SUMMER TRAINING REPORT

On
VENTURE CAPITAL
At
LUDHIANA STOCK AND CAPITAL LTD.

Submitted in partial fulfillment of requirement for

Award of degree in
B.COM
(BACHELORS OF COMMERCE)
Submitted to: Submitted by:

Mrs. Silvi Amritpal Kaur

TRAINING CO-ORDINATOR RAYAT BAHRA GROUP

LUDHIANA STOCK AND OF INSTITUTIONS

CAPITAL LTD. HOSHIARPUR

 ACKNOWLEDGEMENT
No learning is proper and effective without proper Guidance

I am deeply indebted to my training coordinators Mrs.Silvi and Mr Atul Chikarsal for

their valuable suggestion, able guidance and constant encouragement throughout the
project

Intention, dedication, concentration, hard work are very much essential to complete any
task. But still it needs a lot of support, guidance, assistance, co-operation of people to
make it successful.

I bear to imprint of my people who gave me their precious ideas, and times to enable
me to complete the project report. I want to thank them for their continuous support in
my research and writing efforts.

I am extremely grateful to the Management of Rayat and Bahra Group of

Institutions, Hoshiarpur for granting me permission to be a part of this college.

I would also like to acknowledge my parents and batch mates for their guidance and
blessings.

I would also like to thank all others who helped me directly or indirectly during this
project.
 CERTIFICATE
This is to certify that Miss Amritpal Kaur, student of semester-4 of B.Com (2015-2018)
at Rayat and Bahra Group of Institutions affiliated to Punjab Technical University have
completed her summer training project on Venture Capital .

According to me the project report is satisfactory.

Signature
 EXECUTIVE SUMMARY

An exploratory research has been done to figure out the effectiveness and role of
Venture capital. The data collected and analysed quantitatively to help me study about
the role and functions and reforms of Venture capital. It made me aware about the
working of Venture Capitalists.

The following report also includes the financial analysis and SWOT analysis of LSE
which helped in knowing about the strong and weak points of the company. The study in
LSC helped me to understand about various other topics like,, IPO, the trading pattern
in the market and various terms which otherwise were not known to me
 STOCK EXCHANGE

INTRODUCTION;

Stock exchange is the organized and regulated financial market where securities
(bonds, notes, shares) are brought and sold at prices governed by the forces of demand
and supply. This market is also known as the Stock Market and the Secondary
Market.

Stock exchanges also facilitate for the issue and redemption of securities and other
financial instruments including the payment of income and dividends. The record
keeping is central but trade is linked to such physical place because modern markets
are computerized. The trade on an exchange is only by members and stock broker do
have a seat on the exchange.

FEATURES OF STOCK EXCHANGE

Stock Exchange deals in previously issued securities.

This market is not the place of origin of the securities.
Securities are not issued directly by the company to investors.
Securities are sold by the existing investors to other investors.
Stock exchange do not directly contribute to capital formation.
Stock exchange merely transfers existing securities between buyers and sellers.
ABOUT INDIAN STOCK EXCHANGES

a) In India only recognized stock exchange can operate.

b) The recognition is governed under the supervisions of S.C.R.(Security

Corporation Regulatory Act),1956.

c) Securities Exchange Board of India(SEBI) is the monitoring and

regulatory authority of Stock Exchanges in India.

d) Indias oldest and first stock exchange Bombay Stock Exchange

established in 1875. More than 6000 stocks listed.

e) BSE is 139 years old where as NSE is just 13 years old.

f) The Total number of stock exchanges in India are now reduced to 3.

 LISTS OF STOCK EXCHANGES IN INDIA

BOMBAY STOCK EXCHANGE (cash and F&O)

Located on Dalal street, Mumbai.

It is the 10th largest stock exchange in the world.

It is the Asias first stock exchange and one of Indias leading exchange group.

NATIONAL STOCK EXCHANGE (mainly cash)

NSE called Rashtriya Share Bazaar in Hindi and located in Mumbai

It is the 11th largest stock exchange in the world.

NSE key index is the S&P CNX Nifty known as NSE Nifty
 MCX (currency)
MCX Stock Exchange Limited (Multi Commodity Exchange). It is Indias new stock
exchange and is recognized by SEBI & RBI.

It is located at Andheri, Mumbai.

The exchange received permission to deal in interest rate derivatives, Equity, Futures
and Options on Equity and wholesale debt segments.
 LUDHIANA STOCK AND CAPITAL LIMITED

Introduction:
Ludhiana stock and capital limited (formerly known as Ludhiana stock exchange)was
established in 1981 by Sh. S.P. Oswal of Vardhaman group and Sh. B.M. Munjal of
Hero group, leading industrial luminaries, to fulfill a vital need of having a stock
exchange in the region of Punjab, Himachal Pradesh, Jammu & Kashmir and Union
Territory of Chandigarh.

Ludhiana Stock and Capital Limited was one of the leading Regional stock exchange
and has been in the forefront of other stock exchanges in every sphere, whether it was
formation of subsidiary for providing the platform of trading to investors, for brokers etc.
In the era of screen based trading introduced by National Stock Exchange & Bombay
Stock Exchange entering into the field of commodities trading or imparting education to
the public at large.

It played an important role in channelizing savings into capital for various industrial and
commercial units of the state of Punjab and the other parts of the country thereby
facilitated the mobilization of funds by entrepreneurs from the public which contributed
in the overall, economic, industrial and social development of region under jurisdiction

Keeping in view the changing business environments and recent leading guidelines,
shareholders of the company approved resolutions for voluntary surrender of
recognition and Exit as an exchange in the EGM held on 15th July,2013. SEBI allowed
the exit of Ludhiana Stock Exchange Limited as stock exchange, vide 30 th December
2014.

In the light of above and in terms of clause 3 of SEBI Circular no. MRD/DOP/SE/Cir-
36/2008 dated December 29,2008 upon de-recognition of Ludhiana stock Exchange
Limited , SEBI registration certificates as trading members of exchange stand cancelled.
However, SEBI registration certificates of trading members as the Sub-brokers of LSE
Securities Limited on NSE or BSE shall continue to be valid. All the investors of Sub-
Brokers shall continue to trade through L.S.E. Securities Limited and avail DP Services
without any interruption.

The company has 295 members out of which 171 are registered with National Stock
Exchange as Sub-Broker and 124 with Bombay Stock Exchange.
 THE GOVERNING BOARD OF DIRECTORS
The Governing Board of Directors of the company comprises of eight Directors, out of
which six are elected Directors and two are professional directors who are eminent
persons in the field of Finance and Accounts, education etc.

SR.NO. NAME OF DESIGNATION

DIRECTORS
1. Sh. Jagmohan Krishan Chairperson

2. Sh. Jaspal Singh Vice-Chairperson

3. Sh. Kanwalpreet singh Shareholder Director

Walia
4. Sh. Vikas Batra Shareholder Director

5. Sh.Ashok Kumar Shareholder Director

6. Sh. Prem Thapar Shareholder Director

7. Sh. V.P. Gaur Professional Director

8. Sh. R.P. Singh Professional Director

 SWOT ANALYSIS OF LUDHIIANA STOCK EXCHANGE

STRENGHTHS
i. L.S.C Brand is popular among masses. The brand image of LSC can be
capitalized.
ii. It have requisite infrastructure for the Capital Market activities which includes a
multi-storied, centrally air conditioned building situated in the financial hub of the
city i.e. Feroze Gandhi Market.
iii. It has a well experienced staff handling operations of Stocks Exchange.
iv. It has competent Board and professional management.
v. It have much needed networking of sub broker in entire region, who are having
rich experience in Stock Market operations for the last 25 years.
vi. The turnover of are subsidiary is the highest amongst all the subsidiaries of
regional stock exchanges in India.

WEAKNESSES
i. Lack of awareness among customers because of non-aggressive
promotional strategies(print media, newspaper, etc.)
ii. Lesser emphasis on customer retention.

OPPURTUNITIES
i. With the booming Capital Market, it can successfully launch new service
and raise its clients base.
ii. It can easily tap the retail investors with small saving through promotional
channels like print media, electronic media etc.
iii. As interest on fixed deposits with Post Office and Banks are all time low,
more and smaller investors are entering into stock market
iv. Abolition of Long-term Capital gain, tax on shares and reduction in Short-
term Capital gain is making stock as hot destination for investment among
small investors
v. Increasing usage of internet through broadband connectivity may boost a
whole new breed of investors for trading in securities.

THREATS
i. Aggressive promotional strategies by close competitors may hamper LSC
acceptance by new clients.
ii. More and more players are venturing into this domain which can further
reduce the earnings of LSC.
 STATUS OF THE COMPANY

Ludhiana stock and Capital limited is a public limited company. It is a

parent company and its subsidiary is Ludhiana Stock Exchange Securities
Limited. The subsidiary company looks after the trading and the trading is
done through BSE and NSE. Both the parent company and the subsidiary
work under the same roof but have separate departments.
 VENTURE CAPITAL

INTRODUCTION
Venture capital, a financial innovation of the twentieth century, is a long term liquid
investment , which can be in the form of equity, quasi-equity and sometimes debt in new
highly risky ventures. Venture capital became better known after the famous legend of
Apple Computers then made it to the Fortune 500 and Arthur Rock & Company attained
height in Venture Capital industry. However the success of venture capital in USA
stimulated world countries to practice on Venture Capital.

A number of technocrats are seeking to set up their own own and capitalize on
opportunities. In the highly dynamic economic climate that surrounds us today, few
traditional business models may survive. Countries across the globe are realizing that
its not conglomerates and the gigantic corporations that fuel economic growth any
more. The essence of any economy,today is the small and medium enterprises.

This growing trend can be attributed to rapid advances in technology in the last decade.
Knowledge driven industries like infotech, health-care,entertainment and services
have become the cynosures of bourses worldwide. In these sectors ,it is innovation
and technical capability that are big business drivers. This is a paradigm shift from the
earlier physical production and economies of scale model.

However , a Venture Capital may provide the seed capital for unproven ideas, products,
technology oriented or start up firms. The Venture Capitalists may also invest in a firm
that is unable to raise finance through the conventional means.
 WHAT IS VENTURE CAPITAL ????

Venture Capital is money provided by professionals who invest alongside management

in rapidly growing companies viz: Intel, Microsoft, Mastek , Pizza corner

Venture Capital derives its value from the brand equity, professional image, constructive
criticism, domain knowledge, industry contracts, they bring to table at a significantly
lower management agency cost.

Professionally managed Venture Capital firms generally are private partnerships or

closely held corporations funded by private and public pension funds, endowment
funds, foundations, corporations, wealthy individuals, foreign investors, and the Venture
Capitalists themselves.

A Venture Capitalist strives to provide entrepreneurs with the support they need to
create up-scaleable business with sustainable growth while providing their contributors
with outstanding returns on investment, for the higher risks they assume.

The term Venture Capital represents financial investment in a highly risky

project with the objective of earning a high rate of return.

Venture Capitalists generally:

Finance new and rapidly growing companies.
Typicaly knowledge-based , sustainable, upscaleable companies.
Purchase Equity/Quasi-Equity Securities.
Assist in development of new products or services.
Add value to the company through active participation.
Take higher risks with the expectation of higher rewards.
Have a long-term orientation.

When considering an investment, venture capitalists carefully screen the technical and
business merits of the proposed company. Venture capitalists only invest in a small
percentage of a businesses they review and have a long term perspective. They also
actively work with the companys management, especially with contacts and strategy
formulation.
In India, these funds are governed by SECURITIES EXCHANGE BOARD OF INDIA
(SEBI) guidelines.According to this, the Venture Capital fund means a fund established
in the form of a company or trust, which raises the monies through loans, donations,
issue of securities or units as the case may be, and makes or proposes to make
investments in accordance with these regulations.