NFO PROCESS IN MUTUAL FUNDS

AT
INDIA INFOLINE
Project report submitted in
Partial fulfillment for the award of
MASTER OF BUSINESS ADMINISTRATION
Submitted by:
RANJITH !"AR#P
$earin% Roll No#&'(&)*&)+(+
PRIN,-T.N P#/# ,.00-/-
1Affiliated to .smania !ni2ersity3
RA"ANTHAP!R4 H56-RA$A6
1'&&*)'&&73
DECLARATION
I hereby declare that the project titled 8N9. PR.,-SS IN "!T!A0
9!N6S: done at India Info line submitted by me as part of partial fulfillment
for the award of the Bachelor of Business Administration, at Princeton $ha%wati
,olle%e4 "odipuram4 "eerut is a record of Bonafide work done by me.
I also declare that this report has to my knowledge is my own and is neither
submitted to any other university nor published any time before.
1 NIKKI 3

ACKNOWLEDGEMENT
The presentation of this project has given me an opportunity to
epress myprofound gratitude to all concern in guiding me. !oremost I
would like to thank GOPAL SIR "#anager of Indiainfoline$ for giving me
an opportunity to undertake this projectwork.
I would like to thank the IN6IAIN9.0IN- staff for giving me

support and the re%uired material on time.
Iwould also thank the principal of our college.

1 NIKKI 3

FOREWORD
Investments goals vary from person to person. &hile
somebody wants security, others might give more weightage to returns
alone. 'omebody else might want to plan for his child(s education while
somebody might be saving for the proverbial rainy day or even life after
retirement. &ith objectives defying any range , it is obvious that the
products re%uired will vary as well.
Indian #utual !unds industry offers a plethora of schemes and
serves broadly all tupe of investors. The range of products includes e%uity
funds, debt, li%uid, gilt and balanced funds. There are also funds meant
eclusively for young and old, small and large investors. #oreover, the setup
of a legal structure, which has enough teeth to safeguard investors intersts,
ensures that the investors are not cheated out of their hard earned money.
All in all, benefits provided by them cut across the boundaries of investor
category and thus create for them, a universal appeal.
Investors of all categories could choose to invest on their own in
multiple options but opt for #utual !unds for the sole reason that all benefits
come in a package.The #utual !und industry is having its hands full to cater
to various needs of the investors by coming up with new plans, schemes and
options with respect to rate of returns, dividend fre%uency and li%uidity.
In view of the growing competition in the #utual !unds industry,
it was felt necessary to study the investors orientation towards #utual !unds
i.e. their pattern of risk apetite and preferences in various schemes, plans
and options in order to provide a better service,
The study is an attempt in that direction.

ABSTRACT
The purpose of this project creates a design in relation to
process of )!* ")+& !,)- *!!+.$ and how this process is carried out till
the end.
The school work of this project is based on the procedure
takes place in indiainfoline while going through the )!*.
To schoolwork the technical procedure, legal dimensions of
)!* at India info line and eamine briefly the organi/ational structure,
communication network, resource, re%uirements to launch a new fund.
The analysis is made by carrying the applications of reliance
e%uity fund
The data for his study is colleted from various sources like
maga/ines, Books, &ebsites, and from the staff of Indian Info 0ine.
It generates an Idea to the investors in knowing the
technical procedure in carrying a )!* by the *rgani/ation.
)ew !und *ffer process may not be same for all #utual
funds that are released. It may differ from one fund to other depending up
on the si/e like )* .of Applications received, 'ubscriptions amount received
etc. .
CONTENTS
TITLE PAGE NO
INTRODUCTION 1
REVIEW OF LITERATURE 7
COMPANY PROFILE 23
ANALYTICAL FRAME WORK 29
QUESTIONNAIRE 52
FINDINGS AND CONCLUSIONS 57
SUGGESTIONS & RECOMMENDATIONS 58
BIBLIOGRAPY !"
INTRODUCTION
Introduction to the study:

#utual !und Industry which is a relatively of a post1economic
reforms phenomena in India, has been epanding during this
Period in branch and bound #any commercial banks, insurance companies
entered into mutual fund industry apart from foreign players. In the early
years of evolution of mutual fund industry in the Indian financial market it
was a monopoly and continued to be the same till very recent time. Then
many players both foreign and Indian entered in the #utual !und Industry.
This increased the competition between the various firms
working in the mutual fund Industry The need for developing various new
schemes arises so as to attract investors towards the firm and e%ually
encouraging them to invest. This growth in the #utual !und Industry and
scope of increasing markets has further increased the competition between
the firms in the industry.
The competitions had given raise to demand for speciali/ed
products and skills of various individuals who can contribute towards the
containment and growth of individual firms in the mutual firm industry. This
gave rise to various related organi/ations and individuals working as
speciali/ed teams in the various areas of mutual funds. *ne such
organi/ation is IN6IA IN9. 0IN- P;T 0T6 it comes into pictures where
the investors apply for the units in a #utual !und schemes and verify the
validity and eligibility of the investor and allots the units
The mutual fund companies now receive millions of
applications if a new scheme is launched.

This is due to the wide spread awareness created among the urban and
rural Population of India. It therefore becomes a 2erculean task to
#anage the flooding applications 2owever it should be noted that this is a
*ne time activity similar to that of a short run project It is needless to
'tate that a given mutual fund firm will not be possessing
The technological, human and knowledge resources to take up such a
gigantic task, it is in fact not needed by a mutual fund firm to create such a
vast organi/ational structure when it is seen from the point of view scale of
economies. !urther to this problem, the mutual fund industry does not know
where it stands in the current volatile and turbulent environment. This may
be The reason they prefer to hire the services of professionals firm with
speciali/ed knowledge and +pertise.
These developments have led to an outcome that today, launching of mutual
fund scheme has become a well organi/ed activity which is accomplished
through the coordinated endeavors of task groups.
The asset management companies have designed various schemes in
accordance with the re%uirements of the various sections on investors on
basis of e%uity linked, debt instruments linked, commodities linked and
specific industry linked instruments. The investor today is given a wide
range of options to invest in various types of funds according to his interests
and capabilities.
#utual funds enable even a small investor to investor to invest, as most of
the mutual funds just start from a minimum amount of investment of .'.
3444 hence even a small investor can invest into a mutual fund and reap
returns in the same proportions as the other big time investors. This shows
that mutual fund industry is one which aims at every section of the society.
To deal with this large population of investors and the competition, the asset
management company has been forced to develop and design new schemes
and hire the services of professionals.
mutual fund industry involves various operations from the stage of
identification of the target group or defining a market segment, designing a
scheme which comes up to the epectations and aspirations of the target
group or market segment, reaching the selected market through launching
the scheme which is thereby called )!*, till the stage of investing the
amount raised in accordance with the norms stipulated with offer document
and distributing the returns to the investor by way of dividend, after making
ade%uate provision for taation and other operating costs. All this process is
well organi/ed and performed in a specific order. There are various related
organi/ations which speciali/e in the activities at various stages of the
functioning of the mutual funds.
It is therefore felt epedient to eamine the various intricacies involved in
the new fund offer ")!*$. 'pecifically the various documents that are being
processed, the parameters evolve either customarily or by legal mandate to
scrutini/e the applications. 5arious stages involved in the scrutiny, the
rejection criteria, the creation of human organi/ation to monitor the
activities, the communication channel and the structure of the organi/ed
activities and the legal environment of )!* to some etent. 'uch a
dissertation would help to come out with a comprehensive report which may
serve as a guide for the prospective entrants into mutual fund investment
and to the eisting mutual fund investors to some etent.
Obecti!es o" the study:
6 To study the technical, procedural, legal dimensions of the )!*
6 To eamine briefly the organi/ational structure, communication
network, resource re%uirements to launch a new fund
6 To study a sample of application drawn from .eliance #utual
!und.
Methodo#o$y o" study:
To fulfill the objective of the study both primary and secondary data has
been collected. Primary data is the data collected specifically for the study.
-ata is collected directly from people and organi/ations via %uestionnaires or
surveys before being analy/ed to reach conclusions concerning the issues
covered in the %uestionnaire or survey.
In this study primary data was collected through interaction with staff of
India info line P2t 0td# and the applications of .eliance e%uity fund.
'econdary data is the data collected previously by someone else for some
other purpose which can be analy/ed and interpreted according to
re%uirements. !or eample, sources of secondary data are government
publications, newspapers, worldwide web etc.
In this study the 'econdary data is mainly taken from
6 The company7s training material.
6 .econciliation statements.
6 *ther documents generated with in the organi/ation
&hich have to Access8
< www. indiainfoline.com, www.amfiindia.com,www.sebi.com.
Li%it&tions o" study:
6 Analysis of the applications is carried out by taking the
applications from .eliance e%uity !und. The data available is
therefore restricted by the design of the application.
6 The inspection of applications is done on the basis of a sample
of 9:4 applications. Though the sample is drawn randomly, the
possibility of sampling fluctuations affecting the findings
cannot be ruled out.
6 )umerical data like number of applications received, total
subscription amount received, statement of accounts, investor
details, etc are not available and therefore a description of
these aspects is given.
6 )!* process may not be same for all mutual funds that are
released. It may differ from one fund to other depending upon
the si/e like the no. of applications received, subscription
amount received, etc.
REVIEW OF LITERATURE
Ne' "und o""er (NFO):
&hen a mutual fund asset management company announces Public issue of
units of a new fund;scheme it is called a )ew !und *ffer "N9.$.
&hen a mutual fund company plans for a new fund offer it first informs to
the registrar or the back office functions provider like I)-IA I)!* 0I)+
through email. This is called as <)!* 0aunching Information #ail= send by
the fund manager of the asset management company to the )!*
coordinator of the I)-IA I)!*0I)+. In this #ail the fund manager will ask
the )!* coordinator to get ready for the new fund with the re%uired man
power and software.
0ater they send the sample application form, the key information
memorandum "I"$ and offer document to IN6IA IN9. 0IN-. This offer
document sets forth concisely, necessary information about the scheme for a
prospective investor to make an informed investment decision on the
scheme described. The offer document contains the salient features of the
scheme like )!* opening date, )!* closing date, 'cheme name, 'cheme
class, reopening date, plans available banks involved, number of bank
branches involved, minimum amount > fresh purchase, maimum amount >
fresh purchase, epected number of applications, entry load and eit load.
The unit manager or the )!* coordinator will arrange a meeting where the
A#? team, )!* epert7s team, -ata entry team, .econciliation team and the
dispatch team will discuss and fi the target dates by which the work has to
be completed accordingly.
Wh&t is & %utu&# "und=
#utual fund is a mechanism for pooling the resources by issuing to the
investors and investing funds in securities in accordance with objectives as
disclosed in offer document.
Investments in securities are spread across a wide cross1section of industries
and sectors and thus the risk is reduced, -iversification reduces the risk
because all stocks may not move in the same direction in the same
proportion at the same time. #utual fund issues units to the investors in
accordance with %uantum of money invested by them. Investors of mutual
funds are known as unit holders.
The profits or losses are shared by the investors in proportion to their
investment. The mutual funds normally come out with a number of schemes
with different investment objectives which are launched from time to time. A
mutual fund is re%uired to be registered with 'ecurities and +change Board
of India "S-$I$ which regulates securities markets before it can collect funds
from the public.
#utual fund is a collection of stocks and ; bonds. A mutual fund as a
company brings together a group of people and invests their money in
stocks, bonds and other securities. +ach investor owns shares, which
represent a portion of the holdings of the fund.
&ith increased uncertainties or fluctuations in the primary market and
decreasing bank interest rates, mutual funds are gaining popularity day by
day )ow1a1 day7s mutual funds are performing well will high returns to the
investors. There are various types of schemes and plans available to all type
of investors.
0et us assume that you inertia million rupees over night and want
to invest the same to get better returns you can consider the following
investment avenues that are popular in Indian contet
?ompany shares
!ied deposits in banks
@overnment bonds
!ied deposits in )B!?
?hit fund
.eal estate
*ther local money lending options
*ros &nd con+s o" the in!est%ents:
')*. Investment
avenue
.isk .eturn +ffort re%uired
to
track;maintain
investment
9. ?ompany shares
and stocks
2igh 2igh 2igh
:. !ied deposits in
banks
0ow 0ow 0ow
A. @ovt. bonds #edium #edium #edium
B. !ied deposits in
)B!?
2igh #edium #edium
3. ?hit funds 2igh #edium #edium
C. .eal estate #edium #edium #edium
D. *ther money
lending options
#edium #edium -epends
,o' you c&n %&-e %oney "ro% & %utu&# "und=
If the fund sells the securities that have increased in price, the fund has a
capital gain #ost of the funds also pass on these gains to investors in a
distribution.
If fund holdings increase in price but are not sold by the fund manager, the
funds shares increase in price. Eou can then sell your mutual fund units for
profit. !unds will also usually give you a choice either to receive a check for
distributions or to reinvest the earnings and get more shares.
Income it earned from dividends on stocks and interest on bonds. A fund
pays out nearly all income it receives over the year to fund owners in the
form of a distribution.
Ty.es o" Funds:
#utual funds also come in various si/es and shapes. There are about do/en
fund classes but all of them are derivatives of three basic classes are as
follows.
@rowth
Income
0i%uidity
Gro'th: 0ong term growth, since these funds invest in e%uities, they are
also called as e%uity funds. Their risk level is high so is the return.
Inco%e: This type of fund provides regular income by investing in debt
instruments like bonds, debentures etc., Because of their nature of
investment, they are also called debt schemes. Their risk and return levels
are medium.
Li/uidity: These are primarily invested in money market instruments and
thus most volatile, safer and give lower returns. These funds are also known
as cash or money market funds.
In addition to the above type there are other derivative classes as listed
below.
This type of fund### In2est in this area
$alanced fund Is an investment blend of e%uity and dept
Instruments
Inde> fund Invests in the companies that participate in
stock market indices in the same weight age
comprising of an inde
Sector fund Invests in companies pertaining to specific
sectors like health care, banking, !#?@,
technology etc.
-lls ? Ta> funds Invests is @overnment bonds and generally
long term in nature. They provide ta
benefits.
These are called mutual fund schemes. It is based on the investment
objective. There is another ?lassification based on the capitali/ation of
funds. If the fund offers purchase or selling on a ?ontinuous basis it is called
open ended mutual fund. *n the contrary, if the fund is open only for a
particular period, it is called closed ended fund.
Di""erences: O.en ended &nd C#osed ended "unds
')*. !eature *pen ended ?losed ended
9. ?apitali/ation ,nlimited 0imited
:. Any time entry Ees )o
A. Any time eit Ees )o
B. Ta advantage Ees )o
3. Available for a fied
period
)o
"with eemption
of !#P schemes$
Ees
C. 0isted on the echange @enerally )o Ees
*pen ended funds gained popularity because of their fleibility and variety of
features they offer. !or this reason, majority of the mutual funds are Fopen7
in nature.
Ar%s o" & %utu&# "und:
Primarily mutual fund is formed as a trust by a group of sponsors. They are
the owners of the mutual funds and forms trust by a group of sponsors.
They are the owners of the mutual funds and forms trustees who in turn
appoint A#? and manage the mutual fund.
'+BI regulations re%uire that at least two at least two thirds of the directors
of trustee company or board of trustees must be independent i.e. they
should not be associated with the sponsors. Also, 34G of the directors of
A#? must be independent. All mutual funds are re%uired to be registered
with '+BI before they launch any scheme.
This entity@ 6oes this@
Sponsor 9orms "f as a trust# Re%isters
with S-$I#
Trustees Holds funds in2ested in a form
of units#
-nsure compliance with S-$I#
Appoints A",
Asset mana%ement company 9loats "9 Schemes4 "ana%es
funds and cash#
Re%istrar Holds in2estor data# 6o
ser2ices to in2estors
6istributors "arAet 2arious schemes of "9
Tr&ns&ction ty.es (co%%erci&# 0 non1co%%erci&#):
0et7s compare various transactions of mutual funds with those of banks.
In a banA4 you will@ In a mutual fund@
.pen an account with initial
deposit
5ou subscribe in a scheme and
buy units
6eposit money 6o additional purchases
Bith draw money 5ou redeem units
.pt for a recurrin% deposit Start a systematic in2estment
plan
'ince mutual fund offers many more options to investors, it will have many
more transaction types as well. 0et us see some popular transactions in
mutual funds
SN.# Transaction 6escription
+# New purchase New in2estment#
$uyin% units in a
scheme
'# Additional purchase $uyin% additional
units in a scheme
C# Redemption Sellin% units and
%ettin% money
bacA#
(# Switch?shift Transferrin%
in2estment from
one scheme to
other#
D# 6i2idend Bhen A",
announces di2idend
in a scheme#
*# Systematic
in2estment
In2estin% fi>ed
amounts
periodically liAe a
recurrin% deposit#
E# Systematic with
drawl
Re2erse of
systematic
in2estment Sellin%
units periodically
.est are relating to general maintenance only. 'o they are non1commercial
transactions.
Net &sset !&#ue:
As you must have noticed, we always talk about 7units7 in a mutual fund and
not money itself. A unit is basic measure of investment n a mutual fund.
+ach scheme ; plan will have a different market value is called the )et asset
value or simply )A5. 'ince market value of the underlying securities changes
every day, )A5 of a scheme also varies on a day to day basis.
SEBI Guide#ines on Ne' Fund O""er:
+# Procedure for launchin% of schemes:
1+3 )o scheme shall be launched by the asset management company unless
such scheme is approved by the trustees and a copy of the offer document
has been filed with the Board.
1'3 +very mutual fund shall along with the offer document of each scheme
pay filing fees as specified in the 'econd 'chedule.
'# 6isclosures in the offer document:
1+3 The offer document shall contain disclosures which are ade%uate in order
to enable the investors to make informed investment decision Hincluding the
NA2 3 Tot&# &ssets 4 Tot&# #i&bi#ities5Nu%ber o" units
disclosure on maimum investments proposed to be made by the scheme in
the listed securities of the group companies of the sponsorI.
1'3 The Board may in the interest of investors re%uire the asset management
company to carry out such modifications in the offer document as it deems
fit.
1C3 In case no modifications are suggested by the Board in the offer
document within :9 HworkingI days from the date of filing, the asset
management company may issue the offer document.
1(3 )o one shall issue any form of application for units of a mutual fund
unless the form is accompanied by the memorandum containing such
information as may be specified by the Board.
C# Ad2ertisement material:
1+3 Advertisements in respect of every scheme shall be in conformity with
the Advertisement ?ode as specified in the 'ith 'chedule and shall be
submitted to the Board within D days from the date of issue.
1'3 The advertisement for each scheme shall disclose Hinvestment objective
for each schemeI
(# "isleadin% statements:
The offer document and advertisement materials shall not be misleading or
contain any statement or opinion, which are incorrect or false.
D# 0istin% of close ended schemes:
+very close ended scheme shall be listed in a recogni/ed stock echange
within si months from the closure of the subscription Provided that listing of
close ended scheme shall not be mandatory.
1a3 If the said scheme provides for periodic repurchase facility to all the unit
holders with restriction, if any, on the etent of such repurchaseJ or
1b3 if the said scheme provides for monthly income or caters to special
classes of persons like senior citi/ens, women, children, widows or physically
handicapped or any special class of persons providing for repurchase of units
at regular intervalsJ or
1c3 If the details of such repurchase facility are clearly disclosed in the offer
documentJ or
1d3 If the said scheme opens for repurchase within a period of si months
from the closure of subscription.
*# Repurchase of close ended scheme:
1+3 The asset management company may at its option repurchase or reissue
the repurchased units of a close ended scheme.
1'3 The units of close ended schemes referred to in the proviso to regulation
may be open for sale or redemption at fied pre1determined intervals if the
maimum and minimum amount of sale or redemption of the units and the
periodicity of such sale or redemption has been disclosed in the offer
document.
1C3 The units of close ended scheme may be converted into open ended
scheme.
1a3 If the offer document of such scheme discloses the option and the period
of such conversionJ or
1b3 The unit holders are provided with an option to redeem their units in full.
1(3 A close ended scheme shall be fully redeemed at the end of the maturity
period HProvided that a close ended scheme may be allowed to be rolled over
if the purpose, period and other terms of the roll over and all other material
details of the scheme including the likely composition of assets immediately
before the roll over, the net assets and net asset value of the scheme, are
disclosed to the unit holders and a copy of the same has been filed with the
Board.
Provided further, that such roll over will be permitted only in case of those
unit holders who epress their consent in writing and the unit holders who
do not opt for the roll over or have not given written consent shall be
allowed to redeem their holdings in full at net asset value based price.
E# .fferin% Period:
)o scheme of a mutual fund other than the HinitialI offering period of any
e%uity linked savings schemes shall be open for subscription for more than
B3 days
7# Allotment of !nits and refund of money:
1+3 The Asset management company shall specify in the offer document
1a3 The minimum subscription amount it seeks to raise under the scheme
and
1b3 In case of over subscription the etent of subscription it may retain
Provided that where the asset management company retains the over
subscription referred to in clause "b$, all the applicants applying up to five
thousand units shall be given full allotment subject to the oversubscription
mentioned in clause "b$.
1'3 The mutual fund and asset #anagement ?ompany shall be liable to
refund the application money to the applicants1
1i3 If the mutual fund fails to receive the minimum subscription amount
referred to in clause "a$ of sub1regulation "9$J
1ii3 If the moneys received from the applicants for units are in ecess of
subscription as referred to in clause "b$ of sub1regulation "9$.
1C3 Any amount refundable under sub1regulation ":$ shall be refunded
within a period of si &eeks from the date of closure of subscription list, by
.egistered A.- and by che%ue or -emand -raft marked KA;? PayeeK to the
applicants.
1(3 In the event of failure to refund the amounts within the period specified
in sub1regulation "A$, the asset management company shall be liable to pay
interest to the applicants at a rate of fifteen percent per annum on the
epiry of si weeks from the date of closure of the subscription list.
F# !nit certificates or Statement of Accounts:
The asset management company shall issue to the applicant whose
application has been accepted, unit certificates or a statement of accounts
specifying the number of units allotted to the applicant as soon as possible
but not later than si weeks from the date of closure of the Hinitial
subscription list and or from the date of receipt of the re%uest from the unit
holders in any open ended schemeI.Provided that if an applicant so desires,
the asset management company shall issue the unit certificates to the
applicant within si weeks of the receipt of re%uest for the certificate.
+&# Transfer of units:
"9$ A unit certificate unless otherwise restricted or prohibited under the
scheme, shall be freely transferable by act of parties or by operation of law.
":$ The asset management company shall, on production of instrument of
transfer together with relevant unit certificates, register the transfer and
return the unit certificate to the transferee within thirty days from the date
of such production. Provided that if the units are with the depository such
units will be transferable in accordance with the provisions of the 'ecurities
and +change Board of India "-epositories and Participants$ .egulations,
9LLC.
++# 6ispatch of warrants and proceeds:
+very mutual fund and asset management company shall,
1a3 -ispatch to the unit holders the dividend warrants within HA4 daysI of
the declaration of the dividend.
1b3 -ispatch the redemption or repurchase proceeds within 94 working days
from the date of redemption or repurchase.
1c3 In the event of failure to dispatch the redemption or repurchase
proceeds within the period specified in sub1clause "b$, the asset
management company shall be liable to pay interest to the unit holders at
such rate as may be specified by Board for the period of such delay.
1d3 Aside payment of such interest to the unit holders under sub1clause "c$
the asset management company may be liable for penalty for failure to
dispatch the redemption or repurchase proceeds within the stipulated time.
&herever an application for a total value of .'. 34,444 or more, the
applicant or in the case of application in joint names, each of the applicants,
should mention his;her permanent account number "PA)$ allotted under the
Income Ta Act, 9LC9 or where the same has not been allotted, the @I.
number and the income1ta ?ircle;&ard;-istrict should be mentioned. In
case where neither the PA) nor the @I. number has been allotted, the fact
of non1allotment should be mentioned in the application form. Any
application form without these details should not be accepted by the mutual
fund. The above clarification is being issued in accordance with .egulation
DD of the '+BI "#utual !unds$ .egulations, 9LLC.
+'# Instructions for filin% scheme offer document with S-$I:
As advised in '+BI circular #!-;?I.;4C;:D3;:449 dated Muly L, :449, while
filing offer document for launching a new scheme;revising and filing eisting
offer document with '+BI, the mutual funds should highlight and clearly
mention the page number of the offer document on which each of the
following observation has been incorporated. In case of any amendment to
.egulations, the new provisions should be incorporated in the offer
documents.
COMPANY PROFILE
COM*AN6 *ROFILE:
?irca9LL3. A group of professional formed a company called Probity
.esearch N 'ervices Pvt 0td. The name was later changed to India Info line
0td. The *bjective was to provide unbiased and independent information to
market intermediaries and investors. The %uality of research soon caught the
imagination of all major participants in the financial market. In a span of : to
A years the client list read like the who7s who of Indian !inancial market. The
list included consulting firms like #c Oinsey, companies like 2industan 0ever,
Banks like ?itibank, .ating agencies like ?.I'I0, -NB, !I', foreign brokers
as well as leading Indian brokers.
*ne fine morning in early 9LLL, a colleague had a cra/y idea that if
the company made all the research available free on the web, the number of
users may well jump from :34 to :.3 million. To make it true, the business
re%uired a reincarnation. And the pre1re%uisite was a death. It meant that
the company put up all the information free on the website and let go of all
the revenues and profits. &orse, if the new avatar failed, there would be Fno
comebacks7.
The company became heavily dependent on its e1broking business for
survival. The odds were against them. There was no money available from
the private e%uity investors at any valuation. The core promoters of the
company had little eperience of broking. To add to it, the market was hit by
a scam. They also had their share of price to pay and lessons to learn. It was
difficult to retain people. Although devastating for morale, but not surprising,
most market observers had written them off.
There was a core group who never lost hope. They cut all possible costs and
worked on a bare bones structure. They survived against all odds and
started capturing market share. The company rose from strength to strength
to become the leading corporate agent in life insurance and among the top
retail players in mutual fund and broking space.
Our Key Mi#estones:
Incorporated on *ctober 9P, 9LL3 as Probity Research G Ser2ices#
0aunched Internet portal www#indianinfoline#com in #ay 9LLL.
?ommenced distribution of personal financial products like #utual
!unds and .BI Bonds in April :444.
0aunched online trading in shares and securities branded as
www#Dpaisa#com in Muly :444.
'tarted life insurance agency business in -ecember :444 as a
?orporate Agent of I?I?I Prudential 0ife Insurance.
Became a depository participant of )'-0 in 'eptember :449.
0aunched stock messaging service in #ay :44A.
Ac%uired commodities broking license in #arch :44B.
0aunched portfolio management services in August :44B.
0isted on NS- and $S- on #ay 9D, :443.
Ac%uired D3G stake holding in #oney tree ?onsultancy services, which
is a distributor of #ortgages and other 0oan products, in *ctober
:443.
Ac%uired 944G e%uity of #arch #ont ?apital Advisors Pvt 0td in
-ecember :443 through which we have ventured into #erchant
Banking.
-'P #errill 0ynch ?apital subscribed to convertible bonds aggregating
.s.P4crores in -ecember :443. Their current stake in India Info 0ine is
a little over 9B G as on A9
st
#arch :44D.
Bennett ?oleman N ?o 0td "B??0$ invested .s.:4crores in India Info
line by way of preferential allotment in -ecember :443.
Became a depository participant of ?-'0 in Mune :44C.
#erger of India Info line 'ecurities Private 0imited with India Info line
0imited in Manuary :44D.
+ntered into an alliance with Bank of Baroda for Baroda e1trading in
!ebruary :44D.
I.-A license for Insurance Broking April :44D.
Our M&n&$e%ent Te&%:
"r#Nirmal Jain 1,hairman and "ana%in% 6irector3
)irmal Main is the founder and ?hairman of India Info line 0td.
2e holds an #BA degree from II# Ahmedabad, and is a ?hartered
Accountant "All India .ank :$ and a ?ost Accountant.
"r# R#;enAataraman 1->ecuti2e 6irector3
.. 5enkataraman is the co1promoter and +ecutive -irector of
IndiaInfoline 0td.
2e holds a B tech degree in +lectronics and +lectrical
?ommunications +ngineering from IIT Oharagpur and an #BA
degree from II# Bangalore.
2e has held the position of Assistant 5ice President with @ + ?apital
'ervices India 0imited in their private e%uity division.
The Bo&rd o" Directors:
"r# Sat Pal hattar 1Non ->ecuti2e 6irector3
#r. 'at Pal Ohattar joined the Board with effect from April :4, :449.
#r. 'at Pal Ohattar is a lawyer by profession.
2e is a director of a number of public companies in 'ingapore and
India.
"r# Sanji2 Ahuja 1Independent 6irector3
#r. 'anjiv Ahuja joined the Board with effect from August :P, :44:.
#r. Ahuja graduated from )ational ,niversity of 'ingapore with a
degree in ?omputer 'cience and is also a ?ertified Public Accountant.
2e started his own investment advisory and consulting company in
:449, named ?entennial #anagement ?onsultants Private 0imited.
"r# Nilesh ;iAamsey 1Independent 6irector3
#r. )ilesh 'hivji 5ikamsey joined the Board with effect from !ebruary
99, :443.
#r. 5ikamsey %ualified as a ?hartered Accountant in 9LP3 and has
been a member of the Institute of ?hartered Accountants of India
since 9LP3.
"r# ranti Sinha 1Independent 6irector3
#r. Oranti 'inha joined the Board with effect from Manuary :D, :443.
#r. 'inha graduated from the Agra ,niversity with a #asters degree.
#r. 'inha is also on the Board of -irectors of 2industan #otors
0imited, 0arsen N Turbo 0imited N 0I?2!0 ?are 2omes 0imited.
Our 2ision7
Its vision will not be accomplished only by maintaining high growth alone.
*ur vision is to emerge as the most respected financial services company in
India. )eedless to emphasi/e that it is imperative for all us to align our
personal goals and values to this vision.
Kno'#ed$e:
Always keep yourself up1to1date by reading newspapers like
+conomics Times, Business standard and Business 0ine daily. Passing
)?!#, A#!I, I.-A eams also help you to get basic domain
understanding.
&e are in a knowledge industry and hence we cannot afford to go to a
client and appear ignorant and foolish by not even knowing basic
things.
Techno#o$y:
By technology, we mean that as an organi/ation, we leverage
technology to deliver best service to our clients at the least cost.
*ur trading interface for broking is absolutely world class.
&e epect our employees to be comfortable with and confident of
using technology.
Ser!ice7
*ur customer service is warm, friendly and responsive that media
cannot help but rave about. Today, service is the key driver for growth
in financial services. &e take pride in our ability to add value that our
customers can feel and appreciate.
.emember we have to always ensure that simple things like ensuring
customer problems are solved, re%uests are catered to, giving him
investment ideas etc. Basically, whatever it takes to keep him served.
ANALYICAL FRAME
WORK
NFO .rocess:
&hen a mutual fund Assets #anagement ?ompany "A",$ announces a
public issue of units of N new fund;scheme, it is called a new fund offer
"N9.$.
The new fund is planned and sources from where it should be collected and
where the amount should be invested is planned by the A#?.
According to the '+BI rules any new fund launched should be approved by
'+BI. *nce the A#? get the approval of '+BI for the fund it does the
marketing of the fund by it self or through brokers. The investors who are
willing to invest in a particular fund deposit the amount they plan to invest in
the bank as directed by the A#?.
These banks collect the application and amount and direct it towards the
registrar specified by the A#?. !rom this point India info line came into the
picture as the registrar.
The role, responsibilities, activities, forms and reports involved in this
process of )!* is general, are A#?, fund manager, 'IP I;c, 'witches I;c.,
)!* ?oordinator. Internal auditor, 'ystems"';&$ dept. IP* ?entre
coordinator, IP*1.TI, IP*1+-P, 'canning and Printing N -ispatching.
Teams involved in the )!* process)
#utual fund unit
Technology team
-ata entry team
5erification team
+ternal audit team
'canning team
!ranking and dispatching team
Descri.tion o" NFO .rocess:
$anA wise se%re%ation:
The India info line branches collect the applications of the investors across
India and abroad for all the branches of the bank that is involved in this
)!*. These applications are sent to India info line processing center,
2yderabad. After receiving, these applications are segregated bank wise and
branch wise.
IH Numberin%:
I2 numbering is also called as In house )umbering. India info line gives this
I2 numbering to those applications. This is done for their convenience in
doing back office functions easily. All the data on the application is entered
into systems through software developed by India info line technology team
called O1Bolt. 0ater on, we can get any information of a particular
application or investor that we re%uire by entering this I2 number.
$indin%:
All the applications that are received are given for binding. Binding of
application is done by segregating them according to the bank and branch
fro which they are received. India info line does this Binding because to keep
all these applications safe, out of any damage and miss1place.
9irst -ntry:
After finishing binding of applications they are sent to -ate +ntry team.
2ere the first time entry is done. All the information or date of an investor
that is available on the application like name of the applicant, age, Address,
PA), Bank details, broker code, sub broker code, email addresses, guardian
name, amount invested, name of the scheme or plan invested in, etc., are
entered into the systems of India info line.
Second -ntry:
After first entry the data is again sent for the second entry. 2ere in second
entry, the data that is entered in first entry is checked and the information
what ever is missing is entered.
.nline "atchin%:
After entering the data like applicant, age, Address, PA), Bank details,
broker code, sub broker code, email addresses, guardian name, amount
invested, name of the scheme or plan invested in, etc., in the first entry and
once again in the second entry it is sent to the online matching. 2ere in
online matching the physical form of application are kept side by an checking
of data that was entered in the first entry and second entry is done.
9irst time 2erification:
-ata from online matching is sent to the verification team. This team verifies
mistakes that are left in online matching. #istakes like blank address, PA)
blank for amount greater than or e%ual to 34444 .'. )ame blank, bank
details blank, invalid or blank broker code etc., are rectified in the first time
verification.
9irst time ,,0:
!irst time check clearing list is in short is called as first time ??0. !irst Time
??0 is prepared based on the data that is provided after first time
verification.
->ternal Audit:
!irst time check1clearing list is sent to an eternal audit team. India info line
appoints this team before the )!* processes. They are nowhere related to
the organi/ation. This eternal audit team will mainly check name of the
investor, amount invested, bank details PA) number, name of the
scheme;plan and mode of holding "#*2$. But in total they will check more
than A4 characters
Second time 2erification:
If the eternal auditing is not satisfied and if they find any mistakes or
missing information they will send the first time ??0 for second time
verification. 2ere they verify the check list once again and mistakes like
invalid mode of folding "#*2$, invalid email address, status minor without
guardian name, invalid date of birth for minor, invalid eisting account
number, blank;null application number, ).I with blank account type, saving
or current, investor signature missing are rectified.
Second time ,,0:
'econd check the verification team prepares clearing after verifying the
mistakes that are pointed out by the eternal audit team. After preparing
second time ??0 it is again sent to eternal audit team.
Inte%rity ,hecA 1N9. team3:
?heck clearing list will be given by the eternal audit team to the )!* team
in India info line This )!* team in India info line will once again check
further mistakes like spelling mistakes in the name of the applicant etc., and
rectify them.
Inte%rity ,hecA 1by Audit3:
After integrity check by the )!* team it is once checked by the internal
audit team of India info line.
Scannin% 6efault ;alues4 ;erification of "ismatch cases:
+ntire data is filtered at each and every step and finally it is given to the
scanning team for scanning here scanning team will detect and rectify any
further default values and mismatch cases.
Reconciliation4 Rejections and ,heHue returns:
?he%ues of the investors are sent are sent by the balk to India info line
.econciliation team. 2ere this team will verify bank details of the investor
like PA) number, bank a;c number, comparing the amount invested with that
of the minimum amount that has to be invested che%ues with out hue
signature of the investor bounced che%ues etc., and they are rejected. These
rejected che%ues are dispatched to the investors. A sample statement of
accounts "'*A$ is prepared by this reconciliation team.
Handlin% o2er the data to "9S:
+ntire data after getting filtered at each and every step will be handing over
to mutual fund services team. This #!' team will once again verify the data
and the final data will come out any mistakes and default values.
Portin% in TasA "9:
Task #! is the software developed by India info line Technology team. It is
prepared according to the suggestion given by A#?. This Task #! will
resemble the style or Performa or outlook of the statement of accounts. !inal
data that they got after filtering the mistakes and default values is ported in
the task #!.
Allotment of units:
Allotment of units is done as per the amount that is invested by investors.
They will avail the units taking the )et Asset 5alue ")A5$ of that particular
scheme as base.
Sample S.A 2erification by audit:
'tatement of accounts "'*A$ is picked up randomly from a huge lot and the
audit team does verification. This verification will result in preparing a
statement of accounts which in cent percent correct and eact.
This '*A contains data likeQ
6 )ame of the investor
6 Address
6 Bank details
6 Pan )umber
6 @uardian name
6 Broker code
6 'ub broker code
6 )ominee name
6 )ominee addresses
6 :
nd
and A
rd
applicant name
6 Amount invested
6 )o. *f units allotted
6 !und name, 'cheme )ame, Plan )ame N A;c no
6 Transaction type details
6 #ode of redemption payment
6 #ode of dividend payment
6 #ode of dispatch
6 'tatus, occupation.
6 ?urrent balance, average price, current cost, current )A5 etc.,
6ispatch of S.A:
'tatement of accounts "'*A$ once prepared is dispatched to the investor.
'*A7s are neatly packed in an envelope and dispatched to the investors by
the dispatch team through courier.
New 9und Report:
India info line will finally prepare )ew !und .eport. This new fund report has
to be submitted to the A#?. Then A#? will submit a copy of the same to the
'+BI, which is mandatory. The new fund report details like
+3 'cheme details
6 'cheme name
6 'cheme type
6 -ate of opening
6 -ate of closing the scheme ; initial subscription period
6 Target amount
6 #inimum amount to be raised
'3 'ubscription ; Allotment details
6 )umber of applications received with in the country
6 )umber of ).I applications received
6 'ubscription amount received with in the country
6 'ubscription amount received form ).I
6 -ate of allotment of units
C3 Initial issue epenses
(3 -ate of dispatch of refund of refund orders
D3 ,nit holding pattern
*3 -istribution schedule
E3 @eographical -ispersion list
,o#din$ .ro"i#e o" &..#ic&nt7
*&rticu#&rs Sin$#e 8oint Anyone Tot&#
N#$ #% &''()*&+,- 89 " 31 12"
. #% &''()*&+,- 7/ " 2! 1""
Interpretation0
It can be seen that majority of the applicants prefer to hold the allotted units
individually and :CG prefer to hold anyone;survivors. This corroborates with
the age profile of the applicants.
Occu.&tion .ro"i#e o" &..#ic&nts0
P&1,)*2(&1 B2-)+3-- S314)*3 S,253+, P1#%3--)#+&( R3,)135 #2-36)%3 O,731- T#,&(
N#$ #%
&''()*&+,-
3/ /! 2 / 7 23 5 12"
. #%
&''()*&+,-
28 38 2 3 ! 19 / 1""
Interpretation0
#ajority of the applicants are from services personnel at APG, net comes
business People are :PG. The housewife occupy A
rd
highest at 9LG. It is found
that professionals and retired are at the lowest.

STAT9S0
&8 Residential status of indi2idual applicants0
P&1,)*2(&1- R3-)53+, NRI T#,&(
N#$ #% &''()*&+,- 1"/ / 1"8
. #% &''()*&+,- 9! / 1""
Interpretation0
It can be observed from the table and the chart that the majority of
applicants are resident individuals constituting LCG the applicants and
remaining BG are the )on1resident Indians.
98 Status of non)indi2iduals0
P&1,)*2(&1- P&1,+31-7)' AOP:BOI T12-, UF F(( B&+;-
N#$ #% &''()*&+,- 1 " " 1" " "
. #% &''()*&+,- 1" " " 8" " "
P&1,)*2(&1- C#<'&+= S#*)3,= F( SME O,731- T#,&(
N#$ #% &''()*&+,- 1 " " 1" " "
. #% &''()*&+,- 1" " " 8" " "
Interpretation0
In the non1individuals category 2,! occupied the highest at P4G and net
94G is for partnerships. In others category 94G is found and all other non1
individual entities have recorded /ero applications.
A%e profile of the applicants0
P&1,)*2(&1- B3(#6 18 18>3" 31>!" A9#43 !" T#,&(
N#$ #% " 3" 72 18 12"
&''()*&+,-
. #%
&''()*&+,-
" 25 !" 15 1""
Interpretation0
The age profile of the applicants shows that the majority of the applicants
fall into the age @roup A91C4 years and the percentage of them being C4.
This is followed by the age @roup 9P1A4 years and 93G of the applicants
are above C4 years.
In2estment profile of the applicants0
P&1,)*2(&1- 5""">
25"""
25""1>
5""""
5"""1>
1"""""
A9#43
1"""""
T#,&(
N#$ #% &''()*&+,- 78 32 / ! 12"
. #% &''()*&+,- !5 27 3 5 1""
Interpretation0
Amount of investment is high at C3G in the range 34441:3444 and it is very
low at AG in 344491944444, but the net slab. Above 944444 has registered
3G.

Scheme profile of applicants0
P&1,)*2(&1- G1#6,7
#',)#+
B#+2-
#',)#+
D)4)53+5
13)+43-,<3+,
D)4)53+5
'&=#2,
T#,&(
N#$ #% &''()*&+,- 59 / 37 2" 12"
. #% &''()*&+,- /9 3 31 17 1""
Interpretation0
#ajority of the applicants *pted the growth option and the option of
dividend reinvestment is A9G. This means that P4G of the applicants are
not investing for income sake rather they look at the accumulation
of profits.
Analysis of mode of payment0
P&1,)*2(&1- C73?23 DD T#,&(
N#$ #% &''()*&+,- 119 1 12"
. #% &''()*&+,- 99 1 1""
Interpretation0
The mode of payment reflects upon the %uality of applicants. *n an average
LLG have paid through che%ues and therefore the )!* is able to attract
good %uality retail investors.
Analysis of type of account0
P&1,)*2(&1- SB C2113+, NRO NRE FCNR T#,&(
N#$ #% 119 1 " " " 12"
&''()*&+,-
. #%
&''()*&+,-
99 1 " " " 1""
Interpretation0
#ajority of the payments have been made from 'avings Bank account "'B$#
)o payments have been found from ).*, ).+, and !?). even though BG
of the applicants are ).I s
/ender profile of the applicants0
P&1,)*2(&1- M&(3 F3<&(3 T#,&(
N#$ #% &''()*&+,- 89 31 12"
. #% &''()*&+,- 7/ 2! 1""

Interpretation0
The female participation in the )!* is low at :CG. The male applicants are
very high at DCG as is not normally found in found in institutional
investments.
/eo%raphical distribution of applicants0
P&1,)*2(&1- A+571&
P1&53-7
B)7&1 C7&+5)@7&1 D3(7) G2A&1&, K&1+&,&;&
N#$ #%
&''()*&+,-
/ 1 1 17 11 5
. #% 3 1 1 1/ 9 /
&''()*&+,-
P&1,)*2(&1- M&57=&
P1&53-7
M&7&1&-,1& R&A&-,7&+ P2+A&9 U,,&1
P1&53-7
T&<)(+&52
N#$ #%
&''()*&+,-
1 /8 2 2 5 !
. #%
&''()*&+,-
1 /" 2 2 / 5
P&1,)*2(&1- W3-, B3+@&( O,731- ,#,&(
N#$ #% &''()*&+,- 1" ! 12"
. #% &''()*&+,- 8 5 1""
Interpretation0
A predominant feature is that B4G of the applications are from #aharastra
and net highest 9BG is registered for -elhi. 0owest numbers of applications
are from Bihar and ?handighar.
QUESTIONNAIR
:9ESTIONNAIR
1$ ARE YOU INTERESTED IN MUTUAL FUNDS
BA8YES
BB8NO

1!rom the sampling of 944 people D4 percentage of people are really
Interested in mutual funds#3
2$ WAT IS YOUR AGE GROUP
BA825>35
BB835>/5
BC8/5>55
BD855>!5
1!rom the above chart we can understand the age group 331C3 people
are more investing in to the mutual funds3.
3$ WAT IS YOUR OCCUPATION
BA8PRIVATE EMPLOYEE
BB8GOVERNMENT EMPLOYEE
BC8BUSINESS PERSON
BD8RETIRED

12ere )umber of .etired employees are investing more as they are
concerns about their future3.
/$ IN WIC TYPE OF MUTUAL FUND DO YOU LIKE TO INVEST
BA8CLOSE ENDED
BB8 OPEN ENDED

12ere open ended schemes are more fleible compare to close so
#any people are interested into open ended schemes3.
5$ WAT PERCENT OF RETURN DO YOU ECPECT
BA8 1">15
BB8 2">25
BC8 3">/"
BD8 DOUBLING YOUR AMOUNT

12ere )umber of people likes to double their amount.3
!$ WIC TYPE OF FUND ALLOCATION DO YOU LIKE
BA8 1"" PERCENT EQUITY
BB8 8" PERCENT EQUITY & 2" PERCENT DEBT
BC8 7" PERCENT EQUITY 2" PERCENT DEBT & 1" PERCENT MONEY
MARKET
BD8 1"" PERCENT DEBT
12ere many investors are love to invest in 944 percent e%uity fund
Allocation scheme.8
7$ IN WIC OF TE UTI SCEME YOU AVE INVESTED
BA8UTI WEALT BUILDER FUND
BB8UTI INFRASTRUCTURE ADVANTAGE FUND
BC8UTI LONG TERM ADVANTAGE FUND
BD8NONE
12ere the investors are likely to invest in infrastructure advantage
fund as this sector is in a booming stage.8
8$ ARE YOU SATISFIED WIT TE RETURNS OF WIC UTI IS GIVING
BA8YES
BB8NO
BC8CANNOT SAY
1The above chart is clearly saying that today according to market
situation many people are %uite satisfied with the return they are
@etting.8
9$ AD YOU INVESTED IN ANY OTER MUTUAL FUNDS
BA8RELIANCE MUTUAL FUNDS
BB8D M FINANCIAL
BC8FEDILITY MUTUAL FUNDS
BD8SBC
1As people are speciali/ed in market more the investors they all are
Investing in 2'B? if not in ,TI because 2'B? is the world7s local bank
And international old more than :44 year old company8
1"$ DO YOU ADVICE PEOPLE TO INVEST IN MUTUAL FUNDS
BA8YES
BB8NO
BC8CANNOT SAY
NOTE0
As mutual funds is the subject to market so people generally does not
0ike to give advice to others as it is a risky business.
FINDINGS
AND
CONCLUSIONS
9indin%s and conclusions7
; The )!* is found to be a comple activity calling for creating an
organi/ation polling the knowledge and epertise of people in
different areas.
6 The )!* process is simple and well structured as long as it is to
investor to investor, but thereafter the process is lengthy time
consuming and found to be overlapping at some stages.
6 The '+BI regulations governing )!* are comprehensive and
protect investor(s interest at each level.
6 -ifferent funds have been designing different forms of applications
for )!*.
6 An analysis of sample of applications revealed the following
* #ajority applicants prefer to hold the units individually.
* #ajority of the applicants are in service.
* ).I s share is about BG of the total.
* #ore than :;A
rd
of the applicants are 2,! s.
* The model age group is A91C4.
* The most common investment amount is 34441:3444.
* About half of the applicants prefer @rowth option.
* Almost all applicants make the payments by che%ues.
* There were no ).*, ).+ and !?). accounts.
* #ajority the applicants are male, and.
SUGGESTIONS
AND
RECOMMENDAIONS
Su%%estions and recommendations:
< -ifferent funds have been using different forms of applications. A
standardi/ed form of application maybe designed by the competent
authority and should be made mandatory for all funds to use the
standard application form.
< The )!* process is very comple and there is a need to simplify the
process by eliminating certain unnecessary steps in the process ie
instead of carrying out audit for three times and appropriate internal
check system maybe devised to keep the errors within the tolerance
limits.
< The ).I subscribers to the fund maybe encouraged to make the
payments from ).*, ).+ and !?). accounts.
< The application from institutional investors and foreign institutional
investors are to be encouraged through a package of incentives.
6 The participation of senior citi/ens in the )!* s may be encouraged
as they are likely to hold more surpluses compared to others.
6 The holding of units in joint names shall be encouraged.
6 There is a need to investigate the reasons for 2,! s occupying more
than :;A
rd
share in the non1individual applications as its not a body
corporate.
6 A savings from all channels of India ; &orld are to be tapped by the
)!* rather than one or two states applying for a loin share of the
option.
BIBL I OGRAPHY
Bibliography
6 www.Indiainfoline.com
6 www.sebi.com
6 www.amfiindia.com
6 )!* propeller of India info line.
6 )!* records of .eliance #utual !und.
6 #utual !unds in India by 2 'A-2AO.