A TECHNICAL ANALYSIS ON EQUITY STOCKS

Abstract
The project assigned to me is “Technical analysis of Equity stocks”. The report reflects the
understanding that has been developed during the course of the project.
Technical analysis is the process of analyzing a Equity stocks historical price in an effort to
determine probable future prices. This is done by comparing current price action (i.e current
expectation) with comparable historical price action to predict a reasonable outcome.
The report involves good conceptualization of various aspects of technical analysis. Charting is
the most important tool for technical analysis. This report shows various types of charts and the
different price movements that can be reflected through these charts.
A good analyst needs to keep a track of these price charts and decide the right time to buy and
sell Equity stocks. In order to achieve accuracy in timing one’s buying and selling decision the
analyst is required to identify various patterns and formations. The report includes a strategy that
can be followed by stock market investors to gain lucrative return on their capital.
These patterns alone are insignificant and can be misleading which can result in losses. These
patterns should be confirmed by various market indicators and technical indicator of security.
Some of the important technical indicators are covered in the report. Using all these patterns and
indicators collectively will not increase the degree of accuracy and therefore it is very important
for an analyst to develop his own set of patterns and indicators.
The report involves the analysis of the scrips of BSE. The report involves the performance of
these scrips in the given period and also the investing strategy that could have been followed.

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INDEX PAGE NO

CHAPTER I 03-11
INTRODUCTION
OBJECTIVES OF THE STUDY
NEED OF THE STUDY
SCOPE OF THE STUDY
LIMITATIONS TO THE STUDY
RESEARCH METHODOLOGY

CHAPTER II 12-22
REVIEW OF THE LITERATURE

CHASPTER III 23-47

COMPANY PROFILE

CHAPTER IV 48-68
DATA ANALYSIS & INTERPRETATION

CHAPTER V 69-75
CONCLUSION
FINDINGS
SUGGESTIONS
BIBILOGRAPH

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 CHAPTER – I
INTRODUCTION

3
INTRODUCTION OF THE STUDY:
The methods used to analyze securities and make investment decisions fall into two very
broad categories: fundamental analysis and technical analysis. Fundamental analysis
involves analyzing the characteristics of a company in order to estimate its value.
Technical analysis takes a completely different approach; it doesn’t care one bit about the
‘value” of a company or a commodity. Technicians (sometimes called chartists) are only
interested in the price movements in the market.
Despite all the fancy and exotic tools it employs, technical analysis really just studies
supply and demand in a market in an attempt to determine what direction, or trend, will
continue in the future. In other words, technical analysis attempts to understand the
emotions in the market by studying the market itself, as opposed to its components. If
you understand the benefits and limitations of technical analysis, it can give you a new
set or skills that will enable you to be a better trader or investor.
Technical analysis is a method of evaluating securities by analyzing the statistics
generalized by market activity, such as past prices and volume. Technical analysis does
not attempt to measure a security’s intrinsic value, but instead use charts and other tools
to identify patterns that can suggest future activity.
Just as there are many investment styles on the fundamental side, there are also many
different types of technical traders. Some rely on chart patterns; others use technical
indicators and oscillators, and most use some combination of the two. In any case,
technical analyst’s exclusive use of historical price and volume data is what separates
them from their fundamental counterparts. Unlike fundamental analysis, technical
analysts don’t care whether a stock is undervalued – the only thing that matters is a
security’s past trading data and what information this data can provide about where the
society might move in the future. The field of technical analysis is based on three
assumptions:
• The market discounts everything.
• Price moves in trends.
• History tends to repeat itself.

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NEED OF THE STUDY

To start any business capital plays major role. Capital can be acquired in two
ways by issuing shares or by taking debt from financial institutions or
borrowing money from f i n a n c i a l i n s t i t u t i o n s .
T h e o w n e r s o f t h e c o m p a n y h a v e t o p a y r e g u l a r i n t e r e s t a n d principal
amount at the end. Stock is ownership in a company, with each share of stock
representing a tiny piece of o w n e r s h i p . T h e m o r e s h a r e s y o u o w n , t h e
m o r e o f t h e c o m p a n y y o u o w n . T h e m o r e shares you own, the more
dividends you earn when the company makes a profit. In the financial world,
ownership is called EQUITY

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SCOPE OF THE STUDY:

• The study covers a period of six months from January 2017 to June 2017.
• The study helps to find out the future trends in the prices of SBI, ICICI, HDFC equity
shares. Valuable hints can be identified by the investors for their future buying and
selling.

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OBJECTIVES OF THE STUDY:

• To analyze the price movements of shares of SBI, ICICI, and HDFC interpret the
corrections and trends by using Technical Analysis tools.
• To forecast the future trends and provide suitable suggestions to the investors.
• To calculate the risk associated with the Investment
• To find out systematic risk of securities

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RESEARCH METHODOLOGY:

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. The various steps
that are generally adopted by a researcher in studying research problem along with the
logic behind them. It is necessary for the researcher to know not only the research
methods/ techniques but also the methodology.
Analytical Research:
Research Design was based on analytical research, on the other hand, the
researcher has to use facts or information already available, and analyze these
to make these to make a critical evaluation of the material.
Sources of Data:
The main sources of data are collected through website, various
Publication books, magazines, newspaper and reports prepared by research
Scholars etc.
Data Collection:
Data required for the purpose of the study have been collected from the
Websites of the banks concerned.
Data Analysis:
The data required so collected have been analyzed by using MS-EXCEL.
In the process of analysis – Average rate of return, Standard deviation,
Co-efficient of correlation, Covariance and beta values have been collected

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Research tools used:
Returns:
A major purpose of investment is to set a return or income on the funds invested. On a
bond an investor expects to receive interest. On a stock, dividends may be anticipated.

Pt = current price
Po = previous price
Average of the Returns calculated as follows:

Standard Deviation:
1. A measure of the dispersion of a set of data from its mean. The more spread apart the
data, the higher the deviation. Standard deviation is calculated as the square root of
variance.
2. In finance, standard deviation is applied to the annual rate of return of an investment to
measure the investment's volatility. Standard deviation is also known as historical
volatility and is used by investors as a gauge for the amount of expected volatility.
Standard deviation is a statistical measurement that sheds light on historical volatility.
For example, a volatile stock will have a high standard deviation while the deviation of a
stable blue chip stock will be lower. A large dispersion tells us how much the return on
the fund is deviating from the expected normal returns.
Risk is calculated as follows:

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D = deviation; N =No. of days
Beta:
Measures volatility or systemic risk compared to the market or the benchmark index
Beta Value Calculated as follows:

BETA= COVARIANCE OF MARKET AND SBI / VARIANCE OF MARKET

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LIMITATIONS OF THE STUDY

• One of the most important limitations for most technical analysis methods is the fact
that there are so many people using the basic technical analysis methods already, and the
number is increasing every day, making it harder for a single trader to make money on
the market with the methods.
• Because of these methods are so widely spread and there is so much money riding on
the methods, some also claim that technical analysis has become self-fulfilling prophecy,
as people trend to enter the market and put their stops on the same places, increasing the
volatility towards the technical analysis method being correct.
• Technical analysis systems usually do not take into account correlation between
different markets. If you are analyzing several markets and they all give similar signals,
they may have close correlations, meaning that the risk profile for each is very similar,
and that the prices of the assets move in close steps with each other.

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 CHAPTER - II
REVIEW OF LITERATURE

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EQUITY SHARES
Equity represents an ownership position in a corporation. It is residual claim in the sense
that creditors and preference shareholders must be paid as scheduled before equity
shareholders can receive payment. In bankruptcy equity holders are principle entitled
only to assets remaining after all prior claimants has been satisfied. Thus risk is highest
with equity shares and so must be its expected return. When investors buy equity shares,
they receive certificates of ownership as proof of their being part owners of the company.
The certificate states the number of shares purchased and their par value. The attitude
towards equity shares varied from extreme pessimism to optimism from time to time.

• The main advantages of equity shares are listed below:

• Potential for Profit : The potential for profit is greater in equity shares than in any
other investment security. Current dividends yield may be low but potential of
capital gains is great. The total yield or yields to maturity may be substantial over
a period of time.
• Limited Liability: In corporate form of organization, its owners have, generally,
limited liability. An equity share is usually fully paid. Shareholders may lose their
investments, but no more. They are not further liable for any failure in the part of
corporation of meet its obligation.
• Hedge against Inflation: The equity share is good hedge against inflation though it
does not fully compensate for the declining purchasing power as it is subject to
money-rate risk. But when interest rates are high, shares tend to be less attractive,
and prices tend to be depressed.
• Share in Growth: A share is its ability to The major advantage of investment in
equity increase in value by sharing in the growth of company profits over the long
run.
• Tax Advantage: Equity shares also offers tax advantage to the investors. The
larger yield on equity shares results from an increase in principal of capital gains,

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 which are taxed at lower rate than other incomes in most of the countries.
EQUITY CAPITAL TERMINOLOGY:
The important terms used in equity capital are listed below:
• Authorized Capital: The authorized capital is the maximum number of shares
of each type that may be issued by the company. To change this number, or
provision of any class of shares, the company requires the formal approval of
shareholders.
• Issued Capital: Issued capital is the part of the authorized capital that has been
issued for cash, property, or service.

• Paid up Capital: Fully paid shares are those shares for which the corporation
has received full payment up to the par-value, or up to the amount established
as the selling price of no-par-shares. Partly paid shares are those shares that
have been issued for less than par-value or the agreed subscription.
NATURE OF EQUITY SHARES:
Equity shares represent an ownership of a corporation. It is true that the equity shares
must bear first impact of any adversity, but it is also true that the equity shares is the only
class of securities privileged to enjoy maximum participation in an extensive growth of
the company. The risk of the one may be regarded as price. In fact, the investor is vitally
concerned with the yield earned over the commensurate with the opportunity of the other.
Evidence of Ownership: When investor buys equity shares, they receive certificates of
ownership as a proof of their part as owners of the company. This certificates state the
number of shares purchased, their par value, if any, and usually the transfer agent. When
equity shares are purchased on the market (that when it is not a new issue which is
purchased from the company). Maturity of Equity Shares: Equity shares have no maturity
date. Their life is limited by the length of time stated in the corporate charter know as
“Memorandum of Association”. The corporate life might be for stated or limited period,
or it might be perpetual. Most corporations have a perpetual character. The date on which
the equity is sold by the investor is the maturity date, and the price at which the equity is
sold is called the maturity period that the equity is owned.

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Par Value: Par value is the face value of the share. Equity shares have par value, a
nominal stated value. The par value of an equity shares indicates the amount of capital
originally subscribed by the shareholders. New shares cannot be sold less than par value.
If the equity shares are sold for more than par, the excess is transferred to ‘Share
Premium Account’.
Net Asset Value and Book Value: Distrust of present value formulae, the quest for
objectivity and perhaps even nostalgia lead some analyst to place greater emphasis on the
asset value factor when evaluating investment worth of a company’s equity shares. Net
assets or net worth can be calculated from either the asset of liability side of balance
sheet.
Financial Analysis and Accounting Data: The historical numbers that analyst uses to
prepare rates and forecasting equations are generally based on figures that have been
taken from the published financial statements of the firm being analyzed. Although these
statements may have been prepared “according to generally accept accounting
principles”, there may be significant variation in real economic meaning of financial
reports.
INVESTMENT PROCESS IN EQUITY SHARES:
Investment process describes how an investor should go about making decisions with
regard to what marketable securities to invest in, how extensive the investment should be
and when the investment should be made. An eight-step procedure for making these
decisions forms the basis for the investment process.
1. What is Investment
2. Understanding Shares
3. Finding a Broker
4. Evaluation of Shares
5. Research Tools
6. Investing Strategy
7. Investing Technique
8. What Moves the Market
Step 1: What is Investment?

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Investment in broad sense means the sacrifice of current rupees for further rupees.
Investing is making your money work for you without taking any more risks than
necessary for your comfort.
• Investing is the proactive use of your money to make more money.
• How to calculate Risk Premium?
• Risk premium is what a stock should return over a “risk-free” investment. It is
your reward for taking a risk with your money.
• Weak demand is the important factor in stock pricing:
• Despite high crude oil prices, its weak demand for gasoline that holds back
oil stock prices. Supply and demand is an important factor in determining
price of stocks. Corrections is natural part of stock market cycle.
Step 2: Understanding Shares
• Bull and Bear stock market are the two sides of same coin: Bull and bear markets
go together and are necessary for an efficient market.
• Poll results show confidence in stocks: The results of a poll on where the sensex
be at the end of 2009 show stock investors are positive.
Step 3: Finding a Broker
• To decide which type of broker is right for you, you need to use these resources to
find the brokerage arrangement that best fits your needs.
• Thirteen of the top online stock trading sites offer investors a wide variety of
services including research and advice.
• Brokers offer different levels of service. A broker fills in the gaps in knowledge
and experience.
• Stock prices are driven by the relationship between buyers and sellers. Attractive
stocks have more buyers than sellers, which drives up prices, while less attractive
stocks feel the reverse effect.
Step 4: Evaluating Stocks for Investment
Fundamental analysis relies on several tools to give investors an accurate picture of the
financial health of a company and how the market values the stock. The following are the
most popular tools of fundamental analysis. They focus on earnings, growth, and value in

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the market.
a) Earnings Per Share – EPS
b) Price to Earnings Ratio – P/E
c) Projected Earnings Growth – PEG
d) Price to Sales – P/S
e) Price to Book – P/B
f) Dividend Payout Ratio
g) Dividend Yield
h) Book Value
i) Return on Equity
Step 5: Research Tools
The internet is a gold mine of information, but you’ll need some tools to get to the
nuggets. Research tools make the job easier if you know where to find them and how to
use them.
• The better stock screens offer similar characteristics that give you greater
flexibility when looking for investment candidates and eliminate other
companies.
• Stock screens will save time and help to build a thoughtful portfolio by
focusing on those companies that meet your investing requirements.
• Stock screens can help any investor make better stock selections by reducing
the number of companies to research.
• Dividend ratios can tell much about a stock and its future payout prospects.
• One of the best sources of information on companies is free and as near as
your computer.
Step 6: Investing Strategies
What strategy to use as an investor? The different investment strategies and how to
develop personal investment strategy is explained below:
• When and how to sell a winning stock?
O Knowing when and how to sell a winning stock is as important as
knowing when to sell a losing stock.

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 • Don’t be too conservative with stocks:
O Following a too conservative investment strategy in retirement may not
protect you from outliving your money.
Step 7: Investing Techniques
Investing techniques offer powerful ways for investors to execute their strategies. These
techniques provide a structure for investing.
• After-hours trading of stocks may seem like a great idea, but it is full of risks
for the average investor.
• Diversify stocks by industry to avoid across-the-board losses on bad economic
news. Investments should not be correlated to achieve diversity.
• Investing with expectations of high returns is not investing but gambling.
Don’t try to double or triple your money quickly in the stock market – you’ll
be disappointed and perhaps poorer.
Step 8: What Moves the Market?
What makes the market rise or fall? Sometimes it seems to have a mind of its own that
reacts poorly to good news and with enthusiasm to bad news. One should learn the
factors that are the major influences on the markets and how to use this information.
Major economic and political factors shape the market, but most of all the market hates
uncertainty.
Technical Analysis
Technical analysis is a security analysis discipline for forecasting the future direction of
prices through the study of past market data, primarily price and volume.
History
The principles of technical analysis derive from the observation of financial markets over
hundreds of years. The oldest known hints of technical analysis appear in Joseph de la
Vega's accounts of the Dutch markets in the 17th century. In Asia, the oldest example of
technical analysis is thought to be a method developed by Homma Munehisa during early
18th century which evolved into the use of candlestick techniques, and is today a main
charting tool.
Dow Theory is based on the collected writings of Dow Jones co-founder and Editor

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Charles Dow, and inspired the use and development of modern technical analysis from
the end of the 19th century. Other pioneers of analysis techniques include Ralph Nelson
Elliott and William Delbert Gann who developed their respective techniques in the early
20th century.
Many more technical tools and theories have been developed and enhanced in recent
decades, with an increasing emphasis on computer-assisted techniques.
General Description
Technical analysts seek to identify price patterns and trends in financial markets and
attempt to exploit those patterns. While technicians use various methods and tools, the
study of price charts is primary.
Technicians especially search for archetypal patterns, such as the well-known head and
shoulders or double top reversal patterns, study indicators such as moving averages, and
look for forms such as lines of support, resistance, channels, and more obscure
formations such as flags, pennants or balance days.
Technical analysts also extensively use indicators, which are typically mathematical
transformations of price or volume. These indicators are used to help determine whether
an asset is trending, and if it is, its price direction. Technicians also look for relationships
between price, volume and, in the case of futures, open interest. Examples include the
relative strength index, and MACD. Other avenues of study include correlations between
changes in options (implied volatility) and put/call ratios with price. Other technicians
include sentiment indicators, such as Put/Call ratios and Implied Volatility in their
analysis.
Technicians seek to forecast price movements such that large gains from successful
trades exceed more numerous but smaller losing trades, producing positive returns in the
long run through proper risk control and money management.
There are several schools of technical analysis. Adherents of different schools (for
example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the
other approaches, yet many traders combine elements from more than one school. Some
technical analysts use subjective judgment to decide which pattern a particular instrument
reflects at a given time, and what the interpretation of that pattern should be. Some

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technical analysts also employ a strictly mechanical or systematic approach to pattern
identification and interpretation.
Technical analysis is frequently contrasted with fundamental analysis, the study of
economic factors that influence prices in financial markets. Technical analysis holds that
prices already reflect all such influences before investors are aware of them, hence the
study of price action alone. Some traders use technical or fundamental analysis
exclusively, while others use both types to make trading decisions.
Users of technical analysis are most often called technicians or market technicians. Some
prefer the term technical market analyst or simply market analyst. An
Older term, chartist, is sometimes used, but as the discipline has expanded and
modernized the use of the term chartist has become less popular.
Characteristics
Technical analysis employs models and trading rules based on price and volume
transformations, such as the relative strength index, moving averages, regressions, inter-
market and intra-market price correlations, cycles or, classically, through recognition of
chart patterns.
Technical analysis stands in contrast to the fundamental analysis approach to security and
stock analysis. Technical analysis "ignores" the actual nature of the company, market,
currency or commodity and is based solely on "the charts," that is to say price and
volume information, whereas fundamental analysis does look at the actual facts of the
company, market, currency or commodity. For example, any large brokerage, trading
group, or financial institution will typically have both a technical analysis and
fundamental analysis team.
Technical analysis is widely used among traders and financial professionals, and is very
often used by active day traders, market makers, and pit traders. In the 1960s and 1970s it
was widely dismissed by academics. In a recent review, Irwin and Park reported that 56
of 95 modern studies found it produces positive results, but noted that many of the
positive results were rendered dubious by issues such as data snooping so that the
evidence in support of technical analysis was inconclusive; it is still considered by many
academics to be pseudoscience. Academics such as Eugene Fama say the evidence for

20
technical analysis is sparse and is inconsistent with the weak form of the efficient market
hypothesis. Users hold that even if technical analysis cannot predict the future, it helps to
identify trading opportunities.
In the foreign exchange markets, its use may be more widespread than fundamental
analysis. While some isolated studies have indicated that technical trading rules might
lead to consistent returns in the period prior to 1987, most academic work has focused on
the nature of the anomalous position of the foreign exchange market. It is speculated that
this anomaly is due to central bank intervention. Recent research suggests that combining
various trading signals into a Combined Signal Approach may be able to increase
profitability and reduce dependence on any single rule.
Principles
Technicians say that a market's price reflects all relevant information, so their analysis
looks at the history of a security's trading pattern rather than external drivers such as
economic, fundamental and news events. Price action also tends to repeat itself because
investors collectively tend toward patterned behavior – hence technicians' focus on
identifiable trends and conditions.
Market action discounts everything
Based on the premise that all relevant information is already reflected by prices, pure
technical analysts believe it is redundant to do fundamental analysis – they say news and
news events do not significantly influence price, and cite supporting research such as the
study by Cutler, Poterba, and Summers titled "What Moves Stock Prices?"
On most of the sizable return days [large market moves]...the information that the press
cites as the cause of the market move is not particularly important. Press reports on
adjacent days also fail to reveal any convincing accounts of why future profits or discount
rates might have changed. Our inability to identify the fundamental shocks that accounted
for these significant market moves is difficult to reconcile with the view that such shocks
account for most of the variation in stock returns.
Prices move in trends
Technical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat)
or some combination. The basic definition of a price trend was originally put forward by

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Dow Theory.
An example of a security that had an apparent trend is AOL from November 2001
through August 2002. A technical analyst or trend follower recognizing this trend would
look for opportunities to sell this security. AOL consistently moves downward in price.
Each time the stock rose, sellers would enter the market and sell the stock; hence the
"zig-zag" movement in the price. The series of "lower highs" and "lower lows" is a tell
tale sign of a stock in a down trend. In other words, each time the stock moved lower, it
fell below its previous relative low price. Each time the stock moved higher, it could not
reach the level of its previous relative high price.
Note that the sequence of lower lows and lower highs did not begin until August. Then
AOL makes a low price that doesn't pierce the relative low set earlier in the month. Later
in the same month, the stock makes a relative high equal to the most recent relative high.
In this a technician sees strong indications that the down trend is at least pausing and
possibly ending, and would likely stop actively selling the stock at that point.
History tends to repeat itself
Technical analysts believe that investors collectively repeat the behavior of the investors
that preceded them. "Everyone wants in on the next Microsoft," "If this stock ever gets to
$50 again, I will buy it," "This company's technology will revolutionize its industry,
therefore this stock will skyrocket" – these are all examples of investor sentiment
repeating itself. To a technician, the emotions in the market may be irrational, but they
exist. Because investor behavior repeats itself so often, technicians believe that
recognizable (and predictable) price patterns will develop on a chart.
Technical analysis is not limited to charting, but it always considers price trends. For
example, many technicians monitor surveys of investor sentiment. These surveys gauge
the attitude of market participants, specifically whether they are bearish or bullish.
Technicians use these surveys to help determine whether a trend will continue or if a
reversal could develop; they are most likely to anticipate a change when the surveys
report extreme investor sentiment. Surveys that show overwhelming bullishness, for
example, are evidence that an uptrend may reverse – the premise being that if most
investors are bullish they have already bought the market (anticipating higher prices).

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 CHAPTER III
COMPANY & INDUSTRY PROFILE

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STOCK MARKETS IN INDIA
Stock exchanges are the perfect type of market for securities whether of government and
semi-government bodies or other public bodies as also for shares and debentures issued
by the joint-stock companies. In the stock market, purchases and sales of shares are
affected in conditions of free competition. Government securities are traded outside the
trading ring in the form of over the counter sales or purchase. The bargains that are struck
in the trading ring by the members of the stock exchanges are at the fairest prices
determined by the basic laws of supply and demand.
Definition of a stock exchange:
“Stock exchange means anybody or individuals whether incorporated or not, constituted
for the purpose of assisting, regulating or controlling the business of buying, selling or
dealing in securities.”
Bonds
Functions of Stock Exchanges:
Stock exchanges provide liquidity to the listed companies. By giving quotations to the
listed companies, they help trading and raise funds from the market. Over the hundred
and twenty years during which the stock exchanges have existed in this country and
through their medium, the central and state government have raised crores of rupees by
floating public loans. Municipal corporations, trust and local bodies have obtained from
the public their financial requirements, and industry, trade and commerce- the backbone
of the country’s economy-have secured capital of crores or rupees through the issue of
stocks, shares and debentures for financing their day-to-day activities, organizing new
ventures and completing projects of expansion, diversification and modernization. By
obtaining the listing and trading facilities, public investment is increased and companies
were able to raise more funds. The quoted companies with wide public interest have
enjoyed some benefits and assets valuation has become easier for tax and other purposes.

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Various Stock Exchanges in India:
At present there are 23 stock exchanges recognized under the securities contracts
(regulation), Act, 1956. Major of them:
• Ahmadabad Stock Exchange Association Ltd.
• Bombay stock Exchange
• Bangalore Stock Exchange
• Calcutta Stock Exchange
• Cochin Stock Exchange Ltd.
• Coimbatore Stock Exchange
• Delhi Stock Exchange Association
• Guwahati Stock Exchange Ltd
• Hyderabad Stock Exchange Ltd.
• Jaipur Stock Exchange Ltd
• Kanara Stock Exchange Ltd
• Madras Stock Exchange
• Madhya Pradesh Stock Exchange Ltd.
• Meerut Stock Exchange Ltd.
• National Stock Exchange of India
• Pune Stock Exchange Ltd.
• Uttar Pradesh Stock Exchange Association
• Vadodara Stock Exchange Ltd.
Out of these major stock exchanges were:
National Stock Exchange (NSE):
The National Stock Exchange of India Limited has genesis in the report of the High
Powered Study Group on Establishment of New Stock Exchanges, which recommended
promotion of a National Stock Exchange by financial institutions (FI’s) to provide access
to investors from all across the country on an equal footing. Based on the
recommendations, NSE was promoted by leading Financial Institutions at the behest of
the Government of India and was incorporated in November 1992 as a tax-paying
company unlike other stock exchanges in the country. On its recognition as a stock

25
exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE
commenced operations in the Wholesale Debt Market (WDM) segment in June 1994.
The Capital Market (Equities) segment commenced operations in November 1994 and
operations in Derivatives segment commenced in June 2000.
NSE's mission is setting the agenda for change in the securities markets in India. The
NSE was set-up with the main objectives of:
• Establishing a nation-wide trading facility for equities and debt instruments.
• Ensuring equal access to investors all over the country through an appropriate
communication network.
• Providing a fair, efficient and transparent securities market to investors using
electronic trading systems.
• Enabling shorter settlement cycles and book entry settlements systems, and
• Meeting the current international standards of securities markets.
The standards set by NSE in terms of market practices and technology, have become
industry benchmarks and are being emulated by other market participants. NSE is more
than a mere market facilitator. It's that force which is guiding the industry towards new
horizons and greater opportunities.
Bombay Stock Exchange (BSE):
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as
"The Native Share and Stock Brokers Association". It is the oldest one in Asia, even
older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary
non-profit making Association of Persons (AOP) and is currently engaged in the process
of converting itself into demutualised and corporate entity. It has evolved over the years
into its present status as the premier Stock Exchange in the country. It is the first Stock
Exchange in the Country to have obtained permanent recognition in 1956 from the Govt.
of India under the Securities Contracts (Regulation) Act 1956.The Exchange, while
providing an efficient and transparent market for trading in securities, debt and
derivatives upholds the interests of the investors and ensures redresses of their
grievances whether against the companies or its own member-brokers. It also strives to
educate and enlighten the investors by conducting investor education programmers and

26
making available to them necessary informative inputs.
A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected
directors, who are from the broking community (one third of them retire ever year by
rotation), three SEBI nominees, six public representatives and an Executive Director &
Chief Executive Officer and a Chief Operating Officer.
The Executive Director as the Chief Executive Officer is responsible for the day-to-day
administration of the Exchange and the Chief Operating Officer and other Heads of
Department assist him.
The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to
constitution of the Executive Committee of the Exchange. Accordingly, an Executive
Committee, consisting of three elected directors, three SEBI nominees or public
representatives, Executive Director & CEO and Chief Operating Officer has been
constituted. The Committee considers judicial & quasi matters in which the Governing
Board has powers as an Appellate Authority, matters regarding annulment of
transactions, admission, continuance and suspension of member-brokers, declaration of a
member-broker as defaulter, norms, procedures and other matters relating to arbitration,
fees, deposits, margins and other monies payable by the member-brokers to the
Exchange, etc.
REGULATORY FRAME WORK OF STOCK EXCHANGE:
A comprehensive legal framework was provided by the “Securities Contract Regulation
Act, 1956” and “Securities Exchange Board of India 1952”. Three tier regulatory
structure comprising
Ministry of finance
The Securities And Exchange Board of India
Governing body
Members of the stock exchange:
The securities contract regulation act 1956 has provided uniform regulation for the
admission of members in the stock exchanges. The qualifications for becoming a member
of a recognized stock exchange are given below:

27
The minimum age prescribed for the members is 21 years. He should
be an Indian citizen
He should be neither a bankrupt nor compound with the creditors. He should
not be convicted for fraud or dishonesty.
He should not be engaged in any other business connected with a company. He should
not be a defaulter of any other stock exchange.
The minimum required education is a pass in 12th standard examination.
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI):
The securities and exchange board of India was constituted in 1988 under a resolution of
government of India. It was later made statutory body by the SEBI act 1992.according to
this act, the SEBI shall constitute of a chairman and four other members appointed by the
central government. With the coming into effect of the securities and exchange board of
India act, 1992 some of the powers and functions exercised by the central government, in
respect of the regulation of stock exchange were transferred to the SEBI.
OBJECTIVES AND FUNCTIONS OF SEBI:
To protect the interest of investors in securities.
Regulating the business in stock exchanges and any other securities market.
Registering and regulating the working of intermediaries associated with securities
market as well as working of mutual funds.
Promoting and regulating self-regulatory organizations.
Regulating substantial acquisition of shares and takeover of companies.
SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK
EXCHANGES):
Board of Directors of Stock Exchange has to be reconstituted so as to include non-
members, public representatives and government representatives to the extent of 50% of
total number of members.
• Capital adequacy norms have been laid down for the members of various
stock exchanges depending upon their turnover of trade and other factors.
• All recognized stock exchanges will have to inform about transactions within
24 hrs.

28
Buying and selling shares: To buy and sell the shares the investor has to locate register
broker or sub broker who render prompt and efficient service to him. The order to buy or
sell specifying the number of shares of the company of investors’ choice is placed with
the broker. The order may be of any type. After receiving the order the broker tries to
execute the order in his computer terminal. Once matching order is found, the order is
executed. The broker then delivers the contract note to the investor. It gives the details
regarding the name of the company, number of shares bought, price, brokerage, and the
date of delivery of share. In this physical trading form, once the broker gets the share
certificate through the clearing houses he delivers the share certificate along with transfer
deed to the investor. The investor has to fill the transfer deed and stamp it. The stamp
duty is one of the percentage considerations, the investor should lodge the share
certificate and transfer deed to the register or transfer agent of the company. If it is
bought in the DEMAT form, the broker has to give a matching instruction to his
depository participant to transfer shares bought to the investors account. The investor
should be account holder in any of the depository participant. In the case of sale of shares
on receiving payment from the purchasing broker, the broker effects the payment to the
investor.
Share groups:
The scripts traded on the BSE have been classified into ‘A’,’B1’,’B2’,’C’,’F’ and ‘Z’
groups. The ‘A’ group represents those, which are in the carry forward system. The ‘F’
group represents the debt market segment (fixed income securities). The Z group scripts
are of the blacklisted companies. The ‘C’ group covers the odd lot securities in ‘A’,
‘B1’&’B2’ groups.
ROLLING SETTLEMENT SYSTEM:
Under rolling settlement system, the settlement takes place n days (usually 1, 2, 3 or
5days) after the trading day. The shares bought and sold are paid in for n days after the
trading day of the particular transaction. Share settlement is likely to be completed much
sooner after the transaction than under the fixed settlement system.

29
The rolling settlement system is noted by T+N i.e. the settlement period is n days after
the trading day. A rolling period which offers a large number of days negates the
advantages of the system. Generally longer settlement periods are shortened gradually.
SEBI made RS compulsory for trading in 10 securities selected on the basis of the criteria
that they were in compulsory Demats list and had daily turnover of about Rs.1 crore or
more. Then it was extended to “A” stocks in Modified Carry Forward Scheme,
Automated Lending and Borrowing Mechanism (ALBM) and Borrowing and lending
Securities Scheme (BELSS) with effect from Dec 31, 2001.
SEBI has introduced T+5 rolling settlement in equity market from July 2001 and
subsequently shortened the cycle to T+3 from April 2002. After the T+3 rolling
settlement experience it was further reduced to T+2 to reduce the risk in the market and
to protect the interest of the investors from 1st April 2003.
Activities on T+1:
Conformation of the institutional trades by the custodian is sent to the stock exchange by
11.00 am. A provision of an exception window would be available for late confirmation.
The time limit and the additional changes for the exception window are dedicated by the
exchange.
The exchanges/clearing house/ clearing corporation would process and download the
obligation files to the broker’s terminals late by 1.30 p.m on T+1. Depository participants
accept the instructions for pay in securities by investors in physical form up to 4 p.m and
in electronic form up to 6 p.m. the depositories accept from other DPs till 8p.m for same
day processing.
Activities on T+2:
The depository permits the download of the paying in files of securities and funds till
10.30 am on T+2 from the brokers’ pool accounts. The depository processes the pay in
requests and transfers the consolidated pay in files to clearing House/clearing
Corporation by 11.00am/on T+2. The exchange/clearing house/clearing corporation
executes the pay-out of securities and funds latest by 1.30 p.m on T+2 to the depositories
and clearing banks. In the Demat mode net basis settlement is allowed. The buy and sale
positions in the same scrip can be settled and net quantity has to be The analysis makes a

30
separation between operating and financing items in the financial statements. This is
inspired by the Modigliani and Miller notion that it is the operating activities that
generate value, not the (zero net-present-value) financing activities. The separation also
arises from an appreciation that financial assets and liabilities are typically close to
market value in the balance sheet and thus are already valued, but not so the operating
assets and liabilities. The distinction is a feature of the accounting-based valuation model
in Feltham and Ohlson (1995) and of “economic profit” versions of the residual income
model. Recent FASB statements have required many financial assets to be marked to
market. But, correspondingly, unrealized gains and losses are now recognized in
comprehensive income and these, like all income line items, have to be considered in a
ratio analysis. Our structured approach to identifying ratios contrasts to the purely
empirical approach in Ou and Penman (1989). That paper identified ratios that predicted
earnings changes in the data. No thought was given to the identification; indeed there was
no justification that earnings changes are the appropriate attribute to forecast for
valuation. The approach here also contrasts to that in Lev and Thyagarajan (1993) who
defer to “expert judgment” and identify ratios that analysts actually use in practice.
1. Sauda details
A. Cash segments:
In this reports client will get transaction statement for settlement and exchange wise. First
select the date of transactions then exchange by doing drop down and then “GO” to get
the reports.
B. Derivatives segments:
In this reports client will get transaction statement for the day and exchange. First select
the date of transactions then exchange by doing drop down and then “GO” to get the
Reports.
2. Delivery details:
A. Delivery information:
In this reports client will get pay in or payout for all the scrip. Whether it’s NSDL, CDSL
or physical entry.

31
B. Delivery + shares details:
In this reports client will get the inward (pay in), outward (payout). Actual inward shows
you the pay in done from client actual BO id. Actual outward shows the payout from the
client actual BO id and mismatch position.
3. Demats details:
In this reports client will get the Demat confirmation. We have also defined the meaning
and colour description on header.
4. Client’s bills:
A. Cash Segment:
In this reports client will get the bill confirmation for cash segments. First select the date
of transactions then exchange by doing drop down and then “GO” to get the reports.
While zooming in this report, client can get the cash transaction for that particular bill.
B. Derivatives Segment:
In this reports client will get the bill confirmation for Derivatives segments. First select
the date of transactions then exchange by doing drop down and then go to get the reports.
While zooming in these reports, client can get the Derivatives transaction for that
particular bill.
5. Financial statement:
In this reports client will get the financial statement for the entire year. Client can get the
statement date wise, exchange wise, including margin, across the company after selecting
start and end date, selecting exchange, clicking on include margin, ignore firm number
respectively. While zooming client can get the details for that particular bills, receipt,
payment and voucher. Green highlights show u the entry is unreconcile on that bank.
BSE started trading in the equities segment (Capital Market segment) on November 3,
1994 and within a short span of 1 year became the largest exchange in India in terms of
volumes transacted. Trading volumes in the equity segment have grown rapidly with
average daily turnover increasing from Rs.17 crores during 1994-95 to Rs.6,253 crores
during 2005-06. During the year 2005-06, BSE reported a turnover of Rs.1,569,556
crores in the equities segment. The Equities section provides you with an insight into the
equities segment of BSE and also provides real-time quotes and statistics of the equities

32
market. In-depth information regarding listing of securities, trading systems & processes,
clearing and settlement, risk management, trading statistics etc are available.

COMPANY PROFILE

Incorporated in 1993, Net worth Stock Broking Limited (NSBL) has been a listed
company at Bombay Stock Exchange (BSE), Mumbai since 1995.

A Member, at the National Stock Exchange of India (NSE) and Bombay Stock Exchange,
Mumbai (BSE) on the Capital Market and Derivatives (Futures & Options) segment,
NSBL has been traditionally servicing Institutional clients and in the recent past has
forayed into retail broking, establishing branches across the country. Presence is being
marked in the Middle East, Europe and the United States too, as part of our attempts to
cater to global markets. We are a Depository participant at Central Depository Services
India (CDSL) with plans to become one at National Securities Depository (NSDL) by the
end of this quarter. We have our customers participating in the booming commodities
markets with our membership at the Multi Commodity Exchange of India (MCX) and
National Commodity & Derivatives Exchange (NCDEX), through Networth Stock.Com
Ltd. With its strong support and business units of research, distribution & advisory,
NSBL aims to become a one-stop solution to the broking and investment needs of its
clients, globally. Strong team of professional’s experienced and qualified pool of human
resources drawn from top financial service & broking houses form the backbone of our
sizeable infrastructure. Highly technology oriented, the company’s scalability of
operations and the highest level of service standards has ensured rapid growth in the
number of locations & the clients serviced in a very short span of time. ‘Networthians’,
as each one of our 400 plus and ever growing team members are addressed, is a dedicated

33
team motivated to continuously progress by imbibing the best of global practices, Indian
sing

Such practices, and to constantly evolve a comprehensive suite of products &

Services trying to meet every financial / investment need of the clients.

NSE CM and Derivatives Segment SEBI Regn. 1NB230638639 & 1NF230638639

BSE CM and Derivatives Segment SEBI Regn. 1NB010638634 &

PMS SEBI Regn. 1NP000001371 CDSL DP SEBI Regn. IN-DP-CDSL

251-2004

Commodities Trading: MCX -10585 and NCDEX - 00011 (through Networth Stock.Com
Ltd.)

Hyderabad (Somajiguda)
401, Dega Towers, 4th Floor, Raj Bhavan Road, Somajiguda Hyderabad - 500 082
Andhra Pradesh.
Phone Nos.: 040-55560708, 55562256, and 30994985

Mumbai (MF Division)

49, Au Chambers, 4th Floor, Tamarind Lane, Fort

Mumbai - 400 001

Maharashtra.

Phone Nos.: 022- 22650253

Mumbai (Registered Office)

5, Church gate House, 2nd Floor, 32/ 34 Veer Narirnan Road, Fort

Mumbai - 400 001

Maharashtra.
34
Phone No. 022-22850428

The Net worth connectivity with 107 branches and growing

107 branches

Products and services portfolio

 Retail and institutional broking
 Research for institutional and retail clients
 Distribution of financial products
 PMS
 Corporate finance
 Net trading
 Depository services
 Commodities Broking

35
Infrastructure

• A corporate office and 3 divisional offices in CBD of Mumbai which houses

state-of-the-art dealing room, research wing & management and back offices.
• All of 107 branches and franchisees are fully wired and connected to hub at
Corporate office at Mumbai. Add on branches also will be wired and connected to
central hub
• Web enabled connectivity and software in place for net trading.
• 60 operative ID’s for dealing room
• In house technology back up team to ensure un-interrupted connectivity.
1993: Networth Started with 300 Sq.ft. of office space & 10 employees

2006: Spread over 42 cities (around 70,000 Sq.ft of office space) with over 107 branches
& employee strength over 400

Market & research

Focusing on your needs

investor prefer to make own investment decisions or desire more in-depth assistance,
company committed to providing the advice and research to help you succeed.

36
Networth providing every investor has different needs, different preferences, and
different viewpoints. Whether following services to their customers,

 Daily Morning Notes

 Market Musing
 Company Reports
 Theme Based Reports
 Weekly Notes
 IPOs
 Sector Reports
 Stock Stance
 Pre-guarter/Updates
 Bullion Tracker
QUALITY POLICY

To achieve and retain leadership, Networth shall aim for complete customer satisfaction,
by combining its human and technological resources, to provide superior quality financial
services. In the process, Networth will strive to exceed Customer’s expectations.

As per the quality policy, Networth will

 Build in house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of services.
 Establish a partner relationship with in its investor service agents and vendors that
will help in keeping up its commitments to the customers.
 Provide high quality of work life for all its employees and equip them with
adequate knowledge & skill so as to respond to customer’s needs.
 Continue to uphold the values of honesty & integrity and strive to establish
unparalleled standards in business ethics.
 Use state-of-the art information technology in developing new and innovative
financial products and services to meet the changing needs of investors and
clients.

37
Strive to be a reliable source of value-added financial products and services and
constantly guide the individuals and institutions in making a judicious choice of it.

Strive to keep all stake-holders (share holders, clients, investors, employees, suppliers
and regulatory authorities) proud and satisfied.

Key Personnel

• Mr. S P Jain – CMD Networth Stock Broking Ltd.

A qualified Chartered Accountant with over 15 years of experience in the capital
markets.

• Mr. Deepak Mehta – Head PMS

Over 12 years of experience in the capital markets and has the prior work
experience of serving on the Equity desk of Reliance.

• Mr.Viral Doshi – Equity Strategist

A qualified Chartered Accountant with experience of over a decade in technical
analysis with respect to equity markets.

• Mr. Vinesh Jain – Asst. Fund Manager

A qualified MBA graduate specializing in finance and over two years of
experience in the capital markets.

• Research and the Back office.

We have sought to provide premium financial services and information, so that
the power of investment is vested with the client. We equip those who invest with
us to make intelligent investment decisions, providing them with the flexibility to
either tap into our extensive knowledge and expertise, or make their own
decisions. We made our debut into the financial world by servicing Institutional
clients, Now, powered by a top-notch research team and a network of experts, we
provide an array of financial products & services spanning entire India. Our
strong support, technology-driven operations and business units of research,
distribution, advisory, wide array of products & services coalesce to provide you

38
 with a one-stop solution to cater to all your investment needs. Our single minded
objective is to help you grow your Networth.

OUR GROUP COMPANIES

Net worth Stock Broking Ltd. [NSBL]

NSBL is a member of the National Stock Exchange of India Ltd (NSE) and the Bombay
Stock Exchange Ltd (BSE) in the Capital Market and Derivatives (Futures & Options)
segment. NSBL has also acquired membership of the currency derivatives segment
with NSE, BSE & MCX-SX. It is Depository participants with Central Depository
Services India (CDSL) and National Securities Depository (India) Limited (NSDL). With
a client base of over 1L loyal customers, NSBL is spread across the country though its
over 230+ branches. NSBL is listed on the BSE since 1994.

Net worth Wealth Solutions Ltd. [NWSL]

NWSL is into the business of delivery of Financial Planning & Advice. It’s vision is to
‘Advice & Execute money related solutions to/for our customers in the most Convenient
& Consolidated manner, while making sure that their experience with us is always
pleasant & memorable resulting in positive advocacy’. The product & Services include
Financial Planning, Life Insurance, On-line Trading Account, Mutual Funds,
Debentures/Bonds, General Insurance, Loans and Depository Services.

Networth Stock.Com Ltd. [NSCL]

NSCL is the commodities arm of NSBL. It is a member at the Multi Commodity
Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX)
and is backed by solid research & analytics in Commodities.

Networth Soft Tech Ltd. [NSL]

NSL is an ISO 9001:2000 Certified Company. It is into Application Development &
maintenance. Building & Implementation of packaged software across various functions
within the Financial Services Industry is at its core. It also provides data center services

39
which include hosting of websites, applications & related services. It combines a unique
delivery model infused by a distinct culture of customer satisfaction.

Ravisha Financial Services Pvt. Ltd. [RFSL]

RFSL is a RBI registered NBFC engaged in financing, primarily it provides loan against
securities

Principles & Values

At Net worth Stock Broking Ltd. success is built on teamwork, partnership and the
diversity of the people. At the heart of our values lie diversity and inclusion. They are a
fundamental part of our culture, and constitute a long-term priority in our aim to become
the world's best international bank.

Values

 Responsive
 Trustworthy

 Creative

 Courageous

Approach

 Participation:- Focusing on attractive, growing markets where we can leverage

our relationships and expertise
 Competitive positioning:- Combining global capability, deep local knowledge and
creativity to outperform our competitors

 Management Discipline:- Continuously improving the way we work, balancing

the pursuit of growth with firm control of costs and risks Commitment to
stakeholders

40
  Customers:- Passionate about our customers' success, delighting them with the
quality of our service

 Our People:- Helping our people to grow, enabling individuals to make a

difference and teams to win

 Communities:- Trusted and caring, dedicated to making a difference

 Investors:- A distinctive investment delivering outstanding performance and

superior returns

 Regulators: - Exemplary governance and ethics wherever we are

State Bank of India (SBI) is the largest bank in India.

The bank traces its ancestry back through the Imperial Bank of India to the
founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the
Indian Subcontinent. The Government of India nationalized the Imperial Bank of India in
1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank
of India. In 2008, the Government took over the stake held by the Reserve Bank of India.
SBI provides a range of banking products through its vast network in India and overseas,
including products aimed at NRIs. The State Bank Group, with over 16000 branches, has
the largest branch network in India. With an asset base of $250 billion and $195 billion in
deposits, it is a regional banking behemoth. It has a market share among Indian
commercial banks of about 20% in deposits and advances, and SBI accounts for almost
one-fifth of the nation’s loans.
SBI has tried to reduce its over-staffing through computerizing operations and Golden
handshake schemes that led to a flight of its best and brightest managers. These managers
took the retirement allowances and then went on the become senior managers at new

41
private sector banks.
The State bank of India is 29th most reputable company in the world according to Forbes.

History:
The roots of the State Bank of India rest in the first decade of 19th century, when the
Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The
Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay
(incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843).
All three Presidency banks were incorporated as joint stock companies, and were the
result of the royal charters. These three banks received the exclusive right to issue paper
currency in 1861 with the Paper Currency Act, a right they retained until the formation of
the Reserve Bank of India.
The Presidency banks amalgamated on 27 January 1921, and the reorganized banking
entity took as its name Imperial Bank of India. The Imperial Bank of India continued to
remain a joint stock company.
Pursuant to the provisions of the State Bank of India Act (1955), the Reserve Bank of
India, which is India's central bank, acquired a controlling interest in the Imperial Bank
of India. On 30 April 1955 the Imperial Bank of India became the State Bank of India.
The Govt. of India recently acquired the Reserve Bank of India's stake in SBI so as to
remove any conflict of interest because the RBI is the country's banking regulatory
authority
Branches
The corporate center of SBI is located in Mumbai. In order to cater to different functions,
there are several other establishments in and outside Mumbai, apart from the corporate
center. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices,
located at major cities throughout India. It is recorded that SBI has about 10000 branches;
well networked to cater to its customers.
ATM Services
SBI provides easy access to money to its customers through more than 8500

42
ATMs in India. The Bank also facilitates the free transaction of money at the ATMs of
State Bank Group, which includes the ATMs of State Bank of India as well as the
Associate Banks – State Bank of Bikaner & Jaipur, State Bank of hyd, State Bank of
Indore, etc.
You may also transact money through SBI Commercial and International Bank Ltd by
using the ATM-cum-Debit (Cash + Plus) card.
Subsidiaries
The State Bank Group includes a network of eight banking subsidiaries and several non-
banking subsidiaries. Through the establishments, it offers various services including
merchant banking services, fund management, factoring services, primary dealership in
Govt. securities, credit cards and insurance.
The eight banking subsidiaries are:
State Bank of Bikaner and Jaipur (SBBJ)
State Bank of Hyderabad (SBH)
State Bank of India (SBI)
State Bank of Indore (SBIR)
State Bank of Mysore (SBM)
State Bank of Patiala (SBP)
State Bank of Saurashtra (SBS)
State Bank of Travancore (SBT)
Products and Services
Personal Banking
SBI Term Deposits SBI Loan For Pensioners
SBI Recurring Deposits Loan Against Mortgage Of Property
SBI Housing Loan Loan Against Shares & Debentures
SBI Car Loan Rent Plus Scheme
SBI Educational Loan Medi-Plus Scheme
Other Services
Agriculture/Rural Banking
NRI Services

43
ATM Services
Demat Services
Corporate Banking
Internet Banking

44
History
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition
of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary
market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was
formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry.
The principal objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses.
In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the NYSE.
After consideration of various corporate structuring alternatives in the context of the
emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both
entities, and would create the optimal legal structure for the ICICI group's universal
banking strategy.
The merger would enhance value for ICICI shareholders through the merged entity's
access to low-cost deposits, greater opportunities for earning fee-based income and the
ability to participate in the payments system and provide transaction-banking services.
The merger would enhance value for ICICI Bank shareholders through a large capital
base and scale of operations, seamless access to Icecap’s strong corporate relationships

45
built up over five decades, entry into new business segments, higher market share in
various business segments, particularly fee-based services, and access to the vast talent
pool of ICICI and its subsidiaries.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger
of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal
Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The
merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the
High Court of Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature
at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the
ICICI group's financing and banking operations, both wholesale and retail, have been
integrated in a single entity. ICICI Bank has formulated a Code of Business Conduct and
Ethics for its directors and employees
HDFC BANK
History
Housing Development Finance Corporation Limited, more popularly known as HDFC
Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian
Banking Industry by Reserve Bank of India (RBI). It was one of the first banks to receive
an 'in principle' approval from RBI, for setting up a bank in the private sector. The bank
was incorporated with the name 'HDFC Bank Limited', with its registered office in
Mumbai. The following year, it started its operations as a Scheduled Commercial Bank.
Today, the bank boasts of as many as 1412 branches and over 3275 ATMs across India.
Amalgamations
In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector
bank promoted by Bennett, Coleman & Co. / Times Group). With this, HDFC and Times
became the first two private banks in the New Generation Private Sector Banks to have
gone through a merger. In 2008, RBI approved the amalgamation of Centurion Bank of
Punjab with HDFC Bank. With this, the Deposits of the merged entity became Rs.
1,22,000 crore, while the Advances were Rs. 89,000 crore and Balance Sheet size was
Rs. 1,63,000 crore.
Tech-Savvy

46
HDFC Bank has always prided itself on a highly automated environment, be it in terms of
information technology or communication systems. All the braches of the bank boast of
online connectivity with the other, ensuring speedy funds transfer for the clients. At the
same time, the bank's branch network and Automated Teller Machines (ATMs) allow
multi-branch access to retail clients. The bank makes use of its up-to-date technology,
along with market position and expertise, to create a competitive advantage and build
market share.
Capital Structure
At present, HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5 billion), of
this the paid-up amount is Rs 424.6 crore (Rs.4.2 billion). In terms of equity share, the
HDFC Group holds 19.4%. Foreign Institutional Investors (FIIs) have around 28% of the
equity and about 17.6% is held by the ADS Depository (in respect of the bank's
American Depository Shares (ADS) Issue). The bank has about 570,000 shareholders. Its
shares find a listing on the Stock Exchange, Mumbai and National Stock
Exchange, while its American Depository Shares are listed on the New York Stock
Exchange (NYSE), under the symbol 'HDB'.
Products & Services
Personal Banking
• Savings Accounts
• Salary Accounts
• Current Accounts
• Fixed Deposits
• Demat Account
• Safe Deposit Lockers
• Loans
• Credit Cards
• Debit Cards
• Prepaid Cards
• Investments & Insurance

47
 • Forex Services
• Payment Services
• Net Banking
• Insta Alerts
• Mobile Banking
• Insta Query
• ATM
• Phone Banking
NRI Banking
• Rupee Savings Accounts
• Rupee Current Accounts
• Rupee Fixed Deposits
• Foreign Currency Deposits
• Accounts for Returning Indians
• Quick remit (North America, UK, Europe, Southeast Asia)
• India Link (Middle East, Africa)
• Cheque Lock Box
• Telegraphic / Wire Transfer
• Funds Transfer through Cheques / DDs / TCs
• Mutual Funds
• Private Banking
• Portfolio Investment Scheme

48
 CHAPTER IV
DATA ANALYSIS AND INTERPRETATION

49
 Table: 01
Month-Wise Market Prices

January 2017 February 2017 March 2017

Closing Price Closing Price Closing Price
Date Return Date Return Date Return

02 5785.83 2.5484 01 6605 0.8503 01 6809.48 -0.6971

03 5942.39 2.7059 02 6650.48 0.6886 02 6836.27 0.3934

04 5934.43 -0.134 03 6717.47 1.0073 03 6826.9 -0.1371

05 5934.77 0.0057 06 6779.41 0.9221 05 6807.03 -0.2911

06 5934.4 -0.0062 07 6738.02 -0.6105 06 6697.43 -1.6101

07 5942.19 0.1313 08 6788.91 0.7553 07 6635.39 -0.9263

09 5947.54 0.09 09 6847.44 0.8621 09 6730.09 1.4272

10 6080.88 2.2419 10 6825.15 -0.3255 12 6838.04 1.604

11 6110.26 0.4832 13 6839.78 0.2144 13 6887.91 0.7293

12 6097.16 -0.2144 14 6878.82 0.5708 14 6997.7 1.594

13 6146.5 0.8092 15 7023.11 2.0976 15 6953.12 -0.6371

16 6155.78 0.151 16 7032.08 0.1277 16 6866.66 -1.2435

17 6258.4 1.6671 17 7076.99 0.6386 19 6796.42 -1.0229

18 6227.93 -0.4869 21 7129.67 0.7444 20 6698.24 -1.4446

19 6311.34 1.3393 22 6960.61 -2.3712 21 6722.51 0.3623

20 6344.09 0.5189 23 6933.15 -0.3945 22 6842.24 1.781

23 6346.06 0.0311 24 6871.91 -0.8833 23 6708.88 -1.9491

24 6444.56 1.5521 27 6678.83 -2.8097 26 6729.12 0.3017

25 6497.43 0.8204 28 6831.83 2.2908 27 6683.31 -0.6808

27 6554.58 0.8796 29 6857.28 0.3725 28 6660.81 -0.3367

30 6417.22 -2.0956 29- 6575.18 -1.2856

31 6549.31 2.0584 30 6647.77 1.104

50
 Table: 02
Month-Wise Market Prices

OCT2016 NOV 2016 DEC2016

Date Closing PRICE Date Closing PRICE Date Closing Price

Return Return Return

02 6806.09 2.3816 02 6687.94 -0.1578 01 6177.22 -1.6373

03 6864.24 0.8544 03 6622.15 -0.9837 04 6178.64 0.023
04 6835.13 -0.4241 04 6496.99 -1.89 05 6194.73 0.2604
09 6730.78 -1.5267 07 6534.95 0.5843 06 6345.26 2.43
10 6734.03 0.0483 08 6406.07 -1.9722 07 6406.54 0.9658
11 6707.13 -0.3995 09 6358.22 -0.7469 08 6429.05 0.3514
12 6760.98 0.8029 10 6348.82 -0.1478 11 6407.76 -0.3312
13 6689.94 -1.0507 11 6300.73 -0.7575 12 6476.48 1.0724
16 6718.82 0.4317 14 6262.7 -0.6036 13 6481.45 0.0767
17 6788.99 1.0444 15 6306.76 0.7035 14 6399.89 -1.2584
18 6806.86 0.2632 16 6214.37 -1.4649 15 6487.13 1.3631
19 6833.46 0.3908 17 6222.92 0.1376 18 6396.6 -1.3955
20 6777.81 -0.8144 18 6241.2 0.2938 19 6440.74 0.6901
23 6662.83 -1.6964 21 6263.56 0.3583 20 6474.67 0.5268
24 6679.96 0.2571 22 6209.65 -0.8607 21 6530.9 0.8685
25 6650.58 -0.4398 23 6176.39 -0.5356 22 6513.78 -0.2621
26 6629.67 -0.3144 24 6263.39 1.4086 25 6483.63 -0.4629
27 6622.89 -0.1023 25 6272.97 0.153 26 6500.12 0.2543
28 6650.25 0.4131 28 6350.89 1.2422 27 6525.5 0.3905
30 6698.51 0.7257 29 6352.29 0.022 28 6530.99 0.0841
30 6290.01 -0.9804 29 6682.47 2.3194
31 6280.04 -0.1585

Half-yearly average rate of returns of a Market = 0.1393

Variance of a Market = 1.2098

Standard deviation of a Market = 1.0999

51
 Table: 03

Month-Wise SBI Prices

January 2017 February 2017 March 2017

Closing Closing
Closing Price Price Price
Date Return Date Date Return
Return

-
02 01 01
1629.65 0.6267 2077.1 0.7787 2219.75 1.0542
03 1706.5 4.7157 02 2072.65 -0.2142 02 2245.7 1.1691
-
04 03 03
1695.15 0.6651 2103.1 1.4691 2250.75 0.2249
- -
05 06 05
1691.7 0.2035 2163.05 2.8506 2174.15 3.4033
- -
06 07 06
1676.15 0.9192 2152.05 -0.5085 2151 1.0648
- -
07 08 07
1669.75 0.3818 2175.4 1.085 2141.05 0.4626
-
09 09 09
1637.75 1.9165 2181.95 0.3011 2222.3 3.7949
10 1702.05 3.9261 10 2172.5 -0.4331 12 2310.25 3.9576
11 1725.75 1.3924 13 2129 -2.0023 13 2327.65 0.7532
12 1760.7 2.0252 14 2198.45 3.2621 14 2351.5 1.0246
13 15 15 -

52
 1777.15 0.9343 2250.5 2.3676 2299.45 2.2135
-
16 16 16
1816.65 2.2227 2349.05 4.379 2227.95 3.1094
-
17 17 19
1842.85 1.4422 2416.75 2.882 2159.65 3.0656
18 1863.6 1.126 21 2451.75 1.4482 20 2184.15 1.1344
19 1883.7 1.0786 22 2257.8 -7.9107 21 2233.55 2.2617
-
20 23 22
1931.8 2.5535 2261.25 0.1528 2160.6 3.2661
23 1940.65 0.4581 24 2206.8 -2.408 23 2165.25 0.2152
-
24 27 26
2041.3 5.1864 2125.1 -3.7022 2118.3 2.1683
25 2056.6 0.7495 28 2229.55 4.9151 27 2129.8 0.5429
- -
27 29 28
2042.6 0.6807 2243.4 0.6212 2081.15 2.2843
- -
30 29-
1990.7 2.5409 2061.6 0.9394
31 2061.05 3.5339 30 2095 1.6201

53
Table: 04
Month-Wise SBI Prices

OCT 2016 NOV 2016 DEC 2016

Date Closing Date Closing Date Closing

Return Return Return
Price Price Price
02 2129.4 1.642 02 2139.45 0.0702 01 2026.2 -1.4302
03 2170.9 1.9489 03 2085.2 -2.5357 04 2046.2 0.9871
04 2164.3 -0.304 04 1993.6 -4.3929 05 2080.25 1.6641
09 2101.3 -2.9109 07 2026.15 1.6327 06 2159.45 3.8072
10 2151 2.3652 08 1958.95 -3.3166 07 2167.85 0.389
11 2160.3 0.4324 09 1887.6 -3.6423 08 2180.05 0.5628
12 2224.1 2.9533 10 1843.75 -2.3231 11 2164.55 -0.711
13 2211.45 -0.5688 11 1852.2 0.4583 12 2206.9 1.9565
16 2265.4 2.4396 14 1840.2 -0.6479 13 2222.25 0.6955
17 2299.95 1.5251 15 1859.95 1.0733 14 2154.25 -3.06
18 2289.6 -0.45 16 1829.2 -1.6533 15 2182.8 1.3253
19 2271.3 -0.7993 17 1848.1 1.0332 18 2087.65 -4.3591
20 2260.45 -0.4777 18 1942 5.0809 19 2103.1 0.7401
23 2192.1 -3.0237 21 2007.4 3.3677 20 2116.7 0.6467
24 2188.45 -0.1665 22 1938.5 -3.4323 21 2177.95 2.8937
25 2171.7 -0.7654 23 1956.45 0.926 22 2156.75 -0.9734
26 2159.2 -0.5756 24 1970.8 0.7335 25 2114.9 -1.9404
27 2125.7 -1.5515 25 2005 1.7353 26 2116.1 0.0567
28 2131.05 0.2517 28 2100.35 4.7556 27 2113.4 -0.1276
30 2137.95 0.3238 29 2120.3 0.9498 28 2095.45 -0.8493
30 2097.5 -1.0753 29 2159.15 3.0399
31 2055.6 -1.9976

Half-yearly average rate of returns of a SBI =0.2525

Variance of a SBI = 5.1858
Standard deviation of a SBI = 2.2772

54
Table: 05
Month-Wise ICICI Prices

January 2017 February 2017 March 2017

Closing Closing Closing
Date Return Date Date Return
Price Price Return Price

- -
02 01 01
696.45 1.7309 888.2 1.5299 884.35 2.4435
03 725.4 4.1568 02 902.1 1.565 02 902.75 2.0806
04 743 2.4262 03 914.8 1.4078 03 905.55 0.3102
-
05 06 05
747.25 0.572 927.85 1.4265 870.45 3.8761
-
06 07 06
751.35 0.5487 936.9 0.9754 853.2 1.9817
- -
07 08 07
745.45 0.7853 919.95 1.8092 861.1 0.9259
09 745.75 0.0402 09 939.6 2.136 09 914.7 6.2246
-
10 10 12
774.45 3.8485 928.2 1.2133 929.65 1.6344
-
11 13 13
779.6 0.665 934.6 0.6895 929.6 0.0054
12 781.55 0.2501 14 942.15 0.8078 14 953.85 2.6086
-
13 15 15
789.65 1.0364 980.1 4.028 930.25 2.4742

55
 - -
16 16 16
791.55 0.2406 968.85 1.1478 917 1.4243
-
17 17 19
785.6 0.7517 981.55 1.3108 908.6 -0.916
- -
18 21 20
769.35 2.0685 991.05 0.9679 907.55 0.1156
-
19 22 21
796.35 3.5095 957.15 3.4206 935.4 3.0687
- -
20 23 22
842.65 5.814 943.8 1.3948 899.45 3.8433
-
23 24 23
857.8 1.7979 931.6 1.2926 911 1.2841
24 27 - 26 -

886.15 3.305 886.9 4.7982 871.85 4.2975

25 878.6 -0.852 28 910.75 2.6891 27 876 0.476
- -
27 29 28
888.1 1.0813 906.5 0.4666 859.1 1.9292
-
30 29-
851.95 4.0705 856.05 -0.355
31 902 5.8748 30 887.25 3.6446

56
Table: 06
Month-Wise ICICI Prices

OCT 2016 NOV 2016 DEC 2016

Date Closing Date Closing Date Closing

Return Return Return
Price Price Price
02 890.85 0.4057 02 881.7 0.0284 01 781.7 -0.3315
03 907.55 1.8746 03 857.55 -2.739 04 790.3 1.1002
04 890.45 -1.8842 04 833.95 -2.752 05 790.25 -0.0063
09 870.05 -2.291 07 847.7 1.6488 06 807.1 2.1322
10 864.45 -0.6436 08 830.3 -2.0526 07 829.95 2.8311
11 864.9 0.0521 09 821.8 -1.0237 08 829 -0.1145
12 878.15 1.532 10 812.8 -1.0952 11 825.5 -0.4222
13 864.65 -1.5373 11 812.95 0.0185 12 838.8 1.6111
16 873.45 1.0178 14 799.1 -1.7037 13 849.1 1.2279
17 885.65 1.3968 15 816.7 2.2025 14 819.4 -3.4978
18 882.15 -0.3952 16 794.1 -2.7672 15 844.9 3.112
19 877.8 -0.4931 17 787.25 -0.8626 18 816.7 -3.3377
20 860.5 -1.9708 18 805.05 2.261 19 826.4 1.1877
23 843.45 -1.9814 21 810.8 0.7142 20 833.3 0.8349
24 847.5 0.4802 22 800.85 -1.2272 21 850.55 2.0701
25 838.65 -1.0442 23 795.7 -0.6431 22 852.05 0.1764
26 841.55 0.3458 24 819.9 3.0413 25 847.35 -0.5516
27 860.75 2.2815 25 815.9 -0.4879 26 845.45 -0.2242
28 868.9 0.9468 28 834.55 2.2858 27 852.45 0.828
30 881.45 1.4444 29 838.95 0.5272 28 856.5 0.4751
30 817 -2.6164 29 899.6 5.0321
31 784.3 -4.0024

Half-yearly average rate of returns of a ICICI = 0.2388

Variance of a Market = 4.7498
Standard deviation of a Market = 2.1793

57
Table: 07
Month-Wise HDFC Prices

January 2017 February 2017 March 2017

Closing Closing Closing
Date Return Date Date Return
Price Price Return Price

-
02 01 01
427.2 0.0351 496.7 1.1815 514.15 0.7049
03 439.15 2.7973 02 497.8 0.2215 02 518.3 0.8072
04 443.25 0.9336 03 506.35 1.7176 03 518.9 0.1158
- -
05 06 05
442.55 0.1579 506.7 0.0691 511.3 1.4646
-
06 07 06
452.5 2.2483 509.65 0.5822 507.6 0.7236
-
07 08 07
451.1 0.3094 508 -0.3238 515.3 1.5169
09 454.9 0.8424 09 522.15 2.7854 09 522.85 1.4652
-
10 10 12
459.45 1.0002 516.2 -1.1395 519.85 0.5738
11 462.25 0.6094 13 522 1.1236 13 524.8 0.9522
12 466.6 0.941 14 517.7 -0.8238 14 527.05 0.4287
-
13 15 15
469.3 0.5787 532.95 2.9457 510.95 3.0547
- -
16 16 16
461.15 1.7366 526.2 -1.2665 507.7 0.6361
-
17 17 19
467.25 1.3228 527.55 0.2566 498.65 1.7825
18 480.3 2.7929 21 531.1 0.6729 20 504.85 1.2434
19 485 0.9786 22 531.75 0.1224 21 515.4 2.0897
-
20 23 22
488.7 0.7629 531.8 0.0094 502.6 2.4835
-
23 24 23
483.9 0.9822 524.5 -1.3727 513.85 2.2384
24 27 26 -
488.5 0.9506 513.3 -2.1354 510.55 0.6422

58
25 490.1 0.3275 28 530.2 3.2924 27 518.05 1.469
- -
27 29 28
483.6 1.3263 517.8 -2.3387 513.3 0.9169
- -
30 29-
479.05 0.9409 510.7 0.5065
31 490.9 2.4736 30 520.05 1.8308

59
Table: 08
Month-Wise HDFC Prices

OCT 2016 NOV 2016 DEC 2016

Date Closing Date Closing Date Closing

Return Return Return
Price Price Price
02 527.1 1.3556 02 549.8 1.4017 01 491.45 -2.8659
03 529.8 0.5122 03 552.55 0.5002 04 496.8 1.0886
04 526.6 -0.604 04 536.75 -2.8595 05 501.8 1.0064
09 522.95 -0.6931 07 532.15 -0.857 06 519.35 3.4974
10 524.5 0.2964 08 515.45 -3.1382 07 537.25 3.4466
11 526.25 0.3337 09 512.45 -0.582 08 538.3 0.1954
12 530.4 0.7886 10 516.75 0.8391 11 539.55 0.2322
13 530.25 -0.0283 11 510.8 -1.1514 12 549.55 1.8534
16 529.6 -0.1226 14 500.5 -2.0164 13 542.7 -1.2465
17 530.85 0.236 15 499.05 -0.2897 14 534.4 -1.5294
18 536.9 1.1397 16 495.15 -0.7815 15 547.85 2.5168
19 554.2 3.2222 17 497.35 0.4443 18 533 -2.7106
20 551.1 -0.5594 18 500.45 0.6233 19 537.1 0.7692
23 544.9 -1.125 21 497.45 -0.5995 20 534.5 -0.4841
24 541.7 -0.5873 22 489.05 -1.6886 21 543 1.5903
25 546.9 0.9599 23 487 -0.4192 22 544.15 0.2118
26 540.55 -1.1611 24 499.05 2.4743 25 537.25 -1.268
27 540.55 0 25 500.35 0.2605 26 544.1 1.275
28 543.15 0.481 28 507.95 1.5189 27 548.7 0.8454
30 542.2 -0.1749 29 504.6 -0.6595 28 547 -0.3098
30 500.65 -0.7828 29 563.5 3.0165
31 505.95 1.0586

Half-yearly average rate of returns of a HDFC bank = 0.2290

Variance of a HDFC bank =2.1141

60
Standard Deviation of a HDFC bank = 1.4539

BANKS AVG STANDARD

RETURNS DEVIATION
SBI 0.2525 2.28
ICICI 0.2388 2.18
HDFC 0.2290 1.45

61
INTERPRETATION:

• An average rate of return of SBI bank ltd is 0.25. Where as the risk (i.e. standard
deviation) is 2.28. The risk is higher than that of the returns.

• An average rate of return of ICICI bank ltd is 0.24. Where as the risk (i.e.
standard deviation) is 2.08. The risk is higher than that of the returns.

• An average rate of return of SBI bank ltd is 0.23. Where as the risk (i.e. standard
deviation) is 1.45. The risk is higher than that of the returns.

62
 CALCULATION OF CO-RELATION BETWEEN
BANKS AND MARKET
Table: 09
Month-Wise SBI Bank and Market Returns

January 2017 February 2017 March 2017

SBI MRK SBI MRK SBI MRK
Date Date Date
Return Return Return Return Return Return
02 0.6267 0.1237 1 0.7787 0.8503 1 -1.0542 -0.697
03 4.7157 2.7059 2 -0.214 0.6886 2 1.16905 0.3934
04 -0.665 -0.134 3 1.4691 1.0073 3 0.22487 -0.137
05 -0.204 0.0057 6 2.8506 0.9221 5 -3.4033 -0.291
06 -0.919 -0.006 7 -0.509 -0.611 6 -1.0648 -1.610
07 -0.382 0.1313 8 1.085 0.7553 7 -0.4626 -0.926
09 -1.916 0.09 9 0.3011 0.8621 9 3.79487 1.4272
10 3.9261 2.2419 10 -0.433 -0.326 12 3.95761 1.604
11 1.3924 0.4832 13 -2.002 0.2144 13 0.75317 0.7293
12 2.0252 -0.214 14 3.2621 0.5708 14 1.0246 1.594
13 0.9343 0.8092 15 2.3676 2.0976 15 -2.2135 -0.637
16 2.2227 0.151 16 4.379 0.1277 16 -3.1094 -1.243
17 1.4422 1.6671 17 2.882 0.6386 19 -3.0656 -1.022
18 1.126 -0.486 21 1.4482 0.7444 20 1.13444 -1.444
19 1.0786 1.3393 22 -7.911 -2.371 21 2.26175 0.3623
20 2.5535 0.5189 23 0.1528 -0.395 22 -3.2661 1.781
23 0.4581 0.0311 24 -2.408 -0.883 23 0.21522 -1.949
24 5.1864 1.5521 27 -3.702 -2.81 26 -2.1683 0.3017
25 0.7495 0.8204 28 4.9151 2.2908 27 0.54289 -0.680
27 -0.681 0.8796 29 0.6212 0.3725 28 -2.2843 -0.336
30 -2.541 -2.095 29- -0.9394 -1.285
31 3.5339 2.0584 30 1.6201 1.104

63
 Table: 10
Month-Wise SBI Bank and Market Returns
OCT 2016 NOV 2016 DEC 2016
SBI MRK SBI MRK SBI MRK
Date Date Date
Return Return Return Return Return Return

02 1.642 2.3816 02 0.0702 -0.157 01 -1.43 -1.637

03 1.9489 0.8544 03 -2.536 -0.983 04 0.9871 0.023
04 -0.304 -0.424 04 -4.393 -1.89 05 1.6641 0.2604
09 -2.910 -1.527 07 1.6327 0.5843 06 3.8072 2.43
10 2.3652 0.0483 08 -3.317 -1.972 07 0.389 0.9658
11 0.4324 -0.399 09 -3.642 -0.746 08 0.5628 0.3514
12 2.9533 0.8029 10 -2.323 -0.147 11 -0.711 -0.331
13 -0.568 -1.051 11 0.4583 -0.757 12 1.9565 1.0724
16 2.4396 0.4317 14 -0.648 -0.603 13 0.6955 0.0767
17 1.5251 1.0444 15 1.0733 0.7035 14 -3.06 -1.258
18 -0.45 0.2632 16 -1.653 -1.464 15 1.3253 1.3631
19 -0.799 0.3908 17 1.0332 0.1376 18 -4.359 -1.396
20 -0.477 -0.814 18 5.0809 0.2938 19 0.7401 0.6901
23 -3.023 -1.696 21 3.3677 0.3583 20 0.6467 0.5268
24 -0.166 0.2571 22 -3.432 -0.860 21 2.8937 0.8685
25 -0.765 -0.44 23 0.926 -0.535 22 -0.973 -0.262
26 -0.575 -0.314 24 0.7335 1.4086 25 -1.94 -0.463
27 -1.551 -0.102 25 1.7353 0.153 26 0.0567 0.2543
28 0.2517 0.4131 28 4.7556 1.2422 27 -0.128 0.3905
30 0.3238 0.7257 29 0.9498 0.022 28 -0.849 0.0841
30 -1.075 -0.980 29 3.0399 2.3194
31 -1.998 -0.158

64
Table: 11
Month-Wise ICICI Bank and Market Returns

January 2017 February 2017 March 2017

ICICI MRK ICICI MRK ICICI MRK

Date Date Date
Return Return Return Return Return Return
02 1.7309 0.1237 01 -1.53 0.8503 01 -2.4435 -0.697
03 4.1568 2.7059 02 1.565 0.6886 02 2.08062 0.3934
04 2.4262 -0.134 03 1.4078 1.0073 03 0.31016 -0.137
05 0.572 0.0057 06 1.4265 0.9221 05 -3.8761 -0.291
06 0.5487 -0.006 07 0.9754 -0.611 06 -1.9817 -1.610
07 -0.785 0.1313 08 -1.809 0.7553 07 0.92593 -0.926
09 0.0402 0.09 09 2.136 0.8621 09 6.2246 1.4272
10 3.8485 2.2419 10 -1.213 -0.326 12 1.63442 1.604
11 0.665 0.4832 13 0.6895 0.2144 13 -0.0054 0.7293
12 0.2501 -0.214 14 0.8078 0.5708 14 2.60865 1.594
13 1.0364 0.8092 15 4.028 2.0976 15 -2.4742 -0.637
16 0.2406 0.151 16 -1.148 0.1277 16 -1.4243 -1.243
17 -0.752 1.6671 17 1.3108 0.6386 19 -0.916 -1.022
18 -2.068 -0.486 21 0.9679 0.7444 20 -0.1156 -1.444
19 3.5095 1.3393 22 -3.421 -2.371 21 3.0687 0.3623
20 5.814 0.5189 23 -1.395 -0.395 22 -3.8433 1.781
23 1.7979 0.0311 24 -1.293 -0.883 23 1.28412 -1.949
24 3.305 1.5521 27 -4.798 -2.81 26 -4.2975 0.3017
25 -0.852 0.8204 28 2.6891 2.2908 27 0.476 -0.680
27 1.0813 0.8796 29 -0.467 0.3725 28 -1.9292 -0.336
30 -4.07 -2.095 29- -0.355 -1.285
31 5.8748 2.0584 30 3.64465 1.104

65
Table: 12
Month-Wise ICICI Bank and Market Returns

OCT 2016 NOV 2016 DEC 2016

ICICI MRK ICICI MRK ICICI MRK

Date Date Date
Return Return Return Return Return Return
02 0.4057 2.3816 02 0.0284 -0.157 01 -0.332 -1.637
03 1.8746 0.8544 03 -2.739 -0.983 04 1.1002 0.023
04 -1.884 -0.424 04 -2.752 -1.89 05 -0.006 0.2604
09 -2.291 -1.527 07 1.6488 0.5843 06 2.1322 2.43
10 -0.643 0.0483 08 -2.053 -1.972 07 2.8311 0.9658
11 0.0521 -0.399 09 -1.024 -0.746 08 -0.114 0.3514
12 1.532 0.8029 10 -1.095 -0.147 11 -0.422 -0.331
13 -1.537 -1.051 11 0.0185 -0.757 12 1.6111 1.0724
16 1.0178 0.4317 14 -1.704 -0.603 13 1.2279 0.0767
17 1.3968 1.0444 15 2.2025 0.7035 14 -3.498 -1.258
18 -0.395 0.2632 16 -2.767 -1.464 15 3.112 1.3631
19 -0.493 0.3908 17 -0.863 0.1376 18 -3.338 -1.396
20 -1.970 -0.814 18 2.261 0.2938 19 1.1877 0.6901
23 -1.981 -1.696 21 0.7142 0.3583 20 0.8349 0.5268
24 0.4802 0.2571 22 -1.227 -0.860 21 2.0701 0.8685
25 -1.044 -0.44 23 -0.643 -0.535 22 0.1764 -0.262
26 0.3458 -0.314 24 3.0413 1.4086 25 -0.552 -0.463
27 2.2815 -0.102 25 -0.488 0.153 26 -0.224 0.2543
28 0.9468 0.4131 28 2.2858 1.2422 27 0.828 0.3905
30 1.4444 0.7257 29 0.5272 0.022 28 0.4751 0.0841
30 -2.616 -0.980 29 5.0321 2.3194
31 -4.002 -0.158

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Table: 13
Month-Wise HDFC Bank and Market Returns

January 2017 February 2017 March 2017

HDFC MRK HDFC MRK HDFC MRK
Date Date Date
Return Return Return Return Return Ret
02 0.0351 0.1237 01 1.1815 0.8503 01 -0.7049 -0.697
03 2.7973 2.7059 02 0.2215 0.6886 02 0.8071 0.3934
04 0.9336 -0.134 03 1.7176 1.0073 03 0.1157 -0.137
05 -0.158 0.0057 06 0.0691 0.9221 05 -1.4646 -0.291
06 2.2483 -0.006 07 0.5822 -0.611 06 -0.7236 -1.610
07 -0.309 0.1313 08 -0.324 0.7553 07 1.5169 -0.926
09 0.8424 0.09 09 2.7854 0.8621 09 1.4651 1.4272
10 1.0002 2.2419 10 -1.14 -0.326 12 -0.5738 1.604
11 0.6094 0.4832 13 1.1236 0.2144 13 0.9522 0.7293
12 0.941 -0.214 14 -0.824 0.5708 14 0.4287 1.594
13 0.5787 0.8092 15 2.9457 2.0976 15 -3.0547 -0.637
16 -1.737 0.151 16 -1.267 0.1277 16 -0.6361 -1.243
17 1.3228 1.6671 17 0.2566 0.6386 19 -1.7825 -1.022
18 2.7929 -0.486 21 0.6729 0.7444 20 1.2433 -1.444
19 0.9786 1.3393 22 0.1224 -2.371 21 2.0897 0.3623
20 0.7629 0.5189 23 0.0094 -0.395 22 -2.4835 1.781
23 -0.982 0.0311 24 -1.373 -0.883 23 2.2383 -1.949
24 0.9506 1.5521 27 -2.135 -2.81 26 -0.6422 0.3017
25 0.3275 0.8204 28 3.2924 2.2908 27 1.469 -0.680
27 -1.326 0.8796 29 -2.339 0.3725 28 -0.9169 -0.336
30 -0.941 -2.095 29 -0.5065 -1.285
31 2.4736 2.0584 30 1.83082 1.104

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Table: 14
Month-Wise HDFC Bank and Market Returns

OCT 2016 NOV 2016 DEC 2016

MRK MRK MRK
HDFC HDFC
Date HDFC Date Date
Return Return
Return Return Return Return
02 1.3556 2.3816 02 1.4017 -0.157 01 -2.866 -1.637
03 0.5122 0.8544 03 0.5002 -0.983 04 1.0886 0.023
04 -0.604 -0.424 04 -2.859 -1.89 05 1.0064 0.2604
09 -0.693 -1.527 07 -0.857 0.5843 06 3.4974 2.43
10 0.2964 0.0483 08 -3.138 -1.972 07 3.4466 0.9658
11 0.3337 -0.399 09 -0.582 -0.746 08 0.1954 0.3514
12 0.7886 0.8029 10 0.8391 -0.147 11 0.2322 -0.331
13 -0.028 -1.051 11 -1.151 -0.757 12 1.8534 1.0724
16 -0.122 0.4317 14 -2.016 -0.603 13 -1.246 0.0767
17 0.236 1.0444 15 -0.29 0.7035 14 -1.529 -1.258
18 1.1397 0.2632 16 -0.781 -1.464 15 2.5168 1.3631
19 3.2222 0.3908 17 0.4443 0.1376 18 -2.711 -1.396
20 -0.559 -0.814 18 0.6233 0.2938 19 0.7692 0.6901
23 -1.125 -1.696 21 -0.599 0.3583 20 -0.484 0.5268
24 -0.587 0.2571 22 -1.689 -0.860 21 1.5903 0.8685
25 0.9599 -0.44 23 -0.419 -0.535 22 0.2118 -0.262
26 -1.161 -0.314 24 2.4743 1.4086 25 -1.268 -0.463
27 0 -0.102 25 0.2605 0.153 26 1.275 0.2543
28 0.481 0.4131 28 1.5189 1.2422 27 0.8454 0.3905
30 -0.174 0.7257 29 -0.66 0.022 28 -0.31 0.0841
30 -0.783 -0.980 29 3.0165 2.3194
31 1.0586 -0.158

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CORRELATION BETWEEN BANKS AND MARKET

SBI-MARKET ICICI-MARKET HDFC-MARKET

0.7232 0.6898 0.599

INTERPRETATION:
From the above graph it is observed that all the banks i.e., SBI, ICICI, HDFC
Showing positive values and they are positively correlated. This means that,
If one bank prices increases than automatically other bank prices also
increases. If one bank prices decreases than other bank prices also
decreases.

COVARINCE OF THREE BANKS AND MARKET

SBI-MARKET ICICI-MARKET HDFC-MARKET

1.7232 1.6087 0.8698
CALCULATION OF BETA
Beta: Measures volatility or systemic risk compared to the market
BETA= COVARIANCE OF MARKET AND SBI / VARIANCE OF MARKET
VARIANCE OF A MARKET = 1.2098
CO-VARIANCE OF MARKET AND SBI = 1.7621
BETA = 1.7621/1.2098 = 1.46
CO-VARIANCE OF MARKET AND ICICI = 1.6085
BETA = 1.6085/1.2098 = 1.33
CO-VARIANCE OF MARKET AND HDFC = 0.8697
BETA = 0.8697/1.2098 = 0.60

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 BANKS BETA
SBI 1.46
ICICI 1.33
HDFC 0.60

INTERPRETATION:
Beta of 1 Indicates that the securities price will move with the market .A beta less than 1
means that the security will be less volatile than the market .A beta of greater
than 1 indicates that the securities price will be more volatile than the market.
From the above graph it is clearly showing that SBI and ICICI prices are more
Volatile than the market and HDFC prices are less volatile than the market.
High beta stocks are supposed to be riskier but provide a potential for higher
return And low beta stocks poses less risk but also lower returns.

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 CHAPTER V
FINDINGS
SUGGESTIONS
CONCLUSION

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FINDINGS

The following facts were found out during the project work
• It observed that an average rate of return of SBI Bank is 0.25, and ICICI Bank
is 0.24. Whereas the risk (i.e. standard deviation) is 0.28 and 0.24 .That
means the risk is higher and the returns are low. Whereas HDFC bank has an
average rate of return of 0.23 and the risk is 1.45. When compare to three
banks HDFC bank having low risk.
• As far as risk factor is considered SBI Bank is having maximum risk(standard
deviation )of 2.28 at the same time it gives the high returns of 0.25 when
compare to ICICI, HDFC Banks.
• All the banks i.e., SBI, ICICI, HDFC are positively correlated, which means if
prices of one bank increases means other banks prices also increases and vice
versa.
• Beta values of SBI bank is 1.44 and ICICI bank is 1.33 which is more volatile
than the market and they are riskier but they provide a high returns. Whereas
Beta value of HDFC bank is 0.60 which is less volatile than the market, and
they are less risky with less return.

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SUGGESTIONS

• When we want the high returns, we have to bear high risk. But if we bear high
risk it is meaningless to invest our hard earned income. In this present project the
highest earned income is obtained by the bank SBI which is 0.25
• But it is posing this degree of risk of 2.28. So in order to get the more returns
from minimum risk we have to analysis the factor like company back
ground ,performance, market value and historical data. It is suggested to all
investors to analyze fundamental as well as technical.
• But among all the securities, HDFC Ltd is best with its minimum returns and low
risk as compared to SBI and ICICI Bank Ltd.

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 CONCLUSION

Investment is financial asset require a great concentration since they are involved a
great volatility. Risk is uncertainty in the future returns when one invests in financial
assets. To reduce this risk component in the returns one has to be careful enough in
estimating the future of their investment returns. This project has been undertaken to
study the returns of securities listed on stock exchanges. These equities are analyzed
in terms of risk and return. The present study reveals the process of expecting the
returns which the investor can use investment process.

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BIBLIOGRAPHY

75
BOOKS:

 Security Analysis And Portfolio Management-V.A.Avadhani

• Financial Management -Prasanna chandra
• Indian Financial System -M.Y.Khan

WEBSITES:

• www.nseindia.com

• www.bseindia.com

• www.hdfc.com

• www.icici.com

• www.sbi.com

NEWS PAPERS

 ECONOMIC TIMES
 BUSINESS LINE
 NCFM (NSE Certification in Financial Markets)

JOURNALS

 The International Journal of Financial Markets and Derivatives

 The Journal of Derivatives & Hedge Funds

 SSRN Derivatives e-Journal

 European Journal of Operational Research, vol. 223

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