Professional Documents
Culture Documents
PREFACE
As an essential and obligatory part of my course I have undergone 6 weeks, complete summer training at RELIANCE MONEY. This training helped me in getting practical knowledge in the business environment.
I got practical knowledge about RELIANCE MONEY. How the work is done in the Company. I am highly impressed by the emphasis placed on the training programme by RELIANCE MONEY. In this Project Report I have tried to provide maximum information about the Costing & Budgeting which are related to the operations of the Company.
In this Project Report I have provided all the information which not only serves the comprehensive knowledge base but also helps the reader in understanding the fundamentals related to the subject.
Table of content
Sr. No. CONTENTS PAGE NO.
1 2 3 4 5 7 8 9 10 11
Introduction of Reliance ADAG Group Executive Summery Industry Profile Company Profile Research Design Data Analysis & Interpretation Findings, Suggestion & Conclusion Bibliography Financial Details Questionnaire
EXECUTIVE SUMMARY
The Indian capital markets have seen a lot of economic swing since last decade but still it has been flourishing with rapid transformations. Reforms are continuing and are bringing a lot of change in structure, process and governance of capital market. This is helping Indian capital market to gain an image of mature market place in the capital markets of the world. The working mechanism are now more flexible and transparent. The stock exchanges has been corporatized too. Other than this new instruments like index future, index options, derivatives etc. has been introduced.
Out of the major players showing their presence in the financial markets, Reliance Money is the one. Reliance Money is promoted by Reliance Capital; one of India's leading and fastest growing private sector financial services companies, ranking among the top 3 private sector financial services and banking companies, in terms of net worth. During past few years, it has picked up a considerable market share in the sector of financial services. It is a one-stop-shop, providing end-to-end financial solutions (including mobile and webbased services). It has the largest non-banking distribution channel with over 10,000 outlets and 20,000 touchpoints spread across 5,165 cities/ towns; catering to the diverse needs of over 3 million existing customers. During the internship, a research has been carried out on the on the topic A study of investor behaviour at Reliance Money. The objectives of the research were to create awareness about various products and services of the Reliance Money and to know about the investor behaviour and their preferences towards investment decisions and considerations. Other than this, the research included the study of position of Reliance Money in the market and its comparative position with other players. Descriptive research was used in the whole project. The data was collected through meeting investors and potential investors in various areas of Chandigarh and questionnaires were filled on the basis of their responses. The collected data was analyzed using percentage method. Various findings were derived which revealed perception and behaviour of investors and potential investors toward financial market. Other than this, the attitude of investors were also observed towards Reliance Money. Based upon the findings, various suggestion were given with a view to improve the Position of Reliance Money in the market. As a result of research, it was concluded that Reliance Money has a good brand image but it still has to work upon in various areas to excel in the financial sector.
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Capital Market
The Indian capital markets have witnessed a transformation over the last decade. India is now placed among the mature markets of the world. Key progressive initiatives in recent years include: The depository and share dematerialisation systems that have enhanced the efficiency of the transaction cycle Replacing the flexible, but often exploited, forward trading mechanism with rolling settlement, to bring about transparency The infotech-driven National Stock Exchange (NSE) with a national presence (for the benefit of investors across locations) and other initiatives to enhance the quality of financial disclosures. Corporatization of stock exchanges. The Securities and Exchange Board of India (SEBI) has effectively been functioning as an independent regulator with statutory powers. 11
Indian capital markets have rewarded Foreign Institutional Investors (FIIs) with attractive valuations and increasing returns. The Mumbai Stock Exchange continues to be the premier exchange in the country with an increase in market capitalisation from US$ 40 billion in 1990-1991 to US$ 203 billion in 1999-2000. The stock exchange has about 6,000 listed companies and an average daily volume of about a billion dollars Many new instruments have been introduced in the markets, including index futures, index options, derivatives and options and futures in select stocks.
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In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poors. In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as Best IT Usage Award by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999). The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000. Since the early 1950s till the early 1990s, Indian policy makers had been nourishing the goal of Socialist pattern of society. They had been following the development planning strategy of the former Soviet Russia in a mixed economic framework. From July 1991, in the face of an unprecedented foreign exchange crisis, Indian economy started experiencing an IMF-World Bank dictated regime of liberalisation. One aspect of this is financial liberalisation. There is a move towards privatisation of nationalised banks these banks are selling their shares in the stock market. Transnational banks are encouraged to operate in the Indian banking sector. Attempts are made to attract foreign direct investment in different sectors. There is an increasing entry of foreign portfolio capital due to stock market liberalisation. People are encouraged to invest in stocks through income tax benefits and abolition of capital gains tax. There is a move to develop a national pension fund which will be invested in different stocks to get returns out of which pension will be provided to retired people. It is expected that boosting up of stock market will accelerate the process of capital accumulation and growth. Stock market development has been an important part of financial liberalisation in the less developed countries (LDCs). In the pro-liberalisation circle, stock market is assigned to play an important role in the capitalist development of LDCs. 13
There are many studies supporting the positive link between stock market development and growth. Let us mention some of the recent studies. One important study was undertaken by Levine and Zervos (1998). Their cross-country study found that the Development of banks and stock markets has a positive effect on growth. In another study Levine (2003) argued that although theory provides ambiguous relationship between stock market liquidity and economic growth, the cross-country data for 49 countries over the period 1976-93 suggest a strong and positive relationship (see also Levine, 2001). Henry (2000) studied a sample of 11 LDCs and observed that stock market liberalisations lead to private investment boom. Recently, Bekaert et al (2005) analysed data of a large number of countries and observed that the stock market liberalisation leads to an approximate 1 % increase in annual real per capita GDP growth. There are some economists who are sceptical. Long time back Keynes (1936) compared the stock market with casino and commented: when the capital development of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done. Referring to the study of World Bank (1993) , Singh (1997) pointed out that stock markets have played little role in the post-war industrialisation of Japan, Korea and Taiwan. He argued that the recent move towards stock market liberalisation is unlikely to help in achieving quicker industrialisation and faster long-term economic growth in most of the LDCs. In this perspective this study examines the nature of relationship between stock market and growth through capital accumulation in India.
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bribes has shed its image. Professionalism is their new mantra. Public Enterprises like IOC, ONGC, BHEL, NTPC, SAIL, MTNL, BPCL, HPCL and GAIL, SBI, LIC, Hindustan Antibiotics Limited, Air India etc. to name a few, are giving Private Indian companies a good run for their money. Private giants like Reliance Industries Limited, Infosys, Tata, Birla Corporation, Jet Airways, Ranbaxy, Biocon, Bajaj Auto, ICICI are breaking their own records every financial years. Indian Equity Market at present is a lucrative field for the investors and investing in Indian stocks are profitable for not only the long and medium-term investors, but also the position traders, short-term swing traders and also very short term intra-day traders. In terms of market capitalization, there are over 2500 companies in the BSE chart list with the Reliance Industries Limited at the top. There are about 22 stock exchanges in India which regulates the market trends of different stocks. Generally the bigger companies are listed with the NSE and the BSE, but there is the OTCEI or the Over the Counter Exchange of India, which lists the medium and small sized companies. There is the SEBI or the Securities and Exchange Board of India which supervises the functioning of the stock markets in India. Thus, the growing financial capital markets of India being encouraged by domestic and foreign investments is becoming a profitable business more with each day. If all the economic parameters are unchanged Indian Equity Market will be conducive for the growth of private equities and this will lead to an overall improvement in the Indian economy. Indian Stock Market including both NSE-National Stock Exchange and the BSE-Bombay Stock Exchange have certainly taken a tremendous beating in the past few weeks. We are sure most of us here knew that the correction in the trading curve was round the corner which would be healthy, and the markets would bounce back with the help of mutual fund investments & buying of Indian stocks again. However the anticipation went wrong, and the US recession story along with global and Indian commodity prices have added fuel to the global equity market turmoil on a whole.
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destiny are doing things positive and productive. India, as a country is running a very good period and the position of planets in the transit are giving wonderful results. Less than one percent of population own stocks and less than 1000 individuals control the market, the majority being the FIIs, the promoters of the company. The credit should go to media for making stock market headlines. In any case if you are long terms players then step-in and buy now and forget for another 10 years. You will make a killing in the Indian markets. Most of the tech companies and the main index will do well but slightly in the lower side of expectations.
Delay in transfer of shares. Possibility of forgery on various documents leading to bad deliveries, legal disputes etc. Possibility of theft of share certificates in the market. Multiplication or loss of share certificates in transit. Prevalence of fake certificates in the market.
The physical form of holding and trading in securities also acts as a bottleneck for broking community in capital market operations. The introduction of NSE and BOLT has increased the reach of capital market manifolds. The increase in number of investors participating in the capital market has increased the 16
possibility of being hit by a bad delivery. The cost and time spent by the brokers for rectification of these bad deliveries tends to be higher with the geographical spread of the clients. The increase in trade volumes lead to exponential rise in the back office operations thus limiting the growth potential of the broking members. The inconvenience faced by investors (in areas that are far flung and away from the main metros) in settlement of trade also limits the opportunity for such investors, especially in participating in auction trading. This has made the investors as well as broker wary of Indian capital market. In this scenario, dematerialized trading is certainly a welcome move.
The Process
y y y y
Surrendering of certificate to Depository Participants for dematerialization. NSDL is informed by the DP through electronic connectivity. Original share certificates are submitted to the registrar by the DP. The request for dematerialization from NSDL to the register. 17
y y y
The registrar credits an equivalent number of shares in the account and informs NSDL. The NSDL updates its own account and the depository participants are informed. The depository agent credit it in the account of the investor and the same is informed to
the investor.
1.6.3 Rematerialisation
Sometimes the investor may like to convert his electronic holdings back into physical share certificate. The process undertaken for this purpose is called rematerialisation. The investor has to make a request to the depository participant for rematerialisation. The depository participant puts forward the request to NSDL after verifying whether the investor in having necessary security balances. NSDL in turn will intimate the registrar who prints the certificate and dispatch the same to the investor. The certificate has a new range of certificate numbers and new folio number. The Process
y y y y y y
Investor requests the DP for rematerialisation. The depository participant informs it to the NSDL. NSDL intimates the Registrar. The Registrar of the company prints certificates with new number and informs NSDL. NSDL adjusts its account and passes on the details to the DP. The certificates are dispatched to the investor.
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NSDL carries out its activities through various functionaries called business partners who include Depository Participants (DPs), issuing corporate and their Registrars and Transfer Agents, Clearing corporations/Clearing Houses etc. NSDL is electronically linked to each of these business partners via a satellite link through Very Small Aperture Terminals (VSATs). The entire integrated system (including the VSAT linkups and the software at NSDL and each business partners end) has been named as the NEST [National Electronic Settlement & Transfer] system. The investor interacts with the depository through a depository participant of NSDL. A DP can be a bank, financial institution, a custodian or a broker. Just as one opens a bank account in order to avail of the services of a bank, an investor opens a depository account with a depository participant in order to avail of depository facilities.
Fill up the account opening form, which is available with the DP. Sign the DP-client agreement, which defines the rights and duties of the DP and the
Receive your client account number (client ID). This client ID along with your DP ID gives you a unique identification in the Depository
system There is no restriction on the number of depository accounts a person can open. However, if your existing physical shares are in joint names, you have to open the account in the same order of names before you submit your share certificates for demat. A sole holder of the share certificates cannot add more names as joint holders at the time of dematerializing his share certificates. However, if the investor wants to transfer the ownership from his individual name to a joint name, he should first open an account as the sole holder (account A) and dematerialize the share certificates. He should then open another depository account (account B) in which he is the first holder and the other person is the second holder and make an off market transfer of the shares from the account A to account B. The investor will incur a charge on this
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transaction. Alternatively, the certificates can be transferred to the joint ownership and then sent for Dematerialization. Right now, as per the Companies Act, there is no nomination facility for shares (whether in the physical or in the electronic form). The nomination facility for shares can be availed of only when the relevant provisions in the Companies Act are amended. NSDL captures the details of the nominee when the account is opened so as to offer the facility as soon as the relevant amendments are effected in the Law. A client can choose to open more than one account with same DP. In addition to this, he has a choice of opening accounts with more than one DP. However a broker can open just one Clearing Member account per card/ stock exchange for clearing purpose, but he can still open multiple beneficiary accounts Beneficiary is the personal account wherein brokers can keep their personal holdings. A broker has only one Clearing Member-pool-account. One Clearing Member pool account is opened per card/ stock exchange to settle trades in the dematerialized form. The Clearing Corporation/ House just deals with one designated account for pay-in and payout and the broker's clients know to which account they have to deliver and receive securities from. A clearing member cannot hold his personal holdings in his clearing member account. A broker may deal in the depository system as a clearing member only through a special account, known as the Clearing Member account. This account can be used only for clearing purposes and not for holding his own securities in it. As this is a transitory account, the securities held in this account are not eligible for corporate actions. Therefore, the broker will have to open a separate beneficiary owner account to hold his investments. There is no compulsion for the client to open his account with the same DP as that of his broker. Even if he has an account with another DP, he can carry out normal business with his broker. There is no loss in operational efficiency. But it is possible that opening account with his broker's DP may work out to his advantage, as some DPs may offe special charge r structure if the broker and his clients are dealing through him.
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1.6.7 Trading
Trading in dematerialized securities is quite similar to trading in physical securities. The major difference is that at the time of settlement, instead of delivery/ receipt of securities in the physical form, it is done through account transfer. An investor cannot trade in dematerialized securities through his DP. Trading at the stock exchanges can be done only through a registered trading member (broker) of the stock exchange irrespective of whether the securities are held in physical or dematerialized form. DPs role will only be to facilitate settlement of trade in the dematerialized form, by transferring securities from and to the account of the investor, for selling and buying respectively. Trading in dematerialized securities is presently available at NSE, BSE, CSE, DSE,LSE, MSE, ISE & OTCEI. These exchanges have a segment exclusive for trading in dematerialized securities and a segment where trades could be settled either in the physical or in the dematerialized form as per the choice of the delivering client. In unified (erstwhile physical) segment securities can be delivered either in the physical form or in the dematerialized form at the choice of the delivering party. However, securities that have to be mandatorily settled in demat form (both by institutional investors & all category of investors) cannot be settled in physical form. Also for securities that have to be mandatorily settled in demat form by all categories of investors the concept of market lot is eliminated i.e. the tradable lot is one share from the date they become compulsory.
1.6.8 Settlement
The settlement of trades in the stock exchanges is undertaken by the clearing corporation (CC)/ clearing house (CH) of the corresponding stock exchanges. While the settlement of dematerialized securities is effected through depository, the funds settlement is effected through the clearing banks. The clearing members directly with the CC/ CH settle the physical securities. Exclusive Demat segment follows rolling settlement (T+5) cycle and the unified (erstwhile physical) segment follows account period settlement cycle. In case of rolling settlement cycle, the account period is reduced to one day.
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In case of settlement of trades done in exclusive Demat segments, the pay-in and pay out
of funds and securities are effected on the same day afternoon and evening (same day) thus reducing the blockage of funds and limiting exposure to the clearing corporation.
y
Settlement of funds is effected through the clearing banks and depository plays no role in
this.
y y
Settlement of securities is effected through NSDL depository system. Clearing and settlement of the regular market trades is affected through the clearing
members of the clearinghouses of respective stock exchanges. All trading members of stock exchanges are clearing members of clearing houses. In addition, for settlement of institutional trades, custodians are also allowed to act as clearing members.
y
open a clearing account with any DP for the purpose of settling trades in dematerialized securities. As, in the mixed (unified) segment, there is a possibility for all clearing members to receive dematerialized securities, they are expected to open clearing accounts.
y
If there is any short delivery at the time of pay-in of securities, these short positions are
auctioned in the Demat segment as done in the Unified (erstwhile-physical) segment. For trades executed on Wednesday (TD 1):
y y
Final/ Net obligation statement download - Friday (T+2nd working day) Settlement day (SD 1) i.e. pay in and pay out of funds and securities - next Wednesday
Auction trade day (ATD 1) - next Thursday (T+6th working day) Auction settlement day (ASD 1) - Monday (2nd working day from auction trade day i.e.
T+8th working day) Similarly, for trades executed on Thursday (TD 2):
y y y y
Final/ Net obligation statement download - Monday (T+2nd working day) Settlement day (SD 2) - next Thursday (T+5th working day) Auction trade day (ATD 2) - next Friday (T+6th working day) Auction settlement day (ASD 2) - Tuesday (2nd working day from auction trade day i.e.
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1.7.1 Religare
History of Religare Securities Ltd.Religare Securities Limited, a Ranbaxy Promoter Group Company, was founded by late Dr. Parvinder Singh (CMD Ranbaxy Laboratories Limited), with the vision of providing integrated financial care driven by the relationship of trust & confidence. It is a diversified financial services group with a pan-India presence and presence in multiple international locations, Religare Enterprises Limited ("REL") offers a comprehensive suite of customer-focused financial products and services targeted at retail investors, high net worth individuals and corporate and institutional clients. REL, along with its joint venture partners, offers a range of products and services in India, including asset management, life insurance, wealth management, equity and commodity broking, investment banking, lending services, private equity and venture capital. REL, through its subsidiaries, has launched India's first holistic arts initiative - with a gallery - as well as the first SEBI approved film fund, which is an initiative towards innovation and spotting new opportunities for creation and maximization of wealth for investors. Presently, the company is headed by Mr. Sunil Godhwani who is CEO and managing director of the company. It has its registered and corporate office in New Delhi and it operates from seven domestic regional offices, 43 sub-regional offices, and has a presence in 498 cities and towns controlling 1,837 business locations all over India with a workforce of over 9500 people. Pursuant to expansion of REL's business, the company has grown from largely an equity trading company into a diversified financial services company. With the addition of RHH the
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REL group now operates out of multiple global locations, other than India, (the UK, the USA, Brazil, South Africa, Dubai and Singapore). Among the leading service provider in Capital Market In a span of less than five years of its retail operations, RSL recorded a healthy growth rate both in business volumes and profitability. In recent times, the market share has increased from 3.46% in Q4 FY08 to 3.86% Q1 FY09. Major portion of earning were contributed by broking related activities and for the first quarter of FY09, it accounted for 40% of revenues. Quarterly Total Revenue recorded at Rs. 2,887.49 mn, EBIDTA at Rs. 1,184.17 mn and Profit after tax at Rs. 36.68 mn
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has emerged as one of the most respected Stock-Broking and wealth management companies in India. With its unique retail-focused stock trading business model, it is committed to providing Real Value for Money to all its clients. Angel broking ltd. already has a good presence in India and offers world -class financial planning and a wide range of wealth management products to mass affluent and affluent customer segments. Angel Broking limited provides a complete range of financial products and services that include equity broking (internet based online trading as well as offline trading), financial planning, insurance, investment products, equity research, demat account and more. It is one of the leading and professionally managed stock broking firm involved in quality services and research. The membership of the company with The Stock Exchange Mumbai was originally in the name of Mukesh R. Gandhi, which was eventually turned into a corporate membership in the name of Angel Broking Limited. Angel Broking Limited is managed by Mr. Dinesh Thakkar, founder chairman and managing director and he is well supported by Mr. Mukesh Gandhi, a fifteen years veteran in the market. The group is well supported by a professional and qualified research team and efficient operations and back office team, which comprises of highly dedicated and qualified individuals. It has an in-house, state of art research department. Angel Broking Limited is primarily into retail stock broking, with a customer base of retail investors, which has been increasing at a CAGR of 100% every year. The company has huge
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network sub-brokers in Mumbai and other places outside Mumbai, registered with SEBI, who act as Chanel partners for the company. The company presently has total staff strength of around 150 employees who are spread accordingly across the head office and all the branches. It has also empowered its physical presence throughout India through various strategies which it has been adopting efficiently and effectively over a period of time, like opening up of branches at various places, tie-ups with various agencies and sales agents, buy-outs of smaller regional outfits and appointment of sub- brokers and franchisees. Moreover, Angel has been tapping and including high net worth and self-employed individuals it its vast array of clients. Angel has always strived in the direction of delivering ultimate client satisfaction and developing stronger bonds with its customers and ch ose partners. Angel has a vision to introduce new and innovative products and services regularly. Moreover, Angel has been one among the pioneers to introduce the latest technological innovations and integrate it efficiently within its business.
1.7.3 Karvy
Karvy Consultants Limited was established in 1982 at Hydrabad. It was established by a group of Hydrabad-based practicing Chartered Accountants. At initial stage it was very small in size. It was started with a capital of Rs. 1,50,000. In starting it was only offering auditing and taxation services. Later, it acts into the Registrar and Share transfer activities and subsequently into financial services and other services like Financial Product Distribution, Investment Advisory Services, Demat Services, Corporate Finance, Insurance etc. All along, Karvys strong work ethics and professional background leveraged with Information Technology enabled it to deliver quality to the individual. A decade of commitment, professional integrity and vision helped. Karvy achieving a 26
leadership position in its field when it handled largest number of corporate and retail that proved to be a sound business synergy. Today, Karvy has access to millions of Indian shareholders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and half decades, Karvy has evolved as a veritable link between industry, finance and people. An ISO 9002 Company, Karvys commitment to quality and retail reach has made it an Integrated Financial Services Company. Karvy ranks among the top player in almost all the fields it operates. Karvy Computershare Limited is Indias largest Registrar and Transfer Agent with a client base of nearly 500 blue chip corporates, managing over 2 crore accounts. Karvy Stock Brokers Limited, member of National Stock Exchange of India and the Bombay Stock Exchange, ranks among the top 5 stock brokers in India. With over 6,00,000 active accounts, it ranks among the top 5 Depositary Participant in India, registered with NSDL and CDSL. Karvy Comtrade, Member of NCDEX and MCX ranks among the top 3 commodity brokers in the country. Karvy Insurance Brokers is registered as a Broker with IRDA and ranks among the top 5 insurance agent in the country. Registered with AMFI as a corporate Agent, Karvy is also among the top Mutual Fund mobilizer with over Rs. 5,000 crores under management. Karvy Realty Services, which started in 2006, has quickly established itself as a broker who adds value, in the realty sector. Karvy Global offers niche off shoring services to clients the US.
Karvy has 575 offices over 375 locations across India and overseas at Dubai
and New
York. Over 9,000 highly qualified people staff The company adds 5 new offices every month to the companys ever growing national network in every nook and corner of the country. The company service over 16 million individual investors, 180 corporate and handle corporate disbursements that exceed Rs.2500 Crores.
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Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an almost 2000 member team. Today it is a well diversified financial services firm offering a range of financial products and services such as Wealth Management, Broking & Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies. It has a diversified client base that includes retail customers (including High Net worth Individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. We are headquartered in Mumbai and as of June 30th, 2009, had a network spread over 555 cities and towns comprising 1,308 Business Locations operated by our Business Partners and us. As at June 30th, 2009, we had 5,57,373 registered customers. Motilal Oswal Securities Ltd. enters 'Limca Book of Records' for creating India's largest dealing room in Mumbai. It was 'Rated No.1 Best recommendations Mid & Small Caps' and won awards in 3 out of 4 categories at the Starmine India Broker Rankings 2009 from Thomson Reuters
Kotak Securities Limited, a 100% subsidiary of Kotak Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate.
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Kotak also offers stock broking through the branch and Internet, Investments in IPO, Mutual funds and Portfolio management service. Kotak Mahindra is one of India's leading financial conglomerates, offering complete financial solutions that encompass every sphere of life. The group has a net worth of over Rs. 5,609 crore, employs around 17,100 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 344 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. The Group services around 3.6 million customer accounts. Kotak Securities has 195 branches servicing more than 2, 20,000 customers and coverage of 231 Cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments.
India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries, straddles the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites. India Infoline Limited is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory Services and Portfolio Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. It is registered with NSDL as well as CDSL as a depository participant, providing a one-stop solution for clients trading in the equities market. It has recently launched its Investment banking and Institutional Broking business
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2.1 Introduction
Reliance Money is promoted by Reliance Capital; one of India's leading and fastest growing private sector financial services companies, ranking among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Money is a part of th e Reliance Anil Dhirubhai Ambani Group. It is a one-stop-shop, providing end-to-end financial solutions (including mobile and webbased services). It has the largest non-banking distribution channel with over 10,000 outlets and 20,000 touchpoints spread across 5,165 cities/ towns; catering to the diverse needs of over 3 million existing customers.
Reliance Money is a comprehensive electronic transaction platform offering a wide range of asset classes. Reliance Money endeavors to change the way investors transact in financial markets and avails financial services. It provides customers with access to Equity, Equity and Commodity Derivatives, Offshore Investments, Portfolio Management Services, Wealth Management Services, Investment Banking, Mutual Funds, IPOs, Life and General Insurance products and Gold Coins. Customers can also avail Loans, Credit Card, Money Transfer and Money Changing services. Reliance Capital Ltd. has also interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.
In addition to the home-grown portfolio of products and services that Reliance Money has to offer, Reliance Money also distributes a variety of third party financial products. It also assists millions of investors in creating customized individual portfolios based on their diverse investment needs and risk profiles Reliance Money is the largest broker and distributor of financial products in India with the largest distribution network and almost over 3,174 employees. Money has increased its
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market share among private financial companies to nearly Convenient & effective Anytime & anywhere financial transaction
2.2 Vision
To build a global enterprise for all our stakeholders, and A great future for our country, To give millions of young Indians the power to shape their destiny, The means to realize their full potential
2.3 Mission
To create and nurture a world-class, high performance environment aimed at delighting our customers by providing endless financial products in all part of the country.
Trust Integrity Dedication Commitment Enterprise Hard work and Team play Learning and Innovation, Empathy and Humility. These are the values that bind success with Reliance Money
In two successive joint surveys by The Economic Times Brand Equity and ACNielsen,
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The company also walked away with seven other scheme prizes five of them being
outright winners in the Gulf 2007 Lipper Awards. These included the Fund House of the Year by Lipper GCC as well as ICRA Online and the Most Improved Fund House by Asia Asset Management.
y
It also received the NDTV Business Leadership Award 2007 in the mutual fund category
and runners up recognition as the Best Fund House in the Outlook Money-NDTV Profit Awards.
y
In addition, the company received the coveted CNBC Web18 Genius of the Web
distinction for the Best Mutual Fund Website in the country. RCAM was awarded the India Onshore Fund House 2008 instituted by the Asian Investor magazine.
y
The company also won the India Equities award in the 5-yearPerformance category.
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To further improve its position in the money changing and money transfer business, Reliance Money has acquired a significant share holding in Wall Street Finance Ltd, a leading provider of money changing and money transfer services in the Country Reliance Money has tied up with Kuoni India and plans to retail its forex products/services through the national network of over 70 Kuoni outlets Reliance Money has tied up with India Post and World Gold Council to sell gold coins through the post office network across the country Reliance Money has obtained Category I Merchant Banking License from the Securities and Exchange Board of India. This new license allows Reliance Money to provide a wide range of investment banking services such as Issue Management, Underwriting, Private Equity Advisory/ Syndication and Corporate Finance services in India Reliance Money is taking its first steps into the Commodities Exchange business and is in the process of acquiring a 15 per cent stake in Hong Kong Mercantile Exchange (HKMEx). With this holding, Reliance Money becomes the second-largest shareholder in the commodity exchange and will have a board membership. Reliance Money is the first Indian firm to acquire a stake in an international exchange It has also obtained approval from the Ministry of Consumer Affairs for acquiring 10% stake in the National Multi-Commodity Exchange of India Ltd. (NMCE).
34
35
Chart 2.1
Chart 2.3
y y
Eight to ten Business Development Executives under each Centre manager. Business associates under each Centre Manager their number depending upon the area
Remisars under each centre manager. Team leader and PFCs under him for life insurance. One Customer Support Executive and One Senior Finance executive.
Organizing all the BDEs, Business Associates and Remisars under one banner. Making sure that the BDEs, Business Associates and Remisars are carrying out their
functions well i.e. expanding the business in form of selling the Share trading A/cs , mutual funds, selling general along with life insurance policies .
y
Planning strategies for increasing the business (i.e. installation of canopies at the right
Interviewing and Selecting Business development executive for the organization. Identifying the potential agents in the market and making them the business associate or
Assisting the new BDEs or remisars in handling the clients. Training the new BDEs and the remisars about the product and how to approach the
clients.
y
Reporting the regional head on the daily basis about the daily business performed.
37
. Demat account
There are many broking houses doing business in India and they charge a brokerage on every transaction made online or offline. (Buying and Selling are treated as separate transaction). Reliance Moneys advantage over others is that its charging the lowest brokerage in the market which is just 1 paisa on every executive trade irrespective of the volume traded. Reliance Money, the brokerage and distribution arm of Reliance ADA Group, aims to tap investors in the smaller towns and cities through a flat fee structure. The new wonder is Reliance Money's pre-paid card for stock market brokerage. Reliance Money, the financial services division of Anil Dhirubhai Ambani Group-promoted Reliance Capital, is bringing to the market pre-paid cards in denominations of Rs500, Rs1,000, Rs. 2500, Rs. 5,000 and Rs.10,000. Target low level of retail penetration in India - less than 3 per cent of household financing savings makes it into equity markets. Reliance Money Demat Account Holders can trade in
y Equities
Equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as 38
the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created).
y Commodities
A single platform to trade on both the major commodity exchanges i.e. NCDEX and MCX. In addition In-house research desk shall provide research reports on all major commodities which shall enable in getting views for trading and diversify clients holdings. Trade Execution assistance is also provided to clients.
y Offshore Investments
Offshore investment is the keeping of money in a jurisdiction other than one's country of residence. Offshore jurisdictions are a commonly accepted solution to reducing excessive tax burdens levied in most countries to both large and small scale investors alike. The advantage to this is that such operations are both legal and less costly than the solutions offered in the investor's country - or "onshore".
Offshore solutions are accessible to anyone who can meet the minimum investment amount or pay the obligatory fees required to open such an entity. Another reason why 'offshore' investment is superior to 'onshore' investment is because it is less regulated, and the behavior of the offshore investment provider, whether he be a banker, fund manager, trustee or stock-broker, is freer than it could be in a more regulated environment. Reliance Money has already tied-up with CMC Capital Plc UK to offer offshore Investment products to Indian consumers as per guidelines.
How reliance money scored over others? Two way authentication: Reliance offers its customers with a token (an electronic
gadget) that generates a password, which are a third level of security in addition to the customer log in and a password provided. The password generated by the token is valid only
39
for a period of 20 seconds. If the web page expires, for the fresh login, a new password generated by the token has to be keyed in by the customer.
y
Lowest brokerage: Reliance offers the lowest brokerage of 1 paisa which is very less
User friendly software: The portal offered is very easy to understand and use. Better research and news: Reliance offers news from the DOW JONES and REUTERS.
Seeking to bring share trading closer to consumers just like ATMs, Reliance Capital's stock brokerage arm Reliance Money launched Internet trading services through web-enabled retail kiosk.
Reliance Money Provide the kiosks (similar to ATMs) Facilities, to their customer through which the customers can trade on available kiosks at the particular Branch of Reliance Money. The company are going to open these kiosks in the market as the ATMs of the Banks
40
Table 2.1 Following are also the main features of this share trading account provided by Reliance money:1. Flexibility to access reliance money services in multiple ways through Internet, Transaction kiosks, Call and transact or seek assistance through Business partners. 2. This is a safeguarded account as reliance money provides an electronic token that flashes a unique security number in every thirty two seconds.This number works as a third level password (including the login ID and Password) keeping the account sage from any unauthorized access.
3.
investments, mutual funds, IPOs, Life insurance and General Insurance either through online or through channel partners.
41
4. With the help of this A/c investors can access to their banking, trading and Demat accounts without the hassle of writing cheques. Reliance money had tied up with UTI, HDFC and IDBI bank to link this share trading account for the investors. These were some of the features of Reliance money share trading account. A customer can do the share trading through trading kiosks installed by Reliance Money, through net, through business associates of R-Money.
A mutual fund represents a vehicle for collective investment. When you participate in a scheme of a mutual fund, you become a part-owner of the investments held under that scheme. The most important characteristic of a mutual fund is that the contributors and the beneficiaries of the fund are the same class of people, namely the investors. The term MUTUAL means that investors contribute to the pool, and also benefit from the pool. The money held in the trust is divided into shares of equal value called UNITS. Investors become unit-holders and are allocated units based on the amount of their investment. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.
42
Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
2.7.2.1Equity/Growth Schemes
The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Some of the Equity/Growth schemes made available by Reliance Money are:
y y y y y y y
Reliance Growth Fund Reliance Vision Fund Reliance NRI Equity Fund Reliance Equity Opportunities Fund Reliance Index Fund Reliance Tax Saver Fund Reliance Equity Fund 43
2.7.2.2Debt/Income Schemes
The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. Some of the Debt/Income schemes made available by Reliance Money are:
y y y y y y y y
Reliance Income Fund Reliance Medium Term Fund Reliance Short Term Fund Reliance Liquid Fund Reliance Monthly Income Plan Reliance Gilt Securities Fund Reliance Floating Rate Fund Reliance NRI Income Fund
These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert. Some of the sector specific schemes made available by Reliance Money are:
y
y y y
Reliance Pharma Fund Reliance Media and Entertainment Fund Reliance Diversified Power Sector Fund
Investment Objective Generate capital appreciation in medium to long term through investments in equities and equity related instruments comprising of predominantly large cap companies. This scheme will be benchmarked to the Nifty 50 stocks.
Parameters Driving Investment Decision The portfolio strives at all times to achieve an overall 70% allocation to large cap companies. Again the portfolio will limit the exposure to any sector to be less than 25% of the portfolio size and to any scrip to be less than 10%.
45
Investment Objective The objective of this scheme is wealth creation by delivering superior returns over long term (18 months) through investments in value & growth stocks. This will be benchmarked with BSE 200. Reliance Money has launched portfolio management services (PMS), where managers will create a basket of stocks for each client, based on individual needs, for amounts as low as Rs5 lakh. Such services are popular in India but almost all the offerings of large finance companies target high networth individuals (HNIs) with the ability to invest Rs1 crore and above. Reliance Money, which helps clients invest in equities, derivatives and commodities, typically offers such services for amounts between Rs5 lakh and Rs75 lakh; Rs5 lakh is the smallest amount the industrys regulator mandates for PMS. Reliance Money would not take a fee unless the portfolio earns a return higher than 8%. If the client earns a return of 8-20%, the fee charged will be 10% of the absolute returns and if the client earns more than 20%, the fee will be 20%. The company offer a large-cap investment portfolio (where the stocks invested in will be those of large-cap companies), blue chip portfolio (blue chip companies) and an infrastructure portfolio (companies in the infrastructure sector)
lack of access to a branded, affordable, reliable Gold coin has always been a matter of concern.
Reliance aims to bridge this gap by giving 99.99% pure, 24 carat, Swiss Gold coins through its distribution network. Available in 0.5g, 1g, 5gm and 8gm denominations, these 24 carat, 99.99% pure, internationally certified Gold coins cater to a large segment of the society in both the retail and the corporate world.
Available in tamper proof packaging, the overall look and feel of these coins is far superior & they possess a great finish. These Gold coins are Ideal for customers or corporates to be used as a gifting idea, for retail/agent contests, as employee rewards etc. Retail customers buy these coins just for the pleasure of owning it or as an investment idea.
"Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event." Life Insurance policies have been categorized in the following manner: 1. Solution for individuals 2. solution for groups Under the head of solution for individual there are four bifurcations
PROTECTION PLANS 1. 2. 3. 4. Term Plan Simple Term Plan Special Term Plan Credit Guardian Plan 7. 8. 9. 10. Special Endowment Plan Connect To Life Plan Whole Life Plan Wealth + Health Plan
47
5. 6.
11. 12.
RETIREMENT PLANS
1. 2. 3. Total Investment Plan II Pension Super Golden Years Plan Super Golden Years Plan- Plus 4. 5. 6. Wealth + Health Plan Automatic Investment Plan Money Guarantee Plan
CHILD PLANS
1. 2. Child Plan Secure Child Plan 3. 4. Wealth + Health plan Super InvestAssure Plan
Under the Head of Solution for Groups, there are three bifurcations:
48
1. Group Credit Shield Plan 2. Group Term Assurance Plan 3. Group Term Insurance Plan EDLI Other than above mentioned plans, Reliance has tie-up with many insurance companies like ING Vysya, Kotak , EMPLOYEE PROTECTION SOLUTION ICICI prudential, HDFC standard life insurance etc.
Reliance Money also offers life insurance policies of all the above mentioned companies other than its own life insurance products .
y
MOTOR INSURANCE y
Two Wheeler Insurance Policy. Private Car Insurance Policy Home Protect Policy 2. Householders Package Policy
49
HOME INSURANCE TRAVEL INSURANCE Travel Care Insurance Policy For Individuals And Families Travel Care Insurance Policy For Students Travel Care Insurance Policy- Asia y Pravasi Bhartiya Bima Yojana Insurance Policy 1.Individual Personal Accident Policy y y y ACCIDENT INSURANCE COVER
ENGINEERING INSURANCE
y
MARINE INSURANCE LIABILITY INSURANCE
y y y y y y
Directors and Official Liability Policy Workmens Compensation Insurance Policy Professional Indemnity Insurance Policy Product Liability Insurance Policy Public Liabilty Insurance Policy Public Liability(Act) Insurance Policy
PACKAGES INSURANCE
y y y y
Office Package Policy Commercial Care Insurance Policy Industry Care Insurance Policy Shopkeepers Package Policy
y y y
Money Insurance Policy Burgulary and House Breaking Insurance Policy Fidelty Guarantee Insurance Policy
The above mentioned products belong to reliance general insurance but reliance money is also engaged in selling general insurance policies of other companies like Chola mandalan, IFFCO TOKYO etc.
51
HDFC Deposits HDFC Premium Deposits ICICI Home Finance Mahindra and Mahindra Finance
FINANCIAL PERFORMANCE
(Rs. Million)
PARTICULARS Broking Income Distribution Income Q4 FY09 379 153 QYFY08 581 583 FY09 1,762 879 FY08 1,112 1,062
52
253 785
64 1,227
880 3,520
211 2,385
Sub Brokerage Personnel Costs Other Expenses Profit Before Tax Profit After Tax
Table 2.2
Reliance Money generated revenues of Rs. 35 billion (US$ 767 million) for the year
ended March 31, 2009 as against Rs. 24 million of the corresponding previous period, an increase of 48 %. This increase was primarily due to the expansion of the distribution network and increase in its customer base The revenue mix is well balanced with broking contributing to 50% of the total revenues
and distribution of financial products & other services (money transfer, currency changing & precious metal retailing) contribute to the balance 50% It achieved a net profit of Rs. 368 million (US$ 8 million) for the year ended March
31,2008, as against a profit of Rs. 1 million of the corresponding previous period Reliance Money generated revenues of Rs.352 crore for the year ended March 31, 2009,
Scale of operations
PARTICULARS No. of outlets Franchisees As at Mar 31st, 2009 10350 10125 As at 2008 8512 8279 Mar 31,
53
Owned No. of broking accounts Total No. of customers Daily average stock exchange turnover (rs. Billion)
Table 2.3
2.10 Management
The management at Reliance Money is committed to good Corporate Governance, which includes transparency and timely dissemination of information to its investors and unit holders. The Board of Directors of RCAM is a professional body, including well-experienced and knowledgeable Independent Members. Regular Audit Committee meetings are conducted to review the operations and performance of the company.
2.11 Employees
Reliance Money has at present, a code of conduct for all its officers. It has a clearly defined 54
prohibition on insider trading policy and regulations. The management believes in the principles of propriety and utmost care is taken while handling public money, making proper and adequate disclosures. All personnel at Reliance Money are made aware of their rights, obligations and duties as part of the Dealing Policy laid down in terms of SEBI guidelines. They are taken through a well-designed HR program, conducted to impart work ethics, the Code of Conduct, information security, Internet and e-mail usage and a host of other issues. One of the core objectives is to identify issues considered sensitive by global corporate standards, and implement policies/guidelines in conformity with the best practices as an ongoing process. Reliance Capital Asset Management Ltd. gives top priority to compliance in true letter and spirit, fully understanding its fiduciary responsibilities.
55
Because they believe that there is no contradiction between doing well and doing right. Indeed, doing right is a necessary condition for doing well. Each of Reliance Capitals different businesses vigorously implement their own CSR initiatives. Indeed, their CSR efforts are counted when calculating the businesss performance for the year. Some of the work done by them include:
y
Blood donation campsin Mumbai, but also in other cities such as Bangalore, Chennai,
and Hyderabad.
y y
Donating old computers to local schools in Navi Mumbai. Celebrating Independence Day with the less privilegedstreet children are taken to
amusement parks, donations are given to NGOs working with children or the aged or to the Missionaries of Charity. Again, this is done across the country from Raipur to Jaipur, from Kolkata to Chandigarh.
y y
Similar initiatives are undertaken on Diwali or on Christmas. Bihar was stuck by calamitous flooding last year. Reliance Capital employees working
with their businesses generously donated clothes and money for the relief effort.
y
Direct cash aid for paying the medical expenses of life-threatening requirements for some
. Sudip Bandyopadhyay, 45 is the Managing Director of Reliance Money. He has been with Reliance Capital since May 2005 and spearheads its broking, distribution, OTC (over-thecounter) and exchange business, under the brand, Reliance Money. He has been responsible for making Reliance Money into India's largest broking and distribution house in three years.
56
Sudip has been instrumental in taking Reliance Money international through various innovative tie-ups and acquisitions. Sudip was also responsible for the acquisition of AMP Sanmar that launched Reliance's foray in the Life Insurance segment. He has 22 years of experience in the financial sector. Prior to joining Reliance Capital, Sudip was heading Treasury and Investment at ITC. A Charted Accountant and Cost Accountant by profession, Sudip started his career as a management trainee with Hindustan Unilever. An avid reader, Sudip believes that books have played a key role in shaping his life and making him the person he is today. He attributes his success to his learnings from books such as Pather Panchali, Overload, Moneychangers, etc., read by him during various phases of his life
One of Indias leading and fastest growing private sector financial services companies,
and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. It is Indias first insurance company to be awarded the ISO 9001:2000 certification
across all functions, processes, products and locations panIndia. The quality assurance provides an edge over other players. Company issued 36.57 Lac policies during the year as compared to 14.60 Lac in the
previous year thereby registering a growth of 150%. RGIC has been able to give highest ROI of 11.27% in last five years. The net worth has
Excellent outreach with a large distribution network. It has 200 branches across 171 cities
and over 20,000 intermediaries. The setup provides the company is very strong and very effective distribution network, and consequently a strong penetration in the market. Experts and research team to make strategies and products for company as well as clients
Capture the 17% of the Private Sector Share & 7% share of the General Insurance
Industry
Reserves and Surplus has increased five times to Rs.4.998 billion from Rs.1.04 billion
previous year. The Company has earned Rs.1034 crore of New Premium Business in Financial Year
2008 which is 41% share of the Private Sector Industry & 33% of the Industry as whole. Company is ranked number one in the New Premium Business in Financial Year 2008.
Other than this, it maintains a good database of it existing and potential customer, has a brand image and low pricing strategy
y
Reliance Money unlike other brokering houses has introduced a new prepaid system of
brokerage for the share trading in which it provides the lowest form of brokerage charged from an investor.
Weaknesses
y
-Extra control or interference from fellow subsidiaries. Sudden expansion in year 2007-08 by establishing more than 125 branches has
increased operations and administration expenses due to which losses incurred. Due to the emphasis on recruiting young people in the company, staff is
inexperienced. Clientage is not so loyal as compared to the clientage of other competing companies
58
The phenomenon of job hopping is very common in the company. So, the problem
Opportunities
y
IRDA has removed controls on pricing in General Insurance business with effect
from 1st January, 2008. IRDA had notified that except for Motor Third Party risks, all other new insurances and renewals effective on or after 1st January, 2008, insurers shall be free to quotes rates of premium in accordance with file and use guidelines. General insurance industry in India has grown at 15% CAGR in terms of gross
premium collection. The company has moved to 3rd position amongst Private Sector Insurers in
Financial Year 2008 & is ranked 7th amongst the Industry with 14 General Insurance players. In india, there is still a lot more market to be tapped which is getting supported by
increasing spending and thereby saving of people. The mindset of people have also started changing. Now, they consider trading as a
The entire workforce consists of mostly youngsters, which means they can be
encouraged and motivated to do good work because they have a long way to go and most of them are eager to climb the ladder.
Threats
y
New Entrants -Future General India Life Insurance Company Limited -Sep. 2007 -IDBI Fortis Life Insurance Company Ltd. Dec 2007 -Bharti Axa General Insurance Company Ltd. -June 2008 59
New joint ventures (JVs) by industry giants - Max India forms JVC with Bupa Finance to foray into Health Insurance -Shriram Group is to enter General Insurance Market
60
To create awareness about the products offered by Reliance Money in the Market To know about the investment preference or style of investors To know about the awareness of demat account To collect the real time information about preference level of customers using Demat
account and their inclination towards various other brokerage firms e.g. Reliance Money, ICICI, Religare, Angel , Unicon, Sharekhan etc.
y
Money
y y
To know about the awareness of Reliance Money as a brand and services offered To know about the availability of Reliance Money Franchisee To know about the satisfaction level among customers of Reliance Money.
Primary data
Primary data is collected through observation, or through direct communication or doing experiments. Under this, Survey method has been used. For this report primary data was collected by personal interview with investors and potential investors in different areas of Lucknow. The data was collected over a period of 6 days from 15th July to 21th July 2010.
Secondary data:
Secondary data refers to existing primary data that was collected by someone else or for a purpose other than the current one. It means already available through books, journals , magazines ,newspaper, websites. 62
Data has been collected through various websites the list of which has been given in the end of report
63
It is a market research technique for gathering information through face-to-face contact with individuals. Personal interviews take place in a variety of settings-in homes, at shopping malls, in a business office. This type of research is relatively costly, because it requires a staff of interviewers, but it provides the best opportunity to obtain information through probing for clearer explanations. It is the best technique to use early on in the research process when the researcher is not yet sure which questions need to be asked, because new and better questions can come out of the dialogue
3.5 Limitation
Although full efforts have been made in the study but the following limitations should be kept in the mind before making any conclusion:
y y y y y
Sample size was small in comparison of entire population (150) The respondents may be biased or influenced by outside factors. The time constraint was one of the major problems. The respondents were limited and cannot be treated as the whole population. The accuracy of indications given by the respondents may not be consider adequate.
64
The research has been conducted according to present market conditions of recession, so
the finding and inferences may not hold good for every business cycle.
CHAPTER -4
66
160
140 120 22
100 80
15
No
128 yes
60
85 40 20
0 Percentage frequency
Interpretati n
The above table deal with i terest of respondents in invest ent of funds. Out of 150 people taken into consideration for knowing in their interest invest ent 1 8 said that they are interested in invest ent avenues while investment of funds available with them. of them did not show any kind of interest in
Inference
It can be deduced from here that majority of people are interested in investing t eir money in h various available schemes in market. However, some people are still there who do not want to invest funds available with them. So awareness needs to be spread among those who are not willing to invest their money. By telling them various bene which can be availed by fits making investment this can be achieved. They should be introduced with products that suits their investment needs
Percentage 16
67
Above 0%
up to 15% 26%
Interpretation
This table tells about the amount of income people keep aside for investment purposes. Out of 1 8 people who were interested in investment, majority of people, that is, 5 respondents keep 10% of their income for investment and people who invest upto 15% ae also in good r number. But there are very few people who invest more than 0% of their income.
Inference
Therefore, it can be said that more than 1/3rdof respondents invest upto 10% of their income and almost 1/4th of respondents employ upto 15% of their income in investments. On this basis, around 60% of people invest 5% to 15% of their income and this can be the target market for the players in the industry.
Upto 0%
16 7
above 20% 7%
up to 5% 16%
up to 10% 35%
Upto 15%
Upto 10%
5 6
68
Percentage 17 74
94
00
90
94
percentage
Frequency
Interpretation
This table deals with the number of people belonging to different income categories, i.e, upper, middle and lower. Out of 1 8 people who are interested in investing activities, 94 of them belong to middle class. Majority of respondents who are interested in investment belong to middle class
Inference
So, we can say that around 75% of the respondents who are interested in investment beong l to middle class as they consider investments important for stable income and another criteria for targeting the potential investors can be the income categori ation and products can be developed according to specific income category 69
20
80 70
60
74
50 40
30 7 2 2
22
98
Frequency
33
Yes No
74 Percentage
26
20
40
60
80
100
Interpretation
Out of 1 8 people, who showed their interest in investment, 95 said that they are dealing in securities while rest of them, that is, 33 respondents were not dealing In any kind of securities.
Inference
Even though 1 8 respondents have shown interest in investment activities, not all of them are dealing in securities either due to lesser funds available with the for investment or due to m lack of knowledge regarding financial markets. However, 74% of them are still engaged in selling and buying of securities,
70
Percentage 9 45 4
58 30 16 1
13 9
60 50 40
30 20 9 10 0 45
24
30
13 9
1612
12
None of These All of These Mutual Fund Shares & Warrants Bonds & Debenture
Interpretation
When asked about investment preferences, most of the investors were interested in shares & warrants anad mutual funds. 45% favoured shares & warrants and 4% favoured mutual funds.Some investors were also not interested in any of these but were investing their funds in fied deposits of banks and post office saving schemes. 71
Inference
This shows that although the mutual funds market is on the rise yet, the most favored investment continues to be in the Share Market. So, with a more transparent system, investment in the Stock Market can definitely be increased.
Percentage
18
140
123
120 100
2
60 40
20 0
P r ntag
Interpretation
This table was formed on the basis of respondents who were aware of demataccount and those who were not aware of demat account. Out of 150 respondents, 1 3 replied yes as their answer when they were asked that wheter they were aware of demat account or not. But there were atill 7 respondents who did not even know what a demataccount is all about. 7
No 27 1
r qu n
Inference
So, it can be said that around 82% of people know about demat account but there are still some people who do not know about all this and therefore are not able to exploit the earnings opportunities available in financial markets. Therefore, people should be educated about trading in securities so that they can reap benefits out of it
Frequency 22 12 54 35
Percentage 24 9 45 22
40
35 c se
24 20
22
22
I c
He s
12
10
Interpretation
$#
e ce
F e
e cy
C e
y4
30
' ' $
&&
E sy
se sec
es y ke
% " !
"!
73
When asked about the opinion people have about demat account, for most of them, demat account was a mean of fast money & income growth and for some of them stable income. Few people also think that demat account for easy selling of securities and purchase in primary market.
Inference
It is good to see that around 7 % people know that trading through demataccount helps in earning money and income growth. This kind of thinking pattern should be spread among people so that they can invest more and more. In addition, it will also help in mobili ing funds for development of economy.
Percentage 65 35
160
140
52
120
100 0
D
Yes 9 65
60 40 20
0
Percentage Frequency
Interpretation
35
D
74
This table shows that out of 150 people, 98 people had demat account and 52 people do not had demat account. Around 123 respondents are aware of demat account but only 98 of them hold it.
Inference
This pie chart shows around 65% of respondents possess demat account and it is a majority part. So we can say that most of the people are trading in stock market. But there is need of advertisement so as to engage them stock trading and for that demat account is to opened with them.
Frequency 32 36 12 18
Percentage 32 36 12 18
75
40
35 30
25 20
Reliance Money
GHGHG
Religare
15
Others 10 5
0
Percentage Frequency
Interpretation
Out of 98 investors who had demat account, 36 people had their demnataccount in ICICI and 34 investors had the same in Reliance Money. Some investors took name of religare and there was a mi ed response about other depository participants like Karvy, Sharekhan, Indiabulls etc.
Inference
From this pie chart, we can see the main leaders in the market are ICICI and Reliance Money. They have a stiff competition between them and together they hold around 68% of market share. While the other competitors like religare, sharekhan, Indiabulls, Karvy etc. are are still behind
Percentage 50 35
1 8
76
Others 50
50 45 40 35
VT TU T
35 R lian
WXWXW
30 25 20
15 10 4 5 0
SQ P PR P
11
12
8
Oth rs
P
2 3
P r ntag
PQ P
r qu n
Interpretation
When asked from the respondents, who do not had demat account but know about it, about the preferred depository participant, out of 5 investors, 1 said that they would like to open their demat account in Reliance Money and 8 preferred IC for the same purpose. Some ICI investors/ potential investors also took name of religare, sharekhan, indiabulls etc.
Inference
It shows that even though ICICI is the market leader but Reliance Money is giving ICICI a good competition. More people wan to open their demat account in Reliance Money as t compared to people who prefer ICICI for the same purpose.
Religare
4 11
Mon
R ligar
Percentage 17 8
Y
43 11
44 11
45
44
43
40 35
`
30
27
Daily Wee ly
a
25 20
15 17 11 17 11
nthly
Yearly
10 5
0
Percentage
Frequency
Interpretation
Out of the people who had demat account, 43 said that they usually trade once a month and 8 said that they trade weekly. Investors were also there who trade daily or yearly but those people were less in numbers. So almost 7 % of investors trade weekly or monthly.
Inference
Inspite of the huge returns that the share market promises, we see that there is still a dearth of active traders and investors. This is because of the non transparent structure of the Indian share market and the skepticism of the target audience that is generat d by the volatility of e the stock market. It requires efficient bureaucratic intervention on the part of the Government 78
cb
Percentage 84 16
140
120
126
100
0
e
4
Yes
60
40 24
20
0
Interpretation
When people were asked about awareness of Reliance Money as a brand, 1 6 knew about Reliance money and 4 did not know. Around 84% said yes to this question while 16% said no. majority of people know about Reliance Money as a good brand.
Inference
This pie-chart shows that reliance money has a reasonable amount of brand awareness in terms of a premier Retail stock broking company. This brand image should be further leveraged by the company to increase its market share over its competitors.
NO
16
Percentage
frequency
Percentage 41 59
88
Frequency
Percentage
0%
20%
40%
60%
Interpretation
Out of 150 people, 6 people knew about reliance money facilitiesbut a majority of people, that is, 88 people did not know about facilities provided by Reliance Money. Even though around 84% of people knew about Reliance Money as a brand but only 41% of people knew about the facilities provided or services offered by Re liance Money.
Inference
Although there is sufficiently high brand equity among the target audience yet, it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby, that, the company should concentrate mo towards promotional tools and increase re its focus on product awareness rather than brand awareness.
pi
41
62
Yes No
0%
100%
80
70
65
66
60 50
40 35
30 20
10 0 Percentage Frequency
Difficult
Interpretation
When people were asked about the amount of efforts spent in locating Reliance Money franchisee for trading purpose, 32 said that it is easy to find Reliance money Franchisee while 66 of them could not find that so easily. Majority of them found it difficul to reach a t franchisee for trading puposes.
Inference
From the above pie chart we can see that 67% of people found it difficult to locate Reliance Money franchisee for trading and only rest of the investors, that is, only a small part of 33% can locate the same easily. The difficulty in locating the franchisee may harm Reliance Money as people will go for those depository participants whose services are widely available in market. 81
32
asy
59 60 50 40 0
28 19 ood
t
20 10 0
Percentage frequency
s
Interpretation
82
Average Bad
Talking about the satisfaction levels of customers of Reliance Money, out of 44 investors who had demat account in Reliance Money, 19 of them said that they are not at all happy with the services provided by Reliance Money. Only 4 customers had a good sati faction s level and rest of them had an average experience of dealing with Reliance Money.
Inference
This pie-chart corroborate the fact that Strategic marketing, today, has still not gone beyond meeting sales targets and generating profit volumes only. That is why, around 59% of customers which comprises of more than half of the customers having a very low level of satisfaction.
Chapter 5
FINDINGS, SUGGESTIONS AND CONCLUSIONS
83
84
Being doing business in a high potential area, this franchisee can not extract the available potential in that area. All because of the unavailability of Business Development Executives with the franchisee to contact the prospective HNIs at their door step.
85
The preferred mode of investment has come out to be share trading and mutual funds. Most people are engaged in share trading but still many others have also shown interest in mutual funds too. So these are the two most preferred modest of investment.
86
The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time.
87
5.3 Conclusion
As students, many of us are completely ignorant of the work cultures of various corporate organizations. SIP is an attempt to provide us a practical corporate exposure where we work in certain corporate organizations as interns. Working with Reliance Money is a nice opportunity by which I can explore my knowledge A good brand is always welcomed. Everywhere, in general, people are more conscious with the brand. So they go for the brand and are ready to spend some extra bucks for the quality. The Brand image of Reliance Money is good in market but according to customer satisfaction reviews the company have to provide better services and proper follow up Reliance Demat Account is better than other Demat account . Reliance Money have good return of investment too. It also provides a sense of security with the use of special type of key At last it can be on be concluded by that Reliance Money is still growing in the financial sector and has a huge potential for the coming times. . But this project also includes prospective investors, who can invest in stock market but presently does not invest in these markets. There are many reasons for such investors not to invest in stock market. The main reasons for the customer not to invest in stock markets are High risk High uncertainty Lack of knowledge High rate of fluctuations
y y y y
My Learnings
y
To get initial success in this field is very difficult. Although the business generation
becomes easier with time as we serve more people who then get added up in the loyal clientage. Thus time and service are two most factors in his field.
88
Also the corporate remains a very important segment which gets business in bulk but
retail cannot be ignored which makes your business ticking. Apart from the assigned roles and responsibilities, the center manager facilitated me with
a training which covers the product details of Reliance money, and how they are cheaper than other broking agencies, about their corporate culture, organizational structure, sales methodology, tele-calling, application handling, grievances handling with respect to aggressive customers , etc. Regarding customer handling, they provide me with a database for cold call. As it is my
first experience in tele calling, I got tense due to the harsh responses. Later by realizing the responses from the prospective lead calls boost my confidence in tele calling.
ISBN: 978-81-224-1522-3
y
Malhotra, Naresh "Marketing Research and Applied Orientation" IV Ed., 2005, Pearson
y Agarwal, J.D. "Security Analysis & Portfolio Management: A Review, Finance India, Vol. II No. 1, March 1989.
89
Websites:
y y y y y y y y
ANNEXURE
90
0.00 322.82
0.00 321.36
EXPENDITURE : Cost of Fuel and Power Purchased Generation &Distribution Expenses + Employee Cost + Administration expenses + Miscellaneous Expenses + 271.72 6.62 22.24 4.48 6.73 269.53 7.42 22.04 4.26 5.31 0.00 12.80 2.26 10.54 3.11 7.43 2.17 5.26
Less: Preoperative Expenditure 0.00 Capitalized Profit before Interest, Depreciation &Tax 11.03 Interest &Financial Charges + Profit before Depreciation &Tax Depreciation Profit Before Tax Tax Profit After Tax 4.81 6.22 3.54 2.68 1.63 1.05
Adjustment below net profit + P &L Balance brought forward Appropriations + P &L Balance carried forward
Equity Dividend Preference Dividend Corporate Dividend Tax Equity Dividend (%)
91
2.32 192.98
12.22 192.46
Extraordinary Items +
-0.06
1.34
Table 2.9
BALANCE SHEET
Name SOURCES OF FUNDS : Mar-2009 Mar-2008
40.34 16.51
Service Line &Security Deposits from 2.63 Customers 59.48 Total Debt
Total Liabilities
143.78
121.06
APPLICATION OF FUNDS :
Gross Block + Less: Accumulated Depreciation Net Block Capital Work in Progress
92
Investments +
5.17
4.05
Current Assets, Loans &Advances Inventories + Sundry Debtors + Cash and Bank Balance Loans and Advances + Less: Current Liabilities &Provisions Current Liabilities + Provisions +
74.87 10.11 77.30 7.89 8.18 85.05 12.05 9.22 8.60 86.36 16.56 9.51
29.52
35.84
QUESTIONNAIRE
Name: __________________________________________________ Address:
Yes No 93
Q.2: What percentage of your annual income you can keep for investment?
y y y y y
Yes No
Bonds & debentures Shares & warrants Mutual funds All of these None of these
Yes No
Easy in selling securities Purchase in primary market Helps in earn income & also grow money Helps in earn a stable income 94
Yes No
Q.11: How frequently you are going to use your DEMAT a/c?
y y y y
Yes No
Yes No
Easy Difficult
95
96