The Risk and Return Analysis of Equity Fund in Sundaram Mutual Fund

K.L.E.
SOCIETYS
INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH,

B.V.B CAMPUS VIDYANAGAR HUBLI. (APPROVED BY A I C T E, NEW DELHI AND AFFILIATED TO KARNATAKA UNIVERSITY, DHARWAD.) PROJECT REPORT ON:
Study of investors preferences and trends towards investment UNDERTAKEN AT
Submitted in partial fulfillment of the requirement for the award of masters degree in business administration of Karnataka University Dharwad during academic year 2007-2008
Submitted by:Mr.Gururaj A Angadi

M.B.A 4th Sem.
MBA06002088 Institute Guide

Prof. Mona Agarwal
Organization Guide
Mr. BHAKTIYAR KHAN
Faculty, KLESs IMSR Hubli. shindoori
Branch Manager Apollo
Declaration
I, Gururaj A Angadi, hereby declare that this project entitled Study of investors preferences and
trends towards investment,
has been prepared by me
under the valuable guidance and supervision of Prof. Mona Agarwal, Faculty Member, KLESs Institute Of Management Studies And Research, Hubli, in partial fulfillment of the requirements for the award of the Masters Degree in Business Administration during the academic year 2007-2008. I also declare that this project report has not been submitted to any other university for the award of any other degree, fellowship, associate ship or any other similar title.
Countersigned:-
KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI
Prof:-Mona Agarwal GURURAJ.A.ANGADI. (Faculty Member)

, KLESs IMSR Hubli DATE: PLACE: Hubli
MR. Register No. MBA06002026 (M.B.A. Student)
Acknowledgement
I would like to thank Dr. S. M Bagali, Director of KLESs Institute Of Management Studies And Research, Hubli, for the guidance he has given to me in the conduction of my project work.
I express my profound thanks to Prof:-Mona Agarwal, my teacher and guide, who has been magnanimous in guiding, encouraging and supporting me during this project and special thanks to him because who guided me to choose this immensely productive topic and it was because of his confidence in me that I have been able to carry out such a beautiful study report..
My sincere thanks goes to Mr.BHAKTIYAR KHAN, Branch Manager, Apollo shindoori capital investment Hubli, for giving me an
opportunity to do a project for their esteemed organization and for extending his valuable guidance and patient support throughout my project
. Gururaj.A.Angadi
KLESs IMSR, Hubli.
Master of Business Administration: 2006-08

CONTENTS
Page No. Executive Summary Chapter 1 Introduction 1.1 Definition and Overview 1.2 Problem Identification 1.3 Objective of the study Chapter 2 Industry Profile 2.1 Industry overview 2.2 Investment 2.3 Capital market and depository 3 4 6 20 2 2 2 2 i
Chapter 3 Company Profile 3.1 Basic facts about ASCIL 3.2 Service profile of ASCIL 3.3 Product profile of ASCIL Chapter - 4 Data Analysis & Interpretation 4.1 Methodology 4.2 Data Analysis 4.2.1 Analyze investors preference on investment 61 61 62 62 31 32 35 49
Chapter 5 Suggestions and Limitation 5.1 Findings 5.2 Suggestion 5.3 Limitation Chapter 6 Learning Outcomes 6.1 On investment avenues 6.2 On DP Services Chapter 7 Reference: and Bibliography 7.1 Article 7.2 Books 78 79 79 77 77 77 72 73 74 75
7.3 Websites Chapter 8 Annexure 8.1 Questionnaire
79
80 81
EXECUTIVE SUMMARY
This project has been done in APOLLO SINDHOORI CAPITAL INVESTMENT LTD. (ASCIL), which is one of the Indias major depository participants. Apart from the regular activity of a DP, ASCIL provides a range of products to its client for investment. The project is designed keeping importance of the investment pattern of people and the popularity of the various products offered at ASCIL for investment. This study deals with various investment avenues like equity, bonds, debentures, bank deposits, insurance, mutual funds etc. and the risk involved in it. Apart from this, it also gives emphasis on the depository and various functions of depository participants. This study also consists of the investment pattern of people who reside in an economically developed area & economically developing area and how the investment pattern of people varies according to their social classes like age, education, income etc. For this study I have taken Bangalore as an
economically developed area and Bhubaneswar as an economically developing area. In Bangalore, people are generally prefer to take risk in investment and invest in such avenues where the return is more but in Bhubaneswar the scenario is contradictory to Bangalore, where people are more conservative and investing more in Bank Deposits, Postal Deposits etc. Like that, the middle age group people are investing more in Insurance, Equity and Mutual Funds, where as the old age group people prefer to invest in RBI Bonds, Bank Deposits etc. And among ASCILs product, investor are giving more preference to Stock Direct rather than any other of its products. But RBI Bonds is the more preferred product among older age group investors. As ASCIL is one of the major DP in India, 85 per cent of its client are dealing with demat transaction only and merely 15 per cent of its client invested in other products.
PART - I
Introduction
1.1 Definition and Overview 1.2 Problem identification 1.3 Objective of the study 1.4 Methodology
1.1 Introduction:
The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future, which is known as investment. There are various investment avenues such as Equity, Bonds, Insurance, Bank Deposit etc. A Portfolio is a combination of different investment assets mixed and matched for the purpose of achieving an investor's goal. There are various factors which affects investors portfolio such as annual income, government policy, natural calamities, economical changes etc
Topic of the study

Study of investors preferences and trends towards investment. Main Objectives: To understand investors behavior on various investment alternatives.
1.2 Sub Objective of the study:

To study the investment pattern of people. To study the investment decisions of different social class people (in term of age group, education, income level etc.) To analyze the investment pattern of people who reside in an economically developed area and economically developing area. To study the difference between various investment options offered at ASCIL. To study the popularity of various products offered by ASCIL. And, to study the role of ASCIL as a depository participant.
1.3 Problem identification:

Analyze the investment pattern of people and the popularity of different products (Fund Invest, RBI Bonds, Stock Direct, Insure) provided by ASCIL for investment.
1.4 Methodology:
Primary Data A questionnaire schedule was prepared and the primary data was collected. Secondary Data Company website Customer data base Company report Books and publications Related information from net
Period of Study: The study concentrates only on the past 3 years data with the help of data source available. Period of study and analyzing the primary data is two months. Type of research: This is a descriptive research where survey method is adopted to collect primary information from the investors using different scales as required and the required secondary information for the analysis.
Sampling Technique The sampling technique followed in this study is non-probability convenient sampling. Simple random techniques are used to select the respondent from the available database. The research work will be carried on the basis of structured questionnaire. The study is restricted to the investors of Hubli city only. Sample Size The population being large the survey will be carried among 100 respondents who are the clients of ASCIL, They will be considered adequate to represent the characteristics of the entire population. Tools used for data analysis The analysis of data collection is completed and presented systematically with the use of Microsoft Excel and SPSS.
PART - II
Industry Profile
2.1 Industry Overview 2.2 Investment 2.3 Capital Market and Depository
2.1 Industry Overview:

Globalization of the financial market has led to a manifold increase in investment. New markets have been opened; new instruments have been developed and new services have been launched. APOLLO SINDHOORI CAPITAL INVESTMENT LTD. (ASCIL), the premier custodian of Indian capital market providing services of international standards, is geared up to reposition itself in the changed scenario. With world acclaimed automation and a team of committed professionals, ASCIL is confident of scaling new heights. Combining its financial strengths and technical expertise to serve the clients better, wherever and whenever it is needed, ASCIL envisages acting as a partner one can trust. The corporation has restructured and geared itself to serve the growing needs of individual investors in the paperless environment. The organization in its willingness to provide its state-of-the-art financial services in securities industries to the various segments of the investors has expanded itself to more than hundred cities across the country. ASCIL desires to give investors the time and attention in monitoring the performance of their securities consistently. All aimed at providing the investor with optimum financial gain. India has a well established capital market mechanism where in effective and efficient transfer of money capital or financial resources from the investing class to the entrepreneur class in the private and public sector of the economy occurs. Indian capital market has a long history of organized trading which started with the transaction in loan stocks of the East India Company from that time it has undergone drastic changes to meet the requirements of the globalization. The Indian Capital Market had been dormant in the 70's and 80's has witnessed unprecedented boom during the recent years. There has been a shift of household savings from physical assets to financial assets, particularly the risk bearing securities such as shares and debentures. Capital markets
structure has also undergone sea changes with number of financial services and banking companies, private limited companies coming in to the scene which made the competition in the market stiffer. The Companies Act 1850, introduced the concept of limited liability to India, served to stimulate the activity in the stock market. From then number of acts are passed to boost the revolutionary change. The global capital market registered spectacular growth in the decade of 1990's which had an effect on the growth of Indian market. The world market capitalization grew at an average annual rate of 16% during the decade, it grew from about US $ 9.3 trillion in 1990 to about US $ 36 trillion in 2000 but fell to about US $ 28 trillion by 2001. The turnover on all markets taken together has grown nearly 19 times from US $ 5.5 trillion in 1990 to US $ 48 trillion in 2000 before depleting to about US $ 42 trillion in 2001. The turnover in developed markets has, however, grown more sharply than that in emerging markets. The US alone accounted for about 70% of world wide turnover in 2001. Despite having a large number of companies listed in its stock exchanges, India accounted for a merger of 59% in 2001 down from 1.06% in 2000. The stock markets world wide has grown in size as well as depth over last one decade. During the decade 1990-2000, the world market capitalization/GDP ratio more than doubled from 51% to 120%. Value traded GDP rose from 29% to 103% and turn over ratio shot up from 48% to 89%. The combined market capitalization of a select 22 emerging economies increased from US $ 339 billion in 1990 to US $ 2.2 trillion in 2000. The average market capitalization increased from 3.6% to 7%, annual value of shares traded increased from $ 180 billion to $ 2.2 trillion and GDP increased from 16.7% to 45.5%.
For India the total capitalization grew from $ 38,567 million at the end of 1990 to $ 110,396 million at the end of 2001. Turn-over of stocks
increased from $ 21,198 million in 1990 to $ 249,298 million in 2001. Market capitalization as a percentage of GDP grew from 12.2% in 1999 to 32.4% in 2001 while turnover ratio went up from 65.9% in 1999 to 191.4% in 2000. The number of listed companies in India was 5,975 as at end of 2001. There are very few countries, which have higher turnover ratio than India. Standard and Poor (SP) ranked India, 25th in terms of market capitalization, 15th in terms of total value traded in stock-exchanges and 6th in terms of turn-over ratio.
2.2 Investment:
Investment means buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold as an investment, real estate, or collectibles. Valuation is the method for assessing whether a potential investment is worth its price. Types of financial investments include shares or other equity investment, and bonds (including bonds denominated in foreign currencies). These investments assets are then expected to provide income or positive future cash flows, but may increase or decrease in value giving the investor capital gains or losses
2.2.1 Characteristics of Investment:

(i) Interest (return) When we borrow money, we are expected to pay for using it this is known as Interest. Interest is an amount charged to the borrower for the privilege of using the lenders money. Interest is usually calculated as a percentage of the principal balance (the amount of money borrowed). The
percentage rate may be fixed for the life of the loan or it may be variable, depending on the terms of the loan. What factors determine interest rates? The factors which govern these interest rates are mostly economy related and are commonly referred to as macroeconomic factors. Some of these factors are: Demand for money Level of Government borrowings Supply of money Inflation rate (ii) Risk Risk may relate to loss of capital, delay in repayment of capital nonpayment of interest, or variability of return. While some investment such as government securities and bank deposits are almost without risk, others are more risky. The risk of an investment is determined by the investments maturity period, repayment capacity, nature of return commitment, and so on. (iii) Safety Every investor expects to get back the initial capacity on maturity without loss and without delay. Investment safety is gauged through the reputation established by the borrower of the fund. A highly reputed and successful corporate entity assures investors of their initial capital. (iv) Liquidity An investment which is easily saleable or marketable without loss of money and without loss of time is said to be possess the characteristic of
liquidity. Some investments such as deposit in unknown corporate entities, bank deposit, post office deposit, national saving certificate, and so on are not marketable. An investor tends to be prefer maximization of expected return, minimization of risk, safety of fund, and liquidity of investment
The three golden rules for all investors are: Invest early Invest regularly Invest for long term and not short term One needs to invest for Earn return on your idle resources Generate a specified sum of money for a specific goal in life Make a provision for an uncertain future To meet the cost of inflation
2.2.2 Types of Investment:

(i) Short term Investment- It is an investment made by the investor for very short period of time i.e. for one to three years. Such as investment in bank, money market, liquid funds etc. (ii) Long Term Investment When investor invests money for more than three to five years then it is called long term investment. Such as investment in bonds, mutual funds, fixed bank deposits, PPF, insurance etc Various options available for investment Physical assets
o Real estate o Gold/jewelry o Commodities o Assets etc. Financial assets o fixed deposits with banks o Small saving instruments with post offices
o Insurance /provident /pension fund etc. Securities market o Share o Bonds o Debentures o Mutual fund o Derivatives etc.
2.2.3 Investor:
Investor is a person or an organization that invest money in various investment sources for specific objective. Attitude of investment is different in each alternative. E.g. financial market have different attitude towards risk and return. Some investors are risk avers, while some have an affinity of risk. The risk bearing capacity of investor is a function of personal, economical, environment, and situational factors such as income, family size, expenditure pattern, and age. A person with higher income is assumed to have higher riskbearing capacity. Thus investor can be classified as risk skiers, risk avoiders, or risk bearers
Before making any investment, one must ensure to : Obtain written documents explaining the investment Read and understand such documents Verify the legitimacy of the investment Find out the costs and benefits associated with the investment Assess the risk-return profile of the investment Know the liquidity and safety aspects of the investment Ascertain if it is appropriate for your specific goals Compare these details with other investment opportunities available
Examine if it fits in with other investments you are considering or you have already made Deal only through an authorized intermediary Seek all clarifications about the intermediary and the investment Explore the options available to you if something were to go wrong, and then, if satisfied, make the investment. Portfolio A Portfolio is a combination of different investment assets mixed and matched for the purpose of achieving an investor's goal. Items that are considered a part of your portfolio can include any financial asset you own, like shares, debentures, bonds, mutual fund units etc. and real assets like gold, art and even real estate etc. However, for most investors a portfolio has come to signify an investment in financial instruments like shares, debentures, fixed deposits, mutual fund units. Diversification
It is a risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Diversification is possibly the best way to reduce the risk in a portfolio. Advantages of having a diversified portfolio A good investment portfolio is a mix of a wide range of asset class. Different securities perform differently at any point of time. So with a mix of asset types, your entire portfolio does not suffer the impact of a decline of any one security. When your stocks go down, you may still have the stability of the bonds in your portfolio. There have been all sorts of academic studies and formulas that
demonstrate why diversification is important, but it's really just the simple practice of "not putting all your eggs in one basket." If you spread your investments across various types of assets and markets, you'll reduce the risk of your entire portfolio getting affected by the adverse returns of any single asset class.
2.2.4 Investment Avenues:

In India, numbers of investment avenues are available for the investors. Some of them are marketable and liquid while others are non-marketable and some of them also highly risky while others are almost risk less. The investor has to choose proper avenue among them, depending upon his specific need, risk preference, and return expected Investment avenues can broadly categories under the following heads 1. Corporate securities
Equity shares Debenture/Bonds Warrants
Preference shares GDRs/ADRs Derivatives
2. Deposit in bank and non banking companies 3. Post office deposits and certificate 4. Life insurance policies 5. Provident fund schemes 6. Government and semi-government securities 7. Mutual fund and schemes 8. Real estate
(i) Corporate securities:

(a) Equity share Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a share. Thus, the company then is said to have 20, 00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights. When company makes profit shareholder receives there share of the profit in form of dividends. In addition, when company performs well and the future expectation from the company is very high, the price of the companies share goes up in the market. Investor can invest in shares either primary market offerings or in the secondary market.
(b) Preference shares Preference share as that part of share capital of the Company which enjoys preferential right as to: (a) payment of dividend at a fixed rate during the life time of the Company; and (b) the return of capital on winding up of the Company. It is lie in between pure equity and debt. But preference shares cannot be traded, unlike equity shares, and are redeemed after a pre-decided period. Also, Preferential Shareholders do not have voting rights. These are issued to the public only after a public issue of ordinary shares. Preference shares also get traded in the market and give liquidity to investor. Investor can opt for this type of investment when their risk performance is very low.
(c) Debentures and Bonds It is a fixed income (debt) instrument issued for a period of more than one year with the purpose of raising capital. The central or state government corporations and similar institutions sell bonds. A bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date. Many types of debenture and bonds have been structured to suit investors with different time needs. Though having higher risk as compared to bank fixed deposits, bonds and debentures do offer higher returns. Debenture instruments require scanning the market and choosing specific securities that will cater to investment objectives of the investor. (d) Depository Receipts (GDRs/ADRs)
Global depository receipts are the instrument in the form of a depository receipts or certificate created by the overseas depository bank outside India and issued to non-resident investors against ordinary shares. A GDR issued in America, is an American Depositary Receipts. As investors seek to diversify their equity holdings, the option of GDRs and ADRs is very lucrative, while investing in such securities, investors should identify the capitalization and risk characterizes of the instrument and the companies performance in the home country. (e) Warrants A warrant is a certificate giving its holder rights to purchase securities at a stipulated price within a specified time limit. The warrants act as a value addition because holder of the warrant has the right but not the obligation to investing in equity at the indicated rate. An option contract often sold with another security. For instance, corporate bonds may be sold with warrants to buy common stock of that corporation. Warrants are generally detachable. Options generally have lives
of up to one year. The majority of options traded on exchanges have maximum maturity of nine months. Longer dated options are called Warrants and are generally traded over-the counter (ii) Savings bank account with commercial bank Broadly speaking, savings bank account, money market/liquid funds and fixed deposits with banks may be considered as short-term financial investment options: Savings Bank Account is often the first banking product people use, which offers low interest (4%-5% p.a.), making them only marginally better than fixed deposits.
(iii) Bank fixed deposits Fixed Deposits with Banks are also referred to as term deposits. Minimum investment period for bank FDs is 30 days. Fixed Deposits in banks are for those investors, who have low risk appetite. Bank FDs is likely to be lower than money market fund returns. (iv) Company fixed deposits These are short-term (six months) to medium-term (three to five years) borrowings by companies at a fixed rate of interest which is payable monthly, quarterly, semi annually or annually. They can also be cumulative fixed deposits where the entire principal along with the interest is paid at the end of the loan period. The rate of interest varies between 6-9% per annum for company FDs. The interest received is after deduction of taxes. (v) Post Office Savings: Post Office Monthly Income Scheme is a low risk saving instrument, which can be availed through any Post Office. It provides an interest rate of 8% per annum, which is paid monthly. Minimum amount, which can be invested, is Rs. 1,000/- and additional investment in multiples of Rs. 1,000/-. Maximum amount is Rs. 3,00,000/- (if Single) or Rs. 6,00,000/-(if held Jointly) during a year. It has a maturity period of 6 years. A bonus of 10% is paid at the time of maturity. Premature withdrawal is permitted if deposit is more than one year old. A deduction of 5% is levied from the principal amount if withdrawn prematurely. The 10% bonus is also denied. (vi) Life insurance policies
Insurance companies offer many investment schemes to investors. These schemes promote saving and additionally provide insurance cover. LIC is the largest life insurance company in India. Some of its schemes include life policies, convertible whole life assurance policy, endowment assurance policy, jeevan Saathi, money back policy etc. Insurance policies, while catering to the risk compensation to be faced in the future by investor, also have the advantage of earning a reasonable interest on their investment insurance premiums. (vii) Public Provident Fund: A long term savings instrument with a maturity of 15 years and interest payable at 8% per annum compounded annually. A PPF account can be opened through a nationalized bank at anytime during the year and is open all through the year for depositing money. Tax benefits can be availed for the amount invested and interest accrued is tax-free. A withdrawal is permissible every year from the seventh financial year of the date of opening of the account and the amount of withdrawal will be limited to 50% of the balance at credit at the end of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of the preceding year whichever is lower the amount of loan if any.
(viii) Government and semi-government securities It is a fixed income (debt) instrument issued for a period of more than one year with the purpose of raising capital. The central or state government, corporations and similar institutions sell bonds. A bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date.
The government issues securities in the money market and in the capital market. Money market instruments are traded in Wholesale Debt Market (WDM) trades and retail segments. Instruments traded in the money market are short term instruments such as treasury bills and convertible bonds. (ix) Mutual fund These are funds operated by an investment company which raises money from the public and invests in a group of assets (shares, debentures etc.), in accordance with a stated set of objectives. It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification. Mutual fund units are issued and redeemed by the Fund Management Company based on the fund's net asset value (NAV), which is determined at the end of each trading session. NAV is calculated as the value of all the shares held by the fund, minus expenses, divided by the number of units issued. Mutual Funds are usually long term investment vehicle though there some categories of mutual funds, such as money market mutual funds, which are short term instruments. On the basis of objective we can categories mutual funds as equity funds/growth funds, diversified funds, sector funds, index funds, tax saving funds, debt/income funds, liquid funds/money market funds, gift funds, balanced funds.
And on the basis of flexibility we can categories them as open-ended funds, close-ended funds and interval funds. (x) Real Estate
Investment in real estate also made when the expected returns are very attractive. Buying property is an equally strenuous investment decisions. Real estate investment is often linked with the future development plans of the location. At present investment in real assets is booming there are various investment source are available for investment which are directly or indirectly investing real estate. (xi) Bullion investment The bullion offers investment opportunity in the form of gold, silver, and other metals, specific categories of metals are traded in the metal exchange. The bullion market presents an opportunity for an investor by offering returns and the end value of future. It has been absurd that on several occasions, when stock market failed, the gold market provided a return on investments.
2.2.5 Sources of study for investors:

A look out for new investment opportunities helps investors to beat the market. There are many sources from which investors can gather the required information. Such as; (i) Financial institutions Corporate house, government bodies and mutual funds are the main source of investment information. Many of these enterprises have their own website and post investment related information on their websites.
(ii) Financial market Stock exchange and regulated bodies also provide useful information to investor to make there investment decisions. With respect to secondary market,
the Securities and Exchange Board of India uses various modes to promote investors education and takes great effort to achieve an investor friendly secondary market in India. The Reserve Bank of India also provide useful information relating to the prevent interest rates and non-banking financial intermediaries that mobiles money through deposit schemes. (iii) Financial service intermediaries These are intermediaries who promote securities among the public. Many of these intermediaries are the agencies of specific instruments especially tax saving instruments. These intermediaries offer to share their commission from there concerned organization with the individual investor thus investor get additional advantages while investing through intermediaries. (iv) Media Press sources such as financial news papers, financial magazine, business news channel, websites etc. provide information related to investment to the public. Besides information on securities, these sources also provide analysis of information and in certain instance suggest suitable investment decisions to be made by investor
2.2.6 Fundamental analysis of various investment alternatives:

Before investing in various investment alternatives fundamental analysis is very necessary. A fundamental analysis believes that analyzing the economy, strength, management, production, financial status and other related information
will help to choose investment avenues that will outperform the market and provide consistent gain to the investor
Fundamental analysis is the examination of the underlying forces that affect the interests of the economy, industrial sectors, and companies. It tries to forecast the future movement of capital market using signals from the economy, industry, company. Fundamental analysis requires an examination of the market from broader prospective. It also examines the economic environment, industrial performance, and company performance before taking an investment decision. (i) Economic Analysis The economic analysis aims at determining if the economic climate is conductive and is capable of encouraging the growth of business sector, especially the capital market. When the economy expands, most industry groups and companies are expected to benefit and grow and when the economy declines, most sectors and companies usually face survival problems. Hence, to predict scrip prices, an investor has to spend time exploring the forces operating in the overall economy. Economic analysis implies the examination of GDP, government financing, government borrowings, consumer durable goods market, non-durable goods and capital goods market, saving and investment pattern, interest rates, inflation rates, tax structure, foreign direct investment, and money supply. The most used tools for performing economic analysis are; Gross Domestic Product Monetary policy and liquidity Inflation Interest rate International influences Consumer behaviors Fiscal policy etc (ii) Industry Analysis:
It is very important to see how the industry to which the company belongs is faring. Specifics like effect of Government policy, future demand of its products etc. need to be checked. At times prospects of an industry may change drastically by any alterations in business environment. For instance, devaluation of rupee may brighten prospects of all export oriented companies. Investment analysts call this as Industry Analysis. Companies producing similar products are subset (form a part) of an Industry/Sector. For example, National Hydroelectric Power Company (NHPC) Ltd., National Thermal Power Company (NTPC) Ltd., Tata Power Company (TPC) Ltd. etc. belong to the Power Sector/Industry of India. Tools for industry analysis Cross study of performance of the industry. Industry performance over times Differences in industry risk Prediction about market behaviors, and Competition over the industry life cycle (iii) Company Analysis: Company analysis involved choice of investment opportunities within a specific industry that consists of several individual companies. How has the company been faring over the past few years? Seek information on its current operations, managerial capabilities, growth plans, its past performance vis--vis its competitors etc. (iv) Financial Analysis: If performance of an industry as well as of the company seems good, then check, if at the current price, the share is a good to buy or not. For this, look at the financial performance of the company and certain key financial parameters
Like Earnings per Share (EPS), P/E ratio, current size of equity etc. for arriving at the estimated future price. This is termed as Financial Analysis. For that you need to understand financial statements of a company i.e. Balance Sheet and Profit and Loss Account contained in the Annual Report of a company.
2.3 About Capital Markets and Depository:

2.3.1 About Capital Market:
The function of the financial market is to facilitate the transfer of funds from surplus sectors (lenders) to deficit sectors (borrowers). A financial market consists of investors or buyers of securities, borrowers or sellers of securities, intermediaries and regulatory bodies. Indian financial system consists of money market and capital market. The capital market consists of primary and secondary markets. The primary market deals with the issue of new instruments by the corporate sector such as equity shares, preference shares and debt instruments. The secondary market or stock exchange is a market for trading and settlement of securities that have already been issued. The investors will holding securities or sell securities through registered brokers/sub-brokers of the stock exchange. The introduction of NSE & BSE has increased the reach of capital market manifold which in turn increased the number of investors participating in the capital market and thus creates the possibility of a bad delivery. The cost & time spend by the brokers for rectification of this bad delivery tends to be higher with the geographical spread of the clients. The increase in trade volumes leads to exponential rise in the back office operation. The inconvenience faced by the investors (in area that are far long & away from the main metros) in the settlement of the trade also limits the opportunity for such investors in participating in auction trading.
This has made the investors as well as brokers wary of Indian capital market. The erstwhile settlement system on Indian stock exchanges was inefficient and increased risk, due to the time that elapsed before trades was settled. The transfer was by physical movement of papers. There had to be a physical delivery of securities - a process fraught with delays and resultant risks. The second aspect of the settlement related to transfer of shares in favor of the purchaser by the company. The system of transfer of ownership was grossly inefficient as every transfer involves physical movement of paper securities to the issuer for registration, with the change of ownership being evidenced by an endorsement on the security certificate. In many cases the process of transfer would take much longer than the two months stipulated in the Companies Act and a significant proportion of transactions would end up as bad delivery due to faulty compliance of paper work. Theft, forgery, mutilation of certificates and other irregularities were rampant. In addition, the issuer had the right to refuse the transfer of a security. All this added to costs and delays in settlement, restricted liquidity and made investor grievance redress time consuming and, at times, intractable. To obviate these problems, the Depositories Act, 1996 was passed. It provides for the establishment of depositories in securities with the objective of ensuring free transferability of securities with speed, accuracy and security.
2.3.2 Depository:
Depository is an organization where the securities of a shareholder are held in the electronic form at the request of the shareholder through a medium of a Depository Participant (DP). The principal function of a Depository is to dematerialize securities and enables their transaction in book-entry form electronically.
Depository functions like a security bank, where the dematerialized securities are traded and held in custody. This facilitates faster, risk-free and low cost settlement similar to bank. Following tables compares the two; BANK DEPOSITORY
Hold funds in account Hold securities in accounts Transfer funds between accounts Transfer securities between accounts Transfer without physically handling Transfer without physically handling money Safekeeping of money securities Safekeeping of securities
In India the Depository Act defines a Depository to mean, a company formed and registered under the Companies Act, 1956 and which has been granted a certificate of registration under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 Depositories in India There are two depositories in India, which provide dematerialization of securities. National Securities Depository Limited (NSDL) Central Depository Services Limited (CDSL)
Benefits of participation in a depository
Immediate transfer of securities No stamp duty on transfer of securities Elimination of risks associated with physical certificates such as bad delivery, fake securities, etc.
Reduction in paperwork involved in transfer of securities Reduction in transaction cost Ease of nomination facility Change in address recorded with DP gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately Transmission of securities is done directly by the DP eliminating correspondence with companies Convenient method of consolidation of folios/accounts Holding investments in equity, debt instruments and
Government securities in a single account; automatic credit into demat account of shares, arising out of split/consolidation/merger etc. Depository Participant The Depository provides its services to investors through its agents called Depository Participants (DPs). These agents are appointed by the depository with the approval of SEBI. According to SEBI regulations, amongst others, three categories of entities, i.e. Banks, Financial Institutions and SEBI registered trading members can become DPs. The depository has not prescribed any minimum balance. Customer can have zero balance in his account. ISIN ISIN (International Securities Identification Number) is a unique identification
number for a security. Custodian A Custodian is basically an organization, which helps register and safeguard the securities of its clients. Besides safeguarding securities, a custodian also keeps track of corporate actions on behalf of its clients:
Maintaining a clients securities account Collecting the benefits or rights accruing to the client in respect of
securities
Keeping the client informed of the actions taken or to be taken by

the issue of securities, having a bearing on the benefits or rights accruing to the client. Dematerialization of securities In order to dematerialize physical securities one has to fill a Demat Request Form (DRF) which is available with the DP and submit the same along with physical certificates. Separate DRF has to be filled for each ISIN number. Odd lot share certificates can also be dematerialized. Dematerialized shares do not have any distinctive numbers. These shares are fungible, which means that all the holdings of a particular security will be identical and interchangeable. One can dematerialize his debt instruments, mutual fund units, government securities in his single demat account. Re-materialization If one wishes to get back his securities in the physical form one has to fill in the Remat Request Form (RRF) and request his DP for rematerialisation of the balances in his securities account.
Legal framework: The Depositories Act 1956 provides the regulation of depositories in securities. SEBI formulated the Depositories and participants Regulation Act, 1996 to oversee the matter regarding admission and working of Depositories and its participant. The Depositories Act passed by parliament received the Presidents assents on August 10, 1996. The Act enables the setting up of multiple depositories in the country. Only a company registered under the companies Act (1956) and sponsored by the specified categories of institution can setup depository in India. The Depository offers services relating to holding of securities and facility processing of transaction in such securities in book entry form. The transaction handled by depositories includes settlement of market trades, settlement of off-market trades, securities lending and borrowing, pledge & hypothecations. Eligibility criteria for a Depository: Any of the following may be a Depository:
A public financial institution as defined in section 4A of the Companies Act, 1956. A bank included in the second schedule to the RBI Act, 1934. A foreign bank operating in India with the approval of the RBI. A Recognized Stock Exchange. An institution engaged in providing financial services where not less then 75% of the equity is held jointly or severally by the institution.
A custodian of the securities approved by Government of India. A foreign financial services institution approved by Government of India.
The promoters of Depository are also known as its sponsors. A depository company must have a minimum net worth of Rs. 100 cr. The sponsor(s) of the depository have to hold at least 51% of the capital of the Depository Company. Agreement between depository and issuers: If either the issuers (a company which has issued securities) or the investor opts to hold his securities in a demat form, the issuer enters into an agreement with the depository to enable the investors to dematerialize their securities. No such agreement is necessary where the state or central government is the issuer of securities. Where an issuer has appointed a registrar to the issue of share transfer, the depository enters into a tripartite agreement with the issuer and (R&T) agent, the case may be, for the securities declared eligible for dematerialization. Rights and obligation of Depositories: Every depository should have adequate mechanism for reviewing monitoring and evaluating the controls, system, procedures and safeguards. Annual inspections of the procedures and it should be reported to SEBI. To ensure that the integrity of automatic data processor system is maintained to safeguards information. Adequate measures, including insurance, to protect the interests of the beneficial owners against any risk.
2.3.2.1 Function of Depository Participant:
Dematerialization: One of the primary functions of depository is to eliminate or minimize
the movement of physical securities in the market. This is done through converting securities held in physical form in to holdings in to back entry form. Account Transfer: The depository gives effects to all transfer resulting from the settlement of trade and other transaction between various beneficial owners by recording entries in the accounts of such beneficial owners. Transfer & Registration: A transfer is a legal change of ownership of a security in the records of the insurer. Transfer of securities under demat occur merely by passing bookentries in the records of the depositories, on the instruction of beneficial owners. Pledge and hypothecation: Depositories allow the securities with them to be used as collateral to secure loans and other credits. The securities pledged are transferred to a segregated or collateral account through book-entries in the records of the depository. Linkage with clearing system: The clearing system performs the function of ascertainment in the pay in (sell) or payout (buy) of brokers who leave traded on the stock exchange. Actually delivery of securities from the clearing system is from the selling brokers and delivery of securities from the clearing system to the buying broker is done by depository. To achieve this depositories and the clearing system are linked electronically. To handle the securities in electronic form as per the Depositories Act 1996 two depositories are registered with SEBI. They are 1) NSDL -- National securities depository limited.
2) CDSL -- Central depository service (India) limited. NSDL India had a vibrant capital market, which is more than a century old, the paper-based settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. NSDL promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standard that handles most of the trading and settlement in dematerialized form. Using an innovative and flexible technology system, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency and minimizing risk and cost. In the depository system, securities are held in depository accounts, which is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates. CDSL CDSL was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. CDSL received the certificate of commencement of business from SEBI in February 1999. Depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book-entry by a Depository
Participant (DP), who as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a demat account through any DP for dematerialization of his holdings and transferring securities. The balances in the investors account recorded and maintained with CDSL can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account, which gives the details of the securities holdings and transactions. The depository system has effectively eliminated paper-based certificates, which were prone to be fake, forged, counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities.
Company Profile
3.1 Basic facts about SHCIL 3.2 Service profile of SHCIL 3.3 Product profile of SHCIL
PART III
3.0 Company profile:

ASCI, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. ASCI covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. ASCI has a professional management team and ranks among the best in technology, operations and research of various industrial segments The birth of ASCI was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company ASCI Consultants Limited. It started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985. Since then, they have utilized their experience and superlative expertise to go from strength to strengthto better their services, to provide new ones, to innovate, diversify and in the process, evolved ASCI as one of Indias premier integrated financial service enterprise. Thus over the last 20 years ASCI has traveled the success route, towards building a reputation as an integrated financial services provider, offering a wide spectrum of services. And they have made this journey by taking the route of quality service, path breaking innovations in service, versatility in service and finallytotality in service.
Our highly qualified manpower, cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for us the position of an emerging financial services giant enjoying the confidence and support of an enviable clientele across diverse fields in the financial world. Vision of ASCI: To be amongst most trusted power utility company of the country by providing environment friendly power on most cost effective basis, ensuring prosperity for its stakeholders and growth with human face. Mission of ASCI: To ensure most cost effective power for sustained growth of India. To provide clean and green power for secured future of countrymen. To retain leadership position of the organization in Hydro Power generation, while working with dedication and innovation in every project we undertake. To maintain continuous pursuit for cost effectiveness enhanced productivity for ensuring financial health of the organization, to take care of stakeholders aspirations continuously. To be a technology driven, transparent organization, ensuring dignity and respect for its team members. To inculcate value system all cross the organization for ensuring trustworthy relationship with its constituent associates & stakeholders. To continuously upgrade & update knowledge & skill set of its human resources. To be socially responsible through community development by leveraging resources and knowledge base. To achieve excellence in every activity we undertake.
Quality policy of ASCI: To achieve and retain leadership, ASCI shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, ASCI will strive to exceed Customer's expectations. Quality Objectives As per the Quality Policy, ASCI will:
Build in-house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services.
Establish a partner relationship with its investor service agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer's needs. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics. Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients.
Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of same.
Strive to keep all stake-holders (shareholders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.
ORGANIZATION STRUCTURE
HEIRARCHICAL STRUCTURE OF ASCIL

BOARD OF DIRECTORS
MANAGING DIRECTOR AND CEO
JOINT MD
SENIOR VP {BUSINESS DIVISION}
SENIOR VP {FINANCE}
VP'S {FUNCTIONAL}
ASSISTANT VP'S
DIVISIONAL MANGER
List of various Functional VPs: VP (Depository Services) VP (Information Technology) VP (Products) VP (Personal) VP (HRD) VP (R&D) VP (Facilitation centre Co-ordination)
The following Positoins are below Assistant VPs & Div. Mgrs in the Company's Organizational Hierarchy : Senior Manager Manager Deputy Manager Assistant Manager Executive Junior Executive
3.2 Service Profile:

Custodial service: Since its commencement in 1988 as the premire custodian in the country, ASCIL has been providing custodial services of international standards to financial institution. Foreign institutional investors and domestic mutual funds with 70% of the institutional business to its credit, ASCIL has guaranteed to providing specialized services to large investing institution dedicated pool of professional working in inter connected offices linked to client institutions. Stock Exchange, Depositories and brokers through VSATs, electronic mail and other telecommunication channels is at the help of ASCILs custodial service. ASCIL offers the following services to the clients: (i) Market operation: Here they take care of activities starting from receiving the order to receiving/delivering the securities from the clearing House/clearing Corporation to facilitate purchase and or the sale transaction. ASCIL prefers transaction through clearing hours. However they also undertake delivery Vs payment
transaction if the clients desire the same. Market operation also includes customized reporting to clients. (ii) Lodgments and registration: This covers the receipt of securities and scrutiny thereof and also their lodgment with the Registrars/Companies. The securities sent for transfer are followed up at regular intervals. There is also customized reporting the clients of securities in transit.
(iii) Custody management: Custody management covers physical receipt of securities upon registration from the company and online audit of shares in custody. ASCIL is the first custodian to introduce the bar coding system in India wherein a unique identify is imparted to the securities by affixing a bar code. This aids in tracking of securities at any point in the processing cycle correlation of certificates received after registration. (iv) Data bank: To serve client, the corporation requires a large amount of the information from Stock Exchanges, Depositories, SEBI, Companies and other entries of the capital market. Data bank departments collect information from companies and maintain obligation that is required by the corporation for carrying out market obligation. Databank maintain information of approximately 12,500 instruments, 8,500 companies, 2,500 registrars, two depositories and six Stock Exchange namely BSE, NSE, OTCEI, DSE, CSE & MSE, information regarding various scrip (listed and unlisted) in which the clients have holding,
information pertaining to book closures/records, dates for corporate events, exdates and no delivery schedules for various Stock Exchanges. It also keeps information related to details of monetary and nonmonetary benefits, in the electronic segment information such as ISIN data, the Registrars handling demat for a company, the scrip under compulsory. Demat trades as declared by SEBI and a script included in compulsory rolling segments etc. (v) Corporate actions: Corporate actions cell ensures timely collection of monetary and non-monetary benefits. It covers all activities related to corporate actions like calculation entitlement receipts of monitory corporate actions and transfer of the same to client. It also does customized reporting to clients on the status corporate actions. (vi) Primary market: Here ASCIL takes care of applications on behalf of clients for market issues, calculates the entitlement, follow up for allotment or refunds and send customized reports to clients. (vii) Client interface: This is the single point contact for all client issues. The client interface team prepares and reconciles holding the statement for clients. (viii) Reporting and market updates: ASCIL makes available reports on clients holdings; scripts avail for trade and valuation of securities based on the market price on hard copy as well as through file transfer mechanism.
(ix) Street name securities: This is a special service offered to clients who wish to turn around their portfolio in a speedy manner. The securities purchased by the clients are not sent for registration, but are stored in the safe deposit value of the corporation, the corporate events are monitored continuously and the securities are sent for regulation during book closure or before the expiry of the transfer deed. Technology support team: ASCIL has been able to maintain its lead position in this high volume mission critical and securities environment largely due to the emphasis on the innovative use of technology. ASCIL has recognized the need to adopt state-of-the-art technology right from its inception a direct result of this is the receipt of the Smithsonian Institutes Award for Visionary use of information technology and the NATIONAL IT award from CSI for BEST IT USAGE During the past ten years ASCIL has been a user of a wide range of hardware and has one of the best infrastructures in Indian in terms of hardware and networking equipment. It has an enterprise wide network implemented using leased lines VSAT, VPN, and ISDN. About 140 offices are connected through the network. All the workstations are interconnected via Local Area Network and all the branches and facilitation centers (totaling 140 offices) of SCHIL are connected via Wide Area Network. There is a total integration of front office with central back office system and regional offices with our corporate office. ASCILs enterprises wide network connects servers of various platforms. ASCIL Net is one of the largest WANs in the Country. ASCILs in-house development methodology has been certified at CMM level-3 by i-Flex, while its IT activities have been certified for ISO-9001 by BVQ1. Depository Service:
ASCILS depository participant services addresses individual investment needs. With a percentage of leading financial institutions and insurance majors and a proven track record in the custodian business, ASCIL has registered its past success by establishing itself as the first ever and largest depository participant in India. From a tentative foray in 1998 into the individual investor arena to servicing around seven lakh accounts, ASCIL has endeavored to constantly add and innovate to make business a pleasure for its clients. Across the country, fourteen Depository Participant Machines (DPMs) connected to NSDL and seven connected to CDSL ensure fast and direct processing clients instruction.
ASCILs Depository Service includes: Creation of demat request based on client requirement Follow-up with Registrars/companies for pending demat cases. Accounting of securities received in dematerialization form. Opening and maintenance of client Demat accounts Electronic holding statement to clients. Lessoning with Depositories. Settlement of Trades in electronic form. Pledging. Reporting. Securities lending. Account opening Any investor who wishes to avail depository services must first open an account with a Depository participant of NSDL. The investor can open an account with any depository participant of NSDL. An Investor may open an
account with several DPs or he may open several accounts with single DP. After exercising this choice, the investor has to enter into an agreement with the DP. The form and contents of this agreement are specified by the business rules of NSDL. A DP may be required to open three categories of accounts for clients Beneficiary Account, Clearing Member Account and Intermediary Account. A Beneficiary Account is an ownership account. The holder/s of securities in this type of account owns those securities. The Clearing Member Account and Intermediary Account are transitory accounts. The securities in these accounts are held for commercial purpose only. A Clearing Member Account is opened by a broker or a Clearing Member for the purpose of settlement of trades. An Intermediary Account can opened by a SEBI registered intermediary for the purpose of stock lending and borrowing. Check List for Account Opening Proof of Address, certified copies of ration card/ passport/ voter ID/ PAN card/ driving License / bank passbook. Ensure that all compulsory fields in the account opening form are filled (except PAN/ GIR & nomination which are optional). In case of corporate, ensure a copy of board resolution of authorized signatories. Ensure proper authorization in case of power of attorney holder. DP should give a copy of agreement to the client, including the charges. Inform clients regarding standing instruction facility.
Branches of DP to co-ordinate & follow up with Head Office for account opening. Ensure account is activated before forwarding Client ID to client. Inform settlement deadlines to clients. Dematerialization One of the methods for preventing all the problems that occur with physical securities is through dematerialization (demat). The share certificates are shredded (i.e., its paper form is destroyed) and a corresponding credit entry of the number of securities (written on the certificates) is made in the account opened with the depository participant (DP). Each security is identified in the depository system by ISIN and short name.
Steps in Dematerialization of shares: 1. Client/ Investor submit the DRF (Demat Request Form) and physical certificates to DP. DP checks whether the securities are available for demat or not. Client defaces the certificate by stamping Surrendered for Dematerialization. DP punches two holes on the name of the company and draws two parallel lines across the face of the certificate. 2. DP enters the demat request in his system to be sent to NSDL. DP dispatches the physical certificates along with the DRF to the R&T Agent. 3. NSDL records the details of the electronic request in the system and forwards the request to the R&T Agent. 4. R&T Agent, on receiving the physical documents and the electronic request, verifies and checks them. Once the R&T Agent is satisfied, dematerialization of the concerned securities is electronically confirmed to NSDL.
5. NSDL credits the dematerialized securities to the beneficiary account of the investor and intimates the DP electronically. The DP issues a statement of transaction to the client. Rematerialisation Re-materialization is the exact reverse of dematerialization. It refers to the process of issuing physical securities in place of the securities held electronically in book-entry form with a depository. Under this process, the depository account of a beneficial owner is debited for the securities sought to be re-materialized and physical certificates for the equivalent number of securities is/are issued. A beneficial owner holding securities with a depository has a right to get his electronic holding converted into physical holding at any time. The beneficial owner desiring to receive physical security certificates in place of the electronic holding should make a request to the issuer or its R&T Agent through his DP in the prescribed re-materialization request form (RRF). Re-Materialization Process: 1. The DP should provide re-materialization request forms (RRF) to clients. 2. The client should complete RRF in all respects and submit it to the DP. 3. If RRF is not found in order, the DP should return the RRF to the client for rectification. 4. If RRF is found in order the DP should accept RRF and issue an acknowledgement to the client. 5. DP should enter the re-materialization request in DPM. DPM will generate a remat request number (RRN) which should be mentioned on RRF. 6. An authorized person, other than one who entered the RRF details in DPM, should verify the details of RRN and release a request to the depository.
7. The DP should complete the authorization of RRF and forward it to the issuer or its R&T Agent for re-materialization. The DP should forward RRF to the issuer or its R&T Agent within seven days of accepting it from the client. 8. The issuer or its R&T Agent should verify the RRF for validity, completeness and correctness. It should also match the details with the intimation received from the depository against the same RRN. 9. In case the issuer or its R&T Agent finds RRF in order, it should confirm the re-mat request. The issuer or its R&T Agent should then proceed to issue the physical security certificates and dispatch them to the beneficial owner. 10. The DP, on receiving confirmation of debit entry in DPM, should inform the client accordingly. The entire process takes a maximum of 30 days. Trading and settlement One of the basic services provided by NSDL is to facilitate transfer of securities from one account to another at the instruction of the account holder. In NSDL depository system both transferor and transferee have to give instructions to its depository participants [DPs] for delivering [transferring out] and receiving of securities. However, transferee can give 'Standing Instructions' [SI] to its DP for receiving in securities. If SI is not given, transferee has to give separate instructions each time securities have to be received. Transfer of securities from one account to another may be done for any of the following purposes: a. Transfer due to a transaction done on a person to person basis is called 'offmarket' transaction. b. Transfer arising out of a transaction done on a stock exchange.
c. Transfer arising out of transmission and account closure. Settlement of off-Market transaction
Steps in settlement of off-market transaction 1. Seller gives delivery instructions to his DP to move securities from his account to the buyer's account. 2. Buyer automatically receives the credit of the securities into his account on the basis of standing instruction for credits. 3. Buyer receives credit of securities into his account only if he gives receipt instructions, if standing instructions have not been given. 4. DP needs to be extra careful in verifying the signature of the client if unusual quantities of securities are being debited to the account
5. Funds move from buyer to seller outside the NSDL system.
A market trade is one that is settled through participation of a Clearing Corporation. In the depository environment, the securities move through account transfer. Once the trade is executed by the broker on the stock exchange, the seller gives delivery instructions to his DP to transfer securities to his broker's account.
The broker has to then complete the pay-in before the deadline prescribed by the stock exchange. The broker removes securities from his account to CC/CH of the stock exchange concerned, before the deadline given by the stock exchange. The CC/CH gives pay-out and securities are transferred to the buying broker's account. The broker then gives delivery instructions to his DP to transfer securities to the buyer's account. The movement of funds takes place outside the NSDL system. 1. Seller gives delivery instructions to his DP to move securities from his account to his broker's account
2. Securities are transferred from broker's account to CC on the basis of a delivery out instruction. 3. On pay-out, securities are moved from CC to buying broker's account. 4. Buying broker gives instructions and securities move to the buyer's account. Transfer of securities towards settlement of transactions done on a stock exchange is called settlement of market transaction. This type of settlement is done by transferring securities from a beneficiary account to a clearing member account. Brokers of stock exchanges that offer settlement through depository are required to open a 'clearing member account'. In addition to the brokers, custodians registered with SEBI and approved by stock exchanges can open a clearing member account. These accounts are popularly known as 'Broker Settlement Account'. A client who has sold shares will deliver securities into the settlement account of the broker through whom securities were sold.
Pledge and Hypothecation The Depositories Act permits the creation of pledge and hypothecation against securities. Securities held in a depository account can be pledged or hypothecated against a loan, credit, or such other facility availed by the beneficial owner of such securities. For this purpose, both the parties to the agreement, i.e., the pledger and the pledgee must have a beneficiary account with NSDL. However, both parties need not have their depository account with the same DP. The nature of control on the securities offered as collateral determines whether the transaction is a pledge or hypothecation. If the lender (pledge) has unilateral right (without reference to borrower) to appropriate the securities to
his account if the borrower (pledger) defaults or otherwise, the transaction is called a pledge. Pledge of Demat shares Steps: 1. Agreement is signed between the pledger and pledgee outside the NSDL system 2. Pledger gives a pledge creation request to DP who enters it in the system. 3. The request reaches the pledgee's DP through the NSDL system. Pledgee is intimated by his DP. 4. Pledgee gives a pledge creation confirmation to his DP who enters it in the system. 5. Securities are transferred from 'free balances' head to 'pledged balances' head. 6. Loan is given by pledgee to pledger outside the NSDL system. Checklist for pledge/hypothecation While processing a pledge/hypothecation request, the DP should take care with regard to the following steps/points: 1. Ensure that the instruction form is submitted in duplicate. 2. On receipt of instruction for creation of pledge, check whether there is enough balance in pledger's account to effect the creation of pledge/hypothecation or not. If not, advise the client suitably. 3. Ensure that all compulsory fields in the instruction form are entered. 4. Ensure that request for confirmation of pledge is given before the closure date mentioned in the instruction form. Stock Lending and Borrowing
The transactions involving lending and borrowing of securities are executed through approved intermediaries duly registered with SEBI under the Securities Lending Scheme, 1997. Such an intermediary may deal in the depository system only through a special account (known as Intermediary Account) opened with a DP. An intermediary account may be opened with the DP only after the intermediary has obtained SEBI approval and registered itself with SEBI under the Securities Lending Scheme. The intermediary also needs to obtain an approval of NSDL. Deposit of securities from lender to intermediary
Steps: 1. Lender forwards request to his DP. 2. Lender's DP electronically communicates request to NSDL. 3. The securities are blocked in lender's account in favor of the intermediary. 4. NSDL electronically informs intermediary's DP. 5. Intermediary forwards acceptance request to his DP. 6. Intermediary's DP electronically communicates acceptance to NSDL.
7. Securities are moved from lender's account to intermediary's account. Lending of securities by intermediary to Borrower
Steps: 1. Borrower forwards request to his DP. 2. Borrower's DP electronically communicates request to NSDL. 3. NSDL electronically informs intermediary's DP. 4. Intermediary forwards acceptance request to his DP. 5. Intermediary's DP electronically communicates acceptance to NSDL. 6. Securities are moved from intermediary's account to borrower's account
Repayment of securities by Borrower to intermediary 1. Borrower forwards repayment request to his DP. 2. Borrowers DP electronically communicates request to NSDL. 3. The securities are blocked in borrowers account in favour of the intermediary. 4. NSDL electronically informs intermediarys DP.
5. Intermediary forwards acceptance request to his DP. 6. Intermediarys DP electronically communicates acceptance to NSDL. 7. Securities are moved from borrowers account ton Intermediarys account. Repayment of securities by intermediary to lender 1. Intermediary forwards repayment requires to his DP. 2. Intermediarys DP electronically communicates request to NSDL. 3. Securities are blocked in intermediarys account in favour of the lender. 4. NSDL electronically informs lenders DP. 5. .Lender forwards acceptance request to his DP. 6. Lenders DP electronically communicates acceptance to NSDL. 7. Securities are moved from intermediarys account to lenders account.
3.3 Products offered by ASCIL:
Add shares: Stock holding has tie up with reputed banks, which offer the most competitive interest rates in the market. The clients can use the shares in their free account as collateral and take a loan from any of an empanelled bank.
SCHIL completes the documentation and processing and give the cheque to the customers. ADD shares is available at ASCIL centers in all the major cities. Features:
Loan against demat shares held in the DP account with ASCIL. Competitive interest rates from a range of Banks, with whom ASCIL has tied up. ASCIL processes the entire paperwork required with the bank. The service is available at over 100 branches in the ASCIL. Advantages: The stock holding tie-ups with banks gives a wide range of banks to choose from this reads as a wider range of specified and non-specified shares to get a loan against their share. The ADD shares team helps customer with the paper formalities precedent to a loan. The clients can now get a loan at competitive interest rates and margins. This is a resultant of ASCILs tie-up with a wide range of banks. ADD a share simplifies long-winded loan procedures for customer and facilitates early disbursement of funds Add shares are available at 120 branches all over.
Equibuy: As a depository participant, ASCIL assures a safe delivery of shares every time the client buys on the exchange. ASCIL has lined up a panel of reputed brokers who process orders on priority. As the clearing corporations of leading
stock exchanges SCHIL ensures smooth and sure credits into an account. An initial advance and timely replenishments into the Purchase Advance account take care of the payment for customer purchases. Features: An Equibuy instruction from clients gets the shares credited into the account the next day of payout. Payment for purchase made from a running account called Purchase Advance into which the remit an initial advance of Rs. 1,000 and maintain a minimum balance of Rs. 250 at all times. Choosing one or more brokers from a list of 77 brokers empanelled with ASCIL. Registration with broker is not necessary if client is already registered under any of ASCILs other product schemes Purchase on BSE or NSE. Advantages Buy shares with a single instruction and get an assured credit of shares into clients account the next day of payout. Leave the settlement procedures and broker interaction to ASCIL. It affects a faster turnaround of customer portfolio. Equibuy has a very nominal charge. An initial advance of Rs. 1,000 in the Purchase Advance Account and replenishments, as and when necessary, it takes care of payment for clients purchases.
Fund invest: Fund Invest is a basket of financial products, ranging from fixed income securities like fixed deposits, Infrastructure bonds and Capital Gain Bonds to
variable income securities like Initial Public Offers (IPOs) of equities and mutual funds. It is an attempt to offer financial products that cater to the various investments needs of esteemed clients of ASCIL. An effort to guide the investor to a product portfolio that best suits his risk returns profile. Applications for investments can be source from any of the ASCIL offices. Apart from guiding, investor to pick up the right combination of investment instruments, ASCIL help them 'after-sales' service, by acting as an interlocutor between the investor and the issuer of the securities. ASCIL is an AMFI Registered Mutual Fund Advisor (ARMFA). Features: At present, ASCIL are distributing schemes of 25 different Mutual Fund. All these Funds offer wide varieties of investment option depending on the risk appetite of the investor. Capital Gains Bonds come under 54 EC Capital Gains Bonds, where investors get exemption from Capital Gain Tax. These are 'on-tap ' issues. At present, ASCIL is distributing Capital Gain Bonds of Rural Electrification Corporation, National Housing Bank, Small Industries Development Bank of India and National Highway Authority of India. ICICI Bank and IDBI, with Section 88 as the main feature issue infrastructure Bonds Private Placements: Stock Holding distributes Debt papers issued for Private Placement with Structural Obligations by the State and Central Government, typically targeted for Trusts and Provident Funds. Fixed Deposits: ASCIL distribute Fixed Deposits with high investment rating and issued by blue- chip corporate. These papers generally offer 50 to 100 basis points
more than bank fixed deposits of comparable period. At present, they are distributing IDBI Suvidha Fixed Deposits and HDFC Fixed Deposits. Initial Public Offer: IPOs offered from blue chip corporate can be subscribed from ASCIL.
Stock direct: The client can send instructions for buying/selling shares. A three-way handshake between leading brokers, national and international banks and ASCIL is the crux of Stock direct. Stock direct is India's first online trading platform which was launched in 1999. Today Stock direct is the most secure online trading platform which combines encryption technology / digital signature as well as Smart Card security features. A few clicks will seamlessly check clients funds and security positions, route the order to the broker of choice and do the necessary fund and share movements for the client. For people who are not inclined to trading on the net, ASCIL has Request Transmitting Machines (RTMs) placed at specified ASCIL centers. This is an electronic touch screen kiosk where client can insert smart card and trade effortlessly. Features: A single instruction enables client to combine the trading, fund and share transfers with ASCIL taking care of the settlement. Trade from home on the Internet with a floppy containing the Stock direct software or use the Smart Card to trade through the Request Transmitting Machines (RTMs) placed at specified ASCIL centers and partner banks' designated branches. Security measures
based on encryption and digital signature coupled with smart card technology make online deals 100% secure. Advantages: One Stop Shop gives a single instruction towards funds confirmation for buy orders, order routing to clients broker and fund and share movements for settlement purpose. Convenient. Trade from home through the net or use the RTMs placed at specified ASCIL centers Security Digital Signature & Smart Card technology based on 128-bit Encryption make transactions 100% secure. Cost Effective No minimum value of transactions Services Trade processing services ASCIL has specially trained personnel handling thousands of trade instructions involving large values on sophisticated systems using digital signature on STP (Straight through Processing) systems, ensuring smooth trade confirmations to Stock Exchanges, reporting and resolution of mismatches with Clients, etc. Settlement services Institutional trades are either settled through the Clearing House of the Stock Exchanges or as DVP directly with the contracting broker or Counter
Party. As a Custodian ASCIL strives for timely settlement of Funds and Securities, funds are collected/ deposited from/to client and settled with the Clearing Houses/ Brokers/ Counter Parties. In the present context, most of the Institutional trades are settled in the Depository mode. For the Institutional segment alone, ASCIL has a unique clearing code on the two principal stock exchanges and separate DPM units on both NSDL and CDSL. This ensures smooth settlement of transactions on both Exchanges/Depositories, based on the deliverables and receivables received by them for each settlement. For the occasional delivery and receipt of securities in the physical mode, ASCIL ensures prompt scrutiny, processing and lodgment of securities with the respective Company/Registrar and Transfer Agent, with the objective of final transfer to the purchaser, with objections handling if needed, thus facilitating delivery of securities to the parties concerned on sale.
Physical custody services The transferred physical securities, when received, are held in state-ofthe-art, high-security vaults on behalf of the clients. A pioneer in introducing the bar-coding system to track certificates, ASCIL ensures the availability of each and every share certificate at a moments notice.
Intuitional DP services ASCIL has installed dedicated DPMs (Depository Participant Modules) on both the Depositories, viz. NSDL (National Securities Depository Ltd) and CDSL (Central Depository Services Ltd). A dedicated Institutional DP team at ASCIL addresses your need for all core DP services like conversion of physical holdings into electronic form, settlement of trade instructions, Rematerialisation, repurchase and pledge instructions, providing of holding and transaction statements and daily reconciliation of client holdings. NRI services Over the years, ASCIL has grown to become a major player in the capital market. With a network of more than 140 offices operating across the country and franchisees operating abroad, ASCIL provides Depository Participant and related services close to 0.7 million satisfied investors out of which over 6000 are NRI Clientele. ASCIL has a full-fledged NRI cell operating specifically to cater needs pertaining to Depository account opening and maintenance. NRI cell coordinates with prospective NRI customers, collects and assists in obtaining the relevant documents and ensures the Depository Account is opened hassle free. NRI Cell collects physical certificates to be sent for demat and ensures that the certificates are in order and can be sent for dematerialisation under the existing guidelines issued by the depositories. Instructions for trade are accepted by fax
on request by NRI Cell to ensure timely settlement of trades. In this case later on
the client needs to regularise by sending the original trade delivery instruction. Any tariff and billing related query are addressed by NRI Cell. In short NRI Cell is a single point contact for any matter relating to NRI Depository operations. Derivative services: ASCIL provides Clearing Services for derivative segment of BSE/NSE and Commodity segment of MCX/NCDEX. Derivative services are classified into two they are: Stock derivative services, Commodity derivative clearing services. Clearing - Computing obligations of all his TMs i.e. determining positions to settle. Settlement - Performing actual settlement. Collateral Management - Collection of collateral (cash/cash equivalents and securities), valuation on a regular basis (as per J. R. Varma recommendations) and setting up exposure limits for TMs and Institutional clients. Risk Management - Setting position limits based on upfront deposits / margins for each TM and monitoring positions on a continuous basis. Stock broking service Stock Holding Corporation of India ltd, Bangalore recently started the stock broking service on 18th June 2006. foe availing these services client must
As a professional clearing member, ASCIL performs the following functions:
want demat account with ASCIL. For those only this service is available. Presently client can trade only in BSE. For availing this services client want to opening of stock broking account by submitting necessary document. After submission of application account will open in 7 to 10 days Personal client ID will give to client then client can trade. If he want to purchase any script client want to deposit margin amount in bank then he can buy scripts. . Charges Account opening charges Rs 300/Maintenances charge Rs 27/- per month Brokerage on transaction: Slabs Base brokerage Cumulative transaction value 5-10 lacs 10-20 lacs 20-50 lacs 50 lacs-1crore 1 crore-2 crore 5 crore-10 crore 10 crore and above Brokerage 0.55% 0.50% 0.45% 0.40% 0.35% 0.30% 0.25% 0.20%
PART IV
Data Analysis and Interpretation
4.1
Methodology
4.2 Data Analysis
4.1 Methodology:
Primary Data A questionnaire schedule was prepared and the primary data was collected. Secondary Data Company website Customer data base Company report Books and publications Related information from net
Period of Study: The study concentrates only on the past 3 years data with the help of data source available. Period of study and analyzing the primary data is two months. Type of research: This is a descriptive research where survey method is adopted to collect primary information from the investors using different scales as required and the required secondary information for the analysis. Sampling Technique The sampling technique followed in this study is non-probability convenient sampling. Simple random techniques are used to select the respondent from the available database. The research work will be carried on the basis of structured questionnaire. The study is restricted to the investors of Hubli city only.
Sample Size The population being large the survey will be carried among 100 respondents who are the clients of ASCIL, They will be considered adequate to represent the characteristics of the entire population. Tools used for data analysis The analysis of data collection is completed and presented systematically with the use of Microsoft Excel and SPSS.
4.2
Data analysis:
1. TABLE SHOWING AGE GROUP OF INVESTOR

Age group Frequency Percent below 20 20-35 35-50 50 and above Total 15 25 40 20 100 15.0 25.0 40.0 20.0 100.0 Valid Percent 15.0 25.0 40.0 20.0 100.0 Cumulative Percent 15.0 40.0 80.0 100.0
1. GRAPH SHOWING AGE GROUP OF INVESTORS

50
40
40
30
25 20 20 15 10 below 20 20-35 35-50 50 and above
Count
age group
FINDINGS
From the above tables we can come to see that out of 100 sample 15 investors belong to below 20 age group, 25 investors belong to in the range of 20-35 age group, 40 investor belong to in the range of 35-40 age group and 20 investor belong to 50 and above age group,. And we can say that most of the investor are in the range of the age group of 35-40.
2. Table showing the occupation of the investors

Occupation Frequency Percent Valid student business professionals retired not employed Total
50
10 40 35 10 5 100
10.0 40.0 35.0 10.0 5.0 100.0
Valid Percent 10.0 40.0 35.0 10.0 5.0 100.0
Cumulative Percent 10.0 50.0 85.0 95.0 100.0
40
40 35
30
20
10
10
10 5
Count
0 student business profession retired not employed
occupation
Interpretation
From the above table and graph we can say that out of 100 samples 10 investors are student, 40 investors are business mens, 35 investors are professionals, 10 investors are retired, 5 investors are not employed. And we can say that maximum investors are business mens and professionals.
3. Relationship between income level and investment: Annual income Below 1.5 lakhs 1.5 to 3 lakhs 3 to 4.5 lakhs 4.5 lakhs and Above Investment per annum (Weighted Average) 28500 45000 70000 100000
Relation between income and investment

100000 80000 60000 40000 20000 0 Below 1.5 to 3 to 4.5 1.5 3 4.5 lakhs Lakhs lakhs Lakhs and Above Annual Income (in Rs.) Investment per annum (Weighted Average)
Interpretation: From above table and chart we can come to know when increases in income of investor his investment also increases and % increase of investment is more than % increase in income. It means when income of investor changes his portfolio also changes. So portfolio of investor is depend on income of a investor
3. TABLE SHOWING TYPES OF INVESTMENT

Short term or long term investor Frequency Valid short term invester long term investor both Total 3 35 55 10 103 Percent 2.9 34.0 53.4 9.7 100.0 Valid Percent 2.9 34.0 53.4 9.7 100.0 Cumulativ e Percent 2.9 36.9 90.3 100.0
GRAPH SHOWING TYPES OF INVESTMENT

60 55 50
40 35 30
20
Count
10
10
0 short term invester long term investor both
short term or long term investor
INTERPRETATION
The survey reveals that 55 investors invest for long term period i.e. for periods more than 5 years. And 10 investors invest in both long term and short term securities. And remaining investors for short term period. The survey has shown that most of the investors are investing for long term.
4. TABLE SHOWING FREQUENT OF INVESTMENT (GAP THE RANGE OF TWO

How frequently do you invest? Frequency Percent weekly monthly quarterly half yearly yearly Total 25 32 13 17 13 103 24.3 31.1 12.6 16.5 12.6 100.0 Valid Percent 24.3 31.1 12.6 16.5 12.6 100.0 Cumulative Percent 27.2 58.3 70.9 87.4 100.0
INVESTMENT)
4. GRAPH SHOWING FREQUENCY OF INVESTMENT

40
30
32
25 20
17
Count
13 10 w eekly monthly quarterly half hearly
13 yearly
how frequently do you invest
INTERPRETATION
From the above graph we come to know that 32% of investors are investing monthly. 25% investors are investing weekly, 13% investors are investing quarterly, 17% are investing half yearly, 13% investors are investing yearly. It shows 70% of investors are investing money either monthly or quarterly or daily.
5. TABLES SHOWING BASIS OF INVESTMENT

Basis of Investment Self Analysis Financial Advice Broker Advice F/R Advice C A Advice Percentage 54 19 11 11 5
5. GRAPH SHOWING BASIS OF INVESTMENT

54 60 50 40 30 20 10 0 Self Financial Analysis Advice Broker Advice F/R Advice CA Advice 19 11 11 5
INTERPRETATION
From this we can come to know most of the investor (54%) base their investment on self analysis and remaining 46% of investors take advice from advisers such as brokers, financial advisors, friends or relatives or chartered accountants for making their investment decisions.
6. TABLE SHOWS SOURCE OF STUDY FOR INVESTMENT

Source of study Frequency Percent business channels business paper business magazines internet Total
40
28 12 34 26 103
27.2 11.7 33.0 25.2 100.0
Valid Percent 27.2 11.7 33.0 25.2 100.0
Cumulative Percent 30.1 41.7 74.8 100.0
34 30 28 26 20
10
12
Count
0 business channels business magazines internet business paper
source of study
INTERPRETATION
From the graph we can observe that source of information for majority of investors is business magazines. But, business news channels and business papers and internet are also important sources of study.
7. TABLE SHOWS INVESTMENT PATTERN AFFECTED BY MARKET MOVEMENT

Market movement affects your investment pattern Frequency Percent yes No Total 44 56 103 42.7 54.4 100.0 Valid Percent 42.7 54.4 100.0 Cumulative Percent 45.6 100.0
7. GRAPH SHOWS RESPONSE OF INVESTORS WHEN MARKET MOVEMENT TAKES PLACE

58 56 54 52 50 48 46
56
Count
44 42
44 yes No
market movement affect your investment pattern
INTERPRETATION
From the chart we can come to know that for 56 % investors investment pattern will not be affected if there are changes in market movement (BSE index, Nifty etc). Market movement is very important factor for changing in investment pattern
9. TABLE SHOWING INVESTMENT AVENUES OF INVESTOR

Various investment alternatives Frequency Percent Equity mutual fund Insurance Ppf bank deposit gold/silver Total 35 28 17 8 8 4 103 34.0 27.2 16.5 7.8 7.8 3.9 100.0 Valid Percent 34.0 27.2 16.5 7.8 7.8 3.9 100.0 Cumulative Percent 36.9 64.1 80.6 88.3 96.1 100.0
8.
GRAPH SHOWING INVESTMENT ALTERNATIVES OF INVESTOR

40
35 30 28
20 17 10
Count
8 4
0 equity mutual fund insurance ppf bank deposit
gold/silver
various investment alternatives
INTERPRETATION
From the above table it analyzed that equity is the most important investment avenue among all investment options. Second important investment avenue among various alternatives are mutual fund and insurance. Least important investment avenues are investments in PPF and gold/silver..
9.
TABLE SHOWING FACTORS THAT INFLUENCE THE
CHOICE OF VARIOUS INVESTMENT ALTERNATIVES

Choosing the various investment alternatives Frequency Percent Valid risk involve return they give future growth past performance Total 3 27 23 37 13 103 2.9 26.2 22.3 35.9 12.6 100.0 Valid Percent 2.9 26.2 22.3 35.9 12.6 100.0 Cumulative Percent 2.9 29.1 51.5 87.4 100.0
9. CHART SHOWING IMPORTANT FACTORS TO CHOICE VARIOUS INVESTMENT ALTERNATIVES

40 37
30 27 23 20
Count
10 risk involve return they give future grow th
13
past performance
choosing the various investment alternatives
INTERPRETATION
From the chart we can see that for 30% of investors the most important factor considered for investment decision is future growth, second important factor is risk involve and then return they give. For 13% of investors important factor considered for investment is the past performance.
10, TABLE SHOWS BASIS OF CHOICE FOR INVESTMENT IN EQUITY

How do you choose your equity investment? Frequency Percent Performance dividend record bonus/right issue growth rate of the firm firm expansion past record of the firm Total
30
Valid Percent 11.7 17.5 22.3 24.3 9.7 11.7 100.0
12 18 23 25 10 12 103
11.7 17.5 22.3 24.3 9.7 11.7 100.0
Cumulative Percent 14.6 32.0 54.4 78.6 88.3 100.0
25 23 20 18
10
12 10
12
Count
0 perf ormance bonus/right issue f irm expansion past record of the f dividend record grow th rate of the f
how do you choose your equity investment
INTERPRETATION
By seeing above table and chart we come to know that the most important factor considered for choice of equity investment is the Growth rate of the firm. And other important factors are dividend record, bonus/rights issues, growth rate of the firm. Performance and firm expansion.
11. Table Showing schemes preferred by the investors if they are investing in mutual fund
if you are investing in mutual fund which type of schemes do you prefer Frequency tax plan monthly income plan income fund balanced fund index fund Sectroal gilt fund growth fund Total 12 18 24 11 7 12 6 10 103 Percent 11.7 17.5 23.3 10.7 6.8 11.7 5.8 9.7 100.0 Valid Cumulative Percent Percent 11.7 17.5 23.3 10.7 6.8 11.7 5.8 9.7 100.0 14.6 32.0 55.3 66.0 72.8 84.5 90.3 100.0
30
24 20 18
10
12
11 7
12 10 6
Count
0
x ta ln a p ly th n o m in e m o c e m o n la p e c n la a b d in x e d fu s l a o tr c e t il g d n fu w ro g th d n fu
d n fu
d n
if you are investing in mutual fund which type of schemes do you prefer
c in
d n fu
Interpretation From the above table we can conclude that, out of 100, 12 % of the people prefer tax plan when they are investing in mutual fund, 18% of the people prefer monthly income plan when they are investing in mutual fund, 24% of the
investors prefer income fund when they are investing in the mutual fund, 11% of the people prefer balanced fund, 7% of the investor prefer index fund, 12% of the people prefer sectroal, 6% of the investor prefer gilt fund, 10% of the investor prefer growth fund when they are investing in mutual fund, . Maximum of the investor prefer income fund and monthly income plan when they are investing in mutual fund.
PART V
Summary and Findings
5.1 Findings 5.1.1 On the products and services of SHCIL 5.1.2 On investment decision of investors 5.2 Suggestions 5.3 Limitation and scope for further research
5.1 Findings:
5.1.1 On the Products and services of ASCIL ASCIL providing wide range of products and services but all the products and services of ASCIL is not aware to the client. ASCIL Hubli recently starts the broking service. But only 25% of clients are aware about the broking service according to observation and most of them are not aware about it. In ASCIL, 75% clients are using DP service only where as 15 to 20 % are availing the other products and services. 5.1.2 On investment decision of investor Income level of an investor is an impotent factor which affects portfolio of the investor. 55 per cent of investors are preferred to invest in long term avenues where as 35 per cent of investors are preferred to invest in short term and remaining 10% invest in both the avenues. 70 percent of the investors are preferred to invest in either monthly or quarterly or weekly basis. 60 per cent of the investors are investing on the basis of self-analysis. Business magazines are an important source of study for the investor. Apart from this, business papers, business channels and web sites are some other important sources of study. .
Future Growth and risk involved is most important factor for the investor before taking any investment decisions. Growth rate of the firm, Bonus/right issue, Past record , dividend record and performance are the important factor for those investors who are interested to invest in equity. Higher income level groups and risk taking investors are preferred to invest in equity rather than any other investment avenues. Middle age group investors are preferred to invest in equity, where as the old age group investors are preferred to invest in RBI Bonds or any other type of tax saving bonds. Lower income level groups are not preferred to take risk and they choose bank deposits, post office savings and insurance as a better investment option. They also look for tax saving investment avenues. Generally those investors who are invested in equity, are personally follow the stock market frequently i.e. in daily basis. But those who are invested in mutual funds are watch stock market weekly or fortnightly.
5.2 Suggestions:
Client awareness program has to be conducted by ASCIL for Stock Brokering Services, because most of the clients are unaware about this new service. ASCIL should be start NSE trading and derivative trading. Since the intent and web based communication is getting popular ASCIL should update web site frequently and provide information up to date Since the investors expect better services from ASCIL, it should provide more value added services like derivative trading, NSE trading etc.
As investors investment decision is based on the study of different sources, ASCIL should start giving advertisement in business newspaper and in business magazine. Most of the investors portfolio is diversified so there is huge scope in various new services. So ASCIL should come with new intermediaries services like add more mutual funds in to its Fund Invest etc. ASCIL should expand its business by setting up of new branches in various places where they have lot of client for example Bijapur.
5.3 Limitation and scope for further research:

The study is conducted by taking a limited number of sample size which is stated earlier. And this study reflects the perceptions of those investors who are residing in Hubli. There might be a chance that the perceptions of the investors of different cities are varied due to diversity in social life, living pattern, income level etc.
PART VI
Learning Outcomes
6.1 On investment avenues 6.2 On DP services
Learning Outcomes
This project has helped me to learn how to use theoretical knowledge in practical world and to know the methods followed by the corporate world to deal with different situation. I also learnt the following aspects related to investment avenues and DP 6.1 On investment avenues: Different type of investment avenues Risk involved in different investment avenues Benefits and profits by investment
6.2 On DP Service: Facts related to depository Basic function of Depository Participants
PART VII
References and Bibliography
7.1 Articles 7.2 Books 7.3 Websites
References & Bibliography:

7.1 Article Capital Market Review 2003-04, Published by ASCIL
7.2 Books Financial Management, PRASANNA CHANDRA, 6th edition Financial Management, KHAN & JAIN, 3rd edition Security Analysis and Portfolio Management , FISCHER & JORDAN Research Methodology, David .R. Cooper and Schindler
7.3 Websites www.ASCIL.com www.icicidirect.com www.nseindia.com www.economictimes.com
PART VIII
Annexure
8.1 Questionnaire
Annexure
Questionnaire
Dear Respondent I am a Management Student undertaking my summer implant training at "ASCIL" I am conducting study on "Analysis of Investors Investment Decisions " I request you to spare some time of yours to fill this questionnaire .Your response will be kept strictly confidential. Name of investor: ________________________________ Address: _______________________________________ _______________________________________ _______________________________________ Phone: __________________________________________
1. Age group: Below 20 20 to 35 35 to 50 50 and above 3. Occupation: Employed: Private Sector
Public Sector Self-Employed: Business Profession Retired: Not Employed 4. Annual income: Below 150000 150000 to 300000 300000 to 450000 450000 and above 5. Are you short term investor or long term investor Short term investment Long term investment Both 6. What is your investment per annum? Below 20000 20000 to 40000 40000 to 80000 80000 and above 7. How frequently do you invest:
Weekly Monthly Quarterly Half yearly Yearly 8. Do you personally follow the stock market? Yes No
9. If yes, then how frequently do you watch market? Daily Twice a week Weekly Fortnightly
10.What are your various investment alternatives? Equity Real Estate PPF Mutual Fund 11.Basis of Investment: Self Analysis Financial Advice Brokers Advice Friends/Relatives Advice Charted Accountant Advice 12. Source of study : Debentures/Bonds Gold/Silver Bank Deposits Insurance
Others please specify: __________________
Business Channels Business Papers Business Magazines Internet 13. How do you choose your various investment alternatives : Risk involve Return they give Future growth Past performance If other please specify: __________________ 14.How do you choose your equity investment (based on) : Performance Bonus/Right issue Firm expansion Yes No 16.If you are investing in mutual funds which type of schemes do you prefer to invest in? Tax plan Monthly Income plan Income fund Balanced fund Sectoral Index fund Gilt fund Growth fund Dividend record Growth rate of a firm Past record of a firm
15.Does the market movement affect your investment pattern?
17.Are you aware of Apollo Sindhoori Capital Investment Ltd? Yes No
18.If yes, what is the reason for not investing in ASCIL? _______________________________________________________ _______________________________________________________ _______________________________________________________ ___

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K.L.E.

INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH,

Study of investors preferences and trends towards investment UNDERTAKEN AT

Submitted by:Mr.Gururaj A Angadi

MBA06002088 Institute Guide

Faculty, KLESs IMSR Hubli. shindoori

Branch Manager Apollo

has been prepared by me

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

Prof:-Mona Agarwal GURURAJ.A.ANGADI. (Faculty Member)

MR. Register No. MBA06002026 (M.B.A. Student)

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

Master of Business Administration: 2006-08

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

7.3 Websites Chapter 8 Annexure 8.1 Questionnaire

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

Topic of the study

1.2 Sub Objective of the study:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

1.3 Problem identification:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.1 Industry Overview:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.2.1 Characteristics of Investment:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.2.2 Types of Investment:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.2.4 Investment Avenues:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

Equity shares Debenture/Bonds Warrants

Preference shares GDRs/ADRs Derivatives

(i) Corporate securities:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.2.5 Sources of study for investors:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.2.6 Fundamental analysis of various investment alternatives:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.3 About Capital Markets and Depository:

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

Benefits of participation in a depository

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

Keeping the client informed of the actions taken or to be taken by

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

KLESs INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

2.3.2.1 Function of Depository Participant: