Академический Документы
Профессиональный Документы
Культура Документы
Submitted by:
Supervisor:
Dinit Mahendru
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
PHAGWARA
(2008-10)
Page | 2
ACKNOWLEDGMENT
It is difficult to acknowledge precious a debt as that of learning as it is the only debt that is difficult
to repay except through gratitude.
First and foremost I wish to express my profound gratitude to the almighty, the merciful &
compassionate with those grace & blessings. I have been able to complete this work.
I convey my heart full thanks to the Relationship manager Mr.Vikas
Kumar and the staff members of INDIA INFOLINE LTD, with their help
and corporation.
It is my profound privilege to express my sincere thanks to Dr. Sanjay Modi, Director LIM
Phagwara, for giving me an opportunity to work on the project and giving me full support in
completing this project.
I am very thankful to my guide Mrs. Deepika Dhall (Lecturer in LIM, Phagwara) and my
coordinator Ms. Sukhwinder kaur for his full support in completing this project work.
Last but not least, I would like to thank my parents & my friends for their full cooperation &
continuous support during the course of this assignment.
Page | 3
TABLE OF CONTENTS
Contents
page no.
Certificate
Acknowledgement
Table of content
4,5
Executive summary
35
Page | 4
45
49
71
Annexure
73
Questionnaire
Financial statements
Balance sheet
Glossary
Bibliography
82
Page | 5
EXECUTIVE SUMMARY
Role of financial system is to enthusiast economic development. As investors are getting more
educated, aware and prudent they look for innovative investment instruments so that they are able to
reduce investment risk, minimize transaction costs, and maximize returns along with certain level of
convenience as a result there has been as advent of numerous innovative financial instrument such as
bonds, company deposits, insurance, and mutual finds. All of which could be matched with
individuals investment needs. Mutual funds score over all other investment options in terms of
safety, liquidity, returns, and are as transparent, convenient as it can get. Goal of a mutual fund is to
provide an efficient way to make money .In India there are 36 mutual funds with different
Investment strategies and goals to choose from .different mutual funds have different risks, which
differ because of funds goals, funds manager, and investment styles.
A mutual fund is an investment company that collects money from many people and
invests it in a variety of securities .the company then manages the money on an ongoing basis for
individuals and businesses. Mutual funds are an efficient way to invest in stocks, bonds, and other
securities for three reasons:
Page | 6
1.
The objective of the research is to study and analyze the awareness level of investors of mutual
funds.
2.
3.
An attempt has been made to measure various variables playing in the minds of investors in
terms of safety, liquidity, service, returns, and tax saving.
4.
5.
Understanding the different ratios & portfolios so as to tell the distributors about these terms, by
this, managing the relationship with the distributors
6.
7.
To analyze the comparative study between other leading mutual funds in the present market.
8.
9.
Finding out ways and means to improve on the services by INDIA INFOLINE LTD
Page | 7
Page | 8
can handle a maximum of 125 distributors efficiently and also to cover untapped market.
Regular activities like canopy should be done so as to get more interaction with the
distributors.
Regular session should be organized on the handling of the india infoline software so as to
resolve the account statement problem.
All the persons who have cleared the AMFI exam should be empanelled with Mutual Fund so
as to be largest distributor base.
Page | 9
INTRODUCTION
What is a Mutual fund?
P a g e | 10
Mutual fund is an investment company that pools money from shareholders and invests in a variety
of securities, such as stocks, bonds and money market instruments. Most open-end Mutual funds
stand ready to buy back (redeem) its shares at their current net asset value, which depends on the
total market value of the fund's investment portfolio at the time of redemption. Most open-end
Mutual funds continuously offer new shares to investors. Also known as an open-end investment
company, to differentiate it from a closed-end investment company. Mutual funds invest pooled cash
of many investors to meet the fund's stated investment objective. Mutual funds stand ready to sell
and redeem their shares at any time at the fund's current net
asset value: total fund assets divided by shares outstanding.
In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as disclosed in offer
document. Investments in securities are spread across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the
same direction in the same proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of Mutual funds are known as unit
holders. The profits or losses are shared by the investors in proportion to their investments. The
Mutual funds normally come out with a number of schemes with different investment objectives
which are launched from time to time. In India, A Mutual fund is required to be registered with
Securities and Exchange Board of India (SEBI) which regulates securities markets before it can
collect funds from the public. In Short, a Mutual fund is a common pool of money in to which
investors with common investment objective place their contributions that are to be invested in
accordance with the stated investment objective of the scheme. The investment manager would
P a g e | 11
invest the money collected from the investor in to assets that are defined/ permitted by the stated
objective of the scheme. For example, an equity fund would invest equity and equity related
instruments and a debt fund would invest in bonds, debentures, gilts etc. Mutual fund is a suitable
investment for the common man as it offers an opportunity to invest in a diversified, professionally
managed basket of securities at a relatively low cost.
Professional Management.
P a g e | 12
The major advantage of investing in a mutual fund is that you get a professional money
manager to manage your investments for a small fee. You can leave the investment decisions
to him and only have to monitor the performance of the fund at regular intervals.
Diversification.
Considered the essential tool in risk management, mutual funds make it possible for even
small investors to diversify their portfolio. A mutual fund can effectively diversify its
portfolio because of the large corpus. However, a small investor cannot have a welldiversified portfolio because it calls for large investment. For example, a modest portfolio of
10 bluechip stocks calls for a few a few thousands.
Convenient Administration.
Mutual funds offer tailor-made solutions like systematic investment plans and systematic
withdrawal plans to investors, which is very convenient to investors. Investors also do not
have to worry about investment decisions, they do not have to deal with brokerage or
depository, etc. for buying or selling of securities. Mutual funds also offer specialized
schemes like retirement plans, childrens plans, industry specific schemes, etc. to suit
personal preference of investors. These schemes also help small investors with asset
allocation of their corpus. It also saves a lot of paper work.
Costs Effectiveness
A small investor will find that the mutual fund route is a cost-effective method (the AMC fee
is normally 2.5%) and it also saves a lot of transaction cost as mutual funds get concession
from brokerages. Also, the investor gets the service of a financial professional for a very
small fee. If he were to seek a financial advisor's help directly, he will end up paying
significantly more for investment advice. Also, he will need to have a sizeable corpus to offer
for investment management to be eligible for an investment advisers services.
Liquidity.
P a g e | 13
You can liquidate your investments within 3 to 5 working days (mutual funds dispatch
redemption cheques speedily and also offer direct credit facility into your bank account i.e.
Electronic Clearing Services).
Transparency.
Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on a
regular basis. They also send quarterly newsletters, which give details of the portfolio,
performance of schemes against various benchmarks, etc. They are also well regulated and
Sebi monitors their actions closely.
Tax benefits.
You do not have to pay any taxes on dividends issued by mutual funds. You also have the
advantage of capital gains taxation. Tax-saving schemes and pension schemes give you the
added advantage of benefits under section 88.
Affordability
Mutual funds allow you to invest small sums. For instance, if you want to buy a portfolio of
blue chips of modest size, you should at least have a few lakhs of rupees. A mutual fund
gives you the same portfolio for meager investment of Rs.1,000-5,000. A mutual fund can do
that because it collects money from many people and it has a large corpus.
P a g e | 14
Professional Management- Did you notice how we qualified the advantage of professional
management with the word "theoretically"? Many investors debate over whether or not the
so-called professionals are any better than you or I at picking stocks. Management is by no
means infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll
talk about this in detail in a later section.
Costs - Mutual funds don't exist solely to make your life easier--all funds are in it for a profit.
The Mutual fund industry is masterful at burying costs under layers of jargon. These costs are
so complicated that in this tutorial we have devoted an entire section to the subject.
Dilution - It's possible to have too much diversification (this is explained in our article
entitled "Are You Over-Diversified?"). Because funds have small holdings in so many
different companies, high returns from a few investments often don't make much difference
on the overall return. Dilution is also the result of a successful fund getting too big. When
money pours into funds that have had strong success, the manager often has trouble finding a
good investment for all the new money.
Taxes - When making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gain tax
is triggered, which affects how profitable the individual is from the sale. It might have been
more advantageous for the individual to defer the capital gains liability.
Equity funds, if selected in the right manner and in the right proportion, have the ability to play an
important role in achieving most long-term objectives of investors in different segments. While the
selection process becomes much easier if you get advice from professionals, it is equally important
to know certain aspects of equity investing yourself to do justice to your hard earned money.
P a g e | 15
P a g e | 16
1. BY STRUCTURE
Interval Schemes.
2. BY INVESTMENT OBJECTIVE
Growth Schemes.
Income Schemes.
Balanced Schemes.
3. OTHER SCHEMES
1.
Special Schemes.
Index Schemes.
The units offered by these schemes are available for sale and repurchase on any business day at NAV
based prices. Hence, the unit capital of the schemes keeps changing each day. Such schemes thus
offer very high liquidity to investors and are becoming increasingly popular in India. Please note that
an open-ended fund is NOT obliged to keep selling/issuing new units at all times, and may stop
issuing further subscription to new investors. On the other hand, an open-ended fund rarely denies to
its investor the facility to redeem existing units.
P a g e | 17
2.
The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed number of
units. These schemes are launched with an initial public offer (IPO) with a stated maturity period
after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy or
sell units on the stock exchanges where they are listed. Unlike open-ended schemes, the unit capital
in closed-ended schemes usually remains unchanged. After an initial closed period, the scheme may
offer direct repurchase facility to the investors. Closed-ended schemes are usually more illiquid as
compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends
towards the NAV closer to the maturity date of the scheme.
3.
INTERVAL SCHEMES
These schemes combine the features of open-ended and closed-ended schemes. They may be traded
on the stock exchange or may be open for sale or redemption during pre-determined intervals at
NAV based prices.
4.
GROWTH SCHEMES
These schemes, also commonly called Equity Schemes, seek to invest a majority of their funds in
equities and a small portion in money market instruments. Such schemes have the potential to
deliver superior returns over the long term. However, because they invest in equities, these schemes
are exposed to fluctuations in value especially in the short term.
5.
INCOME SCHEMES
These schemes, also commonly called Debt Schemes, invest in debt securities such as corporate
bonds, debentures and government securities. The prices of these schemes tend to be more stable
compared with equity schemes and most of the returns to the investors are generated through
dividends or steady capital appreciation. These schemes are ideal for conservative investors or those
not in a position to take higher equity risks, such as retired individuals. However, as compared to the
money market schemes they do have a higher price fluctuation risk and compared to a Gilt fund they
have a higher credit risk.
P a g e | 18
6.
BALANCED SCHEMES
These schemes are commonly known as Hybrid schemes. These schemes invest in both equities as
well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of
income and moderate capital appreciation and are ideal for investors with a conservative, long-term
orientation.
8.
INDEX SCHEMES
The primary purpose of an Index is to serve as a measure of the performance of the market as a
whole, or a specific sector of the market. An Index also serves as a relevant benchmark to evaluate
the performance of mutual funds. Some investors are interested in investing in the market in general
rather than investing in any specific fund. Such investors are happy to receive the returns posted by
the markets. As it is not practical to invest in each and every stock in the market in proportion to its
size, these investors are comfortable investing in a fund that they believe is a good representative of
the entire market. Index Funds are launched and managed for such investors.
P a g e | 19
9.
Sector Specific Schemes generally invests money in some specified sectors for example: Real
Estate Specialized real estate funds would invest in real estates directly, or may fund real estate
developers or lend to them directly or buy shares of housing finance companies or may even buy
their securitized assets.
P a g e | 20
P a g e | 21
If the complaints remain unresolved, the investors may approach SEBI for facilitating redressal of
their complaints. On receipt of complaints, SEBI takes up the matter with the concerned Mutual fund
and follows up with it regularly. Investors may send their complaints to:
P a g e | 22
DESCRIPTION
IDEAL RANGE
STANDARD
Standard Deviation allows to evaluate the volatility Should be near to its mean
DEVIATION
BETA
values
range
ALPHA
would expect from a fund, given its beta, and the stock are better then market
return it actually produces. It also measures the returns.
unsystematic risk .
SHARPE
Sharpe Ratio= Fund return in excess of risk free The higher the Sharpe ratio,
RATIO
return/ Standard deviation of Fund. Sharpe ratios the better a funds returns
are ideal for comparing funds that have a mixed relative to the amount of risk
asset classes.
taken.
P a g e | 23
P a g e | 24
Equity
Other schemes
schemes
end
inco
me
Sho
Lon
Short
Long
rt
Term
Ter
Ter
Cap
Cap Gains
ital
ital
Gai
Gai
ns
Resid 10
ent
NIL
All
Equ
Liquid
Term
Sche
ity
Schem
Capit
Capita
mes
Sch
es
al
l Gain
AS
PER
Indivi
SLAB
dual
/ HUF
Partn
10
ershi
p
Firms
NIL
30%
TDS
Other
Scheme
em
es
10%
NIL
TAX
NIL
28.32%
14.16%
(25%
(12.5%
with
+10%s
+10%su
index
urchar
charge+
ation)
ge+edu 3%educ
FREE
(20%
cation
tion
cess)
cess)
28.32%
22.66%
(25%
(20%
with
+10%s
+10%
index
urchar
surchar
ation)
ge+edu e+3%
10%
(20%
NIL
TAX
FREE
NIL
cation
educati
cess)
n cess)
P a g e | 25
AOP/
10
BOI
NIL
AS
PER
SLAB
Dome 10
stic
NIL
30%
anies
10
%
NIL
28.32%
22.66%
NIL
AS
PER
SLAB
TAX
NIL
(25%
(20%
with
+10%s
+10%
index
urchar
surchar
ation)
ge+edu e+3%
FREE
(20%
cation
educati
cess)
n cess)
28.32%
22.66%
(25%
(20%
with
+10%s
+10%
index
urchar
surchar
ation)
ge+edu e+3%
10%
NIL
TAX
NIL
FREE
(20%
Comp
NRIs
10%
cation
educati
cess)
n cess)
28.32%
14.16%
(25%
(12.5%
+10%s
+10%su
index
urchar
charge+
ation)
ge+edu 3%educ
10%
(20%
with
STCG-
TAX
30%LTC FREE
G-20%
NIL
cation
tion
cess)
cess)
P a g e | 26
P a g e | 27
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in
which the first Mutual Fund Regulations came into being, under which all mutual funds, except
UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual
Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds setting
up funds in India and also the industry has witnessed several mergers and acquisitions. As at the
end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The
Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other
mutual funds.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of
Unit Trust of India, functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the
erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management
and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund
Regulations, and with recent mergers taking place among different private sector funds, the
mutual fund industry has entered its current phase of consolidation and growth. As at the end of
September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.
P a g e | 28
P a g e | 29
Upon satisfying these conditions, the registration certificate is issued subject to the payment of
registration fees of Rs.25.00 lacs for details; see the SEBI (Mutual funds) Regulations, 1996.
EVALUATING PORTFOLIO PERFORMANCE
It is important to evaluate the performance of the portfolio on an ongoing basis. The following
factors are important in this process: Consider long-term track record rather than short-term
performance. It is important because long-term track record moderates the effects which
unusually good or bad short-term performance can have on a fund's track record. Besides,
longer-term track record compensates for the effects of a fund manager's particular investment
style. Evaluate the track record against similar funds. Success in managing a small or in a fund
focusing on a particular segment of the market cannot be relied upon as an evidence of
anticipated performance in managing a large or a broad based fund. Discipline in investment
approach is an important factor as the pressure to perform can make a fund manager susceptible
to have an urge to change tracks in terms of stock selection as well as investment strategy.
The objective should be to differentiate investment skill of the fund manager from luck and to
identify those funds with the greatest potential of future success.
P a g e | 30
Through Mutual funds, one can set up an investment programme to build capital for retirement
years. Besides, it is an ideal vehicle to practice asset allocation and rebalancing thereby
maintaining the right level of risk at all times.
It is important to know that determination and maintaining the right level of risk tolerance can go
a long way in ensuring the success of an investment plan. Besides, it helps in customizing fund
category allocations and suitable fund selections. There are certain broad guidelines to determine
the risk tolerance.
These are:
Be realistic with regard to volatility. One needs to seriously consider the effect of potential
downside loss as well as potential upside gain. Determine a "comfort level" i.e. If one is not
confident with a particular level of risk tolerance, and then select a different level.
Regardless of the level of risk tolerance, one should adhere to the principles of effective
diversification i.e. The allocation of investment assets among different fund categories to achieve
a variety of distinct risk/reward objectives and a reduction in overall portfolio risk.
It helps to reassess risk tolerance every year. The risk tolerance may change due to either major
adjustment in return objectives or to a realization that an existing risk tolerance is inappropriate
for one's current situation.
Market cap of a company signifies its market value, which is equal to the total number of shares
outstanding multiplied by the current stock price.
The market cap has a role to play in the kind of returns the stock might deliver and the risk or
volatility that one may have to encounter while achieving those returns.For example, large
companies are usually more stable during the turbulent periods and the mid cap and small cap
companies are more vulnerable.
As regards the allocation to each segment, there cannot be a standard combination applicable to
all kinds of investors. Each one of us has different risk profile, time horizon and investment
objectives.
P a g e | 31
Besides, while deciding on the allocation, one has to keep in mind the fact whether the allocation
is being done for an existing investor or for a new investor. While for an existing investor, the
allocation that already exists has to be considered, for a new investor the right way to begin is by
considering funds that invest predominantly in large cap stocks. The exposure to mid and small
caps can be enhanced over a period of time.
It is always advisable to take help of professionals to decide the allocation as well as select the
appropriate funds. However, investors themselves have an important role to play in this process.
P a g e | 32
P a g e | 33
performance. In fact, at times to ensure that your investment remains within the parameters
defined in the investment plan, you may to be forced to exit from that scheme. In other words,
you need to assess as to how much risk did the fund manger subject you to, and did he give you
an adequate reward for taking that risk. Besides, you also need to consider whether own risk
profile allows you to accept the revised level of risk
5. Sell your fund, if you need to
There is no standard formula to determine the right time to sell an investment in Mutual fund or
for that matter any investment. However, you can definitely benefit by following certain
guidelines while deciding to sell an investment in a Mutual fund scheme. Here are some of them:
You may consider selling a fund when your investment plan calls for a sale rather than doing so
for emotional reasons. You need to hold a fund long enough to evaluate its performance over
a complete market cycle, i.e. around three years or so. Many of us make the mistake of either
holding on to funds for too long or exit in a hurry. It is important to do a thorough analysis before
taking a decision to sell. In other words, if you take a wrong decision, there is always a risk of
missing out on good rallies in the market or getting out too early thus missing out on
potential gains. You should consider coming out of a fund if its performance has consistently
lagged its peers for a period of one year or so. It doesn't make sense to hold a fund when it no
longer meets your needs. If you have made a proper selection, you would generally be required
to make changes only if the fund changes its objective or investment style, or if your needs
change.
6. Diversified vs. Concentrated Portfolio
The choice between funds that have a diversified and a concentrated portfolio largely depends
upon your risk profile. As discussed earlier, a well - diversified portfolio helps in spreading the
investments across different sectors and segments of the market. The idea is that if one or more
stocks do badly, the portfolio won't be affected as much. At the same time, if one stock does very
well, the portfolio won't reap all the benefits. A diversified fund, therefore, is an ideal choice for
someone who is looking for steady returns over the longer term. A concentrated portfolio works
exactly in the opposite manner. While a fund with a concentrated portfolio has a better chance of
providing higher returns, it also increases your chances of underperforming or losing a large
portion of your portfolio in a market downturn. Thus, a concentrated portfolio is ideally suited
for those investors who have the capacity to shoulder higher risk in order to improve the chances
of getting better returns.
7. Review your portfolio periodically
It is always a good idea to review your portfolio periodically. For example, you may begin
reviewing your portfolio on a half-yearly basis. Besides, you may be required to review your
portfolio in greater detail when your investments goals or financial circumstances change.
P a g e | 34
Any kind of investment we make is subject to risk. In fact we get return on our
investment purely and solely because at the very beginning we take the risk of parting
with our funds, for getting higher value back at a later date. Partition itself is a risk.
Well known economist and Nobel Prize recipient William Sharpe tried to segregate the
total risk faced in any kind of investment into two parts - systematic (Systemic) risk and
unsystematic (Unsystemic) risk.
Systematic risk is that risk which exists in the system. Some of the biggest examples of
systematic risk are inflation, recession, war, political situation etc.
Inflation erodes returns generated from all investments e.g. If return from fixed deposit is
8 per cent and if inflation is 6 per cent then real rate of return from fixed deposit is
reduced by 6 per cent.
Similarly if returns generated from equity market is 18 per cent and inflation is still 6 per
cent then equity returns will be lesser by the rate of inflation. Since inflation exists in the
system there is no way one can stay away from the risk of inflation.
Economic cycles, war and political situations have effects on all forms of investments.
Also these exist in the system and there is no way to stay away from them. It is like
learning to walk.
Anyone who wants to learn to walk has to first fall; you cannot learn to walk without
falling. Similarly anyone who wants to invest has to first face systematic risk; there can
never make any kind of investment without systematic risk.
Another form of risk is unsystematic risk. This risk does not exist in the system and
hence is not applicable to all forms of investment. Unsystematic risk is associated with
particular form of investment.
Suppose we invest in stock market and the market falls, then only our investment in
equity gets affected OR if we have placed a fixed deposit in particular bank and bank
goes bankrupt, than we only lose money placed in that bank.
While there is no way to keep away from risk, we can always reduce the impact of risk.
Diversification helps in reducing the impact of unsystematic risk. If our investment is
distributed across various asset classes the impact of unsystematic risk is reduced.
P a g e | 35
If we have placed fixed deposit in several banks, then even if one of the banks goes
bankrupt our entire fixed deposit investment is not lost.
Similarly if our equity investment is in Tata Motors, HLL, Infosys, adverse news about
Infosys will only impact investment in Infosys, all other stocks will not have any impact.
To reduce the impact of systematic risk, we should invest regularly. By investing
regularly we average out the impact of risk.
Mutual fund, as an investment vehicle gives us benefit of both diversification and
averaging.
Portfolio of mutual funds consists of multiple securities and hence adverse news about
single security will have nominal impact on overall portfolio.
By systematically investing in mutual fund we get benefit of rupee cost averaging.
Mutual fund as an investment vehicle helps reduce, both, systematic as well as
unsystematic risk.
P a g e | 36
P a g e | 37
October 1995
Revenue
Market Cap
Corporate Address
Branches
India
Management Team
Overview
P a g e | 38
INTRODUCTION.
India Infoline originally incorporated on October 18, 1995 as PROBITY RESEARCH AND
SERVICES PVT LTD. at Mumbai under the Companies Act, 1956 with Registration No.
1193797.and became a public limited company on April 28, 2000. 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. It is the first Company in India to foray into the online distribution of
Mutual Funds It is a one-stop financial services shop, most respected for quality of its advice,
personalized service and cutting-edge technology. The No.1Corporate agent for ICICI Prudential
Life Insurance Company. Research acknowledged by Forbes as Must Read for investor in South
Asia Listed on Bombay and National Stock Exchange with a net worth of INR 200 crore and a
market cap of over INR 1970 crore. The company has a network of 976 business locations
(branches and sub-brokers) spread across 365 cities and towns. It has more than 800,000
customers. It is registered with NSDL as well as CDSL as a depository participant. Providing a
one-step solution for clients trading in the equities market.
P a g e | 39
P a g e | 40
P a g e | 41
Mr Nilesh Vikamsey
Independent Director
India Infoline Ltd.
Mr. Vikamsey, Board member since February 2005 - a practising Chartered Accountant and
partner (Khimji Kunverji & Co., Chartered Accountants), a member firm of HLB International,
headed the audit department till 1990 and thereafter also handles financial services, consultancy,
investigations, mergers and acquisitions, valuations etc; an ICAI study group member for
Proposed Accounting Standard 30 on Financial Instruments Recognition and Management,
Finance Committee of The Chamber of Tax Consultants (CTC), Law Review, Reforms and
Rationalization Committee and Infotainment and Media Committee of Indian Merchants
Chamber (IMC) and Insurance Committee and Legal Affairs Committee of Bombay Chamber of
Commerce and Industry (BCCI).
Mr. Vikamsey is a director of Miloni Consultants Private Limited, HLB Technologies (Mumbai)
Private Limited and Chairman of HLB India.
Mr Sat Pal Khattar
Non Executive Director
India Infoline Ltd.
Mr Sat Pal Khattar, - Board member since April 2001 - Presidential Council of Minority Rights
member, Chairman of the Board of Trustee of Singapore Business Federation, is also a life
trustee of SINDA, a non profit body, helping the under-privileged Indians in Singapore. He
joined the India Infoline board in April 2001. Mr Khattar is a Director of public and private
companies in Singapore, India and Hong Kong; Chairman of Guocoland Limited listed in
Singapore and its parent Guoco Group Ltd listed in Hong Kong, a leading property company of
Singapore, China and Malaysia. A Board member of India Infoline Ltd, Gateway Distriparks Ltd
both listed and a number of other companies he is also the Chairman of the Khattar
Holding Group of Companies with investments in Singapore, India, UK and across the world.
Mr Kranti Sinha
Independent Director
India Infoline Ltd.
Mr. Kranti Sinha Board member since January 2005 completed his masters from the Agra
University and started his career as a Class I officer with Life Insurance Corporation of India. He
served as the Director and Chief Executive of LIC Housing Finance Limited from August 1998
to December 2002 and concurrently as the Managing Director of LICHFL Care Homes (a wholly
owned subsidiary of LIC Housing Finance Limited). He retired from the permanent cadre of the
P a g e | 42
Executive Director of LIC; served as the Deputy President of the Governing Council of
Insurance Institute of India and as a member of the Governing Council of National Insurance
Academy, Pune apart from various other such bodies. Mr. Sinha is also on the Board of Directors
of Hindustan Motors Limited, Larsen & Toubro Limited, LICHFL Care Homes Limited,
Gremach Infrastructure Equipments and Projects Limited and Cinemax (India) Limited.
Mr Arun K. Purvar
Independent Director
India Infoline Ltd.
Mr. A.K. Purvar Board member since March 2008 completed his Masters degree in
commerce from Allahabad University in 1966 and a diploma in Business Administration in 1967.
Mr. Purwar joined the State Bank of India as a probationary officer in 1968, where he held
several important and critical positions in retail, corporate and international banking, covering
almost the entire range of commercial banking operations in his illustrious career. He also played
a key role in co-coordinating the work for the Bank's entry into the field of insurance. After
retiring from the Bank at end May 2006, Mr. Purwar is now working as Member of Board of
Governors of IIM-Lucknow, joined IIMIndore as a visiting professor, joined as a Hon.Professor in NMIMS and he is also a member of Advisory Board for Institute of Indian
Economic Studies (IIES), Waseda University, Tokyo, Japan. He has now taken over as Chairman
of IndiaVenture Advisors Pvt. Ltd., as well as IL & FS Renewable Energy Limited. He is also
working as Independent Director in leading companyies in Telecom, Steel, Textiles, Autoparts,
Engineering and Consultancy.
MILESTONES KEY:-
P a g e | 43
P a g e | 44
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.
Our broking services was launched under the brand name of 5paisa.com through
our subsidiary, India Infoline Securities Private Limited and www.5paisa.com, the ebroking 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, we 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.
Facilities
Our main offices are located in approximately 4,000 square feet of office space
located in Mumbai, India. Our India Infoline Branches collectively occupy an
additional 10,000 square feet of office space located throughout India, As on March
31, 2005, we have 73 branches across 36 locations in India.
New Address
1, Snehdeep, Gokhale Road,
Vile Parle (East),
Date of
August 6,
P a g e | 45
Mumbai - 400 057.
Jan.,15,
Nirlon Complex,
New Name
Services Private-Limited
Probity Research and
Services Limited
India Infoline.com Limited
Services Limited
P a g e | 46
MARCH 2005
- India Infoline fixes a price band between Rs 70 and Rs 80 for its forthcoming public
issue. The company is coming out with public issue of 1.18 crore shares with a face
value of Rs 10 through the book building route. The issue is slated to open on April
21 and close on April 27. Enam Financial Consultants Private Ltd would be the sole
book running lead manager to the issue while Intime Spectrum Registry Ltd is the
registrar to the issue.
-India Infoline public issue gets 6.6 times oversubscription
-IIL appoints R Mohan as VP
MARCH 2008
- India Infoline Ltd has informed that the Board of Directors of the Company have vide circular
resolution passed on March 10, 2008 approved the appointment of Mr. A K Purwar, ex-Chairman
of the State Bank of India, as an independent director on the Board of the Company.
- India Infoline Ltd has informed that pursuant to the resignation of Mr. Nimish Mehta, Company
Secretary and Compliance Officer of the Company. Ms. Falguni Sanghvi has been appointed as
the Company Secretary with effect from October 07, 2008.
- The Company has splits its face value from Rs10/- to Rs2/-.
P a g e | 47
The objective of the research is to study and analyze the awareness level of investors of
mutual funds.
To measure the satisfaction level of investors regarding mutual funds.
P a g e | 48
An attempt has been made to measure various variables playing in the minds of investors
in terms of safety, liquidity, service, returns, and tax saving.
To get insight knowledge about mutual funds
Understanding the different ratios & portfolios so as to tell the distributors about these
terms, by this, managing the relationship with the distributors
To know the mutual funds performance levels in the present market
To analyze the comparative study between other leading mutual funds in the present
market.
To know the awareness of mutual funds among different groups of investors.
Finding out ways and means to improve on the services by INDIA INFOLINE LTD.
RESEARCH METHODOLOGY
P a g e | 49
My research project has a specified framework for collecting the data in an effective manner.
Such framework is called RESEARCH DESIGN. The research process which was followed by
me consisted following steps.
A. PROBLEM:
The problem at hand was to study and measure the awareness level of people regarding mutual
funds in the city.
B. DEVELOPING THE RESEARCH PLAN :
The development of Research Plan has the following Steps:
1. DATA SOURCES: Two types of data were taken into consideration i.e. Secondary data &
primary data. My major emphasis was on gathering the primary data. The secondary data has
been used to make things more clear.
(i)
Primary Data: Direct collection of data from the source of information, technology
including personal interviewing, survey etc.
(ii)
Secondary Data: Indirect collection of data from sources containing past or recent past
information like Banks Brochures, Annual publications, Books, Fact sheets of mutual
funds, Newspaper & Magazines etc.
2. RESEARCH INSTRUMENT
A close friend questionnaire was constructed for my survey. Questionnaire consisting of a set
of questions made to be filled by various respondents.
3. SAMPLING PLAN
The sampling plan calls for three decisions.
P a g e | 50
P a g e | 51
DATA
PRESSENTATION,
ANALYSIS AND
INTERPRETATION
P a g e | 52
Mutual Fund
Scheme Name
Scheme Type
Open Ended
Scheme Category
Growth
Launch Date
29-Sep-1994
Scheme Name
Objective of
Scheme
Scheme Type
Open Ended
Scheme Category
Growth
Launch Date
06-Jun-2005
MinimumSubscription Amount
2000
P a g e | 53
Scheme Name
Of
Scheme
Scheme Type
Open Ended
Scheme Category
Growth
Minimum
Subscription
Amount
Rs.5000/-
P a g e | 54
Mutual Fund
Scheme Name
Objective
of Scheme
Scheme Type
Open Ended
Scheme Category
Growth
Launch Date
25-Sep-1995
Minimum
Subscription
Amount
5000
P a g e | 55
Investment needs?
From the above graph it is clear that there are many people who have participated in the
survey and the major portion of the survey indicates that the people are interested in
investing in mutual funds for the sake o their family financial security. From the above
graph it also reveals that the minor portion of the graph that is to build a corpus for
retirement does not play a major role in the investment decisions.
P a g e | 56
These are the findings from the survey which include the number of participants and the
type of the participants. This survey includes all types of participants which may give exact
results for the evaluation
P a g e | 57
This graph represents the scheme assets of the four major companies. The values
mentioned in the graph are in crores
P a g e | 58
This graph represents the latest NAVs values of all the four major companies in which
reliance capital is the one with highest NAV and Tata is the one with the lowest NAV.
P a g e | 59
This graph stands a symbolic representation of the annual returns of the four major
companies to their customers for the last 3 months. This value is of 14may 2009.
P a g e | 60
This graph stands a symbolic representation of the annual returns of the four major
companies to their customers for the last 5 years. The value is of 14may 2009.
P a g e | 61
This graph is the result of the daily NAVs of the Franklin Templeton India prima plus
scheme for the last one and half year.
This also represents the trend of the previous years. This data is collected by collecting the
NAV values of the previous one and half year their average is taken monthly and a graph is
drawn on the basis of the average values.
P a g e | 62
P a g e | 63
In the same manner as explained above the remaining three graphs of Tata Growth fund,
SBI Magnum Global fund, reliance global fund is been drawn. This graph is the result of
the daily NAVs of the Franklin Templeton India prima plus scheme for the last one and
half year. This also represents the trend of the previous years.
This data is collected by collecting the NAV values of the previous one and half year their
average is taken monthly and a graph is drawn on the basis of the average values.
P a g e | 64
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of Franklin India Prima Plus
P a g e | 65
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of Reliance Growth Fund.
P a g e | 66
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of Tata Growth Fund.
P a g e | 67
This graphical representation shows the percentage of the net assets the company holds in
terms of the debt, equity and others. The above graph shows the graphical representation
of SBI Magnum Global Fund.
P a g e | 68
The Graph is based on the income of the consumer and their investment in various
schemes.
Interpretation
I. Lower income group of below 2 lakh are more attracted towards the income and money
market Schemes as they cannot afford to take too much of risk.
II. Balanced scheme is more popular with the income group of 2 lakh to 6 lakh . This group
is even inclined towards growth Schemes to certain extent .
III. Persons with a salary of 6 lakh and above are fascinated by tax saving and money market
schemes.
P a g e | 69
Interpretation
I. Major chunk are fascinated by the Newspapers/ Magazine.
II. Second best instrument to fascinate the customer is the internet. Because internet provide
the easy and quickest way to get the information.
P a g e | 70
Which factor influence you most to invest through India Infoline Ltd?
FACTORS
PERCENTAGE
Bank Services
20%
Safety
42%
Word Of Mouth
14%
Advertisement
6%
Past Experience
18%
INTERPRETATION
When asked that what factor affect most while investing in Mutual Funds through India Infoline
Ltd than wide preference is given to safety. 42% investors choose safety.20% bank services, 18%
past experience, 14% word of mouth and 6% advertisement.
P a g e | 71
To how much extent are you satisfied with the services offered by India Infoline Ltd?
Extremely Satisfied
80%
10%
5%
Extremely Dissatisfied
5%
INTERPRETATION
Out of the respondents 80% are extremely satisfied with the services offered by India Infoline
Ltd 10% are satisfied to lesser extent, 5%are extremely dissatisfied.
P a g e | 72
INTERPRETATION
As FIIs have entered Indian markets Sensex have crossed 10000 mark and investors have
earned a lot in last financial year. Indians are becoming aware of various investment options.
People have started taking risk as they want to book profits. Investors prefer more equity
schemes than debt schemes, around 60% of the investors invest in equity schemes and
balanced schemes. Investors want to take risk as they want to yield better returns. Investors
want high returns, liquidity, safety and tax benefit. Among all investors gives want to have
safety for their money. Around 91% of the investors prefer open ended schemes rather than
close ended schemes as there is flexibility in open ended schemes.
Investors prefer both systematic investment plan and lump sum. It depends upon the
availability of funds that the investor wants to invest in SIP or as lump sum. Some of the
investors invest in both ways i.e. through SIP as well as lump sum. Basically it depends upon
the availability of fund. When questions were asked about the performance of mutual funds
in future 50% of investors said strong future, 35% of the investors said very strong future and
15% of the investors said moderate future.
P a g e | 73
Customer education of the salaried class individuals is far below standard. Thus
Asset Management Companys need to create awareness so that the salaried class
people become the prospective customer of the future.
Early and mid earners bring most of the business for the Asset Management
Companys. Asset Management Companys thus needed to educate and develop
schemes for the persons who are at the late earning or retirement stage to gain
the market share.
Returns record must be focused by the sales executives while explaining the
schemes to the customer. Pointing out the brand name of the company repeatedly
may not too fruitful.
The target market of salaried class individual has a lot of scope to gain business,
as they are more fascinated to Mutual Funds than the self employed.
Schemes with high equity level need to be targeted towards self employed and
professionals as they require high returns and are ready to bear risk.
Salary class individuals are risk averse and thus they must be assured of the
advantage of risk diversification in Mutual Funds.
There should be given more time & concentration on the Tier-3 distributors.
The resolution of the queries should be fast enough to satisfy the distributors.
Time to time presentation/training classes about the products should be there.
There should be more number of Relationship Managers in different Regions
because one RM can handle a maximum of 125 distributors efficiently and also to
cover untapped market.
Regular activities like canopy should be done so as to get more interaction with
the distributors.
Regular session should be organized on the handling of the india infoline software
P a g e | 74
CONCLUSION
These were my objectives of my project
To get an insight knowledge about mutual funds
Understanding the different ratios & portfolios so as to tell the distributors about these
market.
To know the awareness of mutual funds among different groups of investors.
P a g e | 75
APPENDIX
QUESTIONNAIRE
P a g e | 76
PERSONAL DETAILS:
Name:
Mobile Number:
Adress:_______________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_______________________________
Occupation: _____________________
Age: ____________________________
a. Mutual funds
b. Fixed deposit
c. Insurance
d. Ppf
e. All of the above
P a g e | 77
c) Franklin Templeton .
d) Reliance .
e) ICICI Prudential .
f) SBI .
6. To how much extent are you satisfied with the services offered by india infoline ltd
regarding mutual funds?
a) Exteremly satisfied.
b) Satisfied to the lesser extent
d) Dissatisfied to lesser extent
e) Extremely dissatisfied.
b) Open ended .
P a g e | 78
SIP
b)
Lump sum
P a g e | 79
Particulars
SOURCES OF FUNDS
+ Share Capital
Mar 2009
Mar 2008
Mar 2007
Mar 2006
Mar 2005
566.80
571.03
501.67
451.01
316.22
136.17
9778.84
668.64
9256.60
55.17
2340.81
44.20
1238.34
0.00
207.05
10481.81
17.04
10496.28
0
2897.65
446.82
1733.55
15.01
523.27
13.69
1.03
1305.68
362.70
808.85
2.00
18.08
10499.89
1305.68
11801.95
809.52
3707.17
823.87
2557.42
15.68
538.95
1436.77
449.45
0
987.32
0
45.13
0
0
8693.12
983.18
350.77
0
632.41
0
4.91
0
0
9156.80
730.99
243.85
0.00
487.14
0.00
0.00
0.00
0
1714.50
87.48
52.31
0
35.17
0
0
0
0
1002.49
44.74
37.61
0
7.13
0
0
0
0
403.09
0.00
0.00
1.56
5.61
13.09
0.00
+ Sundry Debtors
1035.29
3428.13
1307.23
54.88
14.90
4302.49
2143.71
950.79
20.91
20.33
0.00
0.00
0.00
0.00
2405.91
3112.99
2197.40
1721.63
133.85
7749.30
8697.92
4455.42
1797.42
169.08
5526.75
5148.54
2445.20
76.69
23.88
+ Provisions
1486.39
1567.44
510.26
202.99
16.47
7013.15
736.16
0
38.15
0.00
38.15
10499.89
3.41
6715.98
1981.94
0
25.89
0.00
25.89
11801.95
0
2955.45
1499.97
0
5.80
0.25
5.56
3707.17
0
279.68
1517.74
0
2.01
0.00
2.01
2557.42
0
40.35
128.73
0
0.00
0.00
0
538.95
0
Shareholder's Funds
+ Secured Loans
+ Unsecured Loans
Total Debts
Total Liabilities
APPLICATION OF FUNDS :
+ Loans (Non Current Assets)
Gross Block
Less: Accumulated Depreciation
Less: Impairment of Assets
Net Block
Lease Adjustment A/c
Capital Work in Progress
Pre-operative Expenses pending
Assets in transit
+ Investments
Market Value of Quoted Investements
Current Assets, Loans & Advances
+ Inventories
P a g e | 80
(Rs.in Millions)
Particulars
No of Months
+ Operating Income
Interest income
Mar 2009
12
5715.35
0
Mar 2008
12
6575.36
0.00
5715.35
6575.36
2828.46
449.12
213.17
0
0
1409.37
1824.72
0
0
1325.42
1990.92
0.00
0.00
539.96
963.39
0
0
0.38
7.91
0
0
0.66
6.75
590.54
597.61
340.14
41.68
17.83
9.90
0
3834.52
1880.82
1.01
21.31
0
3935.27
2640.09
149.04
20.69
0
1864.18
964.28
38.71
0.53
0
50.49
398.63
35.55
1.31
0
26.55
186.62
9.19
+ Interest
1881.84
111.47
2789.14
228.22
1002.99
83.53
434.18
21.97
195.81
0.43
Depreciation
Profit Before Taxation & Exceptional Items
Exceptional Income / Expenses
Profit Before Tax
+ Provision for Tax
255.61
1514.76
0
1514.76
456.50
194.40
2366.52
-290.44
2076.07
789.20
123.27
796.19
0.00
796.19
274.97
14.70
397.51
0
397.51
132.81
5.24
190.14
0
190.14
15.40
1058.25
2287.40
1286.87
1760.99
521.22
604.69
264.69
265.49
174.74
0.79
140.00
3.71
36.51
60.00
22.54
172.10
30.00
10.39
56.66
30.00
5.87
37.46
0
5.53
16.55
Net Sales
EXPENDITURE :
Increase/Decrease in Stock
Purchase of Shares / Units
Employee Cost
+ Operating & Establishment Expenses
+ Administrations & Other Expenses
Equity Dividend %
Earnings Per Share
Book Value
P a g e | 81
P a g e | 82
BALANCED FUNDS
A balanced fund is the mixture of income fund and growth fund invested partly in equity to
achieve a trade-of between risk and return.
CLOSE ENDED
In a close-ended fund an investor is allowed to subscribe only during the period of the initial
offer. Close-ended funds mature after a specified period.
OPEN ENDED FUNDS
Those funds in which investor can invest & withdraw whenever they wish, after the close of
initial offer. Withdrawals are allowed at NAV minus a back end load.
LOCK IN PERIOD
Time period during which investor can neither redeem nor they transfer their holdings to others.
Lock in period is imposed to allow fund manager to deploy money for an adequate period of
time to earn a reasonable return premature withdrawals may destabilize the fund & are not
beneficial to the interests of investors.
MANAGEMENT FEES
An AMC that mangers & markets a mutual fund scheme is entitled to a management fee@ 1% to
25% of the total funds managed, it could be charged to the scheme irrespective of the
performance of the scheme.
REDEMPTION
Disbursement of unit capital on the maturity of that particular scheme to all its existing unit
holders.
MARKET PRICE
The price at which units of mutual funds are quoted in stock exchange where they are listed.
REGISTRAR
Organization appointed by an AMC to the schemes it is registered, monitored, and regulated by
SEBI, it provides required services like system capabilities back up, accepts and processes
investors applications in informs AMC about amounts received/disbursed for subscription/
purchase/ redemption it also handles communications with investors, perform data entry services
and dispatches account statements.
P a g e | 83
CUSTODAIN
Banking organization that keeps in safe custody all the securities & other instruments belonging
to the fund to insure smooth inflow & outflow of securities. It is also approved regulated and
registered with SEBI.
EXIT LOAD
Value of deduction from NAV on the date when one choose to withdraw from a fund, load is
imposed because withdrawals carry transaction cost to AMC it can not be more than 6% of NAV
of corpus as prescribed by SEBI many schemes offer redemption facility without exit load.
ENTRY LOAD
Charge paid by unit holder when he invests an amount in the scheme. Mutual funds incur many
expenses during an issue, which are charged to the scheme. Such load is called entry load.
LIQUIDITY
Ability of investors to change its unit into cash within minimum time as and when he needs
money.
TRANSPARENCY
Basic feature of mutual funds is transparency, their functioning is very efficient, well monitored
& transparent working of AMC is regulated by SEBI it is audited weekly, it has to work under
strict guidelines issued by SEBI, and its NAV is calculated and published daily so that there is no
chance of any default in the working of Mutual Funds.
P a g e | 84
BIBLIOGRAPHY
Books
David F, Swensen. 2005. Unconventional Success. A fundamental Approach to Personal
Investment Free Press 416
D.C. Anjaria. Dhaivat Anjaria. 2001 AMFIs Mutual Fund Testing Programme.
Websites
WWW.GOOGLE.COM
WWW.YAHOO.COM
WWW.WIKIPEDIA.COM
WWW.INDIAINFOLINE.COM
WWW.AMFIINDIA.COM
WWW.MONEYCONTROL.COM
WWW.5PAISA.COM
WWW.SHAREMARKETBASICS.COM
WWW.SHAREMARKET.COM