TURNAROUND OF THE STOCK EXCHANGE
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ManyaMittal,TrishGupta,MuditJain 1ShriRamCollegeofCommerce
ABSTRACT
Ifwegobackafewyears,thestockmarketwassomethingthatwasassociated withgamblingandbetting,andthiscomparisonwasalsonotwrongbecausethe stockmarketwasmanipulated,andfraudpersisted.Financialknowledgewasnot neededtomakemoney;allyouneededwasluck.Butwithchangingtimes,this notionhasalsochanged,andsohasthementalityofthepeople.Afterthe1992crisis,noonewouldhavethoughtthattheSensexwouldhit60,000inthenext30 yearsbutbetterregulationandimplementationofruleshavemadeinvestingin stockseasierandhavehelpedtostopthecomparisondrawnbetweengambling and investing. Business and investment knowledge is the only way to succeed andprogress;thisistheideabeingpopularizedbymany Thoughtheconcepthas changedalot,thethoughtprocessofmostofthepopulationisstagnant,andthey don'ttrustthestockmarkets,asonly51.5millionpeoplehaveaDemataccountin India.Thisisadeficientnumberascomparedtoothercountries.Still,thenumber is increasing rapidly, especially during the covid pandemic when people saw investingastheonlywaytosurviveduringthelockdown.Ingeneral,thestock markethaschangedandhasrevolutionizedforgoodandisgarneringinvestors towardsitself.Sowhatarethereasonsbehindthisturnaround,andwhatfactors havehelpedchangetheimageofstockmarketsisatopicofgreatdiscussion.
Fromtheverybeginning,stockmarketshavebeeninfamousforvariousmanipulationsdonebythebigfishesofthemarket.Variousscamshavealsohappenedin themarketswherethepeoplehavetriedtousetheloopholestorigthepricesof shares even after establishing SEBI (Securities and Exchange Board of India), theregulatorybodyofthestockmarket.Asaresult,peoplewereneververycomfortableenteringtheIndianstockmarkets.WhereasintheU.S.,morethan50% ofadultstradeinmarkets,makingitamorefairmarketbutinIndia,tillsometime ago,averyminimalchunkofthepopulationinvestedinthemarkets.Therefore, Indian markets were never controlled by the market sentiment of the ordinary people. This led the companies to experience unhealthy trading, which ultimatelydecreasedthecompany'simage.But,withtheincreaseininvestorinterest inIndia,thesituationischanging.Earlier,alargechunkofthemarketwasbeing controlledbytheForeignInstitutionalInvestors(FIIs),butnow,sincetheretail participation is increasing, they are acting as a counterpart to the FIIs transactions.Thishelpstoensurethatthereis morehealthyandfairtradingof acompany,andtheaverageinvestoralsodoesn'tsufferduetotheinequalitiesinthesystem.
Forinvestinginthestockmarket,apersonmusthaveaDemataccountopened withabroker Theoverallnumberwaslesspreviously Butduringthepandemic, theoveralltransactioninthesecuritiesmarkethasincreasedasaresult,thenumber of Demat accounts was bound to increase. But let's see what motivated the investors to open Demat accounts.The answer to that is the easy access to the stock market and quick e-KYC procedures that brokers are following due to advancements in technology Earlier, one thing that discouraged people from coming to the markets was the long and delayed procedures being followed. Also,peoplehadtokeepthephysicalcopyoftheirshareswhichbecamecumbersome.Butnow,duetotheadvancementintechnology,orderscanbeplacedeasily through mobile, and the activity has become as simple as placing an online shopping order Leading to all this, around one crore Demat accounts have alreadybeenopenedinFY22inIndia,andthecountisstillincreasing.Thegraph clearlydepictsthehugeincreaseinthenumberofactiveclientsintopbrokerage firmsin2021.
Source: statista
Addingontoit,theemergenceofnewstartupshashelpedreducethecomplexities in the trading process. Many banking companies like ICICI, State Bank of India,KotakMahindra,andHDFCareprovidingtheircustomersnotonlypremium banking services but also providing them the facility to open Demat accountsandtradefromthecomfortoftheirhomes.Almostallupcomingbanks aremakingsuretoincludethetradingofsecuritiesasapartoftheirgrandbanking service plan. IDFC bank, a relatively younger bank founded six years ago, providesDematservicestoitsclients,thushighlightingthepowerofstockmarkets.Also,newstartupslikeZerodha,Upstoxaremakingtheirwayinthisstiff competition.Theyareworkingonlessprofitabilityintermsofbrokeragecharges andgivethesamebasicserviceofbuyingandsellingatattractiveprices.Allthe chargesthatwereearlierhiddenhavenow comeoutintheopen.Basically,the consumerhasgotabasketofcompaniestoassistthemininvestingintheirpreferredstocks.Zerodha,foundedin2010,hascomeintothelimelightrecentlyand has become the fastest-growing brokerage company in India, with around a growthoftwolakhcustomerspermonth.Thecompany,asofOctober2021,had sevenmillionsubscribers,whichisaconsiderableamount.Thenthereareoldbrokerage companies that are still in the market and competing with the banking firmsandthenewstartups.SomeoftheseareMotilalOswalFinancialServices andAngelBrokingthathavealegacyofmanyyears.Thenewstartupcompanies haveovertakenthesecompanies'customerbase,thuscreatingtoughmonopolisticcompetition.AngelBrokinghad6.52millionsubscribersasofOctober2021, whichislessthanZerodha,indicatingthatpeoplewanttooptforacompanythat provides cheap services and are not bothered much about the legacy. Their reduced profitability framework drives others to reduce brokerage plans and offer more services at the same price, thus increasing the number of Demat accountsandmakinginvestmenteasier Notonlythis,mobilewalletcompanies likePaytmhavealsoenteredtheringandaretryingtohijackthecustomerbase. PaytmMoneyapphasbeencreatedtosupplynotonlyfinancialinformationbut also promote healthyinvestmentpractices.The company was founded in 2017 and has gained enormous success in a few years. The company has a clientele baseofmorethan6millioncustomers.Allthesenewemerging
becomeathornfortheold-establishedplayersbecausetheyarenotonlylosing profits but also their customers.To survive, they have to provide the same services and have to cope with any kind of innovation or development that takes place.
Investorsaregettingattractedtothestockmarketsbecauseallthetradingcomplexities have been reduced. Even if you don't want to use a phone, you can always use the internet at a cybercafe to access the markets anytime and anywheretokeepregulartrackofyourinvestments.ThefloggingofDalalstreetwith amassivecrowdliketheoneeveryonesawintheScam1992seriesdoesnottake placeanymorebecausetradingnowtakesplaceattheclickofabutton.Regular tradingupdatesareprovidedoveremailandtextmessagesafterthetradingends foraparticularday Notonlythebrokeragecompanieshavebecometechnologically advanced, but also the exchanges have changed themselves with time. Timelynotificationsaregivennotonlyrelatedtocontractnotesbutalsorelated to frauds and malpractices. Proper investment information is also available on manywebsites,andinvestingyoursavingshasbecomeanaltogethereasytask. Anotheraspectthatismakingpeoplemoreinclinedtowardsthestockmarketis the aspect of less documentation. Gone are the days when you had to visit the exchangetoopenanaccountphysically Nowadays,allyouneedisamobilenumberlinkedwithanAadharcard,andaPANcardtostarttrading.Ittakeslessthan 30 minutes to open an account if you have the proper resources. Upload your photoande-sign,andyouaregoodtogo.Addingtothis,despiteeverythinggettingshiftedtotheonlinemodethetransparencyhasincreasedandthescopeof fraudshasbecomenegligible.Thecompanieskeepthepersonalinformationof clientelesafe,andtheyarespendingmoreandmoreonimprovingthecustomers' cyber security Moreover, one never hears about a wrong order getting placed online because the companies are launching their products in the markets after rigoroustestingandensuringthatallgapsarecovered.
As a part of their responsibility towards society, the companies also make sure thatpeopleenterthestockmarketsonlyafterhavingthecorrectinformation.Asa result,thecompaniesalsooffermocktradingplatformsthatallowpeopletotrade usingvirtualcash.Inthissystem,themarketoperationsarenormal,buttheonly differenceisthatyoudon'tneedfundsforit.Thisallowsmanyyoungaswellas new investors to practice before actually entering the market with their own money.PlatformslikeMoneyControlofferachancetothebloomingtradersto testtheirfinancialknowledgeandskillsusingvirtualcash.Thenaftertheyhave adequateexperience,theycanventureintomarketsusingtheircapital.Thisway, thenewentrantscanavoidgettingexposedtotherisksencounteredattheinitial stages.Also,theydeterfromenteringintowrongpositionsbecausetheylearnthe ability of fund management and risk-taking. This pilot testing helps them sharpenandenhancethealreadypossessedskills,andmostlythesevirtualtradingplatformsarefreetouseandhencearemorepocket-friendly Earlier,people only believed in investing on their own without taking any professional/expert advicebeforeinvesting.Theresultwasthatamajorityofthemmadelossesand thenstoppedtheirjourney But,withincreasingawareness,thedemandforprofessionals as well these virtual platforms is also growing. Thus they are being usedextensivelynowadays,asanetpracticesession.
Withonlineeducationbecomingthenewnormal,therewasanenormousnumber of courses and online teaching platforms that emerged. There was an ultimate growthofthee-educationsystemallovertheworld.Andstockmarketeducators were not behind in this race. Startups,YouTubers, established education institutes, and individual influencers- all saw the dire need amongst people to save their money, earn huge interest, and find sources to earn online. Hence, they grabbedtherightopportunityattherighttime.Everybodybegantocomeupwith theircourses,liveclasses,websitestoeducatepeople,platformswithsimplified stockanalysis,andalotmore.ThemostupcomingIndianyoutubechannelsfor thesameareFinology,Elearnmarkets,etc.Theyhavebuiltaseriesofepisodes from very scratch to teach people. These courses gained attraction and helped viewers gain deep insight into financial knowledge. And these businesses, in turn,founditasanopportunitytoexpandtheircustomerbaseandmakemoney outofit.Moreover,therearewebsitesrunbycorporatefinancialinstitutionsthat developshortcourses,articles,newspiecestokeeppeopleupdated.
Besidesprimaryeducation,anotherthingbecomingessentialtodayisthefinancialknowledgethatonemusthavetomanagetheirfinances.Therefore,withthe increasing interest and demand, new and innovative financial instruments are coming into the market with mouth-watering returns. Mutual Funds are one of theexampleswherepeopleareinvestingtheirmoney Mutualfundhouseshave become very innovative, and they are offering several plans for their investors andmakingiteasyforthemtomakewhoppingreturns.Additionally,Exchange TradedFunds(ETFs)aregainingpopularityamonginvestors.Eventhoughalot hastobeexploredinthisfieldcomparedtoothercountries,thenumbersstilllook promising. The increased attention can be attributed to the low-cost and welldiversified nature of ETFs. Among ETFs, Nifty BeEs (Benchmark Exchange Traded Scheme) are also gaining popularity These are exchange-traded funds that aim to offer returns similar to the S&P CNX Nifty Index. They are being tradedonNSEjustlikeanyothershare.Moreover,thereturnsfromNiftyBeEs areincoherencetoS&PCNXNifty Hencethereisnofundmanagerbias.Moreover,theireasyliquidityfeaturemakesthemanattractiveoptiontoinvestin.In andallnewerinstrumentsarebeingdevelopedtoextractthemaximumreturns.
You might be wondering that people are getting attracted to the stock markets onlybecausetheprocessofKYChasbecomeeasy Thebrokeragechargeshave alsobecometransparent,andthereisagreatdealofvarietytochoosefrom.Moreover,thecompetitionamongthecompaniesishelpingtheconsumersgetagood deal.Butthereisonemorefactordrivingpeoplelikehoneybeestothishoneycomb,andthatistheincreasedlistingofcompaniesonstockmarkets.CompanieslikeZomato,Paytm,Nykaa,PolicyBazaarthatonecomesacrosseveryday aremakingtheirentryintothestockmarketsveryquickly,andtheytooareenjoyingahugecustomerbasenotonlyontheirappsbutalsoontheirstocks.TheirInitialPublicOffersareenjoyinggreatresponsesastheyaregettingoversubscribed manytimes,butwhatisdrivingthisconfidence?Onereasonisthatifsomeone usesaparticularappdaily,theyknowhowaddictedtheyaretoitfortheservices itprovides.Aherdmentalityisbeingfollowedwhereeveryoneisreadytotake risksconsideringtherewouldbesomeonetoindemnifyfortheirrisk.Thismotivates them to capitalize on the opportunity by investing in that company and becoming a part of its future. Even if they know that the company is making losses,theyalwaysknowthatthecustomerbaseisever-expanding.Somedayor the other, the profitability aspect will come in because they trust the business model.As a result of this trust, Burger King's IPO was subscribed 156 times, Zomatowasoversubscribed38times,andNykaawasoversubscribed83times. TheissuesizeofZomatowashumongoussuchthatthestart-upmadeitsdebut directly in the large-cap segment.As a result, many other companies and new startupsarelinedupwiththeirIPOsbecausetheyalsowanttocapitalizeonthis trust.DelhiveryandOlaaresomebignamesthataregettingthemselvesreadyfor mega public offers. This way, the entrants in the market are increasing rapidly becausetheyareconfidentaboutthedailyserviceproviders'progressandwant tofinancetheirfuture.
Duetothistrust,around36IPOshavealreadybeenlistedonboursestillAugust 2021,withacumulativesizeofaroundRs.60,300croresandanother70IPOsare lineduptobelistedbytheendofthisyear Duringthecurrentperiod,thereisa very encouraging environment, the greater outlook is positive, various policy frameworksareinfavor,thesecondarymarketisbreakingallrecords,positive investorsentiment,easeofinvestinginIPOs,activeinstitutionalinvestors,traditional investment sources becoming less attractive, promising Indian IPO history,andmostimportantly,arecenttrendofmind-bogglinglistingdaygainsis actingasthecherryonthecake.Thetypicalideologybehindthecompanyentering the primary markets is to raise some fundings. Companies want perpetual accesstocapitalandenterthemarketsconsideringthattheyareenteringintoadifferent space. Investing has become a sub-culture in India.Therefore, there has beenalotofbuzzaboutIPOsinthemarketbecauseeveryonefearsmissingout ontheopportunity
Notonlythis,butSEBIhasbeenmakingproceduresabiteasyforinvestorsand companies by easing the various IPO-related norms. For instance, SEBI has easedoutthepre-IPOshareholdinglock-inperiod.Generally,theissuethatarose inthepastwasthatthepromotersandtheinvestorscouldnotliquidatetheirpreIPOsecuritiesduringthislock-inperiod.Hence,investorscouldnotsquareoff theirpositionandreceivethevalueoftheirfundsbyliquidatingthemonthestock exchangeforanextendedperiod.Toprovidereliefonthisissue,SEBIreduced thelock-inperiodforthepromotersandforallcategoriesofinvestors.Furthermore,toprovideadditionalsupporttothecompanies,investors,andotherstakeholders,SEBIhasamendedafewotherrulesandregulations,includingbusiness responsibilityandsustainabilityreporting,delistingofequityshares,minimum publicofferrequirements,andmanymore.Additionally,SEBIcameoutwithan investorcharterthataimsatprotectinginvestors'interests.Thecharterincludes therightsandresponsibilitiesofinvestorsanddosanddon'tsofinvestinginthe securitiesmarket.SEBIhasalsoproposedalimitonthemoneyraisedfromIPOs that startups can use for mergers and acquisitions to ensure investor interest. However,thelimitwon'tbeapplicableiftakeovertargetsareexplicitlyspecified beforehand.Therefore,itisevidentthattheregulatoristryingtotakethenecessarystepstoensurethateverythingistransparentandfair
Movingforward,anotherfactorthatisdrivingpeopletowardsstockmarketsis theprospectofinvestinginothermarkets.Thereasonbehindinvestinginother markets is just better returns available in those markets. But there have always beenmanyissueswhileinvestinginthesemarketswhichdiscouragedtheinvestors.Earlier,ifapersonsittinginIndiahadtoinvestintheU.S.market,hehadto undergoalotofcumbersomeandambiguouspaperwork.Duetolengthyprocedurestobefollowed,everyonedidnotpreferinvestinginothermarkets.Moreover, the broker's charges were so high that there was not much incentive to investthere.Around15-20%oftheamountinvestedwasbeingusedtopaythe charges,makingitdifficultfortheoutsideinvestorstomakestaggeringreturns. Forexample,ifapersonwantedtoinvestRs.20,000,thenthefinalamountthat would be invested in the markets would be around Rs. 17,000. Moreover, the dynamicexchangeratescreatedalotofconfusion,andinvestorsendeduppayingmore.But,withtheadvancementintechnology,thingshavestartedgetting easy Now, in India, we have many brokers that allow their clients to directly investinU.S.marketswithminimalcharges.Therefore,withthechangingsituations,moreinvestorshavealsostartedinvestinginmarketsofothercountries.
Furthermore,amassiveincreaseinadvertisementsandthesocialmediapresence ofbrokeragecompanieshasbroughtthesubjectofstockexchangesintothelimelight.The pandemic struck in 2020 brought not only negativity and depression
butalsoofferednewopportunities. Andstockmarketawarenesswasonesuch opportunity Stock markets became the topic of global discussion and started theirultimaterevolution.AllthesocialmediaappslikeInstagram,Snapchat,and Facebook and news channels like NDTV,Aajtak were flooded with advertisementsofstockmarkets.Brokerageappsandonlinecoursesongainingfinancial knowledgeonstockmarketsbecamethenextbigthing.Goingforward,let'stalk about a few top broking firms in India and how their advertisements have changed the entire stock market—starting from one of India's most prominent stockbrokers, Zerodha, with over 2.5 million users in India. Although the founder,NikhilKamath,believesinwordofmouthasthemostsuccessfulmarketingstrategy However,consideringhowimportantitistobuildadigitalpresenceandcomeupwithsomethingthatstandsout,hecameupwithvarsityand then pulsed to give viewers everything under one platform.These are the sites thatkeepapersonupdatedaboutallthecurrentaffairs.Nowlet'sdelvedeepinto themarketingstrategiesofUpstox.UpstoxwasoneoftheleadsponsorsofIPL, themostlovedandwatchedIndiancricketseries.The145-crorethree-yearcontract brings the T20 tournament's sponsorship pool to an all-time high. 'Start Karke Dekho ', Upstox's Indian Premier League video campaign, strives to inspire more financial involvement in the country by emphasizing the significanceofmerelytakingthefirststep.TheadincludesaseriesofmovieshighlightinghowinvestinginUpstoxismoreeffortlessthaninvestingindailyconditions. Foreachsection,thecampaignwastailoredaccordingly AnexcitingandattractivemarketingstrategyareawasspottedattherighttimebyAngelbroking,One ofIndia'supcomingstockbrokeragecompanies.Thefirmcameupwithaplatform,Amplifier,inassociationwithinfluencers.Therightquestionineveryone's mindishowthesetwosignificantlydifferentthingsarerelatedtoeachother The answerrightlyliesinthecreativityandinnovationoftheR&Ddepartmentofthe company. Their philosophy was based on the fact that the economy suffered a heftylosswiththebanningofTikTok.Influencersonthisplatformwerehithard. So,theytargetedthismarketandcollaboratedwiththemonthisplatform.
Likewise, the incoming culture of binge-watching gifted by Covid 19 helped boostthestockmarketswithnewinvestors.Country-wideLockdownhelpedall OTTplatformstogainmassviewership,andtheentertainmentandmediaindustrysawthisasanopportunitytoprovidepeoplewithsomevaluableandexciting watching experiences. One of the biggest hits was the Scam Of 1992: The HarshadMehtaStory,ten-episodeseriesthatstreamedonSonyLiv Thisblockbusterhitbrokemanyrecordsandbecameamust-watchshowlastyear Sucha series interested people and sparked a ray of interest to know more about the stockmarketindetail.Inthepast,therehavebeenmanyshowsandmoviesbased onfinancialknowledge,mainlystockmarketslikeTheWolfofWallStreet,The BigShort,TradingPlaces,MarginCall,amongstmanyothertophits.According toadvertisingandmediaoutlook,thereareover4.23millionTVusersglobally Thus,suchmoviesandseriesultimatelybecomethekeysourcetoreachavast audience.Theenthrallingcontentthatmakestheviewerthinkontheirtoesabout whatwillhappennextreallycreatesanimpact.
Additionally, one thing that is endemic in India is the saving habits in every household.It'sanoldsayingthatthemoreyousave,themorefinanciallystrong you are. But saving with investing is the new norm being followed nowadays. Indiabeinganemergingeconomy,hasalwaysbeenafavoriteshoppingoutletfor foreign and domestic investors. Pandemic just brought it into the limelight, whichfurtherembraceditsglow Itwasayearwhenparkingfundsintheequity markets became a popular activity Awhopping 142 lakh new investors joined the stock markets hence shattering all other previous records. Out of 142 lakh newaccounts,around122.5lakhwereopenedinCDSL(CentralDepositoryServices Ltd.) and 19.7 lakh in NSDL(National Services Depository Ltd.). If we carefullylookatthedata,itclearlyshowsamassivespikeinretailparticipation inIndia.Around44.7lakhretailaccountshavebeenaddedinthemarketoutof 142 lakh.Also, the share of individual investors in total turnover on the stock exchangehasrisento45%from39%inMar'20.Thereasonbehindthesameis excellentreturnsbeingprovidedbythebourses.Moreover,sinceseveralpeople lost their jobs during the pandemic, there was mental pressure on them to earn bread.And this mental pressure drove many people to the markets.And due to continuousunexpectedreturns,aherdmentalitywascreatedinthemarket,makingitthemostfavorablelocationtoparkexcessivefunds.
To conclude, stock markets had undergone a massive change from when they started.Newstartupsandemergingcompanieshaveledthisrevolutionhandin handwiththelong-establishedcompanies.Itisseenthattechnologywasoneof theprimarydriversofthisrevolutionbecauseinvestingbeforethatwasseenasa tediousactivity,butnowithasbecomesecureandstraightforward.Thewindow foranykindoffraudandmalpracticehasbeenclosedthroughproperlawsand rules. Moreover, thepandemicprovidedthepeoplean excellentopportunityto gain appropriate knowledge about stocks, and hence they decided to try their skillandexpertiseinthestockring.Butthiseaseofgatheringknowledgeandgettinggoodreturnsshouldneverletoneignoresthecomplexityofstockmarkets. Justbecausethemarketsareinarecoverymodedoesn'tmeanearningmoneywill beeasy Thestockmarkethasstartedshowingitsothersidetoo,whichwaspreviouslyhidden.Abearcloudseemstohavecastovertheexchanges,andtheflopof Paytmisatestimonytothisstatement.Soinvestingisanactivitywhereonestill needs to toil hard. Investing is not a joke, and the increased positive advertisementsandtheinfluenceofmanynewTVseriesshouldneverletoneforgetabout therisksinvolvedinthis.Tosumup,oneshouldneverforgetthisquotesaidby
the real bull of stock markets- Warren Buffet, “Risk comes from not knowing whatyouaredoing.”Thismeansthatoneshouldalwaysbeawareofhisactions inthestockmarketbecauseforceslikefearofmissingoutandherdmentalityare alwayspresenttotakeone'sbreathaway
BIBLIOGRAPHY:
I. https://scripbox.com/pf/nifty-bees/
II. https://dare2compete.com/blog/upstox-marketing-strategy
III. https://startuptalky.com/zerodha-marketing-strategy/
IV https://economictimes indiatimes com/markets/stocks/news/sebi-comes-out-withinvestor-charter/articleshow/87760375.cms
V https://wwwthehindubusinessline com/markets/stock-markets/demat-acs-set-todouble-with-big-ticket-ipos-on-the-way/article35397851.ece