only as customer retention in which a variety of after marketing
tactics is used for customer bonding or staying in touch after the sale
is made. Shani and Chalasani define relationship marketing as “an
integrated effort to identify, maintain, and build up a network with
individuals consumers and to continuously strengthen the network
for mutual benefit of both sides, through interactive, individualized
and value-added contacts over a period of time”. The core theme of all
CRM and relationship marketing perspectives is its focus on co-
operative and collaborative relationships between the firm and its
customers, and/or other marketing actors.

CRM is based on the premise that, by having a better

understanding of the customers’ needs and desires we can keep them
longer and sell more to them.

Growth Strategies International (GSI) performed a statistical

analysis of Customer satisfaction data encompassing the findings of
over 7,000+ customer surveys conducted by Himachal Tour and
Travels Broking Ltd.

CRM (customer relationship management) is an information

industry term for methodologies, software, and usually Internet
capabilities that help an enterprise manage customer relationships in
an organized way. For example, an enterprise might build a database
about its customers that described relationships in sufficient detail so
that management, salespeople, people providing service, and perhaps
the customer directly could access information, match customer
needs with product plans and offerings, remind customers of service

3
requirements, know what other products a customer had purchased,
and so forth.

The essence of the information technology revolution and, in

particular, the World Wide Web is the opportunity to build better
relationships with customers than has been previously possible in the
offline world. By combining the abilities to respond directly to
customer requests and to provide the customer with a highly
interactive, customized experience, companies have a greater ability
today to establish, nurture, and sustain long-term customer
relationships than ever before. The ultimate goal is to transform these
relationships into greater profitability by increasing repeat purchase
rates and reducing customer acquisition costs. Indeed, this revolution
in customer relationship management or CRM.1 as it is called, has
been referred to as the new “mantra” of marketing. 2 Companies like
Siebel, E.piphany, Oracle, Broadvision, Net Perceptions, Kana and
others have filled this CRM space with products that do everything
from track customer behavior on the Web to predicting their future
moves to sending direct e-mail communications. This has created a
worldwide market for CRM products and services of $34 billion in
1999 and which is forecasted by IDC to grow to $125 billion by 2004. 3
The need to better understand customer behavior and focus on those
customers who can deliver long-term profits has changed how
marketers view the world.

Traditionally, marketers have been trained to acquire

customers, either new ones who have not bought the product category
before or those who are currently competitors’ customers. This has
required heavy doses of mass advertising and price-oriented
promotions to customers and channel members. Today, the tone of
the conversation has changed from customer acquisition to retention.
This requires a different mindset and a 3 different and new set of
tools. A good thought experiment for an executive audience is to ask
them how much they spend and/or focus on acquisition versus
retention activities.

While it is difficult to perfectly distinguish the two activities

from each other, the answer is usually that acquisition dominates
retention.

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 According to one industry view, CRM consists of:

 Helping an enterprise to enable its marketing departments to

identify and target their best customers, manage marketing
campaigns with clear goals and objectives, and generate quality leads
for the sales team.

 Assisting the organization to improve telesales, account, and

sales management by optimizing information shared by multiple
employees, and streamlining existing processes (for example, taking
orders using mobile devices)

 Allowing the formation of individualized relationships with

customers, with the aimof improving customer satisfaction and
maximizing profits; identifying the most profitable customers and
providing them the highest level of service.

 Providing employees with the information and processes

necessary to know their customers, understand their needs, and
effectively build relationships between the company, its customer
base, and distribution partners.

CRM--Customer Relationship Management--has entered the

mainstream. Despite the uncertainty of the economy, CRM is being
thrust into corporate budgets and talked about as a critical initiative
by hundreds of Fortune 1,000 and tens of thousands of other
companies. It has gone from being an important edge in the business
world to a necessary tool for survival. The notion of the customer as
king or queen is once again the rule. How you treat this is a mission-
critical business issue.

But, what is CRM and how does it change the way companies do
business? The changes in the world have been so dynamic and so
dramatic that the path is not necessarily all that obvious. How CRM
impacts that business path is a continuing source of debate in the
world of corporate management.

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 Managing relationships with customers has become a critical
organizational competency. Get winning strategies for acquiring and
retaining customers by leveraging the latest advanced technologies.
This course will teach you how to select the right tools for your
business-- so it can grow today--and on into the future. Lagging
means lost customers, which means damage to the bottom line. But
how do you not lag when customers are moving lightning fast to
demand constant changes in the speed to complete their
transactions? How do you keep your customers when the move to
another company is nothing more than a mouse click and a minute
away?

CRM is the answer. Customer Relationship Management, a

strategy that leverages very advanced technologies is the way to cut to
the 21st Century business chase.

History of CRM

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 Customer Relationship Management (CRM) is one of those
magnificent concepts that swept the business world in the 1990’s with
the promise of forever changing the way businesses small and large
interacted with their customer bases. In the short term, however, it
proved to be an unwieldy process that was better in theory than in
practice for a variety of reasons. First among these was that it was
simply so difficult and expensive to track and keep the high volume of
records needed accurately and constantly update them. In the last
several years, however, newer software systems and advanced
tracking features have vastly improved CRM capabilities and the real
promise of CRM is becoming a reality. As the price of newer, more
customizable Internet solutions have hit the marketplace;
competition has driven the prices down so that even relatively small
businesses are reaping the benefits of some custom CRM programs.

In the beginning…

The 1980’s saw the emergence of database marketing, which

was simply a catch phrase to define the practice of setting up
customer service groups to speak individually to all of a company’s
customers. In the case of larger, key clients it was a valuable tool for
keeping the lines of communication open and tailoring service to the
clients needs. In the case of smaller clients, however, it tended to
provide repetitive, survey-like information that cluttered databases
and didn’t provide much insight. As companies began tracking
database information, they realized that the bare bones were all that
was needed in most cases: what they buy regularly, what they spend,
what they do.

Advances in the 1990’s

In the 1990’s companies began to improve on Customer

Relationship Management by making it more of a two-way street.
Instead of simply gathering data for their own use, they began giving
back to their customers not only in terms of the obvious goal of
improved customer service, but in incentives, gifts and other perks for
customer loyalty. This was the beginning of the now familiar frequent
flyer programs, bonus points on credit cards and a host of other
resources that are based on CRM tracking 3333 customer activity and

7
spending patterns. CRM was now being used as a way to increase
sales passively as well as through active improvement of customer
service.

True CRM comes of age

Real Customer Relationship Management as it’s thought of

today really began in earnest in the early years of this century. As
software companies began releasing newer, more advanced solutions
that were customizable across industries, it became feasible to really
use the information in a dynamic way. Instead of feeding information
into a static database for future reference, CRM became a way to
continuously update understanding of customer needs and behavior.
Branching of information, sub-folders, and custom tailored features
enabled companies to break down information into smaller subsets so
that they could evaluate not only concrete statistics, but information
on the motivation and reactions of customers. The Internet provided
a huge boon to the development of these huge databases by enabling
offsite information storage, where before companies had difficulty
supporting the enormous amounts of information. The Internet
provided new possibilities and CRM took off as providers began
moving toward Internet solutions. With the increased fluidity of these
programs came a less rigid relationship between sales, customer
service and marketing. CRM enabled the development of new
strategies for more cooperative work between these different
divisions through shared information and understanding, leading to
increased customer satisfaction from order to end product.

Today, CRM is still utilized most frequently by companies that

rely heavily on two distinct features: customer service or technology.
The three sectors of business that rely most heavily on CRM -- and
use it to great advantage -- are financial services, a variety of high
tech corporations and the telecommunications industry. The financial
services industry in particular tracks the level of client satisfaction
and what customers are looking for in terms of changes and
personalized features. They also track changes in investment habits
and spending patterns as the economy shifts. Software specific to the
industry can give financial service providers truly impressive
feedback in these areas.

8
 In recent years however, several factors have contributed to the
rapid development and evolution of CRM. These include: -

1. The growing de-intermediation process in many industries due to

the advent of sophisticated computer and telecommunication
technologies that allow producers to directly interact with end-
customers. For example, in many industries such as airlines, banks
insurance, software or household appliances and even consumables,
the de-intermediation process is fast changing the nature of
marketing and consequently making relationship marketing more
popular. Databases and direct marketing tools give them the means to
individualize their marketing efforts.

2. Advances in information technology, networking and

manufacturing technology have helped companies to quickly match
competition. As a result product quality and cost are no longer
significant competitive advantages.

3. The growth in service economy. Since services are typically

produced and delivered at the same institution, it minimizes the role
of the middlemen.

4. Another force driving the adoption of CRM has been the total
quality movement. When companies embraced TQM it became
necessary to involve customers and suppliers in implementing the
program at all levels of the value chain. This needed close working
relationships with the customers. Thus several companies such as
Motorola, IBM, General Motors, Xerox, Ford, Toyota, etc formed
partnering relations with suppliers and customers to practice TQM.
Other programs such as JIT and MRP also made use of
interdependent relationships between suppliers and customers.

5. Customer expectations are changing almost on a daily basis. Newly

empowered customers, who choose, how to communicate with the
companies’ various available channels? Also nowadays consumers
expect a high degree of personalization.

6. Emerging real time, interactive channels including e-mail, ATMs

and call centre that must be synchronized with customer’s non-

9
electronic activities. The speed of business change, requiring
flexibility and rapid adoption to technologies.

7. In the current era of hyper competition, marketers are forced to be

more concerned with customer retention and customer loyalty.

8. As several researches have found out retaining customers is less

expensive and more sustainable competitive advantage than
acquiring new ones.

9. On the supply side it pays more to develop closer relationships with

a few suppliers than to develop more vendors.

10. The globalization of world marketplace makes it necessary to

have global account management for the customers.

Definition: -
“CRM is concerned with creating improved shareholder value
through the use of customer centric business processes and the
development of appropriate relationships with consumers.”

Implementing CRM:

CRM requires an integration of a firm's resources; people,

operations and marketing capabilities to deliver added value to the
customers. CRM should provide businesses and organizations with a
‘single view’ of their customers and across irrespective of the
interactive channel or medium through which the customer accesses
the service or product. For example, a business (e.g. hotel) customer’s
profile and personal references should be accessible to the business
(or hotel) irrespective of channel i.e. whether the customer books
online, calls in or walks into any location should not make a
difference to the service provided based on the personal profile of the
business client.

It is enabled through:

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 Information
 Processes
 Technology
 Applications

A firm that wants to implement CRM must align it's business

processes cross-functionally in the best possible way to allow
increased customer focus with an aim to deliver added value to the
customer.

To implement CRM, the following steps must be followed:

 Develop a CRM framework

 Align current business processes
 Design new cross-functional business processes (where
required)
 Develop Functional Specifications (client-side services)
 Develop Technical Specifications
 Match Technical Specifications to available technology
(Systems, software, etc)
 Product Configuration
 Data Migration and Integration
 Staff Training

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 Customer Segmentation: For CRM to be effective, the
organization’s customer base must be stratified into segments based
on commonalities amongst groups’ of individuals and customers. This
also requires the organization to have strategies to target consolidated
customer segments.

 Reduced Cost of Service: a customer relationship strategy

should reduce the cost of service for both the organization and it’s
customers and increase satisfaction levels.

 Service as a differentiator: The more competitive a market

becomes the more a business will need to rely on its superior product
quality and quality of service to differentiate itself from other
businesses and providers.

 Tie-in’s over time: The greater the effort a customer spends on

a relationship over time, the greater the customer’s stake in helping to
ensure that the relationship works and the more convenient and loyal
the customer becomes.

Pitfalls to avoid:
Many CRM programs fail for two reasons:

1. Lack of supportive business processes: Because business

processes and organizational goals are not part of a strategic CRM
plan tied to organizational goals and objectives.

2. Lack of an enterprise perspective: For Relationship Marketing

to be effective, it requires that the organization creates a seamless
enterprise view. A lot of CRM programs fail because they are
assembled with disparate components that aren't designed to work
together as part of a complete CRM system designed to meet
organizational objectives.

12
Customer Relationship Management
Model

CREATE A DATA BASE

ANALYSIS

CUSTOMER SELECTION

CUSTOMER TARGETING

RELATIONSHIP MARKETING

PRIVACY ISSUES

METRICS

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 Customer Retention Programs

FREQUENCY/
LOYALTY
PROGRAMS

CUSTOMIZATION
CUSTOMER
SERVICE

CUSTOMER
RELATIONSHIP
MANAGEMENT
SATISFACTION

REWARDS COMMUNITY
PROGRAMS BUILDING

14
 Objective of the study of CRM

CRM, in its broadest sense, means managing all interactions

and business with customers. This includes, but is not limited to,
improving customer service. A good CRM program will allow a
business to acquire customers, service the customer, increase the
value of the customer to the company, retain good customers, and
determine which customers can be retained or given a higher level of
service. A good CRM program can improve customer service by
facilitating communication in several ways:

 Provide product information, product use information, and

technical assistance on web sites that are accessible 24 hours a day, 7
days a week

 Identify how each individual customer defines quality, and then

design a service strategy for each customer based on these individual
requirements and expectations.

 Provide a fast mechanism for managing and scheduling follow-

up sales calls to assess post-purchase cognitive dissonance,
repurchase probabilities, repurchase times, and repurchase
frequencies.

 Provide a mechanism to track all points of contact between a

customer and the company, and do it in an integrated way so that all
sources and types of contact are included, and all users of the system
see the same view of the customer (reduces confusion).

15
 Help to identify potential problems quickly, before customer
occur

 Provide a user-friendly mechanism for registering customer

complaints (complaints that are not registered with the company
cannot be resolved, and are a major source of customer
dissatisfaction).

 Provide a fast mechanism for handling problems and

complaints (complaints that are resolved quickly can increase
customer satisfaction).
 Provide a fast mechanism for correcting service deficiencies
(correct the problem before other customers experience the same
dissatisfaction).

 Use internet cookies to track customer interests and personalize

product offerings accordingly

 Use the Internet to engage in collaborative customization or

real-time customization

 Provide a fast mechanism for managing and scheduling

maintenance, repair, and ongoing support (improve efficiency and
effectiveness)

 Mechanism to evaluate Potential KOMs.

 To develop integrated Database.
 Assessing the need of Potential KOMs.
 Ways to meet those needs.
 Identify the softer elements.
 Devising a way to Retain and grow with those KOMs.
 Moving further ahead Satisfaction Delightment LOYALITY
 To develop Strategy and action plan on quarter & annual basis.
 To gain knowledge about consumer behaviour
 To know, how to maintain relationship with customer?
 To know, the needs analysis of customer
 To understand, with the help of feedback form that why
customers are not trading with Angel
 To know, the customer perception about company’s products &
services

16
 To know, the grievances among the customers about products &
services

The CRM program can be integrated into other cross-functional

systems and thereby provide accounting and production information
to customers when they want it.

 Keeping Existing Customers

Grading customers from very satisfied to very disappointed should

help the organization in improving its customer satisfaction levels
and scores. As the satisfaction level for each customer improves, so
shall the customer retention with the organization.

 Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life

stage and life event trigger points by customer, marketers can
maximize share of purchase potential. Thus the single adults shall
require a new car stereo and as he grows into a married couple his
needs grow into appliances.

 Increase Loyalty

Loyal customers are more profitable. Any company will like its
mindshare status to improve from being a suspect to being an
advocate. Company has to invest in terms of its product and service
offerings to its customers. It has to innovate and meet the very needs
of its customers so that they remain as advocates on the loyalty curve.
Referral sales invariably are low cost high margin sales.

17
Research Methodology for CRM
Meeting and satisfying each customer’s need uniquely and
individually. In the mass markets individualized information on
customers is now possible at low costs due to the rapid development
in the information technology and due to availability of scalable data
warehouses and data mining products. By using online information
and databases on individual customer interactions, marketers aim to
fulfill the unique needs of each mass-market customer. Information
on individual customers is utilized to develop frequency marketing,
interactive marketing, and after marketing programs in order to
develop relationship with high-yielding customers. In the context of
business-to-business markets, individual marketing has been in place
of quite sometime. Known as Key Account Management Program,
here marketers appoint customer teams to husband the company
resources according to individual customer needs.

Continuity Marketing Programs

Take the shape of membership and loyalty card programs where

customers are often rewarded for their member and loyalty
relationships with the marketers. The basic premise of continuity
marketing programs is to retain customers and increase loyalty
through long-term special services that has a potential to increase
mutual value through learning about each other.

Partnering Programs

The third type of CRM programs is partnering relationships

between customer and marketers to serve end user needs. In the mass

18
markets, two types of partnering programs are most common: Co-
branding and affinity partnering. Missing process of CRM
Traditionally customer relationship management (CRM) revolves
around the three functions of selling, marketing and support. Various
process models have been built around how these functions are
integrated and operated in a customer oriented enterprise. There is
however a fourth critical function that is lacking in most CRM
models.
The fourth function that often is the source of a competitive
edge is that of innovation. Companies must continually reinvent
themselves to deliver an improved and often a totally new value
offering to their customer base. CRM must provide the customer
intelligence that feeds information back into the enterprise’s
knowledge management processes where it can trigger new
innovation processes. When CRM is integrated into the innovation
process, significant value can be derived from faster time to market
cycle times and with new processes and services. Marketing
automation must ensure that the innovation processes are actually
market driven. A market driven innovation process must include both
strategies that are focused on satisfying customer requirements as
well as strategies focused at redefining customer requirements. Sales
automation should be integrated with the innovation process by
ensuring that all sales channels are prepared and ready to take new
processes and services to market before competitive forces can react.
Customer service automation must be designed to empower the
customer with the option of assisting with the design of the value
offering. Redefining CRM around innovation, sales, marketing and
service can identify new competitive opportunities for an enterprise.
The remaining question is whether companies are prepared to take
the initiative and expand the definition of customer relationship
management to include the process of innovation. The pressure to
deliver results within the traditional definition of CRM already
overwhelms companies. The dialog must start rather earlier than later
because the competitive window of traditional CRM is decreasing and
customer demands for a more innovative and responsive enterprise
will increase

Architecture of CRM

There are three parts of application architecture of CRM:

19
1. Operational - automation to the basic business processes
(marketing, sales, service)
2. Analytical - support to analyze customer behavior, implements
business intelligence aliketechnology
3. Collaborative - ensures the contact with customers (phone,
email, fax, web, SMS, post, in person)

1. Operational CRM

Operational CRM means supporting the "front office" business

processes, which include customer contact (sales, marketing and
service). Tasks resulting from these processes are forwarded to
resources responsible for them, as well as the information necessary
for carrying out the tasks and interfaces to back-end applications are
being provided and activities with customers are being documented
for further reference. Operational CRM provides the following
benefits:

 Delivers personalized and efficient marketing, sales, and service

through multi-channel collaboration

 Enables a 360-degree view of your customer while you are

interacting with them

 Sales people and service engineers can access complete history

of all customer interaction with your company, regardless of the
touch point. The operational part of CRM typically involves three
general areas of business:

Sales force automation (SFA)

SFA automates some of the company's critical sales and sales

force management functions, for example, lead/account
management, contact management, quote management, forecasting,
sales administration, keeping track of customer preferences, buying
habits, and demographics, as well as performance management. SFA
tools are designed to improve field sales productivity. Key
infrastructure requirements of SFA are mobile synchronization and
integrated product configuration.

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Customer service and support (CSS)

CSS automates some service requests, complaints, product

returns, and information requests.
Traditional internal help desk and traditional inbound call-center
support for customer inquiries are now evolved into the "customer
interaction center" (CIC), using multiple channels (Web, phone/fax,
face-to-face, kiosk, etc). Key infrastructure requirements of CSS
include computer telephony integration (CTI) which provides high
volume processing capability, and reliability.

Enterprise marketing automation (EMA)

EMA provides information about the business environment,

including competitors, industry trends, and macro-environmental
variables. It is the execution side of campaign and lead management.
The intent of EMA applications is to improve marketing campaign
efficiencies. Functions include demographic analysis, variable
segmentation, and predictive modeling occurs on the analytical
(Business Intelligence) side.

Integrated CRM software is often also known as "front office

solutions." This is because they deal directly with the customer. Many
call centers use CRM software to store all of their customer's details.
When a customer calls, the system can be used to retrieve and store
information relevant to the customer. By serving the customer quickly
and efficiently, and also keeping all information of a customer in one
place, a company aims to make cost savings, and also encourage new
customers.

CRM solutions can also be used to allow customers to perform

their own service via a variety of communication channels. For
example, you might be able to check your bank balance via your WAP
phone without ever having to talk to a person, saving money for the
company, and saving your time.

2. Analytical CRM

21
 In analytical CRM, data gathered within operational CRM
and/or other sources are analyzed to segment customers or to identify
potential to enhance client relationship. Customer analysis typically
can lead to targeted campaigns to increase share of customer's wallet.
Examples of Campaigns directed towards customers are:

 Acquisition: Cross-sell, up-sell

 Retention: Retaining customers who leave due to maturity or
attrition.
 Information: Providing timely and regular information to
customers.
 Modification: Altering details of the transactional nature of the
customers' relationship.
 Analysis typically covers but is not limited to:
 Decision support: Dashboards, reporting, metrics, performance
etc.
 Predictive modeling of customer attributes
 Strategy and Research Analysis of Customer data may relate to
one or more of the following analyses:
 Contact channel optimization
 Contact Optimization
 Customer Acquisition / Reactivation / Retention
 Customer Segmentation
 Customer Satisfaction Measurement / Increase
 Sales Coverage Optimization
 Fraud Detection and analysis
 Financial Forecasts
 Pricing Optimization
 Product Development
 Program Evaluation
 Risk Assessment and Management

Data collection and analysis is viewed as a continuing and

iterative process. Ideally, business decisions are refined over time,
based on feedback from earlier analysis and decisions. Therefore,
most successful analytical CRM projects take advantage of a data
warehouse to provide suitable data. Business Intelligence is a related
discipline offering some more functionality as separate application
software.

22
 3. Collaborative CRM

Collaborative CRM facilitates interactions with customers

through all channels (personal, letter, fax, phone, web, e-mail) and
supports co-ordination of employee teams and channels. It is a
solution that brings people, processes and data together so companies
can better serve and retain their customers. The data/activities can be
structured, unstructured, conversational and/or transactional in
nature.

Collaborative CRM provides the following benefits:

 Enable efficient productive customer interactions across all

communications channels
 Enables web collaboration to reduce customer service costs
 Integrates call centers enabling multi-channel personal
customer interaction
 Integrates view of the customer while interaction at the
transaction level

23
Literature Review
Company Profile:
Himachal Tour and Travels is one of the leading and
professionally managed stock broking firm involved in quality
services and research. Himachal Tour and Travels is a corporate
member of The Stock Exchange, Bhopal.
The membership of the company with The Stock Exchange
Bhopal was originally in the name of Arpit Saxena, which was
eventually turned into a corporate membership in the name of
Himachal Tour and Travels .
Himachal Tour and Travels is managed by Mr. Dinesh Thakkar
and he is well supported by Arpit Saxena, a fifteen years veteran in
the market.
The group is well supported by a professional and qualified
research team and efficient operations and back office team, which
comprises of highly dedicated and qualified individuals. Himachal
Tour and Travels has an in-house, state of art research department.
Himachal Tour and Travels believes in reaching out to the
customer at the farthest end rather than by reaching out to them. The
company in its Endeavour to give its client the best has opened up
several branches all over Bhopal, which are efficiently integrated with
the Head Office.
Himachal Tour and Travels is primarily into retail stock
broking, with a customer base of retail investors, which has been
increasing at a compounded growth rate of 100% every year. The
company has huge network sub-brokers in Bhopal and other places
outside Bhopal, registered with SEBI, who act as channel partners for
the company. The company presently has the total staff strength of
around 150 employees who are spread accordingly across the head
office and all the branches.

24
 Himachal Tour and Travels has empowered its physical
presence throughout India through various strategies which it has
been adopting efficiently and effectively over a period of time, like
opening up of branches at various places, tie-ups with various
agencies and sales agents, buy-outs of smaller regional outfits and
appointment of sub-brokers and franchisees. Moreover, Himachal
Tour and Travels Broking has been tapping and including high net-
worth and self-employed individuals to its vast array of clients.
Himachal Tour and Travels has always strived in the direction
of delivering ultimate client satisfaction and developing stronger
bonds with its customers and chose partners. Himachal Tour and
Travels has a vision to introduce new and innovative products and
services regularly. Moreover Himachal Tour and Travels has been one
among the pioneers to introduce the latest technological innovations
and integrate it efficiently within its business.

Himachal Tour and Travels Broking Ltd tryst with excellence in

customer relations began in 1987. Today, Himachal Tour and Travels
has emerged as one of the most respected Stock-Broking and Wealth
Management Companies in India. With its unique retail-focused
stock trading business model, Himachal Tour and Travels is
committed to providing ‘Real Value for Money’ to all its clients.

The Himachal Tour and Travels Group is a member of the

Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and
the two leading Commodity Exchanges in the country: NCDEX &
MCX. Himachal Tour and Travels is also registered as a Depository
Participant with CDSL

Himachal Tour and Travels Business

 Equity Trading
 Commodities
 Portfolio Management Services
 Mutual Funds Life Insurance
 Personal Loans
 IPO
 Depository Services
 Investment Advisory
Himachal Tour and Travels Presence

25
 Nation-wide network of 21 Regional Hubs
 Presence in 124 cities
 Over 6810 Sub-Brokers & Business Associates
 More than 5.9 lakh Clients

Himachal Tour and Travels Group

 Himachal Tour and Travels Broking Ltd.
 Himachal Tour and Travels Capital & Debt Market Ltd.
 Himachal Tour and Travels Commodities Broking Ltd.
 Himachal Tour and Travels Securities Ltd.

Directors: -
 Arpit Saxena Director – Research

26
 Arpit Saxena is the motivating force behind Angel’s highly
acclaimed Research team. He’s been a part of the senior management
team since the Himachal Tour and Travels Group’s inception. His
technical and fundamental outlook has provided impetus to Angel’s
market research team. Research-based & personalized advisory
services are Angel’s forte, and Arpit Saxena has undoubtedly been the
brain behind it.

When it comes to analyzing the market, Arpit Saxena is truly a

genius. His hands-on experience and fundamental knowledge of the
market can predict the market trend early. His views on the market
trend are often quoted in the print and electronic media.

Products and Services

We have been trained and introduced to various

product and services, which are as follows:

E-Broking: -
Himachal Tour and Travels offers several user-friendly services
to customers so that they can manage their stock portfolio. Including,
online capabilities linked to an information database to help
customers invest, confidently. Our e-broking services are specially
designed for the net-savvy traders and investors who prefer operating
from their home or office, through the internet.
There are two types of software.

1. Browser-Based
 Himachal Tour and Travels Investor
 Himachal Tour and Travels Trade
2. Application-Based
 Himachal Tour and Travels Diet
 Himachal Tour and Travels Anywhere

USP’s of Himachal Tour and Travels E-broking

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 Multiple Exchanges on a single screen- BSE, NSE-F&O, MCX,
NCDEX
 Hot keys similar to broker’s terminal
 Streaming quotes
 Products/Software/Back office training for all E-broking clients
 In-depth research & technical chart, intra-day calls
 24x7 Back-office
 Viewing ledger, Bills, Contracts, Sauda summary, Open
Position, Holdings, DP Transactions, Auction Details.
 Auto pay-in of shares & Online Securities Pay-Out
 Instant transfer of fund & Online Funds pay-out request
 Highly secure and confidential

Portfolio management service

Successful investing in Capital Markets demands ever more
time and expertise. Investment Management is an art and a science in
itself. Professional Investment Management Services are no longer
the privilege of only large institutional investors. Portfolio
Management Services (PMS) is one such service that is fast gaining
eminence as an investment avenue of choice for High Networth
Investors like you. PMS is a sophisticated investment vehicle that
offers a range of specialized investment strategies to capitalize on
opportunities in the market. The Portfolio Management Service
combined with competent fund management, dedicated research and
technology, ensures a rewarding experience for its clients.

PRODUCT BOUQUET
a- Himachal Tour and Travels Oyster
Chief Investment Officer Mr. Rajen Shah

Bottom up concentrated portfolio of Mid Cap & Small Cap

Companies with emphasis on Value Investing.

28
Investor Profile:
• The scheme would be suited for investors with medium to high risk
appetite having long term perspective

Fees and Charges

2% Asset Management Charges
0.50% brokerage on transactions

b- Himachal Tour and Travels Blue-chip

Fund Manager Mr. Phani Sekhar

Diversified Equity portfolio of Large cap & Mid Cap Companies.

Investor Profile:
• The scheme would be suited for investors with medium to low risk
appetite, having long term perspective.

Fees and Charges

• 2% Asset Management Fees
• 0.50% Brokerage on transactions

Himachal Tour and Travels Equity Derivatives Fund

Fund Manager Mr. Siddarth Bhamre

Bottom-Up concentrated portfolio with Equities & Derivatives,

and emphasis on Hedging by using volatility in the Markets.

Investor Profile:
• The scheme would be suited for investors with low to medium
risk appetite, having long term perspective.
• Suitable for HNI Clients and Corporate who want to park
money for consistent Return from the market even if market
remained flat.

Fees and Charges

• 2% Asset Management Charges
• 0.10% on Delivery and Rs.50 flat on options, 0.01% on futures

c- Himachal Tour and Travels Growth

Fund Manager Mr. Phani Sekhar

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 Diversified Equity portfolio of Large cap & Mid Cap Companies
with emphasis on growth Investment.

Investor Profile:
• The scheme would be suited for investors with moderate risk
appetite.
• Recommended investment horizon is 15 to 18 months.

Fees and Charges:

• 2% Asset Management Charges
• 0.5% brokerage on transactions

PMS characteristics: -

 Personalized Service
 Interaction with Fund Manager
 Regular feedback and reports
 Pro-active management of funds
 Holdings not impacted by entry/exit of big investors
 Can remain liquid for long periods
 Disciplined investment process
 Quality investments
 Limiting risk
 Low portfolio turnover
 Focus on generating Absolute returns rather than Relative
Returns

Himachal Tour and Travels Gold-

Product- Features of Himachal Tour and Travels Gold

 A premium service for clients who needs professional guidance

on
 long term investments
 Minimum funds or portfolio of Rs.1 Lakh and maximum of Rs.4
Lakhs will be eligible for Himachal Tour and Travels Gold..
 Brokerage of 0.50%-0.75% for clients. 50% sharing of brokerage
in case of Sub-broker’s clients.

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 No AMC, No Entry/Exit load and No profit sharing
 Shares can be kept in Himachal Tour and Travels pool or can be
transferred to the respective DP accounts
 Intimation regarding transaction will be given to clients by
evening of the day of transaction
 No Lock-in period. Profits can be redeemed or re-investing
based on client’s wish

 Existing client account can be used for Himachal Tour and

Travels GOLD. Clients can do there own transactions in the same
account as well.
 Research Director Arpit Saxena along with 12 senior analysts
will take investment decisions
 Investment will be done for a longer time horizon. (12-18
Months)
 Browser based BO software for clients and branches
 Monthly Newsletter will be released from Himachal Tour and
Travels GOLD desk
 Periodic meetings will be held in the branches

POSITIONING

 Himachal Tour and Travels GOLD is positioned as an equity

investment option for all those investors who aim for realistic return
from equity as an asset class on a long term perspective.
 It is for the investors who, wishes to seek professional advice for
their investments.

Unique selling Preposition (USP)

 A strong team of 11 sector specific analysts headed by Research

director guiding the investments
 No Entry/Exit load, No profit sharing, No Management fees
 A corpus limit as low as Rs.1 Lakh.
 A portfolio of growth stocks and not market capitalization bias.
 Flexibility of reinvesting, redeeming and liquidating the
portfolio
 A low cost solution for investing.

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 Product Segment

 Himachal Tour and Travels GOLD is for the people who fall in
middle class – higher middle class section of the society
 People who are not risk averse and can understand the return
 benefits vis-à-vis calculated risk taken
 People who are new entrant to the equity markets, normally
coming through the Mutual Fund route.

Target Customers

 Young professionals earning salaries around Rs.3 Lacs to Rs.6

Lacs with one or two years experience
 Middle aged professionals considering traditional ways of
investing i.e. FDs, PPF, gold, bonds, etc.
 Small scale businessmen who are not risk averse and will
understand the importance of reasonable returns
 Retired people who have taken hefty VRS or has savings of
which 20-25% can be invested in equities

Margin Funding and prepaid brokerage

Margin Funding

“Margin Funding” allow you to take higher exposure on the

funds as well as unlock the value of your existing portfolio & take
advantage of investment opportunities in the market without the
involvement of fresh funds. One can use the shares in his current
portfolio to make fresh purchases in the market. If utilized prudently,
this product can help unlock the value of Securities even during
depressed Stock Market conditions and provide customers with the
much-needed liquidity during pressing times.

Advantages:

 Provide instant liquidity without having to sell your Securities.

32
 Allow you to grab investment opportunities instantly without
any need to pay first.
 Leverage your funds available for investments.
 Benefits like bonuses and dividends continue to accrue to the
borrower.
 Any appreciation in the value of the Securities given as margin
would automatically allow enhancement in drawing power.
 Interest calculated on the amount utilized & the time for which
it is utilized.

Pre-Paid Brokerage

Pre-paid brokerage is one of the best schemes for customers to

take the advantages of less brokerage. Different pre-paid recharge are
available with different validity. Some characteristics of pre-paid
brokerage are as follows: -

 Zero account opening charges

 Attractive Brokerage Rate
 Free DP AMC for 1 year
 Assured gifts worth thousands with every account.
 Easy & Fast Recharge
 Free Financial Investment Application with every account

Quality Assurance

Himachal Tour and Travels Broking is the First Brokerage

House to have a Quality Assurance Cell across Industry Dedicated QA
teams at CSO & branches to resolve client queries/ complaints
through telephone, email or visit. Quality assurance cell is one such
significant milestone achieved by the company, which stands for its
performance. Established in 2005,the cell was set up as the
compelling need was felt to shift from ‘customer satisfaction to
customer delight” definition of Quality- Product and services that
totally satisfy and often exceed customer needs and expectations in all
respect to delight him.

33
 Simply put, Quality is achieving a high degree of excellence in
all forms of activities from design, development, serving and
documentation. “Right First Time and Right Every Time”. And to
achieve that, they follow the 4 ‘P’ Quality model:

 Problem solving-continuous improvement and learning

 People and Partners-Respect, challenge, growth
 Process-Standardized tasks for continuous improvement
 Philosophy-Long term thinking
Research & Advisory
The markets ended Monday marginally in the green, after
opening weak due to concerns about Swine flu. The Indices were
weak at the outset of the Tuesday ending the day in red. Markets
surged on Wednesday on positive global cues and short covering in
April 2009 derivatives contracts. The markets remained closed both
on Thursday and Friday. The markets just ended the week positive,
with the Sensex gaining 0.7% and the Nifty closing marginally lower
by 0.2%

Fundamental Analysis

Fundamental analysis is one of the most useful tools that

investors use when making decisions about which stocks they’re
going to buy. It is a process of examining key ratios that show the
current worth of a stock and the recent performance of a company.
Fundamental analysis is used to determine the amount of money a
company can make and the kind of earnings an investor can expect.
Future earnings may be subject to interpretation but good earning
histories create confidence among investors. The stock prices may
increase and the dividends may pay out.

Stock market analysts determine whether a company is meeting

its expected growth by examining the earnings that are reported by
the company on a regular basis. If the company doesn’t meet its
expected growth, the prices of its stocks usually experience a
downturn.

34
 There are a lot of tools that are used to determine the earnings
and the value of a company on the stock market. Most of these tools
rely on the financial statements released by the company. Details
about the value of a company which include competitive advantages
and ownership ratios between the management and the outside
investors can be revealed through further fundamental analyses.

Fundamental analysis is for the rational man

 To make financial forecasts

 To conduct a company stock valuation & predict its
probable price evolution
 To make a projection on its business performance
 To evaluate its management and make internal business
decisions
 To calculate its credit risk

Technical Analysis

The art and science of examining stock chart data and

predicting future stock market movements is called technical
analysis. This style of analysis is used by investors who are often
concerned about the nature and the value of the companies
where they trade their stocks in. The holdings are usually short-
term since the investors drop the stocks once they reach their
projected profit.

The belief that stock prices move in predictable patterns is

the basis for technical analysis. The factors that influence the
movement of the price are supposedly reflected in the stock
market with great efficiency. These factors include company
performance, economic status, and natural disasters. The

35
 efficiency, when coupled with historical trends, produces
movements that can be analyzed and applied to the future
movements of the stock market. Because the fundamental
information about the potential growth of a company is not taken
into account, technical analysis is not intended for long-term
investments. Trades are entered and exited at precise times so
technical analysts need to spend a lot of time watching the
movements of the stock market. Investors can take advantage of
both upswings and downswings in price by going either long or
short. In the event that the market doesn’t move as expected, the
losses can be limited by stop-loss orders.

Hundreds of stock patterns have been developed over time.

Most of these patterns rely on the basic concepts of “support”
and “resistance.” The level where downward prices are expected
to rise from is called the support while the level where the
upward prices are expected to reach before falling again is called
the resistance. Once they hit the support or the resistance levels,
the prices tend to bounce.

Value Added Services

 NRI Service Desk for personalized Assistance

 Dedicated Offline Equity Dealing Desk
 Online Equity Trading Platform
 NRI Investment Advisory Desk
 PAN card Assistance
 Support for Banking & PIS Account
 Portfolio Management, Mutual Fund, IOP Services

36
Training

A training program can serve a range of diverse purposes, and

organizations initiate training programs for many different reasons.
One of the strongest need of training is to respond to challenges
presented by new technology. Customer Relationship Management
training at Himachal Tour and Travels Broking helped us to meet the
challenges in current market scenario. We came to know about
maintaining long lasting customer relationship. We were covered by
Motivational speeches by Board of directors, Product and services,
Role plays, Brain storming, Scrip designing, Back office, Different
departments at Himachal Tour and Travels and the way they execute
their tasks, Research and Advisory, Wealth management services,
Value added services and healthy discussions ,Which are as follows in
detail:

Importance & Needs of Training

Optimum Utilization of Human Resources – Training helps in

optimizing the utilization of human resource that further helps the
employee to achieve the organizational goals as well as their
individual goals.

Development of Human Resources – Training helps to provide an

opportunity and broad structure for the development of human
resources’ technical and behavioral skills in an organization. It also
helps the employees in attaining personal growth.

37
Development of skills of employees – Training helps in increasing the
job knowledge and skills of employees at each level. It helps to
expand the horizons of human intellect and an overall personality of
the employees.

Productivity – Training helps in increasing the productivity of the

employees that helps the organization further to achieve its long-term
goal.

Team spirit – Training helps in inculcating the sense of team work,

team spirit, and inter-team collaborations. It helps in inculcating the
zeal to learn within the employees.

Organization Culture – Training helps to develop and improve the

organizational health culture and effectiveness. It helps in creating
the learning culture within the organization.

Organization Climate – Training helps building the positive

perception and feeling about the organization. The employees get
these feelings from leaders, subordinates, and peers.

Quality – Training helps in improving upon the quality of work and

work-life.

Healthy work-environment – Training helps in creating the healthy

working environment. It helps to build good employee, relationship
so that individual goals aligns with organizational goal.

Health and Safety – Training helps in improving the health and

safety of the organization thus preventing obsolescence.

Morale – Training helps in improving the morale of the work force.

Image – Training helps in creating a better corporate image.

Profitability – Training leads to improved profitability and more

positive attitudes towards profit orientation.

38
 Training aids in organizational development i.e. Organization
gets more effective decision making and problem solving. It helps in
understanding and carrying out organizational policies.

Training helps in developing leadership skills, motivation,

loyalty, better attitudes, and other aspects that successful workers
and managers usually display.

METHODS OF TRAINING
The most widely used methods of training used by
organizations are classified into two categories: On-the-Job Training
& Off-the-Job Training.
ON-THE-JOB TRAINING is given at the work place by superior in
relatively short period of time. This type of training is cheaper & less
time-consuming. This training can be imparted by basically four
methods: -

Coaching is learning by doing. In this, the superior guides his sub-

ordinates & gives him/her job instructions. The superior points out
the mistakes & gives suggestions for improvement.

Job Rotation: - In this method, the trainees move from one job to
another, so that he/she should be able to perform different types of
tasks. E.g. In banking industry, employees are trained for both back-
end & front-end jobs. In case of emergency, (absenteeism or
resignation), any employee would be able to perform any type of job.

OFF THE JOB TRAINING is given outside the actual work place.

Lectures/Conferences:- This approach is well adapted to convey

specific information, rules, procedures or methods. This method is
useful, where the information is to be shared among a large number
of trainees. The cost per trainee is low in this method.

Video Clips can provide information & explicitly demonstrate skills

that are not easily presented by other techniques. Motion pictures are

39
often used in conjunction with Conference, discussions to clarify &
amplify those points that the film emphasized.
Simulation Exercise: - Any training activity that explicitly places the
trainee in an artificial environment that closely mirrors actual
working conditions can be considered a Simulation. Simulation
activities include case experiences, experiential exercises, vestibule
training, management games & role-play.
Cases: - present an in depth description of a particular problem an
employee might encounter on the job. The employee attempts to find
and analyze the problem, evaluate alternative courses of action &
decide what course of action would be most satisfactory.

Experiential Exercises: - are usually short, structured learning

experiences where individuals learn by doing. For instance, rather
than talking about inter-personal conflicts & how to deal with them,
an experiential exercise could be used to create a conflict situation
where employees have to experience a conflict personally & work out
its solutions.
Vestibule Training: - Employees learn their jobs on the equipment
they will be using, but the training is conducted away from the actual
work floor. While expensive, Vestibule training allows employees to
get a full feel for doing task without real world pressures.
Additionally, it minimizes the problem of transferring learning to the
job.

Role Play: - Its just like acting out a given role as in a stage play. In
this method of training, the trainees are required to enact defined
roles on the basis of oral or written description of a particular
situation.

Management Games: - The game is devised on a model of a business

situation. The trainees are divided into groups who represent the
management of competing companies. They make decisions just like
these are made in real-life situations. Decisions made by the groups
are evaluated & the likely implications of the decisions are fed back to
the groups. The game goes on in several rounds to take the time
dimension into account.
In-Basket Exercise: - Also known as In-tray method of training. The
trainee is presented with a pack of papers & files in a tray containing,
administrative problems & is asked to take decisions on these

40
problems & are asked to take decisions on these within a stipulated
time. The decisions taken by the trainees are compared with one
another. The trainees are provided feedback on their performance.

RECOMMENDATIONS & CONCLUSION

No doubt Training is a very powerful tool for the smooth
functioning of the organization, but it needs to be used with care in
order to derive all the benefits. Here are seven recommendations for
getting the best out of this tool: -
1. Learn about the needs and proficiency of each and every employee
before an organization invests its effort, time & money on training. Its
better to identify the needs & shortcomings in an employee before
actually imparting training to him/her.
2. Experienced & skilled trainer, who possesses good amount of
knowledge & understanding about the organization's objectives,
individual abilities & the present environment, should give training.

3. Active participation from the trainees should be encouraged. There

should be a two-way communication between the trainer & trainee.

4. Feedback should be taken from the trainees after the training is

over, so that the organization comes to know about the deficiencies in
the training program & also suggestions to improve upon the same.

5. Focus of training should be on priority development needs and to

produce strong motivation to bring change in employees.
6. The cost incurred on the training program should not exceed its
benefits.

7. The method or type of training should be very cautiously selected

by the organization depending upon the organizations' resources & an
employee's individual need for training.
Thus, training is a vital tool to cope up with the changing needs
& technologies, & ever-changing environment. It benefits both the
organization as well as the employees.

41
Training adopted by us at Himachal Tour and Travels -

We adopted a procedural training to execute our given tasks. A

procedure is a sequence of steps that must be followed to accomplish
a task. These steps may be required a certain level of knowledge or
have mental or physical skills associated with them. A procedure may
be linear, that is, progress from one step to the next until the task is
completed, or a procedure may have one or more decision points
where the student will have to decide which branch of the procedure
to follow next.

For short, simple, linear procedures, the following method of

explanation and demonstration is recommended:

a. The instructor demonstrates the entire procedure and explains

each step as it is done.

b. The instructor repeats the demonstration but has the trainee

explain what actions are occurring.

c. The trainee demonstrates the procedure and explains what he/she

is doing at each step.

d. The trainee demonstrates the procedure again so that the

instructor can check for full mastery.

The instructor continues this "progressive parts" approach until

the entire procedures is explained. It is sometimes appropriate to
combine several simpler steps during the training or address a more
complex step individually before combining it with the entire
training.

For procedures that have decision points, an overview of the

entire procedure is a good starting point. After that the procedure
should be broken up into segments for further instruction. The
decision points within a procedure are good break points for the
segments. An instructor can talk about the sequence of steps prior a
decision point, or the steps between decision points. Depending upon
whether the segments are simple or complex, the methods outlined
above can be used for each segment. The information needed to make
the decisions also needs to be covered at the appropriate point in the

42
 lesson. For more complex decision points, it is recommended that all
segments be explained and demonstrated before discussing the
decision points. It is easier for a person to make a more complex
decision when they understand the steps that make up the alternative
branches of the procedure.

Training Under Different Department-

We have been trained under following departments-

1-Commodities
Commodity markets are markets where raw or
primary products are exchanged. These raw commodities are traded
on regulated commodities exchanges, in which they are bought and
sold in standardized contracts.

 Commodities are easy to Understand and have positive

correlation with Inflation.
 The Commodity market are global in nature , hence less risk for
manipulation.
 Every commodity have separate market in Itself and hence
many such market is simulated at one single screen.
 The trend in one commodity not necessarily have correlation
with the trend of other.
 Historically Commodities have outperformed the Stock Market .
 Diversification through a different asset class.
 Low Margins – 5% - 10% only

Commodities Segment wise (MCX & NCDEX)

43
Metals Oils Energy Softs
Agri.Comm.
Gold Crude palm Oil Brent crude Cotton
Pepper
Silver Mustard Seed Sweet Crude Sugar
Guar seed
Steel Castor oil Furnace oil Guar
Soy Bean
Copper
Jeera
Zinc
Chili
Nickel
Turmeric
Lead &
Aluminum
etc.

Problems faced at the time of training

44
 Though we successfully executed our tasks in our training, we
had to face few problems also and they are-

 Client Data Sheet was not updated, most of them had been
shown with wrong information.

 Most of the clients were not giving appointments and some of

them did not even talk on phone.

 Many of the time when we went to meet the clients with whom
appointments was fixed, after reaching the client’s place they said we
are not available and not even interested.

 A big problem was transportation, Most of the students are out

of the state and not having vehicle, We faced lot many problems to
meet the clients at different corners of Ahmedabad.

 At Himachal Tour and Travels while calling to the customers, it

happened that we did not have sufficient phone available.

 Training room was pre-occupied by full time joined fresher

employee. We faced this problem only 2 to 3 times.

 Variable strategy to execute the tasks

 Wastage of time because of a poor time management

Suggestions to Improve

45
 There should be a fixed strategy for SIP training.

 Team work should be there.

 Data should be up to date, so that we can save the time.

 Participation should be there.

 We should utilize every second.

 The MIS Procedure of company was not proper.

46
Industry Analysis

Industry Analysis at Indian level

1. Introduction

There are two types of market in India.

MONEY MARKET
Money market is a market for debt securities that pay off in
the short term usually less than one year, for example the market for
90-days treasury bills. This market encompasses the trading and
issuance of short term non equity debt instruments including treasury
bills, commercial papers, bankers acceptance, certificates of deposits,
etc.
In other word we can also say that the Money Market is basically
concerned with the issue and trading of securities with short term
maturities or quasi-money instruments. The Instruments traded in
the money-market are Treasury Bills, Certificates of Deposits (CDs),
Commercial Paper (CPs), Bills of Exchange and other such
instruments of short-term maturities (i.e. not exceeding 1 year with
regard to the original maturity)
CAPITAL MARKET
Capital market is a market for long-term debt and equity shares. In
this market, the capital funds comprising of both equity and debt are
issued and traded. This also includes private placement sources of
debt and equity as well as organized markets like stock exchanges.

Capital market can be divided into Primary and Secondary Markets.

Primary Market
In the primary market, securities are offered to public for
subscription for the purpose of raising capital or fund. Secondary
market is an equity trading avenue in which already existing/pre-
issued securities are traded amongst investors. Secondary market
could be either auction or dealer market. While stock exchange is the
part of an auction market, Over-the-Counter (OTC) is a part of the
dealer market.

47
 Secondary Market
Secondary Market refers to a market where securities are
traded after being initially offered to the public in the primary market
and/or listed on the Stock Exchange. Majority of the trading is done
in the secondary market. Secondary market comprises of equity
markets and the debt markets.
For the general investor, the secondary market provides an
efficient platform for trading of his securities. For the management of
the company, Secondary equity markets serve as a monitoring and
control conduit—by facilitating value-enhancing control activities,
enabling implementation of incentive-based management contracts,
and aggregating information (via price discovery) that guides
management decisions.

Difference between the primary market and the secondary

market
In the primary market, securities are offered to public for
subscription for the purpose of raising capital or fund. Secondary
market is an equity trading avenue in which already existing/pre-
issued securities are traded amongst investors. Secondary market
could be either auction or dealer market. While stock exchange is the
part of an auction market, Over-the-Counter (OTC) is a part of the
dealer market.
Main financial products/instruments dealt in the secondary
market
 Equity: The ownership interest in a company of holders of its
common and preferred stock. The various kinds of equity shares are
as follows –

 Equity Shares:
 An equity share, commonly referred to as ordinary share also
represents the form of fractional ownership in which a shareholder,
as a fractional owner, undertakes the maximum entrepreneurial risk
associated with a business venture. The holders of such shares are
members of the company and have voting rights. A company may
issue such shares with differential rights as to voting, payment of
dividend, etc.

 Rights Issue/ Rights Shares: The issue of new securities to

existing shareholders at a ratio to those already held.

48
 Bonus Shares: Shares issued by the companies to their
shareholders free of cost by capitalization of accumulated reserves
from the profits earned in the earlier years.

 Preferred Stock/ Preference shares: Owners of these kind of

shares are entitled to a fixed dividend or dividend calculated at a fixed
rate to be paid regularly before dividend can be paid in respect of
equity share. They also enjoy priority over the equity shareholders in
payment of surplus. But in the event of liquidation, their claims rank
below the claims of the company’s creditors, bondholders / debenture
holders.

 Cumulative Preference Shares: A type of preference shares on

which dividend accumulates if remains unpaid. All arrears of
preference dividend have to be paid out before paying dividend on
equity shares.

 Cumulative Convertible Preference Shares: A type of preference

shares where the dividend payable on the same accumulates, if not
paid. After a specified date, these shares will be converted into equity
capital of the company.

 Participating Preference Share: The right of certain preference

shareholders to participate in profits after a specified fixed dividend
contracted for is paid. Participation right is linked with the quantum
of dividend paid on the equity shares over and above a particular
specified level.

 Security Receipts: Security receipt means a receipt or other

security, issued by a securitisation company or reconstruction
company to any qualified institutional buyer pursuant to a scheme,
evidencing the purchase or acquisition by the holder thereof, of an
undivided right, title or interest in the financial asset involved in
securitisation.

 Government securities (G-Secs): These are sovereign (credit

risk-free) coupon bearing instruments which are issued by the
Reserve Bank of India on behalf of Government of India, in lieu of the
Central Government's market borrowing programme. These

49
 securities have a fixed coupon that is paid on specific dates on half-
yearly basis. These securities are available in wide range of maturity
dates, from short dated (less than one year) to long dated (upto
twenty years).

 Debentures: Bonds issued by a company bearing a fixed rate of

interest usually payable half yearly on specific dates and principal
amount repayable on particular date on redemption of the
debentures. Debentures are normally secured/ charged against the
asset of the company in favour of debenture holder.

 Bond: A negotiable certificate evidencing indebtedness. It is

normally unsecured. A debt security is generally issued by a company,
municipality or government agency. A bond investor lends money to
the issuer and in exchange, the issuer promises to repay the loan
amount on a specified maturity date. The issuer usually pays the bond
holder periodic interest payments over the life of the loan. The
various types of Bonds are as follows-

 Zero Coupon Bond: Bond issued at a discount and repaid at a

face value. No periodic interest is paid. The difference between the
issue price and redemption price represents the return to the holder.
The buyer of these bonds receives only one payment, at the maturity
of the bond.

 Convertible Bond: A bond giving the investor the option to

convert the bond into equity at a fixed conversion price.

 Commercial Paper: A short term promise to repay a fixed

amount that is placed on the market either directly or through a
specialized intermediary. It is usually issued by companies with a
high credit standing in the form of a promissory note redeemable at
par to the holder on maturity and therefore, doesn’t require any
guarantee. Commercial paper is a money market instrument issued
normally for a tenure of 90 days.

Treasury Bills: Short-term (up to 91 days) bearer discount security

issued by the Government as a means of financing its cash
requirements.
2. SEBI

50
 Security Exchange Board of India
SEBI & Its Role In Secondary Market
The SEBI is the regulatory authority established under Section 3 of
SEBI Act 1992 to protect the interests of the investors in securities
and to promote the development of, and to regulate, the securities
market and for matters connected therewith and incidental thereto.
Securities and Exchange Board of India constituted under the
Resolution of the Government of India in the Department of
Economic Affairs No.1 (44)SE/86, dated the 12th day of April, 1988;
The Board shall consist of the following members, namely:-
1. A Chairman
2. Two members from amongst the officials of the Ministry of the
Central Government dealing with Finance (and administration of the
Companies Act, 1956;) 2 of 1934
3. One member from amongst the officials of [the Reserve Bank
4. Five other members of whom at least three shall be the whole-time
members

BOMBAY STOCK EXCHANGE

OF INDIA LIMITED
Bombay Stock Exchange Limited is the
oldest stock exchange in Asia with a rich heritage. Popularly known as
"BSE", it was established as "The Native Share & Stock Brokers
Association" in 1875. It is the first stock exchange in the country to
obtain permanent recognition in 1956 from the Government of India
under the Securities Contracts (Regulation) Act, 1956.
The Exchange's pivotal and pre-eminent role in the
development of the Indian capital market is widely recognized and its
index, SENSEX, is tracked worldwide. Earlier an Association of
Persons (AOP), the Exchange is now a demutualised and corporative
entity incorporated under the provisions of the Companies Act, 1956,
pursuant to the BSE (Corporatization and Demutualization) Scheme,
2005 notified by the Securities and Exchange Board of India (SEBI).
With demutualization, the trading rights and ownership rights
have been de-linked effectively addressing concerns regarding
perceived and real conflicts of interest. The Exchange is
professionally managed under the overall direction of the Board of
Directors.

51
 The Board comprises eminent professionals, representatives
of Trading Members and the Managing Director of the Exchange. The
Board is inclusive and is designed to benefit from the participation of
market intermediaries.
In terms of organization structure, the Board formulates
larger policy issues and exercises over-all control. The committees
constituted by the Board are broad-based. The day-to-day operations
of the Exchange are managed by the Managing Director and a
management team of professionals.
The Exchange has a nation-wide reach with a presence in 417
cities and towns of India. The systems and processes of the Exchange
are designed to safeguard market integrity and enhance transparency
in operations. During the year 2004-2005, the trading volumes on
the Exchange showed robust growth.
The Exchange provides an efficient and transparent market
for trading in equity, debt instruments and derivatives. The BSE's On
Line Trading System (BOLT) is a proprietary system of the Exchange
and is BS 7799-2-2002 certified. The surveillance and clearing &
settlement functions of the Exchange are ISO 9001:2000 certified.

Bombay Stock Exchange Limited (BSE) which was founded in

1875 with six brokers has now grown into a giant institution with over
874 registered Broker-Members spread over 380 cities across the
country. Today, BSE's Wide Area Network (WAN) connecting over
8000 BSE Online Trading (BOLT) System Trader Work Stations
(TWS) is one of the largest of its kind in the country.
With a view to provide efficient and integrated services to the
investing public through the members and their associates in the
operations pertaining to the Exchange, Bombay Stock Exchange
Limited (BSE) has set up a unique Member Services and
Development to attend to the problems of the Broker-Members.
Member Services and Development Department is the single
point interface for interacting with the Exchange Administration to
address to Members' issues. The Department takes care of various
problems and constraints faced by the Members in various products
such as Cash, Derivatives, Internet Trading, and Processes such as
Trading, Technology, Clearing and Settlement, Surveillance and
Inspection, Membership, Training, Corporate Information, etc.

52
 COMMODITY EXCHANGES
There are three categories:

 NCDEX
 MCX

1.
 NMCE

A brief description of commodity exchanges are those which

trade in particular commodities, neglecting the trade of securities,
stock index futures and options etc.

In the middle of 19th century in the United States, businessmen

began organizing market forums to make the buying and selling of
commodities easier. These central marketplaces provided a place for
buyers and sellers to meet, set quality and quantity standards, and
establish rules of business.

Agricultural commodities were mostly traded but as long as

there are buyers and sellers, any commodity can be traded. In 1872, a
group of Manhattan dairy merchants got together to bring chaotic
condition in New York market to a system in terms of storage,
pricing, and transfer of agricultural products.

In 1933, during the Great Depression, the Commodity

Exchange, Inc., was established in New York through the merger of
four small exchanges – the National Metal Exchange, the Rubber
Exchange of New York, the National Raw Silk Exchange, and the New
York Hide Exchange.

53
 The major commodity markets are in the United Kingdom and
in the USA. In India there are 25 recognized future exchanges, of
which there are three national level multi-commodity exchanges.
After a gap of almost three decades, Government of India has allowed
forward transactions in commodities through Online Commodity
Exchanges, a modification of traditional business known as Adhat
and Vayda Vyapar to facilitate better risk coverage and delivery of
commodities.

The three exchanges are:

1. National Commodity & Derivatives Exchange Limited (NCDEX)

2. Multi Commodity Exchange of India Limited (MCX)
3. National Multi-Commodity Exchange of India Limited (NMCEIL)

All the exchanges have been set up under overall control of

Forward Market Commission (FMC) of Government of India.

1. National Commodity & Derivatives Exchange Limited

(NCDEX)

National Commodity & Derivatives Exchange Limited

(NCDEX) located in Bhopal is a public limited company incorporated
on April 23, 2003 under the Companies Act, 1956 and had
commenced its operations on December 15, 2003.This is the only
commodity exchange in the country promoted by national level
institutions.

It is promoted by ICICI Bank Limited, Life Insurance

Corporation of India (LIC), National Bank for Agriculture and Rural
Development (NABARD) and National Stock Exchange of India
Limited (NSE).

It is a professionally managed online multi commodity

exchange. NCDEX is regulated by Forward Market Commission and
is subjected to various laws of the land like the Companies Act, Stamp
Act, Contracts Act, Forward Commission (Regulation) Act and
various other legislations.

54
 2. Multi Commodity Exchange of India Limited(MCX)

Headquartered in Bhopal Multi Commodity Exchange of India

Limited (MCX), is an independent and de-mutulised exchange with a
permanent recognition from Government of India. Key shareholders
of MCX are Financial Technologies (India) Ltd., State Bank of India,
Union Bank of India, Corporation Bank, Bank of India and Canara
Bank. MCX facilitates online trading, clearing and settlement
operations for commodity futures markets across the country.

MCX started offering trade in November 2003 and has built

strategic alliances with Bombay Bullion Association, Bombay Metal
Exchange, Solvent Extractors’ Association of India, Pulses Importers
Association and Shetkari Sanghatana.

4. National Multi-Commodity Exchange of India Limited

(NMCEIL)

National Multi Commodity Exchange of India Limited

(NMCEIL) is the first de-mutualzed, Electronic Multi-Commodity
Exchange in India. On 25th July, 2001, it was granted approval by the
Government to organize trading in the edible oil complex.

It has operationalised from November 26, 2002. It is being

supported by Central Warehousing Corporation Ltd., Gujarat State
Agricultural Marketing Board and Neptune Overseas Limited. It got
its recognition in October 2000.

Commodity exchange in India plays an important role where

the prices of any commodity are not fixed, in an organized way.
Earlier only the buyer of produce and its seller in the market judged
upon the prices. Others never had a say.
Today, commodity exchanges are purely speculative in nature.
Before discovering the price, they reach to the producers, end-users,
and even the retail investors, at a grassroots level. It brings a price
transparency and risk management in the vital market.

55
 A big difference between a typical auction, where a single
auctioneer announces the bids, and the Exchange is that people are
not only competing to buy but also to sell.

By Exchange rules and by law, no one can bid under a higher

bid, and no one can offer to sell higher than someone else’s lower
offer. That keeps the market as efficient as possible, and keeps the
traders on their toes to make sure no one gets the purchase or sale
before they do.

NSE - A New ideology

The broad objective for which the exchange was set up has
made it to play a leading role in enlarging the scope of market
reforms in securities market in India. During last one decade it has
been playing the role of a catalytic agent in reforming the markets in
terms of market microstructure and in evolving the best market
practices keeping in mind the investors.

The Exchange is set up on a de-mutual zed model wherein the

ownership, management and trading rights are in the hands of three
different sets of people. This has completely eliminated any conflict of
interest. This has helped NSE to aggressively pursue policies and
practices within a public interest framework.

NSE's nationwide, automated trading system has helped in

shifting the trading platform from the trading hall in the premises of

56
the exchange to the computer terminals at the premises of the trading
members located at different geographical locations in the country
and subsequently to the personal computers in the homes of investors
and even to hand held portable devices for the mobile investors. It
has been encouraging corporation of membership in securities
market.

It has also proved to be instrumental in ushering in scrip less

trading and providing settlement guarantee for all trades executed on
the Exchange. Settlement risks have also been eliminated with NSE's
innovative endeavors in the area of clearing and settlement viz.,
establishment of the clearing corporation (NSCCL), setting up a
settlement guarantee fund (SGF), reduction of settlement cycle,
implementing on-line, real-time risk management systems,
dematerialization and electronic transfer of securities to name few of
them.

As a consequence, the market today uses state-of-the-art

information technology to provide an efficient and transparent
trading, clearing and settlement mechanism. In order to take care of
investors interest, it has also created an investors protection fund
(IPF), that would help investors who have incurred financial loss due
to default of brokers.

Ownership and Management the NSE

The day-to-day management of the Exchange is delegated to the

Managing Director and CEO who is supported by a team of
professional staff. Therefore, though the role of trading members at
NSE is to the extent of providing only trading services to the
investors, the Exchange involves trading members in the process of
consultation and participation in vital inputs towards decision
making.

57
58
59
 Market Segments and Products

NSE provides an electronic trading platform for of all types of

securities for investors under one roof - Equity, Corporate Debt,
Central and State Government Securities, T-Bills, Commercial Paper,
Certificate of Deposits (CDs), Warrants, Mutual Funds units,
Exchange Traded Funds, Derivatives like Index Futures, Index
Options, Stock Futures, Stock Options, Futures on Interest Rates etc.,
which makes it one of the few exchanges in the world providing
trading facility for all types of securities on a single exchange.

The Exchange provides trading in 3 different segments viz.

 Wholesale debt market (WDM)

 Capital market (CM) segment and
 The futures & options (F&O) segment.

4. NSE FAMILY

NSCCL

National Securities Clearing Corporation Ltd. (NSCCL), a

wholly-owned subsidiary of NSE, was incorporated in August 1995
and commenced clearing operations in April 1996. It was the first
clearing corporation in the country to provide notation/settlement
guarantee that revolutionized the entire concept of settlement system
in India. It was set up to bring and 9 sustain confidence in clearing
and settlement of securities; to promote and maintain short and
consistent settlement cycles; to provide counter-party risk guarantee,
and to operate a tight risk containment system. It carries out the
clearing and settlement of the trades executed in the equities and
derivatives segments of the NSE.

60
IISL

India Index Services and Products Limited (IISL), a joint

venture of NSE and Credit Rating Information Services of India
Limited (CRISIL), was set up in May 1998 to provide indices and
index services. It has a consulting and licensing agreement with
Standard and Poor's (S&P), the world's leading provider of invest able
equity indices, for co-branding equity indices. IISL pools the index
development efforts of NSE and CRISIL into a coordinated whole. It
is India's first specialized company which focuses upon the index as a
core product. It provides a broad range of products and professional
index services. It maintains over 70 equity indices comprising broad-
based benchmark indices, sectoral indices and customized indices.
Many investment and risk management products based on IISL
indices have been developed in the recent past. These include index
based derivatives on NSE, a number of index funds and India's first
exchange traded fund.

NSDL

Prior to trading in a dematerialized environment, settlement of

trades required moving the securities physically from the seller to the
ultimate buyer, through the seller's broker and buyer's broker, which
involved lot of time and the risk of delay somewhere along the chain.

NSE.IT

NSE.IT Limited, a 100% technology subsidiary of NSE, was

incorporated in October 1999 to provide thrust to NSE’s technology
edge, concomitant with its overall goal of harnessing latest technology
for optimum business use.

It provides the securities industry with technology that

ensures transparency and efficiency in the trading, clearing and risk

61
management systems. Additionally, NSE.IT provides consultancy
services in the areas of data warehousing, internet and business
continuity plans.

NCDEX

NSE joined hand with other financial institutions in India viz.,

ICICI Bank, NABARD, LIC, PNB, CRISIL, Canara Bank and IFFCO to
promote the NCDEX which provide a platform for market
participants to trade in wide spectrum of commodity derivatives.
Currently NCDEX facilitates trading of 37 agro based commodities, 1
base metal and 2 precious metal.

5. LISTING OF SECURITIES
The stocks, bonds and other securities issued by issuers
require listing for providing liquidity to investors. Listing means
formal admission of a security to the trading platform of the
Exchange. It provides liquidity to investors without compromising the
need of the issuer for capital and ensures effective monitoring of
conduct of the issuer and trading of the securities in the interest of
investors. The issuer wishing to have trading privileges for its
securities satisfies listing requirements prescribed in the relevant
statutes and in the listing regulations of the Exchange. It also agrees
to pay the listing fees and comply with listing requirements on a
continuous basis. All the issuers who list their securities have to
satisfy the corporate governance requirement framed by regulators.

62
63
6. MEMBERSHIP ADMINISTRATION

The trading in NSE has a three tier structure-the trading

platform provided by the Exchange, the broking and intermediary
services and the investing community. The trading members have
been provided exclusive rights to trade subject to their continuously
fulfilling the obligation under the Rules, Regulations, Byelaws,
Circulars, etc. of the Exchange. The trading members are subject to its
regulatory discipline. Any entity can become a trading member by
complying with the prescribed eligibility criteria and exit by
surrendering trading membership. There are no entry/exit barriers to
trading membership.

7. INVESTOR GRIEVANCES
Investors are the backbone of the securities market. Protection
of their interests is paramount for NSE. In furtherance of their
interests, NSE has put in place systems to ensure availability of
adequate, up-to-date and correct information to investors to enable
them to take informed decisions. It ensures that critical and price-
sensitive information reaching the exchange is made available to all
classes of investor at the same point of time.

Such price-sensitive information as bonus announcements,

mergers, new line of business, etc. received from the companies is
disseminated to all the market participants through the network of
NSE terminals all over India. Action is initiated by the Exchange
whenever any kind of price sensitive information is not provided to
the Exchange at the prescribed time by companies listed on the
Exchange.

64
 8. DEMATERIALISATION &
REMATERIALISATION

DEMATERIALISATION

Meaning

Dematerialisation is the process by which physical certificates

of an investor are converted to an equivalent number of securities in
electronic form and credited into the investor's account with his/her
DP.

Dematerialising securities (physical holding into electronic

holding)

In order to dematerialise physical securities one has to fill in a

DRF (Demat Request Form) which is available with the DP and
submit the same along with physical certificates one wishes to
dematerialise. Separate DRF has to be filled for each ISIN Number.
The complete process of dematerialisation is outlined below:

 Surrender certificates for dematerialisation to your depository

participant.
 Depository participant intimates Depository of the request
through the system.
 Depository participant submits the certificates to the registrar of
the Issuer Company.

Registrar confirms the dematerialisation request from depository.

 After dematerialising the certificates, Registrar updates accounts

and informs depository of the completion of dematerialisation.
 Depository updates its accounts and informs the depository
participant.
 Depository participant updates the demat account of the
investor.

65
 REMATERIALISATION

The process of re-materialisation is used to convert the electronic

holding into physical holdings. If one wishes to get back his securities
in the physical form one has to fill in the RRF (Re-mat Request Form)
and request his DP for re-materialisation of the balances in his
securities account. The process of re-materialisation is outlined
below:

 One makes a request for dematerialisation.

 Depository participant intimates depository of the request
through the system.
 Depository confirms dematerialisation request to the registrar.
 Registrar updates accounts and prints certificates.
 Depository updates accounts and downloads details to depository
participant.
Registrar dispatches certificates to investor.

9. Broker & Sub-Broker

Broker

A broker is a member of a recognized stock exchange, who is

permitted to do trades on the screen-based trading system of different
stock exchanges. He is enrolled as a member with the concerned
exchange and is registered with SEBI.

Sub Broker
A sub broker is a person who is registered with SEBI as such
and is affiliated to a member of a recognized stock exchange.

10. PAY-IN DAY AND PAY- OUT DAY

66
 Pay in day is the day when the brokers shall make payment or
delivery of securities to the exchange. Pay out day is the day when the
exchange makes payment or delivery of securities to the broker.

Settlement cycle is on T+2 rolling settlement basis w.e.f. April

01, 2003. The exchanges have to ensure that the pay out of funds and
securities to the clients is done by the broker within 24 hours of the
payout. The Exchanges will have to issue press release immediately
after pay out.

11. Auction

What is an Auction?

The Exchange purchases the requisite quantity in the Auction

Market and gives them to the buying trading member. The shortages
are met through auction process and the difference in price indicated
in contract note and price received through auction is paid by
member to the Exchange, which is then liable to be recovered from
the client.

67
Major Players of the Industry

S. S. Kantilal Ishwarlal Securities Pvt. Ltd.

(sharekhan.com):
Sharekhan, India’s leading stock broker is the retail arm of
SSKI, and offers you depository services and trade execution facilities
for equities, derivatives and commodities backed with investment
advice tempered by decades of broking experience. A research and
analysis team is constantly working to track performance and trends.
That’s why Sharekhan has the trading products, which are having one
of the highest success rates in the industry. Sharekhan is having 240
share shops in 110 cities; the largest chain of retail share shops in
India is of Sharekhan.
In future, Sharekhan is planning to enter in Mutual funds,
Insurance sector and banking sector to expand beyond the market
currently covered by it. And it has started MF (Mutual Funds) on
priority basis but wants to grow in it.

ICICI Web Trade Ltd. (ICICIdirect.com)

ICICIdirect.com was the first entrant into e-broking.
ICICdirect.com provides the 3-in-1 to the users which ties in their
saving bank account and their Demat account to their brokerage
account electronically. This integration ensures that money is
transferred to/from their bank account and the shares are transferred
from/to their Demat account automatically without writing any
cheques or transfer instructions while carrying out their trades in
shares.

ICICIdirect.com has the option of trading in shares in cash,

margin or spot segments. An investor can also invest in 14 Mutual
Funds (Prudential ICICI MF, Franklin Templeton India MF, Alliance

68
Capital MF, JM MF, Birla Sun Life MF, Sundaram MF, IL&FS MF,
Principal MF, HDFC MF, Standard Chartered MF, Reliance Capital
MF, Kotak Mahindra MF, TATA MF and DSP MERRILL LYNCH MF)
through their trading account.

5Paisa.com:
5paisa is the trade name of India Infoline Securities Private
Limited (5paisa), member of National Stock Exchange and The Stock
Exchange, Bhopal. 5paisa is a wholly owned subsidiary of India
Infoline Ltd, India’s leading and most popular finance and
investment portal. 5paisa has emerged as one of leading players in e-
broking space in India.

The company’s brokerage is one of the lowest in the industry. It

also provides the research on commodities. Investors can benefit
from its analysis and advice available at the click of the mouse. For
those who prefer to trade the traditional way, India Infoline investor
points are available across the country.

India Infoline was founded by a group of professionals in 1995.

Its institutional investors include Intel Capital, one of the leading
technology companies in the world promoted by the UK government,
ICICI, TDA and Reeshanar. The company offers a slew of products
such as stock and derivatives broking, commodities broking and
mutual funds.

Kotak Securities Limited (kotakstreet.com)

Kotak Securities Ltd., a strategic joint venture between Kotak
Mahindra Bank and Goldman Sachs (holding 25% - one of the world’s
leading investment banks and brokerage firms) is India’s leading
stock broking house with a market share of 5 - 6 %. Kotak Securities
Ltd. has been the largest in IPO distribution - It was ranked number
One in 2003-04 as Book Running Lead Managers in public equity
offerings by PRIME Database. It has also won the Best Equity House
Award from Finance Asia - April 2004.

69
 Kotak Securities Ltd is also a depository participant with
National Securities Depository Limited (NSDL) and Central
Depository Services Limited (CDSL) providing dual benefit services
wherein the investors can use the brokerage services of the company
for executing the transactions and the depository services for settling
them. The company has 42 branches servicing around 1, 00,000
customers. Kotakstreet.com the online division of Kotak Securities
Limited offers Internet Broking services and also online IPO and
Mutual Fund Investments.

Kotak Securities Limited manages assets over 1700 crores

under Portfolio Management Services (PMS) which is mainly to the
high end of the market. Kotak Securities Limited has newly launched
“Kotak Infinity” as a distinct discretionary Portfolio Management
Service which looks into the middle end of the market.

India Bulls
Indiabulls is India's leading retail financial services company
with 77 locations spread across 64 cities. Its size and strong balance
sheet allows providing varied products and services at very attractive
prices, our over 750 Client Relationship Managers are dedicated to
serving your unique needs.

Indiabulls is lead by a highly regarded management team that

has invested crores of rupees into a world class Infrastructure that
provides real-time service & 24/7 access to all information and
products. The Indiabulls Professional Network offers real-time prices,
detailed data and news, intelligent analytics, and electronic trading
capabilities, right at your finger-tips. This powerful technology is
complemented by our knowledgeable and customer focused
Relationship Managers.
Indiabulls offers a full range of financial services and products
ranging from Equities, Derivatives, Demat services and Insurance to
enhance wealth and to achieve the financial goals.

70
Motilal Oswal Securities Ltd. (MOSt):
One of the top-3 stock-broking houses in India, with a dominant
position in both institutional and retail broking, MOSt is amongst the best-
capitalized firms in the broking industry in terms of net worth. MOSt was
founded in 1987 as a small sub-broking unit, with just two people running
the show. Focus on customer-first-attitude, ethical and transparent
business practices, respect for professionalism, research-based value
investing and implementation of cutting-edge technology have enabled it
to blossom into a thousand-member team.

The institutional business unit has relationships with several leading

foreign institutional investors (FIIs) in the US, UK, Hong Kong and
Singapore. In a recent media report MOSt was rated as one of the top-10
brokers in terms of business transacted for FIIs.

The retail business unit provides equity investment solutions to

more than 50,000 investors through 270 outlets spanning 150 cities and 22
states. MOSt provides Advice-Based Broking, Portfolio Management
Services (PMS), E-Broking Services, Depository Services, Commodities
Trading, and IPO and Mutual Fund Investment Advisory Services. Its
Value PMS Scheme gave a 160% post-tax return for the year ended March
2004.

In Asia Money Brokers Poll 2003 MOSt has been rated as the Best
Domestic Research House- Mega Funds ,while in 2000 and 2002 it has
been rated as the Best Domestic Equity Research House and Second best
amongst Indian Brokerage firms respectively.

HDFC Securities Ltd (HDFCsec)

HDFCsec is a brand brought to you by HDFC Securities Ltd,
which has been promoted by the HDFC Bank & HDFC with the
objective of providing the diverse customer base of the HDFC Group
and other investors a capability to transact in the Stock Exchanges &
other financial market transactions. The services comprise online
buying and selling of equity shares on the National Stock Exchange
(NSE). Buying and selling of select corporate debt and government
securities on the NSE would be introduced in a subsequent phase. In

71
 a few months, they will also start offering the following online trading
services on the BSE and NSE:
1. Buying and selling of shares on the BSE
2. Arbitrage between NSE & BSE
3. Trading in Derivatives on the NSE
4. Margin trading products.

They are also planning to include buying and selling of Mutual Funds,
IPO subscriptions, Right issues, purchase of Insurance policies and
asset financing.

Different types of company involved in online trading:

 HDFC SECURITIES LIMITED

 ICICI WEB TRADE LIMITED
 KOTAK STREET LIMITED
 FIVE PAISA SECURITIES LIMITED
 INDIABULLS SECURITIES LIMITED
 MONEYPORE SECURITIES LIMITED
 SHARE KHAN SECURITIES LIMITED
 GEOJIT SECURITIES
 OTHERS.

5PAISA.COM

 Trade in BSE,NSE
 Trade in multicommodity exchange
 Trade in national commodity exchange
 Access to research and technical analysis
 V-SAT, internet connectivity
 Online back office, software & support
 Liberal deposit, margin & exposure terms

KOTAK STREET.COM

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 Easy equities
 Easy mutual fund
 Derivatives
 Research on sms
 Margin finance
 Call & trade
 Easy IPO over phones

SHAREKHAN.COM
 Classic account
 Trading on NSE
 Speed trade
 Speed trade plus
 Single screen trading terminal
 Real-time streaming quotes
 Live tic-by-tic intra-day charting
 Instant order/trade confirmations in the same window
 Hot keys similar to a broker’s terminal
 Back-up facility to place trades on direct phone lines

INDIABULLS.COM
 Trade in equity
 Trading through terminal
 Trade in derivatives
 Back-up facility to place trades on direct phone lines

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 Speed trade plus
 Offline support through messenger
 Access research and technical research
 Own transaction engine
 High transaction speed

HDFC SECURITIES.COM
 Trading on NSE
 Mutual fund
 Online back office, software & support

 Live quotes update system

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 SWOT Analysis

Introduction

SWOT Analysis is a strategic planning method used to evaluate

the Strengths, Weaknesses, Opportunities, and Threats involved in
a project or in a business venture. It involves specifying the objective
of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that
objective.
A SWOT analysis must first start with defining a desired end
state or objective. A SWOT analysis may be incorporated into
the strategic planning model. An example of a strategic planning
technique that incorporates an objective-driven SWOT analysis
is Strategic Creative Analysis (SCAN). Strategic Planning, including
SWOT and SCAN analysis, has been the subject of much research.
 Strengths: attributes of the person or company that are
helpful to achieving the objective.
 Weaknesses: attributes of the person or company that are
harmful to achieving the objective.

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 Opportunities: external conditions that are helpful to
achieving the objective.
 Threats: external conditions which could do damage to
the business's performance.

Identification of SWOT is essential because subsequent steps in the

process of planning for achievement of the selected objective may be
derived from the SWOT. First, the decision makers have to determine
whether the objective is attainable, given the SWOT. If the objective is
NOT attainable a different objective must be selected and the process
repeated.
The SWOT analysis is often used in academia to highlight and
identify strengths, weaknesses, opportunities and threats. It is
particularly helpful in identifying areas for development.

Use of SWOT Analysis

The usefulness of SWOT analysis is not limited to profit-seeking

organizations. SWOT analysis may be used in any decision-making
situation when a desired end-state (objective) has been defined.
Examples include: non-profit organizations, governmental units, and
individuals. SWOT analysis may also be used in pre-crisis planning
and preventive crisis management. SWOT analysis may also be used
in creating a recommendation during a viability study.

SWOT-landscape analysis

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 The SWOT-landscape grabs different managerial situations by
visualizing and foreseeing the dynamic performance of comparable
objects according to findings by Brendan Kitts, Leif Edvinsson and
Tord Beding (2000).
Changes in relative performance are continuously identified.
Projects (or other units of measurements) that could be potential risk
or opportunity objects are highlighted.
SWOT-landscape also indicates which underlying
strength/weakness factors that have had or likely will have highest
influence in the context of value in use

SWOT Analysis of Himachal Tour and

Travels broking ltd.
During this training at HIMACHAL TOUR AND TRAVELS
BROKING LTD, we had come to know the Strengths Weaknesses –
Opportunities – Threats for the company and it is very useful for a
company to analyze them. Therefore, the SWOT analysis is presented
here and the suggestions for maintaining strengths and removing
weaknesses are explained.
Strengths:

 Well-maintained infrastructure.
 Dedicated, Intelligent and Loyal staff.
 On-line Trading products.
 Lowest brokerage and other charges w.r.t. Competitors.

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 The best investment advice correct up to 70-90 % through
dedicated
 Research and reports.
 Wide product range to enable the clients to choose the
best alternative.
 One of the best DPs in India.
 A positive image in the existing clients.
 Large retail customer base
 Best online software Odin which within 5 second
 management information system is quite good as
compare to competitors
Weaknesses:
 Less awareness in the market.
 Time consuming process for account opening, resolving the
problems of the customers, etc.
 Service quality is not maintained accordingly how they are
promoted.
 Concentrate more on HNI (High Net-worth Individual)
client
 employee attrition rate is high especially B.D.O. & Dealers
 all branches are not working in a synchronized way

Opportunities:

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 Large primary market to sit as a book runner for the other
companies just like Kotak securities ltd. that runs the books of share
holdings for many companies
 Slope of stock market towards delivery based transactions.
 there are only 2 % to 3% peoples are investing in share
market so huge opportunities are there
 Large potential market for delivery and intra-day
transactions.
 Open interest of the people to enter in stock market for
investing.
 Attract the customers who are dissatisfied with other brokers
& DPs.
 An indirect opportunity generated by the market from its
bullishness.
Threats:
 Decreasing rates of brokerage in the market.
 Increasing competition against other brokers & DPs.
 Poor marketing activities for making the company known
among the customers
 A threat of loosing clients for any kind of weakness of the
company.
 Indirect threat from instable stock market, i.e., low/no profit
of Sharekhan’s clients would lead them to go for other broker/DP.

Past Performance of Himachal Tour and Travels

Broking Ltd

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 June, 2008 ‘Major Volume Driver’ for 2007
 August, 2008 Crossed 5000000 Trading Accounts
 November, 2007 ‘Major Volume Driver’ for 2007
 March, 2007 Crossed 2000000 Trading Accounts
 December, 2006 Created 2500 Business Associates
 October, 2006 ‘Major Volume Driver’ for 2006
 September 2006 Launched Mutual Fund and IPO Business
 July, 2006 Launched the PMS Function
 March, 2006 Crossed 100000 Trading Account
 October, 2005 ‘Major Volume Driver’ for 2005
 September, 2004 Launched Online Trading Platform
 April, 2004 Initiated Commodities Broking Division
 April, 2003 First Publish Research Report
 November, 2002 Angel’s First Investor Seminar
 March, 2002 Developed Web-Enabled Back Office Software
 November, 1998 Himachal Tour and Travels Capital & Debt Market
Ltd. Incorporated
 December, 1997 Himachal Tour and Travels Broking Ltd.
Incorporated

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 Products & Services

Our intensive research process

 Industry wise specialized team
 Bottom-up approach: Identifying under valued stock with sound
management
 Top -down Approach: identifying promising sector & then companies
with good valuations
 Company visits and interaction with top & second line manager
 Thorough analysis of company’s financial data , promise vs
performance & industry trends
 Estimates for future years’ earnings based on industry trends &
company business plans
Our Research & Advisory Products
Market outlook
 Provides price-sensitive information just before opening bell and
analysis its impact on the market in terms of :
 Key corporate development
 Policy announcement

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 Geo-political news & views
Technical Analysis
 Analysis trading patterns and a view on the market position of key
stocks/sectors for the next trading session
 Short term (1-5 days) & medium term (10-20 days) views
 Tracks individual scrip, the sensex & Nifty & other indices
Derivatives analysis report
 FII activity in the F&O Segment
 Change in open market
 Put call ratio
 Cost of carrying cost
 Index- based derivative products

E-Broking

Unique Online Trading Products Customized to suit different

investment/Trading needs

Himachal Tour and Travels Investor

 User-friendly browser for investors
 Easy online trading platform
 Works in proxy and firewall system set up
 Integrated Back office: Access account information – anytime,
anywhere
 Streaming quotes
 Refresh static rates when required
 Multiple exchanges on single screen
 Online fund transfer facility

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 Himachal Tour and Travels Trade
 User-friendly browser-based online trading platform.
 Streaming quotes
 Can be used in proxy as well as firewall environments.
 Advantage to access your account from anywhere.
Himachal Tour and Travels Diet
 Application-based platform for day traders
 Hi-speed trading terminal on your desktop
 Streaming quotes for real time rate updates
 Multiple exchanges on single screen
 Online fund transfer facility
 Integrated Back office: Access account information – anytime,
anywhere
Himachal Tour and Travels Anywhere
 Application-based platform for day traders
 Trading based on historical charts and technical tools
 Streaming quotes for real time rate updates
 Online fund transfer facility
 Integrated Back office: Access account information – anytime,
anywhere
Back-Office
Online client details includes
 Ledger Balance
 Cash Deposits with Angel
 Securities Holdings
 Charges levied/Paid in the client’s account
 Last auction/close-outs offered
 DP Holding for the last 3 transactions

Portfolio Management Services

 Managed by our prominent Fund Manager who are regularly fetched
by TV media for their views on stocks
 Understanding client’s risk & return profile
 Offering the right blend of sector and stock exposures
 Giving dedicated investement Advisors

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 Giving a choice of different schemes to suit every individual investor
preferences
 Catering to individuals, HUFs, Corporate, NRIs, Trusts

Himachal Tour and Travels Currency Future

 Comprehensive Coverage on currencies
 Reports covering in-depth fundamentals of the currencies
 Latest economics data releases with their likely impact, along with
“Technical Levels”
 Comprehensive reports on currencies ideally suited for any
investors / Trader

Depository Services
 No physical instruction required for the client’s sell obligations
 Lowest transaction charges in the country
 Acceptances & execution of instruction on fax
 A combined monthly “Bill Transaction. Holding cum Ledger
statement
 Efficient Pledge Mechanism

Himachal Tour and Travels gold

 Personalized investment advisory

 Portfolio Restructuring and continuous monitoring
 Guidance experienced research team
 Periodic Group meeting with investors .

Pre-Paid Brokerage

 Zero Account opening charges

 Attractive Brokerage rates
 Free DP AMC for 1 year
 Assured gifts worth thousands with every account
 Easy and fast recharge
 Free Financial investment Application with every account
Specialized Products

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 Margin Funding

 facility to allow clients to take higher exposer

 instant liquidity for clients
 margin is deposited in cash as well as collaterals
 Enabling clients grab Earning Opportunity.

Value Added Services

NRI Services

 NRI Services Desk for personalized Assistance.

 Dedicated offline Equity Dealing Desk.
 Online Equity dealing Desk
 NRI Investment Advisory Desk
 PAN Card Assistance
 Support for banking-PIS Accounts
 Portfolio Management, Mutual Fund, IPO services.

Insurance

Himachal Tour and Travels Offers

 Products to meet the objectives of risk coverage .investment and tax

planning.
 Assessment of your insurance needs after proper risk profiling.
 A wide array of individual life cover plans to meet your protection,
savings,and retirement needs.

Mutual funds

 An integrated platform for online /offline mutual funds

 Tie-up with all major AMCS
 Dedicate Relationship Manager for Business Partners

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 Exclusive MF Research Reports by
angel{daily,weekly,monthly,mutual fund reports}.
Loans, IPO and fixed Deposits

 Products distributed by Himachal Tour and Travels include

 Unsecured loans
 personal/business loans against properties
 Secured loans.
 home loans/loan against properties
 loan against securities/gold, IPO-Distribution , Advisory and help
desk , Fixed Deposits ,NHB term Deposits.
Risk management at angel

 An efficient risk management system which enables the customer to

effectively monitor the positions.
 The client report can be accessed from any place and gives categorical
display of the ledger balance deposits and holdings.

Data Analysis

The first and simplest analytical step in data analysis is to

describe the data — for example, summarize its statistical attributes
(such as means and standard deviations), visually review it using

86
charts and graphs, and look at the distribution of values of the fields in
your data. But data description alone cannot provide an action plan.
You must build a predictive model based on patterns determined
from known results, then test that model on results outside the
original sample. A good model should never be confused with reality
(you know a road map isn’t a perfect representation of the actual
road), but it can be a useful guide to understanding your business.

Data analysis can be used for both classification and regression

problems. In classification problems you’re predicting what category
something will fall into – for example, whether a person will be a good
credit risk or not, or which of several offers someone is most likely to
accept. In regression problems you’re predicting a number such as the
probability that a person will respond to an offer.

Indian Brokerage Industry

Introduction

With the fall in the turnover in the Equity segment by over 30

per cent since April, revenue of broking houses have taken a major
hit. Compared with the previous few quarters, the net profits of many
leading broking houses have nearly halved despite the revenues
declining marginally. The results posted by broking firms have been
extremely poor in line with the market conditions, having reported
either a fall in net profit or, at best, only a marginal rise in their
bottom line for the period. The worst-hit seems to be the broking
firms which are facing challenges in their declining business apart
from stringent reluctance of financial institutions to lend them money
for working capital. Broking firms had an excellent rally in the
previous fiscal and thus had extravagant plans of increasing their
foothold across nation, and some of them even globally. With the
current financial meltdown worldwide, most of them have not only
put their expansion plans on hold but also are slowing down in
current businesses. These firms were on a growth spree, adding
branches and people across cities. The augmentation was also driven
by the infusion of funds by the big private equity and foreign players
wanting to invest in these broking outfits. The smaller broking outfits

87
 took a greater hit, as they struggled to meet their margin
requirements due to liquidity constraints. Recently, trading terminals
of 95 broker members were deactivated in the F&O segment and 29
deactivations occurred in the cash segment. In September, the
terminals of 36 broker members were deactivated whereas in August
it was only 11. There were 885 active trading members in the F&O
segment and 984 in the cash segment on NSE in October. The market
scene appears bleak for the securities firms. Quite expected, these
negative sentiments are reflecting in the stock prices of broking firms.
Most of them have fallen by more than 75% from their highs early this
year. After banking stocks, broking outfits have faced the brunt in the
current financial turmoil. When the macro conditions were fine,
invariably stock markets did perform well. Similarly, the downtrend
in the economy is also reflected in the stock market.

Derivative Report
 0.93%, while Minify future’s open interest decreased by 3.48%,
as market closed at 3046.75 levels.
 • Nifty January future is trading at premium of 6.85 points
against premium of 10.25 points in previous trading session. While
February future is trading at premium of 17.30 points.
 • PCR-OI is at the same levels of 1.11. Due to build up in call as
well as put options.
 • IV of at the money option is 40.35%. Historical volatility has
reduced from 56.95% to 55.24%.
 • Stocks which are trading at decent positive cost of carry are
RAJESHEXPO, FSL, BINDALAGRO, IFCI and CHAMBLFERT .

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Data Analysis of Customers

Different customers have the different objectives/purpose for

opening the account in Himachal Tour and Travels Broking Ltd., as
per the survey done by us is as follow: -

Objective for A\C opening No. of Customers

Commodity 1
Investment 137
IPO 45
Trading 245
Investment & Trading 57
Investment Trading & IPO 26
IPO & Trading 31
Investment & IPO 7
Others 39

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Financial Restructuring

Himachal Tour and Travels Broking Ltd. provides the service of

Financial Restructuring. As per the survey the chart is as follows:

90
 Limitations
Definition of perfection differs from individuals to individuals. No
matter how meticulous one is, the study that is completely based on
responses from a vast variety of people cannot be free from
limitations. Though the present study aimed to achieve the above-
mentioned objectives in full earnest and accuracy, it was hampered
due to certain limitations. Some of the limitations of this study may
be summarized as follows: -

 Selection of the people who are under consideration as sample

for the study may not be the best sample selected.
 Sample size was limited due to the limited period allocated for
the survey.
 The selection of people to cover the various types of commodity
trading ranging from agro products to energy and metals like gold
and silver was tedious and time consuming.
 Getting accurate responses from the respondents due to their
inherent Problems, personality traits and mood fluctuations was a
very difficult task.
 Some respondents had to be re-contacted as per their
convenience of time.
 Some of the area in which the survey is carried out was very un
–hygienic and over crowded.
 Some data of customer is not proper. Like their contact number
& address.

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 Findings
 In are, which we ware given out of 800 clients we have mostly
found that they are not interested in the financial portfolio
restructuring. We found 90.7% no interested and 9.3% are interested
in the city.

 Most of the clients whom, we met Government employees,

businessman, Hotels, malls, restaurants and chaiwala also. What
about their interested in trading.

 Most of the clients invested in the IPO, Trading, Investment,

future and options and commodity markets. Out of 800 Most of the
clients Interested in trading.

Awareness about angels new No. of respondents

services
Online trading 300
Margin funding 50
PMS 100
HIMACHAL TOUR AND 30
TRAVELS GOLD
PREPAID BROKERAGE 20
LIFE INSURANCE (BIRLA SUN 20
LIFE)
MUTUAL FUND 200
FIXED DEPOSIT 500
BOND 400

92
Suggestion:

From the above chart we can see that various customer

are about online trading, on the other hand few people aware about
Himachal Tour and Travels gold and its prepaid brokerage services.
Company should give focus on online customer and try to give
more information about Himachal Tour and Travels gold and prepaid
to these existing clients and create interest among them to take
advantage of these new services.

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 BIBLIOGRAPHY

BOOK
Marketing Management Phillip Kotler
Research Methodology Kooper
Human Resource Aswathapa
Production and Operation Adam & Abert

Magazine
Value Line
Eagle Eye
Business World
NSDL

94
Web Site

www.Angelbroking.com
www.sski.com
www.bseindia.com
www.nseindia.com
www.wikipedia.com
www.researchandmarket.com
www.scribd.com
www.coolavenue.com
www.hindubusinessonline.com
www.investopedia.com
www.moneybhai.com

95