PROJECT REPORT ON

STUDY ON DATA ANAYLSIS OF BOMBAY STOCK

EXCHANGE

1
 INTRODUCTION TO THE STUDY

The Bombay Stock Exchange (BSE), also known as the Stock Exchange Mumbai, is one of the
oldest stock exchanges in all of Asia, dating back to 1875 when it was known as the Native Share
and Stock Brokers Association. The exchange is home to about 5,000 listed companies, with a
total market capitalization of around 71 trillion Rupees, or nearly $1.6 trillion as of November
2010. The vision of the Bombay Stock Exchange is "Emerge as the premier Indian stock
exchange by establishing global benchmarks." That means the exchange is thinking big in terms
of customer service and trading activity. The market has not only experienced explosive growth
in terms of trading volume, but also in terms of overall return to investors. After compensating
for inflation, the BSE has averaged a 15.8% annual return when measured by Sensex, the most
popular stock index in India, over the last 20 years. Other important indices originating from the
Bombay exchange include the BSE 100, BSE 500, BSEPSU, BSEMIDCAP, BSESMLCAP, and
BSEBANKEX.

2
Objective of the project:

 To trace the history of Bombay Stock Exchange.

 To study the Functions and Working of The Bombay Stock Exchange

 To study the Regulations Governing The Bombay Stock Exchange

 To study the Data Analysis of Market Intermediaries / Institutions of The Bombay Stock
Exchange

 To compare and analysis the data of Bombay Stock Exchange in various years.

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EXECUTIVE SUMMARY
India has entered the high growth trajectory since the last many years. The economic growth rate
during the last decade (2000s) was 7.3%, supported by robust growth in many segments in the
industry and services sectors. Stocks and gold are the major Investments avenues for Indians. As
gold is one of prime financial assets which can be used as hedge against inflation, the close
relationship between stock market and gold prices are to be observed and analysed. The aim of
this study is to analyze the causal effects of Indian Stock Market on Gold prices and silver prices.

The study was carried out with an objective of studying the long term relationship between
Indian Stock Market and Bullion Market and Cause and Effect Relationship between Indian
Stock Market and Bullion Market. It also aimed at identifying the relationship of macroeconomic
variables with Indian Stock Market and Bullion Market. Empirical research using all variable in
the scope of the research suggests that Only Foreign exchange rate and Forexrev are significant
determinants of Gold price. Only FOREXREVG is a significant determinant of silver price .Only
Foreign exchange rate is a significant determinant of nifty. None of the variables are found to
have a significant impact on SENSEX.

Stock market is an important part of the economy of a country. The stock market plays a pivotal
role in the growth of the industry and commerce of the country that eventually affects the
economy of the country to a great extent. Furthermore it plays a vital role in the mobilization of
capital in many of the emerging economies. This study will be useful for the investors who might
be able to identify some basic economic variables that they should focus on while investing in
stock market and will have an advantage to make their own suitable investment decisions.

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 INDEX
CHAPTER PARTICULAR PAGE NO

1ST  INTRODUCTION 11

 METHODOLOGY AND SAMPLE DESIGN 18

 REVIEW ON RELATED LITERATURE 19

 LIMITATIONS OF THE STUDY 22

2ND  FUNCTION AND WORKING ON BOMBAY STOCK

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EXCHANGE

 WORKING MANAGEMENTS OF BOMBAY STOCK

25
EXCHANGE

 FUNCTIONS OF SEBI 29

 FEATURES OF STOCK EXCHANGE 31

3RD  INVESTOR’S AWARENESS 34

4TH  DATA ANALYSIS OF MARKET 38

INTERMEDIARIES/INSTITUTIONS OF THE BOMBAY
STOCK EXCHANGE

5TH  DATA INTERPRETATION 41

6TH  CONCLUSION 61

5
7TH  BIBLIOGRAPHY 63

6
 Chapter -1
INTRODUCTION

Capital market in India has gone through various stages of liberalization, bringing about
fundamental and structural changes in the market design and operation, resulting in broader
investment choices, drastic reduction in transaction costs, and efficiency, transparency and safety
as also increased integration with the global markets. Indian Capital market has witnessed a
paradigm shift at par with the advanced markets of the world in the last 10 years or so. Business
process, functionality, monitoring / regulating mechanisms, hardware, software etc., are all
revamped to compete with the global leaders.

The current stand of Indian capital market has a long history in its back. The history of the
capital market in India dates back to the eighteenth century when East India Company securities
were traded in the country. The Bombay Stock Exchange developed the BSE Sensex in 1986,
giving the BSE a means to measure overall performance of the exchange. In March 1995,

7
Bombay Stock Exchange (BSE) shifted from open outcry to a limit order book market. BSE is a
brand that is credited with pioneering the growth and development of Indian capital markets.

The problem under study is "Bombay Stock Exchange Function and Working". The stock
exchanges are the pillars of our modern financial capitalism. The stock exchange represents an
organized market for trading in securities. Stock Exchange is an association, organization or
body of individuals, whether incorporated or not, established for the purpose of assisting,
regulating and controlling business in buying, sealing and dealing in securities. The securities
dealt in at a stock exchange include the shares and debentures of public companies already issued
by them, Government securities and the bonds and debentures issued by municipal bodies, public
sector undertaking and port trusts.

The Bombay Stock Exchange has a national reach in India, claiming a presence in 296 towns and
cities throughout the country. The exchange is operated through a unique and proprietary
computer system known as the "BSE On Line Trading System" or BOLT.

Key Terms and Definitions

Stock:

It is referred to as a share of the limited companies in question and it confers the right of a part of
a company. The loss and profit of a company is distributed as dividend to the shareholder or
stockholder.

Stock exchange:
Stock Exchange refers to the place where people or companies or mutual funds buy and sell
shares in a given company. Example: - In Indian context NSE, BSE are the main stock
exchanges. Stock exchanges also provide facilities for issue and redemption of securities and
other financial instruments, and capital events including the payment of income and dividends.
Securities traded on a stock exchange include shares issued by companies, unit trusts,
derivatives, pooled investment products and bonds.

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Bombay Stock Exchange:

The Bombay Stock Exchange (BSE), also known as the Stock Exchange Mumbai, is one of the
oldest stock exchanges in all of Asia, dating back to 1875 when it was known as the Native Share
and Stock Brokers Association. The exchange is home to about 5,000 listed companies, with a
total market capitalization of around 71 trillion Rupees, or nearly $1.6 trillion as of November
2010. The vision of the Bombay Stock Exchange is "Emerge as the premier Indian stock
exchange by establishing global benchmarks." That means the exchange is thinking big in terms
of customer service and trading activity. The market has not only experienced explosive growth
in terms of trading volume, but also in terms of overall return to investors. After compensating
for inflation, the BSE has averaged a 15.8% annual return when measured by Sensex, the most
popular stock index in India, over the last 20 years. Other important indices originating from the
Bombay exchange include the BSE 100, BSE 500, BSEPSU, BSEMIDCAP, BSESMLCAP, and
BSEBANKEX.

Stock Option:

Stock Option gives the right to buy or sell a stock at a future date at a fixed price. Stock options
are traded on the stock exchanges. The term stock option also refers to the Employees Stock
Option Scheme wherein they are granted an option to buy the underlying stocks of a company at
a fixed price at a given date after they have worked in the company for certain years.

Straddle:

When an investor expects violent movements in the market but he is not sure of the direction of it
then he may enter into a straddle strategy that means buying a Call and a Put together of the same
strike price and same expiry. Normally this happens when some major announcement is due in
the market like results of a company etc.

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S&P 500:

This Index represents the top 500 US companies traded on New York Stock Exchange and
NASDAQ. In India, S&P 500 Nifty Index is just like S&P 500 of US.

Stock index:

Index of market prices of a particular group of stocks, such as the S&P 500 and the Nasdaq
Composite Index.

Sensex:

It is an index that represents the direction of the companies that are traded on the Bombay Stock

Exchange BSE. The word Sensex comes from sensitive index.

Market:

A public place where buyers and sellers make transactions, directly or via intermediaries. Also
sometimes means the stock market.

Capital Market:

Sources from which long-term capital is raised for the setting up the sustained growth of
companies. The stock exchange is a part of the capital market, not only because it readily
provides money for new or existing ventures, but also because it helps investors to trade in their

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shares and maintains the liquidity of investments. Investment in further public and rights issues,
convertible and non-convertible debentures, therefore, become an attractive proposition and
companies are able to raise the resource they need. The capital market is distinct from money
market – banks and lending institutions – which provides short – term finance.

Rally:

The word suggests the gain made by the Sensex or Nifty during the course of the day. If such
gains are made on a regular basis then market participants like investors, brokers etc call it as a
market rally.

Crash:
As the word suggests, crash refers to a fall in the value of Sensex and Nifty. In the first three
trading days of this week (February 12-14) alone the Sensex had crashed by more than 700
points.

Correction:

A correction (or a measured fall) in the Sensex and Nifty takes place when these indices rise for a
few days and then retrace or shave off some of these gains.

Dividend:

It is again a way of rewarding a company's shareholders. A dividend is generally issued as a

percentage of the face value of a share. Face value is the nominal price of a company's share.

Book closure date:

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This is the date on which a company closes its books for business after it announces a bonus or
dividend. The company's registrar keeps a track of who owns how many shares of that particular

company.

Bonus shares:

These are the free shares that a listed company gives its shareholders.

Nifty:
It is the Sensex's counterpart on the National Stock Exchange, NSE.

Bull:

A particular kind of investor who purchases shares in the expectation that the market price of that

company's share will increase.

Bear:

Bull's counterpart is the bear.

Squaring off:

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A process whereby investors/traders buy or sell shares and later reverse their trade to complete a

transaction is called squaring off of a trade.

Annual Report:

Report Made by the Directors of a company to its shareholders at the end of each accounting
year, containing (a) Directors‟ report outlining a review of the company’s operations during the
year, a summary, of its financial results, and future projections, if any, (b) Auditors‟ report, (c)
Balance Sheet, (d) Profit and loss account, and (e) Schedules explaining items on the balance
sheet and profit and loss account. Company law requires all companies to prepare such a report
and mail it to the shareholders. A recent amendment in the Company Law, however, permits a
company to send an abridged report to shareholders, who nevertheless have the right to obtain a
full report.

Methodology and Sample Design

Indian capital market is truly an emerging market as it is significant in terms of the degree of
development, volumes of trading and in terms of its tremendous growth potential. Data used
in this study is based on the analysis of Market Intermediaries / Institutions - Securities
Market. In which Monthly, Yearly, Sensex, Return, Volatility, Turnover in Cash Segment
Capitalization etc. are shown. All data in this study based on Mean/SD, Ratios Percentage
This study assumes the Bombay Stock Exchange as the proxies for Indian capital market. All
the pertinent data have been gathered from the publications of RBI, NSE India, and SEBI and
from the websites of BSE India.

REVIEW OF RELATED LITERATURE

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The review of related literature, besides, allowing the researcher to acquaint himself with current
knowledge in the field or area in which he is going to conduct his research. The review of related
studies involves locating, studying and evaluating reports of relevant researches and articles,
published research abstracts, journals encyclopedia, wed journals etc. The investigator needs to
acquire up to data information about what has been thought and done in a particular area. The
researcher draws maximum benefits from the previous investigations, utilizes the previous
findings, takes many hints from designs and procedures of previous researches and formulates an
outline for future research. The review of related studies provides the insight into the methods,
measures etc., employed by others in the particular area. It provides idea, theories, explanations,
hypothesis of research, valuable in formulating and studying the problem at hand. It also
furnishes indispensable suggestion related to the problem and already employed techniques to
the investigator. Unless it is burnt what others have done and stay remains to be done in the area,
one can't develop a research project that could contribute to furthering knowledge in the field. In
fact, the review of related literature serves multiple purposes and is essential to a well designed
research study. It is generally the first step in the research process, and it can contribute valuable
information to any part of the research study. In the process of reviewing the literature, the
investigator is alert for finding out research approaches in the area that have proved to be sterile.

 L.C. Gupta (1992) concludes that, a) Indian stock market is highly speculative; b) Indian
investors are dissatisfied with the service provided to them by the brokers; c) margins levied
by the stock exchanges are inadequate and d) liquidity in a large number of stocks in the
Indian markets is very low. While evidently a painstaking work, the conclusions except `c'
above seem to be built on wrong or questionable arguments.

 Khan (1977, 1978) studied the role of new issues in financing the private corporate sector
during the 1960's and early 1970's and concluded that new issues were declining in
importance. He also showed that with underwriting becoming almost universal, institutions
like the LIC and the UTI were becoming major players.

 Pandey (1981) examines the impact of leverage on equity prices and concludes that
Modigliani-Miller hypothesis is not supported. However, the risk proxy used in the paper,
namely, coefficient of variation of net operating income, is highly questionable.

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 Zahir and Yakesh (1982) find the dividend per share to be the most important variable
affecting the share price, followed by dividend yield, book value per share, dividend
coverage and the return on investment, in that order.

 Balakrishnan (1984) also finds that the current dividend and book value per share are more
important determinants of market price as compared to earnings per share and dividend
coverage.

 Lee (1992) used postwar US data to identify the relationship among asset return, interest
rates and Inflation using multivariate VAR model.

 SHAHID Ahmed (2003) – The research focused on the effects of macro-economic variables
on SENSEX index price from 1997 to 2007. The variables considered for the study were
foreign exchange rate & FDI. Granger causality test was used to find the correlation between
stock returns and the macro-economic variables. The research concluded that there existed a
correlation between the variables and stock returns.

 ‘Shivakumar S (2003) has analysed the net flows of foreign institutional investment over the
years, it also briefly analyses the nature of FII flows based on research, explores some
determinants of FII flows and examines if the overall experience has been stabilizing or
destabilizing for the Indian capital market.

 Lev Blynski and Alex Faseruklxxxi in 2006 studied and forecast option prices with simple
backpropogation neural network and to compare the results between conventional
BlackScholes model, the Black- Scholes model with pure implied volatility and neural
network models over a seven year period.

 Mayank V. Bhatt and Chetan C. Patel (2008) studied the performance comparison of
different mutual funds schemes in India through Sharpe index model and concluded that
mutual funds are the most popular and safe parameter for an investor to invest.

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 Kavita Chavali and Shefali Jain (2009) evaluated the performance of equity linked savings
schemes and concluded that the fund chosen by the investor should match the risk appetite of
the investor.

Limitations of the Study

The study is not without its limitations. The major limitations are given below:

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 The study is limited only to the functions and working of Bombay Stock Exchange.

 Data used in this study is limited from 1991 to 2011 of Bombay Stock Exchange annual
reports.

 Tried to search Primary data, but not able to joint Primary sources.

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 Chapter -2

FUNCTIONS AND WORKING OF THE BOMBAY STOCK

EXCHANGE

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 Bombay Stock Exchange is established in 21st century as medium of Industrial
Development, under sectors Transport Equipments, Capital Goods, Telecom, Healthcare,
Housing Related, Finance Metal, Metal Products & Mining, FMCG, Information
Technology, Power, Oil & Gas etc. Figures relating to the growth of primary capital market
in India present an impressive picture. According to the figures, the resources raised by the
non-government public limited companies increased eight fold between the fifth and sixth
plan periods (1974-75 to 1978-79 and 1980-81 to 1984-85) from Rs. 551 crore to Rs. 4,690
crore. During the seventh plan period Rs. 26,800 crore of resources were estimated to have
been raised including Rs. 12,000 crore through PSU bonds. This represents six-fold increase
over the resources mobilized through the capital market during the sixth plan period. The
trend seems to suggest that it should not be difficult for the market to provide over Rs.
50,000 crore to industry during the eighth plan period. There should be a healthy and strong
secondary market mechanism to sustain this growth of primary market. Because, ultimately it
is only the secondary market or stock exchanges that provide liquidity and price continuity
for corporate securities. In other words, a healthy secondary market is a prerequisite for
smooth functioning of the primary market, which in turn transmits favorable impulses to the
secondary market. Again the ability of the corporate sector to raise the required resources
from the capital market also depends on smooth and efficient functioning of the stock
exchanges. But available evidence indicates that the performance of the stock exchanges is
not in accordance with the role prescribed for them. According to Shri M.R. Mayya,
Executive Director, Bombay Stock Exchange, one of the important functions to be
discharged by the stock exchanges is providing a market place for purchase and sale of the
securities, thus enabling their free transferability. Another major function supposed to be
done by stock exchanges is the process of continuous price formationiii. But recent
developments in important Stock Exchanges like Bombay Stock Exchange and Ahmadabad
Stock Exchange indicate the failure of the stock exchanges to perform their role efficiently
and smoothly.

Working Managements of Bombay Stock Exchange:

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Composition of governing bodies of stock exchanges reveal almost total dominance of
brokers. This is one of the reasons of leniency of governing boards towards erring brokers.
The issues relating to management of stock exchanges need serious attention of policy
planners and the authorities responsible for administration of stock exchanges. It has been
observed that the growth in primary market is not matched by qualitative improvement in the
working and management of stock exchanges. The issues relating to management of stock
exchanges assume greater significance in view of the fact that there are estimates of raising
about Rs. 50,000 crore from capital market through, debentures, bonds and shares.15 In fact,
the responsibilities of stock exchanges are increasing with the increasing investors
participation in securities business. But stock exchanges do not seem to respond to these
responsibilities. There is a need to develop stock exchanges on the basic broad guidelines
which are supposed to give direction to our economic development so that our stock
exchanges can play a more meaningful role in our economy. The broad guidelines include
that "the basic criterion for determining lines of advance must not be private profit, but social
gain and the pattern of development and the structure of socioeconomic relations should be
so planned they result not only in appreciable increase in national income and employment
but also in greater equality in incomes and wealth. Major decisions regarding production,
distribution, consumption and investment -- and in fact all significant socio-economic
relationships -- must be made by agencies informed by social purpose.

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 BSE Hours of Operation

Beginning of the Day Session 8:00 - 9:00

Login Session 9:00 - 9:15

Trading Session 9:15 - 15:30

Position Transfer Session 15:30 - 15:50

Closing Session 15:50 - 16:05

Option Exercise Session 16:05 - 16:35

Margin Session 16:35 - 16:50

Query Session 16:50 - 17:35

End of Day Session 17:35

 The hours of operation for the BSE quoted above are stated in terms of the local time in Mumbai, India
(also known as Bombay). This translates into a standard time zone UTC/GMT +5:30.

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Bombay Stock Exchange Profile:

Address Phiroze Jeejeebhoy Towers,

Dalal Street, Mumbai
400001

Telephone
91-22-22721233/4

Trading Hours Monday - Friday, 9:55 am -

3:30 pm IST

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Holidays
Bakri-Id, Republic Day,
Good Friday, Ambedkar
Jayanti, Independence Day,
Ganesh Chaturthi, Dasera,
Diwali (Laxmi Poojan),
Diwali (Bhaubeej), Ramzan
Id, Guru Nanak Jayanti.

Securities Stocks, bonds, derivatives

Trading System Electronic

Key Staff Chairman - Jagdish Capoor.

CEO - Rajnikant Patel
SENSEX Calculation Methodology:

SENSEX is calculated using the "Free-float Market Capitalization" methodology, wherein, the
level of index at any point of time reflects the free-float market value of 30 component stocks
relative to a base period. The market capitalization of a company is determined by multiplying
the price of its stock by the number of shares issued by the company. This market capitalization
is further multiplied by the free-float factor to determine the free-float market capitalization. The
base period of SENSEX is 1978-79 and the base value is 100 index points. This is often
indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the
freefloat market capitalization of 30 companies in the Index by a number called the Index
Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps
the Index comparable over time and is the adjustment point for all Index adjustments arising out
of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at
which latest trades are executed, are used by the trading system to calculate SENSEX on a
continuous basis.

Functions of SEBI:

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SEBI has been obligated to protect the interests of the investors in securities and to promote and
development of, and to regulate the securities market by such measures, as it thinks fit. SEBI, in
particular, has powers for:-

(a) Regulating the business in stock exchanges and any other securities markets;

(b) Registering and regulating the working of stock brokers, sub-brokers, share transfer agents,
bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers,
underwriters, portfolio managers, investment advisers and such other intermediaries who may
be associated with securities markets in any manner;

(c) Registering and regulating the working of the depositories, participants, custodians of
securities, foreign institutional investors, credit rating agencies and such other intermediaries
as SEBI may, by notification, specify in this behalf;

(d) Registering and regulating the working of venture capital funds and collective investment
schemes including mutual funds;

(e) Promoting and regulating self-regulatory organizations;

(f) Prohibiting fraudulent and unfair trade practices relating to securities markets;

(g) Promoting investors' education and training of intermediaries of securities markets;

(h) Prohibiting insider trading in securities;

(i) Regulating substantial acquisition of shares and take-over of companies;

(j) Calling for information from, undertaking inspection, conducting inquiries and audits of the
stock exchanges, mutual funds and other persons associated with the securities market and
intermediaries and self- regulatory organizations in the securities market;

(k) Performing such functions and exercising according to Securities Contracts (Regulation) Act,
1956, as may be delegated to it by the Central Government;

(1) Levying fees or other charges for carrying out the purpose of this section;

(m) Conducting research for the above purposes;

(n) Calling from or furnishing to any such agencies, as may be specified by SEBI, such
information as may be considered necessary by it for the efficient discharge of its functions;

(o) Performing such other functions as may be prescribed.

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While exercising these powers, SEBI has the same powers as are vested in civil court under the
Code of Civil Procedure, 1908 while trying a suit, in respect of the following matters:

(a) The discovery and production of books of account and other documents, at such place and
such time as may be specified by SEBI,

(b) Summoning and enforcing the attendance of persons and examining them on oath, and

(c) Inspection of any books, registers and other documents of any person referred to in section
12.

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Characteristics or features of stock exchange are:

 Market for securities: Stock exchange is a market, where securities of corporate

bodies, government and semi-government bodies are bought and sold.

 Deals in second hand securities: It deals with shares, debentures bonds and such
securities already issued by the companies. In short it deals with existing or second hand
securities and hence it is called secondary market.

 Regulates trade in securities: Stock exchange does not buy or sell any securities on
its own account. It merely provides the necessary infrastructure and facilities for trade in
securities to its members and brokers who trade in securities. It regulates the trade
activities so as to ensure free and fair trade

 Allows dealings only in listed securities: In fact, stock exchanges maintain an

official list of securities that could be purchased and sold on its floor. Securities which do
not figure in the official list of stock exchange are called unlisted securities. Such unlisted
securities cannot be traded in the stock exchange.

 Transactions effected only through members: All the transactions in securities

at the stock exchange are affected only through its authorized brokers and members.
Outsiders or direct investors are not allowed to enter in the trading circles of the stock
exchange. Investors have to buy or sell the securities at the stock exchange through the
authorized brokers only.

 Association of persons: A stock exchange is an association of persons or body of

individuals which may be registered or unregistered.

 Recognition from Central Government: Stock exchange is an organized market.

It requires recognition from the Central Government.

 Working as per rules: Buying and selling transactions in securities at the stock
exchange are governed by the rules and regulations of stock exchange as well as SEBI
Guidelines. No deviation from the rules and guidelines is allowed in any case.

 Specific location: Stock exchange is a particular market place where authorized

brokers come together daily (i.e. on working days) on the floor of market called trading
circles and conduct trading activities. The prices of different securities traded are shown

26
 on electronic boards. After the working hours market is closed. All the working of stock
exchanges is conducted and controlled through computers and electronic system.

 Financial Barometers: Stock exchanges are the financial barometers and

development indicators of national economy of the country. Industrial growth and
stability is reflected in the index of stock exchange.

27
Chapter -3

28
General DO's and DON'Ts for Investors:

More and more investors are investing / trading in the stock markets than ever before. It is
therefore imperative for the investors to follow some DOs and DON'Ts while dealing in the
stock market. Given below are some general DOs and DON'Ts for investors:

DOs:-
 Always deal with the market intermediaries registered with SEBI / stock
exchanges.

 Collect photocopies of all documents executed for registration as a client,

immediately on its execution. Ensure that the documents or forms for registration
as Client are fully filled in.

 Give clear and unambiguous instructions to your broker / agent / depository

participant.

 Always insist on contract notes from your broker. In case of doubt in respect of
the transactions, verify the genuineness of the same on the BSE website.

 Always settle the dues through the normal banking channels with the market
intermediaries.

 Before placing an order with the market intermediaries, please check about the
credentials of the companies, its management, fundamentals and recent
announcements made by them and various other disclosures made under various
regulations. The sources of information are the websites of Exchanges and
companies, databases of data vendor, business magazines etc.

 Adopt trading / investment strategies commensurate with your risk-bearing

capacity as all investments carry some risk, the degree of which varies according
to the investment strategy adopted.

 Carry out due diligence before registering as client with any intermediary.
Carefully read and understand the contents stated in the Risk Disclosure
Document, which forms part of the investor registration requirement for dealing
through brokers.

 Be cautious about stocks which show a sudden spurt in price or trading activity,
especially low price stocks.

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  Always keep copies of documents you are sending to companies, Trading
Member, Registrar and Transfer Agent, etc.

 Send important documents by a reliable mode (preferably through registered post)

to ensure delivery.

 Ensure that you have money before you buy.

 Ensure that you are holding securities before you sell.

 Follow up diligently and promptly e.g. If you do not receive the required
documentation within a reasonable time, contact the concerned person; i.e. the
Trading Member, company etc., immediately.

 Mention clearly whether you want to transact in physical mode or in demat mode.

 There are no guaranteed returns on investment in the stock market.

 Always keep copies of all investment documentation (e.g. application forms,

acknowledgements slips, contract notes).

DONTs:-
 Don't deal with unregistered brokers / sub - brokers, or other unregistered
intermediaries.

 Don't execute any documents with any intermediary without fully understanding
its terms and conditions.

 Don’t file your arbitration application against trading member, in the Regional
Investor Service Centre having no geographical jurisdiction over the matter.
Please use for the purpose, your address as intimated to your Trading Member by
following due process of law The Exchange redresses investors‟ complaints thru
arbitration and IGRC mechanism, which are quasi-judicial in nature. The period

 Consumed in redressal of complaint thru IGRC will not be considered while

measuring period of „limitation‟ in filing arbitration application provided the
complaint is filed at the concerned Regional Investor Service Centre.

 Don’t file your grievance /s against companies listed on BSE, in the Regional
Investor Service Centre having no geographical jurisdiction over the matter, for

30
 its expeditious redressed. Please use your address for deciding the geographical
jurisdiction.

 Don't deal based on rumors or 'tips'.

 Don't fall prey to promises of guaranteed returns.

 Don't get misled by companies showing approvals / registrations from

Government agencies as the approvals could be for certain other purposes and not
for the securities you are buying.

 Don't leave the custody of your Demat Transaction slip book in the hands of any
intermediary.

 Don't get carried away with advertisements about the financial performance of
companies in print and electronic media.

 Don't blindly follow media reports on corporate developments, as some of these

could be misleading.

 Don't blindly imitate investment decisions of others who may have profited from
their investment decisions.

 Don't forgo obtaining all documents of transactions, in good faith even from
people whom you know.

 Don't forget to take note of the risks involved in an investment.

 Don't get misled by guarantees of repayment of your investments through

postdated cheques.

 Don't hesitate to approach concerned persons and then the appropriate authorities.

 Don't get swayed by promises of high returns.

 BSE has installed a Toll Free line 1800 22 6663 at which the investors can inform
on any specific lead with regard to any type of undesirable trading practices in
any scrip or any type of market aberration observed by them. Investors are
requested to get their messages recorded in English or Hindi. Identity of the
investor will be kept confidential.

31
Chapter 4

32
 DATA ANALYSIS OF MARKET
INTERMEDIARIES/INSTITUTIONS OF THE BOMBAY STOCK
EXCHANGE

Types of Securities Markets:

In the context of equity products, which this publication seeks to cover in depth, the following
markets could be defined:

 Primary Market

 Secondary Market

 Derivative Market

Primary Markets:

Fresh issues of shares and other securities are affected though the Primary market. It
provides issuers opportunity to issue securities, to raise resources to meet their
requirements of business. Equity issues can be effected at face value or at
discount/premium. Issues at discounts are rare and almost unheard of. Issuers can issue
the securities in domestic market and/or international market through ADR/GDR/ECB
route. Resources raised from domestic as well as international markets by issuers have
gone up significantly over the years. During 2006-07, a total of Rs. 33,508 crore was
mobilized by the government and corporate sector from the primary market through
33
 public issues. Capital raised from the primary market through public, rights & follow-on
offerings have aggregated Rs. 67,609 crore during FY 2010-11, as compared to Rs.
57,555 crore during the previous fiscal year. The number of issuances from the primary
market in fact reduced from 76 to 91 over the same period because of a larger per issue
size. During 2010-11, the regulator introduced a new product called a "Qualified
Institutional Placement ("QIP"). QIP enables a listed company to offer shares to qualified
institutional buyers through a private placement mechanism and is a landmark
introduction in the Indian Capital Markets. The banking/finance, construction, IT &
Telecom sectors dominated the primary market issuances during 2010-11.

Secondary Market:

This is the market wherein the trading of securities is done. Secondary market consists of both
equity as well as debt markets. Securities issued by a company for the first time are offered to the
public in the primary market. Once the IPO is done and the stock is listed, they are traded in the
secondary market. The main difference between the two is that in the primary market, an investor
gets securities directly from the company through IPOs, while in the secondary market, one
purchase securities from other investors willing to sell the same.

Equity shares, bonds, preference shares, treasury bills, debentures, etc. are some of the key
products available in a secondary market. SEBI is the regulator of the same.

Derivatives Markets:

Derivatives are tradable products that are based upon another market. This other market is
known as the underlying market. Derivatives markets can be based upon almost any underlying
market, including individual stocks (such as Apple Inc.), stock indexes (such as the S&P 500
stock index) and currency markets (such as the EUR/USD forex.

34
Derivatives include:

 A security derived from a debt instrument, share, loan whether secured or unsecured, risk
instrument or contract for differences or any other form of security, and

 A contract which derives its value from the prices, or index of prices, or underlying
securities. The Act also made it clear that derivatives shall be legal and valid only if such
contracts are traded on a recognized stock exchange. The government is also rescinded in
March 2000 an old notification, which had banned forward trading in securities in the
1960s.

35
Chapter -5

36
 Listed companies on BSE SENSEX

Sector Adj. Factor Weight in

Listed companies
on BSE SENSEX Index (%)
Name

ACC Housing Related 0.55 0.77

Capitals Goo
BHEL 0.35 3.26
ds

Bharti Airtel Telecom 0.35 3

DLF Universal Housing Related 0.25 1.02

Limited

Grasim Industries Diversified 0.75 1.5

HDFC Finance 0.90 5.21

HDFC Bank Finance 0.85 5.03

Hero Honda Transport 0.50 1.43

Motors Ltd. Equipments

Hindalco Industries Metal, Metal 0.7 1.75

Ltd. Product & mining

Hindustan Lever FMCG 0.50 2.08

37
Limited

ICICI Bank Finance 1.00 7.86

Infosys 0.85 10.26

Information
Technology

ITC Limited FMCG 0.70 4.99

Housing Related 0.55 1.25

Jaiprakash
Associates

Larsen & Toubro Capital Goods 0.90 6.85

0.75 1.71
Mahindra & Transport
Mahindra Ltd. Equipments

Maruti Suzuki 0.50 1.71

Transport
Equipments

NIIT Technologies 0.15 2.03

Information
Technology

NTPC Power 0.15 2.03

NIIT 0.15 2.03

Information
Technology

ONGC Oil & Gas 0.20 3.87

38
 Telecom 0.35 0.92
Reliance
Communications

Reliance Industries Oil & gas 0.50 12.94

Power 0.65 1.19

Reliance
Infrastructure

State Bank of India Finance 0.45 4.57

Starlight Industries 0.45 2.39

Metal, Metal
Products, and
Mining

Healthcare 0.40 1.03

Sun Pharma
Industries

0.25 3.61
Tata Consultancy Information
Services Technology

Tata Motors 0.55 1.66

Transport
Equipments

Tata Power Power 0.70 1.63

Tata Steel 0.70 2.88

Metal, Metal
Products&
Mining

Source: www .bseindia.com.

39
 Number of Companies Listed in Bombay Stock Exchange

Year No. of Companies Listed No. of Companies Permitted

1992-93 2,861 0

1993- 94 3,585 0

1994- 95 4,702 0

1995-96 5,603 0

1996- 97 5,832 0

1997- 98 5,853 0

1998- 99 5,849 0

1999- 00 5,815 0

2000- 01 5,869 0

2001- 02 5,782 0

2002- 03 5,650 12

2003- 04 5,528 12
2004- 05 4,731 36

44

2005- 06 4,781 42

2006- 07 4,821 60

2007-08 4,887 63

2008-09 4,929 66

2009-10 4,975 86

2010-11 5,067 91
 Source: BSE.

At the end of March 2010-11, there were 5067 companies listed at BSE. The
BSE Index, SENSEX, is the most popular stock market benchmark attracting
investors from across the globe.

45

Annual Averages of Share Price Indices and Market Capitalizations:

Year BSE Sensex Market

Capitalization (Crore
Rupees)

1990-91 1,050 90,836

1991-92 1,842 3,23,363

1992-93 2,896 1,88,146

42
1993-94 2,892 3,68,071

1994-95 3,977 4,35,481

1995-96 3,289 5,26,476

1996-97 3,468 4,63,915

1997-98 3,812 5,60,325

1998-99 3,295 5,45,361

1999-2000 4,659 9,12,842

2000-01 4,270 5,71,553

2001-02 3,332 6,12,224

2002-03 3,206 5,72,198

2003-04 4,492 12,01,207

2004-05 5,741 16,98,428

2005-06 8,280 30,22,191

2006-07 12,277 35,45,041

2007-08 16,569 51,38,014

2008-09 12,366 30,86,075

2009-10 15,585 61,65,619

2010-11 18,605 68,39,084

Source: BSE.

44
The above table and chart is the indicator of the annual average calculated in respect of the Share
Indices and market capitalization over the period of 20 years.

45
Since its establishment, Bombay Stock Exchange has played a vital role in the growth of capital
markets in India. Another great truth about BSE is that it is the world's fifth largest stock
exchange, with a market capitalization of $466 billion. It makes use of BSE SENSEX, which is
an index of 30 big and developed stocks. The index provides an evaluation of the comprehensive
performance of BSE and is very much tracked throughout the world.

46
Trading Statistics of Bombay Stock Exchange

Year Quantity of Shares Value of Shares

Traded (Lakh) Delivered (Rs crore)

2001- 02 1,82,196 59,980

2002- 03 2,21,403 50308

2003- 04 3,88,748 1,29,312

2004- 05 4,77,174 1,40,056

2005- 06 6,64,467 2,71,227

Source: BSE.

47
48
Trading Statistics of Bombay Stock Exchanges

(Quantity of Shares Delivered)

Year of Shares Delivered

Quantity
(Lakh)

2001- 02 57668

2002- 03 71,131

2003- 04 1,44,531

2004- 05 1,87,519

2005- 06 3,00,653

2006- 07 2,29,685

2007-08 3,61,628

2008-09 1,96,330

2009-10 3,63,578
Source: BSE.

49
Above is the table and chart for the number of shares delivered (in lakhs) in BSE

The Bombay stock exchange is home to about 5,067 (FY 2010-11) listed companies, with a total
market capitalization of around 59 trillion Rupees, or nearly $1.3 trillion (USD) as of September
2011. The BSE is also one of the busiest stock exchanges in the world, currently ranking around
number four in terms of annual transactions. The exchange has experienced explosive growth,
with a four-fold increase in trading volume over the last 15 years.

The following are some of the facts and figures that can help you get a better feel for the volume
of trading that occurs on the Bombay Stock Exchange:

 In 2011, the average volume of business conducted on the BSE was approximately $15
billion USD each month.

 The number of shares traded each month on the BSE is in the range of 30 to 35 million.

50
Trends in Cash Segment Bombay Stock Exchange
Sensex, 100 Index

Year BSE Sensex BSE-100 Index

High Low Close High Low Close

1992-93 4547 2185 2281 2049 989 1021

1993- 94 4299 1980 3779 2073 912 1830

1994 -95 4643 3229 3261 2193 1570 1606

1995-96 3612 2820 3367 1692 1298 1549

1996- 97 4131 2713 3361 1865 1203 1464

1997- 98 4605 3165 3893 2007 1382 1697

1998- 99 4322 2741 3740 1909 1227 1651

1999-00 6151 3183 5001 3906 1380 2902

51
2000- 01 5543 3437 3604 3055 1634 1692

2001- 02 3760 2595 3469 1831 1210 1716

2002- 03 3538 2828 3049 1763 1411 1501

2003- 04 6250 2904 5591 3373 1447 2966

2004- 05 6955 4228 6493 3756 2226 3482

2005- 06 11357 6141 11280 5943 3303 5904

2006- 07 14324 8799 13072 7276 4472 6587

2007-08 21207 12426 15644 11656 6271 8233

2008-09 17736 7697 9709 9433 3949 4943

2009-10 17793 9546 17528 9447 4871 9300

2010-11 21109 15960 19445 11193 8510 10096

Source: BSE.

52
53
 City-wise Distribution of Turnover of Cash Segment at BSE:

(Percentage share in Turnover)

City 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010-
02 03 04 05 06 07 08 09 10 11

Ahmadabad 1.0 2.3 3.4 3.1 2.9 4.4 4.6 7.3 9.9 9.4

Bangalore 0.3 0.4 0.7 0.7 0.9 0.5 0.4 0.3 0.4 0.4

Baroda 0.5 0.8 0.0 0.0 0.0 2.1 2.1 2.4 2.1 2.1

Bhubanesw - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
ar

Chennai 0.2 0.3 0.3 0.4 0.5 0.4 0.4 0.4 0.3 0.4

Cochin 0.3 0.1 0.1 0.1 0.2 0.0 0.0 0.0 0.0 0.0

Coimbatore 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0

Delhi 1.3 2.1 2.6 3.1 3.8 8.3 10.5 11.4 12.8 12.8

Gauhati - 0.0 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0

Hyderabad 0.1 0.1 0.2 0.2 0.4 0.5 0.5 0.5 0.5 0.5

Indore 0.2 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6

54
Jaipur 0.2 0.7 0.8 0.7 0.8 0.9 1.0 1.1 1.1 1.0

Kanpur 0.3 0.4 0.4 0.4 0.3 0.5 0.4 0.4 0.6 0.7

Kolkata 0.8 1.4 1.1 1.0 1.4 2.3 2.1 1.7 1.6 2.0

Ludhiana 0.0 0.2 0.4 0.3 0.3 0.3 0.3 0.2 0.3 0.2

Mumbai 84.0 77.6 74.5 75.3 75.1 49.3 45.2 38.6 36.0 36.3

Patna - 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Pune 0.6 0.4 0.5 0.6 0.7 0.8 0.7 0.6 0.7 0.7

Mangalore - 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0

Rajkot 0.3 1.4 1.7 1.7 1.3 1.5 2.4 4.8 5.1 4.8

Others 9.8 10.9 12.6 11.4 10.7 27.6 28.4 29.7 27.9 28.0

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: BSE.

55
Almost 36% of the terminals in the sample are based in the Western region where Mumbai holds
maximum representation, followed by Ahmadabad at 9%. In the southern region Hyderabad 1%
of the terminals, whereas in the North, Delhi has maximum share at 13%, followed by Kolkata at
2% in the eastern region. Other cities such as Baroda, Jaipur and Pune have 1% shares
respectively. Turnover of cash segment in BSE in different cities has been elaborated in terms of
percentage in the above table over the period of 10 years

56
57
Chapter -6

58
CONCLUSION:

Today BSE India has the maximum number of stocks listed in it comparatively to any
other exchange in the world. BSE Index also known as sensex is the most popular
exchange or stock in India. BSE Index consist of 30 stocks which involves 12 major
sector .BSE India provides a great platform for trading in equity, derivative and debt
instruments. BSE India live has become the major part of Indian Capital Market. BSE
index provide BSE live prices of stocks from morning 9.00AM to 3.30 PM. Today with
the modernization of electronic media like television, computers, internet BSE India has
reached to a new high. People find trading in BSE India live is more easy and fast with
the help of these media. Through BSE Live tracking an investor can track the current
price of the market and can make strategies accordingly. Through BSE India Live a
trader can make certain strategies on how to invest, when to invest, in which scrip to
invest and what is going to be the future of the market.

 It is the oldest and the largest stock exchange in Asia.

 It is the fifth largest stock market in the world.
 Approximately 6,000 Indian companies are listed with Bombay Stock Exchange. .
 It is the first stock exchange that introduced Equity derivatives in India.

59
Chapter – 7

60
BIBLIOGRAPHY

WEBSITES:

 www.bseindia.com

 www.nseindia.com

 www.rbi.gov.in

 www.sebi.org

 www.nse-india.com

 www.shodhganga.inflibnet.ac.in/handle/10603/72112

61