Capital Market Awareness CAPITAL MARKET AWARENESS with an

Capital Market Awareness

CAPITAL MARKET AWARENESS with an Overview Of the Securities Market

Stock Market – Preview of BSE Bombay Stock Exchange (BSE) Founded as The Native Stocks & Share Brokers Association in 1875 Largest number of listed companies…. . 5, 000+ 7 th largest exchange in Asia in terms of Market Capitalization 8 th Largest Exchange in World – number of trades in Equity Shares Traded internationally on the EUREX as well as leading exchanges of the BRCS nations

Overview of Securities Market o Purpose of Securities Market n Companies raise resources through public issues n Buyers and sellers enter into transactions and make a profit or loss o Components of Securities Market n Bonds, Stocks, Mutual Funds, Derivatives of securities (Futures, Options) n Financial Derivatives and Commodity Derivatives n Primary (IPO) and Secondary Market

Overview of Securities Market q Regulators of the Securities Market n SEBI, RBI, DEA and DCA regulates the Indian securities market n Commodity Market is regulated by Forwards Market Commission q Other Key Players in the Securities Market n Depository n Clearing Corporation n Broker

BSE Market Offerings o Cash Market o Derivatives o Currency Derivatives o Interest Rate Derivatives o Debt Market segment o ETFs/Mutual Funds o BSE SME Platform

Trade Guarantee Fund (TGF) o Came into force with effect from May 12, 1997 o System of guaranteeing settlement of trades and market equilibrium in case of payment default o Fund is managed by the Defaulters’ Committee o Main objectives are: n To ensure timely completion of settlements of contracts n To inculcate confidence in the minds of secondary market participants generally and global Investors n To protect the interest of Investors

BSE’s Investor Protection Fund (IPF) Key Initiatives o Sponsored Research Initiative to address the needs of its listed companies and their investors o Objective is to create and disseminate companyspecific research reports o Investor Awareness Programs across India to educate Investors about the Indian Capital Market For further details on BSE IPF, visit www. bseindia. com

Investor Grievance Redressal Mechanism o SEBI is a statutory body established under the SEBI Act, 1992 to protect the interests of investors in securities o Investors can lodge their grievances with BSE or its Depository o BSE has designated Investor Grievance Redressal Committees (IGRCs), or Regional Investor Complaints Resolution Committees (RICRC) o Grievances for redressal are monitored by SEBI through periodic reports o SCORES (SEBI Complaints Redress System) a web based centralized grievance redressal system of SEBI For further details about Investor Grievance Redressal, visit www. bseindia. com

BSE’s Regional Centres o o o Ahmedabad Bangalore Chennai Hyderabad Indore Jaipur Kanpur Kolkata Mumbai New Delhi Pune For full addresses of BSE’s Regional Centres, visit www. bseindia. com

Key Rights of Investors o To receive all benefits/ material information declared for the investors by the Company o Receipt of the Contract Note from the broker o Expect delivery of shares purchased/value of shares sold within 24 hours from pay-out o Approach nearest Regional Investor Service Centre of BSE For the entire list of Rights of Investors, visit www. bseindia. com

Key Investor Do’s o Always deal with the market intermediaries registered with SEBI / stock exchanges o Always insist on contract notes from your broker o Always settle the dues through the normal banking channels with the market intermediaries o Adopt investment strategies commensurate with your risk-bearing capacity o Be cautious about stocks which show a sudden spurt in price or trading activity o No guaranteed returns on market investments For the entire list of Do’s for Investors, visit www. bseindia. com

Key Investor Dont’s o Don't deal with Unregistered brokers / sub brokers, or other Unregistered intermediaries o Don't execute any documents with any intermediary without fully understanding its terms o Don't deal based on Rumours or ‘Tips‘ o Don't fall prey to promises of guaranteed returns o Don't leave the custody of your Demat Transaction slip book in the hands of any intermediary o Don't blindly follow media reports For the entire list of Dont’s for Investors, visit www. bseindia. com

INVESTING in the CAPITAL MARKET

e-trading Screen 1 15

How the Capital Market Operates Day T Time 9: 15 a. m. – 3: 30 p. m. Description of activity Trade Day Confirmation of all trades (including custodial trades) By 11: 00 a. m. Facility of an exceptional window for late confirmations would be made available by the exchanges T+1 Processing and downloading of obligation files to brokers Settlement T+2 Settlement System By 1: 30 System: p. m. / custodians T+2 By 11: 00 a. m. Pay-in of securities and funds By 1: 30 p. m. Pay-out of securities and funds

How the Capital Market Operates o e-trading o BOLT on-line Trading System at BSE o Benefits : n Lower Transaction Costs n Increased Liquidity & Transparency n Greater Competition n Time Efficient & Automated o De-materialization (Demat) o Shares held in electronic format (Non-Physical) o Facilitates electronic settlement of trades o Maintained & monitored by Depository Participant (DP)

You Have to Invest FD Returns = 8% to Beat Inflation Interest is taxable Clearly, ONLY Low Risk FDs will erode your capital More than ~70% of Investors Funds find their way to FD’s

Asset Class Offerings Equity Direct Equity Mutual Funds Debt Bank FDs Corporate FDs Debt Mutual Funds Government Instruments (PPF, NSC, Post Office Savings) Gold ETFs Fund of Funds

Equity v/s Debt – Performance Record Investment of Rs. 100 invested in September 2003 would have been o Equity Rs. 608 in August 2015 at a CAGR Return of ~16% After Tax** o Debt Rs. 245 in August 2015 at a CAGR Return of 5. 4% After Tax** ** Equity Returns are Tax-free % BSE Sensex September 2003 - August 2015 800 700 600 500 400 300 200 100 0 ** assumed investor is in Highest Tax Bracket as on 31 st August, 2015 007 n: Ru ull -2 4 0 20 B 01/09/2 03/10/2 05/11/2 08/12/2 10/01/2 11/02/2 16/03/2 18/04/2 20/05/2 22/06/2 25/07/2 27/08/2 003 004 005 006 008 009 010 011 012 013 014 015

Investing v/s Trading o Time Frame v/s Immediate o Level of Market Expertise o Long Term v/s Speculative o Delivery v/s Square Off o Returns v/s Zero Sum Game

Selecting a Stock Management Business Model Numbers Story behind the Numbers Industry Outlook Annual Report

Capital Markets – Road Ahead Current Participation – 2 -3%; Year 2025 – 10 -15% participation Indian Equity Market - Strong Potential for Growth Investment Cycle has to re-start Sheer Size of Indian Economy Changing Demographics in India

Overview of MUTUAL FUNDS and FINANCIAL PLANNING

What are Mutual Funds Pool of Money Professionally Managed Governed by AMFI and SEBI Sponsor / Trustee, AMC

Mutual Fund Terms o AMC o Corpus o AUM o NAV & Units o Fund Factsheet o Expense Ratio o NFO

Types of Mutual Fund Schemes Equity Mutual Fund Schemes Large Cap / Multi Cap / Mid & Small cap / Sectoral Funds Debt Mutual Fund Schemes Liquid / Ultra Short Term / Dynamic Bond / Income / Gilt Balanced Funds Gold Fund of Funds Tax Saving Schemes

Advantages of Investing through MFs Wide choice of products Relatively easier to invest – in terms of operations Less Volatile Possible to invest small sums Facilitates disciplined investing

Power of Compounding Monthly SIP Amount (`) Expected Rate of Return Estimated Corpus over 10 years 2, 000 15% Rs. 5. 6 lakh 3, 500 15% Rs. 9. 8 lakh 5, 000 15% Rs. 13. 9 lakh Bull Cycle once in 7 -8 years pulls up Average Returns

Financial Planning - Key Aspects o Financial Goals n Buying a house n Children's Education n Children’s Marriage o Insurance Planning o Tax Planning o Retirement Planning

Three Pillars of Investing o Consistency o Liquidity o Returns

THANK YOU !!!! INVESTING IS A FULL TIME ACTIVITY THERE IS NO SHORT CUT TO MAKING MONEY