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A

REPORT

ON

“COMPARATIVE ANALYSIS OF ONLINE TRADING

OF THE COMPANY WITH OTHER BROKING

COMPANIES”

BY

AMIT MANDOWARAANKIT BHANSALI

Office: 5th

Floor, Sakar-1, Opp. Gandhi gram Rly. Station,Navranpura, Ahmedabad-380009.

Tele: 079-66302700, 079-26581133Fax: 079-26582331

SUBMITTED TO:

Dr. Namrata Bajaj Mr.Jasminshah (Faculty Guide) (Company guide)

ICFAI BUSINESS SCHOOL PRSSBAhmedabad. Ahmedabad.



A

REPORT

ON

“COMPARATIVE ANALYSIS OF ONLINE TRADING

OF THE COMPANY WITH OTHER BROKING

COMPANIES”

BY

AMIT MANDOWARA (07 BS 0436)

ANKIT BHANSALI (07 BS 0591)

A report submitted in partial fulfillment of the requirement of MBA program of ICFAI business school

Distribution list:

Company Guide: Mr.Jasmin shah, PRSSB Ahmedabad

Faculty Guide: Dr.Namrata Bajaj, ICFAI business school



ACKNOWLEDGMENTS

Firstly I am glad to thank IBS family to have summer internshipprogram (SIP) for more than 3 months in the curriculum whichhelp us to get exposure to corporate life.

I would like to express my sincere thanks to MR. AtulP.Sharedalal and MR.Jigen P.Sharedalal (director of the company)for giving us the opportunity to work with their esteemedorganization.

I would like to thank Mr. Jasmin Shah (company guide) and Dr.Namrata Bajaj (Faculty Guide) for providing great inspiration

throughout the training and helping us to explore variousavenues in the field.

I am indeed grateful to Mr. Nigam Shah (mutual fundadvisor) and Mr.Bhavin Shah for providing guidance, faith,constructive suggestion and faith in our ability to perform wellwho gave me valuable opportunity of involving myself in real lifeprojects.

I am also thankful to all the staff members of PRSSB, Ahmedabadwho has always guided me whenever required.

I thanks to all whose who knowingly or unknowingly have helpedme in preparing the project

Ankit Bhansali



Table of content

Acknowledgments ii

Abstract iv

1. Introduction

1.1 Purpose and Limitation 1

1.2 Sources and Methods 2

2. Industry analysis 4-6

2.1 Products offered 6-7

2.2 Region-wise revenue 8

3. Online trading

3.1 History of online trading 9

3.2 About online trading 10-13

3.3 Risk of online trading 14

4. SWOT analysis of different broking companies 16-29

5. Comparison of different broking companies

5.1 On the basis of demat cost 30

5.2 On the basis of online trading 31

6. Data analysis 32-39

7. Conclusion 40

8. Recommendations 41

Appendices 42-44

Bibliography 45

CD Attached (online trading demo)



Abstract

In the fourteen week of summer internship project in PravinRatilal Share And Stock Brokers Ltd. I have experienced the

practical corporate life. In this period I have analyze the brokingindustry and its future prospects.

I have visited different broking firm and drew conclusionthereon. These will help the company in enhancing policiesregarding cost and value added services to customer,thereby increasing their customer base.

I have compare the services provided by PRSSB with othercompanies and also I have compare the online features of PRSSBwith other broking companies so as to know where the companystand and try to improve the weaken area.

I have prepared the demo of online trading so as toeducate the customer and encourage them to do online

trading so that cost of company could reduce.

I have also visited online customer of PRSSB by preparingquestionnaire so as to know the feedback of customer, to guidethem how to use and also to know there decision pattern .



OBJECTIVES

• To prepare online trading USP for the company

• To compare the online trading facility provided by thecompany with different Broking companies.

• To Educate the customer of the company about onlinetrading and getting there feedback for the same.

LIMITATIONS

• The field itself is very large so, I won’t be able to analyzeall the data as I have to complete the project within 14weeks, so there is some time constraint.

• As the number of broking companies are very large so, I

have to limit myself to few broking companies for bettercomparison.

• It won’t be possible to get customer feedback of other broking companies as we don’t have the databasefor the same.

• Indian brokerage industry is highly fragmented.

Numerous small firms operate in this space so as to getparticular data became quite difficult.



METHODOLOGY

We have collected the information from both the sources i.e.

1) Primary data2) Secondary data

• The Data related to the broking industry was collected fromvarious websites as well as from newspapers andmagazines.

• The data related to the different broking firms was collected

through primary source by visiting different companiesas prospective customers and also by searching theirwebsites.

• In order to get customer f eedback, I personally calledthe customer of the company from the databaseprovided and meet all the online trading customer inorder to get there response .

• The Data related to PRSSB prof ile was collected through thecompany’s website and by interacting with the employees.

• After collecting the remaining data, I will be doing the SWOTanalysis of selected broking firm which will help thecompany to find unique selling proposition (USP) of PRSSBtogether with identifying its potential to grow.

The research instrument ‘questionnaire’ used in the project isattached with the project.



PHASE 1

ABOUT ONLINE TRADING



INDUSTRY ANALYSIS

• The equity brokerage industry in India is one of the oldest in the Asiaregion. India had an active stock market for about 150 years

that played a significant role in developing risk markets as alsopromoting enterprise and supporting the growth of industry.

•

• The roots of a stock market in India began in the 1860s during

the American Civil War that led to a sudden surge in the

demand for cotton from India resulting in setting up of anumber of joint stock companies that issued securities to raise

finance.•

• Historical records show that as early as 1864, there were about 1,000

brokers with the stock markets functioning from three places inMumbai. Despite passing through a number of changes in the

post liberalization period, the industry has foundits way towards sustainable growth.

•

• A new phase in the Indian stock markets began in the 1970s, with the

introduction of Foreign Exchange Regulation Act (FERA) that led

to divestment of foreign equity by the multinational companies,

which created a surge in retail investing. The early 1980s witnessed

another surge in stock markets when major companies such as

Reliance accessed equity markets for resource mobilization that

evinced huge

interest from retail investors.

•

• A new set of economic and financial sector reforms that began in the

early 1990s gave further impetus to the growth of the stock markets

in India. As a part of the reform process, it became imperative to

strengthen the role of the capital markets that could play an important

role in efficient mobilization and allocation of financial resources to the

real economy. Towards this end, several measures were taken to

streamline the processes and systems including setting up an efficient

market infrastructure to enable Indian finance to grow further and

mature



• The Securities and Exchange Board of India (SEBI), which

was set up in 1988 as an administrative arrangement, was given

statutory powers with the enactment of the SEBI Act,

1992.The broad objectives of the SEBI include:

• to protect the interests of the investors in securities

• To promote the development of securities markets and to regulate the

securities markets.

RAPID GROWTH

The last decade has been exceptionally good for the stock markets in India.

• In the back of wide ranging reforms in regulation and market practice

as also the growing participation of foreign institutional investment,

stock markets in India have showed phenomenal growth in the early

1990s.

• Investor base continued to grow from domestic and international

markets. The value of share trading witnessed a sharp jump too.

• Stock markets became intensely technology and process

driven, giving little scope for manual intervention that has been the

source of market abuse in the past. Electronic trading, digital

certification, straight through processing, electronic contract notes,

online broking have emerged as major trends in technology.

• Risk management became robust reducing the recurrence of payment

defaults.

• Product expansion took place in a speedy manner. Indian

equity markets now offer, in addition to trading in equities,

opportunities in trading of derivatives in futures and options in index

and stock



• Stock exchange reforms brought in professional management

separating conflicts of interest between brokers as owners of

the exchanges and traders/dealers

• The number of brokers in various stock exchanges rose from 6,711 in1996-97 to 10115 in FY07.The increase in the number of brokers inlast decade is around 40%.you can see from the graph below it.

Figure 1

Graph indicating increase in number of brokers during lastdecade.

Sources: dnb

PRODUCTS OFFERED

• In the past couple of years, apart from trading, the firms have startedoffering various investment related value added services:

• The sustained growth of the economy in the past couple of years has

resulted in broking firms offering many diversified services related toIPOs, mutual funds, company research,etc. However, the core trading

activity is still the predominant form of business, forming 90% of the



firms in the sample. 67% firms are engaged in offering IPOrelated services.

• The broking industry seems to have capitalized on the growth of the

mutual fund industry, which was pegged at 40% in 2006. More than50% of the sample broking houses deal in mutual fund investment

services.• The average growth in assets under management in the last two years

is almost 48%. Company research is another lucrative area where the

broking firms offer their services; more than 33% of the firms are

engaged in providing company research services.• Additionally, a host of other value added services such as fundamental

and technical analysis, investment banking, arbitrage etc are offered

by the firms at different levels.

Figure 2

Graph indicating % of companies offering various products

Source:dnb

• Of the total number of broking houses providing trading services, 52%

are based in the West, followed by 25% from North, 13% from South



and 10% from the East. Around 50% of the firms offering IPO relatedservices are based in the West as compared to 27% in North, 13% in

South and 10% in East. In providing mutual funds services, the

Western region was dominant amounting to 49% followed by27% from North; The South and the East are almost at par with

13% and11%

Figure 3

Graph indicating region wise revenue coming from brokingcompanies.

Source: self generated from the study material



HISTORY OF ONLINE TRADING

Indian exchanges and brokering houses have been slow to move their

transactions online. This has been mainly due to Government

regulations. There was initial delay in laying down specifications for creatingClosed User Groups (CUGs). The issue was resolved between the DoT and

the Finance Ministry around 1998 and soon trade portalslike ICICIDirect.com, motilaloswal.com, and smartjones.com

came into being.

The main challenge in online trading at that time was:

1. Connectivity was perhaps the most important technological factor. The

cost of leased lines and VSAT links has been traditionally very high andthe reliability of the links has been low.

2. It also took a long time to commission the links as one had to make anapplication and wait for a few weeks for the link to be up and running.

3. Other issues like security, and backup and recovery procedural costs

were also deterrents.

4. Security is the most crucial element in the network. All

applications have been built with a conscious approach towards

security. The security policies are tightly integrated and regularlyscrutinized to leave no room for compromise. All the applications

and OSs are hardened periodically for safety."5. Backup and recovery this has emerged as one of the vital aspects of

business continuity. When online exchanges were designed a fewyears ago, perhaps a lot of emphasis was not placed on this aspect, as

it is today. However it's not difficult to add business continuityprocesses to an existing network.

Thankfully, along with the resolution of regulatory issues, India

no longer has any pressing connectivity and bandwidth issues. With,the entry of private players into the broadband scenario and the

government opening up the telecom sector, these issues are almost

non-existent. Security solutions and services available in the market havematured and it doesn't cost a pretty packet anymore to put a simple

backup solution in place.



Years

ABOUT ONLINE TRADING

• Traditionally stock trading is done through stock brokers, personally or

through telephones. As number of people trading in stockmarket increase enormously in last few years, some issues likelocation constrains, busy phone lines, miss communication etc startgrowing in stock broker offices. Information technology (StockMarket Software) helps stock brokers in solving these problemswith Online Stock Trading.

• Online Stock Market Trading is an internet based stock trading facility.Online trading refers to buying and selling securities via the Internet orother electronic means such as wireless access, touch-tone

telephones, and other new technologies. Investor can tradeshares through a website without any manual intervention from Stock

Broker.• Though the spread of internet has been slow in India, the players are

catching fast at least in the online trading business. Given the

suitability of the product and rising demand of internet thereis no

surprise that E-broking is picking up fast captivated the imagination of the consumer and created a new breed of investor- the day

trader investor who is impulse to buy, own and to sell and must bematched

by swift transaction processes.

Figure 4



• There are two different type of trading environments available foronline equity trading.

1. Installable software based Stock Trading Terminals

This trading environment requires software to be installed oninvestor’s computer. This software is provided by the stock broker...

These kind of trading terminals are used by high volume intraday equitytraders.

Advantages

Orders directly send to stock exchanges rather than stockbroker. This makes order execution very fast.

It provides almost each and every information which

is required to a trader on a single screen includingstock market charts, live data, alerts, stock market news

etc.

Disadvantages

Location constrains - You cannot trade if you are not

on the computer where you have installed tradingterminal software.

It requires high speed internet connection.

These trading terminals are not easily available for low

volume share traders.

2. Web (Internet) based trading applicationThese kind of trading environment doesn't require any additional

software installation. They are like other internet websites whichinvestor can access from around the world through normal internet

connection.

Advantages of Online Stock Trading (Website based)

Real time stock trading without calling or visiting broker's

office.

Display real time market watch, historical data’s, graphs

etc.

Check the trading history; demat account balance andbank account balance at any time.

Provide online tools like market watch, graphs and

recommendations to do analysis of stocks.

Place offline orders for buying or selling stocks.



Set alert to inform you certain activity on the stockthrough email or sms.

Secure transactions.

Disadvantages of Online Stock Trading (Website based)

Website performance - sometime the website is too slow or

not enough user friendly.

Little long learning curve especially for people who

don’t know much about computer and internet.

ONLINE TRADING PROCESS

The various transactions involved in online trading can be shown from the point of view of the

• Client

• Broker

• Stock Exchange

The client places an order via the net by logging onto hisbroker's site.

The broker accepts and executes the order And places it with the exchange.

The exchange accepts the order after Checking the share limit for the day.

The broker makes the payment either Directly via the clients bank account or indirectly via broker

The exchange receives the money andCompletes the settlement.

The client is intimated about the settlement either Through demat account or through e-mail.



BENEFITS OF ONLINE TRADING

Internet trading is expected to:

• Increase transparency in the market

• Provide management information system(MIS)

• Introduce flexibility in the system, to handle growing volumes and tosupport nationwide expansion plans of market activity.

• Through internet trading three fundamental objectives of SEBI

regulation can be easily achieved. These are:

1) Investor protection

2) Creation of fair and efficient market

3) Reduce risk of systematic risk

• Real time streaming quotes• Instant trade execution and order confirmation

Benefits from the online trading are so much day by day numbers of clients

prefer online trading and also revenue coming from online trading is

increasing at tremendous speed.

Figure 5

Graph indicating % of revenue coming from online trading



Risk of online trading

• There is risk of loss associated with investing in securities regardless of

the method used. New investors need to understand the principles of

investing, their own risk tolerance, and their investment goals beforeventuring into the market. In addition, online investors may want toconsider these other risks.

• High Internet traffic may affect online investors' ability to access their

account or transmit their orders. Online investors should be skeptical

of stock advice and tips provided in chat rooms or bulletin boards.

• Investors should do their own research before acting on these

tips.Also, for some online investors, there is a temptation to "overtrade" by

trading too frequently or impulsively without considering their

investment goals or risk tolerance.

• Overtrading can effect investment performance, raise tradingcosts, and complicate your tax situation Online investors need to beaware of the potential for stock market volatility, the possibility of

delays due to high Internet traffic or high trading

volume, and thedifference between market and limit orders.

Learn about the possibilities & pitfalls of using

the Internet as an investment tool. Still, India has a long way to gofor online trading and is lacking behind from other developing countries.

Figure 6



SWOT ANALYSIS OF OTHER BROKINGCOMPANIES

COMPARISION OF DIFFERENT BROKING

COMPANIES



• ICICI Direct is the sister concern of ICICI Bank. It is an online broking

firm which provides the investors to trade in equity, IPO’s, mutual

funds and derivatives online.

• The ICICIdirect Advantages: It has 3-in-1 accounts integrates

banking, broking and demat accounts. This enables to trade in shares

without going through the hassles of tracking settlement cycles,

writing cheques and Transfer Instructions, chasing your broker for

cheques or Transfer Instructions etc.

• Internet-based Online Trading can be done through software. It is free

of cost but the investor has to refresh again after opening it to view

the live rates as it does not changes automatically unless refreshed.

This is the online portal of ICICIDIRECT.



SWOT ANALYSIS OF ICICIDIRECT

STRENGTH

1st

player to start online trading

3-in-1 account integrates yourbanking, broking and demat

accounts. All accounts are fromicici and very well integrated.

Large distribution network across

India

Investment online in IPOs,

mutual funds, goi bonds, and

postal savings schemes all fromone website.

General insurance is also

available from icici Lombard.

WEAKNESS

Only online is there

Brokerage is very high

Online portal does not show

the fluctuation of price

OPPORTUNITIES

Vast untapped market

Number of user in online trading are

continuous increasing

THREATS

Facing high competition

Various players are using hybridmodel i.e. online and offline whileicicidirect has only online

customer

According to the executive the company have achieved 6-7% (monthto month) increase in customer base till date and they are targeting

same figure in the future also



• Kotak Securities, a strategic joint venture between Kotak Mahindra

Bank and Goldman Sachs (one of the world’s leading investment banks

and brokerage firms, holding 25% stake in the company) is

India’s leading stock broking house with market share close to 9%.

• Set up in 1994, Kotak Securities is a leader in Institutional

Stock Broking, Portfolio Management, Retail Broking &

Distribution and Depository Services.

• Kotak Securities has 835 outlets servicing over 3, 35, 000 customers

and a coverage of 295 cities. Kotaksecurities.com, the online division

of Kotak Securities Limited offers Internet Broking services and

also online IPO and Mutual Fund Investments. Kotak Securities

Limited has over Rs. 2640 crore of Assets under Management

(AUM) as of 30th June, 2007.

• The company has a full-fledged research division involved in Macro

Economic studies, Sectoral research and Company Specific Equity

Research combined with a strong and well networked sales force which

helps deliver current and up to date market information and news.

• 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 accolades that Kotak Securities has been graced with Best

Performing Equity Broker in India - CNBC TV 18" (2008)– Optimix

Financial Advisory Awards



SWOT ANALYSIS OF KOTAK SECURITIES

STRENGTH

They provide daily sms alerts,market pointers, periodicalresearch reports, stockrecommendations etc.

Won many awards and have a

good reputation in the market.

Provide various a/c types, so as tocater individual needs.

Large distribution network across

India.

WEAKNESS

High brokerage is charged

Minimum account balance of

rs.5000 is required

Provide less exposure as

compared to other brokeragehouse.

OPPORTUNITIES

Take benefit of 3 in 1 accountscheme

Capitalize on advisory services

Distribution of financialproducts

THREATS

Facing competition fromicicidirect, HDFC sec., etc

because mare or less thereservices are same.

Competition from low

brokerage house like angel,

motilal oswal, etc

According to the executive they have achieved the growth of 30-35%in online trading customer and they are targeting nearly 45-50% of

their customers to get online within 2-3 years



ANGEL BROKING

• The Angel Group has emerged as one of the top 3 retail broking housesin India. Incorporated in 1987, it has memberships on BSE, NSE and the two

leading commodity exchanges in India i.e. NCDEX & MCX. Be it in form of focused research or state of the art technology or customized product offerinor personalized touch to our services. Angel is the only

100% retail stock broking house offering a gamut of retail centricservices.

SWOT ANALYSIS OF ANGEL BROKING

STRENGTH

Known for giving high

margins.

Good distribution network

across India

Angel clients will have the

advantage to access theirback-office data on mobile

phone.

Four types of onlinesoftware are available so as

to cater individual customer.

WEAKNESS

Online customer base are less

as compared to peers.

Poor quality of service

Company avg. Collection

period is 175 days while avg.

Payment period is 60 days.

OPPORTUNITIES

Targeting service class

people

Online software according to

individual requirement

Capitalize on online IPO and

MFs services.

THREATS

Competition from low

brokerage firms

Less online customer as

compare to peer companies.



• The India Info line group, comprising the holding company, India Infoline Limited and its wholly-owned subsidiaries, straddle the entirefinancial services space with offerings ranging from Equity research,

Equities and derivatives trading, Commodities trading, PortfolioManagement Services, Mutual Funds, Life Insurance, Fixed deposits,

GoI bonds and other small savings instruments to loan products and

Investment banking. India Info line also owns and manages the websites www.in d iainfoline .com and www. 5 pa isa.com

• The company has a network of 596 branches spread across 345 citiesand towns. It has more than 500,000 customers.

• It is registered with NSDL as well as CDSL as a depository participant,

providing a one-stop solution for clients trading in the equities market.

It has recently launched its Investment banking and InstitutionalBroking business.

http://www.indiainfoline.com/










SWOT ANALYSIS OF INDIAINFOLINE

STRENGTH

Rates are very competitive then other

providers

Large number of customer base for

online trading as they were among the

initial players in the sector

Research reports

High security is there in online trading

WEAKNESS

Learning TT advance software is

little tough.

Long process time for opening a

account

Min. Deposit of Rs. 5000 is

required

Opportunities

Huge service class customer base

Online IPO

and

mutual

funds

Huge commodity market is there

THREATS

Other companies who are

charging low brokerage and the

account processing time is also

very less

Many new companies have

started online trading

aggressively which may result i

decreasing their market share

According to the executive they have achieved nearly 25 % p.a growthin online trading customer and they are expecting the same in futurealso. After two years there target is to have 50-60%of there customer

to get online



• Kunvarji group was founded in 1987, with only 5 person at its helm and 200Sq feet of office and now they have grow into a force of over 350 employees,

400 Business associates, and spread of 8 states across the country.

• The company also enjoys establishment of an overseas base at Dubai, UAE.

• The kunvarji group comprises of:

- Kunvarji Finstock Private Limited

- Kunvarji Commodities Brokers Private Limited

- Shikha Growth Fund Private Limited

SWOT ANALYSIS OF KUNVERJI

STRENGTH

Flexibility in brokerage

There is no annualmaintenance

Aggressive approach

Provide Odin software foronline customer

WEAKNESS

Online trading started very

late(2007)

No. of branches are few

OPPORTUNITIES

Targeting HNIs clients

Vast untapped market foronline trading.

To make IPO and F& O online

THREATS

Charges for online trading isvery high while many

companies provide free of cost.

Facing tough competitionfrom small as well as large

players.



SHAH INVESTORS

• SHAH INVESTORS started at 1980 with a mission to provide excellentservices in the stock market, in the capital & F&O segment and

as depository participant in NSDL & CDSL, Shah Investors Home

Ltd. came into being, a brain child...

• The strength in retail client base in Gujarat State is an ample

testimony to our growing stature in our field. And a tribute totheir

'customer first' attitude coupled with services on par with the verybest!

• Banking on assets like core competency of employees - a terrific teamof 65, management seeped with concrete ideas of tomorrow likewebsite for trading, tips online to the clients, infrastructure supported

with ongoing research for better solutions and a quest to provide the

very optimum mix of services to our client base, SIHL will always havevery sure footed entry into the future...

• Till now the number of client is approx. 80000 and still it iscontinuously increasing……..

• Theyhave 1000 customers in online trading and out of them 125-150 getonline daily .They have formed special team of 4 members foraggressively promoting online trading and for customer queries.

•

They add nearly12-15 client every week in their online trading base.

•

They are targeting 10-15% of the customers to get online in next 2years



SWOT ANALYSIS OF SHAH INVESTORS

STRENGTH


There is no annual maintenance

Aggressive approach

Provide Odin software for onlinecustomer

WEAKNESS

Online trading started very

late(2007)

No. of branches are few

OPPORTUNITIES

Targeting HNIs clients

Vast untapped market for onlinetrading.

To make IPO and F& O online

THREATS

Charges for online trading is veryhigh while many companies provide

free of cost.

Facing tough competition from small

as well as large players.

They have 1000 customers in online trading and out of them 125-150

get online daily .They have formed special team of 4 membersfor aggressively promoting online trading and for customer queries

.They add nearly12-15 client every week in their online trading

base. They are targeting 10-15% of the customers to get online innext 2 years



The services provided by PRSSB:

EQUITY TRADING – NSE & BSEDERIVATIVES – NSE & BSE

DEPOSITORYINTERNET BASED TRADINGIPO & BOOKBUILDINGMUTUAL FUNDSFIXED DEPOSITS & RBI BONDSPORTFOLIO ADVISORY

1. Equity & Derivatives

•

In-house team for fundamental research.• User friendly Internet Based Trading - https://itrade.prssb.com/

• View your transaction details through on-line Back-office.

• Digitally signed contract notes at www.prssb.com as well as sent through e-

mail

• Trade confirmation through SMS.

2. Depository

• Consolidated holding report of family accounts with valuation from our

website: w ww.prssb .com

• Demat holding status available 24x7 – Phone Banking• Speed-e – unbelievably low transaction charge, eliminating geographical

barriers with utmost safety.

• On-line Branch Network – all services are available from any of our branches.

• Various details sent through Email – monthly holding statement, allotment of IPO/Book-building, etc.

http://www.prssb.com/








• IPO allotment intimation through SMS.

• Excellent surveillance system for greater safety and security of all

transactions.

• Steady, simple and transparent charge structure over the past few years –

No hidden costs.

• Dedicated and NCFM Certif ied prof essional team

•

Long business hours, as well as working on various public holidays also.

3. Internet Based Trading

• Speed and Power of a broker’s terminal at your Desk-top.

• Real time streaming quotes on one screen.

• Single screen order and trade entry.

• Instant order and trade confirmation.

• Freedom of information and greater transparency.

• Control of your money in your hands – Best price for investors.

• Level playing field.

4. IPO & Book-building

• Independent and efficient team.

• Ranked among top 15 sub-syndicate members in the country.

• Amongst the above, ranked 2nd in Gujarat.

• Guidance available during public issues for small and big investors.

• On-line bidding at all our branches.

5. Mutual Funds, Fixed Deposits & RBI Bonds

• Independent department for Mutual Funds as well as Fixed Deposits and RBI

Bonds.

• NCFM qualified and competent team.• Proper expert guidance available according to the needs and requirements of

the investors.• Fixed Deposit and Bonds of various companies are available, including Bonds

issued by RBI.

• Valuation report with gain and loss sent on monthly basis.

6. Portfolio Advisory

• In-house team for fundamental research.

• NCFM Certified professional team.



• Personalized guidance on your portfolio – with prior appointment.

• In-house research team equipped with latest software’s – “Capitaline” and

“Prowess”.

• Provides rational and disciplined approach for your investments

Online portal of PRSSB



SWOT ANALYSIS OF PRSSB

STRENGTH

Have a good relation with the client


Known for clear & transparent

business

Good distribution network around

Ahmedabad

WEAKNESS

No research report

No marketing for online trading

No customer query desk

OPPORTUNITIES

Large offline customer base so it can

convert into online customer

Target smaller cities in Gujarat

where competition is less.

THREATS

Various big players like kotak ,

angel , ICICI direct , reliance

money etc are aggressively

expanding their market in

online trading

No commodity exchange yet

which is expanding rapidly.

Lack of aggressive approach



Table 1

COMPARATIVE ANALYSIS OF BROKING COMPANIES ON THE BASIS

OF VARIOUS CHARGES

NAME OFDP ICICIDIRECT KOTAK SECURITIES INDIAINFOLINE ANGELBROKING KUNVERJI SHAHINVESTO

RS

PRSSB

Advance

deposit

Rs.2500,if

client does

not have

a/c.

Rs.5000 NIL Rs. 5000 Nil Nil NIL

a/c opening

Rs. 750 Rs 575 Rs.555(lifetime)

Rs. 272

Nil 130

NIL

a/c

maintained Rs. 500 Nil Nil Rs. 300

Rs.200-

individual

Rs.500-

corporate

Rs.450-

normal a/c

Rs.1100-

traders a/c

Rs. 300

Demat

Rs. 35 andRs.2 per certificate

Rs. 35 andRs.2 per certificate

Rs.15 for

postalrequest &Rs. 2 p.c

Rs.25 for postalrequest &Rs. 2 p.c

Rs.30 +Rs.

3 p.c

Rs.35 per

DRF up to

15 cert. &Rs.2 p.cextra

Rs.2 p.c

(mini. Rs.

25 per

request)

Pledge

creation

.02 or

minimumRs. 20

Rs. 25 Rs. 25 Rs. 25 Rs.25 Rs. 55 Rs. 50

Pledge

closure 0.02 or minimumRs. 20

Rs. 25 Rs. 25 Rs. 25 Rs.25 Rs.30 Rs. 50

Pledgeinvocation 0.02 or

minimum

Rs. 20

Rs. 25 Rs. 25 Rs.25 Rs.25 Rs.30 Rs. 50

Off market

transaction-

sale(DP)

Rs. 25

Rs.20 Nil Nil Rs. 10 Nil RS.17

Off market

transaction -sale(inter DP)

Rs. 25

Rs.25 Rs. 17 Rs.20 Rs 20

Rs.25-

normal a/cRs.15 – traders a/c

Rs.25

Source: primary data

p.c – per certificate

DP- depository participant



Table 2

COMPARATIVE ANALYSIS OF VARIOUS BROKING COMPANIES ON

THE BASIS OF ONLINE TRADING

PARTICULARS ICICI

DIRECT

KOTAK

SECURITIES

INDIA

INFOLINE

ANGEL

BROKING

KUNVER

JI

SHAH

INVESTOR

PRSSB

SERVICE

STARTED 7-8years

5-6 years 6 years 4 years 6 months 2 years 1.5 years

SOFTWAREUSED Web

based

Web &

application

based

Web &

application

based

Application

based

Odin

software

Web &

application

based

Web

based

SOFTWARE

CHARGES Nil Nil Nil Nil 1000 p.m Rs.450 p.m Nil

DELIVERY

CHARGES 0.75 0.2-0.59 0.25 0.5 0.15-0.5 0.4 0.3-0.7

INTRA DAY

CHARGES .05 0.02-0.18 .05 .05 .015-.05 .04 0.1

% OF ONLINECUSTOMER 100 40 70 20 2 2 3

% OF

GROWTH

EXPECTED

40-50 40-50 60 25-30 90-100 100 20

Source: primary data



Phase 3

Data analysis

Findings & conclusion

Recommendation



We have call the 368 online customers and the response we get

are given below.

Figure 7

Response of the customer who haveonline

tradingaccount

159

84

int erest ed

71 no problem2

not valid

PRSSB family

not int erested

25

20

0 50 100 150 200

Number of customer s

20 customers are not at all interested in online tradingbecause they are comfortable with offline trading as itbecome matter of habit.25 are staff of PRSSB.71 customers number are not valid or not responding84 customers do not have any problem with online tradingand satisfied with the services.159 customers are interested in knowing how to do online



trading



In questionnaire we have ask the client to rate the various

services of PRSSB.

Figure 8

Graph indicating the performance of various services of the company

From the graph it can be seen that customers are very much

satisfied with the service of depository, equity and initial public

offer.

However responses for online trading services were not

satisfactory and many of customers have negative feedback for

online trading portal of PRSSB.



We have also asked the online client about the features of online trading

Figure 9

From this it has come to know that many of the clients does not know

the features of online trading that the reason the number of onlineclient are less.

Customers only know how to buy or sell the scrip but they don’tknow how to see best market price, how to make portfolio, to see

market analysis and many other features



Problems faced by online trading customers

When we have visited various online clients the common problems they are

facing are as follows:

1. Change password

Online client has to change the password within 14 days and if client does

not use for such period, then client password and pin would expire so clienthas to call to PRSSB and has to ask for new password and pin again.

For improvement

• Default password and pin should be changed frequently for better

safety.• Reset password and pin should be sending through email for

better security and safety for the client. It should see that emailis send immediately.

• When client does not use online portal for more than 14 daysthen software should ask for old password and pin and then

client could change the password and pin.

2. Settings

Client could not start online trading as various settings are requiredlike screen resolution, block pop-up, about security level, etc.

For improvement:

• Demo of online trading could be mailed to all the client or could

be load on company’s website

3. Download java

Java is necessary because it helps to fluctuate the price of various stock.java could be download from company’s website but basic problem isthat generally all the client select ‘save’ the java , so folder of Microsoft

java is there on client pc or laptop but it is not install. Client shouldselect ‘open’ button instead of ‘save’ button and then extract and save

on desktop .so what will happen that Microsoft java folder will be there on

desktop and then click on that and one option will be there so select.this would led to download of java



For improvement

• If possible, procedure of downloading java should be simplified

• Educate the client by giving them the demo of how to download java.

4. Training is provided

As most of the client does not know how to use the online trading

so proper training should be provided for them which will help to

know the various features of online trading.

5. Response for customer query

When online client face any problem during market hours he/she don’t getproper reply as there is only one person who handle the online trading.

For improvement• As the number of online client is increasing day by day there should be

proper team of online department.

After visiting around 70 clients we decided to check whether number

of online transaction is increasing or not, sowe decide to collect the information from back-

office to know the number of transaction has increase

or not.

Figure 10

Months



Graph indicating the number of clients who did online transaction

Figure 11

Months

Graph indicating the average 5 days number of online transaction

Though the number of clients and number of transaction has increasedbut we are not satisfied with the numbers as we are expecting around

400+ transaction.

So we follow up the online client and try to know the reason why theyare not doing online trading.

We come to know that the clients were facing various other technical

problems. The problems are as follows:



1. Order confirmation:

• When client make transaction of buy/sell then sometimes confirmation

for an order is not shown below the screen and it is shown in orderbook(F3), so client become confused whether transaction is accepted

by server or not.

• Sometimes confirmation for an order is shown below the screen but it

is not shown in order book (F3) unless and until ‘refresh’ is done.

2. Loading:

• It takes long time to get into company’s website

• When user name, password and pin is entered to get into online portal

of PRSSB then it takes long time

3. Automatically log off:

• When client add scrip in portfolio option then sometimes it hang soclient has to again log in.

• When client add scrip in add instrument option then also it hang and

so client has to again log in.

4. Option of scrip code:

• When client wants to make his/her portfolio it can do by adding scripin add option and write the symbol of company’s name (e.g. For

reliance power, symbol- Rpower) so it is little difficult for investor toknow the symbol of the various company.

• So if there is option for scrip code as many client make portfolio byseeing the summary of demat account so it would easy for client to

make his/her portfolio

• Or if possible there should be option of company’s name.



CONCLUSION

A new class of tech-savvy investors is increasing in India and also thematurity level of these investors is reaching new heights. E-broking

also makes a good business sense as the manpower cost gets reduced andalso the reach is amazing. The broking firms can get away from expansion

cost and the risk management system is quite robust when technology is

used. I see the trend in the e-broking increasing in the years to come andas of now

I don’t see any major roadblocks in the way.

• Anup Bagchi, managing director and CEO of ICICIdirect.com.

Bagchi expects online business to grow around 80-100 per cent in the coming

year.

• Indiabulls , a relatively late entrant in the game, has been on the fast

track with its online customers growing from 35,000 in June 2003 toover 140,000 at present.

• Jaideep Arora, director, Sharekhan , said, "Online trading represents30 per cent of Sharekhan's broking business. The number of

customers registered with Sharekhan is 130,000 currently, of which

60,000 use Internet trading."



RECOMMENDATIONS

After one and half years of development, Pravin Ratilal Share And StockBrokers Ltd. (PRSSB) has till a long way to go. After studying theorganization and making the analysis of the same, we come to the

conclusion that following changes are required to make it an efficient

and better organization:

• In this competitive era, the broking companies are going for

heavy marketing thus PRSSB should also go for fruitful marketingso as to create public awareness and maintain the brand image.

• Franchises network should be adopted across Gujarat so as togenerate more revenue from the business (as 52 % of revenueof broking firms comes from west) and should see that franchisesshould meet the quality standards of services like what branchesprovided.

• Online team should be assigned to generate more sales and revenuefor the company by following aggressive selling

• PRSSB is not associated with any bank for cheques payment so as toget direct pay-in and pay-out.

• Like other broking firms PRSSB should also provide trainings to theironline customers and also educate the client about what is happening

in the stock market.

• Quarterly or monthly meetings with the client as per the client’srequirements in the retail sector will develop confidence in clienttowards PRSSB.

• Like other broking companies PRSSB should go for fortnightly ormonthly research report so as their client should which stock to buy

and at what price.

• Demo of online trading should be given to each and every online clientso as to educate them how to use it. These can be done by uploading

the demo on company’s website which will also help them to attractnew clients.



APPENDICES

Questionnaire

1- Since how long are you associated with PRSSB? years/months

2- Rate the various services of PRSSB.

(1-Very Good,2-Good,3-Average,4-Poor,5-Very Poor)

DepositoryEquity Trading

Derivatives

Internet Based Trading

IPO & Book BuildingMutual Funds

Fixed Deposits & RBI Bonds

Portfolio Advisory

3- How much is your investment in stock market?Rs .

4- Rate the Service Quality of PRSSB on following Dimensions.

(1-VeryGood, 2-Good, 3-Average, 4-Poor, 5-VeryPoor)

ReliabilityCommunication

Personal guidance

UnderstandingTransparency

Caring attitude

5- What is your mode of trading?

Online trading through a dealer

6- Which Internet connection are you using?

Broadband Dial-upWhat is the speed of the net? ......................Kbps/Mbps.

7- What according to you are the benefits of online trading?(Please tick

your answers) Trading at your convenience

■ Instant Order And

Trade Confirmation Easy Access Through Internet Facility

■ Transparency

Real Time Quotes ■ Direct control onyour investment

8- On what bases you make online transaction or sauda and howfrequently? (1-Always, 2-

Sometimes, 3-Never) Recommendation provided by the dealer

Fundamentals of the company

Technical analysis



9-Are you aware about the following features of online trading portal of

PRSSB? (Y-yes, N-no)Short Cut Keys

Portfolio SummaryMarket by Price

Market Analysis

Client trade report

Net PositionMessage History

Scrip DetailsFAQ’s

Client ledger report

10- When you have a problem in online trading, how often

Company has shown sincere effort in solving it?

Always sometimes never

11- Are you using online Trading portal of any other company?

Yes No

If yes, Name the Company & Mention the Unique Features

……………………………………………………………………………………………………………………………

Rate PRSSB Portal in comparison with others.

(1-VeryGood, 2-Good, 3-Average, 4-Poor, 5-VeryPoor)PRSSB Others.

12- What additional features do you like to have on online trading portal

of PRSSB?………………………………………………………………………………………………

13- Are you aware of the online back office facility provided by the

company?

Yes No

14- What other services would you like to get online?

Online Mutual Fund

Online IPO

Online Payment Online Research Report

15- Any feedback for the company?

…………………………………………………………………………………

Date: Signature:\



Queries of the customers

a. Customer sometimes Automatically get log off from the

online portal page

b. In morning, service get auto stop so service has to restart

frequently.

c. Sometimes when order is placed the customers are not getting

confirmation from the server because server has not

accepted the order.

d. Some times when order is placed the customer are not getting

confirmation from the server but order directly appears in f3

order book.

e. Sometimes it takes lot of time to enter into the itrade even at

normal internet speed (from prssb site) with all settings done.

f. The add instrument and portfolio page get hang sometimeswhen we enter the full scrip name or symbol.

g. It takes lot of time in loading the required data (while add scrip

and add in portfolio).

h. Why itrade page opens only in 1024*768 resolutions. why not it

opens in other resolutions(view is a different thing)

i. Why scrip code and scrip name doesn’t appear but only

scrip symbol is there.

j. Why while entering in the itrade site first password and pin

disappears and then loading appears or it take few seconds forthe site to start loading

k. Why column cannot be changed in portal according to customer

requirement.

l. Why every time we have to set margin for doing transactions.

m. Make something to match scrip name, scrip code and symbol for

customer convenience.

n. Why customers have to refresh when he has to see f3 andf8

book to see all necessary entries?

o. Why index chart is not available after market hours?

p. What is the minimum requirement for the software to work

smoothly?

q. Like if we restore password from the office, is it possible

that

it directly goes to the customer email address immediately

r. Install java can be done in easier way if possible?



BIBLOGRAPHY

www.icicidirect.com

www.prssb.com

www.motilaloswal.com

www.kunverji.com

www.google.com

www.dnb.com /broking industry

Economic times, 15

th

April2008 Ahmedabad Business line, 4

th

may2008 Ahmedabad www.shahinvestors.com www.kotaksecurities.com www.investopedia.com,online tradingreport www.rediff.com, future of online trading www.chittogarh.com, broking industry. www.myiris.com

http://www.icicidirect.com/



http://www.motilaloswal.com/


http://www.kunverji.com/


http://www.google.com/


http://www.dnb.com/

http://www.shahinvestors.com/

http://www.kotaksecurities.com/


http://www.investopedia.com/

http://www.rediff.com/

http://www.chittogarh.com/


http://www.myiris.com/

http://www.icicidirect.com/









http://www.dnb.com/

http://www.shahinvestors.com/



http://www.investopedia.com/

http://www.rediff.com/



http://www.myiris.com/



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