A STUDY ON THE ROLE OF MIDCAP AND SMALL
CAP IN ESTABLISHING STOCK MARKET
PROJECT REPORT
Submitted to the Amrita Vishwa Vidyapeetham in partial fulfilment of the requirements for the award of
MASTER OF COMMERCE (FINANCE AND SYSTEMS)
SUBMITTED BY
JEFFIN GEORGE
KH.AR.P2COM09008
Under the Supervision of
Mr. K. R. Shabu
Faculty Guide
Department of Commerce and Management
Amrita School of Arts and Sciences
Kochi-682 024
1
CERTIFICATE
This is to certify that the project work titled A Study On The Role Of Midcap
And Small Cap In Establishing Stock Market submitted to Amrita Vishwa
Vidyapeetham in partial fulfillment of the requirements for the award of the
Degree of Master of Commerce is a record of original work done by
Jeffin George under my supervision and guidance and that this project work
has not formed the basis of the award of any Degree /Diploma /Fellowship of
similar title to any candidate of any University.
(Seal) Signature with Name and Designation of the Guide
Submitted for the University Examinations held on ______________________
Internal Examiner External Examiner
2
DECLARATION
I hereby declare that this project titled A Study On The Role Of Midcap And
Small Cap In Establishing Stock Market is a record of original work done by
me under the supervision and guidance of Mr. K. R. Shabu and that this
project work had not formed the basis of award of any Degree/Diploma
/Fellowship or similar title to any candidate of any university
Place : Name and Signature of Student
Date :
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ACKNOWLEDGEMENT
I thank almighty god for guiding me throughout this study with his boundless
blessings
Firstly, my sincere thanks to Mr. Francis Lewis, the Deputy General
Manager of CSE for giving me an opportunity to do the project work and also
his support and encouragement.
I take this opportunity to place on record the whole hearted thanks to Mr.
Varghese Mathew, Senior Faculty, CSE institute of Capital Market and
Broker Cochin Stock Exchange Ltd. whose immense support helped me to
make this project a fruitful and a successful one.
I am greatly indebted to Prof. Dr N Ajith Kumar, Department of Commerce
and Management, ASAS, without whose support and co-operation, this
project would have been incomplete.
I extend my sincere thanks to Mr. K. R. Shabu, Faculty Guide,
Department of Commerce and Management, ASAS, my project guide
who give enthusiastic support throughout my project work.
I express my profound gratitude to the faculty members especially my Head of
the Department Dr. M.V. Kamalakshi for guiding me in this study
I am immensely grateful to all workers, supervisors and manager of Cochin
Stock Exchange Ltd
I extend my sincere thanks to all my friends for their encouragement and
valuable suggestions throughout this study.
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TABLE OF CONTENTS
Chapter1: Introduction…………………………………………………….1-5
1.1 Introduction
1.2 Basics about share
1.3 Basics about share price movement
1.4 Title of the project
1.5 Midcap and small cap
1.6 Statement of the problem
1.7 Objectives of the study
1.8 Research methodology
1.9Limitations of the study
Chapter 2: Literature Review…………………..………………………6-25
2.1 Story of market capitalisation
2.2 All-cap history
2.3 What are mid cap stocks?
2.4 What are small cap stocks?
2.5 BSE midcap and BSE small cap index
2.6 Nifty midcap 50
2.7 Sensex beats midcap, small cap indices
2.8 Small/mid cap equity index fund as of September -30- 2010
Chapter 3. Profile of the Industry……………………………………26-43
3.1 Evolution
3.2 Stock Exchange – An Introduction
3.3 Trading in the Indian stock exchanges
3.4 Bombay stock exchange (BSE)
3.5 National Stock Exchange (NSE)
3.6 Over the Counter Exchange of India (OTCEI)
3.7 Regulatory framework
3.8 Capital market regulations
3.9 Status of Stock Exchange
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Chapter 4: Organization Profile – Cochin Stock Exchange…….….….44-60
4.1 Cochin Stock Exchange
4.2 Present Status of cochin Stock Exchange
4.3 Cochin Stock Brokers Limited (CSBL)
4.4 Products And Services
4.5 Departments
4.6 SWOT analysis
Chapter 5: Data Analysis and Interpretations……………….…….61-80
5.1 Analysis and Interpretation
5.2 Portfolio Construction
5.3 Data Size
5.4 Mid cap company details
5.5 Small cap company details
5.6 Analysis of Portfolio
5.7 Portfolio Values
5.8 Return calculation of mid cap and NIFTY mid cap
5.9 Return calculation of small cap and BSE small cap
Chapter 6: Findings, Suggestions and Conclusions.....................
6.1 Findings
6.2 Suggestion
6.3 Conclusion
Bibliography ………………………………..…………………………
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LIST OF TABLES
Table No.
Data Page No.
1 PERFORMANCE 29
2 SETTLEMENT DEPARTMENT 55
3 DATA SIZE 65
4 MID CAP COMPANIES PORT FOLIO 71
5 SMALL CAP COMPANIES PORT FOLIO 72
6 PORT FOLIO AS ON 03-JAN-2011 73
7 PORT FOLIO AS ON 04-JAN-2011 74
8 PORT FOLIO AS ON 05-JAN-2011 75
9 PORT FOLIO AS ON 06-JAN-2011 76
10 PORT FOLIO AS ON 07-JAN-2011 77
11 PORT FOLIO AS ON 10-JAN-2011 78
12 PORT FOLIO AS ON 11-JAN-2011 79
13 PORT FOLIO AS ON 12-JAN-2011 80
14 PORT FOLIO AS ON 13-JAN-2011 81
15 PORT FOLIO AS ON 14-JAN-2011 82
16 PORT FOLIO AS ON 17-JAN-2011 83
17 PORT FOLIO AS ON 18-JAN-2011 84
18 PORT FOLIO AS ON 19-JAN-2011 85
19 PORT FOLIO AS ON 20-JAN-2011 86
20 PORT FOLIO AS ON 21-JAN-2011 87
21 PORT FOLIO AS ON 24-JAN-2011 88
22 PORT FOLIO AS ON 25-JAN-2011 89
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23 PORT FOLIO AS ON 27-JAN-2011 90
24 PORT FOLIO AS ON 28-JAN-2011 91
25 PORT FOLIO AS ON 31-JAN-2011 92
26 PORT FOLIO AS ON 01-FEB-2011 93
27 PORT FOLIO AS ON 02-FEB-2011 94
28 PORT FOLIO AS ON 03-FEB-2011 95
29 PORT FOLIO AS ON 04-FEB-2011 96
30 PORT FOLIO AS ON 07-FEB-2011 97
31 PORT FOLIO AS ON 08-FEB-2011 98
32 PORT FOLIO AS ON 09-FEB-2011 99
33 PORT FOLIO AS ON 10-FEB-2011 100
34 PORT FOLIO AS ON 11-FEB-2011 101
35 PORT FOLIO AS ON 14-FEB-2011 102
36 PORT FOLIO AS ON 15-FEB-2011 103
37 PORT FOLIO AS ON 16-FEB-2011 104
38 PORT FOLIO AS ON 17-FEB-2011 105
39 PORT FOLIO AS ON 18-FEB-2011 106
40 PORT FOLIO AS ON 21-FEB-2011 107
41 PORT FOLIO AS ON 22-FEB-2011 108
42 PORT FOLIO AS ON 23-FEB-2011 109
43 PORT FOLIO AS ON 24-FEB-2011 110
44 PORT FOLIO AS ON 25-FEB-2011 111
45 PORT FOLIO AS ON 28-FEB-2011 112
46RETURN OF MIDCAP PORTFOLIO AND NIFTY MIDCAP INDEX
113
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47RETURN OF SMALL CAP PORTFOLIO AND BSE SMALL CAP INDEX
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LIST OF FIGURES
Figure No.
Data Page No.
1 ORGANIZATION STRUCTURE 50
2MID CAP PORTFOLIO RETURN AND NIFTY MIDCAP RETURN
116
3SMALL CAP PORTFOLIO RETURN AND BSE SMALL CAP RETURN
120
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CHAPTER -1
INTRODUCTION
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1.1 INTRODUCTION
An investor means people who invest their savings. Investment is an activity,
which is different from savings. Savings are generated when a person obtain
from present consumption for a future use. Savings kept as cash are barren and
do not earn anything. Hence, the saver has to find a temporary repository for
his saving until they are required for his future, this result in investment. This is
an era in which the investor or public are thinking of changing their investment
from bank deposit to share market. They get better return from the investment
in capital market than in case of bank deposit. Today, investment has become a
household word and is very popular with people of all lifestyle. It is because of
increase in working population, higher family incomes and consequent savings,
availability of large and attractive investment alternatives, increase in
investment related publicity and so on.
Investment is a word of many interpretations. A person has advanced some
money to others; he may consider his loan as an investment. He expects to get
back the principal along with the interest at a future date. Another person may
purchase a land for the purpose of price appreciation and may consider it as an
investment. In the above cases, it can be seen that investment involves the
employment of money with an aim of achieving additional income or growth in
the values. Thus, investment may be defined as, “a commitment of funds made
in the expectations of some positive rates of return” The capital market is a
market for long-term funds-shares, debentures and bonds. Today the Indian
capital market offers a variety of financial products with varied features and
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benefits, for investors to choose from them. Investing in stock is most popular
method of investment.
1.2 BASICS ABOUT SHARE
Plain and simple, a “stock” is a share in the ownership of a company. A stock
represents a claim on the company’s assets and earnings. As you acquire more
stocks, your ownership stake in the company becomes greater. Holding a
company’s stock means that you are one of the many owners (shareholders) of
the company and as such you have a claim to everything the company owns.
This means that technically you own a tiny little piece of all the furniture,
every trademark, and every contract of the company. As an owner you are
entitled to your share of the companies earning as well. These earning are
called “dividends” and are given to the shareholders from time to time. A stock
is represented by a “stock certificate”
1.3 BASICS ABOUT SHARE PRICE MOVEMENT
Stock prices change every day because of market forces. By this we mean that
stock prices change because of “supply and demand”. If more people want to
buy a stock (demand) than sell it (supply), then the price moves up.
Conversely, if more people wanted to sell a stock than to buy it, there would be
greater supply than demand, and the price would fall (Basics of economics).
Understanding supply and demand is easy. What is difficult to understand is
what makes people like a particular stock and dislike another stock. If investor
is able to understand this he can know what people are buying and what people
are selling. If he knows this he can know what price goes up and what price go
down.
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1.4 TITLE OF THE PROJECT
“The role of midcap and small cap in establishing stock market”
1.5 MIDCAP AND SMALL CAP
Cap is short for capitalisation which is a measure by which we can classify a
company's size. Midcap means Medium capitalization and small cap means
small capitalization. The technical definition of Mid Cap in the Indian
context is companies with market capitalization between $ 2 billion and $ 10
billion.
Small-cap means different things to different people, the common definition in
the Indian context are companies with market capitalization is less than $ 2
billion. Study the role of midcap and small cap companies in establishing the
stock market and the changes in midcaps and small caps in market
1.5.1 FEATURES
Small-cap stocks tend to be younger companies--those with explosive growth
potential but unproven earnings capability. Most of these are speculative
companies subject to either boom or bust. Bio-tech companies, for example,
often rely on large initial capital investments to fund research and development
before they produce products and generate earnings, or are bought by a larger
company. Mid-caps are more established companies, with demonstrable
earnings and notable growth potential.
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1.5.2 EFFECTS
The nature of small- and mid-cap stocks is such that they are subject to
volatility. It requires a smaller amount of capital to cause fluctuations in the
price of a small-cap, as opposed to a larger stock. Small caps are likely to be
affected primarily by company-specific news, such as financing or product
development. Mid caps are not immune from these fluctuations, but they are
also influenced by their sector of the economy and the investment climate in
general. Many mid-cap stocks have a higher "beta," or correlation to a
benchmark market index. Thus, they can be subject to larger swings in both
directions when the market moves as a whole.
1.5.3 CONSIDERATIONS
Most mutual funds or large institutional investors are unable to meaningfully
invest in small- and even some mid-cap stocks. Federal regulations require
disclosure when more than a certain minimal percentage of the outstanding
shares are held by a single entity. The dollar value of the limited number of
shares permitted without triggering these disclosures is too small to have a
notable effect on the overall performance of the fund, and, therefore, their
resources are allocated elsewhere, or in multiple mid-cap companies. If the
disclosures were made, other investors could purchase the stock and send the
price significantly higher.
1.5.4 FUNCTION
Because large institutional investors tend to avoid small and mid caps, other
investors use these to outperform the larger market players. Because mid caps
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are growth-oriented companies, they excel in periods of widespread economic
growth. Small caps, too, generally need favourable economic conditions in
which to thrive. Because small caps are more likely to be domestic rather than
international companies, they tend to benefit from a rising dollar and a
relatively strong U.S. economy.
1.6STATEMENT OF THE PROBLEM
The main focus of the study is to find out the role of midcap and small cap in
stock market. As the share market is volatile i.e. changes may happen at any
time, the risk and return are equally uncertain so the investor has always fear
index in mind. Study some popular midcap and small cap shares and find out
the variations in day to day, weekly and monthly. Finally come to a conclusion
the mid cap or the small cap is good for investment and which areas share is
played more roles in stock market. The study will help to find and understand
about the concept of midcap and small cap, and the role of that in the stock
market.
1.7OBJECTIVES OF THE STUDY
1.7.1 PRIMARY OBJECTIVES
To find out the role of midcap and small cap companies shares in stock
market
To find out midcap or small cap is suitable of investment
1.7.2 SECONDARY OBJECTIVES
To suggest the short term and long term investment opportunities to
investors
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To know the price trend of equity shares of selected small cap and mid
cap companies
Find the relation of Midcap & Small cap Indices with the BSE small
cap and NSE NIFTY
Find the returns of selected portfolios and make a comparison with
index.
1.8RESEARCH METHODOLOGY
Research refers to search for knowledge. One can define research as a
scientific & systematic search for pertinent information on a specific topic.
Research is an original contribution to existing stock of knowledge making for
its advancement. It is the pursuit of truth with the help of observations
1.8.1 TYPE OF RESEARCH:
The Research which will be carried out by me is descriptive, comparative &
analytical Research. The Research is on“The role of midcap and small cap in
establishing stock market” I am focusing my research on Midcap of National
Stock Exchange & Small cap of Bombay Stock Exchange. I have taken three
companies each from small cap and mid cap and make a portfolio of five laks
each. Select the closing prices of Midcap & Small cap companies & closing
value of both Indices and find out the return of all then make comparison by
using line graph.
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1.8.2 DATA COLLECTION:
Secondary sources have been used for the collection of the data used in the
research.
Collecting data from Internet.
Collecting data from BSE, NSE websites etc.
Collecting Information from books.
Collecting data from Magazines
1.8.3 SAMPLE SIZE:
Two months data was collected as:
Daily data from BSE Small cap Indices and NSE NIFTY Indices
(Dec-6-2010 to Feb-4-2011)
Daily closing price data of three companies each of Midcap & Small
cap Indices
1.8.4 TOOLS FOR ANALYSIS:
Various Graphs/Charts etc.
1.9 LIMITATIONS OF THE STUDY
The area of mid cap and small cap wide so the overall study is not
possible
The detailed study of all midcap and small caps is take time
If make study on limited stock does not give accurate result
The area is not very common so the study take some difficulties in collecting
data and make analysis on it.
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CHAPTER -2
LITERATURE REVIEW
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2.1 STORY OF MARKET CAPITALISATION
Basically, market capitalisation (cap) is a way to classify companies in equity
market according to their size. The market cap at any given point of time
shows whether the company is either a large-cap or a mid-cap or a small-cap.
With the rise in stock price and issue of additional shares into the market, the
market capitalisation of a company goes up. As the market cap increases, the
liquidity of the stock in the market also increases.
In the late 70s, Rolf Bans and Mark Reinganum, published a study that the
companies with smaller capitalisation on an average gave more returns than the
companies having larger capitalisation, even after adjusting for risk. This
finding, also known as ‘the size effect’, has evolved into a style for managing
funds.
The Bombay Stock Exchange (BSE) introduced ‘BSE Mid-Cap’ index and
‘BSE Small-Cap’ index on 11 April 2005 to represent and keep track of
companies having size smaller than the 30 stocks listed on BSE Sensex. These
indices denote the ups and downs in the mid-cap and small-cap sector
Many financial experts recommend the inclusion of mega-cap industry-leaders'
stocks as part of your investment portfolio. Such companies tend to dominate a
portion of the market and enjoy relative security in this position.
In order to categorize companies according to their size market capitalization is
used. It also measures the total worth of a particular company.
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The formula for market cap estimation is:
Market Cap = Price per Share x Number of Outstanding Shares
This formula provides you with an idea of the money you should pay if you are
willing to purchase all of the shares of stock of the company that are circulating
on the market.
Companies can be divided by size in the following way:
1. Nano Cap - less than $50 million
2. Micro Cap -$50 million to $300 million
3. Small Cap - $300 million to $2 billion
4. Mid Cap - $2 billion to $10 billion
5. Large Cap - $10 billion to $200 billion
6. Mega Cap - greater than $200 billion
2.2 ALL-CAP HISTORY
Anchor Capital has been applying its value discipline to the management of
All-Cap portfolios since the inception of the firm in 1983. Applying our value
discipline to purchases affords better potential for appreciation and helps to
reduce overall portfolio risk. The goal of the product is to achieve a superior
return to the Russell 1000 Value index, while offering lower absolute risk than
the index.
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2.2.1 WHY ALL-CAP VALUE
Our All-Cap strategy is unique for the following reasons:
(a) The valuation range for our All-Cap universe is broad enough ($1 billion +)
to achieve very broad diversification.
(b) All stocks meet Anchor Capital's defined value criteria at purchase. This
not only affords better appreciation potential, but also reduces overall portfolio
risk.
(c) All stocks purchased and held are internally researched using a bottom-up
philosophy.
(d) Anchor's investment process utilizes modeling and screening of a large
universe. It is continuous and rigorous. It is also robust in the development of
new investment opportunities.
(e) Emphasis is placed on investment in growing companies which meet our
evaluation criteria. This set of valuation criteria includes an analysis of private
market values, current net asset values, and an adherence to a maximum PEG
ratio of 1.1 (at purchase).
2.3 WHAT ARE MID CAP STOCKS?
A mid-cap (mid-capitalization) stock is issued by a corporation with a market
capitalization between that of a small-cap stock and a large-cap stock. A mid-
cap stock offers a middle ground between the growth potential of a small-cap
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and the reduced volatility of a large-cap. A mid-cap stock tends to offer greater
growth potential than a large-cap, and also tends to be more volatile than a
large-cap stock. Like a small-cap stock, a mid-cap stock emphasizes growth,
but a mid-cap stock tends to pay a relatively larger share of its earnings as
dividends. A mid-cap stock tends to be less volatile than a small-cap stock and
less vulnerable in economic downturns. A mid-cap stock is often defined as
having a capitalization ranging from $2 billion to $10 billion, although
capitalization ranges for what constitutes a mid-cap stock do vary over time.
2.3.1 ADVANTAGES OF MID CAP STOCKS:
Mid caps are less affected than small caps by the broader market
sentiment and daily variations in the trading volume.
They represent lower operational risk than small caps.
Unlike the saturated large cap stocks, mid cap shares have potential to
grow.
Typically mid caps yield higher returns than large caps in the long term.
Although mid cap shares can be lucrative investment options, they are riskier
than their large cap counterparts. Also, they are more expensive and less liquid
than large cap stocks.
During the financial crisis of 2008, mid cap stocks performed better than the
blue chips, which were previously very popular among investors. However,
amateur investors could consider beginning with mutual funds that specialize
in mid cap stock investing. This will save you the bother of researching
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individual companies. Investing in mid cap mutual funds will minimize the risk
element, while maximizing the profit potential.
2.3.2 MID-CAP HISTORY
Anchor Capital has been using Mid-Cap stocks in its equity portfolios since the
inception of the firm in 1983. Before 1991 there was no index for Mid-Cap.
Based upon indices one could only invest in Large and Small-Cap stocks. In
1991 the Russell Mid-Cap Index was created. At that time Anchor was using
Large-Cap as well as those stocks that could be classified as Mid-Cap in its
equity portfolios. In 1992, since Anchor was already investing in Mid-Cap
stocks, we decided to offer a pure Mid-Cap portfolio based upon our value
driven disciplines. This was the beginning of our Mid-Cap discipline.
2.3.3 WHY MID-CAP VALUE
Our Mid-Cap strategy is unique for the following reasons:
(a) The valuation range for our Mid-Cap universe is broad enough ($1 billion
to $12 billion) to achieve diversification by economic sector and capitalization.
(b) We are a true Mid-Cap manager since new purchases occur within the
defined capitalization range.
(c) All stocks meet Anchor Capital's defined value criteria at purchase. This not
only affords better appreciation potential, but also reduces overall portfolio risk
(d) All stocks purchased and held are internally researched using a bottom-up
philosophy.
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(e) Anchor's investment process utilizes modeling and screening of over 2,500
companies. It is continuous and rigorous. It is also robust in the development of
new investment opportunities.
(f) Emphasis is placed on investment in growing companies that meet our
evaluation criteria. This set of evaluation criteria includes an analysis of private
market values, current net asset values, and an adherence to a maximum PEG
ratio of 1.1 (at purchase).
2.4 WHAT ARE SMALL CAP STOCKS?
Companies that have small capitalization amount are considered small
companies or smaller quoted companies and are sometimes called small cap.
The stocks from these companies are known as small cap stocks.
In the stock market, company size is measured not by number of employees or
even by size of profits, but rather by a company's market capitalization. While
this seems complicated, it really gives the best idea of the size of a company.
Market capitalization is calculated by considering the number of outstanding
shares or the number of shares in issue. This number is multiplied by the
current price of each share. Basically, the numbers of shares available are
multiplied by the current price to get a value of the price of the company on the
market. Companies that have small capitalization amounts are considered small
companies or smaller quoted companies (SQCs) and are sometimes called
small caps. The stocks from these companies are known as small cap stocks.
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2.4.1 SMALL-CAP HISTORY
The Small-Cap Value product was incepted on July 1, 2002. The Small-Cap
Value discipline targets stocks with market capitalizations between $50 million
and $1.5 billion. Small-Cap Value portfolios contain 60-80 holdings on
average, broadly diversified across major sectors, and expected turnover ranges
from 25% to 50%. Typically, the product has a higher yield and lower P/E ratio
than its benchmark index.
Small or Mini or Micro cap stocks are so popular in these days. They are stocks
from companies which hold very small part of their respective markets. The
term Small cap stocks are often misused with penny stocks, one of the riskier
equities to trade. According to experts, there are both advantages and
disadvantages of trading small cap stocks over trading large and mid cap
stocks.
2.4.2 ADVANTAGES OF SMALL CAP STOCK TRADING
Small cap stocks are much less priced than large and mid cap stocks. So
trader can trade more number of stocks with less money.
Small cap companies show faster growth rates than well-established
large companies.
Offers more return on investment than large companies.
Good for day trading if trading volumes are sufficient.
Good for novice traders to sharp their abilities.
Small cap companies are keener in their business areas and future
25
developments with minimum wastage of resources.
2.4.3 DISADVANTAGES OF SMALL CAP STOCK TRADING
Riskier than mid and large cap stocks, which have fairly stable prices.
Markets are highly volatile with news and disasters.
Small cap stock trading yields lesser dividends, as most companies
invest their earnings to grow more.
There may be lack of sufficient company information.
The trader himself has to execute the trades as there will be lesser
support from brokers and advisors.
2.4.4 SMALL CAP INVESTMENT OPPORTUNITIES
Smaller companies are simply more focused on gaining market share than
larger companies. In fact, some large companies have difficulty finding
suitable investment opportunities, and return a larger proportion of earnings
back to shareholders in the form of stock dividends. On the other hand, small
cap companies will often take their earnings and reinvest the money right back
into their business.
Small companies are often much leaner organizations, being thriftier with the
money they have at their disposal. While many larger companies may be
flying their executives around the country in private jets and helicopters, this
would be an unusual expense for a small cap company.
2.5 BSE MIDCAP AND BSE SMALLCAP INDEX
BSE introduced the new index series called 'BSE Midcap' index and 'BSE
26
Small cap' index on April 11, 2005 with base index value 1000 to track the
performance of companies with relatively smaller market capitalization. BSE-
500 Index - represents more than 93% of the listed universe. Companies with
large market capitalization bias the movement of BSE-500 index. This
necessitated construction of a separate indicator to capture the trend in
companies with lower market capitalization. Over the years, BSE Mid-Cap and
BSE Small-Cap indices have proven to be a great utility to the investing
community.
The market capitalisation of the company represents the total dollar value of
the company's outstanding shares. This is equal to the current market price of
its stock multiplied by the number of shares of stock that it has outstanding.
That number gives you the market value of the company, which is one measure
of the company's size. Roughly speaking, there are three basic categories of
market capitalisation: large cap, midcap and small cap. The definitions for each
of these might vary somewhat depending on whom you are talking to, but
usually they are as follows:
Large cap : Market Cap valued at more than $ 10 billion
Midcap : Market cap valued between $ 2 billion and $ 10 billion
Small cap : Market cap valued at less than $ 2 billion
In general, the larger the cap size, the more established the company and the
more stable the price of its stock. Small cap and Midcap companies usually
have a higher potential for future growth than large cap companies, but their
stock tends to fluctuate more in price. Midcap stocks are more risky than large
cap stocks and less risky than small cap stocks. Then what makes a small &
27
midcap attractive to investors is the potential for growth that could result in a
significant return on the shares of stock. Because the company issuing the
stock is considered to be growing, there is great potential for the price per share
to increase over the short term. For investors who wish to realize quick gains
on their investments, these appear to be an ideal investment. However, the
enhanced potential for growth also carries an increased level of volatility. As
time goes on, the company could encounter unforeseen factors that inhibit the
increase in the value of the stock. When this happens, the stock may become
stagnant or even begin to fall in value.
In Small cap and Midcap indices the numbers of companies are 552 and
293 respectively.
2.5.1 INDEX SPECIFICATION:
Base Year : 2002-03
Base Index Value : 1000
Date of Launch : April 11,2005
2.5.2 BSE MID-CAP AND BSE SMALL-CAP INDEX - SCRIP
SELECTION CRITERIA:
The general guidelines for selection of constituents in BSE Mid-Cap & BSE
Small-Cap Index are as follows:
1. Trading Frequency: The scrip should have been traded on 60% of the
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trading days in the last three months
2. Eligible universe shall comprise of companies aggregating 98.5% of
average market capitalization
3. This list shall be categorized under large-cap, mid-cap and small-cap
segment based on 80%-15%-5% market capitalization coverage
respectively
4. BSE Mid-Cap Index shall comprise of scraps that gives market
capitalization coverage between 80% & 95% from the list derived as
per point no.3 above
5. BSE Small-Cap Index shall comprise of scraps that gives market
capitalization coverage between 95% & 100% from the list derived as
per point no.3 above
6. Quarterly review of these indices shall be carried out as per the above
criteria subject to a buffer of 3%
2.6 NIFTY MIDCAP 50
The medium capitalized segment of the stock market is being increasingly
perceived as an attractive investment segment with high growth potential. The
primary objective of the Nifty Midcap 50 Index is to capture the movement of
the midcap segment of the market. It can also be used for index-based
derivative trading.
2.6.1 METHOD OF COMPUTATION
Nifty Midcap 50 is computed using free float market capitalisation weighted
method, wherein the level of the index reflects the total market value of all the
29
stocks in the index relative to a particular base period. The method also takes
into account constituent changes in the index and importantly corporate actions
such as stock splits, rights, etc without affecting the index value.
2.6.2 BASE DATE AND VALUE
The Nifty Midcap 50 Index has a base date of Jan 1, 2004 and a base value of
1000.
2.6.3 CRITERIA FOR SELECTION OF CONSTITUENT STOCKS
The constituents and the criteria for the selection judge the effectiveness of the
index. Selection of the index set is, inter alia, based on the following criteria:
Stocks with average market capitalization ranging from Rs.1000 crore
to Rs.5000 crore at the time of selection.
Stocks which are not part of the derivatives segment are excluded.
Stocks which are forming part of the S&P CNX NIFTY index are
excluded.
2.6.4 OTHER STATISTICS:
Nifty Midcap 50 stocks represent about 6 % of the free float market
capitalization as on December 31, 2010.
The traded volume for the last six months of all Nifty Midcap 50 stocks
is approximately 9% of the traded volume of all stocks on the NSE.
Nifty Midcap 50 Index was computed using market capitalization
weighted method from the launch date till February 25, 2010
30
2.7 SENSEX BEATS MIDCAP, SMALL CAP INDICES
The BSE small-cap index and mid-cap index have underperformed the blue-
chip companies in the year so far by witnessing an over 19 per cent fall as
compared to the broader market benchmark Sensex. According to a study of
the indices from December 31, 2010 to February 28, 2011, the small-cap index
has shed 19.16 per cent to finally settle at 7,817.32. Similarly, the mid-cap
index has saw an erosion of 18.32 per cent during the period to close at
6,373.23 in the last day of trade in the previous month.
Meanwhile, the broader market key index Sensex has fallen by 13.09 per cent
during the period under review to settle at 17,823.40 as on February 28. During
the review period, the mid-cap index witnessed its lowest closing level of
6,292.18 on February 10, 2011, while the small-cap index reported its poorest
close of 7,585.65 on the same day.
Mid-cap stocks and small-cap stocks are vulnerable to any movement in the
stock market, so any good or bad news may see sharp reactions from them, an
expert said. According to market players, everything was going good in the
mid-cap and small cap stocks but reports of stock price manipulations late last
year in few companies, along with a string of negative news, including rising
inflation, 2G controversy and surging crude oil prices globally, has badly jolted
31
the confidence of small investors.
They also added buying sentiments have been weak and there is an uncertainty
when both these sectors will make a comeback in the near future. The mid-cap
and small-cap indices track the performance of companies with market
capitalisations that are a fifth or a tenth of that of blue-chip firms.
2.8 SMALL/MID CAP EQUITY INDEX FUND AS OF
SEPTEMBER -30- 2010
INVESTMENT OBJECTIVE
The Fund seeks to track the performance of the Russell Small Cap
Completeness Index. This Index is an unmanaged index considered indicative
of the small to mid cap stock market in general. There is no assurance that the
Fund will achieve its objective. Refer to “Risks “section.
MANAGER
The Fund is a collective investment trust managed by a team of State Street
Global Advisors (SSGA) professionals.
INVESTOR PROFILE
Small/mid-cap investments may be most appropriate for someone with a longer
investment horizon. The Fund may be suitable for the investor seeking long-
term capital growth and willing to accept larger market fluctuations.
STRATEGY
The Small/Mid Cap Equity Index Fund (“Fund”) invests in SSGA’s Russell
Small/Mid Cap Index (formerly known as SSGA Russell Small Cap
Completeness Index) Index Series Class Non-Lending Fund. Effective August
18, 2010, all SSGA Lending Fund assets were transferred to the SSGA Non-
32
Lending Fund. The Fund is managed using a “passive” or “indexing” investing
approach, by which SSGA attempts to replicate, before expenses, the
performance of the Index. The Fund typically seeks to achieve its objective by
investing in the securities comprising the Index in the same proportions as they
are represented in the Index. In some cases, it may not be possible or
practicable to purchase all of the securities comprising the Index, or to hold
them in the same weightings as represented in the Index. In those
circumstances, SSGA may employ a sampling or optimization technique to
construct the portfolio. The Fund uses futures, may use other derivatives and
may invest in other investment options.
RISKS
There are risks involved with investing, including loss of money over short or
long periods of time. Fund risks include, but are
not limited to:
MARKET RISK: The risk that the price of securities in a fund will rise or fall
sometimes rapidly or unpredictably due to factors such as real or perceived
adverse economic conditions, political developments, and/or investor sentiment
generally. During a general downturn in the securities markets, multiple asset
classes may decline in value simultaneously. Stocks generally have greater
price volatility than bonds.
BUSINESS RISK: The risk that an investment will lose value because of a
decline in a specific company or industry.
SMALL/MID CAP RISK: Medium-sized companies may suffer more
significant losses as well as realize more substantial growth than larger more
established companies. Equity securities of companies with relatively small
33
market capitalization may be more volatile than securities of larger more
established companies.
MANAGER RISK: The risk that manager decisions can adversely affect the
ability of a fund to meet its investment objectives and/or cause a fund to
underperform relevant benchmarks.
PERFORMANCE
Current performance may be lower or higher than performance data shown.
Performance data shown represents past performance and is not a guarantee or
prediction of future results. For performance data current to the most recent
month-end, please visit the Web site at www.varetire.org and select a Plan
under the Defined Contribution Plans tab. Choose “Plan Investments” and then
“Investment Performance.” The investment return and principal value of an
investment will fluctuate so that, when redeemed, shares/units may be worth
more or less than their original cost.
INDEX 1 Year 3 Years 5 Years 10 Years
Small/Mid
Cap Equity
Index Fund
15.86% -3.61% 2.81% 2.09%
Russell Small
Cap
Completenes
s Index
15.83% -3.85% 2.65% 2.00%
34
Table no:1
CHAPTER-3
INDUSTRY PROFILE
35
3.1 EVOLUTION
3.1.1 BRIEF HISTORY OF STOCK MARKETS
The world's foremost market place New York Stock Exchange (NYSE), started
its trading under a tree (now known as 68 Wall Street) over 200 years ago.
Similarly, India's premier stock exchange Bombay Stock Exchange (BSE) can
also trace back its origin to as far as 125 years when it started as a voluntary
non-profit making association.
News on the stock market appears in different media every day. We hear about
it any time it reaches a new high or a new low, and we also hear about it daily
in statements like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks
and stock markets are important. Stocks of public limited companies are
bought and sold at a stock exchange. But what really are stock exchanges?
Known also as the stock market or bourse, a stock exchange is an organized
marketplace for securities (like stocks, bonds, options) featured by the
centralization of supply and demand for the transaction of orders by member
brokers, for institutional and individual investors. The exchange makes buying
and selling easy.
For example, we don't have to actually go to a stock exchange, say, BSE - we
can contact a broker, who does business with the BSE, and he or she will buy
or sell their stock on their behalf.
36
3.1.2 ORIGIN OF INDIAN STOCK MARKET
The origin of the stock market in India goes back to the end of the 18th century
when long-term negotiable securities were first issued. However, for all
practical purposes, the real beginning occurred in the middle of the 19th
century after the enactment of the companies Act in 1850, which introduced
the features of limited liability and generated investor interest in corporate
securities.
An important early event in the development of the stock market in India was
the formation of the native share and stock brokers 'Association at Bombay in
1875, the precursor of the present day Bombay Stock Exchange. This was
followed by the formation of associations/exchanges in Ahmadabad (1894),
Calcutta (1908), and Madras (1937). In addition, a large number of ephemeral
exchanges emerged mainly in buoyant periods to recede into oblivion during
depressing times subsequently.
Many more stock exchanges were established during 1980’s, namely
Cochin Stock Exchange (1980)
Uttar Pradesh Stock Exchange Association Limited(at Kanpur, 1982)
Pune Stock Exchange Limited (1982)
Ludhiana Stock Exchange Association Limited (1983)
Guwahati Stock Exchange Limited (1984)
Kanara Stock Exchange Limited (at Mangalore, 1985)
Magadh Stock Exchange Association(at Patna, 1986)
Jaipur Stock Exchange Limited(1989)
37
Bhubaneswar Stock Exchange association Limited(1989)
Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989)
Vadodara Stock Exchange Limited (at Baroda, 1990)
Coimbatore Stock exchange
Meerut Stock Exchange
Stock exchanges are intricacy inter-woven in the fabric of a nation's economic
life. Without a stock exchange, the saving of the community- the sinews of
economic progress and productive efficiency- would remain underutilized. The
task of mobilization and allocation of savings could be attempted in the old
days by a much less specialized institution than the stock exchanges. But as
business and industry expanded and the economy assumed more complex
nature, the need for 'permanent finance' arose. Entrepreneurs needed money for
long term whereas investors demanded liquidity – the facility to convert their
investment into cash at any given time. The answer was a ready market for
investments and this was how the stock exchange came into being.
Stock exchange means anybody of individuals, whether incorporated or not,
constituted for the purpose of regulating or controlling the business of buying,
selling or dealing in securities. These securities include:
(I) Shares, scrip, stocks, bonds, debentures stock or other marketable securities
of a like nature in or of any incorporated company or other body corporate;
(ii) Government securities; and Rights or interest in securities.
The Bombay Stock Exchange (BSE) and the National Stock Exchange of India
Ltd (NSE) are the two primary exchanges in India. In addition, there are 22
38
Regional Stock Exchanges. However, the BSE and NSE have established
themselves as the two leading exchanges and account for about 80 per cent of
the equity volume traded in India. The NSE and BSE are equal in size in terms
of daily traded volume. The average daily turnover at the exchanges has
increased from Rs 851 crore in 1997-98 to Rs 1,284 crore in 1998-99 and
further to Rs 2,273 crore in 1999-2000 (April - August 1999). NSE has around
1500 shares listed with a total market capitalization of around Rs 9, 21,500
crore.
The BSE has over 6000 stocks listed and has a market capitalization of around
Rs 9, 68,000 crore. Most key stocks are traded on both the exchanges and
hence the investor could buy them on either exchange. Both exchanges have a
different settlement cycle, which allows investors to shift their positions on the
bourses. The primary index of BSE is BSE Sensex comprising 30 stocks. NSE
has the S&P NSE 50 Index (Nifty) which consists of fifty stocks. The BSE
Sensex is the older and more widely followed index.
Both these indices are calculated on the basis of market capitalization and
contain the heavily traded shares from key sectors. The markets are closed on
Saturdays and Sundays. Both the exchanges have switched over from the open
outcry trading system to a fully automated computerized mode of trading
known as BOLT (BSE on Line Trading) and NEAT (National Exchange
Automated Trading) System.
It facilitates more efficient processing, automatic order matching, faster
execution of trades and transparency; the scrip's traded on the BSE have been
classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares
39
represent those, which are in the carry forward system (Badla). The 'F' group
represents the debt market (fixed income securities) segment. The 'Z' group
scrip's are the blacklisted companies. The 'C' group covers the odd lot
securities in 'A', 'B1' & 'B2' groups and Rights renunciations. The key regulator
governing Stock Exchanges, Brokers, Depositories, Depository participants,
Mutual Funds, FIIs and other participants in Indian secondary and primary
market is the Securities and Exchange Board of India (SEBI) Ltd.
3.2 STOCK EXCHANGE - AN INTRODUCTION
“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”. It is an association of member
brokers’ for the purpose of self regulation and protecting the interest of its
members
3.2.1 FUNCTIONS
Providing a central trading place
Providing liquidity
Supply of long term fund
Ensuring safe and fare dealings
Facilitating Speculation
Balancing the flow of fund
Evaluating the security
Reflecting boom and depression
40
3.3 TRADING IN THE INDIAN STOCK EXCHANGES
Trading in Indian stock Exchanges is limited to listed securities of limited
company. They are broadly divided into two categories namely specified
securities (forward list) and non specified Securities (cash list). Equity shares
of dividend paying grow tormented companies swift a paid up capital of at
least Rs. 50 million and a market capitalization of at least Rs. 100 million and
having more than 20 shareholders are normally put in the specified group and
the balance in non- specified group.
Two types of transactions can be carried out on the Indian Stock Exchange.
Spot Delivery Transactions: “Delivery and payment within the time on
the date of stipulated when entering into the contact which shall not be
more than 14 days following the date of contract.
Forward Transactions: “Delivery and payment can be extended by
further period of 14 days each so that the overall period does not exceed
90 days from the date of contract”. The latter is permitted only in the
case of specified shares.
A member broker in an Indian stock exchange can act as as agent buy and sell
securities for its clients on a commission basis and also can act as a trader or
dealer as a principal, buy and sell securities on his own account and risk, in
contrast with the practice prevailing on New York and London stock
exchanges, where a member can act as a jobber or a broker only. The natures
of trading on Indian stock exchanges are that of age –old conventional style of
face - to - face trading with bid and offers being made by open outcry.
41
However there is a great amount of effort to modernize the Indian stock
exchanges in the recent times.
3.4 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 voluntarily nonprofit making Associations of Persons (AOP) and is
currently engaged in the process of converting itself into demutualised and
corporate entity. It has evolved over the years in to 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 by providing an efficient and transparent market for trading in
securities, debt and derivatives upholds the interest of the investors and ensures
reprisal 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 programs and making available to them necessary
informative inputs.
The exchange also serves to educate and enlighten the investors by conducting
investor education programs and 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.
42
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 every year by rotation), three SEBI nominees, six public
representatives and an Executive Director and 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
he is assisted by the Chief Operating Officer and other Heads of Departments.
The Exchange has inserted new Rule No. 126Ain the rules Byelaws and
Regulations pertaining to constitution of the Executive Committee of the
Exchange. Accordingly, an Executive Committee consisting of the three
elected directors, three SEBI nominees or public representatives, Executive
Director and CEO and Chief Operating Officer had been constituted. The
committee considers judicial and quasi matters in which the Governing Board
has powers as an Appellate Authority, matters regarding annualent of
transactions, admission, continuance and suspension of member- brokers,
declaration of a member broker as defaulter, norms, procedures and other
matters relating to arbitrations, fees, deposits, margins and other moneys
payable by the member brokers to the Exchange etc.
3.5 NATIONAL STOCK EXCHANGE (NSE)
With the liberalization of the Indian economy, it was found inevitable to lift the
Indian Stock Market trading system on part the international standards. On the
basis of the recommendations of high powered Pherwani committee, the
National Stock Exchange was incorporated in 1992 by Industrial Development
43
Bank of India, industrial Credit and Investment Corporation of India, all
Insurance Corporations, selected commercial banks and others.
Trading at NSE can be classified under two board categories
Wholesale debt market and
Capital Market
Wholesale debt market operations are similar to money market operations-
institions and corporate bodies into high value transactions in financial
instruments such as Govt. securities, treasury bills, public sector unit bonds,
commercial paper, certificate of deposit etc.
There are two kinds of players in NSE
Trading members and
Participations
Recognized members of NSE are called trading members who trade on behalf
of themselves and their clients. Participants include trading members and large
players like banks who take direct settlement responsibilities. Trading at NSE
takes place through a fully automated screen based training mechanism which
adopts the principal of an order driven market. Trading members can stay at
their offices and executive the trading, since they are willing to transact will
appear on the screen. When the prices match the transaction will be completed
a confirmation slip will be printed at the office of trading member.
44
NSE has several advantages over the traditional trading exchanges. They are as
follows.
NSE brings an integrated stock market trading network across the
nation. Investors can trade at the same price form anywhere in the
country since inter market operations are streamlined coupled with the
country wide access to the securities.
Delays in communication, late payments and the malpractices
prevailing in the traditional trading mechanism can be done away with
greater operational efficiency and informational transparency in the
stock market operations, with the support of total computerized
network.
3.5.1 THE MAIN OBJECTIVES OF NSE ARE:
To establish the nationwide trading facility for the equities, debt
instruments and hybrids.
To ensure equal access to investors all over the country through
appropriate communication network.
To enable shorter settlement cycle and book entry settlement system.
To meet current international standards of securities market.
3.5.2 PROMOTERS OF NSE
IDBI, ICICI, IFCI, GIC, SBI, Bank of Baroda, Canara Bank, Corporation
Bank, Indian Bank, Infrastructural Leasing and financial services. Stock
Holding Corporation of India and SEBI capital market are the promoters of
NSE.
45
3.6 OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)
The traditional trading mechanism prevailed in the Indian Stock Markets gave
way to many functional inefficiency, such as, absence of liquidity, lack of
transparency, unduly long settlement periods and binami transactions, which
affected the small investors to a great extent. To provide improved services to
investors, the country’s first ring less, scrip less, electronic Stock Exchange
OTCEI – was created to in 1992 by country’s premier financial institutions-
Unit Trust of India, industrial credit and investment corporation of India,
Industrial Development Bank of India, SBI Capital markets, Industrial finance
corporation of india, General Insurance Corporation and its subsidiaries and
Can Bank Financial securities.
Trading at OTCEI is done over the centers spread across the country. Securities
traded on the OTCEI are classified into:
Listed Securities – The shares and debentures of the companies listed
on the OTC can be bought or sold at any OTC counter al over the
country and they should not be listed anywhere else.
Permitted Securities- Certain shares and debentures listed on other
exchanges and units of mutual funds are allowed to be traded.
Initiated Debentures- Any equity holding at least one lakh debentures of
particular scrip can offer them for trading on the OTC.
OTC has a unique feature of trading compared to other traditional exchanges.
That is, certificates of listed securities and initiated debentures are not traded at
OTC. The orginal certificate will be saftely with the custodian. But a counter
46
receipt is generated out at the counter that substitutes the share certificate and
is used for all transactions.
3.7 REGULATORY FRAMEWORK
The four main legislations governing the security market are:
The Securities Contracts(Regulation) Act 1956
The Companies Act 1956
The SEBI Act 1992
The Depository Act 1996
3.7.1 SECONDARY MARKET AND SEBI
SEBI has introduced a wide range reforms in the Secondary market. The
important areas are given below.
Governing Board
Infrastructure
Settlement and clearing
Debt Market
Price Stabilization
Delisting
Brokers
Insider trading
3.8 CAPITAL MARKET REGULATIONS
47
In keeping with the board trust of the ongoing programs of economic reforms,
the mechanism of administrative control over capital issue has been dismantled
and pricing of capital issue is now essentially market/regulation of the capital
markets and protection of investors interests now primarily the responsibility of
the securities and Exchange Board of India (SEBI) which is located in
Bombay.
Accordingly a SEBI’s functions include:
Regarding the business in stock exchanges and any other securities
market.
Registering and regulating the working of collective mutual funds.
Prohibiting fraudulent and unfair trade practices relating the working f
collective mutual funds.
Prohibiting fraudulent and unfair trade practices relating to securities
market.
Promoting fraudulent and unfair trade practices relating to securities
market.
Promoting investors education and training of intermediates f securities
market.
Promoting investors education and training of intermediaries of
securities market.
Prohibiting insider trading in securities with the imposition of monetary
penalties, on market intermediaries.
Regulating substantial acquisition of share and takeover of companies.
48
Calling for information from carrying out inspection, conduction
inquiries and audits of the stock exchange and intermediaries and self
regulatory organization in the securities market.
3.9 STATUS OF STOCK EXCHANGE
The Indian Stock Market is a collection of various regional and national level
stock exchanges in India. It is a platform for the masses of the country to
interest their savings and also as a source of funds for various organizations
and institutions that features in business category.
3.9.1 PRESENT SCENARIO
The current conditions if Indian Market has drastically improved. There is
absolute transparency and instant transactions. All Indian stock markets are
now computerized and Internet Trading has become a common phenomenon.
Indian stock Markets have also developed a dynamic nature and can change
from a bullish temperament to a bearish slide. Any small bit of information or
even a rumor from any part of the country can affect the market and is a fairly
accurate indicator of the prevalent atmosphere in the region or country. People
from across the country and globe get in touch with minute wise readings on
the Stock market and gain a lot of trading aptitude after daily seeing BSE stock
gainers or BSE top losers list which does a world of good to their investment
portfolio.
3.9.2 FUTURE SCOPE OF STOCK EXCHANGE
The future of stock trading appears to be electronic, as competitions growing
between the reaming traditional New York Stock Exchange specialist system
49
against the relatively new, all Electronic Communications networks or ECNs.
ECNs point to their speedy execution of large block trades, while specialist
system proponents cite the role of specialist in maintaining orderly markets,
especially under extraordinary conditions or for special types of orders
The ECNs contend that an array of special interests profit at the expense of
investors in even the most mundane exchange directed trades. Machine- based
systems; they argue, are much more efficient, because they speed up the
execution mechanism and eliminate the need to deal with an intermediary.
Historically, the ‘market’ has been slow t respond to technological innovation,
thus allowing growing pure speculation to continue. Conversion to all
electronic trading could eliminate the trading profits of floor specialists and the
NYSE’s “Upstairs traders’ who like in September and October 2008, earned
billions of dollars selling they did not have, and days later buying the same
amount f shares, but may be 15% cheaper, s these shares could be handed to
their buyers, thereby making the market fall deeply.
50
CHAPTER -4
ORGANISATION PROFILE
51
4.1 COCHIN STOCK EXCHANGE
COCHIN STOCK EXCHANGE LTD. is one of the premier Stock Exchanges
in India, established in the year 1978. The exchange had a humble beginning
with just 5 companies listed in 1978 -79, and had only 14 members. Today the
Exchange has more than 508 members and 240 listed companies. In 1980 the
Exchange computerized its offices. In order to keep pace with the changing
scenario in the capital market, CSE took various steps including trading in
dematerialized shares. CSE introduced the facility for computerized trading -
"Cochin Online Trading (COLT)" on March 17, 1997. CSE was one of the
promoters of the "Interconnected Stock Exchange of India (ISE)". The
objective was to consolidate the small, fragmented and less liquid markets into
a national level integrated liquid market. With the enforcement of efficient
margin system and surveillance, CSE has successfully prevented defaults.
Introduction of fast track system made CSE the stock exchange with the
shortest settlement cycle in the country at that time. By the dawn of the new
century, the regional exchanges faced a serious challenge from the NSE &
BSE. To face this challenge CSE promoted a 100% subsidiary called the
"Cochin Stock Brokers Ltd. (CSBL)" and started trading in the National Stock
Exchange (NSE) and Bombay Stock Exchange (BSE).
CSBL is the first subsidiary of a stock exchange to get membership in both
NSE & BSE. CSBL also became a depository participant in the Central
Depository Services Ltd... The CSE has been playing a vital role in the
economic development of the country in general, and Kerala in particular and
striving hard to achieve the following goals:
52
• Providing investors with high level of liquidity whereby the cost and time
involved in the entry into and exit from the market are minimized.
• Bringing in high tech solutions and make all operations absolutely
transparent.
• Building infrastructure for capital market by turning CSE into a financial
super market.
• Serve the investors of the region.
• Professional stock broking and investment management.
• Imparting Capital Market knowledge to all intermediaries on a continuous
basis.
The Cochin Stock Exchange is directly under the control and supervision of
Securities & Exchange Board of India (the SEBI), and is today a demutualized
entity in accordance with the Cochin Stock Exchange (Demutualization)
Scheme, 2005 approved and notified by SEBI on 29th of August 2005.
Demutualization essentially means de-linking and separation of ownership and
trading rights and restructuring the Board in accordance with the provisions of
the scheme. The Exchange has been demutualised and the notification thereof
published in the Gazette.
53
4.2 PRESENT STATUS OF COCHIN STOCK EXCHANGE
4.2.1 MANAGEMENT
The policy decisions of the CSE are taken by the Board of Directors. The
Board is constituted with 12 members of whom less than one-fourth are elected
from amongst the trading member of CSE, another one forth are Public Interest
Directors selected by SEBI from the panel submitted by the Exchange and the
remaining are the share holder Directors. The Board appoints the Executive
Director who functions as an ex-officio member of the Board and takes charge
of the administration of the Exchange.
The operation of any Stock Exchange can commence only with the recognition
of the central government under the Securities Contract Regulation Act (SCR)
1956. The various regulations concerning the listing of companies and the
trading related activities are provided under SCR rules 1957. The bye law of
the Exchange gives guidelines on opening/closing of CSE, timing of trading
regulation of bedlam or carryover business, fixation of margin prices,
arbitration, settlement of disputes etc.
54
4.2.2 ORGANIZATION STRUCTURE
Fig no: 1
4.2.3 MEMBERSHIP PROFILE
Cochin Stock Exchange currently has 508 members. All the members of CSE
have a share each value of Rs.100 thus making the issued, subscribed and paid
up capital of Rs. 50,800 the authorized capital of CSE is Rs. 1,00,000 with total
membership limited to 1,000. As per the SEBI norms CSE charges an initial
deposit of Rs. 2 lakhs from each member. Based on the volume of trade each
member is to contribute additional deposits. Along with this annual
subscription fee of Rs. 200 for individual members and Rs. 500 for corporate
members will be charged by CSE. The members are appointing their assistance
is sub brokers bared on the guide lines gives by SEBI. From the 6 th to the 10th
year of membership the total amount payable is Rs. 5000 which payable at the
beginning of the 6th year.
55
4.3 COCHIN STOCK BROKERS LIMITED (CSBL)
The CSBL is wholly owned subsidiary f the Cochin Stock Exchange Limited.
The CSBL are a SEBI registered intermediary and corporate trading cum
clearing member of the capital market segment of the NSE and BSE. At the
BSE, CSBL also have a registration under the derivative segment.
For the individual trading through CSBL all of the investors had to register as a
client with one of the CSBL sub broker, who are also member of CSBL Ltd.,
commence trading after entiring into a tripartite agreement with ourselves as
trading member and the sub brokers. Over 138 sub brokers are presently
affiliated to CSBL, having their offices all over the kerala.
The CSBL’s trading and settlement functions are completely automated with
state of art technology, in addition to our well- experienced staff catering of
clients needs. CSBL bank with UTI Bank, The South Indian Bank and Federal
Bank ensure a smooth funds transfer arrangement during trading operation and
more importantly to reassure ourselves that client pay outs are prompt.
Rapid changes taking place in the capital market and dwindled the importance
of Regional Stock Exchanges. Taking into consideration all this developments
and considering the future, the stock exchange decided to start a 100 %
subsidiary called Cochin Stock Brokers Ltd (CSBL).
This is to enable the CSE to acquire the membership other exchange through
its subsidiary. CSBL was incorporated on 28th December 1999 and later it got
membership in NSE and BSE. The CSBL started its operation in full swing
from February 2001. At present the CSBL offers trading in BSE and NSE with
56
more than 50 registered brokers and this have been increasingly day by day.
Each member is given separate terminal for online trading. The staff in the
exchange provides the necessary help for various matter included in the trading
activity.
4.4 PRODUCTS AND SERVICES
Cochin stock brokers ltd (CSBL),a wholly owned subsidiary company of
cochin stock exchange is a corporate member of both NSE and BSE, and
provides trading facilities on here exchange through the brokers if exchange.
The subsidiary offers a wide range of products and services :
1. Trading on National Stock Exchange
2. Trading on Bombay Stock Exchange
3. Internet Trading
4. Depository Participant
5. IPO(Initial Public Offer)
6. Issue of new shares
4.5 DEPARTMENTS
Listing Department
Membership Department
Settlement department
Administration Department
Finance Department
Networks Department
Systems Department
57
Arbitration Department
Legal Department
Surveillance Departments
Arbitration committee
Fund management
4.5.1 LISTING DEPARTMENT
The listing department guides prospective company’s decision of being listed
on the exchange by providing the knowledge base and information on the
statutory requirements that have to be complied with. The major functions
undertaken by the department include post- listing monitoring and compliance
with the listing agreement, monitoring the listing agreements and receiving the
provisions of listing agreement from time to time with specific reference to
SEBI Regulations / circulars that are in force. The department also ensures
diligence in scrutinizing listing applications and adhering to the Listening
Norms.
The department also performs the processing of the documents submitted by
companies on listings/additional listing and provides them with the listing
approval/trading permission and also ensures that the listing fee/processing fee
is paid at the stipulated time
58
4.5.2 MEMBERSHIP DEPARTMENT
The Membership Department screens applications from prospective members
to ensure that they are eligible to be members of the Exchange as per
provisions of the Securities Contracts Regulation Act. It is also verified
whether they are ‘Fit and Proper’ persons eligible to be members as per the
SEBI (Criteria for Fit and Proper persons) Regulation 2004. The eligible
applications are processed and forwarded to SEBI for the purpose of obtaining
registration with SEBI. The department continuously follows up the status of
the applications with SEBI and provides necessary data if any required by
SEBI. The members are informed of their fee liability as and when information
in this regard is obtained from SEBI. The Membership Department also assists
SEBI by ensuring proper delivery of notices and letters issued by SEBI to the
concerned members. The changes in status and constitution of the Brokers are
sent for approval to the Governing Board of the Exchange and thereafter to
SEBI and Members are given necessary directions wherever required. Change
in address and contact information are updated in the Finance and Accounting
System and SEBI intimated.
4.5.3 SETTLEMENT DEPARTMENT
Settlement department is a key department of the CSE. It is dealing with cash
and securities. It helps the broker in setting the matters related to their payin
and payout of cash and securities, recovery of dues and settling the matters
related to the bad deliveries. This department is headed by a Deputy manager
and assisted by two senior officers who look into the operations involved in the
59
settlement activities in the BSE and NSE. CSBL are following T+3 (T-Date of
Transaction)
Settlement system as given below:
NSE/BSE CSBL
Security Paying T + 3 T + 1
Cash Paying T + 3 T + 2
Cash Payout T + 3 T + 4
Delivery Payout T + 3 T + 4
Delivery Intimation - T + 3
Table no: 2
4.5.4 ADMINISTRATION DEPARTMENT
A legal officer with two deputy managers for administration and compliance and
management information system heads the department. Two senior officers looking
after public relations and administration form part of administration.
The major activities of this department include:-
Organizing council meeting, annual general meeting, extra ordinary general
meeting, council meetings etc.
Looking after the discharge and admission of authorized members.
Taking care of all related functions needed for the smooth functioning of the
exchange including regular payments of rent, bills, taxes etc.
Public relations.
Giving necessary guidelines and support to students and other who visit the
exchange for various activities.
Implementation of the guidelines given by council of management.
Procedures involved in the listing.
60
Matters associated with various committees like arbitration, grievance,
disciplinary and defaults.
4.5.5 FINANCE DEPARTMENT
This department takes care of the various financial transactions of CSE thus acting as
the life blood of the organization. The department is headed by a Finance officer and
assisted by a Deputy Manager and several senior and junior officers.
The major activities of the department include
Annual Report Generation
Fund Management
Interaction with bankers
Keeping general accounts of the CSE.
Preparation of various financial statements of the company.
Maintaining of payrolls and maintenance of petty cash register.
Coordinating accounting transactions of different branches and departments.
Taxation
Budgeting and Expense research.
Maintenance of internal control system.
Interaction with external and internal audits.
4.5.6 NETWORKS DEPARTMENT
It is the heart of the various operations of CSE. The trading software used in CSBL is
Multex, developed by CMC. The advantage of using Multex is that both BSE and NSE
scrip’s can be obtained.
CSBL has provided trading facility in equities through Multex to a large
number of their clients over the Wide Area Network.
61
Currently, the clients over the wide area are connected by:
(1) ISDN
(2) Dial-Up
(3) V sat
(4) Asianet
62
4.5.7 LIBRARY DEPARTMENT
The Stock Exchange has emerged as a Public Service Institution catering to
increasing demands of investors in the country. Of the developmental activities
of CSE, education, training and research are dominant in these years bringing
the Stock Exchange and Public nearer and together. The Exchange gives
necessary guidelines and support to Research students and others who visit the
Exchange for various activities.
CSE’s Library has categorized into 6 which is as follows:
Capital Market
Banking & Finance
Law
Tax
General
Management
4.5.8 SYSTEMS DEPARTMENT
It is the heart of the various operations of CSE. The department provides the
necessary technical supports for screen based trading and the computerized
functioning of all other departments.
The various activities of the department include: -
Developments of various software needed for the functioning of the
exchange.
Maintenance of Multex software, which provides online trading with NSE and
BSE.
63
Maintenance of an effective network of computers for the smooth
functioning of the exchange.
Provide the necessary services to the settlement and surveillance
departments.
The support of maintaining depository participants accounts with the CSBL.
The major back office system software used is NESS and BOSS for NSE and
BSE trades calculations respectively. These soft wares are developed in-house
by CSE. This software is used to maintain the entire records of all the trades
that occur each day. It also does all the required calculations for deductions and
also creates all kinds of reports needed by the brokers and their clients.
4.5.9 ARBITRATION COMMITTEE
Any dispute between a member and a remised, authorized assistant, employee or
other person sharing brokerage with him in respect of any matter shall be referred to
arbitration and decided in accordance with the Byelaws and Regulations relating to
arbitration of disputes other than between Members. All other disputes between
them shall also be referred to arbitration in the same manner but if the remise,
authorized assistant, employee or other person sharing brokerage so desire such
disputes may be with the permission of the Council of Management or the president
referred to arbitration and decided in accordance with the Bye-laws, Regulations
relating to arbitration of disputes between members.
The non-member arbitration panel consists of retired High Court and City Civil Court
judges. Chartered accountant, company secretaries, and other professionals having
in depth knowledge of the capital market.
64
4.5.10 FUND MANAGEMENT
For monitoring the fund balance of the brokers with the stock exchange. It facilitates
the internal fund transfer and also carries out timely funds in the paying and payout.
Provides all assistance to cost control and revenue enhancement.
4.5.11 LEGAL DEPARTMENT
CSE has a full-fledged Legal Department, headed by Manager-Legal and is primarily
engaged in advising the management in the merits and demerits of legal issues
involving the exchange. A major function carried by the department is that the
various rules, regulations and directives of SEBI with regard to trading in the Capital
Market by the brokers and sub-brokers are brought to the notice to members and
the investing public. Manager-Legal is the compliance officer as per the provisions of
SEBI regulations besides acting as secretary to the board of directors. The three main
areas of special importance being looked after by the legal department are-
Investor Grievance Service
Arbitration
Default
4.5.12 SURVEILLANCE DEPARTMENT
The Exchange has set up Surveillance Department to keep close watch on price
movements of scrip’s, detect market abuses like price rigging, monitor abnormal
prices and volumes which are not consistent with normal trading pattern etc. The
main objectives of the department are to provide a free and fair market, to arrest
unsystematic risk from entering into the system and to manage risks. The
surveillance function at the exchange has assumed greater importance in the last few
years. SEBI has directed the stock exchanges to setup a separate surveillance
department with staff exclusively assigned for this function.
65
It also offers services like:-
Keeping a close watch on the price movement of scrip’s.
Detect market manipulations like price rigging.
Monitor abnormal changes in prices and volumes which are not
consistent with the normal trading pattern.
Monitor the member broker’s positions to insure that defaults do not
occur.
4.5.13 INVESTIGATIONS DEPARTMENT
The department conducts in-depth investigation based on preliminary enquires
made into trading of the scrip as also at the instance of SEBI. Conducting
Investigations involves the following stages:-.
Identification of scrip’s to the investigator based on the alerts thrown by the
online system and offline reports.
Identification of Members from home the client details have to be called
for.
Preparation of company profile including Corporate News and Financial
Results.
Compilation of client details.
Preparation of reports.
In case irregularities found, necessary actions are initiated.
66
4.6SWOT ANALYSIS
4.6.1 STRENGTH
Good image all over India.
Strong and high quality infrastructure.
Premier stock exchange in India.
Trading in dematerialized shares.
Screen based trading.
Efficient margin system and surveillance.
Professional stock broking and investment management function.
4.6.2 WEAKNESS
CSE failed to execute awareness about stock market among people.
Turn over alone is very low.
Investor are not considering CSE index.
4.6.3 OPPORTUNITY
Promoting interconnected stock exchange of India.
Consolidation of small, fragmented and less liquid markets into a
national integrated liquid market.
Increasing participation in the central depository service ltd
Capital market development around the area, where he exchanges is
located
67
4.6.4 THREATS
Competition from well established stock holders who has membership
in BSE and NSE. People hesitate to invest in stock market because of
higher risk.
People hesitate to invest in stock market because of higher risk.
68
CHAPTER- 5
DATA ANALYSIS
AND
INTERPRETATION
69
5.1 ANALYSIS AND INTERPRETATION
The overall analysis of the study is subdivided into three parts:
1. Analysis of mid cap and small cap portfolios during the period.
2. Analysis of BSE small cap index and NIFTY midcap index during the
period.
3. Analysis of the returns of both portfolios and indexes.
5.2 PORTFOLIO CONSTRUCTION
The companies have been selected from different sectors. Three companies
from mid cap and three from small cap are selected for construct portfolio. The
index taken into consideration is BSE small cap and NIFTY mid cap. Each
company is investing equally in portfolios. From these three companies make a
portfolio of 5 lakhs in mid cap and small cap. And find the return of the
portfolios and make comparison with index returns.
5.3 DATA SIZE
Data’s regarding the share market of BSE small cap and NIFTY midcap from
the month of 04-JAN-2011 to 28-FEB-2011 is taken. For the purpose of the
study a portfolio has been built comprising of shares selected 3 companies
from mid cap and 3 from small caps
70
MID CAP COMPANIES SMALL CAP COMPANIES
MOSER-BAER (I) LIMITED ADITYA BIRLA CHEMICALS (INDIA) LTD
HINDUSTAN CONSTRUCTION COMPANY LIMITED
GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD
INDIAN BANK JK PAPER LTD
Table no: 3
5.4 MID CAP COMPANYS DETAILS
5.4.1 MOSER-BAER (I) LIMITED
Moser Baer, headquartered in New Delhi, is one of India's leading technology
companies. Established in 1983, Moser Baer successfully developed cutting
edge technologies to become the world's second largest manufacturer of
Optical Storage media like CDs and DVDs. The company also emerged as the
first to market the next-generation of storage formats like Blu-ray Discs and
HD DVD. Recently, the company has transformed itself from a single business
into a multi-technology organisation, diversifying into exciting areas of Solar
Energy, Home Entertainment and IT Peripherals & Consumer Electronics.
Moser Baer has a presence in over 82 countries, serviced through six marketing
offices in India, the US, Europe and Japan, and has strong tie-ups with all
major global technology players. Moser Baer has the distinction of being
preferred supplier to all top global OEM brands. Moser Baer stands committed
71
to supplying highest quality fully licensed media to its customers. Moser Baer's
products are manufactured at its three state-of-the-art manufacturing facilities.
It has over 6,000 full-time employees and multiple manufacturing facilities in
the suburbs of New Delhi.
5.4.2 HINDUSTAN CONSTRUCTION COMPANY LIMITED
As a pre-eminent Indian infrastructure company, established over eight decades
ago, HCC has, over the years, strongly anchored itself to India’s development
effort. Today it is acknowledged as a company that continues to empower
India, enabling the nation to surge ahead in different core sectors. At the heart
of all our development efforts is the attempt to touch and improve the quality
of life of people across the length and breadth of the country.
In fact, HCC, as an industry leader in engineering construction, currently
nurtures projects that span across such diverse segments as transportation,
power, marine projects, oil and gas pipeline constructions, irrigation and water
supply, utilities and urban infrastructure, all of which impact the nation of
India, and the progress of its people. HCC, even as you read this, is bringing to
bear its wealth of engineering and construction expertise to develop
infrastructure aimed at further propelling the nation forward, into the 21st
century and beyond.
5.4.3 INDIAN BANK
A premier bank owned by the Government of India
• Established on 15th August 1907 as part of the Swadeshi movement
• Serving the nation with a team of over 19000 dedicated staff
• Total Business crossed Rs.1,74,934 Crores as on 31.12.2010
72
• Operating Profit increased to Rs. 2747.35 Crores as on 31.03.2010
• Net Profit increased to Rs.1554.99 Crores as on 31.03.2010
• Core Banking Solution (CBS) in all 1819 branches
International Presence
Overseas branches in Singapore and Colombo including a Foreign
Currency Banking Unit at Colombo
240 Overseas Correspondent banks in 70 countries
Diversified banking activities - 3 Subsidiary companies
Indian bank Merchant Banking Services Ltd
Indian Bank Housing Ltd.
Indian Fund Management Ltd
A front runner in specialised banking
97 Forex Authorised branches inclusive of 1 Specialised Overseas
Branch at Chennai exclusively for handling forex transactions arising
out of Export, Import, Remittances and Non Resident Indian business
62 Special SME Branches extending finance exclusively to SSI units
5.5 SMALL CAP COMPANYS DETAILS
5.5.1 ADITYA BIRLA CHEMICALS (INDIA) LTD
The Rs2,656-crore Aditya Birla Chemicals business is spread across India,
Thailand and China. In India, the chemicals business operates through four
companies: Aditya Birla Nuvo, Grasim, Aditya Birla Chemicals (India)
(formerly known as Bihar Caustic and Chemicals Limited) and Tanfac. In
Thailand, the business operates through two companies: Aditya Birla
Chemicals (Thailand) Ltd and Thai Peroxide Company Ltd. Four separate
73
chemical companies namely Thai Organic Chemicals Company, Thai Epoxy
and Allied Products Company, Thai Polyphosphate & Chemicals Company and
Thai Sulphites & Chemicals Company were merged together to form Aditya
Birla Chemicals (Thailand) Ltd in 2006.
In China, the chemicals business operates through Aditya Birla Grasun
Chemicals (Fangchenggang) Ltd.The business covers six major product
segments: chlor-alkalis, epoxy, fluorine chemicals, peroxides, phosphates and
sulphites. These chemicals find application across a wide range of industries
including food, food processing, personal consumer products, coating, civil
engineering, wind energy, composites, electrical, pulp and paper, detergents,
water treatment and metal treatment.
They are exported to 58 countries across the globe. The products are
manufactured at ten units — four in India, five in Thailand and one in China.
The chemicals produced at these factories are recognised the world over for
their high quality. The chlor-alkali unit in Thailand, for example, is the only
unit in the country to achieve the hallmark of quality excellence by obtaining
FDA approval. State-of-the-art technology, stringent quality control and
continuous innovative improvements guarantee that the products are of global
standards.
Customer satisfaction is ensured through timely delivery and customisation of
products and processes according to requirements. Research and development
facilities at various locations have the latest equipment to determine the
physical and chemical parameters of newly developed products and their
applications. Different divisions have been accredited with certifications such
74
as ISO-9001:2000, ISO-14001, OSHAS-18001, BS-8800 and TIS-18001.
5.5.2 GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD
It all started in the year 1987 when Mr. C.J. George and Mr. Ranajit Kanjilal
founded Geojit as a partnership firm. In 1993, Mr.Ranajit Kanjilal retired from
the firm and Geojit became the proprietary concern of Mr. C .J. George. In
1994, it became a Public Limited Company named Geojit Securities Ltd. The
Kerala State Industrial Development Corporation Ltd. (KSIDC), in 1995,
became a co-promoter of Geojit by acquiring a 24 percent stake in the
company, the only instance in India of a government entity participating in the
equity of a stock broking company. The year 1995 also saw Geojit being listed
on the leading regional stock exchanges. Geojit listed at The Stock Exchange,
Mumbai (BSE) in the year 2000. Company’s wholly owned subsidiary, Geojit
Commodities Limited, launched Online Futures Trading in agri-commodities,
precious metals and energy futures on multiple commodity exchanges in 2003.
This was also the year when the company was renamed as Geojit Financial
Services Ltd. (GFSL). The Board consists of professional directors; including a
Kerala Government nominee. With effect from July 2005, the company is also
listed at The National Stock Exchange (NSE).
Company is a charter member of the Financial Planning Standards Board of
India and is one of the largest Depository Participant (DP) brokers in the
country. On 31st December 2007, the company closed its commodities
business and surrendered its membership in the various commodity exchanges
held by Geojit Commodities Ltd. Global banking major BNP Paribas took a
75
stake in the year 2007 to become the single largest shareholder. Consequently,
Geojit BNP Paribas has been renamed as Geojit BNP Paribas Financial
Services Ltd
Wide range of products and services
Certified financial advisors help clients to arrive at the right financial solution
to meet their individual needs. The wide range of products and services on
offer includes -
Equities | Derivatives | Currency Futures | Custody Accounts | Mutual Funds |
Life Insurance & General Insurance | IPOs | Portfolio Management Services |
Property Services | Margin Funding | Loans against Shares
5.5.3 JK PAPER LTD
JK Paper Ltd. is India’s largest producer of branded papers and a leading
player in the Fine Papers and Packaging Board segments. It operates two
integrated Mills in India, in Rayagada, Orissa and Songadh, Gujarat, with a
combined manufacturing capacity of 2, 40,000 tonnes per year, using
contemporary technology. The products include a wide range of Coated and
Uncoated Printing & Writing Papers and Packaging Boards. Both the
manufacturing units of the company are ISO 9001-2000 complaint.
It was the first Company to manufacture surface sized printing & writing
paper, followed by copier paper. The Company’s state-of-the-art Packaging
Board plant at Central Pulp Mills produces international quality virgin boards
like FBB, SBS and Cup Stock.Nearly 95% of the Company’s product mix
comprises high value products, marketed under various popular brand names
such as, ‘JK Copier’, ‘JK Bond’, ‘Cedar’, ‘JK Excel Bond’, ‘JK Cote’, ‘JK
76
TuffCote’, ‘JK PureFil’ and ‘JK Pristine Cote’. JK Paper is India’s quality and
price leader.
Besides the strong brands, the Company has a wide distribution network in
India consisting of nearly 150 distributors and over 3000 dealers. JK Paper is
the only company in India with large share of branded products in its portfolio.
JK Paper passionately believes in Environment and Safety and has been
introducing cleaner and environment-friendly technologies. The Company has
an export footprint for high value branded products and Packaging Boards.
77
5.6 ANALYSIS OF PORTFOLIO
5.6.1 MID CAP COMPANIES PORT FOLIO
COMPANY NAME SCRIP CODE NO. OF SHARES
MOSER-BAER (I) LIMITED
MOSERBAER 2758
HINDUSTAN CONSTRUCTION COMPANY LIMITED
HCC 3491
INDIAN BANK INDIANB 638
Table no: 4
5.6.2 SMALL CAP COMPANIES PORT FOLIO
COMPANY NAME SCRIP CODE NO. OF SHARES
ADITYA BIRLA CHEMICALS (INDIA) LTD
ABCIL 1189
GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD
GEOJITBNP 4910
JK PAPER LTD JKPPRQ 2849
Table no: 5
78
5.7 PORTFOLIO VALUES
PORT FOLIO AS ON 03-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 62.4 172099.2
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 48.65 169837.15
INDIAN BANK 638 247.7 158032.6
TOTAL= 499968.95
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 142.4 169313.6
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 33.35 163748.5
JK PAPER LTD 2849 58.55 166808.95
TOTAL= 499871.05
Table no: 6
79
PORT FOLIO AS ON 04-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 62.2 171547.6
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 47.45 165647.95
INDIAN BANK 638 240.1 153183.8
TOTAL= 490379.35
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 142.6 169551.4
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 34 166940
JK PAPER LTD 2849 58.25 165954.25
TOTAL= 502445.65
Table no: 7
80
PORT FOLIO AS ON 05-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 62.25 171685.5
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 48.15 168091.65
INDIAN BANK 638 231.65 147792.7
TOTAL= 487569.85
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 143.2 170264.8
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 33.45 164239.5
JK PAPER LTD 2849 57.85 164814.65
TOTAL= 499318.95
Table no: 8
81
PORT FOLIO AS ON 06-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 60.85 167824.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 46.25 161458.75
INDIAN BANK 638 232.85 148558.3
TOTAL= 477841.35
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 143.35 170443.15
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 32.7 160557
JK PAPER LTD 2849 57.65 164244.85
TOTAL= 495245
Table no: 9
82
PORT FOLIO AS ON 07-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 58.55 161480.9
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 45.3 158142.3
INDIAN BANK 638 220.7 140806.6
TOTAL= 460429.8
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 139.6 165984.4
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 32.3 158593
JK PAPER LTD 2849 55.95 159401.55
TOTAL= 483978.95
Table no: 10
83
PORT FOLIO AS ON 10-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 56.75 156516.5
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 45.55 159015.05
INDIAN BANK 638 214.85 137074.3
TOTAL= 452605.85
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 137.2 163130.8
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 31.15 152946.5
JK PAPER LTD 2849 53.45 152279.05
TOTAL= 468356.35
Table no: 11
84
PORT FOLIO AS ON 11-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 57.05 157343.9
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 45.1 157444.1
INDIAN BANK 638 218.2 139211.6
TOTAL= 453999.6
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 135.9 161585.1
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 30.5 149755
JK PAPER LTD 2849 52.35 149145.15
TOTAL= 460485.25
Table no: 12
85
PORT FOLIO AS ON 12-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 59.9 165204.2
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 44.4 155000.4
INDIAN BANK 638 220.5 140679
TOTAL= 460883.6
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 138.7 164914.3
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 30.85 151473.5
JK PAPER LTD 2849 52.9 150712.1
TOTAL= 467099.9
Table no: 13
86
PORT FOLIO AS ON 13-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 58.95 162584.1
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 44.4 155000.4
INDIAN BANK 638 217.2 138573.6
TOTAL= 456158.1
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 137.45 163428.05
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 30.5 149755
JK PAPER LTD 2849 53.1 151281.9
TOTAL= 464464.95
Table no: 14
87
PORT FOLIO AS ON 14-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 56.85 156792.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 43.95 153429.45
INDIAN BANK 638 209.7 133788.6
TOTAL= 444010.35
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 136.5 162298.5
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 29.7 145827
JK PAPER LTD 2849 52.55 149714.95
TOTAL= 457840.45
Table no: 15
88
PORT FOLIO AS ON 17-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 55.3 152517.4
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 41.5 144876.5
INDIAN BANK 638 205.9 131364.2
TOTAL= 428758.1
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 133.3 158493.7
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 28.65 140671.5
JK PAPER LTD 2849 51.9 147863.1
TOTAL= 447028.3
Table no: 16
89
PORT FOLIO AS ON 18-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 54.8 151138.4
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 39.8 138941.8
INDIAN BANK 638 204.4 130407.2
TOTAL= 420487.4
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 126.75 150705.75
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 28.8 141408
JK PAPER LTD 2849 51.95 148005.55
TOTAL= 440119.3
Table no: 17
90
PORT FOLIO AS ON 19-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 55.05 151827.9
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 41.2 143829.2
INDIAN BANK 638 209 133342
TOTAL= 428999.1
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 129.25 153678.25
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 28.45 139689.5
JK PAPER LTD 2849 51.3 146153.7
TOTAL= 439521.45
Table no: 18
91
PORT FOLIO AS ON 20-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 55.3 152517.4
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 40.8 142432.8
INDIAN BANK 638 217.65 138860.7
TOTAL= 433810.9
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 129.15 153559.35
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 27.9 136989
JK PAPER LTD 2849 51 145299
TOTAL= 435847.35
Table no: 19
92
PORT FOLIO AS ON 21-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 55.9 154172.2
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 40.3 140687.3
INDIAN BANK 638 220.35 140583.3
TOTAL= 435442.8
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 133.85 159147.65
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 27.95 137234.5
JK PAPER LTD 2849 51.1 145583.9
TOTAL= 441966.05
Table no: 20
93
PORT FOLIO AS ON 24-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 58.75 162032.5
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 41.9 146272.9
INDIAN BANK 638 234.05 149323.9
TOTAL= 457629.3
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 137.1 163011.9
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 28.65 140671.5
JK PAPER LTD 2849 53.3 151851.7
TOTAL= 455535.1
Table no: 21
94
PORT FOLIO AS ON 25-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE
PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 57.65 158998.7
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 41.9 146272.9
INDIAN BANK 638 228.4 145719.2
TOTAL= 450990.8
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 139.05 165330.45
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 28.55 140180.5
JK PAPER LTD 2849 52.9 150712.1
TOTAL= 456223.05
Table no: 22
95
PORT FOLIO AS ON 27-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 54 148932
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 39.65 138418.15
INDIAN BANK 638 218.35 139307.3
TOTAL= 426657.45
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 135.4 160990.6
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 28.1 137971
JK PAPER LTD 2849 52.65 149999.85
TOTAL= 448961.45
Table no: 23
96
PORT FOLIO AS ON 28-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE
PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 51.9 143140.2
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 38.4 134054.4
INDIAN BANK 638 211.15 134713.7
TOTAL= 411908.3
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 130.45 155105.05
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 26.65 130851.5
JK PAPER LTD 2849 51 145299
TOTAL= 431255.5
Table no: 24
97
PORT FOLIO AS ON 31-JAN-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 51.2 141209.6
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 36.65 127945.15
INDIAN BANK 638 210.45 134267.1
TOTAL= 403421.85
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 134.15 159504.35
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.9 127169
JK PAPER LTD 2849 52.5 149572.5
TOTAL= 436245.85
Table no: 25
PORT FOLIO AS ON 01-FEB-2011
98
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 50.9 140382.2
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 36.1 126025.1
INDIAN BANK 638 208.95 133310.1
TOTAL= 399717.4
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 138 164082
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 26.05 127905.5
JK PAPER LTD 2849 51.9 147863.1
TOTAL= 439850.6
Table no: 26
PORT FOLIO AS ON 02-FEB-2011
99
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 51 140658
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 35.45 123755.95
INDIAN BANK 638 211.35 134841.3
TOTAL= 399255.25
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 138 164082
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 26.35 129378.5
JK PAPER LTD 2849 51.65 147150.85
TOTAL= 440611.35
Table no: 27
PORT FOLIO AS ON 03-FEB-2011
100
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 50.35 138865.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED3491 37.05 129341.55
INDIAN BANK 638 216.65 138222.7
TOTAL=406429.55
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 139.6 165984.4
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 26.8 131588
JK PAPER LTD 2849 52 148148
TOTAL=445720.4
Table no: 28
PORT FOLIO AS ON 04-FEB-2011
101
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 49.7 137072.6
HINDUSTAN CONSTRUCTION
COMPANY LIMITED3491 36.25 126548.75
INDIAN BANK 638 217.25 138605.5
TOTAL=402226.85
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA)
LTD
1189 138.4 164557.6
GEOJIT BNP PARIBAS FINANCIAL
SERVICES LTD4910 26.1 128151
JK PAPER LTD 2849 52.35 149145.15
TOTAL=441853.75
Table no: 29
PORT FOLIO AS ON 07-FEB-2011
102
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 48.85 134728.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED3491 35.95 125501.45
INDIAN BANK 638 208.95 133310.1
TOTAL=393539.85
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA)
LTD
1189 138 164082
GEOJIT BNP PARIBAS FINANCIAL
SERVICES LTD4910 26.65 130851.5
JK PAPER LTD 2849 52.3 149002.7
TOTAL=443936.2
Table no: 30
PORT FOLIO AS ON 08-FEB-2011
103
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 46.3 127695.4
HINDUSTAN CONSTRUCTION
COMPANY LIMITED3491 34.7 121137.7
INDIAN BANK 638 203.35 129737.3
TOTAL=378570.4
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA)
LTD
1189 136.05 161763.45
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.4 124714
JK PAPER LTD 2849 51.05 145441.45
TOTAL=431918.9
Table no: 31
PORT FOLIO AS ON 09-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
104
MID CAP
MOSER-BAER (I) LIMITED 2758 40.85 112664.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED3491 32.35 112933.85
INDIAN BANK 638 202.25 129035.5
TOTAL=354633.65
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA)
LTD
1189 128.95 153321.55
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 24.4 119804
JK PAPER LTD 2849 49.2 140170.8
TOTAL=413296.35
Table no: 32
PORT FOLIO AS ON10-FEB-2011
105
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 41.35 114043.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 31.6 110315.6
INDIAN BANK 638 206.2 131555.6
TOTAL=355914.5
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 129.45 153916.05
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 23.75 116612.5
JK PAPER LTD 2849 49.2 140170.8
TOTAL=410699.35
Table no: 33
PORT FOLIO AS ON 11-FEB-2011
106
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 40.3 111147.4
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 33.55 117123.05
INDIAN BANK 638 210.8 134490.4
TOTAL= 362760.85
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 134.15 159504.35
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 24.1 118331
JK PAPER LTD 2849 47.05 134045.45
TOTAL= 411880.8
Table no: 34
PORT FOLIO AS ON 14-FEB-2011
107
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 41.95 115698.1
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 35.05 122359.55
INDIAN BANK 638 219.85 140264.3
TOTAL=378321.95
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 136 161704
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.25 123977.5
JK PAPER LTD 2849 49 139601
TOTAL= 425282.5
Table no: 35
108
PORT FOLIO AS ON 15-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 41.35 114043.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 35.25 123057.75
INDIAN BANK 638 218.45 139371.1
TOTAL= 376472.15
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 136.9 162774.1
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.45 124959.5
JK PAPER LTD 2849 48.4 137891.6
TOTAL= 425625.2
Table no: 36
109
PORT FOLIO AS ON 16-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 42.5 117215
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 37.2 129865.2
INDIAN BANK 638 214.2 136659.6
TOTAL= 383739.8
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 136 161704
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.2 123732
JK PAPER LTD 2849 48.95 139458.55
TOTAL=424894.55
Table no: 37
110
PORT FOLIO AS ON 17-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 43.6 120248.8
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 37.1 129516.1
INDIAN BANK 638 220.55 140710.9
TOTAL= 390475.8
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 135.65 161287.85
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.8 126678
JK PAPER LTD 2849 48.7 138746.3
TOTAL=426712.15
Table no: 38
111
PORT FOLIO AS ON 18-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 41.7 115008.6
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 35.7 124628.7
INDIAN BANK 638 220.35 140583.3
TOTAL= 380220.6
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 134.3 159682.7
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.2 123732
JK PAPER LTD 2849 47.95 136609.55
TOTAL=420024.25
Table no: 39
112
PORT FOLIO AS ON 21-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 41.25 113767.5
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 35.1 122534.1
INDIAN BANK 638 219.55 140072.9
TOTAL= 376374.5
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 136.2 161941.8
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 25.1 123241
JK PAPER LTD 2849 47.75 136039.75
TOTAL=421222.55
Table no: 40
113
PORT FOLIO AS ON 22-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 40.1 110595.8
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 35.35 123406.85
INDIAN BANK 638 216.25 137967.5
TOTAL= 371970.15
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 133.25 158434.25
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 24.8 121768
JK PAPER LTD 2849 47.8 136182.2
TOTAL= 416384.45
Table no: 41
114
PORT FOLIO AS ON 23-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED
275839.85 109906.3
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491
35.25 123057.75INDIAN BANK 638
212.95 135862.1
TOTAL= 368826.15
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189
131.75 156650.75GEOJIT BNP
PARIBAS FINANCIAL
SERVICES LTD
4910
24.3 119313JK PAPER LTD 2849
47.95 136609.55 TOTAL= 412573.3
Table no: 42
115
PORT FOLIO AS ON 24-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 38.15 105217.7
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 33.45 116773.95
INDIAN BANK 638 202.95 129482.1
TOTAL= 351473.75
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 127.85 152013.65
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 23.65 116121.5
JK PAPER LTD 2849 45.35 129202.15
TOTAL= 397337.3
Table no: 43
116
PORT FOLIO AS ON 25-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 38.95 107424.1
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 33.65 117472.15
INDIAN BANK 638 203.6 129896.8
TOTAL= 354793.05
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 124.5 148030.5
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 23.45 115139.5
JK PAPER LTD 2849 45.3 129059.7
TOTAL= 392229.7
Table no: 44
117
PORT FOLIO AS ON 28-FEB-2011
INDICES COMPANY NO.OF SHARES
SHARE PRICE
AMOUNT OF INVESTMENT
MID CAP
MOSER-BAER (I) LIMITED 2758 38.55 106320.9
HINDUSTAN CONSTRUCTION
COMPANY LIMITED
3491 33.9 118344.9
INDIAN BANK 638 204.4 130407.2
TOTAL= 355073
SMALL CAP
ADITYA BIRLA CHEMICALS (INDIA) LTD
1189 130.2 154807.8
GEOJIT BNP PARIBAS
FINANCIAL SERVICES LTD
4910 23.8 116858
JK PAPER LTD 2849 45.65 130056.85
TOTAL=401722.65
Table no: 45
118
5.8 RETURN CALCULATION OF MID CAP PORTFOLIO AND NIFTY MIDCAP
The calculation is based on the total portfolio amount of midcap and the nifty
midcap index.
First step to find the return of midcap portfolio by using the formula:
Closing – Opening *100
Opening
Second step is to find out the return of nifty midcap index using this same
formula.
Third step is making a comparison with these two returns by using a line graph.
5.8.1 RETURN OF MIDCAP PORTFOLIO AND NIFTY MIDCAP
INDEX
PORTFOLIONIFTY MID
CAP INDEX
PORTFOLIO
RETURN
INDEX
RETURN
499968.95 2958.05
490379.35 2951.85 -1.91803911 -0.209597539
487569.85 2912.8 -0.572923799 -1.322899199
477841.35 2868.1 -1.995303852 -1.534605878
460429.8 2783.65 -3.643793071 -2.944458004
452605.85 2708.85 -1.699270986 -2.68711943
453999.6 2690.9 0.307939016 -0.662642819
119
460883.6 2747.1 1.516300895 2.088520569
456158.1 2736.7 -1.025313116 -0.378581049
444010.35 2688.2 -2.663056953 -1.772207403
428758.1 2663.6 -3.435111366 -0.915110483
420487.4 2683.9 -1.928989796 0.762126445
428999.1 2684.5 2.024246149 0.022355527
433810.9 2696.4 1.121634055 0.443285528
435442.8 2691.65 0.376177731 -0.176160807
457629.3 2725.6 5.095158308 1.26130812
450990.8 2713.55 -1.450628271 -0.442104491
426657.45 2625.95 -5.39553135 -3.228243445
411908.3 2548.45 -3.456906706 -2.951312858
403421.85 2553.65 -2.060276523 0.204045596
399717.4 2504.1 -0.918257154 -1.940359877
399255.25 2509.4 -0.115619185 0.211652889
406429.55 2532.55 1.796920642 0.922531282
402226.85 2493.85 -1.034053749 -1.528104085
393539.85 2470.7 -2.159726532 -0.928283578
378570.4 2382.95 -3.803795219 -3.551625046
354633.65 2282.3 -6.322932274 -4.223756268
355914.5 2307.65 0.36117554 1.11072164
362760.85 2369.5 1.923594009 2.680215804
120
378321.95 2449.5 4.289630482 3.376239713
376472.15 2459.05 -0.488948632 0.389875485
383739.8 2453.2 1.930461523 -0.237896749
390475.8 2482.7 1.755356103 1.202511006
380220.6 2421.4 -2.626334334 -2.469086076
376374.5 2461.35 -1.011544351 1.649871975
371970.15 2434.45 -1.170204145 -1.092896175
368826.15 2408.2 -0.845229113 -1.0782723
351473.75 2309.15 -4.70476402 -4.113030479
354793.05 2300.3 0.944394852 -0.383257909
355073 2311.4 0.078905153 0.482545755
Table no: 46
5.8.2 TOTAL RETURNS
The total return of midcap portfolio = -28.98098972
The total return of nifty index = -21.86068525
121
5.8.3MID CAP PORTFOLIO RETURN AND NIFTY MIDCAP RETURN
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
-8
-6
-4
-2
0
2
4
6
PORTFOLIO RETURN
INDEX RETURN
Fig no: 2
Interpretation
The graph shows the return of portfolio and the return of index fluctuation for
two month. The fluctuation never goes in a constant mode. In the above graph
it is seen that the portfolio started on a negative note, but shows a positive
growth by the 3rd day. Simultaneously when we study the market return we can
see that it started on a positive note but then declines suddenly. The market and
the portfolio return show a increasing and decreasing trend. It is also seen that
by the end of the first month the market and portfolio returns move in line with
each other, almost coin siding with each other.
122
5.9 RETURN CALCULATION OF SMALL CAP PORTFOLIO AND BSE SMALL CAP
The calculation is based on the total portfolio amount of small cap and the BSE
small cap index.
First step to find the return of small cap portfolio by using the formula:
Closing – Opening *100
Opening
Second step is to find out the return of BSE small cap index using this same
formula.
Third step is making a comparison with these two returns by using a line graph.
5.9.1 RETURN OF SMALL CAP PORTFOLIO AND BSE SMALL CAP INDEX
PORTFOLI
O
BSE SMALL
CAP
INDEX
PORTFOLIO
RETURN
INDEX
RETURN
499871.05 9845.05
502445.65 9841.17 0.515052832 -0.039410668
499318.95 9740.38 -0.622296163 -1.024166842
495245 9639.15 -0.815901339 -1.039281835
483978.95 9363.19 -2.274843764 -2.862908036
468356.35 9098.66 -3.227950307 -2.825212348
460485.25 9019.13 -1.680579328 -0.874084755
467099.9 9147.63 1.43645209 1.424749394
123
464464.95 9088.24 -0.564108449 -0.649239202
457840.45 8993.84 -1.426264781 -1.038704964
447028.3 8868.15 -2.361554118 -1.397512075
440119.3 8893.27 -1.545539734 0.283260883
439521.45 8901.67 -0.135838169 0.094453446
435847.35 8905.18 -0.835931898 0.039430803
441966.05 8946.17 1.403863073 0.460293896
455535.1 9016.54 3.070156633 0.786593593
456223.05 8985.14 0.151020196 -0.348248885
448961.45 8864.23 -1.59167758 -1.345666289
431255.55 8546.29 -3.943746172 -3.586775163
436245.85 8477.82 1.157156122 -0.801166354
439850.6 8355.75 0.826311586 -1.439874873
440611.35 8362.41 0.172956454 0.079705592
445720.4 8464 1.15953663 1.214841176
441853.75 8331.2 -0.867505728 -1.56899811
443936.2 8261.72 0.471298478 -0.833973497
431918.9 7995.27 -2.706988076 -3.225115351
413296.35 7651.82 -4.311584883 -4.295664812
410699.35 7585.65 -0.628362675 -0.864761586
411880.8 7808.79 0.287667852 2.94160685
425282.5 8116.62 3.253781191 3.942096023
425625.2 8164.86 0.080581731 0.594336066
424894.55 8247.42 -0.171665118 1.011162469
426712.15 8324.56 0.427776727 0.935322804
420024.25 8128.91 -1.567309485 -2.350274369
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421222.55 8121.26 0.285293052 -0.094108558
416384.45 8061.75 -1.148585231 -0.732768068
412573.3 8036.41 -0.915295948 -0.314323813
397337.3 7814.04 -3.692919537 -2.767031548
392229.7 7789.47 -1.285456966 -0.314434019
401722.65 7817.32 2.420252724 0.357533953
Table no: 47
5.9.2 TOTAL RETURNS
The total return of small cap portfolio = -19.6347438
The total return of BSE index = -20.59644187
5.9.3 SMALL CAP PORTFOLIO RETURN AND BSE SMALL CAP RETURN
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1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
-5
-4
-3
-2
-1
0
1
2
3
4
5
PORTFOLIO RETURN
INDEX RETURN
Fig no: 3
Interpretation
The graph shows the return of portfolio and the return of index fluctuation for
two month. The fluctuation never goes in a constant mode. In the above graph
it is seen that the portfolio started on a positive note, but shows a negative
growth by the next day. The data of two month gives the picture that the
portfolio and index return in most of the days show negative returns. The small
changes in the market also affect the portfolios. Simultaneously when we study
the market return we can see that it started on a positive note but then declines
suddenly. Sometimes the return of the two is almost equal but sometimes
portfolio returns more than the index return. The market and the portfolio
return show an increasing and decreasing trend in this two month. It is also
seen that by the end of the second month the market and portfolio returns move
up.
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CHAPTER- 6
FINDINGS, SUGGESTIONS
AND
CONCLUSION
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6.1 FINDINGS
1. Market capitalization has been divided into four. They are small cap,
mid cap, large cap, and mega cap. Earlier the capitalization was just one
ie the large cap. But with the number of companies on the increase it
was necessary for further divisions. Thus came the small cap, mid cap,
and mega cap.
2. The advantage of classification of companies is as follows:
Companies that are classified as small cap have a capitalization of
below $2 billion. The advantage of such division is that the capable
investor who wishes to invest can study the performance of
companies under the small cap. As the result they are able to analyze
which companies have stable performance.
Once the company reaches above $2 billion they come to the
capitalization of medium caps. An investor now can, after studying
the small caps can decide in which companies to invest. Thus helping
them to make a proper investment.
With the help of this classification an investor can study the
performance of the company in stage wise.
3. From the recent survey conducted by the India’s foremost and largest
finance magazine “capital market” they found that 120 small cap
companies waiting to break free for transforming to mid caps.
4. Compared to small cap stocks mid cap stocks are less risky
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5. A study conducted by ROXBURY capital management LLC. About
“the case for mid cap stocks in today’s volatile markets” find the
historical performance of last 25 years shows good performance than
small cap and large cap.
6. Mid cap stocks give higher return than small cap and large cap in future.
7. The price of small cap shares is less so the small investors can invest in
good small cap securities.
8. Compared to large cap companies the small cap shows faster growth.
9. Mid cap companies generally have much greater growth potential than
comparable large cap, with more seasoned management, liquidity, and
operating histories than small caps.
10. Investing in a group of securities can reduce the risk involved in
individual securities
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6.2 SUGGESTIONS
1. Create awareness about mid cap and small caps among the investors.
2. Investor should always be aware about the current situation in the stock
market.
3. The stock exchange should function like a financial institution offering
investment opportunities having highest return potential rather than a
facilitator.
4. The investor should consider the past record before investing.
5. The investor should not stick to one strategy in the whole time. He
should change his strategies according to the market situation.
6. The investor must need news papers, business journals or websites to
get an awareness about the market situation and factors that will affect
the stock market. Must have a clean eye on the activities of major
players of the market.
7. The investors consult the stock brokers to collect information about the
market and particular stocks which give good return then make
investment in that with the help of that broker.
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6.3 CONCLUSION
Today Indian capital market offers a variety of financial product with varied
features and benefit for investors to choose from them. However the
knowledge about the particular investment alternative is an essential for the
investor
It can be concluded that the role and the performance of MID CAP and
SMALL CAP help the investor to choose the better fund and asses its
performance with the market. In the changing market situations an individual
investor expecting an optimum risk and return. Result of study shows that the
mid cap and small cap play a very significant role in today’s capital market.
But the problem is most of the investors are not aware about the small caps and
mid caps. So give more priority and encourage to these companies.
The researcher concludes that, if a person who is investing in shares for his
future needs, he can invest in small cap or mid cap companies. That company
will once become a success in its future. From the study of two month the
market of small cap and mid cap shows lots of up and downs and based on that
the small cap shows good return than mid cap in these months. And also the
overall fact should consider the researcher concludes that investing in mid cap
is better than small cap. Because the mid cap companies is less risky than small
cap and large cap.
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BIBLIOGRAPHY
1. Security Analysis and Portfolio Management - S Kevin
2. DALAL STREET Investment journal
3. CAPITAL MARKET magazine
WEBSITES
1. www.capitalmarket.com
2. www.bseindia.com
3. www.cochinstockexchange.com
4. www.dsij.in
5. www.nseindia.com
6. www.moneycontrol.com
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