SGPC’s GURU NANAK INSTITUTE OF MANAGEMENT STUDIES

Matunga (E), Mumbai – 400 019

Summer Internship Project Report

Titled
“FUNDAMENTALS AND TECHNICAL
ANALYSIS OF PRIVATE BANK SECTOR”
In the partial fulfillment of the Degree of
MMS
By
Mr. Tawde Shirish Shivram
[MMS, B-56]
Semester III & Finance:
Batch: 2018-20
Under the Guidance of
Company Guide
Mr. Nikesh Ruparel
(Executive Associative Partner, HDFC Life)

Faculty Guide
Prof. Hema Deogharkar
(Project Guide)

2019-20
 SGPC’s GURU NANAK INSTITUTE OF MANAGEMENT STUDIES
Matunga (E), Mumbai – 400 019

CERTIFICATE
This is to certify that Mr. Shirish Tawde student of Class MMS- B
Semester: III bearing Roll No. 56 has successfully completed the project
titled, “Fundamentals and Technical Analysis of Private Bank sector”, in the
partial fulfillment of the Degree of MMS.

Place: Mumbai

Date:

Name of the Project Guide: Prof Hema Deogharkar

Signature of the Project Guide:

Signature Institutes Seal:

(Dr. D.Y. Patil

Director
 STUDENT DECLARATION

I hereby declare that the project titled “Fundamentals and Technical

Analysis of Private Bank Sector” is my own work conducted under the
supervision of Prof Hema Deogharkar.

I further declare that no part in this project work has been plagiarized
without proper citations and has not formed the basis for the award of any
degree, diploma, associateship, fellowship previously.

Name of Student: Shirish Tawde

Signature of the Student:

 ACKNOWLEDGEMENT

I would like to take this opportunity to thank all those who have made working on this
project feasible for me. I would first like to thank Mr. Nikesh Ruparel , HDFC LIFE,
Mumbai for providing me with the opportunity to work with HDFC Life and giving me
the taste of the real corporate and professional world. It gave me an opportunity to
understand the real life situations and implement all those things which I had earlier only
come across in textbooks as part of my course.

I express my sincere thanks to Faculty Mentor Prof. Hema Deogharkar. for

guiding me in this Project. I am very grateful for the constant support throughout the
duration of the entire project.

I sincerely express my thanks to our Professors for their valuable guidance. I thank each
and every one of them for their valuable suggestions, motivation, and encouragement. I
wish to express gratitude to all those, whom I have worked and interacted with and whose
thoughts and insights helped us to further increase our knowledge and understanding of
the project.

I would also like to extend my thanks to various people, factors, and situations which
contributed to the successful accomplishment of the task. Though I am unable to
mention all of them individually, but the debt of gratitude to them is no less.

Last but not the least; I would like to thank Guru Nanak Institute of Management
Studies, Mumbai for giving me the opportunity to get this relevant exposure in the
corporate sector.
TABLE OF CONTENTS
Sr. No. Topic Page No.
1. EXECUTIVE SUMMARY
2. INTRODUCTION TO THE TOPIC
3. INDUSTRY OVERVIEW
4. COMPANY OVERVIEW
6. PROJECT DETAILS
 Objectives and Limitations of The Project
 Methodology
 Source/s of Data
 Data Collection Instrument
7. DATA ANALYSIS AND
INTERPRETATION
8. RECOMMENDATIONS/FINDINGS
9. KEY LEARNINGS (Specific & General)
10. CONCLUSION
11. BIBLIOGRAPHY
12. LIST OF ABBREVIATIONS
13. ANNEXURE
14. Project Progress Report Duly Filled & Signed
15. Approved Project Synopsis
 EXECUTIVE SUMMARY

As a part of the curriculum, every student studying MBA has to undertake a project on a
particular subject assigned to him in the summer internship program. Accordingly, I have
been assigned the project work on, “Fundamental and Technical Analysis of Private Bank
Sector” at HDFC LIFE, Mumbai

The project Portfolio management and equity research explains various aspects related to
portfolio management such as selection of equity shares, making investments in different
mutual funds, life insurance, etc. The project aims at making a portfolio which can
deliver good results to the investors and for doing this we were thought how to analyze
different stocks and predict their future growth movement. To predict the future of any
stocks, the first step is to do its fundamental and technical analysis. Starting with the
training sessions we were thought about different investment options available for an
investor and how to help investor to choose the best alternative so that he can gain
maximum from his investments

Under this internship program the chosen sector for analysis is Private Bank sector.
‘Equity research on Private Bank Sector has been done, where the mix of large-cap fund
have been taken for the purpose of analyzing. In this outlook, a study has been
undertaken to analyses the equity shares of companies of Private Bank Sector of the
Indian stock market. The first step of beginning with the research is; Economic Analysis
of the sector chosen for equity research-which would give an insight about the
performance of the sector. The next step would be; Index Formulation (of the funds
chosen of the sector to be analyzed) - this helps us in taking various decision on current
day share trading.

Further, Fundamental Analysis will be done where top line, bottom line, ratio analysis and
ratio ranking approach would be used for shortlisting ‘growth-pick and value-pick stocks’.
The next step would be followed by the process of Hedging which basically means
offsetting the loss or minimizing the risk associated with the stocks shortlisted, the
percentage of shares to be hedged
is directly proportional to the volatility of stock held, if a share is highly volatile then
high per-cent of shares would be hedged to cover the loss and vice versa.

The last step in the research will be Technical Analysis- this basically reflects an idea that the
movement of share price follows a trend and the factors which affect the movement of price.
Under technical analysis we would forecast the future price movement of stocks on the basis
of past price movement of the stocks, with help of forecast result investors would be able to
make financial decisions of buying, holding or selling stocks. This analysis helps us to
anticipate future market trend. The main aim of technical analysis to interpret the ‘supply and
demand of stocks’

After following all the above mentioned steps, the outcome we get would be used for the
purpose of making decision regarding investment, asset allocation and coverage of risk.
Hence, this study would help the prospective investors with the right direction for
investing their money. On the basis of the all the above analysis done a Sector Equity
Fund Fact Sheet would be made which would be used as a brochure for purpose of
briefing the investor about the Bank sector’s top performing stocks, defining their
objectives and strategies for a clear picture regarding investment, this sheet would also
focus on the Index and NAV calculate of this sector and whether Index and NAV is able
to beat each other or not.

Hence, this research would help the investors with the right direction for investing their
money. Therefore, in order to achieve the goal of maximizing returns and minimizing
risk, investors need to consider both the risk factors as well as the return factors of
various stocks of an industry. The outcome we get would be used for the purpose of
making decision regarding investment, asset allocation and coverage of risk while
investing and a fund sheet would be made accordingly.
 INTRODUCTION TO THE TOPIC

FUNDAMENTAL AND TECHNICAL ANALYSIS OF PRIVATE

BANK SECTOR

OBJECTIVES OF THE PROJECT

o To provide an overview of the private bank sector and analyzing the stocks of
that sector.
o To study about the major player in Private bank sector which has a good
investment prospects.
o To identify the top line & bottom line of the companies selected under bank
sector and the factors affect them.
o To justify the current investment in the chosen securities.
o To understand the movement and performance of stocks.
o To recommend increase/decrease of investment in a particular security.
o To make comparative study of risk & return in portfolio.

METHODOLOGY

The research is exploratory in nature. It requires the use of Primary as well as

secondary research.

Primary Research: Primary research is new research, carried out to answer specific
issues or questions. It can involve questionnaires, surveys or interviews with
individuals or small groups. There was no primary research conducted for doing
equity research

Secondary Research: Secondary research (also known as desk research) involves the
summary, collation and/or synthesis of existing research rather than primary research,
where data is collected from, for example, research subjects or experiments. To
understand the stock behavior which includes data from various sources such as News
channels Newspapers, Magazines, Government websites, and Company’s official
websites

We collected secondary data from websites such as

https://www.moneycontrol.com/,https://in.finance.yahoo.com/ and collecting
data from other websites such as 5paisa.com, share
https://strade.sharekhan.com and then analyzing the market from that data and
calculating data.

Fundamental analysis
There are 6 steps involved in Fundamental analysis

Step 1:

First analyze the particular industry and note down all the large cap companies
and then calculate the P/E ratio

Step 2:

Then compare the individual P/E ratio with industry P/E ratio of bank
sector

Step 3:

For undervalued companies top line and bottom line is compared and
according to that value picks will be considered.

Step 4:

For all the overvalued stocks PEG ratio will be calculated to know the growth
picks. PEG ratio will be calculated through:

PEG=P/E/EPS
 Step 5:

Asset allocation will be done for all the growth picks and value picks.

Step 6:
After ranking of all the stocks funds will be allocated to each stocks and
AUM will be calculated. Total allocated fund was Rs. 10 cr.

Then Next step is Index Calculation

Steps for Index Calculation-

First we will take all take all the stocks in the list and write down their market cap
nd
for that particular day. I have started it on May 2 2019, so I have taken that
day’s market cap.
Then we calculate each stocks weightage in the index by taking the total of all the
market caps and calculating the percentage of every stock with it.
We will note the closing price of the stocks for that particular day.
The base for the index that I have taken is 1000.
Now from the next day prices will change and the index will change
according to that.
The change in the index is calculated by firstly calculating the %change in
the price and then that percentage of the weightage of the stock.
The % that we will have is the percentage change in the index of that stock.
Finally by calculating the %change in each stock, the overall change in the stock
is
 calculated.
Coming to the conclusion, as this is a long term analysis so the result of it will be
seen in a minimum of 1 year. I will be updating both the NAV and the Index in
future. The NAV is beating the index and showing that the analysis is accurate.

Technical Analysis

Here we use different different Methods to observe the Charts

Such as
Rounding Bottom
Cup with Handle
Double Top
Double Bottom

INTRODUCTION TO INSURANCE INDUSTRY

The insurance industry of India consists of 57 insurance companies of which 24 are in
life insurance business and 33 are non-life insurers. Among the life insurers, Life
Insurance Corporation (LIC) is the sole public sector company. Apart from that, among
the non-life insurers there are six public sector insurers. In addition to these, there is sole
national re-insurer, namely, General Insurance Corporation of India (GIC Re). Other
stakeholders in Indian Insurance market include agents (individual and corporate),
brokers, surveyors and third party administrators servicing health insurance claims. Out
of 33 non-life insurance companies, five private sector insurers are registered to
underwrite policies exclusively in health, personal accident and travel insurance
segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich
Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare
Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd. There
are two more specialized insurers belonging to public sector, namely, Export Credit
Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company
Ltd for crop insurance.

The insurance sector is made up of companies that offer risk management in the form of
insurance contracts. The basic concept of insurance is that one party, the insurer, will
guarantee payment for an uncertain future event. Meanwhile, another party, the insured
or the policyholder, pays a smaller premium to the insurer in exchange for that protection
on that uncertain future occurrence.

As an industry, insurance is regarded as a slow-growing, safe sector for investors. This

perception is not as strong as it was in the 1970s and 1980s, but it is still generally true
when compared to other financial sectors.

Post-liberalisation, the insurance industry in India has recorded significant growth. The
Indian insurance industry is expected to grow to US$ 280 billion by FY2020, owing to
the solid economic growth and higher personal disposable incomes in the country.
Overall insurance
penetration in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001. Gross
premiums written in India reached Rs 5.53 trillion (US$ 94.48 billion) in FY18, with Rs
4.58 trillion (US$ 71.1 billion) from life insurance and Rs 1.51 trillion (US$ 23.38
billion) from non-life insurance.

Over FY12–18, premium from new business of life insurance companies in India have
increased at a 14.44 per cent CAGR to reach Rs 1.94 trillion (US$ 30.1 billion) and non-
life insurance premiums (in Rs) increased at a CAGR of 16.65 per cent. In FY19 (up to
Jan 2019), premium from new life insurance business increased 3.91 per cent year-on-
year to Rs 1.77 trillion (US$ 24 billion).
Life insurance industry in the country is expected grow 12-15 per cent annually for the
next three to five years.

In FY19 (up to Feb 2019), gross direct premiums of non-life insurers reached Rs 1.51
trillion (US$ 23.38 billion), showing a year-on-year growth rate of 13.43 per cent.

There are 24 life insurance and 33 non-life insurance companies in the Indian market who
compete on price and services to attract customers. There are two reinsurance companies.
The industry has been spurred by product innovation, vibrant distribution channels,
coupled with targeted publicity and promotional campaigns by the insurers. The market
share of private sector companies in the non-life insurance market rose from 13.12 per
cent in FY03 to 54.72 per cent in FY19 (up to Feb 2019). In life insurance segment,
private players had a market share of 33.74 per cent in new business in FY19 (up to Feb
2019).

Government has approved the ordinance to increase Foreign Direct Investment (FDI)
limit in Insurance sector from 26 per cent to 49 per cent which would further help attract
investments in the sector.

In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth
US$ 903 million. Enrolments under the Pradhan Mantri Suraksha Bima Yojana
(PMSBY) reached 130.41 million in 2017-18. National Health Protection Scheme was
announced under Budget 2018-19 as a part of Ayushman Bharat. The scheme will
provide insurance cover of up to Rs 500,000 (US$ 7,723) to more than 100 million
vulnerable families in India.
Going forward, increasing life expectancy, favourable savings and greater employment in
the private sector is expected to fuel demand for pension plans. Likewise, strong growth
in the banking industry over the next decade would be a key driver for the motor
insurance market.

DIFFERENT TYPES OF INSURANCE COMPANY

Not all insurance companies offer the same products or cater to the same customer base.
Among the largest categories of insurance companies are accident and health insurers;
property and casualty insurers; and financial guarantors.

Accident and health companies are probably the most well-known. These include
companies such as UnitedHealth, Anthem, Aetna and AFLAC, which are designed to
help people who have been physically harmed.

Property and casualty companies insure against accidents of non-physical harm. This can
include lawsuits, damage to personal assets, car crashes and more. Large property and
casualty insurers include State Farm, Nationwide and Allstate.

INSURANCE FLOAT

One of the more interesting features of insurance companies is that they are essentially
allowed to use their customers' money to invest for themselves. This makes them similar
to banks, but the investing happens to an even greater extent. This is sometimes referred
to as "the float."

Float occurs when one party extends money to another party and does not expect
repayment until after a circumstantial event. This mechanism essentially means insurance
companies have a positive cost of capital. This distinguishes them from private equity
funds, banks and mutual funds.
 MARKET SIZE

Government's policy of insuring the uninsured has gradually pushed insurance

penetration in the country and proliferation of insurance schemes.

Gross premiums written in India reached Rs 5.53 trillion (US$ 94.48 billion) in FY18,
with Rs 4.58 trillion (US$ 71.1 billion) from life insurance and Rs 1.51 trillion (US$
23.38 billion) from non-life insurance. Overall insurance penetration (premiums as % of
GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001.

In FY19 (up to October 2018), premium from new life insurance business increased 3.66
per cent year-on-year to Rs 1.09 trillion (US$ 15.46 billion). In FY19 (up to October
2018), gross direct premiums of non-life insurers reached Rs 962.05 billion (US$ 13.71
billion), showing a year-on-year growth rate of 12.40 per cent.

INVESTMENTS & RECENT DEVELOPMENTS

The following are some of the major investments and developments in the Indian
insurance sector.

As of November 2018, HDFC Ergo is in advanced talks to acquire Apollo Munich

Health Insurance at a valuation of around Rs 2,600 crore (US$ 370.05 million).
In October 2018, Indian e-commerce major Flipkart entered the insurance space
in partnership with Bajaj Allianz to offer mobile insurance.
In August 2018, a consortium of WestBridge Capital, billionaire investor Mr
Rakesh
Jhunjunwala announced that it would acquire India’s largest health insurer Star
Health and Allied Insurance in a deal estimated at around US$ 1 billion.
In September 2018, HDFC Ergo launched ‘E@Secure’ a cyber-insurance policy
for individuals.
Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7
billion) through public issues in 2017.
 In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals
worth US$ 903 million.
India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture
with Ebix Inc to build a robust insurance distribution network in the country
through a new distribution exchange platform.

GOVERNMENT INITATIVES

The Government of India has taken a number of initiatives to boost the insurance
industry. Some of them are as follows:

In September 2018, National Health Protection Scheme was launched under Ayushman
Bharat to provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million
vulnerable families. The scheme is expected to increase penetration of health insurance in
India from 34 per cent to 50 per cent.

Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana
(PMFBY) in 2017-18.

The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue
redesigned initial public offering (IPO) guidelines for insurance companies in India,
which are to looking to divest equity through the IPO route.

IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds
that are issued by banks to augment their tier 1 capital, in order to expand the pool of
eligible investors for the banks.
ADVANTAGE IN INDIA

STRONG DEMAND

Growing interest in insurance among people; innovative products and

distribution channels aiding growth.
Increasing demand for insurance offshoring.

Growing use of internet has started increasing demand

ATTRACTIVE OPPORTUNITIES
Life insurance in low-income urban areas

Health insurance, pension segment.

Strong growth potential for micro insurance, especially from rural areas

INCRESING INVESTMENTS

Insurance sector companies in India have raised around Rs 434.3 billion

(US$ 6.7 billion) through public issues in 2017.
Increase in FDI limit to 49 per cent from 26 per cent, approved in 2016, will
further fuel investments

POLICY SUPPORT
Tax incentives on insurance products
Passing of Insurance Bill gives IRDA flexibility to frame regulations
Clarity on rules for insurance IPOs would infuse liquidity in the industry

SWOT ANALYSIS

MAJOR PLAYERS

 Life Insurance Corporation of India (LIC)

 HDFC standard Life

 ICICI Prudential Life

 SBI Life

 Max Life

 Bajaj Allianz Life

 Birla Sun Life

 INTRODUCTION TO COMPANY

HDFC Life is a long term life insurance provider with its headquarted in Mumbai
offering individual and group insurances.

It is a joint venture between Housing Development Finance Corporation Ltd (HDFC),

one of India's leading housing finance institution and Standard Life Aberdeen PLC,
leading well known provider of financial savings & investments services in the United
Kingdom. On 14 August 2015 HDFC Ltd. entered into a share sale agreement with
Standard Life to sell a 9.00% stake in HDFC Life to the latter. The transaction is
subject to receipt of regulatory approvals. Post the completion of the above
transaction, HDFC will hold 61.65% stake in HDFC Life and Standard Life's stake
will increase to 35.00%, with rest to be held by others.

HDFC Life has about 414 branches and presence in 980+ cities and towns in India.
The company has also established a liaison office in Dubai
HDFC Life distributes its products through a multi channel network consisting of
Insurance agents, Bancassurance partners (HDFC Bank, Saraswat Bank ,RBL Bank)
Direct channel, Insurance Brokers & Online Insurance Platform

PRODUCTS

The Company offers a complete range of protection solutions to help secure your
family's future and provide financial support for your child's education, wealth with
protection solutions, health and wellness solutions, retirement solutions and savings
with protection solutions to help you stay financially secure in the future with small
disciplined savings at regular intervals. HDFC puts people's need first and aims to
protect what is dear to the customer, with assurance. While, Life Insurance cannot
prevent risk, it can compensate financial losses arising from risk. There are different
different plan options available such as health plan, saving and investment plan,
retirement plan, womens plan, children plans, rural plan
HISTORY

HDFC Life Company Limited was founded in 2000. The company is based in
Mumbai, India. It is a joint venture between Indian Housing Development Finance
corporation (HDFC) and U.K based Standard life Aberdeen PLc Inc. In August
2015, Standard life increased their stake in HDFC Insurance to 35%.

HDFC LIFE

The MD and CEO of Company is Vibha Padalkar.HDFC is the first private sector life
Insurance company in India . The IRDA gave accreditation to HDFC life for more
than 149 training centres. The total number of employes are more than 17000.it is
having the annual revenue more than 3.7 billion dollar.

PROJECT INTRODUCTION: FUNDAMENTAL AND

TECHNICAL ANALYSIS OF PRIVATE BANK SECTOR

OBJECTIVES OF THE PROJECT

1. To analyze the individual company performance by considering the

factors relating to the economy, industry
2. To predict investor position (Buy,sell,hold)
3. To know which Securities to be bought,sold

This report will help the investors to know about the current growth prospects of
Indian economy and banking sector. They will get to understand various factor
affecting banking sector and their impact on the growth of banking sector. This report
will help them in estimating future share prices, so that they can invest in better
options.
 METHODOLOGY

The research is exploratory in nature. It requires the use of Primary as well as

secondary research.

Primary Research: Primary research is new research, carried out to answer

specific issues or questions. It can involve questionnaires, surveys or interviews
with individuals or small groups. There was no primary research conducted for
doing equity research

Secondary Research: Secondary research (also known as desk research) involves

the summary, collation and/or synthesis of existing research rather than primary
research, where data is collected from, for example, research subjects or
experiments. To understand the stock behavior which includes data from various
sources such as News channels Newspapers, Magazines, Government websites,
and Company’s official websites

We collected secondary data from websites such as

https://www.moneycontrol.com/,https://in.finance.yahoo.com/ and collecting data
from other websites such as 5paisa.com, share https://strade.sharekhan.com and
then analyzing the market from that data and calculating data. Most of the
secondary data was provided by company.

Data Collection Instrument is by Observation methods

Observation of financial performances and charts

PRIVATE BANK SECTOR ANALYSIS

The Indian banking system consists of 27 public sector banks, 21 private sector banks,
49 foreign banks, 56 regional rural banks, 1,562 urban cooperative banks and 94,384
rural cooperative banks, in addition to cooperative credit institutions.

As of Q3 FY19@ total credit extended by commercial banks surged to Rs 93,751.17

billion (US$ 1,299.39 billion) and deposits grew to Rs 120,818.92 billion (US$
1,866.22 billion). Assets of public sector banks stood at US$ 1,557.04 billion in
FY18.
Indian banks are increasingly focusing on adopting integrated approach to risk
management. Banks have already embraced the international banking supervision
accord of Basel II, and majority of the banks already meet capital requirements of
Basel III, which has a deadline of March 31, 2019.

Reserve Bank of India (RBI) has decided to set up Public Credit Registry (PCR) an
extensive database of credit information which is accessible to all stakeholders. The
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed
and is expected to strengthen the banking sector.

Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY) increased to Rs 988.74
billion (US$ 14.27 billion) and 355.4 million accounts were opened in India^. In May
2018, the Government of India provided Rs 6 trillion (US$ 93.1 billion) loans to 120
million beneficiaries under Mudra scheme. In May 2018, the total number of
subscribers was 11 million, under Atal Pension Yojna.

Rising incomes are expected to enhance the need for banking services in rural areas
and therefore drive the growth of the sector. As of September 2018, Department of
Financial Services (DFS), Ministry of Finance and National Informatics Centre (NIC)
launched Jan Dhan Darshak as a part of financial inclusion initiative. It is a mobile
app to help people locate financial services in India.

The digital payments revolution will trigger massive changes in the way credit is
disbursed in India. Debit cards have radically replaced credit cards as the preferred
payment mode in India, after demonetisation. Debit cards garnered a share of 87.14
per cent of the total card spending.

Growth prospects of banking sector:

• Favorable demographics and rising income levels. India ranks among the top
six economies with a GDP of US$ 2,597 in 2017 and economy is forecasted to grow
at 7.3% in 2018. The sector will benefit from structural economic stability and
continued credibility of Monetary Policy.

• Increase in working population & growing disposable incomes will raise

demand for banking & related services. Housing & personal finance are expected to
remain key demand drivers. Rural banking is expected to witness growth in the future.
• Rising fee incomes improving the revenue mix of banks. High net interest
margins, along with low NPA levels, ensure healthy business fundamentals.

• Wide policy support in the form of private sector participation & liquidity
infusion. Healthy regulatory oversight & credible Monetary Policy by the Reserve
Bank of India (RBI) have lent strength & stability to the country’s banking sector.

• As of August 2018, total number of ATMs in India increased to 213,004 and is

further expected to increase to 407,000 ATMs in 2021.

• With entry of foreign banks, competition in the Indian banking sector has
intensified. Banks are increasingly looking at consolidation to derive greater benefits
such as enhanced synergy, cost take-outs from economies of scale, organizational
efficiency & diversification of risks.

Investments/developments:

Key investments and developments in India’s banking industry include:

• As of September 2018, the Government of India launched India Post Payments

Bank (IPPB) and has opened branches across 650 districts to achieve the objective of
financial inclusion.

• The total value of mergers and acquisition during 2017 in NBFC diversified
financial services and banking was US$ 2,564 billion, US$ 103 million and US$ 79
million respectively.

• The biggest merger deal of FY17 was in the microfinance segment of IndusInd
Bank Limited and Bharat Financial Inclusion Limited of US$ 2.4 billion.

• In May 2018, total equity funding's of microfinance sector grew at the rate of
39.88 to Rs 96.31 billion (Rs 4.49 billion) in 2017-18 from Rs 68.85 billion (US$ 1.03
billion).

Government Initiatives:

• As of September 2018, the Government of India has made the Pradhan Mantri
Jan Dhan Yojana (PMJDY) scheme an open ended scheme and has also added more
incentives.

• The Government of India is planning to inject Rs 42,000 crore (US$ 5.99

billion) in the public sector banks by March 2019 and will infuse the next tranche of
recapitalisation by mid- December 2018.
• The number of total bank accounts opened under Pradhan Mantri Jan Dhan
Yojana (PMJDY) reached 333.8 million as on November 28, 2018.

Factors affecting Banking sector:

• Supply: The supply of money to the banks is controlled by the Reserve Bank
of India (RBI). There cannot be infinite supply of money in the economy.

• Demand: Rising incomes are expected to enhance the need for banking
services in rural areas and therefore drive the growth of the sector. Consumers desire
a seamless banking experience. And technology is developing to allow consumers to
buy products easier, without requiring assistance directly from banks.

• Threat to new entrants: Entry to banking sector is not that easy. In order to
enter into banking, there are certain requirements like licensing requirement,
investment in technology and branch network, capital and regulatory requirements.

• Bargaining power of suppliers: Largely, customers prefer banks for its

reliability. Gradually, customers have hedged inflation by investing in other riskier
avenues.

• Bargaining power of customers: For good creditworthy borrowers bargaining

power is high due to the availability of large number of banks. People turn to banks
for advice and assistance for loans related to business, home, and academics.
Consumers also seek knowledge from bank tellers regarding saving accounts, bank
related credit cards, investments, and more.
• Competition: There is high competition in banking sector as there are public
sector banks, private sector and foreign banks along with non-banking finance
companies competing in similar business segments. Additionally, the RBI has
approved for small finance banks and payment banks which will further increase
competition in the industry.

DATA ANALYSIS AND INTERPRETATION

o Understanding Capital Markets.

o Understanding Index in stock market and creating a new Index.
o Hands on experience on online trading platform.
o Understanding stock movement from fundamental analysis.
o Understanding stock movement from technical analysis.
o Hands on experience on sales of Insurance and Health policies.

UNDERSTANDING CAPITAL MARKETS

Capital Market is one of the significant aspect of every financial market. Broadly
speaking the capital market is a market for financial assets which have a long or
indefinite maturity.

Unlike money market instruments the capital market instruments become mature
for the period above one year. It is an institutional arrangement to borrow and lend
money for a longer period of time. Business units and corporate are the borrowers
in the capital market. Capital market involves various instruments which can be
used for financial transactions. Capital market provides long term debt and equity
finance for the government and the corporate sector. Capital market can be
classified into primary and secondary markets. The primary market is a market for
new shares, where as in the secondary market the existing securities are traded.
Capital market institutions provide rupee loans, foreign exchange loans,
consultancy services and underwriting.

STOCK MARKET

A stock market, which can also sometimes be referred to as an equity market, is a

network of different economic transactions, known as the aggregation of both
sellers and buyers. The sellers and buyers trade stocks. Stocks are securities which
exist on a stock exchange, although some can also be traded privately.

HISTORY OF STOCK MARKET IN INDIA

The first organised stock exchange in India was started in 1875 at Bombay and it
is stated to be the oldest in Asia. In 1894 the Ahmedabad Stock Exchange was
started to facilitate dealings in the shares of textile mills there. The Calcutta stock
exchange was started in 1908 to provide a market for shares of plantations and
jute mills.

Then the madras stock exchange was started in 1920. At present there are 24 stock
exchanges in the country, 21 of them being regional ones with allotted areas. Two
others set up in the reform era, viz., the National Stock Exchange (NSE) and Over
the Counter Exchange of India (OICEI), have mandate to have nation-wise
trading.
They are located at Ahmedabad, Vadodara, Bangalore, Bhubaneswar, Mumbai,
Kolkata, Kochi, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur’
Kanpur, Ludhiana, Chennai Mangalore, Meerut, Patna, Pune, Rajkot.

The Stock Exchanges are being administered by their governing boards and
executive chiefs. Policies relating to their regulation and control are laid down by
the Ministry of Finance. Government also Constituted Securities and Exchange
Board of India (SEBI) in April 1988 for orderly development and regulation of
securities industry and stock exchanges.

ESTABLISHMENT OF NSE

NSE is mainly set up in the early 1990s to bring in transparency in the markets.
Instead of trading membership being confined to a group of brokers, NSE ensured
that anyone who was qualified, experienced and met minimum financial
requirements was allowed to trade. In this context, NSE was ahead of its times
when it separated ownership and management in the exchange under SEBI's
supervision. The price information which could earlier be accessed only by a
handful of people could now be seen by a client in a remote location with the
same ease. Based on the recommendations laid out by the Pherwani committee,
NSE has been established with a diversified shareholding comprising domestic
and global investors. The key domestic investors include Life Insurance
Corporation of India, State Bank of India,

IFCI Limited, IDFC Limited and Stock Holding Corporation of India Limited.
And the key global investors are Gagil FDI Limited, GS Strategic Investments
Limited, SAIF II SE Investments Mauritius Limited, Aranda Investments
(Mauritius) Pte Limited and PI Opportunities Fund. The exchange was
incorporated in 1992 as a tax-paying company and was recognized as a stock
exchange in 1993 under the Securities Contracts (Regulation) Act, 1956. The
capital market (equities) segment of the NSE commenced operations in November
1994, while operations in the derivatives segment commenced in June 2000. NSE
was also instrumental in creating the National Securities Depository Limited
(NSDL) which allows investors to securely hold and transfer their shares and
bonds electronically. It also allows investors to hold and trade in as few as one
share or bond. This not only made holding financial instruments convenient but
more importantly, eliminated the need for paper certificates and greatly reduced
the incidents of forged or fake certificates and fraudulent transactions that had
plagued the Indian stock market.

ESTABLISHMENT OF BSE

The Bombay stock exchange was founded by Premchand Roychand. He was one
of the most influential businessmen in 19th-century Bombay. A man who made a
fortune in the stockbroking business and came to be known as the Cotton King,
the Bullion King or just the Big Bull. He was also the founder of the Native Share
and Stock Brokers Association, an institution that is now known as the BSE. The
Bombay Stock Exchange is the oldest stock exchange in Asia. Its history dates
back to 1855, when 22 stockbrokers would gather under banyan trees in front of
Mumbai's Town Hall. The location of these meetings changed many times to
accommodate an increasing number of brokers. The group eventually moved to
Dalal Street in 1874 and became an official organization known as "The Native
Share & Stock Brokers Association" in 1875.

LIVE TRADING
What is live trading?

Online trading is basically the act of buying and selling financial products
through an online trading platform. These platforms are normally provided by
internet based brokers and are available to every single person who wishes to try
to make money from the market.

The stock market is a major financial entity with players both large and small.
The market facilitates public ownership of corporations while also providing a
trading industry with many different types of careers. The federal government
regulates much of the stock market activity to protect investors and ensure the
fair exchange of corporate ownership on the open markets.

Online trading is the act of placing buy/sell orders for financial securities and/or
currencies with the use of a brokerage's internet-based proprietary trading
platforms. The use of online trading increased dramatically in the mid- to late-
'90s with the introduction of affordable high-speed computers and internet
connections.

Stocks, bonds, options, futures and currencies can all be traded online. The use of
online trades has increased the number of discount brokerages because internet
trading allows many brokers to further cut costs and part of the savings can be
passed on to customers in the form of lower commissions. Another benefit of
online trading is the improvement in the speed of which transactions can be
executed and settled, because there is no need for paper-based documents to be
copied, filed and entered into an electronic format.

The stock market helps to value the securities on the basis of demand and supply
factors. The securities of profitable and growth oriented companies are valued
higher as there is more demand for such securities. The valuation of securities is
useful for investors, government and creditors. The investors can know the value
of their investment, the creditors can value the creditworthiness and government
can impose taxes on value of securities.

Hands on experience on online trading platform

A trading platform is a software through which investors and traders can open,
close and manage market positions through a financial intermediary. Online
trading platforms are frequently offered by brokers either for free or at a discount
rate in exchange for maintaining a funded account and/or making a specified
number of trades per month. For trading funds were provided by the company.
The trading in the internship is done in the group of 8 people and each groups
were provided one platform for trade. The trading in the internship is mostly in
Nifty 50. And for sectorial fund analysis, sector wise indexes have been taken.
The trading is being done on TRADE TIGER by SHAREKHAN& KITE by
ZERODAH’S.

WAYS OF MAKING PROFIT IN STOCK MARKET:-

First way is a basic Buy sell situation in which we buy the stock at a lower
pricing predicting that its price will increase in future and sell it at a higher
price to make profit.

In second case we do SHORT SELLING. Short selling is the sale of a

security that is not owned by the seller or that the seller has borrowed. Short
selling is motivated by the belief that a security's price will decline, enabling it
to be bought back at a lower price to make a profit. In simple words we sell
the share at a higher price predicting that it will decline in the future and buy it
at a lower price to make profit.

WHAT CARE SHOULD WE TAKE WHILE INVESTING?

Obtain written document explaining the investment.

Read and understand such documents.
Verify the legitimacy of the investment.
Find out the cost and benefit associated with the investment.
Assess the risk return profile of the investment.
Know the liquidity & safety aspects of the investment.
Ascertain if it is appropriate for specific goal.

Compare these details with other investment opportunities level in the

market.
Examine if it fits in with other investment you are considering or you
have already made.
Deal only through an authorized intermediateory.
Seek all clarification about the investment or about the intermediary.
Explore the options available to you if something where to go wrong.

Hands on experience on sales of Insurance policies

 To check our patience, time management and personal skills we were told to
sell insurance policy in during financial closing from which we can know the
customer response towards health and life insurance policies and how can we
cope-up with stress during difficult time. We were given different plans such
as 1) Sanchay Plus For 10 years 2) Sanchay Plus for 12 years 3) Retirement
plans 4) Health plans etc.

FUNDAMENTAL ANALYSIS

Fundamental analysis is a method of evaluating a security in an attempt to

measure its intrinsic value, by examining related economic, financial and other
qualitative and quantitative factors. Fundamental analysts study anything that
can affect the security's value, including macroeconomic factors such as the
overall economy and industry conditions, and microeconomic factors such as
financial conditions and company management. The end goal of fundamental
analysis is to produce a quantitative value that an investor can compare with a
security's current price, thus indicating whether the security is undervalued or
overvalued.
Fundamental analysis uses real, public data in the evaluation a security's value.
Although most analysts use fundamental analysis to value stocks, this method of
valuation can be used for just about any type of security. For example, an investor
can perform fundamental analysis on a bond's value by looking at economic
factors such as interest rates and the overall state of the economy. He can also
look at information about the bond issuer, such as potential changes in credit
ratings.
Process of Fundamental Analysis-

Step 1:

First analyze the particular industry and note down all the large cap
companies and then calculate the P/E ratio.
P/E=
Price/EPS

• City Union Bank • Karurvysya Bank

• Idfc First • Federal Bank
• Dcb Bank • ICICI Bank
• Indusind Bank
• Bandhan Bank
• Hdfc Bank
• Axis Bank
• Yes Bank
• Kotak Mahindra Bank
 Step 2:

Then compare the individual P/E ratio with industry P/E ratio of pvt bank
sector which is 32.94 and on the basis of that determine the undervalued and
overvalued companies. In banking sector 7 are undervalued companies and 4
are overvalued.

Companies P/E Ratio Overvalued/Undervalued

City Union Bank 22.8 Undervalued
IDFC First - -
Indusind Bank 29.32 Undervalued
Dcb Bank 22.18 Undervalued
Bandhan Bank 36.17 Overvalued
HDFC Bank 31.36 Undervalued
Axis Bank 44.46 Undervalued
Yes Bank 19.92 Undervalued
Kotak Mahindra 59.72 Overvalued
Karurvyasya 29.58 Undervalued
Federal 17.12 Undervalued
ICICI 81.17 Overvalued

After comparing industry P/E ratio which is 32.94 so there are 7 undervalued stocks
and 4 overvalued stocks.
Step 3:

For all the overvalued stocks PEG ratio will be calculated to know the growth
picks. PEG ratio will be calculated through:

PEG=P/E/EPS

Companies Growth Rate PEG Ratio

Bandhan bank 6.28 1

Kotak Mahindra 25.92 2.93

Axis Bank 18.20 2.94

ICICI Bank 5.23 5.33

If PEG ratio will be more than 1, it will be discarded and if less than 1, it will
be considered as growth picks .Here Kotak Mahindra,Axis Bank,ICICI Bank
will be discarded as its PEG ratio is more than 1.
 Step 5:

Asset allocation will be done for all the growth picks and value picks.

Company Debt Inventory Current Quick ROCE Total RANK

name Equity Turnover ratio ratio
Ratio ratio
City 3.35 8 0.04 26.2 6 44 4
Union
bank
IDFC First 35.46 3 0.14 10.85 4 18 7

Dcb bank 7.54 4 0.04 17.09 11 33 6

Hdfc bank - 6 0.04 17.48 14 59 8

Yes bank 12.99 5 0.07 20.80 1 24 5

Karurvyas 12.61 11 0.03 35.36 2 19 1

ya bank
Federal - 12 0.05 39.96 3 37 3
bank
- 13 0.01 42.66 8 54 2
Bandhan
bank

Ranking is done on the basis of individual ratio whether they need to be increased
or decreased.
 Step 6:
After ranking of all the stocks funds will be allocated to each stocks and
AUM will be calculated. Total allocated fund was Rs. 10 cr.

Companies Allocated Values (Rs.)

Karurvyasya 20000000.3
Bandhan bank 17500111.2
Federal 14961995
City union bank 15000003
Yes Bank 10000053.7
Dcb bank 9499876
IDFC First 7499961.25
HDFC bank 5502168
Cash in hand 38327
Total 100002495
INDEX CALCULATION

For making the Index I have taken all large cap companies in Banking sector.
My fund’s stocks are also included in it.

The steps to make the index is as follows:-

Steps:-

First we will take all take all the stocks in the list and write down their market
nd
cap for that particular day. I have started it on May 2 2019, so I have taken
that day’s market cap.
Then we calculate each stocks weightage in the index by taking the total of all
the market caps and calculating the percentage of every stock with it.
We will note the closing price of the stocks for that particular day.
The base for the index that I have taken is 1000.
Now from the next day prices will change and the index will change
according to that.
The change in the index is calculated by firstly calculating the %change
in the price and then that percentage of the weightage of the stock.
The % that we will have is the percentage change in the index of that stock.
Finally by calculating the % change in each stock, the overall change in the
stock is
calculated.
 Date Index Date Index
02-May 1000 03-Jun 1011.48
03-May 987.9 04-Jun 1010.68
06-May 983.07 06-Jun 995.01
07-May 973.21 07-Jun 1001.12
08-May 964.05 10-Jun 999.06
09-May 959.23 11-Jun 1003.72
10-May 960.7 12-Jun 994.72
13-May 947.71 13-Jun 998.81
14-May 949.66 14-Jun 987.76
15-May 943.75 17-Jun 979
16-May 934.5 18-Jun 979.61
17-May 955.08 19-Jun 984.92
20-May 995.09 20-Jun 989.76
21-May 981.1 21-Jun 983.79
22-May 988.12 24-Jun 981.68
23-May 982.94 25-Jun 987.68
24-May 1003.09 26-Jun 999.58
27-May 1015.15 27-Jun 1000.33
28-May 1016.38 28-Jun 993.05
29-May 1009.05 01-Jul 1005
30-May 1016.98 02-Jul 1005.22
31-May 1011.3 03-Jul 1008.96
04-Jul 1012.39
05-Jul 1013.33

Private bank sector in month of May

1020

1000

980

960

940

920

900

880
2-May

4-May

6-May

8-May

10-May

12-May

14-May

16-May

18-May

20-May

22-May

24-May

26-May

28-May

30-May
 Private bank sector in month of June
1020

1010

1000

990

980

970

960
3-Jun

25-Jun

1-Jul

3-Jul

5-Jul
5-Jun

7-Jun

9-Jun

11-Jun

13-Jun

15-Jun

17-Jun

19-Jun

21-Jun

23-Jun

27-Jun

29-Jun

TECHNICAL ANALYSIS

The Technical analysis is a methodology to assist you in deciding the timing of

investments, which is very vital to make wise investment decisions. The technical
analysis is based on the assumption that history tends to repeat itself in the stock
exchange. If a certain pattern of activity has in the past produced certain results nine
out of ten, one can assume a strong likelihood of the same outcome whenever this
pattern appears in the future. However technical analysis lacks a strictly logical
explanation. Technical Analysis is the study of the internal stock exchange
information and not of those external factors which are reflected in the stock market.
All the relevant factors, whatever they may be can be reduced to the volume of the
stock exchange transactions and the level of share price or more generally, the sum of
the statistical information produced by the market. Few of the most commonly used
technical analysis methods for share market Trading are Japanese Candlestick (most
powerful stock charting method), Price Curves, Trend Lines, High Low Charts and
Moving averages.

DIFFERENT CHARTS AND THEIR

ANALYSIS: Chart Rounding bottom

ROUNDING BOTTOM- The rounding bottom is a long-term reversal pattern that is

best suited for weekly charts. It is also referred to as a saucer bottom, and represents a
long consolidation period that turns from a bearish bias to a bullish bias.
Chart of Cup with a Handle

CUP WITH A HANDLE

The Cup with Handle is a bullish continuation pattern that marks a consolidation
period followed by a breakout. As its name implies, there are two parts to the pattern:
the cup and the handle. The cup forms after an advance and looks like a bowl or
rounding bottom. As the cup is completed, a trading range develops on the right hand
side and the handle is formed. A subsequent breakout from the handle's trading range
signals a continuation of the prior advance.

DOUBLE TOP

The double bottom is a major reversal pattern that forms after an extended downtrend.
As its name implies, the pattern is made up of two consecutive troughs that are
roughly equal, with a moderate peak in between
There is also Triple Top and Triple Bottom which is same as Double top and
Double bottom, instead they have three peaks in place of two peaks.

HEAD AND SHOULDER

A head and shoulders reversal pattern forms after an uptrend, and its completion
marks a trend reversal. The pattern contains three successive peaks with the middle
peak (head) being the highest and the two outside peaks (shoulders) being low and
roughly equal. The reaction lows of each peak can be connected to form support, or a
neckline.
 Technical Analysis in Private Banks

HDFC Bank :- HDFC Bank Shares End At Over Two-Month Low As Bad

Loans Rise. HDFC group shares fall on profit-booking; HDFC, HDFC

Bank slip up to 4%.

Yes Bank - A falling knife, but should you catch it? Ever since the
declaration of the quarterly result, the Yes Bank stock has been falling
continuously and the decline is now close to 50 percent.

City Union Bank - City Union Bank growing 3-4% above industry rate
 RESULTS and FINDINGS

Equity markets are volatile due to its direct relation with many other local, economic
and global dynamics involved. Thus a better understanding by means of equity
research will allow investor to have better insight over the fluctuations of the equity
market and aid in the process of achieving financial objectives. Thus equity research
is of priority and the findings by research analysts are carefully followed up by all
the stakeholders from large companies to individual investors who invest a part of
their capital in the equity market.
 KEY LEARNINGS

Got to know different investment areas where money can be invested

by portfolio managers where they can minimize their risk and expand
gains.
Given a business of 50,000.00 to company in short span and currently have
some leads which will be converted shortly.

Learned how fund managers use hedging to protect their fund from losses.

CONCLUSION OF THE STUDY

As we all know India is one of the fastest growing economy in the world. Nowadays
the Private Banking industry is growing rapidly fast.
The Indian banking industry is going through a technical change where each firm is
engage to change its process

BIBLIOGRAPHY

https://www.ibef.org/industry/insurance-sector-india.aspx

https://www.moneycontrol.com/stocks/marketinfo/marketcap/bse/banks-private-

sector.html http://www.moneycontrol.com/stocksmarketsindia/

https://lifeinsurance.adityabirlacapital.com/about-us/company-profile.aspx
http://www.livefinancialacademy.com/courses/introduction-financial-trading-

online https://www.moneycontrol.com/stocks/marketinfo/marketcap/bse/banks-

private-sector.html

https://www.equitymaster.com/detail.asp?date=09/29/2009&story=5&title=Financial-
statements-Key-ratios

https://www.investopedia.com/university/fundamentalanalysis/

https://en.wikipedia.org/wiki/Banks

https://stockcharts.com/school/doku.php?id=chart_school:overview:technical_analysi
s