A Reliance Capital Company Why earn Month 00

A Reliance Capital Company Why earn? Month 00 2006 Why Invest?

A Reliance Capital Company The Objective Wealth Creation

A Reliance Capital Company Comparative returns for the last 20 years What $1000 invested at the end of 1986 would be worth at the end of 2006? Instrument Value Average Annual Return Stocks (S&P 500) $9310 11. 80% Real Estate $8540 11. 32% Commodities $6510 9. 82% International Stocks $5020 8. 40% Inflation (CPI) $1820 3. 05% Gold $1550 2. 23%

A Reliance Capital Company Power of Equity Month 00 2006 • Unbelievable • but it has happened

A Reliance Capital Company Just imagine… • How much can you make in 26 years by just investing Rs. 10, 000 initially in any of financial instruments ? • Take a wild guess ? ? ? • Let us look at the real example…

A Reliance Capital Company If you have subscribed in 100 shares of ____ company with a face value of Rs. 100 in 1980… • • • In 1981 company declared 1: 1 bonus = you have 200 shares In 1985 company declared 1: 1 bonus = you have 400 shares In 1986 company split the share to Rs. 10 = you have 4, 000 shares In 1987 company declared 1: 1 bonus = you have 8, 000 shares In 1989 company declared 1: 1 bonus = you have 16, 000 shares In 1992 company declared 1: 1 bonus = you have 32, 000 shares In 1995 company declared 1: 1 bonus = you have 64, 000 shares In 1997 company declared 1: 2 bonus = you have 1, 92, 000 shares In 1999 company split the share to Rs. 2 = you have 9, 60, 000 shares In 2004 company declared 1: 2 bonus = you have 28, 80, 000 shares In 2005 company declared 1: 1 bonus = you have 57, 60, 000 shares

A Reliance Capital Company At the end of 2005… • You have 57, 60, 000 shares of the company • Any guess about the company ? • (Hint : Its an Indian company) • Any guess about the present valuation ?

A Reliance Capital Company The result of ‘Power of Compounding’ Your present valuation is about Rs. 200 Cr. + & The company is ‘WIPRO’

A Reliance Capital Company Other such examples… CIPLA Investment of Rs. 10, 000 in 1979 will fetch Rs. 95 cr. + INFOSYS Investment of Rs. 10, 000 in 1992 will fetch Rs. 1. 5 cr. + RANBAXY Investment of Rs. 1000 in 1980 will fetch Rs. 1. 9 cr. +

A Reliance Capital Company Basics of Equity Markets Month 00 2006

A Reliance Capital Company Stock Market ======= Mandi Buyers and Sellers come together Buyer Seller Buyer Seller’s Price – Higher offer Buyer’s Price – Lower Offer

A Reliance Capital Company Stock Exchange (BSE / NSE) Broker Sub- Broker Client

A Reliance Capital Company Delivery Based (Primary and Secondary Markets) Depository (NSDL / CDSL) Depository Participant Client

A Reliance Capital Company Off-line Model Sub broker Depository Participant Client Bank

A Reliance Capital Company On-line Model Reliance Money Broker (Reliance Securities) Sub broker Depository Participant (R Money Franchisee) (Reliance Capital) Reliance Money Client Bank UTI, IDBI, HDFC, Offline CMS

A Reliance Capital Company Margin Trade Scenario 1 Company A Market Opens 10 am Share Price: Rs. 100/Buy 100 shares Total Investment Rs. 10000/At 2 pm Share Price : Rs. 120/Sell 100 shares Profit: Rs. 2000/Return on investment: 20%

A Reliance Capital Company Margin Trade Scenario 2 Company A Market Opens 10 am Share Price: Rs. 100/Buy 100 shares Total Investment Rs. 2000/- Broker provides Rs. 8000/At 2 pm Share Price : Rs. 120/Sell 100 shares Profit: Rs. 2000/Return on investment: 100%

A Reliance Capital Company Services Available • Equities – Delivery, ATST, Margin • Futures and Options • IPO's online • Research Inputs – Dow Jones, Saans • Trading Ideas – Sachin Chavan, Deepak Mohini • Overseas Equities, Commodities, Currency combinations.

A Reliance Capital Company Target Clients Existing Market • Traders • Investors • IPO Applicants New Market • MF Investors • ULIP Investors • Debt Market – FD Invetors

A Reliance Capital Company Futures Contract Current Share Price Rs. 100 Market assessment of value on last Thursday: Rs. 120/Contract Value Rs. 120/My Assessment: Rs. 125/- I ‘ll buy the contract. Counter Party Assessment: Rs. 115/- Counter party sells contract On last Thursday Price is Rs. 121: Buyer Gains. On last Thursday Price is Rs. 118: Seller Gains.

A Reliance Capital Company Thank You