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SUMMER INTERNSHIP PROJECT

ON

“TO STUDY EQUITY VS NON EQUITY INVESTMENT OPTION AND ITS


AWARNESS IN INDIA”

In partial fulfillment of the award of the degree

OF

MASTER OF BUSINESS ADMINESTRATION

Amity Global Business School


Chandigarh

By:
Name: FACULTY GUIDE MENTOR
SAYYED AMAN PROF.POOJA BHARTI
ENROLLMENT NO: INDUSTRY GUIDE
A307019140 81 MR.SUNIL RANA
COURSE
MBA+PGDM (2014-2016)

I
DECLARTION

I hereby declare that this Summer Internship Project is my own work and that, to the best of my
knowledge and belief, under the guidance of Prof. Bhawana Bhardawj it reproduces no
material previously published or written that has been accepted for the award of any other degree
of diploma, except where due acknowledgement has been made in the text.

Signature:-
Student’s Name: - SAYYED AMAN
Enrolment No: - A30701914081
Batch: - MBA+ PGDM (2014-2016)
Date:-
II
ACKNOWLEDGEMENT

This project has been a great learning experience for me & I would like to express my sincere
gratitude to all the people who guide me through the project and without the valuable guidance
and suggestions of these people this project would not have been completely successful.
I owe enormous intellectual debt towards my Industry Mentor Mr. Sunil Rana, & Faculty
Mentor assistant Prof. Pooja Bharti, Professor. Amity Global Business School Chandigarh, for
their continuous support & cooperation throughout my project without which the present work
would not have been possible.

I would like to thank all the respondents whom I interacted during my project & all the retailers
for their cooperation without this I may not able to complete it successfully.

VIPU CHAUHAN
MBA (2017-2019)
Roll No 3719
HPUBS
Shimla
III

Executive Summary

In few years Mutual Funds has emerged as a tool for ensuring one’s financial well-being.
Mutual Fund have not only contributed to India’s growth story but have also helped families tap
into success of Indian industry. As information and awareness is rising more & more people are
enjoying the benefits of investing in Mutual Funds. The main reason the no. of retail Mutual
Fund investors remains small is that nine out of ten people with incomes in India do not know
that Mutual Fund exists. But once people are aware of Mutual Fund investment oppurtunities,the
member who decide to invest in Mutual Fund increases as to many as one in five people. The
trick for converting a person with no knowledge on Mutual Funds to new Mutual Fund customer
is to understand which of the potential investors are more likely to buy MF and use the right
arguments in sales process that customer will accept as important &Relevant to their decision
The project had a great learning experience and at same time it has scope to explore to the
corporate world. The analysis and advice presented in this project report is based on Market
Research on saving and investment practices of investors for investment in MF.This report will
help to know about investor preferences in MF means are they prefer any particular Amcor by
ICICI only. Which type of product they prefer, which option (Growth Dividend) they prefer to
investment strategy that follow SIP (systematic investment planning) or one time plan. This
project is divided into two parts The first part gives insight about MF and its various aspects,the
company profile, objectives of study, Research methodology. One can have a brief knowledge
about MF and its basics through the project. The second part of project consists of data and its
analysis collected through survey done on 50 clients having trading accounts with ICICI direct.
V

CONTENTS

RANK PARTICULARS PAGE NO.

1 CHAPTER INTRODUCTION

1.1 Financial sector

1.2 Industry profile

1.3 Development of financial sector in India

1.4 Growth and present status of the

industry

1.5 Future of insurance sector

1.6

1.7 Functional department of ICICI

1.8 ICICI bank

1.9 Key learning’s

1.10 SWOT analysis of the company

CHAPTER RESEARCH MATHODOLOGY

2.1 Introduction
2.2 Research methodology

2.3 Research design

2.4 Research process

2.5 Descriptive research

2.6 Data collection

2.7 Sample size

2.8 Error in study

2.9 Objective of study

CHAPTER-3
CHAPTER -1
INTRODUCTIONI9IIO

• FINANCIAL SECTOR
Financial Sector of India is intrinsically strong, operationally sundry and exhibits competence
and flexibility besides being sensitive to India’s economic aims of developing a market oriented,
industrious and viable economy. An established financial sector assists greater standards of
endowments and endorses expansion in the economy with its intensity and exposure. The fiscal
sector in India entails banks, financial organization, markets and services. The sector is classified
as organized and conventional that is also recognized as unofficial finance market. Fiscal
transactions in an organized industry are executed by a number of financial organizations which
are commercial in nature and offer monetary services to the society. Further classification
includes banking and non-banking enterprises, often recognized as activities that are client
specific. The chief controller of the finance in India is the Reserve Bank of India (RBI) and is
regarded as the supreme organization in the fiscal structure. Other significant fiscal organizations
are business banks domestic rural banks, cooperative banks and development banks. Non-
banking fiscal organizations entail credit and charter firms and other organizations like Unit
Trust of India, Provident Funds, Life Insurance Corporation, mutual funds, GIC, etc.

Financial Sector of India – Chief Characteristics

• The financial sector of India allows Most Favored Nation (MFN) reputation to all
international banks and firms offering financial facilities.

• The sector has relaxed previous MFN tax exemption on banking activities.

• Allows 12 new financial bank division authorizations every year to international


banks, that is higher as compared to the existing 8 every year.

• Raises the 10% limit of reinsurance by insurance firms in India.


• Permits 51% foreign endowment in fiscal advisory, issuing, hiring, business enterprise
capital, business banking and non-banking credit firms.

Financial services refer to services provided by the finance industry. The finance industry
encompasses a broad range of organizations that deal with the management of money. Among
these organizations are credit unions, banks, credit
card companies, insurance companies, consumer finance companies, stock
brokerages, investment funds and some government sponsored enterprises. As of 2004, the
financial services industry represented 20% of the market capitalization of the S&P 500 in
the United States.

Banks:-

A "commercial bank" is what is commonly referred to as simply a "bank". The term


"commercial" is used to distinguish it from an "investment bank," a type of financial services
entity which, instead of lending money directly to a business, helps businesses raise money from
other firms in the form of bonds (debt) or stock (equity).

Banking services

• The primary operations of banks include:

• Keeping money safe while also allowing withdrawals when needed

• Issuance of checkbooks so that bills can be paid and other kinds of payments can be
delivered by post

• Provide personal loans, commercial loans, and mortgage loans (typically loans to
purchase a home, property or business)

• Issuance of credit cards and processing of credit card transactions and billing

• Issuance of debit cards for use as a substitute for checks

• Allow financial transactions at branches or by using Automatic Teller Machines (ATMs)

• Provide wire transfers of funds and Electronic fund transfers between banks

• Facilitation of standing orders and direct debits, so payments for bills can be made
automatically
• Provide overdraft agreements for the temporary advancement of the Bank's own money
to meet monthly spending commitments of a customer in their current account.

• Provide internet banking system to facilitate the customers to view and operate their
respective accounts through internet.

• Provide Charge card advances of the Bank's own money for customers wishing to settle
credit advances monthly.

• Provide a check guaranteed by the Bank itself and prepaid by the customer, such as
a cashier's check or certified check.

Other types of bank services:

• Private banking - Private banks provide banking services exclusively to high net
worth individuals. Many financial services firms require a person or family to have a
certain minimum net worth to qualify for private banking services. Private banks
often provide more personal services, such as wealth management and tax planning,
than normal retail banks.

• Capital market bank - bank that underwrite debt and equity, assist company deals
(advisory services, underwriting and advisory fees), and restructure debt
into structured finance products.

• Bank cards include both credit cards and debit cards. Bank of America is the largest
issuer of bank cards.

• Credit card machine services and networks Companies which provide credit card
machine and payment networks call themselves "merchant card providers".
Foreign exchange services

Foreign exchange services are provided by many banks around the world. Foreign exchange
services include:

• Currency exchange - where clients can purchase and sell foreign currency banknotes.

• Foreign Currency Banking - banking transactions are done in foreign currency.

• Wire transfer - where clients can send funds to international banks abroad.
Investment services

• Asset management - the term usually given to describe companies which run collective
investment funds. Also refers to services provided by others, generally registered with the
Securities and Exchange Commission as Registered Investment Advisors.

• Hedge fund management - Hedge funds often employ the services of "prime brokerage"
divisions at major investment banks to execute their trades.

• Custody services - the safe-keeping and processing of the world's securities trades and
servicing the associated portfolios. Assets under custody in the world are approximately
$100 trillion.
Insurance

Insurance brokerage - Insurance brokers shop for insurance (generally corporate property and
casualty insurance) on behalf of customers. Recently a number of websites have been created to
give consumers basic price comparisons for services such as insurance, causing controversy
within the industry.

• Insurance underwriting - Personal lines insurance underwriters actually underwrite insurance


for individuals, a service still offered primarily through agents, insurance brokers, and stock
brokers. Underwriters may also offer similar commercial lines of coverage for businesses.
Activities include insurance and annuities, life insurance, retirement insurance, health
insurance, and property & casualty insurance.

• Reinsurance - Reinsurance is insurance sold to insurers themselves, to protect them from


catastrophic losses.
Other financial services

• Intermediation or advisory services - These services involve stock brokers (private client
services) and discount brokers. Stock brokers assist investors in buying or selling shares.
Primarily internet-based companies are often referred to as discount brokerages, although
many now have branch offices to assist clients. These brokerages primarily target individual
investors. Full service and private client firms primarily assist and execute trades for clients
with large amounts of capital to invest, such as large companies, wealthy individuals, and
investment management funds.
• Private equity - Private equity funds are typically closed-end funds, which usually take
controlling equity stakes in businesses that are either private, or taken private once acquired.
Private equity funds often use leveraged buyouts (LBOs) to acquire the firms in which they
invest. The most successful private equity funds can generate returns significantly higher
than provided by the equity markets

• Venture capital is a type of private equity capital typically provided by professional, outside
investors to new, high-potential-growth companies in the interest of taking the company to
an IPO or trade sale of the business.

• Angel investment - An angel investor or angel (known as a business angel or informal


investor in Europe), is an affluent individual who provides capital for a business start-up,
usually in exchange for convertible debt or ownership equity. A small but increasing number
of angel investors organize themselves into angel groups or angel networks to share research
and pool their investment capital.

• Conglomerates - A financial services conglomerate is a financial services firm that is active


in more than one sector of the financial services market e.g. life insurance, general insurance,
health insurance, asset management, retail banking, wholesale banking, investment banking,
etc. A key rationale for the existence of such businesses is the existence of diversification
benefits that are present when different types of businesses are aggregated i.e. bad things
don't always happen at the same time. As a consequence, economic capital for a
conglomerate is usually substantially less than economic capital is for the sum of its parts.

• Debt resolution is a consumer service that assists individuals that have too much debt to pay
off as requested, but do not want to file bankruptcy and wish to payoff their debts owed. This
debt can be accrued in various ways including but not limited to personal loans, credit cards
or in some cases merchant accounts. There are many services/companies that can assist with
this. These can include debt consolidation, debt settlement and refinancing.

(1.2)INDUSTRY PROFILE

• ORIGIN AND DEVELOPMENT OF THE INDUSTRY :-


One of the major economic developments of this decade has been the recent takeoff of India,
with growth rates averaging in excess of 8% for the last four years, a stock In 2006, total equity
issuance reached $19.2bn in India, up 22 per cent. market that has risen over three-fold in as
many years with a rising inflow of foreign investment Merger and acquisition volume was a
record $27.8bn, up 38 per cent, driven by a 371 percent increase in outbound acquisitions
exceeding for the first time inbound deal volumes. Debt issuance reached an all-time high of
$13.7bn, up 28 per cent from a year earlier. Indian companies were also among the world's most
active issuers of depositary receipts in the first half of 2006, accounting for one in three new
issues globally, according to the Bank of New York.The questions and challenges that India
faces in the first decade of the new millennium are therefore fundamentally different from those
that it has wrestled with for decades after independence. Liberalization and globalization have
breathed new life into the foreign exchange markets while simultaneously besetting them with
new challenges. Commodity trading, particularly trade in commodity futures, have practically
started from scratch to attain scale and attention. The banking industry has moved from an era of
rigid controls and government interference to a more market-governed system. New private
banks have made their presence felt in a very strong way and several foreign banks have entered
the country. Over the years, microfinance has emerged as an important element of the Indian
financial system increasing its outreach and providing much-needed financial services to
millions of poor Indian households.

Indian Economy and Financial Markets

The Domestic Economy

There is hardly a facet of economic life in India that has not been radically altered since the
launch of economic reforms in the early 90’s. The twin forces of globalization

According to the official definition, the unorganized sector is comprised of: 1) all the enterprises
except units registered under Section 2m(i) and 2m(ii) of the Factories Act, 1948, and Bidi and
Cigar Workers(condition of employment) Act, 1966; and 2) all enterprises except those run by
the government (central, state and local bodies) or Public Sector Enterprises and the deregulation
have breathed a new life to private business and the long-protected industries in India are now
faced with both the challenge of foreign competition as well as the opportunities of world
markets. The growth rate has continued the higher trajectory started in 1980 and the GDP has
nearly doubled in constant prices The end of the “License Raj” has removed major obstacles
from the path of new investment and capacity creation. The effect is clearly visible in ratio of
capital formation in the private sector to that in the public sector for a decade preceding
liberalization and for the period following it. The unmistakable ascent in the ratio following
liberalization points to the unshackled private sector’s march towards attaining the “commanding
heights” of the economy. In terms of price stability, the average rate of inflation since
liberalization has stayed close to the preceding half decade except in the last few years when
inflation has declined to significantly lower levels. Perhaps the biggest structural change in
India’s macro-economy, apart from the rise in the growth rate, is the steep decline in the interest
rates. Interest rates have fallen to almost half in the period following the reforms, bringing down
the corporate cost of capital significantly and increasing the competitiveness of Indian companies
in the global marketplace.

The Financial Sector

Despite the history of India’s stock exchanges (4 at independence to 23 today) and the large
nu0mber of listed firms (over 10,000), the size and role in terms of allocating resources of the
markets are dominated by those of the banking sector, similar to many other emerging
economies. The equity markets were not important as a source of funding for the non-state sector
until as recently as the early 1980s. The ratio of India’s market capitalization to GDP rose from
about 3.5% in the early 1980’s to over 59 % in 2005, which ranks 40th among 106 countries
while the size of the (private) corporate bond market is small. On the other hand, total bank
deposits (of over $527 billion dollars) are equivalent to 52 % of GDP in 2005, and constitute
three-quarters of the country’s total financial assets. The efficiency of the banking sector,
measured by the concentration and overhead costs, is above the world average. In a series of
seminal papers beginning in the late 1990s, La Porta, Lopez de Silanes, Shleifer and Vishny
(LLSV) have empirically demonstrated the effects that the investor protection embedded in the
legal system of a country has on the development and nature of financial systems in the country.
Broadly speaking, they posit the common-law countries provide better investor protection than
civil law countries leading to “better” financial and systemic outcomes for the former including a
greater fraction of external finance, better developed financial markets and more dispersed
shareholding in these countries as compared to the civil law countries. Consequently, the LLSV
averages of financial system indicators across different legal system groups serve as a
benchmark against which an individual country’s financial system can be compared. India’s
banking sector is much smaller than the (value-weighted) average of LLSV sample countries,
even though its efficiency (overhead cost as fraction of total banking assets) compares favorably
to most countries. The size of India’s stock market, measured by the total market capitalization
as fraction of GDP, is actually slightly larger than that of the banking sector, although this figure
is still below the LLSV average. However, in terms of the “floating supply” of the market, or the
tradable fraction of the total market capitalization, India’s stock market is only half of its banking
sector. “Structure activity” and “Structure size” measure whether a financial system is dominated
by the market or banks. India’s activity (size) figure is below (above) even the average of
English origin countries, suggesting that India has a market-dominated system; but this is mainly
due to the small amount of bank private credit (relative to GDP) rather than the size of the stock
market. In terms of relative efficiency (“Structure efficiency”) of the market vs. banks, India’s
banks are much more efficient than the market (due to the low overhead cost), and this
dominance of banks over market is stronger in India than for the average level of LLSV
countries. Finally, in terms of the development of the financial system, including both banks and
markets, we find that India’s overall financial market size (“Finance activity” and “Finance
size”) is much smaller than the LLSV-sample average level. Overall, based on the above
evidence, we can conclude that both India’s stock market and banking sector are small relative to
the size of its economy, and the financial system is dominated by an efficient (low overhead
cost) but significantly under-utilized (in terms of lending to non-state sectors) banking sector.
However, the situation has changed considerably in recent years: Since the middle of 2011
through to the third quarter of 2014-15, Indian stock prices have appreciated rapidly. In fact, as
shown in Figure 1, the rise of the Indian equity market in this period allowed investors to earn a
higher return (“buy and hold return”) from investing in the Bombay Stock Exchange, or BSE’s
SENSEX Index than from investing in the S&P 500 Index and other indices in the U.K., and
Japan during the period. Only China did better. Many credit the continuing reforms and more or
less steady growth as well as increasing foreign direct and portfolio investment in the country for
this explosion in share values.4 it compares the two major Indian exchanges, the Bombay Stock
Exchange (BSE), and the much more recent, National Stock Exchange, (NSE)) vis-à-vis other
major exchanges in the world. At the end of 2005, BSE was the sixteenth largest stock market in
the world in terms of market capitalization, while NSE ranked eighteenth. It also shows that
trading in the BSE is one of the most concentrated among the largest exchanges in the world,
with the top 5% of companies (in terms of market capitalization) accounting for over 72% of all
trades, but the (share) turnover velocity of BSE (35.4% for the year) is much lower than that of
exchanges with similar concentration ratios.5 Figure 1.9 shows that Indian markets outperformed
most major global markets handsomely during 2003-2012 period. In 2012-13, non-government
Indian companies raised $2.7 billion from the market through the issuance of common stocks,
and $378 million by selling bonds/debentures (no preferred shares). Despite the size of new
issues, India’s financial markets, relative to the size of its economy and population, are much
smaller than those in many other countries. It presents a comparison of external markets (stock
and bonds) in India and different country groups (by legal origin) using measures from LLSV
(1997a). The horizontal axis measures overall investor protection (protection provided by the
law, rule of law, and government corruption) in each country, while the vertical axis measures
the (relative) size and efficiency of that country’s external markets.6 Most countries with the
English common-law origin (French civil-law origin) lie in the top-right region (bottom-left
region) of the graph. India is located in the south-eastern region of the graph with relatively
strong legal protection (in particular, protection provided by law) but relatively small financial
markets.

Along with the rest of the economy and perhaps even more than the rest, financial markets in
India have witnessed a fundamental transformation in the years since liberalization. The going
has not been smooth all along but the overall effects have been largely positive. Over the
decades, India’s banking sector has grown steadily in size (in terms of total deposits) at an
average annual growth rate of 18%. There are about 100 commercial banks in operation with 30
of them state owned, 30 private sector banks and the rest 40 foreign banks. Still dominated by
state-owned banks (they account for over 80% of deposits and assets), the years since
liberalization have seen the emergence of new private sector banks as well as the entry of several
new foreign banks. This has resulted in a much lower concentration ratio in India than in other
emerging economies. Competition has clearly increased advances and assets dropping by over
28% and about 20%. Within a decade of its formation, a private bank, the ICICI Bank has
become the second largest in India. Compared to most Asian countries the Indian banking
system has done better in managing its NPL problem. The “healthy” status of the Indian banking
system is in part due to its high standards in selecting borrowers (in fact, many firms complained
about the stringent standards and lack of sufficient funding), though there is some concern about
“ever-greening” of loans to avoid being categorized as NPLs. In terms of profitability, Indian
banks have also performed well compared to the banking sector in other Asian economies, as the
returns to bank assets and equity. Private banks are today increasingly displacing nationalized
banks from their positions of pre-eminence. Though the nationalized State Bank of India (SBI)
remains the largest bank in the country by far, new private banks like ICICI Bank, UTI Bank
(recently renamed Axis Bank) and HDFC Bank have emerged as important players in the retail
banking sector. Though spawned by government-backed financial institutions in each case, they
are profit-driven professional enterprises. The proportion of non-performing assets (NPAs) in the
loan portfolios of the banks is one of the best indicators of the health of the banking sector,
which, in turn, is central to the economic health of the nation the distribution of NPAs in the
different segments of the Indian banking sector for the last few years. Clearly the foreign banks
have the healthiest portfolios and the nationalized banks the worst, but the downward trend
across the board is indeed a positive feature. Also, while there is still room for improvement, the
overall ratios are far from alarming particularly when compared to some other Asian countries.
While the banking sector has undergone several changes, equity markets have experienced
tumultuous times as well. There is no doubt that the post-reforms era has witnessed considerably
higher average stock market returns in general as compared to before. Since the beginning of the
reforms, “equity culture” has spread across the country to an extent more than ever before. This
trend is clearly visible which shows the ratio of BSE market capitalization to the GDP. Although
GDP itself has risen faster than before, the long-term growth in equity markets has been
significantly higher. The rise in stock prices (and the associated drop in cost of equity) has been
accompanied by a boom in the amounts raised through new issues – both stocks as well as
debentures – beginning with the reforms and continuing at a high level for over half a decade
The ride has not been smooth all along though. At least two major bubbles have rocked the
Indian stock markets since liberalization. The first, coinciding with the initial reforms, raised
questions about the reliability of the equity market institutions. A joint parliamentary committee
investigation and major media attention notwithstanding another crisis hit the bourses in 1998
and yet again in 2001. Clearly several institutional problems have played an important role in
these recurring crises and they are being fixed in a reactive rather than pro-active manner.
Appropriate monitoring of the boursesremains a thorny issue and foul play, a feature that is far
from absent even in developed countries, is, unfortunately, still common in India. Consequently,
every steep rise in stock values today instills foreboding in some minds about a possible reversal.
Nevertheless, institutions have doubtless improved and become more transparent over the period.
The time-honored “badla” system of rolling settlements is now gone and derivatives have firmly
established themselves on the Indian scene. Indeed the introduction and rapid growth of equity
derivatives have been one of the defining changes in the Indian financial sector since
liberalization. Notwithstanding considerable resistance from traditional brokers in Indian
exchanges, futures and options trading began in India at the turn of the centuries. The rapid
growth in the turnover in the NSE derivatives market broken down into different instrument-
types. Evidently futures – both on individual stocks as well as index futures – have been more
popular than options, but the overall growth in less than half a decade has been phenomenal
indeed. Tradable interest rate futures have made their appearance as well but their trading
volume has been negligible and sporadic. Nevertheless, the fixed-income derivatives section has
witnessed considerable growth as well with Interest Rate Swaps and Forward Rate Agreements
being frequently used in inter-bank transactions as well as for hedging of corporate risks.
Similarly currency swaps, forward contracts and currency options are being increasingly used by
Indian companies to hedge currency risk.

Finally the market for corporate control has seen a surge of activity in India in recent years. The
evolution of mergers and acquisitions involving foreign private equity has been a major player in
this area with inflows of over $2.2 billion in 2006, the largest in any Asian country. Hence the
Financial sector development in developing countries and emerging markets is part of
the private sector development strategy to stimulate economic growth and reduce poverty .A
solid and well-functioning financial sector is a powerful engine behind economic growth. It
generates local savings, which in turn lead to productive investments in local business.
Furthermore, effective banks can channel international streams of private remittances. The
financial sector therefore provides the rudiments for income-growth and job creation.

(1.3)Development of financial sector in India:-


The Financial Sector Development Project aims to foster greater market orientation,
allocate efficiency, technical competence and competition in India's financial system and
contribute to meeting the long-term financing needs of its investors as a means of
stimulating economic growth. It will assist the Government of India to sustain financial
liberalization, institutional development of public sector commercial banks and
integration into the global capital markets. It will facilitate expansion of private equity
ownership in public sector commercial banks and development of term foreign currency
lending. The project comprises the following three components:

1) Capital restructuring to support selected nationalized commercial banks which commit


to plans for increasing private equity through public offerings and modernization
initiatives, this support will be through subordinated loans from the government to
strengthen their capital base as required by capital adequacy norms.

2) The project will support a modernization and institutional development program


fostering action in strategic planning, automation and computerization of payment and
accounting functions, human resource development, organizational improvements, and
enhanced capability in the areas of asset-liability credit and treasury management.

3) The backstop facility component will assist eligible Indian banks and financial
institutions in India to source private funds to meet rapidly expanding demand for foreign
currency term loans. It will assist in meeting such demand from small- and medium-sized
companies with foreign exchange earnings and exporters whose direct access to offshore
markets is hampered by high issue cost, the facility will provide a medium-term liquidity
assurance at a market-related price to financial institutions by offering them the option to
borrow funds from the facility at a market-related price representing a market perception
of systemic disruption.

(1.4)GROWTH AND PRESENT STATUS OF THE INDUSTRY

The growth of financial sector in India at present is nearly 8.5% per year. The rise in the
growth rate suggests the growth of the economy. The financial policies and the monetary policies
are able to sustain a stable growth rate. The reforms pertaining to the monetary policies and the
macro economics policies over the last few years has influenced the Indian economy to the core.
The major step towards opening up of the financial market further was the nullification of the
regulations restricting the growth of the financial sector in India. To maintain such a growth for a
long term the inflation has to come down further. The financial sector in India had an overall
growth of 15%, which has exhibited stability over the last few years although several other
markets across the Asian region were going through a turn-oil. The development of the system
pertaining to the financial sector was the key to the growth of the same. With the opening of the
financial market variety of products and services were introduced to suit the need of the
customer. The Reserve Bank of India (RBI) played a dynamic role in the growth of the financial
sector of India.

The growth of financial sector in India was due to the development in sectors
Growth of the banking sector in India
The banking system in India is the most extensive. The total asset value of the entire banking
sector in India is nearly US$ 270 billion. The total deposits is nearly US$ 220 billion. Banking
sector in India has been transformed completely. Presently the latest inclusions such as Internet
banking and Core banking have made banking operations more user friendly and easy
.

Growth of the Capital Market in India


• The ratio of the transaction was increased with the share ratio and deposit system

• The removal of the pliable but ill-used forward trading mechanism

• The introduction of info tech systems in the National Stock Exchange (NSE) in order to
cater to the various investors in different locations

• Privatization of stock exchanges

Growth in the Insurance sector in India


With the opening of the market, foreign and private Indian players are keen to convert
untapped market potential into opportunities by providing tailor-made products.

The insurance market is filled up with new players which has led to the introduction of several
innovative insurance based products, value add-ons, and services. Many foreign companies
have also entered the arena such as Tokyo Marine, Aviva, Allianz, Lombard General, AMP,
New York Life, Standard Life, AIG, and Sun Life.

The competition among the companies has led to aggressive marketing, and distribution
techniques.

The active part of the Insurance Regulatory and Development Authority (IRDA) as a
regulatory body has provided to the development of the sector.

Growth of the Venture Capital market in India


• The venture capital sector in India is one of the most active in the financial sector in spite
of the hindrances by the external set up.

• Presently in India there are around 34 national and 2 international SEBI registered venture
capital funds.

(1.5)FUTURE OF FINANCE SECTOR:-

The financial sector has witnessed changes in many respects. Banking has seen many changes in
the last two decades, as has the mutual fund business. During the first three decades after
independence, the financial sector and changes in it were largely dominated by SBI, IDBI, IFCI,
UTI, ICICI, and LIC but the last two decades saw a significant contribution by many other
players, smaller in size, but faster on their feet. Each one of these large players was created with
very specific mandates, but with sector-wide responsibilities. For example formation of SBI was
the result of the Rural Credit Survey Committee recommendation to create an entity that among
other things, would help the government in stimulating banking in the entire country. Similarly,
the UTI was created in 1964 with the explicit objective of stimulating investment in the stock
market. In other words, these organizations were created with specific purposes and a vision for
the future. They have significantly served the purposes that drove them all these years, and
delivered on the agenda set for them. The present day financial sector has been built on the
achievements of these organizations. However, in the last few years, we see organizations like
SBI and UTI endeavoring to compete with every player in the market. As a consequence, these
organizations are trying to become everything to everybody. The negative image associated with
a public enterprise has only added to their attempt to emulate private enterprise behavior.
Survival has become the objective of these pioneers. In sum, these organizations are fast losing
their initial identity without gaining a new one! These organizations are trying to respond by
tinkering with their organization design or by changing the ownership pattern. Such interventions
are likely to be inappropriate given the status of these organizations. A comprehensive relook at
the existence of these organizations is an imperative. They will have to introspect on their
relevance in the present context. For example, SBI will have to contemplate on the role it can
play in the market given the state of the market today and a desirable state in the future.
Similarly, UTI may have to examine its role in the mutual fund sector.

Organization which have played defining roles in economies, have often found themselves at
such crossroads because they reach there first. The genius of the organization is in identifying the
moment as such and in reinventing itself to play a similar pivotal role again although in a
different context. AT&T was one such organization, which during the early seventies went
through an elaborate exercise of reinventing itself for the future state of communications
business that it envisioned. The task was not just about being prepared for the future but about
preparing to shape the future of the industry. The major players of the financial markets in India
will have to do something similar; they need to envision the desirable future state of the market
and define their role in shaping the future. This would mean playing a pioneering role once again
in a new context; any other role would probably be insignificant for these organizations. The
finance ministry as the de facto owner of these organizations needs to encourage their
managements to undertake this critical task immediately.

(1.6)

ICICI Prudential Life Insurance Company is a 74:26 joint venture with Prudential plc (UK). It is
the largest private sector life insurance company offering a comprehensive suite of life, health
and pensions products. It is also the pioneer in launching innovative health care products like
Diabetes Care Active and health Saver.The company operates on a multi-channel platform and
has a distribution strength of over 2,76,000 financial advisors operating from more than 2000
branches spread across 1800 locations across the country. In addition to the agency force, it also
has tie-ups with various banks, corporate agents and brokers. In fiscal 2009, ICICI Prudential
attained a market share of 10.9% based on retail weighted premium and garnered a total
premium of Rs 153.56 billion registering a growth of 13% and held assets of Rs. 327.88 billion
as on March 31, 2014.

ICICI Lombard General Insurance Company, a joint venture with the Canada based Fairfax
Financial Holdings, is the largest private sector general insurance company. It has a
comprehensive product portfolio catering to all corporate and retail insurance needs and is
present in over 300 locations across the country. ICICI Lombard General Insurance has achieved
a market share of 27.2% among private sector general insurance companies and an overall
market share of 11.2% during fiscal 2009-10. The gross return premium grew by 2.2% from Rs.
33.45 billion in fiscal 2011 to 34.20 billion in fiscal 2012.

ICICI Securities Ltd is the largest equity house in the country providing end-to-end solutions
(including web-based services) through the largest non-banking distribution channel so as to
fulfill all the diverse needs of retail and corporate customers. ICICI Securities (I-Sec) has a
dominant position in its core segments of its operations - Corporate Finance including Equity
Capital Markets Advisory Services, Institutional Equities, Retail and Financial Product
Distribution. ICICI Securities Primary Dealership Limited is the largest Primary Dealer in
Government Securities. It is an acknowledged leader in the Indian fixed income and money
markets, with a strong franchise across the spectrum of interest rate products and services -
institutional sales and trading, resource mobilization, portfolio management services and
research. One of the first entities to be granted Primary Dealership license by RBI, I-Sec PD has
made pioneering contributions since inception to debt market development in India. I-Sec PD is
also credited with pioneering debt market research in India. I-Sec PD has been recognized as the
'Best Domestic Bond House in India' by Asia money every year from 2002 to 2007 and selected
as 'Best Bond House' by Financeasia.com for the years - 2001, 2004 to 2007 and 2009."

ICICI Prudential Asset Management is the third largest mutual fund with average asset under
management of Rs. 514.33 billion and a market share of 10.43% as on March 31, 2009. The
Company manages a comprehensive range of mutual fund schemes and portfolio management
services to meet the varying investment needs of its investors through162 branches and 185
CAMS official point of transaction acceptance spread across the country. ICICI Venture is one
of the largest and most successful private equity firms in India with funds under management in
excess of USD 2 billion. ICICI Venture, over the years has built an enviable portfolio of
companies across sectors including Life Sciences, Information Technology, Media,
Manufacturing, Retail, Financial Services, and Real Estate thereby building sustainable value. It
has several “firsts” to its credit in the Indian Private Equity industry. Amongst them are India’s
first leveraged buyout (Infomedia), the first real estate investment (Cyber Gateway), the first
mezzanine financing for a acquisition (Arch Pharmalabs), the first ‘royalty-based’ structured deal
in Pharma Research & Development (Dr Reddy’s Laboratories - JV) and the first fund level
secondary transaction (Collar Capital)

ORIGIN OF ICICI DIRECT

Even as the European and American stock markets reckon with the changes brought about by the
Internet and IT/telecom advances, the Indian stock market has quickly moved to global
standards. The sheer breadth of the changes since the National Stock Exchange started operations
in 1994 and with the Securities and Exchange Board of India (SEBI) also driving the changes in
the market system, have enabled the Indian market to move well ahead in just five years. Even as
online automated trading and better clearing and settlement mechanisms have been put in place,
perhaps, the most significant change in the Indian market has been the coming of paperless
trading; it may well be a precursor to the next big changes – rolling settlements and Internet
trading. But the push towards paperless trading stands out even in a decade when the market
landscape has changed beyond recognition. Dematerialization (holding and trading securities in
paperless mode) was an alien concept in India before 1995; in five years, large quantities of
paper have been flushed out of the system. Since the entry of the foreign institutional investors
(FIIs) and online trading, the old system, laden with paperwork at every conceivable stage, was
out of place in an otherwise fast trading environment. As the FIIs complained about the
paperwork as a major constraining factor, the government and SEBI took notice. The requisite
legislative changes were put in place quickly - the Depositories Act, 1996 was passed and the
NSE, with the UTI and the IDBI, set up the National Securities Depository Ltd (NSDL).But the
depository concept did not gain popularity; the FIIs which had clamored for its introduction, now
ignored it. The reason: Lack of liquidity. But, unless the institutional investors stepped in, there
could be no liquidity. This stalemate frustrated the push for a paperless environment. Until SEBI
stepped in, that is. With regulatory pushes SEBI, in phases, made demat trading in stocks
mandatory for institutions first and, then, for all investors. Mandatory paperless trading, forced
the FIIs to dematerialize their holdings quickly. As a consequence of SEBI's action, most major
stocks are traded in the paperless mode now. The second phase will involve some 200 stocks in a
few months time. The effect of SEBI's action is evident from NSDL's statistics. A total of 698
companies, with a market capitalization of Rs. 7,37,300 crores (almost 80 per cent of the market
capitalization of all listed stocks), is enrolled with the NSDL. With 13.65 billion shares in the
demat mode, nearly 19 million investor accounts, and securities valued at Rs. 3,96,800 crores
($91 billions) actually dematerialized, the concept of dematerialization can be said to have taken
roots. If the regulatory direction is any indication, more paper will be flushed out of the system
in the next two years. The costs of dematerialization have declined as the NSDL slashed charges
as volumes expanded and the competition _ from the Central Depository Services Ltd (CSDL)
floated by the BSE _ started in 1999 second half. A series of measures by SEBI and NSDL also
helped ease the strain faced by retail investors From a long-term perspective, demat in India is of
considerable significance. Not only has the general trading environment improved and
quickened, volumes too have perked up, even in the demat segment. With demat taking off, there
is now scope for an improvement in the quality of investor services. As a consequence of
dematerialization, the Indian market is also well prepared for web-based trading though the
quality of telecom infrastructure and inadequacies in the banking system-stock exchange
linkages may cause delays. Notably, with regard to the thrust towards paperless trading, the
Indian market managed in three years what took even the US much longer. With a high degree of
dematerialization a reality, the stage is set for rolling settlements and web-based trading. Once
these are in place, the Indian market will have moved closer to the standards in advanced
markets, such as the US. And paperless trading may well be the catalyst for such a rapid
advancement. This is the concluding week of Business Line's 20-week series Markets – a
Century in Retrospect, which featured the most significant market- and corporate-related events.
Other, equally significant, specific topics of a micro-nature will be published through the year.
The dematerialized form of shareholding and the depository mode of trade (scrip less trade) have
been in operation in developed financial markets for over 15 years. In India, the first depository
commenced operation a decade back and is relatively new. The Indian financial market is in need
of both scrip-based and scrip less trade, but the investing community, which is used scrip-based
trade, is bound to take some time to accept the latter. The scrip less trading, till now a domain of
the western world, institutional investors and GDR holders is now mandatory even for small
investors. All those who hold physical share certificates have to get them dematerialized. If they
do not, they will be forced to do so at the time of sale. The countless numbers of conservative
Indians have to digest it, whether they like it or not. First, the institutional investors succumbed.
Then the high net worth individuals, trading in more than a certain numbers of shares, were
forced to give in. now, it is the turn of the small investors of select-companies. With their share
certificates being replaced by small slips and receipts, naturally the average investors will have
their share of fears and apprehensions. It is necessary to educate and convince these investors
about the benefit of Demat rather than forcing them to take part in the game.

GROWTH AND DEVELOPMENT OF THE ORGANISATION

the market share and emerge a front-runner. Another reason for the immense popularity
ICICI consolidating gains

It is a surprise to everyone if the newspapers or the late night editions of the TV news do
not carry anything about the ICICI. One of India's biggest financial institutions is always
in the limelight. The growth of the ICICI over the years has proved repeatedly the ability
of the institution in adopting new technologies and products. It is through its ability to
nourish new products and services that the institution has become a household name in a
very short span of time.
This time again the FI is in the news in a big way. Previously, the institution has been in
the limelight for controlling the market turbulence or expansion into new markets.
However, the reason this time is totally different from the earlier ones. After a constant
expansion of the number of subsidiaries in the last five years, the leading financial
institution has announced its plans of restructuring. Things are moving fast at the Bandra-
Kurla complex of ICICI. Also, after substantially diluting its stake in the ICICI Bank, the
group is also planning for a reverse merger.
Exponential growth The Industrial Credit and Investment Corporation of India limited
founded way back in 1955, has witnessed more than it could have dreamed of at the time
of its inception. However, following the economic liberalization of Indian economy, it has
renamed itself as ICICI. The principal objective behind setting up this organization at that
time was to make available long-term capital for industrial development and investment in
India. Gopalan Ramachandran, Chief executive, Business Economics and Risk
Management says, "Considering the fact that it was established at a time when India had a
stock market but not a reliable capital market to supply long-term debt and equity, the
growth of ICICI is wonderful."
Not only did the institution withstand the test of time but also witnessed exponential
growth that anybody can ever imagine. Under its group umbrella, ICICI has around 27
subsidiaries. Of course, the most prominent and most successful among them is the ICICI
bank. One observer puts the constant increase in the number of subsidiaries as part of their
decentralization strategy.
The major reason for the exponential growth of ICICI is due to its willingness to adapt
itself to changes. It is the first one to start Internet banking. Also it has been the first ever
institution to start a web based securities trading through its subsidiary ICICI Web Trade
Ltd. Says Gopalan Ramachandran, "ICICI is a financial institution that has seldom
resisted change. It has been an ardent promoter of internal and external change." Truly, it
has been the best in the business to adopt to the changes in the environment. And what
more can it ask for from its employees who were most willing to adopt new things. And
all this is due to the comfort provided by the subsidiaries identifies an industry observer.
Not only it witnessed increase in the number of subsidiaries during the last few years, it
has also witnessed one of the best years in existence in terms of rise in its total assets. At
the end of the financial year 2000, its assets stood at Rs. 706 bn. In the process, it has
become the second largest financial institution in India. Also, today the group manages
around 7.4 mn customer accounts. It includes three mn customers' accounts of the ICICI
bank. The well-diversified portfolio of the company will tell the story of its success. Out
of the total portfolio, corporate finance accounts for 37 percent while the structured
project finance accounts for 23 percent. Slowly it is also gaining momentum in the retail
loans segment, though at present it represents only 2 percent of the total portfolio. It is no
doubt that ICICI has now become India's best-managed financial institution catering to the
needs of different customers. "The company is making constant efforts to exploit first
mover advantage in the technology-related businesses." The principal achievements of
ICICI according to Gopalan Ramachandran, are, "It has been able to reduce drastically the
percentage of problem loans and the surge in the size of its balance sheet. Also, it has
rapidly assimilated the technology and had developed institutional and managerial process
aimed at managing risk." The result is the rapid increase in the shareholder value
compared to others in the industry.

SOME MAJOR HIGHLIGHTS OF THIS GROWTH ARE:-

1."As ICICI has transformed its business from a development financial institution to a
diversified financial service group offering a wide variety of products and services it
required various subsidiaries to handle particular activities." Justifying the reason behind
the floating of the subsidiaries and their contribution to the overall success he adds,
"These subsidiaries helped in focusing on their specific areas of operation and facilitated
attention to their specific customer segments and activities."

2. Subsidiaries enable special managerial talent to deploy cutting-edge technologies. The


internalization of risk and reward in subsidiaries is a potent impetus for the growth of the
ICICI group

3."ICICI has empowered managers to try new techniques, technologies and process and
above all, to establish new beachheads for exploitation in the future,"

4, "The retail subsidiaries have hitherto focused on their specific areas of operation in
order to facilitate rapid time to market and dedicate attention to their customer segments
and channels."

➢ Direct Business Catalyst (DBC)

A Direct Business Catalyst (DBC) is an entity which gets new clients for ICICI Direct and
nurtures them by offering them the trade facility on phone. For all its effort it gets a fixed referral
fee and trail commission.
(1.7)FUNCTIONAL DEPARTMENTS OF ICICI

Infrastructure financing, corporate financing and retail have been the strong pillars of ICICI's
growth. They expect these to remain thrust areas in the future too. The financial institution sees
significant opportunities in the power sector, and in the rapid de-regulation of the Telecom
sector. On the retail side, ICICI has established a retail franchisee through a physical presence
across 42 cities. Its retail thrust has been on the planks of technology enabled low cost
distribution channels like the Internet, Call centers and ATMs.

It occupies the number one position in automobile financing (over 20% of the market share),
number one in credit cards on an incremental basis. It also has a growing presence in home
finance and on-line trading.

(1.8)ICICI BANK
ICICI Bank is a commercial banking outfit set up by the ICICI Group. The Bank was registered
a banking company on January 5th, 1994 and received its banking license from the Reserve Bank
of India on May 17th, 1994. The Bank has an authorized capital of INR 300crore (USD 75.96
million), of which subscribed and paid-up capital is INR 165 crore (USD 41.78 million). The
first ICICI Bank branch was started in Madras in June 1994. The branches are fully
computerized with state-of-the-art technology and systems. All of them are fully networked
through V-SAT (Satellite) technology. The Bank is connected to the international SWIFT
network since March 1995. ICICI Bank offers a wide spectrum of domestic and international
banking services to facilitate trade, investment, cross-border business, and treasury and foreign
exchange services. This is in addition to a whole range of deposit services offered to individuals
and corporate bodies. ICICI Bank’s Infinity was the first Internet banking service in the country,
and a prelude to banking in the next millennium. Currently the Bank has around 150,000
customers

ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED

With the recent spurt in entrepreneurship in the country, venture capital and private equity
capital financing are fast attaining a role of prominence. Uniquely positioned to take the Indian
entrepreneur further is ICICI Venture Funds, the wholly owned subsidiary of ICICI, with its keen
understanding of the Indian Financial Markets, entrepreneurial ethos, access to global capital and
a network through influential global alliances. Strong parentage and affiliates provide ICICI
Venture with access to a broad spectrum of financial and analytical resources. An affiliation with
(Trust Company of the West) provides a platform for networking Indian Companies to global
markets and technology. ICICI Venture Funds currently manages / advises 11 Funds aggregating
US$ 400 million, making it the most significant private equity investor in the country. The
investment experience of ICICI Venture’s professionals is the foundation its strengths and
success in several areas of investing. ICICI Venture seeks to invest in opportunities where its
network through ICICI and TCW can create value for all involved. ICICI Venture’s primary
investment objective is capital investment through investments by way of equity or equity-
related securities in unlisted companies with significant growth potential. ICICI Venture’s
investments span a broad spectrum of industries and stages of development, the investment focus
being on

Information Technology
Biotechnology and Life Sciences
Media and entertainment
Retail Services

ICICI SECURITIES AND FINANCE COMPANY LIMITED

Formed in 1993 when ICICI’s Merchant Banking Division was spun off into a new company, I-
SEC today are India’s leading Investment Bank and one of the most significant players in the
Indian capital markets. Its client list includes some of the best known, most respected names in
Indian business and industry, and I-SEC offers them what are probably the widest, most in-depth
range of services in the market, with the highest standards of professionalism. Backed by a
strong distribution network, I-SEC is acknowledged to be at the forefront of all new
developments in the Indian debt market. I-SEC Research Reports, Compendia, Updates, I-BEX
and sovereign Bond Index, have become industry standards, sought after by finance, business
and reputed publications alike. The Project Finance Group has helped take strategic projects
from the drawing board to financial closure, leveraging the expertise of parent organization. I-
SEC has also executed several assignments in M & A, including business valuations, spin-offs
and mergers, for both domestic and overseas clients. The range of products offered by i-SEC
includes: Corporate Finance – Mergers and Acquisitions, Equity, Bidding (especially for
Telecom Projects) Fixed Income – Primary Dealership, Debt Research Equities – Lend
management, Underwriting, Syndication, Private Equity placement, Sales, Trading, Broking,
Sectoral and Company Research I - SEC Continues to sustain a steady rate o growth by offering
the most extensive range of services combined with unrivalled standards of professionalism.

ICICI BROKERAGE SERVICES LIMITED

Set up in March 1995, ICICI Brokerage Services 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. We are a joint venture between
ICICI and the leading financial services provider in India, and prudential plc of U.K., one of the
finest Life insurance companies in the world. Together we provide you with an extensive range
of insurance products to suit your various needs at various life stages. We aim to keep you
covered, at every step in life. Their policies are need-specific and address particular age groups.
This means that no matter where in life you are, we offer specific products to suit your needs for
savings, protection and retirement. Our products can be categorized into the following:

• Saving plans
• Protection plans
• Retirement plans

ICICI PERSONAL FINANCIAL SERVICES LIMITED

ICICI Personal Financial Services Limited (ICICI PFS), formerly ICICI-Credit, was one of the
first four companies to obtain registration as a Non-Banking Financial Company (NBFC) from
the Reserve Bank of India (RBI) on September 10, 1997 under the new section 45IA of the
Reserve Bank of India Act, 1934. During the year 1998-99, there was a significant shift in the
Company’s operation from leasing to hire purchase to distribution and servicing of all rental
products for the ICICI Group. It is now a focal point for marketing and distribution of all rental
asset products for ICICI, including auto loans, consumer durable finance and other financial
products. The Company has thus become part of ICICI’s retail strategy aimed at offering a
comprehensive range of products and services to retail customers. In view of this reorientation of
the business, the name of the Company was changed from ICICI Credit Corporation to ICICI
Personal Financial Services Limited (ICICI PFS) effective March 22, 1999.

ICICI CAPITAL SERVICES LIMITED

ICICI Capital Services Ltd. was incorporated in the name of SCICI Securities Ltd. on September
24, 1994 as a wholly owned subsidiary of erstwhile SCICI Ltd. with the objective of providing
stock broking services to the institutional clients and undertaking activities such as underwriting,
primary market placements & distribution industry & company research etc. After the
amalgamation of ICICI with ICICI effective from April 1, 1996, resulting in the change of the
name. The company is mandated, under review by ICICI, to carry out on its behalf the retail
resource raising activities and to provide front office services related to all retail and semi retail
liability products of ICICI. The company also operates the network of ICICI Centers being set up
by ICICI. As on date the company has set up 91 centers across the country.

ICICI INFOTECH

ICICI InfoTech is a leading provider of end-to-end IT solutions. We have an in-depth experience


of having worked on varied technologies with leading corporations worldwide. Our service
portfolio includes the following:
• IS & IT Consulting
• Software Design and Development
• Enterprise Application Integration
• Value Chain Management Solutions (SCM, CRM etc.)
• Application Re-engineering and Management
• Knowledge Management Solutions
• Embedded System Applications
• Technology Incubation, IT-enabled Services & IT Outsourcing

ICICI Capital Ltd.

Its products are


• RBI Bonds
• E-invest (ICICI Direct.com)
• Fixed Deposits
• Mutual Funds
• Bonds
• De-mat
• Equity IPO

ICICI DIRECT.COM (ONLINE SHARE TRADING):

ICICI Direct.com is a truly online share-trading site. Which means that from the time you punch
in a buy or sell trade on your computer to the final settlement in your account, everything
happens completely online? The 3-in-1 e-invest account integrates your brokerage, bank and one
or more depository accounts to make sure that you can do the otherwise cumbersome share
trading from the comfort of your home or office, at absolutely any time of the day or night

(1.9)KEY LEARNINGS
This project has been a great learning experience for me; at the same time it gave me enough
scope to implement my analytical ability. This project has given me a insight about financial
sector and a true vision about ICICI DIRECT. I have got a deeper knowledge about de-mat
account, bonds and online trading etc. Working with ICICI DIRECT was an great experience as
working with this organization helped me a lot to know about securities and stock market. By
working on this project, I also gain the knowledge about the service profile of the company and
its way of working. How to open an DE-MAT account was a learning experience for me. By the
help of this project, I become able to know about the departmentation and structure of the
company. As on-line share trading is increasing day by day it is very necessary to know the
working of this particular work. This project gave me a golden chance to work with the
organization and learn all the important key points. The manager’s work profile was the main
ingredient I got to know. The overall project was helpful for me as it covered financial sector’s
knowledge and financial services. ICICI direct .com is an unique account that integrates your
saving, trading and de-mat account.
SWOT ANALYSIS OF THE COMPANY

Strengths
1. Management philosophy and commitment to maximize shareholders returns

2. Upgraded product design and development facilities to develop new products and aid
diversification

3. Ongoing activities to support up gradation of operational performance and rise in productivity

4. Team of talented and committed professionals available to improve companies performance


Weakness

1. Competition from cheap imports

2. Low customer base

Opportunities
1. UFSL has initiated development of products for diesel application. This will provide
tremendous scope for diversification and growth

2. Acquisition of AMTEC to provide opportunities to access global OEMs

3. Opportunity to support AMTECs operations by supplying products from India

4. The introduction of new emission norms will provide UFSL opportunity to develop injection
systems and thereby upgrade the status of the company from product to system supplier.

Threats, Risks & Concerns


1. Constant pressure to be cost competitive to meet customer expectations

2. Relentless pressure to maintain profitability due to rising input/raw material prices


3. Increasing popularity of alternative fuel vehicles, such as Hybrid, Hydrogen powered, CNG
and LPG vehicles poses new challenges for the company

CHAPTER -2
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY

(2.1)INTRODUCTION
This chapter aims to understand the research methodology establishing a framework of
evaluation and revaluation of primary and secondary research. The techniques and concepts used
during primary research in order to arrive at findings; which are also dealt with and lead to a
logical deduction towards the analysis and results.

• Research Design
• Research Process
• Data collection
• Samples size
• Errors in the study
• Scope and the Limitation of the study

(2.2)Research Methodology
A research process consists of stages or steps that guide the project from its conception through
the final analysis, recommendations and ultimate actions. The research process provides a
systematic, planned approach to the research project and ensures that all aspects of the research
project are consistent with each other.
Research studies evolve through a series of steps, each representing the answer to a key question.
(2.3)RESEARCH DESIGN
I propose to first conduct a intensive secondary research to understand the full impact and
implication of the industry, to review and critique the industry norms and reports, on which
certain issues shall be selected, which I feel remain unanswered or liable to change, this shall be
further taken up in the next stage of exploratory research.
This stage shall help me to restrict and select only the important question and issue, which
inhabit growth and segmentation in the industry.
The various tasks that I have undertaken in the research design process are:
• Defining the information need

• Design the exploratory, descriptive and causal research.

• Research design is a conceptual structure within which research was conducted. A


research design is the detailed blueprint used to guide a research study towards its
objective. It is a series of advanced decision taken together comprising a master plan or a
model for conducting the research in consonance with the research objectives. Research
design is needed because it facilitates the smooth sailing of the various research
operations, thereby making research as efficient as possible yielding maximum
information with the minimum effort, time and money.

(2.4)RESEARCH PROCESS
The research process has four distinct yet interrelated steps for research analysis it has a logical
and hierarchical ordering:
• Determination of information research problem.

• Development of appropriate research design.

• Execution of research design.

• Communication of results.

Each step is viewed as a separate process that includes a combination of task, step and specific
procedure. The steps undertake are logical, objective, systematic, reliable, valid, impersonal and
ongoing.
(2.5)DESCRIPTIVE RESEARCH
STEPS in the descriptive research:
Statement of the problem
• Identification of information needed to solve the problem

• Selection or development of instruments for gathering the information

• Identification of target population and determination of sampling Plan.

• Design of procedure for information collection

• Collection of information

• Analysis of information

• Generalizations and/or predictions

(2.6)DATA COLLECTION
Data collection took place with the help of filling of questionnaires. The questionnaire e method
has come to the more widely used and economical means of data collection. The common factor
in all varieties of the questionnaire method is this reliance on verbal responses to questions,
written or oral. I found it essential to make sure the questionnaire was easy to read
and understand to all spectrums of people in the sample. It was also important as researcher to
respect the samples time and energy hence the questionnaire was designed in such a way, that its
administration would not exceed 4-5 mines. These questionnaires were personally administered.
The first hand information was collected by making the people fill the questionnaires. The
primary data collected by directly interacting with the people. The respondents were contacted at
shopping malls, markets, places that were showrooms and near to showrooms of the consumer
durable products etc.
The data was collected by interacting with 200 customer and respondents who filled the
questionnaires and gave me the required necessary information. The respondents consisted of
housewives, students, businessmen, professionals etc. The required information was collected
by directly interacting with these respondents.
PRIMARY DATA
New data gathered to help solve the problem at hand. As compared to secondary data which is
previously gathered data. An example is information gathered by a questionnaire. Qualitative or
quantitative data that are newly collected in the course of research, Consists of
original information that comes from people and includes information gathered from
surveys, focus groups, independent observations and test results. Data gathered by the researcher
in the act of conducting research.
This is contrasted to secondary data, which entails the use of data gathered by someone other
than the researcher information that is obtained directly from first-hand sources by means of
surveys, observation or experimentation. Primary data is basically collected by getting
questionnaire filled by the respondents.
SECONDARY DATA
Information that already exists somewhere, having been collected for another purpose. Sources
include census reports, trade publications, and subscription services. There are two types of
secondary data: internal and external secondary data. Information compiled inside or outside the
organization for some purpose other than the current investigation Researching information,
which has already been published? Market information compiled for purposes other than the
current research effort; it can be internal data, such as existing sales-tracking information, or it
can be research conducted by someone else, such as a market research company or the U.S.
government.
Secondary source of data used consists of books and websites
My proposal is to first conduct a intensive secondary research to understand the full impact and
implication of the industry, to review and critique the industry norms and reports, on which
certain issues shall be selected, which I feel remain unanswered or liable to change, this shall be
further taken up in the next stage of exploratory research.

(2.7)SAMPLE SIZE
This involves figuring out how many samples one need.
The numbers of samples you need are affected by the following factors:
• Project goals

• How you plan to analyze your data

• How variable your data are or are likely to be

• How precisely you want to measure change or trend


• The number of years over which you want to detect a trend

• How many times a year you will sample each point

• How much money and manpower you have

I have targeted 200 customers. The people were from different professional backgrounds. The
details of our sample are explained in chapter named primary research where the divisions are
explained in demographics section.

(2.8)ERRORS IN THE STUDY


Interviewer error
There is interviewer bias in the questionnaire method. Open-ended questions can be biased by
the interviewer’s views or probing, as interviewers are guiding the respondent while the
questionnaire is being filled out.
The attitudes the interviewer revels to the respondent during the interview can greatly affect their
level of interest and willingness to answer openly. As interviewers, probing and clarifications
maximize respondent understanding and yield complete answers, these advantages are offset by
the problems of prestige seeking, social desirability and courtesy biases.

Questionnaire error
The questionnaire designing has to careful so that only required data is concisely reveled and
there is no redundant data generated. The questions have to be worded carefully so that the
questions are not loaded and does not lead to a bias in the respondents mind
Respondent error
The respondents selected to be interviewed were not always available and willing to co operate
also in most cases the respondents were found to not have the knowledge, opinion, attitudes or
facts required additionally uninformed response errors and response styles also led to survey
error.
Sampling error
We have taken the sample size of 200 customer and 5 employees The sample has been drawn
from only Poanta sahib region.
Scope and the Limitation of the study
• The scope of study is limited to the respondents are selected from in and around poanta
sahib.

• The project is carried out for the period 8 weeks only.

• Measurement of customer satisfaction is complex subjects, which uses non-objectives


method, which is not reliable.

• The sample unit was also 200

OBJECTIVES OF THE STUDY

1. The objective of the research is to study and analyze the awareness level of investors of equity.

2. To measure the satisfaction level of investors regarding equity.

3. An attempt has been made to measure various variable’s playing in the minds of investors in
terms of safety, liquidity, service, returns, and tax saving

CHAPTER-3
ANALYSIS AND
INTERPRETATION
OF DATA

Analysis and Interpretation of Data

After a thorough study and analysis of the questionnaires, Feedback given by


clients some important and useful findings can be stated. These findings have
helped in a great way to come to the conclusion part of the project work. By
utilizing maximum usage of data, resource .The Pivotal is a software used by ICICI
direct from last four years where all the employees rely on it for getting customer
details, leads.
1. Investment avenues you are aware of:
Particular Response Percentage
Bank 64 32%

Direct equity 44 22%

Bonds 28 14%

Mutual funds 24 12%

Real estate 12 6%

Bullion 12 6%

FDS 8 4%

Gilts 8 4%
Total 200 100%

Most of the people are aware of banks and Direct equity investment. Mutual funds are being
considered an attractive investment opportunity by the investors. However, awareness about FDs
and Gilts is low comparatively.
2. Factors considered while investing gave several different answers as it was an open ended
question. The answers from liquidity, attractiveness, growth of industry (in case of share)
returns, risk, etc.

Particular Response Percentage


Liquidity 45 22%
Attractiveness 35 18%
Growth 70 35%
Return and risk 50 25%
Total 200 100%

• Your portfolio include majority of:

Particular Response Percentage


Govt. securities and bonds 46 23%
Equity linked mutual 18 9%
funds
Real estate 12 6%
Bullion’s 60 30%
Equity share 38 19%
Commodity 14 7%
F.Ds 12 6%
Total 200 100%
This question gave an insight into the type of investors. Most people prefer to invest in Bullions
and government securities and Bonds due to less risk factor associated with these investments.
Equity shares are preferred by people who have knowledge about market and other prefer mutual
funds as an investment option.

• Type of mutual fund invested in:

Particular Response Percentage


Equity diversified 50 25%
Equity index 30 15%
Equity tax planning 38 19%
Balanced equity 28 14%
Balanced debt 20 10%
Money market 12 6%
Debt 22 11%
Total 200 100%

From the above graph we find that the most of the investors have invested in equity oriented
schemes whether it is diversified; index based or tax saving schemes. The result could be
attributed to the higher returns generated by the fund as against debt schemes and in the given
market scenario with a highly buoyant market this seems to be a suitable selection.
• Past returns as a good measures of performance:

Particular Response Percentage


Yes 146 73%
No 54 27%
Total 200 100%

Past returns as a good measure of performance:

The graph suggests that a majority of the investors consider returns as a good measure of
performance evaluation. However, whether the investors consider to be sufficient or not would
be shown in the following graph:

6. Past return as the only measure of performance:

Particular Response Percentage


Yes 112 56%
No 88 44%
Total 200 100%

Past return as the only measure of performance

from the graph it is indicated that a majority of the individual consider returns to be the only
criteria to judge a funds’ performance. This suggests that most of them do not use any other
measures like risk adjusted returns and other consideration while evaluating the performance of a
mutual funds.
7. Approach in making investment

Particular Response Percentage


You take educated view on 46 23%
the investment
You take friendly advice 76 38%
and make decision
You rely totally on your 78 49%
investment adviser
Total 200 100%

Approach in making investment

out of 200 people surveyed approximately 39% of investors rely totally on investment advisors,
while 38% prefer to take friendly advice and rest 23% take educated view on investment for
investing in the various funds.

8. While investing, you are more concerned about:

Particular Response Percentage


Safety of principle 84 42%
earning interest above the 40 20%
inflation rate
Earning high return 76 38%
Total 200 100%

While investing, you are more concerned about

Before investing, one needs to be sure of the safety, risk attached with the particular investment
and the return earned. 42% of the people were more concerned about the safety of principle and
38% people were more invested in earning higher returns.

9. How often do you monitor your portfolio?

Particular Respondent Percentage


Daily 64 32%
Twice in a month 48 24%
Weakly 40 20%
Monthly 32 16%
More than a month 16 8%
Total 200 100%

How often do you monitor your portfolio?

Out of 200 people surveyed, approximately 32% of investors monitor their investment daily:
while 24% monitors twice a month and only 8% of the respondent monitor their portfolio after
more than a month.
10. How long do you invest?

Particular Respondent Percentage


Short term (0-1year) 32 16%
Mid- term (1-3year) 40 20%
Long term (3-5year) 24 12%
More than 5year 8 4%
Till target or return is achieve 96 48%
Total 200 100%

How long do you invest?

It was really a tough choice for investors as many of the respondents were not sure about their
investment tenure. About half of them agreed that they like to book the profit as and when the
reach the targeted return. Only 4% agreed that they are very long term player and don’t change
the portfolio often. Around 12%told, they like to book their portfolio within 3-5 year, whereas
20% were those who were mid-term player. Surprisingly, only16% turned out to be short-term
players.

11. How your portfolio allocation has changed over the time

Particular Respondent Percentage


Didn’t change 8 4%
Changed 52 26%
Changed significantly 140 70%
Total 200 100%

portfolio allocation has changed over the time


Out of 50 people surveyed, 70% of the respondent said that they have made significant changes
in their portfolio, while 26% have changed their portfolio and rest 4% didn’t changed their
portfolio at all.

12. You prefer to invest in equity through?

Particular Respondent Percentage


Equity linked mutual funds 104 52%
Direct investment in stock 66 33%
market
Both 30 15%
Total 200 100%

Prefer to invest in equity through?

This answer helped in doing a comparative analysis between direct equity and equity linked
mutual funds .52% people prefer to invest in equity linked mutual funds because of
diversification and less risk associated if these funds.33% people prefer to investing direct equity
to have the time and knowledge to track the market and predict changes hoping to get higher
returns.

13-You prefer mutual funds equity because (as per their first choice).

Particular Respondent Percentage


Diversification of portfolio 92 46%
Professionally managed 34 17%
Liquidity 28 14%
Lack of time 46 23%
Total 200 100%

Prefer mutual funds equity because

Major reason for preferring equity diversified mutual funds was diversification of portfolio and
lack of time. this help to reduce risk with recent returns to the investors.

14 -Source of information for mutual’s funds.


particular response Percentage
Magazines 22 11%
Mutual fund website 30 15%
Prospectus 36 18%
Relationship manager 42 21%
Financial newspaper 20 10%
Mutual fund periodic report 24 12%
Fund tracking agencies 10 5%
Other 16 8%
Total 200 100%

The graph indicates that the most popular source of information for Mutual funds is the
relationship managers of the banks or investment agents that the investors rely on their
investments. Another important source is the prospectus of the fund and of other funds, mutual
funds website are another important source of this information.
15-You prefer direct investment because (as per their first choice)

Particular Respondent Percentage


You make higher return 108 54%
Want to manage of your own 66 33%
It keeps you busy 26 13%
Total 200 100%

Prefer direct investment because

Fig no.3.15

From thr graph it is indicated that a majority of the individuals prefers direct investment in equity
because of the fire returns associated with it while 33% of the respondent prefers it because they
wants to manage their portfolio on their own.

QUESTIONNAIRE

• Investment avenues you are aware of:

• Bonds b) Bank FDs c) Mutual fund (Equity/Debt)

• Direct Equity e) Bullion f) Gilts g) Real estate


h) Any other (please specify)
• Factor considered while investing……………..

• Your portfolio includes majority of:

• Govt securities and bonds b) equity linked Mutual funds

• Real estate d) Bullion’s

• Equity share f) commodity

• F.Ds

4. Type of Mutual funds invested in:


a) Equity Diversified b) Equity index
c) Equity tax planning d) Balanced Equity
e) Balanced Debt f) Money market
g) Debt
5. Do you consider past returns as a good measures of funds performance?
Yes no
6. Do you base your per performance evaluation on returns only?
Yes no
7. Your approach in making investment is:
• you take educated view on the Investments

• you take friendly advice and make decision

• you rely totally on your investment advisor

• Others

8. While investing, you are more concerned about:


• Safety of principal

• Earnings interests above the inflation

• Earning high returns

• Others
9. How often do you monitor your portfolio?
• a. Daily b. Weekly c. Twice in a month

• d. Monthly e. More than a month

10. How long do you invest:


• a. Short term (0-1 yr) b. Midterm (1-3 yrs)

• c. long term (3-5yrs) d. more than 5 years

• Till you reach your target or returns

11. How your portfolio allocation has changed over the time
• Didn’t change

• Changed

• Changed significantly

12. You prefer to invest in equity through:


• Equity –linked mutual funds

• Direct investment in stock market

• Both

13. You prefer Mutual funds (equity) because (please rank in order of preference)
• Diversification of portfolio

• Liquidity

• Professionally managed

• Lack of time

• Any other (please specify)


14. What are the various sources form where you get the performance evaluation data/advice for
the funds?
• a. Magazines b. Financial Newspapers c. Mutual funds websites

• d. Mutual funds’ Annual and periodic reports e. Relationship managers

• f. Fund tracking agencies g. Prospectus for a new fund

15. You prefer to Direct Equity because:


• You make higher returns

• It keeps you busy

• You like to manage your own funds


CHAPTER 4
CONCLUSION
CONCLUSION

After the entire analysis of survey and questionnaires, we find that most of respondent said that
they have equity stock in their portfolio. And among these 52%, investors prefer to invest
through Mutual funds and only 37% said that they do invest directly in equity market.

According to survey people prefer to invest into Mutual funds than investing directly into stocks.
46% of respondent feel the mutual funds reduce their risk in investing in the market as it gives
diversification to their portfolio. 17% respondents said that it give them the benefit of
professional Management. Just 14% said it give them liquidity irrespective of market of market
conditions. And also lack of time was cited as the reason by 23% of the respondents. Out of
those who said that they prefer to directly invest in stock market, majority 54% gave high weight
age to risk and high returns game. 33% said that they want to be their own fund mangers also,
over 48% agreed that they prefer to book profit as they reach their profile target. They do believe
in churning and enjoy making high returns.

Some investors told that they like to keep a certain percentage of their portfolio into mutual
funds and the rest they want to manage by themselves. It can also be seen from findings that an
investor has made to make a higher return in a long run by investing into high equities, but if one
to make a higher return in the short run and mid-term horizon then definitely mutual funds are
the best buy.
LIMITATIONS

• Paucity of time as we have to do this project is only 56 days


• Indian stock market and semi-efficient market, where sentiments play a major role in
price; hence 100% accurate predictions cannot be made about its future path.
CHAPTER 5
BIBLIOGRAPHY
BIBLIOGRAPHY

Magazine

• Mutual funds insight


• Investors India
• Business World
• Business India

Websites

• www.bseindia.com
• www.moneycontrol.com
• www.indianfoline.com
• www.capitalmarket.com
• www.mutualfundindia.com

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