COMPANY PROFILE

BACKGROUND AND INSPECTION OF THE COMPANY

AnandRathi (AR) is a leading full service securities firm providing the entire gamut of financial services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan India presence as well as an international presence through offices in Dubai, Hong Kong and New York. Founded by Mr. Anand Rathi and Mr. Pradeep Gupta, the group today employs over 2,500 professionals throughout India and its international offices.

Milestones

1994:
Started activities in consulting and Institutional Beta sales with staff of 15.

1995:
Set up a research desk and empanelled with major institutional Investors

1997:
Introduced investment banking businesses. Retail brokerage services launched

1999:
Lead managed first IPO and executed first M & A deal

2001:
Initiated Wealth Management Services

2002:
Retail business expansion recommences with ownership model

2003:
Wealth Management assets cross Rs1500 crores. Insurance broking launched. Launch of Wealth Management services in Dubai. Retail Branch network exceeds 50.

2004:
Commodities brokerage and real estate services introduced. Wealth Management assets cross Rs3000crores. Institutional equities business re-launched and senior research team put in place. Retail Branch network expands across 100 locations within India.

2005:
Real Estate Private Beta Fund Launched. Retail Branch network expands across 200 locations within India.

2006:
AR Middle East, WOS acquires membership of Dubai Gold & Commodity Exchange (DGCX) Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money 2006 poll

 Ranked 6th in FY2006 for All India Broker Performance in Beta distribution in the High Networth Individuals (HNI) Category Ranked 9th in the Retail Category having more than 5% market share Completes its presence in all States across the country with offices at 300+ locations within India

2007:
Citigroup Venture Capital International picks up 19.9% Beta stake Retail customer base crosses 200 thousand Establishes presence in over 450 locations

NATURE AND BUSINESS CARRIED

The firms philosophy is entirely client centric, with a clear focus on providing long term value addition to clients, while maintaining the highest standards of excellence, ethics and professionalism. The entire firm activities are divided across distinct client groups: Individuals, Private Clients, Corporate and Institutions. AnandRathi has been named The Best Domestic Private Bank in India by Asia money in their Fifth Annual Private Banking Poll 2009. The firm has emerged a winner across all key segments in Asia moneys largest survey of high net worth individuals in India. In year 2007 Citigroup Venture Capital International joined the group as a financial partner.

VISION OF THE COMPANY:

TO BE A SHINING EXAMPLE AS A
LEADER IN INNOVATION AND THE FIRST CHOICE FOR CLIENTS AND EMPLOYEES

MISSION OF THE COMPANY

To be Indias first multinational providing complete financial services solution across the globe.

QUALITY POLICY:
Providing integrated financial care driven by the relationship of trust and confidence.

Products
Equities I Bonds I Mutual Funds I Derivatives Managed Investment Services / PMS Commodities FX Trading Life Insurance General Insurance Alternative Assets - Private Beta Funds - Structured Products - Real Estate Opportunities Fund Special Situation Opportunities Offshore Structures & Global Investments

Services
Creation of a customized financial strategy Diversification of assets based on a formal process of asset allocation Active tracking, monitoring and review of portfolios Creation of private trusts Tax planning

Estate planning.

AERA OF OPERATION
Globally, AnandRathis areas of operations are in Dubai, Hong Kong & New York. AnandRathi provides its operation all over in India operating with more than 485 branches and AnandRathi is considered as a top 5th broking house and financial services in India. AnandRathi was opened in Bidar on 28th march 2008. Its a branch dealing with financial services & broking firm in Bidar.

OWNERSHIP PATTERN
AnandRathi is a one man show. AnandRathi itself is the president & owner of the company.

COMPETITORS INFORMATION
Karvy stock broking Ltd. Kotak stock broking Ltd. ARCADIA stock broking Ltd. ICICI stock broking Ltd. Geojit Bnp Paribas

These are the branch and franchise which provide similar business activities.

INFRASTRUCTURAL FACILITIES
It provides all facilities to his employees such as canteen, traveling facilities, good environment, well furnished, individual employees had provided with a separate PC.

ACHIEVEMENT RECEIVED
Win across all key segments in Asia moneys largest survey of high net worth individuals in India. ANANDRATHI has been ranked as the 1st private bank in domestic in India by Asia money polls 2009. ANANDRATHI ranked as the 2nd private bank overall in India by Asia money polls 2009.

FUTURE GROWTH & PROSPECTS

Its future is very bright, because now a days people are interested in financial services as it provides more profit to its clients.

WORK FLOW MODEL

Its work flow process is Top-middle-low level management. Top level management : It consists of manager which looks after all the activities of the firm and collects daily MIS reports from employees. Middle level management: It consists of dealers such as Beta dealers & commodity dealers. These dealers help in generating some returns to the firm by calling clients and making business. It also consists of marketing executives.

Low level management These are the employees who look after the firms inward outward activities.

MCKENSYS 7S FRAME WORK

McKensys model with the seven important factors which determine the future course of any organization namely structure, skill, style, strategy, system, staff and shared value. These seven factors are important for any organization to achieve its objectives. Strategy, system and structure can be considered the hardware of success whilst style, staff, skills and shared value can be seen as the software.

STRUCTURE:
It refers to the organizational arrangements for performing the tasks and activity. The structure could be functional, product wise etc. it also establishes the interrelationship between various functions.

BOARD OF DIRECTORS:
Anand Rathi Founder & Chairman Pradeep Gupta Co-founder & Vice Chairman Amit Rathi Managing Director P. G. Kakodkar Director Dr. S. A. Dave Director C. D. Arha Director Ajit. Bhushan Director

BUSINESS/ FUNCTIONAL HEADS:

Ratnesh Kumar Head- Institutional Equities Rakesh Rawal National Head Wealth Mgmt Roy Rodrigues Head Investment Banking Amardeep Chahal Head Retail

SUB FUNCTIONAL TEAM OF WEALTH MANAGEMENT:

Rakesh Rawal National Head Wealth Management V. Srikanth Director Mumbai Sreedhar Challa Director Hyderabad Nayan Sooda Director Delhi

Sujan Hajra Chief economist

SUB FUNCTIONAL TEAM OF INVESTMENT BANKING:

Roy Rodrigues CEO P. P. Jain Executive Director Puneet Renjhen Associate Director Pankaj Saraf Associate Director Nishant Tiwary Associate Director Rahul Porwal Senior vice President Puspen Karmakar Vice president Rajani Raikar Vice President

REGIONAL, TERRITORY, AND BRANCH FUNCTIONAL TEAM OF INVESTMENT BANKING.

Kiran Kumar Vice President-South Raju Katha Territory manager Satish.S.Patil Branch Manager

DEPARTMENTS IN ANANDRATHI

Accounts department: It deals with maintenance of client ledger balance and expenses of each and every employee and branch.

Human resources department: It deals with process of employee recruitment & selection.

Marketing department: It deals with D-mat a/c, mutual funds, life insurance, Non- life insurance, loans and maintains relation with client.

Technical department: They are dealing with all the electrical and electronic problems like networking, V-satellite connections etc.

RMS department: Dealing with order executing, exposure and holdings of all the clients.

SKILLS:
Skill is the character that one should possess to perform a given job. It includes those characteristics the company expects its member have to perform the assigned job efficiently. At AnandRathi they believe in providing an entrepreneurial environment, with a strong focus on result orientation. At each level, AnandRathi employees have a pre-defined career path and hence an opportunity for continuous growth. They also believe in a complete meritocracy in deciding on promotions and reward systems.

They are a learning organization committed to continuous skill enhancement and training of all their employees. They had a dedicated training cell that focuses on enhancing behavioral and technical skills of employees across the group. Each employee has a predefined, mutually set training calendar that is followed for the entire year. In essence they lay emphasis on attracting, retaining and developing world-class talent.

STYLE:

Style is the pattern of actions taken by members of the top management team over a period of time. This include organization culture, the style of leadership etc. to perform different functions, different departments have been established. These departments are incharge of different functions and manager heads of the department. The Manager is responsible for his department. The management at AnandRathi is fully centralized and partially decentralized. A manager can take decisions independently on certain matters, like particular department manager can organize seminars, investors meets to give information to public through media. Every month the Executive director calls a meeting of Managers where they brief tell their progress in the month. The monthly reports include complete details about customer inflow, customer complaints, number of companies which have applied for listing and delisting, any investor grievance not addressed, or any kind of new rules from exchange or by top management.

company has a top to bottom style of workflow

NATIONAL LEVEL (BOARD OF DIRECTORS) HEAD OFFICERS REGIONAL OFFICERS TERRITORY BRANCH FRANCHISES

The company has adopted both authoritarian and participative style. Head office has whole and sole authority. Regional officers have both authoritarian and participative responsibility. Territory has participative responsibility. Branch is having both responsibilities with regional officers.

DECISION MAKING PARAMETER:

Every day MIS report should be submitted to the branch manager and on that MIS report branch manager will take the decision for next day and further activities.

STRATERGY:
Strategy is the choice of direction and action the company adopts to achieve its objectives in a competitive situation, a strategy explain what are the objectives of the organization and how the organization go about to achieve its objectives. At AnandRathi they nurture talent. ARs ability to provide world-class financial services is a result of its talented manpower pool. A strong focus on their human resources operations is closely integrated into the firms business strategy.

Over the year company have a development cutting edge technology to ensure confidentiality and safety of their clients transaction and sending clients daily ledger balance. The company will send day by day their client transactions and market to market profit and loss account and ledger balance.

SYSTEM:
System refers to all the rules, regulation and procedures, both formal and informal that complement the organizational structure. This includes the way of functions of different departments are carried out. Ex. MIS Accounting system, Trading System etc. One example for a system of trading that is followed by Anand Rathi is as under:

Placing an order with the broker:

The client will place his order with the dealer either to buy or sell or both at fixed prices or at best market price.

Execution of order:
The dealer or broker approaches to client in which the particular share is traded. The bargain will appear in the secondary market daily official list that will include number and price of shares that exchanged hand.

Reporting the deal to the client:

As soon as the deal is transacted, the details of the transaction are recorded in the books of the brokers, after which a contract note is prepared and send to the client.

STAFF:
Employees are the functional unit of one organization. Their selection, training, placement and induction everything is important for the organization. Staff deals with the process by which employees are recruited, deployed and developed, their current position, future up-gradation etc. The monthly report include complete details about the customer inflow customer complaints, number of companies, which have applied for the listing and delisting, any investor grievance not addressed, or any kind of new rules from Head Office or Exchange. In addition to all these the top management holds informal meetings with the Regional level and Manager to give them a feeling of oneness.

Human Resource at Anand Rathi

1) Actively involved in strategizing & designing compensation structure. 2) Conducted analysis of appraisal to facilitate mgmt decision. 3) Monitoring employee performance & engaging them towards higher performance. 4) Propose & executed HR Automations Manpower Budget & Approvals, Quality Selection, Online Assessment Test, Generate Employee Record & Appointment Letter, eLearning, Web Joining, Employee Self Service & PMS underway etc. 5) Supervising monthly payroll processing & Compliance related activities. 6) Re-engineered HR processes along with introducing an exhaustive auto alert & MIS. 7) HRIS Administrator: Maintaining skills inventory of more than 3000 employees. 8) System Reports Movement Analysis, Employee Ageing, Headcount Tracking, New Joiners, Payroll inputs, Compliance, Dealer, LI, Mutual Fund, GI, Manpower Headcount and Cost/Profit centre codes etc.

SHARED VALUES:

This refers to the set a values and aspirations that the organization believes in. it provides a strong basis for every action of the organization. It act as support to future actions of the organization. This includes vision, mission statement of the organization, the shared value of the organization and organization culture. As a members and higher authorities of the company they are having high value skills and knowledge with rich experience, also they are having attitude of sharing their values among themselves. In order to bring our organization to the top level. They are having good sense of sharing all kind of values like human value, ethical value & social values. Moreover organization behavior strengthen the efficiency other employees at the work place.

SWOT ANALYSIS OF THE COMPANY:

STRENGTH:
EXCELLENT INTERNAL PROCESSES: Company has excellent skilled human resource

they have both participative and authoritarian responsibilities.

GOOD PLANS ARE OFFERED: They provide good plans to their clients compare to

their competitors. Their plans are convenient and to invest in any mutual fund, not only mutual fund they also provide lots of opportunities to their clients.
ESTABLISHED BRAND IMAGE: They have well established brand image as it is a

leading full service securities firm providing entire facilities involved in financial services.
LARGEST DISTRIBUTION NETWORKS: Anand Rathi is one of the top Indian mutual

fund distribution houses. This success lies on their philosophy of providing consistently superior independent and unbiased advised to their clients backed by in depth research.

ANANDRATHI is providing loans (auto/home) apart from investment.

WEAKNESS:
CUT-THROUGH COMPETITION: Breaking the limitations of market area to acquire the

large market place which is more difficult. Customer does not try to understand that what actually mutual fund is?

OPPORTUNITIES: Target customers are large in number. Customer is ready to purchase the product, if right approach is taken. Good financial position. It is taken as investment source. It is a way to save the taxes.

THREATS:

Growing market with lots of competitors. Promotional scheme of competitors. Less publicity may decrease its market share. Changing government policies will affect whole mutual fund plan.

ANNUAL REPORT: RATHI GLOBAL FINANCE LIMITED

BALANCE SHEET FOR THE PERIOD UNDER MARCH 31 2012
(Amount in Rs) PARTICULARS Schedule March 31 2012 March 31 2011

I.

SOURCES OF FUNDS Share Holders Funds: Share capital Reserve and surplus Loan Funds Secured Loan Unsecured Loan

1 2

79,000,000 325,483,952

15,683,040 44,752,260

488,308,340 40,033,517

130,305,128 168,750,000

TOTAL

932,825,809

359,490,428

II.

APPLICATION OF FUNDS Fixed Assets Gross Block Less: Provision for Depreciation Net Block Investments 5

7,394,051 5,936,382 1,457,669 20,540,800

7,094,072 5,618,860 1,475,212 70,430,233

Current assets, Loans & advances: a) Stock-in-Trade b) Sundry Debtors c) Cash & Bank Balances d) Loans, Advances & Deposits

6 73,502,953 13,444,615 2,788,987 845,398,468 1,867,095 1,758,337 286,983,165

935,135,023

290,608,597

Less: Current liabilities & Provisions Net current Assets Deferred Tax Assets

26,586,848 908,548,175 2,279,166

5,222,720 285,385,877 2,199,107

TOTAL

932,825,809

359,490,428

RATHI GLOBAL FINANCE LIMITED

PROFIT & LOSS ACCOUNT FOR THGE PERIOD ENDED MARCH 31 2012
(Amount in Rs ) PARTICULARS Schedule March 31 2012 March 31 2011

INCOME:

Treasury & Financing Activities

107,781,343

36,808,539

Distribution & Advisory Services

31,036,288

14,501,437

(TDS of Rs.858,686/-Previous year Rs.1,807,910/-)

Other Income

305,024

88,654

TOTAL

139,122,656

51,398,631

EXPENDITURE:

Payment to & Provision for Employees

10

8,956,048

3,450,475

General & Administrative Expenses

11

4,923,614

6,504,060

Interest & Financial Charges

12

82,925,196

27,188,546

TOTAL

96,804,858

37,143,081

Profit before Depreciation & Taxation

42,317,797

14,255,550

Less: Depreciation

317,522

423,127

Profit Before Taxation

42,000,276

13,832,423

Provision for Taxation Current Tax Deferred Tax Fringe Benefit Tax 14,579,238 (80,059) 23,500 4,680,000 (2,377,178) 122,000

Profit after Taxation

27,477,596

11,407,601

Less: Prior year Taxes

13,744

27,463,852

11,407,601

Balance Brought/Forward from Previous year

30,438,503

21,315,263

Profit available for appropriation

57,902,355

32,722,864

APPROPRIATION:

Transfer to Statutory Reserve

5,495,519

2,281,520

Debenture Redemption Reserve

6,843,750

Balance Carried to Balance Sheet

45,563,086

30,441,344

TOTAL

57,902,355

32,722,864

Introduction:The NPV of an investment is the discounted value of its future cash flows. The CAPM risk-return framework provides us with a method of determining the discount rate of an investment. SML can be used to determine the required rate of return of a firms Beta share. From the firms point of view, this required rate of return is its scost of Beta . The firms cost of Beta can be used as the discount rate to calculate NPV of an investment project that is a risky as the firm.

The market portfolio is approximated by a well diversified share price index. We have several price indices available in India. For example, these indices are:-

1) The Bombay Stock Exchange Sensitivity Index (Sensex) 2) The Bombay Stock Exchange National Index 3) The National Stock Exchange Nifty 4) The economic Times Share Price Index 5) The Financial Express Share Price Index

Notice that these indices include only shares of companies. In theory, the market portfolio should include all risky assets: shares, bonds, gold,silver, real estate, art objects etc.

In computing beta by regression, we need data on returns on market and the security for which beta is estimated over a period of time.

Meaning of Beta
Beta is a measure of a securitys future Risk. But investors do not have future data to estimates beta. What they have are past data about the share prices and the market portfolios. Thus, they can only estimate beta based on historical data. Investors can use historical beta as the measure of future risk only if it is stable over time. Most research has shown that the betas of individual securities are not stable over time. This implies that historical betas are poor indicators of the future risk of securities.

BETA ESTIMATION:The risk of portfolio of securities is measured by its variance or standard deviation. The variance of a portfolio is the sum of: The variance of individual securities times (the square of) their respective weights. The covariance (that is, the correlation coefficient between securities times their standard deviations) of securities times twice the product of their respective weights. In a well diversified portfolio the weights of individual securities will be very small and Therefore, the variances of individual securities will be quite insignificant. But the covariance between the securities will be significant, and its magnitude will depend on the correlation coefficients between securities. The covariance will be negative if all securities in the portfolio are negatively correlated. In practice securities may have some correlation because they all have a tendency to movies with the market. This logic introduces the concepts of diversified risk and non-diversified risk. The unique or the unsystematic risk of a security can be diversified when it is combined with other securities to form a well - diversified portfolio. On the other hand, the market or the systematic risk of the security cannot be diversified because like other securities, it also moves with the market.

DETERMINANTS OF BETA:We have explained that beta is the ration of covariance between returns on market and a security to variance of the market returns. But what drives the variance and covariance? The variance and covariance and therefore, beta depend on three fundamental factors:

1} Nature of Business 2} Operating Leverage 3} Financial Leverage

1} NATURE OF BUSINESS:All economies go through business cycles. Firms behave differently with business cycle. The earnings of some companies fluctuate more with the business cycle. Their earnings grow during the growth of phase of business cycle and decline during the contraction phase. We must distinguish between the earnings variability and the earnings cyclicality. A companys earnings may be highly variable, but it may not have high beta. The earnings variability is an example of a specific risk that can be diversified. Cyclicality of a companys earnings, on the other hand, is the variability of a companys vis--vis the aggregate earnings of the economy.

2} OPERATING LEVERAGE:Operating leverage refers to the use of fixed costs. The degree of operating leverage is defined as the change in a companys earnings before interest and tax due to change in sales. Since variable costs change in direct proportion of sales and fixed costs remain constant, the variability in EBIT when sales change is caused by fixed costs. Higher the fixed cost, higher the variability in EBIT for a given change in sales.

Other things remaining the same, companies with higher operating leverage (because of higher fixed costs) are more risky. Operating leverage intensifies the effect of cyclicality on a companys earnings. As a consequence, companies with higher degree of operating leverage have high betas.

3} FINANCIAL LEVERAGE:Financial Leverage refers to debt in a firms capital structure. Firms with debt in the capital structure are called levered firms. The interest payments on debt are fixed irrespective of the firms earnings. Hence, interest charges are fixed costs of debt financing. The fixed cost of operations results in operating leverage and cause EBIT to vary with changes in sales. Similarly, the fixed financial costs result in financial leverage and cause profit after tax to vary with changes in EBIT. Hence, the degree of financial leverage is defined as the change in a companys profit after tax due to change in its EBIT. Since financial leverage increases the firms (financial) risk, it will increase the Beta of the firm.

BETA ESTIMATION AND THE COST OF BETA

Beta is the measure of systematic risk and it is the ratio of covariance between Market return and the securitys return to the market return variance: Beta also calculated by the market or index model. In the market model, we regress returns on a security against returns of the market index. The market Model is given by the following regression equation: j j m j R R e Where Rj is the expected return on security j, Rm is the expected market Return, is intercept, j is slope of the regression and ej is the error term (with a Zero mean and constant standard deviation). The slope, j, of the regression Measures the variability of the securitys returns relative to the market returns and It is the securitys beta. Problems in Beta Estimation: In practice, the market portfolio is approximated by a well-diversified share price index. We have several prices Indices available in India. Notice that these indices include only shares of companies. In theory, the market portfolio should include all risky assets shares, Bonds, gold, silver, real estate, art objects in computing beta by regression, we need data on returns on market index and the security for which beta is estimated over a period of time. There is no theoretically determined time period and time intervals for calculating beta. The time period and the time interval may vary. The returns maybe measured on a daily, weekly or monthly basis. One should have sufficient number of Observations over a reasonable length of time. the return on a share and market index may be calculated as total return; that is, dividend yield plus capital gain. In practice, one may use capital gains/loss Or price returns [i.e. Pt/Pt-1 1] rather total returns to estimate beta of a.

INDUSTRIAL V/S COMPANY BETA

We show the NSE calculated betas of the software companies. You may notice that betas for software companies are generally high, number of companies have very close to or more than two. There is also evidence of wide differences in betas companies.

Complete Trading Strategies

In the opening paragraph we stated that along with the important contributions this MQP makes to the academic research on trading, we also target individual investors who are willing to challenge their principles to achieve higher returns and peace of mind. We believe that the only way to consistently compare different approaches of trading CAN SLIM stocks is to develop complete trading strategies. The characteristics and principles embedded in a complete trading strategy allow for the collection and analysis of measurable data and their interpretation to form conclusive suggestions to our audience as to how to invest in CAN SLIM stocks. Complete trading strategies provide us with insight into many areas but more importantly they do not allow us to confuse ourselves and limit our performance by making decisions we are neither intellectually nor psychologically capable of doing. Many people believe that trading is all about predicting where the market is going and being right all the time. In reality, the market is comprised of thousands of individuals taking positions every second so it is delusional, useless and expensive to think that you can time its direction or understand its workings. An obvious question arises: If I cannot predict the market, does that mean I cannot outperform it and I should simply invest in a mutual fund getting the average return of S&P 500? The answer is short: No. A guru of trading Charlie Wright, whose book Trading as a Business we refer to numerous times in this MQP, argues that successful traders make money because they do not predict the market but rather trade it correctly.

The latter is achieved by following sound trading rules which have nothing to do with predicting the market.

In order to be profitable in the long-run trading requires a disciplined approach to developing a complete trading strategy by following proper trading principles. In our MQP these take the form of five steps:

1. Set-up: Decide under what conditions you will enter the market

2. Entry: Decide how exactly you will enter the market

3. Exit with a profit: Decide how to exit the market and take your profits

4. Exit with a loss (Money Management Stop): Decide how much you are willing to lose at each trade

5. Cash Management: Decide how much of your capital to allocate to each Position Due to the complexity of creating an algorithm for implementing money management using Trade Station, we do not use this aspect of the complete trading strategy in our MQP. We focus on comparing the set-up while keeping the entry, the exit with a profit and the money management stops constant. In the next five subsections we will walk you through the details of each one of these rules for successful trading.

INTRODUCTION:

Beta Analysis can be approached by focusing on flow variable, such as earning cash flows or dividends, or on a stock variable such as individual assets and liabilities. In practice, these alternative approaches rarely give equivalent values. The investment community is continually searching for new ways of detecting mispriced securities, changes in the models used in this searcher can occur for a variety of reasons new analytical or empirical insight new data bases, new disclosure by firms new statistical tools, ad new developments in computer technology change can also be in clouded by the need to develop in house replication of products already available from competitors. The price to earnings ratio can be used to gain insight in to the relationship between current earnings, the capital market expectations of future earnings, when using price-to-earnings, ratio, it is important to distinguish between the permanent and the transitory components of reported earnings. When pricing Beta, the capital market appears to have a multiyear rather than a singleyear horizon and earnings are (in past) function of the accounting methods used in their computation. The valuation task is relatively straight forward in case of bonds and preference shares, because benefits are generally constant and reasonably certain, Beta Analysis is difficult and different because the return on Beta is uncertain and can change from time to time. It is size of the return and the degree of fluctuation (i.e. risk) which together determine the value of a Beta share to the investor. Therefore forecasting abilities of the analyst are for more crucial in the Beta analysis. Hence, the valuation of Beta assumes an important role in buying the Beta by the retail investors and also in other areas of investment decision.

1.2 Statement of the Problem:

Reviewing of existing literature has revealed variety of models to value the Beta. All these models suffer from their respective limitations. No comprehensive and realistic model is suggested to value the Beta. Hence in this study, an attempt is made to determine the Beta value taking a title Beta Analysis A case Study of Anand Rathi Co. Ltd.

1.3 Objectives of the Study:

The following objectives were tentatively set for our study. 1. To determine the value of Beta stock using three models such as CDDM, PEM and BVM. 2. To determine the intrinsic worth of Beta in weighted manner. 3. To know the reasons responsible for the change in value of Beta over the study period, and 4. To offer recommendation in the light of our findings.

1.4 Scope of the Study:

Market Research is the part of the marketing information system. It is a fundamental concept usually designed to aid market planning and often involves of the company. Today Indian market is flooded with numerous companies with lot of better facilities to the investors.

Further this study would cover the requirements of the company to analyze the Beta of Different companies. So that decision on increase /decrease of the return on the investment of different companies.

1.5 Limitations of the Study:

Inspire of the advantages of the study this study suffers from the following limitations. 1. No. detailed study relating to the topic is undertaken 2. The study is applied only to Anand Rathi Co. Ltd. 3. No comparison has been made between manufacturers of Anand Rathi Co. Ltd. 4. No primary sources of information like questionnaire, interviews etc, is undertaken. It is fully based on secondary source of information. 5. The Secondary data also collected from website, goole.com, Yahoosearch.com, bseindia.com, nseindia.com hindalco.com

1.6 RESEARCH METHODOLOGY

This research study has been based on descriptive and explanative and exploratory method. It describes securities market in India, and explains risk and returns involved in equity investment. Finally it explores various alternatives regarding equity investment.

TOOLS OF DATA COLLECTION

The present data is based upon secondary data sources:

a) Data collected from journals, magazines and newspapers. b) Data collected from the reference books.

Table4.1: showing that EPS, DPS And Market Price of the Indian Oil Company Ltd.

(Source: From Indian Oil Company Ltd)

As per the Indian Oil company Ltd, in the year 2008 the EPS was in Rs.4 per share DPS was Rs.1.6 and the market price of the per share was Rs.12 at the time ;of 2012 it were raised from 4 to 8 EPS and DPS Rs. 1.6 to 3.2 and the Market Price were raised Rs. 12 to 14.5.The companys performance shows that the market price and Dividend per share and Earning Per share continuously going should be increased.

Graph 4.1: showing that EPS, DPS And Market Price of the Indian Oil Company Ltd.

Table 4.2: Beta calculation for Jaya InfoTech Limited

Where, Rj is expected return on security J, Rm is expected market return, is intercept, j is slope of regression and ej is the error term the slope j , of the regression measures the variability of the securities returns relative to the market returns and it is the beta. Beta is the ratio of covariance between the securities returns and the market returns to the variance of market returns.

Graph: 4.2 Beta calculation for Jaya InfoTech Limited

Table: 4.3 Table shows the Beta of the software companies.

(Source: Collected from Sensex) The above table shows that Beta of 8 different companys , in that table the CMC company Beta was 1.32 it is lowest among the 8companys and the GTL company Beta was highest that is 3.23.

Graph: 4.3 Table shows the Beta of the software companies

Table:4.4 Table shows that Beta and Risk-free Rate of Return.

(Source: Collected from Sensex)

The above table shows that the Beta of Tata Power was the lowest among the 6 companies and Risk free return was 5.80%, in the same way the Infosys Company Beta was highest of among the 6 companys i.e. 1.79.

Graph:4.4 Table shows that Beta and Risk-free Rate of Return.

Table: 4.5 Table shows Market Premium and Expected Return of Different Companys

(Source: Collected from Sensex)

The above table shows that the lowest Expected Return of Tata Power and Telco Company was respectively 18.23% and 18.79% and Market Premium was 9%, and Highest Expected Return was 25.85% of the Infosys Company and the Market Premium was 9%.

Graph: 4.5 Table shows Market Premium and Expected Return of Different Companys.

Table: 4.6 Table shows Intercept and Beta of Different Companys.

(Source: Collected from Sensex) The above table shows that the ACC Companys lowest Intercept was 0.002 and the lowest Beta was 0.3 of the Nestle Company and the Highest Intercept was 0.0276 of Satyam Company and the Highest Beta was 2.09 of the Satyam Company.

Graph:4.6 Table shows Intercept and Beta of Different Companys.

Table: 4.7 Table shows the Average Return and Standard Deviation of Return.

(Source: Collected from Sensex)

The above table shows that the lowest Average Return was 0.0011 of the HPCL Company and Highest Average Return was 0.286 of Satyam Company and Lowest Sandra Deviation of Return was 0.0459 of the Nestle Company and the Highest Standard Deviation of Return was0.1073 of the Satyam Company.

Graph : 4.7 Table shows the Average Return and Standard Deviation of Return.

FINDINGS
The Indian oil co. Ltd, EPS were decrease in the year 2008 and 2011.market price was increased 12 and 11.5. The DPS of Indian Oil Co. Ltd, were decrease in the year 2008 &09 but market price were increased at the same time. Beta of Jaya infotech Ltd, the average Rm 5.48 & Rj 3.95. In the software company the beta of CMC company was 1.32 it is better to comparing GTL company. The risk free rate of return on Beta was 0.97 return is 5.8% but the Infosys company Beta was 1.79 but return is same. The ACC intercept is 0.002 and Beta is 1.44 if we compare to Bajaj intercept it is in i.e. 0.0022 and Beta is 0.62. HPCL Average return is 0.0011 And Standard return is 0.0581 but ACC Average return is 0.0026 and standard return is 0.0732.

CONCLUSION:
From this study and after anglicizing it the Beta of the Portfolio companies. Set on the base of 1.5 beta And Market return of Portfolio of securities. So the return on investment in different portfolio sector is depend on companies profits, risk market return and distribution of dividend, after analyzing of Beta we can understand how much the risk and return is there on the investment of investors in different sectors of portfolio.

SUGGESTIONS
The Indian oil company EPS and market price should increase. The Beta of Jay InfoTech Ltd should be 0.5. GTL co. Ltd, it should decrease its value of Beta. Infosys co. Beta is 1.97 but rate of Beta is lowest so it has to improve. ACC intercept is 0.002 but Beta 1.44 it is not better. Standard return is low so it should improve.

BIBLIOGRAPHY

Security analysis and portfolio management - Preeti Singh Financial Management -M.Y Khan Financial Management -I M Pande Accounting for managerial Decision - S.P Gupta

Website:
www.rathi.com www.bse.com www.nse.com

ABBREVIATIONS

EPS- Earning Per Share

Rm- Market Return Rj -Stock Return SDV- Standard deviation V- Value MPS- Market Price of Share