A project report on
- 1. 1) A PROJECT REPORT ON “ STRATEGIC APPROACH OF KARVY STOCK BROKING LTD AND ITS COMPETITORS REGARDING DEMAT ACCOUNT AND SHARE TRADING --- A COMPARATIVE OVERVIEW” SUBMITTED TO K.R.MANGALAM INSTITUTE OF MANAGEMENT N- BLOCK, KAILASH COLONY, NEAR SOUTH DELHI CLUB NEW DELHI-110048 2) CONTENT Serial Number Topic Page Number 1. CERTIFICATE OF THE ORGANISATION 3 2. CERTIFICATE OF THE INSTITUTE 4 3. ACKNOWLEDGEMENT 5 4. PREFACE 6 5. DECLARATION 7 6. OBJECTIVES OF TRAINING 8 7. EXECUTIVE SUMMARY 9 8. SCOPE OF THE STUDY 10 9. INTRODUCTION TO THE INDUSTRY 11-22 10. INTRODUCTION TO THE COMPANY 23-37 11. SWOT ANALYSIS 38-39 12. KARVY PRODUCT 40-42 13. COMPETITORS OF KARVY 43-45 14. REVIEW OF LITERATURE 46-51 15. RESEARCH METHODOLOGY 52-55 16. DATA ANALYSIS 56-66 17. FINDINGS 67 18. CONCLUSION 68 19. RECOMMENDATION 69 20. BIBLIOGRAPHY 70 21. ANNEXURES AND QUESTIONNIARE 72-73 3) CERTIFICATE OF THE ORGANISATION This is to certify that ………………., pursuing MBA+PGPM+PGCM at K. R. Mangalam Institute of Management, New Delhi, has worked under my supervision and guidance on his dissertation entitled ―Strategic Approach of Karvy Stock Broking Ltd. And It„s Competitors Regarding Demat Account & Share Trading--- A Comparative Overview‖ at Karvy Stock Broking Limited, Burdwan from August 1st 2009 to September 12th 2009. To the best of my knowledge this is an original piece of work. During his project he was found to be very sincere, regular and attentive to small details whatsoever told to him. I wish him best of luck and success in life. Dated, Burdwan Branch Head Karvy Stock Broking Ltd. 4) CERTIFICATE OF THE INSTITUTE This is to certify that the project report entitled ―Strategic Approach of Karvy Stock Broking Ltd. And It„s Competitors Regarding Demat Account & Share Trading --- A Comparative Overview‖ at Karvy Stock Broking Limited is a bonafide record of work done by ……………….., and submitted in partial fulfillment of the requirements of MBA+PGPM program of K. R. Mangalam Institute of Management, New Delhi. Dated, New Delhi Lecturer KIM-New Delhi
- 2. 5) ACKNOWLEDGEMENT Sometimes words fall short to show gratitude, the same happened with me during this project. The immense help and support received from Karvy Stock Broking Limited overwhelmed me during the project. My sincere gratitude to …………………… (Branch Manager, Karvy) and …………………….. (Director, KIM, New Delhi), for providing me with an opportunity to work with Karvy Stock Broking Limited. I am highly indebted to ………………………. (I.R.O., Karvy) and company project guide, who has provided me with the necessary information and his valuable suggestion and comments on bringing out this report in the best possible way. I also thank ……………………., faculty guide, KIM New Delhi who has sincerely supported me with the valuable insights into the completion of this project. Last but not the least; my heartfelt love for my parents, whose constant support and blessings helped me throughout this project. 6) PREFACE Private sector is one of the fastest growing sectors in the country. After the liberalization the Private industry still holds vast opportunities for young and experienced professionals. Among the Private Stock Broking Companies, Karvy Stock Broking Ltd. Is the key player and has been making efforts to improve efficiency and customer services. There are many companies in the market which are providing the financial product like insurance, mutual funds, demat account services, general insurance, portfolio management
- 3. services, wealth management, gold coins, money changing, money transfers and the others. Including Demat Account services. Karvy Stock Broking Ltd. offers stock broking services, mutual fund services, insurance, commodity, IPO services, gold coin exchange and foreign exchange services, Share Registry, Mutual Fund Registry, and PAN Service below the single roof. Hence, Karvy Stock Broking Ltd. provides many financial products on the single window. It consists of 7 units namely: - 1. Stock broking services 2. Demat 3. Mutual Funds 4. IPO 5. Commodity 6. Forex 7. Gold Seven.) DECLARATION I hereby declare that the project report titled “Strategic Approach of Karvy Stock Broking Ltd. And It‟s Competitors Regarding Demat Account & Share Trading---A Comparative Overview” is a genuine research work done by me and it has not been published anywhere earlier. Date: Place: NEW DELHI 8.) OBJECTIVE OF TRAINING The objectives of my project include the following:- 1. To study the financial products and services of Karvy Stock Broking Ltd. 2. To make a comparative study of competitors of Karvy Stock Broking Ltd. in Burdwan. 3. To find out potential investors or customers for Karvy Stock Broking Ltd. and present attitude
- 4. of investors regarding share market in Burdwan town. 4. To analise the marketing strategies of Karvy Stock Broking Ltd. and suggest new strategies. So, the objective of the project is to identify the market potential of Demat Account services offered by Karvy Stock Broking Ltd. and a comparative analysis of the competitors of KSBL in Burdwan town. 9.) EXECUTIVE SUMMARY This project has been a great experience for me and at the same time it gave me enough scope to implement my analytical ability. Stock Broking leading industry which is basically my concern industry around which my project has to be revolved is really a very complex industry. This project as a whole can be divided into two parts: - The first part gives an insight about demat account and share trading and its various aspects. It is purely based on what I learned at Karvy Stock Broking Ltd. One can have a brief knowledge about demat and share trading and all its basics through the project. Apart from it I have also gained knowledge briefly about mutual fund, general insurance etc. This entire topic has been covered in a very systematic way. The language has been kept simple so that even a layman could understand. All the data„s have been well analyzed with the help of charts and diagram. The second part consists of data and their analysis, collected through a questionnaire which helps me to clearly know the terms and condition of different leading stock broking companies and their business strategies. It covers the topic “Strategic Approach of Karvy Stock Broking Ltd. And It‟s Competitors Regarding Demat Account & Share Trading---A Comparative Overview”. The data collected has been well organized and presented. Hope the research findings and conclusions will be of use. I have really enjoyed during the time period of summer internship because I gained much better knowledge about the share market trading activities not only a single Karvy Stock Broking Ltd. but also gained another Company„s share trading activities. The practical knowledge gives me enough scope to implement my experience in related companies in the near future. I am able to know better how to manage the employees work and to take necessary steps to enhance growth and development of the employees as well as the company„s wellness. 10.) SCOPE OF THE STUDY The scope of the study refers to the job that to know about the activities of the organization. The study means that the analysis of the products of the company on which he/she has to focus. During the summer training the volunteer need to find out the corporate strategies of the running company and The mile stone which the company has covered during its journey. In the summer training, it is necessary for the student that he /she involve with the experience guys to get the knowledge about the company. That is how the company has got the success, Or if it is
- 5. going in the loss, why. In my training period I have found that the Karvy group is the biggest group in Indian companies. I felt that I can learn the more in the Karvy Stock Broking Ltd. Karvy Stock Broking Ltd. is the part of the Karvy Group of Companies which is a growing company in the financial products. 11.) Introduction to the Indutry 12.) History of Stock Broking The history of stock brokers can be traced back to the origins of the first stock exchange in 1602 at Amsterdam. Even before that brokers are said to have existed in France dealing with government securities. The Amsterdam Stock Exchange was involved in buying and selling of shares for the Dutch East India Company. However, the first real stock exchange came up in Philadelphia in the United States during the late 18th century. Later it was the New York stock exchange which saw a rise in its popularity. Wall Street, as it was called, became the hub of brokerage activities. Earlier stock brokers were largely unorganized, but later most of them joined hands to form institutes and organizations. Till the 1980's stock broking services were used only by the wealthy class who could afford them. Later with the advent of the Internet, stock broking became very easy. Thus, the price tag on stock brokers lowered considerably and their services became available even to the common man. The stock broking duties are now mostly taken up by major organizations with the smaller companies being absorbed by them. In India, too with increasing globalization the major corporations are penetrating deeper into the society. History of Stock Exchanges in India: Stock markets refer to a market place where investors can buy and sell stocks. The price at which each buying and selling transaction takes is determined by the market forces (i.e. demand and supply for a particular stock). Let us take an example for a better understanding of how market forces determine stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an upward movement in its stock price. More and more people would want to buy this stock (i.e. high demand) and very few people will want to sell this stock at current market price (i.e. less supply). Therefore, buyers will have to bid a higher price for this stock to match the ask price from the seller which will increase the stock price of ABC Co. Ltd. On the contrary, if there are more sellers than buyers (i.e. high supply and low demand) for the stock of ABC Co. Ltd. in the market, its price will fall down. In earlier times, buyers and sellers used to assemble at stock exchanges to make a transaction but now with the dawn of IT, most of the operations are done electronically and the stock markets have become almost paperless. Now investors don„t have to gather at the Exchanges, and can trade freely from their home or office over the phone or through Internet.
- 6. History of the Indian Stock Market - The Origin One of the oldest stock markets in Asia, the Indian Stock Markets has a 200 years old history. Year 1800 : East India Company was the dominant institution and by end of the century, business in its loan securities gained full momentum. Year 1830 : Business on corporate stocks and shares in Bank and Cotton presses started in Bombay. Trading list by the end of 1839 got broader Year 1840 : Recognition from banks and merchants to about half a dozen brokers Year 1850 : Rapid development of commercial enterprise saw brokerage business attracting more people into the business Year 1860 : The number of brokers increased to 60 Year 1860-61 : The American Civil War broke out which caused a stoppage of cotton supply from United States of America; marking the beginning of the "Share Mania" in India Year 1862-63 : The number of brokers increased to about 200 to 250 Year 1865 : A disastrous slump began at the end of the American Civil War (as an example, Bank of Bombay Share which had touched Rs. 2850 could only be sold at rs 87.) Pre-Independence Scenario - Establishment of Different Stock Exchanges Year 1874 : With the rapidly developing share trading business, brokers used to gather at astreet (now well known as "Dalal Street") for the purpose of transacting business. Year 1875 : "The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock Exchange") was established in Bombay Year 1880 : Development of cotton mills industry and set up of many others Year 1894 : Establishment of "The Ahmedabad Share and Stock Brokers' Association" Year 1900 : Sharp increase in share prices of jute industries in 1870's was followed by a boom in tea stocks and coal Year 1908 : "The Calcutta Stock Exchange Association" was formed. Year 1920 : Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with 100 brokers. Year 1923 : When recession followed, number of brokers came down to 3 and the Exchange was closed down Year 1934 : Establishment of the Lahore Stock Exchange. Year 1936 : Merger of the Lahore Stock Exchange with the Punjab Stock Exchange. Year 1937 : Re-organization and set up of the Madras Stock Exchange Limited (Pvt.) Limited led by improvement in stock market activities in South India with establishment of new textile mills and plantation companies. Year 1940 : Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was established Year 1944 : Establishment of "The Hyderabad Stock Exchange Limited" Year 1947 : "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and Shares Exchange Limited" were established and later on merged into "The Delhi Stock Exchange Association Limited" Post Independence Scenario The depression witnessed after the Independence led to closure of a lot of exchanges in the country. Lahore Stock Exchange was closed down after the partition of India, and later on merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act were:
- 7. 1. Bombay 2. Calcutta 3. Madras 4. Ahmedabad 5. Delhi 6. Hyderabad 7. Bangalore 8. Indore Many more stock exchanges were established during 1980's, namely: Cochin Stock Exchange (1980) Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982) Pune Stock Exchange Limited (1982) Ludhiana Stock Exchange Association Limited (1983) Gauhati Stock Exchange Limited (1984) Kanara Stock Exchange Limited (at Mangalore, 1985) Magadh Stock Exchange Association (at Patna, 1986) Jaipur Stock Exchange Limited (1989) Bhubaneswar Stock Exchange Association Limited (1989) Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989) Vadodara Stock Exchange Limited (at Baroda, 1990) Coimbatore Stock Exchange Meerut Stock Exchange At present, there are twenty one recognized stock exchanges in India which does not include the Over The Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL). Government policies during 1980's also played a vital role in the development of the Indian Stock Markets. There was a sharp increase in number of Exchanges, listed companies as well as their capital, which is visible from the following table: Indian Stock Exchange Growth 1946 1961 1971 1975 1980 1985 1991 1995 No. of Stock Exchanges 7 7 8 8 9 14 20 22 No. of Listed Cos. 1125 1203 1599 1552 2265 4344 6229 8593
- 8. No. of Stock Issues of Listed Cos. 1506 2111 2838 3230 3697 6174 8967 11784 Capital of Listed Cos. (Cr. Rs.) 270 753 1812 2614 3973 9723 32041 59583 Trading Pattern of the Indian Stock Market Indian Stock Exchanges allow trading of securities of only those public limited companies that are listed on the Exchange(s). They are divided into two categories: Types of Transactions The flowchart below describes the types of transactions that can be carried out on the Indian stock exchanges: Listed Securities of Public Limited Companies Specified Securities (Forward List) Non Specified Securities (Forward List) Equity Share of Company That are Dividend Paying Growth Oriented Companies Paid up Capital of at least Rs. 50 Million Market Capitalisation of at least Rs. 100 Million Has more then 20,000 Share Holder Equity Share of Companies Not Covered in Specified Securities Types of Transactions The flowchart below describes the types of transactions that can be carried out on the Indian stock exchanges: Listed Securities of Public Limited Companies Specified Securities (Forward List) Non Specified Securities (Forward List) Equity Share of Company That are Dividend Paying Growth Oriented Companies Paid up Capital of at least Rs. 50 Million Market Capitalisation of at least Rs. 100 Million Has more then 20,000 Share Holder
- 9. Equity Share of Companies Not Covered in Specified Securities Transaction on Indian Stock Exchange Spot Delivery Transaction Includes Transactions that require delivery and payment within stipulated time period at the time of entering into the contract This period shall not be more that 14 days following the date of contract Forward Transaction Transactions in which Delivery and Payment can be extended by further period of 14 days each. The overall period should not exceed 90 days from the date of contract Transactions permitted only in case of specified shares