Adity Karvy
Adity Karvy
Declaration
I, Adity ASOPA, hereby declare that the project titled RISK AND RETURN OF A PORTFOLIO is an original work carried out under the guidance of Mrs. Tanu
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Marwah. The report submitted is a bonafide work of my own efforts and has not
been submitted to any institute or published before.
Annexure V
Acknowledgement
At the very outset, it is with a deep sense of gratitude that I acknowledge the able guidance received from Mrs. Tanu Marwah and other Finance team of Karvy Stock Broking Limited, during all stages of this project. The project owes much of its work
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I would like to take the opportunity to thank my HOD Mrs. Riju Agarwal HCST, Mathura for her guidance and support throughout the study. Her opinions and experience offered me valuable insights into the study area and gently enhanced the value of the project.
Last but not the least, my endless appreciation goes to my family who has stood by my side and gave me moral support whenever I was low and boosted my will power. I would fail in my duty, if I do not make a special mention of all others who helped me directly or indirectly in pursuit of this project.
Thank You.
Annexure VI
INDEX
Chapter.No.
Content
Page No
Chapter 1
Introduction
5-6 7
Chapter 2
8-37
Chapter 3
Chapter 5
Research Methodology
41-44 45-47
Chapter 6
Questionnaire
Chapter 1
Introduction
Investors in equity markets are besieged by risk. At times, in fact, it seems as though equity investors are more likely to lose money than gain it. In order to address the
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perceived risk associated with investing, portfolio risk management was developed. Portfolio risk management is a field of economics, finance and statistics that seeks to help investors manage the risk associated with the investments they make. Portfolio risk management is largely predicated on the idea that there is some trade-off between risk and return. Equities with higher levels of risk must also carry higher returns, in order to compensate owners for undertaking an elevated level of uncertainty. Portfolio risk management attempts to quantify and manage this risk so as to better match investments to the needs of investors. Stock exchanges to some extent play an important role as indicators, reflecting the performance of the countrys economic state of health. Stock market is a place where securities are bought and sold. It is exposed to a high degree of volatility; prices fluctuate within minutes and are determined by the demand and supply of stocks at a given time. Stockbrokers are the ones who buy and sell securities on behalf of individuals and institutions for some commission. The securities and exchange board of India (SEBI) is the authorized body, which regulates the operations of stock exchange, banks and other financial institutions. The past performance in the capital market specially the securities scam by Harshad Mehta has lead to tightening of the operation by SEBI. In addition the international SEBI and investment expose has made it imperative to better operational efficiency. With the view to improve, discipline and bring better transparency in this sector, constant efforts are being made and to ascertain extent improvement have been made. As the condition of capital market constantly improving, it has started drawing attention of lot more people than before. On the career related aspect, professional opportunities to choose for a wide range of jobs available in the organization in this sector and one can expect to have good time ahead of him. In present scenario stock broking sector is provi9ding more service with the basic investment and karvy have a good financial instruments like Mutual Fund, Demat, Bond etc. which give the right way to save the money and earn good profit by invested premium. Today people want more services and more return on their investment. So this stock broking company is providing more value added services with basic investment operation.
So this is just into the part of the project inside I have discuss the definition, market share and the performance in detail manner. I hope the research work would be satisfactory an up to the expectation of the reader.
Chapter 2
OBJECTIVES OF THE STUDY:
Any activity done without an objective in a mind cannot turn fruitful. An objective provides a specific direction to an activity. Objectives may range from very general to very specific, but they should be clear enough to point out with reasonable accuracy what researcher wants to achieve through the study and how it will be helpful to the decision maker in solving the problem.
The objectives of the study were as follows To identify the factors influencing investment decisions in stocks market. To understand the significance given by investors to those factors and to understand the familiarity of investors with respect to those factors. To understand how much risk is involved by investing money in stock market. What is the relation between Risk and Return. How much return should an investor require form a given portfolio?
Chapter 3
COMPANY PROFILE
Karvy Consultants Limited was established in 1982 at Hyderabad. It was established by a group of Hyderabad based practicing Chartered Accountants. At initial stage it was very small in size. It was started with a capital of Rs 150000.In starting it was offering only auditing and taxation services. Later it acts into the registrar and Share transfer activities and subsequently into financial services and other services like Financial Product Distribution, Investment Advisory Services, Demat Services, Insurance etc. Today Karvy has access to millions of Indian Shareholders, besides companies, banks, financial institutions and regulatory services. Over the past one and half decade Karvy has evolved as a veritable link between industry, finance and people. In January 1998, Karvy became first Depository Participants in Andhra Pradesh. An ISO 9002 Company. Karvys commitment to quality and retail reach has made it an Integrated Financial Service Company. Today Company has 230 Branch Offices in 164 cities all over India. The Company service over 16 million individual investors, 180 corporate and handle corporate disbursements that exceed Rs.2500 crores.
Today KARVY is well known as a premier financial services enterprise, offering a broad spectrum of customized services to its clients, both corporate and retail. Services that KARVY constantly upgrade and improve are because of companys skill in leveraging technology. Being one of the most techno-savvy organizations around helps company to deliver even more cost effective financial solutions in the shortest possible time. What bears ample testimony to Karvys success is the faith reposed in company by valued investors and customers, all across the country. Indeed, with Karvys wide network touching every corner of the country, even the most remote investor can easily access Karvys services and benefit from companys expert advice.
Achievements of Karvy:
Largest mobilizer of funds as per PRIME DATABASE First ISO - 9002 Certified Registrar in India A Category- I Merchant banker A Category- I Registrar to Public Issues Ranked as "The Most Admired Registrar by MARG Handled the largest- ever Public Issue - IDBI Strategic tie-up with Jardine Fleming India Securities Ltd Handled over 500 Public issues as Registrars Handling the Reliance Account which accounts for nearly 10 million account holders First Depository Participant from Andhra Pradesh.
industry in achieving finance from people by issuing shares, debentures, bonds, mutual funds, fixed deposits etc. Companys mission statement is clear and thoughtful which guide geographically dispersed employees to work independently yet collectively towards achieving the organizations goals.
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Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics.
Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients.
Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of same.
Strive to keep all stake-holders (shareholders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.
These are as follows-: Karvy Consultants Limited Karvy Investor Services Limited Karvy Stock broking Limited
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Karvy Computer Shares Pvt. Ltd. Karvy realty (India) Pvt Ltd Karvy globle services Ltd Karvy data base management services Karvy comtrade Ltd. Karvy Insurance broking Pvt Ltd. Karvy Consultants Limited.
In starting it was only offering auditing and taxation services. Later, it acts into the Registrar and Share transfer activities and subsequently into financial services and other services like Financial Product Distribution, Investment Advisory Services, Demat Services, Corporate Finance, Insurance etc. All along, Karvys strong work ethics and professional background leveraged with Information Technology enabled it to deliver quality to the individual. A decade of commitment, professional integrity and vision helped Karvy achieving a leadership position in its field when it handled largest number of corporate and retail that proved to be a sound business synergy.
Today, Karvy has access to millions of Indian shareholders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and half decades, Karvy has evolved as a veritable link between industry, finance and people.
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In January 1998, Karvy became first Depository Participant in Andhra Pradesh. An ISO 9002 Company, Karvys commitment to quality and retail reach has made it an Integrated Financial Services Company.
Today, company has 230 branch offices in 164 cities all over the India. The company adds 5 new offices every month to the companys ever growing national network in every nook and corner of the country. The company service over 16 million individual investors, 180 corporate and handle corporate disbursements that exceed Rs.2500 Crores.
Company Birth
The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company. Karvy Consultants Limited. We started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985. Since then, we have utilized our experience and superlative expertise to go from strength to strength to better our services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of Indias premier integrated financial service enterprise.
Thus over the last 20 years Karvy has traveled the success route, towards building a reputation as an integrated financial services provider, offering a wide spectrum of services. And we have made this journey by taking the route of quality service, path breaking innovations in service, versatility in service and finallytotality in service. Our highly qualified manpower, cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for us the position of an emerging financial services giant enjoying the confidence and support of an enviable clientele across diverse fields in the financial world. Our values and vision of attaining total competence in our servicing has served as the building block for creating a great financial enterprise, which stands solid on our fortresses of financial strength - our various companies.
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With the experience of years of holistic financial servicing behind us and years of complete expertise in the industry to look forward to, we have now emerged as a premier integrated financial services provider. And today, we can look with pride at the fruits of our mastery and experience comprehensive financial services that are competently segregated to service and manage a diverse range of customer requirements. Establishment Year: 1981 Firm Type: Public. Ltd. Nature of Business : Services Level to Expand : International Head office : "Karvy House", 46 Avenue 4, Street No. 1, Banjara Hills, Hyderabad - 500034, (Andhra Pradesh), India. Parthasarathy - Managing Director M Yugandhar - Managing Director M S Ramakrishna - Director Stuart Crosby - Chairman Mark Davis - Director Chandra Balaraman - Director Overview Karvy Stock Broking Limited provides stock broking and research advisory services in India. The company offers portfolio analysis, depository participant, and financial planning and management services for individuals and institutional clients. It also provides a monthly magazine, Fin polis, which provides up-dated market information on market trends, investment options, and opinions. The company was founded in 1990 and is based in Hyderabad, India. Karvy Stock Broking Limited is a subsidiary of Karvy Consultants Limited. Karvy, is a premier integrated financial services provider. Karvy covers the entire spectrum of financial services such as Stockbroking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others.
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Karvy has adequate internal control systems and procedures commensurate with the size nature of its business. These system and procedures provide reasonable assurance of maintenance of proper accounting records, reliability of financial information, protection of resources and safeguarding of assets against unauthorized use.
2. Number of Employees
(Section-wise or as per classification like skilled, semiskilled, unskilled worker, officers, managers, etc.) The number of Employees in Karvy Stock Broking Ltd since In 1991 676 In 2008 7000
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In 2010 10000, and the organization increases 1000 employees per year in each and every branch. Manager In Karvy Stock Broking Ltd number of manager is one.
Officers - In Karvy Stock Broking Ltd number of officers is three. Skilled At present there are six skilled employees in Karvy Stock Broking Ltd. Semiskilled At present there are four semiskilled employees in Karvy Stock Broking Ltd.
Unskilled worker - At present there are two semiskilled employees in Karvy Stock Broking Ltd.
CHAIRPERSON
COUNTRY HEAD
VICE PRESIDENT
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EMPLOYEE
CHAIRPERSON -: In Karvy there is a one chairperson. COUNTRY HEAD -: One country head. VICE PRESIDENT -: There are six vice presidents in the six zones, East West North South South-East North-East
Employees of the organization report to the Vice presidents and the Vice president report to the Country head and lastly Country head submit the final copy of report to the Chairperson. The overall organizational chart of the Karvy Stock Broking Ltd shows a vertical format or structure.
CM & MD (Hyderabad)
GM GM GM
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Zonal Manager
Regional Manager
Executives
4. Future plans of the company The future plans of the Karvy Stock Broking Ltd.is try to acquire more number of customer, and acquisition of Demat & Trading Accounts.
5. KARVY Stock Broking Limited is a member of: National Stock Exchange (NSE) Bombay Stock Exchange (BSE)
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7. COMPETITOR ANALYSIS
1. Bajaj Capital
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It was established in 1964 at Delhi. In 1965 it innovates a new financial instrument Companies Fixed Deposits and becomes the first company to raise Fixed Deposits. The objective of company is to provide professional guidance to investors on where, when and how to invest and to assist the corporate sector in its resource raising activities. Bajaj Capital became the first company to set up Investment Centers all over India for this purpose. Today, Bajaj Capital has 90 offices in over 40 important Indian Cities and has a team of around 500 employees nationwide.
Services provided
Merchant banking Buying and Selling of Money Market Investments Distribution of financial products Investment Advisory Service
Company fixed deposits Bonds Mutual funds Life insurance General insurance Pension schemes Post office schemes Tax saving schemes Insurance linked investment schemes Initial public offerings Housing loans NRI schemes Car insurance
Financial Planning
2. MCS Ltd.
It is established in 1985 in Delhi. It is one of the largest Data Processing House employing more than 600 people.MCS Ltd. has 8 branches all over India.
Volumes Handled Share registry activities for over 100 corporate servicing over 10 million investors. Mutual fund operations for 25 funds, servicing over 4.5 million investors. Billing & settlement plan for Indian operations of IATA Geneva for 1.2 million tickets per annum covering (26 airlines & over 1200 agents).
Services Offered: Registrars and Transfer Agents Registrars to IPOs /Right Issues Registrars to Open Offers Registrars to Mutual Funds Data Processing for Airlines Print Shop Services MCS is a major player in these activities in the Country with a market share of about 25%. MCS today provides these services to over 140 Corporate and Mutual Funds for a total investor base of 15 million.
NJ India Invest (formerly known as NJ Capital stocks) was started in 1994 to cater to the growing financial services sector. NJ India Invest evolved out as a client focused
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need based investment advisory firm. NJ regards mutual fund as one of the best investment avenue available to satisfy any kind of investment need.
ICICI Securities Limited (i-SEC) is a wholly owned investment-banking subsidiary of ICICI Limited. ICICI is the only non-Japanese Asian financial institution to be listed on the New York Stock Exchange (NYSE). ICICI Securities was formed on 22nd Feb. 1993, when ICICI's Merchant Banking Division was spun off into a new company; ICICI Securities today is India's leading Investment Bank and one of the most significant players in the Indian capital markets. ICICI Brokerage Services Limited (IBSL) set up in March 1995, IBSL is a 100% subsidiary of i-SEC. It commenced its securities brokerage activities in February 1996 and is registered with the National Stock Exchange of India Limited and The Stock Exchange, Mumbai.ICICI has started a website ICICIdirect.com which is the mostcomprehensive website, which allows you to invest in Shares, Mutual funds, Derivatives (Futures and Options) and other financial products.ICICI has a large network of branches all over India. Services offered:
5. HDFC
HDFC is the leading financial company in India. IT has large network of branches all over India. HDFC Securities which is fully subsidiary of HDFC provides dematservice. HDFC and its subsidiary provides following services.
Demat Service
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Life Insurance Banking Service Housing Finance Vehicle Finance Education Loan Personal Loan Mutual Fund
Kotak Securities needs no introduction as one of the largest stock broking houses in the country and a leading distributor of primary market offerings. Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman Sachs, the international investment banking and brokerage firm. Kotak Securities is a corporate member of both the BSE and the NSE. It is also a depository participant with the National Securities Depository Limited (NSDL) for trading and settlement of dematerialized shares.
Services offered:
Stock Broking Financial Product Distribution Demat Services Investment Advisory Services
Motilal Oswal Securities Ltd (MOSt) is one of the leading equity research and broking houses of India. MOSt has a 20-member research team, which is engaged round the clock in analyzing the Indian economy and corporate sectors to identify equity investment ideas. Asia Money Broker's Poll 2002 has rated MOSt as one of the best Indian broking house, for research, for the second time since 2000.
Motilal Oswal is member of NSDL and CDSIL for DP. It has wide network of
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Market Positioning-: Market positioning statements of Karvy are At Karvy we give you single window service and We also ensure your comfort. So, Karvy focus on the consumers who prefer almost all investment activities at same place by providing number of various financial services. At Karvy a person can purchase or sell shares, debentures etc. and at the same place also demat it. Karvy also provides other investment option to the same person at same place like Mutual Fund, Insurance, Fixed Deposit, and Bonds etc. and help the person in designing his portfolio. By this way Karvy provides comfort to its customers.
Karvy is also positioned according to Rise and Trout. Karvy is promoted as a no. 1 investment product distributor and R & T agent of India.
Target Market:
Karvy uses demographic segmentation strategy and segment people based on their occupation. Karvy uses selective specialization strategy for market targeting. Target person for the Karvy Stock Broking and Karvy Investment Service are persons who can work as sub-broker for the companies. Companies focus on Advisors of Insurance and post office, Tax consultants and CAs for making sub-broker.
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Karvy uses one level marketing channel for investment product distribution. Subbrokers work as intermediary between consumer and company. Company has both forward and backward flow of activity through channel. Company distributes stationery, brokerage, and information forward to its sub-broker. The sub-brokers send filled forms, queries, amount of investment etc. back to the company.
Karvy provides training to the sub-brokers because they will be viewed as the company by the investors. The executives of Karvy explain various new schemes of investment to the sub-brokers with its objective, risk factors and expected return. Company also periodically arrange seminar to guide sub-brokers.
The objective of advertising of Karvy is to create awareness about services of Karvy among investors and sub-brokers and increase sub-brokers of Karvy. Company doesnt give advertisement in media like TV, Newspapers, and Magazines etc. Karvys advertisement is made indirectly by the companies associate with it. Karvy is R & T agent of around 700 companies. They publish name, address and logo of Karvy on their annual report. Karvy also publish its weekly Stock Market Newsletter Karvy Bazaar Baatein and monthly magazine The Finapolis to guide investors and sub-brokers about market.
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managers and senior executives are recruited by publishing recruitment advertisement in leading national level newspaper. The qualified applicant are then called for interview and selected.
The regional manager has authority to select lower level employee like peon, marketing executives, accountant etc. by approval of zonal manager.
Continuous training and upgrading technical, behavioral and managerial skills is a way of life in Karvy. Karvy encourages employees to hone their skills regularly to enable them to face the challenges of the changing requirements of customers that fit market up and down.
Training needs analysis is done on a regular basis and systematic methodologies are ensured that skills and capabilities of all employees are constantly upgraded to enable them to perform in the challenging work environment.
New employee has given training under experienced employee. The new employee work under experience employee and observe his all activities. When company employs new technology or there is any change in the working of company the training program is arranged.
Employee Motivation: Karvys employees are highly empowered. They dont have to report any person of the same branch but they report upper level branch. E.e. Marketing executive of Jamnagar branch directly reports Senior Marketing executive of Baroda zonal office. If particular branch earn certain profit then Karvy gives them special incentives. E.g. last year Karvy had arranged two days tour of Div for their employees of Rajkot, Jamnagar, Junagadh and Bhavnagar branch which was totally free of cost. This also helps in maintaining co-operation between
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employees.
KARVY is working as Capital Market Intermediaries. Stockbrokers are regulated by SEBI [Stock-brokers and Sub-brokers] Regulations, 1992. The stockbroker is a member of the stock exchange. Stockbrokers are the intermediaries who are allowed to trade in securities on the exchange of which they are members. They buy and sell on their own behalf as well as on behalf of their clients. Stockbrokers expand their business by engaging sub-broker. Sub-brokers mean any person not being a member of a stock exchange who acts on behalf of a stock broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stock-brokers. 2. Demat Services:
Karvy is a depository participant with the National Securities Depository Limited (NSDL) for trading and settlement of dematerialized shares. Depository Participants (DPs) are described as an agent of the depository. They are intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between the two under Depositories Act.
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A DP can offer depository-related services only after obtaining a certificate of registration from SEBI. Since Karvy is also in the broking business, investors who use Karvys depository services get a dual benefit. They can use Karvys brokerage services to execute transactions and Karvys depository services to settle them.
Company is also concern with the distribution of investment products like (a). Fixed Deposit (b). Bonds (c). IPO (a). Fixed Deposit:
KARVY is dealer of 34 fixed deposits of various types which includes fixed deposits of Public Sector, Non Banking Finance Companies, Housing Finance Companies and Manufacturing Companies.
PUBLIC SECTOR
1 HUDCO 2 Sardar Sarovar Narmada Nigam Ltd. 3 Tamilnadu Power Finance Corporation Ltd. 4 NTPC
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1 Ashok Leyland Finance Ltd. 2 Bajaj Auto Finance Ltd. 3 Birla Home Finance Ltd. 4 Cholamandalam Investment & Finance Co. Ltd. 5 Escorts Finance Ltd. 6 First Leasing Company of India Ltd. 7 IDBI Suvidha 8 Nicco Uco Alliance Credit Ltd.
1 Can Fin Homes Ltd. 2 Dewan Housing Finance Corporation Ltd. 3 Gruh Finance Ltd. 4 HDFC Ltd. 5 PNB Housing Finance Ltd. 6 Sundaram Home Finance Ltd.
MANUFACTURING COMPANIES
1 A P Paper Mills Ltd. 2 Amtek India Ltd. 3 Atul Ltd. 4 Ballarpur Industries Ltd. 5 Chambal Fertilizers & Chemicals Ltd. 6 Escort Ltd. 7 Greaves Ltd. 8 Gujarat Alkalies & Chemicals Ltd. 9 Indian Express 10 Ind-Swift Ltd. 11 JK Industries Ltd.
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12 Jindal Steel & Power Ltd. 13 Sound Craft Industries Ltd. 14 Supreme Industries Ltd. 15 Zuari Industries Ltd.
(c). IPO: Company is also provides services related to Initial Public Offer of company. Company provides stationary at the time of IPO as well as provides information to investors regarding IPO and solves their queries.
This division provides portfolio management services to high net-worth individuals and corporate. The expertise of Karvy in research and stock broking gives it the right perspective to provide investment advisory services. Company provides advisory services to its clients.
Financial goal of each individual investor varies according to his dream, ambition and family size and future financial planning for the children & old age pension for self and wife so does the pathway to achieve it. Karvy apply the principles of Financial Planning as both science & art, it understands the time horizon, risk bearing capacity and investment goals of investors keeping in mind their psyche and financial needs. Based upon this Karvy helps individual investors to plan their entire life up to retirement, Taxes, Insurance needs and other important personal financial goals. It
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designs portfolio for investor to invest their saving in various financial products like shares, bonds, debentures, mutual funds, fixed deposits, insurance etc., Company design portfolio by considering following factors. Investors requirement of getting money back, Investors willingness to take risk, Investors tax planning etc.
Corporate finance is the financial activity of corporation. It deals with the firm's operations with regard to investing and financing. It concerned with how firms raise capital and the consequences of alternative methods of raising capital. Firms capital can be raised by raising loans, issuing shares, and acquiring or merging with other businesses by public or private companies. Merchant banking is a financial intermediation that matches entities that need capital and those that have capital. Hence they facilitate the flow of capital in the market. Karvy enjoys SEBI category (I) authorization for Merchant Banking. Karvy offers the full spectrum of Merchant Banking Services, beginning from identifying the best time for an issue to final stage of marketing it, to harvest unparalleled success.
As a merchant banker Karvy offer following services: Issue management Instrument designing Pricing of the issue Registration process for the issue of shares Marketing efforts Final allotment to investors Listing details on stock exchanges Loan syndication Lease financing Corporate advisory services
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6. Insurance:
Karvy is also dealer of many private life insurance companies. At Jamnagar branch, company is associated with dealing of following companies. ICICI Prudential Life Insurance HDFC Life Insurance TATA AIG Life Insurance
Since its inception in 1982, Karvy has demonstrated a dedication coupled with dynamism that has inspired trust from various segments corporate, government bodies and individuals. Karvy has since been performing a pivotal role as the intermediary the interface between these players. With Mutual Funds emerging as a distinct asset class, Karvy has made a strategic choice to leverage the power of latest technology to provide a cutting edge to its services. Karvy, today, service nearly 80% of the asset management companies (AMCs) across an extensive network of service centers with assets under service in excess of Rs.10,000 crores. Karvy's ability to mass customize and offer a diverse range of products for a diverse range of customers has helped mutual fund companies to uniquely position themselves in the market place. These diverse range of services cut across multiple delivery channels service centers, web, mobile phones, call center has brought home the benefits of technology to investors, distributors, and the mutual funds. Going forward, Karvy shall strive to create new products and services, which would address the needs of the end customer. Companys single minded focus in delivering products for customers has given it the distinguished position of being the preferred provider of financial services in the country. List of Mutual Fund Clients of KARVY: 1 Alliance Mutual Fund
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2 Birla Mutual Fund 3 Bank of Baroda Mutual Fund 4 Can Bank Mutual Fund 5 Chola Mutual Fund 6 Deutsche Mutual Fund 7 DSP Merrill Lynch Mutual Fund 8 Franklin Templeton Investments 9 GIC Mutual Fund 10 HDFC Mutual Fund 11 HSBC Mutual Fund 12 IL & FS Mutual Fund 13 JM Mutual Fund 14 Kotak Mutual Fund 15 LIC Mutual Fund 16 Punjab National Bank Mutual Fund 17 Prudential ICICI Mutual Fund 18 Principal Mutual Fund 19 Reliance Mutual Fund 20 State Bank of India Mutual Fund 21 Standard Chartered Mutual Fund 22 Sundaram Mutual Fund 23 SUN F&C Mutual Fund 24 Tata Mutual Fund
8. Income Tax enabled services: Karvy has been started this service since March, 2004. Karvy is work as TIN Facilitation Centre it provides following IT enabled services. a. Distribution of PAN Card. b. Distribution of TAN Card. c. Services related to e-TDS. Karvy work as an intermediary between NSDL and IT payers. Karvy provides various form for different IT enabled services and guide people to fill that forms. It also
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solves queries of the tax payers. It also distributes PAN and TAN card to the tax payers.
Overall Excellence. Handling of Volumes Timely Dispatch Quality Management and Technological Up gradation.
A SEBI Category 1 Registrar, So far, Karvy has handled over 675 ISSUES as Registrars to public issues processed over 52 million applications and is servicing over 16 million investors from various locations spread over 205 clients.
10. Loan:
Karvy has recently started this service at selected branches of metro cities. This service has not been started in Saurashtra-Kucch region. Karvy provides loans for following.
Sharekhan 650/420 Rs. 100 minimum charges &0.5 to 0.8% 0.08% 75 rs 9 times 4 times 5000 TO 120000
Intraday / Futures Options Margin Trade Demat Upfront brokerage payment Brokerage Negotiable
YES
YES
YES
YES
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Hidden Charges Alerts and Reminders Real time Portfolio Valuations Live Intraday scrip charts SMS integration Order on phone Other statistical information like FII data, MF buying / selling activities etc User friendliness Hot keys functionality similar to dealer terminal Exe version for frequent traders Net worth during market hours Personal finance tools Extension of current relationship
YES NO NO NO NO YES NO
NO NO YES NO NO NO
NO NO YES NO NO NO
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Weaknesses:
1. High Employee Turnover.
Opportunity:
1. Growth rate of mutual fund industry is 40 to 50% during last year and it expected that this rate will be maintained in future also. 2. Marketing at rural and semi-urban areas.
Threats:
1. Increasing number of local players. 2. Past image of Mutual Fund.
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Definitions of risk:
A probability or threat of a damage, injury, liability, loss, or other negative occurrence that is caused by external or internal vulnerabilities, and that may be neutralized through preemptive action. The many inconsistent and ambiguous meanings attached to "risk" lead to widespread confusion and also mean that very different approaches to risk management are taken in different fields. For example: The ISO 31000 (2009) /ISO Guide 73 definition of risk is the 'effect of uncertainty on objectives'. In this definition, uncertainties include events (which may or not happen) and uncertainties caused by a lack of information or ambiguity. This definition also includes both negative and positive impacts on objectives. Another definition is that risks are future problems that can be avoided or mitigated, rather than current ones that must be immediately addressed. Risk can be seen as relating to the Probability of uncertain future events For example, according to Factor Analysis of Information Risk, risk is:the probable frequency and probable magnitude of future loss.
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Meaning of Return:
The profit on, or advantage received from, labour, or an investment, undertaking, adventure, etc.
Definition:
The annual return on an investment, expressed as a percentage of the total amount invested also called rate of return. The yield of a fixed income security. Its same as tax return.
Risk and reward are directly related. hypothetically, the riskier the asset, to more potential reward one expects to gain. the less risky, the less gain. The higher the risk, the higher the return required. The reverse is also true. The lower the risk (or the safer the asset) the lower the return.
The explanation is that high returns tend to be achieved in businesses that can't really provide a predictable flow of inflows. With these investments, you will frequently feel it, either going up or down (and even going out of business). No one will invest in these assets if they pretend return a minimal amount. The bank is much safer and provides that already!
Very safe investments (little risk) don't offer a bumpy ride. They tend to be quite predictable, offering an almost secure return. This comes at a price. Since you run minimal risk (the issuer of the asset does run with a lot more risk, but promises you a rate), the issuer will offer you a lesser return.
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"No risk" is generally defined to be the interest rate that a secure and stable government will pay you for loaning money. For example, if you invest in treasury bills from the US Government they give you a certain rate of interest, or if you put your money in a bank Certificate of deposit they give you interest.
This is defined as a "no risk" investment because you are "guaranteed" to get your money back plus the interest.
In other form of investment will contain a risk that is defined against the benchmark of a "no risk" investment. These types of investment are more risky (because they do not have the security or stability that a national government may have). Some are "mildly risky," others are "very risky."
As an investor, if you invest in a risky endeavor, you expect that should the investment work out, you better receive a higher payoff than if you were to simply put your money into a bank. Otherwise there's no point in investing in risky stuff.
Therefore, the riskier the venture, the higher the potential return. Note the word "potential."
High return is not guaranteed. It just means that the "highest return" you could expect from the investment, will be better than what you would get by depositing the money in a bank and collecting interest.
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RESEARCH METHODOLOGY
Research methodology has multiple dimensions. Research Methodology is a way to systematically solve the research problems scientifically. The importance of knowledge of research methodology and how the research is done stems from the following considerations:
(A)
Research Plan:
1. Primary data:
The primary data constitute an integral part of the market research information and which are based on the followings.
i. ii.
(B)
Area of Survey:
The area selected for my research study is Agra. I have selected some residential and market area. The following factors kept in mind while conducting the survey:
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i. ii.
The interviewee age between 22 to 55. The samples are both males and female (70% respondents are male and 30% of them were females).
(C)
Following things consider during questionnaire:It is extremely important to ask the right questions to get the right information, which serves the purpose. It is instrumental to measure the level of knowledge, attitude and behavior of the respondents. It includes the respondents to co-operate and to answer, which are trustworthy. The needs are to be identified to classify the interviewer. The design of the questionnaire should be simple for the respondents as well as the interviewer.
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RESEARCH DESIGN
1. Types of Study 2. Sources of Data 3. Data Collection Mode 4. Target Respondent 5. Sample Size 6. Sampling Method
EXPLORATORY RESEARCH SECONDARY DATA QUESTIONNAIRE METHOD SALARIED PEOPLE AND BUSINESSMAN 50 RANDOM SELECTION.
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QUESTIONNAIRE
Personal Information
1. Name - ____________________________
3. Qualification:
a) Undergraduate b) Graduate c) Post Graduate d) Professional Degree e) Doctorate
5. Do you want to invest? a) Yes b) No 6. If Yes, then where do you want to invest? a) Mutual fund b) Share c) Post office saving d) Bank deposit (FD) e) Others
8. How long have you been investing in equity trading? a) 0-1 year b) 1-3 years c) 3-5 years d) More then 5 years.
9. How did you come to know about karvy as a distributor of share and mutual funds? a) News Paper b) Relatives and Friends c) Investment Advisors d) Television e) Internet
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10. What is your level of awareness about share investment? a) Very High b) High c) Low d) Moderate e) Very Low
11. Karvy is more concern about--------------a) Return to customer b) Client relationship c) Customer needs d) Their own commission
12. Would you like to work with Karvy Securities Ltd for dealing in mutual fund? a. Yes b. No.
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17. Is organization make aware to their customer for recent market changes-----------
a) Yes b) No c) Very Frequent. 18. The new product of karvy VALUE SAVER is effective or not?
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2. Secondary Data:
The data is collected through the secondary sources and it is based on fundamentals. The fundamentals are calculated in the long term and short term basis. For calculating fundamentals in long term aspect I have taken few companies from different sectors, so that the risk and return analysis of 10 companies give a clear view of a portfolio.
Comparative parameters EPS P/E RATIO BOOK VALUE D/E RATIO CURRENT RATIO NET PROFIT MARGIN GROSS PROFIT MARGIN RETURN ON CAPITAL EMPLOYED RETURN ON EQUITY DIVIDEND PAID PROFIT GROWTH MARKET CAPITALIZATION
BHEL Rs 88.60 15.83 Rs 325 * 0.01 * 1.37 * 12.55% * 16.06% * 41.37% * 27.08% 179% 37.35% 94,906.71 cr *
LARSEN & TURBO Rs 72.66* 25.29 * Rs 303.28 0.37 1.19 11.56% 12.74% 22.49% 23.95% * 725% * 42.84% * 1,00,919.11 cr
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ANALYSIS
This comparison shows that in most of the parameters BHEL is good but L&T is better in EPS its stock price is also cheaper and giving a good return on equity and capital employed and having a good profit growth as compared to BHEL where profit is fluctuating year after year so, it is more risky. L&T is also giving a high dividend to its shareholders. So we have chosen L&T for our portfolio. And here are some future plans for L&T which gives a green signal to buy.
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Comparative parameters EPS ( avg for last 5 yrs) P/E RATIO BOOK VALUE D/E RATIO CURRENT RATIO NET PROFIT MARGIN GROSS PROFIT MARGIN RETURN ON CAPITAL EMPLOYED RETURN ON EQUTIY DIVIDEND PAID PROFIT GROWTH MARKET CAPITALIZATION
SUN PHARMA Rs 13.37 * 35.70 * Rs 276.06 * 0.01 * 2.14 * 33.99% * 9.86% 17.05 * 15.71 * 350 % * 211.00% * Rs 49,708.80cr *
RANBAXY Rs 27.28 20.12 Rs 121.74 0.83 1.40 19.74% 18.31% * 12.82 22.41 40% 100.83% Rs 22,755.60cr
ANALYSIS
After comparison of all the parameters it shows that SUN PHARMA is the best among the two. It is cheaper as compared to other. It is also giving a good return on capital employed and equity. It is giving a good dividend to its shareholders and the companys profit is also growing as compared to RANBAXY which is showing a negative growth. SUN PHARMA s market share is also better as compared to RANBAXY. So we have chosen SUN PHARMA for our portfolio which attracting the most to purchase it.
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In the international segment, expect the US (40 per cent of sales) business to grow at about 25 per cent for the current fiscal. While the company is awaiting approval on the 96 ANDAs it has filed with the US FDA and plans to file 30 more, FY10 might see a slight correction as generic sales move down due to the recessionary trends in the Top 8 global markets.
While uncertainties on Taro acquisition and FDA queries on its Caraco plant are negatives for the stock, expect these to be resolved in the next one quarter. The comfortable cash position at $500 million (Rs 2,500 crore) ensures that Sun Pharma can tide over the tight liquidity conditions prevailing currently and also look out for acquisitions at attractive valuations. At Rs 1,057, the stock can deliver returns of about 25 per cent over the next one year. Sun generates 41 per cent of its annual revenues from the US market, a record of sorts among Indian drug firms. The company is bullish on its US prospects and expects 25 per cent growth in the country this year, higher than the 18-20 per cent growth projection it has given for other markets including India.
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COMPARATIVE PARAMETERS
JP ASSOCIATES Rs 5.48 15.08 * Rs 40.01* 2.11 * 1.73 * 16.52% 18.53% 13.01% 20.84% * 20% 90.45% Rs 18,106.16 cr
DLF Rs 7.48 * 31.90 Rs 75.59* 0.99 5.47 ------% * 39.82%* 6.96% * 5.96% 100% * 50.57% * Rs 39,379.68 cr *
EPS ( avg for last 5 yrs) P/E RATIO BOOK VALUE D/E RATIO CURRENT RATIO NET PROFIT MARGIN GROSS PROFIT MARGIN RETURN ON CAPITAL EMPLOYED RETURN ON EQUITY DIVIDEND PAID PROFIT GROWTH( avg growth for last 5 yrs) MARKET CAPITLAIZATION
ANALYSIS
Here DLF is having good prospects when the financial ratios are concerned. As we know JP ASSOCIATES is a diversified company in itself, it has presence in cement, oil& gas, construction sectors. So it is a portfolio sector in itself. We are expecting a strong boost in economy as well as all these above said sectors and as we are not having any stocks in these cement and oil& gas. So we have chosen JP ASSOCIATES as one of our stock.
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Comparative parameters EPS ( avg for last 5 yrs) P/E RATIO BOOK VALUE D/E RATIO CURRENT RATIO NET PROFIT MARGIN GROSS PROFIT MARGIN RETURN ON CAPITAL EMPLOYED RETURN ON EQUITY DIVIDEND PAID PROFIT GROWTH MARKET CAPITALIZATION
TATA STEEL Rs 71.56 8 Rs 418* 0.68 * 1.12 * 19.96% * 31.36% * 13.06% * 13.45% 120.00% 37.35% 53,918.25cr *
JSW STEEL Rs90.12 * 9.61 * Rs 504* 1.26* 0.55* 11.09% 17.33% 15.08% 21.14% * 122.5% * 49.36% * 19,110.00 cr
ANALYSIS
This comparison shows that in most of the parameters JSW STEEL is good but TATA STEEL is better in Cash ratio and Debt Ratio. Its stock price is also cheaper and giving a good return on equity and margins on gross and net profit margins and having a good profit growth as compared to JSW STEEL where profit is fluctuating year after year so, it is more risky. TATA STEEL is also giving a high dividend to its shareholders. So we have chosen TATA STEEL for our portfolio. And here are some future plans for TATA STEEL which gives a green signal to buy.
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Comparative parameters EPS ( avg for last 5 yrs) P/E RATIO BOOK VALUE D/E RATIO CURRENT RATIO NET PROFIT MARGIN GROSS PROFIT MARGIN RETURN ON CAPITAL EMPLOYED RETURN ON EQUTIY DIVIDEND PAID PROFIT GROWTH ( Avg growth for last 5 yrs) MARKET CAPITALIZATION
TATA MOTORS Rs 39.26 * 34.51* Rs.262.30* 1.11 * 0.44 * 6.26% * 8.84% 9.66 * 15.15 * 200 * 142.10% * Rs59,937.42 cr *
MARUTI Rs 79.21 14.74 Rs 409.65 0.07 0.91* 8.34% 9.93 % * 27.89* 21.1* 150.00% 93.30% Rs 33,290.00cr
ANALYSIS
After comparison of all the parameters it shows that MARUTI is the best among the two. It is cheaper as compared to other. It is also giving a good return on capital employed and equity. It is giving a good dividend to its shareholders and the companys profit is also growing as compared to TATA MOTORS which is showing a negative growth. TATA MOTORSs market share is better as compared to MARUTI. But in other parameters MARUTI is better than TATA MOTORS. So we have chosen MARUTI for our portfolio which attracting the most to purchase it.
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1. From the survey it is believed that the demographic characteristics such as age,
gender, marital status, education etc and economic characteristics such as Annual Household income, savings, etc are the important factors that influence ones investment decisions as that influence the ones financial needs, risk appetite etc.
2. Age is considered as influencing factor in investment decisions. When reaches different stages of lifecycle, Investors needs for investment changes. The investment needs of young investor and needs of aged investors are different because young investor looks capital appreciation whereas aged investor look for current income as he does not have any regular source of income.
3. Education level of investor plays major role in investment decisions. The assets involved in educated investors portfolio is different from that of less educated investors. The higher education an investor has higher will be knowledge of investment and knowledge of investment will influence the investment decisions.
4. Income of investors from all possible sources influences the investment decisions. If an investor has higher income that exceeds all possible expenditures, there is possibility that he will invest remaining disposable income in various avenues of investment he is comfortable with.
5. The objective of investor determines the portfolio of his/her investment. If an investor who expects higher income in very short period will look for speculative stocks for investment and ready to take higher risk. If the investors objective is to reduce the tax burden, he looks for tax savings avenues of investments.
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6.
demographic factors, socio-economic factors, etc. Decisions of buying or selling of a stock is mostly influenced by recommendations of brokers/consultant as investor believes that consultant/broker has expertise and specialized in the domain. Investor who believes they have required expertise make decisions based on their investment philosophy like belief in fundamental factors and or current market scenario.
7. It is believed that fundamental analysis is to arrive at value of a stock and current market analysis is to arrive at timing of buying or selling. But speculators use current market factor to make quick profits and genuine investors would like to make money by parking their funds for a longer horizon.
8.
knowledge of investment. Therefore respondents are asked to state their perceived knowledge of investment.
9. The major factor that influences investment decisions is risk appetite of investor. Investor who is able to withstand the substantial losses arising out of an investment will prefer speculative stocks as it gives higher return. Hence investors are asked to different questions that constitute risk appetite of investors.
10. An analysis of Fundamental factors is to arrive at value of share. Profitability of a firm, long-term solvency position, liquidity of the firm, efficiency with respect to asset utilization are considered as fundamental factors. Investors weight different factors differently.
11.
company and followed by efficiency of the company. The other two factors
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considered are liquidity and efficiency of the firm. It can be inferred that investors prefer those companys share which are profitable and which are more efficient. Investors opine that their future returns depend on profitability and efficiency of the firm as efficiency of the firm influence the future returns of the firm and thereby returns of investors and it will ensure their objective of investment over a period of time.
12.
Investors consider both fundamentals of the company and Trends of price and
volume movements before investing. The reason for that might the investors use fundamentals to value the shares and use technical factors or current market scenario for deciding the timing of the purchase or sell decisions.
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Books
Kothari, C.R., Research Methodology, New Delhi, Vikas Publishing House Pvt. Ltd., 2007
Chandra, Prasanna, Investment analysis and portfolio management, New Delhi, Tata McGraw-Hill Education Pvt. Ltd., 2011 Chandra, Prasanna, Financial management, New Delhi, Tata McGraw-Hill Education Pvt. Ltd., 2010
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