About investment in shares and Mutual Fund

1. [TYPE THE COMPANY NAME]
INVESTMENT IN MUTUAL FUNDS AND
SHARES –PROS AND CONS
FINANCIAL MANAGEMENT
TO, PRATIMA TRIVEDI
12/9/2013
REPORT BYPARITOSH SINGH FS35
PRAKRITI FS40
PANKAJ KUMAR SINGH FS34
ROMANSHU VARSHNEY FS64
RAJNEESH SHARMA FS44

2. TABLE OF CONTENTS
Table of Contents
ACKNOWLEDGEMENT ................................................................................................................................... 4
MUTUAL FUNDS ............................................................................................................................... 5
A.
I.
INTRODUCTION ............................................................................................................................ 5
II.
ROLE OF MUTUAL FUNDS IN THE FLNANCIAI, MARKET ................................................... 5
III.
MUTUAL FUNDS: STRUCTURE IN INDIA............................................................................. 5
IV.
GROWTH IN MUTUAL FUND INDUSTRY ............................................................................. 6
IMPACT OF THE GLOBAL FINANCIAL CRISIS ...................................................................... 11
V.
VI.
GOVERNMENT POLICIES ...................................................................................................... 11
VII.
ADVANTAGES OF MUTUAL FUNDS ................................................................................... 12

Diversification............................................................................................................................. 12

Expert Management. ................................................................................................................... 12

Liquidity. ..................................................................................................................................... 13

Convenience. ............................................................................................................................... 13

Reinvestment of Income. ............................................................................................................ 13

Range of Investment Options and Objectives. ............................................................................ 13

Affordability. .............................................................................................................................. 13
VIII.
DISADVANTAGES OF MUTUAL FUNDS............................................................................. 14

No Control Over Portfolio. ......................................................................................................... 14

Capital Gains. .............................................................................................................................. 14

Fees and Expenses. ..................................................................................................................... 14

Over-diversification. ................................................................................................................... 14

Cash Drag.................................................................................................................................... 15
IX.
SOME TOP MUTUAL FUND OF INDIAN MARKET ............................................................ 15

SCHEME: ICICI Prudential Focused Blue chip Equity Fund (G).............................................. 15

SCHEME: BIRLA SL INDIA GENNEXT (G) .......................................................................... 15

SCHEME: SBI DYNAMIC BOND FUND (G) ......................................................................... 16

ICICI Prudential Equity - Volatility Advantage Fund ................................................................ 16
B.
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INVESTMENT IN SHARES.............................................................................................................. 17
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3. 1.
INTRODUCTION .......................................................................................................................... 17
2.
ADVANTAGES OF INVESTING IN SHARES ........................................................................... 17
i.
Inflation Rate: ............................................................................................................................. 17
ii.
Protected From The Eyes Of The Public: ................................................................................... 17
iii.
Growth Rate: ........................................................................................................................... 17
iv.
Dividend:................................................................................................................................. 17
v.
Bonus Issues: .............................................................................................................................. 17
vi.
Capital Appreciation: .............................................................................................................. 17
DISADVANTAGES OF INVESTING IN SHARES ..................................................................... 18
3.
a.
Crash In Share Prices: ................................................................................................................. 18
b.
Liquidation: ................................................................................................................................. 18
c.
Fraudulent Stock Brokers: .......................................................................................................... 18
EXAMPLES OF SHARES TRADED ON NSE ............................................................................. 18
4.
Various sectors in Indian Stock Market and their performance .......................................................... 18
5.
REWINDING BACK TO THE STOCK MARKET TRADING HISTORY OF INDIA ............... 21
6.
STOCK MARKET MILESTONES ................................................................................................ 21
7.
POLICIES FOR SHARE MARKET .............................................................................................. 22


Objectives of the Board were identified as: ................................................................................ 22

Different categories of share market ........................................................................................... 22

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Introduction to SEBI ................................................................................................................... 22
How can you qualify the market as bull or bear?........................................................................ 23
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4. TABLE OF TABLE
Table 1......................................................................................................................................................... 18
Table 2......................................................................................................................................................... 19
Table 3......................................................................................................................................................... 20
Table 4......................................................................................................................................................... 20
Table 5......................................................................................................................................................... 20
TABLE OF FIGURE
Figure 1 ......................................................................................................................................................... 7
Figure 2 ......................................................................................................................................................... 8
Figure 3 ......................................................................................................................................................... 8
Figure 4 ......................................................................................................................................................... 9
Figure 5 ....................................................................................................................................................... 10
Figure 6 ....................................................................................................................................................... 15
Figure 7 ....................................................................................................................................................... 15
Figure 8 ....................................................................................................................................................... 16
Figure 9 ....................................................................................................................................................... 16
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5. ACKNOWLEDGEMENT
We would like to express our special thanks of
gratitude to my Mam’m PRATIMA TRIVEDIwho
gave us the golden opportunity to do this wonderful
project on the topic “INVESTMENT IN
MUTUAL FUNDS AND SHARES-PROS AND
CONS ”which also helped us in doing a lot of
research and we come to know about so many new
things. I am really thankful to you.
We are making this project not only for marks but
also to increase our knowledge …
Thanking you.
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6. A.
I.
MUTUAL FUNDS
INTRODUCTION
Mutual funds are investment vehicles that pool money from many different
investors to increase their buying power and diversify their holdings. This
allows investors to add a substantial number of securities to their portfolio for a
much lower price than purchasing each security individually.
A mutual fund is set up in the form of a trust that has a Sponsor, Trustees, Asset
Management Company (AMC). The trust is established by a sponsor(s) who is like
a promoter of a company and the said Trust is registered with Securities and
Exchange Board of India (SEBI) as a Mutual Fund. The Trustees of the mutual
fund hold its property for the benefit of unit holders. An Asset Management
Company (AMC) approved by SEBI manages the fund by making investments in
various types of securities.
The trustees are vested with the power of superintendence and direction over the
AMC. They monitor the performance and compliance of SEBI regulations by the
mutual fund. The trustees are vested with the general power of superintendence
and direction over AMC. They manage the performance and compliance of SEBI
Regulations by the mutual fund.
II.
ROLE OF MUTUAL FUNDS IN THE FLNANCIAI,
MARKET
The Indian financial institutions have played a dominant role in assets formation
and intermediation contributed substantially in macroeconomic of country. In this
process, Indian mutual funds have emerged as strong financial intermediaries and
are playing a very important role in bringing stability to the financial system and
efficiency to resource allocation Mutual funds have opened new vistas to investors
and imparted much-needed liquidity to the system.
III.
MUTUAL FUNDS: STRUCTURE IN INDIA
Mutual Funds in India follow a 3-tier structure. There is a Sponsor (the First tier),
who thinks of starting a mutual fund. The Sponsor approaches the Securities
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7. &Exchange Board of India (SEBI), which are the market regulator and also the
regulator for mutual funds.
Not everyone can start a mutual fund. SEBI checks whether the person is
ofintegrity, whether he has enough experience in the financial sector, his net worth
etc. Once SEBI is convinced, the sponsor creates a Public Trust (the Second tier)
as per the Indian Trusts Act, 1882. Trusts have no legal identity in India and cannot
enter into contracts, hence the Trustees are the people authorized to act on behalf
of the Trust. Contracts are entered into in the name of the Trustees. Once the Trust
is created, it is registered with SEBI after which this trust is known as the mutual
fund.
IV.
GROWTH IN MUTUAL FUND INDUSTRY
The Indian Mutual fund industry has witnessed considerable growth since its
inception in 1963. The assets under management (AUM) have surged to Rs 4,173
bn in Mar-09 from just Rs. 250 mn in Mar-65. In a span of 10 years (from 1999 to
2009), the industry has registered a CAGR of 22.3%, albeit encompassing some
shortfalls in AUM due to business cycles.
The impressive growth in the Indian Mutual fund industry in recent years can
largely be attributed to various factors such as rising household savings,
comprehensive regulatory framework, favorable tax policies, introduction of
several new products, investor education campaign and role of distributors.
In the last few years, household’s income levels have grown significantly, leading
to commensurate increase in household’s savings. Household financial savings (at
current prices) registered growth rate of around 17.4% on an average during the
period FY04-FY08 as against 11.8% on an average during the period FY99-FY03.
The considerable rise in household’s financial savings, point towards the huge
market potential of the Mutual fund industry in India.
Besides, SEBI has introduced various regulatory measures in order to protect the
interest of small investors that augurs well for the long term growth of the industry.
The tax benefits allowed on mutual fund schemes (for example investment made in
Equity Linked Saving Scheme (ELSS) is qualified for tax deductions under section
80C of the Income Tax Act) also have helped mutual funds to evolve as the
preferred form of investment among the salaried income earners.
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8. Besides, the Indian Mutual fund industry that started with traditional products like
equity fund, debt fund and balanced fund has significantly expanded its product
portfolio. Today, the industry has introduced an array of products such as
liquid/money market funds, sector-specific funds, index funds, gilt funds, capital
protection oriented schemes, special category funds, insurance linked funds,
exchange traded funds, etc. It also has introduced Gold ETF fund in 2007 with an
aim to allow mutual funds to invest in gold or gold related instruments. Further, the
industry has launched special schemes to invest in foreign securities. The wide
variety of schemes offered by the Indian Mutual fund industry provides multiple
options of investment to common man.
With a strong growth in the AUM of domestic Mutual fund industry, the ratio of
AUM to GDP increased gradually from 4.7% in 2001 to 8.5% in 2009. The share
of mutual funds in households’ financial savings also witnessed a substantial
increase to 7.7% in 2008 as against 1.3% in 2001.
Figure 1
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9. Figure 2
Figure 3
The investor-wise pattern of asset-holding as well as investors accounts reveals
that individual investors account for almost 96.75% of total investors account and
contribute Rs 1552.8 bn which is 37.0% of the total net assets as on March 31,
2009. The comparatively lower share of net assets of individual investors in total
net assets is mainly because of lower penetration of mutual fund as an investment
instrument among working population (age group 18-59 years). A majority of
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10. investors in the age group 18-59 years are not aware of mutual funds or of
investing in mutual funds through Systematic Investment Plan (SIP). However,
take up of mutual fund as an investment opportunity by individual investors,
particularly in Tier 2 and Tier 3 towns, is expected to increase in the near future.
Corporate/institutions sector on the other hand, though account for only 1.2% of
the total number of investors’ accounts in Mutual funds industry contributes as
much as 56.3% to the total net assets of the industry as on March 31, 2009. Despite
a rise in net FII inflows in the domestic mutual funds, FIIs constitute a very small
percentage of investors’ accounts (0.0003%) and contribute Rs 49.83 bn to the
total net assets (1% of total net assets of the Indian Mutual fund industry as on
March 31, 2009).
Figure 4
The net resource mobilization of domestic mutual funds which registered strong
growth in FY2000 due to the tax incentives announced in the Union Budget for
FY2000, witnessed a sharp decline in FY01. The decline in resource mobilization
in FY01 was primarily due to the bearish trend in the domestic stock markets and
problems in UTI. The resource mobilization continued to remain at low level up to
FY05. In FY05 resource mobilization by mutual funds declined by almost 95.3%
on account of redemption pressures on income, gilt and equity-linked saving
schemes subsequent to shift of resources in favor of small saving schemes that
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11. offered attractive tax adjusted rates of return. Mutual funds mobilized huge amount
of resources under liquid/money market schemes & growth/equity oriented
schemes, while resource mobilization under debt schemes experienced sharp fall
due to change in interest rate scenario. While, the resource mobilization by mutual
funds witnessed strong growth during FY06-FY07 and in the period Apr-Aug 07
due to buoyant capital market conditions, the eruption of sub-prime mortgage crisis
during Sep-07 and consequent volatility witnessed in the domestic stock markets
led to decline in resource mobilization. The net resource mobilization of mutual
funds turned negative as there was a net outflow of Rs 282.97 bn during FY09 as
against a net inflow of Rs 1,538.01 bn during FY08. The uncertain conditions in
stock markets coupled with redemption pressures from banks and corporates
amidst tight liquidity conditions resulted in significant outflows during the months
of Jun-08 (Rs 392.3 bn), Sep-08 (Rs 456.5 bn) and Oct-08 (458 bn). This led the
RBI to announce various liquidity augmentation measures to provide liquidity
support to mutual funds through banks. With the easing of overall liquidity
conditions, net resource mobilization by mutual funds again turned positive
between the periods Dec-08 to Feb-09. Further, with liquidity conditions remaining
comfortable and stock markets registering strong gains, the net resource
mobilization by mutual funds grew considerably during the first quarter of FY10.
Figure 5
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12. The data reveals that the increase in revenue and profitability of the Mutual fund
industry has not been commensurate with the AUM growth in past few years. The
increased expenditure on marketing, distribution and administration exerted
upward pressure on the operating expenses, thereby impacting AMC’s margins.
The operating expenses as a percentage of AUM rose from 41 basis points in FY04
to 113 basis points in FY08.
V.
IMPACT OF THE GLOBAL FINANCIAL CRISIS
Deepening of the global financial crisis during September 2008, which resulted in
liquidity crunch world-over, had dampening impact of the Indian Mutual fund
industry. With the drying up of credit inflows from banks and external commercial
borrowings route, mutual funds witnessed redemption pressure from corporates.
Although the mutual funds promised immediate redemption, their assets were
relatively illiquid. Besides, mutual funds faced problems such as maturity
mismatches between assets & liabilities of mutual funds, shift from mutual funds
to bank deposits in view of the comparatively higher interest rates being offered by
banks and freezing up of money markets due to lack of buyers for assets like
certificates of deposits of private sector banks.
During Apr-Sep 08, net mobilization of funds by mutual funds declined sharply by
97.7% to Rs 24.8 bn due to uncertain conditions prevailing in the domestic stock
markets. The redemption pressures witnessed by mutual funds led to net outflows
under both the income/debt-oriented schemes and growth/equity-oriented schemes.
Further, the AUM of Mutual fund industry contracted by 20.7% from Rs 5,445.4
bn as on August 31, 2008 to Rs 4,319.0 bn as on October 31, 2008. During the
same period, liquid and debt schemes which contribute more than 65% to the total
AUM witnessed a decline of 19% in AUM.
VI.
GOVERNMENT POLICIES
The RBI decided to conduct a special 14 day repo at 9% per annum for a notified
amount of Rs 200 bn from October 14, 2008 with a view to enable banks to meet
the liquidity requirements of mutual funds.
Scheduled Commercial Banks (SCBs) and All India term lending and refinancing
institutions were allowed to lend against and buy back CDs held by mutual funds
for a period of 15 days.
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13. As a temporary measure, banks were allowed to avail of additional liquidity
support exclusively for the purpose of meeting the liquidity requirements of mutual
funds to the extent of up to 0.5% of their net demand and time liabilities (NDTL).
Accordingly on November 1, 2008, it was decided to extend this facility and allow
banks to avail liquidity support under the LAF through relaxation in the
maintenance of SLR to the extent of up to 1.5% of their NDTL. This relaxation in
SLR was provided for the purpose of meeting the funding requirements of NBFCs
and mutual funds.
The borrowing limit prescribed in Regulation 44(2) of SEBI (Mutual Fund)
Regulations, 1996 was enhanced from 20% of net asset of the scheme to 40% of
net asset of the scheme to those mutual funds who approached SEBI. This
enhanced borrowing limit was made available for a period of six months and could
be utilized for the purpose of redemptions/ repurchase of units.
In order to moderate the exit from close ended debt schemes and in the interest of
those investors who choose to remain till maturity and with a view to ensure that
the value of debt securities reflects the current market scenario in calculation of
NAV, the discretion given to mutual funds to mark up/ mark down the benchmark
yields for debt instruments of more than 182 days maturity was enhanced from 150
basis points to 650 basis points.
VII.
ADVANTAGES OF MUTUAL FUNDS
 Diversification.
Mutual funds spread their holdings across a number of different investment
vehicles, which reduces the effect any single security or class of securities will
have on the overall portfolio. Because mutual funds can contain hundreds or
thousands of securities, investors aren’t likely to be fazed if one of the securities
doesn’t do well.
 Expert Management.
Many investors lack the financial know-how to manage their own portfolio.
However, non-index mutual funds are managed by professionals who dedicate
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14. their careers to helping investors receive the best risk-return trade-off according to
their objectives.
 Liquidity.
Mutual funds, unlike some of the individual investments they may hold, can be
traded daily. Though not as liquid as stocks, which can be traded intraday, buy and
sell orders are filled after market close.
 Convenience.
If you were investing on your own, you would ideally spend time researching
securities. You’d also have to purchase a huge range of securities to acquire
holdings comparable to most mutual funds. Then, you’d have to monitor all those
securities. Choosing a mutual fund is ideal for people who don’t have the time to
micromanage their portfolios.
 Reinvestment of Income.
Another benefit of mutual funds is that they allow you to reinvest your dividends
and interest in additional fund shares. In effect, this allows you to take advantage
of the opportunity to grow your portfolio without paying regular transaction fees
for purchasing additional mutual fund shares.
 Range of Investment Options and Objectives.
There are funds for the highly aggressive investor, the risk averse, and the middleof-the-road investor – for example, emerging markets funds, investment-grade
bond funds, and balanced funds, respectively. There are also life cycle funds to
ramp down risk as you near retirement. There are funds with a buy-and-hold
philosophy and others that are in and out of holdings almost daily. No matter your
investing style, there’s bound to be a perfect fund to match it.
 Affordability.
For as little as $50 per month, you can own shares in Google (NASDAQ: GOOG),
Berkshire Hathaway (NYSE: BRK.A), and a host of other expensive securities via
mutual funds. At the time of this writing, a share of Berkshire Hathaway costs over
$119,000 a share.
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15. VIII.
DISADVANTAGES OF MUTUAL FUNDS
Although mutual funds can be beneficial in many ways, they are not for everyone.
 No Control Over Portfolio.
If you invest in a fund, you give up all control of your portfolio to the mutual fund
money managers who run it.
 Capital Gains.
Anytime you sell stock, you’re taxed on your gains. However, in a mutual fund,
you’re taxed when the fund distributes gains it made from selling individual
holdings – even if you haven’t sold your shares. If the fund has high turnover, or
sells holdings often, capital gains distributions could be an annual event. That is,
unless you’re investing via a Roth IRA, traditional IRA, or employer-sponsored
retirement plan like the 401k.
 Fees and Expenses.
Some mutual funds may assess a sales charge on all purchases, also known as a
“load” – this is what it costs to get into the fund. Plus, all mutual funds charge
annual expenses, which are conveniently expressed as an annual expense ratio –
this is basically the cost of doing business. The expense ratio is expressed as a
percentage, and is what you pay annually as a portion of your account value. The
average for managed funds is around 1.5%. Alternatively, index funds charge
much lower expenses (0.25% on average) because they are not actively managed.
Since the expense ratio will eat directly into gains on an annual basis, closely
compare expense ratios for different funds you’re considering.
 Over-diversification.
Although there are many benefits of diversification, there are pitfalls of being overdiversified. Think of it like a sliding scale: The more securities you hold, the less
likely you are to feel their individual returns on your overall portfolio. What this
means is that though risk will be reduced, so too will the potential for gains. This
may be an understood trade-off with diversification, but too much diversification
can negate the reason you want market exposure in the first place.
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16.  Cash Drag.
Mutual funds need to maintain assets in cash to satisfy investor redemptions and to
maintain liquidity for purchases. However, investors still pay to have funds sitting
in cash because annual expenses are assessed on all fund assets, regardless of
whether they’re invested or not.
IX. SOME TOP MUTUAL FUND OF INDIAN MARKET
 SCHEME: ICICI Prudential Focused Blue chip Equity Fund
(G)
Fund returns v/s Category average (Large Cap)
Figure 6
 SCHEME: BIRLA SL INDIA GENNEXT (G)
Fund returns v/s Category average (Diversified Equity)
Figure 7
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17.  SCHEME: SBI DYNAMIC BOND FUND (G)
Fund returns v/s Category average (Debt Long Term)
Figure 8
 ICICI Prudential Equity - Volatility Advantage Fund
Figure 9
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18. B.
INVESTMENT IN SHARES
1. INTRODUCTION
A unit of ownership that represents an equal proportion of a company's capital. It
entitles its holder (the shareholder) to an equal claim on the company's profits and
an equal obligation for the company's debts and losses.
2. ADVANTAGES OF INVESTING IN SHARES
There are several benefits derived from investment in shares. Below are some of
them:
i.
Inflation Rate:Inflation rate is higher than commercial banks interest rate
but lower than equity price appreciation.
ii.
Protected From The Eyes Of The Public:Nobody knows your worth
except you tell him/her. In other investments, people can easily look at the
assets of the business or your property (real estate) and come up with
approximate worth of it.
iii. Growth Rate:The rate of growth is far beyond the bank interest rate.
iv.
Dividend:This is cash reward given to shareholders as part of the profit
made by the company at the end of each financial year. It is declared at the
annual general meeting (AGM) of the company. The larger the units of your
shareholding, the more money you receive at the end of each financial year.
There are companies that have yearly dividend policy. Your financial
adviser should be able to tell you some of them.
v.
Bonus Issues:This is free shares given to existing shareholders of a
company. Sometimes, company declares bonus instead of dividend or both.
For instance, in the third quarter of the year 2007, First Bank of Nigeria
declared one-for-one bonus. This means a unit for every unit you already
hold. For example, a man who holds 100,000 units previously will be given
an additional 100,000 units free after the declaration of the First Bank bonus
making the values of his shares 200,000 units.
vi.
Capital Appreciation:Price of shares move up or down responding to
the forces of demand and supply. For instance, few months ago there was a
high demand of the shares of Benue Cement Company of Nigeria which
traded for about N6.00 per share. Due to scarce nature of it and the good
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19. performance of the company, a unit of it now costs about N 48.oo This
implies that there is about 700% increment in the value of the stock. If you
had bought N50, 000 units of the shares at N6.00 per share, it means that
you spent 300,000.00 buying the shares. Now, that it costs N48.00 per share,
if you are to self your shares, your returns would be 48x50,000,which is
equal to 2.4 million naira. Thus your capital has appreciated from N300,
000.00 to 2.4 millionaires. Indeed stock business has the potential of making
you a millionaire overnight.
3. DISADVANTAGES OF INVESTING IN SHARES
The benefits of investing in share are many but there are few pitfalls to
avoid.These include:
a. Crash In Share Prices:Due to one reason or the other, sometimes share
prices drop so much. A discerning investor should know what to do at any
point in time.
b. Liquidation:Sometimes companies go into liquidation thereby eroding the
investments of ordinary shareholders. For example, some banks in Nigeria
that did not meet up with the N25 billion minimum capitals as directed by
the central Bank of Nigeria (CBN) died with investors’ money. You must be
vigilant to watch over your investment if you consider it important to you.
c. Fraudulent Stock Brokers:some stockbrokers are unfaithful to their
clients. They may collect your money when there is perceived information
that the shares of a particular company is a good one and instead of making
the transactions in your name may divert the money for their selfish interest,
may be use it to make their own investments. When the company has closed
her book, they may call you for refund or may embezzle your money like
that. You must be careful in selecting your stockbroker.
4. EXAMPLES OF SHARES TRADED ON NSE
Various sectors in Indian Stock Market and their performance
Banks
Table 1
Axis Bank
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1365.35
1399.90
1418.60
953.40
1212.00 1085.55
1155.30
1,280.65
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20. -6.20%
-8.52%
-9.72%
34.32%
5.66%
17.97%
10.85%
HDFC Bank
694.00
-1.69%
630.65
8.19%
683.00
-0.10%
616.30
10.71%
668.05
2.13%
637.65
7.00%
661.20
3.19%
682.30
ICICI Bank
1135.05
0.68%
1106.35
3.29%
1153.60
-0.94%
959.00
19.16%
1080.25 1029.70
5.79%
10.98%
1067.90
7.01%
1,142.75
Bank of Baroda
791.60
-13.79%
730.15
-6.53%
674.50
1.18%
488.55
39.69%
642.30
6.25%
607.60
12.32%
644.60
5.87%
682.45
Bank of India
294.10
-25.11%
314.75
-30.02%
294.15
-25.12%
145.00
51.90%
230.70
-4.53%
213.70
3.07%
217.20
1.40%
220.25
PNB
822.45
-27.41%
809.25
-26.23%
774.85
-22.95%
446.45
33.72%
559.90
6.63%
517.60
15.34%
549.75
8.59%
597.00
SBI
2307.25
-19.31%
2166.20
-14.05%
2049.15
-9.14%
1633.25
13.99%
1809.60 1760.10
2.88%
5.78%
1821.50
2.21%
1,861.80
HCL Tech
625.55
80.18%
755.75
49.14%
747.60
50.76%
1016.40
10.89%
1084.85
3.89%
1063.10
6.02%
1086.55
3.73%
1,127.10
Infosys
2338.50
42.25%
2966.45
12.14%
2427.50
37.04%
3020.85
10.12%
3305.90
0.63%
3347.35
-0.62%
3353.50
-0.80%
3,326.60
Mindtree
686.05
98.13%
874.45
55.44%
819.10
65.94%
1034.85
31.35%
1378.25
-1.38%
1409.65
-3.58%
1391.15
-2.29%
1,359.25
TCS
1282.40
55.95%
1557.80
28.38%
1471.85
35.88%
1987.55
0.62%
2091.75
-4.39%
1989.55
0.52%
2004.60
-0.23%
1,999.95
Tech Mahindra
881.90
89.90%
1079.45
55.14%
925.10
81.03%
1358.55
23.27%
1572.95
6.47%
1659.50
0.92%
1698.10
-1.38%
1,674.70
IT
Table 2
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21. Infrastructure
Table 3
BHEL
241.05
-28.92%
203.10
-15.63%
192.20
-10.85%
141.55
21.05%
140.45
22.00%
137.15
24.94%
156.05
9.80%
171.35
GMR Infra
19.80
7.32%
19.45
9.25%
20.95
1.43%
15.36
38.35%
23.20
-8.41%
21.65
-1.85%
20.45
3.91%
21.25
JaiprakashAsso
104.55
-47.11%
74.25
-25.52%
66.75
-17.15%
37.95
45.72%
47.70
15.93%
46.60
18.67%
53.80
2.79%
55.30
Glenmark
430.85
21.88%
505.20
3.94%
579.10
-9.32%
528.80
-0.70%
520.15
0.95%
509.05
3.15%
515.90
1.78%
525.10
Lupin
593.50
44.54%
598.15
43.42%
753.50
13.85%
839.00
2.25%
873.75
-1.82%
846.45
1.35%
855.45
0.28%
857.85
Ranbaxy Labs
510.75
-14.94%
400.80
8.40%
378.80
14.69%
444.50
-2.26%
407.90
6.51%
415.50
4.56%
421.70
3.02%
434.45
Bajaj Auto
1951.10
-0.03%
1974.60
-1.22%
1748.40
11.56%
1911.45
2.04%
2078.25
-6.15%
1935.05
0.80%
1974.75
-1.23%
1,950.50
Hero Motocorp
1823.35
15.10%
1646.50
27.46%
1642.95
27.74%
1928.95
8.80%
2106.25
-0.36%
1998.20
5.03%
2050.60
2.35%
2,098.70
M&M
930.00
1.69%
878.35
7.67%
989.55
-4.43%
771.10
22.65%
898.50
5.26%
933.15
1.35%
945.60
0.02%
945.75
Maruti Suzuki
1481.25
14.64%
1422.05
19.41%
1587.20
6.99%
1290.25
31.61%
1616.00
5.08%
1647.60
3.07%
1677.40
1.23%
1,698.10
Pharmaceuticals
Table 4
Auto
Table 5
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22. 5. REWINDING BACK TO THE STOCK MARKET
TRADING HISTORY OF INDIA
In the earlier days, stockbrokers kept scouting for 'natural' sites to conduct their
trading activities, shifting from one set of Banyan trees to another. As the number
of brokers kept increasing and the streets kept overflowing, they simply had no
choice but to relocate from one place to another.
Finally in 1854, trading in India found a permanent address, Dalal Street, now
synonymous with the oldest stock Exchange in Asia, The Bombay Stock
Exchange. With a heritage that goes back to over 130 years, BSE was the first
stock exchange in the country to be granted permanent recognition under the
Securities Contract Regulation Act, 1956. The exchange has played a pioneering
role in the development of the Indian Securities Market - one of the oldest in the
world. After India gained independence, the BSE formulated a comprehensive set
of guidelines adopted by the Indian Capital markets. Even today, the BSE Sensex
remains one of the parameters against which the robustness of the Indian Economy
and finance is measured.
The trading scenario in India then underwent a paradigm shift in 1993, when NSE
or National Stock Exchange was recognized as a Stock Exchange. Within just a
few years, trading on both the exchanges shifted from an open outcry system to an
automated trading environment. Today, the Indian Securities market successfully
keeps pace with its global counterparts through the use of modern day technology.
6. STOCK MARKET MILESTONES
1875: BSE established as 'the native Share and Stock Brokers Association'
1956: BSE became the first stock exchange to be recognized under the Securities
Contract Act.
1993: NSE recognized as a stock exchange.
2000: Commencement of Internet trading at NSE.
2000: NSE commences derivatives trading (Index futures)
2001: BSE commences derivatives trading
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23. 7. POLICIES FOR SHARE MARKET
 Introduction to SEBI
The Government of India established the Securities and Exchange Board of India,
the regulatory body of stock markets in 1988. Within a short period of time, SEBI
became an autonomous body through the SEBI Act passed in 1992, with defined
responsibilities that cover both development & regulation of the market while also
giving the board independent powers. Comprehensive regulatory measures
introduced by SEBI ensured that end investors benefited from safe and transparent
dealings in securities.
 Objectives of the Board were identified as:
o To protect the interests of investors in securities
o To promote the development of Securities Market
o To regulate the Securities Market
SEBI has contributed to the improvement of the Securities Market by introducing
measures like capitalization requirements, margining and establishment of clearing
corporations that reduced the risk of credit
Today, the board continues on its two-fold mission of integrating the Securities
Market at the National level and also diversifying the trading products to increase
the number of traders (including banks, financial institutions, insurance companies,
Mutual Funds, primary dealers etc) transacting through the Exchanges. In this
context the introduction of derivatives trading through Indian Stock Exchanges
permitted by SEBI in 2000 AD has been a real landmark.
 Different categories of share market
o SMALL-CAP STOCKS
The stocks of small companies that have the potential to grow rapidly are classified
as small-cap stocks. These stocks are the best option for an investor who wishes to
generate significant gains in the long run; as long he does not require current
dividends and can withstand price volatility. Generally companies that have a
market Capitalization in the range of up to 250 Crores are small cap stocks
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24. o MID-CAP STOCKS
Mid-cap stocks are typically stocks of medium-sized companies. These are stocks
of well-known companies, recognized as seasoned players in the market. They
offer you the twin advantages of acquiring stocks with good growth potential as
well as the stability of a larger company. Generally companies that have a market
Capitalization in the range of 250-4000 crores are mid cap stocks
o LARGE-CAP STOCKS
Stocks of the largest companies (many being blue chip firms) in the market such as
Tata, Reliance, ICICI are classified as large-cap stocks. Being established
enterprises, they have at their disposal large reserves of cash to exploit new
business opportunities. The sheer volume of large-cap stocks does not let them
grow as rapidly as smaller capitalized companies and the smaller stocks tend to
outperform them over time. Investors, however gain the advantages of reaping
relatively higher dividends compared to small- and mid-cap stocks while also
ensuring the long-term preservation of their capital.
 How can you qualify the market as bull or bear?
Bull and Bear markets signify relatively long-term movements of significant
proportion. Hence, these runs can be gauged only when the market has been
moving in its current direction (by about 20% of its value) for a sustained period.
One does not consider small, short-term movements, lasting days, as they may only
indicate corrections or short-lived movements.
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25. REFERENCES
www.moneycontrol.com
www.wikipeadia.com
www.rbi.com
www.moneycrashers.com
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