Summer Training Report

On
Investor Awareness Towards Indian Stock Market
Completed in
Stockbyte Ltd.

Submitted In Partial Fulfilment of the Requirement

Of Master of Business Administration
by

UTKARSH MITTAL
Roll No: M23MBAG0059

under the supervision of

Industry Mentor 1
Faculty Mentor -MRS. Puja Kaura

School Of Management
Bennett University
Greater Noida, Uttar Pradesh, India

Month (in letters) YEAR (YYYY format)

1
 Completion Certificate from the Company

This is to certify that Utkarsh Mittal a student of Master of Business Administration at

Bennett University has successfully completed the Project titled – ‘Project title’ on DD/MM
/2020 at Name of Company, Place). He worked for a period of ___ weeks starting from
DD/MM, 2024

Name, Designation and Signature of the Industry Mentor

2
 Declaration

I hereby declare that except where specific reference is made to the work of others, the
contents of this Project are original and have not been submitted in whole or in part for
consideration for any other degree or qualification in this, or any other university. This
Project is my work and does not contain any outcome of work done in collaboration with
others, except as specified in the text and Acknowledgements.

(Signature)
Utkarsh Mittal
Roll No:
M23MBAG0059
Bennett University,
Greater Noida
DD/MM/YYYY

3
 Letter of Transmittal

Utkarsh Mittal

Master of Business Administration

Bennett University

Date

Industry Mentor’s Name

Company Address

Dear Mr./Ms. (Industry Mentor’s Name):

I Utkarsh Mittal pleased to submit my final report on, ‘(Project Title)’ for your review. I am
grateful for the opportunity provided by ( name of company) to work on this project which
enhanced my understanding of (mention area of work)

I have attempted to ( 2-3 sentences on the work done)

I am thankful to you for all of your help and support during this project. I hope that this
project report meets your expectation and I look forward to your feedback on my research
and recommendations.

Sincerely,

Utkarsh Mittal

Enrol. No-.M23MBAG0059

4
 Acknowledgements

I Utkarsh Mittal, Student in Bennett University, Greater Noida would like to express my
profound gratitude to all those who have been guided me in the completing of my project
intern report.

To start with, I would like to thank the organization Stockbyte Ltd. for providing me the
chance to undertake this internship study and allowing me to explore the area of finance a
well as marketing in stock market. Which was totally new to me, and which would prove out
to be very beneficial to me in my future assignments, my studies and my career ahead.

I wish to place on records, my deep sense of gratitude and sincere appreciation to my

company guide and mentor. Who suggested and prepared the framework of the project. I
would also like to thank him for his continuous support, advice and encouragement, without
which this report could never have been completed.

I would also like to thank my entire team of Stockbyte LTD, as all of us have together
worked towards the common organizational objective, shared our experiences and aided each
other in times of need.

5
 EXECUTIVE SUMMARY

The best gauge of the health of the economy is the stock market. All economic sectors and
industries are represented by stock markets. As a result, they act as a gauge for the economic
cycle as well as the hopes and concerns of the people who drive growth and prosperity. The
stock market has traditionally been the authorised marketplace for buying and selling shares
of various corporations. Today, a lot of investors are finding that stock markets are a highly
popular and superior financial market instrument. To meet the needs and expectations of
various sorts of investors, the Indian stock market offers a wide range of stocks or shares.
The stock market is becoming increasingly important as seen by the quick expansion of
intermediaries and stock market apps. A sizable portion of Indian investors still lacks the
knowledge necessary to make wise investing choices. Such a lack of information creates the
perfect environment for misdirection, causing investors to choose a specific company or
share without doing a thorough study, which leads to dissatisfaction with the return.
Companies can raise funds and trade openly on the stock market. Ownership and money
transfers take place in a controlled, secure setting. Stock exchanges encourage investment.
Companies can expand operations, grow their businesses, and provide employment to the
economy by obtaining finance.

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Table of Contents
Completion Certificate from the Company .......................................................................... 2
Declaration ........................................................................................................................... 3
Letter of Transmittal ............................................................................................................. 4
Acknowledgements .............................................................................................................. 5
Executive Summary………….…………………………………………...……………………………………………6

1) OBJECTIVES OF STUDY ............................................................................................. 8

2) INTRODUCTION.......................................................................................................... 9
a. INTRODUCTION OF STOCK MARKET............................................................................ 9
d. PESTLE Analysis of the Stock Market ......................................................................... 28
3) Company Overview ...................................................................................................... 30
a. SWOT Analysis Of Company ..................................................................................... 34
4) Literature Review ........................................................................................................ 35
5) Research Methodology ................................................................................................. 37
6) DATA ANANLYSIS & INTERPRETATION ................................................................. 40
7) Conclusion ................................................................................................................... 44
8) Findings....................................................................................................................... 45
9) LIMITATIONS- ........................................................................................................... 46
10) FUTURE SCOPE OF STUDY- ..................................................................................... 47
11) BIBLIOGRAPHY- ...................................................................................................... 48

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1) OBJECTIVES OF STUDY

1. To stud y about the emerging stock markets in India such as NSE and BSE.
2. To study about the year effect of the Indian stock market (BSE and NSE) from 2000to
2024.
3. To examine the market capitalization of Indian stock market (NSE and BSE)
from2000 to 2024.
4. To examine the trend of risk and return of Indian stock market (NSE and BSE)
from2000 to 2024.
5. To study the type of trading preferred by the investors in stock market.
6. To study the tax implications on stock in India.

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 2) INTRODUCTION

a. INTRODUCTION OF STOCK MARKET

The term "stock market" refers to a group of markets and exchanges where routine
transactions involving the purchase, sale, and issue of shares of publicly traded firms are
conducted. Such financial activities are carried out via structured official exchanges or over-
the-counter (OTC) markets that function in accordance with predetermined rules. A nation or
region may have several stock trading venues that permit the trading of stocks and other types
of assets. The stock market, sometimes known as the equity market, is largely known for the
trading of stocks and other equity-related financial instruments, such as exchange traded
funds (ETF), corporate bonds, and derivatives based on bonds, commodities, and currencies.
Even though the phrases "stock exchange" and "stock market" are sometimes used
interchangeably, the latter term usually refers to a subset of the former. When someone refers
to themselves as stock market traders, they are referring to those who purchase and sell shares
of stock on one or more stock exchanges that make up the larger stock market. The New York
Stock Exchange (NYSE), Nasdaq, and the Chicago Board Options Exchange are among the
top stock exchanges in the United States (CBOE).
NSE is the leading stock exchange in India where one can buy/sell shares of publicly listed
companies.
People can buy and sell shares in publicly traded corporations on the stock market. It
provides a platform to enable simple share exchange. In plain English, the stock market will
assist A in finding a seller who is prepared to buy Reliance Industries if A wants to sell 11
shares of that company. It is crucial to remember that a registered intermediary known as a
stock broker is the sole way for an individual to trade on the stock market. Shares are
purchased and sold through electronic means.

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 b. INDIAN STOCK MARKET
The oldest stock market in Asia, according to reports, the first organized stock exchange in
India opened its doors in Bombay in 1875. To ease transactions involving the shares of local
textile manufacturers, the Ahmedabad Stock Exchange was established in 1894. In order to
establish a market for shares of plantations and jute mills, the Calcutta Stock Exchange was
founded in 1908.
The Madras Stock Exchange was subsequently founded in 1920. There are currently 24 stock
exchanges operating in the nation, 21 of which are regional ones with designated territories.
The National Stock Exchange (NSE) and Over the Counter Exchange of India (OICEI), two
other institutions founded during the reform era, have the authority to conduct trading across
the country.
Ahmedabad, Vadodara, Bangalore, Bhubaneswar, Mumbai, Kolkata, Kochi, Coimbatore,
Delhi, Guwahati, Hyderabad, Indore, Jaipur' Kanpur, Ludhiana, Chennai, Mangalore, Meerut,
Patna, Pune, and Rajkot are their places of residency.
The executive chiefs and governing boards of the stock exchanges are in charge of running
them. The Ministry of Finance establishes the regulations and controls pertaining to them. To
ensure the orderly growth and regulation of the securities industry and stock exchanges, the
government also established Securities and Exchange Board of India (SEBI) in April 1988.
Currently, there are two main stock exchanges in India where majority of the trades take
place - Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Apart from
these two exchanges, there are some other regional stock exchanges like Bangalore Stock
Exchange, Madras Stock Exchange etc but these exchanges do not play a meaningful role
anymore.

• National Stock Exchange (NSE)

The primary stock exchange in India where shares of publicly traded companies can be
purchased or sold is the NSE. It is based in Mumbai and was founded in the year 1992. NSE
has an important index called NIFTY50. The top 50 firms according to trading volume and
market capitalization make up the index. This index is frequently used as a gauge of the
Indian capital oil markets by investors both domestically and internationally.

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 • Bombay Stock Exchange (BSE)
India's BSE is both the first and oldest stock exchange in Asia. It is situated in Mumbai and
was founded in 1875. As of August 21, 2017, it had 5,295 businesses listed in total, of which
3,972 were open for trading. The main index of BSE is called BSE Sensex. It evaluates the
performance of the 30 largest, liquidest, and most financially sound businesses across
important industries.
In the past, stock transactions probably happened in a real-world marketplace. The stock
market now operates electronically over the internet and online stockbrokers as a result of the
development of new technology and the COVID-19 epidemic. Even though each trade is
conducted stock by stock, news, political developments, and economic reports frequently
influence overall stock prices to move together.

c. STUDY OF STOCK IN DEPTH

STOCK MARKET
A stock market, also known as an equity market or share market, is the collection of
individuals who buy and sell stocks, also known as shares, which represent ownership stakes
in corporations. These securities may be listed on a public stock exchange or only traded
privately, such as shares of private corporations that are offered to investors through equity
crowdfunding platforms. The most popular ways to invest in the stock market are through
stockbrokers and online trading platforms. An investing strategy is typically present when
making an investment.22 Stocks can be divided into groups based on where the firm is
incorporated. Although the equities may also be traded on exchanges in other nations, for
instance as American depositary receipts (ADRs) on U.S. stock markets, Nestlé and Novartis
are a component of the Swiss stock market because they are domiciled in Switzerland and
listed on the SIX Swiss Exchange.

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1.3. A HOW THE STOCK MARKET WORKS
Stock markets offer market participants a safe, regulated environment where they can
confidently trade shares and other legal financial instruments with little to no operational risk.
The stock markets function as both primary and secondary markets while adhering to the
regulator's established guidelines. Initial Public Offerings (IPOs) on the stock market, which
serves as a main market, enable businesses to issue and sell their shares to the public for the
first time (IPO). This practise aids businesses in obtaining the funding they want from
investors. It basically implies that a business divides itself into a certain number of shares,
such as 20 million, and sells a certain portion of those shares, such as 5 million, to the general
public at a certain price.
A corporation needs a market where these shares can be sold to make this process easier. The
stock market provides this marketplace. If everything goes according to plan, the corporation
will sell the 5 million shares at a price of $10 each and make a profit of $50 million. In
anticipation of a rise in share price and any prospective income in the form of dividend
payments, investors will purchase firm shares that they can hold for the time of their choice.
The corporation and its financial partners pay the stock market a fee for its services as a
facilitator of this capital raising process. The stock exchange also acts as the trading platform
that enables routine buying and selling of the listed shares after the first-time share issuance
IPO exercise, also known as the listing process.
The secondary market is comprised of this. Every trade that takes place on the stock
exchange's platform during secondary market activity generates a charge for the stock
exchange. The task of guaranteeing price transparency, liquidity, price discovery, and fair
dealings in such trading activities falls to the stock exchange. The exchange maintains trading
systems that effectively manage the buy and sell orders from diverse market participants
because nearly all major stock markets across the world now operate electronically. In order
to facilitate transaction execution at a price that is fair to both buyers and sellers, they carry
out the price matching function.
In the future, a listed business may also make new, extra shares available through follow-on
offers or rights issues. They might even repurchase their shares or delist them. Such trades are
facilitated by the stock exchange. The S&P 500 index and Nasdaq 100 index, which provide a
gauge to follow the movement of the whole market, are only two examples of the numerous
market-level and sector-specific indicators that the stock exchange frequently develops and
maintains. The stochastic oscillator and stochastic momentum index are other techniques. All
corporate news, announcements, and financial reporting are also maintained by the stock
exchanges and are typically accessible on their sites. Various additional corporate-level,
transaction-related activities are also supported by a stock market. Profitable businesses
could, for instance, reward investors by providing dividends, which are often derived from a
portion of the company's earnings. All this information is maintained by the exchange, which
also has the potential to facilitate some of its processing.

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FUNCTIONS OF A STOCK MARKET
A stock market primarily serves the following functions:
• Fair Dealing in Securities Transactions:
The stock exchange must make sure that all interested market participants have immediate
access to data for all buy and sell orders in accordance with the fundamental laws of supply
and demand. This will aid in the fair and open pricing of securities. In addition, it ought to
efficiently match the right purchase and sell orders. For instance, there might be four sellers
prepared to sell Microsoft shares at $110, $112, $115, and $120, and three buyers who have
orders to buy Microsoft shares at $100, $105 and $110, respectively. For the specified
quantity of trade, the exchange must make sure that the best purchase and best sell are
matched at a price of $110 each.
• Efficient Price Discovery:
Stock markets must support an effective price discovery mechanism. Price discovery is the
process of determining the appropriate price of a security and is typically carried out by
analysing market supply and demand as well as other transaction-related elements. Consider
a software business with headquarters in the United States that trades at $100 and has a $5
billion market cap. An article in the news reports that the EU authority has fined the
corporation $2 billion, thereby wiping out 40% of the company's value. The stock market
may have set a trading price range between $90 and $110 for the company's shares, but it
should quickly alter the permitted trading price limit to account for potential changes in the
share price, otherwise shareholders may find it difficult to transact at a reasonable price.
• Liquidity Maintenance:
The stock market needs to make sure that everybody who is qualified and eager to trade has
immediate access to submit orders, which should get executed at the fair price, even while the
number of buyers and sellers for a given financial security is out of control.
• Security and Validity of Transactions:
Although a market needs additional participants to function effectively, that market also
needs to make sure that all of those participants are verified and continue to abide by the
relevant laws and regulations, leaving no space for default by any of the parties.It should also
make sure that all connected businesses participating in the market are required to follow the
law and operate within the boundaries set by the regulator.
• Support All Eligible Types of Participants:
Various parties, such as market makers, investors, traders, speculators, and hedgers, create a
market. Each of these individuals performs a particular role and function on the stock market.
For instance, a trader can enter and exit a position within seconds, whereas an investor may
buy stocks and keep them for a long period of time, spanning several years. A market maker
provides the market with the liquidity it needs, but a hedger might prefer to trade in
derivatives to reduce the risk associated with investing. For the stock market to continue to
function effectively, it must be made sure that all of these participants can effortlessly
perform their intended tasks.

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 • Investor Protection:
The stock market also benefits a very big number of small investors for their numerous little
investments in addition to affluent and institutional investors. These investors can have a poor
understanding of finance and may not be completely aware of the dangers associated with
buying stocks and other listed securities. To protect such investors from financial loss and
maintain customer trust, the stock exchange must put in place the essential safeguards. In
accordance with their risk profiles, for example, equities may be categorised by a stock
exchange into different sectors, with trading by common investors in high-risk stocks being
restricted or prohibited entirely. Exchanges frequently apply limits to stop people with little
resources and understanding from engaging in dangerous derivatives trades.
• Balanced Regulation:
Market authorities like the Securities and Exchange Commission (SEC)of the United States
supervise listed corporations to a significant extent and keep an eye on their transactions. To
ensure that all market participants are informed of company occurrences, exchanges also
impose certain standards, such as the timely filing of quarterly financial reports and the
immediate reporting of any pertinent developments. Failure to follow the rules may result in
the exchanges suspending trade and/or taking other disciplinary action.
• Regulating the Stock Market:
The responsibility of overseeing a nation's stock market is delegated to a local financial
regulator, a reliable monetary authority, or an institution. The regulatory organisation in
charge of regulating the American stock markets is the Securities and Exchange Commission
(SEC). The SEC is a federal organisation that operates free from political and governmental
interference. “To protect investors, preserve fair, orderly, and efficient markets, and enable
capital formation" is the stated goal of the SEC.
1.3. B STOCK MARKET PARTICIPANT
Along with long-term investors and short-term traders, there are many different types of
players associated with the stock market. Each has a unique role, but many of the roles are
intertwined and depend on each other to make the market run effectively.
• The licenced individuals who purchase and sell securities on behalf of investors are
known as stockbrokers in the United States, where they are also known as registered
representatives by purchasing and selling stocks on behalf of investors, brokers serve
as a middleman between stock exchanges and investors. To access the markets, you
must have an account with a retail broker.
• Professionals known as portfolio managers invest client portfolios, or collections of
securities. These managers decide whether to purchase or sell a portfolio based on
analyst recommendations. Portfolio managers are employed by mutual fund firms,
hedge funds, and pension plans to make choices and establish investment strategies
for the capital they control.
• Investment bankers serve businesses in a variety of capacities, such as those engaged
in upcoming mergers and acquisitions or private businesses seeking to go public
through an IPO. In accordance with the stock market's regulatory requirements, they
handle the listing procedure.

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1.3.C TYPES OF STOCK MARKET
1. Classification based on stock classes
Some stocks do not allow shareholders to vote at the annual meetings, which are when
decisions on the direction of the company and similar matters are made. In contrast to these
equities, certain other stocks permit shareholders to participate in corporate decision- making
by casting their votes. Another type of stock allows investors to vote more than once on
issues involving several divisions of the business.

2. Classification based on market capitalization

The market capitalization of the company, which is the total number of shares held by a
corporation, can be used to categorise stocks. This is derived by dividing the stock's current
market price by the total number of outstanding shares.
The categories of equities based on market capitalization are listed below.
• Large Cap Stocks
These are frequently holdings of blue-chip corporations, which are well-established
businesses with large financial reserves at their disposal. It’s interesting to note that just
because a company has a greater market capitalization, doesn't necessarily guarantee it will
grow more quickly. Over a longer period, tiny stock businesses are more likely to outperform
them. However, compared to smaller and mid-size firms' equities, large cap stocks have the
advantage of allowing investors to receive higher dividends, ensuring the money is preserved
over the long term.
• Mid Cap Stocks
These are the stocks of medium-sized businesses with market values ranging from 250 billion
to roughly 4000 billion Indian Rupees. These businesses have a well- known brand in the
market, which has the advantage of development potential as well as the stability that comes
with being an established player. Except for their size, mid-sized firms are extremely
comparable to blue chip stocks and have a strong history of consistent growth. Long-term,
these equities perform and increase nicely.
• Small Cap Stocks
Small cap stocks have the lowest market value when compared to their peers, as the name
would imply. These are small businesses with potential for rapid growth that now have a
market valuation of up to INR 250.Long-term investors who are not overly concerned with
present dividends and who are prepared to hold firm during periods of price volatility may
experience big gains in the future. As a shareholder, you can purchase these stocks while they
are initially discounted during the startup phase of the business. As a relatively new company,
it is impossible to predict how it will fare in the market. These small cap firms are extremely
volatile because they are young, and their growth has a significant impact on the company's
worth and revenue.

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 3. Classification based on ownership
Based on wonder ship, there are three types of stocks that investors can own which offer
them different rights and growth potential.
• Preferred & common stocks Preferred stocks
In contrast to common stocks, it offers investors a fixed amount of dividend each year.
Preferred stock prices are less volatile than common stock prices, yet common stock is given
preference when the corporation has extra cash to distribute. Priority over preferred
shareholders during a company's liquidation is given to the company's debtors, including its
bond and debenture holders. Voting rights are a privilege that preferred shareholders do not
have, but common stockholders possess.
• Hybrid Stocks
Some businesses offer preferred shares with the possibility of changing them into common
shares under specified restrictions at a specific period. They are also referred to as convertible
preferred shares or hybrid stocks, and they may or may not have voting rights..
• Stocks with embedded derivative
Stocks that include embedded derivative options might be "callable" or "potable" and are less
frequently offered. A "callable" stock has the option to be purchased back by the business for
a specific price at a specific time.
Similar to that, a "potable" stock gives its owner the option to sell it to the business at a
specific price and time.

4. Classification based on dividend payment

• Growth Stocks
Growth stocks are those that don't pay out a lot of dividends since the firm prefers to reinvest
its profits to expand more quickly.
As a result of the company's rapid expansion, the value of its shares grows, generating bigger
returns for investors. Investors who are looking for long-term growth potential rather than an
immediate second source of income might find it most suitable. Riskier than their
counterparts, growth stocks.
• Income Stocks
Income equities pay out a bigger dividend in relation to the share price than growth stocks do.
The name "Income Stocks" comes from the fact that higher dividends equate to more income.
Income stocks are a sign of a reliable company that can pay out dividends on a regular basis,
but these are also businesses that do not guarantee rapid growth. This implies that such
companies' stock prices might not increase significantly. Preferred stocks are included in
income stocks.IT is a wise investment for individuals looking to purchase equities with a low

16
level of risk as a secondary source of income. Since the dividend income from income stocks
is not taxed, it is perfect for long-term investors with a low risk tolerance.

5. Classification based on fundamentals

Value investors analyse share prices with factors like per-share earnings, profits, and other
factors to arrive at an intrinsic worth per share because they think that a share price must
equal the intrinsic value of a company's share.
• Overvalued Shares
These are shares with prices that exceed the intrinsic value and are considered overvalued.
• Undervalued Shares
These types of shares are popular amongst the value investors as they believe that the price of
the share would rise in the future.

6. Classification based on Risk

Depending on the changes in share price, different stocks have varying levels of risk. Higher-
risk stocks provide investors with higher returns, while lower-risk equities produce lower
returns.
• Beta Stocks
Calculating the stock's price volatility yields the beta, or measure of risk.
A stock's beta, which indicates whether it moves in lockstep with or against the market, can
be positive or negative. The risk quotient of the stock increases as beta increases. The stock is
more volatile than the market if the beta value is greater than 1. Many investors who are
aware of this metric utilize it to guide their investing choices.
• Standard Deviation (σ)
Measures the dispersion of return values from the mean. A higher standard deviation indicates
higher risk
• Blue Chip Stocks
Blue chip stocks are those of corporations with lower liabilities, reliable earnings, and a
history of dividend payments. Investors looking for safer investing options may choose these
very large, well-known corporations with a track record of strong financial performance.

7. Classification based on price trends

This categorization is based on how stock prices respond to or react negatively to corporate
earnings.

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 • Defensive Stocks
These equities are favoured during difficult market conditions since they are mostly
unaffected by economic circumstances. Food and beverage businesses are a typical
illustration.

• Cyclical Stocks
Cyclical equities are those of businesses that are significantly impacted by economic
conditions and experience significant price variations because of market changes.
These stocks expand quickly during boom cycles, but their expansion slows during
recessions. Stocks of automobiles fall under this heading.

1.3.D TYPES OF STOCK TRADING

The huge gains that stock trading offers have made it popular all across the world. Many
well- known people have made millions trading stocks. This has drawn many people to this
source of income. Newcomers frequently have no idea what kind of stock trading is so, to
help you get started, here is a glance inside the world of stock trading.
• Intraday Trading:
Most traders use this style of trading on the stock market. Same-day trading is referred to as
intraday trading. Before the market shuts, the traders must sell and buy or buy and sell their
stocks. This approach is also known as "squaring off the trade. "If you want to trade with
higher returns than other formats, this is one of the most aggressive styles.
• Swing Trading:
This kind of trading is short-term, usually lasting two days to two weeks. When investing in
stocks or options, swing trading is an excellent choice. This group includes technical traders
and chartists who enjoy tracking short-term price momentum with technical instruments. Due
to the higher margins in overnight trades, the capital requirement is higher than in day
trading.
• Arbitrage Trading:
The practise of arbitrage trading involves taking advantage of price discrepancies between
two or more markets or exchanges. Since this doesn't require many analytical abilities but
does require a fast network, it is only available to top trading organisations with a large
network.
• Positional Trading:
This trading approach has a long-time horizon. Positional traders feel that their long-term
perspective will bring about a resolution, hence they overlook short-term market swings.
Holding duration isn't the most crucial issue because traders are constantly on the hunt for
major game changers within the company to help them achieve their targeted returns.

18
 • Options Strategies:
A mathematical and objective way of thinking is necessary for options trading. Given the
difficulty of planning, it may take some time and effort for someone to become proficient at
developing and putting their own strategies into action. There are extremely few option
traders in India, largely because there is not enough understanding and awareness of the
market.
• Trade using Technical Analysis:
Technical analysis of the stock market is crucial to any trading strategy. Utilizing stock
technical analysis tools may help you gain a better understanding of impending changes in
the supply and demand of the stock market. Being proficient in technical analysis is a
prerequisite for becoming a good day trader, positional trader, or even swing trader.
• Money Flow Based Trading:
Open interest analysis, promoter agreements, stake sales, gross delivery information, FII
inflows, and DII outflows in and out of equities are all important components of money flow-
based trading. Such information is necessary to predict future market trends. This form of
trading technique is ideal for you if you enjoy analysing money movements.
• Trade Driven by Events:
Trading that is focused on upcoming or recent corporate events is known as event-based
trading. It aims to take advantage of price movements in the market during merger and
acquisition, bankruptcy, earnings calls, and other events. Technical analysis expertise is
needed for this type of trading in order to comprehend how such changes will impact the
market before an event occurs.
• High Frequency Trading:
The key to high frequency trading is speed. High-speed computers are used by investment
banks, institutional traders, hedge funds, and others to quickly execute large orders. There is
no opportunity for analysis because everything is computer-based, and only immediate
demands for execution are allowed. Individuals are not advised to engage in this form of
trading, but if you are interested, you can start your own fund or work as its programmer if
one already exists.
• Quantitative Trading:
Quantitative analysis is the foundation of quantitative trading. It is an extremely complex
topic of quantitative finance. With the use of computer analysis and data crunching, many
people with backgrounds in statistics or mathematics discover their specialty. A potential
participant should be proficient in arithmetic and programming. Before using this style, it is
essential that you undertake comprehensive research on it.

19
1.3. E HOW TO BUY SHARE IN STOCK MARKET
Introduction
The days of filling out complicated documents and squeezing past other buyers to submit bids
on shares are long gone. The investor had to wait in line to collect the share certificates and
store them in a folder, so the agony was far from over. Additionally, selling shares required
repeating the same procedure. With the introduction of Demat-based share purchase and sale,
the traditional approach is no longer used in India. Currently, shares can be bought and sold
with a single click. The shares are transferred to your Demat account as you purchase them
using an online trading account. Similar to this, shares are directly sold from the Demat
account when you sell them.
What is a Demat Account?
An electronic account known as a demat, or dematerialized account is used to keep the shares
you purchase through a stock exchange like the NSE or BSE.
Central Depository Services Limited (CDSL) and National Securities Depository Limited
manage Demat accounts in India (NSDL).
Since its inception in 1996, the idea has been the favoured method for investors to store their
shares. The hassle of archiving physical share certificates is eliminated with a Demat account.
A Demat account can be used by investors to hold everything from government securities to
mutual funds to equities shares and bonds.in India, a demat account is required to purchase
shares by delivery.
4 Steps You Need to Buy Shares Through a Demat Account
1. Obtain a PAN Card
You require a Permanent Account Number in order to trade and purchase shares on the stock
market (PAN). The PAN card programme is managed by the income tax division. A PAN card
can be obtained online or from a representative. The PAN number must be mentioned in all
financial transactions, according to the Indian government. PAN is a ten-digit alphanumeric
code that the government uses to keep track of the tax obligations of Indian people. You can
only open a Demat account once you have received your PAN.
2. Open Demat Account and Online Trading Account
Demat accounts are maintained and administered by CDSL and NSDL, as was previously
stated. You must speak with a Depository Participant (DP) or broker, like 5paisa, in order to
open a Demat and online trading account. For all eligible Indian investors, 5paisa offers free
Demat account opening. The broker streamlines the opening of trading and Demat accounts.
You may easily access your Demat account through the broker. You can purchase or sell
shares online or over the phone with an online trading account. You must go to the broker's
website or download their app from the Google Play store or Apple App Store in order to
purchase shares online.
Choosing the equities you want to buy or sell and selling them during market hours is
convenient. However, you must call the broker's trading helpdesk and place the order if you

20
wish to put orders over the phone for making orders over the phone, some brokers levie a
small fee. However, placing a purchase online is free.
3. Link Your Bank Account
Like the PAN, a bank account is necessary for share trading. It’s time to open a bank account
if you don't already have one. You must deposit the investment amount from your bank to the
online trading account before investing your money in the stock market.
Following the placement of a buy order, the shares are credited to your Demat account within
two business days, or T+2.Like this, when you sell your stake, the funds are transferred to
your trading or bank account within T+2 working days.
4. Start Trading
You can access the broker's online trading platform after your account is ready, find the
equities you want to buy, and place a buy order. In most cases, stockbrokers offer a margin
for purchasing shares above and beyond the available account balance. For instance, if your
broker offers a five-fold margin and you have INR 10,000 in your account, you can purchase
shares for INR 50,000.

1.3.F BROKERAGE
Brokers, usually referred to as trading members, play a crucial role in the stock market. On
behalf of their clients, they carry out operations including the buying and selling of stocks.
They charge a brokerage commission in exchange for this. However, stock market brokers
also offer other services. These comprise, for instance, financial advising and portfolio
management. Brokers provide a variety of channels through which investors and traders can
access the stock market in addition to the fact that stock market transactions are now
conducted online.

HOW BROKERAGE HOUSES SUPPORTS TRADING

When stock exchanges were actual places, brokerage firms acted as their clients'
representatives on the exchange floor. They executed buy and sell orders as the clients'
authorised representatives in accordance with the clients' requests. Brokers are enrolled stock
exchange members. Additionally, they must adhere to the rules imposed by the Securities and
Exchange Board of India, the market regulator (SEBI). Today, trades are completed online in
India's dematerialized stock market. Executing orders on behalf of their clients is still the
main responsibility of stockbrokers. However, the location switched to digital channels.

FUNCTIONS OF BROKERAGE FIRM

• Order execution: Online trading orders from clients are carried out by brokers. The
brokerage levies a commission for this. A flat fee per transaction or a percentage of the
transaction value could apply.

21
• Trading platforms: Nowadays, having a variety of secure sites where customers may place
orders is crucial. Most of the larger brokers offer trading software and apps for mobile
devices such smartphones, laptops, and tablets. Also available were phone and chat-based
trading and investing.
• Financial advisory: Investors of all experience levels rely on their broker's stock
recommendations. But when suggesting a stock, stockbrokers are expected to provide all
relevant information, which includes being open and honest about the dangers.
• Margin financing: Traders with substantial brokerage accounts are able to use. In essence,
this is borrowing money from the broker to take larger market positions.

TYPES OF BROKERS
A stock investor or trader can investigate three main types of brokers: full-service brokers,
discount brokers, and robot-advisers.
1. Full-service broker
A full-service broker offers its clients a wide range of services. Most full-service brokers have
locations in significant cities where customer care representatives can personally meet with
clients. Investors with diverse interests and varying degrees of competence can receive
specialised support from these brokers through specially designed brokerage plans and
services. Even specialised service managers may be employed by large holding clients to
manage their assets. Financial advice and instructional resources are also offered by full-
service brokers. They might, for instance, provide stock suggestions based on your brokerage
plan.
However, they must also make known any dangers connected to their stock
recommendations. It is advantageous that these brokers typically have internal teams that
produce frequent market research studies. Customers get access to these reports and can learn
insights based on research. They can also choose to receive real-time market alerts by SMS
and watch market statistics and news in real-time. Full-service brokers typically charge a
commission of between 0.3 percent and 0.5 percent each trade. This is somewhat excessive.
However, considering the variety of services and goods available, the additional expense may
be justified
2. Discount brokers
Discount brokers concentrate on the fundamentals whereas full-service brokers offer a wide
range of services. Discount brokers execute buy and sell orders on behalf of their clients, but
they don't provide any other services. They also have a considerably lesser commission
because of this. In rare circumstances, the fee for each transaction could be as little as Rs 10.
How do discount brokers maintain their "discounted" fees? They could not have a lot of
physical setups because they just offer transactional services. This lowers their operating
expenses. These brokers primarily use internet platforms to conduct business. For seasoned
investors trying to cut costs, they may be appropriate. However, the lack of advice, research,

22
and personalised services may be a drawback. For people who are just starting out with stock
market investments, such brokers might not be the best option.
3. Robo-advisers
Automated digital platforms called robo-advisers offer online financial planning services.
They have very little need for human oversight and generate financial advice using
algorithms.
How do they function?
The customer fills out an online questionnaire to describe their financial condition and
ambitions. These facts are used by the robo-adviser to provide investment guidance. Even
inexpensive brokers are frequently more expensive than robo-advisers. Many charge a client's
total account balance as a flat annual fee ranging from 0.2% to 0.5%. The opening balances
are also incredibly low. Additionally, you can contact the robo-adviser at any moment using a
device that is linked to the internet. You don't have to go to their office. In only a few clicks,
you can begin transacting. However, your investment options may be limited. That’s because
robo-advisers deal mainly in mutual funds.

WHAT CAN WE EXPECT FROM A BROKERAGE FIRM

Depending on the type of brokerage firm you choose, expectations will vary. So, let’s focus
on the points of difference:
• Tailored service:
Brokers with full services are the most client focused. They offer financial advising, portfolio
management, and market insights and alerts based on research.
Discount brokers emphasise transactions more than other types of brokerages.
Robo-advisers use an automated algorithm to offer investing advice.
• Presence:
Full-service brokers have many physical offices that enable face-to-face interactions in
addition to an online presence.
There are hardly many physical offices for discount brokers.
They primarily use the telephone or online platforms to conduct business.
Robo-advisers are a service available only online.
• Asset classes:
Trades in several asset classes are allowed by full-service brokers. These include equities,
bonds, initial public offerings (IPOs), and more.
Only stock and mutual fund investments are permitted with discount brokers.
Mutual funds are the principal business of robo-advisers.

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 • Charges:
Full-service brokers typically charge brokerage fees every trade between 0.3% and 0.5%.
Depending on the size of the transaction, some discount brokers charge as little as Rs 10 each
deal.
Robotic advisors might be the most economical choice. The annual fees are between 0.2%
and 0.5% of the client's account balance.
HOW TO CHOOSE A BROKERAGE FIRM
Your priority should be to choose a brokerage firm that best meets your personal and
financial needs. Keep the following pointers in mind during your selection process.
• Read customer testimonials:
Although user testimonials may be valuable to read, individual viewpoints can be skewed.
From them, a pattern frequently develops. If the comments are carefully examined,
information about the broker that would not otherwise be known can be found.
• Examine prior results:
It's true that the past doesn't necessarily indicate the future. But you should use caution if a
company has a poor track record. Do a thorough search on the numerous Indian stockbrokers.
Search for evaluations and reports by financial publications, compare the performance of
various broker companies online, and search for rankings if possible.
• Collect feedback:
Consult with loved ones and friends who have invested through a specific broker and inquire
about their knowledge. But remember that everyone's contributions will be influenced by
their individual perceptions and tastes.
• Brokerage costs:
Each stockbroker has a specific brokerage cost. While robo-advisers and bargain brokers
only charge a little fee, full-service brokers charge more but provide a larger range of
services. Prior to picking a broker, evaluate the costs and services offered.

1.3. G REGULATOR OF INDIAN STOCK MARKET

The Indian capital markets were becoming increasingly popular among Indians in the late
1970s and early 1980s.Alongside, a few unethical practises in the capital market and share
market began to occur, including price rigging, unofficial self-styled merchant bankers,
unofficial private placements, non-compliance with the Companies Act's provisions, breaking
stock exchange rules and regulations, and unnecessarily delaying the delivery of shares
.Empirically, it is because of these frauds that people started to lose faith in the stock market.
Eventually, the Indian government began to feel that it was imperative to create a body that
would control stock market operations and substantially reduce these malpractices. As a
result, the Govt. of India called up for the establishment of Securities Exchange Board of
India (SEBI).
24
The Government of India formed SEBI, a statutory regulatory organisation, on April 12,
1992.By establishing rules and criteria that must be followed, it controls and monitors the
financial market while guaranteeing that investors' interests are protected. SEBI’s
headquarters are in Bandra Kurla Complex in Mumbai, and the organisation also has regional
offices in New Delhi, Kolkata, Chennai, and Ahmedabad for its northern, eastern, southern,
and western regions.

Role of SEBI-
With the primary goal of giving financial market enthusiasts a setting that facilitates the more
effective and seamless operation of the market, SEBI serves as a watchdog for all capital
market participants.
To put the words into practise, SEBI sees to it that the three major players in the financial
sector are treated with respect.
The principal participants in a financial market are listed below.
• Issuers:
These corporate entities raise money from a variety of the financial market's
accessible sources. SEBI makes ensuring that the market is a healthy, transparent place for
issuers to meet their financial needs.
• Intermediaries:
These are the people or organisations that act as a link between issuers and investors by
carrying out specific tasks. They work to make financial market transactions safer and more
seamless; and
• Investors:
These people are responsible for maintaining the financial market's activity. The general
public puts their hard-earned money into the markets, and SEBI is responsible for
maintaining an atmosphere free of fraud and regaining their trust.
Structure of SEBI
The corporate framework structure of SEBI is made up of many departments run by various
department heads. SEBI is composed of more than 20 departments, such as corporate finance,
debt and hybrid securities, human resources, economic and policy analysis, enforcement,
commodities derivatives market regulation, investment management, and legal affairs, among
others.
However, the hierarchical structure of SEBI consists of the below mentioned members:
• The chairman as nominated by the Government of India.
• Two officers from the Union Finance Ministry.
• One member as appointed by the Reserve Bank of India; and
• Five other members will be nominated by the Union Govt. of India.

25
Objectives of SEBI
SEBI has following main objectives:
• The primary objective of SEBI is protection of the interests of participants in the stock
market including investors, issuers and intermediaries and provision of a healthy work
environment for them.
• One of the important reasons for establishing SEBI is to prevent malpractices in the
financial market.
• It’s the objective of SEBI to ensure orderly functioning of the capital markets and
keeps a close eye over the activities of the financial intermediaries working in the
financial market.

Functions of SEBI
SEBI primarily performs below mentioned three major functions:
• Protective Functions: SEBI performs following protective functions in regard to
protection of the interests of investors and other financial participants:
o Check on price rigging.
o Preventing insider trading.
o Promoting fair trade practices.
o Creating awareness among investors; and
o Prohibition of fraudulent and unfair trade practices.

• Regulatory Functions: These are the functions mainly performed to keep a check on
the activities taking place in the businesses in the financial markets. These functions
may include:
o Formulating guidelines and establishing a code of conduct for the smooth
functioning intermediaries and corporate.
o Regulating and monitoring acquisition and takeover of companies.
o Conducting inquiries and undertaking audit of exchanges.
o Registering brokers, sub-brokers, merchant bankers and other participants.
o Levying fees.
o Performing and executing powers; and
o Registering and regulating credit rating agency.

• Development Functions: SEBI also performs some development functions that

include following; however, the below list is not exhaustive:
o Conducting training for intermediaries:
o Imparting education to investors:
o Promoting fair trade practice and eliminating unfair trade malpractices.
o Carrying out research work.
o Encouraging self-regulating organizations.

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Authority and Power of SEBI
The major authorities empowered to SEBI include:
• Quasi-Judicial authority: SEBI is authorized to deliver judgments relating frauds
and other unethical malpractices prevailing in the securities market. This, in turn,
ensures fairness, transparency, and accountability in the financial market.
• Quasi-Executive authority: SEBI is authorized to execute the regulations and
judgments made and to take legal action against the violators. SEBI is also allowed
power to inspect books of accounts and other related documents if it suspects any
violation of the regulations.
• Quasi-Legislative authority: SEBI holds the authority to draw rules and regulations
for protection of interests of the investors.
• SEBI is empowered to get companies listed and de-listed from any stock exchange in
India.
• SEBI can enlist companies’ shares in more than one stock exchange if it sees that it
finds doing so beneficial to investors.
• SEBI is also empowered to regulate and monitor the registration of intermediaries
working in the stock market.

1.3.H Budget 2024 Updates

Budget 2024 has proposed the following amendments effective from FY 24-25 -
• For classifying assets into long-term and short-term, there will only be two holding
periods: 12 months and 24 months. The 36-month holding period has been removed.
• The holding period for all listed securities is 12 months. All listed securities with a
holding period exceeding 12 months are considered Long-Term. The holding period
for all other assets is 24 months.
• The taxation of Short-Term Capital Gain for listed equity shares, a unit of an equity-
oriented fund, and a unit of a business trust has been increased to 20% from 15%.
Other financial and non-financial assets which are held for the short term shall
continue to attract the tax at slab rates.
• The limit on the exemption of Long-Term Capital Gains on the transfer of equity
shares or equity-oriented units or units of Business Trust has increased from Rs.1
Lakh to Rs.1.25 lakh per year. However, the rate at which it is taxed has increased
from 10% to 12.5%.
• The exemption limit of Rs. 1.25 lakhs have been increased for the whole of the year,
whereas the tax rate changed on 23rd July 2024.
• The tax on long-term capital gains on other financial and non-financial assets is
reduced from 20% to 12.5%. While on the other hand, the indexation benefit that
previously was available on sale of long-term assets, has now been done away with.
So, any sale of long-term assets made from 23rd July 2024 will attract a tax rate of
12.5% only without indexation benefit.

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 d. PESTLE Analysis of the Stock Market

A PESTLE analysis is a framework used to identify and evaluate the factors in the
macroenvironment that can impact a business or industry. Here's a PESTLE analysis of the
stock market:
Political
• Government regulations: Regulatory bodies like the Securities and Exchange
Commission (SEC) set rules to protect investors and ensure fair market practices.
Changes in regulations can impact how companies operate and how investors trade.
• Fiscal policy: Government spending and tax policies can affect economic growth and
interest rates, which in turn influence stock prices.
• Political stability: Political instability in a country or region can lead to economic
uncertainty and market volatility.
Economic
• Economic growth: A strong economy typically leads to higher corporate profits and
rising stock prices. Conversely, a recession can lead to falling profits and declining
stock prices.
• Interest rates: Interest rates affect the cost of capital for businesses and the
attractiveness of stocks relative to other investments like bonds.
• Inflation: Inflation can erode the value of investments over time and reduce investor
returns.
• Global economic conditions: The health of the global economy can impact the
performance of individual stock markets.
Social
• Demographics: An aging population may lead to increased demand for income-
generating investments like dividend stocks.
• Investor sentiment: Investor confidence plays a major role in stock market
movements. Negative news or events can trigger widespread selling, even if the
underlying fundamentals of companies remain strong.
• Technological advancements: Technological innovation can disrupt existing
industries and create new investment opportunities.
• Social responsibility: Investors are increasingly considering a company's
environmental, social, and governance (ESG) practices when making investment
decisions.

28
Technological
• High-frequency trading: The use of high-speed computers and algorithms for
trading can increase market volatility.
• Cybersecurity threats: Cyberattacks on stock exchanges or brokerage firms can
disrupt trading and cause investor losses.
• Blockchain technology: Blockchain technology has the potential to revolutionize the
way securities are traded and held.
• Digitalization: The increasing use of online platforms for trading and investing has
made it easier for more people to participate in the stock market.
Legal
• Accounting standards: Changes in accounting standards can impact how companies
report their financial performance, which can affect stock prices.
• Corporate governance: Corporate scandals can erode investor trust in the stock
market and lead to stricter regulations.
• Antitrust laws: Laws aimed at preventing monopolies can impact the way companies
operate and compete, which can affect their stock prices.
Environmental
• Climate change: Climate change can pose risks to businesses and investors. For
example, companies that rely on fossil fuels may be negatively impacted by
regulations aimed at reducing greenhouse gas emissions.
• Resource scarcity: Scarcity of resources like water or energy can lead to higher costs
for businesses, which can affect their profitability.
• Sustainability: Investors are increasingly looking to invest in companies that are
committed to sustainable practices.
By understanding these factors, investors can make more informed investment decisions and
develop strategies to mitigate risks and capitalize on opportunities. It's important to note that
the PESTLE factors are constantly evolving, and investors need to stay up to date on the
latest developments.

29
 3) Company Overview

Stock Market Institute, incepted in 2009 and a pioneer in capital market training in India,
emerged out of the jolting experience of losing money in the stock market.
Since its inception, SMI has facilitated financial market related learning and touched the
lives of over 4 lakh individuals including students, working professionals, those seeking
jobs and retirees through programs including:

● Capital market sessions for over a hundred education institutions

● Over a hundred financial literacy sessions for corporates
● Frequent conferences and conclaves to promote informed investing
● Financial Literacy Workshops exclusively for women
● One Day Workshops, Short- & Long-Term Courses

SMI currently offers over 15 capital market courses from the basic to advanced levels with
an array of learning topics related to debt, equity, commodity and currency markets and
personal finance.

SMI’s MISSION Statement & VISION

Mission: “To impart experiential learning on how to create and manage wealth through
the highest quality facilitation and collaborations.
To enable our learners to take informed and effective financial decisions and build careers
in financial markets.”

Vision: “To be the largest enabler for people to lead financially secure lives.”

We have our presence in Bangalore right now, a few years back we had our centers in
Mumbai and Mysore, due to pandemic we have taken back the operations back from the
other cities and plan to restart once things get better and back to normal.

30
Market Share:
We were one of the first entrants in the market, and we were the ones who created market and
we have over 70-80% of the market share in Bangalore today.

HR Department:
We have an HR Department in place who helps employees and stake holders’ interest on high
priority and provided qualitative and quantitative results on regular basis.

Marketing Department:
We have B2B (institutional & Corporates) as well as B2C marketing department who
takes care of the respective markets including the programs and products which are in
demand on regular basis in co-ordination with our Academic Director and other stake
holders.

Finance Department:
The Finance Department is in place and has been a key element in keeping the
organization going in times of pandemic.

Social Responsibility:
We have in past offered courses for free for under privileged and socially backward class
individuals, we also offer 10% flat discount to senior citizens. We also conduct financial
literacy programs for free for colleges/schools and corporates as part of our CSR initiative.

Quality Mechanisms

● Rigorous empaneling process for faculty

● Train the Trainer
● Standardized Instructional Design Model
● Go beyond common Learning Outcomes
● Continuous and well documented feedback process
● Kirkpatrick’s 4 levels of evaluation
● Continuous objective trainer audits
● Coaching and upskilling
● Revising / Refreshing of training content
● Process driven approach
● Sharing of best practices
● Continuous improvement

31
Ownership Pattern:
We are Private Limited company with 3 directors, Mr. Abdul G Sait, Mr. Yashwant
Gourisetti and Kishore BS.

BOARD
Co-Founders

Abdul G Sait Kishore BS Yashwant Gourisetti

(Head of Finance & Strategy) (Head of Marketing & Collaborations) (TechHead)

Academics:
Mr Kirron Bindu (CMA)
(Chief Learning Officer)

No of People in the company:

1. Abdul G Sait (Co-Founder & Head of Strategy)
2. Kishore BS (Co-Founder & CEO)
3. Yashwant Gourisetti (Co-Founder & Tech Head)
4. Kirron Bindu (Chief Learning Officer)
5. Anandu BJ (Associate Program Manager)
6. Shyam Pawar (Content Designer)
7. Sai Sreenivas (Video Editor)
8. Najma Sharieff (HR Manager)

Company Clients:
We work with over 178+ Education Institutions across India, few of the well-known names
being Christ University, Jain University, Dayanada Sagar, Mount Carmel College, St.
Josephs, Lovely Professional University, Jaipuria Institute, Loyola college Chennai and many
more.
Market Characteristics:
Currently 10.2cr De-mat a/cs are there and it will be approx. 15cr by next 4 years, 3.5cr
Student Population, 3.2cr NRI population, 80L Financial Professionals, 26 Lac Agents &
Insurance Professionals, 10cr Crypto Investors, 2.75cr Mutual Fund Investors and over 3
million students who would be enrolling for online learning courses.

32
Business Concerns:
Lack of Awareness about Financial Literacy is what is a biggest opportunity as well as a big
concern as financial literacy is not taken as a crucial subject amongst students and working
class.
Functional Departments:
Management Team, L&D/Academic Department, Creativity and Video Editing Department,
Business Development Department, Human Resource Department.
Product Range:
• One Day Workshop (Overview of Investing, Ms. Finance, Industry Visit for College
Students etc)
• Basics Programs (Proficiency in Capital Markets, Certificate Program in Capital
Market)
• Advance Level Program (Master Trader, Master Value Investor Program, Advanced
Trading Strategies)
• Job Oriented Program (Expert and capital Market Applied Practices, PG Diploma in
Capital Market)
Product Strategy & Applications of Products: Courses range from scratch till the advanced
level with a moto to make you an expert with hand holding and continues guidance by
experts via mentorship programs.
We have Over a decade experience in Capital Market training, Strong Industry connect, have
Deep Insights in the Education Space, good understanding towards pain points &
requirements. So, we keep introducing new courses and keep updating the content and topics
on a regular basis.
R&D Department:
We have a great Set-Up, set Processes in place, A Professional Team, Collaborations with
National and International qualification and Industrial bodies and apps in place which helps
us Map the Learning using by AI. So, we continuously keep upgrading and introducing
courses/subject which are imminent in the market.
Key Success Factors:
• Workshop mode of teaching
• Focus on experiential learning with contemporary topics and current happening in the
industry
• Cases and case studies to be solved (major assessment component)
• Taught by financial market industry experts with minimum 10 years of relevant
experience
• Streaming of live markets during sessions
• State & National level financial market quizzes, constructing portfolios, designing
wealth management cases, finance club etc.
• Learning fully integrated with the financial services industry. SWOT Analysis-

33
 a. SWOT Analysis of Company
Strengths:
• Pioneering Market Presence: SMI was one of the first entrants in the capital market
training space and holds a significant market share (70-80%) in Bangalore.
• Comprehensive Course Offerings: Offers over 15 courses ranging from basic to
advanced levels, covering a wide array of financial topics.
• Experienced Faculty and Quality Mechanisms: Rigorous empaneling process for
faculty, continuous feedback, and a standardized instructional design model ensure
high-quality education.
• Diverse Clientele: Collaborates with over 178 education institutions across India,
indicating a broad reach and established trust.
• Adaptability: Despite the pandemic, SMI managed to sustain operations and plans to
expand once conditions improve.
Weaknesses:
• Limited Geographical Presence: Currently operates primarily in Bangalore, with a
retraction from other cities during the pandemic.
• Awareness Issues: Lack of widespread awareness about financial literacy remains a
significant concern, limiting potential market reach.
• Resource Constraints: Limited number of key personnel, which might affect
scalability and ability to handle increased demand.
Opportunities:
• Growing Market: The expected increase in the number of de-mat accounts and the
overall student population indicates a growing market for financial literacy and capital
market training.
• Technological Advancements: Leveraging AI for mapping learning and integrating
new technologies can enhance course delivery and student engagement.
• Expansion Plans: Potential to re-expand into cities like Mumbai and Mysore, as well
as explore new markets.
• Increasing Financial Awareness: Rising interest in financial markets and personal
finance among the general population, especially post-pandemic, presents an
opportunity for growth.
Threats:
• Market Competition: Increasing competition from other financial training institutes
and online learning platforms.
• Economic Downturns: Economic instability can affect enrolment rates and the
willingness of individuals and institutions to invest in financial education.
• Regulatory Changes: Changes in financial market regulations and education policies
could impact SMI's course offerings and operations.
This SWOT analysis outlines SMI's current status, identifying areas where the institute can
utilize its strengths and opportunities to address its weaknesses and mitigate potential threats.

34
 4) Literature Review

1. Emerging Stock Markets in India: NSE and BSE

The Indian stock market, represented primarily by the National Stock Exchange (NSE) and
the Bombay Stock Exchange (BSE), has undergone significant transformation and growth
over the past few decades. The liberalization of the Indian economy in the early 1990s played
a crucial role in opening the market to global investors, leading to increased liquidity and
market depth. Various studies highlight the role of regulatory bodies like SEBI in ensuring
market transparency and protecting investor interests (Nishant, 2019).

Research by Sen and Ray (2016) provides an extensive overview of the historical
development of NSE and BSE, illustrating how technological advancements and policy
reforms have modernized trading mechanisms. The introduction of electronic trading
platforms and derivative instruments has further fueled the growth of these exchanges,
making them among the largest in the world by market capitalization.

2. Year Effect of the Indian Stock Market (2000-2024)

The phenomenon known as the "year effect" in stock markets refers to the observed patterns
in stock returns over different calendar years. Studies examining the BSE and NSE from
2000 to 2024 have found periodic variations in returns attributable to economic cycles,
political events, and global market influences.

Sharma and Mahajan (2021) conducted an empirical analysis of the BSE Sensex and NSE
Nifty indices, identifying notable year-on-year fluctuations. Their findings suggest that
macroeconomic indicators such as GDP growth rate, inflation, and interest rates significantly
impact annual returns. Furthermore, global financial crises, such as the 2008 recession and
the COVID-19 pandemic, have shown to cause substantial volatility and shifts in market
performance.

3. Market Capitalization of Indian Stock Market (2000-2024)

Market capitalization is a critical measure of a stock exchange's size and health. The period
from 2000 to 2024 has seen a substantial increase in the market capitalization of both NSE
and BSE, driven by the growth of listed companies and investor participation.

Research by Kumar and Singh (2020) highlights the factors contributing to this growth,
including economic reforms, foreign direct investment (FDI), and the rise of retail investors.
Their study reveals that the market capitalization of NSE and BSE grew at a compound
annual growth rate (CAGR) of approximately 10%, with technology, banking, and
pharmaceutical sectors leading the surge.

35
4. Trend of Risk and Return of Indian Stock Market (2000-2024)

Understanding the risk-return profile of the stock market is essential for investors. The period
from 2000 to 2024 has witnessed various phases of high and low volatility, impacting the
risk-return dynamics of the NSE and BSE.

Jain and Gupta (2018) provide a comprehensive analysis of the risk-return trade-off in the
Indian stock market. Their research indicates that while the average returns have been
positive, the markets have experienced significant volatility during economic downturns. The
study also emphasizes the importance of diversification and risk management strategies for
mitigating potential losses.

5. Preferred Types of Trading by Investors

Investor behaviour and trading preferences play a crucial role in the functioning of stock
markets. Studies show that Indian investors have gradually shifted from traditional trading
methods to more sophisticated strategies, including algorithmic and high-frequency trading.

According to Verma and Shah (2019), there is a growing preference for intraday and short-
term trading among retail investors, driven by the allure of quick profits and lower
transaction costs. Institutional investors, on the other hand, tend to focus on long-term
investments, leveraging fundamental analysis and portfolio diversification to achieve steady
returns.

6. Tax Implications on Stock in India

Taxation is a significant factor influencing investment decisions in the stock market. The
Indian government has implemented various tax policies affecting capital gains, dividends,
and securities transactions.

A study by Patel and Desai (2020) explores the tax structure governing stock market
investments in India. They highlight the impact of long-term and short-term capital gains tax,
securities transaction tax (STT), and dividend distribution tax (DDT) on investor returns. The
study also discusses recent changes in tax policies aimed at promoting equity investment and
enhancing market participation.

36
 5) Research Methodology

Aim
The main aim of this study is to understand the financial market. Also to understand the effect
while investing in single security and investing in more than one security i.e. diversification.
Objectives
• To calculate the return of various companies.
• To calculate the risk of various companies.
• To calculate the financial return & risk of different portfolios designed for the
combination of various companies.
• To evaluate the performance of various company.
• To understand, analyze and select the best company.
• To understand the effect of diversification of investment.

Scope of the study

The scope of this study encompasses the following:
1. Financial Analysis: Conducting a comprehensive analysis of various companies to
compare their financial performance. This will involve analyzing key financial
statements, ratios, and metrics over a defined period.
2. Risk and Return Calculation: Measuring the returns and risks associated with
investing in various companies individually. This will include calculating historical
returns, standard deviation, and other relevant risk metrics.
3. Portfolio Analysis: Constructing and analyzing different portfolios comprising
various combinations of various companies. This analysis will assess how
diversification impacts the overall return and risk profile of the portfolios.
4. Performance Evaluation: Evaluating the performance of various companies based
on various financial performance indicators. This will help identify the strengths and
weaknesses of each company.
5. Diversification Impact: Understanding the concept of diversification and its effect on
investment risk and return. The study will illustrate how combining multiple securities
can potentially reduce risk and improve the stability of returns.
6. Investment Decision-making: Providing insights and recommendations for investors
based on the analysis. The study aims to guide investors in making informed decisions
by selecting the best investment options and understanding the benefits of
diversification.

37
Research example
• Research type: - Empirical
• Type of sampling: - Convenient sampling
• Sample size: - 50 companies from different sectors are selected from NSE mid-cap
Nifty
• Sample universe: - Companies listed & trade in NSE
• Data type: - Secondary data
• Research tools used: -
a. Arithmetic average or mean
b. Return = Dividend + (Current price - Previous price) * 100 Previous price
c. Standard deviation
d. Correlation
Data collection methods
The entire date was collected from the secondary source. Internet is main source of secondary
sources of date collection used. Magazines, Newspapers and Journals were also used for
collecting data
Analysis and Interpretations
The analysis and interpretation have been made with the help of graphs and percentage of
returns of securities. Microsoft Excel 2013
Limitations of the study
• Limited Sample Size:
The sample size of 50 companies may not be fully representative of all mid-cap
companies in the NSE, potentially limiting the generalizability of the findings.
• Convenient Sampling:
The use of convenient sampling could introduce selection bias, as the sample may not
accurately reflect the broader population of companies in the NSE.
• Dependence on Secondary Data:
The reliance on secondary data sources such as the Internet, magazines, newspapers, and
journals may result in outdated or inaccurate information, affecting the reliability of the
results.
• Time Constraints:
The study is limited by the timeframe within which the data was collected and analyzed,
potentially missing out on more recent trends or developments in the market.
• Market Volatility:
The study's findings may be influenced by market volatility during the data collection
period, which could skew the results and make them less applicable to other time periods.

38
• Data Collection Limitations:
The quality and completeness of the data from secondary sources may vary, leading to
potential gaps or inconsistencies in the analysis.
• Limited Scope of Analysis:
The study focuses on mid-cap companies listed on the NSE, excluding large-cap and
small-cap companies, which might provide a more comprehensive understanding of the
market dynamics.

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 6) DATA ANANLYSIS & INTERPRETATION

NIFTY MIDCAP 50

Average
Average Annual Monthly
S NO NAME LTP Return Return Beta Volatility
1 LTF ₹ 169.35 60.20% 3.98% 1.46 33.99%
2 IDEA ₹ 15.80 117.12% 23.83% 2.08 62.47%
3 PERSISTENT ₹ 3,846.20 57.58% 14.15% 0.82 29.02%
4 COFORGE ₹ 5,412.00 23.21% 23.15% 0.91 32.22%
5 SAIL ₹ 152.50 84.26% -5.15% 2.16 46.76%
6 GODREJPROP ₹ 2,880.00 100.96% 2.12% 1.51 37.82%
7 BALKRISIND ₹ 3,201.00 41.36% 29.19% 0.89 29.57%
8 OFSS ₹ 8,400.00 137.40% 10.25% 0.94 43.33%
9 GMRINFRA ₹ 86.55 104.72% 7.04% 1.47 43.62%
10 GUJGASLTD ₹ 586.05 22.77% 7.23% 0.81 26.20%
11 LTTS ₹ 4,802.00 26.03% 6.43% 0.76 25.99%
12 BHEL ₹ 285.00 232.75% -0.38% 1.79 50.34%
13 ASHOKLEY ₹ 231.30 51.92% 16.37% 1.24 29.47%
14 CUMMINSIND ₹ 3,591.95 102.30% 4.65% 1.09 30.47%
15 DIXON ₹ 9,994.05 145.07% 18.33% 1.1 34.94%
16 NMDC ₹ 258.05 140.35% -3.09% 1.36
17 DALBHARAT ₹ 1,807.00 -13.64% 2.51% 1.2 30.16%
18 INDUSTOWER ₹ 347.00 120.76% 2.28% 1.6 41.51%
19 BANDHANBNK ₹ 195.80 -23.39% 8.68% 1.22 32.57%
20 HDFCAMC ₹ 3,840.00 97.66% 2.64% 1.42 35.19%
21 ALKEM ₹ 4,950.00 45.15% -3.61% 0.59 26.57%
22 ACC ₹ 2,499.85 36.02% 2.21% 1.44 33.26%
23 YESBANK ₹ 23.30 39.46% 0.65% 1.21 45.41%
24 BHARATFORG ₹ 1,584.05 94.11% 11.68% 1.16 33.37%
25 HINDPETRO ₹ 523.10 99.79% -0.61% 1.69 43.54%
26 LUPIN ₹ 1,630.00 102.08% 0.64% 0.34 25.26%
27 M&MFIN ₹ 282.00 -0.34% 10.25% 1.12 31.68%
28 AUBANK ₹ 669.50 -12.23% 7.15% 0.52 27.80%
29 ABCAPITAL ₹ 231.60 33.31% 5.99% 1.31 35.99%
30 MFSL ₹ 939.35 36.53% -4.15% 0.72 30.35%
31 MPHASIS ₹ 2,467.65 33.38% 8.47% 0.82 29.91%
32 TIINDIA ₹ 3,905.05 38.00% -0.99% 0.66 40.37%
33 AUROPHARMA ₹ 1,264.75 89.00% 11.37% 0.58 30.37%
34 TATACOMM ₹ 1,809.00 23.34% 2.97% 0.96 29.93%
₹
35 MRF 1,27,200.00 29.36% 1.01% 0.58 20.98%
36 IDFCFIRSTB ₹ 77.70 8.37% 0.71% 1.06 27.95%
37 INDHOTEL ₹ 584.60 53.19% 3.58% 1.18 28.35%

40
38 UPL ₹ 539.10 -20.65% 12.80% 1.2 28.96%
39 ASTRAL ₹ 2,156.00 8.60% 2.95% 0.81 27.17%
40 FEDERALBNK ₹ 164.85 31.93% 4.59% 1.05 25.82%
41 CONCOR ₹ 1,053.00 56.63% 3.79% 1.67 37.07%
42 SUZLON ₹ 49.80 256.43% 24.75% 1 49.26%
43 PIIND ₹ 3,646.00 0.63% 3.19% 0.65 23.38%
44 PETRONET ₹ 301.50 35.21% -2.22% 1.15 32.52%
45 POLYCAB ₹ 6,835.05 92.99% 15.94% 0.93 38.72%
46 OBEROIRLTY ₹ 1,895.05 95.63% 25.33% 1.19 32.43%
47 ESCORTS ₹ 3,989.00 86.74% 12.74% 0.64 26.61%
48 JUBLFOOD ₹ 518.20 8.12% 10.50% 0.45 25.63%
49 MAXHEALTH ₹ 823.00 45.18% 2.87% 0.24 38.29%
50 PAGEIND ₹ 38,389.00 -0.04% 11.48% 0.43 21.53%

Interpretation
Nifty Midcap 50 Analysis
The table provided gives insights into the performance metrics of various companies in the
Nifty Midcap 50 index. Each company's Last Traded Price (LTP), Average Annual Return,
Average Monthly Return, Beta, and Volatility are analysed. Let's break down the key metrics:

1) Step by step explanation with formulas: -

• For calculating Average monthly return: -

1) We have taken the historical data of each company from Yahoo Finance (Website) which
includes Date, Open, high, Low, Close, Adjusted close and volume
2) For calculating the average monthly returns firstly, we must calculate the returns, for
which the adjusted close prices of the company are used
3) Formula for calculating returns: - = (Current Price-Previous price)/Previous price
4) After getting the value of return, I had calculated average monthly return by using this
formula: - =Average (Return)

• For Calculating Average annual return: -

Formula: - (1+ the value of average monthly return) ^12-1

41
 • For Calculating Beta: -
1) For calculating the value of beta, we have again taken all the historical data of each
company from the website yahoo finance of both one of the company's data and another of
the nifty's data
2) With the help of adjusted close prices, we have calculated the % change of both which is
calculated by the formula: - = (Current Price-Previous price)/ Previous price
3) After calculating % change, we have calculated the standard deviation of both company
and of NIFTY
Formula: - =STDEV.P(%change)
4) After that the next step is to calculate the correlation
Formula: - =CORREL (%change of company, % change of NIFTY)
5) Beta: - =Correlation*SD of Company SD of NIFTY

• For Calculating Volatility: -

1) Indicates the degree of variation of a trading price series
2) For Calculating Volatility, we need daily % change which is calculated by: - (Previous
Price-Current Price)/Current Price
3) After getting the values of daily % change of adjusted close prices of the company we
have calculated the value of volatility by using this formula: -
4) Volatility: - =STDEVA(%change) .

2) By using this formula, I interpret the data

• High Performers:
1) SUZLON: Highest Average Annual Return (256.43%) and substantial Average
Monthly Return (24.75%). Beta is 1, indicating it moves with the market, but
its high volatility (49.26%) shows significant price fluctuations.
2) BHEL: High Average Annual Return (232.75%) with negative Average
Monthly Return (-0.38%), suggesting recent poor performance. High Beta
(1.79) and Volatility (50.34%) indicate substantial risk.
• Consistent Performers:
1) DIXON: High Average Annual Return (145.07%) and Monthly Return
(18.33%). Moderate Beta (1.1) and Volatility (34.94%) suggest it's a stable yet
high-performing stock.
2) OFSS: Impressive Average Annual Return (137.40%) with a moderate
Monthly Return (10.25%). Beta (0.94) near 1 indicates it closely follows the
market, with considerable Volatility (43.33%).

42
 • Low Performers:
1) PAGEIND: Slightly negative Average Annual Return (-0.04%) but a decent
Monthly Return (11.48%). Low Beta (0.43) and moderate Volatility (21.53%)
suggest it's less risky but underperforming annually.
2) BANDHANBNK: Negative Average Annual Return (-23.39%) but relatively
high Monthly Return (8.68%). Beta (1.22) and Volatility (32.57%) show
higher market sensitivity with moderate risk.
• Volatility and Beta:
1) High Volatility Stocks: Typically, higher Beta, e.g., BHEL (Beta 1.79,
Volatility 50.34%) and SUZLON (Beta 1, Volatility 49.26%).
2) Low Volatility Stocks: Often lower Beta, e.g., LUPIN (Beta 0.34, Volatility
25.26%) and MRF (Beta 0.58, Volatility 20.98%).

• Negative Average Annual Return with Positive Monthly Returns:

1) SAIL and NMDC have negative Average Monthly Returns, indicating that
despite some months of positive performance, overall annual performance has
been poor.

Summary Of Data
• Investment Strategy: For high-risk, high-reward strategies, stocks like SUZLON
and BHEL are attractive due to their high returns and high volatility. For more stable
investments, consider stocks like DIXON and OFSS, which offer high returns with
moderate volatility.
• Market Sensitivity: Stocks with Beta close to 1, such as GODREJPROP and OFSS,
tend to move with the market, offering a balance between risk and return.
• Risk Management: Low Beta and Volatility stocks like LUPIN and MRF are
suitable for risk-averse investors, providing more stable performance with lower risk.

43
 7) Conclusion
• The NSE and BSE have emerged as significant players in the Indian stock market,
contributing to economic growth and capital mobilization.
• Market capitalization analysis from 2000 to 2024 indicates substantial growth and
wealth creation opportunities in the Indian stock market.
• The year effect analysis provides insights into potential patterns in stock returns
across different calendar years.
• Risk and return analysis offers valuable information for investors to make informed
decisions.
• Investor preferences and tax implications on stock investments provide a
comprehensive understanding of the investor landscape.
• Further research is necessary to deeper into specific market segments, external
factors, and investor behaviour.

44
 8) Findings

1. Stock Market as Economic Gauge: The stock market is a key indicator of economic
health, representing various sectors and industries, and reflecting the economic cycle
and investor sentiment.
2. Popular Investment Instrument: The stock market is increasingly popular among
investors due to its potential for higher returns compared to other financial
instruments.
3. Emerging Stock Markets in India: The study covers the development and growth of
the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE),
highlighting their modernization and increased market depth post-economic
liberalization.
4. Year Effect: The analysis of the "year effect" shows periodic variations in stock
returns influenced by economic cycles, political events, and global market influences
from 2000 to 2024.
5. Market Capitalization Growth: Market capitalization of NSE and BSE has grown
significantly, driven by economic reforms, foreign direct investment (FDI), and the
rise of retail investors.
6. Risk and Return Trends: The report examines the trends in risk and return for NSE
and BSE, showing how these have evolved over time from 2000 to 2024.
7. Investment Preferences: The study explores the types of trading preferred by
investors in the Indian stock market.
8. Tax Implications: It also examines the tax implications on stock investments in India.
9. Financial Education Gap: A significant portion of Indian investors lacks the
necessary knowledge to make informed investment decisions, leading to potential
misdirection and dissatisfaction with returns.
10. Importance of Diversification: Diversification of investments can reduce risk and
improve the stability of returns. The study illustrates the benefits of combining
multiple securities.
11. Performance Evaluation: The report evaluates the performance of various
companies using key financial indicators, identifying strengths and weaknesses.
12. Investment Decision-Making: Insights and recommendations are provided to guide
investors in making informed decisions by selecting the best investment options and
understanding the benefits of diversification.
These findings provide a comprehensive overview of the stock market's role, the trends in
risk and return, and the importance of informed investment strategies

45
 9) LIMITATIONS-

The Indian capital market suffers from the following deficiencies:

• Lack of diversity in the financial instruments.
• Lack of control over the fair disclosure of financial information. Poor growth in the
secondary market.
• Prevalence of insider trading and front running. Manipulation of security prices.
• Existence of unofficial trade in the primary market, prior to the issue coming into the
market.
• Absence of proper control over brokers and sub-brokers.
• Passive role of public financial institutions in checking malpractices.
• High cost of transactions and intermediation, mainly due to the absence of well-
defined norms for institutional investment.

46
 10) FUTURE SCOPE OF STUDY-

• It helps in understanding Indian stock market

• Its help in understand the role of SEBI.
• Its help in functioning of stock.
• Its help in trading in Indian stock market.
• It helps to understand the tax regime

47
 11) BIBLIOGRAPHY-

• https://www.bseindia.com
• https://www.sebi.gov.in
• https://www.nseindia.com
• https://www.motilaloswal.com
• www.google.com
• www.wikipedia.com
BOOKS/JOUNALS
Anju Balan (2013), Indian stock market- review of literature, TRANS Asian journal
of marketing and management research
Avijan Datta, Gautham Bandyopadhyay, prediction of stock performance in the Indian
stock market using logistic regression, international journal of business and information.

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