A report on

SECURITIES MARKET AND TRADING MECHANISM

AND
COMPARATIVE ANALYSIS FOR ANANDRATHI FINANCIAL SERVICES LTD. JAIPUR
A report on Summer Internship Program 2010,
Submitted towards partial fulfillment of Post Graduate Diploma In Business Manag
ement (Approved by A.I.C.T.E, Government of India),
Gyan Vihar University Jaipur
At
ANANDRATHI FINANCIAL SERVICES LTD.
Submitted To: Submitted By
Ms. Parul Bhargava Mukul Sharma
Lecturer of ISBM MBA (Fin
ance) 3rd Sem
Gyan Vih
ar University
GYAN VIHAR UNIVERSITY
JAIPUR
This is to certify that
Mr. MUKUL SHARMA
Student of MBA FINANCE (2009-2011) has successfully completed his Summer Interns
hip Program 2010 conducted by AnandRathi Financial Services Limited, Jaipur from
1st June 2010 to 31st July 2010 on project entitled, “Securities Market and Tradi
ng Mechanism And Comparative Analysis For AnandRathi Financial Services Ltd. Jai
pur”
During his summer internship program, the performance of him was excellent, base
d on our evaluation.
I wish his bright future.
Date:
------------------------
(Parul Bhargava)
LITERATURE REVIEW
The Stock Market of India was set up in 1875. From that time onwards the Indian
Stock market has grown in leaps and bounds, and has become a forceful and compet
ent stock market in the continent. It has the same level of efficiency and organ
izational ability. The market caters to the huge population of India and gives t
hem investment opportunities.
NSDL case study (2008): explained information technology revaluation in securiti
es market. The findings are that from title based on Paper Securities to Securit
ies in Electronic Form (dematerialization), One Single Account of investor holdi
ng all his securities, From Paper Based Title Transfer to Electronic Title Trans
fer.
Chatrath, Ramchander and Song (1996) examined the relationship between the India
n stock market and the stock markets of the U.S. and other developed countries u
sing daily data for the period 1984 to 1992. They used the Bombay Stock Exchange
National Index (BSENI) and the Dow Jones Industrial Average (DJIA) as represent
ative indexes for the Indian and U.S. markets, respectively. They find that the
Indian stock market had low correlations with the markets of the developed count
ries. Therefore, the Indian market offered diversification benefits for investor
s in the developed countries for the period 1984 to 1992.
Barry, Peavy III and Rodriguez (1998) examined the return characteristics of eme
rging stock markets along with returns to several U.S. market indexes. They conc
lude that investments in emerging markets increased in importance because many i
nvestors from developed nations believe that markets in the developing countries
have the potential for high returns along with increased diversification benefi
ts. The authors find that the emerging markets do not consistently generate high
returns.
However, these markets continue to provide diversification benefits for investor
s from the developed countries. The authors find that the relative ranking of re
turns between developed and emerging stock markets largely depends on the time p
eriod. Therefore, optimal asset allocation between developed and emerging market
s changes over time.
Arshanapalli and Kulkarni (2001) examined the relationship between the U.S. and
the Indian stock markets. They explain that this relationship is important becau
se of the transformation of the Indian economy to a more open economy over the d
ecade of the nineties. The authors state that increased integration with develop
ed nations is beneficial to India’s economic prosperity, but greater integration w
ith the world economy also makes the Indian economy more vulnerable to outside r
isk.
Published studies that have examined calendar effects in the Indian stock market
appear to be limited. Kaur (2004) reports that few studies have examined the da
y‐of‐the‐week effect in the Indian stock market, and further notes the absence of stud
ies that examine monthly seasonality in the Indian stock market. Kaur utilized t
wo Indian stock indexes, the Bombay Stock
Exchange (BSE) 30 index and the National Stock Exchange (NSE) S&P CNX Nifty stoc
k index, to examine the day‐of‐the‐week effect and the monthly effect.

Sarma (2004) adds that very few studies have examined calendar effects during th
e post reform era in the Indian stock market. Sarma investigated the BSE 30, the
BSE 100, and the BSE 200 stock indexes to detect the day‐of‐the‐week effect. Utilizin
g Kruskal‐Wallis test statistics, Sarma concluded that the Indian stock market exh
ibited some seasonality in daily returns over the period January 1, 1996 to Augu
st 10, 2002.
Some studies examine seasonality in the Indian stock market as part of a broader
analysis of seasonality in several major emerging stock markets. For example, F
ountas and Segredakis (2002) investigate monthly seasonal anomalies in eighteen
major emerging equity markets, including the Indian stock market. They examined
the monthly effect for the period January 1987 to December 1995. For the Indian
stock market, they found August returns were significantly greater than April, M
ay, October and November returns. Yakob, Beal and Delpachitra (2005) examined se
asonal effects in ten Asian Pacific stock markets, including the Indian stock ma
rket, for the period January 2000 to March 2005. They state that this is a perio
d of stability and is therefore ideal for examining seasonality as it was not in
fluenced by the Asian financial crisis of the late nineties. Yakob, et al., conc
luded that the Indian stock market exhibited a month‐of‐the‐year effect in that statis
tically significant negative returns were found in March and April whereas stati
stically significant positive returns were found in May, November and December.
Of these five statistically significant monthly returns, November generated the
highest positive returns whereas April generated the lowest negative returns. Pa
tel and Evans (2003) investigated seasonal patterns in the stock markets of the
seven most industrialized (G7) nations. They examined seasonality for the period
from January 1960 to December 2001, and found that, in all G7 countries, mean s
tock returns for December through May were significantly greater than mean retur
ns for June to November. They further demonstrated that this pattern was not rel
ated to the January effect, and, unlike the January effect, this pattern has bec
ome more prevalent in later years of their study. Keppler and Xue (2003) documen
t seasonal price behavior for eighteen equity markets in developed countries ove
r the period 1970 to 2001. The authors found that these markets generated substa
ntially higher returns from November through April than over the months May thro
ugh October. Keppler and Xue refer to the November‐ April sub‐period as “Good Months” an
d the period May‐ October as “Bad Months” for stock market investing. Lucy and Whelan
(2004) examined monthly and semi‐annual behavior of the Irish stock market. In the
ir investigation of half‐year seasonality, they found returns from November to Apr
il were greater than returns for the six months May through October. This half‐yea
r effect was somewhat consistent for different sub‐samples of their study.
ACKNOWLEDGEMENTS
I would like to thank my faculty guide PARUL BHARGAVA for all her valuable input
s and constant support towards me throughout my project and providing me an oppo
rtunity to learn outside the classroom. It was a truly wonderful learning experi
ence.
I would then like to express my sincere gratitude to the training heads Mr. Avad
h Mangal (Sr. Equity Manager) and Mr. Jitendra Singh (Relationship Manager) Anan
dRathi Financial Services Ltd, Jaipur, for guiding me throughout my summer inter
nship and research project. Her encouragement, time and effort are greatly appre
ciated.
I would like to dedicate this project to my parents. Without their help and cons
tant support this project would not have been possible.
I would like to thank all my training colleagues for their valuable suggestions
and support in project report.
Last but not the least, I would like to thank all the respondents who offered th
eir opinions and suggestions and sometimes critical views throughout the survey
which made me constantly update myself come out with a successful project.
ABSRACT
The project aims to make a detailed study of Securities Market and its functions
in context of Indian Stock exchanges (BSE and NSE) and a comparative analysis o
f Products of AnandRathi with some well known selected companies and in the proc
ess identify the strengths and weaknesses of Anand Rathi.
The project aims to understand Indian Securities Market in context of BSE and NS
E. Also understand the trading mechanism of Stock Exchanges in India. The projec
t aims also to know primary market and secondary market.
The results of the project would conclude of a detailed analysis of collected se
condary data and well supported by analysis of primary data collected through a
survey in the Jaipur city. The survey was mainly conducted to study the customer
knowledge in Securities Market and trading products offered by various broker f
irms.
After a detailed study, I would find out the merits and demerits of the AnandRat
hi and based on those, I would suggest some recommendations to the company in ar
eas where the company to has to really work on.
Finally I would like to interpret the results of the project by combining both t
he primary and the secondary data analyses then identified the areas where the c
ompany is really strong and the areas where it needs to have a second look.
The Project helped me enhance my knowledge on various technicalities of the Ind
ian Securities Market and gave me a broader prospective of various investment op
portunities available in the market.

TABLE OF CONTENTS
CHAPTER NO. CONTENTS PAGE NO.
1. 2
2. 3
3. 4
4. 5
5. 7
6. 8
7. 9
8. 16
9. 16
10. 16
11. Research Methodology 17
12. Source of Data 18
13. Capital Market 22
14. Investment Instruments 31
15. Organizational Structure 34
16. About AnandRathi Financial Services Limited 35
17. About AnandRathi Team 39
18. AnandRathi Private Wealth Management 41
19. AnandRathi Investment banking 44
20. AnandRathi Institutional Equity 48
21. Companies’ Profiles 50
22. Comparative Analysis of Secondary Data 61
23. SWOT Analysis of AnandRathi 64
24. Comparative Analysis of Primary Data 65
25. Merits and Demerits of AnandRathi 70
26. Findings 72
27. Recommendations 74
28. My Experience and Learning 76
29. Conclusion 78
30. Annexure - I (Questionnaire) 79
31. References 82
32. WebID 84
33. Bibliography 85
34. Glossary 86

LIST OF TABLES
S. NO. TABLES PAGE NO.
1. Companies for Comparison 5
2. Primary Market Activities 26
3. Secondary Market Activities 30
4. Companies for Comparison 50
5. Companies for AnandRathi Financial Services Ltd with other broki
ng firms 63
6. Features of AnandRathi Financial Services Ltd 81
LIST OF FIGURES
S.NO. FIGURES PAGE NO.
1. Research Methodology 17
2. Capital Market Segments 23
3. Primary Market Structure 23
4. Derivative Market Structure 32
5. Organizational Structure 34
6. Evolution of Wealth Management 41
7. Protection, Growth and Distribution 42
8. Product Offering 43
9. Service Offering 43
10. Industry Coverage 45
11. Aims of Questionnaire 65
12. Departments in AnandRathi 76

REVIEW
OBJECTIVES OF THE PROJECT
• To study of Securities Market and its functions in respect of BSE and NSE.
• To understand working of broker firm like AnandRathi Securities Pvt. ltd.
• To compare the products of AnandRathi with respect of some other selected compan
ies.
• To identify the strengths and weaknesses of AnandRathi and suggest areas where i
t could focus more and improve upon.
SCOPE OF THE STUDY
This study aims to make an understanding of Securities Market and it’s trading fun
ctions in respect of BSE and NSE. This study also aims to comparative study of t
he products of AnandRathi with some of major selected players in the Indian secu
rities market. The comparative analysis is based on the empirical data collected
from the Jaipur city.
LIMITATIONS OF THE STUDY
• The study aims to understand the Indian Securities Market in respect of BSE and
NSE stock exchanges only. The workings of other stock exchanges are considering
the same working style like BSE and NSE.
• The comparative study is confined only to a small segment of the entire populati
on due to monetary and time constraints and hence the results are applicable onl
y to the city of Jaipur.
• It is not always possible to evaluate companies under similar parameters since m
any companies deal with various businesses thus clubbing all the companies on th
e same parameters is not always possible.

RESEARCH METHODOLOGY
Research methodology
SOURCES OF DATA
In the data collection method, I have collected both primary and secondary data
to meet the objectives.

Primary Data
The primary data was collected by a survey based on the questionnaire for the co
mparative study to compare products of AnandRathi with some selected broker firm
s. This questionnaire was mainly formulated to target the investors and interest
people in securities market. The number of respondents targeted was around 150
and the survey was confined to Jaipur city.

Secondary Data
The secondary data was collected directly from the companies and their websites
and Internet surveys for the comparative study. Also a lot of similar research s
tudies and journals have been referred to understand the Indian securities marke
t.

CAPITAL MARKETS

INTRODUCTION
Markets exist to facilitate the purchase and sale of goods and services. The fi
nancial market exists to facilitate sale and purchase of financial instruments a
nd comprises of two major markets, namely
A. The capital market
B. The money market
The distinction between capital market and money market is that capital market m
ainly deals in medium and long-term investments (maturity more than a year) whil
e the money market deals in short term investments (maturity upto a year).
Capital market can be divided into two segments viz.
A. Primary Market
B. Secondary Market
The primary market is mainly used by issuers for raising fresh capital from the
investors by making initial public offers or rights issues or offers for sale of
equity or debt. The secondary market provides liquidity to these instruments, t
hrough trading and settlement on the stock exchanges.
Capital market is, thus, important for raising funds for capital formation and i
nvestments and forms a very vital link for economic development of any country.
The capital market provides a means for issuers to raise capital from investors
(who have surplus money available from saving for investment). Thus, the savings
normally flow from household sector to business or Government sector, which nor
mally invest more than they save. A vibrant and efficient capital market is the
most important parameter for evaluating health of any economy.

CAPITAL MARKET SEGMENTS

Capital market segment

Primary Market: A market where the issuers access the prospective investors dire
ctly for funds required by them either for expansion or for meeting the working
capital needs. This process is called disintermediation where the funds flow dir
ectly from investors to issuers.
Primary market structure
The other alternative for issuers is to access the financial institutions and ba
nks for funds. This process is called intermediation where the money flows from
investors to banks/ financial institutions and then to issuers.
Primary market comprises of a market for new issues of shares and debentures, wh
ere investors apply directly to the issuer for allotment of shares/ debentures a
nd pay application money to the issuer. Primary market is one where issuers cont
act directly to the public at large in search of capital and is distinguished fr
om the secondary market, where investors buy/ sell listed shares / debentures on
the stock exchange from / to new / existing investors.

Primary market helps public limited companies as well as Government organization

s to issue their securities to the new / existing shareholders by making a publi
c issue / rights issue. Issuers increase capital by expanding their capital base
. This enables them to finance their growth plans or meet their working capital
requirements, etc. After the public issue, the securities of the issuer are list
ed on a stock exchange(s) provided it complies with requirements prescribed by t
he stock exchange(s) in this regard. The securities, thereafter, become marketab
le. The issuers generally get their securities listed on one or more than one st
ock exchange. Listing of securities on more than one stock exchange, enhances li
quidity of the securities and results in increased volume of trading.
A formal public offer consists of an invitation to the public for subscription t
o the equity shares, preference shares or debentures has to be made by a company
highlighting the details such as future prospects, financial viability and anal
yze the risk factors so that an investor can take an informed decision to make a
n investment. For this purpose, the company issues a prospectus in case of publi
c issue and a letter of offer in case of rights issue, which is essentially made
to its existing shareholders. This document is generally known as Offer documen
t.
It has the information about business of the company, promoters and business col
laboration, management, the board of directors, cost of the project and the mean
s of finance, status of the project, business prospects and profitability, the s
ize of the issue, listing, tax benefits if any, and the names of underwriters an
d managers to the issue, etc. The issuers are, thus, required to make adequate d
isclosures in the offer documents to enable the investors to decide about the in
vestment.
Making public issue of securities is fraught with risk. There is always a possib
ility that the issue may not attract minimum subscription stipulated in the pros
pectus. The risk may be high or low depending upon promoters making the issue, t
he track record of the company, the size of the issue, the nature of project for
which the issue is being made, the general economic conditions, etc. Issuers wo
uld like to free themselves of this worry and attend to their operations wholehe
artedly if they could have someone else to worry on their behalf. For this purpo
se the companies approach underwriters who provide this service.
Normally, whenever an existing company comes out with a further issue of securit
ies, the existing holders have the first right to subscribe to the issue in prop
ortion to their existing holdings. Such an issue to the existing holders is call
ed ‘Rights issue’. The price of the security before the entitlement of rights issue
is known as the cum-rights price. The price after the entitlement of rights issu
e is known as the ex-rights price. The difference between the two is a measure o
f the market value of a right entitlement. An existing holder, besides subscribi
ng to such an issue, can let his rights lapse, or renounce his rights in favour
of another person (free, or for a consideration) by signing the renunciation for
m.

The companies declare dividends, interim as well as final, generally from the pr
ofits after the tax. The dividend is declared on the face value or par value of
a share, and not on its market price.
A company may choose to capitalize part of its reserves by issuing bonus shares
to existing shareholders in proportion to their holdings, to convert the reserve
s into equity. The management of the company may do this by transferring some am
ount from the reserves account to the share capital account by a mere book entry
. Bonus shares are issued free of cost and the number of shareholders remains th
e same. Their proportionate holdings do not change. After an issue of bonus shar
es, the price of a company’s share drops generally in proportion to the issue.

Table 2: Primary market activities

Secondary Market: In the secondary market the investors buy / sell securities th
rough stock exchanges. Trading of securities on stock exchange results in exchan
ge of money and securities between the investors.
Secondary market provides liquidity to the securities on the exchange(s) and thi
s activity commences subsequent to the original issue. For example, having subsc
ribed to the securities of a company, if one wishes to sell the same, it can be
done through the secondary market. Similarly one can also buy the securities of
a company from the secondary market.
A stock exchange is the single most important institution in the secondary marke
t for providing a platform to the investors for buying and selling of securities
through its members. In other words, the stock exchange is the place where alre
ady issued securities of companies are bought and sold by investors. Thus, secon
dary market activity is different from the primary market in which the issuers i
ssue securities directly to the investors.

Traditionally, a stock exchange has been an association of its members or stock

brokers, formed for the purpose of facilitating the buying and selling of securi
ties by the public and institutions at large and regulating its day to day opera
tions. Of late however, stock exchanges in India now operate with due recognitio
n from Securities and Exchange Board of India (SEBI) / the Government of India u
nder the Securities Contracts (Regulation) Act, 1956. The stock exchanges are ei
ther association of persons or are formed as companies.
There are 24 recognized stock exchanges in India out of which one has not commen
ced its operations. Out of the 23 remaining stock exchanges, currently only on f
our stock exchanges, the trading volumes are recorded. Most of regional stock ex
changes have formed subsidiary companies and obtained membership of Bombay Stock
Exchange, (BSE) or National Stock Exchange (NSE) or both. Members of these stoc
k exchanges are now working as sub-brokers of BSE / NSE brokers.
Securities listed on the stock exchange(s) have the following advantages:
• The stock exchange(s) provides a fair market place.
• It enhances liquidity.
• Their price is determined fairly.
• There is continuous reporting of their prices.
• Full information is available on the companies.
• Rights of investors are protected.
Stockbroker is a member of the stock exchange and is licensed to buy or sell sec
urities for his own or on behalf of his clients. He charges a commission (broker
age) to the clients on the gross value of the transactions done by them. However
, some of the stockbrokers, apart from buying and selling of securities for thei
r clients for a commission, offer facilities such as safekeeping clients’ shares a
nd bonds, offering investment advice, planning clients’ portfolio of investments,
managing clients’ portfolio.
There are experts who believe that by identifying and processing relevant inform
ation pertaining to financials of the companies "correctly" and quickly (as comp
ared to the market as whole), they can predict the share price movement faster t
han the market and thus outperform the market. Such experts are known as fundame
ntal analysts. These experts use the fundamental approach to security valuation,
for estimating the fundamental price (or fundamental price-earnings multiple) o
f a security.
Fundamental Analysis refers to scientific study of the basic factors, which dete
rmine a share’s value. The fundamental analyst studies the industry and the compan
y’s sales, assets, liabilities, debt structure, earnings, products, market share;
evaluates the company’s management, compares the company with its competitors, and
then estimates the share’s intrinsic worth. The fundamental analysts’ tools are fin
ancial ratios arrived at by studying a company’s balance sheet and profit and loss
account over a number of years. Fundamental analysis is more effective in fulfi
lling long-term growth objectives of shares, rather than their short-term price
fluctuations.
Ratios of values obtained from a company’s financial statements are used to study
its health and the price of its securities. The most important among these are c
urrent ratio, price- earning (P/E) ratio, earnings to equity ratio, price-book v
alue ratio, profit before tax to sales ratio, and quick ratio. Accounting figure
s, which help to arrive at these ratios, include book value, dividend, current y
ield, earning Per share (EPS), volatility, etc.

Unlike the fundamental analysts, there are other experts who believe that largel
y the forces of demand and supply of securities determine the security prices, t
hough the factors governing the demand and supply may themselves be both objecti
ve and subjective. They also believe that notwithstanding the day-to-day fluctua
tions, share prices move in a discernible pattern, and that these patterns last
for long periods to be identified by them. Such analysts are called as ‘Technical
Analysts’.
Technical analysis is a method of prediction of share price movement based on a
study of price graphs or charts on the assumption that share price trends are re
petitive, and that since investor psychology follows certain pattern, what is se
en to have happened before is likely to be repeated. The technical analyst is no
t concerned with the fundamental strength or weakness of a company or an industr
y; he studies investor and price behaviour.
Bear Market
A stock market operator who expects share prices to fall in the immediate future
and keeps selling (with the intention to pick up the shares later at a lower pr
ice for actual delivery), causing selling pressure and lowering the prices furth
er is called a "Bear”. The term is derived from the attacking posture of the bear,
pushing downwards.
Bull Market
A stock market operator who expects share prices to rise and keeps buying (to se
ll the shares later at higher price), causing buying pressure and increasing the
prices further is called a “Bull”. The term is derived from the attacking posture o
f the bull, pushing upwards.
Stag is a person who subscribes to a new issue with the primary objective of sel
ling at profits no sooner than he gets the allotment.
Contract Note is a document given by the stockbroker to his clients giving parti
culars of the securities bought / sold, rate and date of transaction and the bro
ker’s commission. The broker sends the contract note after executing the client’s or
der as an agreement. The contract note must be carefully preserved, as it is a p
rimary documentary evidence of clients transactions being executed by a member
of a stock exchange. In case of any dispute between them, this can be used for t
he purpose of arbitration or filing claims / compensation against the member of
the stock exchange who has executed the transaction.

It also serves as evidence to the income tax authorities in verification of comp

utations of short-term or long-term capital gains or losses. Buying or selling o
f securities of a particular company with an expectation that the prices will in
crease or decrease in a span of short duration with an objective to generate inc
ome on account of such fluctuations in price is called “Speculation”.
This is an activity in which a person assumes high risks, often without regard f
or the safety of his invested principal, to achieve capital gains in a short tim
e. Investing in securities with the intention of holding them for long term for
realizing appreciation in the value of the securities should be the aim of the i
nvestors who wish to derive benefits from holding investments for long term.
Arbitrage means buying shares on one stock exchange at a lower rate and selling
the same on other stock exchange at a higher rate.
Table 3: Secondary market activities
Investment Instruments
Investment is a deployment of funds in one or more types of assets that will be
held over a period of time. Various forms of investment are available to an inve
stor. They cover bank deposits, term deposits, recurring deposits, company depos
its, postal savings schemes, deposits with non-bank financial intermediaries, Go
vernment and corporate bonds, life insurance and provident funds, equity shares,
mutual funds, tangible assets like gold, silver and jewellery, real estate and
work of arts, etc.
Capital market instruments can be broadly divided into two categories namely
• Debt, Equity and Hybrid instruments.
• Derivative Products like Futures, Options, Forward rate agreements and Swaps.
Debt: Instruments that are issued by the issuers for borrowing monies from the i
nvestors with a defined tenure and mutually agreed terms and conditions for paym
ent of interest and repayment of principal.

Debt instruments are basically obligations undertaken by the issuer of the instr
ument as regards certain future cash flows representing interest and principal,
which the issuer would pay to the legal owner of the instrument. Debt instrument
s are of various types. The key terms that distinguish one debt instrument from
another are as follows:
• Issuer of the instrument
• Face value of the instrument
• Interest rate and payment terms
• Repayment terms (and therefore maturity period / tenor)
• Security or collateral provided by the issuer
Different kinds of money market instruments, which represent debt, are commercia
l papers (CP), certificates of deposit (CD), treasury bills (T-Bills), Govt. of
India dated securities (GOISECs), etc.

Equity: Instruments that grant the investor a specified share of ownership of as

sets of a unit of lending. The bond or debenture holder gets an assured interest
only for the period of holding and repayment of principal at the expiry thereof
, while the shareholder is part-owner of the issuer company and has invested in
its future, with a corresponding share in its profit or loss. The loss is, howev
er, limited to the value of the shares owned by him.
Hybrids: Instruments that include features of both debt and equity, such as bond
s with equity warrants e.g. convertible debentures and bonds.
Derivatives: Derivative is defined as a contract or instrument, whose value is d
erived from the underlying asset, as it has no independent value. Underlying ass
et can be securities, commodities, bullion, currency, etc. The two derivative pr
oducts traded on the Indian stock exchanges are Futures and Options.
Figure 4: Derivative market structure
Futures (Index and Stock): Futures are the standardized contracts in terms of qu
antity, delivery time and place for settlement on a pre-determined date in futur
e. It is a legally binding agreement between a seller and a buyer, which require
s the seller to deliver to the buyer, a specified quantity of security at a spec
ified time in the future, at a specified price. Such contracts are traded on the
exchanges.
Options (Index and Stock): These are deferred delivery contracts that give the b
uyer the right, but not the obligation to buy or sell a specified security at a
specified price on or before a specified future date. At present in India, both
Futures and Options are cash settled.

ORGANIZATION STRUCTURE

Figure 5: Organizational structure

ANANDRATHI FINANCIAL SERVICES LTD.
OVERVIEW
AnandRathi (AR) is a leading full service securities firm providing the entire g
amut of financial services. The firm, founded in 1994 by Mr. AnandRathi, today h
as a pan India presence as well as an international presence through offices in
Dubai and Bangkok.
AR provides a breadth of financial and advisory services including wealth manage
ment, investment banking, corporate advisory, brokerage & distribution of equiti
es, commodities, mutual funds and insurance - all of which are supported by powe
rful research teams.
The firm’s philosophy is entirely client centric, with a clear focus on providing
long term value addition to clients, while maintaining the highest standards of
excellence, ethics and professionalism. The entire firm activities are divided a
cross distinct client groups: Individuals, Private Clients, Corporates and Insti
tutions.
The firm has rapidly expanded its footprint to over 350 locations across India w
ith international presence in Dubai, Hong Kong & New York. Founded by Mr. Anand
Rathi and Mr. Pradeep Gupta, the group today employs over 2,500 professionals th
rough out India and its international offices.
AnandRathi has been named The Best Domestic Private Bank in India by Asiamoney i
n their Fifth Annual Private Banking Poll 2009. The firm has emerged a winner ac
ross all key segments in Asiamoney’s largest survey of high net worth individuals
in India.
AnandRathi research expertise is at the core of the value proposition that offer
to Clients. Research teams across the firm continuously track various markets a
nd products. The aim is however common to go far deeper than others, to deliver
incisive insights and ideas and be accountable for results. AR research processe
s incorporate quantitative areas well as qualitative analyses. This multi-pronge
d approach helps us to provide superior risk- adjusted returns for our clients.
AR analysts provide objective and decisive research that is designed to enable c
lients to make informed investment decisions. The team covers entire spectrum of
financial markets from equities, fixed income, and commodities to currencies. T
hey also cover the global markets, to give clients an unparalleled macro-view of
the investment opportunities across the globe.
ANANDRATHI CORE STRENGTHS

BREADTH OF SERVICES
In line with its client-centric philosophy, the firm offers to its clients the e
ntire spectrum off financial services ranging from brokerage services in equitie
s and commodities, distribution of mutual funds, IPOs and insurance products, re
al estate, investment banking, merger and acquisitions, corporate finance and co
rporate advisory.
Clients deal with a relationship manager who leverages and brings together the p
roduct specialists from across the firm to create an optimum solution to the cli
ent needs.
IN-DEPTH RESEARCH
AnandRathi research expertise is at the core of the value proposition that offer
to Clients. Research teams across the firm continuously track various markets a
nd products. The aim is however common to go far deeper than others, to deliver
incisive insights and ideas and be accountable for results.
ANANDRATHI TEAM
BOARD OF DIRECTORS
Anand Rathi | Founder & Chairman
Prior to establishing his own company, Mr. Rathi headed Indian Rayon & Industrie
s, as Senior President. He has held a series of responsible positions with the B
irla group and was also instrumental in setting up of Birla Global Finance. In h
is 40 years of being in the corporate world, Mr. Rathi has held several key posi
tions on various regulatory and professional boards, including, President, Bomba
y Stock Exchange (BSE), and Member, Central Council of Institute of Chartered Ac
countants (ICAI). As President of BSE, Mr. Rathi played a key role in the expans
ion plan of BOLT, the online trading system of the Exchange and setting up of th
e Trade Guarantee Fund. He was the moving force behind setting up of the Central
Depository Services (India) Ltd. He is a gold medalist Chartered Accountant.

Pradeep Gupta | Co-founder & Vice chairman

With over twenty years experience in the securities market. Co–founder and key dri
ver of the Retail and Institutional Equities business of the group.
Amit Rathi | Managing Director
A rank holder Chartered Accountant and an MBA from Leonard N. Stern School of Bu
siness, New York University joined the group in 1998. He was instrumental in est
ablishing the group’s private wealth management and investment banking businesses.
Calling him a ‘financial guru’,the Times of India group, listed Amit in 2008 amongs
t the top 51 young Marwaris in India (under the age of 40).
CLIENT-CENTRIC ETHOS
AnandRathi belief is that there is a spark in every person that distinguishes hi
m as an individual, and defines his aspirations and goals. A Wealth Management s
olution for every individual is therefore unique. Clients deserve a customized s
olution for managing wealth that is specific to needs and not a generic template
based offering.
EVOLUTION OF WEALTH MANAGEMENT
Figure 6:Evolution of wealth management
STRONG RESEARCH CAPABILITIES
AnandRathi Advisory process is rooted in the strength of research team, giving e
xpertise across various asset classes. AnandRathi Economic Research team has bee
n ranked among the top 20 in Asia by Institutional Investor and is one among the
only 2 teams from India to feature in this list.
ANANDRATHI PHILOSOPHY
Wealth Management needs to be far more holistic than just investment advisory. A
nandRathi believe that separation of advisory from product manufacturing is crit
ical to offering a conflict-free and truly objective advice to Clients. AnandRat
hi therefore offer only third-party products and do not manufacture any in-house
products. As an extension to this philosophy, AnandRathi do not hold any propri
etary stake in the markets
PRODUCT OFFERING
Figure 8:Product Offering
SERVICES OFFERING
Figure 9:Service Offering
ANANDRATHI INVESTMENT BANKING
OVERVIEW
AnandRathi are a leading investment bank focused on the middle-market in India a
nd aim to provide a level of service, dedication and expertise that is unmatched
in the industry today. The firm’s core principles of integrity and dedication to
the success of Clients are reflected in all that they do. AnandRathi offer our c
lients high-quality, unbiased advice.
AnandRathi have assembled a group of talented and experienced professionals who
are domain experts and have been recruited from a wide variety of leading global
financial institutions. AnandRathi’s professionals concentrate on using their tim
e and their “intellectual capital” to solve complex financial problems and executing
specialized transactions for Clients. AnandRathi strive to offer clients more s
enior-level attention than may be available from many of the competitors.
INDUSTRY COVERAGE
Focusing on a select group of core industries, AnandRathi’s investment bankers gai
n deep sector knowledge and extensive transaction experience that allow generati
ng relevant ideas that help your business maximize opportunities.

Figure 10: Industry Coverage

SERVICE OFFERING
ADVISORY
AnandRathi’s advisory business serves as an independent sounding board and advisor
on every strategic, financial and operational issue clients face in the daily m
anagement of their businesses. AnandRathi view Clients as partners, which ultima
tely means that focus and dedication extends far beyond that of traditional inve
stment banking advisory services and includes a commitment to senior level focus
. Over the course of their careers, members of senior team have advised on over
$30 billion in transactions.
• Exploring, evaluating and recommending financial and strategic alternatives
• Assessing potential acquirers and targets and providing valuation analyses.
• Negotiating and consummating transactions.
• Advising on transaction structuring, timing, pricing and potential financing.
• Providing Fairness opinions
Private Equity
Extensive knowledge and coverage of the private equity community not just in Ind
ia but around the world allows AnandRathi to bring strong proprietary investment
ideas to financial sponsors and to optimize outcome through identifying high–qual
ity financial buyers for our middle–market clients. AnandRathi has built a special
ized practice in advising private equity firms that want to invest in India but
do not have a presence here.
• Exploring value maximization strategies.
• Developing company positioning and all documentation for potential buyers.
• Developing buyers’ lists and managing all communications with potential buyers.
• Managing due diligence, data rooms, site visits and all buyer investigations.
• Evaluating bids and negotiating and executing final transactions and documentati
on.
RE-STRUCTURING
AnandRathi dedicated, experienced Corporate Restructuring team can assist debtor
s and creditors with restructuring leverage in a dynamic, global economy by draw
ing on our deep industry knowledge and broad network of commercial bankers, priv
ate equity leadership and hedge fund managers.

• Developing the comprehensive restructuring and reorganization plans and assistin

g in the court administered approval process.
• Advising on the ultimate structuring of a potential sale or recapitalization.
CAPITAL MARKET
AnandRathi is a leading underwriter of public offerings and private placements f
or middle–market companies in India. AnandRathi is known for innovative financing
solutions that support complex corporate strategies, as well as long–standing clie
nt relationships. AnandRathi’s Capital markets business seeks to leverage our oper
ational expertise and world class institutional and retail distribution platform
s to partner with existing owners and management to maximize value at the time o
f a public or secondary market offering. Over the course of their careers, membe
rs of our senior team have raised over $20 billion in equity and debt capital fo
r companies around the world.
• Assessing a company’s optimal capitalization and sources of incremental capital.
• Developing a target investor group and effectively positioning the company’s story
 to the investor community.
• Preparing all investor materials and managing all communications with potential
investors.
• Managing the due diligence process and all investor inquiries.
• Assisting with necessary documentation to expeditiously execute a successful cap
ital rising.
• Assessing the most appropriate group of investors to assist the company in its l
ongterm plan.
ANANDRATHI INSTITUTIONAL EQUITY
OVERVIEW
AnandRathi Institutional Equities team has been providing India investment ideas
and trading services to leading institutional investors from all over the world
for the past 15 years. The 65 members team of some of the best analysts and sal
es talent in India forms a comprehensive institutional equities platform. The CE
O, Ratnesh Kumar, who has over 15 years of experience in Indian equities, ably l
eads this team. The team underwent a transformation in early 2008 when senior pe
ople from leading global and domestic institutions joined and significantly grew
AnandRathi’s institutional equity business footprint.
RESEARCH
• A 25 member’s research team, comprising 15 analysts (including sector specialists,
macro economist, strategist) and 10 associates.
• Analysts profile – Senior, well-regarded analysts from leading global/domestic fir
ms have joined AnandRathi’s research team over the past 12 months. Most analysts h
ave over 10 years of industry experience.
• The fundamental research team covers ~100 stocks and tracks a further 15.
• The overriding emphasis is on investment idea generation.
• A specialist technical and derivatives research team.
• A well-resourced team to enable custom research work for key clients and have st
ock coverage across large and mid caps.
SALES, TRADING AND DERIVATIVES
Anand Rathi Institutional sales team is one of the most experienced, with 9 coun
try dedicated sales people having on an average India market experience in exces
s of 10 years.
The cash sales trading and dealing team are experienced in handling large, compl
ex institutional transactions for both FIIs and domestic institutions. The 15 me
mbers derivatives team is capable of structuring and handling large transactions
in index/stock and F&O.
CONFERENCES
Anand Rathi team specializes in offering comprehensive corporate access to its k
ey clients Analysts’ long-standing relationships as well as group relationships he
lp in access to all leading companies. The firm organizes corporate road shows a
nd periodic theme-based conferences at various locations.

SWOT ANALYSIS OF ANANDRATHI FINANCIAL SERVICES LTD.

1. STRENGTHS
A. Lower brokerage rates
B. Less charges on accounts
C. Good customer faiths
D. Better Online flexible plans
E. Good number of employees
F. Good number of branches
G. Good number of terminals
2. WEAKNESSESS
A. Small diversification
B. Few offline flexible plans
C. Less pay-in/pay-out banks
D. Few good promotions
E. Less tie-ups
F. Less educational and awareness activities
G. Less foreign investors attraction plans
3. OPPORTUNITIES
A. Has local support in Rajasthan
B. Growing India stock market opportunities
C. Growing International financial market
4. THREATS
A. High competition by major players in Indian Broking industry
B. Unpredictable Indian stock market and international financial market
C. Industry depends upon only stock market
D. Banking industries in stock market
E. Company is new to the market
COMPARATIVE ANALYSIS OF PRIMARY DATA
INTRODUCTION
I have done a survey in Jaipur city to study the customers’ interest towards Inves
tment and Securities Market. The primary data was collected through questionnair
es. This questionnaire is mainly formulated to target the investors and interest
ed customers in securities market. And see their perceptions and awareness of va
rious investment options available.
Figure 11: Aims of Questionnaire
The sample size of the survey was 150. The sample of respondents was carefully s
elected covering people in all age groups and with different backgrounds and occ
upations. The analysis of these questionnaires gives us an insight about the min
dset of people regarding various investments.
I have also used various statistical methods and factor analysis in SPSS to extr
act the prominent factors influencing the investments decisions of the customers
.
ANALYSIS OF PRIMARY DATA
1. Age Group Analysis
• Age Group (31-50) has most participation in securities market.
• Young Group (18-30) is also interested in securities market.
2. Occupation Analysis
• Businesspersons are most interested in investment.
• Government and Private services persons are also interested.

3. Investment Decision Analysis

• Most of investors are take own decision for investment.
• Family opinions are most important for investors.
4. Investment Interest Analysis
• Good Return is strong reason for investment.
• Wealth Creation and Tax Saving also influence investors.
5. Investment Options Analysis
• Stocks and Insurances products are most preferred by investors.
• Investors take also interest in Govt. Securities/Bonds and Mutual Fund.

6. Awareness of AnandRathi
• AnandRathi is known firm in Jaipur.
7. AnandRathi Features Analysis
• Flexible plans are core strength of AnandRathi.
• Investors prefer lower brokerage rate and good online services.
28. MERITS AND DEMERITS OF ANANDRATHI FINANCIAL SERVICES LTD.
After the complete analysis of primary and secondary data, I find the following
merits and demerits of AnandRathi Financial Services Ltd. Findings are completel
y based on data provided, but I have tried my best here to point out some major
ones.
MERITS
1. I compared to the other selected broker firm with AnandRathi, I find tha
t AnandRathi gives a minimum brokerage rate for Equity, Derivatives and commodit
y trading.
2. AnandRathi provides free Software and WebID for online trading customers
. The software has unique feature that it shows all trading sectors like equity,
derivative, and commodity on single screen. Software shows unlimited scripts on
screen, where else WebID shows only ten segments of 30 scripts.
3. AnandRathi provides various advantages plans for online trading. Custome
r can choose suitable plan for own on the basis of margin money and brokerage ra
te.
4. AnandRathi provides better depositary services than other broker firm wi
th lower AMC (Annual Maintenance Charges).
5. AnandRathi’s online customers can trade on phone when they are unable to t
rade online. Customer can call market time on toll free number.
6. AnandRathi Financial Services Ltd. has tie up with Axis Bank, ICICI Bank
, and HDFC bank. That provides easy online money transfer to saving a/c to tradi
ng a/c and vice versa with out any extra cost.
7. AnandRathi provides market tips on customers’ mobiles and emails. It also
provides market research papers every evening after market closing that summariz
ed whole day trading fluctuation sector wise.
8. AnandRathi gives friendly environment and easy processing system to thei
r customers that help to create relationship with customers.
9. AnandRathi diversify itself through cross sell. It sell insurance of HDF
C bank and it also work as advisory for various firms in initial public offers.
10. Mr. Anand Rathi belongs to Rajasthan, so AnandRathi get good local supp
ort from Rajasthan.
DEMERITS
1. AnandRathi has a limited presence right now so most of the people know n
othing about the company.
2. AnandRathi’s offline products are limited and not flexible that can decrea
se their offline customer.
3. WebID (online product) provides limited scripts at a time. Customer can
see 10 segments of 30 scripts at a time.
4. AnandRathi does not good advertise itself. So it’s having fewer customers
than its competitors.
5. AnandRathi started in 1994. So it is not very old company. Its competito
rs are old and more experience in the securities market. It is not too much dive
rsify in locations and services.
29. FINDINGS
The finding of report are given as
1. India is one of the oldest stock markets in the world with a strong pres
ence of domestic and local intermediation. Stock markets in India surged over a
decade on back of a wide range of economic reforms, liberalization of financial
markets buoyed by greater freedom and flexibility.
2. The market capitalization of BSE was up by 37.23% from Rs. 3,545,041.0 c
r as on December 2007 to Rs. 4,865,044.91 cr as on May 2009. The market capitali
zation of NSE was up by 35.55% from Rs. 3,367,350.0 cr as on December 2007 to Rs
. 4,564,572.18 cr as on May 2009.
3. Business has been exceptionally good in primary and secondary markets, i
n the equities and derivatives segments across both the national level stock exc
hanges. India’s combined turnover in NSE and BSE in the equity segment which was a
round Rs. 2,901,471 cr in the year 2006-2007 has grown 1.33 times to Rs. 3,852,0
97 cr in the year 2008-2009, despite the market fallen by approximately ~50% in
the same year. The derivate segment during the same period has gone up by 1.50 t
imes to Rs. 11,010,482 cr.
4. AnandRathi is a new company to the stock market. It is in growth stage a
nd attracting more customers into stock market.
5. Key strength of AnandRathi is its customer relationship, Lower brokerage
rates, Less charges on accounts, Good customer faiths, Better Online flexible p
lans , Good number of employees, Good number of branches and Good number of term
inals
6. Some weaknesses of company are Small diversification, few offline flexib
le plans, less pay-in/pay-out banks, few good promotions, Less tie-ups, Less edu
cational and awareness activities and Less foreign investors attraction. Plans.
7. Opportunities, for the company, are Has local support in Rajasthan, Grow
ing India stock market opportunities and Growing International financial market.
8. Some threats are High competition by major players in Indian Broking ind
ustry, Unpredictable Indian stock market and international financial market, Ind
ustry depends upon only stock market, Banking industries in stock market, Compan
y is new to the market
9. Jaipur city has good crowd of investors. It is potential market for the
company.
10. Growing market can attract more and more investors to the company.
30. RECOMMENDATIONS
1. AnandRathi has to improve its distribution network, as its reach to an i
nvestor, is very limited. Also the number of employees working for the company i
s very less right now when compared to the other companies.
2. The company should constantly come out with innovative products, as the
competition is very tough with around major companies fighting hard for the mark
et share.
Some new innovative ideas have been suggested below.
a. Family Plans
• Under Family Plan, a customer can open two or more account for the family member
s at a time with cost of single account and lower brokerage.
b. Chain System Plan
• Under Chain System Plan, an existing customer can get some relief in brokerage w
hen he will open five other account of anybody.
c. Boutique brokerage Plan
• Under the Boutique Plan, company often does not charge Brokerage. Instead taking
brokerage, company takes a percentage of any profits generated by customers.
d. Trial Plan
• Under Trail Plan, to promote new customers, company can offer a trail plan in wh
ich there are zero brokerage charges for 15 days.
e. Accounts Plans
• Cash Account Plan: under this plan, customer can get relief in settlement time p
eriod in context of interest charges.
• Margin Account Plan: under this plan, a customer can get higher trading limit fr
om company.
• Discretionary Account Plan: under this plan, broker or financial adviser the rig
ht to buy and sell stock without notifying you.
NOTE:
• Given recommendations are just ideas for the company. The company can alter thes
e ideas according their policies.
• Explanation of ideas is not mentioned in the report.
• Aims of recommendation are to increase customers for the company and attract new
customers for the stock market.
3. As the company is a new company it has to really work hard to get itself
promoted. The company could start sponsoring major events and conduct talk show
s and seminars to get noticed. There are many people in India who still do not k
now about the concept of Share Market. The company could take this as an opportu
nity by trying to create awareness.
4. The company could start using star personalities for their endorsements
like Tiger Wood is Brand Ambassador of Accenture Ltd. (USA).
5. The company should come out with some really outstanding and out of the
world advertisements like the ones Vodafone has released recently which people f
ind it hard to forget soon.
6. The company should first promote the brand AnandRathi and create a posit
ive impression in the minds of the people. In today’s world it is really tough for
the customer to choose from among a vast list of insurance companies as almost
all of them offer the same plans .So the company has to be a bit different from
others in order to stand apart.
31. MY EXPERIENCES AND LEARNINGS
My SIP at AnandRathi financial Services Ltd, Jaipur has been an extremely enrich
ing one. My SIP was divided into two main parts. First part covers Securities Ma
rket of India in context of BSE and NSE. And second part includes comparative st
udy of AnandRathi financial Services Ltd, Jaipur with some major players in brok
ing industry in India.
Since the company is a new company in comparison with competitors, Apart from th
e financial study, I done marketing research on comparative study for the compan
y. The survey had done in Jaipur city to analysis customer’s perception towards in
vestment in share market.
Working at AnandRathi Financial Services Ltd is divided into four major departme
nts. I worked in all departments and understood their importance and operations.

Figure 12: Departments in AnandRathi

The Learning, I gained during my SIP are mentioned below:
• I gained a broader perspective about various investment opportunities and the ri
sk involved in securities market.
• I learnt about segments of securities market and their functions. I gained knowl
edge about IPO distribution in primary market and trading in equity, commodity a
nd derivatives.
• I came to know about the various technicalities about the Indian broking industr
y.
• Interactions with customers during surveys and sales helped me enhance my market
ing skills.
• Through this research I enriched my knowledge on various competitive marketing s
trategies adopted b different companies to survive in a highly competitive marke
t.
• I got my first experience in company. And came to know about working of broker f
irm, work of dealer, work of relationship manager. I learnt about organization s
tructure, hierarchy of works
• I learnt in a more detailed way about the nature of work existing in the broking
industry, the kind of deadlines they have to meet, the kind of pressure and lev
els of stress, which they work under, and the kind of recognitions given to them
after they meet or exceed their targets.
32. CONCLUSION
Here I conclude that the summer internship program, done in AnandRathi Financial
Services ltd, Jaipur, for partial fulfillment of the MBA program in IMS Ghaziab
ad has been completed successfully.
I would like to conclude my summer internship as follow.
1. Survey done with interest of AnandRathi Financial Services ltd, Jaipur h
as been conducted successfully and results are discussed above.
2. The experience gained during the internship has sharpened my marketing a
nd financial skills and given me a great on the field experience.
3. The Indian Broking industry is now in a most exciting phase and is likel
y to grow at a much faster rate compared with many other sectors.
4. The Indian broking industry is reasonably large and fragmented with 9,00
0 odd brokers in the cash segment and around 24,000 sub-brokers. The market shar
e of the top ten brokers in India has remained largely stagnant in the past four
years. The top five brokers in India still control around 15-16% of the market
share.
5. AnandRathi Financial Services Ltd. is a growing company in Indian Brokin
g Industries.
33. ANNEXURE - I (QUESTIONNAIRE)
(This questionnaire is only of the sake of some research work being done on Brok
er firms. Confidentiality would be maintained.)
• Name: _________________________________________________________
• Contact no: _____________________________________________________
• Gender: Male Female
• Age Group:
18-30 31-40 41-50 >5
0
• Qualification:
Post Graduate Graduate 12th < 12
th
• Occupation:
Government Service Businessman
Private Company Self Employed
• Your income range (per annum):
Below 150000 150000-250000 250000-350000
350000-450000 More than 450000
• Your savings per year:
Below 10000 10000-25000 25000-50000
50000-100000 More than 100000
• You would prefer investment? *
Yes No I have investments already
* (If no, stop here)
• What do you consider while making an investment decision?
Family’s opinion Friends advice Broker’s advice
Your own decision Any other (please specify) ___________
• Your opinion about investment:
Tax Saving Good returns
Better future after retirement Wealth creation
Any other (please specify) ___________
• Preferably you would like to invest in:
Mutual funds Stocks and Shares Insurance products Gov
t. Bonds & Securities Any other (please specify) ___________
• How frequently do you invest?
Once a year 2-3 times a year
More than 3 times a year Not investing Not interested
• You would prefer investment in Securities Market? *
Yes No I have investments already
* (If no, stop here)
• Do you have Demat a/c and Trading a/c?
No
At AnandRathi Financial Services Ltd.
I have Demat a/c and Trading a/c at (please specify firm)_____________
• Do you know about AnandRathi Financial Services Ltd?
Yes No
If Yes, Specify source of information________________________________
• Would you like to open Demat a/c and Trading a/c?A
At AnandRathi Financial Services Ltd.
NO
Other (Please Specify why?)______________________________________
• What is your turnover? (Annually)
100000 100000-500000
500000-1000000 above 1000000
• If you know or have Demat a/c and Trading a/c at AnandRathi Financial Services L
td, which features, you like most?
S.No. Particulars Yes/No
1. Nearest Branch
2. Friendly Environment
3. Good Offline Services
4. Good Online Services
5. Good Software and WebID Services
6. Flexible Plans
7. Broker Responds
8. Lower Brokerage Rate
9. Good Depositary Services
10. Good Tips and Research Reports
11. Good Cross Sell Products
Table 6: Features of AnandRathi Financial Services Ltd
• Would you like to give valuable suggestion___________________________
___________________________________________________________________
• Would you like to refer somebody__________________________________
(If yes, please specify)
Name_________________________________________________________
Phone No.________________________Address_______________________
********* THANK YOU FOR YOUR VALUABLE TIME ****
****
34. REFERENCES
1. Bala Arshanapalli and Mukun S. Kulkarni, Interrelationship between In
dian and US Stock Markets, Journal of Management Research, Volume 1, Number 3, M
ay-August 2001, pp. 141-148.
2. Bombay Stock Exchange Website, www.bseindia.com
3. Christopher B. Barry, John W. Peavy III, and Mauricio Rodriguez, Perf
ormance Characteristics of Emerging Capital Markets, Financial Analysts Journal,
January/February 1998, pp. 72-80.
4. Arjun Chatrath, Sanjay Ramchander, and Frank Song, Benefits from Portf
olio Diversification into the Indian Equity Market, American Business Review, Ja
nuary 1996, pp. 1-10.
5. John Echeverri-Gent, Financial Globalization and India’s Equity Market R
eforms, India Review, Volume 3, Number 4, October 2004, pp. 306-332.
6. Federal Reserve Website, www.research.stlouisfed.org
7. Jayen B. Patel, Inter-Temporal Relationship Between the U.S. stock mar
ket and the Emerging Markets of Asia, Journal of Business and Economics Research
, Volume 1, Number 10, October 2003, pp. 1-6.
8. B. S. Bodla and Kiran Jindal, Seasonal Anomalies in Stock Returns: Evi
dence from India and the US, Decision, Volume 33, Number 1, January-June 2006.
9. Stilianos Fountas and Konstantinos N. Segredakis, Emerging stock marke
ts return seasonalities: the January effect and the tax-loss selling hypothesis,
Applied Financial Economics, Volume 12, 2002, pp. 291-299.
10. Roger Ignatius, The Bombay Stock Exchange: Seasonalities and Investment
Opportunities, Managerial Finance, Volume 24, Number 3, 1998, pp. 52-58. Interna
tional Business & Economics Research Journal – March 2008 Volume 7, Number 3
11. Harvinder Kaur, Time Varying Volatility in the Indian Stock Market, Vika
lpa, Volume 29, Number 4, October-December 2004, pp. 25-42.
12. Michael Keppler and Xing Hong Xue, The Seasonal Price Behavior of Global
Equity Markets, The Journal of Investing, Winter 2003, pp. 49-53.
13. National Stock Exchange Website, www.nseindia.com
14. Jayen B. Patel, Diversification in an Emerging Market: A Closer Look at
the Indian Stock Market, International Business and Economics Research Journal,
Volume 5, Number 1, January 2006, pp. 55-64.
15. Jayen B. Patel, Inter-Temporal Relationship Between the U.S. Stock Marke
t and the Emerging Markets of Asia, Journal of Business and Economics Research,
Volume 1, Number 10, October 2003, pp. 1-6.
16. Jayen B. Patel and Dorla A. Evans, Seasonal Stock Return Patterns in the
Seven Industrialized Nations, The Journal of Applied Business Research, Volume
19, Number 3, Summer 2003, pp. 111-120.
17. S. N. Sarma, Stock Market Seasonality in an Emerging Market, Vikalpa, Vo
lume 29, Number 3, July- September 2004, pp. 35-41.
18. Noor Azuddin Yakob, Diana Beal and Sarath Delpachitra, Seasonality in th
e Asia Pacific Stock Markets, Journal of Asset Management, Volume 6, Number 4, 2
005, pp. 298-318.
35. WEB SITES

1. http://www.dnb.co.in/EquityBroking/default.asp
2. http://www.bseindia.com/
3. http://www.nseindia.com/
4. http://www.rathionline.com/
5. http://www.rathi.com/
6. http://www.sebi.gov.in/bulletin/bull-may2010.pdf
7. http://www.sebi.gov.in/investor/handbook2009.pdf
8. http://www.sebi.gov.in/commreport/clientreg.pdf
9. http://www.sebi.gov.in/annualreport/0809/annualrep08-09.pdf
10. http://www.sebi.gov.in/bulletin/glossary.pdf
11. http://www.sebi.gov.in/chairmanspeech/chsp4.pdf
12. http://investor.sebi.gov.in/faq/pubissuefaq.pdf
13. http://investor.sebi.gov.in/faq/Secondary%20Market.html
14. http://investor.sebi.gov.in/downloadable%20Documents/reading%20mat-eng.P
DF
15. http://www.pwc.com/in/en/press-releases/Enhanced_governance.jhtml
36. BIBILOGHAPHY

1. Brealey, Richard and Stewart C. Meyers. 2000. Principles of Corporate Fi

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2. Copeland, T. and J.F. Weston. 1988. Financial Theory and Corporate Polic
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3. Garbade, Kenneth. 1982. Securities Markets. McGraw-Hill.
4. Van Horne, James C. 1978. Financial Market Rates and Flows. Prentice-Hal
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5. Sharpe, William. 1970. Portfolio Theory and Capital Markets. McGraw-Hill
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6. Veale, Stuart R. 2000. Stocks, Bonds, Options and Futures. Prentice Hal
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7. Dalton, John M. 1988. How The Stock Market Works, 2nd Edition. Prentice
Hall Press. New York Institute of Finance.
8. Hull, John C. 1993. Options, Futures and other Derivative Securities, 2
nd Edition. Prentice-Hall. Englewood Cliffs, New Jersey.
9. khan, Jain.2008. Financial Management, 5th Edition, Tata McGraw-hill.
37. GLOSSARY
Numbers
52-Week High/Low: The highest and lowest price at which a stock traded in the pas
t 12 months, or 52 weeks.
A
Absolute Return : The return that an asset achieves over a period of time. This me
asure simply looks at the appreciation or depreciation (expressed as a percentag
e) that an asset - usually a stock or a mutual fund - faces over a period of tim
e. Absolute return differs from relative return because it is concerned with the
return of the asset being looked at and does not compare it to any other measur
e.
Actual Return : The actual gain or loss of an investor.
Acquisition : When one company purchases a majority interest in the acquired.
Allotment : The number of shares allotted to a participant in IPO against the actu
al number of securities he had applied for.
American Depository Receipt (ADR) : A negotiable certificate issued by a U.S. bank
representing a specified number of shares (or one share) in a foreign stock tha
t is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the u
nderlying security held by a U.S. financial institution overseas.
American Depository Share (ADS) : A share issued under deposit agreement that repr
esents an underlying security in the issuer s home country. The terms American d
epositary receipt (ADR) and American depositary share (ADS) are often thought to
mean the same thing. However, an ADS is the actual share trading, while an ADR
represents a bundle of ADSs.
Analyst : A financial professional who has expertise in evaluating investments and
puts together buy, sell and hold recommendations on securities. Also known as a
"financial analyst" or a "security analyst".
Annual General Meeting (AGM) : A mandatory yearly meeting of shareholders that all
ows stakeholders to stay informed and involved with company decisions and workin
gs.
Annual Report : A company s annual statement of financial operations. Annual repor
ts include a balance sheet, income statement, auditor s report, and a descriptio
n of the company s operations.
Annuity : A financial product sold by financial institutions that is designed to a
ccept and grow funds from an individual and then, upon annuitization, pay out a
stream of payments to the individual at a later point in time. Annuities are pri
marily used as a means of securing a steady cash flow for an individual during t
heir retirement years.
Arbitrage: The difference between price of a security in two different exchanges.
The difference can be used to make profits by persons holding a security to sel
l the same at an exchange where its price is high and buy it at an exchange wher
e it is available at a lower price.
Ask : The price a seller is willing to accept for a share, also known as the offer
price.
Ask Size: The number of shares a seller is selling at a quoted ask price.
Asset Allocation: The process of dividing a portfolio among major asset categorie
s such as bonds, stocks or cash. The purpose of asset allocation is to reduce ri
sk by diversifying the portfolio.
Asset Allocation Fund: A mutual fund that splits its investment assets among stoc
ks, bonds and other investment vehicles in an attempt to provide a consistent re
turn for the investor.
Average Annual Growth Rate: The average increase in the value of a portfolio over
the period of a year.
Average Annual Return : The historical return of a mutual fund.
Average Return : The simple average of a series of returns generated over a period
of time.
B
Back door listing : A strategy of going public used by a company that fails to mee
t the criteria for listing on a stock exchange. To get onto the exchange, the co
mpany desiring to go public acquires an already listed company.
Bad Debt : A debt that is not collectible and therefore worthless to the creditor.
 The company as an expense will write off this debt, once considered being bad.
Balance Sheet: A financial statement that summarizes a company s assets, liabilit
ies and shareholders equity at a specific point in time. These three balance sh
eet segments give investors an idea as to what the company owns and owes, as wel
l as the amount invested by the shareholders.
Balanced Fund : A mutual fund that invests its assets into the money market, bonds
, preferred stock, and common stock with the intention to provide both growth an
d income.
Bankruptcy : The state of a person or firm unable to repay debts.
Bar Chart : A style of chart used by some technical analysts, the top of the verti
cal line indicates the highest price a security traded at during the day, and th
e bottom represents the lowest price. The closing price is displayed on the righ
t side of the bar, and the opening price is shown on the left side of the bar. A
single bar like the one below represents one day of trading.
Basis Point : A unit that is equal to 1/100th of 1%, and is used to denote the cha
nge in a financial instrument. The basis point is commonly used for calculating
changes in interest rates, equity indexes and the yield of a fixed-income securi
ty.
Bear Market: A market condition in which the prices of shares are falling or are
expected to fall.
Best Ask : The lowest quoted ask price for a particular share among those offered
from competing market makers.
Best Bid : The highest quoted bid for a particular share among all those offered b
y competing market makers.
Blue Chip : A nationally recognized, well-established and financially sound compan
y.
Bond : A debt investment with which the investor loans money to an entity (company
or government) that borrows the funds for a defined period of time at a specifi
ed interest rate
Book Building: The process by which an underwriter attempts to determine at what
price to offer an IPO based on demand from institutional investors.
Book Closure : A company s announcement of a dividend or bonus to investors.
Book Value : The net asset value of a company, calculated by total assets minus in
tangible assets (patents, goodwill) and liabilities.
Boom : A period of time during which sales or business activity increases rapidly.
Bottom: The lowest point or price reached by a financial security, commodity, ind
ex or economic cycle in a given time period, which is followed by a steady incre
ase.
Bottom Fisher: An investor who looks for bargains among stocks whose prices has r
ecently dropped dramatically. The investor believes that the recent price drop i
s temporary and a recovery is soon to follow.
Bottom Line : Refers to a company s net earnings.
Breakout : A price movement through an identified level of support or resistance,
which is usually followed by heavy volume and increased volatility. Traders will
buy the underlying asset when the price breaks above a level of resistance and
sell when it breaks below support.
Broker : An individual or firm that charges a fee or commission for executing buy
and sell orders submitted by an investor.
Brokerage Account: An arrangement between an investor and a licensed brokerage fi
rm that allows the investor to deposit funds with the firm and place investment
orders through the brokerage, which then carries out the transactions on the inv
estor s behalf.
Bubble : A surge in equity prices, often more than warranted by the fundamentals a
nd usually in a particular sector, followed by a drastic drop in prices as a mas
sive selloff occurs.
Bull Market: A financial market of a certain group of shares in which prices are
rising or are expected to rise.
Bullion : Gold and silver that is officially recognized as high quality (at least
99.5% pure), and is in the form of bars rather than coins.
Buy : A recommendation to purchase a specific security.
Buy and Hold: A passive investment strategy in which an investor buys stocks and
holds them for a long period of time, regardless of fluctuations in the market.
Buy Back : The buying back of outstanding shares (repurchase) by a company in orde
r to reduce the number of shares on the market. Companies will buyback shares ei
ther to increase the value of shares still available (reducing supply), or to el
iminate any threats by shareholders who may be looking for a controlling stake.
C
CAGR: The year-over-year growth rate of an investment over a specified period of
time. It s an imaginary number that describes the rate at which an investment wo
uld have grown if it grew at a steady rate
Capital Gain : An increase in the value of a capital asset (investment or real est
ate) that gives it a higher worth than the purchase price. The gain is not reali
zed until the asset is sold.
Capital Gains Tax: A type of tax levied on capital gains incurred by individuals
and corporations. Capital gains are the profits that an investor realizes when h
e or she sells the capital asset for a price that is higher than the purchase pr
ice.
Cash Flow Statement: This document provides aggregate data regarding all cash inf
lows a company receives from both its ongoing operations and external investment
sources, as well as all cash outflows that pay for business activities and inve
stments during a given quarter.
Choppy Market : A stock market condition whereby prices swing up and down consider
ably but with no resulting overall price movement in either direction.
Closely Held Shares: The shares held by individuals closely related to a company.
Closing Price : The final price at which a security is traded on a given trading d
ay.
Commodity : A basic good used in commerce that is interchangeable with other commo
dities of the same type. Commodities are most often used as inputs in the produc
tion of other goods or services.
Commodity Index: An index that tracks a basket of commodities to measure their pe
rformance.
Common Shareholder: An individual, business or institution that holds common shar
es in a company, giving the holder an ownership stake in the company. This will
also give the holder the right to vote on corporate issues such as board electio
ns and corporate policy, along with the right to any common dividend payments.
Consensus Estimate : A figure based on the combined estimates of the analysts cove
ring a public company. Generally, analysts give a consensus for a company s earn
ings per share and revenue; these figures are most often made for the quarter, f
iscal year and next fiscal year.
Correction: Corrections are generally temporary price declines, interrupting an u
ptrend in the market or asset.
Crash : A major decline in a financial market.
D
Demat - Dematerialization : The move from physical certificates to electronic book
keeping.
Dalal Street : A term that refers to the Bombay Stock Exchange, the major stock ex
change in India. The street is home not only the Bombay Stock Exchange but also
a large number of other financial institutions.
Day Trader : A stock trader who holds positions for a very short time (from minute
s to hours) and makes numerous trades each day. Most trades are entered and clos
ed out within the same day.
De-merger : A corporate strategy to sell off subsidiaries or divisions of a compan
y.
Debenture : A type of debt instrument that is not secured by physical asset or col
lateral. Debentures are backed only by the general creditworthiness and reputati
on of the issuer. Both corporations and governments frequently issue this type o
f bond in order to secure capital.
Debt : An amount of money borrowed and owed by one party to another.
Debt Fund: An investment pool, such as a mutual fund or ETF, in which core holdin
gs are fixed income investments. The fee ratios on debt funds are lower, on aver
age, than equity funds because the overall management costs are lower.
Deflation : A general decline in prices, often caused by a reduction in the supply
of money or credit. It is the opposite of inflation.
Delisting : The removal of a listed security from the exchange on which it trades.
Derivative: A security whose price is dependent upon or derived from one or more
underlying assets. The derivative is a contract between two or more parties. Its
value is determined by fluctuations in the underlying asset like commodities, b
onds, stocks, etc
Disinvestment: The action of an organization or government selling or liquidating
an asset or subsidiary.
Diversification : A risk-management technique that mixes a wide variety of investm
ents within a portfolio. The rationale behind this technique contends that a por
tfolio of different kinds of investments will, on average, yield higher returns
and pose a lower risk than any individual investment found within the portfolio.
Dividend : Distribution of a portion of a company s earnings, decided by the board
of directors, to a class of its shareholders.
Downgrade: A negative change in the rating of a security.
Due Diligence – DD: An investigation or audit of a potential investment.
E
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) i
s a good metric to evaluate profitability
EPS: Earnings Per Share (EPS) is the earning on each share of a company
ESOP: Employee Stock Ownership Plan . A qualified, defined contribution, employee
benefit plan designed to invest primarily in the stock of the sponsoring employe
r.
Earnings Estimate: An analyst s estimate for a company s future quarterly or annu
al earnings.
Earnings Surprise : When the earnings reported in a company s quarterly or annual
reports are above or below analysts earnings estimates.
Equity Fund: A mutual fund that invests in a broad, well-diversified group of sto
cks.
Ex-Dividend : The trading of shares when a declared dividend belongs to the seller
rather than the buyer.
Exponential Moving Average – EMA: A type of moving average that is similar to a sim
ple moving average, except that more weight is given to the latest data.
F
FCCB: Foreign Currency Convertible Bond. A type of convertible bond issued in a c
urrency different than the issuer s domestic currency.
FDI: Foreign Direct Investment. An investment abroad, usually where the company b
eing invested in is controlled by the foreign corporation.
FII: Foreign Institutional Investor. An investor or investment fund that is from
or registered in a country outside of the one in which it is currently investing
.
Face Value: The nominal value of a security stated by the issuer. For shares, it
is the original cost of the share shown on the certificate.
Financial Porn: A slang term used to describe sensationalist reports of financial
news and products causing irrational buying that can be detrimental to investor
s financial health.
Fiscal Year : Any 12-month period that a company uses for accounting purposes.
Fully Paid Shares: Shares issued in which no more money is required to be paid to
the company by shareholders on the value of the shares.
Fund Of Funds : A mutual fund that invests in other mutual funds.
Fundamental Analysis: Fundamental analysis is to produce a value that an investor
can compare with the security s current price in hopes of figuring out what sor
t of position to take on that stock.
Futures : A financial contract obligating the buyer to purchase an asset (or a sel
ler to sell an asset) at a predetermined date and price.
G
GAAP: Generally Accepted Accounting Principles. The common set of accounting prin
ciples, standards and procedures that companies use to compile their financial s
tatements.
GDP : The forfeited output of a country s economy.
GDR: Global Depositary Receipt. A bank certificate issued in more than one countr
y for shares in a foreign company. A foreign branch of an international bank hol
ds the shares.
Gilt Fund : A mutual fund that invests in several different types of medium and lo
ng-term government securities in addition to top quality corporate debt.
Going Public: The processes of selling shares that were formerly privately held t
o new investors for the first time. Also known as Initial public offering (IPO).
Green Field Investment: A form of foreign direct investment where a parent compan
y starts a new venture in a foreign country by constructing new operational faci
lities from the ground up.
Greenshoe Option : A provision contained in an underwriting agreement that gives t
he underwriter the right to sell investors more shares than originally planned b
y the issuer.
Growth Fund : A diversified portfolio of stocks that has capital appreciation as i
ts primary goal, and thereby invests in companies that reinvest their earnings i
nto expansion, acquisitions, and/or research and development.
Guidance : Information that a company provides as an indication or estimate of the
ir future earnings.
H
Haircut : The difference between prices at which a market maker can buy and sell a
security.
Hammering: The rapid and concentrated sale of a stock thought to be overvalued by
the market.
Hedge : Making an investment to reduce the risk of adverse price movements in an a
sset. Normally, a hedge consists of taking an offsetting position in a related s
ecurity, such as a futures contract.
Hedge Fund: An aggressively managed portfolio of investments that uses advanced i
nvestment strategies such as leverage, long, short and derivative positions in b
oth domestic and international markets with the goal of generating high returns.
Holding Period: In a long position, holding period refers to the time between an
asset s purchase and its sale. In a short sale, the length of time for which the
short position is held.
I
Initial Public Offering -IPO : The first sale of stock by a private company to the
public.
Iceberg Order : A large single order that has been divided into smaller lots, usua
lly by the use of an automated program, for the purpose of hiding the actual ord
er quantity.
In And Out : The purchase and sale of a security within a short period of time, us
ually on the same day.
Income Fund : A mutual fund that seeks to provide stable current income by investi
ng in securities that pays interest or dividends.
Index : A statistical measure of change in an economy or a securities market. In t
he case of financial markets, an index is essentially an imaginary portfolio of
securities representing a particular market or a portion of it.
Index Fund: A portfolio of investments that is weighted the same as a stock-excha
nge index in order to mirror its performance.
Inflation : The rate at which the general level of prices for goods and services i
s rising, and, subsequently, purchasing power is falling.
Inorganic Growth: A growth in the operations of a business that arises from merge
rs or takeovers, rather than an increase in the companies own business activity.
Insider Information: Material information about a company s activities that has n
ot been disclosed to the public.
Insider Trading : The buying or selling of a security by someone who has access to
material, nonpublic information about the security. Insider trading can be ille
gal or legal depending on when the insider makes the trade. It is illegal when t
he material information is still nonpublic.
Institutional Investor: A non-bank person or organization that trades securities
in large enough share quantities or dollar amounts that they qualify for prefere
ntial treatment and lower commissions.
Interim Dividend : A dividend payment made before a company s AGM and final financ
ial statements.
IPO Lock-Up : A contractual caveat referring to a period of time after a company h
as initially gone public, usually between 90 to 180 days. During these initial d
ays of trading, company insiders or those holding majority stakes in the company
are forbidden to sell any of their shares.
J
Joint Venture : Two companies joining together to start a new entity, keeping the
current entities untouched to start a business.
K
Key Performance Indicators - KPI : A set of quantifiable measures that a company o
r industry uses to gauge or compare performance in terms of meeting their strate
gic and operational goals.
L
Limit Order : An order placed with a brokerage to buy or sell a set number of shar
es at a specified price or better.
Liquidity : The degree to which an asset or security can be bought or sold in the
market without affecting the asset s price.
Long Term: Holding an asset for an extended period of time. Depending on the type
of security, a long-term asset can be held for as little as one year or for as
long as 15 years or more.
Losing Your Shirt: In the investment world, this expression is used to describe a
very bad investment that causes an investor to lose everything he or she has in
vested.
M
M&A -Mergers And Acquisitions: A merger is a combination of two companies to form
a new company, while an acquisition is the purchase of one company by another w
ith no new company being formed.
Margin: Borrowed money that is used to purchase securities.
Margin Call: A broker s demand on an investor using margin to deposit additional
money or securities so that the margin account is brought up to the minimum main
tenance margin.
Market Order: An order to buy or sell a stock immediately at the best available c
urrent price.
Market Perform: Market perform is a neutral assessment of a stock and is either s
trongly positive or negative.
Market Timing : The act of attempting to predict the future direction of the marke
t, typically through the use of technical indicators or economic data.
Market Value : The current quoted price at which investors buy or sell a share of
common stock or a bond at a given time. Also known as "market price".
Maturity Date : The date on which the principal amount of a note, draft, acceptanc
e bond or other debt instrument becomes due and is repaid to the investor and in
terest payments stop.
Medium Term : An intermediate period of time to hold an asset.
Mid Cap : Companies having a market capitalization between Rs 500 crore and Rs 1,0
00 crore
Monetary Policy: The actions of a reserve bank of India, that determine the size
and rate of growth of the money supply, which in turn affects interest rates.
Money Market : The securities market dealing in short-term debt and monetary instr
uments.
Mutual Fund : A security that gives small investors access to a well-diversified p
ortfolio of equities, bonds and other securities. Each shareholder participates
in the gain or loss of the fund. Units are issued and can be redeemed as needed.
N
NAV - Net Asset Value : The total value of the fund s portfolio less liabilities.
O
Offering Price : The price at which publicly issued securities are made available
for purchase.
One Night Stand Investment: Buying a security with the intention of holding it fo
r the long term, but subsequently panicking and selling it the following day.
Online Trading : The act of placing buy/sell orders for financial securities and/o
r currencies with the use of a brokerage s internet-based proprietary trading pl
atforms.
Open End Fund : A type of mutual fund where there are no restrictions on the amoun
t of shares the fund will issue. If demand is high enough, the fund will continu
e to issue shares no matter how many investors there are. Open-end funds also bu
y back shares when investors wish to sell.
Open Offer : A secondary market offering that is similar to a rights issue in whic
h a shareholder is given the opportunity to purchase stock at a price that is lo
wer than the current market price.
Organic Growth: The growth rate that a company can achieve by increasing output a
nd enhancing sales. This excludes any profits or growth acquired from takeovers,
acquisitions or mergers.
Oversubscribed : A situation in which the demand for an initial public offering of
securities exceeds the number of shares issued.
P
P/E Ratio - Price-Earnings Ratio : PE ratio or PE multiples is the ratio arrived b
y dividing Current market Price by Earnings per share of that stock.
Par Value : The face value of a bond.
Pension Fund: A fund established by an employer to facilitate and organize the in
vestment of employees retirement funds contributed by the employer and employee
s.
Poop And Scoop: A highly illegal practice occurring mainly on the Internet. A sma
ll group of informed people attempts to push down a stock by spreading false inf
ormation and rumors. If they are successful, they can purchase the stock at barg
ain prices.
Portfolio : The group of assets - such as stocks, bonds and mutual - held by an in
vestor.
Preferred Stock: A class of ownership in a corporation that has a higher claim on
the assets and earnings than common stock.
Premium : The difference between the higher prices paid for a fixed-income securit
y and the security s face amount at issue.
Price Target: A projected price level as stated by an investment analyst or advis
or.
Private Company: A company whose ownership is private.
Pro-Rata : Used to describe a proportionate allocation.
Profit Taking: The action of selling stock to cash in on a sharp rise. This actio
n pushes prices down temporarily.
Public Company: A company that has issued securities through an initial public of
fering and which are traded on at least one stock exchange.
Public Offering : The sale of equity shares or other financial instruments by an o
rganization to the public in order to raise funds for business expansion and inv
estment.
Pump And Dump: A scheme attempting to boost the price of a stock through recommen
dations based on false, misleading, or greatly exaggerated statements.
Q
QOQ - Quarter on Quarter: A measuring technique that calculates the change betwee
n one financial quarter and the previous financial quarter. This is similar to t
he year over year measure, which compares the quarter of one year (Q1 2007) to t
he same quarter of the previous year (Q1 2006).
Quarterly Earnings Report: A quarterly filing made by public companies to report
their performance. Included in earnings reports are items such as net income, ea
rnings per share, earnings from continuing operations and net sales.
R
Rally : A period of sustained increases in the prices of stocks or indexes.
Record Date: The date established by an issuer of a security for the purpose of d
etermining the holders who are entitled to receive a dividend, rights or bonus.
Redemption : The return of an investor s principal in a security, such as a stock,
 bond, or mutual fund.
Registrar : An institution or organization that is responsible for keeping records
of bondholders and shareholders.
Resistance : The price at which a stock or market can trade, but which it cannot e
xceed, for a certain period of time.
Rights Offering (Issue) : Issuing rights to a company s existing shareholders to b
uy a proportional number of additional securities at a given price (usually at a
discount) within a fixed period.
S
SEBI - Securities And Exchange Board Of India: The regulatory body for the invest
ment market in India.
Saturday Night Special : A slang term used to refer to a surprise takeover attempt
.
Sector Fund: An investment fund that makes investments solely in businesses that
operate in a particular industry or sector of the economy.
Sensex : An abbreviation of the Bombay Exchange Sensitive Index (Sensex) - the ben
chmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the lar
gest and most actively traded stocks on the BSE.
Settlement Date : The date by which an executed security trade must be settled. Th
at is, the date by which a buyer must pay for the securities delivered by the se
ller.
Share Capital : Funds rose by issuing shares in return for cash or other considera
tions.
Shareholder: Any person, company, or other institution that owns at least 1 share
in a company.
Shares : A unit of ownership interest in a corporation or financial asset. The two
main types of shares are common shares and preferred shares.
Short Sale: A market transaction in which an investor sells borrowed securities i
n anticipation of a price decline and is required to return an equal amount of s
hares at some point in the future.
Short Term : Holding an asset for short period of time.
Simple Moving Average – SMA: A simple, or arithmetic, moving average that is calcul
ated by adding the closing price of the security for a number of time periods an
d then dividing this total by the number of time periods.
Small Cap : Refers to stocks with a relatively small market capitalization. It is
a company with a market capitalization less than Rs 500 crore.
Spinoff : The creation of an independent company through the sale or distribution
of new shares of an existing business/division of a parent company.
Stop-Limit Order : An order placed with a broker that combines the features of sto
p order with those of a limit order. A stop-limit order will be executed at a sp
ecified price (or better) after a given stop price has been reached.
Stop-Loss Order : An order placed with a broker to sell a security when it reaches
a certain price. It is designed to limit an investor s loss on a security posit
ion.
Support : The price level, which, historically, a stock has had difficulty falling
below.
T
Takeover : A corporate action where an acquiring company makes a bid for an acquir
ee. If the target company is publicly traded, the acquiring company will make an
offer for the outstanding shares.
Technical Analysis: A method of evaluating securities by analyzing statistics gen
erated by market activity, such as past prices and volume. Technical analysts do
not attempt to measure a security s intrinsic value, but instead use charts and
other tools to identify patterns that can suggest future activity.
Technical Rally : An upward movement in a security s price following a declining t
rend. The movement is caused by technical as opposed to fundamental factors affe
cting sentiment.
Tick : The minimum upward or downward movement in the price of a security.
Top Line: A reference to the gross sales or revenues of a company.
Trailing EPS: The sum of a company s earnings per share for the previous four qua
rters.
U
Underperform : An analyst recommendation that means a stock is expected to do slig
htly worse than the market return.
Undersubscribed: A situation in which the demand for an initial public offering o
f securities is less than the number of shares issued.
Upgrade : A positive change in the rating of a security.
V
Valuation : The process of determining the current worth of an asset or company.
Vested Interest: A financial or personal stake one entity has in an asset, securi
ty, or transaction.
Volatility: Volatility refers to the amount of uncertainty or risk about the size
of changes in a security s value.
W
Warrant : A derivative security that gives the holder the right to purchase securi
ties (usually equity) from the issuer at a specific price within a certain time
frame.
Write-Off : A reduction in the value of an asset or earnings by the amount of an e
xpense or loss.
X
XD - Ex- Dividend: Buying the shares trading in XD will not entitle you for the d
ividend which is already declared but not yet been issued.
Y
YOY - Year Over Year: A method of evaluating two or more measured events that com
pares the results of measurement at one time period with those from another time
period, on an annualized basis.
Yield : Yield is the annual rate of return for any investment and is expressed as
a percentage.
Z
Zero Dividend Preferences : Zero dividend preference shares are Preference shares,
which receive no dividends throughout their lives.