CHAPTER 1

INTRODUCTION

INTRODUCTION
COMPANY DETAILS

Background
Karvy Consultants Limited was established in 1982 at Hydrabad. It was established by a
group of Hydrabad-based practicing Chartered Accountants. At initial stage it was very
small in size. It was started with a capital of
Rs.1,50,000.
In starting it was only offering auditing and taxation services. Later, it acts into the
Registrar and Share transfer activities and subsequently into financial services and other
services like Financial Product Distribution, Investment Advisory Services, Demat
Services, Corporate Finance, Insurance etc.
All along, Karvys strong work ethics and professional background leveraged with
Information Technology enabled it to deliver quality to the individual. A decade of
commitment, professional integrity and vision helped Karvy achieving a leadership
position in its field when it handled largest number of corporate and retail that proved to
be a sound business synergy.
Today, Karvy has access to millions of Indian shareholders, besides companies, banks,
financial institutions and regulatory agencies. Over the past one and half decades, Karvy
has evolved as a veritable link between industry, finance and people.
In January 1998, Karvy became first Depository Participant in Andhra Pradesh. An ISO
9002 Company, Karvys commitment to quality and retail reach has made it an Integrated
Financial Services Company.
Today, company has 230 branch offices in 164 cities all over the India. The company adds
5 new offices every month to the companys ever growing national network in every nook
and corner of the country. The company service over 16 million individual investors, 180
corporate and handle corporate disbursements that exceed Rs.2500 Crores.

WHERE KARVY STAND IN THE MARKET?

KARVY is a legendary name in financial services, Karvys credit is defined by its mission
to succeed, passion for professionalism, excellent work ethics and customer centric
values.
Today KARVY is well known as a premier financial services enterprise, offering a broad
spectrum of customized services to its clients, both corporate and retail. Services that
KARVY constantly upgrade and improve are because of companys skill in leveraging
technology. Being one of the most techno-savvy organizations around helps company to
deliver even more cost effective financial solutions in the shortest possible time.
What bears ample testimony to Karvys success is the faith reposed in company by valued
investors and customers, all across the country. Indeed, with Karvys wide network
touching every corner of the country, even the most remote investor can easily access
Karvys services and benefit from companys expert advice.

KARVY GROUP
Karvy Consultants Limited
Karvy Comtrade Limited
Karvy Insurance Broking limited
Karvy Realty (India) Limited
Karvy Globle Service Limited
Karvy Data Management Service Limited
Karvy Financial Service Limited
Karvy Investor Services Limited
Karvy Stock broking Limited
Karvy Computer Shares Pvt. Ltd.

Mission Statement of Karvy

An organization exists to accomplish something or achieve something. The mission
statement indicates what an organization wants to achieve. The mission statement may be
changed periodically to take advantage of new opportunities or respond to new market
conditions.
Karvys mission statement is To Bring Industry, Finance and People together.
Karvy is work as intermediary between industry and people. Karvy work as investment
advisor and helps people to invest their money same way Karvy helps industry in
achieving finance from people by issuing shares, debentures, bonds, mutual funds, fixed
deposits etc.
Companys mission statement is clear and thoughtful which guide geographically
dispersed employees to work independently yet collectively towards achieving the
organizations goals.

Vision of Karvy
Companys vision is crystal clear and mind frame very directed. To be pioneering
financial services company. And continue to grow at a healthy pace, year after year,
decade after decade. Companys foray into IT-enabled services and internet business
has provided an opportunity to explore new frontiers and business solutions. To build a
corporate that sets benchmarks for others to follow.

Karvy Values:
Integrity
Responsibility
Reliability
Unity
Understanding
Excellence
Confidentiality
Karvy has adequate internal control systems and procedures commensurate with the size
nature of its business. These system and procedures provide reasonable assurance of
maintenance of proper accounting records, reliability of financial information, protection
of resources and safeguarding of assets against unauthorized use.

KARVY SERVICES AN OVERVIEW

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

1.

Stock broking
Demat services
Investment product distribution
Investment advisory services
Corporate finance & Merchant banking
Insurance
Mutual fund services
IT enabled services
Registrars & Transfer agents
Loans

Stock Broking:

KARVY is working as Capital Market Intermediaries. Stockbrokers are regulated by SEBI

[Stock-brokers and Sub-brokers] Regulations, 1992. The stockbroker is a member of the
stock exchange. Stockbrokers are the intermediaries who are allowed to trade in securities
on the exchange of which they are members. They buy and sell on their own behalf as
well as on behalf of their clients.
Stockbrokers expand their business by engaging sub-broker. Sub-brokers mean any
person not being a member of a stock exchange who acts on behalf of a stock broker as an
agent or otherwise for assisting the investors in buying, selling or dealing in securities
through such stock-brokers.

2. Demat Services:
Karvy is a depository participant with the National Securities Depository Limited (NSDL)
for trading and settlement of dematerialized shares.
Depository Participants (DPs) are described as an agent of the depository. They are
intermediaries between the depository and the investors. The relationship between the
DPs and the depository is governed by an agreement made between the two under
Depositories Act.

A DP can offer depository-related services only after obtaining a certificate of registration

from SEBI.
Since Karvy is also in the broking business, investors who use Karvys depository services
get a dual benefit. They can use Karvys brokerage services to execute transactions and
Karvys depository services to settle them.

3. Investment Products Distribution:

Company is also concern with the distribution of investment products like
(a). Fixed Deposit
(b). Bonds
(c). IPO
5 (a). Fixed Deposit:
KARVY is dealer of 34 fixed deposits of various types which includes fixed deposits of
Public Sector, Non Banking Finance Companies, Housing Finance Companies and
Manufacturing Companies.
Company is dealer of following Fixed Deposits
4
5
6
7
8

Cholamandalam Investment & Finance Co. Ltd.

Escorts Finance Ltd.
First Leasing Company of India Ltd.
IDBI Suvidha
Nicco Uco Alliance Credit Ltd.
[FD of Non Banking Finance Companies with which Karvy deals]

HOUSING FINANCE COMPANIES

Sl. No.
Company Name
1
Can Fin Homes Ltd.
2
Dewan Housing Finance Corporation Ltd.
3
Gruh Finance Ltd.
4
HDFC Ltd.
5
PNB Housing Finance Ltd.
6
Sundaram Home Finance Ltd.
8

[FD of Housing Finance Companies with which Karvy deals]

MANUFACTURING COMPANIES
Sl. No.
Company Name
1
A P Paper Mills Ltd.
2
Amtek India Ltd.
3
Atul Ltd.
4
Ballarpur Industries Ltd.
5
Chambal Fertilizers & Chemicals Ltd.
6
Escort Ltd.
7
Greaves Ltd.
8
Gujarat Alkalies & Chemicals Ltd.
9
Indian Express
10
Ind-Swift Ltd.
11
JK Industries Ltd.
12
Jindal Steel & Power Ltd.
13
Sound Craft Industries Ltd.
14
Supreme Industries Ltd.
15
Zuari Industries Ltd.
[FD of Manufacturing Companies with which Karvy deals]

(b). Bonds:
Karvy is dealer of following bonds
RBI Saving Bonds
NHB
REC

(c). IPO:
Company is also provides services related to Initial Public Offer of company. Company
provides stationary at the time of IPO as well as provides information to investors
regarding IPO and solves their queries.

4.

Investment Advisory Services:

9

This division provides portfolio management services to high net-worth individuals and
corporate. The expertise of Karvy in research and stock broking gives it the right
perspective to provide investment advisory services. Company provides advisory services
to its clients.
Financial goal of each individual investor varies according to his dream, ambition and
family size and future financial planning for the children & old age pension for self and
wife so does the pathway to achieve it. Karvy apply the principles of Financial Planning
as both science & art, it understands the time horizon, risk bearing capacity and
investment goals of investors keeping in mind their psyche and financial needs. Based
upon this Karvy helps individual investors to plan their entire life up to retirement, Taxes,
Insurance needs and other important personal financial goals. It designs portfolio for
investor to invest their saving in various financial products like shares, bonds, debentures,
mutual funds, fixed deposits, insurance etc., Company design portfolio by considering
following factors.
Investors requirement of getting money back,
Investors willingness to take risk,
Investors tax planning etc.

5.

Corporate finance & Merchant banking:

Corporate finance is the financial activity of corporation. It deals with the firm's
operations with regard to investing and financing. It concerned with how firms raise
capital and the consequences of alternative methods of raising capital. Firms capital can
be raised by raising loans, issuing shares, and acquiring or merging with other businesses
by public or private companies.

Merchant banking is a financial intermediation that matches entities that need capital and
those that have capital. Hence they facilitate the flow of capital in the market.
Karvy enjoys SEBI category (I) authorization for Merchant Banking. Karvy offers the full
spectrum of Merchant Banking Services, beginning from identifying the best time for an
issue to final stage of marketing it, to harvest unparalleled success.
As a merchant banker Karvy offer following services:
10

Issue management
Instrument designing
Pricing of the issue
Registration process for the issue of shares
Marketing efforts
Final allotment to investors
Listing details on stock exchanges
Loan syndication
Lease financing
Corporate advisory services
Underwriting
Portfolio management

6.

Insurance:

Karvy is also dealer of many private life insurance companies. At New Delhi, Motinagar
branch, company is associated with dealing of following companies.
ICICI Prudential Life Insurance
HDFC Life Insurance
TATA AIG Life Insurance

7.

Mutual Fund Services:

Since its inception in 1982, Karvy has demonstrated a dedication coupled with dynamism
that has inspired trust from various segments corporate, government bodies and
individuals. Karvy has since been performing a pivotal role as the intermediary the
interface between these players.
With Mutual Funds emerging as a distinct asset class, Karvy has made a strategic choice
to leverage the power of latest technology to provide a cutting edge to its services. Karvy,
today, service nearly 80% of the asset management companies (AMCs) across an
extensive network of service centers with assets under service in excess of Rs.10,000
crores.
Karvy's ability to mass customize and offer a diverse range of products for a diverse range
of customers has helped mutual fund companies to uniquely position themselves in the
market place. These diverse range of services cut across multiple delivery channels
11

service centers, web, mobile phones, call center has brought home the benefits of
technology to investors, distributors, and the mutual funds.
Going forward, Karvy shall strive to create new products and services, which would
address the needs of the end customer. Companys single minded focus in delivering
products for customers has given it the distinguished position of being the preferred
provider of financial services in the country.

List of Mutual Fund Clients of KARVY:

1

Alliance Mutual Fund

Birla Mutual Fund

Bank of Baroda Mutual Fund

Can Bank Mutual Fund

Chola Mutual Fund

Deutsche Mutual Fund

DSP Merrill Lynch Mutual Fund

Franklin Templeton Investments

GIC Mutual Fund

10

HDFC Mutual Fund

11

HSBC Mutual Fund

12

IL & FS Mutual Fund

13

JM Mutual Fund

14

Kotak Mutual Fund

15

LIC Mutual Fund

16

Punjab National Bank Mutual Fund

17

Prudential ICICI Mutual Fund

12

18

Principal Mutual Fund

19

Reliance Mutual Fund

20

State Bank of India Mutual Fund

21

Standard Chartered Mutual Fund

22

Sundaram Mutual Fund

23

SUN F&C Mutual Fund

24

Tata Mutual Fund

[List of MF Companies with which Karvy deals]

8. Income Tax enabled services:

Karvy has been started this service since March, 2004. Karvy is work as TIN Facilitation
Centre it provides following IT enabled services.
a. Distribution of PAN Card.
b. Distribution of TAN Card.
c. Services related to e-TDS.
Karvy work as an intermediary between NSDL and IT payers. Karvy provides various
form for different IT enabled services and guide people to fill that forms. It also solves
queries of the tax payers. It also distributes PAN and TAN card to the tax payers.
TIN Overview
National Securities Depository Ltd. (NSDL) has established a nationwide Tax Information
Network (TIN) on behalf of the Income Tax Department (ITD). This is designed to make
the tax administration more effective, furnishing of returns convenient, reduce compliance
cost and bring greater transparency.
While NSDL will be the primary agency responsible for the design, implementation and
maintenance of TIN as per the requirements of ITD, other agencies will also play key
roles in the TIN system.
13

Karvy has established infrastructure required to provide IT enabled services so, Karvy
provides TIN facilitation centers all over India on behalf of NSDL. Besides Karvy
following companies can also work as intermediary between NSDL and customers.
Alankit Assignments Ltd.
Integrated Enterprise (I) Ltd.
Shell Tran source Ltd.

9 Registrars & Transfer agents:

In 1985, Karvy entered the Registrar and Share Transfer Business to create a market niche
in the competitive field of financial services. In 1994-95, it reached a milestone when it
processed 104 Public Issues constituting 46 per cent market share. Now in its second
decade of existence, Karvy is the leader in the industry: In an opinion poll conducted by
an independent market research agency - MARG, Karvy has been rated as Indias Most
Admired Registrar on various parameters: Overall Excellence.
Handling of Volumes
Timely Dispatch
Quality Management and Technological Up gradation.
A SEBI Category 1 Registrar, So far, Karvy has handled over 675 ISSUES as Registrars to
public issues processed over 52 million applications and is servicing over 16 million
investors from various locations spread over 205 clients.

10. Loan:
Karvy has recently started this service at selected branches of metro cities. This service
has not been started in Saurashtra-Kucch region. Karvy provides loans for following.
Vehicle Loan
Home Loan
Personal Loan

14

MARKETING STRATEGY OF KARVY

Market Positioning:
Market positioning statements of Karvy are At Karvy we give you single window
service and We also ensure your comfort.
So, Karvy focus on the consumers who prefer almost all investment activities at same
place by providing number of various financial services. At Karvy a person can
purchase or sell shares, debentures etc. and at the same place also demat it. Karvy also
provides other investment option to the same person at same place like Mutual Fund,
Insurance, Fixed Deposit, and Bonds etc. and help the person in designing his
portfolio. By this way Karvy provides comfort to its customers.
Karvy is also positioned according to Ries and Trout. Karvy is promoted as a no. 1
investment product distributor and R & T agent of India.

Target Market:

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

Marketing channel System:

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

15

Training Channel Members:

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

Advertising and Promotion:

The objective of advertising of Karvy is to create awareness about services of Karvy

among investors and sub-brokers and increase sub-brokers of Karvy.

Company doesnt give advertisement in media like TV, Newspapers, and Magazines etc.
Karvys advertisement is made indirectly by the companies associate with it. Karvy is R &
T agent of around 700 companies. They publish name, address and logo of Karvy on their
annual report.

Karvy also publish its weekly Stock Market Newsletter Karvy Bazaar Baatein and
monthly magazine The Finapolis to guide investors and sub-brokers about market.

16

HR POLICY OF KARVY
Karvys HR Department is located at Hyderabad.

Recruitment and Selection Policy:

The upper level members like zonal managers, regional managers, branch managers and
senior executives are recruited by publishing recruitment advertisement in leading
national level newspaper. The qualified applicant are then called for interview and
selected.
The regional manager has authority to select lower level employee like peon, marketing
executives, accountant etc. by approval of zonal manager.

Training and Development:

Continuous training and upgrading technical, behavioral and managerial skills is a way of
life in Karvy. Karvy encourages employees to hone their skills regularly to enable them to
face the challenges of the changing requirements of customers that fit market up and
down.
Training needs analysis is done on a regular basis and systematic methodologies are
ensured that skills and capabilities of all employees are constantly upgraded to enable
them to perform in the challenging work environment.
New employee has given training under experienced employee. The new employee work
under experience employee and observe his all activities. When company employs new
technology or there is any change in the working of company the training program is
arranged.

Employee Motivation:
Karvys employees are highly empowered. They dont have to report any person of the
same branch but they report upper level branch. If particular branch earn certain profit
then Karvy gives them special incentives. This also helps in maintaining co-operation
between employees.

17

BRANCH LEVEL ORGANIZATION CHART

Branch Manager

Sr. Executive

Executives
(SB - 4)

Executive
(IT)

Marketing

Clerk

Executives-3

Executive
(Demat)

Peon

Accountant

Peon[Branch Level Structure of Karvy]

18

(Investment)

Quality Policy Of Karvy:

To achieve and retain leadership, Karvy shall aim for complete customer satisfaction, by
combining its human and technological resources, to provide superior quality financial
services. In the process, Karvy will strive to exceed Customers expectations.

Quality Objectives of Karvy

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.

19

Achievements of Karvy:
Largest mobilizer of funds as per PRIME DATABASE
First ISO - 9002 Certified Registrar in India
A Category- I Merchant banker
A Category- I Registrar to Public Issues
Ranked as "The Most Admired Registrar by MARG
Handled the largest- ever Public Issue - IDBI
Strategic tie-up with Jardine Fleming India Securities Ltd
Handled over 500 Public issues as Registrars
Handling the Reliance Account which accounts for nearly 10 million account
holders
First Depository Participant from Andhra Pradesh

20

SWOT ANALYSIS OF KARVY

Strengths:
Employees are highly empowered.
Strong Communication Network.
Good co-operation between employees.
Number 1 Registrar and Transfer agent in India.
Number 1 dealer of Investment Products in India.

Weaknesses:
High Employee Turnover.

Opportunity:
Growth rate of mutual fund industry is 40 to 50% during last year and
it expected that this rate will be maintained in future also.
Marketing at rural and semi-urban areas.

Threats:
Increasing number of local players.
Past image of Mutual Fund.

21

INDUSTRY DETAILS
Following are list of Mutual Fund companies in India.
Sr. No.

Mutual Fund Name

Alliance Mutual Fund

No.
of
Schemes
36

Benchmark Mutual Fund

Birla Mutual Fund

74

Bank of Baroda Mutual Fund

17

Can Bank Mutual Fund

25

Chola Mutual Fund

45

Deutsche Mutual Fund

40

DSP Merrill Lynch Mutual Fund

40

Escorts Mutual Fund

15

10

Franklin Templeton Investments

130

11

GIC Mutual Fund

12

HDFC Mutual Fund

79

13

HSBC Mutual Fund

32

14

IL & FS Mutual Fund

43

15

ING Vysya Mutual Fund

55

16

JM Mutual Fund

55

17

Kotak Mutual Fund

56

18

LIC Mutual Fund

35

19

Morgan Stanley Mutual Fund

20

Punjab National Bank Mutual Fund

22

21

Prudential ICICI Mutual Fund

124

22

Principal Mutual Fund

68

23

Reliance Mutual Fund

74

24

Sahara Mutual Fund

12

25

State Bank of India Mutual Fund

59

26

Standard Chartered Mutual Fund

100

27

Sundaram Mutual Fund

52

28

SUN F&C Mutual Fund

29

Tata TD Mutual Fund

100

30

Taurus Mutual Fund

31

Unit Trust of India

42

32

UTI Mutual Fund

66

Development of Mutual Funds in India

The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank the. The history of
23

mutual

funds

in

India

can

be

broadly

divided

into

four

distinct

phases

FirstPhase-1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up
by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the
end of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation
of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June
1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund
(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda
Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up
its
mutual
fund
in
December
1990.
At the end of 1993, the mutual fund industry had assets under management of
Rs.47,004 crores.
Third Phase 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer
(now merged with Franklin Templeton) was the first private sector mutual fund registered
in
July
1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI
(Mutual
Fund)
Regulations
1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds
24

setting up funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets
of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under
management was way ahead of other mutual
funds.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29, 835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other
schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under
the
purview
of
the
Mutual
Fund
Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of
assets under management and with the setting up of a UTI Mutual Fund, conforming to
the SEBI Mutual Fund Regulations, and with recent mergers taking place among different
private sector funds, the mutual fund industry has entered its current phase of
consolidation and growth. As at the end of September, 2004, there were 29 funds, which
manage
assets
of
Rs.153108
crores
under
421
schemes.
The graph indicates the growth of assets over the years.

25

[Growth in Assets Under Management]

[Source: www.amfiindia.com]

Mutual Funds Organisation

There are many entities involved and the diagram below illustrates the organizational set
up of a mutual fund:

26

[Assets Under Management By Fund Type]

[Source: www.amfiindia.com]

[Assets Under
Management
By AMC]
[Source:

www.amfiindia.com]

27

REGULATORY BODIES
Financial System is basically responsible for the major up and downs in the economy. So,
there are some regulatory bodies on it which ensures effectiveness in the management of
fund of the investors and transparency in the transactions.
Ministry of Finance

SEBI
Stock Brokers
R & T Agent
Mutual Fund

RBI

Dept. of IT

Commercial
Banks
NBF Co.

PAN
TAN
e-TDS

[Regulatory bodies]

28

COMPETITORS DETAILS
1. Bajaj Capital
It was established in 1964 at Delhi. In 1965 it innovates a new financial instrument
Companies Fixed Deposits and becomes the first company to raise Fixed Deposits. The
objective of company is to provide professional guidance to investors on where, when
and how to invest and to assist the corporate sector in its resource raising activities.
Bajaj Capital became the first company to set up Investment Centers all over India
for this purpose. Today, Bajaj Capital has 90 offices in over 40 important Indian
Cities and has a team of around 500 employees nationwide.
Services provided
Merchant banking
Buying and Selling of Money Market Investments
Distribution of financial products
Investment Advisory Service

Company

Post

Tax

Insurance

Initial

Car insurance

fixed

Housing
NRI

deposits
Bonds
funds
insurance
insurance
schemes
schemes
schemes
schemes
offerings
loans
schemes

Investment
Retirement
Insurance

planning
planning
planning

Mutual
Life
General
Pension
linked

office
saving
investment
public

Financial Planning

29


Children's

Short-term cash flow planning

future
Tax

planning
planning

2.MCS Ltd.
It is established in 1985 in Delhi. It is one of the largest Data Processing House employing
more than 600 people.
MCS Ltd. has 8 branches all over India.
Volumes Handled
Share registry activities for over 100 corporate servicing over 10 million investors.
Mutual fund operations for 25 funds, servicing over 4.5 million investors.
Billing & settlement plan for Indian operations of IATA Geneva for 1.2 million
tickets per annum covering (26 airlines & over 1200 agents).
Services Offered:
Registrars and Transfer Agents
Registrars to IPOs /Right Issues
Registrars to Open Offers
Registrars to Mutual Funds
Data Processing for Airlines
Print Shop Services
MCS is a major player in these activities in the Country with a market share of about 25%.
MCS today provides these services to over 140 Corporate and Mutual Funds for a total
investor base of 15 million.

3. N.J.India Investments Pvt. Ltd.

NJ India Invest (formerly known as NJ Capital stocks) was started in 1994 to cater to the
growing financial services sector. NJ India Invest evolved out as a client focused need
based investment advisory firm. NJ regards mutual fund as one of the best investment
avenue available to satisfy any kind of investment need.
30

4. ICICI Securities Ltd.

ICICI Securities Limited (i-SEC) is a wholly owned investment-banking subsidiary of
ICICI Limited. ICICI is the only non-Japanese Asian financial institution to be listed on
the New York Stock Exchange (NYSE). ICICI Securities was formed on 22nd Feb. 1993,
when ICICI's Merchant Banking Division was spun off into a new company; ICICI
Securities today is India's leading Investment Bank and one of the most significant players
in the Indian capital markets.
ICICI Brokerage Services Limited (IBSL) set up in March 1995, IBSL is a 100%
subsidiary of i-SEC. It commenced its securities brokerage activities in February 1996 and
is registered with the National Stock Exchange of India Limited and The Stock Exchange,
Mumbai.
ICICI has started a website ICICIdirect.com which is the most comprehensive website,
which allows you to invest in Shares, Mutual funds, Derivatives (Futures and Options)
and other financial products.
ICICI has a large network of branches all over India.
Services offered:
Merchant Banking
Demat Service
Stock Broking

5. HDFC
HDFC is the leading financial company in India. IT has large network of branches all over
India. HDFC Securities which is fully subsidiary of HDFC provides demat service.
HDFC and its subsidiary provides following services.
Demat Service
Life Insurance
Banking Service
Housing Finance
31

Vehicle Finance
Education Loan
Personal Loan

6. Kotak Securities Ltd.

Kotak Securities needs no introduction as one of the largest stock broking houses in the
country and a leading distributor of primary market offerings. Kotak Securities limited is a
joint venture between Kotak Mahindra Bank and Goldman Sachs, the international
investment banking and brokerage firm.
Kotak Securities is a corporate member of both the BSE and the NSE. It is also a
depository participant with the National Securities Depository Limited (NSDL) for trading
and settlement of dematerialized shares.
Services offered:
Stock Broking
Financial Product Distribution
Demat Services
Investment Advisory Services

7. Motilal Oswal Securities Ltd.

Motilal Oswal Securities Ltd (MOSt) is one of the leading equity research and broking
houses of India. MOSt has a 20-member research team, which is engaged round the clock
in analyzing the Indian economy and corporate sectors to identify equity investment ideas.
Asia Money Broker's Poll 2002 has rated MOSt as one of the best Indian broking house,
for research, for the second time since 2000.
Motilal Oswal is member of NSDL and CDSIL for DP. It has wide network of branches. It
has 158 branches all over India.
Services Offered:
Demat Services
Stock Broking
Investment Advisory Service

32

PRODUCT DETAILS
Mutual funds serve as a link between the saving people and the capital market in that they
mobilize saving from investors and bring them to borrowers in the capital markets. In
short, it is a common pool of money into which investors place their contribution that is to
be invested in accordance with a stated objective.
A mutual fund uses the money collected from the investors to buy those assets, which are
specially permitted by its stated investment objective. When an investor subscribes to a
mutual fund, he/she buys a part of asset or the pool of funds that are outstanding at that
time.
A mutual fund is constituted as an investment company and an investor buys into the fund,
means he buys the share of the fund and is known as a unit holder. Since each unit holder
is a part of owner of a mutual fund, it is necessary to establish the value of his part. Since
the unit held by an investor evidences the ownership of the funds assets, the value of the
total asset of the fund when divided by the total number of units issued by the mutual
fund gives us the value of one unit. This is called as Net Asset Value (NAV).

33

STRUCTURE OF INDIAN MUTUAL FUNDS

Mutual fund industry is highly regulated by the government keeping in view of the
protection of investors interest as well as to maintain operational transparency.
In India SEBI Regulations Act, 1996, guides the formation and operation of Mutual
Funds. A Mutual Fund comprises of 4 separate entities.
1.
2.
3.
4.
5.

Sponsor
Board of Trusties
Asset Management Company
Custodian and Depositories
Distributors

1.

Sponsor:

Sponsor is defined under SEBI regulation as any person who, acting alone or in
combination with another body corporate, establishes a mutual fund. The sponsor gets the
fund registered with SEBI. The sponsors form a trust and appoint a Board of Trustees.
The sponsor must contribute at least 40% of the net worth of the AMC.
The sponsor must posses a sound financial track record over 5 years prior to
registration.

2. Board of Trustees:
Mutual funds are managed by Board of Trustees. Trust is created by a document called the
Trust Deed that is executed by fund sponsor in favour of trustees.
The trustees appoint the AMC and custodian with the prior approval of SEBI.
They also approve all the schemes floated by the AMC.
They have right to dismiss the AMC, with the approval of SEBI.
Half of the trustees should be independent persons. Neither the AMC, nor its
employees can act as trustee.
A trustee can not be appointed as a trustee of two or more mutual funds until and
unless he is an independent person or has permission from the Mutual Fund where
he is trustee.
Trustees can be removed only by prior approval of SEBI.
3. Asset Management Company:
34

The role of an AMC is to act as the investment manager of the Trust under the Board
supervision and direction of the Trustees.
The AMC is required to be approved and registered with SEBI.
The AMC of a Mutual Fund must have a net worth of at least Rs. 10 crore at all
time.
The AMC can not act as a trustee of any other Mutual Fund.
They will float schemes only after obtaining the prior approval of the Trustees and
SEBI.
The director of AMC should be a person of reputed of high standing and at least
have five years experience in relevant field.
AMC can be terminated with 75% unit holders or majority of trustees.

4. Custodian and Depositories:

As per SEBI Regulations Mutual Funds shall have a custodian who is not any way
associated with the AMC. It carry outs the activity of safe keeping the securities or
participating, in any clearing system. The custodian should be independent from sponsors
and AMC and should have a sound track record and adequate relevant experience.
As Indian capital markets are moving away from having physical certificates to ownership
of these securities in dematerialized form with Depository. Mutual Funds
dematerialized securities are hold by depository participant.

5. Distributors:
For a fund to sell units across a wide retail base of individual investors, an established
network of distribution agents is essential. AMCs usually appoint Distributors or Brokers,
who sell units on behalf of the fund. A broker usually acts on behalf of several mutual
funds simultaneously and may have several sub-brokers under him for the purpose of
distribution of units.

35

MUTUAL FUND A GLOBALLY PROVEN INVESTMENT

Worldwide, the mutual fund has a long and successful history. The popularity of mutual
fund has increased manifold. In developed financial market, like US mutual funds have
almost overtaken bank deposits and total assets of over US $ 3 trillion.
In India, Mutual Fund industry started with the setting up of UTI in 1964. Public sector
banks and financial institution began to establish Mutual Funds in 1987. The private sector
and foreign institutions were allowed to set up Mutual Fund in 1993.
WHAT IS MUTUAL FUND?
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost.

36

Critical View About Mutual Fund

Advantages:
1. Portfolio Diversification:

Each investor in a fund is a part owner of all the funds assets, thus enabling investor to
hold a diversified investment portfolio even with a small amount of investment, which
would otherwise require big capital.
2. Professional Management:
Mutual Funds provide the services of experienced and skilled professionals, backed by a
dedicated investment research team that analyze the performance and prospect of
companies and selects suitable investments to achieve the objectives of the scheme.
3. Diversification:
Mutual Fund invests in a number of companies across a broad cross-section of industries
and sectors. This diversification reduces the risk because all stock can not go through a
downtrend at the same time and in the same proportion. You achieve this diversification
through a mutual fund with powerless money that you can do on your own.
4. Reduction of Transaction Cost:
The investors bear all the cost of investing such as brokerage or custody of securities.
When going through the fund investor has the benefit of economies of scale; the funds pay
lesser cost because of larger volumes, a benefit passed on to its investors.
5. Liquidity:
By investing in Mutual Funds the investors can cash their investment by selling their units
to the fund if open-ended, or selling them in the stock market if the fund is close ended.
6. Convenience & Flexibility:
Mutual Funds Companies offer investor to transfer their holding from one scheme to
other.

37

7. Tax Benefits:
The investors are totally exempt from paying any tax on the income they receive from the
Mutual Funds.
Investment up to 10000 in ELSS qualifies for tax rebate of 20%.
8. Regulatory oversight:
Mutual funds are subject to many government regulations that protect
fraud.

investors from

9. Convenience:
You can usually buy mutual fund shares by mail, phone, or over the Internet.

Limitations:
1.

No Control over Costs:

An investor in a mutual fund has no control over the overall cost of investing. He/she has
to pay investment management fees as long as he/she remains with the fund. Fees are
payable even while the value of the investment may be declining.
2.

No Tailor made Portfolios:

Investors who invest on their own can build their own portfolios of shares and bonds and
other securities. Investing through fund means he/she delegates this decision to the fund
managers.
3.

Managing a Portfolio of Funds:

Availability of a large number of funds can actually mean too much choice for the
investor. He/she may again need advice on how to select a fund to achieve his/her
objectives, quite similar to the situation when he/she has to select individual shares or
bonds to invest in.
4.

Entry and Exit Cost:

When large bodies like a fund invest in shares, the concentrated buying or selling often
result in adverse price movements i.e. at the time of buying, fund has to pay high and vise38

versa. But now SEBI has confirmed that no AMC can charge entry load on new mutual
fund.

5.

No Guarantees:

No investment is risk free. If the entire stock market declines in value, the value of mutual
fund shares will go down as well, no matter how balanced the portfolio. Investors
encounter fewer risks when they invest in mutual funds than when they buy and sell
stocks on their own. However, anyone who invests through a mutual fund runs the risk of
losing money.

39

MUTUAL FUND CYCLE

[Mutual Fund Cycle]

[Source: amfiindia.com]

From above cycle, it can be observed clearly that how the money from the investors flow
and they get returns out of it. With a very small amount of fund, investors pool their
money with fund managers.
After studying the market, the fund manager invests money of the investors in various
securities like shares, bonds, debentures, government securities etc. to achieve goal of the
investors.
With ups and downs in the market returns are generated and they are passed on to the
investors in form of dividend or capital gain or lost. The above cycle is very clear and also
very effective.
The fund manager while investing on behalf of investors takes into consideration various
factors like time, risk; amount etc. so that he/she can make proper investment decision.

40

Types of Mutual Fund

[Fig.10: Types of Mutual Funds]

41

By objective:
Investment goals vary from person to person. While somebody wants security, others
might give more weightage to returns alone. Somebody else might want to plan for his
childs education while somebody might be saving for the proverbial rainy day or even
life after retirement. With objectives defying any range, it is obvious that the products
required will vary as well. So, Mutual funds can be classified based on the objectives of
the investor.
(a). Equity Fund:
Equity funds invest a major portion of their corpus in equity shares issued by companies.
NAV of equity funds are fluctuated by fluctuation in price of shares that it holds. So there
is a high risk as well as high return in equity fund. Potential to earn in such funds is higher
when they are invested for long term.
The leading example of such funds are
Prudential ICICI Growth Plan,
Tata Pure Equity Fund,
Reliance Vision,
Franklin India Prima Fund etc.
(b).

Debt Fund:

Debt funds invest in debt instruments debt instruments issued by governments, private
companies, banks and financial institutions. By investing in debt, these funds target low
risk and stable income investors. These funds are low risk low return funds.
The leading examples are:
Birla Income Plus,
Principal Income Fund,
HDFC Income Fund,
UTI Bond Fund etc.
(c).

Balanced Fund:

42

A balanced fund is one that has a portfolio comprising debt instruments as well as
preference and equity shares. The idea is to reduce volatility of funds, while providing
some upside for capital appreciation. They are best suitable for the people looking for a
combination for capital appreciation and regular income and best time spend for such
investment is more than 3 years.
The leading examples are
Prudential ICICI Balanced Fund,
Birla Balance Fund,
Franklin India Balance Fund,
Sundaram Balance Fund etc.
(d).

Money Market Fund:

Money market funds invest in securities of a short-term nature, which generally means
securities of less than one-year maturity such as Treasury Bills issued by governments,
Certificates of deposit issued by banks and Commercial paper issued by companies.
The major strength of money market funds are the liquidity and safety of principal that the
investors can normally expect from short term investments.
The leading examples are
Prudential ICICI Liquid Plan,
Templeton India Liquid Fund,
Grindlays Cash Fund etc.
(e).

Gilt Fund:

These funds are sort of government funds wherein the investments are made in debt
instrument of government, which carry no risk of non payment of interest as the RBI
manages the payment of interest and principal on the investments. These funds are best
suited for regular income and long term investment objectives.
The leading examples are
Prudential ICICI Gilt Fund,
Tata Gilt Securities Fund,
Templton India Government Securities Fund etc.
43

2. By Duration:
(a). Open-ended Fund:
An open ended fund is one that is available for subscription and repurchase on a
continuous basis. These schemes do not have a fixed maturity period. Investors can
conveniently buy and sell units at NAV related prices which are declared daily basis. The
key feature of this fund is liquidity.
(b). Close-ended Fund:
A close ended fund has a stipulated maturity period e.g. 5-7 years. The fund is open for
subscription only during a specified period at the time of launch of the scheme. Investors
can invest in the scheme at the time of initial public issue and thereafter they can buy or
sell units on stock exchange where the units are listed at NAV. These mutual fund schemes
disclose NAV generally on weekly basis.
(c).

Interval Fund:

Interval funds combine the features of open-ended and close-ended schemes. They are
open for sale or redemption during pre determined intervals at NAV related prices.
Risk Return Grid
Risk Tolerance/Return
Focus
Expected

Suitable Products

Low

Debt

Bank/ Company FD, Debt basedLiquidity, Better Post-Tax

Funds
returns

Medium

Partially
Debt,
Partially
Equity

Balanced
Funds,
SomeLiquidity, Better Post-Tax
Diversified Equity Funds andreturns,
Better
some debt Funds, Mix of sharesManagement,
and Fixed Deposits
Diversification

High

Equity

Diversification, Expertise in
Capital Market, Equity Funds
stock picking, Liquidity,
(Diversified as well as Sector)
Tax free dividends
44

Benefits offered by MFs

[Table11: Risk Return Grid of various MF]

45

3. By Load:
(a).

Load Fund:

Marketing of new mutual fund scheme involves initial expenses. These initial expenses
may be recovered from the investors by entry or exit load.
But now SEBI has confirmed that AMC can not charge entry load on new mutual fund.
(i). Entry Load or Front-end Load:
If initial expenses recovered from investors at the time of investors entry into the fund, by
deducting a specific amount from his initial contribution it is called Entry Load. But now
it has been banned by SEBI.
(ii). Exit Load or Back-end Load:
If initial expenses recovered at the time of the investors exit from the scheme, by
deducting a specified amount from the redemption proceeds payable to the investor it is
called exit load.
(iii). Deferred Load:
The load amount charged to the scheme over a period of time is called a deferred load.
(b).

No Load Fund:

Funds that dont charge entry, exit, or deferred load or any other charges for sales
expenses are called no load funds.
Now, generally all Mutual Fund companies charge 2 to 2.5% entry load on equity
fund.
Generally there is no exit load on equity and sectoral funds to maintain liquidity of
that funds.
Generally there is no entry load on gilt scheme and income fund.
There is 0.25 to 1% exit load on gilt and income fund if investors exit from fund
before specified time which is generally 3 to 6 months.

46

Other types of fund:

(a) Tax Saving Funds:
These schemes offer tax rebates to the investors under specific provisions of the Income
Tax Act, 1961 as the Government offers tax incentives for investment in specified
avenues. E.g. Equity Linked Saving Scheme (ELSS). Pension schemes also offer tax
benefits.
The leading examples are
Prudential ICICI Tax Plan,
Templeton India Pension Plan,
Franklin India Taxshield etc.
(b) Index Funds:
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index,
S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same
weightage comprising of an index. NAV of such funds are changed accordance with the
change in the index.
The leading examples are
Birla Index Fund,
HDFC Index Fund,
Prudential ICICI Index Fund,
UTI Index Fund etc.
(C) Sector Funds:
These are the funds which invest in the securities of only those sectors or industries as
specified in the offer documents. E.g. Pharmaceuticals, Software, Petroleum etc. These
types of funds are more risky compared to diversified funds.
The leading examples are
Birla IT Fund,
Pru. ICICI FMCG Fund,
47

Franklin India Pharma Fund etc.

(d) Commodity Funds:
Commodity funds invest into the different commodities directly or through shares of
commodity companies. E.g. Commodity fund invest in gold or shares of gold mines.
Commodity funds have not yet developed in India.
(e) Off Shore Funds:
These funds invest in equities in one or more foreign countries there by achieving
diversification across the countrys borders. However they also have additional risks such
as the foreign exchange rate risk and their performance depends on the economic
conditions of the countries they invest in.

48

RESEARCH OBJECTIVES
Any activity done without an objective in a mind cannot turn fruitful. An objective
provides a specific direction to an activity. Objectives may range from very general to
very specific, but they should be clear enough to point out with reasonable accuracy what
researcher wants to achieve through the study and how it will be helpful to the decision
maker in solving the problem.
The objective of any research is basically divided into two categories.
Primary Objective:
To find out market potential of Karvy Investor Service Ltd.
Secondary Objectives:
Following are secondary objectives.
To assess an awareness of mutual funds in Delhi.
To find out how many people are interested in dealing of mutual fund.

49

CHAPTER 2
LETERATURE REVIEW

50

REVIEW OF LITERATURE
A number of studies have been conducted from time to time to understand the
different aspects relating to primary market and merchant banking activities in India.
However, most of them have focused upon the primary market in India only. Research
in the area of merchant banking in India and its role in the primary market is very
limited and that too is descriptive in nature and deals with procedural aspects,
organization and management and marketing aspects of merchant bankers. A review
of important studies is presented below:
Verma (2008)1 conducted research on merchant banks in India with the purpose to
analyse their organization structure and management pattern and to assess their
suitability for medium and small size corporate and non corporate enterprises. The
suitability of merchant banking services in reducing investors risk and corporate
capital structure has also been examined. The information was collected from a
sample of 32 merchant bankers through questionnaire and the study covered the
period 2000 to 2005
Shah (2005)3 conducted an empirical study on the data set of 2056 Indian IPOs listed
on the BSE from January 2004 to May 2005 with the objective to examine the under
pricing of IPOs and to establish the empirical regularities about Indias IPO market.
He examined six factors underlying under pricing, namely asymmetric information
between firms and investors, fixing the offer price too early, the interest rate float, loss
of liquidity on the amount paid at issue date (liquidity premium), building loyal
shareholders and merchant bankers rewarding favoured clients as an incentive to
under price.
Qumar (2008)8 analyzed the non fund based financial services by the leading public
sector banks (PSBs) in the field of merchant banking for the period 2001-03 to 200708. According to the author, the public sector banks entered in merchant banking
business on the recommendations of Banking Commission 1972 and dilution of
foreign equity of large number of foreign companies operating in India. He analyzed
the role played by public sector banks in handling the number and amount of issues as
lead manager, co manager, underwriter, adviser, banker to issue and the project
appraiser

51

CHAPTER 3
RESEARCH METHODLOGY

52

RESEARCH METHODOLOGY
1.

Research Design:

A research design is a pattern or an outline of a research projects working. It is a

statement of only the essential elements of a study, those that provide the basic guidelines
for the details of the project. It comprises a series of prior decision that taken together
provide master plans for executing a research projects.
A research design serves as a bridge between what has been established i.e., the research
objectives and what is to be done, in conduct of the study to relish those objectives. If
there were no research design, the research would have only foggy notions as about what
is to be done.
I have used Exploratory Type. The research is of both qualitative as well as quantitative
type.
2.

Unit of Analysis:

Middle class, Upper Middle class and HNIs people.

Characteristics of interest:
Peoples knowledge about Mutual Fund
Peoples knowledge about Karvy
Peoples interest in getting knowledge of Mutual Fund
Peoples willingness to deal in Mutual Fund with Karvy
3.

Sources of Data:
a. Primary Source:

The primary data is collected using sampling method and by survey using questionnaire.
b. Secondary Source:

53

Secondary data includes information regarding present market scenario, Information

regarding Mutual Funds and competitors are collected by Internet, Magazines and News
papers and books.
4.

Sample Planning:

Sample Size: 50 units

Sample Extent: Delhi
Sampling Design:
A Sample Design is a definite plan for obtaining a sample from a given population. It
refers to the technique or method the researcher would adopt in selecting items for the
sample.
I have used both Convenience Sampling Method.
5.

Data Collection Method:

I have used Survey Method to collect data. I have collected data using questionnaire.
Questionnaire Plan
I have used Structured Questionnaire for gathering the required data through
contacting respondent personally.
Type of Information:
I have collected Fact, Awareness, Attitude, Future action plan and reason using
questionnaire.

54

Type of Questions:
Close-ended questions of Dichotomous and Multiple Choice type are asked in the
questionnaire for data collection.

6.

Data Analysis & Interpretation:

Data Analysis is based on the data collected by way of Questionnaires. From the collected
data findings are extracted. The data is tabulated and frequency distribution chart is
prepared.

55

CHAPTER 4
ANALYSIS & INTERPRETATION

56

RESEARCH ANALYSIS AND INTERPRETATION

1. What is the investment preference of the people?

Inference : Graph shows that 30% of people are investing in mutual fund. That mean it is
a good opportunity for the company as they can grap the rest unaware people to being
them investor in mutual fund by making them aware about mutual fund.

57

2. What is the reason for investing money in mutual funds?

Inference : Graph shows that 50% (above among all) people

are interested in investing in mutual fund. That mean company
can increase investors for investing in mutual fund by giving
them equity based mutual fund.

58

3. What is the frequency of investment in mutual funds?

Inference: Graph shows that 40% people are investing in mutual fund once a month. So
company suggests people about SIP and company suggest rest of the people about the
benefits of SIP.

59

4. How much is the awareness about scheme offered for Mutual Fund?

Inference: Graph shows that 66% of people have few knowledge about
mutual fund and 10 % of people do not know about mutual fund. That
means company can make fully aware about mutual fund to people and
tell them benefit associated with mutual fund so that they will invest in
Mutual fund.

60

5. How many are aware of tax advantage by Mutual Fund?

Inference: Graph shows that 38 % of people dont know about tax

benefit associated with mutual fund and 34 % of people are not sure
about tax benefit through mutual fund. This is the good opportunity
for company to increase investors of mutual fund by making aware
them tax benefit associated with mutual fund in such schemes like ELSS.

61

6. Who are the external advisors to people for investment in mutual fund?

Inference: Graph shows that 38 % of people invest in mutual fund

on the suggestion of their friends. So they are potential investors for
the company. Company can take care of these investors by suggest
them to invest on professional advisory.

62

7. What are the types of Mutual Funds in which people invest?

Inference: Graph shows that most of the people (58 %)

invest in equity based mutual funds. They are risk taker.
Company can take care of these investors by suggesting
them balanced and debts funds.

63

8. Why they are not investing in mutual funds?

Inference: Graph shows that 48% of people are not investing in

Mutual fund because of bitter past experience. 14% have not knowledge about mutual
funds. 22 % do not believe on this service.
6 % are not able to select the best scheme for them.Company assumes
that these investors have lack of advisory. So company should suggest them for investing
on basis of professional advisor.

64

9. How many people are interested in knowing more about mutual fund?

Inference: Graph shows that 86 % of people are interested to know

more about mutual funds. This is the great opportunity for the
company to increase the investors by making them aware about
mutual funds and telling them benefits associated with mutual funds.

65

CHAPTER 5
CONCLUSION & LIMITATION

66

CONCLUSION
Our exhaustive research in the field of Mutual Fund threw up some interesting trends which can be seen
in the above analysis. A general impression that we gathered during data collection was the immense
awareness and knowledge among people about various companies and their mutual fund schemes. People
are beginning to look beyond SBI for their mutual fund needs and are willing to trust private players with
their hard earned money.
People in general have been impression by the marketing and advertising campaigns of mutual fund
companies. A high penetration of print, radio and television ad campaigns over the years is beginning to
have its impact now.
It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate as a
wealth management and wealth accumulation option. The difference between unpredictability and a
safety anchor in the market is provided by in-depth knowledge of market functioning and changing
trends, planning with foresight and choosing one options with care. This is what KARVY provide in our
Stock Broking services.
KARVY offer services that are beyond just a medium for buying and selling stocks and shares. Instead
we provide services which are multi-dimensional and multi-focused in their scope. There are several
advantages in utilizing our Stock Broking services, which are the reasons why it is one of the best in the
country.

67

LIMITATIONS
Due to limitation of time and cost constrains a sample size of only 50 respondents are chosen.
Data Analysis and interpretation done may not be that strong due to small sample and
Convenience Sampling Method.
The sample extent for research is only Delhi.
Some of the respondents may be biased in giving responses.
My inexperience in research area might have affected results.

68

CHAPTER 6
BIBLIOGRAPHY

69

BIBLIOGRAPHY
REFERANCE BOOKS:

A. D.C.Anjaria & Dhaivat Anjaria,Association of Mutual Funds In India, AMFI Workbook, Mutual Fund
Scenario, page no-233,234, Second Edition, Sultan Chand & Sons, Delhi, 2003.
B. Sundaram & Varshney, Banking, Theory Law and Practice; Concept and Types of Mutual Fund, page no
-3.45,3.46,3.52,3.53, Fifth Edition,Sultan Chand & sons; New Delhi, 2004.
C. Varshney & Malhotra, Principles of Banking, Risk Associated with Mutual Fund, page no256,257,258,259, Third Edition, Sultan Chand & Sons, Mumbai, 2005.
D. Beri, G.C., Marketing Research, Sources and Types of Data, page no-v Eighth Edition, Tata McGraw
Hill, New Delhi 2010.

WEBSITES:

1) http://en.wikipedia.org/wiki/Mutual_fund
2) https://www.karvymfs.com/karvy/
3) http://www.thefinapolis.com/v2/Mutualfunds/Mutualfunds.asp

70

Questionnaire
1. Which are the investment tools you invest in?
[ ] Bank Fixed Deposit
[ ] RBI Bonds
[ ] Mutual Funds
[ ] Equities
[ ] others (Please specify)

2. You primarily invest for (Rank according to your preference)

[ ] Returns
[ ] Liquidity
[ ] Savings
[ ] Tax Benefits

3. Rank the investments options according to you preference of

Investment.
[
[
[
[

]
]
]
]

Bank Fixed Deposit

RBI Bonds
Mutual Funds
Equities

[ ] Any other (Please specify)

4. What is the frequency of your investments?

[ ] Once a Month
[ ] Once in 6 Months
[ ] Once a Year

71

5. Do you invest in Mutual Funds?

[ ] Yes
[ ] No
6. If the answer to question 8 is "Yes"
a.)Are you aware of the various schemes offered by Mutual Funds?
[ ] Yes
[ ] No
[ ] Few

b.)Do you know that you can get Tax Advantages by investing in Mutual Funds?
[ ] Yes
[ ] No
[] Not Sure

c.)On whose external advice do you invest?

[ ] Bank
[ ] Distributor
[ ] Agents
[ ] Direct investments
[ ] C.A.

d.)Which types of Mutual Fund do you invest in?

72

[ ] Debt
[ ] Equities
[ ] Balanced

7.If the answer to question 8 is "No"

You do not invest in Mutual Fund because of (you may give multiple answers)

[ ] Bitter past experience

[ ] Lack of Knowledge
[ ] Lack of confidence in service being provided
[ ] Difficulty in selection of schemes
[ ] In-efficient investment advisors

8. If Mutual Fund offer you Steady Returns, Tax Benefits, Liquidity, Diversification of Portfolio, Lesser Risk
would consider it as an investment option in the future for you?
[ ] Yes
[ ] No
[ ] May be

9. Would you be interested to know more about Mutual Funds?

[ ] Yes
[ ] No

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