chirag jogi

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1

SUMMER INTERNSHIP TRAINING

AT

FAIRWEALTH SECURITIERS LTD

A project report submitted in partial fulfillment for the award of

POST GRADUATED DIPLOMA IN MANAGEMENT

BY

CHIRAG M. JOGI

KOHINOOR BUSINESS SCHOOL AND CENTRE FOR MANAGEMENT RESEARCH

KHANDALA

April – June 2010



2

DECLARATION

I Chirag M. Jogi, a student of Kohinoor Business School, hereby

declare that the project titled “Summer Internship training at Fairwealth

Securities Ltd.” is an original work done by me.

This project report is submitted as a partial fulfillment requirement for

PGDM.

Chirag M. Jogi

PGDM

Kohinoor Business School



3

Acknowledgement

I would like to give sincere thanks to all those who have helped me in

some or the other way for preparation of my report.

My sincere gratitude to Mr. Naveen Gaba for providing me an

opportunity to work with Fairwealth Securities Ltd, and giving me necessary

direction on doing this project to the best of my abilities.

I am highly indebted to Mr. Kamlesh Kumar Sharma, Senior Manager –

Business Development and my company guide, Mr. Sujeet Gupta, DP

Manager and Mr. Shishir Simon, RMS Manager, who has provided me with

necessary information and also for the support extended to me in completion

of this report and their suggestion and comments on bringing out this report

in the best way possible.

Mr. Milind Dalvi my faculty guide, Kohinoor Business School, who is

always there for my assistance and directs me whenever I was in need of it.

I am happy to get his guidance and sharp supervision on my Summer

Internship report.

I am sincerely thankful to all those who directly or indirectly helped me

in completion of this assignment report.



5

List of Tables Page No

Product and Exchanges where the company is registered 15

Table of Exposure 15

Brokerage Charges 16

Other charges 17

Procedure of DP 19

Comparative Analysis Table 22



6

ABBREVIATIONS

DP: Depository Participant

VSAT: Very Small Aperture Terminus

RMS: Risk Management System

NSE: NATIONAL STOCK EXCHANGE

BSE: BOMBAY STOCK EXCHANGE

MCX: MULTI COMMODITY EXCHANGE

NCDEX: NATIONAL COMMODITY EXCHANGE



7

EXECUTIVE SUMMARY

The Report titled “Summer Internship training at Fairwealth Securities Ltd.”

is my project on understanding the way a broking firm works, and the

objective is to share the practical experience which I got during internship

period. The research is based on primary data which I gathered during the

period and personnel observation.

This report is a brief description of the work which I performed during 2

months at Fairwealth Securities Ltd., Fort, Mumbai. During this period I

worked in the marketing, DP department. Task and the duties assigned is

given in this report. The internship program provided me an opportunity of

being exposed to the actual world of marketing, market dealing and the

operations at a broking firm. It was a great experience for me to work in this

organization. Theoretical knowledge in marketing and operation became

potent and strong with the help of practical implication.

During the period I saw the strength of the organization is economical

brokerage charges, high exposure (limit) with respect to margin money and

Good research calls, consumer friendly website. The weakness which isobstructing the growth of the company is lack of marketing to bring up the

branding for the firm, higher slag time in operations as half of the work

depends on Gurgaon office which is the head office of the organization. To

overcome this Mumbai office should be given its own operational control and

decentralized decision making.



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Facilitate company growth

Companies view acquisitions as an opportunity to expand product lines,

increase distribution channels, hedge against volatility, increase its marketshare, or acquire other necessary business assets. A takeover bid or a

merger agreement through the stock market is one of the simplest and mostcommon ways to company growing by acquisition or fusion.

Redistribution of wealth

By giving a wide spectrum of people a chance to buy shares and thereforebecome part-owners (shareholders) of profitable enterprises the stock

market helps to reduce large income inequalities .Both casual andprofessional stock investors through stock price rise and dividends get a

chance to share in the profits of promising business that were set up by

other people.

Corporate governance-

By having a wide and varied scope of owners, companies generally tend toimprove on their management standards and efficiency in order to satisfy

the demands of these shareholders and the more stringent rules for publiccorporations by public stock exchange and the government. Consequently, it

is alleged that public companies (companies that are owned by shareholders

who are members of the general public and trade shares on publicexchange) tend to have better management records than privately-held

companies (those companies where shares are not publicly traded oftenowned by the company founders and / or their families and heirs, or

otherwise by a small group of investors). However, some well-documented

cases are known where it is alleged that there has been considerableslippage in corporate governance on the part of some public companies.

Creates investment opportunities for small investors

As opposed to their businesses that require huge capital outlay, investing in

shares is open to both the large and small stock investors because a personbuys the number of shares they can afford. Therefore the Stock Exchange

provides an extra source of income to small savers.



11

Government raises capital for development projects

Governments at various levels may decide to borrow money in order to

finance infrastructure projects such as sewage and water treatment works orhousing estates by selling another category of securities known as bonds.

These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such municipal bonds can obviate the need to directly tax the citizens in

order to finance development, although by securing such bonds with the fullfaith and credit of the government instead of with collateral, the result isthat the government must tax the citizens or otherwise raise additionalfunds to make any regular coupon payments and refund the principal when

the bonds mature.

Barometer of the economy

At the stock exchange, share prices rise and fall depending, largely onmarket forces. Share prices rise tend to rise or remain stable when

companies and the economy in general show signs of stability and growth.

An economic recession, depression, or financial crisis could eventually leadto a stock market crash.

Therefore the movement of the general tends in the economy .The listingrequirements are the set of conditions imposed by a given stock exchange

upon companies that want to be listed on that exchange .Such conditions

sometimes include minimum number of shares outstanding, minimummarket capitalization, and minimum annual income.



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13

MISSION :

• We aim to provide wealth maximization solution for our clients and

guide our clients in talking sober investment decisions.

Broking with Human touch

• State of the art IT infrastructure, choice of connectivity available

• Quality Research – Empowering the client

• Decentralised operations

Marketing Strategy with Respect to 4 P’s

With respect to pricing it targets itself as low brokerage firm

All range of Financial Product are made available

Company is positioning itself as a company with maximum leverage

Company has 200+ branches distributed over 12 states



14

PRODUCT AND SERVICES:

• The Equity broking arm

Fairwealth Securities Ltd offers personalized premium services on the NSE,

BSE & Derivatives market-Equity and Currency Markets.

• The Commodity broking arm

Fairwealth Commodities Broking Pvt. Ltd offers services in Commodity

trading on NCDEX and MCX.

OUR OFFERINGS

• Equity and Derivatives Broking (Retail and Institutional)

• Commodities Broking

• Currency Derivatives Broking

• IBT - Online Internet Based Trading

• Equity Research

• Commodities Research

• Depository Services

• Portfolio Management Services

• Mutual Fund Distribution

• Insurance Broking

• IPO

• Wealth Management



15

EQUITY TRADINGNSE CASH AND F&O

BSE CASH AND F&O

COMMODITYMCX

NCDEX

CURRENCY TRADING MCX-SX

RESEARCHEQUITY RESEARCH

COMMODITY RESEARCHDEPOSITORY

WE ARE DEPOSITORY PARTICIPANT

OF CDSL

INTERNET TRADING SOLUTION FOR ONLINE TRADING

DISTRIBUTION

MUTUAL FUND

LIFE INSURANCE

GENERAL INSURANCE

FIXED DEPOSIT

IPO

SERVICES: Limit / ExposureAPP ROVED STOCK (List on website)

INTRADAY10 TIMES

DELIVERY4 TIME

ILLIQUID SCRIP S (List on website)

INTRADAY 2 TIME

DELIVERY1 TIME

T2T/ BE

INTRADAYNO

DELIVERY1 TIME



16

Z GROUP

INTRADAYNO

DELIVERY

ONLY SELLING NO BUYING

ALLOWED, (STOCK SHOULD BE

IN OUR DP)

DISALLOWED (G,F,R)

BSE (G,F,R) groups are disallow ed for

creating any fresh positionONLY SQUARE OFF ALLOWED

NON P LEDGABLE ( REST OF ABOVE)

INTRADAY2 TIME

DELIVERY1 TIME

Brokerage Charged:

Cash Market Intraday Delivery

Normal 0.03 / Rs. 100 0.30 /Rs. 100

Minimum 0.02 / Rs. 100 0.10/ Rs. 100

Futures 0.03/ Rs. 100 0.30/ Rs. 100

Options Rs. 50 per lot

On Margin money of Rs. 10000 account opening becomes Free



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Other charges:

Scheme

Account opening ChargeRs. 500 (Free if margin money

of Rs.10000 given)

Account maintenance chargeRs.250 every year OR Rs.1000

(one time)and life time free

Dematerialization charges Rs 25 s+ 3 Per Certificate

Rematerialization Charges Rs 30 per Request

Custody Nil

Transaction Charges (Per Transaction)Receipt / Purpose

Delivery

Nil0.02% of Market Value (Subject

to min of Rs 12 and max uptoRs. 25 Per Transaction)

Pledge(Per Transaction)

Creation, Invocation/ClosureRs 25



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My Work and Learning at Fairwealth Securities Ltd

Initially I was imparted process and product knowledge. I was given

sufficient time to know about the product and also about the Sales and

distribution channel. I had to work with the Senior Business Development

Manager and think of ways of improving the sale of Demat and Trading

Account.

I was provided database and had to make calls from the data. Provide

information to the prospective client about the company and the product we

sold. Then try to fix an appointment with the prospective client, then

persuade and convince them to open an account with the company

We asked for a minimum margin money of Rs.10000. Initially I was

accompanied by the Relation Ship manager for every meeting. Main

objective was to know the need of the customer and how to fulfill in the best

way.

My internship dealt in fields:

Demat Account

Cash Trading (Equity)

This experience helped me to understand the basic functioning of Fairwealth

Securities Ltd. as a broking house.

During this process of training there various people who helped me:

My Training for Demat was initiated by Senior Business Development

Manager Mr. Kamlesh Sharma,

Mr. Shishir Simon, Head RMS Department Manager provided me the training

on the limits offered by the company and the work of RMS Department

Mr. Sujit Gupta, DP Manager provided me the training on how the forms

filled from the clients are punched into the system and way the are

activated.

Documents Required for Opening a Trading & Demat Account:

1. Photo copy of PAN Card / Passport / Voter ID card / Driving License for

Photo Proof

2. Photocopy of Passport / Voter Id / Driving License / Bank Passbook /

Rent Agreement / Ration Card / Flat Maintenance Bill / Telephone Bill /

Electricity Bill for Address Proof



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3. Statement of holding / client master: in case the client already has a

Demat A/c with any other DP provider

4. A Cancelled Cheque and Margin Money Cheque

Procedure which every form received from the client follows

Total Time Taken in opening and activating the account: 2 days maximum

In case of HNI client the entire process is completed in Just 2 hrs

My Experience and learning w ith RMS department:

Here a continuous watch is maintained on the account balance of the client. If the

balance turns negative (debit balance) then the client is intimated about it and

further if still the balance remains negative then dealer is intimated to square off

the position to that effect.

Filled form is

receivedn

Documents are

verified

Details are punched

into the system

Details Punched are

re‐verified

Punched entry is

released to be

received by HO

Head Office

activates the client

code

Sends an email as well

as sms to the client

informing about

activation



20

Understanding exposure:

When we say that company gives an exposure of 10 times on the margin money on

intraday basis, it means that if the client has a credit balance (margin) of Rs.20000,

then he can he can buy and sell shares for worth Rs 200000 in that day

Similarly if the client purchase the shares on Day x and sells it on some other day

than its called delivery based. In delivery the company provides exposure of 4

times.

That is when client has margin money of Rs. 20000, then he can purchase shares

worth Rs. 80000. And make the payment within 5 days or clear his position within 5

days. (Company gives T+5 days credit)

After the training I was asked to get to the work of finding client for the company.

Sources of I ncome for the company:

Business model

1st Source:

Branch office: Branch office through its own Business Development executivesacquire client for the company

2nd Source:

Franchisee: Company Charges low brokerage from franchise and franchise charge

the standard brokerage from the client. Difference is the profit of franchisee.

Franchisee has to give a Franchisee fees of Rs. 100000 for setting up their own

trading system. Every Franchisee is given a separate code.

3rd Source:

Remissar: Remissar introduces the client to the company. Every remissar is also

given a separate unique code. Then the brokerage earned through the client is

shared in a agreed proportion

Competitors;

1. Reliance money

2. Motilal Oswal

3. Angel Broking

4. Anand Raathi



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5. HDFC securities

6. Ventura

7. And many other

During the training period I was given additional Task of performing a comparative

analysis with respect to all major competitors.

Also I took up an additional task: To find, criteria which prompts a client to stay

with or change his broker

List of Objective:

1. Increase the Sales of Demat Account

2. Comparative Analysis of the company with respect to Competitors

3. Understanding Clients expectation from his broker

Methodology:

Research Type: Analytical

Sample Size: 4 companies

For which I first selected the competitors whom I have to target for analysis:

Competitors Selected:

1. Ventura

2. Angel Broking

3. Motilal Oswal

Tools: Percentage tool

Then I prepared a list of Questions which I need to ask the competitors,

questionnaire is attached at the end of the report

Strategy Adopted:

First, I surfed the websites of the competitors and made an online request to them

that I want to open an account with them.

Then their representative called me and in the disguise of prospective client I

collected this data.

This data is a primary source of data.(June 2010)



22

For the objective of increasing the sale and understanding clients

requirement:

We daily made calls to many people and asked them to open a Demat and Trading

account with our company and in the process I also asked the questions through

which I can conclude about the behavior of the client. Questionnaire is attached at

the end of the report.

Scope of Research:

I was conducted in the city of Mumbai and Mumbai Suburbs.

Research Methodology:

Types of Research: Analytical Research

Sampling: It was a randomly selected Data.

Sample Size: 500 people

Findings and Conclusion:

Comparative Analysis:

FairwealthSecurities

Ventura Angel Broking Motilal Oswal

Brokerage 0.03 Intraday0.30 Delivery

0.015 Intraday0.17 delivery

0.07Intraday(oneside)

0.50 delivery

0.06 Intraday(one Side)0.50 delivery

Margin Money Rs. 10000 As per Deal Rs. 10000 Rs. 25000

Deposit Zero Rs. 5000 Zero Zero

Accountopening

charge

500 499 400 400

Exposure 10 times onIntraday

4 times of Delivery

No exposure 5-6 Times onboth Intraday

and delivery

4 times onboth intraday

and delivery

Online Trading Yes Yes Yes Yes

Annual

Maintenance

charge

Rs 250 per

year or Rs.

1000 life time

Rs 300 per

year

Rs. 400 per

year

Rs. 400 per

year

Conclusion:



23

1. Brokerage charged by Fairwealth Securities is comparatively economical to

many big players. In comparison to Ventura, company’s brokerage is

marginally high, but they charge deposit of Rs. 5000 and this can act as a

comparative edge of Fairwealth over Ventura as Fairwealth doesn’t charge

any such Deposit.

2. With respect to other charges it’s more or less same.

3. What the competitors stress more is on their online trading, which Fairwealth

doesn’t stress.

4. With respect to exposure provided, no one offers such a high exposure.

Findings: On Clients Expectation Survey

1. Of the all people where contacted for opening a Demat account 99% of the

people were not aware of the brand of Fairwealth Securities Ltd.

2. 10% of the people had left trading as they suffered a heavy loss earlier.

3. 25% of the people are not at all interested in the stock market related calls

4. 55% of the people were satisfied with their current broker

5. Reason for their satisfaction:

6. They had trading relation with the broker since many years

7. The brokers was their relative

8. Brokers doesn’t charge any margin money and gives more credit period

9. A broker is very much near to the place of residence.

10.5% of the contacted people were ignorant about the functioning of the stock

market and how does the market work. But they seemed to be interested in

knowing

11.10% of the people showed interest in the companies trading account due to

the low brokerage charges

12.Other didn’t speak or attend the call

13.Those who showed interest were only those who had some experience of

trading.14.Reason for their interest was lower broking charge and high exposure

compared to the trading and Demat account with their current broker.

15.Currently the modern investors are more interested in online trading as they

can keep a watch on their stock by themselves.

16.They need a dedicated representative to be in their contact for their query

and problems.

Interpretation: Findings collaborate the fact that Strategic marketing,today, has gone beyond only meeting Sales targets and generating profit



24

volumes. It shows that all the competitors are striving hard not only to woothe customers but also to make them Brand loyal by generating customersatisfaction.

Finding with Respect to the Operations:

1. DP Department functions very effectively, but due to the loads of work, there

is a need to appoint additional staff

2. Marketing Department / Business Development department needs more

marketing support for making the brand recognizable

3. Lack of focus on Marketing the Online Trading

Suggestions:

1. Company needs to take a marketing campaign to make the brand

recognizable. This can be done by distributing umbrella with Fairwealth Logo

embedded on it.

2. Company experts should give interviews and their expert advice on the news

channels to make the brand of Fairwealth more familiar with the investors

3. To come up with one stop marketing and business development, and not just

for the corporate office. Many investors who are impressed by the low

brokerage but not converted into clients, because they want a centre near

their house. So the company can do that as we have franchisee spread

across the Mumbai, whereby the code given would be from Fort office, butmapping in the franchisee and Franchisee and companies sharing agreement

should be made with respect to this new development.

4. Its necessary to develop a good relationship with the client in this field as the

findings suggest that most of the people trade only with the person whom

they know and whom their know persons recommend

5. So the company should adopts more professional approach of decision

making and make the work as prompt as possible and reduce the slag time

to remain in the competition.



25

6. Customers find difficulty in getting the emails from the company. As email

are not received early from the company even after the request, hence I

suggest to improve this part of the operations as modern day investors are

more techno savvy and future belongs to online trading, so the company

needs to focus more on Online Trading.

7. After sales services and follow up calls are important for getting newreferences so trained telesales should be appointed for this purpose whose

sole work should be to make feedback calls.8. There should be regular training programme like Workshops, Seminars, and

9. Meetings etc. for the sake of development of the organization and also forthe development of the employees’ performance simultaneously.

Limitations:

1. This survey was pertained to the people of Mumbai, and the broking firms in

Mumbai.

2. Plans provided by the competitive firms are the standard rates and not the

negotiable rates.

3. Lack of response from many people on sharing the info about the brokerage

they pay and charges charged

4. Lack of Brand Awarness

5. Difficulty in convincing people to open an account as it’s a risk taking venture

6. Increased competition

7. The study is conducted with the data available and the analysis was madeaccordingly.

8. It was not feasible to compare all the broking firms in the market



26

Questionnaire for competitors

Q1. What’s the Account Opening Charge?

Q2. What’s the Brokerage?

Q3 What’s the Margin money?

Q4 Do I have to pay any deposit?

Q5 What is the exposure you provide?

Q6 Do you provide Online Trading Facility? Do you I have to Pay any other chargesfor that?

Q7 What are the additional benefit I get?

Q8 Is the brokerage Negotiable?

Q9 What are the document required?

Q10 What is the charge I have to pay when I sell the scrip from the DP

Q11 What is the Annual Maintenance Charge I have to pay?

Questionnaire for Client

Q1 Sir / Mam, do you invest in market?

Q2 If yes, Where is your account and what brokerage do you pay?

Q4 If No, would u be interested in opening an start trading?

Q3, Would you like to open an account with us / Interested in opening an account

with us?

Q4 If yes, Sir when can we schedule a meeting?

Q5 If no, Sir/ Mam, if you don’t mind may I know the reason why?