Next step is to list it on an exchange like kraken. What is the process ?
You would need to contact the exchange and ask them to list your token. It's likely they would only list your token if it was in their best interest. (e.g. If they can make a profit from your token being traded.)
What determines the initial value of a custom token ?
In the token sale/crowdsale/ICO, you set the value of the token yourself. This can either be a static value, or a dynamic value based on some variable, such as time remaining in the sale, or proportion of crowdsale tokens yet to be sold.
What will be conversation rate of mycustom token with Ether ?
After the initial sale is complete, the conversion rate (price in ETH) is set by supply and demand - you can't just set this value yourself. If the market doesn't like your token, it won't be worth anything.