ACKNOWLEDGEMENT

The successful completion of any task would be incomplete without mentioning the people who made it possible and whose constant guidance secured as success. I take this opportunity to express my gratitude and sincere thanks to Mr. MAHESH KUMAR, Company Guide for providing me an opportunity to do this project in this esteemed organization, for his timely and invaluable help, guidance and suggestion and encouragement until completion of this work. And also my sincere thanks to all the officials who helped me in getting the data as per my requirements for the completion of project work. It is my great pleasure to register my sincere thanks to Mr. RAJEEV MATHUR, my reporting head for his encouragement. I express my hearty thanks to MR.GAURAV BAGRA, my faculty guide, for his invaluable help and guidance, which made my study a memorable and meaningful one. I express my gratitude and heartiest thanks to my family members who gave me full support throughout the tenure of my project. Finally I would like to thank all my friends for their support and help which helped me to complete this project work successfully.

PREFACE
The practical knowledge is always incomplete without its practical implication like a gun without the bullet. Seeing the necessity of the practical knowledge, the P.G.D.M. curriculum is designed in such a manner so as to impart the students, opportunity for enough exposure to the corporate world. For the partial fulfillment of P.G.D.M. curriculum students are required to conduct field visit, helps student to gain the practical knowledge about various industrial activities through implementation of theoretical knowledge of different concepts and theories. For the same the student has chosen RELIANCE MONEY Limited ,Jaipur to carry out his field visit. Through this report student has tried to present the facts and finding of his study in the form of a document.

TABLE OF CONTENTS
CONTENTS CHAPTER 1ST INDUSTRY PROFILE ORIGIN OF SHARE MARKETS IN INDIA 1. STOCK 2. SECURITIES a. Primary Market b. Secondary Market c. Exchange STOCK 3. SECURITY EXCHANGE BOARD OF INDIA (SEBI) a. Sensex b. Nifty c. Bombay Stock Exchange d. National Stock Exchange

CHAPTER 2ND

COMPANY PROFILE Introduction of the Company Hierarchy Level Group Overview Products of the Company Product Fees Structure

CHAPTER 3RD

EXECUTIVE TRAINING Objectives Target/Task Strategies Achievement Awards Limitation Conclusion

CHAPTER 4TH PROJECT

 Executive Summary Objectives of the study Value addition to the company Research methodology Methods of data collection Limitation of the Research Questionnaire Facts and findings Analysis and interpretation Suggestions Bibliography

CHAPTER 1

ST

INDUSTRY PROFILE
ORIGIN OF SHARE MARKETS IN INDIA The origin of stock market in India goes back to the end of the 18th century when long term negotiable securities where first issued. However, for all practical purposes, the real beginning occurred in the

middle of the 19th century after the enactment of the companys act in 1850, which introduced the feature of limited liability and generated investor interest in corporate securities. An important early event in the development of the stock market in India was the formation of the Native Share and Stock Brokers association at Bombay in 1875, the precursor of the present day Bombay Stock Exchange. This was followed by the formation of associations/exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). In addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to recede into oblivion during depressing times subsequently. Presently the recognized stock exchanges in India have one of the following organizational forms; a) Voluntary non- profit making association b) Public limited company and c) Company limited by guarantee A governing body consisting of selected and nominated members manages recognized stock exchanges. Stock exchanges are required to appoint an executive director with substantial powers to be the chief operating executive.

1. STOCKS A type of security that signifies ownership in a corporation and represents a claim on part of the corporations assets and earnings.

There are two main types of stock: common and preferred. Common stock usually entitles the owner the right to vote at shareholder meetings and to receive dividends that the company has declared. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event a company goes bankrupt and is liquidated. Also known as shares or equity. 2. SECURITIES Traceable interests representing financial value. They are often represented by a certificate. They include shares of corporate Stock or Mutual fund, bonds issued by corporation or governmental agencies Stock Options Or other options, Other derivatives securities, limited partnership units, and various other formal investment instruments. a) Primary Market The market in which investors have the first opportunity to buy a newly issued security. b) Secondary Market A market on which an investor purchases an asset from another investor rather than an issuing corporation. c) Exchange

A market in which securities, commodities, options, or futures are traded.

3. SECURITY EXCHANGE BOARD OF INDIA (SEBI) The regulatory body for the investment market in India. The purpose of this board is to maintain stable and efficient markets by creating and enforcing regulations in the market place. Shortly after the stock market crash of 1929 (known as Black Thursday), a regulatory body called the Securities & Exchange Commission (SEC) was born. Its goal was to restore investor confidence and faith in a financial sector that was notorious for fraudulent activities, easy credit and hazardous investments. Two significant proposals by the U.S. Congress, the Securities Act of 1933 and the Securities Exchange Act of 1934, led the way to the formation of the SEC and, ultimately, a structured financial industry under government supervision. The aim of both of these acts was to protect investors from any indiscretions that could arise from: a. Fraudulent and questionable public companies. b. Dishonest and unscrupulous individuals dealing in the securities markets. The SEC is divided into four main divisions. They work together, but have specific areas in which they mandate and ensure

compliance. These departments are Corporate Finance, Market Regulation, Investment Management and Enforcement. a) Sensex The commonly used name for the Bombay Stock Exchange Sensitive Index - an index composed of 30 of the largest and most actively traded stocks on the Bombay Stock Exchange (BSE). b) Nifty The 50 stocks that were most favored by institutional investors in the 1960s and 1970s. Companies in this group were usually characterized by consistent earnings growth and high P/E ratios. c) Bombay Stock Exchange The Bombay Stock Exchange was established in 1875. It is one of the oldest organized exchanges in the world with a long, colorful, and checkered history. The BSE switched from the open outcry system to the screen based system in 1995. Jobbers play an important role in BSE. A jobber is a broker who trades in his own account and hence offers a two-way quote or a bid-ask quote. d) National Stock Exchange

Inaugurated in 1994, the National Stock Exchange (a) establish a national-wide trading facility for equities, debt and hybrids (b) facilitate equal access to investors across the country(c) imparts fairness efficiency and transparency to securities (d) shorten settlement cycle and (e) meet international securities markets. The NSE has two segments: the capital market segment and the wholesale debt market segment. The capital market segment covers equities, convertible debentures, and retail trade in non-convertible debentures.

CHAPTER 2
COMPANY PROFILE

ND

RELIANCE MONEY LIMITED IS PROMOTED by reliance Capital Ltd and is a part of RELIANCE .

Anil Dhiru Bhai Ambani Group, and is ranked among the 15 most valuable private companies in India. Reliance capital is one of Indias leading and fastest growing private sector financial service . Companies, and ranks among the top 3 private sector financial services and banking group in terms of net worth .reliance capital has interests in assets management and mutual funds, life and general insurance private and equity and propriety investments ,stock broking,

depository services, distribution of financial products, consumer finance and other activities in financial services. The Reliance Anil Dhiru Bhai Ambani group is one of of Indias top 3 business houses, and has market capitalization of over Rs. 2,90,000 crores (US$ 75 Billion ), Net Worth in excess of rupees 40,000crores (US$ 10 Billion), cash flow of rupees 9000 crore (US $ 2.2 Billion ) ,net profit of rupees 5000 crores (US $ 1.3 Billion) and zero net debt . As portfolio managers we endeavour that every portfolio created by us reflects the value on which RELIANCE MONEY has built . A commitment towards transparency and service .Add to that a strong research driven investment process. SERVICES OFFERDED BY RELIANCE MONEY (A)STOCK BROKING SERVICES : RELIANCE MONEY offer services that are beyond just a medium for buying and selling stocks and shares .Instead it provides services which are multi dimensional and multifocussed in their scope. There are several advantages I utilizing RELIANCE MONEY BROKIMG SERVICES, which are the reasons why it is one of the best in the country. RELIANCE MONEY LTD (i)RELIANCE MONEY offers trading on a vast platform like NATIONAL STOCK EXCHANGE ,BOMBAY STOCK EXCHANGE.

(ii)RELIANCE MONEY make trading safe to the maximum possible extent ,by accounting for several risk factors and planning accordingly under look after of highly skilled research team ,comprising of technical analysts as well as fundamental specialists , secure resultoriented information on market trends ,markets analysis and market predictions.

(iii)RELIANCE MONEY Broking services are widely networked across India, with the number of our trading terminals providing retail stock broking facilities .Our services have increasingly offered customer oriented convenience ,which we provide to a spectrum of investors ,high net worth or otherwise ,with equal dedication and competence .

(B)MUTUAL FUND SERVICES:RELIANCE MONEY has attained a position of immense strength as a provider of across the board transfer agency services to AMCs, Distributors and Investors. Besides providing the entire back office processing , company provide the link between the various Mutual Fund and the investor ,including services to the distributor ,the prime channel in this operation . carrying the limitless ideology forward ,company have explored new dimension in every aspect of MUTUAL FUND serving right from volume management , cost effective pricing ,delievery in the least turnaround time ,efficient back office and front office operations to customized service .Company have been with the AMCs every step of the way ,helping them serve their investors better by offering them a diverse and costomised rangeof services .The first to market approach that is our anthem has earned us the reputation of an innovative service provider with a visionary bent of mind (C)DISTRIBUTION OF FINANCIAL PRODUCTS:The paradigm shift from pure selling to knowledge based selling drives the business today . with our wide portfolio offerings ,we occupy allsegmentsin the financial service industry .

A 1600 team of highly qualified and dedicated professionals drawn from the best of academic and professionals backgrounds are committed to maintaining high levels of client service delievery. This has propelled among the top distributors for equity and debt issues with anestimated market share of 15% in terms of application mobilized ,besides being estabilised as the leading procurer in all public issues. There by providing planning and advisory services to the mass affluent. Here we understand the customer needs and lifestyle in the context of present earnings and provide adequate advisory services that will necessarily help in creating wealth .Judicious planning that is customized to meet the future needs of the customer deliever a service that is exemplary .The market savvy and the ignorant investors ,both find this service very satisfactory .the edge that we have over competition is our portfolio of offerings and our professional expertise.The investment planning for each customer is done with an unbiased attitude so that the service is truly customized . Our website provides up-dated market information on market trends , investments options opinions etc.Thus empowering the investor to base every financial move on rational thought and prudent analysis and embark on the path to wealth creation . (E)INSURANCE BROKING :At RELIANCE MONEY Pvt. Ltd.,we provide both life and non life insurance product to retail individuals ,high net worth clients and corporate .with the opening up of the insurance sector and with a large number number of private players in the business ,we are in a position to provide trailor made policies for different segments of customers. In our journey to emerge as a personal finance advisor ,we will be better positioned to leverage our relationships with the product providers and place the requirements of our customer appropriately with the product providers .With the Indian markets seeing a sea change, both in the terms of investments pattern and attitude of

investors , insurance is no more seen as only a tax saving product but also as an investment product .By setting a separate entity , we would be positioned to provide the best of the products available in this business to our customers . Our wide national ,spanning the length and breadth of India ,further supports these advantages .further ,personalized service is provided here by a dedicated team committed in giving hassle free service to the clients . (F)PERSONAL FINANCE ADVISORY SERVICE:Under RELIANCE MONEY we deliever advisory services to a cross section of cutomers .The service is backed by a team of dedicated and expert professionals with varied experience and background in handling investment portfolios. They are continually engaged in designing the right investment portfolio for each customer according to individual needs and budget considerations with a comprehensive support system that focuses on trading customers portfolios and providing valuable inputs ,monitoring and managing the portfolio through varied technological initiatives . This is made possible by the expertise we have gained in the business over the years .

1.3BELIEF DESCRIPTION OF THE PROBLEM There has always been a constant debate amongst the financial experts
Regarding investing in a firm on the basis of the dividends being paid out. Dividends are that part of the net earnings of a corporations that is distributed to its stockholders. dividend disbursements are based on a percentage of the par value of the stock or are a certain sum per share of no-par-value stock. They become payable only when approved by the board of directors and are usually declared at regular intervals. Obviously, dividends are not paid unless the company has accumulated a profit or surplus.In the United States, dividends may be paid in property of various kinds ,including bonds and stocks of the company

or stocks of other companies first acquired for other purposes, in notes, or in cash.Dividends may be paid in stocks when the accumulated profits of a company are to be retained for reinvestment in the business .Dividends in the form of notes ,often called Scrip dividends ,are rare ;they are only paid when the company has earnings that it expects to convert into cash before the notes are due .In Great Britain ,dividends are payable only in cash .Liquidation dividends are the return of the capital of a busuiness that is being terminated .Enterprise with diminishing assets such as mines ,issue a modified form of liquidation dividend ,The dividend from preferred shares of stocks is a fixed percentage that must be paid before the remainder of the profit is divided among other shares .If there are not enough profits to pay the whole dividend on preferred stocks ,future profits may be assigned to pay back those dividends before anything is paid on common stocks .Preferred stock is ranked as first and second ,according to the priroty of the obligations .Preferred dividends offers from interst on bonds in that there is no default if the former is not paid .The term dividend is also used to refer to fractional payment of the amount owed by a bankrupt firm to a creditor . There are three schools of thoughts regarding the payment of dividends. They are : AGAINST DIVIDENDS : First ,some financial analysts feel yhay the consideration of a dividend policy is irrelevant because investors have the ability to create Homemade Dividends .Thes analysts claim that this income is achieved by individuals adjusting their personal portfolio to reflect their own preferences .For e.g. ,investors looking for a steady stream of income are more likely to invest in bonds ,rather than a dividend paying stock. Because their interst payments wont change those who own bonds dont care about a particular companys dividend policy .

The second argument claims that little to no dividend payment is more favourable for investors .Supporters of this policy point that taxation on a dividend is higher than on capital gain . The argument against dividends is based on the belief that a firm who reinvests funds will increase the value of the firm as a whole and consequently increase the value of the stock .According to the proponents of the non dividend policy ,a companys alternatives to paying out excess cash as dividends are the following undertakings more projects ,repurchasing the companys own shares ,acquiring new companies and profitable assets ,and reinvesting in financial assets. FOR DIVIDENDS: In opposition to these two arguments is the idea that a high dividend payout is more important for investors because dividends provide certainly about the companys financial well being ;dividends are also attractive for investors looking to secure current income .Also ,there are many examples of how the decrease and increase of a dividend distribution can affect the price of a security .Companies that have a longstanding history of a stable dividend payouts would be negatively affected by lowering by lowering or omitting dividend distributions ; these companies would be positively affected by increasing dividend payouts or making additional payouts of the same dividends . Furthermore ,companies without a dividend history are generally viewed favorably when they declare new dividends . NEUTRAL : And the final argument ,dividends do not matter ,where they are paid out on the stockholders or not ,The basis for this argument is simple . Firms that pay more dividends will offer less price appreciation and deliver the same total return to stockholders .This is because a firms value comes from the investments it makes-plant ,equipment and real assets ,for example and whether these investments deliver high or low returns .If a firm that pays more dividends can issue more shares in the

market ,raise equity ,and take exactly the same investments it would have if it have not paid the dividends ,its overall value should be unaffected by its dividend policy. There can be different types of importance that can be associated with the payment dividends, One of the simplest ways for companies to communicate financial wellbeing and shareholder value is to say the dividend check is in the mail. Dividends, those cash distributions that many companies pay out regularly to shareholders from earnings, send a clear, powerful message about future prospects and performance. A companys willingness and ability to pay steady dividends over time and its power to increase them provide good clues about its fundamentals. Typically, mature, profitable companies pay dividends. However, companies that do not pay dividends are not necessarily without profits. If a company thinks that its own growth opportunities are better than investment opportunity available to shareholders elsewhere, the company should keep the profits and reinvest into the business. For these reasons, few growth companies pay dividends. But even mature companies , while much of their profits may be distributed as dividends, still need to retain enough cash to fund business activity and handle contingencies. An excellent example can be the progression of Microsoft through its life cycle , which demonstrates the relationship between dividends and growth . When Bill Gates brainchild was a high flying growth company ,it paid no dividends ,dut reinvested all earnings to fuel further growth .Eventually ,this 800-pound software gorilla reached a point where it could no longer grow at the unprceedended rate it had maintained for so long .So,instead of rewarding shareholders through capital appreciation ,the company began to use dividends and

share buybacks as a way of keeping investors interested .The plan was announced in July 2004 ,nearly 18 years after the companys IPO .The cash distribution plan put nearly $75 billion worth of value into the pockets of the investors through a new $0.08 quarterly dividend ,a special $3 onetime dividend ,and a $30 billion share buyback program spanning four years. The changes witnessed in Microsoft in the last few years are a perfect illustration of what can happen when a firms growth levels off .In Jan 2003 ,the company finally announced that it would pay a dividend: Microsoft has so much cash in the bank it simply couldnt find enough worthwhile projects in which to invest you cant be a high flying growth stock forever! The fact that Microsoft started to pay dividends did not signal the companys demise; it simply indicated that Microsoft had become a huge company and had entered a new stage in its life cycle ,which meant it probably would not be able to double and triple at the pace it once did . By choosing to pay dividends , management is essential conceding that profits from operations are better off being distributed to the shareholders then being put back into the company .In other words , management feels that reinvesting profits to try to achieve further growth will not offer the shareholders as high a return as a distribution in the form of dividends . There is another motivation for a company to pay dividends ; a steadily increasing dividend payout is viewed as a strong indication of

a companys continuing success .The great thing about dividends is that they cant be faked .They are paid or not paid ,increased or not . In the backdrop of these arguments comes the age old for an investor .Whether it is actually feasible to have a portfolio consisting of stocks that give higher dividend yield ? Do higher yield stocks earn higher returns ?Is there anything else that the investor should take into consideration ?If the answer is yes ,then what is it ? This is what we plan to find out in his study.

CHAPTER 2

PROJECT PROFILE

2.1 PURPOSE AND SCOPE OF STUDY:

One has to understand that a company cannot keep on forever. When it reaches a certain size and exhausts its growth potential, distributing dividends is perhaps the best way for management to ensure shareholders receive a return from the companys earnings .A dividend announcement is taken as a sign that a companys growth has slowed, but it is also evidences of a sustainable capacity to make money .This sustainable income will likely produce some price stability when paid our regularly as dividends before investing in stocks .This is what this report seeks put to study more closely. The aim of this study is to challenge and at the same time study more closely the common belief among investors is that a high dividend paying firm is a good bet when it comes to investing in the stock market . And in the process come up with ways to add more criterias other than just high dividend yield so as to come with a more comprehensive technique to filter out stocks accordingly . And hence help in creating a portfolio which gives better returns to the investors. 2.2RESEARCH METHODOLOGY This analysis has been divided into several stages ;they are all described here in detail. First of all, to actually this myth that a high dividend paying stock gives better returns ,we have to form a portfolio of such companies which have high dividend yields for a given time period and subsequently apply several criterias to the available data regarding dividend sustainability etc., which would be discussed ahead .The aim is to

qualify or not some companies from this portfolio according to some predetermined criterias and reach a portfolio and see if the returns are indeed higher for this new portfolio compared to the original one . 1.To give credibility to our study, we will have to collect data for a large no. of companies and the figure that I decided upon was that of over 100 companies These 100 companies were chosen on the basis of top 100 companies in terms of dividend yield . Where, Dividend yield =Annual Dividend per share /current stock price. 2.In the second stage, we check whether the dividends being paid out are sustainable or not .Because if we actually take into consideration that : Some stocks with high dividend yields may be paying much more in dividends than they can afford . Any firm that pays a substantial portion of its earnings as dividends is reinvesting less and can therefore expect to at a much lower rate in future. Thus, we might have to trade off higher dividends yields for lower earnings growth in the future . Another reason for not depending on Dividend yields for our analysis was that a yield that is considerably higher than that of other stocks in an industry may indicate not a good dividend but rather a depressed price (dividend yield =annual dividend per share /priced per share ). The suffering price, in turn, may signal a dividend cut or, worse, the elimination of the dividend.

Thus, we will have to take some other criteria also to qualify the stocks for the sustainability of dividends. Which in case, we will take those stocks out of the original portfolio on the basis of their payout ratio below some level say, 51% Where payout ratio is, the % of earnings paid out in dividends . It is calculated by , Payout ratio (%)= Dividends per share / earnings per share

We are taking payout ratio because the payout ratio indicate how well earnings support the dividends payment: lower the ratio, the more secure is the dividends suppose to be. 3. Even after this stage, we cant say that the short listed companies have sustainable dividends or not. This is not a complete text because of two reasons, Earnings are not cash flows. Accounting earnings can be very different from cash flows. Because, accountants major earnings by subtracting accounting expenses from revenues which includes non- cash expenses, accrual accounting etc, and hence does not always yield the same result as cash accounting. Firms may have reinvestment needs. often the firms have to reinvest to maintain assets and these capital expenses will reduce cash flow. Thus, even if earnings roughly approximate cash flow, firms may not be able to pay them out in the dividend.

Thus, we conclude that will have to apply other test along with the previous one to reach a list of stocks that have truly sustainable dividends. And for dividends to be truly sustainable, the cash flows left over after capital expenditure will have to be greater than dividends. The measure that we take up is the free cash flow of equity (FCFE) method, which measures cash left over after reinvestment needs are met. For that, FCFE = Net Cash from Operating Activities + Net Cash Used In Investing Activities Now, finally we qualify only those companies (out of the short listed ones) for the next stage which have Dividend per Share (DPS) less than the FCFE per share. The list of companies that we get after this stage, have truly sustainable dividends.

4. As a firm is increasing the dividends it pays to its stockholders, it is then reinvesting less of its earnings back into its business. We have to take this into consideration, and hence disqualify those companies which have the expected long term growth rate in earning per share less than a certain limit, say 20 %. To calculate that we use,

Expected Long Term Growth Rate in EPS = (1 Payout Ratio) (Return on Equity) 5. At this stage, we take the short listed companies that we have after the previous stages and calculate the average return on the new portfolio and compare that with the average return from the original portfolio and in the process try to establish if the new portfolio is better than the original portfolio of 100 companies in terms of returns. Plus at the same time we also calculate average Betas for both the portfolios to see as to which portfolio is the more riskier one. The portfolio which has the higher value of beta would be the more risky one.

2.3 PROCEDURE FOR DATA COLLECTION AND ANALYSIS The type of study this is, it is not feasible to collect the data from the primary sources. That is, directly from the companies themselves. The reason being that the list of companies is an exhaustive one and not all offices/branches are situated on Kolkata, the city where the analysis was done.

Hence, the analysis was done using secondary data which consisted of over 100 companies from one financial year. The secondary sources for data were www .reliancemoney .com www .123india .com www .nseindia .com CAPITALINEPLUS software

For the purpose of analysis the following sources were use.

Investment fables by ASWATH DAMODARAN www .Investopedia.com www .answers .com www .karvy .com

2.4 CHAPTER SUMMARY

In this chapter, we see as to how we intend to go about the project. This first of all included studying the purpose and scope of this study. In which we specified that the aim of the study was to challenge the investment myth that high dividend stocks are good to invest in. and in the process provide some solution to the age old dilemma faced by investors. In the second part of the chapter, we went through the research methodology that we intended to follow in this study. In this, we discussed all the five stages that we intended to take this study through. These five stages were: Forming a portfolio just on the basis of a high dividend yield Short listing companies out of this portfolio on the basis of their payment ratio Then further short listing remaining companies on the basis of their free cash flow per share and their DPS The above two stages are stages are meant to qualify only those scripts which have the capability to sustain the dividends that they have been paying. In this stage we check if paying high dividends would affect the rate of growth of the EPS of those scripts. And only short list those scripts that have their rate of growth in EPS above a certain level.

 In the final stage we check if the return of the portfolio, which we are left with at the end of the 4th stage, is greater or lesser than the returns of the portfolio that we started out with in the 1st stage. As well as we also check as to which portfolio is the riskier one by looking at the average beta calculated for both the portfolio. In the next part of the chapter we go through the procedure for data collection and analysis. That in this case would require us to basically see the sources of data that we would have to refer to. It would include a whole mix of web sites, softwares, magazines and books that have been mentioned in the above chapter.

CHAPTER 3

COLLECTION AND ANALYSIS OF INFORMATION

3.1 DATA COLLECTION

Data for this study has been collected from various sources depending on the stage this study has been going though. In the following pages, we will go through every stage sequentially as discussed in the research methodology and see as to how the data was collected and the inferences made out of it. 1. Initial stage: In this stage aim was to shortlist those firms which were having high dividend yield. To provide feasibility and credibility to the study, we require the most recent data and at the same time data which was from a large number of firms. To fulfill these objectives, I went thorough the data available in the internet databases of the website www.123india.com. The most recent

data which was from the year 2005-2006 had a very few firms which had high dividend yields, that is only about 28 firms, which would have proved to be too less for a detailed study. Since this study is more concerned with testing a myth, I went back another year for the collection of data .That is, for the year 2005-06 from the same website www.123india.com.

The data hence collected is given below:

1 2 3 4 5

BERGER PAINT BALAJI TELEFILMS BONGAIGON R P&G SAIL

PAINTS MEDIA AND ENTERTAINMENT REFINERIES PERSONAL CARE STEEL

19.4 17.3 16.1 7.7 7.3

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

CHENNAI PETRO CHAMBAL FERT ABBOTT INDIA G.E.SHIPPING INDO RAMA SYN. GUJ. NARMADA ONGC SHIP. CORP. TATA CHEM FINOLEX IND. TAMILNADU NEWS PRINT CLARIANT(I) BLUE STAR VIJAYA BANK RALLIS INDIA KIRLOSKAR BROS. GODREJ CONSUMER CENTURY ENKA GODREJ INDUSTRIES COLGATE GAIL

REFINERIES FERTILISERS SHIPPING TEXTILES-SYNTHETIC FERTILISERS OIL EXPLORATION /PRODUCTION SHIPPING CHEMICALSINORGANIC PETROCHEMICALS PAPER & PAPER PRODUCTS AIR CONDITIONERS BANKS PESTICIDES AND AGROCHEMICALS DIESEL ENGINES PERSONAL CARE TEXTILES-SYNTHETIC CHEMICALSINORGANIC PERSONAL CARE GAS

7 6.7 6.6 6.3 6.2 6.1 5.5 5.4 4.9 4.8 4.8 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.4 4.4 4.4

27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

GABREIL(I) ASHOK LEYLAND HERO HONDA BH.EARTH MOVERS TATA ELXSI

AUTO MOBILES -4 WHEEELERS AUTOMOBILES-2&3 WHEELERS ENGINEERING COMPUTERS HARDWARE POWER

4.4 4.3 4.3 4.2 4.1 4 3.9 3.8 3.7 3.6 3.5 3.4 3.3 3.2 3.1 3 2.9 2.8 2.7 2.6 2.5 2.4

ALSTOM PROJECTS ANDHRA BANK BANKS TATA INFOTECH INFORMATION TECHNOLOGY MUNJAL SHOWA AUTO ANCILLARIES L&T ENGINEERING CUMMINS INDIA DIESEL ENGINES GODFREY CIGARETTES PHILIPS CANARA BANK BANKS KOCHI REF REFINERIES E.I.D. PARRY DIVERSIFIED ASIAN PAINTS PAINTS HLL DIVERSIFIED M&M AUTOMOBILES DABUR PERSONAL CARE HDFC BANKS BOI BANKS TATA TEA TEA AND COFFEE

49 50

THERMAX LTD. TATA POWER

ELECTRICAL EQUIPMENT PPWER

2.4 2.3

INITIAL PORTFOLIO
The major constituents of the portfolio constructed according to the
sector that they belong to ,have been given below: PETROLEUM / REFINERIES / GAS BANKS, INVESTMENT COMPANIES AND INSURANCE PHARMA AND I.T. AUTO (INCLUDES AUTOMOBILES, ENGINES, AOTO PARTS STEEL, POWER AND MINING TEXTILE PERSONAL CARE AIR CONDITIONERS CHEMICALS AND FERTILISERS PAINTS ELECTRONICS & TELECOMMUNICATION 9 8 5 11 8 3 4 2 8 3 4 65

3.2 CHAPTER SUMMARY:

In this chapter, we basically go through every stage that was mentioned in chapter 2 under research methodology .That as we saw results in the scripts getting short listed to 15 from an original portfolio of 100 after applying all the above mentioned criterias . And when we calculate the returns on both the old and the new portfolios and compare the two, we find out that the returns of the new portfolio are much higher than the old portfolio by almost 523.5% And since the beta for the new portfolio is lower at 0.619 as compared to the beta for the original portfolio which is at 0.847;therefore,the new portfolio is less risky than the original portfolio.

FIXED INCOME INSTRUMENTS

This product class includes options such as Fixed Deposits, Debentures, Bonds, preference shares etc. These investments are relatively safer but limited upside on returns.

FOREIGN CURRENCY INVESTMENTS

Wherever allowed by government regulations,investors particularly in developing countries will prefer to keep their assests in foreign currency.Hard currencies like the US dollar or pound or Euro are relatively stable .The risk of currency depreciation in case of economic /political turmoil is high.This was evident when all major south asian currencies collapsed last year.

COMMODITIES
A trader or speculator, who generally are skilled, does investing in commodities on a large scale typically. Normally in commodities high risk investors would invest for high returns in a short period. A proxy for this is the way retail households stock up commodities in anticipation of price increase, such as stocking sugar or wheat requirement for the full year .

MUTUAL FUNDS

Mutual funds are surrogate direct investment in debt or equity . In effect ,any mutual fund is an effective retail (can be institutional also)fund agglomeraror . mutual funds can be classified on the basis of their investment strategy and avenues . Equity funds invest in shares while debts funds invest in debentures ,and other debt instruments .A balanced fund tries to maintain an optimum balance of debt equity . While the mutual fund manager is supposed to have higher expertise in managing portfolios and should therefore yield higher return but in practice most mutual funds have under performed the indices , i.e. have under performed the market averages . One has to carefully select a mutual fund based on their track record and also the right kind of scheme for the investors risks profile and other objectives .

EQUITIES
Options available are secondary market (buying and selling shares in the stock exchanges ) or the primary market (IPOS).Generally classified as high risk high returns asset By fair equit investing is an interesting and challenging subject. By buying even a single share, you are buying a part of the company or business. And therefore the fundamental approach is to be geared towards valuing the business.

INDIAN SECURITIES MARKET

Indian stock market has a long history dated to 19th century .at the end of 19th century Bombay stock exchange was established in Bombay now

known as Mumbai. From that time it has passed through a metamorphosis with several ups and downs like 17th may a black Monday in Indian stock market history comparable to 11th September in the US market .it has seen the emergence of so many regional exchanges as well as one big exchange in the form of NSE which swept all the business in his favour. With the demutualization of exchange it has also seen the extinction of regional exchanges. It we go through the present scenario then maximum business on cash market segment are shared by BSE and NSE is the bigger player and in derivative segment it is almost monopoly of NSE .if we divide the whole Indian securities market in terms of value in cash market that is equities and derivatives also known as F&O segment then the rotio comes to 1:2.

BOMBAY STOCK EXCHANGE:

The stock exchange, Mumbai, which was established in 1875 as The Native Share and Stockbrokers Association As a voluntary non profit making association, it has evolved over the years into its present status the premier Stock Exchange in the country. It may be noted that the Stock Exchanges is the oldest one in Asia, ever older than the Tokyo Stock Exchange ,which was founded in 1878. The Exchange while providing an effective market also upholds the interest of the investors and ensures redressal of their grievances, whether against the companies or its own member brokers .It also strives to educate and enlighten the investors by making available necessary informative inputs.

NATIONAL STOCK EXCHANGE OF INDIA:

In 1991 government of India appointed an expert committee under the championship of Mr. M. J. Pherwani to study the problems relating to the handling of the increased volume of trading in stock exchanges and to suggest measures for a healthy growth of the stock market .The committee after looking at the working and functioning of the exchanges recommended that a National Stock Exchange to be set at Bombay which can provide access to investors from all over the country .NSEIL was then established under the section 3 of the securities Contract (regulation) Act 1956. It began its operation on June 30th 1994 by trading in dept instruments .the trading on equity commenced on 3rd Nov.1994.

OBJECTIVES OF SETTING UP OF NSE

The NSE is expected to operate as a model stock exchange having country wide representation of broker community .The new exchange will provide a nationally integrated stock market system ,fastening easy flow of transections and resources in cost effective manner .The objectives are: -To establish a nation wide trading facility for equities and dept instruments.

 To ensure an equal access to investors all over the country through appropriate communication network. To provide affair, efficient and transparent security market in investors using an electronic trading system . To enable shorter settlement cycle and book entry settlement system. To meet current international standard of securities market.

RELIANCE MONEY CORE STRENGTHS

Breadth of services ,in line with its client-centric philosophy ,the firm offers to
its clients the entire spectrum of financial services ranging from brokerage services in equities and commodities ,distribution of mutual funds ,IPOs and insurance products, real estate ,investment banking ,merger and acquisitions , corporate finance and corporate advisory. Clients deal with a relationship manager who leverages and brings together the product specialization from across the firm to create an optimum solution to the client needs .

To execute a transaction a person needs two acconts namely :

1.DEMAT A/C 2.TRADING A/C

Before learning about Demat account it is very important to understand the following terms:

DEMATERIALISATION
Dematerialisation of securities occurs when securities ,issued in physical form are destroyed and an equivalent number of securities are credited into the beneficiary owners account .India has adopted dematerialization to depository. in a depository system, the investors to gain by way of efficient settlements ,lower costs and lower risks of theft or forgery etc.

DEPOSITORY PARTICIPANTS
A Depository Participant (DP) is described as an agent of the depository. They are the intermediates between the depository and the investors .the relationship between the DPs and the depository is governed by an agreement made between the two under depositories act. In a legal sense ,a DP is an entity that is registered as such with SEBI Act ,a DP can offer depository related services only after obtaining a certificate of registration from SEBI.

DEPOSITORY/DEMAT A/C
Any investor who wishes to avail depository services must first open an account with a depository participant of CDSL/NSDL. The process of opening a Demat account is very similar to a bank account .The investor may open an account with several DPs or he may open several accounts with a single DP .there are several DPs offering various depository

related services .each DP is free to fix its own fee structure .Investors have the freedom to choose a DP based on criteria like convenience , comfort, service levels, safety, reputation and charges .After exercising this choice ,the investor has to enter into an agreement with the DP. The form and contents of this agreement are specified by the business rules of CDSL/NSDL.

TYPES OF ACCOUNTS
Types of depository account depends on the operations to be performed .There are three types of Demat Accounts which can be opened with a depository participant viz .
(a) Beneficiary Account (b) Clearing Account (c) Intermediary Account

BENEFICIARY ACCOUNT
This is an account opened by an investors to hold their securities in dematerialized form with a depository and to carry out the transections of sale and purchase of such securities in book entry form through the depository system .A beneficiary account holder is legally entitled for all rights and liabilities attached to the securities (i.e. equity shares ,debentures ,government securities, etc.) held in that account .Therefore, the account is Beneficial Owner Account. A beneficiary account can

be be in the name of an individual ,corporate, HUF, Minor, Bank, Financial Institution, Trust, etc. or the broker himself for the purpose of his personal investments in demat form .the Account is opened with a DP.

DOCUMENTS FOR VERIFICATION

For the purpose of verification,all investors have to submit the following documents along with the prescribed account opening form. Proof of Identity - A beneficiary account must be opened only after obtaining a proof of the applicant. The applicants signature and photograph must be authenticated by an existing account holder or by the applicants bank or after due verification made with the original of the applicants valid passport ,voter ID ,driving license or PAN card with photograph; and further . Proof of address The account opening form should be supported with proof of address such as verified copies of ration card /passport /voter ID/driving license /bank passbook. An authorized official of the participant ,under his signature ,shall verify the original documents. In case any account holder fails to produce the original documents for verification within the aforesaid period of 30 days ,it must be immediately brought to the notice of NSDL. Failure to produce the original documents within the prescribed time would invite appropriate action against such account holders, which could even include freezing of their accounts.

COMMON INFORMATION

The process of opening an account with a depository ,nature of such an account , and various factors to be considered for opening a depository account are explained below .Some details are common to all types of accounts .These are: 1.Name of the holder . 2.Date of birth. 3.Occupation 4.Adress & phone /fax number 5. Bank details like name of bank, type of account (current /savings) account number, branch address , MICR, etc. 6.PAN number ,if applicable 7.Details of nomination. 8.Specimen signatures.

BENEFICIARY ACCOUNTPROCEDURE FOR OPENING AN ACCOUNT

Investors have the choice of selecting a DP based on their convenience, comfort, service levels, safety ,reputation charges , etc. They have the flexibility to have more than one account with the same DP or any other

DPs. No minimum balance is required for opening a depository account .Investors also have the freedom to close an account with one DP and open with any other DP . The type of the account opening form to be filled by an investor and the list of documents required depend on the type of beneficiary account to be opened whether it is for NRIs or corporate or individuals . Further , the individual account can be in a single name or joint names. Clearing members and brokers have to open a beneficiary account if they have to deal with their own holdings. There are several client types in the depository system and the different codes are allotted to them like Resident ,Ordinary ,HUF ,Corporate . For each kind of account there ;is a different application form. A DP must understand clearly the difference in the application forms, to facilitate efficient and error free service to investors. Seperate forms are prescribed for individuals (including HUF) and corporate clients/clearing member accounts . The forms require the applicants to give the following detail:

(a) Name(s) of Account holder(s)The participant should ensure that the name is identical to that which appears on the certificate to be dematerialized. In case of a joint account ,the name of the holders should be in the same order as appearing in the share certificate to be dematerialized .investors are advised to open their account in their fully expended name, i.e., to spell to the first name as well as the middle name. This would obviate any doubts about the veracity of information. Investor can dematerialize all

physical securities held in his full name, abridged name, name with initials or any other fashion in this account. By opening the account in the fullest/expended name, changes or wrong credits/debits and rejection of demat requests are minimized . for example, there may be two investors with the same initials and same last name A K Khanna may be either Arun Kumar Khanna or Ashok Kishore Khanna.if the name is fully spelt out there is no ambiguity and there is no need then for the DP to take steps to verify the identity .similarly ,investor can dematerialize shares held in any form of name like A.K.Khanna ,Arun Kumar K.etc into one account.

(b)Mailing and Communication address(es)The veracity of the applicants address is determined through the documents submitted for verification like ration card,passport ,voter ID,PAN card driving license ,bank passbook etc .for NRI accounts ,proof is required for both addresses that of the account holder as well as the constituted attorney .for corporate accounts ,a copy of memorandum of association ,articles of association ,board resolution permitting opening of accounts ,the registered address of the company of the personal(s) authorized to operate the account on behalf of the company have to be furnished.

(c)Details of guardian in case account holder is a minor

Only a guardian can open a depository account for a minor.the guardian remains the beneficial owner in the records of the depository for the securities held on behalf of the minor till he becomes a major .the

guardian is required to sign the application form and details of his name and address need to be given in addition to the details of the minor .

(d)Foreign address and RBI approval details for NRI,FIIor OCB accountsFor foreignbased clients like NRIs ,FIIs,OCBs,etc.the DP must obtain original or attested copies of the power of the attorney and the approval from RBI permitting them to invest.if the account holder is anFII or an OCB ,SEBI registration letter is required.

(e)Clearing member details for a clearing account

A broker account as a clearing account can be opened only after the depository approves it and allots a clearing member business partner identification number (CM-BP-ID).a broker member can have only one clearing account per stock exchange of which he is member .the DP should obtain ,with the account opening form ,the necessary details from the clearing member along with the letter from the Clearing corporation allotting a CC-MD-DP.in case the clearing member account is being transferred from any other DP ,a no objection certificate from the earlier DP is also required.

(f)Details of bank account Details of bank account of the account holder ,including the 9 digit code number of the bank and the branch appearing on the MICR cheques issued by the bank

have to be fulfilled In the application form.Companies use this information for printing them on dividend /interest warrants etc .

(g) Details of the Income Tax Permanent Account Number (PAN)or GIR No.In case the account holder is not an income tax assessee ,or he has not yet been allotted a PAN card or GIR no. the DP must obtain a declaration to this effect from the account holder .in other cases ,a photocopy of PAN card or the acknowledgement of latest income tax returns is required .

(h)Nomination declaration
A beneficial owner can make a nomination of his account in favour of any person by fillinf the nomination form with his account DP .such nomination is considered to be conclusive evidence of the account holder(s ) disposition in respect of all the securities in the account for which nomination is made .the nomination submitted should be in the format prescribed by NSDL in its Bye laws and Business rules .

(i)Details of the introducerIf an existing client has introduced a new client to the DP,his signature is required on the form .in other cases the DP may ask for details that he considers appropriate .for example ,the Dp may require the application form to be attested by the bankers ,or employees of the client .

Supporting Documents As mentioned earlier ,supporting documents ,required to be submitted with the account opening form include
1. Photograph of account holder (s)/authorized holders /constituted attorney. 2. Proof of incorporation for companies e.g., certified copies of the memorandum of Association ,trust deed etc., 3. Certified copy of the document authorizing the specified person (s) to operate the account e.g., a copy of the board resolution etc., 4. Any other document the DP may consider necessary to establish the genuineness of the Account Holder(s).

CLEARING MEMBER ACCOUNT

The entities that are authorized to pay out from a clearing corporation /clearing house against trades done by them or their clients are known as clearing members .CMs are identified in the system through their CMDP-ID. All payin and payout transactions are carried out through their accounts .

TRADING ACCOUNT TYPES

With a Demat Account the client can operate in the primary market i.e. he can apply in the initial public offer .But to operate in the secondary markets person must have a trading account with some broker .A number of different trading accounts are offered by the brokering houses . The most common ones are a cash account , a margin account (frequently called a cash and margin account ,and an option account (frequently called a cash, margin and option account ).Basically ,these accounts represent different levels of credit and trustworthiness of the account holder as evaluated by the brokerage house .

A cash account is the traditional brokerage account (sometimes called a Type 1account ). If a person has a cash account ,he may make trades ,but he has to pay in full for all purchases by the settlement date. This is becoming somewhat less common, especially in the age of Internet trading ; most brokers are strict and require good funds in the account , although some brokerages houses may require a significant deposit before they open the account .ARSPL provides this client but usually requires a minimum margin of Rs.10,000 on which the company gives the client the exposure up to 6 times i.e. they can buy

shares up to Rs.60,000 .Wherein the client makes the balance payment on the next day of the execution of trade . A margin account is a type brokerage account that allows the person to take out loans against securities he own or against amount ( sometimes called as Type 2 account). Because the brokerage house is essentially granting him credit by giving him a margin account, he must pass their screening procedure to get one. Even he does not plan to buy on margin, note that all short sales (Type 5) have to occur in a margin account. If a person has a margin account, he must also have a cash account. SEBI regulates this account by limiting the funding to 50:50. ARSPL provides this facility to the clients at 40:60 wherein the client pays 40% and the company will pay 60%. Interest of 15% p.a. on reducing balance will be charged on the amount borrowed. The terms under which the company leads the money to the client are determined by the clients portfolio.

An option account is a type of brokerage account that allows the person to trade stop options (i.e., puts and calls). To open this type of account broker will require the person to sign a statement that he understands and acknowledges the risks associated with derivative instruments. This is actually for brokers protection and came into place after clients who made large losses in options and then claimed that they were unaware of the risks successfully sued brokers. Otherwise an option account is identical to a margin account

ARSPL BROKERAGE STRUCTURE

Exposure offered Margin Financing Interest rate on Margin Finance Brokerage Structure

: 6 times of margin : In ratio of 2:3 : @ 15% : On delivery Intraday : 0.20-0.25% : 0.02-0.03%

COMPETITORS
INDIA BULLS SECURITIES LTD. India bulls is Indias leading retail financial services company with 77 locations spread across 64 cities. While their size and strong balance sheet allow them to provide the client with varied products and services at very attractive prices, their over 750 Client Relationship Managers are dedicated to serving the client needs.

India bulls is leaded by a highly regarded management team that has invested crores of rupees of into a world class infrastructure that provides our clients with real- time service and 24/7 access to all information and products. Their flagship India bulls Professional Network offers real- time prices, detailed data and news, intelligent analytics, and electronic trading capabilities. This powerful network is complemented by the knowledgeable and customer focused Relationship Managers. Exposure Offered Margin Financing Interest rate on margin finance Brokerage Structure On delivery Intraday F and O : 0.20% : 0.80% : 0.40% : 3 times of margin : In ratio of 1:2 : @15-16%

MOTILAL OSWAL SECURITIES LTD. One of the top-3 stock broking houses in India, with a dominant position in both institutional and retail broking .MOSL is amongst the best capitalized firms in the broking industry in terms of net worth. MOSL was founded in 1987 as a small sub broking units, with just 2 people running the show. Focus on customer- first- attitude, ethical and

transparent business practices, respect for professionalism, research based value investing and implementation of cutting edge technology have enabled it to blossom into a thousand member team. The institutional business unit has relationships with several leading foreign institutional investors (FIIS) in the US, UK, Hong Kong and Singapore. In a recent media report MOSL was rated as one of the top -10 brokers in terms of business transaction for FIIS.

Exposure Offered margin) Margin financing Brokerage Structure

: 5 times of margin (there is a haircut on securities offered as

: In ratio of 40:60 On delivery Intraday F and O : 0.25% : 0.10% : 0.10%

FORTIS SECURITIES

Fortis was founded by late Dr. Parvinder Singh, EX CMD Ranbaxy Laboratories Ltd., with the vision of prviding integrated financial care driven by relationship of trust & confidence.Fortis Securities Ltd. Is a wholly owned subsidiary of Fortis Financial Services Ltd. (FFSL) a company promoted by the late Dr. Parvinder Singh .FFSL is listed on the Bombay Stock Exchange and the National Stock Exchange.To enlarge its geographical reach FFSL acquired controlling stake in Empire Finance Company Ltd. On July 1,1995 and subsequently merged into FFSL .Empire Credit Ltd. The securities arm of EFCL was renamed as Fortis Securities Ltd., to reflect the parentage of the company. Exposure offered : 5 times of margin (cash) 4 times of margin (security) Margin Financing: Currently stopped because already margin financed is over Rs. 450 crores. However, they are restarting this facility from April 2005 in ratio of 30:70. Interest rate on margin finance : @16% on actual days up to Rs. 1 crore. @14% on actual days up to Rs. 1 crore. Brokerage Structure: On delievery:0.20-0.25%

 Intraday:0.04-0.05% F&O:0.04-0.05% SSKI (SHARE KHAN) Share khan is an equity focused organization tracing its lineage to SSKI a veteran equities solutions company with over 8decedes of experience in the Indian Stock markets. Share Khan runs Indias largest chain of share shops with around 250 outlets in 113 cities.

Exposure offered : 4 times of margin Margin Financing: The quantum of margin finance provided is at the discretion of the management., This quantum varies according to the profile and creditworthiness of the client. Interest rate on margin finance: 16% (varies according to the prevailing market rates) Brokerage Structure: On delivery Intraday

: 0.15% : 0.10%

 F&O

: 0.10%

Flow chart of dealing process

Above mentioned flow chart shows how a dealing process can be done at stock exchange .First of all customer places his order to buy or sell the script with his dealer . Dealer is a member of stock exchange in turn dealer executes the deal on exchange . At the end of the day clearing corporation looks on the whole process and find out the net position of each client like what they are supposed to get or pay which is is called clearing process then with the help of clearing bank and depository participant it settles the whole deal by pay in/out of fund and security. Right now the whole process takes two days to settle i.e. ,on T+2 basis.The time table of this process are mentioned below

CASH MARKET
Activity Days

Trading

Rolling settlement trading

Clearing

Custodial conformation Delivery Generation

T+1 working days T+1 working days

Settlement

Securities and funds pay in Securities and funds pay out Valuation Debit

T+2 working days T+2 working days T+2 working days

INTRODUTION TO THE PROJECT

OBJECTIVE The primary objectives of the project being undertaken are as follows: 1. To have an understanding of the basics of stock broking and the operations of a broking firm .

2. To understand the functioning of RELIANCE MONEY as a distribution house for financial products like Mutual funds ,Insurance and IPOs. 3. To acquire the basis knowledge about D-mat ,Trading and IPO. 4.To acquire the knowledge of mutual fund. 5. Why to invest in mutual fund? 6 . To make people aware about Mutual Fund and promoting the sales of Mutual fund. 7 . To provide after sale services to the prospects and clients with respect to Mutual fund.

LIMITATIONS

Like Every Research, this project will also have some limitation, some of them are:

1 . Apprehensions in the minds of people with respect to investing in the Mutual fund because they are subject to market risks. 2 . With the concept of permission marketing prevailing in, telemarketing sometimes outrages the prospective clients. 3. Inability to clearly define the different segments of investors due to subjectivity in their investment plans.

4 . Reluctance of customers to disclose their investment plans. 5 . Duration of 2 months would not give a holistic perspective to the observations made.

METHODOLOGY
The first phase of my project deals with convincing the clients to be part of our company by opening a D-mat and a trading account. The methodology which we adopt, is having a telephonic conversation with the prospective clients during which we convince them about our services and try to fix up a meeting with them. In the meeting we endeavor to convince them to open D-mat and trading account with the company once the client is convinced he has to comply with certain formalities and would have to furnish certain proofs. Once the account is opened, a strong relationship has to be maintained with him. The client is advised to invest on certain stocks based on the research, which we derive from the Mumbai Research Team given below are the details of the product we shall and the formalities required to fulfilled by the clients. The second and main phase of project deals with the telephonic conversation with the prospective and existing clients during which we convince about our services also try to fix up a meeting with them. In this meeting we observe them by interviewing and suggest them to invest in Mutual fund because of the volatility of stock market. We give them just a short comparative analysis between Mutual fund and Stocks.

We answer their question about Mutual funds like Why to invest in Mutual fund and What are the advantages of Investing in Mutual Funds rather than investing in Stocks. Once the client agree then we fill up their forms and a strong relationship has to be maintained by providing them after sale services and suggesting them time to time of New Funds and Existing funds.

FINDINGS
The results obtained from the market survey can be summarized into the following findings, which can be concentrated upon to attract to invest in shares. The awareness level about broking houses is low which needs to be improved to attract people towards investing in stock market and Mutual fund. RELIANCE MONEY as a brand is well perceived by the people and this should be utilized by Reliance Money Securities for penetrating the untapped market. A large no. of people are ready to invest in Mutual fund but they need some advisory services that should be utilized by Reliance Money Securities. It is the current scenario of the market that more of the people want to invest in Mutual funds rather invest in Equities because Index is making new records daily.

 After equities, It is second instrument which has a good return % record with liquidity. So after Investment in Banks and Stocks it is the next preferred mode of investment and people who only invest in Mutual funds, they will continue to invest even during unstable situations. More important than getting new customers is to retain existing customers as a satisfied customer will get new customers and this can be achieved by increasing the awareness levels of people. The investor gives more important to brokerage charges than advisory services or brand name while selecting a broking house. Thus, this aspect should be concentrated upon while approaching new customers.

CONCLUSION
The reason people prefer staying away from the share markets is lack of confidence about their own understanding of the market and the very nature of the market. So this is a good sign for Mutual Funds to attract the customers. The fact that stock markets themselves are volatile and wide open to changes in external forces makes it much more difficult for people to

consider them as a investment alternative. So again a strong support given to Mutual Funds because of diversification that reduces the risk. The right kind of investment in presence scenario is no doubt Mutual funds but basically they are always subject to market risk but still they performing well from last few years so there is more need to make people aware about Mutual Funds because is the best tool for the person who do not want to take headache like trading at terminal and no doubt it has beaten other instruments and the future is so bright but there is still need to make aware. Reliance Money Securities is currently one of the biggest broking in the Jaipur and its strategies to penetrate further into the market will certainly take it way ahead of its competitors.

BIBLIOGRAPHY
www .reliance money.com www .kotakcomstreet.com

www .indiainfofile.com www .bseindia.com www .nseindia.com www .5paisa.com www .sbi.com www .sebi.com www .indiabulls.com www .icicidirect.com www .karvy.com www .capitalmarket.com

INVES TMENTMAD EF ORTH EL AS TNUMB ER OFYEARS

10 years& above 47% 1-5 years -16%

5-10 years -37%

AGEGROUPOFV ARIOUSINVES T ORS

BETWEEN 20-30 BETWEEN 30-50 ABOVE 50 -51%

-17% -32%