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SUMMER INTERNSHIP PROJECT REPORT ON “Overview Study of Stock Exchange Market of India” AT BOMBAY STOCK EXCHANGE BROKERS FORUM

Submitted By SHUBHAM S.PATIL Roll No -79

In Partial Fulfillment of Summer Internship for the Award of the Degree of Masters of Management Studies In

Alkesh Dinesh Mody Institute for FinancialAnd ManagementStudies, University ofMumbai

Internship Period: 4th May 2018- 06th July 2018 1

DECLARATION I, Mr. Shubham Patil, student of the course, Masters in Management Studies at Alkesh Dinesh Mody Institute for Financial and Management Studies, Mumbai, hereby declare that this project report is the record of authentic work carried out by me during the period from 4th May to 6th July 2019, and has not been submitted to any other University or Institute for the award of any degree/diploma, etc.

Date:

Shubham S.Patil

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ACKNOWLEDGEMENT Internship in MBA is one of the initial path for entering the corporate world. It helped me to gain industry experience. The theoretical knowledge which we learnt in the classrooms, are practically implemented by the firm and got an opportunity to test our ability in the real environment. This industrial experience will polish the skills and the way we approach towards anything further in our studies.

At the outset, I would like to thank BSE Brokers Forum for giving me an opportunity to train with its employees and successfully complete my summer internship in their esteemed organization and for their precious time and valuable guidance that they provided during the training period.

For their unstinted and invaluable guidance, I would like to express my heartfelt gratitude to my mentor Mr. AdityaShrinivaswho gave me an excellent opportunity to work on this project. I am grateful for their guidance and assistance. Their recommendations and suggestions have been invaluable for the successful completion of this project.

I am grateful to Prof. SmithaShukla Director, Prof. ArunaDeshpande -MMSCoordinator and Mrs. KavitaPandey, Training and Placement Committee, ADMI for their excellent co- ordination with the industry for the Summer Internship Program and thus giving me an opportunity to enhance my knowledge and skills

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Sr. No

Content

Pg. No

1.

Introduction

7

2.

Online Stock Exchange

9

3

Types of Stock

11

4.

Importance and Role of Stock Exchange in Indian Market

13

5.

Industry Profile - Indian Stock Market,BSE and NSE

17

6.

Company Profile –Brokers Forum

23

7

Overview Of The Regulatory Framework Of The Capital Market In 25 India

8

Trading With Stock Market

27

9

Capital Market Participants

29

10

Investment

30

11.

Investment Types

34

12.

Data Analysis & Interpretation

45

13

Findings Of The Study

58

14

Conclusion

59

15

Bibliography / References

60

4

5

6

 INTRODUCTION A stock exchange, share market or bourse is a corporation or mutual organization which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets are driven by various factors which, as in all free markets, affect the price of stocks (see stock valuation).There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or overthe-counter. This is the usual way that bonds are traded. Increasingly, stock exchanges are part a global market for securities.A stock exchange is simply a market that is designed for the sale and purchase of securities of corporations and municipalities. A stock exchange sells and buys stocks, shares, and other such securities. In addition, the stock exchange sometimes buys and sells certificates representing commodities of trade. This article discusses:



What is the principle behind the operation of stock exchanges?



What are the functions and processes involved in stock exchanges?



Know in detail about major stock exchanges 7

Understanding what a stock exchange is and how an online stock exchange works, can help you make the right decisions when it comes to your investment. Being able to follow the NY stock exchange and being able to understand the NASDAQ stock exchange numbers that appear on your news every evening can help you become a better investor and can help you profit more from the stock market.

History of Stock Exchanges:

In 11th century France the courtiers de change was concerned with managing and regulating the debts of agricultural communities on behalf of the banks. As these men also traded in debts, they could be called the first brokers. Some stories suggest that the origins of the term "bourse" come from the Latin bursa meaning a bag because, in 13th century Bruges, the sign of a purse (or perhaps three purses), hung on the front of the house where merchants met. However, it is more likely that in the late 13th century commodity traders in Bruges gathered inside the house of a man called Vander Burse, and in 1309 they institutionalized this until now informal meeting and became the "Bruges Bourse". The idea spread quickly around Flanders and neigh boring counties and "Bourses" soon opened in Ghent and Amsterdam.

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 Online Stock Exchange: A stock exchange is simply a market that is designed for the sale and purchase of securities of corporations and municipalities. A stock exchange sells and buys stocks, shares, and other such securities. In addition, the stock exchange sometimes buys and sells certificates representing commodities of trade. This article discusses: 

What is the principle behind the operation of stock exchanges?



What are the functions and processes involved in stock exchanges?



Know in detail about major stock exchanges

Understanding what a stock exchange is and how an online stock exchange works, can help you make the right decisions when it comes to your investment. Being able to follow the NY stock exchange and being able to understand the NASDAQ stock exchange numbers that appear on your news every evening can help you become a better investor and can help you profit more from the stock market.

How Does A Stock Exchange Work? Buying and selling of stocks at the exchange is done on an area which is called the floor. All over the floor are positions which are called posts. Each post has the names of the stocks traded at that specific post. If a broker wants to buy shares of a specific company they will go to the section of the post that has that stock. If the broker sees at the price of the stock is not the quite what the broker is authorized to pay, a professional called the specialist may receive an order. The specialist will often act as a go-between between the seller and buyer. What the specialist does is to enter the information from the broker into a book. If the stock reaches the required price, the specialist will sell or buy the stock according to the orders given to them by the broker. 9

The transaction is then reported to the investor. If a broker approaches a post and sees that the price of the stock is what they are authorized to pay, the broker can complete the transaction themselves. As soon as a transaction occurs, the broker makes a memorandum and reports it to the brokerage office by telephone instantly. At the post, an exchange employee jots down on a special card the details of the transaction including the stock symbol, the number of shares, and the price of the stocks. The employee then puts the card into an optical reader. The reader puts this information into a computer and transmits the information of the buy or sell of the stock to the market. This means that information about the transaction is added to the stock market and the transaction is counted on the many stock market tickers and information display devices that investors rely on all over the world. Today, markets are instantly linked by the Internet, allowing for faster exchange. How does a stock exchange operate and how a transaction is made there? Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor. You've probably seen pictures of a trading floor, in which traders are wildly throwing their arms up, waving, yelling, and signal to each other. The other type of exchange is virtual, composed of a network of computers where trades are made electronically.

The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, reducing the risks of investing. Just imagine how difficult it would be to sell shares if you had to call around the neighbourhood trying to find a buyer. Really, a stock market is nothing more than a super-sophisticated farmers' market linking buyers and sell

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 Types Of Stock There are different types of stocks to choose in the stock market. While you do not necessarily have to be an expert on all the types of stocks available in stock market content, being able to differentiate and choose stocks is crucial to stock market investing. This article helps you to know more on: What re the various types of stocks available? 

What are the features of preferred stocks?



What are the characteristics of blue chip stocks?

There are different types of stocks to choose in the stock market. While you do not necessarily have to be an expert on all the types of stocks available in stock market content, being able to differentiate and choose stocks is crucial to stock market investing. Depending on your goals and your investment, you may simply find that some stocks are better suited to your needs than others. At the very least, being able to tell the difference between preferred and common stocks can help you get started in investing. Preferred Stocks and Common Stocks All stocks are generally designated as preferred or common. Common stocks are stocks that offer you a bit of ownership of a company. Each common stock you have offers you a specific amount of ownership, entitles you to some dividends and allows you one vote for each share you own in electing directors or making key business decisions. Common stocks in this sense are different from debentures or bonds, which are money given to a company as a loan in return for the promise of specific interest. Preferred stock offers you preferential treatment when it comes to paying out of dividends. If the company goes bankrupt, stocks holders holding preferred equities get faster access to any assets not used towards paying debts. If you have preferred cumulative stock, your position is secure. This type of stock allows unpaid dividends to be accrued. If a company cannot pay dividends one year, your dividends accrue until the company can pay. 11

During such period all the money owed over the previous years will be paid. Those holding preferred types of stock usually have no voting ability and these stocks only get their predetermined dividend and not more than that. This is to offset the other advantages of preferred status. Growth of Stocks Growth stocks are stocks of companies that are experiencing rapid growth and are expected to continue growing in the future. A company with growth stocks is generally a stable company that is experiencing larger sales as well as incurring reasonable expenses. Such a company invests money in new products. These stocks are attractive to investors since they allow investors to make money from a growing and prospering company. However, these stocks can also be a risk. These stocks are often expensive, and of course there is no guarantee that a company will continue to grow and prosper as projected Dividend Stocks Dividend stocks are those stocks that pay a yearly dividend or cash amount in addition to having an inherent buying and selling value. Having high dividend stocks means that you make money each year that a company profits. This article takes you through: Dividend stocks are those stocks that pay a yearly dividend or cash amount in addition to having an inherent buying and selling value. Having high dividend stocks means that you make money each year that a company profits. The best dividend stocks are used by wealthy people in order to create a passive income. Thanks to the Internet, almost any investor can start investing in these stocks. It is easy to find a list of dividend paying stocks and even get newsletters that feature monthly dividend stocks right in your mailbox or email inbox.

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 The Importance of the Stock Exchange: Stock exchanges perform important roles in national economies. Most importantly, they encourage investment by providing places for buyers and sellers to trade securities. This investment, in turn, enables corporations to obtain funds to expand their businesses. Corporations issue new securities in what is known as the primary market, usually with the help of investment bankers (see Investment Banking). The investment bank acquires the initial issue of the new securities from the corporation at a negotiated price and then makes the securities available for its clients and other investors in an initial public offering (IPO). In this primary market, corporations receive the proceeds of security sales. After this initial offering the securities are bought and sold in the secondary market. The corporation is not usually involved in the trading of its stock in the secondary market. Stock exchanges essentially function as secondary markets. By providing investors the opportunity to trade financial instruments, the stock exchanges support the performance of the primary markets. This arrangement makes it easier for corporations to raise the funds that they need to build and expand their businesses. Although corporations do not directly benefit from secondary market transactions, the managers of a corporation closely monitor the price of the corporation's stock in secondary markets. One reason for this concern involves the cost of raising new funds for further business expansion. The price of a company's stock in the secondary market influences the amount of funds that can be raised by issuing additional stock in the primary market.

Corporate managers

also pay attention to the price of the company's stock in secondary markets because it affects the financial wealth of the corporation's owners—the stockholders. If the price of the stock rises, then the stockholders become wealthier. This is likely to make them happy with the company's management. Typically, managers own only small amounts of a corporation's outstanding shares. 13

If the price of the stock declines, the shareholders become less wealthy and are likely to be unhappy with management. If enough shareholders become unhappy, they may move to replace the corporation's managers. Most corporate managers also receive options to buy company stock at a selected price, so they are motivated to increase the value of the stock in the secondary market.Stock exchanges encourage investment by providing this secondary market. Stock exchanges also encourage investment in other ways. They protect investors by upholding rules and regulations that ensure buyers will be treated fairly and receive exactly what they pay for. Exchanges also support state-of-the-art technology and the business of brokering. This support helps traders buy and sell securities quickly and efficiently. Of course, being able to sell a security in the secondary market increases the relative safety of investing because investors can unload a stock that may be on the decline or that faces an uncertain future.

The Role of Stock Exchanges: Stock exchanges have multiple roles in the economy, this may include the following: Raising capital for businesses: The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public. Mobilizing savings for investment: When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in a stronger economic growth and higher productivity levels and firms.

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Facilitating company growth: Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion. Redistribution of wealth: Stocks exchanges do not exist to redistribute wealth. However, both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses. Corporate governance: By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). Creating investment opportunities for small investors: As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors. 15

Government capital-raising for development projects: Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling an...