Académique Documents
Professionnel Documents
Culture Documents
Submitted
In the partial fulfillment of the Degree of
Master of Business Administration
By
Chirag Naresh Patel
Enrollment No. EIILMU/09/F718
Under the Guidance of:
Prof. Nimesh Bhatt
International Business School
Submitted To:
International Business School
EIILM University
Ahmedabad
July, 2010
BATCH: 2009-2011
1
INDEX
Rank Particulars Page No.
1. Certificate by Guide 4
2. Certificate by Mentor 5
3. Candidates Statement 6
4. Preface 7
5. Acknowledgement 8
6. Executive Summery 9
7. Objective of Study 10
About Mutual Fund 11
8. Introduction 12
9. History of Mutual Fund 14
10. Organization Of Mutual Fund 17
11. The way and type to invest in Mutual Fund 19
12. Regulatory of mutual Fund Scheme 20
13. Types of Mutual Fund Scheme 21
14. SEBI Registered Mutual Fund 24
15. Points to measure M.F Performance 26
16. Procedure for registering M.F. with SEBI 27
17. How to reduce risk while investing 28
18. Growth in assets in Management 30
19. Advantages of Mutual Fund 31
20. Disadvantage of Mutual Fund 33
Company Details 34
21. Snapshot of “India Infoline Ltd” 35
22. History 36
23. Milestones 37
24. About India Infoline Ltd. 39
25. Vision statement 40
26. Management team 41
27. Contact details 44
28. Company’s structure 45
29. Unique Approaches 48
30. Assets under Management 49
31. NFO Period from 1st June to 3rd July 2010 50
32. Invest online 51
33. Philosophy on Corporate Governance 53
34. Financial Statement of IIFL 55
Research Methodology 57
35. Research Methodology 58
36. Hypothesis 59
37. Data analysis 69
Summery and Conclusion 83
38. Findings 84
39. Suggestion 85
40. Limitations 86
41. Conclusion 87
42. Bibliography 88
Annexure 89
2
43. Questionnaire 89
44. Different Terminology 92
This is to certify that the contents of this report entitled “Awareness Regarding Mutual fund” by
Chirag Naresh Patel (Enrollment No. EIILMU/09/F718) submitted to International Business
School for the Award of Master of Business Administration (MBA Semester-II) is original
research work carried out by him/her/them under my supervision.
This report has not been submitted either partly or fully to any other University or Institute for
award of any degree or diploma.
3
Date: 10 July 2010
Place: Ahmedabad
4
CERTIFICATE BY THE MENTOR
This is to certify that the contents of this report entitled “Awareness Regarding Mutual Fund” by
Chirag Naresh Patel (Enrollment No. EIILMU/09/F718) submitted to International Business
School, Ahmedabad for the Award of Master of Business Administration (MBA Semester-II) is
original research work carried out by him/her under my mentoring. I, hereby certify the
authenticity of the data and facts mentioned in the report.
This report has not been submitted either partly or fully to any other University or Institute for
award of any degree or diploma.
5
CANDIDATE’S STATEMENT
I hereby declare that the work incorporated in this report entitled “Awareness Regarding Mutual
Fund” in partial fulfillment of the requirements for the award of Master of Business
Administration (Sem.- II) is the outcome of original study undertaken by me and it has not been
submitted earlier to any other University or Institution for the award of any Degree or Diploma.
6
PREFACE
MBA education brings its students in direct contact with the real corporate world through
industrial training. The MBA program provides its students with an in depth study of various
managerial activities that are performed in any organization.
I have undergone my summer training at India Infoline Ltd. It is one of the leading mutual fund
companies in the country. I feel great pleasure to present this report work after my training at
India Infoline Ltd. that produced to be golden opportunity for me by enriching my knowledge
by comparing my theoretical knowledge with the managerial skill and application.
Simple language has been used throughout the report. Report is illustrated with figure, charts and
diagrams as and when required.
7
ACKNOWLEDGEMENT
“Expression of feelings by words makes them less significant when it comes to make
statement of gratitude”
It is with a sense of gratitude that I acknowledge the effort of a whole host of well-wishers who
have in some way or the other contributed in their own special ways to the success of this effort.
Individual effort alone can never contribute in totality, to the successful completion of any
venture. At first, I wish to express my sincere gratitude to Mr. Janardan vayeda sir who has
give me lots of support and encourage for this project, who has guide me throughout the project.
I would also like to thank other member of the company like Miss. Sweta Sorathiya and other
company members.
I would also like to thank Prof. Nimesh Bhatt has also help me as a project guide of the college
whenever I am in need.
How can I forget my Parents who rendered me not only financial support but also a moral
support without which I could not have completed my project.
8
EXECUTIVE SUMMARY
The India Info line group, comprising the holding company, India Info line Limited and
its wholly-owned subsidiaries, straddle 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, Govt. bonds and other
small savings instruments to loan products and Investment banking. India Info line also owns and
manages the websites www.indiainfoline. Command www.5paisa.com The Company has a
network of 976 business locations (branches and sub-brokers) spread across 365 cities and towns.
It has more than 800,000 customers.
In today’s competitive world there are many goods chasing few customers some are trying
it expands their size and share of existing market. As a result there are loser and winners.
Winners are those who carefully analyze needs identify opportunities and create aloe rich offers
for target customer.
The objective of the market research to determine the demand and supply and use of the
product and competitors study so as to get the total market scenario of the product for analyzing
market problem research is needed. A firm can obtained market research in number of ways. It
can hire market research firm or it can ask student to design and carry out market research
project.
These marketing problems and opportunities if entrust to the student of marketing.
Especially when they seek the same during the project gives opportunities to apply their
theoretical knowledge and managerial knowledge.
India infoline.com/5paisa.com is related tosh remarket, it is equity to caused organization
tracing its lineage to SSKL, a veteran solution company with over 8 decades of experience in the
lead in stock market.
9
OBJECTIVES OF THE STUDY
1. The objective of the research is to study and analyze the awareness level of investors of
mutual funds.
3. An attempt has been made to measure various variable’s playing in the minds of investors in
terms of safety, liquidity, service, returns, and tax saving.
6. To analyze the comparative study between other leading mutual funds in the present market.
8. Finding out ways and means to improve on the services by India Infoline Ltd.
10
ABOUT
MUTUAL
FUND
11
INTRODUCTION
Mutual fund is an investment company that pools money from shareholders and invests in a
variety of securities, such as stocks, bonds and money market instruments. Most open-end
Mutual funds stand ready to buy back (redeem) its shares at their current net asset value, which
depends on the total market value of the fund's investment portfolio at the time of redemption.
Most open-end Mutual funds continuously offer new shares to investors. Also known as an open-
end investment company, to differentiate it from a closed-end investment company. Mutual funds
invest pooled cash of many investors to meet the fund's stated investment objective. Mutual
funds stand ready to sell and redeem their shares at any time at the fund's current net
asset value: total fund assets divided by shares outstanding.
In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as disclosed in offer
document. Investments in securities are spread across a wide cross-section of industries and
sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not
12
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. The profits or losses are shared by the investors in proportion to their
investments. The Mutual funds normally come out with a number of schemes with different
investment objectives which are launched from time to time. In India, A Mutual fund is required
to be registered with Securities and Exchange Board of India (SEBI) which regulates securities
markets before it can collect funds from the public. In Short, a Mutual fund is a common pool of
money in to which investors with common investment objective place their contributions that are
to be invested in accordance with the stated investment objective of the scheme. The investment
manager would invest the money collected from the investor in to assets that are defined/
permitted by the stated objective of the scheme. For example, an equity fund would invest equity
and equity related instruments and a debt fund would invest in bonds, debentures, gilts etc.
Mutual fund is a 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
13
HISTORY OF THE MUTUAL FUND INDUSTRY
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank. The history of mutual funds in India can
be broadly divided into four distinct phases
Phase - 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development
Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The
first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700
crores of assets under management.
14
Second Phase - 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and
Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).
SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can
bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual
Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established
its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores.
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in
which the first Mutual Fund Regulations came into being, under which all mutual funds, except
UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual
Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds setting
up funds in India and also the industry has witnessed several mergers and acquisitions. As at the
end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The
Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other
mutual funds.
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
15
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of
Unit Trust of India, functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the
erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management
and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund
Regulations, and with recent mergers taking place among different private sector funds, the
mutual fund industry has entered its current phase of consolidation and growth. As at the end of
September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.
16
THE STRUCTURE CONSISTS OF
SPONSOR
17
Sponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the
Investment managed and meet the eligibility criteria prescribed under the Securities and
Exchange Board of India (Mutual Fund) Regulations, 1996. The sponsor is not responsible or
liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial
contribution made by it towards setting up of the Mutual Fund.
TRUST
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts
Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.
TRUSTEE
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The
main responsibility of the Trustee is to safeguard the interest of the unit holders and ensure that
the AMC functions in the interest of investors and in accordance with the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed
and the Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are
independent directors who are not associated with the Sponsor in any manner.
ASSET MANAGEMENT COMPANY (AMC)
The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC
is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an
asset management company of the Mutual Fund. At least 50% of the directors of the AMC are
independent directors who are not associated with the Sponsor in any manner. The AMC must
have a net worth of at least 10 cores at all times.
REGISTRAR AND TRANSFER AGENT
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the
Mutual Fund. The Registrar processes the application form, redemption requests and dispatches
account statements to the unit holders. The Registrar and Transfer agent also handles
communications with investors and updates investor records.
18
Mutual funds normally come out with an advertisement in newspapers publishing the date of
launch of the new schemes. Investors can also contact the agents and distributors of mutual funds
who are spread all over the country for necessary information and application forms. Forms can
be deposited with mutual funds through the agents and distributors who provide such services.
Now days, the post offices and banks also distribute the units of mutual funds. However, the
investors may please note that the mutual funds schemes being marketed by banks and post
offices should not be taken as their own schemes and no assurance of returns is given by them.
The only role of banks and post offices is to help in. distribution of mutual funds schemes to the
investors. Investors should not be carried away by commission/gifts given by agents/distributors
for investing in a particular scheme. On the other hand they must consider the track record of the
mutual fund and should take objective decision.
19
The capital market regulates the mutual funds in India. SEBI requires all mutual funds to
be registered with them. SEBI issues guidelines for all mutual funds operations-
investment, accounts, expenses etc. Recently, it has been decided that Money Market
Mutual Funds of registered mutual funds will be regulated by SEBI through (Mutual
Fund) Regulations 1996.
RBI
RBI, a supervisor of the Banks owned Mutual Funds-As banks in India come under the
regulatory Jurisdiction of RBI, banks owned funds to be under supervision of RBI and
SEBI. RBI has supervisory responsibility over all entities that operate in the money
markets.
STOCK EXCHANGE
Stock Exchanges are Self-regulatory organizations supervised by SEBI. Many closed
ended funds of AMCs are listed as stock exchanges and are traded like shares.
1. BY STRUCTURE
20
1.1. Open – Ended Schemes.
1.2. Close – Ended Schemes.
1.3. Interval Schemes.
2. BY INVESTMENT OBJECTIVE
2.1. Growth Schemes.
2.2. Income Schemes.
2.3. Balanced Schemes.
3. OTHER SCHEMES
3.1. Tax Saving Schemes.
3.2. Special Schemes.
3.3. Index Schemes.
3.4. Sector Specific Schemes.
22
Subject to such conditions and limitations, as prescribed under Section 88 of the Income-tax Act,
1961.
23
1. FORTIS Mutual fund
2. Alliance Capital Mutual fund,
3. AIG Global Investment Group Mutual fund
4. Benchmark Mutual fund,
5. Baroda Pioneer Mutual fund
6. Birla Mutual fund
7. Bharti AXA Mutual fund
8. Canara Robeco Mutual fund
9. CRB Mutual fund (Suspended)
10. DBS Chola Mutual fund,
11. Deutsche Mutual fund
12. DSP Blackrock Mutual fund,
13. Edelweiss Mutual fund
14. Escorts Mutual fund,
15. Franklin Templeton Mutual fund
16. Fidelity Mutual fund
17. Goldman Sachs Mutual fund
18. HDFC Mutual fund,
19. HSBC Mutual fund,
20. ICICI Securities Fund,
21. IL & FS Mutual fund,
22. ING Mutual fund,
23. ICICI Prudential Mutual fund
24. IDFC Mutual fund,
25. JM Financial Mutual fund
26. JP Morgan Mutual fund
27. Kotak Mahindra Mutual fund,
29. LIC Mutual fund
31. Morgan Stanley Mutual fund
32. Mirae Asset Mutual fund
33. Principal Mutual fund
34. Quantum Mutual fund,
35. Reliance Mutual fund
36. Religare AEGON Mutual fund
24
37. Sahara Mutual fund,
38. SBI Mutual fund
39. Shriram Mutual fund
40. Sundaram BNP Paribas Mutual fund,
41. Taurus Mutual fund
42. Tata Mutual fund,
43. UTI Mutual fund
25
POINTERS TO MEASURE MUTUAL FUND
PERFORMANCE
26
WHAT IS THE PROCEDURE FOR
REGISTERING A MUTUAL FUND WITH SEBI?
An applicant proposing to sponsor a Mutual fund in India must submit an application in Form
A along with a fee of Rs.25, 000. The application is examined and once the sponsor satisfies
certain conditions such as being in the financial services business and possessing positive net
worth for the last five years, having net profit in three out of the last five years and possessing
the general reputation of fairness and integrity in all business transactions, it is required to
complete the remaining formalities for setting up a Mutual fund. These include inter alia,
executing the trust deed and investment management agreement, setting up a trustee
company/board of trustees comprising two- thirds independent trustees, incorporating the
asset management company (AMC), contributing to at least 40% of the net worth of the
AMC and appointing a custodian. Upon satisfying these conditions, the registration
certificate is issued subject to the payment of registration fees of Rs.25.00 lacs for details; see
the SEBI (Mutual funds) Regulations, 1996.
27
HOW TO REDUCE RISK WHILE INVESTING:
Any kind of investment we make is subject to risk. In fact we get return on our
investment purely and solely because at the very beginning we take the risk of parting
with our funds, for getting higher value back at a later date. Partition itself is a risk.
Well known economist and Nobel Prize recipient William Sharpe tried to segregate
the total risk faced in any kind of investment into two parts - systematic (Systemic)
risk and unsystematic (Unsystemic) risk.
Systematic risk is that risk which exists in the system. Some of the biggest examples
of systematic risk are inflation, recession, war, political situation etc.
Inflation erodes returns generated from all investments e.g. If return from fixed
deposit is 8 per cent and if inflation is 6 per cent then real rate of return from fixed
deposit is reduced by 6 per cent.
Similarly if returns generated from equity market is 18 per cent and inflation is still 6
per cent then equity returns will be lesser by the rate of inflation. Since inflation exists
in the system there is no way one can stay away from the risk of inflation.
Economic cycles, war and political situations have effects on all forms of investments.
Also these exist in the system and there is no way to stay away from them. It is like
learning to walk.
Anyone who wants to learn to walk has to first fall; you cannot learn to walk without
falling. Similarly anyone who wants to invest has to first face systematic risk; there
can never make any kind of investment without systematic risk.
28
Another form of risk is unsystematic risk. This risk does not exist in the system and
hence is not applicable to all forms of investment. Unsystematic risk is associated
with particular form of investment.
Suppose we invest in stock market and the market falls, then only our investment in
equity gets affected OR if we have placed a fixed deposit in particular bank and bank
goes bankrupt, than we only lose money placed in that bank.
While there is no way to keep away from risk, we can always reduce the impact of
risk. Diversification helps in reducing the impact of unsystematic risk. If our
investment is distributed across various asset classes the impact of unsystematic risk
is reduced.
If we have placed fixed deposit in several banks, then even if one of the banks goes
bankrupt our entire fixed deposit investment is not lost.
Similarly if our equity investment is in Tata Motors, HLL, Infosys, adverse news
about Infosys will only impact investment in Infosys, all other stocks will not have
any impact.
Portfolio of mutual funds consists of multiple securities and hence adverse news about
single security will have nominal impact on overall portfolio.
29
30
ADVANTAGES OF MUTUAL FUNDS
Professional Management.
The major advantage of investing in a mutual fund is that you get a
professional money manager to manage your investments for a small fee. You
can leave the investment decisions to him and only have to monitor the
performance of the fund at regular intervals.
Diversification.
Considered the essential tool in risk management, mutual funds make it
possible for even small investors to diversify their portfolio. A mutual fund
can effectively diversify its portfolio because of the large corpus. However, a
small investor cannot have a well-diversified portfolio because it calls for
large investment. For example, a modest portfolio of 10 bluechip stocks calls
for a few a few thousands.
Convenient Administration.
31
Mutual funds offer tailor-made solutions like systematic investment plans and
systematic withdrawal plans to investors, which is very convenient to
investors. Investors also do not have to worry about investment decisions, they
do not have to deal with brokerage or depository, etc. for buying or selling of
securities. Mutual funds also offer specialized schemes like retirement plans,
children’s plans, industry specific schemes, etc. to suit personal preference of
investors. These schemes also help small investors with asset allocation of
their corpus. It also saves a lot of paper work.
Costs Effectiveness
A small investor will find that the mutual fund route is a cost-effective method
(the AMC fee is normally 2.5%) and it also saves a lot of transaction cost as
mutual funds get concession from brokerages. Also, the investor gets the
service of a financial professional for a very small fee. If he were to seek a
financial advisor's help directly, he will end up paying significantly more for
investment advice. Also, he will need to have a sizeable corpus to offer for
investment management to be eligible for an investment adviser’s services.
Liquidity.
You can liquidate your investments within 3 to 5 working days (mutual funds
dispatch redemption cheques speedily and also offer direct credit facility into
your bank account i.e. Electronic Clearing Services).
Transparency.
Mutual funds offer daily NAVs of schemes, which help you to monitor your
investments on a regular basis. They also send quarterly newsletters, which
give details of the portfolio, performance of schemes against various
benchmarks, etc. They are also well regulated and Sebi monitors their actions
closely.
Tax benefits.
You do not have to pay any taxes on dividends issued by mutual funds. You
also have the advantage of capital gains taxation. Tax-saving schemes and
pension schemes give you the added advantage of benefits under section 88.
Affordability
Mutual funds allow you to invest small sums. For instance, if you want to buy
a portfolio of blue chips of modest size, you should at least have a few lakhs
32
of rupees. A mutual fund gives you the same portfolio for meager investment
of Rs.1,000-5,000. A mutual fund can do that because it collects money from
many people and it has a large corpus.
Professional Management-
Did you notice how we qualified the advantage of professional management with the
word "theoretically"? Many investors debate over whether or not the so-called
professionals are any better than you or I at picking stocks. Management is by no
means infallible, and, even if the fund loses money, the manager still takes his/her cut.
We'll talk about this in detail in a later section.
Costs –
Mutual funds don't exist solely to make your life easier--all funds are in it for a profit.
The Mutual fund industry is masterful at burying costs under layers of jargon. These
costs are so complicated that in this tutorial we have devoted an entire section to the
subject.
Dilution –
It's possible to have too much diversification (this is explained in our article entitled
"Are You Over-Diversified?"). Because funds have small holdings in so many
different companies, high returns from a few investments often don't make much
difference on the overall return. Dilution is also the result of a successful fund getting
too big. When money pours into funds that have had strong success, the manager often
has trouble finding a good investment for all the new money.
Taxes –
When making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-
gain tax is triggered, which affects how profitable the individual is from the sale. It
might have been more advantageous for the individual to defer the capital gains
liability.
Equity funds-
if selected in the right manner and in the right proportion, have the ability to play an
important role in achieving most long-term objectives of investors in different
segments. While the selection process becomes much easier if you get advice from
professionals, it is equally important to know certain aspects of equity investing
yourself to do justice to your hard earned money.
33
COMPANY
DETAILS
34
SNAPSHOT OF “India Infoline Ltd.”
Date of Establishment October 1995
Revenue Rs. 2654.1 million (2008-2009)
Market Cap Rs. 5110.71 (April 21 2009)
Corporate Address 84, Nariman Bhavan, Nariman Point, Mumbai -
400021, Maharashtra, India
Branches India
Management Team Nirmal Jain – Founder
R Venkataraman-- Co-promoter and Executive
Director
Sat Pal Khattar- Non Executive Director
Nilesh Vikamsey- Independent Director
Kranti Sinha - Independent Director
35
Infoline Group also contains India Infoline Media and
Research Services Limited, India Infoline Commodities
Limited, India Infoline Marketing & Services, India
Infoline Investment Services Limited and IIFL (Asia)
Private Limited
HISTORY
We were founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider. We gradually evolved into a one-
stop financial services solutions provider. Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1,361 business locations and a
presence in 428 cities. Our global footprint extends across geographies with offices in New
York, Singapore and Dubai. We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE).
We offser a wide range of services and products comprising broking (retail and institutional
equities and commodities), wealth management, credit and finance, insurance, asset
management and investment banking.
We are registered with the BSE and the NSE for securities trading, MCX, NCDEX and
DGCX for commodities trading, CDSL and NSDL as depository participants. We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager. We
also received the FII license in IIFL Inc. IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations. Two subsidiaries – India Infoline Investment Services and Moneyline Credit
Limited – are registered with RBI as non-deposit taking non-banking financial services
companies. India infoline Housing Finance Ltd, the housing finance arm, is registered with
the National Housing Bank.
36
MILESTONES
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs, banks, consulting firms and corporates.
1999
2000
2004
Acquired commodities broking license; launched Portfolio Management Service.
2005
2006
2007
2008
Launched wealth management services under the ‘IIFL Wealth’ brand; set up India
37
Infoline Private Equity fund; received the Insurance broking license from IRDA;
received the venture capital license; received in principle approval to sponsor a mutual
fund; received ‘Best broker- India’ award from Financeasia; ‘Most Improved Brokerage-
India’ award from Asiamoney.
2009
Received registration for a housing finance company from the National Housing Bank;
received ‘Fastest growing Equity Broking House - Large firms’ in India by Dun &
Bradstreet.
38
“India Infoline Ltd.”
India Info Line is a one-stop financial services shop, most respected for quality of its
advice, personalized service and cutting-edge technology.
Vision Statement :
Our vision is to be the most respected company in the financial service space.
India Info line Group :
The India Info line group, comprising the holding company, india info line limited
and its wholly-owned subsidiaries, straddle 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,
goi bonds and other small savings instruments to loan products and investment
banking.
India Info line also owns and manages the websites www.indiainfoline.com and
www.5paisa.com the company has a network of over 2100 business locations
(branches and sub-brokers) spread across more than 450 cities and towns. the group
caters to approximately a million customers.
39
India Infoline Investment Services Limited
Diversified,
Addressing all customer segments
40
MANAGEMENT TEAM
Nirmal Jain, MBA (IIM, Ahmedabad) and a Chartered and Cost Accountant, founded
India’s leading financial services company India Infoline Ltd. in 1995, providing globally
acclaimed financial services in equities and commodities broking, life insurance and
mutual funds distribution, among others. Mr. Jain began his career in 1989 with
Hindustan Lever’s commodity export business, contributing tremendously to its growth.
He was also associated with Inquire-Indian Equity Research, which he co-founded in
1994 to set new standards in equity research in India.
Mr. R Venkataraman
Executive Director
41
senior managerial positions in ICICI Limited, including ICICI Securities Limited, their
investment banking joint venture with J P Morgan of USA and with BZW and Taib
Capital Corporation Limited. He was also Assistant Vice President with G E Capital
Services India Limited in their private equity division, possessing a varied experience of
more than 16 years in the financial services sector.
Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India Infoline
Ltd. comprises:
Mr Nilesh Vikamsey
Independent Director
Mr. Vikamsey, Board member since February 2005 - a practising Chartered Accountant
and partner (Khimji Kunverji & Co., Chartered Accountants), a member firm of HLB
International, headed the audit department till 1990 and thereafter also handles financial
services, consultancy, investigations, mergers and acquisitions, valuations etc; an ICAI
study group member for Proposed Accounting Standard — 30 on Financial Instruments
— Recognition and Management, Finance Committee of The Chamber of Tax
Consultants (CTC), Law Review, Reforms and Rationalization Committee and
Infotainment and Media Committee of Indian Merchants’ Chamber (IMC) and Insurance
Committee and Legal Affairs Committee of Bombay Chamber of Commerce and Industry
(BCCI).
Mr. Vikamsey is a director of Miloni Consultants Private Limited, HLB Technologies
(Mumbai) Private Limited and Chairman of HLB India.
42
Mr Sat Pal Khattar
Mr Sat Pal Khattar, - Board member since April 2001 - Presidential Council of Minority
Rights member, Chairman of the Board of Trustee of Singapore Business Federation, is
also a life trustee of SINDA, a non profit body, helping the under-privileged Indians in
Singapore. He joined the India Infoline board in April 2001. Mr Khattar is a Director of
public and private companies in Singapore, India and Hong Kong; Chairman of
Guocoland Limited listed in Singapore and its parent Guoco Group Ltd listed in Hong
Kong, a leading property company of Singapore, China and Malaysia.
Mr Kranti Sinha
Independent Director
Mr. Kranti Sinha — Board member since January 2005 — completed his masters from
the Agra University and started his career as a Class I officer with Life Insurance
Corporation of India. He served as the Director and Chief Executive of LIC Housing
Finance Limited from August 1998 to December 2002 and concurrently as the Managing
Director of LICHFL Care Homes (a wholly owned subsidiary of LIC Housing Finance
Limited). He retired from the permanent cadre of the Executive Director of LIC; served as
the Deputy President of the Governing Council of Insurance Institute of India and as a
member of the Governing Council of National Insurance Academy, Pune apart from
various other such bodies. Mr. Sinha is also on the Board of Directors of Hindustan
Motors Limited, Larsen & Toubro Limited, LICHFL Care Homes Limited, Gremach
Infrastructure Equipments and Projects Limited and Cinemax (India) Limited.
Mr Arun K. Purvar
Independent Director
Mr. A.K. Purvar – Board member since March 2008 – completed his Masters degree in
commerce from Allahabad University in 1966 and a diploma in Business Administration
in 1967. Mr. Purwar joined the State Bank of India as a probationary officer in 1968,
43
where he held several important and critical positions in retail, corporate and international
banking, covering almost the entire range of commercial banking operations in his
illustrious career. He also played a key role in co-coordinating the work for the Bank's
entry into the field of insurance. After retiring from the Bank at end May 2006, Mr.
Purwar is now working as Member of Board of Governors of IIM-Lucknow, joined IIM–
Indore as a visiting professor, joined as a Hon.-Professor in NMIMS and he is also a
member of Advisory Board for Institute of Indian Economic Studies (IIES), Waseda
University, Tokyo, Japan. He has now taken over as Chairman of IndiaVenture Advisors
Pvt. Ltd., as well as IL & FS Renewable Energy Limited. He is also working as
Independent Director in leading companies in Autoparts, Engineering and Consultancy.
CONTECT DETAILS
44
COMPANY STRUCTURE
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.
45
India Infoline Media and Research Services Limited.
The content services represent a strong support that drives the broking, commodities, mutual
fund and portfolio management services businesses. Revenue generation is through the sale
of content to financial and media houses, Indian as well as global.
It undertakes equities research which is acknowledged by none other than Forbes as 'Best of
the Web' and '…a must read for investors in Asia'. India Infoline's research is available not
just over the internet but also on international wire services like Bloomberg (Code: IILL),
Thomson First Call and Internet Securities where India Infoline is amongst the most read
Indian brokers.
India Infoline Commodities Pvt Limited is engaged in the business of commodities broking.
Our experience in securities broking empowered us with the requisite skills and technologies
to allow us offer commodities broking as a contra-cyclical alternative to equities broking. We
enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges,
and recently acquired membership of DGCX. We have a multi-channel delivery model,
making it among the select few to offer online as well as offline trading facilities.
India Infoline Marketing and Services Limited is the holding company of India Infoline
Insurance Services Limited and India Infoline Insurance Brokers Limited.
(a) India Infoline Insurance Services Limited is a registered Corporate Agent with the
Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent
for ICICI Prudential Life Insurance Co Limited, which is India's largest private Life
Insurance Company. India Infoline was the first corporate agent to get licensed by IRDA in
early 2001.
(b) India Infoline Insurance Brokers Limited is a newly formed subsidiary which will carry
out the business of Insurance broking. We have applied to IRDA for the insurance broking
licence and the clearance for the same is awaited. Post the grant of license, we propose to also
commence the general insurance distribution business.
46
India Infoline Investment Services Limited
Consolidated shareholdings of all the subsidiary companies engaged in loans and financing
activities under one subsidiary. Recently, Orient Global, a Singapore-based investment
institution invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services.
This will help focused expansion and capital raising in the said subsidiaries for various
lending businesses like loans against securities, SME financing, distribution of retail loan
products, consumer finance business and housing finance business. India Infoline Investment
Services Private Limited consists of the following step-down subsidiaries.
(a) India Infoline Distribution Company Limited (distribution of retail loan products)
IIFL (Asia) Private Limited is wholly owned subsidiary which has been incorporated in
Singapore to pursue financial sector activities in other Asian markets. Further to obtaining the
necessary regulatory approvals, the company has been initially capitalized at 1 million
Singapore dollars.
47
COMPANY’S UNIQUE APPROACHES
48
ASSET UNDER MANAGEMENT
49
IDFC Mutual Fund has launched a new fund named as IDFC Capital Protection Oriented Fund - Series
II, a three year close ended income scheme. The scheme shall mature on 30 June 2013. The New Fund
Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 1 June
and closes on 30 June 2010.
The investment objective of the scheme is to protect the capital by investing in high quality fixed
income securities as the primary objective and generate capital appreciation by investing in equity and
equity related instruments as a secondary objective.
The scheme would allocate up to 16% of assets in equities & equity related securities with high risk
profile. It would further allocate 84% to 100% of assets in debt securities & money market instruments
(of which up to 30% would be in securitized instruments) with low to medium risk profile. Equity
Derivatives (futures and options) may be used in place of cash equities with the condition that the total
notional exposure together with the investments in equities will not exceed the allocation of the corpus
towards equity investments at any point of time.
The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under the
scheme during the NFO period.
Entry and entry load charge shall be nil for the scheme.
The Scheme's performance will be benchmarked against CRISIL MIP Blended Index.
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so effortless.
50
All you have to do is register with us and thats all. No paperwork no queues and No
registration charges.
If you are 5p customer use your existing login ID and Ledger (fund transfer) password.
Indiainfoline offers you a host of mutual fund and IPO choices under one roof; backed by
in-depth information and research to help you invest effortlessly.
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof, backed by in-depth
research and advice from research house and tools configured as investor friendly.Investing
in Mutual Funds has never been easier
Evaluate MF
Invest Wisely! Don't get caught in the trap of chasing performance. Buy a fund
because it meets an objective in your portfolio. Let us provide you platform where
you can search, research and compare funds across all fund families, asset classes
and objectives using this section.
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form/ paperwork.
The India Infoline Group is committed to placing the Investor First, by continuously striving to
increase the efficiency of the operations as well as the systems and processes for use of corporate
resources in such a way so as to maximize the value to the stakeholders. The Group aims at achieving
not only the highest possible standards of legal and regulatory compliances, but also of effective
52
management.
Committee
Audit Committee
Terms of reference & Composition, Name of members and Chairman: The Audit committee
comprises Mr Nilesh Vikamsey, Chairman of the Committee, Mr Sat Pal Khattar, Mr Sanjiv Ahuja
and Mr Kranti Sinha, three of whom are independent Directors. The Managing Director, the
Executive Director along with the Statutory and Internal Auditors are invitees to the Meeting. The
Terms of reference of this committee are as under: - To investigate into any matter that may be
prescribed under the provisions of Section 292A of The Companies Act, 1956 - Recommendation and
removal of External Auditor and fixation of the Audit Fees. - Reviewing with the management the
financial statements before submission of the same to the Board. - Overseeing of Company’s financial
reporting process and disclosure of its financial information. - Reviewing the Adequacy of the Internal
Audit Function.
Terms of reference & Composition, Name of members and Chairman: The Compensation /
Remuneration Committee comprises Mr Sanjiv Ahuja, Chairman of the Committee, Mr Nilesh
Vikamsey and Mr Kranti Sinha, all of whom are independent Directors. The Terms of reference of
this committee are as under: - To fix suitable remuneration package of all the Executive Directors and
Non Executive Directors, Senior Employees and officers i.e. Salary, perquisites, bonuses, stock
options, pensions etc. - Determination of the fixed component and performance linked incentives
alongwith the performance criteria to all employees of the company - Service Contracts, Notice
Period, Severance Fees of Directors and employees. - Stock Option details: whether to be issued at
discount as well as the period over which to be accrued and over which exercisable. - To conduct
discussions with the HR department and form suitable remuneration policies.
Details of the Members, Compliance Officer, No of Complaints received and pending and pending
transfers as on close of the financial year. The committee functions under the Chairmanship of Mr
Kranti Sinha, a Non-executive independent Director. The other Members of the committee are Mr
Sanjiv Ahuja, Independent Director and Mr R Venkataraman, Executive Director. Ms Komal Parikh,
Company Secretary is the Compliance Officer of the Company.
53
FINANCIAL STATEMENT OF INDIA INFOLINE LTD.
Balance sheet
(Rs.in Millions)
Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005
SOURCES OF FUNDS
+ Share Capital 566.80 571.03 501.67 451.01 316.22
Share Warrants & Outstandings 136.17 668.64 55.17 44.20 0.00
+ Reserves & Surplus 9778.84 9256.60 2340.81 1238.34 207.05
54
+ Unsecured Loans 1.03 1305.68 362.70 808.85 2.00
Total Debts 18.08 1305.68 809.52 823.87 15.68
Total Liabilities 10499.89 11801.95 3707.17 2557.42 538.95
APPLICATION OF FUNDS :
+ Loans (Non Current Assets) 0 0 0 0 0
Gross Block 1436.77 983.18 730.99 87.48 44.74
Less: Accumulated Depreciation 449.45 350.77 243.85 52.31 37.61
Less: Impairment of Assets 0 0 0.00 0 0
Net Block 987.32 632.41 487.14 35.17 7.13
Lease Adjustment A/c 0 0 0.00 0 0
Capital Work in Progress 45.13 4.91 0.00 0 0
Pre-operative Expenses pending 0 0 0.00 0 0
Assets in transit 0 0 0 0 0
+ Investments 8693.12 9156.80 1714.50 1002.49 403.09
Market Value of Quoted Investements 0 0.00 0 0.00 1.56
Current Assets, Loans & Advances
+ Inventories 5.61 13.09 0.00 0 0
+ Sundry Debtors 1035.29 3428.13 1307.23 54.88 14.90
+ Cash and Bank 4302.49 2143.71 950.79 20.91 20.33
+ Other Current Assets 0 0.00 0.00 0.00 0.00
+ Loans and Advances 2405.91 3112.99 2197.40 1721.63 133.85
Total Current Assets 7749.30 8697.92 4455.42 1797.42 169.08
Less : Current Liabilities and Provisions
+ Current Liabilities 5526.75 5148.54 2445.20 76.69 23.88
+ Provisions 1486.39 1567.44 510.26 202.99 16.47
Total Current Liabilities 7013.15 6715.98 2955.45 279.68 40.35
Net Current Assets 736.16 1981.94 1499.97 1517.74 128.73
Miscellaneous Expenses not written off 0 0 0 0 0
Deferred Tax Assets 38.15 25.89 5.80 2.01 0.00
Deferred Tax Liability 0.00 0.00 0.25 0.00 0.00
Deferred Tax Assets / Liabilities 38.15 25.89 5.56 2.01 0
Total Assets 10499.89 11801.95 3707.17 2557.42 538.95
Contingent Liabilities 3.41 0 0 0 0
Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005
No of Months 12 12 12 12 12
+ Operating Income 5715.35 6575.36 2828.46 449.12 213.17
Interest income 0 0.00 0.00 0.00 0.00
Net Sales 5715.35 6575.36 2828.46 449.12 213.17
EXPENDITURE :
Increase/Decrease in Stock 0 0 0.00 0 0
Purchase of Shares / Units 0 0 0.00 0 0
Employee Cost 1409.37 1325.42 539.96 0.38 0.66
+ Operating & Establishment Expenses 1824.72 1990.92 963.39 7.91 6.75
+ Administrations & Other Expenses 590.54 597.61 340.14 41.68 17.83
Provisions and Contigencies 9.90 21.31 20.69 0.53 1.31
55
Less: Pre-operative Expenses Capitalised 0 0 0 0 0
Total Expenditure 3834.52 3935.27 1864.18 50.49 26.55
Operating Profit (Excl OI) 1880.82 2640.09 964.28 398.63 186.62
+ Other Income 1.01 149.04 38.71 35.55 9.19
Operating Profit 1881.84 2789.14 1002.99 434.18 195.81
+ Interest 111.47 228.22 83.53 21.97 0.43
Depreciation 255.61 194.40 123.27 14.70 5.24
Profit Before Taxation & Exceptional Items 1514.76 2366.52 796.19 397.51 190.14
Exceptional Income / Expenses 0 -290.44 0.00 0 0
Profit Before Tax 1514.76 2076.07 796.19 397.51 190.14
+ Provision for Tax 456.50 789.20 274.97 132.81 15.40
Profits After Tax 1058.25 1286.87 521.22 264.69 174.74
+ Appropriations 2287.40 1760.99 604.69 265.49 0.79
Equity Dividend % 140.00 60.00 30.00 30.00 0
Earnings Per Share 3.71 22.54 10.39 5.87 5.53
Book Value 36.51 172.10 56.66 37.46 16.55
56
RESEARCH
METHODOLOGY
Research Methodology
57
Sampling Technique : Non-Probability Technique-
Convenience Sampling Method.
58
age * awareness Cross tabulation
Awareness
yes No Total
age 20-30 Count 7 6 13
% of Total 7.0% 6.0% 13.0%
Std. Residual -.4 .5
30-40 Count 29 17 46
% of Total 29.0% 17.0% 46.0%
Std. Residual .0 .0
40-50 Count 25 10 35
% of Total 25.0% 10.0% 35.0%
Std. Residual .6 -.8
50-above Count 2 4 6
% of Total 2.0% 4.0% 6.0%
Std. Residual -.9 1.2
Total Count 63 37 100
% of Total 63.0% 37.0% 100.0%
Chi-Square Tests
Exact
Sig.
Asymp. Sig. (2- Exact Sig. (1-
Value Df sided) (2-sided) sided) Point Probability
a
Pearson Chi-Square 3.799 3 .284 .292
Likelihood Ratio 3.727 3 .293 .313
Fisher's Exact Test 3.770 .289
Linear-by-Linear
.024b 1 .878 .896 .492 .104
Association
N of Valid Cases 100
a. 3 cells (37.5%) have expected count less than 5. The minimum expected count is
2.22.
b. The standardized statistic is -.154.
59
Interpretation:- The above chart and diagram shows that awareness of Mutual fund is more
in the age between 30 and 40.There are more people who have awareness regarding Mutual
Fund from 46 respondents 29 are aware it shows high awareness. People having age above 50
have not much awareness regarding Mutual fund from 6 respondents 4 are not aware and
only 2 are aware about Mutual Fund.
60
Hypotheses:-2 Occupation and awareness of Mutual Fund
61
Chi-Square Tests
Point
Asymp. Sig. (2- Exact Sig. Exact Sig. Probabilit
Value Df sided) (2-sided) (1-sided) y
Pearson Chi-Square 1.419a 4 .841 .848
Likelihood Ratio 1.447 4 .836 .846
Fisher's Exact Test 1.415 .866
b
Linear-by-Linear Association .220 1 .639 .666 .352 .062
N of Valid Cases 100
a. 2 cells (20.0%) have expected count less than 5. The minimum expected count is 2.59.
b. The standardized statistic is -.469.
Interpretation:-After analyzing all the data can say service people are more aware about
Mutual Fund and business person also are more aware among all the despondence. Students
are not more aware about Mutual Fund. From 18 Professional 13 are aware and 5 are not
aware is shows more awareness in professionals.
62
Hypotheses 3:-Education level and awareness of Mutual Fund
Cases
Education qualification *
100 100.0% 0 .0% 100 100.0%
awareness
awareness
yes no Total
graduate Count 30 15 45
other Count 0 1 1
63
Chi-Square Tests
64
Hypothesis 4:-Occupation and way of invest of Mutual Fund
65
Chi-Square Tests
Asymp. Point
Sig. (2- Exact Sig. (2- Exact Sig. Probabilit
Value Df sided) sided) (1-sided) y
Pearson Chi-Square 8.063a 4 .089 .085
Likelihood Ratio 10.437 4 .034 .068
Fisher's Exact Test 8.252 .055
Linear-by-Linear
2.113b 1 .146 .199 .099 .046
Association
N of Valid Cases 28
a. 10 cells (100.0%) have expected count less than 5. The minimum expected count is 1.50.
b. The standardized statistic is -1.454
Interpretation:-Above chart and data shows that both the ways of investing into Mutual
Fund are as fabulous. People choose lump sum option as much as sip. But we can see that
people whose occupation is Profession choose only lump sum way of investing in mutual
fund. Business people mostly choose sip as a way of their investment.
66
Hypotheses:-5 Annual income of people and type of Mutual Fund
Cases
Std.
.1 -1.1 -1.1 -.3 .6 1.8
Residual
100000- Count 2 0 4 1 1 2 10
300000 % of Total 6.5% .0% 12.9% 3.2% 3.2% 6.5% 32.3%
Std.
.6 -1.3 1.9 -.7 -.7 .3
Residual
300000- Count 1 3 1 3 1 0 9
500000 % of Total 3.2% 9.7% 3.2% 9.7% 3.2% .0% 29.0%
Std.
-.1 1.3 -.4 1.0 -.6 -1.2
Residual
500000- Count 0 2 0 1 2 0 5
above % of Total .0% 6.5% .0% 3.2% 6.5% .0% 16.1%
Std.
-.8 1.3 -.9 .0 1.0 -.9
Residual
Total Count 4 5 5 6 6 5 31
67
Chi-Square Tests
Asymp. Sig. (2- Exact Sig. (2- Exact Sig. (1- Point
Value df sided) sided) sided) Probability
N of Valid Cases 31
a. 24 cells (100.0%) have expected count less than 5. The minimum expected count is .65.
b. The standardized statistic is -1.475.
Interpretation:-From the above data and chart we can analyze choice of the people in
purchasing Mutual fund as per their income level. People having annual income of a l lake to
3 lake prefer reliance Mutual Fund. There is different choice of purchasing Mutual Fund.
DATA ANALYSIS
68
Age
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
From all the respondents there are more people who have age between 30-40 and less no of
people are having age of less then 50.
69
Gender
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
From the all respondents there are 70 % male and 30% female. It shows that there is more no.
of male then the female.
70
Occupation
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
From all the respondents more respondents are service person and business person. These
number is double then the profession and student
71
Annual income
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
There are more people who have there annual income within one lakh to five lakh. People
having Income of below one lakh and above five lakh are very less.
72
Education qualification
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
Above graph shows that there are more people who complete there graduation and under
graduate people are less number it shows that now a days education level is increased.
73
Awareness
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
Out of all the respondents 63% respondents are aware about Mutual Fund and 37%
respondents are not aware about Mutual Fund.
74
Source of awareness
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
From all the respondents most of the respondents are aware about Mutual Fund from the bank
and others are aware from the T.V, News paper, Friends and Brokers.
75
Investment In M.F
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
From all the respondents 63% respondents are aware about Mutual Fund and among all of
them only 34% have invest in the Mutual Fund.
76
Way of invest
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
Above diagram shows that two ways of investing into Mutual Fund like Lump sum and S.I.P
are same famous people like Lump Sum investment as well as S.I.P (Systematic Investment
Plan).
77
Type of mutual fund
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
From above diagram we can say that there is no much difference in preference of purchasing
Mutual fund.There is minor difference in purchasing different type of Mutual fund.
78
Awareness of tax benefit
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
In the above diagram we can see that more people are aware about tax benefit which is given
to the purchaser of the Mutual Fund. So tax benefit is more fabulous among the people.
79
Option like in M.F
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
The above analysis shows that growth option is more Preferred then the dividend option
among all investors of the Mutual fund.
80
Awareness of service in M.F
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
Above diagram shows that more no. of respondents know the SMS alert service which is
provided by the Investor of Mutual Fund and less no. of respondents know the service of
correspondents.
81
Satisfaction level
Cumulative
Frequency Percent Valid Percent Percent
Analysis:-
From the above diagram we can say that mostly people are satisfied and extremely satisfied
with Investment Company of Mutual Fund so we can say that Investment Company Play a
Good role in Investment of Mutual Fund.
82
SUMMERY
AND
CONCLUSION
83
FINDINGS OF THE RESEARCH
Among all the respondents 63% are aware about Mutual Fund and 37% are not aware
about Mutual Fund.
From all aware respondents onl 34 respondents have invest in Mutual Fund.
There are 70% male and 30% female out of all the respondents and more no. of male
are aware then the female about Mutual Fund.
Among 18 professionals 13 are aware and 5 are not aware about Mutual fund it shows
that there is more awareness in professionals.
There are 23 respondents who are under graduate among them 14 are aware and 9 are
not aware about Mutual Fund.
There are 45 respondents who are graduate among them 30 are aware about Mutual
Fund and 15 are not aware about Mutual Fund.
More respondents have their annual income between 1 lacks to 3 lacks and from them
most of the people are prefer Reliance Mutual Fund.
From all the respondents 67% respondents have awareness regarding Mutual Fund
through Bank and less no. of respondents are aware through broker.
50% respondents are investing in lump sum and 50% are investing in Systematic
Investment Plan.
65% respondents are known about Tax benefit and 35% are not aware about tax
benefit.
58% respondents like Growth Option and 42% respondents like Dividend Option.
From all the service provided by company SMS alert is more known by respondents
which is 55%.
Among all the respondents 33% are satisfied with their investment in Mutual Fund
and 24% are extremely satisfied with their investment. Only 8% are extremely
dissatisfied with their investment.
84
SUGESSIONS
After seeing the whole Data analysis and findings my suggestions for the industry are shown
as below.
The company should give the knowledge regarding Mutual Fund through
various sources like more advertisement, TV programmes etc. about what it
is? How it works? What is its benefit for us with its advertisement or in
programmes. Because many people have heard about it but don’t know what
it is?
The company should also attract the low Income people by showing them the
benefits of the liquidity funds for the short Term to attract them.
As per survey Bank creates higher awareness so the Mutual Fund companies
should more collaborate with the Banks.
The company should also attract the customer through different schemes who
having knowledge about the Mutual Funds but not investing in Mutual Funds.
The company should also make aware the people about the AMFI exam and
should motivate them to be financial adviser to get more business.
The company should give information regarding Tax benefit to Invest into
Mutual Fund.
The company should organize seminar to give information about Mutual Fund
and should distribute brochures having detail of schemes of Mutual Fund.
85
LIMITATION OF THE RESEARCH
Sample size is 100 which is very small that is not enough to study the awareness of
consumers of the country.
Respondents are not sincere and care full to fill up the questionnaire so we cannot find
right solution.
It take much time to go in different areas and fill up questionnaire so the timings are
also limited to make the Project.
To create hypothesis and make cross tabulation is little bit confusing technique so it
may be a limitation.
In India people are not much care full and educated regarding Investment plan so to
do this type of research is little hard.
86
CONCLUSION
After making the whole report I am concluding that this project measures the awareness
of Mutual Funds and its service. As Mutual Funds having good options and schemes, so we
can grow it with creating the awareness among the people. It is also good for those who want
to make their future in it. For that the only thing you need is to give time to your money to
grow, they will surely give good returns and the other thing is the knowledge of the all
product and schemes.
As there is lesser no. of people investing in the Mutual Fund in comparison of the other
instruments of the investment like L.I.C, post, savings a/c etc. So there is a good chance of its
growing. Even Mutual Fund is also having the product as substitute of it. So the industry can
get the benefit of it.
The industry cans aware more investors to invest in Mutual Fund. They can do these through
seminars, advertisement etc. They can also increase their sales by collaborating with many
banks. They can also make more advisors by giving them more commission.
87
BIBLIOGRAPHY
Web sites
www.indiainfoline.com
www.amfindia.com
www.moneycontrol.com
www.google.com
www.wikipedia.com
www.sharemaketbasics.com
www.sharemarket.com
Books:-
88
ANEXURE
1. Gender :
Male Female
2. Age:
20-30 30-40
40-50 50-Above
3. Occupation :
Student business
Service profession
5. Education Qualification
89
Under Graduate Graduate
Post Graduate Other _______(specify)
Research Questions
Yes No
7. From which source you come to know about Mutual Fund ?
Broker Friend/Relative
Yes No
9. Are you aware about the different ways of investing into Mutual Fund?
Yes No
11. Out of the following in which Mutual Fund you have invested?
SBI Other
12. Are you aware about different tax benefit of investing into Mutual Fund?
Yes No
Yes No
Growth Dividend
90
14. Out of following which service you are aware which are provided after investing in
Mutual Fund?
Extremely Satisfied
Satisfied
Neutral
Dissatisfied
Extremely dissatisfied
THANK YOU……
91
DIFFERENT TERMINOLOGY
AMC
The AMC is the corporate entity, which markets and manager and manages a mutual
fund scheme and in return receives a management fee from the fund corpus. SEBI
specifies that an AMC must be separate entity the trust that manages it.
NAV
It is the value of unit of a Mutual Fund scheme and represents its true worth. NAV is
arrived at by dividing total value of all investment made under the scheme by number
of units of the scheme. NAV is critical yardstick of the funds performance.
UNITS
Units in a mutual fund scheme are similar to shares of a joint company. These are
always in denominations of Rs. 10 each the sum total of all the units constitutes
corpus of mutual fund.
SPONSORS
Sponsor of a mutual fund are those who establish the mutual fund trust and the AMC
they constitute the shareholders of the AMC and receive dividends on profits made by
the AMC. SEBI rules stipulate that mutual fund trust as well as the AMC must
maintain an arms length relationship with the sponsors to avoid any conflict to
interests, which may affect the unit holders.
INCOME FUND
These Funds invest largely in fixed income securities like bonds and debentures. Such
funds earn returns more regularly than a growth fund but level of returns over longer
periods normally lag behind those offered by growth funds while returns in such
funds may be regular, their scale may fluctuate depending upon the prevalent interest
rates and credit quality of the debt securities.
92
GROWTH FUNDS
Growth funds predominantly invest in stock market securities and carry risks larger
than income funds. Since stock markets travel through a natural cycle of boom and
bursts one should normally stay invested inequity funds for a longer times to earn
higher returns.
Equity funds may earn higher but they also carry larger risks. For risk taking investor
equity are best suited.
BALANCED FUNDS
A balanced fund is the mixture of income fund and growth fund invested partly in
equity to achieve a trade-of between risk and return.
CLOSE ENDED
In a close-ended fund an investor is allowed to subscribe only during the period of the
initial offer. Close-ended funds mature after a specified period.
LOCK IN PERIOD
Time period during which investor can neither redeem nor they transfer their holdings
to others. Lock in period is imposed to allow fund manager to deploy money for an
adequate period of time to earn a reasonable return premature withdrawals may
destabilize the fund & are not beneficial to the interests of investors.
MANAGEMENT FEES
An AMC that mangers & markets a mutual fund scheme is entitled to a management
fee@ 1% to 25% of the total funds managed, it could be charged to the scheme
irrespective of the performance of the scheme.
REDEMPTION
Disbursement of unit capital on the maturity of that particular scheme to all its
existing unit holders.
93
MARKET PRICE
The price at which units of mutual funds are quoted in stock exchange where they are
listed.
REGISTRAR
Organization appointed by an AMC to the schemes it is registered, monitored, and
regulated by SEBI, it provides required services like system capabilities back up,
accepts and processes investors applications in informs AMC about amounts
received/disbursed for subscription/ purchase/ redemption it also handles
communications with investors, perform data entry services and dispatches account
statements.
CUSTODAIN
Banking organization that keeps in safe custody all the securities & other instruments
belonging to the fund to insure smooth inflow & outflow of securities. It is also
approved regulated and registered with SEBI.
EXIT LOAD
Value of deduction from NAV on the date when one choose to withdraw from a fund,
load is imposed because withdrawals carry transaction cost to AMC it can not be
more than 6% of NAV of corpus as prescribed by SEBI many schemes offer
redemption facility without exit load.
ENTRY LOAD
Charge paid by unit holder when he invests an amount in the scheme. Mutual funds
incur many expenses during an issue, which are charged to the scheme. Such load is
called entry load.
LIQUIDITY
Ability of investors to change its unit into cash within minimum time as and when he
needs money.
94
TRANSPARENCY
Basic feature of mutual funds is transparency, their functioning is very efficient, well
monitored & transparent working of AMC is regulated by SEBI it is audited weekly,
it has to work under strict guidelines issued by SEBI, and its NAV is calculated and
published daily so that there is no chance of any default in the working of Mutual
Funds.
95