Presentation on comparative analysis of stock brokers

Submitted By: Poonam Nanda -1174275 (MBA 3A) Submitted To : Mr. Sonu Dua

INTRODUCTION
In most industrialized countries, a substantial part of financial wealth is not managed directly by savers, but through a financial intermediary, which implies the existence of an agency contract between the investor (principal) and a broker or portfolio manager(agent ).Therefore, delegated brokerage management is arguably one of the most important agency relationships intervening in the economy, with a possible impact on financial market and economic developments at a macro level. In most of the metros, people like to put their money in stock options instead of dumping it in the bank-lockers. Now, this trend pick pace in small but fast developing cities like Chandigarh, Gurgaon, Jaipur etc. As the per-capita-income of the city is on the higher side, so it is quite obvious that they want to invest their money in profitable ventures. On the other hand, a number of brokerage houses make sure the hassle free investment in stocks. Asset management firms allow investors to estimate both the expected risks and returns, as measured statistically.

INTRODUCTION OF THE COMPANY

THE KOTAK MAHINDRA GROUP
Kotak Mahindra is one of India's leading banking and financial services organizations, offering a wide range of financial services that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the diverse financial needs of individuals. The group has a net worth of over Rs. 100.6 billion and has a distribution network of branches, franchisees, representative offices and satellite offices across cities and towns in India, and offices in New York, London, San Francisco, Dubai, Mauritius and Singapore servicing around 8 million customer accounts.

INTRODUCTION TO KOTAK SECURITIES Ltd

Originally established in 1994, Kotak Securities is a subsidiary of Kotak Mahindra Bank, which services more than 7.4 lakh customers. The firm has a wide network of more than 1400 branches, franchisees representative offices, and satellite offices across 448 cities in India and offices in New York, London, Dubai, Mauritius and Singapore.

They process more than 4,00,000 trades a day which is much higher than some of the renowned international brokers. The company is a corporate member of both The Bombay Stock Exchange (BSE) and The National Stock Exchange of India (NSE). Currently, Kotak Securities is one of the largest broking houses in India with substantial geographical reach to Asia Pacific, Europe, Middle East and America. > They have been the pioneers in providing many products and services.Some of them include: Mobile stock trading application to keep track of the investments. Facility of Margin Finance to the customers for online stock trading. Investing in IPOs and Mutual Funds on the phone. SMS alerts before execution of depository transactions.

AWARDS

Best Broker in India by Finance Asia for 2009 & 2010. Best Brokerage Firm in India by Asia money in 2009, 2008, 2007 & 2006 UTI MF - CNBC TV18 Financial Advisor Awards - Best Performing Equity Broker (National) for the year 2009 Best Performing Equity Broker in India - CNBC TV 18 Optimix Financial Advisory Awards, 2008 Avaya Customer Responsiveness Awards (2007) in Financial Services Sector The Leading Equity House in India in Thomson Extel Surveys Awards for the year 2007 Euro money Award (2006 and 2007) - Best Provider of Portfolio Management: Equities Avaya Customer Responsiveness Awards (2006) in Financial Institution Sector.

ONLINE ACCOUNT TYPES

Twin Advantage / Green Channel: 2 DPs, Limit against shares Free Way: Flat Rs 999 Cover Charge p.m 0.03% per transaction High Trader: 6 Times Exposure Cash & Derivatives, Auto sq off 2:55 Cash Expressway: Spot payment, additional 0.5% charges. For Kotak Fast Lane / Keat Lite / Keat PRO X are trading interfaces Keat Desktop with advanced tools comes at a charge of Rs 500 p.m

PRICING OF KOTAK

Account Opening: Rs 500 Demat: Rs 22.5 p.m Initial Margin: Rs 5000(Compulsory) Min Margin Retainable: Rs 1000 Brokerage Slab wise: Higher the volume, lower the brokerage. Even older customers (on 0.25% & 0.40%) have been moved to the slab wise structure wef 1/4/2011.

SLAB STRUCTURE OF KOTAK

< 1 lakhs 1 lakhs - 5 lakhs < 10 lakhs 10lakhs - 25 lakhs 25lakhs 2 Cr 2 Cr - 5 Cr > 5 Cr

0.65% 0.60% 0.10% 0.08% 0.06% 0.05% 0.04%

SALIENT FEATURES

KOTAK is charging low rate of Brokerage among the entire brokerage house. Providing both types of trading to its customers ONLINE a well as OFFLINE. One of the largest broking houses in India. It is the first broking house with the Concept of ONLINE TRADING. Maximum Satisfactory for its clients and for Employees too. No work pressure for employees. Having high security site with a PROTOCOL http.

WHY JOIN KOTAK????

BRAND

The Kotak Brand Identity serves not only to differentiate us from other brands but also communicates our attitude, character and values. Brand Identity is an important strategic asset. Our brand helps us communicate coherently and clearly with our customers, employees, business associates and all other stakeholders a critical requisite in an increasingly cluttered business world.

LEADERSHIP EDGE

Kotak Securities is one of the best stock broking houses in the country. We have been the pioneers in introducing the sub-broker model in the Stock Broking business.

STRONG FINANCIAL GROUP

Established in 1985, the Kotak Mahindra Group is one of Indias most reputed financial conglomerates. The group has a net worth of over Rs. 7,100 crore. The Group services around 6.5 million customer accounts

ETHICS

We believe that ethics of a company help to deliver value to all the stake holders and lead to success. Kotak Securities adheres to strict ethical practices and compliance that comprise of commitments towards customers, associates, stakes holders and employees.

NETWORK

Kotak Securities has India presence with its network of Branches, Sub-brokers and Primary market sub brokers. Presence of Kotak Securities with over 20,000 primary market sub brokers, 1420 outlets in 447 cities makes it one of the broking houses with the largest network.

OBJECTIVE

Each research study has its own specific purpose. It is like to discover to Question through the application of scientific procedure. But the main aim of our research to find out the truth that is hidden and which has not been discovered as yet. Our research study has two objectives:To study about the competitive position of KOTAK SECURITIES Ltd in Competitive Market. To study about the reason of satisfaction with broking house. To study about awareness of security market and investment options. To study the factors while investing.

COMPARATIVE ANALYSIS OF STOCK BROKERS

OTHER MAJOR PLAYERS IN THE REGION KARVY ICICI DIRECT HDFC SECURITIES INDIABULLS

KARVY is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.

1. 2. 3. 4.

PRODUCT AND SERVICES OF KARVY GROUP

Karvy comrades. Karvy consultant ltd. Karvy merchant banking. Karvy global services ltd.

1. 2. 3. 4. 5. 6.

7.
8. 9.

ICICI Web Trade Limited (IWTL) maintains www.icicidirect.com (herein after referred to as the "Website") whereas IWTL is an affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited. IWTL has launched and established an online trading service on the Website. PRODUCTS AND SERVICES OF ICICI DIRECT Investing in Mutual funds Personal Finance Customer Service Features IPOs Margin Trading Margin PLUS Trading Call Trade Trading on NSE/BSE Trade in derivatives

HDFC security is the subsidiary of HDFC (Housing Development Financial Corporation). www.hdfcsec.com also reserves the right to decide on the criteria based on which customers would be chosen to participate in these services. The launch of new services is subject to the clearance of the regulators. i.e. SEBI, NSE and BSE.

PRODUCT OFFERED BY HDFC SECURITY Online trading for Resident & Non Resident Indians. Cash-n-Carry on both NSE and BSE. Day trading on both NSE and BSE. Trade on Futures & Options on the NSE. Online IPO's. Telephone-based Broking (Equity & Derivatives

Indiabulls Securities (ISL) is one of India's leading capital markets companies providing securities broking and advisory services. Indiabulls. Securities also provides depository services, equity research services and IPO distribution to its clients and offers commodities trading through a separate company. These services are provided both through on-line and off-line distribution channels. India bulls Securities is a pioneer of on-line securities trading in India. India bulls Securities in-house trading platform is one of the fastest and most efficient trading platforms in the country. PRODUCT OFFERED BY INDIA BULLS Equity & Debt Stock Broking Insurance Commodity trading Depository Services Derivatives Broking Services Equity Research Services Mutual Fund Distribution IPO Distribution

METHODOLOGY
My On the Job training is Corporate Pitching. In the first phase we were trained and they taught us different things about market. After that they shared their experience about the real life problem faced by the customers. They provided leads and after that we made calls regarding their interest & purpose of trading, preferred company for trading, problems faced by the customers, their satisfaction level, reasons for not trading, requirement of any RM, change the form of contract notes etc. The customers were guided to fill the forms regarding authority letter etc.. The details of the calls were recorded. Maintaining record of clients and contacting them at regular basis.

TARGET ASSIGNED

Do at least 30-40 calls a day, whenever required. Do Mapping of the Dealers of the branch.

TYPES OF RESEARCH SAMPLE DESIGN SAMPLING UNITS SIZE OF SAMPLE SOURES OF DATA COLLECTION

Qualitative Research Probability research design. Jalandhar as a sampling unit Research sample size is 100

Primary & Secondary Data. In our research primary data, as well as secondary data. Primary, I collected a fresh, and the first time data and secondary is which I got from already available data like annual report, magazines etc. Survey Method: - Survey refers to the method of securing information concerning phenomena under study from all or selected number of respondents of the concerned area. In a survey the investigator examines those phenomena which exist in the universe independent of his action. We used the Scheduling Method. Scheduling: - In this method the enumerators along with schedules, contacts respondents, (here contact on telephone) put to them the questions from the Performa in the order the questions are listed and recorded the replies in the space meant for the same in the Performa.

Q1. Awareness about the investment options available.

KNOWLEDG %AGE E Yes 80%

No

20%

TOTAL

100

INTERPRETATION Only 80% people know the exact meaning of investment. Because of remaining 20% take his/her residential property as an investment. According to law purpose this is not an investment because it does not create any profit for the owner.

Q2. Most preferable investment scenario.

INVESTMENT SCENARIO Banks Derivatives securities market Insurance Bonds Real estate Others TOTAL 4% 20% 20% 4% 100 24% & 28% %AGE

INTERPRETATION Today scenario is changed, so the most area is covered by the derivative and securities market. It is 28% of the total population.

Q3. The basic investment.

purpose

of

the
PERCENTAGE

INVESTMENT PURPOSE Liquidity Returns Capital

30% 25% 10%

appreciation
Tax benefits Risk covering Others TOTAL 20% 5% 10% 100

INTERPRETATION 75% people are interested in liquidity, returns and tax benefits. And remaining 25% are interested in capital appreciations, risk covering, and others.

Q4. Most important factors taken in mind while making investments.

FACTOR Risk Returns Both TOTAL %AGE 8% 17% 75% 100

INTERPRETATION 75% people are considered the both factors risk as well as returns but, only 25% considered the risk or returns factor.

Q5. Awareness related to security markets.

KNOWLEDGE PERCENTAG E Complete 8% Partial Nil 75% 17%

TOTAL

100

INTERPRETATION On that basis, we conclude that 17% people know nothing about the securities investments and 75% people have partial knowledge about it, so, some promotional activities are required for increasing the awareness about security market.

Q6. Do you have any de-mat & trading account?

ACCOUNTS PERCENTAGE

Yes

60%

No

40%

TOTAL

100%

INTERPRETATION Only 60% respondents have de-mat and trading account and remaining 40% says no because they dont know why shares move up and down.

Q7. In which company you have d-mat and trading account?

80%

COMPANY
70%

PERCENTAGE 68% 7% 3% 15% 7%

Kotak securities HDFC securities Indiabulls Karvy Others

60%
50% 40%

30%
20% 10% 0% Kotak HDFC Indiabulls securities securities Karvy Others

TOTAL

100

INTERPRETATION In KOTAK Ltd 68% respondents have de-mat & trading account because of better services.

Q8. Specify the reason of satisfaction with the current broking house.
SATISFACTI PERCENT ON AGE Operating expenses Services Brokerage TOTAL 18%

25% 57% 100

INTERPRETATION 57% respondents are satisfied with the Brokerage charges,25% with the Services & 18% with the Operating Expenses of the Broking house.

FINDINGS

Coming to satisfaction 57% say Kotak Ltd is better than others stock brokers due to less Brokerage charges. Main purposes of investments are returns & liquidity. Investors take risk as well as returns into their mind while making the investment. People want to invest their money in the security market but they dont have proper knowledge. People pay more emphasis on brokerage than service provided by brokerage houses.

OTHER FINDINGS (During Training)

MUCH TIME They take too much time to open a Demat account as against promised. LIMITED BRANCHES It is having limited number of branches in India and thats why it creates problem in opening the accounts. MONEY- MONEY- MONEY Only focus is to open the Demat account and take the money from the customer. UNCONTROLLED BRANCHES No control on the branches. GOOD RESEARCH REPORTS But also provide good research reports after their technical and fundamental analysis only from online account.

SUGGESTIONS
Improvement in the opening of De-mat & contract notice procedure is required. There should be a limited number of clients under the relationship manger (Mapping). So that he can handle new as well as old customer properly. Some promotional activities are required for the awareness of the customer. People at young age should be encouraged to invest in stock market. Seminars should be held for providing information to prospective and present customers. KOTAK should focus on customer satisfaction and the product availability and treat their customer as GOD. The best way of competing with the competitor is to make your customer satisfied, which results in the loyalty of your customers for your company. KOTAK should continuously do a RESEARCH AND DEVELOPMENT PROGRAMME, which will result in the information about the customers. For that they should appoint R&D depts. This will continuously do this work Commitment should be equalized for every person. Provide the facility of free demonstrations for all.

LIMITATIONS
As only JALANDHAR dealt in survey so it does not represent the view of the total Indian market. Size of the research may not be substantial. The survey was carried through questionnaire and the questions were based on perception. Some respondents either do not have time or willing does not respond, as they are quite annoyed with the phone call. Many contact details were wrong or not answered. The respondents were reluctant to give information due to their busy schedule & did not give importance to the phone call. Complete data was not available due to company privacy and secrecy.

LIMITATIONS (OTJ-ON THE JOB)

Mostly people comfortable with traditional brokers: - As people are doing trading from there respective brokers, they are quite comfortable to trade via phone. Lack of Techno Savy people and poor internet penetration: -Since most of the people are quite experienced and also they are not techno savy. Also internet penetration is poor in India. Some respondents are unwilling to talk : - Some respondents either do not have time or willing does not respond, as they are quite annoyed with the phone call. Inaccurate Leads: - Sometimes leads are provided which had error in it which varies from only 5 digit phone number to wrong phone number.

LIMITATIONS (OFTJ-Off The Job)

TIME PRESSURE As the time was only 6 weeks, there was a pressure to prepare the report with accurate data and present it to the Assistant Manager. EXPENSES NOT PROVIDED Expenses which were incurred to get the information were not provided by the company. FINDING ACCURATE DATA There was a pressure to present only accurate data not fake which took lots of time in proving that the data was accurate. PEOPLE NOT READY TO GIVE INFORMATION People who were approached were reluctant to provide the information due to their busy schedule. MARKET TIME This was the biggest problem as we could contact our Assistant Manager only after the share market closed and they completed their work and settlements that is after 4 P.M.

CONCLUSION
On the basis of the study it is found that KOTAK SECURITIES Pvt. Ltd is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. Kotak Ltd. provides the facility of Trade as well as relationship manager facility for encouragement and protect the interest of the investors. It also provides the information through the internet and mobile alerts that what IPOs are coming in the market and it also provides its research on the future prospect of the IPO. Study also concludes that people are not much aware of commodity market and while its going to be biggest market in India. The company should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers, so that they feel more comfortable while investing in the stock market.
From the above study, it can be concluded that although KOTAK has earned some reputation but it will take some time to get established and standardized its branches.

RECOMMENDATIONS
MORE BRANCHES Need to open more branches to be a topper in market because it has a low distribution network. LESS TIME They should try to make some arrangements to reduce account opening time by verifying documents at branch itself. LINK-BANK A/Cs Linked as many accounts as client wants to its online account. NEW BANKS IN THE KITTY Need to tie up with major banks like SBI, Allahabad Bank, Bank of Baroda etc. CUSTOMER SATISFACTION The company should focus on the customer satisfaction not on just taking money from their pocket. CONTROLLED BRANCHES The company would have to make some arrangements to control the branches and make standardized procedures for all of them for their better control and performance appraisal

BIBLIOGRAPHY

Books Sharma, D.D., Marketing Research, New Delhi, Sultan Chand & Sons Educational Publishers, 2005. BERIG C. MARKETING RESEARCH NEW DELHI, TATA Mc GRAW-HILL PUBLISHING COMPANY LIMITED. Kothari, C.R., Research Methodology, Second Edition, New Delhi, New Age International (p) Ltd Publishers, 2006. Other Sources Economic Times. Business Standard. Training Kit Provided by the KOTAK. Websites: www.moneycontrol.com www.google.com www.kotak.com www.karvy.com www.icicidirect.com www.hdfcsecurities.com www.indiabulls.com