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A PROJECT REPORT ON

WEALTH MANAGEMENT
With Reference to

SUBMITTED IN PARTIAL FULFILMENT OF


REQUIREMENT OF PGPM PROGRAME
(2008 – 2010)

INSTITUTE OF BUSINESS MANAGEMENT AND


RESEARCH
AHMEDABAD

SUMBMITTED TO SUBMITTEDBY
PROF.PRIYANKA GOHIL RAMESH KUMAR (253)
SATISH KATHIRIYA (269)

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DECLARATION
We, hereby, declare that the PGPM Project titled, “A PROJECT REPORT
ON WEALTH MANAGEMENT WITH REFERNEC TO
INDIAINFOLINE” plans is original to the best of our knowledge and have not
been published elsewhere. This is for the purpose of partial fulfillment of the
requirement for the degree of Post Graduate Programme in Management
(PGPM).

RAMESH KUMAR (D-253)

SATISH KATHIRIYA (D-269)

Sign – (1)...........................

(2)………………………….

Place: - Ahmedabad

Date: - 10 December 2009

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ACKNOWLEDGEMENT

Any purpose and its fulfillment require deep routed efforts for its completion.
Many characters play a vital role. This is more when a project undertaken is
directly to a cause.

Our sincere thanks to Prof. Dr. R. K. Balyan, Director of IBMR


Business School for gave this opportunity to us. Our sincere thanks to Prof.
B.N.Mehta, Academic Director. He was introduced as one of the pillars of our
Organization. It is from him that we learnt the nuance of the day-to-day affairs.
He made us to learn more processes beyond our project.
We would like to thank Prof.Priyanka Gohil , our Project guide, not
only for giving us the opportunity to work on this project, but also for providing
us with sound guidance and the necessary facilities to carry out the project. She
constantly insisted and helped us in learning new things. She provided us a lot
of learning opportunities.

Finally we would like to thank all those who were directly and indirectly
concerned in making my project successful. To put it in a nutshell a difficult
and arduous journey was made simple and quiet enjoyable due to their support.

RAMESH KUMAR (253)

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SATISH KATHIRIYA (269)

PREFACE

MBA program is one of the most reputed professional courses in the field of
Management. Training is an integral part of MBA (PGPM). As a
complementary to that every trainee has to submit a report on the research work
conducted in that institute.

This report is thus prepared for the project work done at Indiainfoline
Bapunagar branch. The topic of the project is, “wealth management with
reference to IndiaInfoline”.

Investment means putting your money to work to earn more money. If done
wisely it can help to meet one's financial goals like buying a new house, paying
for a college education, education, enjoying a comfortable retirement or
whatever is important to an individual.

One needs to make decisions about how much he/she wants to invest and where
to invest. To choose he needs to know current good options available and their
relative risk exposures. These help are given to a client in Indiainfoline as to in
which portfolio they can invest and what risks are related to it. They manage all
the respected returns of their clients and timely inform them for the switching to
be done between funds in cases of expected downfall in returns of their Mutual
Funds in future.

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INDEX
NO PARTICULAR PAGE NO
1 INTRODUCTION TO WEALTH MANAGEMENT 6
✔ INTRODUCTION OF WEALTH MANAGEMENT 7
2 COMPANY PROFILE 14
✔ INTRODUCTION TO INDIA INFOLINE 15
✔ HISTORY OF INDAIINFOLINE 16
✔ VISION 18
✔ MISSION 18
✔ COMPANY’S PHILOSHOPY 18
✔ COMMITTEE 19
✔ COMPANY STRUCTURE 20
✔ PRODUCT & SERVICE 21
✔ MILESTONES ACHIVED 35
✔ MARKET SHARE OF COMPANY 37
✔ CHALLENGE FACED BY INDIAINFOLINE 39
✔ MARKETING STRATGY OF INDIAINFOLINE 40
✔ HUMAN RESOURCES 41
3 RESEARCH METHODOLOGY 42
✔ OBJECTIVE OF STUDY 43
✔ DATA COLLECTION 43
✔ FUNDAMENTAL RESEARCH SERVICE 44
✔ TECHNICAL RESEARCH SERVICE 45
✔ SWOT ANALYSIS 47
✔ PORTER’S FIVE FORCE MODEL 48
4 DATA ANALYSIS 50
✔ FINANCIAL PERFORMANCE 51
✔ P & L ACCOUNT OF INDIAINFOLINE 54
✔ BALANCE SHEET OF INDIAINFOLINE 56

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✔ COMPITITORS 57
✔ COMPARATIVE ANALYSIS OF CHARGES & 60
FACILITIES PROVIDED BY DIFFERENT COMPANY
✔ PERFORMANCE HIGHLIGHT 2008-09 61
✔ HIGHLIGHTS ,2008-09 INDUSTRY OPTIMISM 62
5 FINDING 64
6 RECOMMENDATION 65
7 CONCLUSION 66
8 BIBLIOGRPHY 67

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INTRODUCTION
Wealth management Service is provided by banks, professional trust companies, and
brokerages. For those with sizeable assets, professional wealth management can help you
plan your estate or invest your assets based on personal criteria and financial goals.

Wealth Management system is an integrated platform designed to support high


demand of customer relationship businesses and a complex portfolio management analysis.
The solution provides technology that helps private wealth institutions utilize their
customer’s database more proficiently and more efficiently. With IndiaInfoline WMS
sophisticated work system, firms will be able to enhance their services and sale capabilities
throughout a comprehensive set of wealth management services such as investment strategy
setting, marketing event or campaign management, a high level of portfolio management or a
graphic design of a consolidated report.

Wealth management System offers a one-stop solution to take the guess work out of
mandatory rollovers so you can save time and money.

Wealth management is an advanced investment advisory discipline that incorporates


financial planning and specialist financial services. The key objectives are to provide high net

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worth individuals and families with tailored retail banking services, estate planning, legal
resources, taxation advice and investment management, with the goal of sustaining and
growing long-term wealth. Wealth management can be provided by independent financial
advisers or large corporate entities whose services are designed to focus on high-net worth
retail customers. Such customers would be considered mass affluent or upper retail clients
because of their net worth, the number of potential products they own from financial
institutions, their assets under management and other methods of segmentation. Large banks
and brokerage houses create separate sales forces, services and other benefits to retain or
attract these customers who are typically more profitable than other retail banking, brokerage,
or insurance customers.
In most industrialized countries, a substantial part of financial wealth is not managed
directly by savers, but through a financial intermediary, which implies the existence of an
agency contract between the investor (the principal) and a broker or portfolio manager (the
agent). Therefore, delegated brokerage management is arguably one of the most important
agency relationships intervening in the economy, with a possible impact on financial market
and economic developments at a macro level.

As the per-capita-income of the city is on the higher side, so it is quite obvious that
they want to invest their money in profitable ventures. On the other hand, a number of
brokerage houses make sure the hassle free investment in stocks. Asset management firms
allow investors to estimate both the expected risks and returns, as measured statistically.
There are mainly two types of Portfolio management strategies.

● Passive Portfolio Strategy


● Active Portfolio Strategy
1. Passive Portfolio Strategy: A strategy that involves minimal expectation input, and
instead relies on diversification to match the performance of some market index. A
passive strategy assumes that the marketplace will reflect all available information in
the price paid for securities
2. Active Portfolio Strategy: A strategy that uses available information and forecasting
techniques to seek a better performance than a portfolio that is simply diversified
broadly.

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The Basic Methods of Wealth management is….

1) Mutual funds
A Mutual Fund is a body corporate registered with SEBI (Securities Exchange Board of
India) that pools money from individuals/corporate investors and invests the same in a variety
of different financial instruments or securities such as equity shares, Government securities,
Bonds, debentures etc. Mutual funds can thus be considered as financial intermediaries in the
investment business that collect funds from the public and invest on behalf of the investors.
Mutual funds issue units to the investors. The appreciation of the portfolio or securities in
which the mutual fund has invested the money leads to an appreciation in the value of the
units held by investors. The investment objectives outlined by a Mutual Fund in its
prospectus are binding on the Mutual Fund scheme. The investment objectives specify the
class of securities a Mutual Fund can invest in. Mutual Funds invest in various asset classes
like equity, bonds, debentures, commercial paper and government securities. The schemes
offered by mutual funds vary from fund to fund. Some are pure equity schemes; others are a
mix of equity and bonds. Investors are also given the option of getting dividends, which are
declared periodically by the mutual fund, or to participate only in the capital appreciation of
the scheme

2)Equities
Equity trading is the buying and selling of company stock shares. Shares in
large publicly-traded companies are bought and sold through one of the major stock
exchanges, such as the Bombay Stock Exchange, National Stock Exchange, which serve as
managed auctions for stock trades.
Share or stock is a document issued by a company, which entitles its holder to be one of the
owners of the company. A share is issued by a company or can be purchased from the stock
market.

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Share market where dealing of securities is done is known as share market. There are two
ways in which investors gets share from market:

Primary market: markets in which new securities are issued are known as primary market.
This is part of the financial market where enterprises issue their new shares and bonds. It is
characterized by being the only moment when the enterprise received money in exchange for
selling its financial assets.

Secondary Market: Market in which existing securities are dealt is known as secondary
market. The market where securities are traded after, they are initially offered in the primary
market. Most trading is done in the secondary market.

The Stock Market is an invisible market that trades in stocks of various companies belonging
to both the public and private sectors. The Indian Stock Market is often referred to as the
Share Market since it deals primarily with shares of various companies.

A Stock Exchange is a place where the stocks are listed and traded. Such exchanges may be a
corporation or mutual organization which specializes in the business of introducing the
sellers with the buyers of stocks and securities.

The Indian Stock Market in India comprises of two stock exchanges:

● Bombay Stock Exchange (BSE)

● National Stock Exchange (NSE)

BOMBAY STOCK EXCHANGE (BSE)

The Bombay Stock Exchange (BSE) was established in 1875.The BSE India Stock Exchange
serves as the most important for companies to raise money. The chief function of the Stock
Market of India is to help raise money as capital for the growth and expansion of various
private and public sector enterprises. Besides, the Stock Market of India provides able

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assistance to the individual investors through daily updates on current position of the stocks
of the respective companies that are enlisted in the Stock Index in which the movement of
prices in a section of the market are captured in price indices. The popular acronym for Stock
Index is Sensitive index or sensex. Moreover, the liquidity provided by the exchange enables
the investors to sell securities owned by them easily and quickly. Hence a person, who is
subjected to sudden dearth of funds, can immediately sell his shares for cash in India Stock
Market.

The BSE Sensex, also known as “BSE 30” is a widely used market index not only in India
but across Asia. In terms of volume of transactions, it is ranked among the top five stock
exchanges in the world.

NATIONAL STOCK EXCHANGE (NSE)

The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the
largest stock exchange in India and a preferred exchange for trading in equity, debt and
derivatives instruments by investors. NSE has set up a sophisticated electronic trading,
clearing and settlement platform and its infrastructure serves as a role model for the securities
industry. The standards set by NSE in terms of market practices; products and technology
have become industry benchmarks and are being replicated by many other market
participants.

NSE provides a screen-based automated trading system with a high degree of transparency
and equal access to investors irrespective of geographical location. The high level of
information dissemination through the on-line system has helped in integrating retail
investors across the nation.

The exchange has a network in more than 350 cities and its trading members are connected to
the central servers of the exchange in Mumbai through a sophisticated telecommunication
network comprising of over 2500 VSATs.

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NSE has around 850 trading members and provides trading in equity shares and debt
securities. Besides this, NSE provides trading in various derivative products such as index
futures, index options, stock futures, stock options and interest rate futures.

In addition to these organizations there are other organizations highlighting on the share
trading in the Indian Stock Market are:

● Securities and Exchange Board of India (SEBI)

● NSDL

● CDSL

3)Commodities
Do you think gold prices will go up further?
Are you sure that crude oil prices are going to fall?
Have you heard that the soya crop this year is bad and will result in soya prices going up?
If you believe that these predictions have a good chance of coming true and are willing to
bet some money on them, you could try your hand at playing the commodity futures market.

A commodity is a basic good representing a monetary value. Commodities are most often
used as inputs in the production of other goods or services. With the advent of new online
exchange, commodities can now be traded in futures markets. When they are traded on an
exchange,

Commodities must also meet specified minimum standards known as basic grade.

Types of Commodities

● Precious Metals : Gold and Silver


● Base Metals : Copper, Zinc , Steel and Aluminum
● Energy : Crude Oil, Brent Crude and Natural Gas
● Pulses : Chana , Urad and Tur
● Spices : Black Pepper, Jeera, Turmeric , Red Chili
● Others : Guar Complex, Soy Complex, Wheat and Sugar

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4) Bonds
Bonds refer to debt instruments bearing interest on maturity. In simple terms,
organizations may borrow funds by issuing debt securities named bonds, having a fixed
maturity period (more than one year) and pay a specified rate of interest (coupon rate) on the
principal amount to the holders
It is a fixed income (debt) instrument issued for a period of more than one year with the
purpose of raising capital. The central or state government, corporations and similar
institutions sell bonds. A bond is generally a promise to repay the principal along with a fixed
rate of interest on a specified date, called the Maturity Date.

5) Portfolio Management Service (PMS)


Portfolio management service (PMS) is a type of professional service offered by
portfolio managers to their client to help them in managing their money in less time. Portfolio
managers manage the stocks, bonds, and mutual funds of clients considering their personal
investment goals and risk preferences. In addition to money, the portfolio managers manage
the portfolio of stocks, bonds, and mutual funds.

Successful investing in Capital Markets demands ever more time and expertise. Investment
Management is an art and a science in itself. Portfolio Management Services (PMS) is one
such service that is fast gaining eminence as an investment avenue of choice for High Net
worth Investors (HNI). PMS is a sophisticated investment vehicle that offers a range of
specialized investment strategies to capitalize on opportunities in the market. The Portfolio
Management Service combined with competent fund management, dedicated research and
technology, ensures a rewarding experience for its clients.

Indiainfoline PMS brings with it years of experience, expertise, research and the backing of
India's leading stock broking house. At Angel, experienced portfolio management is the

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difference. It will advise you on a suitable product based on factors such as your investment
horizon, return expectations and risk tolerance.

6) Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of
financial assets over time, between the lender and the borrower.
In a loan, the borrower initially receives or borrows an amount of money, called the principal,
from the lender, and is obligated to pay back or repay an equal amount of money to the lender
at a later time. Typically, the money is paid back in regular installments, or partial
repayments; in an annuity, each installment is the same amount. The loan is generally
provided at a cost, referred to as interest on the debt, which provides an incentive for the
lender to engage in the loan. In a legal loan, each of these obligations and restrictions is
enforced by contract, which can also place the borrower under additional restrictions known
as loan covenants.
Acting as a provider of loans is one of the principal tasks for financial institutions. For other
institutions, issuing of debt contracts such as bonds is a typical source of funding.

7) Insurance
Insurance is a basic form of risk management which provides protection against
possible loss to life or physical assets. A person who seeks protection against such loss is
termed as insured, and the company that promises to honor the claim, in case such loss is
actually incurred by the insured, is termed as Insurer. In order to get the insurance, the
insured is required to pay to the insurance company (i.e. the insurer) a certain amount, termed
as premium, on a periodical basis (say monthly, quarterly, annually, or even one-time).

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INTRODUCTION TO INDIAINFOLINE
IndiaInfoline 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 offer 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.

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HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18, 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act, 1956 with
Registration No. 11 93797. The IndiaInfoline Group commenced its operations as an
independent provider of information, analysis and research covering Indian businesses,
financial markets and economy, to institutional customers. We became a public limited
company on April 28, 2000 and the name of the Company was changed to Probity Research
and Services Limited. The name of the Company was changed to India Infoline.com Limited
on May 23, 2000 and later to India Infoline Limited on March 23, 2001.

In 1999, The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers. Hence we launched our Internet portal,
www.indiainfoline.com in May 1999 and started providing news and market information,
independent research, interviews with business leaders and other specialized features.

In May 2000, the name of our Company was changed to India Infoline.com Limited
to reflect the transformation of our business. Over a period of time, we have emerged as one
of the leading business and financial information services provider in India.

In the year 2000, The India Infoline Group leveraged it’s position as a provider of
financial information and analysis by diversifying into transactional services, primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products, like mutual funds and RBI Bonds. These activities were carried on by our
wholly owned subsidiaries.

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The India Infoline Group’s broking services was launched under the brand name of
5paisa.com through our subsidiary, India Infoline Securities Private Limited and
www.5paisa.com, the e-broking portal, was launched for online trading in July 2000. It
combined competitive brokerage rates and research, supported by Internet technology
Besides investment advice from an experienced team of research analysts, we also offer real
time stock quotes, market news and price charts with multiple tools for technical analysis.

Acquisition of Agri Marketing Services Limited ("Agri")

In March 2000, The IndiaInfoline Group acquired 100% of the equity shares of Agri
Marketing Services Limited, from their owners in exchange for the issuance of 508,482 of
our equity shares. Agri was a direct selling agent of personal financial products including
mutual funds, fixed deposits, corporate bonds and post-office instruments. At the time of our
acquisition, Agri operated 32 branches in South and West India serving more than 30,000
customers with a staff of, approximately 180 employees. After the acquisition, we changed
the company name to India Infoline.com Distribution Company Limited.

The India Infoline group, comprising the holding company, India Infoline Ltd (NSE:
INDIAINFO, BSE: 532636) and it’s subsidiaries, is one of the leading players in the Indian
financial services space. India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives, Commodities, Portfolio
Management Services, Mutual Funds, Life Insurance, Fixed deposits, Loans, Investment
Banking, GoI bonds and other small savings instruments. It owns and manages the website,
www.indiinfoline.com, which is one of India’s leading online destinations for personal
finance, stock markets, economy and business.

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A forerunner in the field of equity research, IndiaInfoline’s research is acknowledged by
none other than Forbes as ‘Best of the Web’ and ‘…a must read for investors in Asia’.
IndiaInfoline’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 it is
amongst the most read Indian brokers.

A network of 753 business locations spread over 346 cities across India, facilitates the
smooth acquisition and servicing of a large customer base. All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology.

The group caters to a customer base of over 500,000 over a variety of mediums viz. online,
over the phone and at our branches. The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts, sales and
trading professionals.

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries. The consolidated figures will
give a more meaningful picture of the Company to the investors. Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries, unless otherwise
specified.

VISION

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Our vision is to be the most respected company in the financial services space.

MISSION

“To become a full-fledged financial services company known for its quality of advice,
personalized services and cutting edge technology”

COMPANY PHILISOPHY
The IndiaInfoline 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 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 top Executivess 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.

Compensation/ Remuneration Committee

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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.

Share Transfer and Investor Grievance Committee


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.

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India, viz. the Stock
Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory
Services and Portfolio Management Services. It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE. It is registered
with NSDL as well as CDSL as a depository participant, providing a one-stop solution for
clients trading in the equities market. It has recently launched its Investment banking and
Institutional Broking business.

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A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to clients.
These services are offered to clients as different schemes, which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients

PRODUCT & SERVICES


Equities
India Infoline provided the prospect of researched investing to its clients, which was
hitherto restricted only to the institutions. Research for the retail investor did not exist
prior to India Infoline. India Infoline leveraged technology to bring the convenience of
trading to the investor’s location of preference (residence or office) through

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computerized access. India Infoline made it possible for clients to view transaction
costs and ledger updates in real time.

Over the last five years, India Infoline sharpened its competitive edge through the
following initiatives:
Multi-channel delivery model :
The Company is among the few financial intermediaries in India to offer a complement
of online and offline broking. The Companies network of branches also allows
customers to place orders on phone or visit our branches for trading.

Integrated middle and back office :


The customer can trade on the BSE and NSE, in the cash as well as the derivatives
segment all through the available multiple options of Internet, phone or branch
presence.

Multiple-trading options :
The Company harnessed technology to offer services at among the lowest rates in the
business.

Membership:
The Company widened client reach in trading on the domestic and international
exchanges.

Technology :
The Company provides a prudent mix of proprietary and outsourced technologies,
which facilitate business growth without a corresponding increase in costs.

Content :
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term.

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Service :
Clients can access the customer service team through various media like toll-free lines,
emails and Internet- messenger chat for instant query resolution. The Companies
customer service executives proactively contact customers to inform them of key
changes and initiatives taken by the Company. Business World rated the Companies
customer service as Best in their survey of online trading sites carried out in December
2003.

Key features :
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant, providing a


one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments, online as well as offline.


Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500,000 clients

Provision of free and world-class research to all clients

Commodities
India Infolines extension into commodities trading reconciles its strategic intent to
emerge as a one stop solutions financial intermediary. Its experience in securities
broking has empowered it with requisite skills and technologies. Increased offering:
The Companies commodities business provides a contra-cyclical alternative to equities
broking. The Company was among the first to offer the facility of commodities trading
in Indias young commodities market (the MCX commenced operations only in 2003).
Average monthly turnover on the commodity exchanges increased from Rs 0.34 bn to
Rs 20.02 bn. The commodities market has several products with different and non-
correlated cycles. On the whole, the business is fairly insulated against cyclical
gyrations in the business.

IndiaInfoline distinguished its business through the interplay of knowledge and

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technology:
Complete solution :
The Company provides a complete - advice to execution solution facilitated by
information and advice on likely commodity trends in the Indian and international
environment.

Technology :
The Company has extended the trading terminal to the investors home/workplace
reinforced with real-time commodity information and ledger position.

Rates :
The Company harnessed technology to offer services at among the lowest rates in the
business. Membership: The Company widened client reach in trading on the domestic
and international exchanges.

Key Features :
Enjoys memberships with the MCX and NCDEX, two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model, making it among the select few to offer online as well as
offline trading facilities

Extended commodity trading to retail investors, among the few Indian financial
intermediaries to do so

Online business at 80% of revenues dominates commodities trading revenues


Provides regular commodity updates pertaining to the Indian and international
environment

INSURANCE
An entry into this segment helped complete the client's product basket; concurrently, it
graduated the Company into a one stop retail financial solutions provider. To ensure
maximum reach to customers across India, we have employed a multi pronged approach and
reach out to customers via our Network, Direct and Affiliate channels. Following the

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 25


opening of the sector in 1999-2000, a number of private sector insurance service providers
commenced operations aggressively and helped grow the market.

The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues. The annuity based income generated
from insurance intermediation result in solid core revenues across the tenure of the policy.

Over the last five years, India Infoline sharpened its competitive edge in this business
segment through the following initiatives:

Client base :
Grew its 40,000 strong client base through knowledge-led analysis, translating into an
attractive opportunity to cross-sell products and generate referral business.

Distribution network :
Invested in a distribution network of 177 branches across 19 states, which provided it with
an unmatched reach within its segment.

Hands-on training :
Invested aggressively in training its field force more than 100 hours a year in product
attributes across the insurance sector - highlighting various product details and marketing
skills apart from regular meets where best practices are shared.

Technology :
The Company provides a prudent mix of proprietary and outsourced technologies, which
facilitate business growth without a corresponding increase in costs.

Research and advice :


Provided clients with advice on diverse investment products based on the customers existing
and prospective financial profile.

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Key features :
India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels, namely branch network, preferred client
group, direct marketing, corporate tax advisory, walk-ins and seminars, to reach out to
customers.

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so
effortless. All you have to do is register with us and that’s 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

APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form/ paperwork.

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Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings,
prospectus/offer documents, and IPO reports are few of the features, which help
you, keep on top of the IPO markets.

Loans
They say you mustn't trust a man till you know his house. Everyone likes hearing people
say Wow, what a beautiful house you have! From cave dwelling, we have evolved and now
a house provides far more than just shelter...it also becomes a source of pride. A Housing
Loan is used as finance to help you buy or modify that perfect home.

The different Housing Loan products can be classified as:


 Home Loans & Home Extension Loans

 NRI Loans

 Land Loans

 Home Equity Loans

• What is a housing loan? • Repayment capacity


• Who can apply? • Credit documentation
• General Terms and conditions • Legal documentation
of a Housing Loan product. • Tax Benefits
• Charges applicable to housing • Property Insurance
loan products.

What is a housing loan?


They say you mustn't trust a man till you know his house. Everyone likes hearing people
say "Wow, what a beautiful house you have!" From cave dwelling, we have evolved and

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 28


now a house provides far more than just shelter...it also becomes a source of pride. A
Housing Loan is used as finance to help you buy or modify that perfect home. The different
Housing Loan products can be classified as:

Home Loan

Home Extension Loans

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply?


As long as you want to buy a house in India, you can apply for a Home Loan. You could be
a Resident Indian or an NRI; you could want to buy a property now or in the future, but you
may still apply for a Home Loan. In case you go with the last option and want to wait before
you consider nests, all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will
help you plan out your budget. To find out your eligibility, please use our calculator.

General Terms and Conditions of a Housing Loan Product


You are allowed to visit zoos on the condition that you do not feed the animals. When

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 29


you're 18, you are allowed to go for that late night party on the condition that someone
drops you home before 12. Every step we take requires condition to be fulfilled. Similarly,
these are the general terms & conditions of a Home Loan. For more details, please refer to
the individual product.

• LTV Ratio will not exceed a particular percentage. This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property

• Elastic can be stretched only to a certain extent. The loan tenure also will not go
beyond 20 years. However, HFIs do provide for different tenures with different
terms and conditions.

• Your EMI normally does not exceed 50% of your Gross Monthly income.

• The total monthly payment towards all the loans you have availed of, including the
present one, will normally not exceed 50% of your Gross Monthly Income.

• Your loan eligibility is calculated using LTV, IIR and FOIR norms and the lowest
from the three is chosen.

• Your profile is considered by the HFI before your repayment capacity is judged.

• If the HFI insists on a personal guarantor, you need to provide one before the
disbursement of your loan.

• Your property should be both technically and legally clear before your loan can get
disbursed by the HFI.

• In case you have bought an under construction property, your loan will be partly
disbursed, as per the stages of construction and PEMI needs to be paid on it.

• The disbursement, in most cases, will be in the name of the builder or the seller or
the society or the development authority unless you have made some payment to
them.

• Repayment of the loan is either via Deduction Against Salary, Post Dated Cheques,
standing instructions or by cash / DD.

• You can either choose to repay the loan using the Annual rests or Monthly rests.

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Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below:

• Upfront Fees

• Rate of Interest

• Legal and Technical Charges

• Stamp Duty and Registration Charges

• Personal Guarantee from Charges

• Cheque Bounce Charges

• Delayed Payment Charges

• Additional Charges

• Incidental Charges

• Prepayment Charges

• PDC Swapping Charges

Legal and technical charges :


Some HFIs charge you for the legal and technical checks undertaken on your documents
and property, by lawyers and the technical team of the HFI.

Stamp duty and registration charges:


If you go in for a registered mortgage, these charges incurred by the HFI are passed onto
you. Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property.

Personal Guarantee form charges:


A piece of paper signed does not have much value unless stamped and validated by the
concerned authority. That power of attorney document that you signed with your spouse

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 31


would not be credible unless signed on a Rs.100 stamp paper. Similarly, HFIs currently
charge you a minimum of Rs.100 to get the personal guarantee validated and stamped in the
eyes of the law.

PDC swapping charges:


In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of
a change in bank accounts, a change in EMI amount, etc., the HFis might charge a flat fee
for it.

Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed. Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms. FOIR calculation also takes into account the
installments of loans you are currently repaying. The lower between the IIR and FOIR is
chosen as your maximum repayment capacity. This is then compared to the loan amount
that you have requested for and the loan eligibility as per LTV norms and the lowest of
these would be your final loan eligibility.

Salaried Self-employed
Any extra income on your salary slip Any non-recurring income that affects profit
(including overtime, etc.) is subtracted (like sale of asset) is subtracted.
50% of the average variable income over the Any non-recurring expense that adversely
last 6 months is added affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can 50% of the average depreciation of the last
be proved is added. two years is added.
HRA that can be received and is not being
received is added.

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50% of the average annual income of the last
two years is added.

Credit Documentation
Would you trust any Tom, Dick or Harry with any matter at all? We all require a certain
assurance from people before we trust them; some sort of guarantee that they are
trustworthy. For HFIs this guarantee rests in the form of tangible documents. Credit
documents are required by all HFIs but vary in kind based on your occupation, employer,
qualifications, experience, etc. Credit documents can be classified as

Income documents:
Money money money...no one can take a chance on the credibility of money matters
because at the end of the day, business is business. Almost everything about your loan is
based on your income and therefore proof regarding the same is required by the HFI to
ensure that no miscommunications occur.

Personal documents:
Previously, tribes and clans had passwords without which you could not enter into the
territory; as proof of who he was, King Solomon had a ring as identification. Throughout
history, proof of identity has been important as mistaken identity has never been
uncommon. To prevent any such shams, HFIs also require a set of documents, for a general
Home Loan Product, identifying who you are.

He following list out all the documents needed. {under this line will be placed the document
sent separately as an excel sheet}

Legal Documentation
We might be living in the electronic age but that doesn't take away the importance and
monopoly of paper as everything to do with law will always be on paper. To stick by this
unwritten rule, there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type. The

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 33


following form a broad outline of the documents required and a detailed list can be found
here.

• Copy of the offer letter sent by the HFI, accepted by you.

• Title documents of the property which include


-Duly registered sale agreement.
-Receipts of your own contribution.
-Allotment letter
-Registration receipt
-If needed, land documents indicating ownership.
-Possession letter
-Lease agreement, if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage.

• No Objection Certificate from the developer, society or development authority

• Personal Guarantees, if required.

• Documents for alternate or additional security.

• Post dated cheques for the EMIs.

These documents do NOT cover the entire list needed and if it is a resale property, the
pertaining agreements, etc. will also need to be attached.

Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans.
The details are given under the respective sections.

Property Insurance
Some events are not in our hands and are completely unavoidable. Floods, drought and
storms uproot trees and destroy the land. Along with this the birds lose their homes and

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 34


while building a nest may not be that bad and the loss is not that great, the money that you
invest in your cosy home might just be washed away. For this reason insuring your property
is a good idea as you safeguard the asset against damage or loss.. Property insurance is not
compulsory though some HFIs insist on a mortgage redemption life insurance policy and
you will therefore get a reduced interest rate. Some of the points that need to be noted
regarding property insurance are:

• You can choose the tenure of your insurance.

• The premium is charged up front

• The longer your tenure, the greater the discounts insurance companies offer you.

News Letter
The Daily Market Strategy is your morning dose on the health of the markets. Five
intra-day ideas, unless the markets are really choppy coupled with a brief on the global
markets and any other cues, which could impact the market. Occasionally an
investment idea from the research team and a crisp round up of the previous day's top
stories. That's not all. As a subscriber to the Daily Market Strategy, you even get
research reports of India Infoline research team on a priority basis.

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by. A weekly
outlook coupled with the best of the web stories from India Infoline and links to
important investment ideas, Leader Speak and features is delivered in your inbox every
Friday evening.

Portfolio Management

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 35


You get recessions. You have stock market declines. If you don't understand that's going
to happen, then you're not ready; you won't do well in the markets. No need to worry.
We at India Infoline would take care of all issues related to managing your hard earned
money.

Our Portfolio Management Service is a product wherein an equity investment portfolio is


created to suit the investment objectives of a client. We at India Infoline invest your
resources into stocks from different sectors, depending on your risk-return profile. This
service is particularly advisable for investors who cannot afford to give time or don't
have that expertise for day-to-day management of their equity portfolio.

It is all about your money, being managed by the experts, while you continue with your
routine life. Isn't it simple and totally hassle free.

What's more, you can keep track of your dividends / bonus / rights issues with paperless
tracking. So you always know how fast your investment is growing. It basically means
assigning the right job to the right person.

Research

IIFL special research cell where some of India's finest financial analysts bring you
intensive research reports on how the stock market is faring, when is the right
time to invest, when to execute your order and more.

IIFL make sure that investors are always prepared to make own investment decision
when the opportunity arises.
IIFL bring you intensive research reports - whether sectoral or company-wise or more -
that tell you exactly when and where to invest. So whenever there is an exciting
investment opportunity, you are in the know and always ready to invest. Research
reports IIFL will help you choose your investments wisely, without wasting time.
Presented in a lucid and easy-to-understand format; these reports help you make
informed decisions.

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ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with
leading asset management companies. It operates primarily in the retail segment
leveraging its existing distribution network to reach prospective clients. It has received
the in-principle approval to set up a mutual fund.

The group recently commenced its offshore asset management business under the ‘IIFL
Capital’ brand. Also, IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations. The Singapore
arm can now offer broking, asset management and investment banking services.

IIFL Inc received an FII license, thereby facilitating the investment of dedicated funds
in India.

With offices in New York, Singapore and Dubai, IIFL Capital aims to offer India-
focused equity products, fund management and advisory services for offshore and
domestic wealth management customers.

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MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs, banks, consulting firms and corporates.
1999
Restructured the business model to embrace the internet; launched
archives.indiainfoline.com mobilised capital from reputed private equity investors.
2000
Commenced the distribution of personal financial products; launched online equity
trading; entered life insurance distribution as a corporate agent. Acknowledged by Forbes
as ‘Best of the Web’ and ‘...must read for investors’.
2004
Acquired commodities broking license; launched Portfolio Management Service.
2005
Listed on the Indian stock markets.
2006
Acquired membership of DGCX; launched investment banking services.
2007
Launched a proprietary trading platform; inducted an institutional equities team; formed
a Singapore subsidiary; raised over USD 300 mn in the group; launched consumer
finance business under the ‘Moneyline’ brand.
2008
Launched wealth management services under the ‘IIFL Wealth’ brand; set up India
Infoline Private Equity fund; received the Insurance broking license from IRDA;
received the venture capital license; received inprinciple approval to sponsor a mutual
fund; received ‘Best broker- India’ award from FinanceAsia; ‘Most Improved
Brokerage- India’ award from Asiamoney.

2009

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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.

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MARKET SHARES OF COMPANY

• Retail broking:
IndiaInfoline has around 3 lakh customers. It has a tie-up with Bank of Baroda
for e-broking.

• Institutional broking:
IndiaInfoline has roped in Bharat Parajia, director of sales at CLSA in
Singapore, H Nemkumar, CLSA's country head for India, Aniruddha Dange, CLSA's
head of research in India, and Vasudev Jagannath, CLSA's head of sales in India.
While Parajia will join as head of institutional sales at India Infoline, Dange will be
head of research and Nemkumar head of investment banking.

Each one of them is bringing in more than 10 years of experience with a


top institutional brokerage in Asia. The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route. Their collective stake would
add up to around 15%. Parajia already holds a 2.88% stake in India Infoline. He will
subscribe to 25 lakh equity warrants at Rs 440 each.Nemkumar will pick up another
25 lakh, while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each. The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each, of which 10% will be paid up front as their sign-on bonus.
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into shares.That is, all these guys will have to cough up about Rs 360
crore to convert their warrants into shares. Currently, the company's institutional
equities team has 35 people, including research analysts and dealers.

• Consumer Finance:

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 40


During the quarter, it managed a book size of Rs 25 crore and has suffered a loss of
Rs 5.5 crore. It expects to break even in 2-3 quarters. NIM of 6-8% on personal loans
and 3-4% on home refinancing. It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary. It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters. IndiaInfoline is going slow as it has just started this business with a
robust risk management system. The company has roped in experts from Citi
Financial and other banks.

Ticker: 532636
Exchanges: BOM
2009 Sales: 9,630,900,000
Major Financial
Industry:
Sub Securities
Industry: Brokerage
Country: INDIA
Employees: 14105

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 41


CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai, Ahmedabad,
and New Delhi accounting for major bulk of the trading.

Competition related - due to high brand proliferation, the market from a consumer standpoint
has become “commoditized” given product parity in terms of offerings.

Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis.

Key executives
S.No Name Designation
1 Mr. Nirmal Jain Chairman and Managing director
2 Mr. A K Purwar Director
3 Mr. R Venkataraman Executive Director
4 Mr. Nilesh Vikamsey Independent Director
5 Mr. Kranti Sinha Independent Director
6 Mr. Sat Pal Khattar Non Executive Director

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 42


MARKETING STRATEGY OF INDIA
INFOLINE

Market Positioning:

Market positioning statements of India Infoline are “At India Infoline we give you
single window service” and “We also ensure your comfort”. So, India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services. At India Infoline a person can purchase or sell shares, debentures
etc. and at the same place also demat it. India Infoline also provides other investment option
to the same person at same place like Mutual Fund, Insurance, Fixed Deposit, and Bonds etc.
and help the person in designing his portfolio. By this way India Infoline provides comfort to
its customers.

Target Market:

India Infoline uses demographic segmentation strategy and segment people based on
their occupation. India Infoline uses selective specialization strategy for market targeting.
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies. Companies focus on Advisors of
Insurance and post office, Tax consultants and CAs for making sub-broker

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Marketing channel System:

India Infoline uses one level marketing channel for investment product distribution.
Sub-brokers work as intermediary between consumer and company. Company has both
forward and backward flow of activity through channel. Company distributes stationery,
brokerage, and information forward to its sub-broker. The sub-brokers send filled forms,
queries, amount of investment etc. back to the company.

Training Channel Members:

India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors. The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective, risk factors and expected return. Company
also periodically arrange seminar to guide sub-brokers.

Advertising and Promotion:

The objective of advertising of India Infoline is to create awareness about services of


India Infoline among investors and sub-brokers.

India Infoline also publishes its weekly Stock Market Newsletter ‘Market Mantra’.

HUMAN RESOURCES
The India Infoline Group’s Human Resources policy is based on the philosophy of “Owner
Mindset”. We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees. We encourage all employees to behave more as
51owners of their departments rather than employees. Our people are highly driven and work
towards increasing India Infoline’s brand and market share across product lines.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 44


We have developed extensive in-house training modules. In addition, our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited. We lay emphasis on “on the job training” where an experienced and senior person
mentors a junior executive.
In addition to salary, our employees get performance-based incentives on a quarterly basis.
We have also implemented an Employee Stock Option Plan.
As on December 31, 2009, the total employee strength of our company and our subsidiaries
was 1200.

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RESEARCH METHODOLOGY

i) Objective of the Study:

• To know percentage of people invest in mutual fund, insurance, equity and other
financial products and services.
• To know future prospects of their investment in the financial products and
services.

i) Data Collection:

Primary data:-
Primary data are data freshly gathered for a specific purpose. The various sources of
primary data for my project are as follows.
• Banks.
• Local residents.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 46


• People from industries
• Mall
• Small Retailers

Secondary Data:-
Secondary data provide a starting point for research and offer the valuable source of
information.
The secondary data was the most important source for my project because it gave us
information about company profile, competitors, market scenario, market share, etc.
It also give us information of the financial industry, its emergence,& its importance in
country progress.
We used secondary data for following sources:
• Internet
• Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES:

✔ The Sunday Weekly Report :


This weekly report is the ace of all reports. It offers a comprehensive market
overview and likely trends in the week ahead. It also presents few top picks based on
an in-depth analysis of technical and fundamental factors. It gives short term and
long term outlook on these scrip’s, their price targets and trading strategies. Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis.

✔ The Industry Watch :


This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy. It analyzes their strengths and
weaknesses and ascertains their future outlook. The final view is arrived at after

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 47


thorough interaction with industry experts. Also comparative performances of
various companies in the sector are evaluated and top picks are recommended.

✔ Stock Analysis :
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices. The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip.

✔ Flash News :

Key developments and significant news announcements that are likely to have
an impact on markets / scrips are flashed live on trading terminals. Flash news keeps
the market participants updated on an online basis and helps them to reshuffle on their
holdings.

TECHNICAL RESEARCH SERVICE

✔ Nifty Tracker :
Nifty Futures is the most traded instrument with highest volumes in F & O and
excellent liquidity. The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years. The objective is to generate positive returns for traders who are looking for a
high risk / high reward product.

✔ Online Chart :
An online forum to help clients, specifically day traders in judging the
directions of the market and stocks which are in the limelight.

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✔ Intraday Calls :
For day traders, indiainfoline provides intra-day calls with entry, exit and stop
loss levels during market hours. These calls are flashed on their terminals. Their
analysts continuously track the calls and provide recommendations according to the
market movements.

✔ Position Calls :
Indiainfoline “Position Trading Calls” are based on thorough analysis of the
price movement in select scrip’s. These calls are for a 10-15 day time span with stop
loss and target levels. These calls are flashed on their terminals during market hours.

✔ Derivative Strategies :
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools. Suitable “Derivative Strategies” are devised,
which are flashed on their terminals and published in their reports.

✔ Futures Calls :
A customized product for HNIs to help them trade with leveraged position;
wherein clients are advised on the stocks with entry, exit and stop loss level for short
term benefits. Over and above this, financial status of the calls is monitored at all
times.

OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry. We recognize that technology is an important tool for
broking operations.
We believe that online trading will gain market share due to significant advantages that it
offers
• It enables the customer to trade directly without any agent intervention
• It offers customers the convenience of trading from almost anywhere

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• It enables rapid dissemination of information and at reduced costs
• It offers a responsive mechanism for reporting grievances, problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load. Our current technology infrastructure comprises
several high ends Dell, HP, IBM servers running on Microsoft Operating System. Most of
these servers support online customers for trading activities and users for the
www.indiainfoline.com and www.5paisa.com websites.
The IndiaInfoline Group’s main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP). Our website is hosted with Net Magic Solutions, another
ISP. All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems. The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps. Our connectivity between the internal and external servers is through
this fiber connection.

Net Magic Solutions sources bandwidth from VSNL and Bharti, thereby providing us
with redundancy in the event of a failure of one of the provider’s gateway. By co-locating
some servers with Reliance Infocom we have further increased our redundancy.
The IndiaInfoline Group has implemented CISCO Pix firewall, managed by Net Magic.
All our servers, routers and desktops are behind this firewall. All connections to our trading
servers happen in a secure manner using 128 bit encryption. We have a security certification
from Thawte.

The key components of our technology infrastructure include

- Online trading software


- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 50


- Networking and hardware
- Security

SWOT Analysis:
Strengths

• Integrated technology platform


• “One Stop” shop
• Pan - India distribution network
• “India Infoline.com” and “5paisa.com” have developed into brands

Weaknesses
• Lack of a banking arm to complete the bank-broker-depository chain
• Insignificant presence in institutional Segment

Opportunities

• Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
• Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share

Threats

• Economic slowdown
• Volatile movement in indices events like May 17, 2004
• Stock markets falls will have a cascading effect on our mutual fund mobilization
• Increase/decrease in interest rate can affect our debt/ income fund mobilizations
• Future changes in personal taxation rules can impact insurance sales
• Increasing competition from large and particularly foreign players

PORTER’S FIVE FORCE MODEL


Competitive Force: - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment.
• Industry competitors
• Potential entrants.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 51


• Substitutes.
• Buyers.
• Suppliers

Intensity of Competition:

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations.

Increased Focus of Banks in Retail Broking:


Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry.

Online Trading Competes with Traditional Brokerage:


There is an increasing demand for online trading due to consumer’s growing preference for
internet as compared to approaching the brokers.

Threat of New Entrants


Entry of Foreign Players
New forms of trading including T+2 settlement system, dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industry.Threat of Substitutes

Alternative Investment Options


Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services.

Buyer Power
Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses.

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Low Product Differentiation Proves Beneficial:
The retail broking services provided by the various companies are homogeneous with very
low product differentiation. This allows customers to enjoy a greater bargaining power.

Supplier Power

Increased Dependence on IPOs


There is a growing dependence of corporate on broking houses with the rising number of
IPO’s coming to the market.

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INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 54
Financial Performance

Year 2007-08
List Revenue Profit before Profit after tax
interest,
depreciation and
tax
Indiainfoline Ltd. 6,724.4 2,772.5 1,286.9
India Infoline 1,522.1 1,208.9 315.5
Investment
Services Ltd
Moneyline Credit 113.2 19.4 20.7
Ltd
India Infoline 18.4 71.3 56.0

Distribution
Company Ltd

India Infoline 405.0 129.7 75.3


Marketing

Services Ltd

India Infoline 688.1 4.2 41.7


Insurance

Services Ltd

India Infoline 170.1 14.7 8.3

Commodities Ltd

India Infoline 823.8 98.1 63.0


Media and

Research Services
Ltd

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 55


Other subsidiaries 96.9 62.4 51.2

Inter-company 326.1 169.2 42.5


adjustments

Aggregate 10,235.9 4,022.2 1,639.3

This is the tabel represents the Revenue, profit before interest, depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment. If we see this table we will find that the total revenu for 2008-09
was 10235.9, and 4022.2 is his profit before interest, depreciation and tax which
is
4022.2 * 100 =39.3%
10235.9
And if we calculate the profit on total revenue it will be

1639.3 * 100 =16.01%


10235.9

And if we calculate the total Interest, depreciation and tax they will be

4022.2-1639.3=2382.9

Rs. Mn
Lists 2007-08 2007-06
Gross Income 6724.4 2867.2
Profit before interest, depreciation and 2,772.5 983.4

taxation

Interest and financial charges 211.6 63.9

Depreciation 194.4 123.3

Profit before tax 2,366.5 796.2

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Taxation - Current 793.4 260.7

- Deferred 20.3 2.4

- Fringe benefit tax 10.9 11.9

- Short or excess provision of income-tax 5.3 0.0

Net profit for the year 1,577.2 521.2

Less: Extraordinary items (Net of tax) 290.4 0.0

Less: Appropriations

Dividend:

Interim dividend 0.0 149.6

Proposed final dividend 342.6 0.0

Dividend distribution tax 58.2 21.0

Transfer to general reserves 131.0 53.0

Add: Balance brought forward from 474.1 83.5


previous year

Add: Other adjustments (profits of India 0.0 93.0

Infoline Securities Private Limited added

pursuant to merger)

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Balance to be carried forward 1,229.1 474.1

Profit & Loss account of India Infoline


------------------- in Rs. Cr. -------------------

2009 2008

INCOME

Sales Turnover 542.27 616.11

Excise Duty 0.00 0.00

Net Sales 542.27 616.11

Other Income 29.34 27.29

Stock Adjustments 0.00 0.00

Total Income 571.61 643.61

EXPENDITURE

Raw Materials 0.00 0.00

Power & fuel Cost 0.00 0.00

Employee Cost 136.91 128.79

Other Manufacturing Expenses 93.32 105.93

Selling & Admin Expense 112.16 119.13

Miscellaneous Expense 41.03 39.67

Preoperative Exp. Capitalists 0.00 0.00

Total Expenses 383.42 393.42

OPERATING PROFIT 158.85 222.59

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PBDIT 188.19 249.88

Interest 11.15 22.82

PBDT 177.04 227.04

Depreciation 25.56 19.44

Other Written Off 0.00 0.00

Profit Before Tax 151.48 207.62

Extra Ordinary Items 2.23 -0.53

PBT(post extra-ord items) 153.71 207.09

Tax 47.88 78.39

Reported Net Profit 105.83 157.73

Total value Addition 383.42 393.53

Preferred Dividend 0.00 0.00

Equity Dividend 79.45 34.36

Corporate Dividend Tax 13.50 5.82

Per Share Data

Share in Issue(in Lakhs) 2,834.00 571.03

Earning Par Share(Rs) 3.73 27.62

Equity Dividend (%) 140.00 60.00

Book Value(Rs) 36.58 17335

This is the Profit and loss account for the years 2007-08 and 2008-09. In which we can see
that the turnover, sale and other profits have decreased from the 2007-08 to 2008-09, which is
an impact of recession.

The total income is also decreased from 643.61 to 571.61 in 09, which is around 11.19% of
the previous year or 72 cr.

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3%. In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 59


Operating profit was decrease from 222 to 158, approximate 28.82%, from the year 2007-08
to 2008-09.

Report net profit is decreased from 157.73 to 105.83

Share in issued has increase from 571.03 to 2834.00

Earning per share has come down from 27.62 to 3.73 which is 90%

Balance Sheet in Cr.


2009 2008

Sources of funds

Share capital 56.68 57.10


Reserve & surplus 980.13 932.75

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Equity share 11.37 59.77
warrants

Net worth 1048.18 1040.62

Loan funds

Secured loan 1.70 -

Unsecured loan 00.10 130.56

Total Liability 1049.98 1180.19

Application funds

Fixed
asset(including
intangibles)

Gross block 143.67 98.31

Less: accumulated 44.94 35.07


depreciation and
amortization

Net block 98.73 63.72

Capital work in 4.51 00.49


progress

103.24 63.73

Investment 873.71 915.68

Currents asset
loan and advance

Sundry debtors 103.52 342.81

Cash & bank 264.10 061.62


balance

Stock on hand 166.72 154.06

Loan & advance 244.41 313.89

778.75 872.38

Less: current
liabilities &

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 61


provision

Current liabilities 552.68 514.85

Provisions 148.64 156.74

Total 701.31 671.59

Net current 77.43 200.79


assets

Total of Assets 1049.98 1180.19

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09.

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period. Which
is all the impact of recession not only on this broking firm, on all others too, the same impact
was their in this period, their is a cost cutting and reduction on other expenses.

The biggest of this can be seen on the liability side on unsecured loans which has come down
from 130.57 to 00.10, which is more then 99%, organization has increased his cash from
61.62 to 264.10 for the period of 2008-09 as compare to 2007-08.

COMPETITORS
(ACCORDING TO VOLUME)

LAST MARKET SALES NET TOTAL


PRICE CAP. TURNOVER PROFIT ASSET
(Rs.cr)

INDIABULLS 135.20 4188.09 2003.09 99.451 14722.36

INDIA INFOLINE 141.30 4004.44 571.57 103.59 1049.99

EDELWEISS CAP 470.00 3,525.20 191.39 26.39 1,865.28

MOTILAL OSWAL F 170.80 2,443.58 57.26 45.31 433.49

HSBC INVEST 264.00 1,843.68 24.31 -15.21 667.45

FUTURECAPITAL 230.50 1,464.32 132.44 9.31 1,216.75

NETWORK 18 90.20 865.07 94.50 -19.41 862.11

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GEOIIT BNP 37.80 847.03 140.56 14.39 276.06

DELTA CORP 43.30 723.81 42.73 8.31 356.87

NALWASONS INV 1,210.0 621.48 14.78 11.26 270.90


0

This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation, which includes last price of share, market capital, sales turnover,
net profit and total assets.

This graph shows thr last share price of the organisation, in this we can see that Nalwasons
investment has the highest share price, as compare to others it is very high. The indiainfoline
stand very short in this.

When it comes to market capital the Indiabulls has the highest market capital, and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph.

When we talk about sales turnover of the broking firm, or investment organisation again the
indiabulls has the hight sales turnover, as compare to other its very high, other stand no ware
infront of him, but still indiainfoline manages second position.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 63


The profit is the main aim of each and every organsation. In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls.
Indiainfoline’s profit is just ahead of indiabulls.

There are two vacent place which indicates no profit, but it is not like that, here it means loss
both HSBC and NETWORK 18 has suffered a loss of 15.21 and 19.41 respectively.

From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive, because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only.

But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors.

Comparative Analysis of charges and facilities


provided by different companies

Company Account Margin Brokerage AMC Exposure branche


Opening Money Intra- (for intra) s
Delivery(%)

India infoline 0/- 2555/- 0.05-0.50 250/- 8 times 607

Kotak 750/- 5000/- 0.06- 0.59 360/- 4 times 890


securities

ICICI direct 500/- 975/- 0.075- 0.05 450/- 5 times 2124

Motilal oswal 415/- Not 0.03- 0.30 300/- 4 times 430


Restricted
Religare 299/- 5000/- 0.025-0.25 Nil 20 times 1837

Angel broking 731/- 5000/- 0.03- 0.30 300/- 4 times 120

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 64


Geojit 650/- Nil 0.03- 0.30 Nil 20 times 500

India bulls 900/- Nil 0.03- 0.30 Nil 20 times 718

Reliance 750/- Not 0.05- 0.25 50/- 5 times 10000


money Restricted

Share khan 750/- 5000/- 0.03- 0.30 500/- 4 times 250

Hdfc 799/- 5000/- 0.05-0.50 500/- 5 times NA


from
2 nd
yr

This is comparative study based on the charges made by Indiainfoline and other broking
firms. In this it take lowest charge to open an accout and providing an appropriate brokerage
to his clients as compare to few others. And low margin money and it has a total of more then
600 branc all over India, which is very good in number and very less as compare to Reliance,
kotak securities, ICICI securities and Religare, so that they can provide a proper attention
towards his clients and manages thaind in better was, that’s the reason we have seen about
they have good amout of net profit with less investment.

That’s the reason they have a line “ITS ALL ABOUT MONEY, HONEY”

PERFORMANCE HIGHLIGHT IN 2008-09


Business Division Business Highlights
• Market share of equities increase from
Broking 3.4% in 2007-08 to 3.76% in 2008-09.
• Customer base for retail equities
increased 35.8% from .44 ml in 2007-
08 to .06 ml in 2008-09.
• Published in-depth and thematic
reports on INCH, politics, rural India,
infrastructure, self commodities,
utilities and India worming.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 65


• Receive Insurance Broking License.
Insurance • Forged alliances with major insurance
companies for the distribution of life
and nonlife products.
• Alter the product mix in favor of
traditional products like Endowment
Products.
• Proactively suspended personal loans
Credit and Finance and mortgages business from
September 2008, while the personal
loan business is still suspended, the
mortgages business has been Re-
Started.
• Revenue at Rs.2654.1 ml in 2008-09
against Rs.1937.5 ml in 2007-08.
• Registered the Housing Finance
Subsidiary with NHB.
Wealth and asset Management • Introduce the family office platform.
• Raised around Rs.1.8 bl in the largest
single day debenture listing of its
kind.
• Received in principle approval for
sitting up of Mutual Funds.
• Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services.

Highlights, 2008-09 Industry optimism


Wealth management

• Mobilised Rs 1.8 bn in the largest single-day debenture listing of its kind


• Built relationships with many reputed families across India and the globe
Asset management
• Received the in-principle approval from SEBI to sponsor a Mutual fund

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 66


• IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities. The Singapore arm can now offer
broking, asset management and investment banking services
• IIFL Inc received an FII license, thereby facilitating the investment of dedicated funds in
India
• Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall:


• India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd. Also, they were the Syndicate members to
Adani Power IPO in July 2009.

• The first premium mobilization from insurance broking business stood at Rs 410
million.

• The net NPA on the books continue to remain less than 1%.

• Its core business improved significantly.

• Its market share remains same at 3.6%.

• Average daily equities volumes stood at Rs 33.36 billion as compared to Rs 32.25


billion in the previous quarter.

• The company's customer base improved to 33%.

• Its financial income grew by 48.7%.

• Its employee cost was of Rs 7.36 million.

• Administrator cost grew by 28% at Rs 507 million, QoQ.

• Depreciation coat stood at Rs 131.5 million.

• Interest coat was of Rs 155 million.

• Its advertisement cost was of Rs 24 million.

• Its cash and cash equivalent stood at Rs 9.3 billion and debt was at Rs 300 millions.

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FINDINGS
➢ Brokerage of India infoline is higher than Others broking firms like Religare,Motilal
Oswal,Indiabulls,they are charging 0 .03% for Intraday and 0 .30% for Delivery
where India Infoline is taking 0 .05% for Intraday and 0 .50% for Delivery.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 68


➢ Margin money of India infoline is higher than other firm like Indiabulls,Geojit,Motilal
Oswal,there is no restriction of margin moneye.But in India Infoline,the minimum
margin money should be 5000/2555 rs..

➢ Exposure is less than other firms. India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money.

➢ HDFC, ICICI direct provide their customer’s three types of account (de-mat a/c,
trading a/c, bank a/c) but India infoline provide only De-mat a/c and Trading a/c.

➢ Religare takes Rs.299 for lifetime services, where as India infoline takes Rs.555.

➢ Relationship manager changes many times, it creates problem for the offline customers
.

➢ Securities are not so much reliable.

➢ India Infoline has hidden charges, Customer are not much aware about that.

➢ Customer satisfaction of India infoline not so good.

➢ Most of the customers are trading offline.

➢ Most of the customers approach towards the broking firm is through the relationship
manager.

➢ Most of the people are not much aware of share market and its benefit.

Recommendation

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 69


➢ To increase awareness about Share Market and the name India Infoline itself, the
company should organize campaign. The campaign can be weakly, monthly, yearly, it
will give a good result to the company to capture market in the competitive position.

➢ The company should reduce the margin money. It can help to acquire more
customers, if the firms bring plans for no boundation of margin money.

➢ The Company should increase their focus on the less margin money customers also .It
can help to make more customers of low margin money which can increase the
revenue of the firm. The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer.

➢ Transaction error should be avoided .Transaction should be done properly, taking in


consideration that it is one of the most required quality of a firm. Wrong transaction
or default transaction may lead the prestige of the company to be down.

➢ Brokerage rate should be reduced. Religare,Motilal Oswal,Indiabulls, are charging as


0 .03% for Intraday and 0 .30% for Delivery where as India Infoline is charging 0 .
05% for Intraday and 0 .50% for Delivery.Though it is negotiable but for high margin
money customer not for less margin money customer.

➢ The Company should increase Exposure. It is the good tool to capture the market.

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CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee. While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market. I
was also able to know about the business environment and business ethics of the business
world. I also came to know about what does a firm or an organization require or wants from a
employee or a trainee. From the survey, I found that India infoline is in the top three position
in the share market.

INSTUTUE OF BUSINESS MANAGEMENT & RESEARCH 71


BIBLIOGRAPHY

 Websites:-

• www.indiainfoline.com
• www.5paisa.com
• www.nse.com
• www.moneycontrol.com

 Book source:-

• Financial management
- Khan & Jain.
• Principal of financial management
-Prassana Chandra
• Business Environment
- Francis Cherunilam

• Annual report of indiainfoline

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