Introduction About Dhwaja Finance

About Dhwaja FINANCE Dhwaja Share and Securities Private Ltd. (previously known as Dhwaja Securities and services private ltd.) promoted by Mr. Gaurang Shah and Mr. Sunil Anandpara in the year 2005 to carry on the business as share & Stock brokers and/or sub-brokers. In the process the company started its activity as client to main brokers of The Bombay Stock Exchange Ltd and The National Stock Exchange of India Ltd. Subsequently the company became sub broker of M/s Twin Earth Securities P. Ltd. main broker of The Bombay Stock Exchange Ltd and The National Stock Exchange of India Ltd. in the year 2007. The company has performed as sub broker of M/s Twin Earth Securities P. Ltd. for more then two years. In the Month November of 2009 the company had inducted director namely Mr. Hemal Shah. The company has plans to go retail and expand its activities in Maharashtra and Gujarat to begin with in addition to the existing retail and HNI client base. The company has also procured a business premises in Kandivli of aprox 6000 sq ft for its new operation as a Head office. The company is also in the process of acquiring the required infrastructure for the proposed new activity DHWAJA FINANCE is a well-diversified financial services entity offering clients unbiased advice on structuring a complete investment portfolio. Maintain over three decades of experience and excellence in the industry; we cultivate a customerfirst attitude, ethical and transparent business practice, professionalism, research based investing and implementation of cutting edge technology. The DHWAJA Finance Group is a clearing cum trading member of various Equity and Commodity Exchanges and market segments through these entities:

DHWAJA Finance & Securities (P) Ltd. Member: The National Stock Exchange (NSE); Member: Bombay Stock Exchange Ltd. (BSE); Cash & Derivatives Segments DHWAJA Member: Member: (NCDEX) Member: Limited Commodities (P) Ltd. Multi-Commodity Exchange (MCX) National Commodity & Derivatives Exchange National Multi-Commodity Exchange of India

Why DHWAJA? We are focused on single set of goals: YOURS. The difference in our service and other such firms is the personal touch that we lent to every transaction. At Dhwaja Finance, customers are not portfolios or ID numbers. We recognize you for the person you are and treat your association with us as a relationship. Our investment solutions, advice, and even personal dealings are tailor made for you. Our relationship with you is based on understanding your needs and objectives and collaborating with you to structure personalized financial strategies. We have made a commitment to help every kind of investors, regardless of account size, to treat each investor as our most important client. Our Vision: To be a leading wealth management service provider acting solely in the financial interest of our clients through a nationwide network of qualified professionals and business associates Our Philosophy:

Our business is built upon three important cornerstonesOur Clients, Business Associates and Employees. Our Philosophy is unique and clearly defined: Towards our Clients:

The client is the driving force behind what we do. Our goal is to provide the highest quality of products and services, along with value- added advice and guidance based on clients needs. We look to develop long term relationships with our clients built on strong ethics and trust. Towards our Business associate:

The power of partnerships engenders involvement, respect and mutual support. This is precisely the relationship that we foster with our Business Associates. We provide a complete platform built upon the best infrastructure and technology to enable our Business Associates to efficiently service the financial needs of our investing clients.

Towards our Employees:

Our employees are what set us apart. We are all here for one reason to serve our clients best interests. It is leadership and accountability across our organization that we establish a common direction, encourage creative collaboration and providing an inspiring environment for our people Our Values: Upholding these values is the primary responsibility of leaders at every level within Dhwaja.
Partnership:

Relationships among our staff members as well as our clients are driven by the power of partnership. The power of partnership engenders involvement, respect, contribution and mutual support. We encourage free exchange of ideas and demand teamwork.

 Striving for excellence: While serving our clients

we constantly strive for excellence to ensure that they derive complete satisfaction in their dealings with us.
Client focus: We

aim to provide the highest quality of products and services to best serve the changing needs of clients.
Teamwork: We strive for seamless integration of

services through cooperation and collaboration within and across workgroups and teams.
Meritocracy:

We invest in our employees development and actively strive to be the best at attracting and retaining talented people. Our success calls for entrepreneurial spirit and initiative from each individual.
Integrity: At Dhwaja, our goal is to act in ways

that help us to exemplify the highest standards of personal and professional ethics in all aspects of our business.
Privacy: We respect our clients right to privacy

and use information

with appropriate discretion.

Product OF DHWAJA

Equity :-

A corporate member of NATIONAL STOCK EXCHANGE in both Capital Market and Derivatives segments. The company is also member of other premier exchange of the country i.e., BSE.

We undertake buying and selling of shares for individuals, HNIs and corporate besides for institutional client; provide advisory board services to clients in taking investment decisions in purchase and sale of shares. Our research team extends advisory to clients (HNIs and corporate in taking investment decisions in buying & selling of Shares/Stocks, etc.

EQUITY investing with DHWAJA Why invest in Stocks? Although past performance cannot guarantee future market results, stocks historically have outperformed all other long term financial assets. They are the only financial assets that have significantly outpaced inflation overtime. FEATURES of EQUITY investing with DHWAJA Growth of capital: Shares offer capital growth over the long term, depending on the company concerned.

Potentially Higher Return:

Many investors worried about day-to-day market volatility, shun stocks. But the stock market has provided considerably higher return over fixed deposits and other fixed-income investments over a period of time. Risk: Simply stated, higher returns are associated with higher risks. You, as an investor, need to understand your risk tolerance level and certain principles of investing which can help you diversify and mitigate this risk.

Benefits of Equity investing with Dhwaja The role of a full-service brokerage firm goes far beyond executing buy-and-sells transactions. At Dhwaja Finance, we help you assimilate the massive amount of information trends in the economy, the markets, specific industries and individual companies that may affect your particular investments decisions. The role of Dhwaja Finance is to help you, the investors, make deliberate, thoughtful decisions that match your personal needs with suitable investment alternatives.

COMMMODITY Trading with Dhwaja

Why invest/trade in commodities? Of late, commodities have come to be accepted as a separate asset class with a unique and distinct source of returns in India, along with traditional avenues like stocks, bonds and real estate. Commodity prices impact you in every sphere of life whether you are a producer, trader or a consumer. You can now proactively participate in the Commodity markets by investing and trading in a range of commodities. In the process of the company started its activity as a main broker of Multi Commodity Exchange of India Ltd. (MCX), and also admitted in National Multi Commodities Exchange of India Ltd. (NMCE) as a trading cum clearing member and in National Commodities and Derivatives Exchange of India Ltd. (NCDEX) as a trading member.

COMMMODITIES offered on MCX & NCDEX

Precious Metals: Gold, Silver Other Metals: Aluminum, Copper, Nickel, Steel, Teen Energy: Crude oil, Brent crude

 Agricultural Products: Chana, Guar Gum, Guar seed,

Gur, Jeera, Maize, Kapas, Raw Jute, Red chilly, pepper, cashew, Castor seed, Crude Palm oil, Expeller Mustard oil, Mustard seed, Ground Nut oil, RBD palmolein, Soya Bean, Soy seed, Refined Soya oil, Rubber, Sugar, Turmeric,YellowPeas.

Participate in COMMMODITIES Markets as...

Hedger: One who wants to hedge the price risk in the

commodity he is exposed to.

Investors:

One who sees participation in the commodities market only as an investment opportunity to diversify the risk of his portfolio?

Arbitrageur: One who is interested in taking advantage

of any mispricing arising in the markets? Speculator: One who sees to create a trading position based on an informed opinion of the markets.

The membership ID's & SEBI registration numbers are as under:

SEBI Broker Regn No. INB2313 72930

Exchange

Trade Name

Nse Capital Market

INF2313 72930

INE2313 7293

INB0113 72936

INF0113 72936

INE2613 72930

MCX/TC

DHWAJA SHARES & SECURITI ES PVT LTD NSE DHWAJA Future & SHARES & Option SECURITI ES PVT LTD NSE DHWAJA Currency SHARES & Derivetives SECURITI ES PVT LTD BSE DHWAJA Capital SHARES & Market SECURITI ES PVT LTD BSE Future DHWAJA & Option SHARES & SECURITI ES PVT LTD MCX Stock DHWAJA Exchange SHARES & SECURITI ES PVT LTD MCX DHWAJA

Regist CERT.DT. ration No. 13729 26/03/2010

13729

26/03/2010

13729

26/03/2010

3301

26/03/2010

3301

26/03/2010

13729

26/03/2010

35780

M/CORP /1549

NCDX/P M/CORP /0999

NCDX

MC/TCM NMCE /CORP/0 360

COMMODI TY SERVICES PVT LTD DHWAJA 1024 COMMODI TY SERVICES PVT LTD DHWAJA CL043 COMMODI 4 TY SERVICES PVT LTD

Contact us:Head Office : 603/Sanjar Enclave, Khajuria Lane Opp Milap Cinema. Kandivali-West. Mumbai-400067. Board Line : 42552700/701 Register Office: 103, Laxmi villa, M.G.Road, Opp.Hanuman Temple, Kandivali (West) Mumbai- 400067. Tel : 2862 20 91/2861 38 70.

Surat Branch: G-13,Empire State Building, Udhna Darwaja Ring Road.Surat-395001. Board Line :

10

Research Methodol ogy

(a)Statement of Problem:

It is risk return to construct and

11

Analyses of the portfolio Under different sectors. (b)Objective of study: (1) To construct the portfolio by Doing fundamental and price Trend analysis (2) To construct the portfolio by Considering risk and return Associated with it. (3) To measure risk and return of Constructed portfolio and to Revise it if it is necessary. (c) Period covered: (d) Sources of data: Secondary data: Expert guide, magazine, books, website, nseindia.com, Bseindia.com (e) Scope of Study: a) Study covers the scripts from different sectors. b) Study emphasis more on fundamental and technical analysis rather than government interferences. c) Study covers only equity share of 2 month

12

different sectors. It do not cover mutual fund and any other instrument under different sectors. (f) Selection of Sample: Project has covered Top 20 companies under different sector. Top 20 companies are selected on the basis of their market capitalization and total turnover. Method : Non probability ( Judgment Sampling) (g) Significance of Study: There are so many risk which are associated with investment so investor have to invest money in the stock market . After analysis risk & return. Once the investment has been done, it is necessary to review risk & return, otherwise our investment is not giving proper return and minimize risk. This project give idea how to select scripts for portfolio, how to calculate . (h) Data Collection: Annual report of selected companies for ratio analysis.

Closing price of selected companies of last 1 year (monthly).

Closing price of index of last 1year(monthly).

13

(i) Tools & Techniques:

Sharp single index model for portfolio construction.

Ratio analysis. Calculation of

(j) Chapter planning: a. About company b. About capital market c. Research Methodology d. About different sector e. Fundamental Analysis of companies
f.

Portfolio construction &analysis.

g. Portfolio Review. h. Conclusion.

(k)Limitation of study: Some of scripts are selected. They may not give true idea. Only financial position is covered for portfolio construction.

14

 Techniques which can used may not fully scientific.

Introduction about
15

Capital Market

A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market (equity securities) and the bond market (debt). Financial regulators, such as the UK's Financial Services Authority designated (FSA) or the U.S. to Securities that and Exchange are Commission (SEC), oversee the capital markets in their jurisdictions ensure investors protected against fraud, among other duties.

16

Capital markets may be classified as primary markets known and as secondary markets. In the In primary markets, new stock or bond issues are sold to investors via a mechanism underwriting. secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, overthe-counter, or elsewhere. Under a secondary market offering or seasoned equity offering of shares to raise money, a company can opt for a rights issue to raise capital. The rights issue is a special form of shelf offering or shelf registration. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from the firm at a specified price within a specified time. A rights issue is in contrast to an initial public offering (primary market offering), where shares are issued to the general public through market exchanges

CAPITAL MARKET

INDUSTRIA L SECURITIES

GOVERNME NT

17

LONG ERMS LOAN

SECURITIES

MARKET

PRIMARY MARKET SECONDARY MARKET

The securities market can be divided in to three parts: 1.) 2.) 3.) Industrial securities market Government securities market Long term loans market SECURITIES MARKET:securities i.e. the market New consists of two and

1.) INDUSTRIAL

The

industrial parts

complementary

Issue

Market,

Secondary Market. It is a market for industrial securities namely:

18

(i) (ii)

Equity shares or ordinary shares or common stock. Preference shares

(iii) Debenture or Bonds. The corporate sector raises their capital through these above three types of securities. This is the physical or tangible asset through which the market functions. Company raises it capital in the primary market though: I) Primary Market Primary market is the market for those securities which are issued first time in the market for the public. The New Issue Market deals with new securities i.e. securities which were not previously availably and are offered to the investing public for the first time. Primary market is a market for New issues or New financial claims. Hence, it is called New Issue Market. The market, therefore, derives its name from the fact that it makes available a New Block of Securities for public subscription. In the Primary market, borrowers exchange new financial securities for long term funds. It facilitates capital formulation. Companies raise ite capital in the primary market though: (i) (ii) (iii) Public Issue Right Issue Primary placement/subscription

The most popular method of raising capital is sale of securities to the public by new companies is called Public Issue. Right Issue means, when existing company first offered. The security to existing shareholders on a Pre

19

emptive bases, while company want to raise additional capital is called capital is called Right Issue. Private placement imagine private sale of securities to small group investors. II) Secondary Market Secondary market is the market for those securities which have already been available in the market and listed on a stock exchange. The main benefit of Secondary market is securities sold and purchased continuously among investors without involvement of company. This market consists of all stock exchange recognized by the Government of India. The stock exchange in India are regulated under the securities contracts (Regulation) Act, 1956.

2.) GOVERNMENT

SECURITIES MARKET:-

The government securities market (G-secs) is the largest segment of the long term debt market in India, accounting for nearly two-thirds of the issues in the primary market and more than four fifths of the turnover in the secondary market. It is otherwise called Gilt-Edged securities market. It is a market where Government securities are traded. In India there are many kinds of Government Securities-short term and long term. Long term securities are traded in this market while short term securities are traded in the money market. Securities issued by the Central Government, State

20

Government, Electricity market.

Semi

Government All India and

authorities State level

like

city

Corporation, Port Trusts etc. Improvement Trusts, State Boards, financial institutions and public sector enterprise are dealt in this

Participants in the G-secs Market Banks are the largest holders of G-secs. About one third of the net demand and time liabilities of the banks are partly in government securities market mainly to meet statutory liquidity requirements and partly for investment purpose. Apart from banks, insurance companies, and provident funds have substantial holdings of G-secs almost one-fifth of the outstanding G-secs are held by these institutions. Other investor in G-secs includes mutual funds, primary and satellite dealers, and trusts. Government securities are issued in denominations of RS. 100. Interest is payable half- yearly and they carry tax exemptions also. The role of brokers in marketing these securities is practically very limited and the major participant in this market in the commercial banks because they hold a very substantial portion of these securities to satisfy their S.L.R. requirements. The secondary market for these securities is very narrow since most of the institutional investors tend to retain these securities until maturity. The Government securities are in many forms. These are generally:

21

(i) (ii)

Stock certificates of inscribed stock Promissory Notes

(iii) Carrier Bonds which can be discounted. Government securities are sold through the Public Debt Office of the RBI while Treasury Bills are sold through auctions. Government securities offer a good soured of raising inexpensive finance for the Government exchequer and the interest on these securities influences the prices and yields in this market. Hence this market also plays a vital role in monetary management.
3.) LONG

TERM LOANS MARKET:-

Development banks and commercial banks play a significant role in this market by supplying long term loans to corporate customers. Long term loans market may further be classified into: (i) (ii) Term loans market Mortgages market

(iii) Financial Guarantees market.

(i)

Term Loans Market

In India, many industrial financing institutions have been created by the Government both at the national and regional levels to supply long term and medium term loans to

22

corporate customers directly as well as indirectly. These development banks dominate the industrial finance in India. Institutions like IDBI, IFCI, ICICI, and other state financial corporations come under this category. These institutions meet the growing and varied long term loans. They also help in identifying investment opportunities, encourage new entrepreneurs and support modernization efforts.

(ii)

Mortgages Market

The mortgage market refers to these centers which supply mortgage loan mainly to individual customers. A mortgage loan is a loan against the security of immovable properly like real estate. The transfer of interest in a specific immovable properly to secure a loan is called mortgage. This mortgage may be equitable mortgage or legal one. Again it may be a first charge of title deeds to properties as security whereas in the case of a legal mortgage the title in the property is legally transferred to the lender by the borrower. Legal mortgage is less risky. Similarly, in the first charge, the mortgages transfer his interest in the specific property to the mortgagee as security. When the properly in question is already mortgaged once to another creditor, it becomes a second charge when it is

23

subsequently mortgaged to somebody else. The mortgagee can also further transfer his interest in the mortgaged property to another, In such a case, it is called a sub mortgage. The mortgage market may have primary market as well secondary market. The primary market consists of original extension of credit and secondary market has sales and resales of existing mortgages at prevailing prices. In India residential mortgages ate the most common ones. The Housing and Urban Development Corporation and the LIC play a dominant role in financing residential projects. Besides, the Land Development Banks provides cheap mortgages loans for the development of lands, purchase of equipment etc. These development banks raise finance through the sale of debentures which are treated as trustee securities. (iii) Financial Guarantees Market A guarantees market is a centre where finance is provide against the guarantee of a reputed person in the financial circle. Guarantee is a contract to discharge the liability of a third party in case of his default. Guarantee acts as a security from the creditors point of view. In case the borrower fails to repay the loan, the liability falls on the shoulders of the guarantor. Hence the guarantor must be known to both the borrower and the lender and he must have the means to discharge his liability. Though there are many types of guarantees, the common forms ate:

24

a) b)

Performance Guarantee Financial Guarantee

Performance guarantees cover the payment of earnest money, retention money, advance payments, non-completion of contracts etc. On the other hand financial guarantees cover only financial contracts. In India, the market for financial guarantees is well organized. The financial guarantees in India relate to: A. B. C. Deferred payments for imports and exports Medium and long term loans raised abroad Loans advanced by banks and other financial institutions. These guarantees ate provided mainly by commercial banks, development banks, Governments both central and states and other specialized guarantee institutions like ECGC (Export Credit Guarantee Corporation) and DICGO (Deposit Insurance and Credit Guarantee Corporation). This guarantee financial service is available to both individual and corporate customers. For a smooth functioning of any financial system, this guarantee service is absolutely essential.

Capital market is important as it plays an important role in bringing rapid industrial development in a country. The savings are invested profitably for economic

25

development because of the services offered by capital market. Mobilization of investable surplus and provision of expert services to investors and companies are two significant activities undertaken by the capital market.

Capital market acts as a link between those who save and those who need funds and are in a position to invest them with safety and reasonable return. It is importance due to: It enables the investors to adopt their investment to their expectations which are constantly changing. It acts as a link between those who save and those who are interested in investing these savings. It provided the capital to those enterprises which can apply it profitably, productively and increase the aggregate national income. It provides proper flow of funds and brings about the rational allocation of resources through the conversion of financial assets into physical assets. Thus, the capital market facilitates capital formation. It provides incentives to saving and facilitates capital formation by offering suitable rate of interest as the price of capital. It serves as an important source for technological up gradation in industrial sector by utilizing the fund invested by the public.

26

 It facilitated buying and selling of securities at listed price by providing continuously marketability to the investors. The securities offered in the capital market are transferable in character. The changing business conditions in the economy are immediately reflected on capital market. Booms and depression can be identified by capital market. So suitable monitory and fiscal policies can be taken by government. Capital market supplies securities of different kinds with different maturity and yields in unable the investors to diversify their risk by wider portfolio of investment.

27

28

Introduction about Different Sectors

29

INTRODUCTION ABOUT SECTOR

A. Meaning of sector: There are many companies or scrip that manufacturer the same products Provide services are specified under the particular name that called sector. B. List of the sector:

30

 Banking Chemicals Infrastructure Pharmaceutical Fertilize Agro Inputs Auto Ancillaries Auto Mobiles Aviation Breweries & Distilleries Cement Cigarettes The meaning of Textiles Consumer Durables Courier & Logistic Services Cycle & Accessories Diversified Dye Stuff Engineering Financial Institutions

31

About Banking Sector

investment banking is not the financial investment in the banking sector. But in fact, investment banking is a kind of banking function which is used to help clients in creating wealth and funds. The commercial banks use this type of banking in accord with sensible and practical use of the available resources. Not only this, investment banking and people engaged in this sector also provides advice on how to transact in business they are currently in.

Through investment banking, companies can create funds in two ways. They can either draw on public funds from capital market by releasing the stock i.e. corporate finance or they can go to venture capitalists or private equities to become share holders in their company. The field of investment banking is also engaged in giving advice and consultation on how to manage various takeovers and merging i.e. [M&A] merger and acquisitions. They also provide companies with ideas on how to declare public offerings and manage their talents. The handling of mergers and acquisitions come under the corporate finance function of the investment banking. The margin between investment banking and other forms of banking has been very unclear for a long time now and for the same time; the function of this banking sector has grown to covering every field of wealth management process of corporate as well as individual persons.

Corporate Finance: this is the sector where investment

32

banking works and supports companies the most in getting extra money. Lets take an example that a company needs more money to finance the market research of a product tobe launched to stay forward in competition. Here, investment banking can help you by getting your companys shares sold and raising funds for you. The other way, how an investment bank can get you money is by trading in stocks on behalf of their clients.

[M&A] Merger and Acquisitions: This point doesnt have any explanation and it can be defined only through an example. Lets take an example of a company who is going strong in business and market and wish to buy another company just to add more authority to their name and business. Professionals from investment banking sector makes them realize that on merging; both these companies can be a great group and can acquire major part of the market and also the business. They also tell them what are the other benefits of getting merged and also what is the right time according to market conditions for both the companies to get merged into each other. Among other import The last decade has seen many positive developments in the Indian banking sector. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve

33

regulation in the sector. The sector now compares favorably with banking sectors in the region on metrics like growth, profitability and non performing assets (NPAs). A few banks have established an outstanding track record of innovation, growth and value creation. This is reflected in their market valuation. However, improved regulations, innovation, growth and value creation in the sector remain limited to a small part of it. The cost of banking intermediation in India is higher and bank penetration is far lower than in other markets. Indias banking industry must strengthen itself significantly if it has to support the modern and vibrant economy which India aspires to be. While the onus for this change lies mainly with bank managements, an enabling policy and regulatory framework will also be critical to their success.

The failure to respond to changing market realities has stunted the development of the financial sector in many developing countries. A weak banking structure has been unable to fuel continued growth, which has harmed the longterm health of their economies. In this white paper, we emphasize the need to act both decisively and quickly to build an enabling, rather than alimenting, banking sector in India.

34

Influenced by the global financial turmoil and repercussion of the subprime crisis, the global banking sector has been witness to some of the largest and best known names succumb to multi-billion dollar write-offs and face near bankruptcy. However, the Indian banking sector has been well shielded by the central bank and has managed to sail through most of the crisis with relative ease. Further with the economic buoyancy the world over showing signs of cooling off, the investment cycle has also been wavering. Having said that, the latent demand for credit (both from the food and non food segments) and structural reforms have paved the way for a change in the dynamics of the sector itself. Besides gearing up for the compliance with Basel II accord, the sector is also looking forward to consolidation and investments on the FDI front. Public sector banks have been very proactive in their restructuring initiatives be it in technology implementation or pruning their loss assets. While the likes of SBI have made already attempts towards consolidation, others are keen to take off in that direction. Incremental provisioning made for asset slippages have safeguarded the banks from witnessing a sudden impact on their bottom lines. Retail lending (especially mortgage financing) that formed a significant portion of the portfolio for most banks in the last two years lost some weight age on the banks' portfolios due to their risk weight age. However, on the liabilities side, with better penetration in the semi urban and rural areas the banks garnered a higher proportion of low cost deposits

35

thereby economizing on the cost of funds.

Apart from streamlining their processes through technology initiatives such as ATMs, telephone banking, online banking and web based products, banks also resorted to cross selling of financial products such as credit cards, mutual funds and insurance policies to augment their fee based income.

About Chemical Sector

Understanding the expectations of stakeholders and then responding appropriately is crucial to the industrys ability to do business. Only by earning the trust and respect of stakeholders will the industry maintain their license to

36

operate in communities across the world. Sustainability, UK approached TERI to execute a survey to understand whether in India sustainable development imperatives are driving change in the chemical industry and shaping the perceptions of the industrys stakeholders. And most importantly, to explore what stakeholders believe a WBCSD project should cover for the realization of a sustainable chemical industry in India.

Survey Approach
The approach as provided by Sustain Ability was first to identify the stakeholders and then categories them across groups/ segments and undertake the interviews. The essence of the interview was to understand views of the stakeholders:

On the Indian chemical sector Industrys response to address these issues, Prescriptions to make the industry sustainable and on The WBCSD project its necessity & focus The survey was distributed and administered as follows: 45 stakeholders were initially identified based on

37

previous experience and existing database. The target list was narrowed to 28 preferred targets based on subsequent screening. 19 responses were received (interview + email) Annexure 01 A Stakeholder dialogue was organised to share the survey findings and discuss the future of the Indian chemical industry in general and the ideal characteristics of a potential WBCSD project on sustainable chemical sector, in specific. The stakeholder dialogue saw 20 participants deliberating on the subject.

Responses and Limitations:Representatives of 19 stakeholders responded to the survey in a limited time frame of one and a half months, which was a major constraint. As with many surveys of this nature stakeholders that see them as leaders or early movers are more likely to respond. Therefore the survey likely includes the attitudes and approaches of some of the most active stakeholders in this area.

38

While every effort was made to reach a diverse sample group the findings presented here may not be representative of all the stakeholders operating within the chemical sector in India. Given the limited time frame, TERI has analyzed, consolidated and

About Infrastructure Sector

Over annum

the

past

four in

years,

the

Indian

Economy

consistently recorded growth rates in excess of 8.5% per resulting rapidly increasing infrastructure spending. Total infrastructure spending is expected to increase from US$ 24 billion in 2005 to US$ 47 billion in

39

2009. billion

(FICCI)Total

investment

requirement

in

the

infrastructure sector over the next five years is US$ 445

It is estimated that the Infrastructure Sector needs to grow at a CAGR of 15% over the next five years to support the growing requirements of virtually every other sector of the Indian Economy. stimulating and mobilizing With the objective of private sector increased

investments, either from domestic sources or foreign avenues, the government has offered various incentives:

40

Liberalization of FDI Regulations

i. Barring aviation, 100% FDI under the automatic route is now permitted in all infrastructure sectors. ii. FDI under the automatic route is permitted up to 49% 100% for various services in the aviation sector.

Extended tax holiday periods

Under section 80-IA of the Income Tax Act, 1961, a ten year tax holiday is available to enterprises engaged in the business of development, operation and maintenance of infrastructure facilities, subject to compliance with the conditions prescribed therein.

Introduction of Public Private Partnerships

Based on resounding global success, the government has introduced the concept of public-private partnershipsin India, to combine the best practices of public and private sectors to efficiently develop and maintain infrastructure facilities. PPPs are aimed at inducing private sector participation in activities which might otherwise prove to be cost prohibitive e.g. development, operation and

41

maintenance of toll roads. The Industry has received an aggregate of US$ 6.6 billion in infrastructure investments over the past six years. The Government has indicated that the Indian infrastructure sector has the potential to absorb US$ 150 billion (including the power sector) in FDI over the next five years.

Roads

India has one of the largest road networks in the world, aggregating to approximately 3.34 million kilometers. (Economic Survey 2007-08)

The Government has laid down ambitious plans for development and up gradation of the domestic road network. Private sector participation through PPPs is being actively in encouraged to achieve operation greater and efficiencies maintenance. It is estimated that the total investment requirement for development and up gradation of the countrys development,

42

road

network

over

the

next

five

years

is

approximately US$ 55 billion. (Economic Survey 2007-08)

About Pharmaceuticals Sector

The Indian Pharmaceutical Industry is capable to meet the country's demand for every drug. The manufacturing units within the country are meeting about 80% of the country's drug requirements. The drug production sector is equipped with technology and researched knowledge base. The industry produces drugs worth rupees 18000 cores and is growing at 9 per cent every year. It offers quality products

43

with internationally accepted quality standards. There are about 20,000 production units in India with products sold at competitive lower prices than international drug prices. India has various competitive advantages in Pharma

production over western world. It has a large pool of educated manpower with technical and managerial skills It has a well-developed research and development base equipped with advanced technology. Low cost of research over the Western countries gives India a potential advantage for future developments. The country has an open market policy where foreign capital investment is permitted. Restriction on capital investment has been removed in the recent years with a view to make new investments profitable. Also, the country has a strong legal framework, an essential for pharmaceutical industry. The most promising fact about India is a 70 million middle class population with good consumption power. In this section Naukri hub researches in to the prospects of Indian Pharmaceutical industry in detail. Accounting for two percent of the world's pharmaceutical market, the Indian pharmaceutical sector has an estimated market value of about US $8 billion. It's at 4th rank in terms of total pharmaceutical production and 13th in terms of

44

value. It is growing at an average rate of 7.2 % and is expected to grow to US $ 12 billion by 2010. Over the last two years the pharmaceutical market value has increased to about US $ 355 million because of the launch of new products. According to an estimate, 3900 new generic products have been launched in the past two years. These have been by and large launched by big brands in the Pharma sector. And in the year 2005 Indian pharmaceutical companies captured around 70% of the domestic market.

As in the present scenario, only a few people can afford costly drugs, which have increased price sensitivity in the pharmaceutical market. Now the companies are trying to capture the market by introducing high quality and low price medicines and drugs.

With the Product Patent Act, which came into action in January 2005, this industry is able to attract big MNCs to India. Earlier these big firms had apprehensions in launching new drugs in the Indian market. At present, a large number of Indian pharmaceuticals companies are looking for tie-ups with foreign firms for inlicense drugs. GlaxoSmithKline is among the top choices for

45

the firms that wish to launch their product in India, but do not have any branch over here. Contract research and pharmaceutical outsourcing are the new avenues in the pharmaceutical market. Contract manufacturing is growing at a very fast pace and is estimated to grow to US $30billion, whereas contract research is estimated to reach US$6-10 billion. Indian multinational companies like Dr.Reddy's Lab, Cipla, Ranbaxy, etc have created awareness about the Indian market prospects in the international pharmaceutical market. Approvals given by Foods and Drugs Administration (FDA) and ANDA (Abbreviated New Drug Application)/DMF (Drug Master File) have played an important role in making India a cost-effective and high quality product manufacturer. Furthermore, the changes that took place in the patent law, change of process patent to product patent, have helped in reducing the risk of loss for intellectual property.

Industry Strengths: Capital Investment in Technology: Owing to the

availability of advanced technology at low costs, the companies can produce drugs at lower costs.

Cost Effective: The filing cost of ANDAS and DMFs is comparatively low for the Indian companies.

46

Manpower: There is a large pool of technical experts available at modest salaries. Contract Research & Contract Manufacturing: There is a good scope for contract research and contract manufacturing. Infrastructure: There is a well-developed infrastructure for the pharmaceutical industry. Generic Drugs: In the last few years, the generic drugmanufacturing investments, in segment the has received making it huge more process

competitive and efficient.

About Fertilizer Sector

Fertilizer is key input in enhancing crop production. Fertilizer consumption and food grain production is closely correlated (Table 1). Presently fertilizer contributes about50% to the total increase in food grain production.

47

Increasing pressure of population and hiking land resources demand for vertical expansion of agriculture where the role of fertilizers will further increase. At the present level of nutrition, additional 150 million tons of food grain production has to be achieved to feed almost 1.5billionpeople by 2040. This estimate does not include demand for animal feed, which will rise due to depleting grasslands. Thus, the crusade of higher production of food grain has to continue with increased vigor using fertilizers along with the other sources of plant nutrients.

Table -1. All India Fertilizer Consumption and Food grain Production (Million tons)
year 1951-52 1961-62 1971-72 1981-82 1991-92 20002001 Fertilizer Consumption (N+P205+K20) Food grain Production 0.05 51.99 0.34 82.71 2.66 105.17 6.07 133.3 12.73 168.37 16.63 196.07

Production of Fertilizers
India has become third largest country with a total capacity of 11.757 million tons of N and 5.056 million tons of P2O5 in year 2000-2001.Domesticproduction of nitrogenous fertilizers was 10.942 million tons in 2000-2001, whereas production of phosphatic fertilizers was 3.734million tons (Table 2), which

48

are marginally high, compared to last years production. All India capacity utilization has gradually improved over the years and was maintained at almost cent per cent level. However, during2000-01 restrictions were imposed on capacity utilization for Urea at 92% as a consequence the production of urea declined. The increase in production of total N is observed due to increase in production of DAP and other complexes which also have 'N'. Production of DAP during 2000-01 was 10 % higher compared to previous year (Table 3). Imports of Fertilizers The gap between demand and domestic supply is met through imports. Imports of urea have declined substantially during the past five years (Table 4). There have been virtually no imports of urea during 200001. except some quantity vocative consumption. India is presently self sufficient in respect of urea and DAP. The entire quantity of potashis imported, mostly as MOP. Growth in Fertilizer Industry Fertilizer production is capital intensive and presently the cost of production of indigenous material is high and returns on investment are low. The Indian fertilizer industry, which achieved phenomenal growth in eighties, witnessed decline in the growth rate during the nineties. In the recent past, the fertilizer industry has not attracted any significant investment. Due to sufficient

49

indigenous capacity and low international prices of urea the Government of India in Feb. 2000 decided that no new grassroots projects will be allowed during the next three years. Even if the Government reviews its decision, the earliest a project could start would be by 2004-05. Lack of availability of natural gas in the country has prompted investors to collaborate for joint ventures abroad for urea production. Gulf countries, due to abundant availability of gas, nearness to Indian shores and investment friendly environment, are becoming the first choice for joint ventures. Government is keen on implementation of Indo-Oman Fertilizer Project. The financial closure is expected by October 2001 and the commercial production will begin 36 months After that. India will purchase the entire production of 1.65 million tons per annum of urea, from this project on long term basis. As India does not have significant high-grade rock phosphate reserve, it is mainly dependent on import of either rock phosphate or pose acid or DAP. Most of the capacity of DAP is based on imported phos acid and ammonia. There has been some new capacity addition for NP/NPK complexes by way of importing rock phosphate and converting it to pose acid and then to DAP/NPK or production of pose acid at rock Phos phatemines abroad in JV and importing phosphoric acid for further conversion to DAP/NPK. Apart from thee existing joint venture plants for phosphoric acidic Senegal, Jordan and Morocco, some more JV projects are under negotiation.

50

51

Fundamental of Companies

Portfolio construction have selected following companies from different sectors which are fundamentally sound.
No company's Name Price Earning Ratio (P/E ratio) 22.43 11.63 47.86 20.95 Earnin g Per Share (EPS) Book Value (BV) Face Value (FV) Oper ating profit Margi n (OP M) 20.48 22.09 42.54 21.3 Gross Profit Margi n (GPM ) 21.59 21.59 48.32 20.74 Net Profit Margi n (NPM) 14.73 17.05 44.44 14.29

1 2 3 4

CIPLA LTD J.B.CHEMICALS & PHARMACEUTICAL S LTD SUN PHARMACEUTICAL INDUSTRIES LTD TORRENT PHARMACEUTICAL LTD

13.47 11.98 8.68 54.51

73.5 72.6 55.2 104.1

2 2 1 5

52

5 6

JUPITER BIOSCIENCE LTD GUJARAT NARMADA VALLEY FERTILIZERS COMPANY BHARAT FERTILIZER INDUSRIES LTD MANGLORE CHEMICALS & FERTILIZERS LTD TATA CHEMICALS LTD SPICE ISLANDS APPARELS LTD ALFA LAVAL INDIA LTD GEI INDUSTRIES SYSTEMS LTD KULKARNI POWER & TOOLS LTD SARASWATI INDUSTRIES SYNDICATE LTD YUKEN INDIA LTD C&C CONSTRUCTIONS LTD DLF LTD EXELON INFRASTRUCTURE LTD CONSOLIDATED CONSTRUCTION CONSORTIUM PUNJ LLOYD LTD STATE BANK OF INDIA FEDERAL BANK LTD CORPORATION BANK ING VYSYA BANK LTD HDFC BANK LTD

11.1 12.5

19.1 7.97

66.5 133.8

10 10

50.16 18.34

36.59 18.7

17.49 10.48

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

5.28 6.57 18.41 1.95 19.68 18.97 4.42 8.18 9.61 5.11 49.99 34.6 10.17 5.73 16.74 11.24 5.76 14.62 26.03

10.24 4.77 17.87 8.64 59.54 8.94 13.59 11330 23.1 19.54 4.51 2.6 5.06 11.06 44.54 8.37 26.66 20.19 23.43

18.2 28.8 182.4 90.4 207.9 52.6 57.5 563.2 109.5 246.1 75.6 19.5 87.5 107.6 1038.57 274.03 402.6 183.79 463.66

10 10 10 10 10 10 5 10 10 10 2 10 2 2 10 10 10 10 10

13.15 6.67 13.26 1.78 15.13 16.42 13.4 5.95 13.82 21.27 56.7 5.54 9.74 8.88 64.27 65.3 74.9 1 14.0 5 56.0 7

13.21 5.28 12.75 0.68 17.14 12.28 8.82 6.06 12.29 11.1 32.42 5.11 7.47 8.06 27.36 31.1 9 26.9 4 13.6 8 32.6

9.24 4032 7.27 2.05 9.96 7.91 3.3 3.04 7.07 1.88 19.71 4.33 3.35 2.2 11.14 12.51 13.98 12.05 17.11

53

54

Portfolio Construction & Analysis

Calculation of CIPLA LTD

Calculation of Ri
Month
Jan Feb

CLOSING PRICE
317.3 315.3

Return
-5.45292 -0.63032

55

Mar Apr May Jun Jul Aug Sep Oct Nov Dec summation Average return

337.1 342.55 318.95 337.75 326.6 303.35 321.65 352.25 343.7 369.9

6.91405 1.616731 -6.88951 5.894341 -3.30126 -7.1188 6.032636 9.513446 -2.42725 7.622927 11.77408 0.981173

Ri = Ri = Ri =

Summation of Return 12 11.77408 12 0.981173

Calculation of

Month y
Jan Feb Mar Apr May Jun Jul -5.4529201 -0.6303183 6.9140501 1.6167309 -6.889505 5.8943408 -3.301258

X
-6.3376 0.437646 6.684419 0.17652 -3.4973 4.463184 0.945658

XY
34.55842643 -0.27585628 46.21640786 0.285385338 24.09466654 26.30752755 -3.121861321

x2
29.7343376 0.39730116 47.8040888 2.6138188 47.4652819 34.7432535 10.8983064

Y2
40.16517 0.191534 44.68146 0.031159 12.23111 19.92001 0.894269

56

Aug Sep Oct Nov Dec

-7.118799 6.0326356 9.5134463 -2.427253 7.622927

0.575489 11.67429 -0.18327 -2.55132 5.060332

-4.096790978 70.42673746 -1.743529303 6.192700144 38.57454143

50.6773106 36.3926923 90.5056605 5.89155907 58.109016

0.331188 136.289 0.033588 6.509234 25.60696

Total y

11.774076 17.44804 237.4183549 415.232627 286.8847 0.981173 1.454004

= (12)(237.41)-(17.44)(11.77)
(12)(415.23)-( 304.43)

= 0.842394

Calculation of

y- x

= (0.9811) (0.8423)(1.4540)

-0.2436
57

 Calculation of ei2

ei2 =

= (286.88)-(-0.2436)(11.77)- (0.8423)(237.41) 12 ei2 =18.1751

Calculation of 2i
Sensex Return
16,357.96 16,429.55 17,527.77 17,558.71 16,944.63 17,700.90 17,868.29 17,971.12 20,069.12 20,032.34 19,521.25 20,509.09

Month
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

(x-x)

(x-x)2
60.70911 1.032983 27.35725 1.631965 24.51537 9.055165 0.258415 0.771789 104.4542 2.680655 16.04266 13.0056

-6.3376 -7.79161 0.437646 -1.01636 6.684419 5.230415 0.17652 -1.27748 -3.4973 -4.9513 4.463184 3.00918 0.945658 -0.50835 0.575489 -0.87852 11.67429 10.22028 -0.18327 -1.63727 -2.55132 -4.00533 5.060332 3.606328

58

Summation Average return

17.44805 1.454004

261.5151

2i = (x-x)2
n

2i = 261.5151
12

2i =21.7929

Calculation of Ri, , ei2 , of different companies :N COMPANY O.

1 2 CIPLA LTD J.B.CHEMICALS & PHARMACEUTICALS LTD

Ri
0.982 7.85

0.842 0.602

ei2
18.175 105.21

0.2436 7 6.9742 71

59

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

SUN PHARMACEUTICAL INDUSTRIES LTD TORRENT PHARMACEUTICAL LTD JUPITER BIOSCIENCE LTD GUJARAT NARMADA VALLEY FERTILIZERS CO. BHARAT FERTILIZER INDUSRIES LTD MANGLORE CHEMICALS & FERTILIZERS LTD TATA CHEMICALS LTD SPICE ISLANDS APPARELS LTD ALFA LAVAL INDIA LTD GEI INDUSTRIES SYSTEMS LTD KULKARNI POWER & TOOLS LTD SARASWATI INDUSTRIES SYNDICATE LTD YUKEN INDIA LTD C&C CONSTRUCTIONS LTD DLF LTD EXELON INFRASTRUCTURE LTD

3.053 3.515 -2.68 1.522 9.023 6.255 2.04 5.268 0.323 8.736 1.142 -0.19 8.099 -1.31 -1.29 0.68

0.949 0.259 -0.266 -0.034 0.833 -0.532 0.962 1.814 0.472 1.564 -0.154 0.484 0.238 0.764 1.746 3.381

35.480 60.818 111.75 39.777 299.72 102.63 52.611 337.99 30.402 180.93 1 63.239 56.43 113.78 26.494 32.835 680.30

1.6727 6 3.1382 94 2.3019 5 1.5711 31 7.8126 75 7.0284 32 0.6409 4 2.6315 36 0.3632 5 6.4613 5 0.3666 65 0.8978 9 7.7523 88 2.4177 6 3.8270 8 4.2354 4

60

19 20 21 22 23 24 25

CONSOLIDATED CONSTRUCTION CONSORTIUM PUNJ LLOYD LTD STATE BANK OF INDIA FEDERAL BANK LTD CORPORATION BANK ING VYSYA BANK LTD HDFC BANK LTD

-1.72 -4.01 2.095 4.92 3.817 2.255 2.965

0.48 2.358 1.006 0.259 0.776 1.172 1.166

32.071 57.190 39.069 96.239 58.426 69.643 21.369

2.4178 7 7.4335 9 0.6326 04 5.2959 3 2.6884 17 0.5514 55 3.0550 85

(A) Ranking the securities

61

N O

COMPANY

Ri
0.982 7.85

Ri/
1.165 13.03

Ra nk
15 4

1 CIPLA LTD 2 J.B.CHEMICALS & PHARMACEUTIC ALS LTD 3 SUN PHARMACEUTIC AL INDUSTRIES LTD 4 TORRENT PHARMACEUTIC AL LTD 5 JUPITER BIOSCIENCE LTD 6 GUJARAT NARMADA VALLEY FERTILIZERS COMPANY 7 BHARAT FERTILIZER INDUSRIES LTD 8 MANGLORE CHEMICALS & FERTILIZERS LTD 9 TATA CHEMICALS LTD 10 SPICE ISLANDS APPARELS LTD 11 ALFA LAVAL INDIA LTD 12 GEI INDUSTRIES SYSTEMS LTD 13 KULKARNI POWER & TOOLS LTD 14 SARASWATI INDUSTRIES SYNDICATE LTD 15 YUKEN INDIA LTD 16 C & C CONSTRUCTION S LTD 17 DLF LTD 18 EXELON

0.842 0.602

3.053

0.949

3.215

3.515 -2.689 1.522

0.259 -0.266

13.55 10.10

3 6 25

-0.034 -45.03

9.023 6.255

0.833 -0.532

10.83 -11.7

5 24

2.04 5.268 0.323 8.736 1.142 -0.194 8.099 -1.307

0.962 1.814 0.472 1.564

2.120 2.905 0.683 5.584

12 10 16 7 23 18 1 21 19 17

-0.154 -7.432 0.484 -0.401 0.238 0.764 1.746 3.381 34.01 -1.71 -0.73 0.201

62
-1.289 0.68

Where,
I * (Ri-Rf)*

C=

ei
1+ I i

ei

Ri Rf

is selected.

Calculation of Cut off Rate

Ra nk 1 2 3 4 5 6 7 8 9 Securities YUKEN INDIA LTD FEDERAL BANK LTD TORRENT PHARMACEUTICA L LTD J.B.CHEMICALS & PHARMACEUTICA LS LTD BHARAT FERTILIZER INDUSRIES LTD JUPITER BIOSCIENCE LTD GEI INDUSTRIES SYSTEMS LTD CORPORATION BANK SUN PHARMACEUTICA L INDUSTRIES LTD SPICE ISLANDS (Ri-Rf) 34.016 37 19.025 13 13.556 88 13.037 0 10.836 19 10.106 3 5.5843 13 4.9180 5 3.2159 25 2.9051 (Ri-Rf)* ei2 0.01694 8 0.01321 9 0.01498 7 0.04492 0.02506 8 0.00640 3 0.07553 5 0.05070 1 0.08169 8 0.02826 i2/ei2 0.0004 98 0.0006 9 0.0011 05 0.0034 45 0.0023 13 0.0006 33 0.0135 2 0.0103 09 0.0254 04 0.0097 Cumulative (a) 0.016948 0.030168 0.045155 0.090077 0.115145 0.12154 0.197085 0.247786 0.3294 Cumulative (b) 0.000498 0.013718 0.028705 0.073627 0.098696 0.105099 0.180635 0.231336 0.313035 c 0.36537 0.50613 0.60536 0.75369 0.79640 0.80503 0.87004 0.89381 0.91798

10

0.357752

0.3413026

0.92397

63

APPARELS LTD 11 12 13 14 15 16 17 18 19 20 21 22 HDFC BANK LTD TATA CHEMICALS LTD STATE BANK OF INDIA ING VYSYA BANK LTD CIPLA LTD ALFA LAVAL INDIA LTD EXELON INFRASTRUCTUR E LTD SARASWATI INDUSTRIES SYNDICATE LTD DLF LTD PUNJ LLOYD LTD C&C CONSTRUCTIONS LTD CONSOLIDATED CONSTRUCTION CONSORTIUM LTD KULKARNI POWER & TOOLS LTD MANGLORE CHEMICALS & FERTILIZERS LTD GUJARAT NARMADA VALLEY FERTILIZERS COMPANY

00 2.5437 93 2.1202 57 2.0831 42 1.9246 39 1.1654 79 0.6839 76 0.2010 94 0.4009 5 -0.7384 1.6986 3 1.7102 4 3.5823 7 7.4329 4 11.759 7 45.032 5

7 0.16175 0.03730 3 0.05390 0.03794 0 0.04550 5 0.00500 7 0.00337 7 0.00166 5 0.06852 5 0.16513 0 0.03768 7 0.02574 6 0.00277 3 0.03241 5 0.00129 3

30 0.0635 87 0.0175 93 0.0258 77 0.0197 12 0.0390 44 0.0073 21 0.0167 97 0.0041 52 0.0927 98 0.0972 13 0.0220 36 0.0071 87 0.0003 73 0.0027 56 2.8720 7E 0.519506 0.556810 0.610717 0.64865 0.694162 0.699170 0.702548 0.700883 0.632358 0.467227 0.429540 0.403793 0.503056 0.540360 0.594267 0.632207 0.677712 0.682720 0.686098 0.684433 0.615908 0.450777 0.413090 0.387343 0.94637 0.94978 0.95401 0.95658 0.95931 0.95959 0.95978 0.95969 0.95552 0.94073 0.93586 0.93205

23 24 25

0.40102 0.368604 0.367311

0.384570 0.352155 0.350861

0.93161 0.92604 0.92580

(C)Arrival of Portfolio
Calculation of
Ra nk

Zi

0.2381 0.2586

Securities
1 YUKEN INDIA LTD 2 FEDERAL BANK LTD

ei
113.78 57 96.239

RiRf/
34.01637 97 19.02513

Zi
0.069 0.049

64

5 3 TORRENT PHARMACEUTICAL LTD 4 J.B.CHEMICALS & PHARMACEUTICALS LTD 5 BHARAT FERTILIZER INDUSRIES LTD 6 JUPITER BIOSCIENCE LTD 7 GEI INDUSTRIES SYSTEMS LTD 8 CORPORATION BANK 9 SUN PHARMACEUTICAL INDUSTRIES LTD 10 SPICE ISLANDS APPARELS LTD 11 HDFC BANK LTD 12 TATA CHEMICALS LTD 13 STATE BANK OF INDIA 14 ING VYSYA BANK LTD 15 CIPLA LTD 0.2593 0.6021 0.8327 -0.2661 1.5644 0.7761 0.9494 1.8135 1.1657 0.9621 1.0055 1.1717 0.8424 60.818 4 105.21 02 299.72 76 111.75 84 180.93 05 58.426 1 35.480 7 337.99 29 21.369 8 52.611 3 39.069 5 69.643 6 18.175 2

53 13.55688 39 13.03703 7 10.83619 55 10.10635 1 5.584313 47 4.918051 8 3.215925 85 2.905100 63 2.543793 43 2.120257 77 2.083142 72 1.924639 41 1.165479 58 0.054 0.069 0.027 0.022 0.04 0.053 0.06 0.01 0.086 0.021 0.03 0.016 0.01

Calculation of Zi YUKEN INDIA LTD

65

i ei

Ri Rf

Zi

0.2381

34.01 0.9593
113.78

Zi

= 0.069172894

Calculation of Zi FEDERL BANK LTD

Zi

0.2586

19.025-0.9593
96.23

Zi

0.048543686

66

Calculation of
Rank

Xi
Zi
0.069 0.049 0.054 0.069 0.027 0.022 0.04 0.053 0.06 0.01 0.086 0.021 0.03 0.016 0.01

Securities
1 YUKEN INDIA LTD 2 FEDERAL BANK LTD 3 TORRENT PHARMACEUTICAL LTD 4 J.B.CHEMICALS & PHARMACEUTICALS LTD 5 BHARAT FERTILIZER INDUSRIES LTD 6 JUPITER BIOSCIENCE LTD 7 GEI INDUSTRIES SYSTEMS LTD 8 CORPORATION BANK

Xi
11.23 7.89 8.73 11.23 4.46 3.81 6.5 8.54 9.81 1.7 14.04 3.45 4.7 2.63 1.55

9 SUN PHARMACEUTICAL INDUSTRIES LTD 10 SPICE ISLANDS APPARELS LTD 11 HDFC BANK LTD 12 TATA CHEMICALS LTD 13 STATE BANK OF INDIA 14 ING VYSYA BANK LTD 15 CIPLA LTD

67

Calculation of
Zi
i

xi YUKEN INDIA LTD

Zi
0.069172894
0.615542859

xi = Xi

= 11.2377 %

Calculation of

xi FEDERL BANK LTD

xi =

0.048543686
0.615542859

Xi = 7.8863 %

68

Conclusion

69

Conclusion
This whole project is concern with the construction of portfolio and by doing this project we come to know about how to construct the effective portfolio which comprise the maximum return for the investors and minimize their risks

In the portfolio construction we have prepare portfolio according to the sharp model and by constructing a portfolio we have selected such scrips from list of many scrips and specially we have consider such factor like , , and ei 2 through which we know risk factors and return factors of the project and base on that we come to know about the effectiveness of the portfolio. Also after preparing the portfolio we have specially analyzing the selected scrips and measuring the actual performance of the scrips so if require any changes then we can change the portfolio and revised it. EXELON INFRASTRUCTURE LTD Have given negative return in all the three months, while C&C CONSRUCTION, DLF LTD, CIPLA LTD, TATA CHEMICAL, PUNJ LLOYD LTD, SBI BANK, K

70

Has give negative return in Jan. and Feb., but they give positive return in march. according to market return. And especially this project gives you detailed idea about the Banking, Fertilizer and chemical, pharmaceutical sector so those who want to invest their money into this sector for that this is very helpful study. Infrastructure sectors not given proper result in this year so in future suggestion to not invest in Infrastructure sectors. It sector has given negative return in this year. Sharp model gives idea how to select securities for optimal portfolio. Here, we construct & analyze Portfolio of five Sectors but thats not enough, we have to also see the performance of selected securities. Some Companies give return not

71

Bibliography
72

Bibliography
Magazine :
Capital Market

Web-sites :
www.bseindia.com www.nseindia.com www.moneycontrol.com money.rediff.com
Books

: Investment Management; V.K.Bhadla; Gangadharn.

73